Why is Yahoo stock holding up so well?

In the immediate aftermath of the retreat of Microsoft Corp in its several-months-long effort to acquire Yahoo! Inc, the Sunnyvale-based company’s stock lost 15 percent of its value, which raised speculation in the business-news media that dissident shareholders will mount an offensive to oust the company’s current Board of Directors as a punishment for not accepting a deal with Microsoft. In a company statement issued on Saturday, it was obvious that Yahoo Chairman Roy Bostock remained unrepentant with regard to the position that the company’s Directors staked out in response to Microsoft’s bid. From the beginning of this process, our independent board and our management have been steadfast in our belief that Microsoft's offer undervalued the company and we are pleased that so many of our shareholders joined us in expressing that view,” Mr. Bostock said in the company’s statement. “Yahoo! is profitable, growing, and executing well on its strategic plan to capture the large opportunities in the relatively young online advertising market,” he added. Yet the company’s shareholders could remain skeptical over whether its Directors acted in their best interest. Indeed, many of the shareholders may even be irate over what many could see as the company passing up a good offer from Microsoft, especially after the Redmond company increased its bid during the later stages of negotiations. This dissatisfaction could cause many of Yahoo’s shareholders to attempt the ouster of its Directors.

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Could this be much ado about nothing? I mean is the combined company really going to be able to compete with Google any better than each has on its own? Google's market share for Web search in the U.S. rose in February to 58.7 percent, up from January and the same period a year ago, while Yahoo's, at 17.6 percent, was down compared with the same periods. Microsoft's MSN was 11.2 percent. Together, Yahoo and Microsoft only have half of Google's share in the space.

http://brickfinancial.com/blog-mt1/mt-tb.fcgi/46

http://www.brickfinancial.com/thethirdpig/archive/2008/05/yahoo_playing_hard_to_get.html

Google's present position as the market leader has only gotten more solidified over the years. Just over two years ago (August '05), Google only had a share of 37%, while Yahoo and Microsoft together had 45% of the market. Google is in a prime position no matter the outcome of the Yahoo/Microsoft merger. When "Google" ceases in being a verb, then its time to worry.