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Yahoo! Japan Key to YHOO Treasure

Let's assume that Yahoo! can actually show some double-digit revenue and earnings growth next year and do a YJ-type 22% growth in net income. That's $1.55 in EPS at the old share count or $1.86 billion in earnings.

On an 850 million share count, that $1.86 billion in earnings becomes $2.19 in EPS or almost double the current estimate.

At a 10x multiple of $1.86 billion in earnings, Yahoo! would be worth nearly $11 billion. At the moment, net of its Alibaba stake (at a $60 billion valuation and post taxes), its YJ stake, and its cash, Yahoo!'s core business is being valued at $1.43 billion.

Yahoo!'s stake in YJ is nothing to sniff at. And it might be a key catalyst for Yahoo this year.



At the time of publication, the author was long YHOO.



This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Eric Jackson is founder and Managing Member of Ironfire Capital and the general partner and investment manager of Ironfire Capital US Fund LP and Ironfire Capital International Fund, Ltd. In January 2007, Jackson started the world's first Internet-based campaign to increase shareholder value at Yahoo!, leading to a change in CEOs in 2007. He also spoke out in favor of Yahoo!'s accepting Microsoft's buyout offer in 2008. Global Proxy Watch named Jackson as one of its 10 "Stars" who positively influenced international corporate governance and shareowner value in 2007.

Prior to founding Ironfire Capital, Jackson was President and CEO of Jackson Leadership Systems, Inc., a leadership, strategy, and governance consulting firm. He completed his Ph.D. in the Management Department at the Columbia University Graduate School of Business in New York, with a specialization in Strategic Management and Corporate Governance, and holds a B.A. from McGill University.

He was previously Vice President of Strategy and Business Development at VoiceGenie Technologies, a software firm now owned by Alcatel-Lucent. In 2004, Jackson founded the Young Patrons' Circle at the Royal Ontario Museum in Toronto, which is now the second-largest social and philanthropic group of its kind in North America, raising $500,000 annually for the museum. You can follow Jackson on Twitter at www.twitter.com/ericjackson or @ericjackson.

You can contact Eric by emailing him at eric.jackson@thestreet.com.

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