Quantum Strategies CIO: Yahoo-Twitter Combination Is 'Somewhat Possible'
He said the mostly likely combination would be a deal where the two companies work together, with Twitter finding a way to use Yahoo’s Tumblr for longer posts and Yahoo getting access to Twitter’s data.
“They work together. They feed each other stuff back and forth,” Udall said.
Related Link: SunTrust: Twitter-Yahoo Combo 'Could Make Sense'
Although Yahoo’s market cap is only $46 billion, Udall explained that it has a lot of cash coming because of its investment in Alibaba Group Holding Ltd (NYSE: BABA). He said that Yahoo could easily borrow $10 billion and buy Twitter, but he doesn’t think that’s what Yahoo wants.
Udall pointed out that Microsoft Corporation (NASDAQ: MSFT) would also be a good candidate for a potential deal with Twitter. He explained that Microsoft’s Bing search engine is losing momentum, but would benefit greatly from Twitter’s data.
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