There's lots of discussion of what Yahoo! should do with the proceeds of the Alibaba sale. Some are calling for a dividend (boring), while Josh suggests a bold move would be to buy a controlling stake in Twitter.
And while the core advertising business continues to drag, I don't see any simple deals that would really reverse that. So, while Yahoo should continue to make small, strategic technology deals, I'd look elsewhere for the big deals.
Yahoo still has a huge footprint in both Finance and Sports, so why not double-down on those? And two important, emerging opportunities for Yahoo come in Video and Mobile, so those need attention as well.
Assuming Yahoo has $10 Billion to go shopping with, who should they buy?
In the Finance space, there are a number of interesting content plays that could reenergize their Finance pages and give them some unique content. Stocktwits, the online community for active traders, provides the best insights into financial events as they happen. Just watch the StockTwits page for a tech company during their earning release and you’ll see what I mean. Estimize, who crowdsource earnings estimates, M&A rumors and now economic data, could provide an innovative reason to visit Yahoo pages. TheStreet.com has been rapidly building their video content and would be an attractive fit, provided they could convince Cramer to stay on board for a few years. Yahoo could probably acquire those three companies for around $350mm.
While ESPN has now surpassed Yahoo Sports in traffic (according to ComScore), Yahoo is a close second. It may not be ideal timing, but if I were Marissa, I’d give Jim Bankoff at Vox Media a call. While the new Ezra Klein-led Vox.com may not be a great fit, SB Nation would be a great addition, while Curbed could open up some new opportunities. If they couldn’t get SB Nation, I’d see if I could pry Deadspin from Gawker and would also take a look at Bill Simmons’ long form site Grantland. I might also look to pick up either Narrative Science or Automated Insights, both of which offer technology which automates short editorial articles from statistics. Yahoo already uses Automated Insights for personalized summaries of fantasy sports results, but could expand its use across multiple verticals.
Video is a big area of focus for Yahoo, and one where they’ve had success, though the numbers aren’t yet big enough to move the needle. If I were Yahoo, I’d look at Funny Or Die, or perhaps see if IAC might part with CollegeHumor.com in order to drive short-form video and bring more of an edginess to their offerings.
That leaves mobile and social. There’s a lot of interesting activity there. I think the valuations for SnapChat are too high, and I could see it going downhill after an acquisition, but maybe Yahoo could make a play for Whisper or Secret. And, of course, a content site like Buzzfeed or Distractify could drive a lot of social engagement on mobile and the desktop.
If you were Marissa, what would you do with that pile of cash?