Monday, September 10, 2007

Paperstand (KBW, GOOG, YHOO, DIS)

The WSJ reports that Kohlberg Kravis Roberts now appears willing to make concessions to investment banks arranging the $24bn in debt for its purchase of First Data (FDC). Specifically, the private-equity firm appears willing to agree to a covenant that places a performance criteria on First Data's debt, making it easier to sell the debt to investors leery of the potential risk. As a result, the sale of the debt financing is expected to be launched by midweek.

According to the WSJ, at a time when Wall St. is struggling with tremors in the mortgage sector, the investment-banking boutique KBW (KBW) is tacking in the other direction. Earlier this summer, the firm launched what it expects will become a broad push into the REIT sector. It has hired a new team of research analysts and traders from other firms including Stifel and Wachovia. Over time, the firm also intends to hire a team of investment bankers who specialize in the REIT mkt. Execs at KBW say it wants to capitalize on tough times in the US real-estate mkt.

The WSJ reports that tech consultancy Capgemini will begin recommending Google's (GOOG) online suite of office software to its corporate customers, a move that could bolster Google effort to drum up more sales to big businesses. Hoping to diversify beyond the online-ad mkt, Google began selling a souped-up version of its office applications in Feb for a $50 annual fee per user. While the low cost has appealed to small businesses and universities operating on tight budgets, Google has had a tougher time winning over large co’s. Google's software bundle includes email, word processing, spreadsheets and calendar mgmt.

“Heard on the Street” column out saying that investors who have grown impatient with Yahoo (YHOO) may have to wait awhile longer to see any pop in its stock. The co replaced its CEO in June and this summer kicked off a strategic review to better position it for a changing online-ad mkt and compete with the likes of Google. Now, partway through Yahoo's strategic soul-searching, a major overhaul appears unlikely. Over the summer, CEO Jerry Yang did actively assess one major sacred cow: the Web-search-ad business it built up at great expense in recent years. Under the scenario discussed by top execs, Yahoo would have outsourced that search-ad activity to either Google or Microsoft. Such a move would likely give Yahoo an immediate rev bump representing hundreds of millions of dollars annually. It could also bring in additional one-time payments from any outsourcing partner and would reduce some of Yahoo's operations costs and capital spending. But one of the people familiar with the matter says Mr. Yang concluded that Yahoo needed to be the "marketing operating system," providing advertisers with a full menu of online-ad options. Yahoo would have a hard time doing so if it outsourced search advertising. Any discussion of outsourcing search ads has now cooled.

The NY Times reports that Disney (DIS) said it would begin its own testing of toys featuring Disney characters, including random testing of products already on store shelves.

1 comment:

fCh said...

I'm a user of Google apps. for corporations and have wondered myself why the adoption is so slow. It's got to do with Google's fixation on search-driven advertising (at the expense of corporate) sales.

That fixation may become infatuation in case the advertising landscape changes (recession, etc.).

Yahoo is so slow to innovate quality of service and feature set that it's got to reach lower before else.