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Thursday, October 12, 2006

Comments

Yaser Anwar

Michael your spot on!

Yahoo is facing so much media pressure to do a deal that like you I'm worried. Google has a lofty stock & 10 bn in cash whereas Yahoo just has a 34bn market cap and not nearly as much cash.

An overpriced acquisition would lead to a disaster for Yahoo coupled with the recent problems it has been facing with Panorama search delay & not to mention loosing ground in the search business.

Yahoo has operating margins of just 17-8% whereas GOOG has around 34%, the Facebook acquisition could help it bolster the earnings but 1 has to keep in mind Facebook's deal with MSFT for advertising.

I hope Yahoo doesn't give into the pressure & figures out a way to calm the media & investors.

Justin Smith

Michael,

Facebook may have more leverage with the way their numbers have been looking in the last month. If you're interested, I wrote about that this morning at Inside Facebook.

-Justin

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