This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Yahoo! CEO Ready to Resume Microsoft Talks

"If I were Yahoo!, I would ask myself would this deal now make sense?" Boova says.

Sanford Bernstein analyst Jeffrey Lindsay says the agreement with Google had been one of two best shots for Yahoo! -- the other being a possible merger with Time Warner's (TMX) AOL division. But now, neither of those options is likely to happen.

"Without the Yahoo!-Google deal, there aren't enough synergies in a Yahoo!-AOL combined entity to reach Time Warner's asking price," Lindsay wrote in a recent report.

For Google, a search deal with Yahoo! had never been considered a huge money maker but more of a strategic decision to block a combination between Microsoft and Yahoo!, which would conceivably be more competitive in search as a combined entity. Google maintains about 63% of the search business, compared to about 8.5% for Microsoft and about 20% for Yahoo!.

Lindsay estimates that Google would have generated only about $50 million a year in revenue from the search deal with Yahoo!. That's nothing compared to the legal costs it would have incurred to fend off a challenge from the Justice Department, not to mention the deep scrutiny of its business practices.

Boova says that a merger between Yahoo! and Microsoft will still be subject to regulatory review, but it will be less vulnerable than a deal with Google, given Google's domination over its competitors.

"A combination with Google and anyone else is going to draw the most scrutiny," he says.

Boova maintains that Microsoft must have had confidence that a merger with Yahoo! would hold up, otherwise it wouldn't have taken a chance in the first place.

3 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,122.01 +15.31 0.09%
S&P 500 2,000.12 +0.10 0.00%
NASDAQ 4,569.6210 -1.0160 -0.02%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs