Tech For Sale! HP? Yahoo? Netflix? Which Icon Sells Next?

The tech sector has entered an amazing period of corporate turmoil – one which could result in a number of iconic brands changing hands. Not all of the companies now potentially in play will actually change hands, but some of them might. Here are some names to keep an eye on in the weeks ahead:

• Yahoo: There’s little question that the company is in play; on Friday afternoon noneother than Alibaba Group CEO Jack Ma said that he would be “very, very interested” in potentially buying the company. I’d love to know what Carol Bartz thinks about that theory. Yahoo, of course, is the largest investor in Alibaba Group, and had an icy cold relationship with Ma while Bartz was running the company. As assortment of private equity firms are also reportedly looking at the company; one potential outcome would be a carve-up of Yahoo, with Ma buying back the company’s Alibaba stake, and other parties taking the core operating business. Something almost certainly is going to happen here; but the situation is complicated, and might not provided a huge investor payoff.
• Hewlett-Packard: As my friend Mark Veverka pointed out in Barron’s over the weekend, HP is the first tech company with a market cap of more than $5 billion to trade at less than 5.5x forward earnings in 20 years. The Wall Street Journal’s Heard on The Street column over the weekend recycled the idea I wrote about a few weeks ago that Oracle might want to make a run at HP. Still seems like a long show, and I suspect it would depend on HP getting rid of not only the PC business but also their printer unit. What Oracle would want is the enterprise hardware and software arms. HP has a market cap of $44.6 billion; even with a modest premium this would be a deal with a price tag well over $50 billion. The Journal concludes that any further fall in HP’s share price could make a deal too hard to resist. The cheap P/E gives the company allure, but a deal, even by Oracle, still seems like a long shot.
• Netflix: No one is really talking about Netflix as takeover target, but if the stock keeps sinking, there are plenty of potential bidders – whether for the streaming business, the re-named Qwikster DVD-by-mail business, or both. The company’s market cap now sits a hair below $6 billion. Maybe CEO Reed Hastings should dial-up his pal Steve Ballmer; note that Hastings sits on the Microsoft board.
• AOL:  The struggling Internet content company’s market cap is down to $1.2 billion – back out the $460 million in in cash, and you can see how skeptical the Street is about the AOL turnaround strategy. But there are some valuable pieces at AOL, including AOL instant messenger, the Huffington Post, Moveifone, Engadget, Patch and various other things. The status quo seems unlikely to last; one way or another AOL is likely to look a lot different a year from now, and new ownership is a possibility.
• Research In Motion: The BlackBerry maker is in big trouble, hemorrhaging market share to Apple and Android phones. There has been speculation that someone might want the company’s mobile IP, the company’s installed base and the iconic BlackBerry brand. But I’m skeptical: co-CEOs Jim Balsillie and Mike Lazaridis seem convinced that can fix what ails the company; and the list of potential buyers is perilously short. At some point, the company could get sold for parts. But a rescue does not seem in the cards.

Eric Savitz - Forbes