Will Mickey Mouse Scream Yahoo!?
By Todd Harrison Aug 20, 2008 7:30 am
The next generation of digital media is upon us.
--Walt Disney
The final stretch of summer is traditionally a time to fire up the grill, catch some rays and get ready for some football.
It’s supposed to be a relaxing respite to reflect on what we’ve seen and where we’re going as markets meander and lazy traders hit the beach.
Yeah, pull this leg and it plays jingle bells!
There’s no rest for the weary in our ever-changing, multi-linear marketplace.
If we’re not talking about the big picture blues, we’re debating how much of the socioeconomic malaise is priced into the market.
If commodities are the fruits of your labor, there’s plenty to chew on as we sift through the pits.
Do you want to fashion a tin foil hat, sit on a grassy knoll and talk conspiracy? Heck, we can do that too!
Regardless of the topic—and there’s plenty to choose from these days—you can be sure there are two sides to every story.
Writing in this environment is a thankless process where you’re only as good as your last trade and held to task for daring to share a view. Even when you’re right, there will be people who got it wrong looking to point fingers and place blame.
But that, too, shouldn’t come as a shocker.
With that in mind and a humble hat in hand, I’m taking a break from the big picture blues, commodity screws and counter-trend views to share some vibes that have been resonating in my crowded keppe.
They’re not on many radars but therein lies the appeal for those of us who like to swim against the tide.
Will Mickey and Minnie Scream Yahoo?
We know all about the Yahoo (YHOO) 2008 reality show. Seriously, if someone took the time to cast Miley Cyrus as Jerry Yang and Vanessa Hudgens as Steve Ballmer, it would have been the number one box office hit of the year!
Microsoft (MSFT) extended a generous bid for the company at the beginning of the year, the stock ripped from $19 to $28, Yahoo pushed back, Microsoft held firm, smart money players such as Carl Icahn and Paulson & Company got involved and in the end, Yahoo won the battle even as investors lost the short-term profit war.
I was lucky enough to be long Yahoo call options when the unsolicited Microsoft bid was announced and sold my position into that first rally. I watched from the sidelines until the technical gap filled to the downside ($19) and again took a small upside position. That too was rewarded, albeit on a much smaller scale, before I again unwound my position.
Position in YHOO
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2009 Minyanville Media, Inc. All Rights Reserved.
(2)
Reply
2008-08-20 09:26:10
You've done it
I may be late to the party but this partnership would seem to make incredible sense. Very interesting.
2008-08-20 11:43:35
presidence ?
There is presidence in this model and that would be AOL buying "who ever those guy were".
Me thinks you're on to something . . . only this time we are working with a mature board of directors.
This is something I posted on one of Kevin's article a while back.
Had it played out this way Yahoo would be Google.
It's the "killer App".
Japan experienced the first modern bubble which was fueled by the electronics revolution; the creation of VCRs and stereos and the like . . . enabled by the integrated circuit.
The "killer App" was television programing, music and gaming.
Bubbles are created by irrational exuberance and fueled at first by hope which eventually evolves into greed.
Hope is fueled by the realization that investors are on the precipice of a new paradigm.
Greed is when everyone else "piles on"
The first thing to consider is the "killer app" and how that plays into the success of any new paradigm.
The tech stock bubble was initiated by the creation of the personal computer in the mid '80s. But it wasn't until Microsoft created a useful operating system that the PC really took off.
The "killer app" wasn't the OS though it was what you could do with it.
The PC set off a tsunami that culminated in the creation of thousands of great companies.
At the same time there was a wireless handset revolution bubbling up in Europe . . that "killer App" that was fueled by the lack of standards in landline communications networks.
There was a boom in all the devices that enabled information to be organized in useful ways.
There was a boom in devices used to make the devices.
There was a boom in gaming consoles and the "killer app" was next new game.
This all pointed to the ultimate "Killer App"; the internet.
The internet was the "end all, be all Killer App" . . . the holy grail . . . the final frontier. . . . and ultimately what killed the tech bubble.
The thing is with every new device or technology came the search for it's "killer App" . . . if there was a killer app there would be demand.
So there were thousands of new technologies created some found success and some didn't.
But ultimately there was the internet. . . . the ultimate killer app of all technologies.
Billions of dollars were spent on developing technologies that would capitalize on the "net".
What eventually became the tech stock bubble was stopped dead in it's tracks by the realization there was way too much capacity for the "net" to consume.
It really wasn't going to work out the way everyone had hoped because there was an insurmountable problem .
That problem was bandwidth and the bottle neck that all that data would hit at "the curb".
Like clogged arteries blocking life-giving blood on it's journey to the heart the blockage at the curb would stop everything and only let in small bits at a time.
During the last stages of the tech bubble people began to realize that there was too much capacity in the system and no where for it go . . . . so they stopped building out.
The holy grail was in fact technology that would enable all that bandwidth to reach consumers in their homes and offices.
When all we had was plain old telephone wires at every curb the telecom companies were preparing for data that would require several hundred thousand times the bandwidth supported by plain old wires.
Once they finally ran the numbers on enabling bandwidth at the curb of every home and office in America the telecoms realized it was futile and they stopped expanding.
Today . .. . .many years later . . . and several trillion dollars later we sit at our computers and watch cryptic videos on Youtube and we drive cars that get 10 miles to each gallon.
What we needed was a national internet "bandwidth to the curb" policy with tax incentives to enable the regional telecoms to expand . . . . just like the freeway policies of the Eisenhower administration enabled the phenomenal growth of the auto industries. . . . what we got was a war..
Minyan Terry . . . of Celtic blood
Me thinks you're on to something . . . only this time we are working with a mature board of directors.
This is something I posted on one of Kevin's article a while back.
Had it played out this way Yahoo would be Google.
It's the "killer App".
Japan experienced the first modern bubble which was fueled by the electronics revolution; the creation of VCRs and stereos and the like . . . enabled by the integrated circuit.
The "killer App" was television programing, music and gaming.
Bubbles are created by irrational exuberance and fueled at first by hope which eventually evolves into greed.
Hope is fueled by the realization that investors are on the precipice of a new paradigm.
Greed is when everyone else "piles on"
The first thing to consider is the "killer app" and how that plays into the success of any new paradigm.
The tech stock bubble was initiated by the creation of the personal computer in the mid '80s. But it wasn't until Microsoft created a useful operating system that the PC really took off.
The "killer app" wasn't the OS though it was what you could do with it.
The PC set off a tsunami that culminated in the creation of thousands of great companies.
At the same time there was a wireless handset revolution bubbling up in Europe . . that "killer App" that was fueled by the lack of standards in landline communications networks.
There was a boom in all the devices that enabled information to be organized in useful ways.
There was a boom in devices used to make the devices.
There was a boom in gaming consoles and the "killer app" was next new game.
This all pointed to the ultimate "Killer App"; the internet.
The internet was the "end all, be all Killer App" . . . the holy grail . . . the final frontier. . . . and ultimately what killed the tech bubble.
The thing is with every new device or technology came the search for it's "killer App" . . . if there was a killer app there would be demand.
So there were thousands of new technologies created some found success and some didn't.
But ultimately there was the internet. . . . the ultimate killer app of all technologies.
Billions of dollars were spent on developing technologies that would capitalize on the "net".
What eventually became the tech stock bubble was stopped dead in it's tracks by the realization there was way too much capacity for the "net" to consume.
It really wasn't going to work out the way everyone had hoped because there was an insurmountable problem .
That problem was bandwidth and the bottle neck that all that data would hit at "the curb".
Like clogged arteries blocking life-giving blood on it's journey to the heart the blockage at the curb would stop everything and only let in small bits at a time.
During the last stages of the tech bubble people began to realize that there was too much capacity in the system and no where for it go . . . . so they stopped building out.
The holy grail was in fact technology that would enable all that bandwidth to reach consumers in their homes and offices.
When all we had was plain old telephone wires at every curb the telecom companies were preparing for data that would require several hundred thousand times the bandwidth supported by plain old wires.
Once they finally ran the numbers on enabling bandwidth at the curb of every home and office in America the telecoms realized it was futile and they stopped expanding.
Today . .. . .many years later . . . and several trillion dollars later we sit at our computers and watch cryptic videos on Youtube and we drive cars that get 10 miles to each gallon.
What we needed was a national internet "bandwidth to the curb" policy with tax incentives to enable the regional telecoms to expand . . . . just like the freeway policies of the Eisenhower administration enabled the phenomenal growth of the auto industries. . . . what we got was a war..
Minyan Terry . . . of Celtic blood
Get real-time options trading ideas from Steve Smith, veteran options trader and newsletter author, plus let him show you the way to cut risk and boost your returns through the strategic use of options. Click here for a free 14 day trial to OptionSmith by Steve Smith.
Copyright 2009 Minyanville Media, Inc. All Rights Reserved
