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Victor Cook

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  • Will Microsoft's Proxy Threat Force Yahoo!'s Hand? [View article]
    Maybe there's another alternative. See "Yahoo's Aduacious Option!" at customersandcapital.co...
    Feb 20 08:04 AM | Likes Like |Link to Comment
  • Did Microsoft 'Massively Undervalue' Yahoo? [View article]
    Ted,

    Thanks for your comment. I agree Yahoo! appears to have limited options, most of which are unattractive.

    Tomorrow evening I'll post an article, "Yahoo's Audacious Option!," which proposes taking the company on a different path to its future. I’d like to get your comments on that story before I post it. If you’re interested please send an email address to me. Thanks

    ~V
    Feb 16 03:53 PM | Likes Like |Link to Comment
  • Did Microsoft 'Massively Undervalue' Yahoo? [View article]
    User 127562,

    Those required multiples will depend in large part on how investors perceived the future value of Yahoo! cashflows given on the strategic direction management took to achieve optimal earnings. Will they not?

    ~V
    Feb 16 03:43 PM | Likes Like |Link to Comment
  • Microsoft Panics, Overpays For Yahoo [View article]
    Michael,

    And they don't need to shell out nearly $45 billion to fix a Selling & Marketing over-spend problem lives in Redmond's backyard. See my "Microsoft-Yahoo Deal: A Question of S&M Synergy" at seekingalpha.com/artic...
    Feb 4 11:42 AM | Likes Like |Link to Comment
  • Microsoft + Yahoo = No Longer a Recipe for Success [View article]
    Dana,

    Not a good recipe for success and besides, Microsoft doesn't need to spend $45 billion to fix their problem, because the source of that problem is in Redmond's back yard. See my post on "Microsoft-Yahoo Deal: A Question of S&M Synergy" at seekingalpha.com/artic...
    Feb 4 11:29 AM | Likes Like |Link to Comment
  • M&A Implications of Microsoft's Yahoo Bid [View article]
    Markos,

    There may be syngeries from a Yahoo! acquisition but Selling & Marketing are not among them. See "Microsoft-Yahoo! Deal: A Question of S&M Synergy." at seekingalpha.com/artic...
    Feb 4 11:19 AM | Likes Like |Link to Comment
  • Microsoft Takeover Bid for Yahoo! [View article]
    The underlying problem with this merger is the lion’s share of the redundancies Mr. Ballmer refers to are in his own backyard.

    In 2006 it cost Microsoft 18.8¢ more to generate a dollar in sales than it cost Google. Multiply that 18.8¢ times its sales revenues and you find that Microsoft had an $8.3 billion dollar problem. That's how much the company was over-spending on enterprise marketing in 2006 compared with Google. And it cost Yahoo 15.1¢ more to generate a dollar in sales than it cost Google. Yahoo had a $1 billion dollar problem. Combined there were almost $10 billion in redundancies at the companies.

    The combined R&D spending ($7.4 billion) and Selling, General & Administrative ($16.3 billion) expenses of MSFT and YHOO totaled $23.7 billion in 2006. So their redundancies relative to Google amounted to over 42% of total spending. And over 85% of those same redundancies belong to Microsoft. These could be reduced without shelling out $45 billion for Yahoo. For the details see my April 16, 2007 article “Microsoft’s $8 Billion Problem” at www.customersandcapita...
    Feb 1 11:13 AM | Likes Like |Link to Comment
  • Microsoft/Yahoo Deal Should Go Through [View article]
    And that's the $45 billiion question of the day, Thomas. The underlying problem with this merger is the lion’s share of the redundancies Mr. Ballmer refers to are in his own backyard.

    In 2006 it cost Microsoft 18.8¢ more to generate a dollar in sales than it cost Google. Multiply that 18.8¢ times its sales revenues and you find that Microsoft had an $8.3 billion dollar problem. That's how much the company was over-spending on enterprise marketing in 2006 compared with Google. And it cost Yahoo 15.1¢ more to generate a dollar in sales than it cost Google. Yahoo had a $1 billion dollar problem. Combined there were almost $10 billion in redundancies at the companies.

    The combined R&D spending ($7.4 billion) and Selling, General & Administrative ($16.3 billion) expenses of MSFT and YHOO totaled $23.7 billion in 2006. So their redundancies relative to Google amounted to over 42% of total spending. And over 85% of those same redundancies belong to Microsoft. These could be reduced without shelling out $45 billion for Yahoo. For the details see my April 16, 2007 article “Microsoft’s $8 Billion Problem” at www.customersandcapita...
    Feb 1 11:08 AM | Likes Like |Link to Comment
  • What Would a Combined Microsoft-Yahoo Look Like? [View article]
    The underlying problem with this merger is the lion’s share of the redundancies Mr. Ballmer refers to are in his own backyard.

    In 2006 it cost Microsoft 18.8¢ more to generate a dollar in sales than it cost Google. Multiply that 18.8¢ times its sales revenues and you find that Microsoft had an $8.3 billion dollar problem. That's how much the company was over-spending on enterprise marketing in 2006 compared with Google. And it cost Yahoo 15.1¢ more to generate a dollar in sales than it cost Google. Yahoo had a $1 billion dollar problem. Combined there were almost $10 billion in redundancies at the companies.

    The combined R&D spending ($7.4 billion) and Selling, General & Administrative ($16.3 billion) expenses of MSFT and YHOO totaled $23.7 billion in 2006. So their redundancies relative to Google amounted to over 42% of total spending. And over 85% of those same redundancies belong to Microsoft. These could be reduced without shelling out $45 billion for Yahoo.

    For the details see my April 16, 2007 article “Microsoft’s $8 Billion Problem” at www.customersandcapita...
    Feb 1 11:05 AM | Likes Like |Link to Comment
  • Dell, You Can't Make a Tune Out of Just One Note [View article]
    Peyton,

    I elaborate on the equation for maximum earnings potential in my August 8, 2007 post on "Morgan Stanley, Merrill Lynch and the Fable of Three Bears." Check it out.

    If you really want to dig in the dirt there's a link in that post to an audio slide show I did on "The Rule of Maximum Earnings," based on Chapter 5 in my book "Competing for Customers and Capital."

    If you still have questions, or want actually to apply this to a business, you should get your hands on a copy of my book, then go to Appendix A "Definitions and Derivations" pages 250-252 and code the expressions into a spreadsheet and test them on financial accounting data.
    Jan 31 04:03 PM | Likes Like |Link to Comment
  • Metrics For Measuring Dell's Magic Marketing Machine [View article]
    It,

    See my January 28, 2008 post "Dell, You Can't Make a Tune Out of Just One Note."
    Jan 31 03:48 PM | Likes Like |Link to Comment
  • If Only Dell Had Listened to the Numbers [View article]
    Good quesiton. The idea behind the Sun acquisition was to get entry into the IT departments of major corporations. This was required in order to allow individuals to buy machines online as if they were buying for their own use outside corporate firewalls.

    This in turn required design and installation of new accounting and control systems to manage end user buying decisions in place of centralized IT buying decisions. And that in turn would have required Dell to put in place the hardware and software support needed to service end users (Competing for Customers and Capital, pages158-59).

    Sounds far fetched I know. But it also seemed far fetched at the time that major supermarket chains would ever link their accounting and control systems to with P&G in order for both to better manage inventory costs. A drag on short run profits but with the potential for much greater volume and value creation in the long term.
    Jan 31 03:43 PM | Likes Like |Link to Comment
  • Is the Open Source Movement Good for Sun Microsystems? [View article]
    Very interesting analysis. In the same line of thinking another revealing metric lurks in the background of JAVA's performance. As well as that of DELL, HPQ and IBM. I call it "Enterprise Marketing Costs per Dollar of Revenue." For the most recent numbers, as well as ten quarter trends for all four companies, see my post: "Dell Can't Carry a Tune With Just One Note" at customersandcapital.co...

    Jan 29 11:58 AM | Likes Like |Link to Comment
  • Getty Images Confirms It's Up For Sale [View article]
    On December 31, 2005 Getty Images had a market cap of $5,558.4 million. Of this amount only $808 million were tangible assets. How far the company has fallen would make a great HBS case study. Since I don’t do case studies, the closest I can come to shedding a little light on Getty’s fall from grace is two early posts on my blog.

    The first was “Oil vs. Images” on October 25, 2007. This one draws some interesting comparisons between two generations of Getty companies and See:
    www.customersandcapita...

    The second was “The Value of Clouds in the Sky” on March 3, 2007. This one highlights the degree to which Getty Image’s market cap in 2005 was driven by intangible market value. See:
    www.customersandcapita...

    Jan 23 01:01 PM | Likes Like |Link to Comment
  • Microsoft's $154 Billion Question: Accounting For the Unaccountable [View article]
    Thanks for the clarification. I understand. But the point remains that the present value of its cash flows are driven not by tangible assets, but by those many other sources of value that are intangible. Pinning down the sources of that value is the purpose of my analysis of optimal SG&A spending ... what I call "enterprise marketing expenses." For the details see my audio slide show at breeze.tulane.edu/chap.../


    Dec 28 01:06 PM | Likes Like |Link to Comment
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109 Comments
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