Wall Street Looking To Continue Its Buy 'Em Up Then Break 'Em Up Strategy With Yahoo?

from the next! dept

Fri, Oct 5th 2007 4:09pm — Mike Masnick

In the past, we've joked about Wall Street's amazing ability to convince companies that they need to acquire each other and merge to bring out "synergies" and then convince those same firms to later break themselves up into separate companies to "release shareholder value." It's all part of the shell game, where the investment bankers on Wall Street get to take out their huge fees whether a company is being built up or broken apart. It looks like the latest such target may be Yahoo, as an analyst at Sanford Bernstein has kicked off the discussion by noting that the company could release shareholder value by breaking itself up into three companies. Which companies? Well, it would want to split up the search and the advertising parts of the business... you know, the same parts of the business that folks convinced Yahoo it needed to buy four years ago if it was going to successfully take on Google. Now, of course, the only way for it to successfully take on Google is to get rid of those businesses. Luckily, the folks on Wall Street will happily help with both ends of the transaction for a ~~small~~ significant fee. Sometimes I think I'm in the wrong business.

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Filed Under: acquistions, investment banks, mergers, spinoffs, wall street
Companies: sanford bernstein, yahoo

5 Comments

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Peters, 5 Oct 2007 @ 9:28pm

You hit the nail on the head. Not only are these endless mergers and split-ups useless for anyone except investment bankers, they are soul-destroying for companies and their employees. First, a series of rapid-fire acquisitions, with no thought about cultural fit, long term retention of acquired employees and so on. Then when most such acquisitions (predictably) fail to generate value, go through lay-offs, spin-offs and so on, further destroying morale.

Yahoo is a poster-child for such company abuse. They are acquiring approximately one company a month now, and most of them make no sense at all to me. Example: what the f**k do Yahoo Mail guys do for work, if they need Zimbra now? what the f**k do their own advertising teams do if they need a Blue Lithium - this is not to say those other companies are bad, just to point out that Yahoo has employees whose job was supposed to be to keep ahead in each of these areas.
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Lucretious, 6 Oct 2007 @ 4:21am

I blame "International Bankers".
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internet-income-business-opportunity.blogspot.com, 7 Oct 2007 @ 9:45am

Wall Street Looking To Continue Its Buy 'Em Up The
I am so sad about what has been happening at Yahoo recently, a company that used to be the darling of the internet world. They have grown too rich and lazy. I don't think breaking it will help, instead it could help speed up its complete demise. What I suggest is retirement of all old staff, complete re-shuffling of all the staff and to bring in new and fresh blood.
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- JustMatt, 8 Oct 2007 @ 8:04am
  
  Re: Wall Street Looking To Continue Its Buy 'Em Up
  "retirement of all old staff" Age Discrimination I tells ya!
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