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A special deal on media the Yahoo! Tumblr deal.
Too late for Yahoo! would it crash it on the social media craze let's ask Scott.
-- capital IQ thanks for being with -- -- you know I know she put out.
A higher price target for Yahoo! if you're -- your point five dollars is going to be thirty dollars and yet you kept it as a hold.
How come -- not gonna recommend the -- -- first of all I'd say that Dennis we raised the target price but really doesn't have much to do with.
With the announced acquisition of -- -- this is really about just kind of looking at our.
The valuation models.
And indicating that you know we think that Yahoo! over the next twelve months.
A twelve month target price of thirty dollars is more appropriate than 25.
Yet but you're not recommending is a -- that was more the -- my question Scott what are your dad now we're not recommending and I thought yeah I thought that was clear.
We have a hold recommendation on Yahoo! what's that and -- that.
Yes okay and this deal with Tumblr.
About one point one billion dollars for up firm that had to thirteen million dollars in revenue all of last year and thirteen million the first quarter.
That's kind of an out of whack price what do you figure -- the key obstacles that Yahoo! have to overcome to make the deal pay.
Yeah well obviously one of the things that.
You know we we try to get more information about during the conference call -- -- successful.
Is what you're speaking to it to some of the financial metrics that Tom.
You know enabled Yahoo! to get comfortable this transaction they talked about a lot of the methodologies that they used to.
Analyze and evaluate Tumblr.
But as you pointed out we think one of the reasons that some of the financial metrics were lacking is frankly.
They weren't very favorable in terms of people thinking about the transaction.
But to some extent that to be okay.
You know we think back to when Google bought YouTube or even FaceBook buying it's -- Graham I mean very similar transactions in some respects -- that you're paying.
You know a billion to two billion dollars for.
A platform and an asset that's more growth mode and not in monetization mode.
To make this work we think -- -- was gonna have to strike a very difficult balance on one hand.
Let Tumblr remain independent what their management team kind of continue doing what they're doing.
Push them to monetize.
There are substantial user base and contact.
A little bit more proactively we think that's going to be -- -- -- and were -- -- -- how they're gonna do that successfully.
I think the bigger obstacle will be of -- of these deals you know you're buying the talent inside the firm.
This deal feels like they're buying the audience -- the question is what of that article stick around there's a lot of uproar on -- today.
Saying we can't believe -- coming -- -- very -- all right thanks for being with us today Scott Kessler.
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