Filed under: Google (GOOG), Apple Inc (AAPL), AT and T (T)

The New York Times [registration required] reports that Dave Stolte took his Apple Inc. (NASDAQ: AAPL) iPhone to Ireland and England in July and returned home to a little surprise — a bill for $3,000.

Stolte’s $3,000 phone bill was a result of unanticipated European roaming charges. Consider the case of mortgage consultant, Neil Dingman. Dingman used his iPhone only a few times on a European trip this summer and had expected to see just a small increase in his next bill for roaming charges. But he failed to turn off an iPhone feature that automatically checks e-mail. Thus his iPhone roamed over networks in Italy, Croatia and Malta more than 500 times. And he ended up with $852.31 in roaming charges.

But Stolte’s story has a happy ending. Thanks to the posting of Stolte’s bill on the Internet, AT&T Inc. (NYSE: T) went from giving him a $100 credit to full credit for that $3,000 iPhone bill. The lessons? Turn off the e-mail checking feature if you’re out of the U.S. And if you get a ginormous iPhone bill — post a complaint video on Google Inc.’s (NASDAQ: GOOG) YouTube.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the stocks mentioned.

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Filed under: Deals, Bad news, Competitive strategy, Google (GOOG), Microsoft (MSFT)

Capgemini, the largest computer consulting firm in Europe, will begin to market Google (NASDAQ: GOOG) Apps to its corporate customers. It would have been hard for the big search company to get a better endorsement. Capgemini global outsourcing chief executive Paul Spence said, “Incorporating Google Apps Premier Edition into our offering is yet one more way that we are helping our clients adopt technological innovations within a robust and tested framework.”

Google Apps has companies’ e-mail, spreadsheet, word processing, and presentation software packaged into one bundle. The software operates on PCs with most of the processing being done on Google servers instead of one the PC itself, the way that Microsoft (NASDAQ: MSFT) has done so far.

The move has to be considered as a fairly big blow to Microsoft Office. Since its launch, Google Apps has been characterized as a nice, inexpensive solution for small businesses. It does not appear to have been widely adopted even in that market, but having a large IT consulting firm offering the software could begin to change that perception.

Microsoft, which is beginning to market desktop software that operates on servers to compete with Google, does not need a big boost for Google right now.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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Filed under: Before the bell, Deals, Industry, Google (GOOG), Yahoo! (YHOO)

According to the Wall Street Journal, Yahoo! (NASDAQ: YHOO) gave serious consideration to outsourcing its search function to either Microsoft (NASDAQ: MSFT) or Google (NASDAQ: GOOG). The paper writes: “Such a move would likely give Yahoo an immediate revenue bump representing hundreds of millions of dollars annually, because Google, for one, generates about 40% more revenue for each consumer search than Yahoo! …”

Yahoo! has spent a huge sum on developing its own Panama technology to improve its competitive position with Google, but there is not much evidence that this program has worked well. Another quarter or two of bad results could send Yahoo! back to Google to pick up the additional revenue.

The idea that Yahoo! would turn to a rival for its key search function shows how badly off the company is and how little management may be able to do about it. When Yahoo! decided not to make search a major part of its business, before Google had become a big company, it sealed its fate as a display advertising company, but the display market is no longer growing quickly.

Not matter how much pride Yahoo! would have to part with to set up a partnership with Google for search, it should do so. It needs the revenue and Wall Street needs a revival of the stock.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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Filed under: Before the bell, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Apple Inc (AAPL), Hewlett-Packard (HPQ), eBay (EBAY), Intel (INTC), First Data (FDC)

Before the bell: Stock to open mixed

Europe’s largest computer consultancy, Capgemini, announced today it would partner with Google Inc (NASDAQ: GOOG) to help market Google Apps software package, a suite similar to Microsoft (NASDAQ: MSFT) Office suite but online. So far Google hadn’t manage to diversify its income much beyond its core businesses of internet searches and advertising. Perhaps this could help. This could be a blow to Microsoft should Google manage to push its Google Apps enough.

Yahoo Inc (NASDAQ: YHOO), which recently had a management change and launched a strategic review, may not overhaul its business, according to the Wall Street Journal. Nearing his 100-day deadline, when new chief Yang is supposed to deliver a new strategic plan for the company, it seems now that no big strategic announcements are planned at the end of that period. Talks of outsourcing search-advertising activity have cooled and no significant layoffs are expected.

While AMD prepared to unveil its new chip today, Intel Corp. rival (NASDAQ: INTC) said Saturday that construction work is underway at its $2.5 billion chip manufacturing plant in China.

Private equity firm Kohlberg Kravis Roberts appears now willing to concede to certain condition on bank debt it needs to close $24 billion in financing to buy payment processing firm First Data (NYSE: FDC).

Utility Belt is examining not only Apple Inc.’s (NADSAQ: AAPL) new iPods, but also Hewlet-Packard’s (NYSE: HPQ) new iPAQ phone, a RIM (NADSAQ: RIMM) BlackBerry competitor and the Blackbird, a luxury PC.

L’Oreal has launched legal action against eBay (NASDAQ: EBAY). Once again, another company sues the online auctioneer for not doing enough to combat the sale of counterfeits. Last year Louis Vuitton and Tiffany’s (NYSE: TIF) launched similar suits. On its part, eBay says it acts once notified by firms of counterfeits.

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Filed under: Consumer experience, Newspapers, Marketing and advertising

When I saw the headline in today’s USA Today that Subway and Dunkin Donuts are going to start selling pizza, I threw up a little bit in my mouth. Just to be sure it’s not a personal thing, I asked a few friends and we all reached the same conclusion: There’s a small possibility that I would buy pizza at Subway, and zero chance I would buy it at Dunkin’ Donuts. And especially not for breakfast.

McDonald’s (NYSE: MCD) tried pizza years ago and left with its tail between its legs, but apparently Subway and Dunkin’ still can’t resist reaching for a piece of the $28.5 billion pizza pie.

Subway has been selling pizza at more than half of its locations since the summer, and would like more franchisees to do the same, but is not requiring it. According to the USA Today, “Subway’s $2.99 thick-crust pizzas arrive frozen. They’re defrosted, then baked in the toaster ovens in about 90 seconds. Meat toppings are a buck each. Veggies are free.” Yum?

What do you think? Are my friends and I crazy, or are these forays into pizza ill-advised and destined to fail?

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Filed under: SEC filings, Other issues, Deals, Initial public offerings

Wall Street’s equity market eases back into the fall schedule this week, with just one deal on the docket:

IPOs:

Wednesday

Encore Energy Partners LP (ENP), a 9M-share IPO. UBS Investment and Lehman Brothers are the lead managers. Filing range: $20-$22.

For the latest market intelligence on IPOs, Syndicate, and after-market trades, check out The Fly Syndicate at www.theflyonthewall.com. [Subscription required.]

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Filed under: Products and services, Consumer experience, Marketing and advertising, Media World

If you haven’t read or seen anything about the album cover the English band Hard-Fi created for their most recent album, you might be interested simply for the novelty of the approach. Once Upon a Time in the West was released last week (next week in the U.S.) with the band’s name, the album title and the words “No Cover Art.” larger than both as the cover image (or non-image).

The band has stated that they wished to “break the rules” of an increasingly digital market where album covers did not matter by simply not having any artwork. The accompanying artwork for the first single from the album tells the listener that an “expensive black and white photo of band” is not available in a more overt statement about the decline in importance for artwork to accompany an album. The band also told NME that “it gets harder to do something really interesting because of the size of CDs” and that they have been told that this move makes the album “the white album” for this generation. (8/18/2007, p.21) Of course, when the “white album” was released in 1968 it hardly mattered that the sleeve was white as much as it mattered that The Beatles were putting out a new album.

On the whole, the scheme seems like a fairly interesting marketing campaign. Reports indicate that Warner Music Group (NYSE: WMG) label executives were against the move, which has sparked harsh criticism from fans on the band’s message boards. Despite these backlash, the lack of artwork and surrounding media coverage brought this potential listener to their website and clips of their songs which seems a successful ploy to bring in new listeners. It may only be a novelty bid in a saturated market but “no cover art” may just succeed and allow the band to reinsert the importance of music in selling music in the record industry.

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Filed under: Analyst reports, Analyst upgrades and downgrades, Krispy Kreme Doughnuts (KKD)

If you had a target of $11 on Krispy Kreme (NASDAQ: KKD) when the stock was at $6.33 and then the company reported a horrible quarter and the stock tanked more than 38%, what would you?

If you’re CIBC, you would issue an “oops”, but still manage to maintain an authoritative tone. CIBC “removed” their price target of $11. Not lowered, just removed. Poof. Gone!

The analyst pointed out, quite correctly, that many of the cures management talked about in the earnings release and on the conference call have already been tried or are currently in place. The company is also facing a liquidity crunch, and declining revenues are doing little to help that.

Continue reading CIBC World Markets downgrades Krispy Kreme (KKD)

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Filed under: Magazines, Personal finance

Money has a list of 47 quick and easy steps to get yourself on the path to a better financial future. Some of the tips include switching your savings to a high-yielding online bank, haggling down your interest rates on credit cards, putting together a “forever portfolio”, and checking how your salary compares to the industry average.

What’s interesting about the list is how easy most of these things are to do — and how few people will do them. It’s indicative of the serious financial literacy deficit that exists in our country, and people are literally throwing money away because of their ignorance.

Print out Money’s list and give it your adult children. If you have college-age kids, I’d be surprised if they’ve done more than 5 of the 47 smart things.

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Filed under: Earnings reports, Good news

Good news from Martek Biosciences Corp. (NASDAQ: MATK) recently. Its product, Martek’s life’sDHA (docosahexaenoic acid) was recently proven to lower bad cholesterol in adult males, in addition to its proven effectiveness in infant formula to foster eye and central nervous system development. CEO Steve Dubin stated that the company is seeking not only new markets for its existing products, but is also ramping up R&D to develop new products. One new market, potentially huge, is China, for which Martek recently received permission to market Martek life’sDHA for food use.

Martek recently released 3Q (third quarter) 2007 results which include the launch of 8 new products containing life’sDHA. Sales in 3Q increased 12% to $74.5 million. Year to date (YTD) sales are up 11% to $213.5 million, led by rising demand by both domestic and international customers for Martek’s infant formula. Martek life’sDHA is found in Breyers Yougurt and General Mills’ Yoplait Kids, as well as equivalent products internationally. The one negative ripple in this pool of otherwise good news is that Martek supplies life’sDHA to Dean Foods Company (NYSE: DF), the country’s largest supplier of raw milk products. Dean Foods is having financial problems and may be forced to scale back production, which will in turn lower sales of life’sDHA. But in what might turn out to be an ever bigger market, life’sDHA may help in medications used to treat clinical depression. Clinical studies for this usage are continuing.

Martek recently sold off its Fluorescent Detection Products unit to a group of former employees, leaving Martek free to concentrate on expanding applications for life’sDHA. The company also paid down its long-term debt by $19 million over the past 9 months. The company provided 4Q guidance of revenues between $77-80 million, net income between $6.5-$6.8 million, EPS of $0.20-$0.21. Revenues for FY 2007 are forecast at $302-305 million, with EPS of $0.62-$0.63, a growth rate of 12%.

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