The Splits

Today's post is sponsored by the word split. Splitting off companies or divisions can be good for a number of reasons. In the first case listed below, the end product will result from an increased level of creativity and the removal of corporate shackles (and the company that was split off will be much, much happier). In the second case, the functions of the divisions are so distinct (even though they're all technology companies) that each could function more efficiently if operated separately.

-- Microsoft will split off Bungie Studios, the maker of the popular Halo video game series, and retain an equity stake in the company.

-- A Sanford Bernstein analyst believes the sum of Yahoo's parts is worth more than its sum. By breaking down the company's divisions into display advertising, search and subscriptions segments and comparing to multiples of comparable companies, the analyst values the three separate divisions at $54.3 billion. Yahoo's current market cap is $37 billion.   

Comments

[Jesse]

Same is true of WMG - given the current stock price, the publishing unit is worth more than the purported market cap of the entire company.