The new deal is rather complex and would involve collaboration between Yahoo’s and Microsoft’s online advertising businesses without a complete takeover. It seems likely that Microsoft may later restart its merger negotiations, if the new deal succeeds. The time for the new discussion is crucial for both companies as Yahoo! is likely to announce its new partnership with Google sometime this week. With the Yahoo-Google partnership being subjected to antitrust scrutiny, any further collaboration with Yahoo! will not pay-off for Microsoft. To avoid any tussle with Carl Icahn, Yahoo! might decide to review its deal with Microsoft. The Microsoft-Yahoo saga is unfurling new dramas every day.

Image

Source: BBC

Despite Icahn’s past successes with TWA, Time Warner, Oracle and BEA, his new activism might not be as easy as it seems. Microsoft on its part has said that it has ‘moved on’ after being rebuffed by Yahoo. How much truth is there in Microsoft’s assertion is not clear. The current scenario in the equity market is showing that Yahoo’s shares are performing much better than anticipated after Microsoft walked away from the deal but Microsoft’s share prices have remained the same. When Microsoft offered Yahoo its $44 billion acquisition deal, Yahoo’s share was at $19 per share. With the current share price being around $26 per share, Yahoo might ask for a higher price for acquisition. Now it remains to be seen whether Icahn’s activism will do any trick.

Source:Iht
Image

No amount of cajoling or coaxing made Yahoo accede to Microsoft’s demand for acquisition. Heartbroken, Microsoft has finally given up its plan to acquire Yahoo. It will instead tread a solitary path to achieve its goal of increasing its share in online advertising, albeit at a slower pace.

26 April 2008 was the deadline set by Microsoft for Yahoo to accept its $44.6 billion offer for acquisition. The unresponsive Yahoo made Microsoft threaten the company with a hostile take offer. However, with Yahoo remaining undeterred, Microsoft agreed to raise its offer by $5 billion to $47.5 billion or $33 per share. But Yahoo remained adamant and demanded $53 billion. A desperate chief executive of Microsoft Steve Ballmer in a letter to Yahoo chief executive Jerry Yang formally withdrew the offer in the best interests of Microsoft stockholders, employees and other stakeholders.

With no further possibility of Microsoft acquiring Yahoo, what will this mean for the internet companies? The possibility of hostile take over of Yahoo by Microsoft is still open, although Mr. Ballmer has officially denied such possibility in the near future. The possibility of Google approaching Yahoo with a higher bid than Microsoft cannot be ruled out. In such an eventuality, Google’s monopoly will expand further making things difficult for Microsoft. As for the immediate affect, Yahoo will see some downslide in its share prices with Microsoft walking away from the deal.

Source: BBC

Image

Quarterly results from Yahoo! showed that the company had performed better than expected that raised speculations that Microsoft would be forced to raise its cash-and-shares offer to win control over Yahoo!. Yahoo! is saying that it wants a higher bid before it begins any meaningful talk with Microsoft. However, Microsoft has given Yahoo! time until Saturday to respond after which it will propose its own candidate for the Yahoo! board.

For Microsoft, acquiring Yahoo! is very important to compete with Google and seize a sizable portion of the online advertising revenue. Yahoo! has been dillydallying with the offer that Microsoft made last February. The search group has also approached AOL. It is even open to joint venture with its biggest rival Google.

Source:Times Online
Image

The first quarter results of the worlds most popular online search engine reveal that even the slowing US economy does not have an adverse effect on its revenue. Google was up by a 30% in the first quarter compared to last year as its first quarter profits rose to $1.31bn.

It was courtesy of the innovation in search, ads and applications that increased the earnings for Google as per CEO Eric Schmidt. Incidentally it is also for the first time that the company has managed to have more sales abroad with 51%, a partial reason for which was the slump in the dollar value eventually increasing the value of the earnings outside the US. This news has also given a breather to the Google officials who were worried of deteriorating sales on account of slowdown in online advertising. Google is currently the fifth biggest company in the US by market capitalisation.

With the US economy on a further downswing it would be interesting to see how the sales report for the second quarter shape up for Google. Considering the present slump not really affecting them, it could see a further rise in profits in the next quarter ending in June.

[Courtesy]

Libya has the fourth largest natural gas reserve in Africa after Algeria, Nigeria and Egypt. Besides Libya, Gazprom is trying to win production contracts in Algeria, which already supplies 13 percent of Europe’s total gas requirements. By creating a natural gas cartel, Russia would geopolitically surround Europe with its pipelines, further increasing its monopolistic hegemony in the European energy sector.

The EU is trying to reduce its dependence on the Russian gas supplier by strongly backing the construction of the Nabaccu pipeline that when completed would make it possible to supply natural gas from Azerbaijan via Turkey to rest of the EU countries. However, divisions within the EU members has stalled the Nabaccu project with Italy, Germany, Hungary, Bulgaria and Austria benefiting by striking separate deals with Gazprom, the Gazprom-Eni deal being the latest in the series of bilateral agreements.

That Gazprom’s monopoly is not good for the European energy sector has been proved repeatedly by Russia’s confrontation with the former Soviet States. Russia entered into direct confrontation with Ukraine over Gazprom’s demand for price increase that saw Gazprom not only curtailing gas supply to Ukraine but also blocked Ukraine’s attempt to negotiate directly with Turkmenistan by denying Turkmenistan the right of way for its gas through the Gazprom pipeline network unless it was first sold to Gazprom. Gazprom’s efforts to control the African gas supplies will increase the woes of Europe.

Source:International Herald Tribune
Image

The Thomson Corporation, a preeminent provider of information solutions to business and professional customers globally has announced that its shareholders have overwhelmingly approved the proposed acquisition of Reuters Group PLC at a special meeting held on March 26, 08 in Toronto. 99% votes went in favor of the deal and cleared the way for winding up the deal on April 17, 08.

Reuters said that its shareholders approved the transaction by 92.6% at a meeting in London. This too is the biggest that happened in the history of the Canadian-based specialized data company. If the deal approves, then the new formation will be known as Thomson Reuters Corporation and their share of the world market for financial data will be one third, in competition against Bloomberg LP.

After the deal the main situation that comes out shows Thomson’s shares fell 2.5 percent to 34.66 dollars in New York while Reuters’ US-traded shares fell 0.3 percent to 72.19. It is also coming in the ears that David Thomson, the CEO of Thomson and grandson of founder Roy Thomson will be chairman of the combined firm i.e. Thomson Reuters Corporation and Reuters CEO Tom Glocer will be chief executive of the combined Thomson Reuters.

Sources say that Richard Harrington, the president and CEO of Thomson, plans to retire after the deal and is positively looking towards it and said that the deal has given them a global footprint which they never had in their own company. This is also being said that the combination of the two is going to be tremendously good for the shareholders.

Source

Under this revised deal, JP Morgan would purchase 95 million newly issued Bear Stearns shares. The New York Times reported that Bear’s board of management has also agreed to this new offer. John Augustine, chief investment strategist with Fifth Third Investment Advisors was noted as saying that JP Morgan has had this deal sewn up right now. The new offer puts Bear Stearns at a value of about $2.1 billion, much more than the $236 million which it was valued at under the initial deal. Representatives of Bear, JP Morgan and the Fed were not immediately available for comment.

The revised deal has financial backing from the Federal Reserve. This would raise concerns about the US government’s ability to rescue Wall Street bankers while millions of homeowners face the possibility of foreclosure.

Bear has recently been ranked as the fifth-largest U.S. investment bank but that ranking took a downturn as large subprime mortgage losses and falling confidence in the company prompted a run on the bank. The finalization of this new deal is vital to JP Morgan as this would serve as encouragement to banks and other customers that they can do business with Bear safely yet again. Bear’s liabilities were tightened by JP Morgan and it agreed to back all of Bear’s prime brokerage contracts and all of its short- and long-term loans.

Image

Via BBC

It seems that the tale of the tub has finally ended with Yahoo rejecting Microsoft’s offer of $44.6 billion at the end of the humongous affair that carried on for the past couple of weeks. The unsolicited bid was finally turned down by Yahoo and the status quo has again been preserved with Yahoo continuing to pose as a dominant competitor in the market of networking business.

The speculation concerning the fate of competition in view of the Yahoo and Microsoft’s merger has been mollified by this as it has again become evident that Yahoo is not willing to bend down on its knees in the face of adversity even if its is concerning a temptation of billions of dollars.

Although in view of the statements made by Yahoo’s Board of Directors suggested that the bid did not matched up to Yahoo’s expectations but did not hinted on a value for the same. In lieu of this it was communicated that Yahoo’s turning down the offer was a step towards maximizing the profits for the investments in Yahoo by its stockholders. It also seems willing to stand again in the emerging industrial market and competitive environment.

But it is yet not known if Microsoft will continue to brace itself up in this protracted struggle to acquire Yahoo. But it is also speculated that Microsoft will be taking steps to increase the bid value to $5 billion and increase the share value to $40 per share, but it still very unprecedented. Acquiring a titan of the business world does not seem to be an easy affair; rather it will take another titan like Microsoft to merge with a rival competitor on a much bigger scale than the present stipulated bid. In the face of this it is about time that another gargantuan bid will definitely accomplish the task of acquiring Yahoo. The only thing it is to see is when and who will do this

Source: USA Today

In the Troy of the internet networking industry, Yahoo seems to be the very sought after Helen, pursued by two titans, Microsoft and Google, one trying to convince her to marry and the other trying to deter that. The proposed alliance between Yahoo and Microsoft and now the open condemnation of Google and its unceasing efforts to restrain this alliance from becoming a reality has amounted to a Trojan War situation, the outcome of which seems to rely on the sole decision of Yahoo although the $44.6 billion bid would not be an easy bait to resist.

A twist in the story is currently being seen as Google is trying its best to convince Yahoo out of this stipulation giving the reason that it would pose serious threats to the competitive nature of the industry, its openness and innovation. Google is keeping a continuous watch over the situation and seems to be suggesting Yahoo, ways that would help it to resist the irresistible bid. This is suggestive of hypothetical alliances or some kind of partnership between the two with the help of AOL, as Google owns five percent of its shares.

Although big shots like AT&T, Comcast and Times Warner do not intend to join the bidding war, there seems to be a possibility for this if there is a speculated Yahoo fragmentation or break up. Google has also extended its arguments against Microsoft to the extent of accusing the company of illegally capturing the market of personal computers. Google’s senior vice-president David Drummond exclaimed the argument in his words,

“Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?”.

But it seems that Yahoo is not very impressed by Google’s effort to ward of this solicited bid, as it has denied any statement which refers to low market competition. In lieu of this, Microsoft has asserted that the alliance would definitely lead to more competitive market as there would be more potent search engines and online advertising scope. But this seems to be negative and threatening feature for Google as its share of online business will reduce considerably. Now with Yahoo taking its own time to decide whether it will take the bait or not, it seems to be very disconcerting and testing time for Google as well as the market.

Via: IHT

On Friday, Microsoft had announced that it is willing to offer $44.6 billion in cash and stock to Yahoo in what is being termed as the biggest ever acquisition by Microsoft. With Yahoo’s share prices closing at $19.18 on Thursday, the offer gives a 62% premium at $31 per share. Microsoft believes that the acquisition will increase their combined efficiency at reduced cost and saving $1 billion annually.

The pertinent question that remains is whether the acquisition will enable Microsoft to snatch the online services monopoly from Google whose popularity is deeply entrenched in the virtual world with the word ‘google’ entering dictionaries worldwide. With Yahoo retaining around 17% of the online market share, the combined share of Microsoft and Yahoo is far behind Google’s 77% market share. In fact, Microsoft has been trying for nearly two years since late 2006 to make Yahoo agree to its merger proposal. After considerable dillydallying, the reluctant Yahoo CEO Jerry Yang is believed to be considering the proposal from Microsoft CEO Steven Ballmer with all seriousness. Plummeting equity prices seem to have unnerved Yahoo.

What remains to be seen is Google’s reaction to the news of this grand acquisition. Current scenario does not seem that the company will become jittery from any combined move by Yahoo and Microsoft.

Source:IHT

The main reason of the slump in the mobile phone business is it could not compete with the cheap handsets especially from the Chinese manufacturers. The technology also is not suitable for multimedia activities demanded by the high-end users in America and Europe. By dissociating itself from the mobile phones business, Motorola will concentrate on its core business that includes radios, networking equipments and household electronics.

Now the question remains who will take over Motorola’s ultra-thin Razr phones? According to an analyst of the company, a Chinese company is interested in buying the business. This once again justifies the current Wall Street joke that describes the state of financially troubled American giants – ‘Shanghai, Dubai or Mumbai or say good-bye.’

Source:Guardian
Image:Telecomwereld

In this competitive market, another key organization to come forward is the Yahoo! Inc., the epitome of the internet networking, which has decided to shrink down their workforce up to seven percent. This has come as a consequence to the twenty-three percent loss of profit in the fourth quarter of the year that has gone by. The loss in the value of Yahoo has come as the other companies like Google and MSN have entered the online advertisement business.

Yahoo incorporated this decision as a cautious strategy to come into terms with any such losses that can be hypothetically anticipated in the current year. But this in turn has led to a big scaling down of shares of this esteemed group, almost 10 percent of the amount that was earlier. This has led to the exhaustion of almost $35 billion shareholder wealth.

Although the stipulated downsizing is not revealed for particular areas of the organization currently, the co-founder of the group has termed this as a necessary step for the company’s transformation in the coming months. It is estimated that the downsizing and thereof the cost cutting could help make up the lost revenues of the company.

In another twist, Yahoo and AT&T have planned to share the revenues earned through online advertising, as the online services are as per the agreement between the two companies.

Parmalat SpA, the Italian dairy group that went broke about four years back, has reached a deal for an out-of-court settlement with the Italian bank Intesa Sanpaolo. The private arrangement between the two companies, which was announced on Sunday, is worth 327 million Euros ($469.52 million).

The food group also reached simultaneous arrangements with Cariparma and Biberbanca (both are banking companies). These arrangements are worth 83 million Euros and 3 million Euros respectively. The out-of-court arrangements will mark the end of all lawsuits between the companies.

Parmalat had sued the banks for their alleged role in worsening its financial problems that eventually led to the group filing for bankruptcy protection in 2003. The charges were more specifically applicable to the use of credit to conceal company’s financial difficulties. The collapse of Parmalat and the associated companies under 14 billion Euros of debt was Europe’s biggest financial scandals at that time. It cost dear thousands of people who had invested in company’s bonds.

A joint statement issued by both the companies said that the settlement had brought to an end ‘all pending damages.’ The Italian bank also denied any wrongdoing and claimed that it was ‘totally unaware of the Parmalat state of insolvency.’ The settlement was:

...only to avoid uncertainties which arise, as a matter of fact, from the involvement in a long-lasting and very complex litigation while also considering the related heavy administrative costs.

Parmalat had returned to the Milan stock exchange a couple of years back after restructuring itself. Under the chairmanship of new CEO Enriqe Bondi, it has since been on a crusade to recover billions of Euros from banks in settlements and litigations. The recouping exercise has contributed fairly to the company’s coffers since then.

Early this year, the Italian dairy firm had reached similar settlements with Merryl Lynch, Italy’s Banca Monte Parma and Dutch bank ING. The latest settlement brings the total amount that Parmalat has settled to a staggering $1.73 billion. It still has pending recoveries against American companies Bank of America and Citigroup.

Image

Via

Following several years of being the most flourishing carmaker in Germany, Bayerische Motoren Werke faced several losses in its business. The layoff will mainly focus on restoring profitability of the German company. In the recent past, there have been many other instances of such layoffs in Germany with General Motors eliminating several thousands of workers from its Mercedes, Volkswagen and Opel departments. BMW’s concern was to manufacture more number of cars without expanding payments. As BMW is enhancing its car production in the US, it is unlikely that US will be witnessing such a layoff.

According to BMW spokesman Bill McAndrews, many employees with provisional contacts with the Munich-based BMW will be affected as a result of this mass layoff. The company will be proposing voluntary buyouts and will also have a discussion with its unions to settle for more flexible working hours. He added, ‘This will be done with a BMW approach... It will be socially acceptable.’

IG Metall, BMW’s union, showed no astonishment as the layoff news spread. This dismissal confirms that the company is facing stark competitive pressure. According to experts, Porsche and Audi in collaboration with Volkswagen will grow stronger in the years to come. In addition to this, the most immediate competitor of BMW, Mercedes-Benz, has recovered from the unsuccessful merger with DaimlerChrysler subsequent to sale of Chrysler by Daimler in the month of May this year. At present, Mercedes-Benz is registering a superior return on sales than that of BMW. According to an analyst of London’s Morgan Stanley, ‘Over the past 10 years, no one has benefited more from the Chrysler distraction than BMW... No one will be hurt more by the Mercedes revival.’

BMW, which is under the supervision of the Quandt family, is also currently facing rising pressure on its manufacturing costs as a result of stringent regulations by European Union on the release of harmful greenhouse gas carbon dioxide from the passenger cars. As per new emission policies formulated in Brussels this week, BMW will be required to cut down its average discharge of carbon dioxide by 25 percent.

In November this year, the BMW Group’s sale of Mini and Rolls-Royce mounted by 13.2 percent compared to the last year. In 2007, the company is ahead of its 2006 business figures by 8.3 percent. It manufactured 1.347 million cars within November, 2007 and this number equaled total number of vehicles it produced in entire 2006. But its profits declined owing to rising costs. Whereas Mercedes is on the verge of earning more than 8 percent return on sales in 2007, BMW’s return on sales remains at approximately 6 percent. In September 2007, Norbert Reithofer, BMW’s chief executive had divulged the company’s 5-year business strategy to increase profitability along with cost savings worth $8.6 billion. He also fixed a target of achieving around 8 to 10 percent return sales by the year 2012 and revealed the company’s plan to sell 1.8 million cars by that time.

BMW has developed a new sport utility vehicle with a hybrid engine, the X6, together with Daimler and General Motors and it displayed the latest model at the Frankfurt Motor Show in the month of October. It is also in the process of producing the Mini, its subcompact range of models.

Speculation is ripe in Germany that BMW could arrive at a closer cooperation with its archrival Daimler. BMW executives have shown interest in this regard and the two companies are already collaborating in developing hybrid engine technology. Though McAndrews refused to divulge about BMW’s purchase of any stake in Daimler, Jonas of Morgan Stanley had detailed out the advantages resulting from BMW buying a 20 percent stake in Daimler in a report last month. He added that, such a joint venture would help the companies leverage on their operational synergies against the competitor Porsche, Audi, and Toyota’s Lexus. He said, ‘Larger competitors can spread costs over more models, which means they can offer a better car at a better price.’

Some other analysts differed on this opinion by saying that such a deal is unlikely to materialize because, Daimler has recently recovered from a failed merger with Chrysler. The resulting consequences of this huge layoff can be observed only in the year to come.

Image Credit: MotorTrend

Source: IHT