Yahoo!'s (NASDAQ:YHOO) big footprint in Asia could be a significant benefit to Microsoft (NASDAQ:MSFT) as it tries to gain market share from Google (NASDAQ:GOOG) in the region. Yahoo! owns large pieces of Yahoo! Japan and China e-commerce firm Alibaba. A takeover from Microsoft would give the world's largest software maker access to all of that.

According to Reuters, "If the deal goes through, Microsoft stands to gain a leg up over Google from cooperation with Alibaba's online software and Yahoo Japan's online customer base."

The theory may be based on soft reasoning. Yahoo! has been operating in the region for a decade and Google, which entered the market much later, has done fine. In Japan, Google is No.2 in audience behind Yahoo!, according to comScore. Google recently signed a deal to be the default search engine for NTT Docomo (NYSE:DCM) handsets. Docomo is the dominate cellular provider in Japan.

Microsoft may pick up relationships with web properties in Asia, but if its search product does not measure up to Google's that may not matter. Being better is the best way to get bigger. Buying in won't guarantee success.

Japan's largest wireless operator, NTT DoCoMo, Inc. (NYSE: DCM), will be joining with the world's leading internet search company to provide advanced services to its customers. Google Inc. (NASDAQ: GOOG) will help NTT customers find what they want on the web through a promotional effort that aims to boost mobile search as well as generate revenue with search-related advertising.

In a country where much of the mobile subscriber population regularly accesses the internet through millions of cellphone handsets, this is a significant development. But it's not just because Google has partnered with a global wireless carrier -- it's because the partnership referred to search-related advertising explicitly.

One area that Google must treat carefully with new wireless partnerships is its ability to monetize its search service within the confines of a smaller screen. The company made its fortune supplying relevant but relatively simple text ads to web surfers, so it already knows how to reach customers successfully in another medium: supply relevancy and quality without taking away from the search experience.

In some ways, Wall Street should be surprised that it did not happen sooner. Apple (NASDAQ: AAPL) is talking to cellular carriers about launching the iPhone in Japan. In the country that created the Walkman and PlayStation, it would seem only logical that a tech gadget like the iPhone would be a huge success.

Japan is known for its obsession with cellphones. It is a large market for text applications and ringtones.

The Wall Street Journal writes that Apple is in talks with NTT DoCoMo (NYSE: DCM), the largest carrier in Japan, and Softbank. The Japanese market has "nearly 100 million mobile-phone users who buy new phones every two years on average. Japanese consumers are also already used to shelling out hundreds of dollars for expensive phones with advanced capabilities such as digital television, camera and music," according to the paper.

MAJOR PAPERS:

• Looking to enter the Japanese market, sources familiar with the matter said that Apple Inc (NASDAQ: AAPL) CEO Steve Jobs recently met with NTT DoCoMo Inc (NYSE: DCM) to discuss a deal to offer its iPhone, the Wall Street Journal reported.
• Nike Inc (NYSE: NKE) is in talks with Mike Ashley to try and persuade the entrepreneur to not block its £285M takeover offer for Umbro, the Financial Times reported.

OTHER PAPERS:

• The Detroit News reported that in an effort to cut costs, General Motors Corporation (NYSE: GM) is looking to form a deal with the United Auto Workers on a buyout program for veterans.

WEB SITES:

• According to two people familiar with the fund, The Goldman Sachs Group Inc (NYSE: GS) is looking to start Goldman Sachs Investment Partners, its newest stock hedge fund, with as much as $10B, Bloomberg reported.

MOST NOTEWORTHY: Washington Post, Harvest Natural, Memc Electronic Materials and Boston Private Financial were today's noteworthy upgrades:

• Deutsche Bank upgraded shares of The Washington Post Company (NYSE: WPO to Buy from Hold to reflect the company's exposure to the counter-cyclical education division.
• Jefferies upgraded shares of Harvest Natural Resources Inc. (NYSE: HNR) to Buy from Hold and raised their target to $17 from $11 after the company received final approval in the conversion to a mixed company. They note that conversion clears the way for renewed investment.
• Friedman Billings added Memc Electronic Materials Inc (NYSE: WFR) to its Top Picks List following its Q3 report and guidance as "solar wafer contracts," not including spot poly, are expected to increase from 15% of the total to 35%-40% in CY08 and greater than 50% in CY09.
• William Blair raised its rating on Boston Private Financial Holdings Inc (NASDAQ: BPFH) to Outperform from Market Perform after the better-than-expected Q3 results.

OTHER UPGRADES:

• Goldman added Dell Inc (NASDAQ: DELL) to its Conviction Buy List.
• NTT DoCoMo Inc (NYSE: DCM) was upgraded to Hold from Sell at Citigroup and to Buy from Neutral at UBS.
• Credit Suisse upgraded Cardinal Health Incorporated (NYSE: CAH) to Outperform from Neutral.
• Merrill upgraded Coca-Cola Femsa SA (NYSE: KOF) and Northeast Utilities (NYSE: NU) to Buy from Neutral.

There is an "all out" price war among the three big cellular service providers in Japan which may give companies like Verizon Wireless and Sprint (NYSE: S) some ideas about how to steal one another's customers.

NTT Docomo (NYSE: DCM), the largest cell company in the Japan, lost almost 23,000 customers in August. Rival KDDI picked up over 158,000, and up-start Softbank added almost 189,000.

Reuters reports that switching providers has become easier "after a rule change allowed subscribers to keep their phone numbers when changing service providers, speeding up price competition in a saturated mobile market."

Docomo, which has just over half of the $78 billion mobile market in Japan, is preparing to cut its basic rates in half to stay competitive with its two rivals.

Saturated is the key word. In the US, the three largest cell service providers, AT&T (NYSE: T) Wireless, Verizon Wireless, and Sprint, have nearly 180 million subscribers. T-Mobile runs in fourth place. In a country with 300 million people, many of whom are not old enough to use a phone, the big growth years are probably over.

Cellular division are the most profitable operations at AT&T and Verizon (NYSE: VZ). Their landline businesses are being taken from them by cable VoIP offerings. If the US mirrors Japan, and price wars come to the US, profits at big telecoms are in for a slide.

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

"Investors have shied away from the big telcos in recent years because of concerns that their traditional businesses were shrinking," notes George Putnam III, an expert in uncovering turnarounds.

But now, he explains, "After years of concern about the cable companies invading their turf, the big telecoms are now well positioned to fight back."

In his The Turnaround Letter, the advisor looks at seven leaders in the global telecom space, all of which he says represent global leaders, with dominant positions in their local markets and the "potential to grow steadily by expanding the services they offer."

AT&T (NYSE: T) Putnam notes, gained control of Cingular Wireless due to its merger with Bellsouth. The renamed AT&T Wireless, he says, will account for about 35% of AT&T's revenues.

The advisor observes, "In addition to a strong wireless presence, AT&T is rolling out fiber-based landline services. With revenues expected to be north of $120 billion in 2007 and substantial operating cash flow, AT&T is a force to be reckoned with." Further, he notes, the dividend was just raised for the 22nd consecutive year, and the company is expected to repurchase roughly $7 billion worth of stock in 2007.

MOST NOTEWORTHY: Brocade Communications Systems, Inc (BRCD), AT&T Inc (T), DaimlerChrysler (DCX), AMR Corp (AMR) and Continental Airlines, Inc (CAL) were today's more noteworthy upgrades:

• JP Morgan upgrade shares of Brocade Communications Systems, Inc (NASDAQ: BRCD) to Overweight from Neutral, citing positive trends in networked storage; shares were also added to the firm's Focus List.

• Matrix believes improving product mix and demand for new products is driving strong fundamental trends in AT&T (NYSE: T). Matrix upgraded T shares to Strong Buy from Buy and sees upside to their intrinsic value of $56.

• Bernstein believes the divestiture of Chrysler from DaimlerChrysler AG (NYSE: DCX) is a positive for the company and upgraded shares to Outperform from Market Perform.

• Soleil upgraded shares of AMR Corp (NYSE: AMR) to Buy from Hold on valuation and Continental Air Lines Inc (NYSE: CAL) to Hold from Sell based on a more constructive industry outlook...

OTHER UPGRADES:

• Morgan Stanley upgraded NTT DoCoMo, Inc (NYSE: DCM) to Overweight from Equal-Weight.

• Bear Stearns upgraded TiVo Inc (NASDAQ: TIVO) and Paychex, Inc (NASDAQ: PAYX) to Outperform from Peer Perform.

• Goldman upgraded Forest Oil Corp (NYSE: FST) and CommVault Systems, Inc (NASDAQ: CVLT) to Buy from Neutral.

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

MOST NOTEWORTHY: Dominion Resources (D), Syniverse Holdings (SVR), Research in Motion (RIMM), Verizon Communications (VZ) and Comcast (CMCSA) were the noteworthy upgrades today:

• Jefferies upgraded shares of Dominion Resources (NYSE: D) and raised their target to $90 from $68 as the firm believes shares are fairly valued based on assumed higher spark spreads in New England.

• Syniverse Holdings (NYSE: SVR) was raised to Peer Perform from Underperform at Bear Stearns after its Q1 report.

• Credit Suisse upgraded Research in Motion (NASDAQ: RIMM) and raised their target to $145 from $100 as the firm believes the company will benefit from smart phone market growth and improving international traction. However, FBCO still believes RIMM's increasing exposure to the consumer market will continue to pressure margins.

• Prudential said Verizon Communications (NYSE: VZ) is showing signs of improving revenue growth and accelerating FiOS TV subscriber additions, as well as continued dominance in wireless, and upgraded shares to Neutral from Underweight.

• Matrix USA raised Comcast Corp's (NASDAQ: CMCSA) rating to Hold from Sell on valuation...

OTHER UPGRADES:

• Goldman upgraded Danaher Corp (NYSE: DHR) to Buy from Neutral with an $81 target.

• NTT DoCoMo (NYSE: DCM) was upgraded to Outperform from Neutral at Credit Suisse.

• Bear Stearns raised Ingersoll-Rand's (NYSE: IR) rating to Peer Perform from Underperform.

• Needham upgraded Sigma Designs (NASDAQ: SIGM) to Buy from Hold with a $28 target.

• Wachovia raised Innkeepers USA Trust (NYSE: KPA) rating to Market Perform from Underperform.

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

I've just returned from the World Money Show in Orlando where more than 10,000 investors gathered to learn about global investing. I had a chance to meet with many of the financial experts and global company representatives featured at the show, and over the next week I will share some of their top investment ideas. To view all of the stocks featured in this special global report, click here.

Visiting from Japan was mobile phone operator NTT DoCoMo (NYSE:DCM), whose stock is a favorite buy from Tony Sagami, editor of the Asia Stock Alert and a global analyst with Martin Weiss Research.

In reviewing the company, Sagami is particularly impressed with its new "portable wallet," which lets a cell phone act a credit card.

First, he notes, "The company just reported its results for the first nine months of its fiscal year (through the end of December). And while the firm delivered essentially flat sales and profits from the same period last year, DoCoMo still made $3.3 billion of profits on $29.7 billion of sales in the last nine months.

"Meanwhile, three items impressed the heck out of me. First, DoCoMo grew its subscriber base from 50.3 million last year to 52.2 million today. For a country whose cellular phone market is mature and very saturated, that additional 1.9 million cellular subscribers is pretty impressive.

"In addition, DoCoMo generates about $6 billion of free cash flow each year and has been using those dollars to buy back stock, increase its dividend, and invest in building out its network and new cutting-services, such as osaifu-ketai.

In a statement that is sure to get both Google and Yahoo! excited, Japan's super-advanced mobile carrier NTT DoCoMo has said that it wants to make Internet search on its i-mode wireless data service (used by millions of Japanese customers) just as ubiquitous as Internet search is on personal computers. NTT DoCoMo President Masao Nakamura said that both Google and Yahoo! would be possible partners to make this prediction become a reality.

We know that Google CEO Eric Schmidt and founders Sergey Brin and Larry Page have repeatedly hinted in shareholder meetings and analyst days just recently that Google sees the mobile phone (and device) space as the next big this for Internet search. If you know math -- and many of us do -- it's hard not to agree with them. There are literally billions of mobile phones on the planet, an higher-speed wireless data technologies are being implemented in the Americas and in Europe. Japan already has many incredibly-fast mobile phone data networks that work alongside voice calls. In fact, it would not be odd to say that more Japanese use their mobile phones for Internet access than PCs -- a pretty large cultural difference between the Pacific Rim and the U.S., where most Internet access is done through personal computers.

Does Google stand to soon benefit from Internet search moving into the mobile realm more heavily? Sure it does. But it will have competition. While it seems Google has secured the Internet search brand for the PC universe, there is probably more up for grabs in the mobile space. Yahoo! and even Microsoft may make advances to be just as competitive in that landscape since they've both lost the edge for Internet search in the PC space. Google may just be coming on full-force to a mobile phone near you.