If I asked you what Google is, you would say; a search engine. If I asked you about Apple, Twitter or Facebook, I assume you know what it is. But what if I ask you what Yahoo! Is? What is it? A site with different things?
You know what ebay is, and you know what PayPal is, and after years saying they`re better together, they are splitting up. I think that is a smart thing to do, and people shouldn`t worry, because both companies have so far been a part of people`s life since they`re first day.
Elon Musk sold PayPal to eBay in 2003 and it was a great match. It became easy for people to process payments for eBay sales. This split is all about growth. You can imagine what PayPal can do in the digital wallet business if they don`t have to worry about eBay?
Right now you feel like you must have a PayPal account to shop on eBay, but you don`t. And here is the key. Later on this month, Apple will launch the new Apple Pay, and that will crash with eBay and PayPal`s mirrage. The mirrage is now over, and it`s a tricky divorce.
Now, people can pay a dozen different ways, like Apple Pay, Bitcoin or PayPal and so on. That`s fair. It`s up to the people to make a choice. It depends on where they have an account. I think many will sign up for the new Apple Pay system. They will revolutionize the digital business, and probably have a monopoly in the market, but what about Yahoo? What are they doing? What is it?
Yahoo! is not expanding. They are going in the opposite direction. They closed Yahoo Education yesterday, because, as they say, it is outside of their core experience. In addition; Users`needs are already well served by alternative online resources.
They will also shut down the Qwiki app, which automatically created short movies based on events from a user`s camera roll. They will shut down the app on November 1, but the Qwiki team will continue to innovate on a new digital media experience for Yahoo users.
Yahoo started about twenty years ago as a directory of websites that helped users explore the internet. They are still committed to connecting users with the information they`re passionate about, and their business has evolved and at the end of the year (December 31, 2014), they will retire the Yahoo Directory.
Yahoo still owns about 16% of Alibaba and Yahoo`s market cap is $40,3 billion, but the value can approach about $46 bilion. Their core business are generating only about $700 million.
The cash made by the Alibaba IPO are more worth than the company`s current market capitalization, and the company could be fairly priced with a multiplier of only 5.
The stock can move from here, and the pressure to merge with AOL has pumped the stock. I don`t think people will jump into this stock before they know more about what direction it will move. Yahoo moved up +0,57% yesterday. Price; $40,75.
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