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Brian White
Oklahoma City, OK - http://

Brian White is a strong advocate of value investing and index funds, but has known to hold an equity or two from time to time. Financially speaking, he's covered the Fortune 500 for six years in various reporting and writing positions and currently owns a business consulting company. Additionally, Mr. White holds BA and MBA degrees.

Best Buy spends $2.1 billion to buy 50% of Carphone Warehouse

Best Buy, Inc. (NYSE: BBY) has gone shopping across the pond, and will be spending about $2.1 billion in cash to purchase 50% of the UK's Carphone Warehouse mobile telephone retailer. Best Buy is signaling to the retailer world that it thinks mobile is the place to be, after it committed to expanding mobile market share here in the U.S. just recently in a large way.

This multi-billion commitment to Carphone Warehouse will allow the European retailer to pay down debt and gets Best Buy a foothold in the European retail business in a pretty large and immediate way. Along with Wal-Mart Stores, Inc. (NYSE: WMT), U.S. retailers are seeking out ways to expand their footprints globally. Carphone Warehouse isn't just a small step in that direction, as it's one of Europe's largest mobile phone retailers.

Best Buy's revenues continue to soar on an annual basis, and this partnership should add to that amount significantly. While U.S. competitor Circuit City Stores, Inc. (NYSE: CC) has had nothing but troubles recently and is just hanging out in la-la land while delivering substandard results every quarter, Best Buy is going for the jugular -- still growing sales and taking market share in the U.S. and now in Europe. Can it be stopped? For now, there's no equal -- so, no.

Google seeks long-term ad deal with Yahoo!

After Microsoft Corp. (NASDAQ: MSFT) walked away from a $40+ billion dollar deal with Yahoo, Inc. (NASDAQ: YHOO) this past week, competitor Google, Inc. (NASDAQ: GOOG) was very, very relieved. After all, a combined Micro-Hoo would have been a significant competitor (in a best-case scenario) to Google. To help dissuade both parties to make a deal, Google ran a two-week test on Yahoo! to supply the competitor with its own advertising system. The test went well.

Now that Yahoo! has proved that is could one day dump its search technology and outsource that piece of its business to Google, Google executives are looking for that exact scenario. They believe it will help prevent another attempt by Microsoft to purchase Yahoo! in the future. They are probably right -- if Google were to become one of Yahoo!'s largest partners, there would be issues with Microsoft buying Yahoo! now or in the future, from a regulatory perspective.

Google co-founder Sergey Brin said that "We have been talking to Yahoo and we are very excited to be working with them ... we share a lot of values with them" in his remarks at yesterday's annual Google shareholder's meeting at Google's Mountain View, Ca. headquarters. Brian added that a potential deal with Yahoo! was "not about scuttling (the deal)." Hogwash -- I say that was exactly why the Google-Yahoo! test was performed. Look for a Yahoo!-Google search advertising partnership in the very near future, folks.

Target matches Wal-Mart's new prescription drug price cuts

Wal-Mart Stores, Inc. (NYSE: WMT) implemented another phase of its low-price prescription drug program this week, and as usual competitor Target Corp. (NYSE: TGT) followed suit with price reductions of its own. In addition to offering a 30-day supply of many popular generic prescription drugs for $4, Wal-Mart is now offering a 90-day supply for $10. And so is Target.

Is Target just trying to keep up, or does it see a benefit in matching drug price cuts by its larger competitor? In response to the price cuts, Target said that it "understands the challenges guests are facing in the current economic environment." It probably planned to make these price cuts as soon as Wal-Mart did and gain the same kind of free PR that comes with such a drastic price reduction in something that millions of Americans now depend on.

But Target does not position itself as the "low price" leader like Wal-Mart does. Its marketing is more upscale, and so is the appearance of its stores -- even while carrying much of the same merchandise. So why is Target matching these prescription drug price cuts? Is it trying to take customers from Wal-Mart? Of course -- the two are fierce competitors even though marketing and merchandise presentation strategies are what I'd consider to be worlds apart. Sometimes, price is everything.

Ford planning more fuel-efficient 6-speed engines

Gasoline prices continue to increase along with crude prices, and the latter seem to find a new record every single day. Wasn't it just a few months ago that the media was going crazy about oil reaching the $100 per barrel mark? It hit $122 this week. Now, that's not a year later; that's less than half a year later. It's not surprising then that automakers with an inflexible SUV-selling strategy are getting pummeled, while automakers with a decent offering of gas-efficient vehicles are seeing product mix changes in retail sales.

Ford Motor Co. (NYSE: F), which showed a surprising profit in its most recent quarter, said that it plans to really up the presence of gas-efficient six-speed transmissions by the end of 2009, and wants to have these transmissions in 98% of its North American vehicles by 2012. If Ford follows through with this commitment, it'll be a game-changer for the industry. And, it will force General Motors Corp. (NYSE: GM) to do the same thing. Ford stated that the newer 6-speed automatics will get 4% to 6% better gas mileage than the standard 4-speed and 5-speed automatic transmissions.

GM is not sitting idly by at the same time, though. It debuted a 6-speed automatic transmission in the popular 2008 Chevy Malibu, which it is pitting as a strong competitor to market leaders Honda Motor (NYSE: HMC) Accord and Toyota Motor Corp. (NYSE: TM) Camry. Will the new trend in the consumer vehicle market be smaller 4-cylinder engines with advanced, fuel-efficient 6-speed automatic transmissions? You can count on it until oil prices fall to $50 a barrel. And, that'll be when pigs fly.

Sprint-Clearwire deal could give Google what it's always wanted

As Tom mentioned earlier, Sprint Nextel Corp. (NYSE: S) is merging its next-generation wireless assets with Clearwire Corp. (NASDAQ: CLWR) to form a new joint partnership that -- finally -- will create a high-speed wireless internet network that covers most of the U.S. Although Sprint's Xohm service has been decried by investors as a "non-core" asset weighing down Sprint's pocketbook, it still has enormous potential in the near future. Sprint's not in terribly good shape -- but it does have vision. Of course, vision and execution are two different things.

So, it is pleasing to think that if the new Sprint-Clearwire venture can build out is national presence successfully and capture customers tired of limited high-speed internet service, the world will be its oyster. Of course, other companies are contributing to the venture as well, including Google, Inc. (NASDAQ: GOOG). Why would Google want to put money into this? Because this could be Google's most important investment ever.

Bypassing the telephone and cable companies that have a stranglehold on most of the high-speed internet business in the U.S. has long been the dream of Google. It doesn't want a middleman in the way of it connecting consumers and businesses with the information they seek. Although Google wasn't successful in the recent FCC radio auctions (maybe by design), finding a way to provide internet service directly to its customer base would give Google on a much more powerful perch than it has even today. Google could even buy the new Clearwire partnership outright once it's established.

I think they're starting to get giddy in the Google board room.

Merrill Lynch's John Thain: Credit crisis getting better

Merrill Lynch and Co., Inc. (NYSE: MER) CEO John Thain said today that the risk in the housing market is "much lower" than it has been recently as the credit crisis in the U.S. is "getting better." Leave it to the leader of a company which has written off over $30 billion in mortgage lending investment to make this claim. But the thing is, could he be right?

Although Thain said "economic pressure" will remain high over the next year, he expressed confidence that the end of the housing bubble, which is still popping in many parts of the country, is now in sight. Thain also indicated that food prices and shortages as well as higher unemployment will continue to have an impact on the U.S. economy. Of course Merrill has had three quarters of disastrous results like other large investment banks, and the company is still toiling with the idiocy of incredibly risky investments that have left it weakened financially.

Even if Thain had been hired by Citigroup, Inc. (NYSE: C) last year, he'd be in the same mess in the same industry. I'm not sure what "much lower" risk in the housing market means, although he's probably talking about his company's reduced exposure to those SIVs and other vehicles from the Flintstone era that start off fast before the wheels fall off.

I hope Thain is correct in his assessments, and Merrill Shareholders are probably wanting the same thing, just much more badly than myself.

Yahoo! could have offered Microsoft unmonetized eyeballs

Even though Microsoft Corp. (NASDAQ: MSFT) could have upped its offer for Yahoo, Inc. (NASDAQ: YHOO) this past weekend, it did not. Microsoft CEO Steve Ballmer walked away from the deal after Yahoo held out for more money. At this time, Microsoft was wise to walk away from Jerry Yang's ego. The reason? No company should spend over $40 billion for a bunch of unmonetized eyeballs. But then again, Microsoft needs to up its game in the consumer space; not so much in the enterprise business space.

Yahoo! has one of the most lucrative audiences on the web, if not the most lucrative. The company, to save its life, can't figure out how to continuously grow revenue with that huge audience it has. I won't beat a dead horse here, but if Yahoo! thinks it's really worth $37 per share, some reality needs to be put in its pipe and smoked. Microsoft would have purchased the rights to combine its ailing Internet properties with a huge audience that Yahoo! can't seem to squeeze money out of with any kind of strategy. Customers want everything for free, but Yahoo! doesn't have the advertising strategy down to allow that. We can thank former CEO Terry Semel for that.

And the kicker is this: If Google, Inc. (NASDAQ: GOOG) will soon be providing Yahoo! with its search infrastructure (after a successful test), just what was Microsoft buying, anyway? Engineering talent? Employees with a combative culture? We all know Microsoft wanted Yahoo! badly, but the mixing of oil and water here would not have instantly made a neat company or anything. And Yahoo!? It's not worth what it thinks it is. Period. Get over it, find out how to more effectively compete and monetize those eyeballs -- then come back to the table if anyone will sit there with you then.

Next year's Super Bowl 30-second ad: $3 million

General Electric Co. (NYSE: GE)'s NBC Universal unit will charge $3 million per 30-second advertising spot in the 2009 Super Bowl, according to the Wall Street Journal (subscription required). Is it me, or does that strike anyone as particularly insane? The deal is this: I would be that many disinterested fans watch the Super Bowl just for the ads alone. The reason? These are the best of the best, attention-grabbing and inventive commercials.

So, why don't ad agencies and PR flacks do this the rest of the year? The only Super Bowl ad that stuck in my mind this year was Tide's 'talking stain" ad, which probably cost a few dollars to produce and was enormously effective. The cost of the campaign was the cost of the ad, of course. All those other advertisers that spend millions on Super Bowl ads this year? Can't remember one of them.

The price for a 2008 Super Bowl 30-second ad spot was $2.7 million, so NBC is upping the game here a bit. Is that ad inventory worth it? With media changing all the time, television is still a lucrative game, and smart advertisers are combining the web and television into complementary market platforms. Like the Tide commercial referenced above, the entire ad was designed to drive traffic to MyTalkingStain.com, not to your local supermarket to buy the product. That's smart marketing. If you spent $3 million for an ad, would you want the impact of the web to somehow be involved? I thought so -- but not all ads do, apparently.

Kohl's scales back expansion plans

Kohl's Corp. (NYSE: KSS) recently said that it would scale back its plans for opening new locations in the U.S. in 2008 and for the next few years, citing a "squeeze-play on consumers." Instead of the announced 90 new stores this year, Kohl's now expects to open 70 to 75 new stores this year. The retailer is still on track to open its 1,000th store later in 2008, however.

Although the "mall store outside the mall" has identified about 400 sites for potential locations in the near future, it said that kind of expansion may not happen until 2014. Last year, the retailer opened 112 stores nationwide, ending up with a total of 943 stores total in 57 states.

Kohl's is right when it said that its customers are "under a lot of pressure" due to higher fuel, grocery and health care costs. The good news, from what I have seen in the past, is that Kohl's has very low prices for much of its "Croft & Barrow" apparel items, its private-label brand. If it can fight the good fight with Target Corp. (NYSE: TGT) and Wal-Mart Stores, Inc. (NYSE: WMT) in terms of prices and clothing selection, it may yet have decent sales on those items as expensive housewares and related items sink this year.

The Wal-Mart Weekly: Examining upcoming shareholder resolutions, Part 1

Welcome to the 59th installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions, and just a bit of everything else when it comes to a very hot topic these days: Wal-Mart.

In this week's Wal-Mart Weekly, I'll begin a multi-part column that takes a look inside some of Wal-Mart Stores, Inc.'s (NYSE: WMT) annual shareholder meeting proposals. As many of you may know, Wal-Mart's annual shareholder's meeting happens in early June, about a month from now.

I covered it live from the show floor last year, where all 11 shareholder proposals were easily and soundly defeated. Nothing new here, as Wal-Mart's board has a habit of glossing past many proposals that would give its shareholders a glimpse into its internal operations.

So, let's start off by looking at a shareholder proposal that asks for more public visibility into Wal-Mart's political donations. This is a great question for the retailer, and one would think that if Wal-Mart has nothing to hide, it would open the transparency book to answer this proposal. We'll only know in a month when the meeting actually happens, but we'll consider what the retailer could do in this column. Visit this link to get a rundown on Wal-Mart's SEC Form 14A for its upcoming shareholder's meeting, and then join me after the break.

Continue reading The Wal-Mart Weekly: Examining upcoming shareholder resolutions, Part 1

Target's Ulrich to step down at a precarious time in the retailer's history

When longtime Target Corp. (NYSE: TGT) CEO Bob Ulrich retires soon, he'll leave behind a very impressive legacy. Target, the second-largest discount retailer in the U.S., has grown alongside its larger competitor Wal-Mart Stores, Inc. (NYSE: WMT). While Wal-Mart was opening stores and increasing sales at a blistering pace, Target was no slouch. Even though Wal-Mart grew much faster, Target's strategy worked pretty darn effectively, too.

Target seemed to beat Wal-Mart to the punch on the trends many customers cared about: brand-name clothing, hip marketing, clean and bright stores and very effective marketing and merchandising of its own store-brand product lines. While Wal-Mart became the generic big-box store, Target seemed to be the store shoppers flocked to to stay away from Wal-Mart's lifeless marketing, boring stores and grand-central-station customer traffic. In other words, price isn't everything to every U.S. retailer customer.

Now that Ulrich is retiring, his longtime company sidekick Gregg Steinhafel will be taking over with some lingering challenges that will put him on the hot seat almost immediately. Target is suffering, along with other retailers, from a seemingly-persistent economic slump and from the performance of its credit-card business (which is being hit with defaults due to consumer credit problems nationwide). Although things can be rosy at Target, they aren't for all of its customers at this time. With rising energy prices and the spike in food staple prices recently, Target's store brands like Archer Farms may suffer or need to be priced at the level of brand names -- and then they may lose their appeal to consumers looking for quality alternatives to higher-priced brand names. Steinhafel will have his plate full as he takes over when Ulrich turns 65 --Target's mandated retirement age for the CEO position.

Yahoo! to feature Google's search ads permanently?

When Yahoo, Inc. (NASDAQ: YHOO) featured a two-week test that saw it use competitor Google, Inc.'s (NASDAQ: GOOG) text advertising, the move was done with moxie. Yahoo! spent a lot of time and money developing its Project Panama text advertising system only to bring in Google's market-leading system as an outsourced solution. What was the deal? Well, the deal was Yahoo!'s attempt at making a takeover by Microsoft Corp. (NASDAQ: MSFT) as hard as possible.

That two-week test was completed a few weeks ago, and now rumors are surfacing that Yahoo! may enter into an agreement with Google to carry the search leader's advertising once again. This partnership would make it harder for Microsoft to acquire Yahoo! (something that's waiting in the wings), while providing Yahoo! with some decent cash flow. It seems almost every partner of Google's, insofar as text advertising, ends up doing quite well.

While Microsoft still has not said anything almost a week after its proposed offer for Yahoo! expired, the end of this summer could see a major shift in the online advertising landscape. Either Microsoft will be successful in acquiring Yahoo! through a proxy fight or an upped-price offer, or Google and Yahoo! will have a partnership that would give Google even more power in the online advertising world -- where it's already the king of the hill by far. Break out the fake fingernails, 'cause you may be chewing on them if you have any holdings in any of the three companies

Wal-Mart recruiting more affluent shoppers to its stores?

Wal-Mart Stores, Inc. (NYSE: WMT) has been trumpeting the fact for over a year now that it wants to get more higher-income shoppers into its locations to buy more higher-margin goods. Is it winning that strategy? Wal-Mart U.S. Chief Eduardo Castro-Wright indicated this week at a Lehman Brothers conference that not only is the retailer keeping its core base of low to mid-income shoppers, but it's recruiting more affluent ones too.

The reason? The economic downturn that's seeing energy and gas prices at their highest levels in decades plus the rising cost of food -- among other things. Castro-Wright said that while Wal-Mart is reaching more affluent customers at this point in time, the real zinger is that the retailer is in a position to keep them shopping at Wal-Mart once the economy improves. That's what Wal-Mart always wanted -- growing its long-term customer base.

The actual shopper demographic Wal-Mart is talking about here contains those shoppers making $55,000 to $70,000 per year (or more), of which February traffic increased 0.7% and increased 2.2% in March. Wal-Mart's old staple, low prices, seems to be the biggest hit with customers right now -- even though Wal-Mart dropped the "Always Low Prices" moniker into a more self-help motto like "Save Money. Live Better" last year. One large change I witnessed recently that's definitely geared towards the more affluent customer was the home electronics section, which resembled a high-end electronics store more than a big-box mass merchant.

Google steps up hiring in 2008, but not in an organized way

Google, Inc. (NASDAQ: GOOG) has been growing its employee count by leaps and bounds over the last few years, but has recently slowed that growth which, of course, sounded an investor alert. But, the world's largest internet search engine just can't keep track of the activities of all its new employees, according to CEO Eric Schmidt.

Google does not want new employees to get lost in the cracks, according to Schmidt. If this is true, then Google is growing too fast for its britches. "We have slowed our head count growth for a couple of reasons, but the biggest reason is it began to feel like we really didn't have a good sense of what people were doing ... the systems in the company, literally who's doing what, what are they doing, seemed to lag our ability to hire these great people," Schmidt told CNBC.

In the first quarter of 2008, Google upped its head count from 16,805 to 19,156. That's quite a bit in a single quarter. Even with all those new people, Google affords more luxuries on its employees than most other public companies in the world. Even with a recession in progress (if you agree with that), Google's business, so far, has been stellar. Schmidt indicated that "we have gross margins to afford it," in talking about the lavish treatment of Google employees and the benefits they receive. Will shareholders continue to like the way that money is being spent? So far, there have not been any complaints.

Battle of the Brands: Microsoft vs. Google

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

Microsoft Corp. (NASDAQ: MSFT) has been around more than 30 years now and continues to make money hand over first every quarter. Its growth has slowed to levels representative of a mature company, but the power the computer software maker has over the flow of the world's information is very formidable. Then you have Google Inc. (NASDAQ: GOOG), a company just a decade old but with power that rivals Microsoft in many ways. In a sense, Microsoft provides the river, and Google provides the current.

That's probably not what Microsoft executives had in mind, but that's reality. The two companies are uniquely different cultures: Microsoft is a standard, dyed-in-the-wool, buttoned-down corporation and Google operates in an organized chaos type of way, much like a start-up software company. The difference is that Google's revenue and growth is slowly reaching where Microsoft's is, and it's only taken a fraction of the time.

Continue reading Battle of the Brands: Microsoft vs. Google

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Last updated: May 10, 2008: 04:33 PM

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