MAJOR PAPERS:

• The Nasdaq Stock Market (NASDAQ: NDAQ) will acquire the Philadelphia Stock Exchange for $652M, reported the Wall Street Journal (subscription required).

OTHER PAPERS:

• Microsoft (NASDAQ: MSFT) announced yesterday that it fired Chief Information Officer Stuart L. Scott on Friday for violating company policies, although the company did not specify an exact reason for the dismissal, reported the Associated Press.
• Laurence Fink, the chairman and CEO of BlackRock (NYSE: BLK), has met with the executive search firm responsible for filling the CEO vacancy at Merrill Lynch (NYSE: MER). Fink is believed to be the leading candidate to become Merrill's CEO, according to the New York Times.

WEBSITES:

• GigaOM reported that Google (NASDAQ: GOOG) is kicking off its game-focused advertising initiative later this month, according to inside sources.

CNET Networks, Inc. (NASDAQ: CNET) is launching a group of blogs in the hope of expanding its news coverage and appeal to a broader base. The company's stock did not move and is down today. In early 2006, the shares traded for almost $16. They now rarely trade above $9.

CNET would seem to be a good business. With the immense need for information its tech news service, download center, and reviews of new devices would seem to be critical to the needs of executives following in the industry and consumer electronics buyers.

But, as some observers have pointed out, online readers turn to blogs like Gigaom and TechCruch for the kinds of information CNET used to have. The blogs are often faster at breaking news and have more of an edge in reviewing new electronics. This may be because the newer websites do not rely on mainstream advertisers for most of their revenue.

And, the blogs have gotten big, very big. A recent look at Alexa rankings show CNET as the 153 most visited web destination. But, Engadget is No. 641 and TechCrunch is No. 644. These blogs do not have to support the large editorial and infrastructure costs that CNET does.

It is too late for CNET to get into the tech blog business. It is already commanded by independent operators with large audiences and rock-bottom costs. CNET's only open tactic is down the M&A road and perhaps the industry will see some consolidation.

Does Wall Street care about all the glamour and glitz currently being touted at the Consumer Electronics Show in Las Vegas this week? Well, after a day of large announcements, both the NYSE and the 'DAQ held firm on either small losses or tiny gains form some of the largest names in the consumer electronics and computer industries -- Microsoft Corporation(NASDAQ:MSFT), Apple Computers, Inc.(NASDAQ:AAPL), Motorola(NYSE:MOT)and Qualcomm(NASDAQ:QCOM).

In other words, the street is waiting to see if all these 'grand visions' turn into revenue reality. Most of them will not -- for all the earth-shaking announcements and product unveilings at each year's CES, very few fruitful consumer consumables come out of the mix. Mostly, these ghosts are the grand visions that the keynoters talk about, like Microsoft's Bill Gates touting yet another "converged" living room universe and Motorola's Ed Zander saying that "everything will be going mobile" in regards to consumer electronics. I'm not sure I want that 50" plasma TV going anywhere, thank you very much.

So, is it any wonder that the CES even this week has failed to wake up Wall Street in a way that stock option-hungry executives would like it to? The results are in the pudding -- consumer sales and revenue gains along with growth -- and so far, the pudding bowl is quite empty.

This week, the Wall Street Journal wrote about how venture capital is starting to seep into the blogosphere ("Bloggers Find Financial Backers For Their Independent News Sites").

Deja vu  all over again?  Interestingly enough, back in the 1990s, there was a flood of money that flowed into content deals. Yes, some journalists were becoming dot-com multimillionaires. However, when Nasdaq collapsed, so did many of these ventures.  In fact, there was a book on the topic -- Starving to Death on $200 Million – which chronicled the implosion of the Industry Standard.

So, to use an ominous phrase:  is this time different?  Perhaps so.  Actually, the attraction of blogs is that they are fairly low cost.  This makes it possible to make money from niche categories.  Also, it is fairly easy to scale-up (since bandwidth is extremely cheap).

Some examples of recent financings:  Alan Patricof, who invested in Apple at the start-up phase, has put his own money in PaidContent.org; True Venture Partners invested in GigaOm.com, a popular blog by Om Malik, a writer for Business 2.0 (which is a publication of Time Warner); and Mark Cuban, who sold Broadcast.com to Yahoo!, invested in Sharesleuth.com.

The question on everyone's lips today, as they watched Vonage stock sink lower and lower, until it was nearly $2.50 below its $17 offering price, was: is it all Skype's (and therefore, eBay's) fault? More to the point, was it all Andy Kessler's fault?

When Skype first announced their free SkypeOut calling in the U.S. and Canada, Kessler wrote for GigaOm, wondering if this move was a catlike (in the sense that cats are evilly playful, like Tom of Tom & Jerry, but smarter): "Vonage is begging customers to buy 20% of the deal - not a great sign. Ebay knows this, why not toy with the mouse before you kill it. What better way to do away with the Vonage IPO and raise their cost of capital then scare investors even more," he wrote.

Commenters excoriated him, complaining that he was both bitter and wrong. Today he had the last word, and wrote, "Here's how not to do a deal. Citigroup raised the number of shares in the deal, but not the price." That, Kessler, says, was the wrong move in an uncertain climate (investors hardly knew whether Vonage had any value when SkypeOut is free). What's more, pricing at the middle of the $16-$18 range, always a questionable strategy, proved to be egg all over Citigroup's face. Vonage has money, Citigroup has its fee, and all the investors who bought at $17 now have lots of places toward which to shake their fists.

Sphere, a new search engine with $3.75 million in VC funding from Hearst Publishing, Trident Capital and About.com founder Scott Kurnit, launched this week. GigaOm reviewed the site last fall, giving it a thumbs-up. Zdnet also gives it a good review, noting that is "generally speedy" and the interface is "clean and easy to navigate." Here are some other reviews:

TechCrunch:  "As great as the basic search platform is, what I like best about Sphere is in the Tools area. Install the “Sphere It” bookmarklet and click it whenever you are reading something that you’d like more information on. Sphere will analyze the page in real time and present blog search results that are relevant to that topic. It’s important to note that this is not a search to find blogs linking into that page you are viewing; rather you are finding fresh blog content that is related to the subject matter of what you are reading. I’ve tested this and find it extremely useful."