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Will Comcast Now Buy Yahoo?

NEW YORK (TheStreet) -- With big speculative tech stocks finally rolling over -- Twitter (TWTR) and Facebook (FB) are both down over 10% in the last week -- maybe it's time to stop talking about big tech buying and start talking about big tech selling out.

The most obvious such play on my board would be Comcast (CMCSA - Get Report) buying Yahoo! (YHOO - Get Report).

There are already synergies. Yahoo! Sports works on-air with Comcast's NBCsn, and it has a large radio presence. looks a lot like a Tumblr. Yahoo's New York offices are just blocks from Rockefeller Center.

Yahoo!'s news and mail services could easily replace Comcast's current online efforts. Integrating Yahoo!'s identification technology with Comcast's online video would provide synergy, and Yahoo!'s cloud would help with hosting all of Comcast's offerings.

A Yahoo! acquisition would face none of the antitrust scrutiny that Comcast's pending purchase of Time Warner Cable (TWC) does, and the completion of that purchase would leave Comcast with few routes to new U.S. growth anyway. Its only way to get bigger at that point would be to become a global brand, and Yahoo! can help it do that.

Right now Comcast itself is valued at just south of $130 billion, and Yahoo! is valued at $35.8 billion. It sounds like a lift, but most of that value lies in Yahoo's Alibaba stake, and most of this deal would be done in stock. The value of that stake will hit a ceiling once Alibaba itself is priced for the public market.

Comcast could easily sell most of that stake to get its money back, perhaps through an insider deal that would get it a seat on the Alibaba board. This would give Comcast an insider's view of Alibaba's march into the U.S., and thus help bring it into the e-commerce market.

All these niches - online news, finance, sports and tech, mail, search, shopping, cloud - are areas where Comcast has tried to follow in the last several years, but failed. Comcast cable users don't hang around on Comcast web pages.

Comcast's success is based on vertical integration. It owns NBC Universal, and when an NBC cable network collects fees for carriage Comcast writes checks to itself. Comcast knows that more-and-more people are cutting their cable cords but retaining their broadband Internet connections.

Yahoo! would give Comcast vertical integration on Internet content.

What would Yahoo! get?

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