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Google finally disappoints investors

Google Inc. (NASDAQ: GOOG) today disappointed investors. I'm sure that geeks from Cambridge to Silicon Valley are wondering if the world has come to an end. Let be the first to say this isn't the end of the world. In fact, it's a good way to remind people that Google is mortal.

In fact, the company's earnings were still great even if they weren't as fantastic as some had expected. Net income soared to $925.1 million, or $2.93 per share. Revenue rose 58 percent to $3.87 billion. Excluding stock-based compensation costs, profit was $3.56, about three cents below expectations. Revenue excluding so-called traffic acquisition costs was $2.72 billion, below above the $2.68 billion, analysts had expected, according to MarketWatch.

Though I'm not sure where things went wrong in this quarter, it's worth remembering that Google itself has repeatedly said growth was slowing. Its repeatedly mentioned that it plans to pour big money into the busines and that it doesn't care much about meeting quarterly numbers.

I wonder if anyone listened.

Why wasn't the cheating in the CNBC contest uncovered sooner?

The cheating on CNBC's "Million Dollar Portfolio Challenge" was so blatant that anyone with even the tiniest knowledge of the stock market could have sensed that something was seriously wrong.

BusinessWeek points out that the top finalists in the contest averaged returns of 45% during the first nine days of the final round which stretched out annually would equal 1,200%. The odds of someone being able to generate these sorts of results legitimately are pretty slim. Having more than one contestant show these returns should have immediately set off alarm bells at the General Electric Co.- (NYSE: GE) owned network.

This wasn't a difficult flaw to exploit. The magazine reports that all these wannabe Warren Buffetts did was go the CNBC Web site and hold off executing the trades until after the 4 p.m. close by keeping their Web browsers opened. They wound up getting the pre-close price for stocks that went up in after-hours trading.

CNBC, which is offering $1 million to the first-prize winner, denies that the controversy surrounding the contest has damaged its credibility. "Why would it?" said Kevin Goldman, a spokesman for CNBC in an interview, adding the company launched an investigation as soon as the problems were brought to its attention though BusinessWeek said whistleblower Jim Kraber was initially rebuffed. He declined to release the names of the parties CNBC has hired to ferret out these miscreants.

The "Million Dollar Portfolio Challenge" was a successful promotion that helped make CNBC.com of the top business news sites fairly quickly. Whether the cable channel is too clever for its own good remains to be seen.

E.W. Scripps may sell off newspapers adding to the market glut

E.W. Scripps Co. (NYSE:SSP) is one of the few newspaper publishers that Wall Street thanks to its fast-growing Internet and cable businesses. Now, the company may sell off some if not all of its 18 newspapers, which include the Memphis Commercial Appeal and Denver's Rocky Mountain News, according to media reports.

``There might be a better opportunity for these papers to survive with different ownership, certainly with a different capital structure,'' said Scripps Chief Financial Officer Joe Necastro at a Citigroup Inc. investment conference yesterday, according to Bloomberg News. ``We don't want an asset that's generating less cash next year than it is this year."

Who can blame him? Profits of the newspaper business have lagged the rest of Scripps for years. They aren't terrible as newspapers go, but they aren't doing much to help the stock price either, which climbed a whopping 4 percent last year. Investors think Scripps is a well-managed company and are fans of The Home Shopping Network cable channel and the Shopzilla comparison shopping sites. Wall Street, though, has little use for the newspapers owned by Scripps or any other company.

Maybe some of the same private equity players that are in the hunt for Tribune Co. (NYSE:TRB) will be interested in the papers. Gannett Co., (NYSE:GCI), the top newspaper publisher, also will look at some properties as will Dean Singleton's closely held MediaNews Group. Perhaps as in other cities local buyers will emerge. But as I've said before I find it difficult to believe that the new owners will fare much better in dealing with the problems of declining advertising and circulation revenue than the old ones. Scripps, like every other newspaper seller, is going to have dififculty getting good prices for any properties it tries to sell.

Despite the industry's spin, newspapers are a print business. Internet advertising is growing at a healthy rate but that business isn't large enough to make much of a difference to the company's overall bottom line. For newspapers to survive, they are going to need to be in private hands.

Unilever keeps Fabio from enjoying the oblivion he so richly deserve

Unilever (NYSE:UL) has got some nerve in continuing to keep Fabio employed as spokes-hunk -- the company's word -- for I Can't Believe It's Not Butter!.

There are plenty of other deserving "C" level celebrities who deserve the job. The company should get a DVD of any season of VH1's "The Surreal Life" if it's stuck for ideas.

Fabio wore out his 15 minutes of fame about two hours ago. Unlike other fading celebrities, it's tough to miss the romance novel model because he never seems to go away. But if you are a Fabio fan -- and I pity you if that's the case -- then have I got a contest for you.

In order to promote its new I Can't Believe It's Not Butter! spread with olive oil, Unilever is giving away a luxurious vacation on an island in the Mediterranean, according to a press release.

"One lucky winner and six companions will be whisked away for a week of luxury to a private, 32,000 square-foot villa set on an island in the Mediterranean, where, with the ring of a bell, a five-star Mediterranean chef will prepare mouth-watering cuisine and a staff of 27 is at your every beck and call," the Anglo/Dutch conglomerate said. "A captain will sail you and your guests around the clear blue waters, a driver will chauffeur you around to the best white sand beaches, and a personal masseuse will take all your tension away 24/7."

Contestants have to guess where the island from clues provided by Fabio specially marked packages of "I Can't Believe It's Not Butter!" and on the Web site http://www.tasteyoulove.com. I never thought I would write Fabio's name and "taste" in the same sentence.

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Last updated: March 19, 2010: 03:43 AM

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