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Yahoo! Inc. (YHOO)’s Marriage Proposal Might Breath Some Life Into the Company

Yahoo! Inc. (NASDAQ:YHOO)‘s CEO Marissa Mayer must have breathed a sigh of relief as the knight in shining armour, Starboard Value appeared with a marriage proposal involving AOL, Inc.(NYSE:AOL). CNBC‘s Kate Rogers reported that Yahoo! Inc. (NASDAQ:YHOO) will not just sit on the proposal and looks forward to discuss it with none other than Starboard Value themselves.

Yahoo! Inc. (NASDAQ:YHOO)

“[…] Marissa Mayer, Yahoo! Inc. (NASDAQ:YHOO)’s CEO did acknowledge that the company did receive a letter from Starboard Value, the activist investor, which called on yahoo today to pursue a combination with AOL, Inc.(NYSE:AOL), highlighting what they call significant shareholder value creation, so Marissa Mayer acknowledging that she did receive the letter and they looked forward to reviewing it with Starboard […],” said Rogers.

It’s been a long ride for Yahoo! Inc. (NASDAQ:YHOO), the summary of which can also be seen in the company’s topsy turvy stock chart for this month. In short, the company’s stock price has been declining after  Alibaba Group Holding Ltd (NYSE:BABA)’s IPO and investors have been keeping their beady eye on Marissa Mayer to see what she does from the proceeds from its investment in Alibaba.

Some investors have been least impressed by Mayer’s management track record and if there is anything that they were hopeful about was that Mayer will make a less than satisfactory acquisition play yet again. Yahoo! Inc. (NASDAQ:YHOO) might be saved form that considering most of Mayer’s work has been done by Starboard Value which they presented in a letter addressed to the company’s CEO and board of directors after acquiring significant shares of Yahoo! Inc. (NASDAQ:YHOO).

Yahoo! Inc. (NASDAQ:YHOO)’s stock price spiked from around $39 to $40.6, an increase of about 4% when the news of the letter hit the markets. However, there are still concerns of how successful the merger of these two ageing tech companies will be. Certainly, both companies will be able to benefit from reduced costs as both business models are very similar, but in terms of revenue growth the issue is still undecided.

Disclosure: none

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