Shares have slipped well below Microsoft's buyout price, and that presents a great opportunity for investorsThe Street has turned against Yahoo (YHOO) since Microsoft's May 4 announcement that it would walk away from its proposal to buy the Internet giant. Don't let that mislead you. Yahoo is more attractive now than ever, especially in terms of its stock valuation. And it isn't necessarily the end of Microsoft's desire to rope in Yahoo, or Yahoo's desire to be roped. Yahoo co-founder and Chief Executive Officer Jerry Yang has said in plain words that he is still open to a deal with Microsoft.
In the meantime, certain catalysts could heat up Yahoo's stock: Yahoo may do a deal with Google (GOOG) or with Time Warner's (TWX) AOL, it could take more aggressive moves to entice Rupert Murdoch, chairman and CEO of News Corp. (NWS) to take another look, and—likeliest of all —Microsoft could come back with an offer that pleases both sides.
Larry Haverty, portfolio manager at Gabelli Global Multimedia Trust, which owns shares in both Yahoo and News Corp., is sure that a Yahoo-Microsoft deal will ultimately get done. He believes it is the only way the two companies could compete with Google in the huge online advertising market.
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