It seems that not a day goes by without some news regarding one of the largest deals Wall Street is following intently these days, InBev's $46 billion hostile takeover bid for Anheuser-Busch Cos Inc. (NYSE: BUD).

Not long ago, Reuters reported that Anheuser-Busch filed a suit Monday against InBev NV, calling the brewer's takeover attempt an "illegal plan and scheme" to acquire Anheuser "at a bargain price."

It isn't surprising the Budweiser maker has filed a suit. Only last week, when A-B officially rejected InBev's $46 billion offer, the latter filed a suit of its own as well as launched a proxy battle, filing a consent solicitation with regulators seeking to replace Anheuser's board. Anheuser's suit seeks an injunction to stop InBev's attempts to replace its board. Anheuser says it wants first to make sure certain alleged false and misleading statements are fixed.

From the lawsuit (pdf file) it seems that some of the misleading statements Anheuser is complaining about have to do with InBev's financing possibilities and its plans for the company once it is taken over. I don't normally read litigation documents, but the language here seems quite strong with allegations even of rumor mongering. Judge for yourself:

This past holiday weekend my colleague Doug McIntyre gave support to a blog I wrote in May 2007 when he posted Google (GOOG): The Failure Of YouTube. In my rant I gave a detailed analysis outlining how Google had overpaid for YouTube by a fantastic amount.

In the story Doug quotes projections that 2008 revenue generated by Google might gross $200 million from YouTube. That's revenue, not profit. A 20% profit would be $40 million if that was possible. In the article I wrote: How can I say Google overpaid for YouTube? I stated the case in plain English why the YouTube investment would have to earn $300 million (net, not gross) minimum, in its first year not to be dillutive.

They missed the target by a mile. They will continue to miss the target and I do not expect it to ever justify the cost. Just because Google has lots of cash slushing around does not mean they have money to waste.

The Microsoft Corp. (NASDAQ: MSFT) -- Yahoo Inc. (NASDAQ: YHOO) merger dance is not quite over yet.

In an open letter to his fellow long-suffering Yahoo shareholders, billionaire Carl Icahn disclosed that he has spoken "frequently" with Microsoft CEO Steve Ballmer; "frequently" over the past week about Yahoo. Ballmer indicated to Icahn that the world's largest software company would still be interested in doing a deal ... with one catch.

"Steve made it abundantly clear that, due to his experiences with Yahoo! during the past several months, he cannot negotiate any transaction with the current board," Icahn said. "If a new board were elected, he would be interested in discussing a major transaction with Yahoo!, such as either a transaction to purchase the "Search" function with large financial guarantees or, in the alternative, purchasing the whole company. He stated that Microsoft would be willing to enter into discussion immediately if the new board that has been nominated were elected."

In a separate press release, Microsoft underscored Icahn's statement, adding that despite speaking with Yahoo!'s board since last year, the company decided that it cannot reach an agreement with the current board. Can you say trial balloon?

Google, Inc. (NASDAQ: GOOG) may be a company based on reality after all. In addition to the company's search market share and increasing brand awareness worldwide, its lavish employee perks and working conditions have earned it an enviable position among IT and software workers. Free bus rides to work, free food and drink and other nice perks are part of working for the internet giant. Just don't ask about its daycare facilities.

Google announced last week that it would be raising the prices of its infant care services by almost 75%. This after bringing in employees to tell them of the change in advance and gauge their collective feedback. Although many parents were left in awe (as in, how could Google do this!), the company decided to implement the plan gradually over five quarters and reduce the price increase. The annual daycare costs for two kids would have risen from $33,000 per year to $57,000 per year (it's not clear how much the increase was reduced). Is Google doing evil here? Nope -- just joining reality.

The comedown from employees as Google starts implementing policies that most (if not all) public companies already have will be harsh. If you are a Google shareholder, do you like all that dough being used to pamper Google employees with all those freebies? Does it make the company more competitive and allows workers to be as productive as possible? In many ways, it does. Google doesn't do things like this out of the goodness of its heart. It's all about wringing the best work from each worker. If those perks start getting stripped away, Google may join the ranks of "normal" public companies. Its workers don't want that.

About two years ago, Google (NASDAQ: GOOG) paid $1.65 billion for YouTube. The purchase is now starting to look like a poor decision.

According to The New York Post, "YouTube's numbers for 2008 don't look pretty: while 3 billion videos are viewed every month, revenues could total an anemic sub-$200 million this year."

Some analysts believe that the trouble with YouTube is that the videos are too short, or that it is difficult for marketers to figure out in advance which content will pull well with users. Those views are wrong.

The basic trouble with YouTube is that that video quality of 99% of the content is terribly poor. Source material for many clips comes from home video cameras or cellphones. None of that is of "production value." Putting ads that cost millions of dollars to create next to low-resolution content is a hard sell.

YouTube has a very basic problem. Most of its videos don't look good and a lot of them are barely watchable.

Douglas A. McIntyre is an editor at 247wallst.com.

Microsoft (NASDAQ: MSFT) wants to expand the reach of its vital Office suite of products. The software giant wants to utilize a subscription model for the collection of programs. The initiative will commence later this month at Circuit City (NYSE: CC) and it will eventually reach other retail stores. People will also eventually have the option of accessing the subscription product via computers such as ones made by Dell (NASDAQ: DELL). The cost is reported to be $70 for twelve months of Office access.

This is an interesting scheme. As the article points out, businesses might not bat an eye at subscribing to software applications, but for consumers, this is a different ballgame. Many of us, myself included, are so used to going down to a Best Buy (NYSE: BBY) to purchase a software package for a flat fee that paying yearly dues just seems like an alien concept. And I'd say this goes double for something as large and complex as the Office program. Microsoft believes that $70 on an annual basis will be perceived as cheap and will expose consumers who might normally either seek upgrades on a pirated basis or who would simply continue using older versions to regular approved updates. It is a large investment, after all, to upgrade to a new iteration of Office.

Microsoft would be wise to market the heck out of the subscription model for Office, taking full advantage of the inflationary environment we are currently in. If potential users can be convinced of the value proposition, then they could eventually become hooked on the promise of upgrades over time for the relatively economical price indicated. Checking around on the net, I notice that a lot of the negative comments about this idea center on the fact that there are already free alternatives out there to Office, such as applications offered by Google (NASDAQ: GOOG).

When Google, Inc. (NASDAQ: GOOG) purchased wireless software development company Android years ago, its founder asked Google's co-founder Larry Page, "Is this interesting to Google?" It sure turned out to be, although the mobile phone operating system environment was announced almost a year ago and nothing concrete has shipped in a customer device yet. My bet is that Google isn't delaying development to fine-tune its software -- it's had years to do that and the money to boot.

The problem is the wireless environment in the U.S., for starters. The competitive landscape is so tightly controlled that Google's mantra of "open access" just won't sit well with wireless carriers used to telling customers what they can and cannot do with their phones. If you think U.S. consumers have control over their wireless lifestyles, a quick trip to Europe will dispel that notion pretty fast.

If Google really wants to make Android the ubiquitous, free and open mobile operating system it wants it to be, what are the alternatives to having partnerships with mobile carriers who will, of course, be afraid of Google? Google has bid on wireless airwaves before (only to have the goal of allowing open devices accessible to closed networks), but this time, I see it going down the mobile virtual network operator route, plain and simple. Although the MVNO model has largely failed in the U.S., Google doesn't have a national wireless network to operate. But with its large pockets, it sure can buy wholesale from the existing carriers and place its Android customers with service -- and then, give them anything they want. Like, mobile search results with ads next to them.

Google (NYSE: GOOG) closed at $534.74 Tuesday.

GOOG is scheduled to report Q2 EPS on July 17.

Jefferies says: "Reiterating Buy and $600 target on healthy domestic search growth.

GOOG July option implied volatility of 46 is above its 26-week average of 37 according to Track Data, suggesting large price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

MAJOR PAPERS:

• According to people familiar with the discussions, the Wall Street Journal reported that Microsoft Corporation (NASDAQ: MSFT) has held discussions with Time Warner Inc (NYSE: TWX) and News Corporation (NYSE: NWS), among others, about joining it in a deal that could lead to the breakup of Yahoo! Inc (NASDAQ: YHOO). Some of the sources said the preliminary talks are unlikely to result in a deal with Yahoo!
• Johnson & Johnson (NYSE: JNJ) is reportedly in exclusive talks to sell its wound-care business Ethicon to the private-equity arm of JP Morgan Chase & Co (NYSE: JPM), according to the Wall Street Journal. Terms of the potential deal were not disclosed.

OTHER PAPERS:

• Sources familiar with the inquiry said that the Justice Department has opened a formal antitrust investigation into a deal that would allow Google Inc (NASDAQ: GOOG) to provide some search advertising for Yahoo!. The Washington Post reported that investigators will demand documents from Google and Yahoo!, as well as other large companies in the media and Internet industries.

WEB SITES:

• Reuters reported that regulators in the European Union are looking at the long-term effects of BHP Billiton Limited's (NYSE: BHP) $170B bid for Rio Tinto Group (NYSE: RTP). Sources familiar with the EU questionnaire said regulators have asked competitors and customers about effects of the deal on their businesses through 2015.

Microsoft (NASDAQ: MSFT) may try to buy Yahoo! (NASDAQ: YHOO) again, but it does not want the whole company. It finds the search business useful as part of its battle with Google (NASDAQ: GOOG). The content portal business does not have much attraction, and Redmond wants a company like Time Warner (NYSE: TWX) to pick up that piece. According to The Wall Street Journal, Microsoft "approached other media companies in recent days about joining it in a deal that would effectively lead to Yahoo's breakup."

The new deal just might work. Yahoo! dropped below $20 yesterday, putting its stock back where it traded before the first buy-out offer. The No. 2 search company's shares reached as high as $33. Investors, especially Carl Icahn, are steamed that Yahoo! did not grab all of that extra money.

Even if Microsoft cannot find a partner to take the Yahoo! content business, it may move ahead. It only has 10% of the US search business. Yahoo! has about 20% and Google around 60%.

Microsoft still needs Yahoo!, and with its stock down by a third, Yahoo! needs a buyer.

Douglas A. McIntyre is an editor at 247wallst.com.

Seth MacFarlane is the genius behind News Corp.'s (NYSE: NWS) Family Guy animated television series. But why should News Corp. have all the fun programming cool content? That's apparently what Google Inc. (NASDAQ: GOOG) was thinking when it signed up Seth MacFarlane to produce a series of short animated clips for the Google Content Network.

According to The New York Times, MacFarlane has created something called Seth MacFarlane's Cavalcade of Cartoon Comedy. Little two-minute clips will be distributed to various websites that key in on the youthful male demographic which loves Family Guy. When users click on the clips, they will perhaps see an ad before the thing starts or some sort of banner attached to it. They might also simply see the name of the presenting sponsor before watching. Google will split monies generated by the ads with MacFarlane, the website that features the clip, and Media Rights Capital, the entity which sells the inventory.

I love the idea of the Google Content Network and I think that, over time, it should be a great success, but as with any novel platform, it all comes down to the word in the middle -- content. Google will live and die by the quality of the content because, although lesser-quality stuff might still find an audience in other mediums, the web has such intense competition for eyeballs that have minuscule attention spans. If the clips don't grab the viewer right away, then the ad inventory won't be as valuable to the buyers.

Time Warner Inc. (NYSE: TWX) reaches an interesting milestone this morning. The terms of its paid search advertising deal with Google Inc. (NASDAQ: GOOG), give the search giant the right to require AOL to register Google's 5% equity interest for sale in an initial public offering as of July 1, 2008.

It isn't a forced IPO of the unit -- or at least it doesn't have to be. Time Warner has the right to purchase Google's equity interest for cash or shares of Time Warner common stock based on the appraised fair market value of the equity interest in lieu of conducting an initial public offering.

FULL DETAILS can be seen in this filing for the terms and exceptions.

It is hard to know what Google will do, but I think Google will likely want to keep the AOL stake. If not, it is pretty hard to imagine Time Warner chief Jeff Bewkes allowing 5% of AOL to go public (in this lousy market) or be sold to someone that the company wasn't fully on board with. It seems he'd have little choice but to buy back the equity interest.

Win or lose, after two years time's finally up.

Minyanville's top dog, Todd Harrison, dares to ask in public what Wall Street types quietly consider in private. For more insight and ideas, visit www.minyanville.com.

Lot's going on today as I juggle the end of June. With time constraints on both sides of this screen in mind, I humbly offer the following thoughts:

• I covered the incremental "fade" exposure in Google (NASDAQ: GOOG) (put out near the opening) and I'm now in watch mode.
  
  
• It's tough to tell how much of the big beta action is quarter-end proppage and how much is legitimate demand. As I covered my American Express (NYSE: AXP) earlier--and continue to have exposure in Wachovia (NYSE: WB)--I'm leaving it on for the time being (and yes, subject to change).
  
  
• And yeah, I'm trading around that ugly duckling--nibbling under $15 and trading the swings. There's no putting lipstick on that pig--using it as my vehicle of choice has thus far been wrong. It ain't over till our interns sing, however, so I'm fighting the good fight.
  
  
• That sorta brings up the question du jour: Are we gonna see quarterly inflows... or quarterly outflows?
  
  
• The upside seems begrudging. Of course, after the decline we've seen, you'd be grudging too if you were Hoofy.
  
  
• Somebody call Armond Goldman! l I'm starting the South Beach Diet on Monday, lest anyone wonders what is happening to my sense of humor.
  
  
• The scariest thing on my screen? The VXO is down 6% today. I repeat, the VXO is down 6% today. Ruh roh...

R.P.

I read an article over the weekend about Yahoo! Inc. (NASDAQ: YHOO) and its reorganization attempts. Make no mistake about it, this company needs to alter its DNA if it intends to survive in a world without a Microsoft Corp. (NASDAQ: MSFT) taking it over.

In a nutshell, it looks like Yahoo! wants to retool its divisions so that it can more efficiently react to changes in the online marketplace. Yahoo! apparently feels that its current organizational structure inhibits growth and is looking to create new teams dedicated to developing products that will capture eyeballs and advertising opportunities as quickly as possible. The company also wants to focus on cloud computing, a technology that is important to the business sector.

Well, from the point of view of an investor looking at Yahoo!, I don't see anything here that persuades me to buy the stock. Synthesizing a new plan of corporate attack is pretty much par for the course for any company that is doing terribly and is looking to get back on the good side of Wall Street. But is there anything really exciting in the plan? No. It's just Yahoo! doing something. There's nothing too revolutionary going on. Centralizing this and that might add value. It also might not. It's all in the execution, and I'm not sure I want to trust a company that rebuffed Microsoft's reasonable buyout offer to execute anything at this point.