News Corp (NYSE:NWS) has made a great deal of the fact that Google (NASDAQ:GOOG) News gets a major benefit by running headlines from News Corp properties including The Wall Street Journal and Fox. Google does not sell advertising on its Google News pages and links on they service send millions of visitors to media outlets everyday, so it is hard to figure the News Corp objection. Rupert Murdoch, head of News Corp, wants to charge for all the content at his company’s websites, but in the meantime the Google traffic would seem to be valuable.

News Corp is working on a partnership with Microsoft (NASDAQ:MSFT) to have News Corp content indexed at its Bing search engine. Microsoft may even pay for this content, although the FT story which first brought up the potential transaction does not make that clear.

Microsoft is also apparently in discussions with other large media companies to create deals similar to the one it is discussing with News Corp.

Microsoft will have to pay content providers a substantial sum to block Google’s access to indexing and displaying their headlines. Google News is by far the largest news aggregation site on the internet and some online content sites get more than 25% of their traffic from the service. Content firms may be able to block Google’s access to their stories, but it is not clear at all that Microsoft can pay them for the lost traffic.

Any system set up by Microsoft to give a traffic platform for publishers is bound to be extremely complex. It is not at all clear how it would pay content providers and whether compensation would be based on traffic or come metric of content quality. Bing has a 9% share of the search market in the US and Google has 65%. The difference makes it impossible for Microsoft to match Google’s news traffic flow.

Many publishers are not willing to give up their Google News traffic. That may give a content company like The New York Times (NYSE:NYT) an advantage over The Wall Street Journal, if the Times keeps its relationship with Google and the traffic that comes with it and WSJ.com does not.

Google still holds the key to the online content kingdom. No content company can thrive without traffic, and the more the better.

Douglas A. McIntyre

eBay Inc. (NASDAQ: EBAY) is having an issue which may have just cost sellers millions and millions of dollars in untold profits today.  After doing random searches today on Christmas present purchases and with eBay being one of the online destinations, it was suddenly clear that something was wrong on eBay.  The system was not working if you did not already have your item numbers known.  Search functions yielded nothing and stores were out.  If this were to happen after midnight on a Tuesday, it might not matter.  But this outage is on a weekend day when so many buyers and sellers aren’t at work and are able to spend the effort to go eBaying.

A technical support chat only yielded “Due to the great number of visitors currently using the system, your request cannot currently be dealt with. Please try again later.”

A call into support just has the message “We are currently experiencing technical difficulties with search and the ability to access stores….”

Whether this lasts or not is unknown, but even the most common searched words yield “0 results found for _____” and “We were unable to run the search you entered. Please try again in a few minutes.”

The reality is that this does happen from time to time on the web.  But when you see how the entire system is down for search and for stores, it is just proof that there are not enough redundancies.  Or worse.

JON C. OGG
November 21, 2009

By Douglas A. McIntyre

“A chicken in every pot and a car in every garage.” –Herbert Hoover, 1928.

Federal regulators plan to propose a way to get inexpensive broadband to every person in the U.S. According to several media sources, The Federal Communications Commission will offer a program for the federal government to take an activist role in expanding broadband, and may add a tax to phone bills to help fund it. Two months ago, the Berkman Center at Harvard laid out a plan for universal U.S. broadband. It said that building the necessary infrastructure of the program could cost as much as $350 billion.

Read more…

Websites in the US were attacked by hackers earlier this year. The assaults slowed down some sites and closed other online services completely. It was assumed at the time that the attacks originated in North Korea and one or more countries that were part of the old Soviet Union.

McAfee (NYSE:MFE), the security software company, recently issued a report saying that the US, Russia, China, Israel, and France have built their own capacity to make cyber attacks on other nations.

Now the concern is that the next threat will come from al Qaeda.

FBI and  Homeland Security officials told The Wall Street Journal that the terrorist group might target infrastructure which may include power grids and transportation systems. A successful attack could cause part of the nation’s energy delivery system to go down. It could also compromise the transportation of both people and goods. It could, in other words, damage the US economy, perhaps significantly.

Cyber attacks would move the terrorist threat from one in which al Qaeda has to move people into the US and get weapons or build them. There has long been concern that terrorists could set off a “dirty bomb” in a large city, killing large numbers of people and shut the city down.

Cyber terrorism has the advantage, for the terrorists, of being a method of damaging the US from remote locations which may be hard to detect and even harder to attack. There is little point in the US attacking al Qaeda online. It has not real infrastructure to disrupt.

The US may have invented the internet and now its enemies are preparing to use the invention against the inventor.

Douglas A. McIntyre

The use of social networks to sell products and services gets more complex by the day. The latest scheme to tap into the swarms of people who congregate at Facebook is a program from MasterCard (NYSE:MA) and Amazon (NASDAQ:AMZN).

The promotion for the credit card and e-commerce companies will allow consumers to go to a new website. The site will allow people who want to buy gifts for their social network “friends” to find their personal characteristics like age and sex and pick presents accordingly.

The promotion will cost the two companies plenty of money. MasterCard will use TV commercials to promote the program. Amazon will give out $10 gift certificates to certain participants. Each is betting that people will use their social network relationships to buy presents for the holidays.

The idea faces one big hurdle. Most shoppers just want to go to a store or an e-commerce site, buy a gift, “sign” a card, and send it to a friend or family member. Anything that adds to that process is almost certainly superfluous.

Douglas A. McIntyre

You have already seen the Hewlett-Packard (NYSE: HPQ) buyout of 3Com Corporation (NASDAQ: COMS).  But this week before that deal was announced we covered how mergers in the technology sector have been very slow to develop over the scale in which we and others think is possible for the sector.  After the Intel Corporation (NASDAQ: INTC) settlement with Advanced Micro Devices (NYSE: AMD), the tally of cash that is now estimated would be an implied $265 billion that is available for the tech giants in our 24/7 Wall St. Real-Time 500 to make acquisitions.

The giant cash balances are held by Microsoft Corporation (NASDAQ: MSFT), Cisco Systems Inc. (NASDAQ: CSCO), Apple Inc. (NASDAQ: AAPL), Google Inc. (NASDAQ: GOOG), and Oracle Corp. (NASDAQ: ORCL), assuming nothing happens with Sun Microsystems Inc. (NASDAQ: JAVA).  But players like QUALCOMM Inc. (NASDAQ: QCOM), EMC Corporation (NYSE: EMC), International Business Machines (NYSE: IBM), Dell Inc. (NASDAQ: DELL), Yahoo! Inc. (NASDAQ: YHOO), Amazon.com Inc. (NASDAQ: AMZN), and eBay Inc. (NASDAQ: EBAY) are either all sitting with large amounts of cash or will be very soon.

We have broken out these technology, IT, software, and Internet companies by the cash amount they hold or what they have in a soon-to-be cash balance.  Of course only a fraction of this cash will be used for mergers.  But there is also a ton of room here for dividends and of course the share buybacks.

Microsoft Corporation (NASDAQ: MSFT) is the #2 on the Real-Time 500 by market cap with close to a $260 billion market cap. It ended the quarter with $36.7 billion in cash and short-term investments, but it also ended with equity and other investments of roughly $6 billion.  We water down the non-cash investments in our analysis to account for dilution and selling pressure, but a one-third off the value would give the software giant some $40 billion.  That could be over $4.00 per share that could be paid out as another huge dividend.  In any deals it makes there is always the concern that antitrust issues will arise, but that has not been the case in the search pact with Yahoo! so far.

Cisco Systems Inc. (NASDAQ: CSCO) has some $35.4 billion in cash and equivalents.  It also just raised $5 billion in a senior unsecured note offering this week, which effectively offsets the $2.5 billion for the Starent Networks Corp. (NASDAQ: STAR) and the $3.1 billion for the Tandberg deal if that gets resolved and completed.  We are not counting Tandberg because it has had trouble and is considered an at-risk deal, which would give a total figure of about $37.9 billion today.  With a $136 billion market cap, Cisco could pay close to a $6 dividend and start over building its cash if it wanted to.

Apple Inc. (NASDAQ: AAPL) is the perpetual mystery over what it can or will do with its cash mountain.  The company now sitting with a market cap of $184 billion now that it has a price over $200.00 per share. Buying back its own stock would be expensive and maybe just silly and integrating an outside company into Apple might be far from easy.  It holds close to $34 billion in cash if you include its long-term investments.  Apple could pay out a special of over $37.00 today if it wanted to zero out the cash and start building that all over again.  Or perhaps it could go make a video game platform acquisition.

Google Inc. (NASDAQ: GOOG) has a market cap over $180 billion and its new cash balance was listed as $22 billion. It is spending $750 million to acquire AdMob and $105 million to acquire On2 Technologies Inc. (AMEX: ONT).  But these are both stock deals rather than cash and that leaves its cash as is.  We saw that it might be buying stock to do the deal, but that is chump change for the king of search. Google has also noted it is on the prowl and these two small deals won’t stop that.  If Google can’t find a large target, it could pay close to $69.00 per share and just start over on its cash growth game.

Intel Corp. (NASDAQ: INTC) has a market cap of almost $110 billion and has close to $13 billion in cash equivalents after closing a recent deal. But it has another $4.3+ billion in equity securities and other long-term investments. If we took the same one-third out to water that down, that leaves almost $3 billion there and a grand total of right at $16 billion… Back out the $1.25 billion heading out the door in Q4 for the Advanced Micro Devices (NYSE: AMD) settlement and you have almost $15 billion.  There are dozens of core related technologies in computing and in communications that it would not fall under harsh antitrust reviews, but anything processor related to PCs would be a tough sell.

Oracle Corp. (NASDAQ: ORCL) is a wild card now as its deal for Sun Microsystems Inc. (NASDAQ: JAVA) at $7.4 billion, or $5.6 billion net of Sun’s cash and debt, is in jeopardy over the E.U. possible blockage. The company has a $111 billion market cap and it ended its August quarter with some $20.5 billion in cash and marketable securities. Ellison could pay out a special dividend of $4.00 if he wanted to start over at zero again.  He has proven to be a deal-maker and we already know how much he is willing to spend to grow even if a target is not making money.

And what about Sun Microsystems Inc. (NASDAQ: JAVA)?  If that deal is really blocked, it will have to do something other than fire employees.  Sun has ‘bought earnings before’ and its old balance sheet lists close to $3 billion in cash and other equivalents.. we will water that down to $1.5 billion because it needs capital while it keeps losing money.

Hewlett-Packard Company (NYSE: HPQ) ended with $13.7 billion in gross cash, but that is still over $24.6 billion in cash if you include its long-term investments on the books.  Back out $2.7 billion for 3Com Corporation (NASDAQ: COMS) and you end up with almost $22 billion in cash.  H-P is probably out of the M&A business until 2010 now.

QUALCOMM Inc. (NASDAQ: QCOM) has a $75 billion market, and its cash and equivalents was $17.7 billion at the end of its fiscal fourth quarter.  That would leave the potential for a $10.00 special dividend if it wants to return capital to holders and then start over building its cash. Or it could look for other intellectual property plays that would give it a 10 to 20 year patent lock.

EMC Corporation (NYSE: EMC) is worth almost $35 billion and no longer has the $2.1 billion from the deal to buy Data Domain.  But EMC also still has over 50% of the float of VMware (NYSE: VMW) and that company is worth $16.6 billion that could be counted.  The company said it ended its September quarter with cash and investments of $8.4 billion.  If you assume that VMware could be carved out for half its market value in a very discounted sale, then EMC is sitting on close to $17 billion before tapping any credit lines and before tapping any debt.

International Business Machines (NYSE: IBM) has a market cap of $167 billion and now lists roughly $11.5 billion in cash. That is down from the prior quarter after it boiught back shares and retired debt. It is also on notice now that H-P bought 3Com.  Based upon the debt pay down, we’d assume a deal would only come in the form of stock today.

Yahoo! Inc. (NASDAQ: YHOO) has a $22.5 billion market cap and may be a wild card because of new management and a Bartz-led reorganization.  It ended its September quarter with cash and equivalents of $4.5 billion.  It also holds over $3 billion in investments in stakes of other companies, so if you water that down by one-third it has access to $6.5 billion.

Dell Inc. (NASDAQ: DELL) completed its Perot purchase for $3.9 billion, which would leave roughly $8.8 billion in cash and equivalents versus $12.7 billion reported in August.  Add in another $1 billion in cash flow for this quarter just ended on October 31 (results not out yet) and you get an implied $9.8 billion today.  Michael Dell might not want to do another ‘me-too’ deal or transformative merger, but that choice may be one that is by force rather than by desire.

Amazon.com Inc. (NASDAQ: AMZN) completed its the Zappos.com buyout, but that was all in stock.  Its market cap is almost $57 billion and it had almost $4 billion in cash and equivalents.  Raising cash would be easy for the company to do after the huge run and with as well as everyone is treating it. It has made some very selective deals over the last year or two and we expect the niche acquisition game to continue.  Bezos was an investment banker before.

eBay Inc. (NASDAQ: EBAY) is worth almost $31 billion again, yet it ended last quarter with cash and equivalents of over $4 billion when you include investments.  But… the recent settlement will clear the sale of of the Skype unit of $1.9 billion, plus it will still retain 30% of the entity.  Include the cash flows and eBay is closer to $6 billion in cash.  Just sticking by its model probably won’t be a good message, but what it would buy is more of a question than an answer.

The cash and available amounts listed herein does sometimes differ with what was listed as just the cash and marketable securities.  Our figure includes its long-term investments that can be unlocked and also includes recent cash raises.  We also water the ‘equity investments’ down to give a more conservative picture.  In short, this $265 billion is probably a lot more available than what we are counting.  This is also just the U.S-based list.  With a very weak US Dollar, our companies are looking cheaper and cheaper to foreign buyers.

Brocade Communications Systems, Inc. (NASDAQ: BRCD) is being overly punished this morning with a 12% drop to $8.15 now that 3Com was the merger of choice by H-P.  Brocade may still be a target, yet you never know for sure.  JDS Uniphase Corp. (NASDAQ: JDSU) is up over 10% at $7.99 now that Jim Cramer joined in on what we commented about it being viewed as a possible takeover candidate before.  Stay tuned for a larger expanded list of takeover candidates in technology here.

You can join our open email distribution list which goes out several times per week to be notified of key merger news, key analyst calls, top early morning day trader alerts, along with news of IPO’s, key offerings, guru investor data on Buffett and others, mergers, and more.

JON C. OGG
NOVEMBER 12, 2009

Several studies show that Microsoft’s (NASDAQ:MSFT) Bing search engine picked up market share in October. Combined with Yahoo! the two companies could end up with clost to 30% of the industry in the United States. The firms believe that the deal will be final in the first quarter of next year. Google (NASDAQ:GOOG) will still have two-thirds of the market, but perhaps second place is not so bad.

The value of first place is hard to argue. Google has a market capitalization of $180 billion and had operating income of $2 billion on revenue of slightly less than $6 billion last quarter. Yahoo! serves about 20% of the searchs made in the US but has a market cap of only $23 billion and made a very modest $70 million on $1.78 billion in revenue in the period ending September 30. Microsoft does not break out its search revenue or expense, but its online operations are small and lose money.

Bing has some momemtun now and the deal it has put together to marry its search business with Yahoo! may no longer look as good it did when the tranaction was first announced. The final agreement seems to be taking a long time to close. Maybe someong has cold feet.

Bing and Yahoo! together will not be a very big operation. The search joint venture is unlikely to have revenue of better than $2.5 billion a quarter, as measured as if it were its own company. Cost cutting should make it fairly profitable, but the bottom line is unlikely to be any better than $350 million a quarter, a small fraction of what Google makes.

Google has a scale and profit advantage over its competition for several reasons but the most important is that the more searches a search engine does, the more accurate the results are for both consumers and advertisers. Google works at an order of magnitude the its competition can image but cannot come close to matching.

Microsoft says that search is a “strategic” business, a weapon of sorts against Google and other competitors. It is not entirely clear why that is true. Perhaps it is because Google has something that Microsoft does not, but the Google’s leverage from that, beyond making a lot of money, is not clear. Search does not appear to be critical to Oracle (NASDAQ:ORCL) or SAP (NYSE:SAP), the two largest enterprise sofware companies in the world. Microsoft must be a special situation, but it has not necessarily made a powerful case of why.

Sometime next year, the Yahoo! deal with Microsoft will probably be approved by regulators. Putting the search operations of the two companies involves substantial risks as all large corporate integrations do. Google is going to take advantage of any disruption in the service of its two competitor. Microsoft gets an edge in the tech world because of its joint venture with Yahoo!, but that edge is an obscure one. The two firms together get a mediocre business.

Douglas A. McIntyre

It is usually questionable if Microsoft Corp. (NASDAQ: MSFT) and its new Bing.com search engine is stealing from Google Inc. (NASDAQ: GOOG) or from Yahoo! Inc. (NASDAQ: YHOO) when it comes to gains in the share of internet search.  Or maybe it was IAC/InteractiveCorp. (NASDAQ: IACI) and its Ask.com distant #4 search product.  Hitwise is only one source which measures U.S. searches, but a reading of searches conducted in the four weeks ending Oct. 31, 2009 showed a gain for Bing. Hitwise showed that Bing is clearly taking more from Google and some from Yahoo!.  Even Ask.com got a little lift this time.  Hitwise gave the following data:

Gooogle was 71.08% of search in September, but that shrank by a factor 0.01 to 70.6% in October.  Yahoo! was 16.38% in September, but that also shrank by a factor of 0.01 to 16.14%.

Microsoft’s Bing.com is taking back some share of the search market as the September reading of 8.96% share of the search market grew by a factor of 0.07 to 9.57% of the share of search.

IAC/InterActiveCorp’s distant #4 search product, Ask.com, had September search share of 2.56%.  That rose by a factor of 0.02 to 2.62% for October.  That figure used to be higher, so maybe Diller and the IAC team are trying to garner more glue that holds all the IAC sites together.

At this rate, Bing and Yahoo! combined are just over 25%.  It won’t be easy to force this change, but if the two companies can get back to above a combined 30% share between the two then they will be able to show that they have a real and true answer to the Google search universe.

JON C. OGG
NOVEMBER 11, 2009

The recovery is on and mergers are happening, yet the technology sector has been slow to make deals.  Despite some deals already having taken place from the technology giants and that $260 billion cash balance which was there in the middle of last quarter is even larger now.  The tally for cash by our count is now right around $269 billion.  We looked through the top market caps of technology companies in our 24/7 Wall St. Real-Time 500 and this list is expanded now that some issues have been resolved in all the companies.  The stocks in this group are Microsoft Corporation (NASDAQ: MSFT), Cisco Systems Inc. (NASDAQ: CSCO), Apple Inc. (NASDAQ: AAPL), Google Inc. (NASDAQ: GOOG), Intel Corp. (NASDAQ: INTC), Oracle Corp. (NASDAQ: ORCL), Sun Microsystems Inc. (NASDAQ: JAVA), Hewlett-Packard Company (NYSE: HPQ), QUALCOMM Inc. (NASDAQ: QCOM), EMC Corporation (NYSE: EMC), International Business Machines (NYSE: IBM), Dell Inc. (NASDAQ: DELL), Yahoo! Inc. (NASDAQ: YHOO), Amazon.com Inc. (NASDAQ: AMZN), and eBay Inc. (NASDAQ: EBAY).

These few tech companies with the $269 billion cash that could be deployed for mergers, acquisitions, or the good old dividends are also listed before tallying up credit lines, factoring, debt sales, and other creative financing methods.  We have listed the suppositions and counting methods for each one to illustrate how much is available at each company.

Microsoft Corporation (NASDAQ: MSFT) is still #2 on the Real-Time 500 with close to a $260 billion market cap as of now. It ended the quarter with $36.7 billion in cash and short-term investments, but it also ended with equity (and other) investments of $6 billion.  If you water that down by one-third, then Mister Softy is sitting on $40 billion before any new debt.  That leaves over $4.00 per share that could be paid out today if it just did another huge dividend return and wanted to start over building cash.  In any deals it makes there is always the concern that antitrust issues will arise, but that has not been the case in the search pact with Yahoo! so far.

Cisco Systems Inc. (NASDAQ: CSCO) ended its October quarter with some $35.4 billion in cash and equivalents.  It also just raised $5 billion in a senior unsecured note offering yesterday, which effectively offsets the $2.5 billion for the Starent Networks Corp. (NASDAQ: STAR) and the $3.1 billion for the Tandberg deal if that gets resolved and completed.  For counting purposes, we are not counting Tandberg because it is thought of as an at-risk deal. That puts a remaining cash balance in the pending file of about $37.9 billion today.  It spent $1.8 billion buying back stock last quarter and a recent boost to its buyback plan leaves about $13.1 billion just to buy back its own stock.  With a $136 billion market cap, Cisco could pay close to $6 billion dividend and start over building its cash if it wanted to.

Apple Inc. (NASDAQ: AAPL) is now sitting with a market cap of $181 billion now that it has a price over $200.00 per share. Buying back its own stock would be expensive and maybe just silly and integrating an outside company into Apple might be far from easy.  But Apple is now sitting on right at $34 billion in cash if you include its long-term investments.  Apple could pay out a special of over $37.00 today if it wanted to zero out the cash and start building that all over again.

Google Inc. (NASDAQ: GOOG) now has a market cap getting close to $180 billion and a new cash balance of $22 billion.  Google is spending $750 million to acquire AdMob and $105 million to acquire On2 Technologies Inc. (AMEX: ONT).  But these are both stock deals rather than cash and that leaves its cash as is.  Google has also noted it is on the prowl and these two small deals won’t stop that.  If Google could not find a way to deploy cash and chose the cash dividend route, it could pay close to $69.00 per share and just start over on its cash growth game.

Intel Corp. (NASDAQ: INTC) has a market cap of $108 billion now mid-week and has close to $13 billion in cash equivalents after closing a recent deal. But it has another $4.3+ billion in equity securities and other long-term investments. If we took the same one-third out to water that down, that leaves almost $3 billion there and a grand total of right at $16 billion.  There are dozens of core related technologies in computing and in communications that it would not fall under harsh antitrust reviews, but anything processor related to PCs would be a tough sell.

Oracle Corp. (NASDAQ: ORCL) is tough to evaluate right now because the deal for Sun Microsystems Inc. (NASDAQ: JAVA) is valued at $7.4 billion, or $5.6 billion net of Sun’s cash and debt.  But this is now a deal in jeopardy and it is hard to know if Larry Ellison will just try to walk away from it. The company has a $109 billion market cap and it ended its August quarter with some $20.5 billion in cash and marketable securities.  In short, Larry Ellison could pay out a special dividend of $4.00 if he wanted to start over at zero and build up his cash from scratch.  But Ellison is a deal-maker, and we now know just how much he is willing to spend to grow even if a target is not making money.

And what about Sun Microsystems Inc. (NASDAQ: JAVA)?  If that deal is really blocked, then this company is going to be in a pickle to find a way to make money.  The company has gone out and bought earnings before, and its old balance sheet lists close to $3 billion in cash and other equivalents.  Because it is a money-losing company, we’ll give this a 50% haircut and give the company some $1.5 billion that it could use in cash.  We’d view any company as highly unlikely to accept Sun Micro shares as buyout collateral unless they were a desperate seller.  So the total added here is $1.5 billion.

Hewlett-Packard Company (NYSE: HPQ) ended with $13.7 billion in gross cash, but that is still over $24.6 billion in cash if you include its long-term investments on the books.  That is versus a $118 billion market cap.  There is still likely to be a rather long lull before H-P tries to match its big buyout of EDS even if Dell is tip-toeing into IT-services and consulting with Perot.

QUALCOMM Inc. (NASDAQ: QCOM) now has a $74 billion market cap yet it announced last week that cash and equivalents came to $17.7 billion at the end of its fiscal fourth quarter.  QUALCOMM has been settling suits and seems like less of a legal risk than before and it would seem that the company might want to deploy its cash.  It won’t send this back of course, but that would leave the potential for a $10.00 special dividend if it wants to return capital to holders and then start over building its cash.

EMC Corporation (NYSE: EMC) has close to a $35 billion market cap and no longer has the $2.1 billion from the deal to buy Data Domain.  But EMC also still has over 50% of the float of VMware (NYSE: VMW) and that company is worth $16.6 billion that could be counted.  EMC has noted that it could be making deals into the future, and to avoid antitrust issues it would seem that the company could or would make $1 to $3 billion buyouts each year.  The company said it ended its September quarter with cash and investments of $8.4 billion.  If you assume that VMware could be carved out for half its market value in a very discounted sale, then EMC is sitting on close to $17 billion before tapping any credit lines and before tapping any debt.

International Business Machines (NYSE: IBM) has a market cap of $166 billion and now lists roughly $11.5 billion in cash.  That is down from the prior quarter after it bought back shares and retired debt. IBM would likely look at another people-intensive or service-intensive deal if it has an appetite to do a cash deal, although there are random hardware and storage and systems possibilities still out there.  Based on the debt pay down, we’d assume a deal would only come in the form of stock today.

Yahoo! Inc. (NASDAQ: YHOO) has close to a $23 billion market cap and the distant #2 search player is hard to call a definite buyer now because of new management and a reorganization.  It ended its September quarter with cash and equivalents of $4.5 billion.  It also holds over $3 billion in investments in stakes of other companies, so if you water that down by one-third it has access to $6.5 billion.

Dell Inc. (NASDAQ: DELL) completing its $3.9 billion Perot Systems Corp.acquisition, which would leave roughly $8.8 billion in cash and equivalents versus $12.7 billion reported in August.  Add in another $1 billion in cash flow for this quarter just ended on October 31 (results not out yet) and you get an implied $9.8 billion today.

Amazon.com Inc. (NASDAQ: AMZN) is a dark horse here that is probably going to stick to using stock for its acquisitions when it can like it did with the Zappos.com buyout.  Its market cap is now $55 billion and it had almost $4 billion in cash and equivalents.  Raising cash would be easy for the company to do after the huge run and with as well as everyone is treating it.  That could take the cash balance far higher, although some might wonder if Jeff Bezos would use it to invest in rocket ships.

eBay Inc. (NASDAQ: EBAY) has a $30 billion market cap, yet it ended last quarter with cash and equivalents of over $4 billion when you include investments.  eBay’s recent settlement will clear the sale of the Skype unit of $1.9 billion, plus it will still retain 30% of the entity.  Include the cash flows and eBay is closer to $6 billion in the green and white paper stuff.  The company probably needs to do something for new growth, yet whether that means buying a public or private operation is an unknown.

The “cash and available” amounts we have listed do sometimes differ with what was listed as just the cash and marketable securities because of recent cash raises or because we have included a watered-down valuation of other investments that could be counted in there if a company really wanted to go do deals.  And of course no company ever wants to “zero out its cash” to pay dividends, but this shows just how much cash is available at each company.

You can join our open email distribution list which goes out several times per week to be notified of key merger news, key analyst calls, top early morning day trader alerts, along with news of IPO’s, key offerings, guru investor data on Buffett and others, mergers, and more.

JON C. OGG
NOVEMBER 10, 2009

Rupert Murdoch, head of News Corp (NYSE:NWS), has made it clear that he is done with the BBC and Google (NASDAQ:GOOG) stealing his content and using it to make money. He may sue both companies under the “fair use” laws to keep them from using material from his huge media empire.

Murdoch should be careful what he wishes for. According to a study from Experian Hitwise, “on a weekly basis Google and Google news are the top traffic providers for WSJ.com account for over 25% of WSJ.com’s traffic.” And, “over 44% of WSJ.com visitors coming from Google are “new” users who haven’t visited the domain in the last 30 days.”

Murdoch may have his way and badly damage his WSJ.com business in the process.

Douglas A. McIntyre