Yahoo Being Broken Into Pieces?

Analysts study the patterns of companies and the ebb and flow of their revenues and developments, and then suggest what should be done. It’s what they do. Recently analysts have said that Yahoo Inc. may be more valuable to shareholders if the company broke its Internet businesses into pieces or did a major overhaul that would include giving up Web search.

It seems impossible to imagine Yahoo doing either, however according to a report in Reuters, analyst at Stanford C. Bernstein Jeffrey Lindsay said that if broken up, Yahoo’s operations could be valued at as much as $39 a share as opposed to the current valuation of $27 a share.

Shares for the company rose 2.4% in pre-marketing trading to $27.80 from a Thursday close on the Nasdaq of $27.15.

Lindsay suggested that the company could even skyrocket to a valuation of $45 a share should they cut the company staff by 25%, restructure its graphic display advertising and outsource its paid search within a major scale overhaul.

Reuters reported on Lindsay’s comments in a research report stating, “It appears that Yahoo will not take bold measures to right the ship. We believe that Yahoo still has a potentially high intrinsic value. We believe, however, that to stop the inevitable slide into irrelevance the management team must consider more radical actions and strategies.”

Yahoo has had a history of struggles that have prevented the company from making an imprint with its main display advertising business. Lindsay attributes this to not effectively capitalizing on the company ad network. Will Jerry Yang be able to save his company from “irrelevance” or will Yahoo slide into the darkness with the other Internet and technology ghosts?