Street Signs

Investors Not Shouting Yahoo! Over Changes


Yahoo's trying--but Wall Street's not buying. Investors are not impressed with the web firm's management shake-up. Although Yahoo says the move is designed the make the company more productive, investors are punishing the company - pushing shares lower.

Why is the market turning a deaf ear to Yahoo’s optimistic overtures?

On "Street Signs" CNBC’s Erin Burnett asked Imran Khan--an internet analyst with JP Morgan.

Yahoo Reshuffle

Khan says the management restructuring poses a heighten risk of employee defections and will cause near term distractions--but overall he sees the management changes as a positive decision.

Khan says for 2007 JP Morgan is not optimistic about Yahoo! for the following reasons:
- audience is fragmenting
- pressure in CPM (clicks per minute) growth rate
- they don’t have a strong presence in European market
- and company’s innovation timeline is much longer than competitors

In the event that there is a buy-out offer – Khan thinks Yahoo! would consider it. Khan reminded us that a few months back on CNBC--he said that Yahoo! and eBay would make good potential partners – but, he can’t predict if an M&A will happen or not.

Analyst disclosure: GOOG and YHOO are investment banking clients of JP Morgan.