Yahoo May Sell Stake in Japan Joint Venture
Many analysts believe that Yahoo could use the money to become more competitive with Google (GOOG) and Web 2.0 firms like Groupon and Twitter.
That analysis is probably flawed. Yahoo's plans to take search market share from Google are based on its joint venture with Microsoft, so there is little the company can do to influence its presence in the U.S. search market. Yahoo would also have trouble entering the social network business. Groupon has been valued at over $10 billion, Facebook's valuation is near $50 billion, based on a recent investment from Goldman Sachs (GS). Morgan Stanley may buy a 10% stake in Twitter for as much as $450 million. None of these companies has shown an interest in a sale or near-term IPO
Even with $8 billion in the bank, Yahoo would not have the capital or market value to become a significant presence in the hot social media industry, which is now at the center of Internet destination growth.