"Did You Know? 3.0"

Simply fascinating video presentation here:

(Click for Video – Thanks, Bren)

"This Overload"

Presumably overwhelmed by heavy traffic, cnbc.com crashed today as the S&P 500 hit new 5-year lows.

Shortly thereafter the market turned and ramped higher.

Sometimes the best sentiment indicators are those you aren’t looking for.

Overload – Zappacosta

Source:
CBNC.com Crashes as the Market Plunges
Betsy Schiffman
Wired
November 13, 2008

I Love Google (Still Crazy After All These Years)

A little over three years ago I wrote a piece titled, “Everybody Loves Google.” At the time the stock was trading at $300 per share and, although I loved company, I couldn’t get behind the stock’s valuation:

You know a product has “made it” when it’s added to the popular lexicon. For example, we don’t use a bandage on a booboo; we use a band-aid. People don’t order a cola; they order a coke. And when we want to find more information about something we don’t say, “do an internet search.” We say “google it.”

Google has “made it.” People love the search engine. They also love the email and mapping services Google offers, too. I love the free software and hosting service Google offers for this blog.

And investors love the stock.

At the current price of $300 per share, investors love the stock enough to give it a multiple of over 80 times its earnings of the past 12 months. (This compares to roughly 30 times for Yahoo! and 25 times for Microsoft.) Jim Cramer, of CNBC’s “Mad Money” fame and a prominent Google-lover, recently argued that the stock is actually undervalued and should trade closer to $400 per share.

But I think that the most enlightening way of looking at Google’s valuation is to look at its total market capitalization of $82 billion. For purposes of comparison, let’s look at the valuation of a few other media companies.

Omnicom, the largest advertising agency in the world, carries a market cap of $15 billion. Gannett, publisher of 101 daily newspapers including USA Today and owner of 21 television stations, is valued by the market at $18 billion. Yahoo!, probably Google’s closest competitor, trades for $48 billion. Put all of these together and they still don’t add up to the current market value of Google.

Another interesting comparison can be made with Time Warner. Time Warner, one of the largest and most successful media companies in the world, carries a market capitalization of $77 billion, or $5 billion less than Google.

Remember that Google’s main business, its only real profit engine, is search (actually the advertising revenue attached to the search engine).

Time Warner, a media behemoth, owns, among other businesses, Warner Brothers and New Line Cinema, creators of the Lord of the Rings and Harry Potter movies. It also owns the HBO, TBS, TNT, CNN, CNN Headline News, the WB, and Cartoon Network television channels. In addition, the company owns Time Magazine, People, Sports Illustrated, Entertainment Weekly, Fortune Magazine and one of the largest cable television providers in the country. And I shouldn’t forget to include that other little internet company owned by Time Warner, AOL.

Comparing the two companies, any rational person would have to say that Time Warner is a much more valuable company simply for the diversity and competitive strength of their individual businesses. Or take our hypothetical conglomerate of Omnicom, Gannett and Yahoo! I can’t imagine anyone, besides madman Jim Cramer, truly believing that Google could be more valuable.

In contrast to Cramer’s $400 per share price target, John Hussman, one of the smartest investors I know of, has written that he can’t find any way Google should be priced over $30. This difference of opinion, of course, is what makes a market.

One of these guys, however, is wrong.

It comes down to this: either all of our comparison companies are drastically undervalued or Google is drastically overvalued. And if you believe the former to be true, I’ve got a boatload of stocks to sell you.

That doesn’t change the fact that Google has a great product. I love Google… just not its stock.

Well, I’ve since had a change of heart. Today, I bought the stock… at $300.

Three years ago I thought the stock price was crazy; today, with the stock price virtually unchanged (and after quadrupling revenues and adding over $10 billion in cash to the balance sheet), I’m crazy about it.

Still Crazy After All These Years (Album Version) – BarryBeckett

Jerry Yang’s New Book

Jerry Yang has now officially lost $30 billion for Yahoo! shareholders since telling Microsoft to take their $33-per-share offer and shove it back in May.

Frankly, I’m amazed that the board hasn’t canned this guy yet. Corporate governance is, indeed, dead.

"Are you a mac or a pc… or a complete idiot?"

This is the question that Microsoft seems to be asking in it’s latest ad campaign they famously recruited Jerry Seinfeld to promote.

While the popular mac commercials ask a simple, straightforward question, “are you a mac or a pc?” implying “are you cool or are you lame?,” these new Microsoft ads seem to have no message I can decipher other than Bill and Jerry are pc guys and, by the way, they are also complete idiots.

Microsoft doesn’t seem to realize that this is their game to lose. They already dominate most consumer tech markets. All they have to do is keep doing what they’re doing (stealing other companies’ successful product designs and using their dominance to own the market, (see the game console industry)) and avoid making major mistakes (Vista?).

Mac took a no name kid (Justin Long) and made him cool:

(Click for video)

Microsoft is taking the cool kid (Jerry Seinfeld) and making him look like an idiot:

(Click for video)

Hey, Microsoft, this ad campaign borders on major mistake territory.

"My Back Pages" – Wordled

Source:
http://wordle.net/

Making the "Gravedancer" Proud

From the L.A. Times:

When Sean O’Toole decided to make his fortune in foreclosures, he figured he would have five “partners”: death, disease, divorce, drugs and denial….

O’Toole capitalized on the five Ds in 2002, when the real estate market was taking off and foreclosures were few and far between. Rather than compete with thousands of speculators flipping new homes, he scoured property records to find distressed houses. Over the next few years he bought and sold 152 such properties.

Now, as foreclosures multiply across California and bargain-hunting investors are starting to snap them up, O’Toole has stopped trading foreclosed houses and is instead selling a sixth D: data.

O’Toole, 40, founded the website ForeclosureRadar.com last year. The site, he said, lists every default, auction and foreclosure in California. Such information is crucial to investors seeking properties to buy, and before Internet listing services such as ForeclosureRadar.com emerged in recent years, the information often required a personal visit to county records offices.

Rather than join the rush of those mining for gold in distressed real estate, O’Toole has set himself up as Levi Strauss once did. Instead of selling jeans to prospectors, though, he is selling foreclosure data to would-be buyers.

With partners like those, O’Toole seems less of a Levi Strauss and more of a Sam Zell.

Source:
Sean O’Toole’s got the details on California foreclosures
Peter Y. Hong
Los Angeles Times
June 8, 2008

Crackberry Addicts Get New Drug

From Clusterstock:

Good news for all you Crackberry addicts: Research in Motion (RIMM) and E*Trade (ETFC) are happy to bring you trading – by – Blackberry. Just don’t go and assume that this gives RIM an insurmountable advantage over its new competition, Apple’s iPhone (AAPL). No doubt trading deals are in the works for Steve Jobs’s tool, too.

Good story; better cartoon.

(Click through for audio)

Source:
RIM (RIMM) and E*Trade (ETFC) Now Allow Trading-By-Blackberry
Henry Blodget
Clusterstock
June 5, 2008

Dell Wins (By Screwing Customers)

Bloomberg reports:

Dell Inc. rose the most in five years in Nasdaq trading after profit and sales beat projections, signaling that Chief Executive Officer Michael Dell’s turnaround strategy is making progress.

The shares climbed as much as 9.8 percent after the second- largest personal-computer maker said sales advanced to $16.1 billion, exceeding the $15.7 billion average of analysts’ estimates compiled by Bloomberg.

Interestingly, however, the AP reported earlier this week:

A New York judge concluded Tuesday that the computer retailer Dell engaged in repeated false and deceptive advertising of its promotional credit financing and warranties.

Justice Joseph C. Teresi of State Supreme Court ordered Dell to disclose more clearly that most customers do not qualify for free financing or get “next day” repair service.

The New York attorney general, Andrew M. Cuomo, sued Dell last year.

“For too long at Dell the promise of customer service was a bait and switch that left thousands of people paying for essentially no service at all,” Mr. Cuomo said.

Amen.

Sources:
Dell Surges Most in Five Years on Turnaround Progress
Melita Marie Garza
Bloomberg
May 30, 2008

New York Judge Rules Against Dell in Suit Over Marketing
The Associated Press
May 28, 2008

EA execs playing too much GTA IV?

Electronic Arts, in Niko Bellic fashion, again extended its offer of “protection” to Take Two shareholders over the weekend:

Electronic Arts, the world’s largest video-game publisher, today announced its third extension of its tender offer for shares of Take-Two Interactive Software until June 16, continuing its attempt to acquire the publisher of one of the video-game industry’s most valuable products, the “Grand Theft Auto” series.

EA, though, said it would not raise its $2 billion bid.

EA’s bid now represents a discount to the current stock price – virtually unheard of in takeover deals (Yahoo! refused a 75% premium from Microsoft!). And for some reason EA execs don’t think that the offer of a takeunder for the company that just put out the biggest media release in history is unreasonable.

Sounds like they’re playing a little too much GTA IV:

(Click through for video)

Source:
EA again extends deadline on Take-Two offer
John Boudreau
Mercury News

A $500 Million Week for Grand Theft Auto
Matt Richtel
The New York Times