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By Christine Benz | 09-09-2011 10:21 AM

Who's In and Who's Out?

Morningstar's markets editor Jeremy Glaser looks at what's in and out at Yahoo, Bank of America, Groupon, and more.

Christine Benz: Hi, I'm Christine Benz for Morningstar.com, and welcome to the Friday Five. It's been a short work week, but a busy week in the corporate world. Here to discuss what's in and what's out is Morningstar's markets editor, Jeremy Glaser.

Jeremy, thanks so much for being here.

Jeremy Glaser: Very welcome, Christine.

Benz: So, Jeremy what do you want to talk about today?

Glaser: Well, this week, we're going to talk about Yahoo, Groupon, Bank of America, International Paper, and finally, something at Disney.

Benz: OK. So, let's start with Yahoo which saw a big shake-up in the executive suite. What's going on there?

Glaser: I can't say, anyone was blown away by surprise, but the CEO of Yahoo, Carol Bartz, was unceremoniously fired this week, apparently via phone. She was told that she was no longer needed and that her services were no longer needed.

Yahoo has been having a lot of problems lately. The firm has a lot of money tied up in its Asian stakes, both in Yahoo Japan and with the Chinese Internet-search company, and there has just been a lot of tension between the Asian partners and with Yahoo. The firm really had trouble getting its ad business to get back up to snuff to be able to really compete against Google.

Yahoo has yet to really prove that, since it rebuffed that offer from Microsoft a few years ago, the firm really makes sense as a stand-alone business.

After this firing there's a lot of talk about if Microsoft is going to come back to the table or if others (suitors) possibly want Yahoo's business. It's still a big company; it's still doing OK. But certainly, Bartz wasn't able to turn things around, and it could be a long road back for Yahoo. Even without her at the helm, the firm still has some large structural problems that it's going to have to solve or that any potential acquirer would have to solve. And I think it's a story we're going to be watching for a long time.

Benz: That's one of those firms that's one of the oldest names in the tech world, but maybe kind of betwixt and between with so many new firms encroaching on what had been Yahoo's territory. A lot of Internet users I know say that they just don't visit Yahoo sites that often.

Glaser: Exactly, and it's very difficult to monetize a lot of the content through display advertising and through some of the firm's search advertising. Yahoo is just losing a lot of that traffic.

Benz: Now, in terms of monetizing, another big firm that everyone been watching has been Groupon, which is now shelving its plans to go public. What do you think is going on there?

Glaser: Well, Groupon has been an interesting story for a while. I think a lot of people, me included, were surprised when the financials came out, when the firm released its first S1 which showed just how little profit Groupon was really raking in. The firm was spending a lot more on marketing, and it was costing a lot more than I think a lot of people had initially expected, when they looked at the business model without being able to examine the specific numbers.

Groupon was still on track to price the IPO and to go public, either this week or next week or sometime in the very near future. It decided to put those plans on hold. The official reason is that, with the volatility in the market, the firm thought it could get better pricing maybe by waiting a little bit. But I think it could be possible that investor appetite just isn't as strong as the firm had initially expected. With Groupon putting out financial results that might not be incredible--and there were a lot of questions about the sustainability of the firm's business model and their competitive advantages--the company is now kind of rethinking maybe where it will be able price. And it now might go back to the drawing board and think about the business a little bit more before it goes public. Groupon will have to, again, think about other offers, such as the one from Google just from a few months ago. With the that huge offer Groupon got, it might be looking at that in hindsight and realizing that maybe the firm should have taken the money and ran back then.

Benz: Now, shifting gears from the tech world, Jeremy, Bank of America also is a highly controversial stock at the moment. The Company did some shaking up in its corporate suite, as well?

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