from Commentaries:

Gut feeling: How Google CEO valued YouTube deal

Eric Schmidt, Chairman and CEO of Google, sits for an interview at the Newseum in Washington on Oct. 2, 2009Let the second-guessing, the mock horror, the disbelief, the crowing begin.

Google CEO Eric Schmidt has acknowledged he realized upfront that he was overpaying to acquire YouTube, to the tune of $1 billion, judged by any conventional measures.

The many critics of Google's $1.65 billion deal to acquire the video-sharing site three years ago will claim this confirms everything they have always said about the deal. Not quite.

In fact, not really at all.

Schmidt came clean in a deposition by lawyers in the Viacom copyright lawsuit that there was very little revenue coming into YouTube to justify the price his company paid.

No surprises here. There were intangibles to consider:

1. YouTube's popularity was sky-rocketing, making it the runaway market leader among video-sharing sites.
2. It was crushing his company's own site, Google Video.
3. YouTube was up for auction and would be sold to a competitor unless Google jumped first.
4. Google overbid to ensure YouTube didn't fall into rival hands.

The Google CEO said he told his company's board of directors that the 18-month-old video-sharing site was worth $600 million to $700 million, according to CNet, which obtained a transcript of his testimony. Of course, he fails to mention the potential costs of copyright lawsuits that already loomed for YouTube.

from Commentaries:

The finite value of a T-Mobile UK merger

-- Eric Auchard is a Reuters columnist. The opinions expressed are his own -- 

By Eric Auchard 

Eric AuchardLONDON, Sept 4 (Reuters) - Deja vu, all over and over again. The news is that T-Mobile UK is for sale. Still. 

The Financial Times, citing unnamed sources, says Deutsche Telekom is in "preliminary stage" talks with Vodafone, France Telecom, and Telefonica to sell T-Mobile UK. 

The logic of such a deal seems to be compelling. DT needs to sell out because T-Mobile lacks the scale to gain an edge over its multiple competitors. 

from Commentaries:

Bracing for bar brawl in mobile phone emerging markets

The last thing that the complex negotiations between India's Bharti and South Africa's MTN Group to create the world's third largest mobile phone company needed is more complexity. The existing deal involving an intricate mix of cash and stock is further complicated by currency fluctuations and diverging growth rates between the maturing Indian market and the wide-open African one.

Zain's footprint in Africa and Middle EastBut if a third company, Zain of Kuwait, succeeds in starting up a full-scale bidding war for itself, the Bharti-MTN deal could come off the rails and fall apart.  Zain's CEO told Kuwaiti daily Al-Rai on Monday that it is in talks with three major, but so-far unnamed telecom firms, including one from India. Last month, Zain said it was reviewing the possible sale of its far-flung African operations after French conglomerate Vivendi called off talks to buy a majority of Zain's African business.  A Vivendi spokesman says nothing has changed since then. There's no word yet from other obvious suspects -- France Telecom or Vodafone -- on whether they are interested.

The most likely Indian bidder for Zain looks like Reliance Communications, India's distant No. 2 mobile operator to Bharti. There's history here, as Reliance tried to nab MTN a year ago. That move came after Bharti's first try to strike a deal with MTN, South Africa's second largest operator, fell apart over which company's management would end up controlling the combined entity.

from Commentaries:

Tech Links: Phones, more phones and communion wafers

HTC Android phoneBetter luck next year for Android
Taiwanese smartphone maker HTC has warned of a revenue shortfall, saying it has too many new phone models chasing too little revenue. Revenue growth will turn negative in 2009, instead of growing 10 percent, as the company had previously forecast.

Chief Executive Peter Chou says: "Momentum on both the Windows Mobile and Android platforms are also turning out to be weaker than expected."

HTSEC weighted indexTC said it is boosting its marketing spending to more than 15 percent of revenue from 13.5 percent to fend off market leader Nokia and the Apple iPhone juggernaut.

Sirius XM on the iPhone

starplayr2.jpgWe’re not entirely sure if the current round of leaks will lift Sirius XM out of its $1.40 per share doldrums, but screenshots of a new iPhone application in development that will let users stream Sirius XM radio stations could put a new shine on the company.

The shots, leaked to Orbitcast, show a login screen that would appear to imply that the service would likely only be available to existing Sirius or XM subscribers or subscribers to the mobile service. We’ve seen various mobile applications that do just that over the years for Windows Mobile phones. But this is the first to offer a common platform for both services — and months ahead of the company’s own timeline for an interoperable receiver.

Citigroup’s Tony Wible thinks the link to Apple “highlight that SIRI’s value lies in its content and not its hardware or infrastructure.” And such applications could help it gain share in the audio entertainment market. “SIRI bears argue that AAPL’s products will take share from SIRI, but we disagree as both MP3 players and satellite radio have unique advantages that leads us to believe both will co-exist. New satellite radio plans create a greater opportunity for synergies between the two,” Wible writes.

Sony buys out Bertelsmann’s stake in Sony BMG

Beyonce and Justin Timberlake(Updates earlier post to clarify deal terms)

After four years of recriminations and in-fighting between executives from Sony Music and executives from BMG Music Entertainment, Tokyo-based Sony Corp has decided to end the mutual pain of a controversial merger and take full control of Sony BMG.

Artists like Beyonce, Bruce Springsteen and Justin Timberlake will now record under a new banner: Sony Music Entertainment Inc.

The FT had reported in June that Bertelsmann was looking for $1.2 billion-$1.5 billion for its 50 percent stake in Sony BMG, but it looks like the German media company settled for $600 million-$900 million — the exact sum depends on how you do the math.

Yahoo: The Road to No Deal

The following is a timeline of key events leading up to Yahoo’s Aug. 1 annual meeting.

2006 January – Yahoo Inc begins to report a string of weak quarterly results, reflecting competitive missteps by the company, market share gains by rival Google Inc, changes in the online advertising landscape and weakening spending in some ad segments.


2006 – Microsoft Corp and Yahoo begin preliminary talks on various partnerships, including a merger.

Sirius XM: Are you ready for some radio?

New Sirius Logo

The marathon satellite merger for Sirius and XM is finally complete. (Check out the new “Sirius XM Radio” logo, above, provided by Sirius.)

That means new channel options, new pricing options, new radios — eventually.

We want to know if you care. Does the prospect of having Oprah and Howard Stern on your radio make you want to sign up for satellite radio? Will you start paying for the service once the free subscription in your new car runs out? Does the thought of the upcoming professional football season mean it’s time to pick up a satellite radio?

Timeline: Sirius and XM Satellite Radio

A Russian Proton with a satellite for Sirius Satellite Radio is lifted into place at its launching pad at the Baikonur Cosmodrome, Kazakhstan, on September 1, 2000, while (L to R) Bob Prevaux, Program Director for Space Systems Loral talks with Rob Briskman, Executive Vice President for Sirius Satellite Radio and Ted Sitek, Mission Manager for International Launch Services. (Reuters/Karl Ronstrom)******Federal regulators have cleared the last remaining hurdle for Sirius Satellite Radio’s proposed acquisition of XM Satellite Radio Holdings, a deal that will combine rivals in the nascent U.S. pay-radio market.******The U.S. Federal Communications Commission reached an agreement to conditionally approve the deal on Thursday, four months after the Department of Justice gave its blessing, and 18 months after XM and Sirius agreed to combine. Experts say that new services from a combined company could come in a few months, but suggest their holiday subscription growth may be hurt by the delayed deal closing.******Here are are some important dates in the history of the satellite radio industry.******* 1994 – CD Radio goes public at about $3.15.******* Oct. 1999 – XM goes public at $12 a share.******XM and Sirius Price chart - 3 years******* Nov. 1999 – CD Radio changes its name to Sirius Satellite.******A Pioneer Xm2go Inno satellite radio is displayed in a car at a trade show* Nov. 2001 – XM starts national radio service, after launching its first two satellites — “Rock” and “Roll” — earlier in the year.***

    **** 2002 – Sirius launches national satellite radio service.******* Oct 2003 – XM reaches 1 million subscribers.******* Dec 2003 – Sirius signs 7-year, $220 million pact with the National Football League.******xm-sirius-logo.jpg* Oct 2004 – Shock Jocks Opie and Anthony begin broadcasting on XM, on a premium channel.******* Oct 2004 – XM signs 11-year, $650 million pact with Major League Baseball; deal starts with the 2005 season.******* Oct 2004 – XM unveils Delphi MyFi, its first portable radio receiver.******* Dec 2004 – Sirius reached 1 million subscribers********** Shock Jock Howard SternOct 2004 – Sirius signs shock jock Howard Stern to 5-year, $500 million deal.******* April 2005 – XM raises subscription price to $12.95 a month from $9.99, matching Sirius.*******Sept 2005 – XM surpasses 5 million subscribers.******* Feb 2006 – XM signs 3-year, $55 million deal with Oprah Winfrey.******* Sept 2006 – Sirius tops 5 million subscribers.******* Jan 2006 – Sirius starts broadcasts of Howard Stern.******* Feb 2007 – Sirius and XM propose merger; Deal requires approval of their respective shareholders, the U.S. Federal Communications Commission and the U.S. Justice Department. Sirius CEO Mel Karmazin to be CEO of new company, XM Chairman Gary Parson to become Chairman.******Lifestyle diva Martha Stewart (R) stands next to Mel Karmazin, CEO of SIRIUS Satellite Radio******* July 2007 – CEO Hugh Panero says he is stepping down in August; COO Nate Davis to become Interim CEO.******* Nov 2007 – XM and Sirius shareholders approve the deal.******* Gary Parsons, Chairman of XM Satellite RadioMar 2008 – The Justice Department approves the deal.************* June 16, 2008 – FCC Chairman Kevin Martin announced his recommendation to approve the merger with conditions.******* June 30, 2008 – Sirius ends the second quarter with 8.9 million subscribers, up 25 percent from a year earlier. XM had 9.65 million subscribers at the end of June, up 17 percent from a year earlier.******* July 25, 2008 – FCC Commissioners approve the deal with conditions, clearing the way for a deal that will leave just one U.S. satellite radio service. Analysts expect the deal to close within days or weeks of the regulatory approval.******(Sources: XM, Sirius, Hoover’s, Reuters)******(Top picture: A Russian Proton with a satellite for Sirius Satellite Radio is lifted into place at its launching pad at the Baikonur Cosmodrome, Kazakhstan, on September 1, 2000, while (L to R) Bob Prevaux, Program Director for Space Systems Loral talks with Rob Briskman, Executive Vice President for Sirius Satellite Radio and Ted Sitek, Mission Manager for International Launch Services. (Reuters/Karl Ronstrom))

    Google, Microsoft augur tougher times ahead

    googlesign.jpgGoogle’s second quarter earnings disappointed Wall Street yesterday and sent its shares tumbling. The search giant blamed lower returns from managing its huge cash piles but analysts are also concerned the market leader in search advertising might augur a wider slowdown in online advertising.

    Google itself said revenue growth from search ads was “positive” in every sector except for real estate, which was down by a small amount.

    But the Street wasn’t convinced, perhaps because Microsoft also disappointed with its quarterly earnings citing “tough” economic conditions which impacted its software business and online ad sales.