Bigmouthmedia search engine news: finance

Microsoft 'considering investing $1.5bn in retention of Yahoo! staff'

Wed, 30 Apr 2008 12:00:00 GMT

Internet giant Microsoft is reportedly considering setting aside $1.5 billion in order to retain Yahoo! staff if its takeover of the search engine provider goes ahead.

According to details of a lawsuit filed by shareholders against Yahoo! in February concerning pension funds, Microsoft will use the money if it is successful in its bid for Yahoo!.

During a conference call hearing on March 24th, a Yahoo! lawyer said that Microsoft had "earmarked $1.5 billion for employee retention at Yahoo!", the Wall Street Journal reports.

The legal case concerned allegations that Yahoo! breached its duties by not responding in good faith to Microsoft's acquisition offer.

Initial discussions concerning the $1.5 billion staff retention plan were said to have taken place in a communication between the general counsels of Yahoo! and Microsoft.

A Microsoft spokesman stated: "Microsoft is not commenting on the suit or anything related to it."

Meanwhile, in a staff email sent in February, Kevin Johnson, president of the Microsoft platforms and services division, commented, "There's no question we will dedicate significant rewards and compensation to Yahoo! and Microsoft employees."

In January of this year, Yahoo! revealed it had let go of more than 1,000 workers, reducing the company's total number of personnel to around 13,200.

The reductions were said not to have affected the areas of the business that support its "critical growth initiatives".

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Yahoo!'s earnings report 'will result in prolonged Microsoft takeover battle'

Thu, 24 Apr 2008 12:00:00 GMT

The positive earnings results posted earlier this week by Yahoo! will not help it fight off Microsoft's takeover bid, but rather will result in a drawn out struggle, it has been suggested.

According to Aleksandra Bosnjak, lead analyst at StrategyEye Digital Media, the search engine provider's first-quarter performance "has probably set the scene for a prolonged battle for Microsoft in its bid to takeover Yahoo!", VNUNet.com reports.

As had been predicted by a number of search industry analysts, Yahoo! revealed that its earnings for the first three months of 2008 had beaten expectations, with net revenue standing at $1.35 billion, slightly ahead of initial estimates of $1.32 billion.

Commenting on the results, Ms Bosnjak said: "By delivering earnings and revenue that surpassed market estimates, Yahoo! added more uncertainty in terms of finding the right acquisition price."

She added that, regardless of its earnings, the internet company is still in a "position of weakness" and will have to collaborate with another company in order to make advances in the market.

The expert stated: "It is in Yahoo!'s interest to resolve this bid as soon as possible since failing to find a solution means, ultimately, no progress."

Additionally, both Yahoo! and Microsoft are under pressure to combat the advances being made by rival company Google, which is ahead in "every single aspect of online competition", she went on to say.

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Yahoo! earnings beat expectations

Wed, 23 Apr 2008 12:00:00 GMT

As predicted by several search industry analysts, Yahoo! has revealed that its earnings for the first quarter of this year beat expectations.

The search engine provider reported net revenue of $1.35 billion, slightly ahead of initial estimates of $1.32 billion and 14 per cent higher than the $1.18 billion it made during the same period last year.

Commenting on the results, Jerry Yang, Yahoo! co-founder and chief executive officer, said: "This quarter's solid performance underscores the fact that we are executing on that plan.

"Yahoo! is beginning to realise the benefits of the very substantial and deliberate long-term investments we've made to capitalise on the opportunities ahead in display and to recapture momentum in search."

He went on to say that, not only does the search engine provider have a "unique franchise" and industry-leading technology, but it also benefits from the "dedication and professionalism" of its team.

Mr Yang added that the success of the financial quarter is indicative of how well the personnel at Yahoo! can perform under challenging circumstances.

However, the earnings report did not get a positive reaction from investors. Indeed, its shares fell in value following the announcement.

In an interview with Bloomberg, Paul Meeks, an analysts with family investment firm LR Burtschy & Co, said: "[Yahoo!] needed to show fabulous results and these are good results. I don't know if they're what's necessary to prove to investors they can go it alone."

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Yahoo!'s earnings 'to face scrutiny'

Mon, 21 Apr 2008 12:00:00 GMT

Search engine provider Yahoo! is expected to come under intense scrutiny when it announces its first-quarter earnings, the Wall Street Journal reports.

According to the publication, the announcement, which will be made tomorrow (April 22nd), will be an opportunity for the firm to demonstrate it is worth more than rival company Microsoft is bidding for it.

Microsoft has set a deadline for discussions for April 26th, two days after it releases its own three-monthly earnings.

Analysts anticipate that Yahoo! will meet its modest financial projections, which it confirmed earlier this month.

The firm predicted first-quarter revenue of between $1.68 billion and $1.84 billion. This compares to $1.67 billion a year earlier.

According to Jeffrey Lindsay, an internet analyst with wealth management company Sanford C Bernstein, Yahoo! is likely to deliver in terms of its projected earnings due to its desire to avoid a Microsoft takeover unless the offer is raised.

He stated: "In any internet business, you can pull the stops out in any one or two quarters. [Yahoo! would] be very crazy not to."

Last week, rival search engine provider Google announced revenue of $5.19 billion for the first three months of 2008. This figure exceeded the expectations of investors who were concerned about the search giant's financial status following the publication of comScore figures that suggested the company's click-through rates had increased by only two per cent compared with last year.

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Google ranked top in world's most powerful brands

Mon, 21 Apr 2008 12:00:00 GMT

Internet giant Google has topped a poll of the world's most powerful brands.

According to research firm Millward Brown's annual top 100 global brand power list, the search engine provider has an estimated value of $86 billion.

Meanwhile, competitor Microsoft came fourth in the list, with its brand value said to stand at $70.89 billion.

The figures are derived from a combination of balance sheet values and consumer sentiment.

Commenting on the findings, Peter Walshe, global account director at Millward Brown, stated: "Google's rank has been driven by fantastic financial performance and equity value," the Guardian reports.

The news will be welcomed by Google, which recently announced impressive first quarter revenue results.

Last week, the search engine provider reported revenue of $5.19 billion for the first three months of 2008, a sum which significantly exceeded the expectations of the majority of investors.

The top five positions remained unchanged year-on-year, with each of the five companies achieving growth of at least 15 per cent compared to 2007.

Meanwhile, the top 100 brands combined have increased in estimated value by 21 per cent over the past two years to reach $1.94 trillion.

Brands in emerging Asian markets, such as China, were also reported to have achieved success compared to those in more established Asian countries.

Indeed, the top Chinese brands had risen in estimated value by 51 per cent this year, compared to just seven per cent in Japan and Korea.

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Google revenue exceeds investors' expectations

Fri, 18 Apr 2008 12:00:00 GMT

Internet giant Google has exceeded the expectations of investors, reporting revenue of $5.19 billion for the first three months of 2008.

This figure is 42 per cent higher than the search engine provider reported in the first quarter of last year.

Commenting on the impressive results, Eric Schmidt, chief executive officer of Google, said: "Our ongoing innovation in search, ads and apps helped drive healthy growth globally across our product lines, yielding another strong quarter for Google."

He added that, as the firm integrates DoubleClick into its ad platform, new ways to improve the experiences of users and increase value for advertisers and publishers open up.

Mr Schmidt continued: "Also, while exercising operational discipline, we continue to explore opportunities that add value to users everywhere and to Google in the long-term."

As a result of Google's announcement, shares in the company rose sharply in after-hours trading, increasing by more than 17 per cent.

Investors had been concerned after a report by research firm comScore recently suggested that click-through rates on Google had increased by only two per cent compared with last year.

Responding to the positive results in light of Wall Street fears, Rob Sanderson, an analyst with American Technology Research, stated that "there was a lot of smoke and not much fire", the San Francisco Chronicle reports.

He added that investors were "very much relieved" when Google posted its figures.

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AOL-Yahoo! deal 'imminent'

Mon, 14 Apr 2008 12:00:00 GMT

In a bid to fend off Microsoft's takeover bid, search engine provider Yahoo! is closing in on a deal with AOL, according to sources.

Confirming a Wall Street Journal story, one insider told Reuters that under the terms of such a deal, Yahoo! would receive a cash investment from AOL's parent company Time Warner in exchange for a 20 per cent stake in the combined business.

The agreement, which would exclude AOL's dial-up internet access business, would reportedly value AOL at around $10 billion.

According to the source, Yahoo! would use the money provided by AOL to buy back millions of its own shares to boost its holdings and raise its stock prices.

Meanwhile, Greg Sterling, an analyst at Sterling Market Intelligence, stated that, were AOL and Yahoo! to combine, they may choose to make their instant messaging programs interoperable, USA Today reports.

He went on to say that both Yahoo! and AOL's strengths are in display advertising, adding: "Together, ad reps would have an easier time selling a large audience. It would give both a big boost."

Reportedly, the move to avoid a Microsoft takeover is part of a two-pronged strategy which would also see Yahoo! team up with Google to outsource some of its web search ad operations.

Under the deal, which was announced last week, Yahoo! will initiate a limited test of Google's AdSense for Search service.

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Murdoch may assist Microsoft in its Yahoo! takeover bid

Thu, 10 Apr 2008 12:00:00 GMT

Media mogul Rupert Murdoch is considering the prospect of teaming up with Microsoft to assist it in its bid to takeover search engine provider Yahoo!, it has been suggested.

A source close to the matter told the New York Times that the Australian businessman's News Corporation is discussing how it could back up Microsoft's bid for Yahoo!.

Reportedly, the terms of a possible deal are still being worked out, but the joint proposal would add social networking site MySpace to the Yahoo!-Microsoft combination currently being suggested by the software giant.

The talks between Murdoch and Microsoft are understood to be at a sensitive stage, with one insider telling the New York Times that there is "a long way to go before anything is definite".

Meanwhile, another source stated that News Corporation would put extra money into the Microsoft offer for Yahoo!.

Both of the sources spoke on the condition of anonymity because the negotiations are still at a private stage.

Neither Microsoft nor News Corp would comment on the possibility of an agreement.

Meanwhile, in a bid to fend off a Microsoft takeover, Yahoo! has reportedly begun to close in on a deal with Time Warner's AOL unit under which it would receive a cash investment from Time Warner in exchange for a 20 per cent stake in the combined AOL-Yahoo! business.

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Yahoo! to test Google search ads

Thu, 10 Apr 2008 12:00:00 GMT

Yahoo! has announced it is set to begin a limited test of rival firm Google's AdSense for Search service.

AdSense for Search enables website owners to place Google search boxes on their pages. When a user then searches the internet or the site with the search box, Google shares the advertising revenue it makes with the site owner.

Commenting on the deal, Google spokesman Daniel Rubin said: "Yahoo! will be testing Google's AdSense for Search service, which will deliver relevant ads alongside Yahoo!'s own natural search results.

"This is only a limited test and does not necessarily mean that Yahoo! will join the AdSense programme."

Meanwhile, Yahoo! added that the test will only apply to traffic from Yahoo.com in the US and will not include the firm's extended network of affiliate publisher partners.

Initially, the test will run for up to two weeks and, according to a company statement, will be limited to no more than three per cent of Yahoo!'s search queries.

Yahoo! - which is under increasing pressure to enter into formal negotiations with Microsoft concerning a possible takeover - added that its board of directors is currently exploring "strategic alternatives to maximise stockholder value".

Meanwhile, Microsoft was quick to raise possible antitrust concerns over a Yahoo!-Google deal.

It said: "Any definitive agreement between Yahoo! and Google would consolidate over 90 per cent of the search advertising market in Google's hands."

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Yahoo! investor speaks out against Microsoft takeover

Wed, 09 Apr 2008 12:00:00 GMT

Search engine provider Yahoo! has received support from its second largest investor in its bid to fend off Microsoft's takeover bid.

Bill Miller, portfolio manager at asset management firm Legg Mason, stated in an interview with the Wall Street Journal that his firm is prepared to support an effort by Yahoo! to retain its independence should Microsoft lower its offer.

Recently, Microsoft wrote to the Yahoo! board telling chief executive Steve Ballmer that "now is the time" to negotiate over the final terms of the deal.

In the letter, Microsoft also threatened to lower its offer if the search engine provider does not come to an agreement within three weeks.

Commenting on the threat, Mr Miller stated that Microsoft had "blundered".

He commented: "Telling the shareholders you are going to take something away from them is not a way to get their support."

The businessman went on to say: "If Microsoft lowers the price, I am not prepared to say that's better than Yahoo! remaining independent."

According to Mr Miller, the current $29 a share bid is "not something he's too excited about", but if Microsoft were to raise the offer, the pressure would shift "very quickly" to Yahoo! to enter into negotiations.

He added that, "bumping the number up" from its current level would have a significant psychological impact on Yahoo!'s shareholders.

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