But, Apple already has its own Safari browser. And, the industry is controlled by Microsoft’s (NASDAQ: MSFT) Internet Explorer, Google (NASDAQ: GOOG) Chrome, and Firefox. It is a good guess that Yahoo! wants to use Axis to move further into mobile search, but it has already lost most of that market to Google.

As has been true on PCs, there is no reason for the great majority of users to switch from their preferred browser when they move from computer to portable device

Douglas A. McIntyre

The top mobile phone advertising platform was the iPhone, with 15% of the market, followed by RIM’s Blackberry Curve with 4.4% and Motorola’s Droid Razr with 4%. When combined with advertising served to tablets, Apple grabbed about 28% of impressions, followed by Samsung with 18%.

As a group, smartphones took 73% of all advertising in the first quarter, up from 62% in the same period a year ago. Tablets, however, took 20% of impressions, up from 15% last year, and now claim nearly 3x the ad impressions for feature phones.

The data comes from a survey by Millennial Media Inc. (NYSE: MM), a mobile ad network that competes with Apple’s iAds and Google’s AdMob.

Millennial also note that of the top 10 devices that display ads, 3 were tablets. A year ago only Apple’s iPad made the top 20. The two additions this year were Samsung’s Galaxy Tab and Amazon’s Kindle Fire.

As tablets attract more buyers, it’s reasonable to expect that their share of the ad market will grow. Recent research from Nielsen indicates that tablets get 24% of all Worldwide Web ad clicks, compared with just 11% for phones. Tablets are more like desktop and laptop computers and users may click on ads because of the more familiar size of the screen. The small screens on smartphones are not as easy to use to find things quickly — and that’s the appeal of smartphones and smartphone apps — to find exactly what a user wants with the least amount of fuss.

This is good news for Apple, of course, and not-so-good news for Google, which pays a hefty price in traffic acquisition costs to maintain its position as the default search engine on OEM smartphones, including iPhones. By one estimate Apple gets 50%-60% of the revenue from a Google search on iOS, whether from an iPhone or an iPad. Google probably does not have to part with quite as much revenue for devices from other makers, but a cut of about 40% would match Google’s reported traffic acquisition costs. Google needs to find a way to hold onto more of its search revenue because its mobile ad network simply can’t make up the lost cash flow.

Paul Ausick

For the full year, Pandora sees revenues up in a range of $420 million to $427 million versus its prior forecast of $410 million to $420 million.  Its non-GAAP loss is now put in a range of -$0.11 to -$0.07 versus a prior range of -$0.16 to -$0.11 per share. Part of Pandora’s growth is due to a larger buildup of its sales force to better compete in advertising.

One issue that Pandora still faces is higher content costs.  As it grows in reach and listening, its expenses rise in a what is effectively a straight line.

SIRIUS XM Radio Inc. (NASDAQ: SIRI) is in a potential disarray after a large share sale by CEO Mel Karmazin that may actually help John Malone and Liberty Media Corporation (NASDAQ: LMCA) in its quest to take it over while Karmazin is publicly trying to defend the company against Malone’s efforts.

Pandora is up 18% at $12.22 in the pre-open session and this would generate an implied market capitalization rate of $2 billion.  That is valuing Pandora at 4.7-times revenue expectations for 2012.  SIRIUS XM is worth some $7.56 billion in market value, but it trades at only about $2.25-times revenue expectations of $3.37 billion for 2012.  Another difference between these two companies is that SIRIUS XM is profitable and it has a lot of exclusive content that Pandora does not have.

It is hard to think that things might be making a good turn at Pandora due to its cost structure, but that is what the market vote is with real trading and investing dollars this Thursday.

JON C. OGG

In the first phase of the trial, a federal judge narrowed the litigation over Oracle’s copyright claims and upheld a portion of Oracle’s claims. In the third phase the judge will assess damages against Google for its infringing use of some parts of Java code in Google’s Android operating system. Oracle has indicated that it intends to seek a seriously large payment for the infringement. Oracle has also said that it will appeal the jury’s verdict.

The verdict did not affect either company’s share price during today’s trading session. After hours both are down slightly.

Paul Ausick

An even more interesting analysis by Reuters blogger Felix Salmon, who explains how Morgan Stanley might actually have made a pile of money by propping up FB’s share price last Friday. Salmon argues that the greenshoe shares were the equivalent of a big short:

Chances are, no one outside the company will ever know for sure what Morgan Stanley’s P&L on the Facebook IPO ends up looking like. But it would make sense, if Morgan Stanley saw a lot of selling pressure on Friday, for the bank to keep [holding] onto at least a little bit of its short position into Monday morning. At which point it could make a tidy profit on that plunging share price.

Facebook’s IPO — the gift that keeps on giving.

Paul Ausick

A class-action suit on behalf of shareholders was filed in Manhattan this morning, the financial industry’s own watchdog, the Financial Industry Regulatory Authority (FINRA) is launching an investigation into the way banks communicated a cut in FB’s estimates, and shares in Morgan Stanely (NYSE: MS), FB’s lead underwriter, are down more than -2%. And short-sellers are chasing shares today too, as we noted earlier this morning. All before lunch.

Facebook is responding by testing a new design for its Timeline feature. Lawsuits and falling share prices are somebody else’s problems. At Facebook, there’s no time for such trivial matters.

Facebook has traded about 38 million shares this morning and shortly before noon the price is up 1.8% at $31.60.

Paul Ausick

Short sellers have been reported as being able to find some shares to borrow as early as Tuesday, a day or two before the first wave of traditional short sellers were supposed to be able to find stock to borrow.  It generally takes three trading days.  Generally.  In many cases it can take as long as two weeks before short sellers can find any shares.

As an indication that short selling has already begun, Dow Jones has a note this morning that short sellers borrowed about 13 million shares on Tuesday and the source was Sungard.  This is supposedly ahead of having to pay the high cost to borrow.

As far as the rest of the street is concerned, borrowing shares to short sell Facebook is likely to happen throughout the rest of the week and even next week after the options start to trade on Facebook.

Facebook shares are trading up 1.7% at $31.55 this morning ahead of the opening bell.  As a reminder, $38.00 was the IPO price and all those sellers who were hitting the ‘market sell’ orders this week were investors who were allocated shares at the IPO and those investors who chased the stock at a premium after it opened when NASDAQ’s order system was botched.

JON C. OGG

Trying to discern a bottom for a stock that has only traded for three days would require all the skills of gypsy fortune-teller Madame Sousatzka. As revelation after revelation pile up about the company’s roadshow and its bankers and its CEO, one wonders what the federal investigators will have left to look for. But the chances are that faced with a hard-nosed investigation by the SEC if there’s anything left hidden, it will also be revealed. Without Madame Sousatzka’s help.

Facebook’s shares closed today down -8.55% at $31.12 in a trading range of $30.98-$45.00. Those folks who bought at the high end are no doubt feeling very bad today.

Paul Ausick

The companies announced that SAP America has entered into an agreement to acquire Ariba for its cloud-based business commerce network at a price of $45.00 per share.  This generates and enterprise value (equity and debt) of about $4.3 billion.  The Ariba board of directors has already approved the transaction unanimously and the buyout represents a 20% premium over the May 21 closing price.

Today’s acquisition will combine Ariba’s buyer-seller collaboration network with SAP’s customer base and business process expertise “to create new models for business-to-business collaboration in the cloud.”

SAP is worth almost $70 billion in market value and its $58.77 share price for ADRs compares to a 52-week range of $47.39 to $72.52. Ariba shares were up 0.8% at $37.96 before being halted and the 52-week range is $21.90 to $40.45. With Thomson Reuters having a consensus estimate of $0.99 EPS for 2012, SAP is effectively paying 45-times earnings for Ariba.

JON C. OGG

According to a report at Business Insider:

But, just as important, news of the estimate cut was passed on only to a handful of big investor clients, not everyone else who was considering an investment in Facebook.

That’s a big no-no because such information is “material” according to the SEC and selectively disseminating news about a company implies insider trading.

The SEC, along with ahandful of other government agencies, have begun investigating the Facebook IPO. As the days pass, more goodies land on their plates.

Shares are down about -2.5% just before noon, at $33.34.

Paul Ausick