News reports are that Dell is engineering an Apple iPod Rival, which will do pretty much everything that iPod does, but at a fraction of the price. Wall Street Journal has got hints that price may be in the range of just $100 USD, which surely looks very interesting. Guess they will launch it just before Thanksgiving Holidays :-)
This video has updates:
So those of us who want functionality, can use the Dell option (even LG/Samsung may come up with something soon). And those who want to use Apple (and feel stylish about it), can of course stay on with the iPod – surely there will be innovations in it. Steve Jobs is never satisfied with status quo- which is good.
Category Archives: Market News
JPMorgan buys Bear Stearns for $2 per Share!
$2 a Share for shares that were trading about $60 last week! Amazing things you can do with $2 per share in a bearish market.
Over the weekend Bear Stearns showed its empty wallet to the Fed and managed to convince US Treasury Secy Henry Paulson for a bailout plan.
And over the weekend, the Federal Reserve cut its discount rate by 25 basis points and offered to lend money to several financial firms, in an effort to prop up the US financial sector. Well, a lot of props have been put already (refer our previous posts on US Banking sector crisis).
With the help of further cut in discount rate, JP Morgan Chase offered to buy rival investment bank Bear Sterns for $2 a share, with a total value of $236 million. It could have been 99 cents per share as well, but no, that would look too bad! The deal occurred Sunday night, with the US federal government acting as a catalyst to avoid a bankruptcy.
For anyone who’s been looking at Bear Stearns, Cash flow problems have been brewing for the last few months – they had clearly over leveraged themselves – and this weekend did it.
To quote AP news:
JPMorgan Chief Financial Officer Michael Cavanagh did not say what would happen to Bear Stearns’ 14,000 employees worldwide, or whether the 85-year-old Bear Stearns name would live on after surviving the Great Depression and a slew of recessions. He told analysts and investors on a conference call that JPMorgan was most interested in buying Bear Stearns’ prime brokerage business, which completes trades for big investors such as hedge funds.
This CNN report has more info:
http://edition.cnn.com/2008/BUSINESS/03/17/world.markets/index.html
JPMorgan inherits some liabilities as well. For example, about $16.5 million property liability in the form of lease rental agreement that Bear Stearns had signed in London with the Canary Wharf Group (CWG).
This news over the weekend has resulted in hard falls of various stock indices across Asia as well. The Indian Sensex fell 951 points today (6% drop in one day).
Google completes DoubleClick acquisition
A lot has been talked about Google’s acquisition of DoubleClick, and whether they can show tangible improvements or new services as a result of it. DoubleClick has a strong platform for display advertising, and that’s the main reason Google bought it, so that it can give a good offering for a variety of media advertisements. Yesterday, Eric wrote this note on Google’s blog:
3/11/2008 09:48:00 AM
Posted by Eric Schmidt, Chairman and CEOI’m pleased to share the news that we completed our acquisition of DoubleClick today. Although it’s been nearly a year since we announced our intention to acquire DoubleClick last April, we are no less excited today about the benefits that the combination of our two companies will bring to the online advertising market.
Because we have been waiting for regulatory approval for our acquisition, we’ve been limited by law in the extent to which we could conduct detailed integration planning to map our way forward. That work will begin in earnest now. Although we don’t have detailed plans to announce today, we will communicate regularly with you about our progress in integrating our two companies.
An immediate task we’ll undertake over the next few weeks is matching and aligning DoubleClick employees with our organizational plan for the business. This will involve determining the right staffing levels for all functions and will ensure that we have the right people assigned to the right responsibilities within Google. We plan to complete this process in the U.S. by early April.
Outside the U.S., the steps we will propose are subject to consultation with employee representatives where applicable, and of course any decisions will be made in accordance with local law. The exact timing of the process outside the U.S. will vary based on the needs and requirements of each region.
As with most mergers, there may be reductions in headcount. We expect these to take place in the U.S. and possibly in other regions as well. We know that DoubleClick is built on the strength of its people. For this reason we’ll strive to minimize the impact of this process on all of our clients and employees.
For more, read Google’s blog post here.
EBay Sellers Strike Looks Serious
If you are not actively into online business, you may not have heard about it yet.
A large number of small sellers at EBay are on a strike this week to protest at the treatment they are receiving from the company. Given that EBay generates revenues from the sellers (and not the buyers directly), the sellers are protesting against two things:
(a) The recent increases in fee which is making it very difficult for smaller sellers – who are not ‘power sellers’ (there are various fees that a seller has to pay: listing fee, final value fee, and then PayPal fee).
(b) The fact that EBay has removed the ability of sellers to give negative feedback on troublesome buyers. If you visit the forums, many sellers are especially annoyed this change, because it creates an uneven playing field where the buyer can get away with hurting a seller.
Different reports are quoting different numbers – but the fact is the Ebay listings and sales have gone down as a result of this. The management is sticking to its stand, while the small sellers want to raise us their voice as much as they can in the one week’s time, because many of them can’t afford to not sell for long.
The fee increase mentioned above actually reflects the fact that EBay is struggling with the ongoing damage caused by refunds/returns done by fake sellers and fake buyers – both of them are increasing – and unless EBay uses some new steps to police this aspect (which should involve trusted EBayers in some way to share market intelligence) – this trend will continue to hurt EBay and the majority of genuine EBayers who have been selling / buying on EBay for almost a decade now.
In fact, many trusted smaller sellers have closed down their EBay stores in the last 6-12 months due o the reducing profit margins available to a smaller seller. No doubt, new sellers will take their place because it is a large eco-system.
But this whole episode makes one thing very clear: If we can create a similar system as EBay and get some interested traffic to it, there is a demand for it, and it can take-off.
Here are some news reports on this topic:
CNN: http://money.cnn.com/2008/02/07/smbusiness/ebay_boycott.fsb/
http://www.auctionbytes.com/cab/abn/y06/m08/i16/s01
And some of the best discussion is happening these blog posts:
http://bits.blogs.nytimes.com/2008/01/29/sellers-give-negative-feedback-on-ebay-changes
http://webpronews.com/topnews/2008/02/20/ebay-boycott-having-minimal-effect
Analysis of Microsoft’s bid for Yahoo
Microsoft is dealing from a position of strength, with an offer that most Yahoo shareholders see very good to let pass.
Meanwhile, Google is trying what it can to see how to counter this deal, and has also been talking to Yahoo to see if Yahoo can outsource the search to Google, which is expected to improve Yahoo’s net income by 25% according to some analysts.