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  • Why Microsoft should mull Baidu buyout

    Posted May 05 2008, 06:15 AM by Douglas McIntyre
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    Google rules the search world in all but one important country. China not only has the largest population in the world, it has the largest number of people online totaling 221 million users. It passed the US last month for total number of internet citizens. At some point China could have 500 million people on the worldwide web, more than double the US.

    Google's share of the search market in China is only 25%. Local search engine Baidu has 60%.

    Baidu is a very small company when put along side Google. Revenue at the Chinese company many hit $200 million this year. Operating income might be $60 million. Google's revenue will be well over $20 billion this year. Operating income should be almost $10 billion. Still, Google can't make progress in China.   Read More...

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  • Yahoo's week of drama

    Posted Apr 11 2008, 12:09 PM by Kim Peterson
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    My, how things can change in a week. Last Friday, Microsoft was putting the screws to Yahoo, telling Reuters it was "evaluating" its $31-a-share bid for the company because Yahoo has dropped in value. 

    This week, a furious round of wheeling and dealing has given Yahoo the edge. I have to hand it to CEO Jerry Yang. His flirtation with AOL and Google is putting incredible pressure on Microsoft to raise its offer. The market seems to like where all this is headed: Yahoo shares are up slightly from where they started the week and closed today at $28.34.

    The Street seems to think a Microsoft acquisition is still the most likely scenario, and Yahoo shares are up because of a general belief that Yang can extract more money out of the deal. And while things today may appear murkier than ever, this corporate drama seems to be careening (wildly, perhaps) to some sort of closure, possibly in the next week.   Read More...

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  • Microsoft, Yahoo, Google can "beat each other's brains out"

    Posted Feb 27 2008, 10:52 AM by Kim Peterson
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    "I think it's a mistake. But I think Napoleon said never interrupt your enemy when they're in the middle of making a mistake." -- AOL chief exec Randy Falco on Microsoft's bid to acquire Yahoo in order to compete with Google.

    More interesting quotes from the usually reserved Falco in this AdAge.com article.   Read More...

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  • Yahoo starts its kabuki dance

    Posted Feb 11 2008, 12:09 PM by Kim Peterson
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    Yahoo's board met Friday to discuss and then reject Microsoft's cash-and-stock acquisition offer. And why wouldn't they? Consider:

    --Microsoft offered a 50/50 combination of cash ($31 a share) and stock

    --Microsoft shares closed at $28.56 Friday. That means Microsoft would pay $27.16 in stock for each Yahoo share.

    --Under the 50/50 scenario, that put Microsoft's bid at $29.08 a share. But Yahoo shares closed at $29.20 on Friday.

    So it's no wonder that Yahoo would dismiss the offer as too low. And the Street seems to agree, because today Yahoo shares have climbed to $30. That shows investors are hoping for a better deal. As the New York Times points out, Yahoo shares would sink if investors truly believed Yahoo was going to ignore all offers and go it alone.   Read More...

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  • Cutting 2,000 jobs at AOL is a good start

    Posted Oct 15 2007, 11:23 AM by Kim Peterson
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    It's been a long time since AOL was considered a serious competitor to Microsoft or Yahoo. The company has never been a threat to Google. I would say today's announcement of 2,000 staff cuts marks the end of an era, but I think that already happened. 

    Paring 2,000 from a workforce of 10,000 is significant, but it isn't enough. According to a staff memo by CEO Randy Falco, the layoffs will help the company continue its massive push into online advertising. AOL changed its strategy in August 2006 to focus on advertising and move away from the subscription Internet access business. The company has been slashing jobs since 2001, when it had 18,000 employees.

    Certainly the cuts were necessary. In August, Time Warner pulled back its ad growth forecasts for the year. Its Q2 ad sales grew by only 16%, down from 40% for four previous quarters. And on the Internet access side, AOL lost 1.1 million paying subscribers. A lot of lines are trending down at AOL, and a massive layoff will help reverse that   Read More...

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