A stark reality check
At $24.09, Thursday’s closing price, Yahoo has a market capitalization of $32 billion. When Mr. Lindsay looks at the company’s $2 billion in cash, along with its holdings in Yahoo Japan, Alibaba (the Chinese e-commerce firm) and other entities it doesn’t run, he comes up with a value of $13.24 a share. That leaves a value of $10.51 a share for the actual business of Yahoo, making the value of Yahoo’s core business about $14 billion, or 7 percent of Google’s $200 billion market value.
Mr. Lindsay runs through a litany of problems with Yahoo’s core business that reduce its value in his calculations. The company’s overall audience is stagnant and its share of Web searches is falling. And it is losing lucrative revenue from providing e-mail and other services to phone company broadband systems.