Filed under: Industry

Alltel Wireless, the private mobile telephone services company that just keeps on grinding along really well, added just over one million new subscribers to its ranks in the company’s most recently completed quarter. This is a number often seen by larger competitors like AT&T, Inc. (NYSE: T) and Verizon Wireless, but not by the fifth-largest cellular carrier in the U.S.

It’s odd that larger carrier Sprint Nextel Corp. (NYSE: S), which uses the same technology as Alltel, lost over a million customers in its most recent quarter. In fact, it seems the top five cellular carriers in the U.S. are all experiencing growth — except Sprint Nextel. I mean, is Sprint Nextel’s service that bad compared to fellow carrier Alltel? Must be, since customers are leaving in droves. Sprint didn’t say whether it was Nextel customers who left in huge numbers or Sprint customers. You see, the merger between the two companies, which is a complete disaster, relied on a fusion of two incompatible technologies that never happened.

Why haven’t Sprint and Alltel decided to come together? The companies use the same technology and some areas would have to be divested, similar to areas AT&T had to sell when it merged with Cingular Wireless years ago. Still, Sprint Nextel needs a lifeline and CEO Dan Hesse has one monumental task in front of him. Having a laggard company join with a company that’s smaller — but growing much more rapidly — would not be a bad thing. That is, if he can convince Alltel’s owners that perhaps a merger between the two companies would be a good thing.

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Filed under: Deals, Industry, Electronic Arts (ERTS)

Take-Two Interactive (NASDAQ: TTWO) has launched its important new “Grand Theft Auto IV” franchise and it has done remarkably well. It didn’t cause a big bump in the firm’s stock, which has only moved from $26.62 three weeks ago to $27.10.

The company’s one suitor, Electronic Arts (NASDAQ: ERTS), had already taken the shares up from from under $18 with its buyout offer. Most analysts believe that the offer will be extended because Take-Two has resisted a buyout.

According to The Wall Street Journal, there is a “belief among Take-Two management and some of the company’s shareholders that the company deserves a higher offer from EA. “

No matter what Take-Two believes, EA’s ideal move now is probably not to extend the offer but, instead, to walk away. The Take-Two share price would be very apt to move back below $20, which would pressure the company’s board to do something to move the share price back up again.

EA’s shareholders are ill-served if the company extends its offer. Without a buyer, Take-Two might have to come to the negotiating table and Electronic Arts could get a better deal.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

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Filed under: Before the bell, Earnings reports, Deals, Microsoft (MSFT), Yahoo! (YHOO), Market matters, Halliburton (HAL), Gap Inc (GPS), Economic data, Oil, Housing

Stock futures were lower Friday morning as one again crude prices resumed their seemingly endless move upward. The market might also be agitated about further data upcoming about the housing market.

On Thursday, U.S. stocks ended higher two days of heavy losses as finally crude-oil futures retreated, giving some relief to the markets. The Dow industrials finished 24 points higher, or 0.19%, the Nasdaq Composite rose 16 points, or 0.67%, and the S&P 500 added 3 points, or 0.26%.

Only one economic report is due out this day. April existing-home sales will be released at 10 a.m. EDT, and economists anticipate it to decline yet again.

Oil prices rose Friday, as supply concerns once again took center stage especially with growing global demand. After tumbling around $4 overnight from a record above $135 a barrel, light, sweet crude for June delivery was up $1.29 to $132.10 a barrel.

With the long weekend just around the corner, trading might be lighter than usual this day. U.S. markets will be closed Monday for Memorial Day.

Despite the market softening somewhat lately, deal news have been increasing. This day, we hear that Halliburton (NYSE: HAL) has made a conditional bid of $3.36 billion for Expro International Group PLC (OTC: EXPRF), the British oil services firm. The all-cash proposal is about 6% higher than the previous one.

Meanwhile, Yahoo Inc. (NASDAQ: YHOO) on Thursday postponed its annual meeting from July 3 to late July. No doubt, Yahoo!’s board, afraid of losing control following Carl Icahn’s call to replace the board. Yahoo’s board might use the time to either negotiate a deal with Microsoft Corp. (NASDAQ: MSFT), a partnership with another company, or prepare its defense. This the second time Yahoo has postponed its annual meeting.

Gap Inc. (NYSE: GPS) reported results after the close Thursday, saying that while revenue dropped 5%, it managed to still boost its first-quarter profit by 40% by managing inventory and slicing costs. Gap said that it earned $249 million, or 34 cents per share on $3.38 billion in revenue. It beat estimates of 30 cents per share but missed the expected $3.42 billion in revenue. GPS shares traded 2.5% higher in after-hours.

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Filed under: Deals

Yahoo! Inc. (NASDAQ: YHOO) Chief Executive Jerry Yang is bound to cry “uncle” sooner rather than later.

Pressure is mounting on the co-founder of the web portal to do something — anything — to boost Yahoo’s moribund share price. Billionaire activist investor Carl Icahn is leading a mutiny among shareholders disappointed that the company couldn’t figure out a way to reach an agreement on a deal with Microsoft Corp. (NASDAQ: MSFT). Display advertising is coming under pressure as advertisers shift spending to search or demand steep rate cuts. Board member Edward Kozel this day announced his resignation, another indication of management’s growing isolation.

Yahoo management is clearly hunkering down. This day, comes word that the company is delaying its annual meeting from July 3 to the end of July. Is that enough time to reach an agreement with Microsoft or a search deal with Google Inc. (NASDAQ: GOOG)? Who knows? But you can bet that the meeting will not occur until there’s some “good news” to report.

Meanwhile, Microsoft Chief Executive Steve Ballmer told a technology conference in Moscow that the Yahoo acquisition wasn’t “strategic.” Hmm, then why bother doing it? Clearly, Ballmer is posturing to get a better deal with Yahoo. Having Icahn on his side certainly helps.

As for Icahn’s threatened proxy fight, the key word here’s “threat.” The last thing that Icahn wants to do is actually run a company. Operations just aren’t his thing. But as he showed with Blockbuster Inc. (NYSE: BBI), Icahn is not afraid to wage proxy contests and win them. In Blockbuster’s case, he trounced management. Whether that’s a Pyrrhic victory remains to be seen. Shares of Blockbuster have tumbled more than 22% this year and investors are skeptical that buying Circuit City Stores Inc. (NASDAQ: CC) will boost the video-rental firm’s lagging fortunes.

So,Yahoo shareholders should hope that Yahoo figures out a way to make Icahn and his allies happy before things get much worse.

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Filed under: Products and services, Launches, Consumer experience, Competitive strategy, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), eBay (EBAY), Marketing and advertising

Microsoft Corp. (NASDAQ: MSFT) shares dropped 1.77%. OK, you can state it was just as much as the Nasdaq dropped, or you can also state that no one was really impressed with the software giant’s new cashback on search service.

It is no secret Microsoft is trying to boost its world wide web division and gain search market share. After so often being accused of being a monopoly, I guess it’s hard for it to see Google Inc. (NASDAQ: GOOG) now being accused of the same in the lucrative business of world wide web search. Well, Microsoft tried to acquire Yahoo! Inc. (NASDAQ: YHOO), No. 2 in search (although it is also losing market share to Google) but we all know that didn’t work out all that well… at least not yet. I get the feeling we haven’t heard the last on that subject yet.

To address its search insufficiencies, Microsoft Wednesday rolled out Live Search Cashback, a new service that pays consumers who buy selected items from participating retailers found through Microsoft’s Live Search engine. Only a portion of the buy price, of course, between 2-30% will be paid — via check, direct deposit to a bank account or eBay Inc. (NASDAQ: EBAY)’s PayPal. So naturally, those wishing to use the service will need to sign up and provide Massive Brother with even more personal information.

No one can tell me this doesn’t smack of desperation. Is Microsoft really serious in thinking this could actually make a dent in its search business? The cash rebate might attract some people, but that doesn’t mean they’re going to change their search habits. If anything, they might still search on Google, then go to the Live engine and find what they want there. The rest of time, I bet, Live won’t be in use! Of course, the higher the cashback, the more people it will attract, but doesn’t that sound a tiny backward? How much can Microsoft spend on that? And couldn’t Google at any time counter with a similar offer should it select to?

I’m sorry, but this just doesn’t sound enjoy it would change anything in the reality of search this day.

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Filed under: Bad news, Economic data, Housing, Recession

Sales of existing homes in April 2008 fell 1.0%, to a seasonally-adjusted annualized rate of 4.89 million, the National Association of Realtors announced Friday, as inventories of homes swelled to a 23-year high.

Economists surveyed by Bloomberg News had expected April 2008 existing home sales to total a 4.85-million annualized rate. The March 2008 sales rate was revised higher to a 4.94-million annualized rate.

Even more telling, inventories — unsold homes and condominiums — rose to an 11.2-month supply at the current sales rate. A typical, healthy housing market has a three to four month supply of unsold homes on the market.

Further, the inventory of single family homes rose to 10.7-month supply - - its highest level since 1985. Meanwhile, the inventory of condominiums increased to a 14.2-month supply.

Also, the median sales price for houses and condominiums fell to $202,300 in April 2008, an 8% decrease from the $219,900 median recorded a year ago.

Existing home sales varied by region. Sales fell 6.0% in the Midwest, declined 4.4% in Northeast, were unchanged in the South, but rose 6.4% in the West.

Economic Analysis: Another bearish housing report. The report indicates Americans are continuing to delay their home purchases, which is rational, given the likely continued decline in home prices, save for a few isolated (and fortunate) markets/cities. The housing sector remains in a pronounced recession — its worst slump in more than 15 years.

Further, as the housing slump continues, each month it seems to contain another record-breaking stat: this month it was the inventory of single family homes, which reached its highest level — 10.7 months — since 1985. Moreover, given the housing sector’s relationship to U.S. GDP growth, housing’s continued doldrums point to continued overall U.S. economic sluggishness through at least Q2 2008, and most likely through Q3 2008.

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Filed under: Deals

Will he or won’t he? That’s the question of the day surrounding Yahoo! Inc. (NASDAQ: YHOO) amid speculation that Carl Icahn could be close to staging a proxy fight for control of the company’s board of directors. A formal announcement of his plans could come as early as Wednesday, according to reports, just ahead of a Thursday filing deadline for Yahoo!’s annual meeting July 3.

Icahn probably would not go to all the trouble of amassing a 3.5% stake in Yahoo! if he wasn’t intent on pursuing a proxy battle, though there are a number of potential roadblocks that could thwart him.

The biggest appears to be whether Microsoft Corp. (NASDAQ: MSFT) would still be interested in acquiring Yahoo! should Icahn take over the board. All indications are that the company has moved on, though it’s entirely possible Microsoft is just posturing and would gladly come back to the negotiating table if it could acquire Yahoo! for $33 a share, or $47.5 billion, its last offer price.

Continue reading at TechConfidential.com.

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Filed under: Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Marketing and advertising

Google, Inc. (NASDAQ: GOOG)’s market share in April increased once again, going from 67.25% to 67.90% of all internet searches performed in the U.S. Sounds like a tiny increase, but we’re talking hundreds of millions of additional searches here. Even a tenth of 1% is a major increase.

Google also earned the distinction today of being named the No. 1 most-visited site by ComScore, topping Yahoo for the first time.

Both Microsoft Corp. (NASDAQ: MSFT) and Yahoo, Inc. (NASDAQ: YHOO) saw decreases in search market share due to Google’s continued dominance. April data from internet traffic research firm Hitwise indicated that Google continues to dominate U.S. internet searches, while being responsible for the lion’s share of connecting web searchers with specific industries as well.

For example, 31% of of web traffic and health and medical sites was supplied by Google, as well as 23% of web traffic to travel websites. This alone demonstrates the power Google has over the web. Some industries would see huge decreases in traffic if Google were to go away. In effect, Google’s web search dominance has a very broad and meaningful over entire industries on the web, including shopping and classifieds, news and media, entertainment and others.

Still think Google is worth $576.30 per share?

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Filed under: Bad news, Industry, Economic data, Recession

U.S. industrial production plunged 0.7% in April 2008, the U.S. Federal Reserve announced Thursday, as a spectrum-wide contraction took place in the nation’s factories.

Economists surveyed by Bloomberg News had expected industrial production to decline 0.3% in April 2008.

Further, factory output plummeted 0.8% - - the largest drop in factory output since September 2005, a month that reflected the abnormal, irregular factory output reduction caused by Hurricane Katrina in the late summer of 2005. Excluding autos and auto parts, factory output declined 0.4%.

Also, capacity utilization increase declined to 79.7% in April 2008 from 80.4% in March 2008. Economists surveyed by Bloomberg News had expected capacity utilization to total 80.1% in April 2008. Capacity utilization totaled 80.3% in February 2008.

Industrial output evaluation

Economist David H. Wang stated the April 2008 industrial production statistic reflects a familiar theme in the current U.S. economic slowdown: a contracting factory sector.

“After a one-month rise or respite, our factories resumed their downward path, and we continue to see losses sector-wide. It is a major source of reduced output and job losses in the U.S. economy,” Wang stated. “The April data shows we’ve had a pronounced decline in factory output for about 9 months and this will weigh on commercial activity. This means we’re most likely in a recession and I would be very surprised if Q2 GDP does not turn out to be negative.”

In April 2008, consumer goods production dropped 0.8%, business equipment declined 1.1%, industrial materials fell 0.8%, and mine output dropped 0.8%. On the positive side, high-tech production increased 1% and utilities output rose 0.3%.

The monthly industrial production statistic indicates how much factories, mines, utilities and related plants are assembling/forging. Further, although the manufacturing sector accounts for less than 20% of the U.S. economy, because a considerable portion of it is cyclical activity, the report has a major impact on the stock market. Many economists and analysts also argue that industrial output reflects longer-term trends in the U.S. economy, due to the huge capital amounts and long-term planning involved in initiating industrial operations.

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Filed under: Google (GOOG), Entrepreneurs, Blackstone Group L.P (BX), Small business

No doubt, Barack Obama is an breathtaking speaker. Even his opponents grudgingly concur.

Yet he has misspoken on several occasions. His comment that mentioned “bitter” Americans took a toll on his campaign. And he’s being lampooned in the blogosphere and on talk shows for his slip that he’d visited all “57 says.“

Entrepreneurs can learn from his talents — and his slip-ups. In other words, when making a pitch — or a speech — you need to be very careful what you state. You need to think like a politician.

Of course, even top business leaders can make big-time blunders. Just look at Steve Schwarzman, the CEO of The Blackstone Group LP (NYSE: BX). At a private investor conference, he said the following about his aborted $1.7 billion buyout of PHH Corp. (from a piece in the NY Post):

Trying to buy a mortgage bank in the midst of the subprime crisis was the equivalent of being a noodle salesman in Nagasaki when the atomic bomb went off. Not a lot of noodles left or even a person — and that’s what happened to us on this deal.

It was certainly a puzzling and unsympathetic comment.

Schwarzman seemed to think that the speech would be private. But with the pervasiveness of social media, it’s assumed that anything you say will somehow windup becoming public and be used against you (here’s a blog post on it, for example).

Keep in mind that Blackstone is working hard to bolster its operations in Japan. Clearly, as businesses expand into global markets, it is becoming even more important to be watchful of what we say.

Here’s some additional advice when making public comments:

Don’t hype your company: Over the years, I’ve talked to lots of small companies. While many entrepreneurs have tremendous passion (which is critical to success), this can sometimes get out of hand. Often, they’ll hype things or even misrepresent their performance.

But it’s fairly obvious. For me, it usually means I won’t write about a company. For potential customers, it probably means they won’t do business with you.

Now, it’s certainly OK to emphasize your strong points. This is essential. However, there’s a temptation to inflate stuff. And, if you’re caught, it can be just as bad as the situation with Blackstone. That is, your comments might become a feeding frenzy for bloggers.

Be mindful of the blogosphere: Unfortunately, such gaffes will usually become top-page material for anyone searching Google (NASDAQ: GOOG) for your name or your company. In such cases, it’s tough to recover — since controversial material tends to be the most popular material.

So, before talking, think about it. Make sure your message is consistent and concise.

This sounds like basic advice. Yet, I’ve seen many entrepreneurs who don’t practice it. And, in the end, it could be harmful for the business.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

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