SHU Site Availability

[Dmarque]

Yahoo’s stock in Ali Baba is worth $14 billion.   Yahoo also owns 35% of Yahoo Japan. This is a joint venture with a Japanese company called Softbank. Together, they own and operate Japan’s biggest internet site called Yahoo Japan. Yahoo Japan trades on the Tokyo Stock Exchange.   Yahoo’s stake in Yahoo Japan is worth about $4 billion.   At the end of 2011, Yahoo had more than $2 billion in cash in its accounts...And it has no debt.   Here is what the value inside the Yahoo house adds up to:

$14 billion for its ownership in Ali Baba 
$4 billion for its ownership in Yahoo Japan 
$2 billion in cash 

So, Yahoo is worth $20 billion. Right now, the stock market values Yahoo at $19 billion. Just take a good look at that. Here is a company the stock market says is worth $19 billion. But the hidden value inside Yahoo is actually worth $20 billion.

I still havent mentioned Yahoos's main U.S. business, Yahoo.com. You're getting that, too...in addition to the $20 billion I've already mentioned. In other words, Apple will get Yahoo for free plus $20 billion in cash; all for $19 billion (assuming, that it could buy at Yahoo's current share price).

So how much is Yahoo.com worth? Yahoo is Still a Powerhouse. As I said, the stock market is currently valuing Yahoo at $19 billion. Now, to be fair, Yahoo's internet business has struggled for a few years. Competitors like Facebook and Google have taken market shares from Yahoo. Despite that, Yahoo is still the second-largest internet media company in the world. Yahoo has over 700 million users worldwide. Yahoo reaches 86% of all Americans through its websites. Its internet sites are viewed by 178 million unique users monthly. Its email service is used by 70 million people globally. It;s the No. 2 online display advertising company in the world. Yahoo's mission was best described by its first CEO Tim Koogle To ffulfill peoples need to find and get connected to the information that matters to them. That's still Yahoo's mission today.

I use Yahoo Finance every day. It is still the top financial website in the world. So, like Apple, Yahoo has a very loyal customer base.     Online display advertising pays for all those services people love. For example, on the Yahoo Finance pages that I frequent, I see advertisements for brokers like E*Trade, Ameritrade, or Options Express. Yahoo receives money for displaying those ads. Some advertisers pay Yahoo more if their ads are clicked.

Apple is renowned for its high standards. It won’t go near anything that it considers to be below its standards. But Yahoo’s widgets passed the test. Every computer that Apple ships contains a “dashboard” that features these little programs. In fact, it’s the only non-Apple software Apple installs in its computers.
 
Also, Yahoo was the first company to create email apps for the iPad and the iPhone. In his keynote speech introducing the iPad, Steve Jobs specifically mentioned Yahoo Mail as the best email app.
 
In 2011, Yahoo generated $2.2 billion in revenue through online display advertising!! The global market of online display advertising is valued at $25 billion. Industry analysts estimate that this market is growing 20% a year worldwide.

Yahoo also sells ads that show up when you search for something online. When someone clicks on an ad that Yahoo displays, Yahoo makes money. Yahoo generated $1.9 billion in this business, in partnership with Microsoft. In this partnership, Microsoft makes the search technology and Yahoo brings in the customers. Yahoo has so many customers, that Microsoft is willing to pay $400 million a year to get access to them. For Yahoo, that is free money! That $400 million a year comes in with no effort from Yahoo.

Cash flow is the best way to measure the strength of an internet business. Yahoo’s businesses are cash-flow monsters. In 2011, Yahoo generated $1.3 billion in operating cash flow. Cash flow like that allows Yahoo to buy back stock. When companies buy back their stock, it acts like a dividend for its investors. Over the last two years, that added dividend has amounted to nearly $3 billion, or 15%, based on the current value of the company. Yahoo’s cash flow also enables it to be entirely debt free.

Now, I did say that Yahoo has struggled to keep up with Facebook and Google recently. But Yahoo is innovating and looking to grow by introducing new products for the iPad and iPhone. That’s why Wall Street analysts are only estimating sales growth of 4% and earnings growth per share of 13%. But Wall Street analysts are not crediting Yahoo for a very special app called IntoNow, which has extraordinary potential.     Yahoo has an app called IntoNow that syncs to a television. It can listen to the television show you are watching and tell you information about it (like the specific episode). Then, it shares the information with your friends, allowing people to share and discuss different programs. Time magazine say IntoNow is the best smartphone app of 2011. IntoNow was awarded the “Most Significant Technology, platform or product” award by TV of Tomorrow, for the most innovative technology product of 2011. Apple stores’ Rewind publication says IntoNow is the best social networking iPad app of 2011. MG Siegeler, writing for the influential tech blog Tech Crunch, said he was amazed and dumbfounded when he used it.   An app like IntoNow has the potential to jump-start sales and earnings growth at Yahoo. Share price and value will jump soon after.

Personally, I'm of the view that IntoNow is a transformational technology. It’s similar to other new transformational technologies that led to huge gains. These include personal investments, such as investing in Google at its IPO at $85, buying shares of Netflix at $25, and Apple. Now, I didn’t always hold these companies for maximum gains, but if you held them to their peaks...you'd have gains of 788% for Google, 1,100% for Netflix, and 537% for Apple. When it comes to investing, it's not enough to simply identify the next big thing. You must identify it when the world is not expecting it to be the next big thing.

So, when the world figures it out.....big gains! Yahoo's IntoNow has all the elements to be a transformational technology. Its easy to use. IntoNow is going be used by households alongside their TVs. TVs are a huge market because Americans watch about 3.5 hours of TV a day. That’s 1,278 hours per year. But it’s not just Americans who love TV. Worldwide, people watch about 3 hours and 12 minutes of TV each day. That’s why TV advertising is a $420 billion global market. IntoNow will allow Yahoo to tap into this huge market.

Before he died, Steve Jobs said that Apple had figured out to how to build a TV that was easier to use, and could directly connect to our music and video files on our computers. “It would be seamlessly synced with all of your devices...It will have the simplest user interface you could imagine.”   Yahoo’s IntoNow fits that description exactly. It seamlessly syncs your TV to your smartphone or tablet computer. Once you’re connected, IntoNow can act like a remote control to your TV and all your music, videos, and information that you use on your devices to connect you to the internet. The only part missing is the connection between the person and the TV. That’s the part that Yahoo is an expert at through its IntoNow app. Apple is looking for the key to unleash its Apple TV........Yahoo is it.

Mayer isn't a factor here. She is merely a passenger on a boat that is being dragged to dock by a Tugboat.