Believe it or not, Twitter Inc (NYSE:TWTR) reportedly thought about making a bid for the core assets of Yahoo! Inc (NASDAQ:YHOO) but dropped the idea.
That’s a damn shame, because a TWTR-YHOO tie up would have been the funniest couple since Laurel and Hardy.
There’s a saying on Wall Street when it comes to stupid merger ideas: “Tying two bricks together won’t make them float.” In the case of a TWTR-YHOO marriage, a quiet watery death would be about the best outcome anyone holding Yahoo stock or Twitter stock could hope for.
Twitter, you’ll recall, is still trying to figure out what it is and how to monetize that.
Ditto for Yahoo.
Twitter also has hit a growth wall, and it increasingly looks like it will never make the jump to being a truly mass-market social media platform.
Yahoo established itself as a mass-market leader decades ago, and it has been downhill ever since.
TWTR Shareholders Dodge a YHOO Bullet
As the Post reports, the two hobbled companies had a management meeting a few weeks ago to examine YHOO’s financials and discuss whether a strategic combination might make sense. Importantly, Twitter CEO Jack Dorsey didn’t show up, which indicates that the company didn’t take the idea of a deal very seriously.
Good for them. Twitter doesn’t have a single challenge that could be addresses by acquiring Yahoo. There is a rationale for such a marriage, the Post reports:
“Twitter is the destination for instant news, and Yahoo has a lot of eyeballs on its site. The idea isn’t as crazy as you might think.”
Yes, it is. Indeed, it sounds like something out of the Scooby Doo School of Management. “It’s so crazy it just might work.”
Nah. Just ask Yahoo how it’s billion-dollar acquisition of Tumblr turned out.
Fortunately for anyone holding TWTR stock, the idea went nowhere fast, the Post reports.
Twitter isn’t going to solve its growth problems by acquiring tired web properties. And although it’s always good to have more bidders than fewer bidders, after what Verizon Communications Inc. (NYSE:VZ) dropped on buying AOL, Yahoo shareholders should feel confident that they’re going to do about as well as can be expected when the saga of YHOO’s core business finally comes to an end.
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.
