Video chain Blockbuster (NYSE: BBI) reported earnings earlier this week for the fourth quarter. While there were some positive aspects to the story, I can tell you that the stock is not a buy at all, at least not from where I sit.
Okay, let me throw some of the good stats out at you. According to the press release, Blockbuster's same-store sales, or comps, are doing well. In Q4, domestic comps rose well over 4%. Free cash flow was positive. And earnings on an adjusted basis calculated out to $0.40 per share. That was a huge beat, since analysts were looking for $0.25 per share.
When it comes to mergers and acquisitions, Cisco (NASDAQ: CSCO) is a pro. While some of its deals have failed, the fact remains that the company has built a global powerhouse via dealmaking.
However, last year was uncharacteristic for the aggressive Cisco; that is, the tech giant bought only four companies. Keep in mind that, in a typical year, the company will average a deal a month.
Well, things may change in 2009 (this is according to Barrons' Tech Trader Daily blog). All in all, it looks like Cisco will rev up the deal machine.
OK, so what might Cisco target? A key area is video.
This certainly makes sense. After all, video requires tremendous Net infrastructure. Plus, video is likely to be more attractive to corporate America. Ultimately, a video-meeting could be much more cost-effective than flying to meetings.
Oh, and it looks like the slowing economy may be a good thing. It should mean better valuations -- and more motivated sellers. And, Cisco has the firepower to get attention, with a whopping $27 billion in the bank.
In his The Turnaround Letter, he adds, "But the company also has very valuable assets and strong cash flow. In addition, we believe the stock would command a good premium in a takeover." Here's his bullish review.
"Following its IPO in 1995, Qwest expanded via acquisitions and partnerships, and participated in the telecom bubble of the late 1990's.
"Unlike many of the other high-flying telecoms of that era, however, Qwest realized that in addition to a story you needed customers. In 2000, it went out and acquired US West, which gave Qwest the revenue base to survive the bursting of the telecom bubble
"Although the company survived, the shareholders have had a rocky ride during the current decade. The stock peaked around 60 in 2000, dropped to just above 1 in 2002, rebounded to 10 in 2007 and then declined to its present level.
"Management's challenge is too maximize the value of its assets. One of Qwest's greatest assets, and biggest challenges, is its huge traditional landline telephone business. The landline business is in a slow but steady decline as customers move to wireless or Internet telephony.
David Einhorn has one of the better money management track records of anyone in the business and has also made headlines with his efforts to expose alleged fraud at Allied Capital (NYSE: ALD). If you haven't read his book on that company, it's probably the best investment title of the year.
Einhorn recently sat down for an interview with TheStreet.com (you can watch it below). He's long Target (NYSE: TGT) and Microsoft (NASDAQ: MSFT) but is still short some of the badly beaten down financial stocks and credit rating agencies. He's bearish on stocks that are trading at high multiples in anticipation of a second-half recovery, something he is "not so sure about."
While at the recent Digital Hollywood conference, I heard much talk about online video. And the main question was: How can you make money from it?
Well, Accenture (NYSE: ACN) is trying to find some ways. In fact, this week, the company agreed to purchase Origin Digital (the amount was not disclosed).
The privately-held firm calls itself a "global video applications service provider." That is, the company helps with the key elements of managing, syndicating and reporting digital content – across various platforms, such mobile, VOD, IPTV, broadband, and so on.
Accenture already has a Digital Media Service division. But, with Origin Digital, there will definitely be much more heft as well as opportunities for cross-selling.
All in all, this seems like a good fit for Accenture. After all, Corporate America realizes that online video has many benefits in terms of obtaining customers, education, and branding. Yet, it's a process that does require some deep domain expertise.
So you've been on the job for three years but the boss won't cut you a raise. Is that your problem, friend? Perhaps the solution to your problem rests in your own hands. If you can prove you're deserving of a raise in salary and you take the appropriate steps to get one, an increase in taxable income just might be in your future. Take a look at the following informative video to gain some insight on effective paycheck building strategy. If you employ the tactics discussed in this video, and you still can't get a raise, it might be time to seek a new employer. I believe that you have every right to expect appropriate compensation for exemplary job performance, even if that means getting it from a new company.
Here's a happy little video message for the leadership at the now defunct Bear Stearns. I thought of this as soon as I read the recent blog post by Michael Rainey regarding the Bear Stearns blame shifting game that's now going on. C'mon you guys, sit up and take your medicine like good kids do. You screwed up. Just admit it will ya?
Back in 2000, a variety of dot-coms – like Pets.com, LastMinuteTravel.com, Monster.com (Nasdaq: MNST) and so on – spent gobs of money on Super Bowl commercials. Of course, it marked the height of the bubble. Since then, upstart companies have been mostly afraid of producing commercials.
Hey, take a look at this classic ad from Pets.com (now defunct), during the 2000 Super Bowl:
But don't be afraid. While I'm not suggesting that you shell out $2.7 million for a Super Bowl ad, I still think things are different. After all, it's fairly cost-effective to advertise on local cable channels. What's more, online video is also surging.
So how can you crank out a top-quality 30-second spot?
Let's take a look:
Production: Technology is making it incredibly cheap to create commercials. "All you need is an Apple (Nasdaq: AAPL) Mac laptop and the iMovie software that comes with the computer," said Rob Frankel, who is the author of The Revenge of Brand X and has his own marketing firm. "And just about any MiniDV camera can produce broadcast-quality video."
That's all he needed to create this spot:
To spice things up, you can use stock footage and music clips (which may even be free). "A simple Google (Nasdaq: GOOG) search will find a lot of stock content," said Frankel.
Crafting the right message: It's temping to be too cute or cutting-edge when putting together a 30-second spot. Unfortunately, the result is that your audience ignores things – or is just confused. Some tips:
Focus on one idea (that's easy to understand). Clutter is your enemy.
Avoid special effects and location shoots.
Don't star in your own commercials.
"Notice that some of the best commercials these days offer one central image or theme with even stark or simplified backgrounds," Rachel Weingarten, who is the president of GTK Marketing Group. "It might be wiser to spend more on the concept and come up with a very clever and catchy phrase or theme or even sweepstakes or promo that can drive people to your website, retail location or some other call to action."
Google (NASDAQ: GOOG) CEO Eric Schmidt often says that the mobile frontier is the next biggest opportunity for Google. In terms of the math, he's correct: there are many more cellphones in use worldwide than PCs -- all it takes is to get customers accessing the web on their phones. So far, success has been mixed, however, Apple (NASDAQ: AAPL)'s iPhone is changing the game. iPhone users are going on the web constantly.
The web search giant has just taken a large leap in that direction, now that it has announced YouTube Mobile availability on millions of existing cellphones. The more customers that buy advanced, 3G-capable wireless phones, the more potential customers Google will have accessing YouTube content and even uploading videos directly from their handsets.
YouTube mobile product manager Dwipal Desia indicated, "It's basically the full YouTube experience you can get on the desktop -- on the phone." With YouTube easily the world's most popular online video property, can Google transfer this to the mobile arena in the next year or two? Getting customers to use YouTube Mobile is the largest barrier -- because once you've used it, it's hard to resist (from my experience, anyway).
Although Google referenced the iPhone and phones from service provider Helio, the company did say that the full YouTube video experience was not available on handsets from the second-largest wireless carrier, Verizon Wireless. The next step, of course, will be for Google to find out how it can monetize YouTube Mobile.
Comcast (NASDAQ: CMCSA) will bombard its customers with content. It is opening a new business that will offer its cable subscribers a massive library of films and TV shows that they can also watch on the internet. Comcast hopes to offer up to 6,000 movies.
According toThe New York Times, "Comcast is already the world's largest buyer of content, and it is spending about $4.5 billion a year to assemble content from around the world to offer on demand."
While Comcast's TV offerings will be only available to subscribers, its internet video site will be open to the public. But how does that help the company? Comcast is up against established internet video sites, ranging from YouTube to the higher end Hulu. There is abundant video material already on the web.
From a cable VOD standpoint, most consumers only watch the most popular films. Having thousands of extra films is hardly likely to bring in extra subscribers.
Douglas A. McIntyre is an editor at 247wallst.com.
Indicating reduced profitability in the video display market, Fujitsu (OTC: FJTSY) has announced its departure from the production of high end plasma televisions. This news comes via ars technica and is indicative of a major trending pattern. Much is astir among Japanese electronics manufacturers as companies there take a turn for the lean and are engaged in forming manufacturing power alliances.
Much is being affected by the near total domination of liquid crystal display technology within a tightening, yet deepening image display sector. Take further evidence of change by considering Brian White's post about the exit from rear projection television by Sony Corp. (NYSE: SNE). The LCD field is currently saturated and for it's improvement it needs to thin out.
Strides are still being made in regard to making LCD displays thinner and engineers are working on reducing power consumption. Little can be done however, to improve LCD profitability with so many companies cranking out cheap displays. What's needed now is for some of the remaining display manufacturers to aggressively address some considerable quality issues.
Gary Sattler does not knowingly hold financial interest in the companies he blogs about.
Best Buy (NYSE: BBY) has announced a new online video sharing and storage service. The new service, aptly -- and boringly -- named "Best Buy Video Sharing," is being launched in partnership with online hosting company Mydeo (which I suppose is a play on "My Video").
This new service must be geared toward customers who would utilize Best Buy for Business, the retailer's division that markets itself towards small- and medium-sized businesses. I say this because the cost of this new video sharing service -- $6.97 for 100 minutes of video hosting to start -- can't really compete with consumer-level services like Google (NASDAQ: GOOG)'s YouTube and Google Video, which are free.
But then again, many businesses have training needs and other unique needs that would require secure video hosting with long lengths (an hour or more), and this service would appear to be perfect for those needs. However, if Best Buy is trying to crack into the video content consumer distribution business, I fail to see what the point is. Will consumers readily pay for something when the competition gives it away for free? Is history holds, then most likely they will not.
Best Buy should market this new service to the business customer and de-emphasize it to the standard consumer. Whether it does this is anyone's guess.
When Sequoia Capital does a venture deal, people listen. The firm has backed such companies as Cisco (NASDAQ: CSCO), Apple (NASDAQ: AAPL), Google (NASDAQ: GOOG) and YouTube.
Well, Sequoia is making another play in the video space; that is, it has arranged a $4 million investment in TokBox.
With TokBox, you can make video calls – for free. Also, the platform is completely web-based. You don't even have to register for the service. There is also a cool feature that allows you to embed TokBox on a blog or social network.
I had a chance to interview Chase Norlin on the matter (he is the CEO and founder of Pixsy, which is a video search engine). According to him:
"Tokbox is in a very interesting space that has yet to produce a clear winner. The pioneer and current leader of the space is Paltalk, the main difference being that they're a downloadable app. The recent funding of TokBok brings back a lot of memories of eBay (NASDAQ: EBAY)'s Skype in the early days: Find a breakthrough technology, get mass distribution, then figure out how to monetize it later. Hopefully these guys will figure out that last part quicker than Skype has."
If you want to check out other venture fundings, click here.
Looks like Yahoo, Inc. (NASDAQ: YHOO) has put yet another feather in its cap, as the internet company will have its web browser toolbar distributed along with video player software from company DivX Inc. as of this week. DivX makes a very popular video compression codec technology that is used in millions of downloadable videos.
Yahoo!'s toolbar is how millions of Yahoo! users interface with the company's various offerings every day, since it is always visible and available on a customer's web browser. DivX had worked previously with Google, Inc. (NASDAQ: GOOG) for about two years, and the relationship was apparently still in good standing despite the change to Yahoo!. According to a DivX representative, "We had worked with Google for two years and it was a good relationship. The deal we had with Yahoo was the most attractive to us at this time."
In other words, Yahoo! probably offered more to DivX to be included as a co-brander of every download of DivX video player and authoring software, which is not surprising considering the large moves the Sunnyvale, California has made in the last month to start playing more firmly with internet search leader Google.
Is Amazon.com, Inc. (NASDAQ: AMZN)'s Unbox video download service worth a look for those wanting to get into video downloads outside of Apple, Inc. (NASDAQ: AAPL)'s iTunes product offerings? Depending on which products you may already have in your home, it very well may be.
Amazon's Unbox video service has been tweaked since I originally looked at it a few months ago, and now the service offers many free TV show downloads for use with your computer or portable media player (like the new Creative Zen), as well as movie and TV show downloads for your TiVo, Inc. (NASDAQ: TIVO) box.
While Amazon's Unbox video player program download doesn't feature all the niceties of Apple's iTunes, I'm not sure it was designed to. The program download, which facilitates content transfer to your PC, is very straightforward and incredibly easy to use. While not featuring music or podcast downloads, the program focuses on video content exclusively (for now). However, that may change soon, with Amazon recently unveiling that it's now offering 2+ million non copy-protected music downloads as well. Perhaps the Unbox player will feature music content soon? That would be my educated guess.