Cut-Yahoo-In-Half Analyst: Good Point, Bad Idea

Doug McIntryre at 24/7 Wall St runs some numbers on Yahoo and observes that the company’s US business is moribund while international is still chugging along.  For those concerned about Yahoo’s Q3 (as we are), this is important to remember: Yahoo!’s US revenue could be “flat,” as a source recently suggested, but international growth could still allow the company to make the low end of its projected Q3 range.

McIntyre also accurately points out that Yahoo’s off-balance-sheet assets are worth a lot–$6 a share at last count–which means that the business itself is quite reasonably valued.  We believe this is one reason why president Sue Decker bought 47,000 shares on the open market in mid-August.

However, the answer to McIntyre’s rhetorical question–should Yahoo should pump up shareholder value by splitting the company in two (international and US)?–is a resounding “No.”  These aren’t two different businesses–they are the same business replicated worldwide.  They leverage the same technology resources, R&D, etc.  And along with Google and perhaps one or two other Internet behemoths, they offer advertisers what no other media company on the planet can: global reach. 

See Also:
Is Yahoo! Better Off As Two Companies?  (24/7 Wall St)
Industry Source: Yahoo Big Q3 Miss
What Sue Decker Sees in Yahoo