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from Counterparties:

MORNING BID – Google, IBM cloud market rebound

The markets have remained interesting this week as earnings season has ramped up, but the most interesting index remains the Nasdaq Composite.

The Nazz continues its upward swing following Tuesday’s volatile, deep plunge; it has now gained more than three percent in the brief period between the lows it hit Tuesday and the Wednesday close. That's a pretty short period of time to see such a dramatic move in the index but doesn’t necessarily point to better tidings ahead. Bespoke Investment Group pointed out that when swings like this are usually seen – there have been 18 such occurrences since 2000 – it doesn’t bode well for the tech-heavy index.

On average, the decline following all of these types of days like Tuesday – where the market opens at least 0.1 percent higher, drops as much as 1.5 percent and then finishes in positive territory – is 2.84 percent in the week that followed. That’s not encouraging, but that’s kind of the way things go when the market sees bouts of volatility like this.

Notably, most of these volatile sessions are clustered around bad market environments – it happened several times in 2000 and 2001 before abating, only to return in 2008; so rough markets are generally when this kind of thing occurs. What’s undetermined now is how well the markets overall will do in a rebound attempt and whether it’s a Sisyphean pursuit at a time when many stocks are doomed for more pain.

from Alison Frankel:

Google friends swamp 9th Circuit in ‘Innocence of Muslims’ case

Is there anyone who doesn't sympathize with the actor Cindy Lee Garcia, who was baldly deceived into appearing in the abhorrent anti-Islam film "Innocence of Muslims"?

The filmmaker, a shadowy character who goes by three different names, told Garcia she'd be appearing in "Desert Warrior," an adventure movie set in the Middle East. Instead, he overdubbed her lines to make it appear as though the actress was accusing the prophet Mohammed of pedophilia, and included her brief scene in a screed so incendiary that it inspired riots in Egypt and elsewhere in the Muslim world.

from Breakingviews:

Rob Cox: GE should put itself up for sale

By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

General Electric should sell itself. If that sounds like an April Fools’ Day joke, think again. It’s a real proposal on the ballot at the industrial group’s annual meeting. Setting aside the absence of any obvious buyer for the $260 billion company, the proposition illustrates the kind of shareholder democracy gone wild that many boards, and even some regulators, would like to squelch. They have half a point.

from Alison Frankel:

First Amendment protects Internet search results: N.Y. judge

U.S. District Judge Jesse Furman of Manhattan grabbed the chance Thursday to set precedent on a question that has received surprisingly little attention in the courts: Does the First Amendment's protection of free speech extend to the results of Internet searches? Furman was clearly captivated by the issue as an intellectual challenge, delving into the vigorous academic discussion of the First Amendment and Internet search even deeper than the two sides in the case, the Chinese search engine Baidu and the activists who sued the site for supposedly violating their civil rights by blocking their pro-democracy works from appearing in search results. In a supersmart opinion that Furman seems to have written to be widely read, the judge concluded that when search engines exercise editorial judgment - even if that judgment is just algorithms that determine how results will be listed - they are entitled to free speech protection.

That protection, he said, is quite broad in scope. "There is a strong argument to be made that the First Amendment fully immunizes search-engine results from most, if not all, kinds of civil liability and government regulation," Furman wrote. "The central purpose of a search engine is to retrieve relevant information from the vast universe of data on the Internet and to organize it in a way that would be most helpful to the searcher. In doing so, search engines inevitably make editorial judgments about what information (or kinds of information) to include in the results and how and where to display that information (for example, on the first page of the search results or later)."

from Breakingviews:

Unicorns stampede through tech fantasyland

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By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

There’s a new stampede in technology’s fantasyland: Unicorns. The single-horned stallion has made the leap from legend to run free through modern-day Silicon Valley, New York, London and the plains of central Israel as a term to describe the most successful startups. In a different and unintended sense, the trope couldn’t be more apt.

from Jack Shafer:

Who’s afraid of Comcast?

Set aside for a moment everything you've read about the $45 billion bid Comcast made for Time Warner Cable last week. Blank from your mind Paul Krugman's prediction that the deal will result in a Comcast monopoly. Pretend you didn't read the New York Times piece about the acquisition presaging further consolidation in the cable market, with Charter Communications picking off Cox Communications. Thump yourself with a neuralyzer, if you can, and remove from your memory the protest against the transaction by Michael Copps, former Federal Communications Commission commissioner.

Finally, purge from your bile ducts the seething hatred you hold for Comcast and Time Warner Cable, those hurtful memories of rising bills, rotten service, and phone-tree purgatory and allow me to persuade you that we're having the wrong telecom argument when we quarrel about mergers and acquisitions. Instead of blocking mergers or beating concessions out of the telecom giants, let's give them the treatment they really fear: Policies that encourage the entry of competitors, which are the bane of every monopolist.

from Edward Hadas:

AOL, solidarity and health insurance

The head of the American internet company AOL managed to say something really stupid a few weeks ago, and to sound callous at the same time. It’s a shame Tim Armstrong came off so badly, because he was trying to deal with a serious topic.

Armstrong was trying to justify the company’s decision, since reversed, to trim its employees’ retirement benefits. He started out at a disadvantage, because the chosen cutback was sneaky. A change that sounds innocuous, moving from monthly to annual employer payments into employee pension savings accounts, is actually a way to eliminate payments to employees who leave before the end of the year. It’s hard to look honest and upfront when explaining that.

from Breakingviews:

Lenovo’s M&A spree challenges investors’ faith

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By Ethan Bilby and Peter Thal Larsen
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Lenovo prides itself on being a modern multinational, but its approach to divulging information remains frustratingly old-school. The Chinese group is buying Google’s Motorola phone business just a week after picking up IBM’s low-end server unit. Adding the two loss-making divisions to its portfolio will cost up to $5.2 billion in cash and stock. Though there’s some strategic logic, shareholders have little way of working out whether the deals stack up.

from Breakingviews:

Googleization of Yahoo hits pricey speed bump

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By Richard Beales and Robert Cyran
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The Googleization of Yahoo has hit a pricey speed bump. Chief Executive Marissa Mayer has fired the chief operating officer she lured from her former employer, costing Yahoo as much as $60 million for Henrique de Castro’s 15 months on the job. She may have made the right call, but it’s a reminder that a sprinkling of Googledust won’t on its own get Yahoo growing again.

from Breakingviews:

Google raises temperature on “internet of things”

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By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Google has turned up the temperature on the so-called “internet of things.” The search giant’s decision to pay $3.2 billion for Nest Labs, a maker of smart thermostats, signals a shift in Silicon Valley’s arc of disruption. Sending data to people on the go looks rather ho-hum next to a future where consumers communicate with, and control, their products remotely.

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