Articles of the Day


Microsoft May Buy Back $20 Billion — A top-rated software analyst says that Microsoft is poised to buy back as much as $20 billion worth of company stock to make up for the 20% dip shares have taken since the software giant announced its intention to buy Yahoo. UBS AG analyst Heather Bellini said she expects Microsoft to complete the repurchase over the next three months. In other words, if you believe her, buy now. “They won’t announce it until it’s done,’ Bellini said, adding that a buyback of between $15 billion and $20 billion would lift earnings per share by as much as 10 cents annually. Bellini pegs Microsoft shares at $40 in the next year; shares are currently trading at around $26.

Cablevision Confirms It Will Explore Spin Offs To Lift Stock Price — Thwarted in its attempt to acquire the company outright, Cablevision management is getting serious about finding ways to lift the company’s sagging share price. CEO Jim Dolan indicated on last week’s conference call that it would explore stock buybacks and dividends as possible means of getting a lift. The company now says its board has officially authorized the company to explore a spin-off of one or more of its businesses. Although the core cable business continues to perform well, investors have punished the company for sticking its fingers into too many pies (Sundance Channel, Newsday). Similar to the longtime knock on Comcast, management is perceived as being spendthrift with shareholder cash (Comcast eventually instituted a dividend to help combat this perception).

News Corp. In Line; FIM Income Down On Higher Costs; TV Crushed — News Corp. has reported revenue of $8.59 billion for the quarter ended June 30, for 16.5 percent growth over the prior year’s quarter. Op income grew 21 percent to $1.48 billion. The company provides a net income figure of $1.12 billion ($.43 per share), well above last year’s net income of $890 million ($.25 per share), though the numbers aren’t comparable, as this quarter includes gains on the sale of Fox Sports Bay Area and Gemstar-TV Guide International. Like last quarter, the company isn’t providing an adjusted or non-GAAP figure, so the op income growth looks like the best bet for the moment. On a divisional breakdown, TV op income was hit hard, falling 28 percent to $279 million. Broadcast TV has been getting crushed across the board this quarter, as the company chalked up the decline to lower ratings and lower revenue. Things were much brighter on the cable side of the business, with op income up about 10 percent to $313 million.

Dow Jones’ Scarce Numbers; WSJ.com’s Subs Pass 1.1 MIllion; Integration With Other Brands — Now that Dow Jones is one small part of the News Corp empire, its reported numbers are also, well, tiny. In News Corp’s Q208 earnings today, little mention of DJ’s number, though some more details were given in the earnings call. DJ contributed operating income of $24 million in Q208 (down from $37.9 million in the year-ago quarter when DJ was independent) and $45 million for News Corp’s full fiscal year, net of $24 million and $47 million in acquisition related amortization, respectively.

United Online Revs Fall 7 Percent; But People Keep Joining Pay Social Net Classmates — Classmates, the subscription-based social net that United Online failed to take public continues to add subscribers… Paying accounts at the unit were up 41 percent from last year. Company-wide revenue still fell by 7 percent to $122.3 million, dragged down by the ISP business, which saw a 22 percent decline in revenue. Still, analysts had been looking for about $120 million. Unlike EarthLink, which has managed to grow ISP income despite the revenue fall (by slashing costs), op income on the ISP side fell to $21.1 million from $27.0 million. Back to Classmates—which the company would still love to take public one day—revenue grew by 19 percent to $57 million. The company added 288,000 paying subscribers in just this quarter. Op income grew by 29 percent in this unit to $6.1 million.

DoubleClick To Serve Ads In Microsoft’s Silverlight Player — Microsoft and Google have learned how to play nice–at least in the realm of online video advertising–as the companies announced a partnership to enable DoubleClick to serve ads in Silverlight 2, the second version of Microsoft’s streaming video player. Advertisers can tap into available Silverlight 2 inventory through DoubleClick’s In-Stream video advertising platform, which includes detailed analytics and forecasting tools. Silverlight 2 joins a host of online video players that DoubleClick can serve ads into, including FlashIn-Stream ads, including Real Media, Windows Media, and Adobe’s market leader, Flash.

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