Microsoft Corp. and Yahoo! Inc., whose Internet-search agreement is under antitrust review by the U.S. Justice Department, received backing from the biggest advertising agencies and a trade group that represents them.
Chief executive officers from WPP Plc, Interpublic Group of Cos., Publicis SA and Omnicom Group Inc. signed a letter to the Justice Department saying the combination “is good for advertisers, marketing services agencies, Web site publishers and consumers.” The group asked regulators to bring their review to “a speedy conclusion.”
The companies need to convince the agency, which last year scuttled a search agreement between Yahoo and market leader Google Inc., that the deal doesn’t constrain competition. Microsoft said last month that the Justice Department had expanded its review of the deal, in which Yahoo agreed to use Microsoft’s Bing search engine on its Web sites.
The letter came from Nancy Hill, CEO of the American Association of Advertising Agencies, and was posted on the group’s Internet site.
The 10-year agreement also would have Yahoo selling ads next to search results from both companies. Microsoft and Yahoo are arguing their combination is needed to create a viable competitor to Google.
Market Shares
Microsoft, based in Redmond, Washington, fell 14 cents to $26.36 at 4 p.m. New York time on the Nasdaq Stock Market. Yahoo, based in Sunnyvale, California, added 41 cents to $17.22. Google, in Mountain View, California, rose $2.24 to $552.09.
Google had 64.9 percent of U.S. Internet search traffic in September, according to research firm ComScore Inc. in Reston, Virginia. Yahoo and Microsoft had 28.2 percent combined. Outside the U.S., Google has an even bigger lead.
In November 2008, Google walked away from a planned search deal with Yahoo after the Justice Department said it would sue to stop the alliance. That agreement was opposed by the Association of National Advertisers, a trade group that represented companies like Wal-Mart Stores Inc. and General Motors Corp.
Monday, October 19, 2009
Activists snare media with Chamber of Commerce hoax
An activist group seeking to draw attention to the debate over climate change policy staged a hoax on Monday, posing as representatives of the U.S. Chamber of Commerce.
The Yes Men group issued a press release and held a news conference at the National Press Club, purporting that the business group had decided to support climate change legislation currently before the U.S. Congress.
A spokesman for the Chamber of Commerce broke into the news conference, alerting media to the hoax, but Reuters and other outlets had already issued reports.
The Chamber said it would ask police to investigate.
"Public relations hoaxes undermine the genuine effort to find solutions on the challenge of climate change," Thomas Collamore, a spokesman for the Chamber of Commerce, said in a statement.
"These irresponsible tactics are a foolish distraction from the serious effort by our nation to reduce greenhouse gases."
Reuters issued a correction to its report as soon as it confirmed the hoax and subsequently withdrew the story and sent an advisory to readers.
The Yes Men group issued a press release and held a news conference at the National Press Club, purporting that the business group had decided to support climate change legislation currently before the U.S. Congress.
A spokesman for the Chamber of Commerce broke into the news conference, alerting media to the hoax, but Reuters and other outlets had already issued reports.
The Chamber said it would ask police to investigate.
"Public relations hoaxes undermine the genuine effort to find solutions on the challenge of climate change," Thomas Collamore, a spokesman for the Chamber of Commerce, said in a statement.
"These irresponsible tactics are a foolish distraction from the serious effort by our nation to reduce greenhouse gases."
Reuters issued a correction to its report as soon as it confirmed the hoax and subsequently withdrew the story and sent an advisory to readers.
Apple Profit Surges on iPhone Sales
Apple Inc. continued to power through the recession as it posted a 47% quarterly profit jump as consumers continued to snap up its iPhones and Macintosh computers.
The company also sounded an upbeat note for the holiday season, despite new competition in the smart-phone and PC markets. Shares of Apple surged more than 6% after the results were released, eclipsing $200.
Apple sold 7.4 million iPhones in the quarter ended Sept. 26, up 7% from a year ago and 41% more than the previous quarter, bucking concerns of a supply constraint. Demand was fed by a price drop and a faster iPhone model announced in June, which it has been gradually rolling out in overseas markets.
"We feel very, very good about suiting up and competing against anyone," Tim Cook, Apple's operating chief, said on a conference call. "Frankly, I think that people are really just trying to catch up with the first iPhone that was announced two years ago, and we've long since moved beyond that."
Apple also sold 3.1 million Macintosh computers in the quarter, up 17% from a year earlier, as it continued to gain ground on Windows-based machines. In the quarter, Apple released Snow Leopard, a major upgrade to its Mac operating system, and it said initial sales have been double that of the previous upgrade two years ago. Microsoft Corp. will release a new version of its rival software, Windows 7, this week.
While Wall Street had feared that expectations for Apple's earnings could be too high, the results exceeded even the most optimistic expectations. "I'm shocked," said Kaufman Brothers analyst Shaw Wu.
Overall, Apple reported a fiscal fourth-quarter profit of $1.67 billion, or $1.82 a share, compared with $1.14 billion, or $1.26 a share, a year earlier. Its gross profit margin rose to 36.6% from 34.7% a year ago. Revenue increased 24% to $9.87 billion from $7.9 billion a year earlier.
Apple's strong results appear to indicate that overall consumer spending is recovering. Other technology companies have also recently posted positive earnings, including Intel Corp. and Google Inc.
"This quarter really signals that we're coming out of the trough," said Gene Munster, an analyst for Piper Jaffray. "You don't see too many blow-out quarters like that, especially when you're the size of Apple."
Apple's shares, which have nearly doubled over the past year, rose 6.1% to $201.50 in late trading, after closing up about 1% at $189.86 on the Nasdaq Stock Market.
For the current quarter, Apple's forecast for earnings and profit were less conservative than in the past. The company projected per-share earnings of about $1.70 to $1.78 with revenue between $11.3 billion to $11.6 billion.
The company also sounded an upbeat note for the holiday season, despite new competition in the smart-phone and PC markets. Shares of Apple surged more than 6% after the results were released, eclipsing $200.
Apple sold 7.4 million iPhones in the quarter ended Sept. 26, up 7% from a year ago and 41% more than the previous quarter, bucking concerns of a supply constraint. Demand was fed by a price drop and a faster iPhone model announced in June, which it has been gradually rolling out in overseas markets.
"We feel very, very good about suiting up and competing against anyone," Tim Cook, Apple's operating chief, said on a conference call. "Frankly, I think that people are really just trying to catch up with the first iPhone that was announced two years ago, and we've long since moved beyond that."
Apple also sold 3.1 million Macintosh computers in the quarter, up 17% from a year earlier, as it continued to gain ground on Windows-based machines. In the quarter, Apple released Snow Leopard, a major upgrade to its Mac operating system, and it said initial sales have been double that of the previous upgrade two years ago. Microsoft Corp. will release a new version of its rival software, Windows 7, this week.
While Wall Street had feared that expectations for Apple's earnings could be too high, the results exceeded even the most optimistic expectations. "I'm shocked," said Kaufman Brothers analyst Shaw Wu.
Overall, Apple reported a fiscal fourth-quarter profit of $1.67 billion, or $1.82 a share, compared with $1.14 billion, or $1.26 a share, a year earlier. Its gross profit margin rose to 36.6% from 34.7% a year ago. Revenue increased 24% to $9.87 billion from $7.9 billion a year earlier.
Apple's strong results appear to indicate that overall consumer spending is recovering. Other technology companies have also recently posted positive earnings, including Intel Corp. and Google Inc.
"This quarter really signals that we're coming out of the trough," said Gene Munster, an analyst for Piper Jaffray. "You don't see too many blow-out quarters like that, especially when you're the size of Apple."
Apple's shares, which have nearly doubled over the past year, rose 6.1% to $201.50 in late trading, after closing up about 1% at $189.86 on the Nasdaq Stock Market.
For the current quarter, Apple's forecast for earnings and profit were less conservative than in the past. The company projected per-share earnings of about $1.70 to $1.78 with revenue between $11.3 billion to $11.6 billion.
Monday, October 12, 2009
Cost Cuts Lift Profits But Hinder Economy
U.S. stocks notched new 52-week highs again on Monday, thanks to corporate America showing better-than-expected profits. But that optimism belies deep worries among company executives about the strength of the economic recovery.
Tool maker Black & Decker Corp. said earnings this quarter will be roughly twice its earlier forecast, while Dutch consumer-goods conglomerate Royal Philips Electronics NV also reported an unexpected profit. The Dow Jones Industrial Average rose 20.86 points to 9885.80, its highest since Oct. 6, 2008. The S&P added 4.7 points to 1076.19.
Freight tonnage at YRC was down 35.3% from a year earlier in the second quarter. Mr. Zollars says he hasn't seen his clients, who range from retailers to heavy industry, doing much restocking to prepare for increased business.
In coming weeks, the details of earnings reports -- including items such as capital expenditures, as well as revenues for companies that sell capital goods -- will demonstrate the extent to which executives are turning their relative optimism and cash into actual investment.
Novartis, Vanda in drug deal worth up to $265M
Novartis Pharma AG and Vanda Pharmaceuticals Inc. said Monday that they reached a deal worth up to $265 million that gives Novartis exclusive rights to sell Vanda's schizophrenia drug Fanapt in the U.S. and Canada.
The deal amends an earlier agreement between the companies. Under its terms, East Hanover, N.J.-based Novartis, an affiliate of Novartis AG, will be able to distribute an oral tablet form of the drug in both countries. It will also be responsible for clinical development in both countries, such as developing and selling a long-acting injectable form of Fanapt.
Rockville, Md.-based Vanda will keep the rights to sell Fanapt in an oral and injectable form outside Canada and the U.S.
Bank of America Set to Reveal Merrill Advice
In a stunning reversal, Bank of America’s board has voted to reveal the legal advice that the bank received late last year about its merger with Merrill Lynch, according to three people briefed on the matter.
After six months of digging in its heels, the bank is expected to provide legal documents that could shed light on how its lawyers advised executives to deal with the disclosure of key information about losses and bonuses at Merrill Lynch to the bank’s shareholders.
With a stroke of a pen, the bank’s decision will remove a stumbling block in a wide range of cases. The documents may exonerate bank executives, like its retiring chief, Kenneth D. Lewis, or may provide the evidence that some investigators are seeking to lay blame at individuals’ feet.
The bank has refused to allow its attorneys to answer questions about many aspects of the deal, even as pressure to do so surged from many corners. Some of the pressure came from lawmakers in Congress and regulators who are deciding whether to allow Bank of America to return part of the $45 billion it received in bailout funds — an outcome the bank has been urgently pursuing.
Hong Kong stocks finish lower, ending 5-day rally
Hong Kong stocks reversed opening gains to close down 200.09 points, or 0.93 percent, at 21,299.35 on Monday, tracking losses on the Chinese mainland market and ending a five-day rally of the Hang Seng Index.
The benchmark index opened at the day's high of 21,623.33, but reversed early gains later. It once dipped to as low as 21,262.71 during the day's trading.
Turnover fell to a rather modest 44.18 billion HK dollars (5.71billion U.S. dollars) from Friday's 62.23 billion HK dollars (8.04billion U.S. dollars).
The benchmark index opened at the day's high of 21,623.33, but reversed early gains later. It once dipped to as low as 21,262.71 during the day's trading.
Turnover fell to a rather modest 44.18 billion HK dollars (5.71billion U.S. dollars) from Friday's 62.23 billion HK dollars (8.04billion U.S. dollars).
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