Ashkan Karbasfrooshan

Microsoft or Google Will Buy Twitter in 2010

Thanks James. Re: Wave, Google also invested a lot in Google Video but didn't hesitate to buy YouTube for $1.65B in stock. If you hear Sergey Brin, he is pretty open is saying "if someone comes to us re: M&A, we will consider it" so considering that both Evan Williams sold Blogger.com and Dick Costolo sold Feedburner to Google, I am sure thay know how to connect ;) - the question is, whether or not either had a good taste in their mouth after the sale and implementation to consider this.

Sure, the money would be nice, but I doubt either has a massive stake in the company, most of the proceeds would probably go to the money folks so maybe Evan, Dick and Biz really want to go big. Problem is, at their valuation, they need a massive AdSense like success... not sure "Premium accounts" will do the trick.


On Nov 23 10:01 AM James Beswick wrote:

> Great piece - many interesting points. I'd be really surprised if
> Google steps in here though, since it wouldn't jive well with Google
> Wave and they probably don't want to disturb the Justice Department
> monopoly people while they're busy sleeping over the banking situation.

Microsoft or Google Will Buy Twitter in 2010

Carlos, anything is possile but old media really lacks a) the stomach and b) the financial wherewithal to come up with the cash and their stock (as currency) isn't enticing to most of the backers here, I think.

On Nov 23 09:52 AM Carlos Navarro wrote:

> Thanks for distilling this down to the essence of Twitter's long
> term viability: revenue generation. At the end of the day, Twitter
> can only burn through other peoples' money for so long; at some point
> it has to convert into a true profit-generating machine which it
> has clear potential to do. I'm curious, however, whether another
> media company might have interest in Twitter; perhaps an old media
> company trying for one last "Hail Mary" try at reviving its media
> interests? Not sure -- but would enjoy hearing someone's response?
> Thanks. Carlos Navarro

Will Wall Street Buy Tim Armstrong's Plans for AOL?

Hampton, quite true. I think one of the main issues is "type" of content. TWX has great "super premium" video content and long form journalism articles that don't do quite as well online as traditional media would like.

And... I am guessing, but not sure the AOL editors want to push these either, as they see what kind of content works better.


On Nov 15 11:46 AM Hampton wrote:

> It is curious that Bewkes is focusing Time Warner on content, yet
> he is spinning off AOL which is now hanging its hat on content. Either
> he doesn't believe AOL will succeed or he just doesn't want to make
> the effort.

Will Wall Street Buy Tim Armstrong's Plans for AOL?

Wow, thanks for the kind words. Glad you enjoyed them. I still pen management/success style articles on HipMojo.com.

On Nov 15 08:05 AM GordonG wrote:

> Ash -
>
> 1. I loved your old success articles from askmen.com. they were
> an inspiration for my own success. almost every one was a masterpiece.
>
>
> 2. excellent analysis on AOL. as a long-suffering TWX shareholder,
> i hope they finally figure it out.
>
> Keep up the great work!
>
> BEST WISHES!
>
> G

Where Is the Online Video Advertising Revenue Going?

UB, it was eMarketer's own figures, which they recently scaled back:

www.emarketer.com/Arti...

Microsoft Adopts Adobe Flash; Scores Touchdown Against Apple

Mr. Bean you are right, not sure why it says Google...

Yahoo!'s Mismanagement Shows Through

@TheNoseKnows - $8? Once YHOO fell below $20/share, given the assets, revenue/profits and cash on hand, it was inevitable that someone saw this was an asset in distress that was undervalued and would make a move. It just so happens that MSFT beat a PE firm to it. And frankly, as many have stated, MSFT is the one who can reap most value out of the deal, and as such, can overpay. If MSFT would back away (they won't, because they're almost there), the stock would fall... but if it falls below $20, then guess what - someone will make an offer, again.

@Thomas - Once YHOO is publicly traded, it loses control.

Once YHOO fails to execute and hit the promises it lays out to investors, then it becomes vulnerable to a takeover.

That's what is happening here. This has nothing to do with choice. Jerry Yang chose to bring on Terry Semel, give him $500M in shares and evaporate 50% of the company's value. He's run out of choices. I am not speaking opinion there, I am speaking facts.

@Fedup - As per Flickr, it's moot. One of the many vestiges of Bubble 2.0 where we thought eyeballs = value. Flickr, like Webshots before it, is a nice tool or feature but not one that MSFT (or anyone else) will monetize.

In other words, MSFT is not interested in Flickr or Crappr or anything else the hippy love crowd (aka Silicon Valley) became enamorated with, they're interested with "the billboard" that is YHOO that Thomas referred to above.

All of this is part of a cleansing process that is well overdue. Again, I would love to see YHOO independent, heck, I rooted for that for 4 years... but in last week's analyst call, I could no longer in clear conscience support Jerry and Sue.

Yahoo!'s Mismanagement Shows Through

Even more arguments against outsourcing search to Google:

watchmojo.com/web/blog.../

My point: outsourcing search made sense in 2003 before the company bought Inktomi, Overture and spent billions on Panama. Now that it has spent billions and lost so much time, it would be accelerating its demise.

A sale to MSFT creates a strong #2 in online advertising, I would think. Google is not doing this for cloud computing as much as they are doing it to build an online advertising business.

Yahoo!'s Mismanagement Shows Through

I am neither a MSFT fanboy nor a critic, but I don't think that most people (users) care much who owns YHOO. Only people in the industry - be it finance, marketing, or tech industries - have such positive or negative biases.

Frankly, YHOO is a bit sloppy and buggy, with more resources it would be more robust.

Lastly, as an investor I will sell for the price MSFT ultimately acquires YHOO, I believe that might be more than $31, hence why I did not sell, but many have. As well, many have bought in expecting it to go higher.

Based on your comments you seem to be smart, but outsourcing search to Google is foolish. It only makes Google stronger, it only adds 25% more revenue now but over time Google will squeeze YHOO's margins (ask yourself if AOL is indeed stronger today than when it sold 5% to Google and powered its search with Google).

So long as YHOO is independent, it will be benchmarked to Google. And by handing off search to Google, it is showing that it has not learned from history and repeating the same mistake it did in 2000.

At least now YHOO is better positioned in Asia than Google (world's fastest market). Problem is: Yang and Decker are incompetent and dishonest. They don't know what they are doing.

I would vote FOR the sale to MSFT at a price higher than $31.

I would vote AGAINST the sale to MSFT if Decker and Yang - and many others - would resign which I doubt they will do.

All in all, outsourcing search to Google only weakens YHOO and strengthens GOOG. Google's offer showed just how self-serving Google is. It does nothing but further weaken YHOO, in my opinion.

Yahoo!'s Mismanagement Shows Through

Thomas, respectfully, if YHOO rejects the offer, then they owe shareholders an explanation of what their plan is to match the $31 share price. If it involves "time" then existing shareholders will ask for Yang, Decker et al.'s resignation.

If they reject simply to get MSFT to up its price, they better hope that the strategy pans out because regardless Sue and Jerry are due for a change of landscape.

I cannot understand how you can mismanage a company with YHOO's assets and brand, but Sue and Terry have done just that. One way or another, it's time to go.

Microsoft, Yahoo! Merger Makes Sense

Thomas - I've written so many articles blasting YHOO; investors would short the stock after reading those. My point is: if I write the odd article that suggests YHOO will always be an M&A target, please do not think it's got anything to do with owning shares. I'd argue I own shares because I think it will remain an M&A target, not the other way around!

David - I never said MSFT+YHOO is the optimal option for YHOO, I simply said this makes sense, the best pick is to go private (though with a more expensive interest rate this is less likely), gut the senior levels of management, reposition and spin off in an IPO in 3 years or so. That would almost triple the value but the bulk of the upside would not be at current investors' benefit, Thomas!

Frank - GOOG bought YouTube once it became clear Google Video had little traction... for example. So while I get your point, I think ultimately YHOO and MSFT might realize a merger makes sense because GOOG - whose shares I do NOT own - is running away with online ads...

aQuantive/Microsoft Clears Anti-Trust Hurdle, AQNT Gains $1B

Alan, Thanks for the clarification. Though technically, AQNT rose from $5.03B to $5.19B, the headline was an editorial addition (not mine). My post had little with the gain based on market cap, solely based on price change movement.

Is It Time For Apple and Microsoft to Buy Music Labels?

ET - that's why we write. And trust me, you probably have a higher regard for the labels (mgmt) than I do.

Thomas - Schmidt must having such a blast being one step ahead of MSFT after his experiences at Sun and Novell. Karma in full swing. Apple/Google? Maybe this calls for a "Should Apple and Google merge" article?

Just kidding, I think.

Is It Time For Apple and Microsoft to Buy Music Labels?

Et, no worries re: typos.

You are aware, that if I would have added an extra layer in terms in the profit and cost contribution of iTunes then the post would have been 3,000 words, right? Your breakdown was as long as my post!

The simplified answer is: Apple's margins are practically nil on iTunes, and yes, there are other costs but since a major argument of mine is that as unit sales increase, then *digital content* is practically all profit... We're not really talking about old style music publishing, I'm referring mainly to digital sales.

So to make things simple: I simply said: 2B unit songs sold x $1/song = $2B in revenue.
But to (my crime) make it simple, assume right now, Apple keeps 0%, so it's $2B in revenue that goes out the door. But if it owns it, and goes digital, then it would retain a large chunk of that revenue.

Again, this was a simple math exercise, food for thought kind of argument.

Yes, the post is called: "should Apple/MSFT..." but I also wrote "what is Wikipedia's valuation," it's a hook, all headlines have a hook.

You seem to be well versed in music, when Elton John sings The Bitch is Back, he's not talking about a dog, it's a figurative sense (all right bad one).

Seeking Alpha (this is NOT a knock) are the most literal readers out there!

Anyway, you do seem to have a lot of good insight into the music business. I'm writing a book called Context is King, talks a lot about digital music and why the labels flopped, if you'd like to chime in (something tells me you do), feel free to contact me.

Is It Time For Apple and Microsoft to Buy Music Labels?

The Seeking Alpha faithful never cease to amaze me.

If one is to say this is "rubbish," it should be based on "In 1991, the companies agreed to share the trademark of the term, Apple, but Apple Computer was forbidden to use the name in any use "whose principle content is music".

But, the companies entered a new agreement this year:
www.apple.com/pr/libra...

So I don't see why Apple's new-found economic muscle would not allow it to sign a new agreement.

*BUT*

once again, this article is 100% about financial engineering... it's (I hate to use the term) a "thought exercise" like when last year I said "What would Wikipedia be worth if it were a for-profit?"
www.watchmojo.com/web/...

I was not clearly saying Wikipedia should be a for profit... I was asking what's it value.

That's the angle of the blog etc., if you don't like it, don't read it!