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Top Analyst: Forget AOL, Private Equity Looking At Yahoo!

Shares of Yahoo! rose in trading Thursday following a report that AOL and a group of private-equity firms may put in a bid for the Internet company. But one widely followed analyst said the AOL element may be just a "sideshow."

Mark Mahaney, a top-rated technology analyst at Citgroup, said private equity is likely interested in Yahoo! , not AOL , for several reasons. It's unlikely they'd have to compete with a strategic buyer, for example. Acquiring Yahoo! would also create a lot of cash flow. Yahoo! has 60 percent of market cap in Asia assets, which might appeal to private equity because those assets could be sold quickly, he said.

Apart from Yahoo! investments in Asia, Mahaney said the Sunnyvale, Calif.-based company has display advertising and outsourced search businesses.

Mahaney doesn't think the deal is likely to happen though.

"We've seen Yahoo!'s board and management team blow these deals in the past," he explained. "I actually think you'd get a continuation of that. I don't think Yahoo!'s going to want to sell to private equity."

Elsewhere in the tech space, Google will report quarterly earnings after the closing bell Thursday. Guy Adami, managing partner of Drakon Capital, noted that the stock has been a run, but wondered if Mahaney thought it would soon fizzle out.

Mahaney said he's "going long and strong" on GOOG. When the stock was trading much lower, he liked the stock and more than a $100 to the upside, nothing has changed.

If with Google's earnings we get a confirmation of US growth, that means display ad networks, mobile search and YouTube are becoming material, he said. In other words, revenue growth could accelerate and while it might not be apparent now, it will show up next year.

OptionMONSTER.com's Jon Najarian agreed that while Google's story isn't happening this quarter, it could play out next quarter. From the options market, he's seeing a lot of upside calls being sold.

For the third straight year, "Institutional Investor" magazine recognized Mahaney as their top tech analyst in their annual "All-America Research Team."

Watch the videoto see the full conversation with Mark Mahaney—it starts at 1:00.

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CALL TO THE FLOOR: GLOBE SPECIALTY METALS

Jeff Bradley, CEO of Globe Specialty Metals , stopped by the "Fast Money" studios Thursday to talk about the recent increase in commodity prices, contracts, operating costs and more.

Watch the video to see full interview.

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CALL THE CLOSE

If the financials continue to fall, Najarian would be a seller of the market.

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Steve Cortes, founder of Veracruz, is also a seller of the markets because he thinks "government interference in the banks is just beginning."

Steve Grasso of Stuart Frankel doesn't like the market at current levels either. In May, the S&P couldn't push past the 1,172 level and because we're trading in that range Thursday, he would sell the market.

Finally, Adami said he's also a seller of the market.

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Trader disclosure: On Oct.14, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Cortes is short (BAC); Cortes is short (BIDU); Cortes is short the U.K. Pound; Grasso owns (ASTM), (BA), (BAC), (C), (CSCO), (JPM), (LPX), (MO), (MOT), (NDAQ), (PFE), (PRST)
For Steve Grasso:
Stuart Frankel & Co and it’s partners own (COG)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HPQ)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (MERC)
Stuart Frankel & Co and it’s partners own (NWS.A)
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (OPEN)
Stuart Frankel & Co and it’s partners own (PDE)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (RDC)
Stuart Frankel & Co and it’s partners own (TLM)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co and it’s partners are short (QQQQ)
For Mark Mahaney
Citigroup owns 1% or more of (YHOO), (AKAM), (NFLX)
Citigroup makes a market in (GOOG), (AMZN), (PCLN), (YHOO), (AKAM), (NFLX), (OPEN)
In the past 12 Months, Citigroup acted as manager or co-manager of (PCLN) and has received investment banking compensation
Citigroup provided non-investment banking services and received compensation from (GOOG), (AMZN), (YHOO) in the past 12 months
For Robert Wetenhall
***No Disclosures***

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