TechCrunch submits:
By Leena Rao
AOL CEO Tim Armstrong hinted that this was coming, but this morning Google (GOOG) and AOL announced a five-year renewal of the search deal between the two companies. Google will continue to power search across AOL’s content network and properties. The partnership will be expanded to include mobile search and YouTube.
Zacks.com submits:
Networking gear maker Cisco Systems (CSCO) has offered $5 billion for the Internet telephony company Skype, TechCrunch, a leading Silicon Valley blog, reported recently. The deal, if successful, would derail a planned initial public offering from Skype and redraw the battle lines in the lucrative market of video communications. Skype is reportedly looking for a valuation of $5 billion.
Google (GOOG) was also rumored to have considered making a bid for Skype, but antitrust concerns prevented the search giant from making an actual offer, the blog reported. Ironically, Google added a free phone-calling service to its Gmail email service last week, a move that was seen as putting the company in direct competition with Skype.
Skype’s attraction lies not only in its video-conferencing capabilities but also its huge worldwide subscriber base. Skype has a registered user base of 560 million, but most of its revenue is generated from nearly 8 million users who pay for its inexpensive computer to landline and mobile phone calling services. Keeping that in mind, it will be interesting to see how Cisco justifies a $5 billion price tag for a company which had revenues of $406 million in the first half of the year and a GAAP profit of $13 million. eBay (EBAY) sold Skype to a group of private investors, led by Silver Lake Partners, for about $1.9 billion.
Wall Street Cheat Sheet submits:
Yesterday Apple (AAPL) announced their new version of AppleTV. The day before, Amazon (AMZN) announced they will be streaming TV and movies.
With new studies showing 58% of TV viewers had streamed or downloaded TV within the last six months (45% watched or downloaded TV content at least once a week), which company will win the WebTV battle? Here’s the tale of the tape:
Mark J. Perry submits:
Online advertised vacancies dropped 57,100 in August to 4,236,200, following an increase of 139,200 in July, according to The Conference Board Help Wanted OnLine (HWOL) Data Series released today. The gap between the number of unemployed and advertised vacancies (supply/demand rate) stood at 3.40 unemployed for every advertised vacancy in July (the last available unemployment data) but is down from its peak of 4.73 in October 2009.
Labor demand continues to struggle to post gains month after month,” said June Shelp, Vice President at The Conference Board. “During the last few months, gains in online job demand one month have been partially offset by dips in the following month. But the good news is that overall job demand is still maintaining a modest upward trend for both the nation and most States.
YCHARTS.com submits:
Yahoo! (YHOO) and Microsoft (MSFT) started sending out materials yesterday to help advertisers transition their accounts from Yahoo!’s search marketing system to Microsoft’s AdCenter. Given Yahoo’s second quarter results, where search revenues declined 8 percent year-over-year, the remainder of the year should be interesting as accounts transition to Microsoft. If the initial process is any indication of how successful the switch will be, investors may want to pay close attention to Yahoo! shares.
YHOO, MSFT Chart (click to enlarge)
Geoffrey Rocca submits:
I have followed United Online (UNTD) for a bit of time now. I still like their FTD online property, and I think their dialup business is capable of spinning off quite a bit of free cash flow before it ceases operations. (I am fairly indifferent to classmates.com). By traditional valuation metrics, the stock is still underpriced, but I have noticed that their free cash flows are declining quarter by quarter, presumably as the result of the loss of some after-sale marketing programs. I think the company will eventually find a new equilibrium, but on the other hand, I wouldn’t care to place a bet on what level of free cash flow that equilibrium will be.
Last quarter, they reported net income of $14 million, depreciation of $14 million, and capital expenditures of $10 million, producing estimated free cash flows of $18 million. If we use this figure as the basis for their full year outlook and capitalize it at a rate of 10x, we get a value for the company of $720 million, which is more than 50% above the current market cap. However, the quarter before last, free cash flow was $21 million, and the quarter before then $23 million, and the quarter before that, $26 million. Fortunately, as the result of their disappointing earnings announcement and not-optimistic outlook, the company’s market cap dropped by roughly $90 million when they announced last quarter’s earnings, so it seems that the market is more or less instinctively walking the price down until the company regains cash flow stability. So, hopefully those of us who are waiting for that moment will not see the apparent bargain price pulled away from us prematurely.
Dan Ramsden submits:
When Wired Magazine published its controversial “Web is Dead” cover story a few weeks ago, many were quick to dismiss it as sensationalist. This was undoubtedly based on a misunderstanding. The Internet per se was not pronounced dead by the article, but rather websites as a dominant delivery mechanism for Internet content. And dead was probably not a word to be taken literally, but maybe an adjective like vulnerable comes closer to the mark. In fairness to the critics, had the article’s title been rendered in the future tense, the statement would have seemed more like a prophecy than a pronouncement, and this may have been easier to accept. Regardless, watching Steve Jobs Wednesday afternoon unveil his lineup of new products, all of which are based on or supported by apps rather than web destinations, the Wired article begins to hit eerily home.
Of all the products and features unveiled by Apple (AAPL) yesterday afternoon, the one that may turn out to be the biggest news is Ping. Not to take away from the elegance of new iPod models, or the sleekness of the new Apple TV device, but neither of these offerings is ground-breaking for Apple. If anything, such a comment speaks to the high expectations that the company has established in the marketplace and the high standard to which we now hold it. And although Apple TV must still prove itself after an initial false start (while other alternatives have since begun to offer more or less similar consumer possibilities), there is good reason to believe that Apple TV will make an impact. Given the company’s trademark brilliance at product launches, updates, relaunches, redesigns – notwithstanding a so-called “antennagate” hiccup that nobody now even remembers – Apple TV could well become the standard that the iPod, iPhone, and iPad have already become.
Jason Schwarz submits:
There is one thing that Apple’s (AAPL) Ping has that both Facebook and Twitter lack…an established precedent of e-commerce. If you sing in a band would you rather have followers on Twitter or on iTunes? Obviously you want them on iTunes because that ‘buy now’ button is ever present. If you host a television show do you want followers on Twitter or on iTunes? That $.99 TV show is only one click away. Facebook and Twitter are both great in their own way but the whole making money part of it has yet to be figured out.
The appealing thing about Ping is that the platform is built around media, it isn’t built around you. Many people are uncomfortable giving up too much personal information to Facebook and yet they still have a desire to interact on the Internet. Ping gives them that opportunity without having to give up privacy. Apple might be on to something big with Ping.
Sam Diaz submits:
One of the announcements out of Apple’s event this morning focused around Ping, a Facebook-and-Twitter-meets-iTunes kind of social network.
It was a nice effort, I suppose. After all, if you have 160 million members – with credit card numbers on file, no less – it’s probably a nice way to jump start into the social networking game. But will users really go to iTunes to be social?
Trefis submits:
The number of new job postings on Monster (NYSE:MWW) sites in North America has fallen steeply over the past few years owing to the hiring slump and the challenging recruiting marketplace in the US. We expect the declining trend to continue as a result of the growing reach of social media networks like Facebook, Twitter and LinkedIn. However, if the number of new job postings were to pick up rapidly, contrary to our expectations, there could be a significant upside to Monster’s stock.
An expected increase in new job postings on Monster’s international sites could boost Monster’s stock further. We currently have a Trefis price estimate of $12 for Monster’s stock, about 10% above the current market price of $11. We estimate that Career Services International and Career Services North America constitute around 41% and 34% of Monster’s stock price, respectively.
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