Archive for April 9th, 2008
Posted by: in Business News
Filed under: Business, World wide web, News, Yahoo!, AOL
Yahoo! seems to have come up with the ultimate response to Microsoft’s heavy-handed attempts to purchase the internet portal. The Wall Street Journal reports that Yahoo! is in speaks with Download Squad’s parent company AOL over plans to merge the two companies’ world wide web operations.
If the deal goes through, the two companies would combine their web and internet based services. AOL’s old school ISP services wouldn’t be part of the deal, which would value AOL at $10 billion. Yahoo! would reportedly use some of the revenue from a merger with Time Warner/AOL to purchase back a whole bunch of stock which woudl help the company fend off any further unwanted advances from Microsoft.
The upshot of a possible partnership or merger is that people will stop picking on AOL for duplicating Yahoo!’s homepage design. The downside is that a merged company could conceivably be called AOwho? OK, probably not. We for one welcome our new Yahoo! overlords anyway.
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Posted by: in Latest News
Filed under: Deals, Products and services, Consumer experience, Google (GOOG), Yahoo! (YHOO)
 Websites produce massive amounts of data - which can be quite valuable and is a massive business, as seen with operators like Omniture (NASDAQ: OMTR), WebTrends, CoreMetrics, and Google (NASDAQ: GOOG) Analytics.
Well, Yahoo! (NASDAQ: YHOO) is jumping into the game. This day, the company announced that it has purchased IndexTools (the price tag was not disclosed).
Founded in 2000, the company has built a nice offering of analytics tools to measure web behavior. For example, you can examine things like the return-on-investment for paid search.
According to its website, IndexTools has grown 100%+ per year for four years (since 2002). What’s more, the customer retention rate is an impressive 98%.
Simply put, web analytics is absolutely critical for a major player in on the web advertising. Unfortunately, in the case of Yahoo, the company allowed Google to get a head start.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements . He also operates MergerBook.com.
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Posted by: in Latest News
Filed under: Deals, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Marketing and advertising
 Funny what happens when Microsoft Corp. (NASDAQ: MSFT) is breathing down your neck.
Yahoo Inc. (NASDAQ: YHOO) may be close to throwing in the towel on search. According to The Wall Street Journal, the World wide web portal is in talks with Google Inc (NASDAQ: GOOG) about an advertising partnership.
The short-term test, involving a very limited percentage of Yahoo’s Web search queries, “is designed for the two sides to evaluate the revenue potential of a broader search ad outsourcing arrangement,” the paper said. “They have been discussing such an arrangement as part of Yahoo’s pursuit of alternatives to Microsoft Corp.’s unsolicited acquisition offer.”
This is long overdue.
Yahoo has wasted billions of dollars of shareholders’ money chasing Google’s tail in the search market. Its lack of progress in that area is the main reason why its shares have been beaten down by Wall Street and has attracted Microsoft’s interest.
In other news, top Yahoo shareholder Bill Miller of Legg Mason Inc. (NYSE: LM) has criticized Microsoft for blundering with its ultimatum to the Internet portal instead of just raising the offer.
The ball now is in Redmond’s court.
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Posted by: in Latest News
Filed under: Deals, Good news, Rumors, Walt Disney (DIS), Citigroup Inc. (C)
 With reports that Citigroup (NYSE:C) is close to selling off some $12 billion of leveraged loans and debt, the banking giant is taking a painful but very important step in cleaning up its financial situation. According to Reuters, “The sale would be to private equity firms including Apollo Management, Blackstone (NYSE: BX) and TPG, at an average price slightly below 90 cents on the dollar.”
This is important for Citi for two reasons. First, they’ll end up with about $10 billion in cash to help them get through these tough times. Secondly, the price that they are getting for these bonds is shocking. Who would have dreamed that they could get a little less than 90 cents on the dollar.
Another interesting point is that the private equity group TPG is involved. As my colleague Zack Miller posted yesterday about its investment in Washington Mutual (NYSE:WM), TPG must believe that the banks have bottomed out. Why else would they be ponying up tens of billions of dollars?
It seems to me that we’re at or very near the bottom for bank stocks. Long-term investors looking for a turnaround play might want to take a look and do some analysis of the banking sector.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer’s fund has no position in any stock mentioned, as of 4/9/08.
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Posted by: in Business News
Filed under: Business, Internet, Web services, Yahoo!
 Yahoo! could be preparing to launch a Google Analytics competitor. The big Y has acquired Tensa Kft, makers of IndexTools.
Yahoo! will integrate IndexTools with its current analytic tools to help build the company’s advertising network. The services will first be available to members of the Yahoo! ad network, but eventually the company plans to build a system that’ll let third party developers “monitor and optimize the traffic performance” of web applications.
The deal is expected to shut in the first half of the year. The terms of the acquisition were not released.
[via TechCrunch]
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Posted by: in Latest News
Filed under: International markets, Deals, Live coverage, Competitive strategy, Dell (DELL), Hewlett-Packard (HPQ), Russia, Middle East
 Usually, when sovereign funds put money into a company it is simply a financial investment. Dell (NASDAQ: DELL) may have unlocked something more. According to The Wall Street Journal: “Dell said it is in talks with a government-owned entity in Dubai about establishing a joint venture to further increase the personal-computer maker’s sales in the Middle East.” In other words, the computer company will get value well beyond cash.
For Dell, it is a brilliant move that shows government funds can do more than just write checks. The PC market in the Middle East is massive and growing very rapidly.
The US company might have found a template for improving its market share around the world through forming joint ventures with local pools of capital. Dell’s growth in might markets has been injured by the improvement of share by Hewlett-Packard (NYSE: HPQ), and the rise of massive computer companies Lenovo and Acer out of China. All of these companies need to improve their business in growing markets, like the Middle East and Asia, if they want their earnings to move up.
If the Dell venture in Dubai works, it would be wise to look to sovereign funds in Russia, China, and Singapore for similar deals. Dell’s market share in many of these regions is in trouble. Who superior than the locals to help them?
Douglas A. McIntyre is an editor at 24wallst.com.
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Posted by: in Latest News
Filed under: Deals, Microsoft (MSFT), Yahoo! (YHOO)
The elbows are getting sharp in the corners and soon the battle lines over the Microsoft (NASDAQ: MSFT) fight for Yahoo! (NASDAQ: YHOO) will become more evident to the public. Legg Mason’s large equity fund lead by disgraced stock guru Bill Miller is prepared to support an effort by Yahoo to remain independent, should Microsoft lower its offer, according to The Wall Street Journal.
Miller’s performance has been so hideous over the last year that he should keep his views to himself.
What Miller is not acknowledging is that Microsoft might simply walk away if it cannot get the support of Yahoo!’s shareholders and board. The portal’s stock was below $20 and many predict it could go back there if Microsoft withdraws its offer. The eventual price depends on Yahoo!’s first quarter performance, but at this point, Redmond thinks it has the best deal — perhaps the only deal — in town.
The conventional wisdom is that if Microsoft goes away, it may take years for Yahoo! to get its price back above $30, if it gets there at all. Yahoo! might be underestimating how bad the current recession could get. If so, it may look back at the current offer and rue the day that it decided to fight a takeover.
At the very least, with Miller’s track record, he is hardly a bell-weather for what Yahoo! should do.
Douglas A. McIntyre is an editor at 247wallst.com.
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Posted by: in Latest News
Filed under: Deals, Citigroup Inc. (C), Blackstone Group L.P (BX)
 Citigroup (NYSE:C) would like to get a number of troubled loans off its balance sheet before its reports earnings. Accordingly, it is close to selling $12 billion in leveraged loans and bonds to private equity firms Apollo, Blackstone (NYSE:BX) and TPG. The debt would be sold at “an average price slightly below 90 cents on the dollar”, according to Reuters.
Citi has, by its own calculation, about $43 billion of these loans on its balance sheet. It is anxious to get rid of as much of the exposure as possible. But, the potential deal raises a point. If the haircut on the loans is only 10% and the smartest equity firms in the world want the paper, why is Citi so anxious to sell it?
The answer is panic. At this point American banks are taking so much risk off of their balance sheets that some assets, which are only modestly impaired, are being sold along with those which have relatively low inherent value.
In Citi’s haste to solve its problems, the baby might be exiting with the bathwater.
Douglas A. McIntyre is an editor at 247walls.com.
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Posted by: in Latest News
Filed under: Before the bell, Earnings reports, Deals, Market matters, Citigroup Inc. (C), Advanced Micro Dev (AMD), Alcoa Inc (AA), Bed Bath and Beyond (BBBY), Circuit City Stores (CC), United Parcel’B’ (UPS), Economic data, Blackstone Group L.P (BX), Federal Reserve
 Stock futures were lower this morning, indicating the beginning of what could be another down day on Wall Street as more troubling news from the financial industry was reported, while UPS warned of a slowdown in its delivery business.
On Tuesday, U.S. stocks ended lower following a revenue warning from Advanced Micro Devices (NYSE: AMD), a lackluster earnings report from Alcoa Inc. (NYSE: AA), a dividend cut from Washington Mutual (NYSE: WM) and the Federal Reserve minutes, all of which affecting investors’ sentiment. The Dow industrials shut 35 points lower, or 0.29%, the S&P 500 lost 7 points, or 0.51%, and the Nasdaq Composite dropped 16 points, or 0.68%.
This morning, given the very light economic calendar consisting of February wholesale inventories at 10:00 a.m. EDT, the Street will likely focus — once again — on the troubles in financials. The top story on the Wall Street Journal is about the options the Fed is considering to alleviate the credit crunch further including “contingency plans for expanding its lending power in the event its current steps to unfreeze credit markets fail.” While such plans aren’t surprising and even welcome, the report comes after the Fed showed concern the economic downturn could last into 2009 when it released Tuesday the minutes of its FOMC meeting.
And as if that wasn’t enough to squash some hopes some investors lately had that we’ve seen the bottom, Citigroup (NYSE: C) came and reported it is close to a deal toto sell $12 billion of loans at a loss to Apollo Management LP, Blackstone Group LP (NYSE: BX) and TPG Inc. as part of an effort to shrink the bank’s balance sheet. Again, not surprising after what Citi’s CEO said only Tuesday, and even a positive development, but it goes to show the magnitude of the problem and potential losses. Indeed, shares of Citi rebounded almost 2.7% in premarket trading.
Still in financials, Standard & Poor’s late Tuesday slashed its ratings on four mortgage insurers.
And not just financials are dampening the mood this morning, United Parcel Service (NYSE: UPS) cut its first-quarter profit guidance after the closeTuesday, as it was squeezed from both sides. On the one hand the weakening economy has reduced domestic package volume, while on the other higher fuel prices increased costs. Shares of UPS fell almost 2.9% in premarket trading.
Earnings are due out of Circuit City Stores (NYSE: CC) and, after the close, Bed Bath & Beyond (NASDAQ: BBBY).
Oil prices were steady Wednesday ahead of the release of weekly U.S. inventories at 10:30 a.m. EDT that’s expected to show gasoline inventories fell last week.
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