Filed under: Google (GOOG), Yahoo! (YHOO), Nokia Corp. (NOK), Sprint Nextel Corp (S)

Get ready for ads to invade your cell phone. Yes, today Nokia Corporation (ADR) (NYSE: NOK) announced that it is purchasing Enpocket (the price tag was not disclosed). Enpocket has a sophisticated platform to manage mobile advertising campaigns - using things such as SMS, MMS, and even video. The firm has deals with companies like Sprint (NYSE: S) and Vodafone.

Right now, the mobile ad market is fairly small - but it’s expected to grow quickly. And, it looks like Nokia wants to be a part of the action.

I had a chance to interview Dipanshu Sharma, who is a wireless expert and founder of V-Enable (which is a mobile search provider). According to him:

“Quite exciting to see Nokia take an active role in overall mobile value chain than just handset sales. Nokia has a very strong presence in Europe and Asia, with their own advertising platform and where customers buy handsets mostly directly than through carriers.

“I guess after Google, Inc. (Nasdaq: GOOG) and Yahoo, Inc. (Nasdaq: YHOO) kept pushing Nokia to preload them and make statements that mobile advertising is a bigger play than online advertising in the long term, Nokia had to do something to be part of that value chain. Again, this deal shows the new leadership at Nokia is serious about being a solution for the consumer.”

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

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Filed under: Deals, Rumors, Management, Competitive strategy, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Time Warner (TWX)

There has been more than speculation that Yahoo (NASDAQ: YHOO) is near the center of Microsoft’s (NASDAQ: MSFT) radar screen, but perhaps AOL-Yahoo would be better fit. Maybe a deal for AOL will be more likely once Jeff Bewkes replaces Richard Parsons as chief executive of Time Warner (NYSE: TWX). (The Wall Street Journal reported today that Bewkes is likely to take over from CEO Dick Parsons as early as Jan. 1, 2008).

One reason Microsoft does not own Yahoo already is that Yahoo is expensive. Maybe Yahoo has another path to follow. Maybe Yahoo and Time Warner could help each other out. If Time Warner set AOL free to merge with Yahoo than their combined forces might be a better competitor for both Google (NASDAQ: GOOG)and Microsoft.

The current five year deal between AOL and Google made Google the seach engine for the site and since it forked over $1 billlion for 5% of the business, the valuation if it were independant would be $20 billlion. More importantly at the time it was reported that 10% of Googles revenue was generated through AOL. That certainly was incentive to get a deal done. I have seen no current data on this but if it is somewhere in the vicinty then a Yahoo/AOL combination would reduce Googles stranglehold on search and add it to the new company. It might represent as much as a 20% swing in traffic and revenue.

If Yahoo were to be acquired by Microsoft, it would become a part of what is now a very large conglomerate. One that should give some thought to it’s own lethargy. Microsoft is losing money on numerous hardware ventures and might be better off refocusing on software, both online and in the business environment. Now that Parsons is stepping aside to let Bewkes lead pehaps there will be the energy and insight to make a move.

Some time ago, I wrote Time Warner is not integrated yet because I thought that Time Warner (NYSE: TWX) may be going nowhere fast and as a shareholder and contributing writer I would like to see improvement in the value and quality of the company. Two weeks ago, I wrote Time Warner (TWX): No catalyst or no leadership? Some comparisons because progress is not only slow but hard to perceive. Maybe I’m just impatient but I would like to at least hear about a plan of action from someone in the executive suite. Perhaps there is hope with a new CEO.

Read Chasing Value or Serious Money to find potential opportunities, and to verify my track record, as well.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm

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Filed under: Conventions and conferences, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)

Word from the TechCrunch conference in California is that Yahoo! (NASDAQ: YHOO) bought open source e-mail and calendar company Zimbra for $350 million. Zimbra has more than nine million paid mailboxes across 50+ countries making it “one of the fastest growing solutions in the business, education and service provider markets for messaging and collaboration.”

The deal will allow Yahoo! to enter the business of onlne/offline desktop operations which has recently been attractive to Google (NASDAQ: GOOG). Microsoft’s (NASDAQ: MSFT) Office and Windows OS have dominated this market for years, but they are not open source, so the code cannot be used by outside developers to make related applications. The Microsoft products also tend to be expensive.

As the news becomes official, it leaves open the question of why Yahoo! is expanding into more businesses that do not have a proved business model when its core display ad model is in such great trouble.

Maybe new toys are more important than new revenue.

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

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Filed under: Time Warner (TWX)

Time Warner Inc. (NYSE:TWX) is sending its AOL corporate headquarters to New York City, where it can be closer to the Time Warner Inc. parent and closer to the ad markets. While this is a significant shift, this is not an entire relocation of the unit. Upon hearing of the AOL headquarters move the first thought was that this was going to be a move of thousands of workers, although that does not appear to be the case after looking through the news.

The largest transition here is integrating all of its newly acquired advertising properties into a new entity called Platform A, building on its Advertising.com network and the recent acquisitions of TACODA, Third Screen Media, Lightningcast and ADTECH. Platform A already reaches more than 90% of the domestic online audience, according to comScore Media Metrix. This was an area I had noted before as being the brightest spot inside the company if you looked at the total reach.

AOL will relocate its corporate headquarters to 770 Broadway in New York City, where the company has leased office space and where AOL’s New York-based advertising and programming operations also will be based. According to the press release, AOL will continue to have significant operations in Dulles, VA, as well as offices in Mountain View, CA, and other locations.

AOL’s Randy Falco and Ron Grant also present tonight at Merrill Lynch’s Media & Entertainment Conference at 7:00 PM. At the same link you’ll see that Dick Parsons, Chairman & CEO, will present at the Goldman Sachs Communacopia Conference tomorrow at 2:05 PM EST.

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Filed under: Analyst reports, DaimlerChrysler (DAI), Analyst initiations

MOST NOTEWORTHY: Quicksilver Gas Services, Hireright, DaimlerChrysler and Masimo were today’s noteworthy initiations:

• AG Edwards initiated Quicksilver Gas Services (NYSE: KGS) with a Buy rating and $26 target as the firm believes the company’s distribution growth has high visibility, based on its current asset base and the possibility of third-party acquisitions. UBS initiated shares with a Buy rating and $34 target.
• Hireright (NASDAQ: HIRE) was initiated with a Market Perform rating and $13 target at Piper Jaffray, as the firm believes the company’s distribution growth has high visibility, based on its current asset base and the possibility of third-party acquisitions. CIBC is positive on Hireright’s extensive solution set and strategic alliances and initiated shares with a Sector Outperformer rating.
• DaimlerChrysler (NYSE: DAI) was started at Bear Stearns with an Outperform rating. Following the Chrysler transaction, Bear expects Daimler to raise its margin guidance now that the company can focus on its truck platform.
• Masimo Corporation (NASDAQ: MASI) was initiated with an Outperform rating at Piper Jaffray, as the firm believes the company’s “best in class” technology will drive continued pulse oximetry share gains. Cowen initiated shares with a Neutral rating on valuation and Deutsche Bank started shares with a Buy rating and $30 target..

OTHER INITIATIONS:

• TD Newcrest started shares of Vitran Corporation (NASDAQ: VTNC) with a Hold rating.
• Lazard started shares of E-House China Holdings (NYSE: EJ) with a Buy rating; CIBC initiated shares with a Sector Outperformer rating and $25 target.
• Rodman & Renshaw initiated shares of Iomai Corporation (NASDAQ: IOMI) with a Market Outperform rating and $4.25 target.

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Filed under: Employees, Circuit City Stores (CC)

When a company publicly states its intent to jettison 3,400 employees to make room for ‘cheaper’ ones, perhaps it can make enemies out of its own employees? That thought entered my mind when I saw that three employees of a Circuit City Stores, Inc. (NYSE: CC) retail location in Modesto, California were arrested this past week for using customer credit cards to steal over $50,000 in merchandise from the nation’s second-largest consumer electronics retailer.

Apparently, the three employees in question (ages 23, 19 and 19) stole a 42-inch plasma television, xbox 360 and other higher-end electronics. Circuit City store management became suspicious earlier in the year when some large-ticket purchases lacked basic customer information. As it turned out, the employees were using credit information from legit customers in order to use existing credit lines to fraudulently purchase the products.

After an internal investigation, managers from the location approached Modesto police and the arrests were made. It appears that the customers who had their credit information looted were unaware that their good names and credit were used to pilfer tens of thousands worth of electronics goods. As the police investigation continued, other names were apparently brought up and officials now suspect even more employees may have been involved.

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Filed under: Analyst reports, Analyst upgrades and downgrades, New York Times’A’ (NYT)

MOST NOTEWORTHY: New York Times Co, Lee Enterprises, McClatchy Co, Marsh & McLennan, Deutsche Bank, Ryanair and Applebee’s were today’s noteworthy downgrades:

• Merrill reduced estimates on New York Times Company (NYSE: NYT), Lee Enterprises (NYSE: LEE) and McClatchy Company (NYSE: MNI) to Sell from Neutral due to the slowing economy and the impact from the housing market on newspaper advertising.
• Citigroup downgraded shares of Marsh & McLennan Companies (NYSE: MMC) to Hold from Buy following the departure of Brian Storms, CEO of Marsh Brokerage, as they believe it suggests a continued struggle at the company’s core business.
• The firm also downgraded Deutsche Bank (NYSE: DB) to Sell from Hold to reflect a more bearish outlook for European Banks due to the drop in credit-market revenue.
• UBS downgraded shares of Ryanair Holdings (NASDAQ: RYAAY) to Neutral from Buy as they expect higher costs to squeeze margins.
• Oppenheimer downgraded shares of Applebee’s International Inc (NASDAQ: APPB) to Sell from Neutral as they do not expect another suitor to come forward.

OTHER DOWNGRADES:

• Goldman Sachs removed Forest Oil Corporation (NYSE: FST) from its Conviction Buy List.
• Bear Stearns downgraded Novo Nordisk (NYSE: NVO) to Peer Perform from Outperform.
• Soleil downgraded shares of US BioEnergy Corporation (NASDAQ: USBE) and VeraSun Energy Corporation (NYSE: VSE) to Sell from Hold.
• Leap Wireless (NASDAQ: LEAP) was downgraded to Market Perform from Outperform at Raymond James.

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Filed under: Analyst upgrades and downgrades, PepsiCo (PEP), Coca-Cola Enterprises (CCE), Technical Analysis, Stocks to Buy

The world’s largest maker of Pepsi-Cola beverages is not PepsiCo (NYSE: PEP) itself, but a 1999 PepsiCo spin-off with the clearest mission statement in corporate America.

Pepsi Bottling Group (NYSE: PBG) is engaged in the manufacture, sale and distribution of Pepsi-Cola beverages. The firm operates about 300 manufacturing and distribution facilities and delivers Pepsi-Cola, Aquafina water, Lipton’s Iced Tea, Mountain Dew, Tropicana juice, Starbucks Frappuccino and Slice to stores and third-party distributors. PBG operates in North America and Europe, accounting for more than half of the Pepsi-Cola beverages sold in North America and about 40% of the worldwide volume. Coca-Cola Enterprises (NYSE: CCE) is a major competitor.

There was good news for PBG investors last week, when Goldman Sachs raised its rating on the beverage group to “attractive.” The analyst noted the potential for improved performance, as costs for most of the commodities used to make and bottle beverages stabilize.

Continue reading Pepsi Bottling Group (PBG): ‘We Sell Soda’

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Filed under: Analyst reports, Analyst upgrades and downgrades, Ford Motor (F), Netflix, Inc. (NFLX), Advanced Micro Dev (AMD)

MOST NOTEWORTHY: Ford Motor Co, Advanced Micro Devices, Brocade, Netflix and Equinix were today’s noteworthy upgrades:

• Bear Stearns believes Ford Motor Company (NYSE: F) could also benefit from similar deal to General Motors Corporation’s (NYSE: GM) potential VEBA healthcare restructuring with the UAW. The firm upgraded Ford shares to Outperform from Peer Perform.
• Advanced Micro Devices (NYSE: AMD) was upgraded to Neutral from Underweight at JP Morgan. The firm expects AMD’s Barcelona server chip will help close the gap vs. Intel Corporation (NASDAQ: INTC).
• Citigroup upgraded shares of Brocade Communications Systems (NASDAQ: BRCD) to Buy from Hold and added the stock to their Global Tech Conviction List on expectations for market share gains and margin upside in 2008.
• Thomas Weisel upgraded shares of Netflix Inc (NASDAQ: NFLX) to Overweight from Market Weight, citing reduced pressure from competitor Blockbuster Inc (NYSE: BBI), which could lead to upside in subscribers.
• Needham upgraded shares of Equinix (NASDAQ: EQIX) to Buy from Hold to reflect improving fundamentals and potential upside from the IXEurope acquisition.

OTHER UPGRADES:

• UBS upgraded shares of Sun Healthcare Group (NASDAQ: SUNH) and CSX Corporation (NYSE: CSX) to Buy from Neutral.
• Susquehanna raised Tween Brands Inc (NYSE: TWB) to Positive from Neutral.
• FTN Midwest upgraded Hudson City Bancorp (NASDAQ: HCBK) to Buy from Neutral.
• Bebe Stores (NASDAQ: BEBE) was upgraded to Outperform from Market Perform at Wachovia.

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Filed under: Forecasts, Bad news, Lennar Corp’A’ (LEN), Economic data, Housing, Federal Reserve

Alan Greenspan, interviewed by the FT ahead of the release of his new book, said that he expects housing prices to drop sharply from “current levels.” There is still some hope in the market, perhaps misplaced, that the sharp fall in homes values will be largely restricted to the subprime market.

Greenspan’s comments are unlikely to help shares of beaten down homebuilders such as Lennar (NYSE: LEN). The FT writes that Mr Greenspan said he would expect “as a minimum, large single-digit” percentage declines in US house prices from peak to trough and added that he would not be surprised if the fall was “in double digits”.

If Greenspan is right, and he often is, the fall-out in home devaluations would like be a fairly deep and lead to a long recession. A very sharp drop in home values, coupled with rising consumer credit card debt, and high oil prices would likely be a set of straws that would break the back of US consumers.

Greenspan’s opinion has not been echoed by current members of the Fed. Perhaps, they are hoping against hope that a rate cute will save the US economy from negative growth.

But, as each day passes, Greenspan’s view look more likely to be true.

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

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