Business Insider Research Morning Call 9/12/11

Yahoo Could realise The Value Of Its Asian Assets Through A Tracking Stock
Even as Yahoo is reviewing pitches for a potential sale/breakup of the company and Alibaba Group’s Chairman Jack Ma discounted his role in CEO Bartz’s departure, (the two had battled frequently in recent months over Yahoo’s 40% ownership stake) the fact remains that figuring out how to unlock the value in Yahoo’s Asian asets remains the biggest hurdle to any deal.  “That’s what continues to be the biggest debate,” notes one Yahoo insider. “Yes Yahoo has these great Asian assets, but they don’t do us any good anymore.” Among the options Yahoo is exploring is the establishment of a tracking stock(s) that would attempt to mirror the value of the underlying Asian assets. “There’s simply no way to spin off the Asian assets tax free,” said the Yahoo veteran. “However, there are ‘non-ideal’ ways to realise the value of those assets. Think tracking stock–and yes, we all know how screwy those are.”

Does Groupon Negatively Affect A Local Merchant’s Ratings?
A new study suggests they do, noting that a Groupon deal is associated with lower Yelp ratings. We’re sceptical however: this might be due to adverse selection, namely the fact that most people who write reviews tend to be highly positive or negative. A few bad experiences might therefore negatively drive ratings, but it might not mean that consumers overall are dissatisfied. 

Groupon grew revenue 13% in August, gained 2% marketshare. This is according to a report by Yipit, probably the best observers of the daily deals space. A shakeout is coming to the daily deals space and if Groupon can be disciplined about cash it should be a big winner.

Amazon is working on a Netflix-like service for e-books. It’s a smart idea: pay a fixed monthly fee, get access to a bunch of books. Obviously publishers aren’t going to like it because it commoditizes their business further. One market where this could be huge, though: textbooks. Digital textbooks are the wave of the future, the question is to know when and how it’s going to happen. Amazon’s cheap media tablet combined with a service like that could be a must-have back-to-school device.

AT&T issues its first filing in its fight against the Feds who want to block its T-Mobile merger. They’re aggressive and sticking to their guns, saying (somewhat implausibly) the deal would promote competition. As we wrote previously, this is a fight to the end for AT&T: the deal must go through for them because of how huge their breakup clauses are.

AOL’s “Project Devil” ad format is struggling to gain traction. Project Devil is a sliver lining of AOL’s sad story: the idea is to replace a bunch of small ads on a content page with one, huge ad. But the problem, from buyers’ perspective, is that even though they like the product, it’s not live on enough properties to justify the investment. Devil needs to be on more properties so Devil ads will have enough reach to satisfy advertisers.

Ad spending is slowing down with the economy. We previously wrote about this here →

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