Yahoo! Inc. (NASDAQ:YHOO)’s two major shareholders have not been swayed by the company’s recent uplift in the market as they continue to aggressively push for a merger with AOL, Inc. (NYSE:AOL). CNBC’s Jon Frott argues that yahoo’s investor have a history of being impatient going as far as the Terry Semel era.
CNBC’s Carl Quintanilla reports that the two major shareholders are making direct plea to AOL CEO, Tim Armstrong, to pursue a possible merger and take over the reins of the combined company. The revelations come in the wake of Yahoo! Inc. (NASDAQ:YHOO) agreeing to acquire BrightRoll for $640 million in cash.
Frott argues that the shareholders are pushing for the merger on the fact that Yahoo! Inc. (NASDAQ:YHOO) has gained impressive value over the past few months making it a possible takeout stock.
“Yahoo Shareholders do have a history of being impatient; look at the Terry Semel era. They were mad at Terry because Yahoo! Inc. (NASDAQ:YHOO) wasn’t Google, drummed him out while it turns out in retrospect that a lot of good things are going on. I think they have to be careful not to do that here, “said Mr. Frott
A merger between AOL, Inc. (NYSE:AOL) and Yahoo begun to gain pace in the wake of activist investor Jeffrey Smith’s Starboard Value LP reiterating that such a deal could result in cost saving synergies. CEO, Marissa Mayer has done a stellar job since taking over, seen by the stock more than tripling in value even though the company’s core business has underperformed amidst increased competition from Google Inc. (NASDAQ:GOOG).
Frott acknowledges that the acquisition of BrightRoll could be another important step for Yahoo! Inc. (NASDAQ:YHOO) in the ads segment. A move into programmatic advertising is expected to fuel suggestions of a merger with AOL, Inc. (NYSE:AOL) as the latter specializes in this kind of advertising.
“BrightRoll is big in this area of programmatic video advertising; video is big. I think the question is, is this so commoditized that programmatic video does not have a lot of legs? But Marissa is good at this sought of stuff. The stuff that computers do hasn’t been as good at dealing with people in selling advertising, but computers she is an ace, “said Mr. Frott
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