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Monday, September 7, 2015

If $yhoo bought $twtr

Yahoo has a tremendously high passive user base Twitter is looking for, and Twitter has the influencers that can convert those users to keep building a community around interest.

Yahoo does not have a network effect. Their early developed communities have dwindled, and the main influencers are active on Twitter. But Yahoo still has amazingly high traffic, with an active user base. 

An example of the potential is the Yahoo Sports mobile app. (But Twitter should still keep the other deals they have in place with ESPN, etc, if they can.)

There is a strong leader in Mayer, effectively bringing back yahoo from the brink. Although the market is slow to catch on. 

I am of the thought that Twitter is undervalued. Price-to-sales near 10 while growing top line at 60%. And despite the criticism of "scale", that top line growth is coming with "only" 300M users. (The numbers seem to contradict the 'scale' argument. But hey, a billion users just sounds cooler or convienent.)

Despite the above, Twitter can and should stay independent. Twitter seems on the right path, and it's just a matter of time before they prove it for the street. (Although the lack of leadership is pretty annoying.) And with Project Lighting in the wings, that may add to the goodness. (Would love to see them keep using their protocol status to embed themselves throughout the web and mobile apps.)

I just think there is a legitimate business case to be made if Yahoo and Twitter merged or Yahoo bought Twitter. 

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