Are YHOO’s Weaknesses Now Its Strengths?
We’ve mentioned YHOO bullishly on the site two times in recent months.
Here, we noted YHOO was likely to grow closer with AAPL over time given the combination of the latter’s disdain for GOOG and flop in Maps on its iPhone 5 release.
Here, we said the following about a variety of tech stocks we analyzed in the post at the time:
“YHOO appears the most attractive – if it merely hit its 23.6% retracement level it’d be a ~$33 stock, or a double from here. You can bet that a big move will result once the break out or down from that flag pattern finishes too!…be looking for entry points in YHOO right now”
With all of the above in mind, there is a story over the weekend noting a potential partnership brewing b/t YHOO and FB in search.
The irony to us is that YHOO’s failure to-date vs. others on the web might actually be its strength now – the relationships b/t tech’s global behemoths (i.e,. AAPL, MSFT, GOOG, FB, etc.) are increasingly resulting in turf wars as each business, where once highly focused and specialized, starts to overlap with the business of the others.
In effect, YHOO’s irrelevancy in tech leaves it in a special situation vs. these other companies – above the tenuous relationship fray.
This leaves Marissa Mayer in a unique position to exploit the fact that search remains a gateway and anchor of sorts for the web and is something players like AAPL or FB, who lack properties or presence in the space, might increasingly need to be a part of in the future.
To us, the latter fundamental realities make the long-term technical break-out from the flag pattern in the chart below all the more interesting.