Market Overview

Is the End of Web 1.0 Around the Corner?


Over the weekend, we learned that Alibaba CEO Jack Ma had expressed his interest in buying Yahoo (NASDAQ: YHOO), as Yahoo owns 39% of the Chinese Internet company.

Today, we got a report that Silver Lake, Alibaba Group, and Russia's Digital Sky Technologies are in serious talks about a potential joint bid for the Sunnyvale, Calif.-based company. The report first originally appeared in Bloomberg. AllThingsD had initially mentioned Silver Lake, Digital Sky and Alibaba as potential bidders for Yahoo.

The trio supposedly first contacted Yahoo to talk about the deal. So far no offer price has surfaced for the company, but there was a tweet yesterday from Doug Kass, a portfolio manager, that mentioned he heard $19 per share as an offer from the group. That $19 per share offer is a price that Dan Loeb, from Third Point LLC, has DST) entering the bid, that could only add to the political concerns.

Still, it is clear that Yahoo's time as an independent company is coming to an end, and with that, perhaps the end of the Web 1.0 era. Web 1.0 is traditionally seen as companies like Yahoo, Netscape, AOL (NYSE: AOL), and Microsoft (NASDAQ: MSFT), which were early players in the first days of the Internet.

Yahoo never could get the Web 2.0 movement, led by social networking, and search, as companies like Google (NASDAQ: GOOG), Facebook, Twitter, and LinkedIn (NYSE: LNKD) passed Yahoo by. It was spinning its wheels, and according to Loeb, has the "same crappy interface it's had since 2004." Needless to say, Yahoo has not really changed with the times. That is reflective by the revolving door at the CEO position, last held by Carol Bartz.

The board of directors has royally messed up the company to the point where it is in desperate need of new leadership. At the Delivering Alpha conference, when making his presentation on Yahoo, Loeb described the board as "clowns." This comes as Jerry Yang, the company co-founder and former CEO, spurned a $33 per share bid from Microsoft (NASDAQ: MSFT) in 2008. Keep in mind, Yang still sits on the board, and is very influential.

When Yahoo is finally acquired, it will probably be the end of the Web 1.0 era as the markets know it. The market seems to like it however. From today's reaction, it looks as if the market is about to say good riddance to Web 1.0, and usher on the new era once and for all.

Posted-In: Long Ideas M&A News Short Ideas Rumors Movers Tech Media Best of Benzinga


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