Seeking Alpha
Long only, medium-term horizon, tech, solar
Profile| Send Message|
( followers)  

While new Yahoo (NASDAQ:YHOO) CEO Marissa Mayer is known for building teams of technologists, reporters who look at the company keep expecting her to build a media company.

Exhibit A is TheStreet.Com. Yahoo may become Google Junior, reads the headline. But Mayer should buy Oprah, says the story.

Shares are down on reports Mayer won't give shareholders back the money from its sale of Alibaba as part of a general operations review she's now taking on. Sad speculators, who want the cash, say she's planning a kitchen remodel on a house that needs a new foundation.

I don't think so. But that $4.2 billion could bring in a whole herd of hot new apps. It's enough money to buy Craigslist. It's enough to buy Github. It's enough to buy Kickstarter. It's more than the current valuation of RIMM (RIMM). It's a lot of money.

More important, it's enough to hire literally thousands of programmers, from Google and elsewhere, who might build something that doesn't exist now.

There are lots of great things that don't exist now. A great app incubator - a single source for developing apps on multiple platforms, finding them, and monetizing them - does not exist now. Systems for giving small businesses access to cloud resources don't really exist now. A Kickstarter that can actually sell stock and build companies does not exist now.

Mayer oversaw some projects that failed at Google. I seem to recall her being at Google Health when that launched. But a good tech executive is not afraid of failures like that. Launch 100 projects at $42 million each, she probably figures, and you're bound to come up with 10 that, taken together, are worth a lot more than $4.2 billion.

If you're thinking of buying YHOO today, in other words, you're buying a share of Marissa Mayer. You're buying her savvy, her contacts, her ability to nurture and build teams of technologists. You're not buying a cash machine, and you're not buying a media company.

Only buy if tech is what interests you. At $15/share or lower, it interests me as a speculation. I'd love to see what a great tech executive can do with $4.2 billion, and frankly $1,500 for 100 shares is popcorn money.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: As indicated I may buy some YHOO next week. But not today.

Source: Expect Mayer To Make Yahoo A Tech Company