Today was a whip-around day. All day. Despite better construction and better manufacturing employment data, the markets looked like they were trying to roll over again before the end of day rally took stocks back up on the day. It seems that bargain hunters won over the fear that was felt earlier this afternoon.
Microsoft Corp. (NASDAQ: MSFT) CEO Steve Ballmer has indicated that the October 22 release of the Windows 7 operating system won't increase PC sales significantly. That's quite a statement from the CEO of the world's most influential software company on a new flagship piece of software that is said to be a truly shining product.
Why would the release of Windows 7 and its inclusion on millions of new PCs not increase sales? Ballmer's stated that "There will be a surge of PCs but it will probably not be huge," but it isn't really telling. Microsoft's bottom line will rely heavily on sales of its upcoming Windows 7 software -- and if PC sales don't pick up, how will Windows 7 sales fare? Microsoft licenses its software to PC makers, so it's not directly tied to retail and wholesale PC sales. Still, indirectly they're joined at the hip.
If IBM Corp. (NYSE: IBM) really does go ahead and buy Sun Microsystems (NASDAQ: JAVA) for a cool $6.5 billion or more, the two former adversaries could be joined into a powerful computing combination. One of its -- no, its largest competitor would be: Microsoft Corp. (NASDAQ: MSFT). With many powerful players challenging Microsoft's dominance these days (Google in the consumer space), here's another one. That is, if the merger speculation turns out to be true.
The world's largest software maker is laying off 5,000 people, about 5% of its staff, in its first company-wide dismissal of workers. The move is not surprising.
Though the Redmond, Washington-based company is a cash-generating machine, investors are worried that it will be hurt by the slowdown in corporate IT spending. Last month, Forrester Research projected that spending by businesses on technology would rise 1.6% in the U.S. That's down from a projection of more than 6% made in August.
As Microsoft (NASDAQ: MSFT) gets ready for another round of talks with Yahoo! (NASDAQ:YHOO) about buying its search business, the news that CEO Steve Ballmer killed two chances to get into search several years ago has emerged.
While there is some chance that the new chief of Yahoo! may elect to keep the portal company's search business, there is little reason not to at least hear Microsoft's latest offer.
Ballmer had the opportunity for MSFT to build online search empire almost ten years ago. According toThe Wall Steed Journal, "In 2000, before Google married Web search with advertising, Microsoft had a rudimentary system that did the same, called Keywords, running on the Web. Advertisers began signing up. " For reasons that are hard to fathom, the world largest software company thought that an ad business built on search could hurt revenue from its other businesses. Microsoft also had the chance to buy a relatively small search company and passed.
As we begin the trek to grandmother's house, it's worth reflecting on what we have to be thankful for. The answer? When it comes to money, most of us have a lot less than we did a year ago. But for those of you who have your health and your families to comfort you, it will cost much less to buy the gasoline to visit than it would have in July. And as you're driving to visit those families -- consider how much less you lost in the last year than the world's 10 biggest losers.
According to the web site, The Business Sheet, those unfortunate people suffered a mind-boggling $176 billion in lost stock market value in the last 12 months. It turns out that 52% of the losses were suffered by three executives based in India. Here they are:
Anil Ambani - $32.5 billion. Ambani heads Reliance Communications that invested $500 million in Dreamworks earlier this year.
Lakshmi Mittal- $30.5 billion. Mittal heads ArcelorMittal which has suffered from a decline in the price of steel.
Mukesh Ambani -$28.2 billion is Anil's brother and controls Reliance Industries, a petrochemical manufacturer.
These are some other folks that make The Business Sheet's list:
Sheldon Adelson -$30 billion. I did consulting work for Adelson about 22 years ago and he is quite a character. His Las Vegas Sands (NYSE: LVS) casino is suffering from the economic slowdown and he's had some trouble with debt.
Warren Buffett -$13.6 billion. As I posted, Buffett's Berkshire Hathaway (NYSE: BRK.A) has had some problems this year.
The Wall Street Journal must have better things to do with its time and all that expensive newsprint. The paper reports that CEOs of 175 large US companies have lost over $42 billion in net worth from the end of their most recent fiscal years though last week.
By this calculations, Warren Buffett is down $9.6 billion. Microsoft's (NASDAQ: MSFT) has seen his piece of the software company drop by almost $5 billion in value.
The reason that the data is foolish is that a loss is not really ever a loss unless and until the underlying securities are sold. People like Buffett and Ballmer don't need billions of dollars now, and they are still extraordinarily rich.They are unlikely sellers Two years from now, their net worth may be higher than they were in 2007. Who knows?
The calculation of wealth, made popular by the Forbes 400 is an exercise in futile math. What the rich are worth, especially if their money is in liquid securities is a snapshot in time, and one which can change hour-by-hour.
Why bother to eat of the time of good reporters?
Douglas A. McIntyre is an editor at 247wallst.com.
It wasn't all that long ago that Microsoft Corporation (NASDAQ: MSFT) eyed Yahoo, Inc. (NYSE: YHOO) with an eye towards acquisition. Yahoo fought it off, spending a great deal of money and lawyer's time, and filling any tech-oriented new outlets with headlines for quite a while.
Now the smell of acquisition is once more in the air thanks to Microsoft honcho Steve Ballmer saying a deal would "make sense." Yahoo is even cheaper than the $19/share level that first got Microsoft interested. In a shaky economy, giants like Microsoft can afford to go hunting for small companies to snap up.
Now this is so far just an off-hand statement (in appearance). Ballmer could just be testing the waters to see how Yahoo! and its shareholders react. So far today, the market reacted by bidding the share price of Yahoo up.
Yang busted some moves recently dancing with the star of Where the Hell is Matt?, the outstanding internet feature following adventurer and dancer (I use the term loosely) Matt Harding. Don't miss the video at the end of this post, if you're not familiar with Matt. - it's perhaps the most charming, uplifting video I've seen in years.
Of course, who can forget Steve Ballmer's dance at the podium during a Microsoft presentation? And, of course, Mark, 'Gimme the Cubs" Cuban performing on Dancing with the Stars?
Come to think of it, many CEOs are already quite accomplished at performing the fan dance with their balance sheets. Ex-Gov. Spitzer has shown his fondness for the hustle and the shag, while Donald Rumsfeld is still waiting for the cakewalk to begin. Senator Craig seems to favor the swing, while President Bush appears dead-set on taking on the Persian Dance before he waltzes out of the White House.
And me? Having lived through the Vietnam Era, I'm doing the Time Warp again.
If we told you that a $3.00-plus drop in the price of oil wouldn't cause a major stock rally, it might only not be a surprise the bears who believe we are headed lower no matter what. Today was one where the markets spent much time in negative territory and then recovering towards the end of the day before making one last dive. If you think it was a quiet day, we had nearly a 300-point difference between today's high in the morning and the lows before today's recovery. These are today's unofficial closing levels:
The Walt Disney Company (NYSE: DIS) saw a severe downgrade after Lehman cut it to Underweight on its premium to peers and weakness tied to Theme Park exposure. Shares were down over 2% at $30.22 in today's final minutes.
Many Wall Street analysts thought that when Microsoft (NASDAQ: MSFT) lost its bid for Yahoo! (NASDAQ: YHOO) that it would take the $45 billion it was going to spend and buy other online companies.
Think again. Microsoft's management says it is not so. According to the FT, "Steve Ballmer, chief executive, scotched talk that Microsoft would turn to a `plan B' of other acquisitions to boost its online presence." Ballmer feels that buying more internet companies will not improve its share of the search market. He is not simply after more pageviews.
The news is probably disappointing to several large online companies. AOL, Facebook, Monster (NASDAQ: MNST), and Digg might all have been part of a Microsoft plan to improve the size of its presence on the web.
The Microsoft comments send another message. Search is important. Display advertising is not. Search is an efficient way to make money. Display advertising's best growth years are behind it.
If Ballmer is right, the online world is about to go through a major upheaval.
Douglas A. McIntyre is an editor at 247wallst.com.
In a bit of investigative reporting that no one will care about, The Wall Street Journal has discovered that a series of disputes between Steve Ballmer and Bill Gates eight years ago caused a changing of the guard at the company. The paper writes that "The conflict between the two men paralyzed business-strategy decisions that the company still wrestles with today. Board members stepped in to try to mediate a truce."
The piece in the Journal is a nice human interest story, but that it would be the top story at the paper is a bit odd. That is until the reader considers that the cult of personality is still alive and well in American business. Chiefs like Lee Iaccoca and Jack Welch have written best-selling books. Apple (NASDAQ: AAPL) customers and shareholders worship Steve Jobs.
All of that, to a large extent, takes the eye off of the ball. The people who run large companies, even those that are fabulously successful, are only doing the jobs that the investing public expects of them. Even if they are founders. Gates and Jobs decided to take their companies public. After that, the only reasonable question is whether they made shareholders money.
In many ways, the transition from Gates to Ballmer has been a failure. Eight years ago, Microsoft (NASDAQ: MSFT) traded at $53. Now its stands at under $28. Gates may have turned the CEO job over to Ballmer, but neither has done the stockholders any favors.
Douglas A. McIntyre is an editor at 247wallst.com.
Recently I posted a Serious Money metrics story that included Microsoft Corp. (NASDAQ: MSFT) and Yahoo Inc. (NASDAQ: YHOO) comparisons along with six other stocks. Until now I have not felt very strongly about the merits of Microsoft's offer to acquire Yahoo! and merge assets and features.
I was leaning toward the price is too high camp, but now, after Microsoft has withdrawn the offer and I have looked at the current state of affairs of both companies, I think it did the right thing and may have avoided a nightmare.
To bring Yahoo! into the fold, Microsoft would have had to find enough cost savings by eliminating overlapping departments or it would have had to hope it could double Yahoo's earnings. If not, the acquisition would unduly weigh down the mother ship, because Microsoft's P/E Ratio of 17.08 is half that of Yahoo!'s 34.25.
When you look at the ROE,Microsoft (NASDAQ: MSFT) -- with its 45.28% -- has a four times greater return than that of Yahoo Inc. (NASDAQ: YHOO)'s 10.96%. Yahoo looks like another drag.
According to people familiar with the matter, Robert Verrone, one of the most zealous commercial real-estate lenders during the industry's boom, will leave Wachovia Corporation (NYSE: WB) within the next week, the Wall Street Journal reported.
WEB SITES:
Bloomberg reported that the Department of Justice is probing whether UBS AG (NYSE: UBS) helped clients evade American taxes. In an e-mailed statement, the firm said one senior bank employee was "briefly detained" by authorities.
Bloomberg also reported that Vallejo, California's city council voted to go into bankruptcy. Officials said that after talks with labor unions failed to win salary concessions from police and fire fighters, the city does not have enough money to pay its bills.
According to a rumor, TechCrunch reported that the Yahoo Inc (NASDAQ: YHOO) board of directors yesterday authorized Yahoo chairman Roy Bostock, rather than CEO Jerry Yang, to call Microsoft Corporation (NASDAQ: MSFT) CEO Steve Ballmer about re-starting negotiations.
The dust is settling after the withdrawn purchase offer of Yahoo Inc. (NASDAQ: YHOO) by Microsoft Corporation (NASDAQ: MSFT). During that fascinating process, speculation ran high as to why Steve Ballmer chose the strategy that he did. People were asking what the probable outcomes could be and what would possibly be created by the acquisition. What I have found to be lacking in the realm of the public keyboard is a synopsis of what exactly Steve Ballmer has accomplished through this seemingly fruitless process.
Today was a whip-around day. All day. Despite better construction and better manufacturing employment data, the markets looked like they were trying to roll over again before the end of day rally took stocks back up on the day. It seems that bargain hunters won over the fear that was felt earlier this afternoon. 
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