Articles of the Day

HLTH Corp. and WebMD Cancel Merger Agreement, Citing Market Turmoil — The wildly fluctuating financial markets have doomed a long-planned merger between HLTH Corp. and its majority-owned subsidiary, WebMD. HLTH said the companies’ boards, which both agreed to the termination, felt both sides would benefit from WebMD remaining as a publicly-traded unit, citing its approximately $340 million in cash and inv*stm*nts and no long-term debt as evidence of a strong balance sheet. Given the particular struggles in the credit market these days, WebMD’s growth would have been constrained by HLTH’s $650 million in long-term debt that would be coming due in 18 to 36 months. HLTH owns approximately 84 percent of WebMD. Separately, HLTH said it was buying back 50 million shares of its common stock at a price per share of $9.20.

Analysts Disappointed By Yahoo’s Q3, Low Expectations For The Future — Yahoo’s struggles are nothing new, and yesterday’s Q3 reconfirmed that the tough times will only continue. Aside from plans to lay off 10 percent of its workforce, Yahoo reported anemic 1 percent growth in revenue—$1.786 billion—and a 19.6 drop in net income to $153 million. Also, affiliate revs continued their series of quarterly declines, dropping 10 percent over last year; and while O&O display was up 3 percent, it represented a significant slowdown in growth. As for how some of the analysts who follow Yahoo saw it, most continue to believe that the company’s stock, which was trading around $12.60—less than a third of where it was back in June when Microsoft was trying to acquire it—is still worth holding. But most remain skeptical about a turnaround before the end of 2009.

Netflix Q3 Revs Rise 16 Percent; Net Income Gains 30 Percent — Netflix Q3 revenues came in at $341 million, up 16 percent year-over-year from Q307’s $294 million. Meanwhile, GAAP net income for the same period was $20.4 million ($0.33 per diluted share), compared to $15.6 million ($0.23 per diluted share) the year before—a 30 percent gain. Gross profit also grew, rising 8.4 percent to $116 million from Q307’s $107 million. The movie rental company also beat analysts’ estimates, Reuters reported. As a result, Netflix shares gained roughly 3 percent to end $24.53 a share in after-hours trading on Monday after closing at $23.80 a share.

FIM Partners With Lin TV To Build Local Broadcast Sites — Fox Interactive Media is working with digital publishing company Lin TV to build up parent News Corp.’s local broadcast sites. So far, the FIM and Lin TV have launched two sites, for Rhode Island’s and Florida’s Over the next few weeks, an unspecified number of other local TV sites will be rolled out. As part of the arrangement, FIM is delivering both back-end and front-end publishing services to LIN TV’s stable of web properties, including content management, video, contextual search and social networking. On its end, Lin TV is creating customized video players, weather map and social net tools.

Fox Creates Mobile Group After Buying Jamba Stake; Will Launch U.S. Brand — News Corp is overhauling its mobile operations after paying VeriSign (NSDQ: VRSN) $200 million for its remaining 49 percent state in Jamba, the mobile content company. This marks the end to the company’s whirlwind history, which succeeded with the rise of ringtones, only to struggle as it faced controversies over billing practices and waning ringtone sales. Going forward, the company known as Jamba will be gone, but the brand will continue under the newly formed Fox Mobile Group, which will be led by Jamba’s CEO Mauro Montanaro. Under the new leadership and business structure, the group will enter its next phase, which includes significant investments by launching a new mobile brand in the U.S. and by opening up a new studio to create made-for-mobile content. To understand what’s going on, we talked to Fox Mobile Group’s new CEO Mauro Montanaro, Jamba’s former CEO.

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