ASKJ going cheap

So IAC are buying Ask Jeeves and my shares are up almost 20% and I have only owned them for a couple of weeks. 20% in a few weeks? I must be happy right! Well yes and no. Obviously 20% in a few weeks is a fantastic performance but I think the shares are worth more than IAC are paying for them. Couldn't ASKJ have got a better price? I think IAC need them more than they need IAC. I was becoming increasingly fond of ASKJ's little corner of the Internet and had high hopes for my shares. I didn't think getting back to $40 in the next year was impossible. Now they will be stuck around $28 until the transaction completes. Then I have the choice of buying into IAC or looking elsewhere.

Rather than be stuck with a static share price for the next 4 or 5 months I will sell the shares in the next few days when the price is right.

That then leaves me with the pleasant choice of where I allocate the capital. IAC is an option of course but I am not a big fan of holding companies. I know that IAC has a nice portfolio of Internet companies but the synergies aren't all the obvious in my opinion. I think Barry Diller has too many eggs in his basket and I don't really see his point. He seems to love making deals more than making a particular vision successful. I see the future spinning out of the travel groups into Expedia as positive but for now I will just keep an eye on IAC.

I am quite tempted to put the money into eBay and I think financially that may be the best choice but that will leave me only invested in 3 companies in my growth portfolio, limiting the educational opportunities.

Yahoo looks like a good choice. I love the company's strong brand and quality web sites. Their financial site is the best I have found. The information is presented cleanly and the adverts are not obtrusive. They are also in the online auction business in Japan and China - a business I love! Most of their revenue comes from advertising which is a bit scary as advertising is one of the first industries to be hit in a recession, but there seems to be a lot of momentum behind Internet advertising at the moment.

We will see. But for now it is a fond farewell to ASKJ.