What is interesting is that Taleo was not even part of this cloud ETF, and many of the ETFs components are not exactly all cloud space players.  Is it fair to lump in all cloud players as targets when one is software and one is hardware?  Be advised, there are some stocks which have had buyout rumors in the past listed below but there are no current rumors we have heard.

Here is the weighting of the cloud ETF’s more cloud-centric companies, with the most recent weightings and some commentary on some of the names:

Equinix, Inc. (NASDAQ: EQIX) 3.80%…probably too expensive to acquire now on valuation metrics and with a $6.1 billion market cap.

Akamai Technologies, Inc. (NASDAQ:: AKAM) 3.72%… surged after earnings, now unlikely to be bought on the cheap by would be acquirers.  

Rackspace Hosting, Inc. (NYSE: RAX) 3.39%… has been called a buyout candidate before but the company’s line is that it wants to remain independent.

Teradata Corporation (NYSE: TDC) 3.35%… still considered a special situation by some investors but no buyout rumors have proven true, and shares are up big after earnings.

NetApp, Inc. (NASDAQ: NTAP) 3.22%… “The one that got away.”  This used to be a buyout dream stock, but valuation got in the way.  Now at over $14 billion the time may have come and gone.

Salesforce.com, Inc. (NYSE: CRM) 3.08%… way too expensive to acquire on a valuation basis.  Cloud is everywhere here in effect as a great benefit, but this one is diversified into CRM and SaaS.

Where this gets interesting is that Taleo is a human resources software maker and perhaps not just cloud software as some of the media headlines would have suggested.  The 18% premium also suggests that paying up for the cloud players is only a limited value.

Just because one buyer buys a loose cloud play in software does not translate to buyouts in hardware. 

JON C. OGG

• Feb 01 traded 125,300 shares and closed at $14.59
• Jan 31 traded 58,300 shares and closed at $14.25
• Jan 30 traded 33,400 shares and closed at $14.28
• Jan 27 traded 16,200 shares and closed at $14.20
• Jan 26 traded 400 shares and closed at $13.50
• Jan 25 traded 1,300 shares and closed at $13.59

We said it before and we will say it again… This ETF owns no shares of Facebook as of yet.  It will have to after the Facebook IPO but it does not now.  Interpublic Group of Companies, Inc. (NYSE: IPG) owns shares but barely rose today.  Affiliates of Goldman Sachs Group Inc. (NYSE: GS) own shares, and Microsoft Corporation (NASDAQ: MSFT) owns shares.  The social media company only has a halo-effect around the theme of social media.

Facebook is and was one of our Top 17 IPOs For 2012, but so was Twitter, Living Social and Yelp.

LinkedIn Corporation (NYSE: LNKD) closed up 6.4% at $76.98 solely on being a rival and Zynga Inc. (NASDAQ: ZNGA) rose 16% to $12.39 due to its being north of 10% of Facebook’s revenues.

What is so funny is that even FriendFinder Networks Inc. (NASDAQ: FFN), the adult-themed social networking site and one of the worst IPOs of modern time, rose solely because of the social media halo.  That gain was 16% to $1.33 against a 52-week range (actually under a year) of $0.51 to $10.01.

The one business development company which does own Facebook shares is GSV Capital Corporation (NASDAQ: GSVC).  Its shares have risen since the impending filing was telegraphed last Friday and the stock rose by over 7% to $18.51 today.

This is called the Halo-effect if there ever was one.

Facebook’s full IPO details are here.

JON C. OGG

The case for the extraordinary value of Apple’s share is straightforward. It had revenue of $46.3 billion in the last quarter, up from $26.7 billion in the same period a year ago. Net income was $13.1 billion, an increase from $6 billion. The strength of those numbers is compounded by their rapid growth rates. Apple probably has passed Hewlett-Packard (NYSE: HPQ) as the largest tech firm in the world by sales.

There have been other, and probably more remarkable, technologies than Apple’s hardware and software, which make the company’s results less impressive.

The sales of Windows-based PCs, a product which is now viewed as nearly ancient, are still about 400 million a year. It is hard to calculate how many of these have been sold since they were first introduced in 1980. It is probably 6 billion or more. In addition to what companies like Dell (NASDAQ: DELL) and HP have made on that business, the Windows revenue of Microsoft (NASDAQ: MSFT) has to be added. The figure is certainly close to $1 trillion.

The video game console and software-based games also would have to be contenders to the sales of Apple’s products. Sales of the Sony (NYSE: SNE) PlayStation are above $200 million and growing. Add to that the sales of the Microsoft Xbox and Nintendo Wii. The total of all of these has to be $600 million or more.

Apple’s numbers may be stunning, but they are not as stunning on a second look when compared to other technology products, the success of which are almost forgotten.

Douglas A. McIntyre

Microsoft’s sales in the past quarter did not improve much — from $20 billion to $20.9 billion. Earnings were down very slightly to $6.6 billion. But the world’s largest software company is nearing the end of its Windows 7 product cycle, and Windows 8 is on the horizon. The strength of its earnings were in its Servers & Tools division and Business division. These signal the health of corporate and enterprise IT spending. Google has tried to enter this field with its apps products and failed. Microsoft’s products have the appeal of completeness and are fully finished. The power of its numbers in these areas was confirmed by IBM’s (NYSE: IBM) strength in the same sector

Google’s earnings were impressive on their face. Sales rose 25% to $10.6 billion. Earnings were up very modestly from $2.54 billion to $2.71 billion. The margins were unimpressive. Wall St. reacted by dropping shares by 10%. The strangest thing about the company’s numbers was that the employee count at Google rose from 31,353 at the end of September to 32,467. This happened as Google dropped out of a number of is faltering businesses. It would seem the size of its workforce ought to decline. Google has decided to invest in a future that may be severely limited.

Google’s figures were hurt by the movement of search to mobile devices from the PC. Yield per click on its text ads dropped 8% from the same period a year ago. Some analysts believe that click activity on mobile devices is poor. Google may be the leader by far in mobile search. The victory appears to have caused damage to its margins.

Google’s other major push into mobile is its Android operating system. Its adoption has been extraordinary. Android growth has outpaced the increase in the use of Apple’s (NASDAQ: AAPL) OS, and Microsoft barely has as foothold in the market. Google has not found a way to make money on Android, and the software is under patent attacks, mostly from Microsoft. An open source operating system that was supposed to be free has turned out to be expensive for its adopters. Most have agreed to pay license fees to Microsoft for its intellectual property. Microsoft may have found the mobile OS business more profitable than Google, even though Windows mobile OS growth has been nonexistent.

Microsoft was mocked for its entry into hardware, mostly through its Xbox franchise. Redmond posted fourth-quarter sales of $4.2 billion for the division. That is up from $3.7 billion the year before. Sales of “entertainment and devices” are now nearly as large as that of Windows. And the division made $528 million. Google has finally seen the strength of hardware. It is set to buy Motorola Mobility (NYSE: MMI), the wounded handset company. It is not as good a hardware operation as Xbox is, but it allows Google a chance to have some of the success that Microsoft had when it started a gaming and entertainment device business that no one through would succeed. Microsoft also has a strong foothold in the American living room. Google has not yet launched its attempt — Google TV.

Finally, Google said it would press harder into display advertising. Search ads were assumed to be a much better place to make money than display. Display ads have been the foundation of Microsoft’s online business. Suddenly Google finds the sector attractive.

Google has begun to move closer to Microsoft’s business model — a model that most analysts have believed is deeply flawed.

Douglas A. McIntyre

The company offers earnings and sales guidance in its conference call, so consider this report as unfinished business.  Here is the consensus: For the coming quarter, estimates are $0.61 EPS and $17.53 billion in sales.  For fiscal June-2012, the current estimates are $2.72 EPS and almost $74.5 billion in sales.
 
Microsoft also said that its cash and equivalents came in at $10.6 billion, but it listed its short-term investments as being $41.1 billion.

Shares were at the highest pre-earnings handle that they have been in a year.  After closing at $28.12, the after-hours report has shares up 2% at $28.75 and the 52-week range is $23.65 to $29.46.

Before seeing any analyst call notes tomorrow and the day after, the consensus price target (mean target) from Thomson Reuters is $31.14.  Shares closed out 2011 close to $26.00 and the 50-day moving average is $26.21 and the 200-day moving average is $25.65.

Until you get guidance in the conference call, this should be considered unfinished business.

JON C. OGG

After the close on Tuesday came word that Bill Veghte has been appointed as the company’s Chief Strategy Officer.  It was noted, “In addition to his new responsibilities, Veghte will continue in his current role as executive vice president of HP Software.”  And later in the release it noted, “Veghte will lead HP’s cloud and webOS open source initiatives.”

EVP of HP Software as Strategy head… a former SAP head booted out… a giant Autonomy acquisition… naming Meg Whitman as CEO with internet experience… and keeping the PC unit because it would cost too much to get rid of.  Does anything here tell you that the future direction of HP is going backwards into more and more hardware?

HP noted that this further signals its “commitment to providing customers with the latest platforms, products and services needed for success in a rapidly changing world.”

As far as Veghte’s past, he joined HP in 2010 and was credited for helping to grow HP’s software business by 18% in the most recent year.  Before joining HP he spent ‘two decades’ at Microsoft Corporation (NASDAQ: MSFT) “in a variety of senior leadership positions” and it was noted that he managed the company’s $15 billion global Windows business and was called “instrumental in the delivery and launch of Windows 7.”

JON C. OGG

SAP reported record software revenue up 16% in the quarter to 1.74 billion euros, and up 22% for the year 2011.  More important is that the company is claiming to have beaten its annual guidance in non-IFRS software and
 software-related service sales.  It is also claiming to have exceeded its earnings guidance on higher margins.

SAP is planning to release more detailed quarterly and annual financial data on January 25 but this was called by the company as having been its “best ever full-year and fourth quarter” in the release.

After closing at $53.25 in New York against a 52-week range of $47.39 to $68.39, the pre-market trading has shares up just over 2.5% at $54.57 in active trading.

Shares of Oracle are indicated down 0.4% at $27.05 against a 52-week range of $24.72 to $36.50.

JON C. OGG

The world’s largest software company has now signed agreements with handset makers Samsung, HTC Corp., LG, and eight other makers, which together manufacture about 70% of all smartphones using the Android operating system. So, while Google may give away Android, the operating system is no longer free. But Google doesn’t get any payment — checks are made out to Microsoft.

Microsoft has been pressing smartphone makers for months to pay up, and most have been doing so. Google has spoken out against all the patent lawsuits over mobile hardware and software, but the company is hedging its bets with its acquisition of Motorola Mobility Holdings Inc. (NYSE: MMI). Apple has been particularly aggressive in pursuing what it believes to be Google’s patent infringements. Another aggressive actor is Oracle Corp. (NASDAQ: ORCL), which acquired the patents and copyrights on the Java programming language when it acquired Sun Microsystems.

Google may end up having to compensate handset makers for the Microsoft fees, especially if the new Windows Phone operating system starts to encroach on Google’s lead in mobile platform software. Nokia Corp. (NYSE: NOK) is not the only smartphone maker that will be using the new Microsoft mobile operating system.

One thing that might happen is that Microsoft could agree to license Windows Phone at a lower price if a handset maker agrees to replace Android with the new Microsoft operating system. Google, which derives virtually all of its revenue and profit from advertising, must be able to grow its mobile advertising base and to do that it needs Android out there on as many smartphones as possible. It’s a jungle out there.

Paul Ausick

Nuance has been thought of as a potential takeover name for Microsoft Corporation (NASDAQ: MSFT) and for Apple Inc. (NASDAQ: AAPL) on and off for some time.  This may not change the speculation status much.  But what this does accomplish is a new platform to “easily find content by speaking channel numbers, station names, show and movie names.”  This would allow for searching by content, actor, and genre.  The notion that this allows for staying connected through Twitter, Facebook and Skype may just be gravy.

Dragon TV was unveiled as a voice and natural language understanding platform for TV, device and set-top box OEMs and service operators geared toward making it easy to find and access the TV show that a subscriber wants to watch.

If Nuance can open this up to cable outfits Comcast Corporation (NASDAQ: CMCSA) and Time Warner Cable Inc. (NYSE: TWC), and to AT&T INc. (NYSE: T) for its uVerse, let alone DIRECTV, Inc. (NASDAQ: DTV) and Dish Network Corporation (NASDAQ: DISH) for satellite, then Nuance may get a much wider footprint.

How this gets monetized is up for anyone’s guess.  Nuance projected that about 1.6 billion TVs should be connected to the web by 2014 according to Strategy Analytics.  It even notes the difficulty in finding what is on television.  How many times have you been looking for a televised game or show and have no idea what channel it is on?

This will allow OEMs and service operators to deliver TVs, set-top boxes and applications that let consumers find and experience content with Nuance’s leading voice technologies.

Again, the trick is on the monetization.  If it can get a piece of a upcharge for the service then this may open up millions and millions more in revenues per month.  If it is a promotional feature, then this may just be a another brand building effort.

JON C. OGG

The problem with a bankruptcy is that it does nothing to increase the value of Kodak’s patents. If they have a very large value, Kodak would have gotten that already. It has had months to complete a process to use its intellectual property to bolster its balance sheet. That has not happened.

A Chapter 11 filing would allow a court to auction off Kodak’s 1,100 patents. That, it is assumed, would get full value. That theory is flawed. Kodak should be able to hold an auction of its own. The court has no special power to get what the open market will not give.

Kodak’s problem may be that in a world of digital patent wars, its assets are not terribly valuable. Companies like Google (NASDAQ: GOOG), Apple (NASDAQ: AAPL), Samsung and HTC already have armies of lawyers in courts skirmishing to lay claims that their intellectual property should own the territory of certain technology and techniques. Some argue that Google bought Motorola Mobility (NYSE: MMI) because of its patent portfolio. Google says otherwise. It wants Motorola for its revenue and access to the wireless hardware markets. Google’s comments may not be misleading. There is a value in market share in one of the fastest growing portions of the global tech markets.

Dozens of American companies have digital patents that number into the thousands, and more are held by overseas firms. Shoppers may have looked at Kodak’s patents and decided that they are not worth much at all, either because of limited scope or fears that, once acquired, they will have to be defended in court.

The market has not given Kodak a premium for its intellectual property. It might as well auction its patents and get what it can.

Douglas A. McIntyre