The public battle of the search engines is about to begin, and YHOO is already revving its engines. It will be noteworthy to discover who will actually own Google once the dust settles but Google’s highly touted pre-IPO is causing a stir among investment banking firms as to how much (not who will) will be generated from the IPO. But the stock will be a hot commodity not only in the public eyes, but also for looming acquirers such as Microsoft.
Google's had some setbacks, running into a legislative wall in California on their gmail prospect, pressure to expand overseas, and improve the search demographic while still optimizing ad revenues.
IMO, YHOO is preparing for a strong run with Google. It is profitable, has a proven track record as a public company, and leads Google in terms of business segments and revenue diversity. YHOO also has a broader market width with global reach in niche markets. This translates to the potential for a solid run, chasing Google’s IPO.
Some if’s:
If Google’s IPO lives up to the hype of becoming the biggest IPO, taking off like in the days of Netscape, then YHOO will run too and the internet bubble could return.
If Google raises $25-30 bil in capital, it would be close to YHOO’s cap, which in turn could result in YHOO’s stock becoming more volatile influenced by an overall volatile sector.
If YHOO splits its stock before Google’s IPO (highly likely), YHOO will make a very solid run (97.3% confidence based on historical scenarios).
If Google, fundamentally, has the goods to become the market leader, then the institutional holdings will be tremendous, BEFORE the public gets any hands on the shares, and taking into consideration the current regulatory environment on IPO’s that are much more strict than the 90’s.
Last year, Google said they might execute an IPO. Didn’t happen. This year, they said they would probably proceed with the IPO. No date set. Microsoft still rolling over the prospect of buying Google. Why all the speculation and hype? Besides management, wall street knows. It starts as an institutional offering, then a top tier fund offering, then a mid-tier investment offering, and eventually funnels into the public domain. Big $$$$. By the time John Q. Public gets to buy, he’ll be looking at inflated, bloated stock. But for John Q. Public, ESQ, he could find the sell short opportunity of the year if he chooses his timing and entry point wisely.
Bottom line, if you are considering taking a long or mid-term position in the mad-dash search engine race, consider the prospect of YHOO as the stock the public often overlooks right before a pre-internet bubble ignition on an IPO run. YHOO shares are available now…and the public will be scrambling to get shares of Google to no avail until they find YHOO shares running too.
IMO, the key here is that once the green flag is up: YHOO’s public and Google’s institutional will be in the race of the year.
