SubscribeTDI Episode 58: Sign of the Times with Andrew+Andrew
May 26, 2008
Special Guest: Andrew Ross Sorkin: Editor, NY Times Dealbook. We discuss the interesting and the not so interesting deals that may be happening and those that may not.
Andrew Ross Sorkin is The New York Times’s chief mergers and acquisitions reporter and a columnist. Mr. Sorkin, a leading voice about Wall Street and corporate America, is also the editor of DealBook (nytimes.com/dealbook), an online daily financial report he
started in 2001. In addition, Mr. Sorkin is an assistant editor of business and finance news, helping guide and shape the paper’s coverage.
Mr. Sorkin, who has appeared on NBC’s “Today” show and on “Charlie Rose” on PBS, is a frequent guest host of CNBC’s “Squawk Box.” He won a Gerald Loeb Award, the highest honor in business journalism, in 2004 for breaking news. He also won a Society of American Business Editors and Writers Award for breaking news in 2005 and again in 2006. In 2007, the World Economic Forum named him a Young Global Leader.
Mr. Sorkin began writing for The Times in 1995 under unusual circumstances: he hadn’t yet graduated from high school. Mr. Sorkin lives in Manhattan.
Andrew+Andrew discuss Microsoft (MSFT) and Yahoo! (YHOO) as well as Amazon (AMZN), the airlines (JBLU) and everything that is on top of the merger and deal discussions of the past several weeks.
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Stocks from The ZachZone: Genco Shipping & Trading Limited (GNK), TBS International Limited (TBSI) , Hughes Communications Inc. (HUGH), Safe Bulkers Inc. (SB)
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If you are looking for the Indications of Interest Survey, click here.
Also, Andrew’s audiobook is finally out and you can download directly from audible.com or iTunes.
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Hey Yahoo! - Microsoft is now MaxiHARD
May 4, 2008
Is it over? Maybe not….Maybe this is part of a bigger plan…
Microsoft may be actually pulling the plug on the Yahoo! deal as a form of intimidation. It is a risky play, but perhaps it is a strategy that is sort of a “See what happens to your shares if we pull out” strategy by Balmer and Microsoft. Yahoo! shareholders are going to be angry, that is for sure. But, what if that is exactly what Balmer wants? What if this is the Maxihard-ball that we were expecting from Balmer and Friends?
It has been a weird few months of this already. After coming to Yahoo! (YHOO) with a surprise takeover offer, Microsoft’s Steve Balmer “patiently” waited for Jerry Yang to come to his senses. Who is Yang kidding anyway? While Yahoo! is the #1 trafficked site, the company has done a lousy job at creating shareholder value. Sure, the integration of the two companies was going to Read more
TDI Episode 43: Inside MSN Money and The Facebook Factor
February 3, 2008
Special Guest: Chris Jolley, MSN Money Senior Manager. $180 prize giveaway. MSN Money and discussion of where they are going. Andrew begins with a discussion of the Microsoft and YAHOO! deal and the real reasons for the move. Then we go in depth into the MSN Money site and what it has to offer.
Chris Jolley is a 12 year – veteran of Microsoft Corporation, having served in a number of business and marketing capacities. Currently, as the business leader for Microsoft’s Financial Products Group, Chris Jolley is responsible for defining and executing the marketing strategy for Microsoft’s consumer finance products, including MSN Money and Microsoft Money software. In this role, Jolley oversees the distribution, sales, public relations, and advertising of the products, as well as industry partnership efforts.
During Jolley’s tenure with the Financial Products Group, the MSN Money site has grown from 2 million visitors a month to over 13 million and the Microsoft Money software has evolved to include unprecedented Web integration, marking a new era in automation for online financial activities.
He has been a speaker and moderator at numerous financial conferences, including American Banker’s EBPP and
Account Aggregation conferences, Spring Internet World and NetFinance, and has become a recognized industry expert discussing trends and issues in the online finance space.
Jolley joined Microsoft in 1995. Prior to re-joining the financial products group, he focused on partnership marketing, distribution and fulfillment for the MSN Internet Access business, direct marketing for Microsoft’s consumer annuity programs and leading the merchandising teams for MSN Shopping and Windows Live.
Stocks Mentioned: (MSFT) (AAPL) (YHOO) (GOOG) | Get Andrew’s Book - The Disciplined Investor
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Microsoft and Yahoo! - Facebook is the Real Reason
February 1, 2008
Balmer is dancing, Yang is sobbing. If you listen closely, you can almost hear the distant sound of Taps playing as the vultures are circling what is left of a once gorgeous technology story. After a pathetic quarter and an even more disappointing year, Yahoo! is now bleeding a slow death. The takeover announcement has opened a hole in the fabric of the universe today. It may seem like an alternative reality that Microsoft (MSFT) and Yahoo! (YHOO) will merge, but that was precisely what was announced. For $44 billion (66% premium), Microsoft will step up their web presence and create the most significant competition to Google (GOOG) that we have seen since Google’s inception.
Throughout the morning, this announcement was the focus of CNBC discussions and online message boards. Admittedly, it was a left-field surprise to guests and reporters as well as individuals and institutions. One oddball standout in the discussion was CNBC’s commentator Jim Goldman who talked the deal down and continued his Gah-Gah praise (love affair) with Goo-Goo. One has to wonder what is his angle is as he seemed to qualify the news as nothing more than a fly in the ointment for Google’s long-term strategy. Jim, wake up… this easily throws a 900-pound monkey wrench into Google’s quest for global dominance for all things online.
As Google has been executing with almost flawless precision, Yahoo! has been generally fathering. So what makes this so attractive to Microsoft? It is simple, synergistic and an accretive transaction. It has also been estimated that it could provide a terrific addition to the bottom line, adding approximately $.13 of positive earnings per share to Microsoft. That is a deal worth doing!
Beyond that, the reasons and rationale will be tossed around for the next few weeks. Many have also questioned whether or not Google would thrown in a bid for Yahoo!. Truth be told, it is not their style. It would surely meet with regulators disapproval as Google holds the majority of market share. Anti-trust is not Google’s game. Even so, while it appears that this could take some market share, the combination is still not strong enough to significantly hurt Google.
So, why is this merger/buyout in the works? Simple…it is all about the the Facebook Nation. This is apparently the main focus of the Microsoft plan as they have been slowly moving towards a greater relationship with Facebook for some time. Have you taken notice of the sea-change to the look and feel of Microsoft as a company as they have finally realized that “square-corners” is not selling. Microsoft wants desperately to be hip. They own the desktop, but they don’t own the action/nightlife.
Think of a teenager living in their parent’s home. They use it as a place to flop, eat and wash. They tolerate their parents yet keep them at a social distance. Once they have their wings, they are out of there. Apple (AAPL) has done a good job at capturing the early adoption of many of the Gen-Xers and now Gen-Y is up for grabs. This is the social generation with idealism. “They’re after a sense of purpose, work-life balance, fun, variety, respect, and the opportunity to do ‘real’ work that makes a difference. Arguably everyone wants these things from a job but the difference with Generation Y is they’ll talk with their feet when their needs are not fulfilled,” explains by author Peter Sheahan in his book Generation Y.
The communication vehicle of choice is text messaging and Facebook. This generation is always-on in a virtual-conversation. Privacy is not as much of a concern to them as is the thought of knowing that someone is listening.
Yahoo! Offers sex-appeal and millions of potential opportunities for eyeballs and access for Microsoft. It a way of stepping up the cool factor for Microsoft to ensure that they will be the choice for search, operating system and mobile products for generations to come. The timing couldn’t be better as the first chink in Google’s earnings growth was announced just hours prior. There is a plan and it looks like it may actually work. Microsoft should be able to break out above the recent resistance of $35 if this actually goes through.
Disclosure: Horowitz & Company clients are LONG MSFT
Yahoo! and AOL to Merge?
January 29, 2008
Just for fun…. Click the video below and ask yourself if something looks a touch familiar about of the AOL and Yahoo! sites. Click it over and over.
With all of the problems that both companies have encountered (GOOGLE) and the competition they endure (GOOGLE), it would be of great benefit to look towards a consolidation rather than a fight. Aside from the graphic similarities, there is a great deal of overlap between both of these companies.
In their earnings announcement, Yahoo Inc. (YHOO) reported a drop in quarterly profit on Tuesday and its shares fell nearly 7 percent as Chief Executive Jerry Yang predicted a tough 2008 amid a weakening U.S. economy.
“While we will continue to face headwinds this year, we believe that the moves we are making will help us exit 2008 stronger and more competitive and return to higher levels of operating cash flow growth in 2009,” Yang said in a statement.
The article continued to explain, “Yahoo’s larger share of the display market makes it more vulnerable to any spending pullbacks in a recession. Analysts expect key rival Google Inc (GOOG) may fare better in a downturn with its dominance of paid search listings, a form of advertising that is viewed as more closely tied to sales.”
News outlets are not impressed with Yahoo! results either:
Yahoo net drops as reorganization stays in focus
at MarketWatch (Tue 5:00pm)
Yahoo 4Q Earnings Fall Over 23 Percent
AP (Tue 4:59pm)
Yahoo Q4 In Line; Q1, ‘08 Outlook Light; Stock Slumps
at Barron’s Online (Tue 4:53pm)
Yahoo disappoints investors again
at CNNMoney.com (Tue 4:49pm)
Another flop at Yahoo!
at Fortune (Tue 4:44pm)
To the Yahoo! an AOL team: DO SOMETHING! ANYTHING EXCEPT WHAT YOU HAVE BEEN DOING! Shareholders are losing out because of your stubbornness. Be brave, be daring and think of the little ant that moved that rubber-tree plant. You can do it…!
Disclosure: Horowitz & Company clients do not hold positions in stocks mentioned as of the publish date.
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