What Yahoo! Inc. (YHOO) Bought With Tumblr Is Team

This demonstrates a second important point, the changing nature of tech investors. They’re younger, hipper, more alive to both the opportunities in the space and what’s required to get them.

Yahoo! unmoored from fundamentals

It’s important for investors to understand that Yahoo! Inc. (NASDAQ:YHOO) has nearly doubled in value over less than a year not because Yahoo! is growing, but because of the strategic direction Mayer has put in place and the continued rise in the value of its investments in Yahoo! Japan and Alibaba. The company is actually smaller, in terms of revenue, than when Mayer took over, and its earnings performance has become far more erratic.

The big concerns for investors should be that this is an all-cash deal. Yahoo! Inc. (NASDAQ:YHOO)’s cash position is now back to where it was in June, before it sold out half its Asian positions. That money is gone, and if Tumblr’s owners decide to take the money and run (money does funny things to people) this could become like water slipping through her fingers.

Thus the extraordinary lengths Mayer is going to make the new team feel comfortable, validated and appreciated. Because they’re what she bought, not the users, and not the site. The team.

Can the team deliver on the bottom line? I think it can. I speculated on Yahoo! Inc. (NASDAQ:YHOO) when Mayer came on board, and I’m staying on board for the ride.

The article What Yahoo! Bought With Tumblr Is Team originally appeared on Fool.com and is written by Dana Blankenhorn.

Dana Blankenhorn owns shares of Yahoo!. The Motley Fool recommends Facebook. The Motley Fool owns shares of Facebook. Dana is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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