Next week marks the beginning of 2008 and my two high school kids will also receive their first semester report cards, the moment of truth for them. It got me to think perhaps it was time to grade my own performance for 2007 on BloggingStocks. So here goes, the A's to the F's...

The A's:

• My recommendation of Aquantive Corp at $24 and stating that Microsoft (NASDAQ: MSFT) needed to buy this company. It did at $66.50. Many readers and members of my investment web site made a near three bagger in less than six months.
• Recommendation of Color Kinetics at $19 back in May to only watch it get bought out at $34 by LG Phillips (NYSE: LPL) of the Netherlands.
• Recommendation of Kyphon at $37 and have Medtronic (NYSE: MDT) buy it at $71
• Recommendation of Opsware at $8 back in March and then again in May at $9 and have Hewlett-Packard Compaq (NYSE: HPQ) buy it out at $14.50
• Recommending Apple ( NASDAQ: AAPL) all year and re-iterating the buy since $80, now at $198 with a new price target at $300 for 2008
• Writing the exhaustive series of the Top 25 Stocks for the NEXT 25 Years back in May/June. Many of the stocks have been bought out and several are up more than 20%.

In my book about Baby Boomer investing I highlight what I feel are the five major growth industries going forward. The industries are health care, alternative energy, technology, communications and lifestyle. I also mention 42 companies within those industries that could be the leaders, the game changers. Since the book has been published, five of the 42 stocks I wrote about are being acquired!

The latest one to go is Checkfree (NASDAQ: CKFR). Fiserve (NASDAQ: FISV) has announced its $4.4 billion bid. Checkfree made our banking-transactional life much easier. The other four that will be part of larger companies are Opsware (NASDAQ: OPSW), Color Kinetics (NASDAQ: CLRK), aQuantive (NASDAQ: AQNT) and Kyphon (NASDAQ: KYPH). Other than aQuantive, the other three were also part of my Top 25 stocks for the NEXT 25 years series.

As the 42 companies are down to 37, it causes some reflection for the future. Great, emerging companies will always be on the radar screen of larger, well-financed suitors. If growth cannot be internally generated through research and development efforts, larger companies will need to acquire growth and next generation products or technology. With interest rates still historically low, the borrowing necessary to buy these young, up-and-comers is not a significant issue. Investors will reward mature companies if they acquire intelligently and strategically.

In the past Mike Fowlkes, Sarah Gilbert and I have pointed out what seems blatant illegal activity in Dow Jones (NYSE: DJ) and Aquantive (NASDAQ: AQNT). Now there is activity in Hilton Hotels (NYSE: HLT) worth taking a look at.

Hilton Hotels closed up 9.34 to $45.39 today on news the company agreed to be acquired by Blackstone Group (NYSE: BX) in a deal valued at $26 billion. A reader pointed out interesting activity on Hilton Hotels.

With the stock up, let's look and see how many "lucky" traders picked up calls on the stocks. A call option gives the buyer the right to buy the stock at a set price. If you think a stock is going to go up you can buy the right to buy that stock at a set price, in the hopes that it does in fact go up, as you expect.

The Hilton July 35 calls (HLTGG) had a volume of 3,660 Tuesday with a high price of $1.90. That is above the average volume of 314 calls per day since the options were issued and just above the previous record high daily volume of 3,616 on 5/31. Those calls are now worth about $10.50 a piece so a 450% gain over two days isn't bad. I have to say this looks suspicious; sort of like a man running from a bank with a bag of money.

Looking at the Hilton August 40 calls (HLTHH) it becomes a little more obvious. Tuesday there were 5,844 contracts for 0.85 cents or less. In the past three weeks -- since the options came out there were only a total of 70 contracts traded. The contracts bought Tuesday are now worth about $5.80 a piece. A 582% gain in two days, representing about $2.8 million in profits.

If that isn't enough money ...there is more. The July 40 calls (HLTGH) saw 3,312 contracts trade Tuesday for less than 0.40. Now at 5.50 it is a 1,275% return for another $1.6 million in profits.

While I do not know who made the trades, their intentions and what they knew when; I am betting they will soon be getting a call from the SEC. In all fairness, just because I see a man wearing a black ski mask running out of the bank carrying a bag of money and a gun doesn't mean he is a bank robber. These trades could be legit, but they trades have all the tell-tale signs of insider trading. By the way has anyone been following Paris recently? Has she been meeting with Martha Stewart?

Kevin Kersten is an Options Analyst with InvestorsObserver.com. Do you have any deadwood in your portfolio? Check out the 18 Warning Signs That Tell You To Dump A Stock.

Disclosure note: Mr. Kersten owns and or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about.

Google's (NASDAQ: GOOG) deal to buy DoubleClick seemed certain to get a government review. Google is too dominant in text advertising and DoubeClick too big in display ad serving and targeting. Of course, competitors like Microsoft (NASDAQ: MSFT) said it would put too much online advertising power in one set of hands.

Now the eyes of the Federal Trade Commission have turned on Microsoft and Yahoo! (NASDAQ: YHOO). Their respective deals to buy aQuantive (NASDAQ: AQNT) and Right Media are going to get the antitrust once over, at the very least.

Right now, the FTC's review of the Google deal is more formal [subscription required] than the other two, but that could change. More than one industry association has asked that the government to take a close look at all three transactions.

Although the odds are that none of the M&A activity that is designed to bring advertising targeting under the umbrellas of big web portals will be stopped, perhaps the FTC work will be more than a formality. When these three transactions are added to AOL's ownership of Advertising.com, the concentration of private data about individual's web habits will be in very few corporate hands.

Perhaps there should be a divide between those that have the information and those who have the advertising inventory. But, that would be in a too perfect world.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Jim Cramer proposing on CNBC's Mad Money that Yahoo! (NASDAQ: YHOO) and eBay (NASDAQ: EBAY) should get together and merge. He is calling for this because the growth is slowing for both companies, and a merger could jump start it. Cramer contends that companies with slower growth have to do something to get their sizzle back. Cramer said that Microsoft (NASDAQ: MSFT) was reportedly in talks to buy Yahoo! and that the aQuantive (NASDAQ: AQNT) buyout signals it is willing to do deals. If these companies had better areas to invest in they wouldn't be propping shares up with buybacks. A merger would allow Yahoo!'s massive users to use Skype and PayPal to buy goods. Cramer thinks this would bring back growth, and would finally get Semel out of Yahoo!

This is just after Yahoo!'s chief technology officer bailed out of the company today. As Cramer is long Yahoo! in his charitable trust and as he's been touting ideas for something like this, this "call to merge" is hardly a surprise to me or to others. The market caps are very similar, although eBay is the larger company. You should know that if you are playing these stocks based only on Cramer's comments, then know that you are buying what is probably his third or fourth round of recommendations calling for this. This is the first time he made an entire segment on this would-be merger, but this is best defined as "re-information."

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Was Microsoft Corp. (NASDAQ: MSFT) looking for a complete toolkit to compete with Google Inc. (NASDAQ: GOOG) on the internet advertising front? The company doesn't need Yahoo! Inc. (NASDAQ: YHOO) to get there. As Doug noted earlier, Microsoft now says it has "all the pieces" it needs to build a successful ad business -- without even giving a shout out to Yahoo! This is true -- Microsoft has used a little of its war chest to make several acquisitions and partnerships that it will use as the basis for quite a large assault in the world of internet advertising (from the ground up, in a manner of speaking).

The purchase of aQuantive Inc. (NASDAQ: AQNT) was the final arrow in Microsoft's quiver that gives the software giant everything it needs to take on Google successfully -- and all of it was at a price premium to acquiring Yahoo! -- something Microsoft easily knows. Buying Yahoo! would have given it instant customers, but Yahoo!'s advertising strategy is still a little shaky -- and aQuantive's was not. In other words, Microsoft was looking for the bargain here. It found all the bargains it could.

Did Microsoft need the "instant scale" it would have received from an acquisition like Yahoo!? Some analysts still believe that, although perhaps Microsoft saw that its immense resources could be best used to grow its own scale organically, rather than just to buy it for instant gratification. This news, though, dampens the outlook for Yahoo! terribly, as the company now is on its own to compete against Google for ad dollars (which it has not being that successful at), as well as the immense capability of Microsoft -- which is its second-largest competitor. YHOO shareholders, get out that rabbit's foot and start rubbing now.

Microsoft (NASDAQ: MSFT) made it clear, once and for all, that it does not need Yahoo! (NASDAQ: YHOO) to be successful with its internet advertising strategy. Microsoft's Yusuf Mehdi, the head of ad strategy at the world's largest software company said that [subscription] its current internet products plus customers and tech it will get from buying aQuantive (NASDAQ: AQNT) round out the arsenal that it needs to compete for online advertising.

The announcement leaves Yahoo! in a a difficult position. With Google's (NASDAQ: GOOG) purchase of DoubleClick, Yahoo! does not have a large presence in the internet ad serving business. Its share of the search market is still dropping according to Hitwise, and there is still little evidence that the company's Panama advertising search product is bringing in a large slug of new revenue. Yahoo!'s top line only grew about 10% in the last quarter.

Yahoo!'s shares jumped from $28 to over $33 when the press published reports that Microsoft was interested in buying the web portal. But, the stock has sold off to $28.60 since then. Investors are likely to do very little with the shares until Yahoo!'s next quarterly earnings report. If it is weak, and Panama has not produced a quarter of solid results, it will be a long year for Yahoo! shareholders.

Douglas A. McIntyre is a partner at 24/7 Wall St.

MOST NOTEWORTHY: GlaxoSmithKline plc (GSK), SanDisk Corp (SNDK), Lockheed Martin Corp (LMT) and aQuantive, Inc (AQNT) were today's noteworthy downgrades:

• Deutsche Bank and ABN Amro cut GlaxoSmithKline (NYSE: GSK) to Hold from Buy following the New England Journal of Medicine warnings from Avandia.

• Merrill Lynch cut SanDisk (NASDAQ: SNDK) to Neutral from Buy due to concerns that oversupply in the industry will extend through next quarter.

• Cowen downgraded shares of Lockheed Martin (NYSE: LMT) to Neutral from Outperform based on slower 2007-2008 EPS growth and less cash redeployment upside than General Dynamics Corp (GD) and Raytheon Co (RTN).

• UBS downgraded aQuantive (NASDAQ: AQNT) to Neutral from Buy and RBC Capital cut shares to Sector Perform from Outperform after the Microsoft (MSFT) acquisition...

OTHER DOWNGRADES:

• Piper Jaffray downgraded Cytyc Corp (NASDAQ: CYTC) To Market Perform from Outperform.

• NetBank, Inc (NASDAQ: NTBK) was downgraded to Underperform from Market Perform at Friedman Billings.

• Merrill Lynch downgraded shares of Aeropostale, Inc (NYSE: ARO) to Neutral from Buy.

• AG Edwards downgraded BHP Billiton Ltd (NYSE: BHP) to Hold from Buy.

• Gabelli downgraded shares of Alltel Corp (NYSE: AT) to Hold from Buy.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Today (around 1 p.m.) ValueClick's (NASDAQ: VCLK) stock is up a healthy 15% to $34.50. Back in January, the stock was trading at about $23.

Of course, the betting is that this online advertising operator will get scooped up like its peers, such as aQuantive (NASDAQ: AQNT), 24/7 Real Media (NASDAQ: TFSM), and DoubleClick. Hey, why not?

The problem is that the mega cap internet players such as Microsoft (NASDAQ: MSFT), Yahoo (NASDAQ: YHOO) and Google (NASDAQ: GOOG) have already made deals in the space. Instead, the suitors that are left can't really muster the premium pricing. These companies include the likes of IAC/InterActieCorp (NASDAQ: IACI) and Time Warner (NYSE: TWX).

While Microsoft or Google may want to bulk up even more, the fact remains that this is pure speculation. In fact, ValueClick is a hodge-podge of different sites and is more a technology play. It's like 24/7 Real Media, which didn't snag a big premium on its deal.

So, as always, investors need to be very careful on this one.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

MOST NOTEWORTHY: ValueClick, Inc (VCLK), aQuantive, Inc (AQNT), Cigna Corp (CI), Warner Music Group (WMG), Clear Channel Communications, Inc (CCU) and Medtronic, Inc (MDT) were today's more notable downgrades:

• Baird cut ValueClick Inc (NASDAQ: VCLK) to Neutral from Outperform, citing the FTC inquiry.

• aQuantive (NASDAQ: AQNT) was downgraded to Sell from Buy after the company was acquired by Microsoft (MSFT) and because aQuantive no longer trades on fundamentals. Kaufman and Gabelli also cut aQuantive to Hold from Buy.

• Cigna (NYSE: CI) was downgraded at Prudential to Neutral from Overweight on valuation.

• Warner Music Group's (NYSE: WMG) downgrade to Sell from Neutral at Pali Research was based on the lower industry outlook, which Pali believes revenues are likely to fall at least 10% for the industry in 2007, along with the company's release schedule.

• Bear Stearns downgraded Clear Channel Communications (NYSE: CCU) to Peer Perform from Outperform on the acceptance of the higher bid.

• Medtronic Inc (NYSE: MDT) was downgraded to Underweight from Equal Weight at Morgan Stanley...

OTHER DOWNGRADES:

• Georgia Gulf Corp (NYSE: GGC) was downgraded to Sell from Hold at Matrix USA.

• Stifel cut Core Laboratories (NYSE: CLB) to Hold from Buy.

• UBS downgraded Intuit Inc (NASDAQ: INTU) to Neutral from Buy.

• Occidental Petroleum Corp (NYSE: OXY) was removed from Goldman's Conviction Buy list.

• Friedman Billings downgraded downgraded CapitalSource, Inc (NYSE: CSE) and Countrywide Financial Corp (NYSE: CFC) to Market Perform from Outperform.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

If anyone wonders why Microsoft (NASDAQ: MSFT) paid $6 billion for aQuantive (NASDAQ: AQNT), they need look no further than the report from Leichtman Research Group for first quarter 2007. In these three months alone, 3 million people joined the broadband revolution. Read that as 3 million more potential YouTube visitors, Second Life devotees, advertisees. This represents almost 6% growth in this quarter alone, bringing the total of U.S. broadband subscribers to 56.2 million.

Of that audience, 55% buy through their cable company, while the telephone industry pulls in 43%. For this quarter, though, the telephone side accounted for 51% of the growth. In fact, the telephone companies have led cable in acquisitions in each of the last 10 quarters.

Leading the pack overall is AT&T (NYSE: T) with 12.8 million subscribers, followed closely by Comcast (NASDAQ: CMCSA) at 12 million. Verizon (NYSE: VZ) and Time Warner Cable (NYSE: TWC) both have more than 7 million subscribers. Others with over a million are Cox, Charter, Cablevision, Qwest (NYSE: Q) and Embarq. Top performer for the quarter? AT&T, with almost 700,000 new subscribers.

Recent mergers between traditional and online advertising firms suggest a deep flaw in the advertising business -- a flaw exposed by Google Inc. (NASDAQ: GOOG)'s evidently unstoppable technology edge. How so? While traditional advertisers deliver open-loop systems, Google delivers a closed-loop solution.

The reason that online advertising is growing is because it offers a closed-loop solution -- a notion that I first described in Net Profit. By contrast, TV and newspaper advertising is an open-loop system -- one in which a company pays to reach a viewer without getting any specific feedback on whether the advertising money leads to increased sales.

By contrast, a closed-loop solution measures the specific response to the advertising dollar -- tracking whether a user clicks on an ad and whether that clicking leads to an online purchase. I call it a solution because it lets the advertiser measure the extent to which advertising expense leads to increased sales. The closed-loop solution's ability to measure return on advertising is an enormous breakthrough for advertisers.

As everybody knows, Google's algorithm for linking tiny text advertising to Internet search has boosted the online advertising business. According to the Wall Street Journal [subscription required], those search-related ads now account for 40% of the $20 billion U.S. internet ad market. And internet-ad sales overall have nearly tripled in the past five years -- to 7% of the $286 billion overall U.S. ad market -- up from 3% in 2002.

Moreover, Google's success is coming out of the hide of TV and newspaper advertisers. For example, in 2006 General Motors Corp. (NYSE: GM) cut its TV ad spending 15% to $1.38 billion and reduced its newspaper advertising 60% to $232.1 million. Meanwhile, GM's online spending rose 16% to $130 million.

Back in the 1990s, a group of online ad players -- like Mediaplex, DoubleClick and 24/7 -- sported multibillion dollar market caps. Of course, it did not take long for the bubble to burst.

Funny enough, the conventional wisdom was that we would never see these kinds of valuations again.

Well, never say never.

Microsoft Corp. (NASDAQ: MSFT) is going to pay $6 billion for aQuantive Inc. (NASDAQ: AQNT) and Google Inc. (NASDAQ: GOOG) is buying DoubleClick for $3.1 billion.

We are going back to the future. So what does this all mean?

I had a chance to interview Dana Ghavami, who is the CEO of CheckM8:

How about some background on your company?

CheckM8 has been in the business of online ad technologies for seven years. We service many leading online publishers and are backed by leading institutional investors, including SoftBank and CCI of Dentsu. The company is US-based, with offices in New York and R&D facilities in Israel, in addition to sales and support offices in the UK, Spain, and Sweden. Customers include leading online publishers: Business Week, Nielsen, Sports Illustrated, Terra Networks, Washington Post, amongst many others. Our first product, called the Rich Media Manager, released four years ago, allows publishers to produce and manage premium ad formats for maximum-CPM opportunities online. Our flagship AdVantage product released two years ago allows publishers to manage their end-to-end ad, inventory, rich media needs in a single platform.

Does the Microsoft deal for aQuantive make sense in light of the high valuation?

We're looking at an industry that's going to drive $60B of advertising by 2010 and be the future medium of consumers and advertisers. So, if I had a major stake (like Microsoft) and the competition (Google) was one step ahead, I'd pull that kind of trigger too in hopes of having one of the seats at the small and priceless roundtable in the not-so distant future. These companies are looking at making multiples of what they're paying today in the foreseeable future.

Do you think we'll see more consolidation in the space, such as with ValueClick and private companies?

Very likely. However, the big media companies are increasingly looking for integrity and independence with their digital ad infrastructure and rapidly running out of options. At some point, there won't be enough established
and proven solutions to manage their critical needs and building their own solutions is not a practical option. Therefore, the need for reputable and trustworthy independent solutions will continue to exist.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

I have been writing about aQuantive (NASDAQ: AQNT) for the past several months and thought that Microsoft (NASDAQ: MSFT) would buy them. It is, for a very hefty premium. Members of my website are thrilled as they got involved at $19 and MSFT is paying $66.50, or north of $6 billion in cash.

Who's next? With a garbage-like company 24/7 Real Media (NASDAQ: TFSM) being bought for $650 million -- which proves the rising-tide-lifts-all-boats theory -- ValueClick (NASDAQ: VCLK) is the last strong public player in the space. TFSM by the way is being paid a minuscule premium for its shares as compared to AQNT. My previous firm ThinkEquity Partners worked extensively with TFSM and they have been hoping for a buyer the past couple of years.That aside, VCLK is the one to focus on now.

ValueClick is headquartered in suburban Los Angeles and is a recognized leader in the website marketing/advertising/digital marketing sector, right behind AQNT. ValueClick is experiencing growth in the 30-35% sustainable range, similar to aQuantive. The most important factor is ValueClick is among the leaders in the new-age digital media space.

New-age digital media is a space that neither Google (NASDAQ: GOOG) nor Microsoft could master with their own research and development efforts -- they had to acquire it. Old-time advertising companies can play in the space around the fringes, but they do not have the necessary proprietary technology needed to dominate or impress their customers. They were buyers of the technology from ValueClick, aQuantive and DoubleClick.

The space is red hot and will continue so as traditional corporations keep moving bigger and bigger pieces of their advertising budgets to the internet. Congratulations to Microsoft -- they got this one right!!

Georges Yared is the CIO of Yared Investment Research where he explores more growth stock ideas.

Illegal insider trading has been rather active recently. When an offer was made for Dow Jones (NYSE: DJ) by News Corp (NYSE: NWS), I mentioned some odd option activity. It wasn't long before the SEC was investigating and a Hong Kong couple was investigated. Some estimates of the insider trading show that about 50% of buyouts and mergers have illegal activity.

This morning aQuantive (NASDAQ: AQNT) is up about 77% to 63.64 on a buyout from Microsoft (NASDAQ: MSFT). It took me about 5 minutes to dig up some "unusual" activity. If you look at the June 40 calls (QBT FH) there is some "interesting activity."

A call option gives the purchaser the right (or option) to buy a stock at a set price. Each option contract gives the right to buy 100 shares of stock. For easy comparison to stock prices, option prices are always quoted in cents per share.