Analyst Upgrades

• Wells Fargo (WFC) to conviction buy from neutral at Goldman.
• Adobe (ADBE) to buy from neutral at UBS.
• Fifth Third Bancorp (FITB) to outperform from market perform at FBR Capital.
• Vail Resorts (MTN) and Goldcorp (GG) to buy from hold at Deutsche Bank.
• OmniVision (OVTI) to overweight from neutral at JPMorgan.
• Penn Virginia (PVA) to hold from sell at Canaccord.
• Hub Group (HUBG) to outperform from market perform at Morgan Keegan.

Newspaper websites seem to be the preferred source of local news for consumers, according to the Newspaper Association of America and comScore (SCOR). Fifty-seven percent of respondents are drawn to local newspaper websites. But take this with a grain of salt: 54% chose online portals and 53% selected local television websites. In terms of what consumers consider the most trusted local news source to be, newspapers have the lead, but the gap is narrowing. Now, only 33% choose the newspaper for this reason, with local television sites pulling in 32%.

"While newspaper Web sites often face dozens of competitors touting their own local offerings in any given market, they have been able to thrive by leveraging trusted brands and strong local content to appeal to consumers and advertisers alike," John Sturm, president and CEO of the NAA, said in a statement.

Facebook is becoming a powerful force in the search engine market. It's still far behind search behemoth Google (GOOG), but the social media platform's U.S. search traffic ticked higher by 13% last month, according to data from comSore (SCOR). From 351 million search queries executed on Facebook in December, the number grew to 395 million in January.

Google still owns 65.4% of the U.S. search market, having received 14 billion search queries last month. Yahoo! (YHOO), Microsoft (MSFT), Aol (AOL) and Ask share the remainder of the market. Among these competitors, market share changed little month-over-month. So, for Facebook, this month's growth bucked the trend.

The December 2009 data from comScore (SCOR) were released Tuesday, and the results for the social media sector are nothing short of staggering. Fifty-four percent (112 million) of the 205 million-strong U.S. internet-user population are on Facebook, with 27% (57 million) still using News Corp.'s (NWS) MySpace. But according to data from both comScore and Experian Hitwise (EXPN), the most active users were on Tagged, MyYearbook and Orkut. And Facebook users were more active than those on MySpace.

There's no doubt that plenty is happening in the social media space, but there are some facts that just might surprise you, either because of the speed of change or the discovery of players that may not have occurred to you.

Google (GOOG) is accustomed to being in the top spot. It leads search and virtually owns the online ad space. Its Google News portal is among the top sites for directing traffic to media outlets. But, the behemoth is starting to feel the feet from social media sensation Facebook.

Not only is the rather young platform stealing market share from Google News, it's now encroaching on its e-mail turf ... a situation that Google isn't taking lightly. To compete more effectively with Facebook, Google is upgrading its Gmail capabilities to include more social media tools reminiscent of those found on its competitor.

It's now official: Microsoft (MSFT) and Yahoo! (YHOO) are in cahoots to take on search engine giant Google (GOOG). The new search partnership inked by the two companies still needs to secure regulatory approval, but the talks that began in late July are merely a step away from reality now.

Microsoft and Yahoo! expect to pass this final step early next year. If this happens, the muscle behind Yahoo! search will be Microsoft's Bing search engine.

Online retail sales are expected to increase 3% to $28.8 billion for this year's holiday season. The analysts at comScore include traditional retailers, like Macy's (M) in this estimate, but don't count auction sites like eBay (EBAY), travel or corporate sales. The estimate compares favorably against the National Retail Federation's forecast of a 1% year-over-year drop for all retail sales and exceeds the industry's most aggressive holiday season sales estimates of 2%.

Last year, online retail sales fell 3% for the holiday season, the first decline since the industry started keeping score in 2001. Even if we don't hit the 3% growth level this year, 2009 is still expected to be better than 2008, now that the economy has stabilized (at least relative to last year).

The Twitter ecosystem may be changing constantly, but most of that comes on the back of individual developers and outside companies. They beat on Twitter APIs to create new products that may win them glory, recognition or cash. Over the past month, though, Twitter itself has gotten into the game, releasing or announcing a handful of new features.

A new function for "retweeting" (echoing another's tweet to your own followers), changes to how trending topics are managed, and the ability to create lists are new tools intended to engage users ... on the Twitter.com website. Considered within the context of Twitter's changed terms of service this year, the upgrades may be part of a broader ad-based revenue plan.

A new executive team is trying to bring MySpace back to its former glory. By focusing on music, videos and games, it hopes to recapture some of its luster. With the MySpace refugees mounting, it's time for some new blood to make some brilliant, future-changing decisions. This week, the company is holding a conference for its global ad sales team to explore ways to bring in traffic and beef up ad spending.

MySpace is poised to haul in $495 million in ad revenue this year, down 15% from last year's $585 million, according to research firm eMarketer. In August, MySpace attracted 64.2 million unique visitors from the United States, off 15% from August 2008, according to comScore, while Facebook pulled in 92.2 million unique U.S. visitors – up more than 100% year-over-year.

Google Inc. (NASDAQ: GOOG) is dominating online video just like it does internet searches. In August, Google's various video properties went past the 10 billion video view March. In all, the Mountain View, Calif., company took in 40% of all online video viewership, according to comScore.

Of course, the answer to Google's fortunes in online video viewership was YouTube. Google Video didn't account for much at all, as YouTube accounted for 99% of all video viewed on Google's video properties. The only problem: Google continues to not monetize YouTube very well, which has been a point of contention since the 2006 acquisition for $1.65 billion. The good news: YouTube has grown like gangbusters at the same time, and the YouTube acquisition has kept Google at the top of the video viewing field ever since.

Google, Inc. (NASDAQ: GOOG) continued to lead the pack in web search throughout April, as web searches in the U.S. increased by 3% from the same month in 2008. Of all U.S. web searches in April, 64% happened on Google websites, while Yahoo! Inc. (NASDAQ: YHOO) raked up just over 20% and Microsoft Corp. (NASDAQ: MSFT) just over 8%.

The question will be raised yet again -- can Yahoo! or Microsoft compete with Google in web search? Yahoo!'s 20.4 share is nothing to sneeze at, but when the top spot has over three times that share, there are strategies to consider. As in, is it worth competing?

We all know that the current economic slowdown was bound to hurt holiday spending, and today we get news of just how much an impact it had on online shopping, as comScore announced that shoppers spent 3% less this year compared with 2007.

The report was based on spending between November 1 and December 23, and showed that consumers spent $25.5 billion online, compared with $26.3 billion in the same period last year, another clear signal that people are cutting their spending because they are worried about the economy.

A bright spot in the report did show that Cyber Monday, the Monday immediately following Black Friday, was the second biggest day ever for online spending, with an increase of 15% in sales from last year, to $846 million in sales.

Minyanville's Sean Udall dares to share the kind of keen insight and actionable information you won't find in any prospectus. Here he discusses some players in the tech sector. For more original thought, visit www.minyanville.com.

SuccessFactors (NASDAQ: SFSF): The stock prices secondary at $11.80 and is holding pretty tough. I'm watching this one pretty closely and was hoping for some post-secondary weakness to possibly add a starter here. A pretty good balance sheet just got better, but I guess the question is, "What is it going to do with that cash?"

Digital TV Holding (NYSE: STV): This company may have made a bottom recently and the deal announced today is exactly what the company talked about in its last quarterly call. I've commented on the possibility of it securing more revenue streams (partnering for recurring advertising revenue) in the past. It looks to be developing the conduits to deliver on that.

comScore (NASDAQ: SCOR): Google (NASDAQ: GOOG) news is hurting the stock badly. I sold my mine some time back after that series of paid click reports ahead of Google's last quarter that proved to be quite inaccurate. All that aside, I don't think comScore's core business is going to disappear within a compressed time frame and may be worth a long side trade if it moves near or under $20. I'll leave it be and see what develops, as the knife could cut further.

MAJOR PAPERS:

• The Wall Street Journal's "The Game" column speculates that one of the results of the Bear Stearns crash could be the push of investment banks and commercial ones closer together, which could result in better handling of volatility with more stability. Some observers think Merrill Lynch & Co (NYSE: MER), Morgan Stanley (NYSE: MS) or The Goldman Sachs Group Inc (NYSE: GS) could go that route by buying a commercial bank. Any move would force them to adhere to better reserve ratios, affect short term bank funding, and shrink balance sheets.
• The Wall Street Journal reported that Google Inc (NASDAQ: GOOG) will soon make available a new service that measure hits on the Internet with the intent of helping advertisers decide where to buy ads online and would directly compete with comScore Inc (NASDAQ: SCOR) and Nielsen Online. Ad executives said Google's method could make targeting markets more efficient.
• A Manhattan judge dismissed four claims made by American International Group Inc (NYSE: AIG) in its fight to regain control of a block of its shares held by Starr International, a company that once founded a lucrative compensation plan for AIG executives. AIG believes the shares held by Starr should continue to be used to fund employee compensation, the Financial Times reported.

WEB SITES:

• According to Scorpio Partnership, Bloomberg reported that UBS AG (NYSE: UBS) and Merrill Lynch had slower growth in assets under management last year due to losses connected to the U.S. subprime crisis.

At a meeting yesterday, everyone had a smartphone. It's just standard nowadays.

But whose keeping track of the metrics on these devices? Well, one of the top players is M:Metrics. This week the company agreed to sell out to comScore, Inc. (NASDAQ: SCOR) for $44.3 million and 50,000 stock options.

It's a savvy deal. According to the investor conference call, comScore's CEO, Dr. Magid Abraham, said that M:Metrics is a "significant" player in the space and has a three-year lead. Yes, in the topsy-turvy tech world, that's a big deal.

M:Metrics has a variety of products, with more than 180 customers. For example, MobiLens allows for a monthly online surveys of mobile phone usage from more than 40,000 users. Next, MeterDirect is an on-device meter, which is used by 4,000 users of smartphones and is compatible with 280 device models. Finally, there is M:Ad. As the name implies, this tracks mobile ads.

No doubt, mobile is going to be a big growth driver for comScore. Apparently, the revenue contribution could be 10% or more by 2009 as mentioned on the conference call.

Plus, comScore should derive some cost savings (from its well-developed infrastructure) as well as cross-sale opportunities (from its extensive product offerings). Actually, there is little customer overlap between the companies.

Wall Street seems to like the deal. In Thursday's trading, comScore's shares were up 5% to $24.68.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.