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Thursday, 30 July 2009 - Yahoo investors disappointed, but hold out hope | Technology |
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    Read more with google mobile : Yahoo investors disappointed, but hold out hope | Technology |

      My Profile    Top News Reuters top ten news stories delivered to your inbox each day. Subscribe You are here: Home > News > Technology > Article Home Business & Finance News U.S. Politics International Technology Internet Entertainment Sports Lifestyle Oddly Enough Health Science Special Coverage Video Pictures Your View The Great Debate Blogs Weather Reader Feedback Do More With Reuters RSS Widgets Mobile Podcasts Newsletters Your View Make Reuters My Homepage Partner Services CareerBuilder Affiliate Network Professional Products Support (Customer Zone) Reuters Media Financial Products About Thomson Reuters Yahoo investors disappointed, but hold out hope Wed Jul 29, 2009 6:35pm EDT   Email | Print | Share | Reprints | Single Page [-] Text [+] By Anupreeta Das NEW YORK (Reuters) - Yahoo Inc investors are disappointed it could not milk more money from Microsoft Corp, but said they were relieved a deal was struck that would allow Yahoo to focus on its other, stronger businesses. The companies signed a 10-year pact on Wednesday under which Microsoft will power search queries on Yahoo's sites and Yahoo's sales force will be responsible for selling premium search ads to big buyers for both companies. Yahoo shares fell more than 12 percent during the trading day because investors felt they got a raw deal. Prior to the announcement, some had expected Microsoft to pay up to $5 billion in upfront fees to Yahoo. "It was disappointing, based on expectations," said Ryan Jacob, who owns Yahoo shares through his Jacob Asset Management. "I wish they (Yahoo) could have gotten better terms." Investors lamented that Microsoft paid Yahoo no money upfront and that it will share only 88 percent of search revenue from Yahoo sites with Yahoo. "I was surprised at their decision to give the milk for free rather than forcing Microsoft to buy the cow," said Eric Jackson, a former Yahoo investor, who sold off his holdings in September after Yahoo turned down Microsoft's $47.5 billion buyout offer. "Yahoo should have fought harder for a big upfront," similar to the search proposal Microsoft initially suggested last year after it failed to buy all of Yahoo, Jackson added. Jackson, who now owns Microsoft stock, does not regret selling his Yahoo shares because the search pact, "is a great deal for Microsoft, not so much from Yahoo's perspective." Other Yahoo investors still held out hope for a full acquisition by Microsoft, or at least a search deal that would add value to Yahoo's share price. How much value this deal brings to Yahoo is not immediately clear. "The sentiment was that deal would include as much as $3 billion to $5 billion of upfront, based on what sell-side analysts were saying," said a Yahoo investor, who spoke on condition of anonymity. "That's several dollars of value that goes off Yahoo's share price immediately." Still, investors and analysts said the long-term benefits to Yahoo of partnering with Microsoft outweigh the short-term losses, especially in light of Google Inc's leading position in the search market. They are keen for Yahoo to focus on developing its huge portfolio of websites and generate more revenue from selling advertising space on them, known as display ads, rather than battling market leader Google on Web search. "The lack of an upfront payment and of cash flow guarantees, of a display relationship and complex systems integration are short-term negatives," wrote Jefferies & Co analyst Youssef Squali in a research note. But Yahoo can now save on search technology expenses and add to earnings. It also "frees up management to focus exclusively on display advertising, where (Yahoo) clearly has an edge," Squali said. Some analysts also said Yahoo Chief Executive Officer Carol Bartz was under pressure from investors to sign a search deal with Microsoft and move on after talks had dragged on for 18 months.  Continued... View article on single page   Share: Del.icio.us Digg Mixx Yahoo! Facebook LinkedIn     Next Article: Waking up is getting serious on smartphones     Also on Reuters Commentary: Fed volunteers to burst bubble Starbucks and McDonald's carve coffee niches House husbands go for TV glory in new U.S. show More Technology News Mac flaw could let hackers get scrambled data Foxconn suicide turns spotlight on China counterfeiting Microsoft, Yahoo in 10-year Web search partnership   |  Video Lawmaker urges regulations for file-sharing Waking up is getting serious on smartphones More Technology News... Editor's Choice Slideshow  A selection of our best photos from the past 24 hours.  Slideshow  Most Popular on Reuters Articles Video Organic food is no healthier, study finds As U.S. recession bites, Ohio hopes fade for Obama Madoff gives feeder fund managers' names to lawyer Unemployment spreads distress in U.S. home loans House Democrats reach deal on healthcare bill House Democrats clinch healthcare deal Starbucks, McDonald's carve coffee niches Canadians cry foul over U.S. healthcare attacks Foxconn suicide turns spotlight on China counterfeiting Facing budget gaps, U.S. states shuffle tax codes: group Most Popular Articles RSS Feed Video  US, UK meet on Afghanistan Obama steps up healthcare push Obama sees U.S. economy improving Drug crackdown in Mexico Jackson doctor update Spain bomb targets police Opposition clashes in Kyrgyzstan Ukraine border visa troubles Uighur leader calls for probe Schwarzenegger slashes spending Most Popular Videos RSS Feed Techonlogy news Web giants get together Microsoft and Yahoo have inked a 10-year Web search deal to better compete against market leader Google, but stopped short of combining their display advertising businesses.  Full Article    In Facebook's shadow While competing with Facebook is no easy challenge, some small social media sites appear to be finding their footing and growing at rapid rates, albeit from a very low base.  Full Article    NY singles go online The Big Apple has edged past Boston, Chicago, Seattle and Washington, D.C. as the best U.S. city for singles, thanks in large part to online dating.  Full Article    UK writes Twitter guide The British government has published a guide to help ministers understand how to use the social networking site, with the aim of extending its news and corporate messages online.  Full Article    eBay holds up its stars EBay will slash fees by 20 percent for its top-rated sellers and push their listings higher up in the search queue, part of steps to try to rev up its long-stagnant Marketplaces arm.  Full Article  Reuters.com:  Help and Contact Us  |  Advertise With Us  |  Mobile  |  Newsletters  |  RSS  |  Labs  |  Archive  |  Site Index  |  Video Index Thomson Reuters Corporate:  Copyright  |  Disclaimer  |  Privacy  |  Professional Products  |  Professional Products Support  |  About Thomson Reuters  |  Careers   International Editions: Africa  |  Arabic  |  Argentina  |  Brazil  |  Canada  |  China  |  France  |  Germany  |  India  |  Italy  |  Japan  |  Latin America  |  Mexico  |  Russia  |  Spain  |  United Kingdom  |  United States   Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

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