Filed under: Competitive strategy, Google (GOOG)

Google, Inc. (NASDAQ: GOOG) continues to have the ambition of becoming the largest advertising company in the world. Well, at least that’s the thought I have held for over two years now. Is it a coincidence that Google’s online revenue growth in 2007 was larger than the combined advertising revenue of the 17 top offline media companies? No.

Henry Blodget, who couldn’t be trusted as a Wall Street analyst (which is why he isn’t one any longer), runs Silicon Alley Insider and contrasted Google’s growth with media powerhouses Viacom, CBS and Clear Channel (among others). He came to the conclusion that Google is pounding up hard on the media landscape as it comes to taking ad revenue share from just about anyone in the business.

Blodget says: “A single media property, Google.com grew by $2 billion. All the offline media properties owned by the 13 offline media companies — all of them — grew by about $1 billion.” After looking at the 13 other companies, it’s not hard to imagine that Google beat them all — combined. This isn’t a surprise to me at all — Google’s foray into advertising isn’t a mistake and the way it’s taking market share is also not a mistake. In the U.S. alone, Google’s ad revenue totaled about $8.7 billion for 2007 — up 44% from 2006 revenue. That’s 5.7% of $153.7 billion spent on advertising in the U.S. last year.

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Filed under: Competitive strategy, Google (GOOG)

Google, Inc. (NASDAQ: GOOG) continues to have the ambition of becoming the largest advertising company in the world. Well, at least that’s the thought I have held for over two years now. Is it a coincidence that Google’s online revenue growth in 2007 was larger than the combined advertising revenue of the 17 top offline media companies? No.

Henry Blodget, who couldn’t be trusted as a Wall Street analyst (which is why he isn’t one any longer), runs Silicon Alley Insider and contrasted Google’s growth with media powerhouses Viacom, CBS and Clear Channel (among others). He came to the conclusion that Google is pounding up hard on the media landscape as it comes to taking ad revenue share from just about anyone in the business.

Blodget says: “A single media property, Google.com grew by $2 billion. All the offline media properties owned by the 13 offline media companies — all of them — grew by about $1 billion.” After looking at the 13 other companies, it’s not hard to imagine that Google beat them all — combined. This isn’t a surprise to me at all — Google’s foray into advertising isn’t a mistake and the way it’s taking market share is also not a mistake. In the U.S. alone, Google’s ad revenue totaled about $8.7 billion for 2007 — up 44% from 2006 revenue. That’s 5.7% of $153.7 billion spent on advertising in the U.S. last year.

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Filed under: Deals, Consumer experience, Competitive strategy, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)

Google (NASDAQ: GOOG) is hardly likely to benefit from a Microsoft (NASDAQ: MSFT) buyout of Yahoo! (NASDAQ: YHOO). Having a larger competitor with a bigger piece of the search market hardly does it any good. The “merger” of the two companies also creates that largest display ad company in the world.

But, display advertising is not a fast-growing business. Google’s search operation is, and it will continue to have , more than 60% of the market in the US.

Perhaps because its share price is down so much, Google has begun kicking about the proposed marriage. According to Reuters, Google CEO Eric Schmidt said, “We would hope that anything they did would be consistent with the openness of the Internet, but I doubt it would be.” The search company is probably trying to hint that Microsoft would “use” the new company to promote its software agenda to the detriment of consumers who simply want to use the internet for information and entertainment.

It may be a reasonable argument to get regulators to look hard at the potential deal, but Microsoft is not that stupid. It is very likely to understand that pushing its products to users and hurting access to the normal experience of getting everything from sports scores to news about Madonna won’t fly.

Google can hardly talk. It pushes its Google Apps software, its e-mail and mapping products to people who come to the site to use its search features. None of the big internet sites is “pure”. They do have to make money.

Douglas A. McIntyre is an editor at 247wallst.com.

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Well, they were one of the few remaining pushing seconds via the wholesale channel when the rest of the world backed away.  I guess the sovereign wealth funds said “no mas” to home equity loans through brokers.  Of course, they are still available through the retail channel.  Just another ding against brokers.  Just another bonus for the retail folks.  Anyone still have questions about whether banks are trying to phase out wholesale?

From Citi Home Equity:

Important Announcement to CitiMortgage and Citi Home Equity Customers Regarding Home Equity Products - Please read

Earlier this month, CitiMortgage shared publicly a new business strategy that included originating greater percentage of saleable products. As a result of this strategy, we will no longer offer home equity stand alone or combo products, effective March 18, 2008.

• The last day to register and lock either a stand alone second or combo is Tuesday, March 18.
• On Wednesday, March 19 these products will no longer be available on the Citi Home Equity Web site at www.CitiHomeEquity.com.
• All stand alone and combo loans in the pipeline must fund on or before May 12, 2008.

With this change in strategy, I do want to reiterate two things. First, home equity products are still available via Citi’s retail distribution channels. Second, CitiMortgage intends to remain an industry leader in both Wholesale Lending and mortgage lending overall and we thank you for your continued business as we work through this time in the industry together.

Hat tip Dan and Aaron for the communication - as Chris used to say - the beat goes on.

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Filed under: Hewlett-Packard (HPQ)

In the summer of last year, BladeLogic (NASDAQ: BLOG) launched its IPO, which skyrocketed nearly 50%. It helped that one of its main rivals, Opsware, get a $1.65 billion buyout offer from Hewlett-Packard (NYSE: HPQ).

Well, BladeLogic has now agreed to sell out, although at a lower valuation: $800 million. The buyer is tech veteran, BMC Software (NYSE: BMC).

BladeLogic is focused on helping to deal with the mind-numbing complexities of data centers, helping with things like compliance, downtime, speed and so on. Keep in mind that there’s about $140 billion spent on data centers per year.

At the same time, over the past few years, BMC has done a good job restructuring its company. Now it’s in a position to ramp growth - and BladeLogic will be a nice boost. In fiscal Q1, the company’s revenues spiked 68% to $21.4 million.

Although, Wall Street is skeptical. In today’s trading, BMC’s stock is down 7% to $31.31.

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, JPMorgan Chase (JPM), Bear Stearns Cos (BSC)

Shares of Bear Stearns (NYSE: BSC) are currently trading at around $3.75, a premium of more than 85% to the recently announced deal for the firm to be acquired by JPMorgan Chase (NYSE: JPM) for $2 per share.

A few things come to mind. First, as recently as last week, CEO Alan Schwartz was essentially telling the market that there wasn’t no darn iceberg, that if there was, he would have steered the ship clear of it, and that if they had hit an iceberg, everything would have been fine: “Bear Stearns’ balance sheet, liquidity and capital remain strong,” he said in a statement.

How could things have deteriorated so quickly that a takeover offer at less than 5% of the market price at the time of that statement was compelling? It seems likely that Bear Stearns’s financial statement are completely unreliable at this point, leading me to this conclusion: Nobody knows nothing, and buying Bear Stearns here is mindless speculation based on nothing . And speculation that someone else will come along and pay 85% more than the Fed-backed bailout that the company’s board has already set up, is all that is — speculation — and I wouldn’t bet on it.

That’s not a game I’d want to be playing — there’s just not enough information here for intelligent investing. I’d stay the hell away from Bear Stearns.

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Filed under: Hewlett-Packard (HPQ)

In the summer of last year, BladeLogic (NASDAQ: BLOG) launched its IPO, which skyrocketed nearly 50%. It helped that one of its main rivals, Opsware, get a $1.65 billion buyout offer from Hewlett-Packard (NYSE: HPQ).

Well, BladeLogic has now agreed to sell out, although at a lower valuation: $800 million. The buyer is tech veteran, BMC Software (NYSE: BMC).

BladeLogic is focused on helping to deal with the mind-numbing complexities of data centers, helping with things like compliance, downtime, speed and so on. Keep in mind that there’s about $140 billion spent on data centers per year.

At the same time, over the past few years, BMC has done a good job restructuring its company. Now it’s in a position to ramp growth - and BladeLogic will be a nice boost. In fiscal Q1, the company’s revenues spiked 68% to $21.4 million.

Although, Wall Street is skeptical. In today’s trading, BMC’s stock is down 7% to $31.31.

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: Options

CME Group(NYSE:CME) is recently trading down $45 to $440.26. CME’ s clearing member, MF Global-(NYSE- MF) , is recently down $11.10 to $6.23. The CME announced an offer of 0.323 share and $36.00 per share to acquire NYMEX(NYSE:NMX) this morning. CME March 440 straddle is priced at $41.05. CME April option implied volatility of 57 is above its 26-week average of 35 according to Track Data, suggesting larger risk.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

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Filed under: Deals, JPMorgan Chase (JPM), Bear Stearns Cos (BSC)

Shares of Bear Stearns (NYSE: BSC) are currently trading at around $3.75, a premium of more than 85% to the recently announced deal for the firm to be acquired by JPMorgan Chase (NYSE: JPM) for $2 per share.

A few things come to mind. First, as recently as last week, CEO Alan Schwartz was essentially telling the market that there wasn’t no darn iceberg, that if there was, he would have steered the ship clear of it, and that if they had hit an iceberg, everything would have been fine: “Bear Stearns’ balance sheet, liquidity and capital remain strong,” he said in a statement.

How could things have deteriorated so quickly that a takeover offer at less than 5% of the market price at the time of that statement was compelling? It seems likely that Bear Stearns’s financial statement are completely unreliable at this point, leading me to this conclusion: Nobody knows nothing, and buying Bear Stearns here is mindless speculation based on nothing . And speculation that someone else will come along and pay 85% more than the Fed-backed bailout that the company’s board has already set up, is all that is — speculation — and I wouldn’t bet on it.

That’s not a game I’d want to be playing — there’s just not enough information here for intelligent investing. I’d stay the hell away from Bear Stearns.

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Filed under: JPMorgan Chase (JPM), Bear Stearns Cos (BSC), Newcastle Investment (NCT)

Friday morning, lost in the midst of another bad day in the market, Newcastle Investment (NYSE: NCT) reported that it would be cutting its dividend to increase cash for additional liquidity and possible share buybacks. As the stock price has gone down, the trailing dividend yield continued to rise. When I bought at $12.50, the yield was about 22%. The trailing yield as of Friday’s close was 32.50% at a stock price of $8.60. Looking forward the current payout will be $0.25 per share, decreasing the yield to about 11% going forward.

The lower yield is in line with the level of distributions made before the financial crisis, but many investors since were looking to enjoy the higher yields given their now higher level of market risk. The stock lost $1.64, almost, 16% on this news and the overall negativity, caused in part by one of the Carlyle Groups investment vehicles Carlyle Capital collapsing and Bear Stearns (NYSE: BSC) news on Friday that it was remaining open but only as a ghost of its former self with the help of the Federal Reserve and JP Morgan Chase (NYSE: JPM). Of course, we all know that by Sunday afternoon it was announced that JPMorgan will be acquiring Bear Stearns for $2 share.

Continue reading Chasing Value: Newcastle Investment — questions abound

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