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
TheStreet Open House

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) buying Yahoo! (YHOO).

There are already synergies. Yahoo! Sports works on-air with Comcast's NBCsn, and it has a large radio presence. NBCNews.com 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?

1 of 2

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 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

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