Analysts regularly suggest that Microsoft (MSFT) should buy Yahoo! (YHOO) to help the big software company’s flagging internet fortunes. The latest advice on the matter comes from UBS where the Internet analysts clearly don’t have enough to do to occupy their time. The researchers say that Microsoft has several options to improve its internet presence. One is to do small partnerships and acquisitions. Clearly that does not get Microsoft big as fast as it might need to. Or, buy Yahoo!, which might hurt MSFT EPS for a year or two.
The problem with the argument is that management at Yahoo! now thinks that they are on to something with Panama. The new ad technology is improving response rates to search based advertising. In anticipation of better days, Yahoo!’s stock is up from $25.30 in late December to over $32 earlier this week, a move of over 26% that leaves Yahoo!’s market cap at $42 billion.
The time to buy Yahoo! is when the stock was under $23 a few months ago. Or, if it drops because Panama is not a success. But, now is not the time.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
Top Gaining Stocks
Top Losing Stocks