bloggingstocks:msft

The devil made him do it. Or maybe it was Bill Gates.

No matter. The internets are having a jolly mock-fest over a man who took brand marketing to an alarming plateau. Our sister site Engadget is a-twitter over the happy Microsoft Zune fan who got not one, but two Zune logos tattooed on his beefy arms.

With the amount of chatter going on about this chap, you might think he'd be in for his 15 minutes of fame as a sort of underground Zune spokesman. But there are a few problems:

Microsoft Corporation (NASDAQ: MSFT)'s MP3 player Zune is widely seen as a decided also-ran next to the ubiquitous Apple Inc. (NASDAQ: AAPL) iPod. And even though Microsoft hired college students to help flack Zune during its launch late last year, there are certain tacit rules when it comes to using people to help promote a brand: One of them is that they gotta seem cool and attractive to other people.

In other words, not big-'n-geeky and living in your parents' basement. That sort of endorsement doesn't exactly help Zune's cause.

The fan in question is flying out to Microsoft's Seattle headquarters in July. Maybe the company should pay him not to do it any more favors.

Microsoft Corp. (NASDAQ:MSFT) does not want Apple Inc.'s (NASDAQ:AAPL) Mac owners to run the Windows Vista operating system on those machines, reversing a decision made just this week. In the "virtualization" world, Microsoft's current Windows XP computer operating system can be run inside of a "virtual software" environment on current Apple MacIntosh computers so that Apple fans can use those stylish Apple systems with Apple software but can still access the Windows environment for certain things (like work email or running Windows-only applications).

That arrangement works pretty well for the Windows XP operating system on current (or even older) Mac computers, but Microsoft has now said that it will only allow the bare-bones Windows Vista "Basic" operating system to be used in this virtual Apple Mac environment. Vista versions such as the "Premium" or "Ultimate" won't be allowed to be used with "virtualization" software at all on Apple systems.

However, with Apple systems now using Intel CPUs, installing Windows Vista alongside the Apple Mac operating system without this kind of "emulation" is no problem. Basically, Microsoft does not want customers using the nicer versions of Windows Vista on older Apple Mac machines made before Steve Jobs decided to use Intel chips in all Apple Mac systems.

Will this hurt the adoption of Microsoft's Windows Vista operating system growth? Probably not, but this move signals that Microsoft would like most Windows Vista customers to use non-Apple machines, like the commodity PCs from vendors like Dell, HP and Acer. Surprised? I'm not.

[Disclosure: I own MSFT shares as of 6-22-07]

General Electric Co. (NYSE: GE) and Pearson Plc. (NYSE: PSO) came to their senses and dropped their plans to bid for Dow Jones & Co. (NYSE: DJ) all but assuring that Rupert Murdoch's News Corp (NYSE: NWS) will eventually own the publisher of the Wall Street Journal.

The companies realized that Murdoch is an uneconomic competitor. His $5 billion bid for the New York-based media company is ridiculous. No sane company would try to match him and the media tycoon knows it.

Murdoch is motivated by power as much as money. He won't care if the returns on Dow Jones aren't fantastic as long as he gets to control one of the most influential media outlets in the world. Money in Murdoch's case really is no object.

Speaking of money, New York Mayor Michael Bloomberg is dipping his toe in the presidential campaign so Wall Street is wondering yet again whether he will sell his financial data and media company Bloomberg LP, where I worked for seven years.

There's been talk about whether the billionaire politician will sell the company for years. The top management dismissed some of the more ludicrous speculation including talk of a buyout by Microsoft Corp. (NASDAQ: MSFT). BreakingViews discussed the issue in a piece posted on the Wall Street Journal Web site, pointing out that an acquistion of the media company would be difficult.

The one point that the story missed was that Bloomberg LP really likes being a private company. I doubt that the company would have ever started a cable TV channel or bought a radio station if it were public but these were things Mike Bloomberg thought were important so they were done.

If Bloomberg gets acquired -- and I don't think it will happen -- it will be a private equity company.

In what looks like a strategy from 1998, Microsoft Corp. (NASDAQ: MSFT) has announced that it's taken a $12 million stake in a Chinese television set manufacturer, Changdong, so that both companies can jointly develop entertainment products linking television and the Internet. That, umm, sounds so last century that it isn't even funny. Remember WebTV, Microsoft?

But this time there is a slight twist to the story. The web is rapidly becoming the mode of choice for distributing movies, music and other entertainment content. Part of Apple Inc. (NASDAQ: AAPL)'s strategy right now with iTunes is to make it a one-stop shop for television shows, recent movies and an entire universe of music available just by using a mouse click and, of course, and Apple iPod. Add the newer AppleTV into the mix, and you're now allowing all that same content to be served right up to newer TV with a simple remote and a high-speed internet connection.

So, perhaps Microsoft's strategy here is to go beyond the current Xbox entertainment content channel and try to bridge this newer distribution model with television content using a TV set maker as a partner. Microsoft, though, has done this before and the resultant splintering of manufacturers, difference in user interfaces and inconsistent user ecosystems caused chaos over time. Apple gets it, though -- the company provides a unified, branded and incredibly easy-to-use front for all this content, whether you're loading it from a PC onto an iPod or downloading that same content to your TV set with a remote control.

Sony's (NYSE: SNE) chairman Howard Stinger is predicting that 380 video games that work on the new PS3 will be released over the next year. He believes that this huge influx in content will help raise the sales of the flagging game platform. He is clearly right that the scenario would be better than if the PS3 had no games at all.

But the PS3 is being outsold by the Nintendo Wii by very large margins in the US, Europe, and Japan. In most of these regions, the Microsoft (NASDAQ: MFST) Xbox 360 also sells more units than the PS3. The situation is so bad that Nintendo's market cap is getting close to being as large as Sony's, demonstrating investor confidence that the surge in Wii sales will continue.

The one flaw in Stringer's logic is that more games for the Xbox and Will will also be released over the next year. So, the influx in content for the PS3 may simply keep it competitive.

And, with low sales, simply being competitive may not be enough.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Call it Google (NASDAQ: GOOG) de-personalized, un-personalized, non-personalized or just Google without personalized results. Any way you phrase it, the concept is the same. There is apparently already a plug-in available which will bypass Google personalized search results for you. Take a trip into the blogs using the keywords, Google and personalized, and you'll likely find what you seek there.

As soon as Google initiated its personalized search function, I noticed (and disliked) the results. You see, our household PC serves dual functions and Google's personalization efforts have had a slightly negative impact on the utility of it. During the day, my wife uses the computer for her online retail endeavors. She often spends time searching suppliers, searching competitors, searching trends and the like. However, when I get on the machine later at night, I'm looking for stock tips, news items, financial blogs and other hot topics. What happens is that each day, depending on the intensity of the other person's prior use, the Google personalization feature has tainted the field for the subsequent user.

If you also are having difficulty dealing with the way Google has chosen to sculpt your search results, go ahead and cruise the blogs to find that plug-in. If you're like me and you don't mind hard keying a bypass when you go into Google search, try typing &pws=0 after the URL for your search term. I'm told that works also.

I do have one thing to state in support of Google related searches. At least its search utility still works on our machine. For some odd reason, which remains a mystery to me, Yahoo! (NASDAQ: YHOO) image searches have taken a particular dislike to our machine or the Microsoft (NASDAQ: MSFT) software on it. Every time we try to move harvested images from the internet into our archives via Yahoo!, the Yahoo! search not only blows us out of the search pages but it closes our browser in the process. As of yet, I have not tested our image links from Flickr and the jury remains out on Yahoo migrations to Photobucket.

Google's (NASDAQ: GOOG) M&A pursuit continues. The latest purchase is for Zenter, which provides PowerPoint-like presentations online. It's slick software.

Of course, there's lots of buzz that Google wants to take a big chunk of Microsoft's (NASDAQ: MSFT) highly lucrative franchise, Office.

But is that really the case?

I had a chance to interview Robert Hoffer, who is a managing director of Newforth Partners.

"There's no doubt that Google Docs wants to be the Microsoft application killer, but what Google is really buying when they purchase these firms is the talent. And that's the name of the game.

"It's not about just taking 20 year old legacy applications such as spreadsheets, word processors, and Powerpoint and putting these ancient apps into the browser. It's about adding unique features and functionality that take the usage of these apps to the next level - the level that being online makes uniquely possible, such as file sharing, group editing, publishing, notifications, revision tracking, document archiving, mashups, etc.

"Microsoft's approach - Microsoft Live - is going to be hard pressed in the consumer space to compete with Google, but Google is going to be hard pressed to compete in the enterprise space with Microsoft."

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

MAJOR PAPERS:

• The Wall Street Journal reported that Toyota Motor Corporation (NYSE: TM), which launched a factory-building blitz five years ago, is now being urged by senior members of the founding family to stop building factories in the United States on fears it will hurt the company's efficiency.
• Kirk Kerkorian, who controls MGM Mirage (NYSE: MGM), had planned to buy the Bellagio Hotel and Casino and the $7.4B Project City Center from MGM. But that deal now appears to be off, according to the Wall Street Journal.

OTHER PAPERS:

• The U.K. Times reported that News Corporation (NYSE: NWS) has had preliminary talks with Yahoo Inc (NASDAQ: YHOO) about giving its social networking site MySpace to the online search company, in exchange for a 25% stake in Yahoo!.
• The New York Times reported that NYC Mayor Michael Bloomberg will leave the Republican Party and register as an Independent.
• The New York Times also reported that Microsoft Corporation (NASDAQ: MSFT) will pay Take-Two Interactive Software (NASDAQ: TTWO) $50M for two exclusive downloadable episodes of Grand Theft Auto for the Xbox 360.

Main market news here.

According to the Times Online, News Corporation (NYSE: NWS) has discussed swapping MySpace with Yahoo! Inc. (NASDAQ: YHOO) in return for a 25% stake in the enlarged group. With Yahoo!'s market cap around $37 billion, that would put the value of MySpace around $11 billion, not a bad deal for Murdoch who bought MySpace for $580 million less than two years ago. Yahoo! also signed a deal with six mobile operators in Asia to make it the default portal. YHOO shares are up 1.3% in pre-market trading (7:51 a.m.).

Very much unlike Microsoft Corp. (NASDAQ: MSFT), the software giant has bowed to pressure from Google Inc. (NASDAQ: GOOG) and antitrust regulators and make it easier for Windows Vista users to pick a non-Microsoft program to search their hard drives. Manufacturers will be able to set a different program such as Google Desktop as the default instead of Vista's "Instant Search."

Wal-Mart Stores Inc. (NYSE: WMT) said it would today unveil plans to expand its current financial services business that currently includes check cashing, money orders and money transfers. The expansion plan includes opening 1,000 Wal-Mart MoneyCenters, which will offer low-cost money services like check cashing and money transfers, by the end of 2008 and selling prepaid Visa debit cards that don't require a credit check or bank account.

Nokia Corp. (NYSE: NOK) unveiled a new corporate structure. Starting 2008, Nokia will be organized through three lines: devices, services and software, and markets. Nokia wants to align its company to the conversion of mobile phones and internet. NOK shares are up 1.8% in pre-market trading (8:07 a.m.).

According to the The Wall Street Journal Online, top executives at Toyota Motor Co. (NYSE: TM) are concerned the automaker has built too many factories in the United States and are urging a new strategy of greater reliance on exports from Japan, meaning stepping back its U.S. factory expansion.


Notable analyst calls:
Home Depot (NYSE: HD) was upgraded by Stigel Nicolaus from Hold to Buy and a $50 target price.
Anheuser-Busch (NYSE: BUD) was downgraded by AG Edwards from Buy to Hold.

Google (NASDAQ: GOOG) has complained to the Justice Department that Microsoft's (NASDAQ: MSFT) new Vista operating system made it difficult for companies to run desktop search functions on the system from the world's largest software company.

Rather than put up a fight over the antitrust implications, Microsoft has made changes to Vista to avoid a battle with both federal and state governments. The Justice Department and seventeen states have agreed to Microsoft's solution to the problem.

Perhaps Microsoft is getting wise in its old age. Or, perhaps it is getting timid. The company has been hit with antitrust actions in Europe and the U.S. over matters that range from using its operating system to give its internet browser advantages over Netscape to harming RealNetworks (NASDAQ: RNWK) by pushing the Window Media Player with its operating system. Microsoft ended up paying billions of dollars in fines and settlements.

The news certainly represents a change for heart. Microsoft has gotten out in front of the problem rather than waiting to fight an accusation brought by a government agency.

For better or worse, this is a new Microsoft.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Are you concerned about the amount of time you or a loved one spend playing video games? You aren't alone – the American Medical Association is too. In fact, they were so concerned they commissioned a study of the possibility of video game addiction.

In a conclusion that might concern the industry, including Electronic Arts (NASDAQ:ERTS), Playstation maker Sony Corp ADR (NYSE:SNE) and xBox's Microsoft (NASDAQ :MSFT), the study raises serious concerns about the pastime.

That concern falls into two categories – the first, the potential for game activities to shape the non-game behavior of participants, hearkens back to the long-running concern over television violence. The AMA study points to a number of small studies that find a causal link between violent games and the aggressive behavior of those who play them. However, it also recognizes that industry-sponsored studies found no such link.

2001 was a long, long time ago. In the ever-evolving world of technology, six years can be measured in dog-years: one dog year equals seven human years. Terry Semel rode in to Yahoo! (NASDAQ: YHOO) as the savior, the professional manager who would move this absolutely cool company to the next level. The space was evolving and revolving in a huge way. Nobody could even put a bona-fide growth rate on the internet search/ marketing/advertising/communication field. Semel thought he had entered a marathon.

In 2001, Google (NASDAQ: GOOG) was only three years old, as the company was founded in 1998. The secrecy surrounding Google was legendary, yet weird. Google was formidable, but it was also private. Numbers were never confirmed, but people in the know whispered Google was catching Yahoo and knocking it from its premier position. Google was gathering headlines and believers while Yahoo! was reporting good, not great, or consistent quarterly numbers. The technology media and its close-followers knew Google was catching Yahoo!, it was only a matter of time.

The world realized in 2004 that Google was also running a marathon, but with a sprinter's speed. Google completed its initial public offering in August 2004 and was crowned the winner: game, set and match. Immediately, the market propelled Google to a market capitalization that has surpassed Yahoo!'s. As of this writing, Yahoo! is a faint figure in Google's rear view mirror. Google is worth $160 billion while Yahoo! is a respectable $37 billion.

Nintendo Co., Ltd (ADR) (OTC: NTDOY) has taken the gaming console world by storm with a combination lower-price and highly-interactive "Wii" gaming platform that has sent Microsoft Corporation (NASDAQ: MSFT) Xbox 360 and Sony Corporation (ADR) (NYSE: SNE)'s PlayStation 3 to the back of the line since late in 2006. Nintendo seems to have a knack for paradigm shifting, as its $250 Wii gaming system combines high levels of physical player interaction along with a highly-enjoyable gaming experience. It's not the most technologically-advanced gaming system out there, but Nintendo seemed to know (before anyone else) that geek-specs like graphics and polygon count mean very little if the games themselves don't draw players into the environment. It's like the difference between watching a movie on a 19-inch TV screen and seeing a Broadway play from the tenth row (you get the idea).

Nintendo, though, is not resting on its laurels as Microsoft is wooing moms and others with more family-friendly games as well as making it easier to find gaming titles meant for younger audiences via re-vamped in-store displays. Yes, there are more markets for gaming outside of the teenage and twenty-something male set. Surprised?

This is precisely what Nintendo did with the launch of the Wii gaming console back in November of last year, and that strategy has worked perfectly for the Japanese company. By appealing to more of a mainstream audience (like sports players, parents and even the elderly), the market for Nintendo's Wii goes far past the tech-gamer set that higher-end gaming consoles generally try to court right out of the door. Contrast this to Sony's PlayStation 3, which is so advanced and pricey, it's cornered itself into a severe niche -- and the niche market where it's lumbering is just not enough (yet) to get it selling where Sony can actually make some money with the thing. Maybe it never will, although the original PlayStation consoles took years to build their own highly successful franchises. Nintendo, though, has already built its "Wii" little empire and it's getting larger by the month.

Finally, Yahoo! Inc. (NASDAQ: YHOO) has ditched its CEO Terry Semel, according to MarketWatch. And the new CEO is Jerry Yang, a co-founder of the company. Former CFO, Susan Decker was named president, positioning her for a chance to take over the top slot.

It is beyond me why Semel held onto his job for so long. He helped stabilize Yahoo after the dot-com crash but has stumbled from one incompetent quarter to the next for years. And he has taken home some truly outrageous pay -- a total of $452 million in salary, bonus and stock-option exercises since April 2001 [subscription] -- during which time Yahoo stock has risen four-fold.

However, in the last year the disconnect between Semel's pay and Yahoo's performance became too much to take. According to the New York Times, his total 2006 pay was $107.5 million during which time Yahoo's stock fell 35%. And directors concluded Yahoo was just not catching up fast enough with Google, Inc. (NASDAQ: GOOG) so Semel had to go.

Susan Decker had been positioned to take over the company as CEO. But Yahoo's board probably decided that she was not yet ready. However, she is considered to have the inside track during the CEO search to replace Semel. So Yang's appointment could be just a temporary move that will help stabilize the company until she is ready.

Or, with the stock up 8% to $29.62 in after-hours trading, he might just sell it. It would make a nice morsel for Microsoft Corporation (NASDAQ: MSFT).

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned in this post.

[See our live blog of the web cast in which Terry Semel discusses his resignation here.]

Word on the Street is that Yahoo! Inc (NASDAQ: YHOO) CEO Terry Semel is considering resigning from the Internet giant. Rumors are swirling that if Semel resigns, potentially within the next six months, co-founder Jerry Yang will take his place as CEO and Sue Decker will become the company's president.

Last week, the Associated Press reported that angry shareholders have been looking to oust Semel for some time. One shareholder, the article noted, said he believes the company "is drifting" and "its problems ultimately lie at Terry's feet. The feeling among shareholders is widespread." The fact that rival Google Inc (NASDAQ: GOOG) has seen its shares increase nearly six-fold since going public, while Yahoo!'s stock fell 4%, has had shareholders calling for Semel's head on a plate; Google's stock has risen about 30% over the past year, while Yahoo!'s is down 10%.

Shareholders believe that Yahoo!'s younger rival is dominant in the search advertising field, partly because of its acquisitions of DoubleClick and YouTube, while Yahoo! is contending with the resignation of CTO Farzad Nazem (Jerry Yang is serving as the company's interim CTO).

Then there's the issue of Panama, which some claim to be a "Google-wannabe." Back in January, the Wall Street Journal reported some users saying that an upgrade to the online-ad system is a "hassle." Currently, Yahoo! trails behind both Google and Microsoft Corporation (NASDAQ: MSFT) in the ad-search field, and with many disappointed in Panama, investors can only hope that a new CEO, someone with "fresh eyes," would be able to make an acquisition -- online advertising company ValueClick Inc (NASDAQ: VCLK), perhaps? -- to fill in the gap.

Let's say Semel resigned and Yang took his place. Many analysts feel that this would be a positive move for the company; RBC Capital, for one, believes that shares of Yahoo! could go up $1-$2 should Semel resign. Under new management, the firm said, the company could be open to new ideas that Semel had previously rejected.

While there has been speculation the company would be put up for sale under the direction of Semel, perhaps an intense restructuring under a new leader would be what the company needs to get back on track.