Jim Cramer proposing on CNBC's Mad Money that Yahoo! (NASDAQ: YHOO) and eBay (NASDAQ: EBAY) should get together and merge. He is calling for this because the growth is slowing for both companies, and a merger could jump start it. Cramer contends that companies with slower growth have to do something to get their sizzle back. Cramer said that Microsoft (NASDAQ: MSFT) was reportedly in talks to buy Yahoo! and that the aQuantive (NASDAQ: AQNT) buyout signals it is willing to do deals. If these companies had better areas to invest in they wouldn't be propping shares up with buybacks. A merger would allow Yahoo!'s massive users to use Skype and PayPal to buy goods. Cramer thinks this would bring back growth, and would finally get Semel out of Yahoo!
This is just after Yahoo!'s chief technology officer bailed out of the company today. As Cramer is long Yahoo! in his charitable trust and as he's been touting ideas for something like this, this "call to merge" is hardly a surprise to me or to others. The market caps are very similar, although eBay is the larger company. You should know that if you are playing these stocks based only on Cramer's comments, then know that you are buying what is probably his third or fourth round of recommendations calling for this. This is the first time he made an entire segment on this would-be merger, but this is best defined as "re-information."
Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.
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Reader Comments (Page 1 of 1)
5-31-2007 @ 1:08PM
Randy Smythe said...
Meg Whitman told analysts in March that she didn't see a need to do a deal with Yahoo but we've heard that before. The two companies have been working closely with each other over the last several years and the combined company would be a much stronger competitor for Google. Besides the two companies have a similar corporate culture and this move would be much easier to accomplish then a Yahoo Microsoft deal.
From an online sellers perspective, I don't like the idea of eBay's management running the combined company. At least not the marketplace management team.
It certainly makes since from an investors standpoint though.
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6-01-2007 @ 10:50AM
ayamore said...
You are so right, lol! The eBay team would only run the whole union into the ground.
eBay has lost it's luster for investors. Meg is a name when even heard by investors, tend to make her investors vomit!
Warren Buffet dropped this stock like a ton of bricks a few weeks ago. Other big time fund managers also dropped this stock. More will follow. The writing is on the wall. Cramer can see it coming, lol....CRASH....
6-01-2007 @ 12:10PM
omninews said...
Ebay has potential synergies with Yahoo or Google. I think the Skype division will be resold to one of the major telcoms at a nice premium. Also, PayPal is going to be a compelling target for banks
and S&Ls soon. I think either of these sells are equally as likely as a Yahoo or Google purchase in the next year.
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6-03-2007 @ 9:01AM
Steve said...
I think the Google / Ebay mergr would be a great one.
The reality is, google would be feeding ebay, an astonishing amount of traffic.
It has also become clear that people are using their ebaystores to send traffic to Google Base.
http://www.imitrust.com