Yahoo Stock Falls – US-FOREX.US
A night’s sleep wasn’t enough to calm Yahoo! investors unhappy with the terms of its deal with Microsoft.After sinking 12.1% on Wednesday, Yahoo!
shares felllittle further on Thursday, pulling the poster-child of the 1990s Dotcom boom to 14.43 by midday trading, 16.2% down from its Tuesday close.”Investors are clearly disappointed with the terms of the deal,” said Todd Greenwald, an analyst at Signal Hill Group. Meanwhile, things were fine in Redmond, Wash., where Microsoft
enjoyed a upwards push of 1.2%. On Wednesday, Yahoo! and Microsoft announced a 10-year deal where Yahoo! would adopt the MS Bing search engine, while Microsoft would be in charge of the global selling of premium search advertising for both companies. The deal will, at least initially, bring in 500 million in annual operating income and save Yahoo! 200 million in capital expenditures. The problem with that is Yahoo!’s investors thought they it would pick up 2 billion or more up front for its search business. Steve Ballmer, Microsoft’s chief executive, said nothing like that could never happen. The deal can be seen as desperate. And why not? The former rivals and wopuld-be merger partners have both lost considerable ground to Google
for one simple reason: they’re not as good. These problems have also contributed to the expired shelf-life of their brands, being passed by, of course, Google, and others like Apple
in the vital game of being viewed as fresh and cutting-edge.It was also desperation, or something like it, that led Microsoft in tried to purchase Yahoo!, the search-world’s distant second-place runner, in an astounding 44.6 billion hostile takeover last year. It didn’t work out, but not before the notorious Carl Icahn got involved, eventually leading to the ouster of Yahoo! founder and chief executive Jerry Yang.
Thursday saw financial advisory firm Collins Stewart cut its price target to 18.50 from 20, though maintained its “buy” rating. Incidentally, Microsoft also announced on Thursday that it’s collaborating with comScore to develop a digital media planning product called Reach and Frequency Planner, which is supposed to allow brand advertisers to predict reach, frequency and audience composition at the ad placement level.