In describing the results of last night's Iowa caucuses, The Washington Post's David Broder minced no words: "Eight years after Iowa voters did the conventional -- sending George W. Bush and Al Gore on to meet in the election of 2000, they shook up the status quo in both parties as never before. The victories of Barack Obama and Mike Huckabee jolted the expectations of establishment candidates with far stronger conventional credentials." The New York Times' David Brooks was similarly thunderstruck. "I've been through election nights that brought a political earthquake to the country. I've never been through an election night that brought two."
While I admit the results were exciting, there is something that people often forget that the Philadelphia Inquirer's Dick Polman argues they need to remember: "Incumbents aside, exactly one victorious Iowa candidate -- George W. Bush in 2000 -- has ever gone on to win the presidency in the same year. Even though (Jimmy) Carter got an historic boost in Iowa, on the way to his November election, he actually finished second in Iowa -- behind 'Uncommitted.'"
Oh, so all of the hot air that's been expounded in the past 24 hours over this antiquated political system is that one of the least representative states in the country may not actually mean much in the long term. That's unbelievable, but what's worse is that we are about to go through this whole exercise yet again in an equally non-representative state, New Hampshire.
It seems that every couple months there are new buyout rumors regarding the fast-growing social media site, Digg. And, yes, the rumors are buzzing again. The culprit this time is the Valleywag blog.
Of course, the suitors include old media stalwarts that – yet again – can't seem to shoot straight in the new media world. They would include such companies as the New York Times (NYSE: NYT) or the Washington Post (NYSE: WPO).
Oh, and the price tag for the deal is $300 million to $400 million. But, hey, in light of Microsoft (NASDAQ: MSFT)'s investment in Facebook, this seems cheap-o.
Ironically enough, Digg recently signed a $100 million ad deal with Mr. Softy. In other words, it seems like Microsoft may be to blame for the craziness in the social media world, huh? And, as a result, it may be making it very expensive for old media companies to buy into the space.
Barron's Online's (subscription required) "Inside Scoop" column reported that Adobe Systems (NASDAQ: ADBE) founder and co-chairman John Warnock sold 25K shares for $1.1M last week, according to SEC data.
The Wall Street Journal (subscription required) reported that Ben Bernanke, the Federal Reserve chairman, last night said that while the housing market will continue to be a "significant drag" on the U.S. economy next year, strong income growth has kept consumer spending steady.
OTHER PAPERS:
Verizon Communications (NYSE: VZ) told Congressional investigators that it has provided customers' telephone records to federal authorities in emergency cases without court orders hundreds of times since 2005, reported the Washington Post.
Ad agency WPP Group (NASDAQ: WPPGY) is in final negotiations to acquire Blast Radius, an Internet agency, reported the U.K. Times.
Smith & Nephew (NYSE: SNN) is being investigated by the SEC on bribery allegations, according to the U.K. Times.
Activist investor Knight Vinke is attacking HSBC (NYSE: HBC) once again, according to the U.K. Times.
WEBSITES:
DigiTimes.com reported that Taiwan Semiconductor Manufacturing Company (NYSE: TSM) has denied a report by the Ottawa Citizen which speculated that Taiwan Semi was seeking to acquire Canadian design house Emerging Memory Technologies, saying the rumors were false.
TechCrunch.com reported that Napster (NASDAQ: NAPS) is switching from its desktop client to a fully web based client, enabling users to listen to their music from any computer after logging into the service.
Singapore Airlines deal to buy 15.7% of China Eastern Airlines (NYSE: CEA), along with their parent Temasek Holding's 8.3% share, may be in jeopardy as Cathay Pacific Airways is said to also be interested in China Eastern, reported the Wall Street Journal.
OTHER PAPERS:
As a part of its annual report to be released this week, BHP Billiton Limited (NYSE: BHP) is expected to announce that it has uncovered potentially the largest gold reserves in the world at its South Australian Olympic Dam mine, reported the Herald Sun.
According to the Washington Post, citing congressional investigators, the FBI is investigating technology company Unisys Corporation (NYSE: UIS) after it allegedly failed to detect "cyber break-ins traced to a Chinese-language Web site and then tried to cover up its deficiencies."
The Telegraph reported that British bank Barclays (NYSE: BCS) is reportedly preparing to sell FirstPlus, one of its subprime consumer loan units, at a loss. Barclays is expected to obtain a price lower than GBP4.5B, the book value of the unit's loan portfolio.
Microsoft Corporation (NASDAQ: MSFT) will tomorrow release its 'Halo 3' video game and the company expects over $150M in sales in the first 24 hours of its release, and a profit margin that could reach 90%, reported the Los Angeles Times.
Housing slump or not, Home Depot Inc (NYSE: HD) CEO Frank Blake says there will be no large jobs cuts or store closings, reported the Associated Press.
Ratan Tata, chairman of the Tata Group of India, has confirmed his interest in the Jaguar and Land Rover units of Ford Motor Company (NYSE: F), according to the Wall Street Journal.
OTHER PAPERS:
The Washington Post reported that Home Depot Inc (NYSE: HD) has made a deal to sell its supply arm, HD Supply, for $8.5B, down from the original price of $10.3B, to a consortium of private equity firms headed by Carlyle Group, inside sources say.
According to a sources with knowledge of the discussions, Altria Group Inc (NYSE: MO) is considering spinning off its Philip Morris International division as part of a restructuring plan to increase shareholder value, reported the New York Times.
So the Immigration and Naturalization Service is raising fees to cover its costs. Why all the griping? Why are people complaining about the agency wanting to cover its increasing costs? When was the last time it raised prices?
Washington Post Report: The Bush administration will announce an increase today in immigration application fees of more than 80%, federal officials said yesterday. The cost of applying for naturalization, for example, would rise from $330 to $595, and a required fingerprint check would go from $70 to $80.
Some people have complained that this should be funded by Congress......oh please, don't get me started. Funded with what, Congress has no money! I think it's great that a government office should be self-sufficient. The same people who argue that immigrants do not cost the taxpayer anything and are not a burden are the ones who also want someone else to pay.
The Wall Street Journal reported that President Bush picked former advisor Robert Zoellick to take over the World Bank from Paul Wolfowitz; Mr. Zoellick, now a vice chairman at Goldman Sachs Group Inc (NYSE: GS), was a trade representative and deputy secretary of state.
The Institutional Shareholder Service has advised shareholders of medical device maker Biomet Inc (NASDAQ: BMET) to turn down a $10.9B private equity deal for the company, according to the Wall Street Journal.
Rather than focus on potential take-out targets, Barron's Online's "Weekday Trader" said that the smart bet for investors is to focus on companies with rising profits, cash flows and dividends, such as Loews Corp-Carolina Group (NYSE: CG) and Imperial Tobacco Group plc (NYSE: ITY), which boast free cash and dividends.
Barron's Online's (subscription required) "Inside Scoop" section reported that Thomas Everist, an MDU Resources Group (NYSE: MDU) board member since 1995, has sold a total of 742K shares for a total of $22.6M in MDU stock since May 2, according SEC data.
The Wall Street Journal (subscription required) reported that EMI Group (OTC: EMIPY), the third largest music company by sales agreed to sell to Terra Firma Capital Partners for $4.74B, possibly ending its seven year battle with Warner Music Group Corp (NYSE: WMG).
OTHER PAPERS:
According to the New York Post, citing people familiar with the situation, the weakening housing market and other issues are making it difficult for Home Depot Inc (NYSE: HD) to sell its professional supply business.
Discovery Communications is in talks with CBS Corporation (NYSE: CBS) to sell half its Discovery Times channel and form a joint-venture partnership, according to sources close with the situation, reported the Washington Post.
The Wall Street Journal (subscription required) reported that the UAW and representatives of Kirk Kerkorian, which made a $4.5B proposal for DaimlerChrysler AGs (NYSE: DCX) Chrysler unit, met to discuss the potential of an employee stock ownership plan and other alternatives to a takeover of the struggling automaker.
A $25B deal to take SLM Corporation (NYSE: SLM), known as Sallie Mae, private will most likely remain under the scrutiny of a federal regulator, reported the Wall Street Journal.
OTHER PAPERS:
The Washington Post reported that the FDA knew years in advance about contamination problems at a Georgia peanut butter plant and on California spinach farms that led to disease outbreaks, documents and interviews show.
According to an examination by the San Jose Mercury News, a criminal case against Apple Inc (NASDAQ: AAPL) CEO Steve Jobs in the stock-options backdating investigation looks unlikely.
Welcome to Media World, my new weekly column, which will cover the highs and lows of today's media. I am, as they say, platform agnostic, meaning that I expect to offend both the mainstream and new media. I look forward to your feedback.
For my first column, I'd like to direct your attention to Citizen K Street, a 27-part series the Washington Post Co. (NYSE:WPO) is running on the Web site of its flagship paper about the rise of Washington lobbyist Gerald S.J. Cassidy. I'm sure the series, which was a herculean effort, will win all sorts of awards as these sorts of projects usually do.
But it's 27 parts. Who has the time to devote to reading a newspaper series that last that long about any topic? Is anything worth that degree of fuss?
One person who doesn't think so is Cassidy. In his blog, he seemed stunned by attention he's gotten from the Post. "There are so many other issues that face our country that are much more deserving of this attention." he writes.
Don't buy the false modesty.
Lobbying is plenty important, particularly in light of the Jack Abramoff scandal. It's also a huge business in Washington as Post Associate Editor Robert Kasier, who wrote the series, pointed out to me.
But I wonder whether Citizen K Street will only appeal to the most passionate of political junkies, the types of people who watch C-Span instead of "American Idol." Kaiser, who has been at the Post for 43 years, doesn't know either.
"I can't say I am sure we will have a huge audience," he said. "We are asking people to do something that they are not used to doing."
According to Saudi Arabian Oil Minister Ali Naimi, the world oil market is in "much, much better health and balance" now and, if trends hold, there will be no need for further production cuts or increases in supply when members of the Organization of Petroleum Exporting Countries meet next month.
The Financial Times (subscription required) reported that MasterCard Inc (NYSE: MA) is expected to announce a pilot program with the GSM Association that will allow migrant workers to use cellphones for international money transfers.
The Deutschland edition of the Financial Times reported that Private Equity is looking at Infineon Technologies ADS (NYSE: IFX).
OTHER PAPERS:
According to the U.K. Times, Sanofi-Aventis ADS (NYSE: SNY) has called off talks with Bristol-Myers Squibb Company (NYSE: BMY) over a potential deal.
The Washington Post reported that thousands of Army Humvees are lacking the Frag Kit 15 armor upgrade, which is not anticipated to be completed until this summer.
Investor's Business Daily's"The New America" column highlighted Web conferencing leader WebEx Communications Inc (NASDAQ: WEBX).
The U.K. Times reported that Rio Tinto plc (NYSE: RTP) has warned that the future of its only operation in the U.K. is bleak, with negotiations on its future having failed to deliver a solution.
The Washington Post said, according to a National Intelligence report, that the situation in Iraq will get worse and the United States has little control over it.
Investor's Business Daily's"New America" column mentioned Heelys (NASDAQ: HLYS) positively, saying there is plenty of room for growth in the wheeled sneaker market, although cautioning it could be a fad like rollerblades or the Razr scooter before it.
From BusinessWeek's "Inside Wall Street" column:
Weyerhaeuser Company (NYSE: WY) named Debra Cafaro, a well-regarded REIT executive, to its board, sending a "clear signal that Weyerhaeuser will be looking at moving its huge timberlands into a REIT," says Mark Wilde of Deutsche Bank.
Archer Daniels Midland Company (NYSE: ADM) should rise to $6 a share this year, says Carl Birkelbach, president of Birkelbach Investment Securities
Access Pharmaceuticals' (NASDAQ: ACCP) two cancer drugs -- one of which, MuGard, has already been O.K.'d by the Food & Drug Administration -- are catching the eye of investors.
The Wall Street Journal (subscription required) touched on the effect of the iPhone on Research in Motion's (NASDAQ: RIMM) business and also warned of more trouble at Ford Motor (NYSE: F) with the United Auto Workers union.
The "Heard on the Street" column recommended investors not "hang up" on Research in Motion's shares because of Apple Inc's (NASDAQ: AAPL) upcoming iPhone.
A plan by Ford to offer bonuses to a significant portion of its white-collar workers may upset UAW talks.
The Financial Times (subscription required) featured articles on Corus Group (NYSE: CGA) and Barclays plc ADS (NYSE: BCS).
A Front Page article said an iron ore dispute involving Companhia Vale do Rio Duce may threaten CSN's bid $11.2B bid for Corus Group.
Barclays is "poaching" Citigroup (NYSE: C) executives. The latest deserter is Todd Gravino, who will become Barclays CFO of global retail and commercial banking.
OTHER PAPERS:
The U.K. Times wrote that AstraZeneca ADS (NYSE: AZN) doubled its M&A team to seek out targets to help rebuild its weak pipeline of new drugs.
Reuters Group (NASDAQ:RTRSY) may be an old company (founded in the 1840s), but it is still looking for ways to innovate (after all, the company got its start with a new technology called the telegraph).
Well, this week, the company invested $7 million in a start-up company, Pluck. Think of Pluck as a New Age distribution company – using things like RSS to syndicate blogs. The company has deals with biggies like the Washington Post (NYSE:WPO) and Gannett Co. (NYSE:GCI).
True, for a company like Reuters, a $7 million investment is not particularly large. It does, however, validate blogs as a source of good content. Actually, Reuters is already a user of the Pluck technology.
I interviewed Bill Flitter, who is the founder and V.P. of marketing at Pheedo (a top Web-based content distribution company). To him, the deal highlights two key trends:
"First, RSS is being used more and more to distribute pieces of content throughout the web and reassemble it in the most relevant and customized way. It is a simple technology that offers so many ways to move content around the web. It is really a versatile tool, a Swiss army knife of capabilities.
"Second, blogs are increasing in authority, but more importantly, readers of blogs and news stories are now able to participate in the story. This is a huge shift, especially since Reuters, a massive media outlet, is enabling this new social media concept. Readers can influence the news and what people read -- people can tell their version of the story now and not just read it through the lens of a gatekeeper."
Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.
There's an interesting piece in the Washington Post about MySpace.com. The title says it all: "In Teens' Web World, MySpace Is So Last Year."
Actually, the author does not provide tangible proof that MySpace.com is going downhill.
No doubt, the site has had a stunning ascent, with over 124 million profiles – and grabbing $900 million from Google Inc. (NASAQ: GOOG). Hey, even if MySpace self-destructs, News Corp. (NYSE: NWS.A) will still have more than covered its initial $580 million purchase price.
However, the author brings-up some good points to consider:
• The history of social networking – especially when focused on teens – is volatile. Some of the prior leaders, such as Friendster and Xanga, are a fraction of their former success. • There's the creep factor. The author interviewed a variety of teens who are afraid of weirdos who troll MySpace. • Then there's the authority factor. That is, teachers often go on MySpace to see what their students are doing. • Also, if key people in a teen's network moves to another site, then many others will follow. For example, a big source of users for MySpace were former users of Friendster. • Most importantly: Teens bore easily.
Besides, when a site like MySpace gets into mainstream media, can it really be cool any more?
Tom Taulli is the author of various books, including the Complete M&A Handbook. He operates InvestorOffering.com.
In describing the results of last night's Iowa caucuses, The Washington Post's David Broder minced no words: "Eight years after Iowa voters did the conventional -- sending George W. Bush and Al Gore on to meet in the election of 2000, they shook up the status quo in both parties as never before. The victories of Barack Obama and Mike Huckabee jolted the expectations of establishment candidates with far stronger conventional credentials."
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