In a move to help turnaround its troubled business, General Electric Company (NYSE: GE) will sell or divest its appliance division, and could expect to receive between $5B and $8B for the unit, according to the Wall Street Journal. Potential buyers appliance makers BSH Bosch & Siemens Hausger of Germany and Haier Group of China, as well as private equity firms and Controladora Mabe, GE's partner in Mexico.
The Wall Street Journal also reported that Comcast Corporation (NASDAQ: CMCSA) will acquire Plaxo, a networking Web site, in an effort to increase its range of services. Terms of the deal were not disclosed.
To help improve its Ask.com search engine, the Wall Street Journal reported that IAC/InterActiveCorp (NASDAQ: IACI) will buy the Lexico Publishing Group, which owns Dictionary.com, Thesaurus.com and Reference.com.
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Citing the New England Journal of Medicine, Bloomberg reported that migraine headache medicines, including Merck & Co Inc's (NYSE: MRK) Maxalt and GlaxoSmithKline Plc's (NYSE: GSK) Imitrex caused potentially fatal reactions in at least 11 people. The Journal said people using "triptans," an older class of migraine drugs, could develop serotonin syndrome, which may cause fever, shock, vomiting and rapid heartbeat.
According to the New York Post, IAC/InterActiveCorp. (NASDAQ: IACI) Chairman Barry Diller is expected to meet with his board this week to restart the process of breaking up his company into five separate pieces, sources said. At the same time, Diller and Liberty Media Corporation (NASDAQ: LMDIA) Chairman John Malone are continuing to talk about a deal that would trade one or more of IAC's assets for Liberty's ownership stake in IAC.
The UK Times has learned that Numis Securities, the stockbroking group headed by Michael Spencer, is in "advanced talks" to buy the UK equities business of The Bear Stearns Companies Inc (NYSE: BSC). Numis may look to hire a team of 25 from Bear.
The Wall Street Journal also reported that IAC/InterActiveCorp (NASDAQ: IACI) is planning to launch a number of new web sites, and hopes to capture a variety of audiences including African-Americans, children and news followers.
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Lehman Brothers Holdings Inc. (NYSE: LEH) said it liquidated three investment funds, with assets valued at $1 billion as of February 29, because of "market disruptions," Bloomberg reported.
Reuters reported that the U.S. Department of Defense approved the sale of 157 armored trucks to Britain. The trucks are built by Force Protection Inc. (NASDAQ: FRPT), and the deal is valued at $125 million if all options are exercised.
Will InterActive Corp. (NASDAQ: IACI) be dumping its search and information portal Ask.com? Sort of, according some insider accounts. It wouldn't be jettisoning Ask.com entirely -- it would just be getting rid of the technology that powers the search engine's results. The engine behind Ask.com, Teoma, could be taken out and replaced by Google, Inc. (NASDAQ: GOOG)'s technology.
Google already has a stranglehold on internet search. It's been suggested for quite a while that Yahoo, Inc. (NASDAQ: YHOO) dump its pride in its search engine technology (known as Project Panama for the last few years) and just use Google instead for powering its search engine. Does Google have that much power -- one that would make competitors use its search engine technology to power their own sites? Yes, it does.
If Ask.com were to switch to just using Google, then the search service really would hold little value to the customers using it. Sure, Ask.com would wrap Google search results in its own brand and customer interface, but would there truly be a compelling reason to use Ask.com at that point? Not really. Just like Yahoo!, Ask.com has spent huge amounts of cash to improve its search technology with little to show for it.
That's the first-mover advantage Google has. Even if either had a better search service, that wouldn't mean more search customers. Then again, does either have a superior search service? I personally use Ask.com daily in addition to Google -- it's great. For my sole search engine service, though, it's not that good.
Liberty Media Corporation (NASDAQ: LCAPA) filed a lawsuit in Delaware against IAC/InterActiveCorp's (NASDAQ: IACI) Barry Diller in an attempt to block Mr. Diller from completing the spinoffs of several units on terms that could dilute Liberty's voting power; the suit follows a suit filed by IAC against Liberty seeking to complete the divestiture on its own terms, the Wall Street Journal said.
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The Evening Standard learned that billionaire Wilbur Ross is in takeover talks with AMBAC Financial Group Inc (NYSE: ABK) and that a deal could come within the next two weeks.
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According to analysts, TheDeal.com's Dealscape blog reported that the troubles at WellCare Health Plans Inc (NYSE: WCG) could lead to a sale of the company after the departure of the company's three executives.
Citing a source close to Advanced Micro Devices Inc (NYSE: AMD), CRN.com reported that rumors of a merger between the company and International Business Machines Corporation (NYSE: IBM) "is nothing but speculation." A rumor in Mergermarket, which caused AMD's share price to spike almost 11% on Wednesday, said IBM's microelectronics division could merge with AMD "possibly in the near term."
Yesterday, I attended the Kelsey Group's Interactive Local Media/SES Local conference. Based on the turnout, there are many companies trying to get a piece of the online local marketplace, which is still in the early phases. But the Internet giants like Google Inc. (Nasdaq: GOOG), Microsoft Corporation (Nasdaq: MSFT) and Yahoo! Inc. (Nasdaq: YHOO) are gunning for dominance.
So, what are venture capital investors looking for?
Well, there was a great forum on the topic. The panelists included: Nick Veronis, managing director at Veronis Suhler Stevenson; Kara Nortman, vice president of M&A at IAC; and Mark Gorenberg, a partner at the VC firm Hummer Winblad Venture Partners.
"For entrepreneurs looking at local," said Veronis, "this is great timing. The market is hot and the valuations are robust."
He is bullish on so-called mobile phone coupons. "We are seeing much higher conversions with mobile coupons," said Veronis. "It's also convenient. So, coupons may skip the desktop."
But, according to Nortman, this doesn't mean that traditional valuation metrics no longer apply. "When we look at acquisitions of online properties," she said, "we look at cash flows. The cash flows may come in year 2 or 3 – but there needs to be a case that online users can be translated into cash."
Interestingly enough, this week IAC announced that it has invested in a Web 2.0 social networking site, MerchantCircle. "We like that the company has a viral model and a strong user base of over 300,000 merchants."
Also, if you want to check out other recent early stage fundings, visit DealProfiles.com.
InterActive Corp. (NYSE: IACI) seems to be following the herd with this week's announcement of a comedy news channel that sounds very similar to Comedy Central's The Daily Show and The Colbert Report. The new IAC property, titled 23/6, will partner with liberal political site the Huffington Post and will be in full comedic charge of satirizing the news with humor interlaced throughout all moments.
Bloggers from the Huffington Post as well as comedy writers from The Daily Show and The Simpsons will be part of the cast, so expect some funny moments from the new network. 23/6 joins a growing roster of online and television networks and series dedicated to taking normal (and highly predictable) news and turning a spin on those stories to keep the bay of reality, well, away from the mind of the normal consumer. At least, that's my two cents here.
I especially like 23/6's planned "Monolog-o-tron," which will be an online tool for generating your own talk show using drop-down menus on a website. That's a shot at Letterman and Leno and my guess is that it won't be the last one taken. With a whole new generation taking to the web for news and satire instead of played late-night shows, this could very well be another great hit for Barry Diller's IAC.
TheStreet.com's Jim Cramer says the market showed its stuff Monday, and health care, tech and retail look like buys.
Sweet comeback as people are getting too panicked and too bearish. I noticed it first in the retailers, which all trade like subprime-mortgage originators.
It then spread to the oil and oil-service stocks (as if oil is going to plummet, not just find a level). The minerals got whacked something awful off the usual recession gambit.
Then it started hitting tech names, including ones that are doing well and just reported, like EMC (NYSE: EMC) (Cramer's Take) off the big downgrade.
To me the last straw was the collapse, for a second day, of Goldman Sachs (NYSE: GS) (Cramer's Take), something that simply makes no sense at all except from the proposition that both competitors, Merrill (NYSE: MER) (Cramer's Take) and Citigroup (NYSE: C) (Cramer's Take), will now be better run (which is a given, by the way).
The ability of this market to shrug off these losses will be the tale of today's tape. Resilience has been the hallmark of this market when it comes up against key levels, and it showed it again today.
It's probably time to do some buying of health care -- we did Monday in Action Alerts PLUS -- tech, and retail, and cover some of the financials. RELATED LINKS
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer was long EMC, C and Goldman Sachs.
According to a person briefed on the situation, Merrill Lynch & Co Inc's (NYSE: MER) CEO Stan O'Neal was negotiating the terms of his forced departure on Sunday and the departure is expected to be announced on Monday. The top contenders for the CEO position are said to be BlackRock Inc's (NYSE: BLK) CEO Laurence Fink and NYSE Euronext Inc's (NYSE: NYX) CEO John Thain, the Wall Street Journal reported.
The WSJ also reported that Alibaba.com raised $1.5B after the company priced its IPO at HK$13.50, at the top-end of the HK$12-$HK13.50 range. Yahoo! Inc (NASDAQ: YHOO) holds a 39% stake in Alibaba Group.
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Ness Technologies Inc (NASDAQ: NSTC) was awarded a contract worth NIS 5 Million to convert the pension fund data managed by Opal Future Technologies, Globes reported.
Indian company Dr. Reddy's Laboratories Limited (NYSE: RDY) is set to attempt to raise its share of the U.S. over the counter drug market by partnering with at least six more U.S. retail chains; the company plans to launch up to 10 drugs over the next 12 months that could become OTC offerings in the U.S., the Economic Times reported.
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According to TechCrunch, IAC/InterActiveCorp (NASDAQ: IACI) may have submitted a letter of intent to acquire movie-centered social network Flixter over the last week or so.
InterActive Corp. (NASDAQ: IACI) has a head honcho with some meaty chops in the entertainment and publishing business. Barry Diller, who has spearheaded television, movies and now internet entertainment (among many other areas) was interviewed recently for his take on the past and his prowess on inventing the future, so to speak. Diller's claim to fame as he put it? Try this: "The only thing that's ever driven me is curiosity."
Diller's internet empire stretches from Expedia.com (travel) to Ask.com (search). It also has other properties that hang somewhat in the balance, like LendingTree.com and TicketMaster.com. One of his most recent deals was plunking down $50 million for a majority stake in GarageGames so that consumers can play graphically rich games on their PCs not needing those PC-priced videogame consoles.
Lloyd Grove of Portfolio.com interview of Diller covers many subjects, the most fascinating of which are Diller's takes on how the internet is changing everything and why newspapers are on their way out. These are two items that I follow quite closely so when someone with Diller's track record voices his opinion on them, I'm interested.
A few morsels: 1) IACI's stock in the last 10 years has done well despite turbulences in the last three to five years. 2) Wall Street doesn't understand InterActive since it is such a complex megamachine in a zillion business units, and 3) why web-based news aggregation and value-adding has not really been done yet (and why newspapers are quasi-doing that, but going downhill as a distribution medium).
Diller's perspective is worth reading, whether you agree with him or not. He does get some plugs in for the companies he's involved with (what good leader wouldn't), but his interview is an entertaining read nonetheless.
MOST NOTEWORTHY: CKE Restaurants (CKR), Capella Education (CPLA), IAC/InterActiveCorp (IACI), Liberty Media (LINTA) and BWAY Holding (BWY) were today's noteworthy initiations:
JP Morgan started CKE Restaurants (NYSE: CKR) with a Neutral rating, citing near-term margin concerns.
Barrington believes Capella Education (NASDAQ: CPLA) is one of the fastest growing companies within its group in every aspect including enrollment, earnings and revenue.
Stifel started IAC/InterActiveCorp (NASDAQ: IACI) with a Buy rating, believing there is a 60% chance of a material event occurring within the next 6 months. Stifel believes QVC is the best interactive retailing operator given its 22% EBITDA margins and 16% operating margins.
Banc of America initiated BWAY Holding (NYSE: BWY) with a Neutral rating, citing a balanced risk/reward. JP Morgan started shares of BWY with an Overweight rating on valuation...
The mobile search trains of Google (NASDAQ: GOOG) and Yahoo! (NASDAQ: YHOO) left the station some time ago. Even Nokia (NYSE: NOK), the world's largest handset company has its own search function.
With the estimates for mobile-based advertising pointing to $11 billion, according to Informa PLC, no one wants to be left behind.
IAC/Interactive (NASDAQ: IACI) will launch its own Ask Mobile software, which will include features from some of the parent's other websites, including City Search and Ticket Master. It will be introduced with Sprint (NYSE: S).
No matter how well the service works, it has two drawbacks. The first is that Ask.com is among the smallest search operations, with about 5% of the U.S. market. It brings that small share and a relatively late introduction to the mobile space to the table. It is also forming its first partnership with the weakest of the Big Three mobile carriers, which may be an indication it could not get AT&T Wireless (NYSE: T) or Verizon Wireless (NYSE: VZ) to take the product.
As Doug McIntyre wrote yesterday, Google Inc. (NASDAQ: GOOG) increased its web search popularity in the U.S. pretty dramatically in March. While Google continues to make headway with web search volume (and making quite a bit of money within that market), Yahoo! Inc. (NASDAQ: YHOO) and Microsoft Corp. (NASDAQ: MSFT) have (so far) shown that they are not making any solid gains on Google. A distant player, Ask.com, owned by Barry Diller's InterActive Corp. (NASDAQ: IACI), maintains about 4% of the web search marketplace.
Will any other search engine ever seriously challenge Google? For the near future, probably not. Yahoo! is in the business of building relationships with paying customers (Terry Semel's vision, I think) and Microsoft has a pretty diversified product and revenue stream, although Windows and Office are the main cash cows. Do they need to complete with Google better? They should be (although not a die-hard requirement), and both companies are probably tired of Google riding off into the sunset with all that cash. Microsoft's constant claim that its Live.com search engine is central to its strategy may be fine, but actions speak louder than words. Where are the actions?
Google has an enormous first-mover advantage here. Not because it was first with a search engine index, but because it was first with a search engine with text ads that customers not only found unobtrusive, but helpful in many cases. That alone is why Google is where it is, and why the other companies can't keep up.
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