The stock market is abuzz this morning with the IPO of Alibaba and as a shareholder of the now public company, Yahoo could have some extra cash available. Given the enormous rise in value the ROI on the investment could be a major assist in making a play on a company like AOL. And for Yahoo, potential synergies of such an acquisition or merger could help both grow.
MarketWatch refers to a note out of BGC Partners seeing upside in such a combination. In terms of original content and video content syndication, economies of scale can help to further improve profit margins. At the same time, television is not going away and those same dollars could be used instead to acquire a cable network and extend its digital expertise across another media platform. A CNN-Yahoo merger perhaps or MSNBC-Yahoo stake? And if not a news network, a general entertainment company like AMC Networks or Scripps might be appealing too. The upsides are tremendous and Yahoo is no doubt considering all its options.