Filed under: Deals, Competitive strategy, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), China, Japan
Yahoo! (NASDAQ: YHOO) may have a superior foothold in Asia than any other big internet company. This is driven by its holdings in Yahoo! Japan and Chinese e-commerce company Alibaba. According to The Wall Street Journal, “Depending on how their value is calculated, the stakes account for $9 billion to $14 billion of Yahoo’s value.”
The valuations are old news. What is not so old is that it is dawning on Microsoft (NASDAQ: MSFT) that having Asian allies might help the company fight off Google (NASDAQ: GOOG) in the fast-growing markets of the Far East. It is something that the world’s largest software company does not have now.
The Yahoo! board has a one-of-a-kind chance to speak the strategic value of these holding up with shareholders in public and with Microsoft in private. The prevailing wisdom is that Yahoo! has no alternate other than to sell to Redmond, and that the price is the issue. Yahoo! management should be saying that the Microsoft bid does not take into account the value of having powerful partners in Japan and China and that these are worth several more dollars a share.
It is an argument that has the benefit of being true.
Douglas A. McIntyre is an editor at 27wallst.com.
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