Ticker Shock: Yahoo Climbs Back Into Bed with Microsoft?

I hope everyone had a nice, long, peaceful weekend. It did go a little too quickly, though, didn’t it?

Not too much happened in the equity markets in Asia overnight. The Hang Seng was closed on holiday and the Nikkei was down - but less than 1%. Meanwhile, Europe was on holiday. And here in the US, we're currently trading lower. It looks like it could end up being kind of a quiet day.

Here's what I’m focused on this morning:

Yahoo (YHOO):
 Are Mister Softee and the California-based Internet company canoodling?

The AP reports that: “The chief executives of Microsoft Corp. (MSFT) and Yahoo met recently to discuss possible business deals, news reports said Friday. Under one possible scenario, Microsoft would sell Yahoo's search ads while Yahoo would manage Microsoft's display ads.”

Whether or not Ballmer, Bartz and their peeps get serious remains to be seen. But I think even the mere speculation of any sort of tie-up could give Yahoo’s shares a boost. In fact, I think they’ll get a goose in today’s session, thanks to the recent chatter.

I continue to believe that this could be a good year for Yahoo shareholders - particularly with a new chief executive, whom I assume is eager to prove her worth at the helm.

As an aside, if I were Microsoft and were looking to make any sort of move, I’d prefer to pounce while Yahoo’s shares are still in the doldrums.

Gannett (GCI):
 As advertisers have pulled back, shares of the major newspaper companies have taken a shellacking. Gannett, known for its USA Today paper, has received a particularly large pummeling. Its shares are more than 80% off their 52-week high.

But there appears to be 1 firm betting that the company will mount a comeback: Ariel Investments. In fact, the Associated Press reports reports that the investment firm had been bellying up to the bar and owned more than 12% of the stock at March 31. And that’s interesting because it comes on the heels of some insider buying. Note that some executives were dropping coin on the stock toward the latter part of last year.

I’m not ruling out the possibility of a comeback at Gannet. The simple fact is that the company traces its roots back toward the earlier part of the last century, and it’s surely had to endure tough times before.

At the same time, the problems in print seem to run deep, and -- as far as Ariel is concerned -- these guys probably have a really long-term view. Same thing for the insiders. And for that reason, I wouldn’t do anything more than take a nibble because it could take a while to pay out at this point. Also, under $5 a pop, I don’t think analysts are going to be paying it too much mind.