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Posted
Oct 01 2007, 11:42 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
The most telling news from eBay's Skype announcement today is that it paid $530 million to settle an earn-out agreement. That doesn't sound so bad unless you consider that eBay was supposed to pay up to $1.7 billion as different revenue and profit targets were achieved. So to settle for a third of the total amount is an acknowledgement that things are not going as well as planned.
 eBay spent $2.6 billion on Internet calling company Skype in 2005, drawing skepticism from many corners. The idea was that eBay buyers and sellers would talk to each other on the computer, and the increased communication would boost the number of eBay transactions. But eBay never seemed to follow through with this initial vision, and many active eBay users probably still don't understand Skype, how it works or what it does.
eBay tries to spin today's news by saying the payment "is reasonable given the progress and anticipated rapid growth" of Skype's user base. The company is going to eat that $530 million as well as an additional $900 million as an impairment charge for its Q3.
Heads must roll with that kind of screwup, and today brings the resignation of Skype CEO Niklas Zennstrom. eBay's chief strategy officer will fill in temporarily. Skype President Henry Gomez is going back to eBay corporate as a senior VP.
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Posted
Oct 08 2007, 10:02 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
 It's been a horrible year for Yahoo. The company has derailed, and things will get worse before they get better. But for all the talk of a buyout or merger with Microsoft or another company, I just can't see it. Let's quickly review Yahoo's 2007 blues:
Missed earnings. First quarter profits came in below expectations, causing the stock to drop 11%. The second quarter met expectations but saw income fall year-over-year. Execs lowered guidance for the third quarter and the full year. After taking a hit this year, the stock price has been creeping up in September and closed today just shy of $28.
CEO turnover. Terry Semel resigned in June and co-founder Jerry Yang stepped in to lead.
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Posted
Oct 09 2007, 09:46 AM
by
Matt Koppenheffer
Rating:
Money Blog: Top Stocks Blog - MSN Money
What would it take for me to stop using Google?
That's the question I was asking myself this morning after reading through articles from RedHerring and Business Week. Google has shown that search is big business, and number two Yahoo!, along with Microsoft and IAC/InterActiveCorp want a bigger piece.
When it comes to regular Google users like me (I hear there are a lot of us), the question for the rest of these companies is how they're going to lure us away to their search engines. While Google doesn't have the same kind of stickiness that, say, Microsoft does in desktop software, I think snagging Google users could be just as tough
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Posted
Oct 15 2007, 11:23 AM
by
Kim Peterson
Money Blog: Top Stocks Blog - MSN Money
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
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Posted
Oct 17 2007, 11:20 AM
by
Kim Peterson
Money Blog: Top Stocks Blog - MSN Money
 I'll give Yahoo props when the company finally gets its act together, but that's not going to be for a while. Don't be fooled by all the "Woo-hoo for Yahoo" headlines; this company is not out of the woods.
Yes, Yahoo did beat analysts' expectations on revenue and profit in its Q3 results Tuesday, but that was because the bar was set so low. Analysts had been expecting a measly 8 cents a share. If Yahoo couldn't beat that it should have been put out of its misery for good. Yahoo shares are up nearly 7% today after the earnings news.
A deeper look reveals that all is not on the upswing at Yahoo. Operating income, for example, fell to $150 million from $202 million in the year-ago period, and operating expenses were up nearly across the board. Profit of 11 cents a share was unchanged from a year ago. The cost of revenues rose as well.
And remember that 100-day internal analysis in which CEO Jerry Yang said there would be no sacred cows? It's over, and let's just say that it's good to be a cow at Yahoo. Here's what Yang came up with: Yahoo should be the starting point on the Internet for people. Yahoo should be an advertising "must buy." Yahoo should attract developers with open platforms. Read More...
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Posted
Nov 09 2007, 08:12 AM
by
Kim Peterson
Money Blog: Top Stocks Blog - MSN Money
Looks like the tech selloff didn't end yesterday. A quick check:
Google: Down 3.2%
Apple: Down 2.9%
Cisco Systems: Down 4.3%
Oracle: Down 3.6%
Yahoo: Down 3.5%
This could be another ugly day.
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Posted
Dec 10 2007, 03:46 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
 Boeing shut down its ambitious onboard WiFi project last year, saying that after six years of work it couldn't find enough airlines who would offer the service to its customers. The service, called Connexion, provided e-mail, Web and TV during flights, with costs that ranged from $15 for less than three hours to $30 for a full day. It was mainly offered on non-U.S. airlines, and people who used it raved. But analysts said the service, which cost $150 million a year to run, was only used by 1,000 people a day across 125 commercial planes.
Boeing was too hasty in killing Connexion. U.S. airlines are slowly embracing free WiFi service, hoping to lure customers who want to send e-mails and instant messages from 30,000 feet. JetBlue is launching its WiFi trial tomorrow on just one plane, becoming the first U.S. carrier to do so. American, Virgin and Alaska plan to roll out service next year.
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Posted
Dec 19 2007, 03:52 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
This year has been a disaster for some tech companies. Oh sure, it's been a fabulous ride for Apple, Amazon and Google.
But this post is about the losingest losers out there. The train wrecks. The Lindsay Lohans of technology. Here are the companies, and their "oops" moments, that made 2007 memorable:
Yahoo
Share performance: Down 30% since the end of October.
Oops moment: Launching a public soul-searching in the form of a 100-day self-examination to craft a strategic plan.
What happened: The 100 days ended with no big announcements. Yahoo is too large and too laden by its own bureaucracy to be nimble. What's more, the company lost valuable search market share to Google this year.
Chance of recovery in 2008: Moderate. Yahoo is overhauling some core services, including e-mail and photo, but has been unable to monetize a user base that numbers some 475 million. Lots more work to do.
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Posted
Jan 04 2008, 11:35 AM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
Whenever your job is getting you down, just be glad you aren’t a financial journalist who has to make annual predictions that live forever on the web. Since the advent of MSN Search and Google, there is no hiding my most unfortunate calls in the drawer anymore. It’s all out there. So as an addendum to my 2008 forecast, which you can read right here, here’s how my '07 predictions fared.
1. Bull market, year 5. Well, sort of. I forecast an S&P 500 gain of 13% on 2007. We got 3.5%. The Nasdaq 100 did go up 19%, though, so let’s average them out and call it good.
2. Goldilocks lives! I forecast modestly rising inflation, modest job growth and below-trend U.S. economic growth of 2.6%. This was right on, as annualized growth came to 2.8% in 2007.
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Posted
Jan 16 2008, 12:18 PM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
 Wall Street continues to be plenty upset at Yahoo. The stock neared its 52-week low today and its three-month performance (pictured) isn't pretty. I can't find much reason for this week's slide, except for the departure of yet another executive.
The media is piling on Yahoo a bit this week. Kara Swisher at BoomTown writes about a Sanford Bernstein report suggesting that Yahoo drop its conservative business approach and start moving much faster. Outsource the search business, the report said, and cut staff.
The Motley Fool has named Yahoo its worst stock for 2008, noting the slide in Yahoo's share of the U.S. search market recently (Yahoo is around 21% now).
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