Verizon Goes for the Core in Yahoo Purchase - transforming itself in the process

Verizon Communications has purchased Yahoo's operating business for 4.83 billion in cash.Yahoo Japan and Yahoo's stake in Alibaba Group Holding are excluded from the deal.Verizon had agreed to raise its bid last week.Believed to be strongly behind the move was Verizon AOL CEO and Chairman Tim Armstrong,who has long sought Yahoo for its digital advertising business-even before the Verizon offer came along.Verizon had made a major transformative move when it purchased AOL last year for 4.4 billion.*
By purchasing the assets,Verizon gains access to Yahoo's advertising technology tools,BrightRoll and Flurry,as well as its email,search and messenger platforms;and content such as Yahoo News and Yahoo Sports.Verizon is looking to enhance its mobile video and advertising portfolios so as to make up for the slowing wireless business now at a saturation point.They also want Yahoo's scale,which will then drive the company's audience from millions to billions.*
The remainder Yahoo will become a publicly traded holding company with a different name.It will keep its Alibaba Group Holding Ltd 15% stake and 35% of Yahoo Japan,plus its convertible notes and some minority investments.The new Yahoo will be permanently structured to hold these legacy assets.Yahoo had been pressured by activist investor Starboard Value LP to jettison the core business.*
On Verizon's side,its head of product innovation and new business,Marni Walden,will become CEO of the combined firm.*
Verizon Communications Inc (VZ),Yahoo Inc (YHOO)

Words of the Day:Cybersecurity,Antitrust and Alibaba

I'm paranoid enough that I get a new credit card every three months,said Ken Westin,Tripwire security researcher.I'm guessing at least one or two retailers a week are going to be coming out with an announcement.I'm expecting to see more shoes drop.
I think the Home Depot hackers are a much more sophisticated group than those that hacked Apple's iCloud accounts of celebrities.Odds are,they're operating outside the US.Once those credit cards get exfiltrated out of the US to Russia or Eastern Europe,it's almost impossible to follow up on the investigation.*
Microsoft has an antitrust law problem in China.Their office was raided by Chinese authorities in July.This is pretty serious for Microsoft,said David Evans,Vice President and Chairman of Global Economics.It's not clear what exactly the allegations are.The full array of claims I don't think we know at this point in time.I think the point is,it's a law that was passed in 2008.This is a baby antitrust law.It's really a very new thing in China.This is actually very quick for China to be taking the law so seriously and acting so aggressively.*
Alibaba,the Chinese Internet titan,has valued itself at 162.7 billion dollars prior to its initial public offering on the New York Stock Exchange later this month.Alibaba will announce share pricing on September 18 and go public the following day.Its publicity roadshow begins at the Waldorf Astoria in New York today,followed by two weeks of meetings with prospective investors.
Alibaba has spent 4.6 billion dollars on 2014 deals.There will be questions about this M&A strategy,as profit margins are crimped when a business expands too rapidly.The company also has an ownership structure that is not investor-friendly.Investors have less of a say in big company decisions than they would like.
It does concern me,says Jeff Sica,founder and president of SICA Wealth Management,because transparency is clearly one of the clouds on their horizon.The top question is,is Alibaba going to be able to operate under the standards of the NYSE?*
Microsoft(MSFT,Home Depot(HD),Apple Computer(AAPL)

Should You Invest in Yahoo

Yahoo beat Wall Street expectations for both profit and overall sales in Q4,with a roughly 4% gain in sales.Display ads alone brought in 520 million dollars in revenue,which was down 10% on the year;but search revenue was 427 million,up from 376 million a year ago.
Eric Jackson of Ironfire Capital said Yahoo is gonna be the AOL of 2013.I think Yahoo has really been trucking along nicely.This year,there is a possible sale of Yahoo's stake in China's Alibaba.com,plus the monetisation of Yahoo Japan.
Marissa Mayer,Yahoo's fifth CEO in four years,is clearly focused on mobile,but it will take years.They're gonna focus on small acquisitions-companies with 50 employees or less whom they can partner with.Yahoo can actually partner with anyone-even Apple or Google.
Ms.Mayer,37,who had been one of Google's founding employees, is a genuine star of the business world.She's injected some dynamism into a company Wall Street had all but given up on.
Yahoo shares are at a three year high.Stifel Nicolaus raised the stock from a hold to a buy Monday.Yahoo closed flat at 19.34 in Monday after hours trading.
Yahoo Inc(YHOO)

Asia This Day:Growth and a Sale

China's 2012 growth is expected to expand at the slowest pace in 13 years,a recent survey predicts.People have got to expect Chinese growth in the low 7s,said currency expert Chris Gothard of Brown Brothers Harriman.Responding to this,China's outgoing President,Wen Jiabao,called for a proactive fiscal and a prudent monetary policy,while giving more priority to maintaining growth.For its part,Thailand is recovering nicely from last year's devastating flooding around the capital,Bangkok.The nation grew 11% on the quarter,with both domestic spending and tourism gaining momentum.On the year,Thai growth was up 0.3%,beating the estimate of a -0.5% loss.Back in China,Internet titan Alibaba is buying back 20% of a stake in it held by Yahoo for 7.1 billion dollars-6.8 billion of that will be in cash.Yahoo will still own more than 50% of Alibaba with Softbank.Yahoo is considering a massive share buyback with the proceeds of the sale.The MSCI Asia Pacific Index rose 0.2% this morning,Monday. Yahoo(YHOO)