Microsoft (NASDAQ: MSFT) wants to expand the reach of its vital Office suite of products. The software giant wants to utilize a subscription model for the collection of programs. The initiative will commence later this month at Circuit City (NYSE: CC) and it will eventually reach other retail stores. People will also eventually have the option of accessing the subscription product via computers such as ones made by Dell (NASDAQ: DELL). The cost is reported to be $70 for twelve months of Office access.
This is an interesting scheme. As the article points out, businesses might not bat an eye at subscribing to software applications, but for consumers, this is a different ballgame. Many of us, myself included, are so used to going down to a Best Buy (NYSE: BBY) to purchase a software package for a flat fee that paying yearly dues just seems like an alien concept. And I'd say this goes double for something as large and complex as the Office program. Microsoft believes that $70 on an annual basis will be perceived as cheap and will expose consumers who might normally either seek upgrades on a pirated basis or who would simply continue using older versions to regular approved updates. It is a large investment, after all, to upgrade to a new iteration of Office.
Microsoft would be wise to market the heck out of the subscription model for Office, taking full advantage of the inflationary environment we are currently in. If potential users can be convinced of the value proposition, then they could eventually become hooked on the promise of upgrades over time for the relatively economical price indicated. Checking around on the net, I notice that a lot of the negative comments about this idea center on the fact that there are already free alternatives out there to Office, such as applications offered by Google (NASDAQ: GOOG).
One of Yahoo!'s (NASDAQ: YHOO) plays for showing that it does not need a deal with Microsoft (NASDAQ: MSFT) is to find another large partner for a merger or joint venture. It is becoming more likely that the partner may be either Time Warner's (NYSE: TWX) AOL or News Corp (NYSE: NWS), which owns MySpace.
The structure of a deal with AOL might look very much like the one the firms discussed earlier in the year. According toThe Wall Street Journal, "The two companies are talking about a structure they began discussing several months ago -- an arrangement whereby Time Warner would fold AOL into Yahoo and take a minority stake in the combined venture."
A transaction with AOL would give Yahoo! three important advantages. First, it would nearly double the size of its user base, giving it by far the largest audience of any company in the US. Yahoo! would also get AOL's Advertising.com network, the biggest display ad network in the nation. Finally, Yahoo! would get a substantial set of new customers for its search and search advertising businesses.
Wall Street wants to see Yahoo! sold. Any other alternative, including a deal with AOL, is likely to drive its shares down. But, if it wants any chance of staying independent, a transaction with Time Warner may be its only viable alternative.
Douglas A. McIntyre is an editor at 247wallst.com.
According to people familiar with the situation, the Wall Street Journal reported that Yahoo! Inc (NASDAQ: YHOO) is again talking to Time Warner Inc (NYSE: TWX), this time about taking over AOL, with Time Warner taking a stake in the combined entity. News Corporation (NYSE: NWS) has its eye on any Yahoo moves. Meanwhile, Microsoft Corporation (NASDAQ: MSFT) is considering what its next move against Yahoo might be and is talking to News Corp.
The Wall Street Journal also reported that, as part of the company's plan to cut costs, Tribune Co's Los Angeles Times newspaper may look to cut about 250 jobs, including about 17% of its news staff.
The Financial Times reported that Chrysler, which has been searching for foreign partnerships, signed with China's Great Wall Motor a memorandum of understanding to explore long-term business ties in areas that include technology, distribution and components.
OTHER PAPERS:
According to the Dallas News, AMR Corporation's (NYSE: AMR) American Airlines informed its flight attendants' union that is may lay off 900 flight attendants on August 31.
WEB SITES:
Yonhap reported that LG Electronics will release "Dare," a new touch-screen mobile phone in the U.S. that will compete with Apple Inc's (NASDAQ: AAPL) latest iPhone models.
Stock futures were mixed early Thursday morning, the last and shortened day of trading this week -- markets will close at 1 p.m. EDT. Oil, again, has reached new highs as investors awaited the ECB decision on interest rate. Wall Street is also anxious about the upcoming jobs report, especially after Wednesday the ADP employment figures were worse than expected. Today's session will likely be choppy.
Despite starting the day on a positive note Wednesday, U.S. stocks ended sharply lower after the ADP employment figures damped mood on the Street. Also, crude oil prices rose sharply and an analyst warned that General Motors (NYSE: GM) may have to consider bankruptcy at some point; GM stock closed below $10 a share. The Dow industrials tumbled 166 points, or 1.46%, entering bear territory -- down over 20%, the Nasdaq Composite lost 53 points, or 2.32%, and the S&P 500, fell 23 points, or 1.82% - the only major index still not in bear territory.
Soon, at 7:45 a.m. EDT, the European Central Bank will announce its decision on interest rates. The ECB is widely expected to increase rates, which in turn could further weaken the dollar, driving oil prices higher.
Then, at 8:30 a.m., the Labor Department will release the June payroll figures. Economists expect the unemployment rate to fall to 5.4% from 5.5% last month, but job losses are expected to rise to 60,000 positions, up from 49,000 in May, according to Briefing.com.
At 10:00 a.m., the June ISM services index will be released, and another decline is expected.
For those of you who own blue-chip stocks, this is an eye-opening prediction. An article at CNBC.com talks about the possibility of Dow 10,000. Dow 10,000!
I repeated that in case you didn't get it the first time. It sounds pretty scary to me, and it should sound pretty scary to a lot of you out there. I'd have to presume that most investors don't use the stock market primarily as a substitute casino for the times when Las Vegas is out of reach. Many of you out there must own a Disney (NYSE: DIS) or a Coca-Cola (NYSE: KO), maybe a General Electric (NYSE: GE) or a Microsoft (NASDAQ: MSFT), something generally considered core and safe for the long-term. I happen to own the first three. Anyone who does is in for some huge volatility if Dow 10,000 comes along.
Actually, whether it comes along or not, volatility is here to stay. And here's the thing about the Dow 10,000 prediction: it isn't so farfetched on a mathematical basis. When you first read that number, you say to yourself "No way, that would be like a depression!" But because the numbers are getting higher, the actual point moves aren't as dramatic as they may seem on the surface. If we hit 10,000, that would represent a decline of approximately 29% from the high reached back in October 2007. As I write this, the Dow is about 20% off the high. Is another 9% feasible?
Brand-Name Stocks Uner $10: Buyer Beware These well-known names in the bargain bin may look appealing, but experts advise laying off until their earnings picture is clear. Among the stocks to be weary of are Sprint Nextel, Motorola, Ford Motor, Qwest, Washington Mutual, Northwest Airlines, Del Monte, Rite Aid, Chico's, Crocs, United Airlines, Palm, Sealy, Blockbuster, Circuit City and Orbitz. Brand-Name Stocks Under $10: Buyer Beware
According to people familiar with the discussions, the Wall Street Journal reported that Microsoft Corporation (NASDAQ: MSFT) has held discussions with Time Warner Inc (NYSE: TWX) and News Corporation (NYSE: NWS), among others, about joining it in a deal that could lead to the breakup of Yahoo! Inc (NASDAQ: YHOO). Some of the sources said the preliminary talks are unlikely to result in a deal with Yahoo!
Johnson & Johnson (NYSE: JNJ) is reportedly in exclusive talks to sell its wound-care business Ethicon to the private-equity arm of JP Morgan Chase & Co (NYSE: JPM), according to the Wall Street Journal. Terms of the potential deal were not disclosed.
OTHER PAPERS:
Sources familiar with the inquiry said that the Justice Department has opened a formal antitrust investigation into a deal that would allow Google Inc (NASDAQ: GOOG) to provide some search advertising for Yahoo!. The Washington Post reported that investigators will demand documents from Google and Yahoo!, as well as other large companies in the media and Internet industries.
WEB SITES:
Reuters reported that regulators in the European Union are looking at the long-term effects of BHP Billiton Limited's (NYSE: BHP) $170B bid for Rio Tinto Group (NYSE: RTP). Sources familiar with the EU questionnaire said regulators have asked competitors and customers about effects of the deal on their businesses through 2015.
U.S. stock futures were higher Wednesday morning, as Wall Street could try to having yet another positive session. While Starbucks news of store closing and reports Microsoft may still be interested in Yahoo helped lift sentiment, UnitedHealth already issued a warning this morning. Employment data is also on tap before the market opens.
U.S. stocks finally ended higher on Tuesday. Surprisingly, it was car sales that helped the mood on the Street as as June sales came in not as bad as expected. The Dow industrials ended 32 points higher, or 0.28%, the S&P 500 added 4 points, or 0.38%, and the Nasdaq Composite added 11 points, or 0.52%.
Today, investors will have the ADP June private sector employment figures to chew on ahead of the government's report tomorrow. The employment report is expected to be released at 8:15 a.m. EDT. Then, at 10 a.m., May factory orders are due out.
Also on the docket today is weekly crude inventories, usually released at 10:30 a.m. EDT. While oil came off highs Tuesday due to a slightly stronger dollar, it again rose above $141 a barrel Wednesday, due to persistent supply concerns that has analysts warning of higher prices yet. An IEA report saying supplies will remain tight and demand will likely grow despite higher prices helped push prices higher.
Microsoft (NASDAQ: MSFT) may try to buy Yahoo! (NASDAQ: YHOO) again, but it does not want the whole company. It finds the search business useful as part of its battle with Google (NASDAQ: GOOG). The content portal business does not have much attraction, and Redmond wants a company like Time Warner (NYSE: TWX) to pick up that piece. According toThe Wall Street Journal, Microsoft "approached other media companies in recent days about joining it in a deal that would effectively lead to Yahoo's breakup."
The new deal just might work. Yahoo! dropped below $20 yesterday, putting its stock back where it traded before the first buy-out offer. The No. 2 search company's shares reached as high as $33. Investors, especially Carl Icahn, are steamed that Yahoo! did not grab all of that extra money.
Even if Microsoft cannot find a partner to take the Yahoo! content business, it may move ahead. It only has 10% of the US search business. Yahoo! has about 20% and Google around 60%.
Microsoft still needs Yahoo!, and with its stock down by a third, Yahoo! needs a buyer.
Douglas A. McIntyre is an editor at 247wallst.com.
Six months of 2008 are now behind us and the stock market has not been a friendly place to most investors. Stability that was once found in household names that were industry giants is gone, and they have now been brought to their knees.
Many of them were the stocks we might have looked to in the past for stability, so you can be sure I put forward my five candidates with a little trepidation, but forward I go anyway. First a little review is in order.
Citigroup Inc. (NYSE: C) dropped from around $53 per share last year to around $30 in January and we can buy it today for around $17. Even at that price Goldman Sachs (NYSE: GS) has downgraded it to a sell and thinks there is more bad news to come. Citigroup was the largest bank in the world. Not any more.
General Motors (NYSE: GM) was the largest car maker in the world. That was before the stock tumbled from $43 to its current $11 range. A crushing blow to long time investors hoping that someone in the company could stop the ship from sinking.
Who's Minting the Most Millionaires? Not the U.S.A. A new survey finds when it comes to minting the wealthy, India and China now outpace the U.S. which isn't even in the top 10 anymore. Other countries also outpacing America include Brazil, Korea, Indonesia, Slovakia, Singapore, UAE, Czech Republic and Russia. A Millionaire Boom In The East - Forbes.com
Yahoo's (NASDAQ: YHOO) embattled management and board have one month left to prove to shareholders that they made the right call in rejecting Microsoft's (NASDAQ:MSFT) bid. With shares trading at about $20, they are going to have to do some fancy footwork to show why rejecting a $31to $33 per share offer was actually good for shareholders.
Yahoo is trying to convince investors that a proposed 'search' deal with Google (NASDAQ:GOOG) will provide the growth needed to restore Yahoo to previous glory. According to an AP report: " By relying on Google's superior technology to show some of the ads alongside its search results, Yahoo believes it can increase its annual revenue by about $800 million and generate another $250 million to $450 million in annual cash flow."
Keep in mind that since the Microsoft deal fell apart, Yahoo has lost more than $16 billion in market cap. It is going to have to generate a lot more in revenues to show that they made the right choice.
My other problem is that I have many friends who over the last week have told me they can't access their Yahoo mail or open up their saved stock portfolio's on Yahoo Finance. I, personally, have been locked out for two days.
Billboard reported Monday that MTV Games, a division of Viacom Inc. (NYSE: VIA), will release the second installment of the popular Rock Band game this September. Rock Band first came out late last year in direct competition with Activision Inc.'s (NASDAQ: ATVI) Guitar Hero franchise, but where Guitar Hero only offers guitar simulated play, Rock Band offers a wide range of instruments and vocal game play. Rock Band also features an online store where users can download additional tracks for the game.
Rock Band 2 will be released at a time when a number of other music-related games, and according to MTV Games the game will feature "new and 'improved' drum and guitar controllers, a larger soundtrack, and new online modes and customization options." Additionally, all previous controllers and downloaded songs will also be compatible with the new game, so players will not lose those features or be required to buy new input devices. The game will initially only be available on Microsoft Corporation's (NASDAQ: MSFT) Xbox 360 platform but will expand to other systems by the end of the year.
Rock Band and Guitar Hero alike have revolutionized many listeners' interface with the music they love, simply because it expands the "play-ability" of many users who may not have ever picked up or tried to play actual instruments. Those listeners aren't lazy by any means, but these two game franchises expand the experience of playing music in a way that has never been possible before.
I read an article over the weekend about Yahoo! Inc. (NASDAQ: YHOO) and its reorganization attempts. Make no mistake about it, this company needs to alter its DNA if it intends to survive in a world without a Microsoft Corp. (NASDAQ: MSFT) taking it over.
In a nutshell, it looks like Yahoo! wants to retool its divisions so that it can more efficiently react to changes in the online marketplace. Yahoo! apparently feels that its current organizational structure inhibits growth and is looking to create new teams dedicated to developing products that will capture eyeballs and advertising opportunities as quickly as possible. The company also wants to focus on cloud computing, a technology that is important to the business sector.
Well, from the point of view of an investor looking at Yahoo!, I don't see anything here that persuades me to buy the stock. Synthesizing a new plan of corporate attack is pretty much par for the course for any company that is doing terribly and is looking to get back on the good side of Wall Street. But is there anything really exciting in the plan? No. It's just Yahoo! doing something. There's nothing too revolutionary going on. Centralizing this and that might add value. It also might not. It's all in the execution, and I'm not sure I want to trust a company that rebuffed Microsoft's reasonable buyout offer to execute anything at this point.
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Stock futures were mixed early Thursday morning, the last and shortened day of trading this week -- markets will close at 1 p.m. EDT. Oil, again, has reached new highs as investors awaited the ECB decision on interest rate. Wall Street is also anxious about the upcoming jobs report, especially after Wednesday the ADP employment figures were worse than expected. Today's session will likely be choppy.
For those of you who own blue-chip stocks, this is an eye-opening prediction. An article at 
U.S. stock futures were higher Wednesday morning, as Wall Street could try to having yet another positive session. While Starbucks news of store closing and reports Microsoft may still be interested in Yahoo helped lift sentiment, UnitedHealth already issued a warning this morning. Employment data is also on tap before the market opens.
Six months of 2008 are now behind us and the stock market has not been a friendly place to most investors. Stability that was once found in household names that were industry giants is gone, and they have now been brought to their knees. 
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