MAJOR PAPERS:

• Take-Two Interactive Software Inc (NASDAQ: TTWO) rejected Electronic Arts Inc's (NASDAQ: ERTS) unsolicited takeover offer as too low, and now EA is turning hostile, going directly to the shareholders to acquire all outstanding shares for $26 each, the same price originally offered to Take-Two, the Wall Street Journal reported.
• No one wants to see The Bear Stearns Companies Inc (NYSE: BSC), rumored to have liquidity problems, fail, but competitors and clients are being extra cautious, according to the Wall Street Journal.
• The credit crunch has hit three more funds, the Financial Times said. Drake Management, Global Opportunities Capital and Blue River Asset Management have all been forced to suspend investor withdrawals or close down after being faced by turmoil in the credit markets.

OTHER PAPERS:

• According to Tim Berners-Lee, the inventor of the World Wide Web, the UK Times reported that Google Inc (NASDAQ: GOOG) may eventually be superseded as the dominant Internet brand by a company that uses the power of next-generation Web technology.

Continuing with our defensive stock series for a choppy/consolidating market: generally, one would not list a tech stock as a defensive play. Cisco Systems (NYSE: CSCO) is an exception.

Two fundamentals warrant the advocacy of Cisco as a defensive play: 1) the company supplies the majority of networking equipment used for the internet -- it is the world's largest supplier of computer internetworking systems, and 2) emerging market growth. So long as the internet remains intrinsic to business processes in emerging/developed markets and so long as emerging markets continue to grow, Cisco will benefit in the years ahead. Analysts project a roughly 15%-20% annual revenue growth rate for CSCO for 2007-2009. Another positive: look for CSCO's advanced technologies unit to continue to contribute impressively to the company's revenue on video system business.

Further, we'll skip for this review the debate regarding the possible "broadband shortage" and focus instead on the counterargument. Assume deteriorating conditions in the U.S., perpetually high energy prices slowing global growth, and increased protectionist sentiment. The impact on Cisco? Most likely, CSCO keeps growing, albeit at a slower rate, but it will grow, nonetheless. CSCO's shares closed Wednesday down 28 cents to $31.26.

[Note: Technical analysis agnostics stop reading here; all others continue.]

Technically, Cisco's chart is strong. True, the stock has recently retreated from a 52-week high of around $33.60, but this came after an impressive advance from the $26-range. Cisco has dipped below its 50-day moving average for the second time in four months, but it's been above its 200-day moving average for more than a year. The p/e of 27 is elevated, but this is not an unreasonable p/e, given CSCO' s likely strong revenue growth.

Stock Analysis: Cisco (CSCO) is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 1 year should be rewarded from CSCO's shares. Sell/Stop Loss: $22.

Yesterday I half-heartedly went to see the Pixar / Disney (NYSE: DIS) movie "Ratatouille" with my 11-year-old son. To my great surprise it was fantastic. The story, quality of animation and superb writing were cleverly executed. If Pixar continues to produce this highly imaginative level of animation then the first class Walt Disney tradition lives on.

It may appear that the entertainment industry is being diluted, fragmented and slowly surrendering to the Internet via vast amounts of "product" created by amateurs and wannabees, but this is deceiving. The Web has allowed for the immediate distribution of a diverse range of ideas in new media such as YouTube (Google Inc. (NASDAQ: GOOG). It has created a platform to launch what otherwise might be undiscovered talent. But we deceive ourselves if we think this will ever be a substitute for the top talent assembled by Pixar / Disney.

For example, we know that there are more people playing basketball then ever before and they have greater skills too. However, we still pay top dollar and flock to see Kobe and Shaq, even though they now play on opposite coasts. We want to see the best. While the web has proven to be informative, entertaining and democratizing it is not Hollywood. While it has exposed us to new ideas, (and garbage) and provided opportunity to millions of people and new artists, for the most part it is a new delivery system and a new marketing platform. It is not Disney or Dreamworks and it never will be.

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and watch out for more Battle of the Brands posts.

Yahoo! Inc. (NASDAQ: YHOO) was the shining star of the internet bubble in 2000, just before the dot-com crash, and has managed to keep a huge customer base (tens of millions, if not hundreds of millions based on how you calculate it). Yahoo! customers are loyal apparently, even though Google has trounced Yahoo! in recent years in terms of search popularity and overall brand awareness. Like Google Inc. (NASDAQ: GOOG), Yahoo! was founded by Stanford grad students, Jerry Yang and David Filo, so that information on the web could be more easily found back when the web was in its infancy -- 1995.

From 1995 to 2001, Yahoo! grew at a rapid clip, and then saw a downward spiral as advertising fortunes started collapsing at the same time Google's "text ad" advertising model started growing by leaps and bounds. It's pretty obvious by now that Yahoo!'s "one ad for all" approach grew quite stale (and so did its revenues) at the same time Google's "customer relevant" and unobtrusive ad model grew an an inversely proportionate rate. Yahoo! has made great strides on the comeback trail under five-year CEO and Hollywood expert Terry Semel, who has modeled Yahoo! as a "relationship builder" to customers (and gotten them to pay for certain services).

This model is quite opposed to Google's "tool-based" customer model that can't touch Yahoo!'s model for creating and enhancing actual relationships with paying customers, beyond just providing easy internet tools for customers while keeping that "relationship" quite distant. Yahoo! shares spit almost three years ago, but have remained between $29 and $44 per share since that time. By contrast, Google's shares have skyrocketed from $85 in August 2004 to over $460 today. In terms of an investment over the past five years, it's hard to draw a conclusion since Google has been publicly traded for less than three years, while Yahoo! has been traded for quite a bit longer than that.