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Posted
Jun 16 2008, 11:34 AM
by
Kim Peterson
Does Yahoo hate its shareholders? That's being suggested by The New York Times' Joe Nocera, who sent CEO Jerry Yang a nastygram over the weekend. Nocera writes: "In fact, Jerry, as a board member since Yahoo went public, it has always been your job to look out for Yahoo’s shareholders. But we sure wouldn’t know that from the way you’ve acted these past months. I haven’t seen this much contempt for shareholders since Robert Nardelli ran Home Depot."
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Posted
Jun 13 2008, 09:41 AM
by
Kim Peterson
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Any way you look at it, yesterday was a dark day for Yahoo. The stock crumbled 10% after the company confirmed a Microsoft deal was dead. Three key Yahoos announced they were leaving, adding to the ongoing employee exodus. Yahoo announced an advertising sales deal with Google, but it wasn't significant enough to sway angry shareholders. The company's stock isn't faring any better today -- down 6% on heavy volume to $22.14 at 11 a.m. PST.
We won't see the full implications of Yahoo's moves for a while. Clearly, Yahoo needed breathing room, and outsourcing some search business to Google accomplishes that. Yahoo gets Microsoft and Carl Icahn off its back and can figure out a new strategy -- and it gets a new source of short-term revenue. But Yahoo has let Google in the front door, and now risks the possibility
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Posted
Jun 12 2008, 01:04 PM
by
Kim Peterson
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Some of that stampeding sound on the Street today came from Yahoo investors running for the exits. Shares of the company are down 11% on huge volume to $23.37 after the company said all merger talks with Microsoft are dead. Microsoft had zero interest in renewing any talks, according to a Yahoo statement. Microsoft shares are up 4% today to $28.29.
Yahoo and Google are reportedly set to announce some sort of partnership this afternoon. Stay tuned.
Update: Yahoo hired Google in a nonexclusive deal to sell some online ads in the U.S. and Canada.
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Posted
Jun 05 2008, 11:15 AM
by
Kim Peterson
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Google is leasing 42 acres at NASA's Ames Research Center, and plans to build employee housing there along with child care facilities, gyms, restaurants and basketball courts. And what a deal: Google will pay NASA just $3.7 million in annual rent for the property. The company makes that much in revenue in two hours. Construction won't start until at least 2013, and eventually, the campus could hold 5,000 workers. The move gives Google some breathing room as it continues its breakneck rate of growth. I'm curious about what Google housing might look like. The company has set the gold standard for employee cafeterias, serving better food (for free) than you can find in most restaurants. Will Google homes be as sophisticated?
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Posted
May 14 2008, 11:06 AM
by
Kim Peterson
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Citywide Wi-Fi networks sound like a fantastic idea. Take your laptop with you to the park or the grocery store. Drop your home Internet connection. Look up directions in your car (parked, of course). More than 150 U.S. cities planned to roll out municipal Wi-Fi at one point, but the reality is setting in: these networks don't work. Latest case in point: EarthLink, which is shutting down its Philadelphia Wi-Fi network in 30 days. Earthlink even tried to give away the network, but couldn't reach a deal with anyone. Too bad for EarthLink, which plunged deep into the municipal Wi-Fi business when its dial-up revenue fizzled. Shares dropped after the announcement, but have climbed nearly 3% today to $9.36.
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Posted
May 05 2008, 06:21 AM
by
Douglas McIntyre
Rating:
Pegging Yahoo's potential financial exposure from shareholder lawsuits after it turned down an offer of about $33 from Microsoft is hard. It starts with the difference between the offer and where the stock falls after the rejection. That price could be $22 or lower. Investors would have lost $12 billion, and perhaps more.
Yahoo is lucky, if one can call it that. Proving damages beyond the actual financial set-back to shareholders will be hard. Investors were not "damaged" as much as they simply lost money.
The other factor to Yahoo's advantage is that some groups of stockholders may not sue it at all. That would include the company's founders. Along with some large shareholder who supported the company walking away, probably 20% of the stock is in hands of people who would take no action. But, large class actions suits, especially if they are making progress, could be joined by that majority of the stockholder base who held shares three months ago as well as when the offer was rejected.
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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.
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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.
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Posted
Mar 14 2008, 12:23 PM
by
Kim Peterson
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Yahoo seems to be dropping its anyone-but-Microsoft merger attitude. Senior executives from both companies met on Monday to discuss Microsoft's cash-and-stock acquisition offer, although "discuss" might be too strong a word, since the Yahoos "mostly listened," according to the WSJ.
Yahoo had a duty to shareholders to at least hear Microsoft out, now that its list of possible alternatives is down to pretty much zero. AOL is busy with its $850 million acquisition of social networking site Bebo. Rupert Murdoch says News Corp. is staying out. Google lost its initial enthusiasm about thwarting the bid.
It's unclear how serious the meeting was. No bankers attended and no negotiation took place. We don't even know if the CEOs were there. But the official silence has been broken. Yahoo shares fell nearly 3% today to $26.71 on the news, and Microsoft shares are down nearly 2.3% to $27.96.
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Posted
Feb 26 2008, 09:10 AM
by
Douglas McIntyre
Rating:
Google is down almost 7% today to just above $452. That is less than $20 from its 52-week low. Twenty dollars might seem like a lot, but the shares would only have to fall another 4% to get there.
Google traded at over $747 last November.
With the news that internet advertising revenue was up only 25% last year and some evidence that small advertisers who use Google AdSense may be getting pinched by the economic slowdown, the chances of the search company hitting its $4.68 EPS target for the quarter do not look as good as they did a month ago. Recent data also show that the search company's click-through rates on ads are flat. They have been moving up for months.
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