MAJOR PAPERS:

• According to people familiar with the situation, the Wall Street Journal reported that Yahoo! Inc (NASDAQ: YHOO) is again talking to Time Warner Inc (NYSE: TWX), this time about taking over AOL, with Time Warner taking a stake in the combined entity. News Corporation (NYSE: NWS) has its eye on any Yahoo moves. Meanwhile, Microsoft Corporation (NASDAQ: MSFT) is considering what its next move against Yahoo might be and is talking to News Corp.
• The Wall Street Journal also reported that, as part of the company's plan to cut costs, Tribune Co's Los Angeles Times newspaper may look to cut about 250 jobs, including about 17% of its news staff.
• The Financial Times reported that Chrysler, which has been searching for foreign partnerships, signed with China's Great Wall Motor a memorandum of understanding to explore long-term business ties in areas that include technology, distribution and components.

OTHER PAPERS:

• According to the Dallas News, AMR Corporation's (NYSE: AMR) American Airlines informed its flight attendants' union that is may lay off 900 flight attendants on August 31.

WEB SITES:

• Yonhap reported that LG Electronics will release "Dare," a new touch-screen mobile phone in the U.S. that will compete with Apple Inc's (NASDAQ: AAPL) latest iPhone models.

MAJOR PAPERS:

• Last November, Google Inc (NASDAQ: GOOG) and 30 partners were said be developing a new type of handset using Android that was expected to revolutionize the industry. The first new phones were expected to be available in this year's second half but are now slated for the fourth quarter the Wall Street Journal reported.
• According to people familiar with the situation, the Wall Street Journal reported that Citigroup Incorporated (NYSE: C) will make sharp cuts in its investment banking division this week.
• The Wall Street Journal reported that Live Nation Inc's (NYSE: LYV) Chairman, Michael Cohl, stepped down down as a director and executive to end the strategy feud with CEO Michael Rapino. over how to pursue the "360 deals" with music superstars.
• The Financial Times reported that there are worries that investment banks will accelerate the pace of their layoffs this summer, after it became known that The Goldman Sachs Group Inc (NYSE: GS) gave pink slips to workers in its investment banking division last week. Goldman is now expected to lay off up to 10% of the workers at the division.

OTHER PAPERS:

• New Jersey put its $150M center for stem cell research on hold, the Star Ledger reported, eight months after ground was broken on the project.

Last night, handset maker Motorola Inc. (NYSE: MOT) announced that it would be slashing another 2,600 jobs as the company continues to battle lower sales. The current job cuts represent approximately 4% of its total job force as of the end of 2007 of 66,000 employees.

It wasn't that long ago that Motorola was a major force in the world of mobile phones, but over the past two years the company has definitely fallen from grace among consumers. Two years ago the company was the world's second largest handset maker, but that status is no more, and the company is currently sitting in the fourth spot overall.

Analysts have blamed the company's drop due to lack of innovation, and some have gone so far as to predict that the company's handset business is doomed if Motorola can not pick up the pace and start to pump out new and fresh ideas for consumers to gobble up.

MAJOR PAPERS:

• Following the collapse of The Bear Stearns Companies Inc (NYSE: BSC), the industry is rampant with rumors wondering about the financial well being of scores of other institutions, according to a Wall Street Journal report called "The Credit Crisis Hits Wall Street". True or not, its giving fits to the companies, regulators, and investors.
• Skyrocketing fuel prices and a weakened economy are taking their toll on the airline industry, reported the Wall Street Journal. Additionally, the proposed Delta Air Lines Inc (NYSE: DAL) merger with Northwest Airlines Corporation (NYSE: NWA) has lost its momentum as airline pilots cannot agree on a structured seniority system.

OTHER PAPERS:

• According to people close to the situation, the New York Times reported that before the end of the month, Citigroup Incorporated (NYSE: C) is planning to lay off another 2,000 investment bankers and traders.
• The Detroit News reported that Ford Motor Company (NYSE: F) appears to have fallen short of its goals in the latest, and possibly last, round of company-wide buyouts for hourly workers.

Luxury car maker BMW AG revealed today its plans to slash another 5,600 jobs by the end of 2008 as part of a restructuring effort aimed at boosting company's profits. Its decision is expected to bring annual savings of 500 million euros ($752 million) starting in 2009.

According to a BMW spokesman, part-time workers would take the hardest hit, with 5,000 fewer posts. Half of them had already been eliminated last year and the rest are set to be cut by the end of 2008. The restructuring plan also involves more than 3,000 full-time jobs, including 2,500 in Germany, and 600 other positions in other regions. Thus, the restructuring plan comes with a total number of 8,100 jobs cuts. This is 7.5% of BMW's work force, which totals almost 108,000 workers.

Ernst Baumann, the company's head of personnel, said BMW may make more cuts if the dollar continues to decline. Baumann did not specify the total costs that the restructuring plan would bring, but he believes expenses will result in the "three-digit million" euro range.

Howard Schultz's effort to shake up ailing Starbucks (NASDAQ: SBUX) took an unpleasant turn today, at least if you're an employee at the company's headquarters. The coffee giant announced that it will cut 600 jobs at its headquarters in Seattle as part of Schultz's "transformation agenda." About 220 of the job cuts will involve layoffs, while the remaining positions will simply go unfilled.

If you're an investor, this may be a bit of good news. Investors typically love layoffs, since they reduce costs and, perhaps more importantly, send a signal that management is serious and in control. However, investor reaction has been muted so far, with the stock trading flat at $17.84 on Friday morning. It may be that 600 jobs is not a significant number given the company's total of over 170,000 workers.

Apparently the news of the layoffs arrived via email. Schulz has been sending a series of messages titled "Howard Schultz Transformation Agenda Communication," and the job cuts were announced in part seven in the series. Previous installments included plans to eliminate breakfast sandwiches, close some stores, and hold a company-wide training session for all baristas.

Somehow, I doubt that Starbucks employees are looking forward to the next email.

MAJOR PAPERS:

• A slowdown in growth in the telecommunications equipment industry may result in a joint venture between Motorola Inc (NYSE: MOT) and Nortel Networks Corporation (NYSE: NT), that would have combined sales of about $10B, the Wall Street Journal reported.
• The Wall Street Journal also reported that Yahoo! Inc's (NASDAQ: YHOO) board is planning to reject the Microsoft Corporation (NASDAQ: MSFT) bid of $31 per share, feeling that Microsoft would be taking advantage of a deteriorated Yahoo! share price. Sources said Yahoo! will not consider any offer under $40 per share.
• Sony Ericsson, a joint venture between Sony Corporation (NYSE: SNE) and LM Ericsson Telephone Company (NASDAQ: ERIC), admitted that its business is weak in India, China, and the U.S. The joint venture has designated those three countries as priorities, the Financial Times reported.

WEB SITES:

• According to a source, the Silicon Alley Insider reported that Yahoo! is expected to let go 1,000 employees or more during the week of February 12.
• SiliconValleyWatcher "heard" from a very reliable source that Salesforce.com Inc (NYSE: CRM) has approached Oracle Corporation (NASDAQ: ORCL) over a potential sale of itself for $75 per share.

AdAge has a report out today noting that Time Warner CEO, Jeffrey L. Bewkes, plans to lay off 75 or more people tomorrow. But this report says the cuts are coming primarily from the company's corporate offices. That would be much closer to home for the top brass there, so 75 of the 600 to 700 noted in the article would be a substantial signal that the company is making sacrifices top to bottom in a quest for shareholder rewards.

If this is the case, it would be coincidental with earnings, also scheduled for tomorrow morning. Bewkes still has time on his side to make his mark. Now that Carl Icahn isn't in the middle of the hornet's nest, the current shareholder base has become patient. A bear market trading pattern forces people to stop badgering CEOs so much, because relative performance gets harder and harder to prove.

This is Bewkes' first earnings report as head honcho there, but Dick Parsons was still in charge for most of this last quarter. Bewkes may go over a formal plan and he might not. Most likely the media conglomerate will outline a formal date that the actual plan will be announced.

Obviously, most of BloggingStocks' attention is probably going to pertain to Bewkes' forward plans for AOL. Many of the mega-merger watchers from last week think this puts added pressure on AOL, although that might not really be the case. Since that is opinion, I will hold off on going into details on that.

Time Warner Inc. (NYSE: TWX) shares closed down 2.7% today at $15.40. The 52-week trading range is $14.64 to $21.97. Stay tuned for earnings tomorrow.

Blame the tight credit markets and fear of recession: IPOs hit a 50-month low in January. According to the Telegraph, "figures showing the extent of the slump come as investment banks across the world are cutting jobs on expectations of a continued lull in activity over the coming year. " M&A activity has also hit its slowest pace since late 2004.

The real damage from the slowdown may be to investment and large money center banks. Now that mortgage-related write-offs have damaged their balance sheets, they might have hoped that earnings from underwriting and M&A divisions could help with earnings in 2008. It looks like that will not happen.

Financial executives will be looking for more lay-offs at their firms to try to offset falling revenue. That means the loss of high-paid jobs in cities like New York, London, Paris, and Zurich.

A depression may be coming to the M&A sector.

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

Yahoo! Inc. (NASDAQ: YHOO) stock is falling this morning after the Wall Street Journal and New York Times both reported that the company is preparing to lay off workers in an effort to re-focus its business to better compete with rival Google (NASDAQ: GOOG). Unnamed sources told both papers that layoffs could number hundreds of employees. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on YHOO.

After hitting a one-year high of $34.08 in October, the stock has hit a new one-year low today. This morning, YHOO opened at $19.26. So far today the stock has hit a low of $19.26 and a high of $21.03. As of 11:00, YHOO is trading at $20.41, down 37 cents (-1.8%). The chart for YHOO looks bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider a February bear-call credit spread above the $25 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in 4 weeks as long as YHOO is below $25 at February expiration. Yahoo! would have to rise by more than 22% before we would start to lose money.

YHOO hasn't been above $25 since December and has shown resistance around $24 recently. This trade could be risky if the US economy turns things around quickly, but even if that happens, this position could be protected by resistance YHOO might find around $24.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in YHOO or GOOG. He does provide content for AOL.

Sprint Nextel Corp. (NYSE: S) shares are flat this morning even as most other stocks are falling. The Wall Street Journal reported yesterday afternoon that the company plans to lay off several thousand employees in a move designed to boost profit margins so that it can better compete with rivals AT&T (NYSE: T) and Verizon (NYSE: VZ). S cut its payroll by about 5,000 jobs last year. Analysts are saying that although cutting costs will help the company, the most pressing issue for S will be finding a way to stop its customers from defecting to its two big rivals. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on S.

After hitting a one-year high of $23.42 in June, the stock hit a one-year low of $12.10 last week. S opened this morning at $12.23. So far today the stock has hit a low of $12.20 and a high of $12.47. As of 10:30, S is trading at $12.35, down 1 cent (-0.1%). The chart for S looks bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

After Mexican billionaire Carlos Slim said Friday afternoon that he was looking to unload all he could from his investment in U.S. computer and electronics retailer CompUSA, the chain announced late Friday evening that it would sell itself to a private firm who would then shut down the entire chain by the new year.

It's been a rocky road for CompUSA this year. The chain announced that it would close half its stores earlier this year on failing performance and heavy competition from Best Buy (NYSE: BBY) and online computer retailers. CompUSA will apparently be selling all inventory in all stores at fire-sale prices until the first of the year, so if you're looking for a computer or flat-screen TV bargain, better suit up.

Bristol-Myers (NYSE: BMY) revealed its big plan for the next five years. It also said that the company is not for sale.

Much of what was said about the company by its management is that the firm would be more nimble and will focus on profitable areas like biotech. But the program for revenue was thin on detail and long on talk.

What the plan actually boils down to is what these things always do when a company has no answer to revenue problems: cost cuts. BMY will lay off 4,800 people over the next three years, and will close 50% of its factories between now and 2012. Among its more mature products, it will cut out a large portion of brands that face falling sales.

The Wall Street Journal writes that "in addition to the job cuts and plant closings, the company said it will divest itself of its medical-imaging business and is exploring alternatives for its ConvaTec wound-care unit and Mead Johnson nutritional businesses."

All of this will save the company about $1.5 billion a year, but in the long run that may not matter much. There was nothing in what the company said to make investors believe that management can drive new revenue.

The market saw that and yesterday the stock closed down for the day.

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

Citigroup Inc. (NYSE: C), which has already ousted its CEO because of the subprime tsunami, now reportedly is planning to slash as many as 45,000 jobs, according to CNBC's Charles Gasparino.

"In some cases, the layoffs have already begun, with managers being told by their supervisors that they have to eliminate whole departments," he wrote on CNBC's Web site.

Usually, investors cheer this sort of thing but these aren't usual times. Shares of the beleaguered bank, down 46% for the year, were down $1.59, or 5%, to $30.12 in early afternoon trading, indicating that investors probably expected big job cuts to come.

These layoffs are on top of the 17,000 announced in April.

There's no doubt that this holiday season won't be very merry for people who work for the big financial services firms. Former CEO Chuck Prince, though, won't have any worries thanks to the $68 million golden parachute he received for destroying $64 billion in market value.

The Associated Press reports that Chrysler has slashed the jobs of 12,000 workers -- a Halloween trick for its people if there ever was one. But is this 15% of its workforce layoff going to make Chrysler competitive?

Chrysler's cutting slow selling products and investing in new ones. Specifically, Chrysler is eliminating the Dodge Magnum wagon, the convertible version of the Chrysler PT Cruiser, the Chrysler Pacifica crossover and the Chrysler Crossfire sportscar. And it's introducing the Dodge Journey crossover and Dodge Challenger, along with two new hybrid models, the Chrysler Aspen and Dodge Durango.