Brian White
Oklahoma City, OK - http://
Brian White is a strong advocate of value investing and index funds, but has known to hold an equity or two from time to time. Financially speaking, he's covered the Fortune 500 for six years in various reporting and writing positions and currently owns a business consulting company. Additionally, Mr. White holds BA and MBA degrees.
Posted Nov 21st 2008 3:21PM by Brian White
Filed under: Good news, Google (GOOG), Yahoo! (YHOO), AT and T (T)
With Yahoo, Inc. (NASDAQ: YHOO) stock in the dumper, the CEO spot looking for a newcomer and musings about the future of the company underway, perhaps there is a small bright light for the internet pioneer. Wireless provider T-Mobile will use Yahoo!'s mobile search as the default on all its phones' mobile web browsers.
While that may not be the biggest victory one can think of, it does help. Mobile search and web browsing has been increasing in usage (though still small), and although T-Mobile USA is only the nation's fourth-largest mobile provider, just the fact that Yahoo!'s services will keep the largest wireless providers from using competitive mobile search products is a blessing for Yahoo!
Making money from mobile web search is another matter. Although Yahoo! and T-Mobile said they will share revenue from the new arrangement, the question is this: are any mobile search companies and wireless providers making any significant revenue from mobile search partnering? At this point in time, it's hard to see that just based on skimpy usage. While it may not be that way in the future. T-Mobile International, which replaced Google, Inc. (NASDAQ: GOOG) mobile search with Yahoo!'s solution earlier in 2008 and Yahoo! also has its fingers in mobile search with the largest wireless provider in the U.S., AT&T, Inc. (NYSE: T). Perhaps Yahoo!'s rebirth will be around mobile technology after all. It's just a question of when.
Posted Nov 21st 2008 11:11AM by Brian White
Filed under: Products and services, Launches, Research in Motion (RIMM)
Research In Motion Ltd. (NASDAQ:
RIMM) launched the newest BlackBerry "do everything" wireless phone this week to much fanfare. While some pundits has argued whether this was the reel first "iPhone killer" to come to market, most of the universe eagerly waited to test an actual unit and see if what the specifications looked like matched reality. Add to that the fanatical user base the BlackBerry has -- just as nutty as iPhone worshippers -- and it was a classic showdown. Would the new BlackBerry Storm hold its own against
Apple, Inc.'s (NASDAQ:
AAPL) offering?
Being released today on the second-largest wireless network in the U.S. -- Verizon Wireless -- the newest BlackBerry offering is the first without a real, tactile keyboard. However, the touchscreen does have actual, tactile feedback. In other words, it can be "pressed" instead of just hovered over or lightly tapped. After having scanned an
in-depth review over at Engadget, there may be some major adjustment to this all-new way of inputting information into a phone, just like when Apple released the original iPhone and touchscreens were the new "it."
The gamble RIM takes here is if the real "tough" screen will get customers who require some kind of tactile feedback when using phones to become BlackBerry customers over the iPhone. From a phone standpoint, this is a good comparison. But when looking at the complete multimedia package of the iPhone from top to bottom, I'm unsure the Storm is even in the same league.
As a phone and email device, you bet -- the Storm is every bit as good as the iPhone on paper (feel free to disagree). Since Verizon told Apple to take a hike when the iPhone was originally offered to it, it's now 18 months later and the company finally has an answer. However, the question and answer may have already been asked and answered by
AT&T, Inc. (NYSE:
T), who Apple chose to partner with when Verizon Wireless declined.
Posted Nov 20th 2008 12:57PM by Brian White
Filed under: Target Corp. (TGT), Best Buy (BBY), Costco Wholesale (COST), Black Friday
As Black Friday approaches just over a week from today, you may be wondering where some of the best deals will be had. Sure, the usual suspects like
Costco Wholesale Corp. (NASDAQ:
COST),
Best Buy, Inc. (NYSE:
BBY) and
Target Corp. (NYSE:
TGT) will be offering huge discounts on the largest shopping retail day of the year. This year is different: the U.S. is in the midst of a full-blown economic funk. Consumers are not spending, retail prices are way down and layoffs are increasing. Will you be spending like a drunken sailor this holiday season?
Regardless of the precarious economic climate the U.S. and much of the world is in, retailers are not closing up shop for winter. There are
still some great bargains to be had and people will shop for gifts this year, just at a much lower rate than in the past. Just how low a rate remains to be seen, but let's chew on some deals to whet the whistle: Best Buy if offering an eMachines desktop PC with 18.5" LCD monitor and printer for $299 and a Canon Powershot 10 Megapixel digital camera for $199, Target is offering men's cotton sweaters (your choice of neck style) for $10 and a Garmin nuvi 200 GPS system for $119, and CostCo is offering a VTech 3-handset cordless phone system for $39 and a Western Digital portable backup hard drive for $89.
Compared with normal pricing on all those items, there are
savings to be had this year. Will you be out in your car early in the morning hours of Friday morning to snag one of these deals or perhaps another one? Human nature tells us that there will be those of you brave enough to trade time and patience for dollars. If you do take in some bargains this coming Friday, you'll be in a select group, as many of us will be reigning in purchases and will be spending extra wisely. The retailers will thank you, and hopefully their bottom line numbers will show your effort this season.
Posted Nov 20th 2008 12:12PM by Brian White
Filed under: Deals, Apple Inc (AAPL), Wal-Mart (WMT)
It was just a matter of time. It looks like the
Apple, Inc. (NASDAQ:
AAPL) iPhone 3G
will be coming to Wal-Mart sometime before the end of the year, but probably after Christmas. According to the
Boy Genius Report, which claims its sources are reliable and to have come across some internal Wal-Mart correspondence, the iPhone 3G will be sold in 2,500 Wal-Mart locations in about a month from now.
Remember that the iPhone 3G must be activated (unlike the original iPhone), so only Wal-Mart locations that can use a specific ordering and activation system can carry the iPhone 3G. Some Sam's Club locations will also carry the iPhone 3G, but they also must use the Wal-Mart ordering and activation system in-house (several Sam's locations use a different wireless activation system). All in all, this will make the iPhone available to just about every American (well, the ones with good credit at least) as more U.S. shoppers have exposure to Wal-Mart than just about any other store.
The question is whether Apple is forsaking the iPhone cool brand allure by offering it at the largest discounter in the world. At this time, no. The iPhone 3G has been out in the world long enough for the iPhone to make its name. Offering it at Wal-Mart now won't impact its reputation nor affect Apple's cred.
Since Apple pretty much dictates pricing to its retail partners, expect the iPhone 3G to sell for a dollar or two less than the standard $199 and $299 pricing levels seen at all other retailers. Say, something like $197.48 and $297.48, as Wal-Mart is into non-standard retail pricing schemes to try and create the illusion of low prices against the competition. The presumed launch date: December 28th. Get ready.
Posted Nov 19th 2008 11:10AM by Brian White
Filed under: Bad news, Amazon.com (AMZN)
Amazon.com Inc. (NASDAQ:
AMZN) hit a 52-week low yesterday, a week after the online retailer saw a previous year low. Worries about this year's retail holiday shopping season have
investors fleeing like rats on a sinking ship. Analyst Matt Nemer with Thomas Weisel lowered his Q4 earnings estimate on the retailer from $0.44 per share to $0.39 per share, while Barclays analyst Douglas Ammuth indicated that Q4 profit margins could shrink as price cuts go into effect.
Still, Amazon.com has one of the best chances to weather the consumer spending slowdown starting, well, yesterday. Almost everyone I know is already shopping for the holidays, and many are shopping online and are definitely searching out bargains. While the management of companies that run shopping malls in my area are considering bankruptcy, standalone retailers with strong brands and good customer perception appear to be doing fine. I'm left wondering how long that can last, though.
Amazon's shares have come back from the stratosphere and have settled into what could be considered a normal range. The company is making money, making profits and is very strong in almost every area in which it operates. It's the world's largest online-only retailer and unlike many other retailers, I've never seen the company say that it makes a huge percentage of its profit in the end-of-year holiday shopping season. All things considered, my guess is that Amazon.com will do fine this season. Not stupendous, but fine.
Posted Nov 19th 2008 8:55AM by Brian White
Filed under: Bad news, Industry, Economic data
Online data measurement company comScore released on Tuesday
October 2008 e-commerce figures, saying it was the slowest growth it has measured since 2001, when it has started tracking the data. After years of solid growth for online retailers (from double digits to single digits recently), October online retail sales grew at a measly 1%. When online retail growth comes to a screeching halt, with all those heavy discounts and free shipping, something's amiss.
Let's take a look at the last five months in online retail sales growth: 11% to 8% to 6% to 5% to 1%. Yikes.
ComScore chairman Gian Fulgoni indicated that rising prices and unemployment rates combined with the psychological impact of the global economic situation has consumers frozen on many of their spending. It will be interesting to see what November's growth figure is like, even with the official start of the holiday shopping season.
ComScore's most significant figure was that spending for households that make below $50,000 per year has dropped off significantly, declining 3% in October compared to the month a year-ago. For households making $50,000 to $100,000, spending increased 1% in October, while households making over $100,000 increased spending to the tune of 14% in October. So,
according to comScore, growth really did come to an almost complete stop for households earning less than $100,000. Will spending recover for this demographic for the next month and a half? Doubtful.
Posted Nov 18th 2008 3:45PM by Brian White
Filed under: Management, News Corp'B' (NWS)
When
News Corp. (NYSE:
NWS) CEO and media baron Rupert Murdoch speaks, people in the media business should listen. The 77 year-old tycoon has built an impressive array of media properties and is one of the few who gets it when it comes to how media should be created, by whom it should be created, and how it's consumed by different consumer segments.
Recently, Murdoch indicated that the deeply troubled newspaper industry can survive only if
editors and writers throw their egos out the window and regain the trust and loyalty of their readers. The once monopolistic newspaper industry now competes with the 24/7 internet news trade and its army of well-informed bloggers and citizen journalists. If the old guard doesn't believe this is the new competition, then I hope they have a second career all lined up.
Murdoch's words appear uncannily prescient: "My summary of the way some of the established media has responded to the internet is this: it's not newspapers that might become obsolete. It's some of the editors, reporters, and proprietors who are forgetting a newspaper's most precious asset: the bond with its readers." He goes on to say that the "paper on the porch" might go away, but daily news will not.
Continue reading Rupert Murdoch: The newspaper old guard is arrogant - and obsolete
Posted Nov 18th 2008 3:30PM by Brian White
Filed under: Apple Inc (AAPL), Employees, International Business Machines (IBM)
When Mark Papermaster
decided to leave IBM for Apple, it sent a strange signal to many industry pundits. Why would
Apple, Inc. (NASDAQ:
AAPL) be hiring a dyed-in-the-wool microchip designer to run its consumer products division? Does it need help in the hardware engineering department or is it out to create another breakthrough in consumer product design to keep the iPod and iPhone cash cows alive as those categories age?
Although we didn't get an answer to those questions, Papermaster was forced to play a bit of tug of war, at least legally.
IBM Corp. (NYSE:
IBM) was able to convince a judge to put an injunction on his reporting to work at Apple due to a non-compete clause with his former employer. Papermaster has now countered by saying that IBM and Apple do not compete at all in the area where he will be employed at Apple. He's right -- in fact, IBM and Apple don't compete on any level at all any longer.
So, we have to
wonder what IBM's beef is here. Some clauses in his contract with IBM are so broad that apparently Papermaster should not be able to work for any tech company for a year after leaving IBM. The non-compete portion of this contract states that he can't go to work for the competition, even if there is no competition in the product space. In other words, Papermaster's countersuit will try to find this section of his contract to be invalid due to the fact that IBM's interests won't be hurt in any way by his employment at Apple. Good luck on that one. Today there will be a meeting between the two companies to hash out details, so this may become a bit thicker soon.
Posted Nov 17th 2008 9:54PM by Brian White
Filed under: Management, Yahoo! (YHOO)
After a short and tumultuous tenure as CEO of the company he co-founded, Jerry Yang and
Yahoo!, Inc. (NASDAQ:
YHOO) announced this evening that
Yang will step down as CEO as soon as a successor is found. Carl Icahn is certainly happy, as are the YHOO investors who saw Yang refuse
Microsoft Corp.'s (NASDAQ:
MSFT) $33/share buyout offer earlier this year. Yahoo! shares closed today below $11.
It's a forgone conclusion that Yahoo! will immediately begin searching for a new CEO. The internal list probably includes just one person -- Yahoo! President Sue Decker. She has ruled the Yahoo! kingdom alongside Yang for the last 16 months and is easily qualified for the position. She also does not seem to bear the blame for failing to consummate the proposed Microsoft merger almost 10 months ago.
This is a precarious time in Yahoo!'s future -- it needs a CEO that can unwrap Yahoo!'s magic once again and get customers -- and the market -- interested in the company again. Yahoo! still has great products and a great brand, but it has tarnish that needs to be wiped away.
Google, Inc. (NASDAQ:
GOOG) has stolen any remaining thunder that Yahoo! may have once had. Now Yahoo is seen as an incredibly popular but stodgy company that just doesn't have the cutting-edge position it used to hold in the internet.
It's hard to see how a new CEO can totally re-invent the company. But anything is better for Yahoo! than where it sits now. Yang can go back to his old position as "chief Yahoo!" and rally the troops -- that is, if any of them are even loyal to him any longer.
Posted Nov 17th 2008 3:18PM by Brian White
Filed under: Wal-Mart (WMT), Columns
Welcome to the 85th installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions, and just a bit of everything else when it comes to a very hot topic these days: Wal-Mart.
Wal-Mart Stores Inc. (NYSE: WMT) has seen its share of ups and down in recent years. It has tried to change its strategy, brought more stores into its fold, had a hand at recruiting more customers from higher-margin spending segments and has eventually returned to its strength: supplying discounts on everything it sells to as many consumers as possible.
Where is Wal-Mart headed? Right now, in a straight line. I firmly believe that the world's largest retailer is in the best possible position to ride out the current global economic crisis better than any other company in any industry. Why? People won't stop eating and clothing themselves and their kids, while buying birthday cards and placemats. And, they want it as cheap as possible. Enter Wal-Mart.
Continue reading Wal-Mart Weekly: Wal-Mart wary of economy, but should it be?
Posted Nov 17th 2008 1:46PM by Brian White
Filed under: Bad news, Sirius Satellite Radio (SIRI)
As
Jamie Dlugosch mentioned a few days ago,
Sirius XM Radio (NASDAQ:
SIRI) shares are trading for less than a can of pop at the local gas station. The company, which just completed its merger this past summer, saw its biggest customer -- automakers -- fall on hard times just as it was poised to try and grow as a combined company. Timing is everything; if Sirius were operating back in 2006, it'd be just fine. But it is almost 2009 and the economy is in a world of hurt. So are consumer spending dollars and just about any automaker you look at.
That's a one-two punch for satellite radio. Although I've used satellite radio before, the talk radio and interruption-free decade channels were about it for me. Sirius is now
shuffling channels, trying to find a better mix that newer customers would be drawn to, as well as eliminating DJs on some music channels to save costs. When the
difference between pay radio and terrestrial radio starts diminishing, that is a signal of the end. Sirius can't expect to have lackluster music programming and a lack of actual DJ personality to be perceived as "better" to existing customers, who could turn off satellite forever and create their own music service with a $50 MP3 player.
Note to Sirius: millions of consumers already do this. They download new music, podcasts and other entertainment directly (and in many cases, for free) and listen to what they want on their portable device over their car stereo systems. Although Sirius XM CEO Mel Karmazin acknowledged that MP3 players, iPods and the like
were large competitors to satellite radio, this time his company is probably seeing it in force as it cuts costs and erases one benefit after another that are supposed to come with the $13/month radio service. Satellite Radio will survive the economic downturn, but who knows if it will be a shell of itself with a declining customer base and even more piles of debt after it is all through.
Posted Nov 17th 2008 10:22AM by Brian White
Filed under: Analyst upgrades and downgrades, Dell (DELL)
Dell, Inc. (NASDAQ:
DELL) won't see growth or gain market share in the next few quarters, according the brokerage house Merrill Lynch. So much so that the broker
cut its rating on the PC maker to Neutral, citing the company's lack of catalyst to change anything about its bleak future as the business and consumer sectors continue to pull back their money.
But Dell wasn't the only one whacked. Merrill indicated that the market for PCs would be deteriorating through 2010, with a 2% free fall in 2009, contrasting against its earlier call of a 12% spike next year. In other words, it has no idea how the PC market is going to shake out. Might as well flip a coin.
Declining European and U.S. sales forecasts in the PC market are now showing up in the Asia Pacific and emerging markets as well. Although Merrill did say that expectations for growth in the newer netbook category would help offset softness in overall sales, I'm skeptical.
These newer
netbooks are under-powered and are hard to type on (try one), even though the valiant attempt by PC makers to create a new category -- something that will sell -- is admirable. There will be a niche market for these devices (many of which cost as much as an on-sale full-size notebook), but that's it. If there's a bright future for these things plus any kind of profit margin that's respectable, I don't see it. That is, unless buyers like under-powered old hardware running old software with less features. But hey, it's small!
Posted Nov 14th 2008 6:41PM by Brian White
Filed under: Products and services, Google (GOOG), Apple Inc (AAPL)
Google, Inc. (NASDAQ: GOOG) continues to bet that beating the competition in the wireless arena is not a strategy, but a matter of growth survival. If it wants to rule the wireless search and web application universe like it has the world wide web, it has to be everywhere on every device. To that tune, Google has upgraded its search results for the Apple, Inc. (NASDAQ: AAPL) iPhone in an effort to fit better with the device's specific display limitations -- and capabilities.
Yes, Google voice search was just added to the iPhone's capabilities, but Google can't stop there. Google indicated this week that the "side to side" scrolling to view complete search results on the iPhone has been eliminated. In addition, easier "click to call" and "get directions" links are now in place for those mobile searches where Google thinks you may want to call someone or find directions from a web search on the iPhone. Even though the iPhone has a great display, it's nowhere near a standard flat-screen monitor.
Similar to how Google displays itself on a standard cellphone, a "Classic" option exists at the bottom of every Google search performed on the iPhone should iPhone users wish to get the "full Google" experience on the limited screen real estate on the iPhone. For iPhone fanatics (you're probably included if you own one), the new layout will probably be to your liking. And, just like Google wants you too, you'll continue to use Google for all your iPhone web-based search needs forever and ever. At the same time, Yahoo! Mobile employees may be heard collectively screaming.
Posted Nov 14th 2008 5:20PM by Brian White
Filed under: Bad news, Sprint Nextel Corp (S)
Sprint Nextel Corp. (NYSE: S) seems to be clinging to life as it leeches wireless customers to the competition and desperately tries to get employees to take buyout clauses. Since the company can't find a soul to buy its Nextel national U.S. wireless network, it must nevertheless stop owning and operating that network where affiliate iPCS has its wireless territory.
Perhaps Sprint can just turn off the Nextel wireless network in those areas and have a wireless parts garage sale? It won't be able to get rid of that network infrastructure to make at least a little money. Who would want it? Answer: nobody. A court found this week that Sprint is already in violation of its agreement with iPCS and must shut down its Nextel network in iPCS's territories, so there is nothing Sprint Nextel can do, except get the blowtorches and dumptrucks ready.
The problem for Sprint, however, is not equipment mothballing. It has 500,000 Nextel subscribers in iPCS territory. What does it do with them? If the company has to shave half a million subscribers, that would be disastrous to a wireless company already losing hundreds of thousands of customers per year. Look for Sprint to settle with iPCS before the end of 2008 by whatever means possible. It can't afford to lose any more customers.
Posted Nov 13th 2008 2:43PM by Brian White
Filed under: Google (GOOG), Recession
As Doug
noted a few days ago, shares in
Google, Inc. (NASDAQ:
GOOG) have dropped to 52-week lows and then some. It's no surprise -- Google has joined just about every public company in the stock market freefall this year. But now, the company's shares have gone below the $300 mark for the first time since 2005. Is the company doomed?
Of course not. Google has very little debt and billions in cash to do whatever it wants. It, of course, won't be immune from the online advertising slowdown that's in progress and will get worse. Still, if analyst pundits think businesses can just stop advertising and expect the same business activity, that's a huge fallacy. Google will still remain one of the best advertising destinations, even as businesses squeeze their marketing budgets as much as they can.
Google's shares are off more then 50% this year, but this doesn't change the fact that Google's financial fundamentals are completely sound. But, of course, doom and gloom predictors are coming out of the woodwork with the guesswork on what Google's 2009 profit outcomes could be (flip a coin, anyone?).
Collins Stewart analyst Sandeep Aggarwal told Yahoo! that "we believe that the high CPC (costs-per-click) inflation Google has been experiencing for the past six quarters is not sustainable and will pressure core search growth". Of course it won't be sustainable. But Google isn't going to hurt unless it stays this way for 24 months or more.
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