Filed under: Google (GOOG), Amazon.com (AMZN), Small business

Over the past couple years, major players like Google (NASDAQ: GOOG) and Amazon.com (NASDAQ: AMZN) have invested in the so-called “cloud.” Basically, they’re leveraging their huge infrastructures to provision services - like web hosting, storage and so on - to other companies. Actually, I know many startups that have such deals (helping to cut costs and get to market faster).

But what if you don’t want to outsource this? Well, there is an alternative: Parascale. The company sells cloud software that you can install on your own servers.

As an indication of its power, Parascale has raised $11.37 million in a Series A round. The investors include Charles River Ventures and Menlo Ventures (both firms have extensive backgrounds in the storage area).

Parascale got its begin four years ago. Interestingly enough, it hasn’t been an simple journey. The original team had to get second mortgages and lines of credit to support operations.

But now, it looks like the timing is right. “With the explosion of digital content,” said Sajai Krishnan, who is the CEO of Parascale CEO, “there is a need for more efficient storage systems.”

The Parascale Cloud Storage (PCS) is built on widely followed standards as well as Linux servers. This makes it easier for customers to adapt the technology to their needs (which isn’t an simple thing to do with Google and Amazon.com).

No doubt, the storage marketplace has gone through several major shifts over the past twenty years. So, with cloud storage, it looks like we may be seeing another shift - and Parascale will now have the resources to become a leader in the space.

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

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Filed under: Forecasts, Consumer experience, Competitive strategy, Google (GOOG), Apple Inc (AAPL), Motorola (MOT), AT and T (T), Nokia Corp. (NOK), Research in Motion (RIMM)

This post is part of my series featuring established companies and the smaller, more aggressive or innovative rivals that might eventually succeed them.

Apple (NASDAQ: AAPL) is one of the great stories of corporate America and the stock market. Under the leadership and genius of Steven Jobs, Apple is emerging as the premier technology growth company of this decade and the next. In the past five years the stock has rocketed from $9 to the current $175, and yet the story is actually stronger than ever before.

Apple has three major legs of growth in its arsenal and a distribution system that is second to none. The products of Apple are both cool and revolutionary. The 2002 introduction of the iPod defined the MP3 player space. Apple has sold over 150 million units as of March 2008 and commands over 70% of the market share. Many iPod owners are on their 3rd and 4th units, so the actual penetration of addressable customers has been barely scratched. The newer versions include touch screen and of course can store up to 20,000 songs and numerous movies and pictures.

The Mac computer has been re-engineered these past couple of years and is now the rage of the personal computer market. The new Mac is beginning to enter the traditional enterprise sector while maintaining its dominance in the consumer sector. The Leopard operating system became available in mid-2007 to rave reviews. Apple is taking market share in the competitive PC sector while maintaining its pricing structure. The company doesn’t compete on price but offers such better functionality that buyers do not mind paying full retail price. The attendant software programs are also seeing a resurgence and also carry high margins.

The iPhone is a revolution unto itself. On June 28, 2007, Apple WAS NOT a player in the fiercely competitive cell phone market. On June 29, 2007, Apple became a force to reckon with. The CEO of old traditional global cell phone maker Motorola (NYSE: MOT) stated at a conference, “we have no answer for the iPhone.” (Stunning yet true and, by the way, Motorola is still a “sell” as I wrote last year in BloggingStocks.)

The iPhone will launch its new version with twice the juice and half the price. The $199 retail price, down from $399, won’t mean less revenues for Apple. Carrier partner AT&T (NYSE: T) is subsidizing the difference in exchange for the two-year subscription from the iPhone customer. Apple has sold 5.4 million units of the iPhone as of the end of March 2008. The often-quoted goal of 10 million units sold by year end 2008 should be accomplished by September. Apple will roll out the new iPhone in 70 countries by year end.

The global race for “smart phone” market share will be a three company race: Nokia (NYSE: NOK), Research in Motion (NASDAQ: RIMM), and Apple.

Apple has a brilliant distribution strategy in place with its powerful, globally placed 232 retail Apple stores. Apple is America’s number one retailer in the valuable metric of sales-per-square-foot of selling space. Last year it topped $4,500 per square foot. Apple controls the customer buys from soup to nuts, as customers buy software and other accessories in addition to the Mac, iPod or iPhone.

There is no other story in the technology world like Apple … well, maybe Google, (NASDAQ: GOOG), but that’s another story!

Georges Yared is editor of YaredsGameChangers.com and author of the new report “How to Spot the Next Google.”

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Filed under: Before the bell, Major movement, Earnings reports, Analyst reports, Analyst upgrades and downgrades, Deals, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Apple Inc (AAPL), General Motors (GM), Anheuser-Busch Cos (BUD), ConAgra Foods (CAG), NIKE, Inc’B’ (NKE), Red Hat Inc (RHT), Palm Inc (PALM)

Before the bell: Futures lower on financials, tech concerns

Reporting today:
Palm Inc. (NASDAQ: PALM) is expected to post a loss of 22 cents a share in the fourth quarter.
ConAgra Foods (NYSE: CAG) is expected to post earnings of 34 cents a share in the fourth-quarter .

Nike Inc. (NYSE: NKE) reported late Wednesday a rise in quarterly profit of 12% to $437.9 million, or 86 cents a share, helped by gains in Europe and Asia. Sales jumped 16% to $5.1 billion. The earnings beat Wall Street’s forecast. Shares are down 4.8% in premarket trading.

Anheuser-Busch Cos. (NYSE: BUD) will likely officially reject InBev NV’s $46.3 billion takeover bid this week and announce plans to lower $1 billion in costs, pay a special dividend and sell off divisions like its theme-park unit to increase its stock price. InBev may then raise its offer.

Yahoo Inc. (NASDAQ: YHOO) defended the deal it made with online search leader Google Inc. (NASDAQ: GOOG), saying it is a more desirable partner than Microsoft Corp. (NASDAQ: MSFT). Yang, Yahoo’s CEO, wrote so in a letter Wednesday. The letter is part of Yahoo’s campaign to protect its strategy and board against a revolt led by activist investor Carl Icahn.

Goldman Sachs downgraded General Motors Corp. (NYSE: GM) to Sell from Neutral and cut its price target to $11 from $19. Most troubling is that the broker said that liquidity concerns could increase. Goldman cut its rating of two other sector stocks as well. Shares are down 5.6% in premarket trading to $12.09.

Red Hat (NYSE: RHT) reported first-quarter results Wednesday after the close. Profit rose almost 7% and revenues grew 32%, inline with estimates. Shares are down 4% in premarket trading.

Telefonica SA said Wednesday it has received 300,000 pre registrations in the U.K. and Spain to purchase Apple Inc.’s (NASDAQ: AAPL) new third- generation iPhone.

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Filed under: Before the bell, Earnings reports, Management, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Apple Inc (AAPL), Toyota Motor Corp. (TM), Employees, Sony Corp ADR (SNE), KB HOME (KBH), Intuit Inc (INTU)

Before the bell: Futures drift lower as oil sets another record high

Since Apple Inc (NASDAQ: AAPL) is no longer insisting on revenue sharing from mobile operators selling its iPhone, China Mobile Ltd (NYSE: CHL) said this cleared the biggest hurdle in bringing the iPhone to mainland China. They just have to resolve some practical issues now.

KB Home (NYSE: KBH) shares climbed over 5.8% in after-hours trading Thursday. The builder is to report results this morning, a quarterly loss is expected.

Sony Ericsson, the joint venture between Sony (NYSE: SNE) and Ericsson (NASDAQ: ERIC) warned Friday it might not see any profit growth in the second quarter, due to slowing demand for some of its higher-priced phones and a delay in shipping new models to the market and will also experience a gross margin squeeze. ERIC shares are down about 6% in premarket trading.

Intuit Inc. (NASDAQ: INTU) will cut about 575 jobs, or about 7% of its workforce, as the result of a reorganization to Internet-based service. The company anticipates the cuts to result in a 4 cents a share charge, in the fiscal fourth quarter. Intuit now sees an adjusted fourth-quarter loss of 7 cents to 9 cents a share, a more massive loss than analysts had estimated.

An era is about to end Friday as Bill Gates ends his full-time tenure as Microsoft (NASDAQ: MSFT) — the world’s largest software company — leader. The Microsoft founder and visionary leaves the company after a failed attempt to acquire Yahoo! Inc. (NASDAQ: AAPL) as it tries to gain market shares in world wide web search where Google Inc. (NASDAQ: GOOG) dominates. It will be interesting to see how the company continues on without his daily guidance, and if anything, perhaps something to watch as investor worry what will happen if Steve Jobs retired.

Toyota Motor Corp. (NYSE: TM) “may implement a broad price hike for vehicles and trucks sold in Japan to help offset surging prices for steel and other materials, according to a Japanese media report Friday.”

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Filed under: Forecasts, Deals, Consumer experience, Competitive strategy, Google (GOOG), Microsoft (MSFT), Entrepreneurs

This post is part of my series featuring established companies and the smaller, more aggressive or innovative rivals that might eventually succeed them.

I remember way, way back to November 2006 when Wall Street was stunned that Google (NASDAQ:GOOG) was paying the ungodly sum of $1.65 billion for privately held YouTube. How were they to monetize this goofy, home video web site? Since November 2006, it appears that Google got a bargain when compared to other social networking web sites.

Facebook has over 80 million users including a new Facebook profile for Democratic presidential nominee Barack Obama. Facebook attained Wall Street relevancy last year when Microsoft (NASDAQ: MSFT) concurred to pay the unheard of $246 million for a 1.6% ownership stake. That October 24, 2007, Microsoft investment valued Facebook at almost $10 billion in the private equity world. As of yet, there’s no filed Facebook IPO, but investors bet the company will file an IPO before the end of 2009.

The new player capturing headlines in the social networking world is LinkedIn. The company is designed for the business and professional world. The more than 23 million registered users represent over 150 different industries. It’s a place to swap ideas, best practices and other opportunities.

LinkedIn was founded in 2002 specifically for the business community. LinkedIn just received a $53 million venture capital investment led by Sequoia Partners. The $53 million represents a 5% stake in the company, therefore valuing LinkedIn at $1.06 billion.

The easy business model of social networking web sites grants for an instant global presence, thus enhancing the underlying values of these companies. In the case of Google, the monetizing of YouTube will begin shortly as Google strategically places swift 15 second ads on the bottom of the requested video. Google will be watched closely by other industry insiders as no one wants to cheapen the freedom and ease of use of the social networks by cluttering them with countless ads.

With fresh growth capital, LinkedIn will expand its marketing efforts globally and grow its user list. The user list is the most valuable asset and Sequoia Partners valued each member at over $50.

The next couple of Google-type IPOs may come from this sector of the World wide web … stay tuned.

Georges Yared is the editor of YaredsGameChangers.com and the author of the new report “How to Spot the Next Google.”

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Filed under: Microsoft (MSFT), Yahoo! (YHOO), Ford Motor (F), General Motors (GM)

So much for “geopolitical risk” not being a factor in the markets, and for that matter so much for the bulls. Today was a psychological blow for traders as the DJIA crossed under the 12,000 level today. Israel’s conducting of a training exercise to bomb Iranian nuclear facilities was the excuse needed for the bears to assume full control. Oil prices rose over $2.00 per barrel to $134.77 this day, even ahead of the weekend meeting to explore ways to boost Middle East refinery production. Throw in the excuse of a Quadruple Witching Day on top of it and that’s all she wrote. These are the unofficial closing levels for major US index levels:

DJIA 11,842.69 (-1.8%)
S&P500 1,317.93 (-1.9%)
NASDAQ 2,406.09 (-2.3%)
10 YR T-Note 4.137% (-0.06%)
52-WEEK LOWS
TOP 10 ANALYST CALLS

Here’s a partial earnings calendar for next week’s massive technology earnings on deck.

Cincinnati Financial Corp. (NASDAQ: CINF) managed to buck much of the downward trend today despite the company’s poor guidance comments after losing money on investments and its insurance exposure to the big Midwest Flooding. Shares were up 0.6% at $28.78 in the final minutes of trading today.

Ford Motor Co. (NYSE: F) and General Motors Corporation (NYSE: GM) were both hit hard this day after S&P placed the Large 3 Auto Makers’ credit ratings on review under a “negative credit watch” list. To show how sensitive the market is still treating credit risk, Ford shares were down over 8% at $5.80 and GM shares were down 6.6% at $13.81 in the final minutes this day.

Despite word out of Microsoft Corporation (NASDAQ: MSFT) saying they weren’t going to go on a web buying spree to eliminate additional dilution fears, shares of the software beast were down 2.5% at $28.19 in the final minutes of the day.

The Mosaic Company (NYSE: MOS) performed better than the market today, but shares saw a muted reaction after the company put its nitrogen fertilizer business up for sale. Shares were up 0.6% at $152.16 in the final minutes of trading.

Yahoo! Inc. (NASDAQ: YHOO) saw a drop after reports came out that the company is sending away 3 executives and is considering a reorganization. Shares were down 2.7% at $22.11 in the final minutes of the day.

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Filed under: Newspapers, Magazines, Google (GOOG), Merrill Lynch (MER), Goldman Sachs Group (GS), Morgan Stanley (MS), Amer Intl Group (AIG)

MAJOR PAPERS:

• The Wall Street Journal’s “The Game” column speculates that one of the results of the Bear Stearns crash could be the push of investment banks and commercial ones closer together, which could result in better handling of volatility with more stability. Some observers think Merrill Lynch & Co (NYSE: MER), Morgan Stanley (NYSE: MS) or The Goldman Sachs Group Inc (NYSE: GS) could go that route by buying a commercial bank. Any move would force them to adhere to superior reserve ratios, affect short term bank funding, and shrink balance sheets.
• The Wall Street Journal reported that Google Inc (NASDAQ: GOOG) will soon make available a new service that measure hits on the Internet with the intent of helping advertisers decide where to buy ads on the internet and would directly compete with comScore Inc (NASDAQ: SCOR) and Nielsen On the internet. Ad executives said Google’s method could make targeting markets more efficient.
• A Manhattan judge dismissed four claims made by American International Group Inc (NYSE: AIG) in its fight to regain control of a block of its shares held by Starr International, a company that once founded a lucrative compensation plan for AIG executives. AIG believes the shares held by Starr should continue to be used to fund employee compensation, the Financial Times reported.

WEB SITES:

• According to Scorpio Partnership, Bloomberg reported that UBS AG (NYSE: UBS) and Merrill Lynch had slower growth in assets under management last year due to losses connected to the U.S. subprime crisis.

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Filed under: Competitive strategy, Microsoft (MSFT)

Plenty of companies advertise how their product can help the world in some way. Firms sometimes brag about using recyclable materials or the charities they donate to. Even if I think the company is doing it for publicity reasons, the donations still help a good cause, so I approve. Well, now Microsoft (NASDAQ: MSFT) has designed a creative way of drawing in customers and sending out donations.

The program, called i’m (think instant messaging), donates a portion of the ad revenue that Microsoft receives each time you use Windows Live Messenger or Windows Live Hotmail. So just by using its services the user can give to a worthy cause. Since March of last year, this service has raised over $1.5 million in ad revenue for charity.

Starting June 23, the initiative is hosting the i’mtalkathon (read the disclaimer at the bottom). It’s “30 days of e-mailing and IMing for the common cause.” The intention is to get people who stumble upon the ‘blog’ to go and sign up for one of the offered services. Surely, this will help raise money for charities as well as Microsoft.

The ideal part is that there is no cap on how much Microsoft will donate, so each time you use the service you can count on some money going to the cause of your choice. What are your choices? There is a moderate selection of charities like The American Red Cross, Sierra Club, and others. To join in, simply go here and sign up for one or both of the two services. Then you get to select the charity you would like the money to go to and you’re all set.

It’s clear that Microsoft has many new customers to gain, and presumably ad revenue too, since only a portion will go to charity. This should help it compete with other online services that Google (NASDAQ: GOOG) offers, like Gmail. It will even help soften the evil image that Microsoft seems to have. Even though, the company has been charitable before and some people still seem to hate it.

Overall, I think it is a great idea to sign up, as long as it really is helping others out, as the $1.5 million indicates. The only thing I want to know is what percentage of the revenue $1.5 million represents.

Brendan Cleary does not hold positions in any of the stocks mentioned above.

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Filed under: Launches, Google (GOOG), Citigroup Inc. (C)

You have to look hard to find good news about Citigroup (NYSE: C) these days. but despite all the bad headlines, the company continues to find new ways to innovate.

Take its joint venture Mobile Money Ventures LLC (MMV), which is an alliance with SK Telecom. Basically, this is a new company that’s building new financial mobile applications.

On Monday, MV debuted a new offering - and it leverages Google (NASDAQ: GOOG)’s Android. In fact, I saw a demo of it at the 2nd Mobile Commerce Summit.

All in all, it’s pretty cool. The application helps with tracking and payments (there are also person-to-person transfers). Plus, you can even get mobile coupons and rewards - and send them to friends.

More importantly, the interface is intuitive and quick. It has a slick iPhone feel.

While the mobile banking market is still in the nascent stages, it looks like the growth rate will be particularly strong (just as was the case with ATMs during the 1980s). No doubt, Citigroup is making the commitments to be a top player in this important category — which is apt to lead to more customer engagement and hopefully more profits for the long haul.

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

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Filed under: Google (GOOG), Microsoft (MSFT), Nokia Corp. (NOK)

Of course, Microsoft (NASDAQ: MSFT) demonstrated the huge value of owning a pervasive operating system.

But what about the OS for mobile? Microsoft has been building its own substitute. Moreover, Google (NASDAQ: GOOG) has Android.

However, the winner might actually be the handset maker, Nokia (NYSE: NOK). This week, the company announced it is purchasing Symbian, which has about 60% of the global market for the mobile OS. The offer comes to about $409.8 million (to grab the 52% that Nokia doesn’t already own).

But, unlike Microsoft, Nokia isn’t taking a proprietary approach. Instead, Symbian is going to be open source.

True, this is likely to take some time (say several years), but in the meantime, Nokia can leverage its big global platform by using Symbian’s 1,200 programmers. The upshot should be improved innovation and faster product launches (oh, and there will be no need to pay licensing fees to Symbian).

OK, so what about rival handset makers that rely on Symbian, such as Motorola (NYSE: MOT), Sony Ericsson Mobile and Samsung? Might they be worried?

Perhaps, but then again, they realize the importance of having standardization. And by being open source, the handset makers have the leeway to add their own abilities.

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

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