Wall Street, stunned by the $150
billion merger of America Online Inc. (AOL.N) and media empire
Time Warner Inc. (TWX.N), wrestled Tuesday with the question of
what corporate mega-deal could be next.
|Yahoo! founders David Filo, left, and Jerry Yang, right, hold up a fish prop in Filo's office in Santa Clara, Calif. that was used in a recent Yahoo! television advertisement.
And the swirl of speculation about possible mergers between
high-flying Internet companies and old-line media companies
centered on one player Yahoo! Inc. (YHOO.O), the fast-growing
network of Web sites.
"Yahoo! is sitting in the driver's seat," said Carolyn
Trabuco, an analyst with First Union Securities. "I think
Yahoo! can do any deal that it wants to do."
Other market buzz featured a host of more big names that
could be struggling for a place in the market in the wake of
Time Warner's takeover Monday by AOL, the No. 1 Internet service
The Walt Disney Co. (DIS.N), the No. 2 entertainment
company, with its Go.com (GO.N) Web unit, theme parks and movie
Seagram Co. Ltd. (VO.TO) (VO.N), the world's biggest
music company and owner of Universal Studios;
CBS Corp. (CBS.N), the broadcasting company in the middle
of a $47 billion merger with Viacom Inc. (VIA.N), the owner of
MTV, Paramount Pictures and other entertainment properties, in a
$37 billion deal;
MindSpring Enterprises Inc. (MSPG.O), the No. 2 U.S. Web
service provider after America Online.
General Electric Co.'s (GE.N) NBC television network and
Japan's Sony Corp. (SNE.N)(6758.T), the consumer electronics
giant and music company and owner of Columbia Pictures, also
were part of the mix.
David Kathman, a Morningstar analyst in Chicago, said Yahoo!
was a natural choice since the company had the most popular
network of Web sites. It also has a highly valued stock that it
can use as merger currency.
"There are just all kinds of possibilities," he said. For
example, Kathman said Yahoo!, based in Santa Clara, Calif.,
might try to snap up MindSpring as a way to break into the Web
A Yahoo! spokesman was not immediately available to comment
on the speculation.
Peter Kreisky, vice president of Mercer Management in
Lexington, Mass., called Yahoo! a "very desirable target" as
other companies looked around for deals to rival the AOL-Time
However, he added, "AOL proved there was only room for one
mass media/Internet company. (This deal) wipes out aspiring
First Union's Trabuco said Yahoo! prized its independence
and lacked a "deal shop" corporate atmosphere.
"I think Yahoo! goes it alone for the near term the next
year, 18 months," she said. "There is a lot Yahoo! can do on
Shares of Yahoo!, which also will report fourth quarter
results Tuesday after the market closes, were off 29-1/16 at 407
in early afternoon.