Microsoft v Google - the fight begins as MSN swallows Yahoo

Microsoft have offered US$ 31 a share for Yahoo , half and half, stock / cash.

At 31/12/08 Microsoft had US$21,076,000 cash at the bank so they can afford this US$44.6 Bn. deal , which is at a mind boggling premium of 62% of Yahoo's closing price on Thursday. ( MSN paid US$6 Bn. (Mkt Cap US2.4 Bn pre bid) last May for online advertising specialist aQuantive)

On Friday Yahoo closed out at US$28.38 up 48% which gave it a P/E of 60.38 and a Market cap of US$37.93 Bn.

Microsoft closed out at US$30.45 down 6.6% with a P/E of 17.32 and a Market cap of US$283 Bn.

So by spending all their cash pile, diluting their stock Microsoft can boost their current share of the search market to just over 30%.
Remember that MSN were late into the search market and they have doubled their share of the market since year end 2006.

There appears little synergy between Yahoo (who laid off 1,000 of its 14,300 workers this week) and MSN (79.000 employees) , this is a case where 2 + 2 does not necessarily = 4... and Google (7,000 employees) have an unstoppable, superb global model, constantly refined and improved which serachers choose because it produces the results they want.

Frankly the sages of Seattle have no choice, the market for bloated software is over, Vista has been a disaster.. they need to get a bigger share of the global search pie with it's attendant revenues and they need it fast.

Five years down the line this will be seen as a masterstroke. MSN will be a leaner, fitter machine... first thing they need to do is buy Blinkx.

Gannett press sales, revenues, profits in Q4 2007 take a dive

Gannett Co. Inc.'s are the US's largest newspaper publisher and own 85 daily newspapers - including USA Today, 23 television stations and hundreds of nondaily publications.

Things look bad for the dead tree press based on their latest quarterly results ;

Q4 2007 revenue was US$1.9 billion, down 12% from US$2.2 billion in Q4 2006. Earnings were US$245 million, or US$1.06 per share (down 30%) compared with $354 million US$1.51 per share last year.

Newspaper advertising revenues dropped 12% US$1.2 Bn. and circulation fell 7% to US$313 Mn. Broadcast advertising fell 21.7 % to US$212 Mn.

In Q4 Gannett took a charge of US38 Mn. in severance expenses and facility consolidation costs - USA Today, gave the pink slip to 45 of its 500 newsroom staff on December 3rd.

For the fiscal year ended Dec. 31, Gannett earned US$1.06 Bn. down 9% from US$1.16 Bn in 2006. Annual revenue was US$7.4 billion, down from US$7.8 billion in 2006.

Sigbn of the Times ? The company two weeks ago created the position of chief digital officer, charged with expanding and enriching its global digital operations, as it looks to get more out of its digital operations amid waning print revenues.

Charge, Ad Slump Sink Gannett WSJ
Gannett Fourth-Quarter Profit Falls; Ad Revenue Drops Bloomberg

i-Store competition competition heats up as Amazon sign up Warner Music - Sony BMG to sign ?

Amazon.com Inc has signed up Warner Music Group Corp onto its music download service. The latest major record label to join the competitor to Apple's iTunes store.

Available from Thursday on the Amazon MP3 service, users purchase the tunes and download them to Apple's popular iPod or many other digital music players thst plsyd MP3 format digital files.

Both companies said they will also offer exclusive tracks and special album bundles from Warner, the world's No. 3 music company.

See previous post Monday, December 03, 2007
MP3 Music Downloads - the new black in the 2008 record biz

Billboard say that Pepsi and Amazon have been planning for 12 months for a massive joint download promotion which is expected to be announced on February 3 during the Super Bowl, in Arizona.

Expect an announcement from Sony BMG Music Entertainment real soon now. (owned 50$ each by Bertelsmann and Sony Corp.America)pic Sony Star Jennifer Lopez

Amazon are nearly back to the all time highs of just over US$100 in 199 when they had 2 share splits.