Articles of the Day


Microsoft’s Profits and Revs Up; Online Losses Increase — Microsoft (NSDQ: MSFT) has announced its Q308 earnings, and its revenues are profits are up for the quarter. Revenues came in at $15.06 billion, a 9 percent increase over the year-ago quarter. Net income was $4.37 billion, up slightly $4.29 billion in the year-ago quarter. The company is also downward revising its estimates for next year in keeping with the economic environment, especially for second half of 2009. And the pitch this quarter from MSFT: we can help you save money. “Our customers are asking how they can save money and do more with less…Microsoft is uniquely positioned to help our customers save money through supplier consolidation, increased productivity, and a low total cost of ownership through the depth and breadth of our product portfolio and solutions.” Yes, funny. Division wide: in its Entertainment and Devices Division (EDD), which includes XBox and Zune, revenues came in at $1.81 billion, down from $1.93 billion in the year-ago quarter. Operating income for the division was $178 million, up from $167 million in the year ago quarter. In its Online Services Business (OSB) unit, which includes MSN and other online advertising services, revenues came in at $770 million, up from $671 million in the year ago quarter. Operating losses for the division widened significantly, to $480 million, from $267 million in the year ago quarter.

Weblogs, Inc. Three Years Later: Impressive Page View And Revenue Growth — Earlier this month News Corp. celebrated the three year anniversary of the acquisition of MySpace. Today, AOL does the same for the Weblogs, Inc. blog network they acquired in October 2005. Since the acquisition, AOL says, the Weblogs, Inc. blogs (which include Engadget, TMZ, Download Squad, TUAW, Joystiq, Autoblog and others) have seen worldwide unique visitors climb nearly 1000% (122% annually, on average) and page views rise over 1,500% (154% annually, on average), according to August 2008 comScore Media Metrix. In October 2005, the blogs had a U.S. audience of 1.4 million unique visitors and were generating about $6 million in revenue. Today its 13 million uniques and revenues of about $30 million. In short, it was one of AOL’s better acquisitions.

Cox Enterprises’ Asset Sales Enter First Round Bids, Banker Says; Dirks Van Essen, And Murray Advisor On Sale — Cox Enterprises’ cluster of more than 20 daily and weekly publications has entered the first round of bids, said a banker familiar with the sale. The package has just hit the street, and bidders are now receiving the offering memorandum, the banker said. Cox, a privately-held media conglomerate in Atlanta, is looking at a deal value of 7x-to-8x cash flow. On 13 August, Cox announced the sale of certain newspapers in Texas, North Carolina and Colorado. Cox is also selling Omaha, Nebraska-based Valpak, its direct mail advertising subsidiary. It hired Citigroup for the newspaper sale and Goldman Sachs & Co. for Valpak. Cox did not return phone calls seeking comment. A spokesperson for Dirks Van Essen confirmed the firm was among Cox’s M&A advisors. An industry analyst speculated that the newspaper assets will have a difficult time attracting a buyer in this depressed market. James Gross, an analyst at Barrington Research, noted that although newspapers may occasionally come up for sale, few assets have found buyers in the past couple of years because of rapidly declining classified sales as Internet use grows. The banker himself expressed skepticism that Cox will sell the newspapers. He said until banks make financing available, few deals can consummate. The first analyst named Gannett and Newscorp as possible buyers. On 23 October, Gannett had a market capitalization of USD 2bn and traded at USD 9.65, close to its 52-week low of USD 8.49. Newscorp had a market cap of USD 23.5bn and traded at USD 9.00 close to its 52-week low of USD 7.64. Private equity players have taken interest in the papers, the banker said, although he declined to name them. Source: mergermarket.

Bill Gates Quietly Starts New Company — Just months after officially leaving his day-to-day role with Microsoft, Bill Gates has quietly established a new company with high-tech office space, a cryptic name and even its own trademark. Just what it will do is still anyone’s guess. According to public documents, the new company is called bgC3 LLC, and is some kind of a think tank. According to a Gates insider, it’s not a commercial venture but rather a vehicle to coordinate the software mogul’s work on his business and philanthropic endeavors. But Gates himself, who established the company under a different name in March before changing it to bgC3 in July, isn’t talking.

AOL Adds Yahoo Mail To Your Inbox — AOL has updated its webmail application to include a set of plugins that allow users to quickly access current news topics as well as third party services, most notably Yahoo Mail. Historically portals have been reluctant to give users access to their messages on other services, but they have been recently been opening up (which makes sense, given that they want to be a one-stop hub for all of your internet needs). Last month AOL gave users access to both their Yahoo and Gmail accounts from its homepage, and is now integrating the features into its main webmail client (Gmail hasn’t been integrated there yet, but it’s on the way). The move is another step in AOL’s attempt to prove that it is no longer a walled garden. Unfortunately Yahoo’s API handicaps how useful the feature is, as its integration is pretty clunky – instead of pulling in your messages and displaying them in AOL’s webmail interface, each message is actually a link to the Yahoo webmail client that opens in a new browser window.

Facebook Joins Advertising Research Foundation — Facebook heads a list of 34 new members who have joined The Advertising Research Foundation since June, representing a cross-section of the advertiser/ad agency/media/research and academic communities. “Having Facebook as a new member is a clear indication that our initiatives regarding the value of understanding social media are resonating throughout every facet of our industry,” Joel Rubinson, chief research officer at the ARF, said in a statement. Other new members include Hasbro, Eli Lilly, Kimberly-Clark, Mars, Novartis, UBS, PricewaterhouseCoopers LLP, and Bain & Company. Ad agencies include Adcentricity, Butler/Till, Global Hue and M:30. Cablevision heads a large Media group, including ABC Family and Disney Kids, Catalina Marketing, Fuse, National Cinemedia, PBS Kids Sprout, Rainbow Media and Tribune Media Net.

Despite Layoffs, Yahoo Slated To Set Up Major Shop In Nebraska — One door closes and another new facility opens—at least in Yahoo’s case. AP sources say Yahoo (NSDQ: YHOO) will announce plans to build a major facility in La Vista, Nebraska on Friday, just days after it said it would have to cut 1,500 jobs to help ride out the economic downturn. And the new digs won’t come cheap: in exchange for getting major state tax breaks, Yahoo has to invest at least $100 million and create at least 50 jobs worth at least $68,700 each within four years. Property records show that the Web giant already spent $14.8 million on the building itself (per Data Center Knowledge). Yahoo’s shares were trading up after the company said it would slash $400 million in expenses before the end of the year—and though the Nebraska facility is designed to be a cost-cutting measure, we’ll have to see how Wall Street reacts to this new, slightly more expensive news.

FAS Rejects Kokuna Holdings’ Application To Acquire 100% In Begun — Russia’s Federal Anti-Monopoly Service (FAS) has announced it has rejected Kokuna Holdings Limited’s application to acquire Russian contextual advertising company ZAO Begun. The regulator stated that Kokuna Holdings Limited submitted an application for acquiring 100% voting shares in Begun. FAS stated that, after considering the application, it decided to reject it over competition issues. According to an earlier report, Rambler Media, operating one of Russia’s most popular internet brands, agreed to sell its contextual advertising company ZAO Begun and related subsidiaries to Google, for a total cash consideration of USD 140m. Vedomosti online, and other Russian wires, wrote that Kokuna Holdings Limited is a subsidiary of Google. Source: mergermarket.

Twitter Fastest-Growing Social Networking Site — Twitter, Tagged and Ning were the fastest-growing social networking sites in September, according to Nielsen Online. Starting from a base of less than 1 million visitors a year ago, each has at least tripled U.S. traffic since then. Micro-blogging site Twitter has grown almost fourfold from 533,000 to 2.4 million visitors. Among more established social networks, LinkedIn was the fastest-growing–nearly tripling its audience to 11.9 million. That growth rate helped the site for professionals this week close another $22.7 million in venture capital. In June, it raised $53 million.

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