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Yahoo! Inc (YHOO), A Closed-In Mutual Fund Of Interesting Tech Positions: Roger McNamee

Yahoo! Inc. (NASDAQ:YHOO)’s like a black-box at the moment, because practically nobody has any idea what’s going on with the company. Analysts don’t even know how to react to the latest announcement that Yahoo! Inc. (NASDAQ:YHOO)’s investing $20 million in Snapchat. According to CNBC, it will be interesting to watch how things will fare from now on, but it’s not recommended to take long positions into the tech company yet.

Yahoo! Inc. (NASDAQ:YHOO)

“I just think we’re at that point in the cycle where the burden of proof is on those who believe that you can make good money from those valuations and now that Yahoo!’s kind of become a mutual fund, like a closed in mutual fund of interesting tech positions, they’re going to be one to watch,” suggested Roger McNamee.

One of the big issues that Yahoo! Inc. (NASDAQ:YHOO) faces is the fact that despite a relatively large consumer base, monetizing the services is cumbersome at best. Then there’s also the problem of having to grow numerous tech infants while struggling with falling revenues and negative income. So, Yahoo! Inc. (NASDAQ:YHOO) can learn from Snapchat and can get some value out of this relationship, but the latter might see the cooperation detrimental.

“I have to say from a 30,000 foot perspective, these look like two very different fund raising rounds. On one hand you have a strategic Yahoo!, which all reports say Yahoo! could find an important strategic partner in Snapchat, not the other way around. It could be an interesting way for Yahoo! to distribute its own news and learn from it,” said Kayla Tausche.

Judging by the scale of the investment, there’s little probability that Marissa Mayer has put big hopes in Snapchat, but this should not undermine the scale of the possible outcomes emerging from the decision.

Disclosure: none
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