Moffett Skeptical of Verizon/Yahoo Deal
Craig Moffett, analyst at MoffettNathanson, said Verizon paid what could be a very steep price for Yahoo, $4.8 billion (see 1607250016), which could be closer to $5.9 billion after accounting for restricted stock units, he said. Meanwhile, Yahoo’s core revenue…
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is declining by an “alarming” 11 percent per year, he said. “Finding synergies in the words behind the combination of Yahoo with AOL and Verizon is easy: Yahoo brings content,” Moffett said in a Tuesday research note. “AOL brings advertising technology (and some additional content). Verizon brings user data. Verizon is hoping that one plus one plus one equals … well, if not four, then at least three and a half. The strategy is to make Yahoo’s advertising inventory worth more -- perhaps dramatically more -- by enhancing it with location-based data about wireless users and selling it more efficiently and effectively using AOL’s ad tech and ad sales force.” The words tell “a good story,” but the numbers behind the deal might not, he said.