June 07, 2008

Jerry Yang You Ingrate

Right now, Jerry Yang should be taking Carl Icahn out to the finest meal The French Laundry can offer. At the very least, Yang should add Icahn to his holiday wishe list as Icahn has done something that Yang hasn't been able to do for the last three years – make Yahoo! relevant in daily conversations. No longer do the Yahoo! beat reporters have to beg the company's under utilized PR people for interesting stories aside from the uninspiring advertising deals they regularly announce.

Icahn has saved Yahoo! from being a 90's trivia question (Who was the king of Internet search before Google?). And while the most practical application to today's users, My Yahoo!, has been replicated and surpassed by Pageflakes and Netvibes, will this new found Interest in the 90's stalwart save the company from an agonizingly slow descent back into obscurity ?

We at Techstocker think Yahoo! will remain a fixture in the headlines of business pages across the country and is a good short term investment for two simple reasons:

1. Carl Icahn didn't invest approximately $1.5b in Yahoo! stock on a whim. Icahn saw an opportunity to make a quick return on his cash and he's not about to let that go. The letters going back and forth are just the opening volley in a war that Yahoo! does not have the ammunition to fight.

2. Yahoo! desperately needs this deal. While Yang would like everyone to believe everything is smooth sailing on the S.S. Yahoo!, the reality is the company has been sailing aimlessly for a few years and will probably never return to a profitable port.

Lighten the load on your financial services stocks and place a small wager on Yahoo! It will return to its 52-week high which should net everyone, including Icahn and Yang, a nice little profit in these uncertain times. While it may leave Yang a little embarrassed, at least the improved valuation of his company stock will allow him to do some retail therapy.

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