Seth Gilbert, 02-7-2008
It’s been a good year for video games and the holidays were especially good for game publisher Activision. Much like a movie studio with two huge summer blockbusters in the theaters at the same time, Activision’s Guitar Hero and Call of Duty sequels powered the company to record results (thanks, in part, to strong November and December sales.)
In what may be the company’s last earnings report before the completion of their merger with Vivendi Games, Activision reported stellar third quarter results. This is now the 16th consecutive year that sales are up for the company.
CEO Bobby Kotick said “broader audiences are responding to products like Guitar Hero, and we expect that the demographics for video games will continue to expand.” He also added in the conference call with analysts that the company, and game industry, are “taking mindshare away from traditional forms of entertainment like movies and television.”
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Seth Gilbert, 02-6-2008
YouTube long ago won the popularity contest for user generated video. Other startups, even some of the same founding generation, have been battling for second place or to just survive. Some like Grouper, reinvented themselves. Now, Los Angeles based Revver, one of the earlier competitors, appears poised to bow out of the race entirely.
Citing “sources familiar” CNET’s News.com is reporting that the company is in dire need of cash and may be sold for as little as $300 to $500k plus the assumption of an estimated million dollar debt. A price in that range would represent pennies on the dollar relative to total investment in the company.
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Seth Gilbert,
For the second time in as many days, a major global media company released results which suggested little adverse, or material, impact from either the writers’ strike or a feared slow down in advertising spending related to the economy.
As was the case with News Corp, Disney’s CFO Tom Staggs reported a “really strong ad market.” during Disney’s earnings call Tuesday. Revenue at the Media Networks Division which houses ABC, ESPN and the other cable networks was $4.17b versus $3.79b for the same period a year ago. Operating profit at ABC climbed to $322m, a 30% gain. The rest of the cable networks had operating profits of $586m (up 27%).
Contrary to fears, the writers’ strike hasn’t had much teeth (so far). Just the opposite, in the short term it may even be helping financially. Click to Read More
Seth Gilbert, 02-5-2008
After the close of markets Monday, News Corp released their second quarter earnings. The numbers, which are reported below, were very good on an operating level despite slightly missing profit expectations. Also, in a true rarity for this earnings season, the company raised its guidance for fiscal 2008 operating income.
More insightful than the numbers was the analysts call and Q&A. Rupert Murdoch’s participation is a little like a light version of Warren Buffet’s famous annual meeting speeches. Mr. Murdoch is at times frank, occasionally reserved but always on point and extremely well informed. At one point, he even corrected one of his colleagues on the numbers. What follows are some of Murdoch’s comments on the News Corp empire, broken out by theme:
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Seth Gilbert, 02-1-2008
Sometimes rumors sound crazy. Sometimes they’re so crazy, they end up becoming true. Microsoft proved that early this morning with the surprise announcement of an unsolicited cash and stock takeover offer for struggling web giant, Yahoo.
Rumored at times to be possible, probably, and impossible, one thing a deal between the two never seemed was real. For more than eighteen months of chatter, partnership talk and innuendo, this prospect seemed like somebody’s fantasy. Now it is shockingly real.
Microsoft has offered to pay $31 a share, which represents a purchase price of approximately $44.6 billion. The proposal would provide for cash and stock payment. Yahoo! shareholders will be able to choose either cash or stock, with the total deal being half of each. The offer represents a 62 percent premium above the closing price of Yahoo! stock on Jan. 31, 2008.
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Seth Gilbert,
With the widespread news of Microsoft’s unsolicited takeover offer for Yahoo now spreading across the news channels, here are the facts from their original source.
The following is the text of Steve Ballmer’s letter to Yahoo’s Board of Directors proposing the acquisition
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Seth Gilbert, 01-31-2008
Amazon was a pioneer in establishing internet based e-commerce. Now, in their second act, they look like they are trying to blaze a similar trail in the sale of digital goods. Today, in line with those efforts, Amazon announced they will buy spoken word (audiobook) publisher Audible for $11.50 a share in cash.
At the $11.50 a share price Amazon is paying a 24% premium over Audible’s Wednesday closing price of $9.33 a share. Two months ago Audible traded upwards of $14 a share. Last quarter they did sales of $27m and lost $192k. Those metrics may make the purchase look like a bargain (and it probably is), but views on that are likely to be divergent. Part of the reason: last month, Audible’s largest shareholder, Apax, signaled a lack of confidence in the company when they (and affiliates) began selling off their 23% stake in the company.
Probably the best near term gauge for valuing this deal as an Amazon shareholder lies in measuring the strategy it reflects rather than the approximately $300m purchase price.
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