Yahoo!’s (NASDAQ: YHOO) assets in Asia, a piece of Yahoo Japan and one of China’s Alibaba, are valued at about $11 billion by most analysts. The board and management of Yahoo! should be making the case that they are worth much, much more than that.
As The Wall Street Journal points out, the relationships that Yahoo! has built in Asia put it ahead of companies like Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOG). That should give Yahoo!’s holdings in the region a value that is beyond their appraised number. As WSJ.com points out "While the online advertising market is experiencing solid growth in the U.S., companies that stake out major positions in Asia stand to reap greater rewards."
The information shows, once again, that Yahoo! management is being passive in promoting the value of the company. While stating the Microsoft’s bid is too low. the big portal company has not made any specific case as to why that is true.
Yahoo! may not be able to avoid a buy-out from Microsoft. No competing bids have appeared and merger talks with other companies have no yielded fruit. But, Yahoo! is doing real harm to its shareholders by not "talking up" the value of the company by showing Wall St. a road-map that gets to the valuation of $40 which the board has put on the company.
Yahoo!’s Asia holdings are a perfect opportunity for the company to mount the bully pulpit and argue that Microsoft’s bid is too low. Someone at the firm needs to show they have the guts to speak up.
Douglas A. McIntyre