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Rupert and Bill Don't Scare Me!

Erik D'Amato cikke a Blog rovatból, 2007. május 4. péntek, 15:27 | 16 hozzászólás

chart.jpgSometime after lunch today, around $6 billion - or roughly a trillion forints - of perceived value was added to the shares of Yahoo!, on news that Microsoft may be planning a takeover of the deep-rooted but recently-troubled portal company. (That's a screen-shot of the "pre-market" activity in the stock, taken from Yahoo's own finance pages at around 3:00 p.m. Budapest time.) The stunning news comes just a few days after Australian-American media magnate Rupert Murdoch caused an even bigger jump in the shares of the Dow Jones company, which publishes the Wall Street Journal, among many others. The two deals again leads one to wonder how freaked out to be about moguls like Bill Gates and Rupert Murdoch extending their grip over the global flow of information.

mogulok.jpgEver since I worked at his first American publication (the strangely offline tabloid Star) more than 25 years ago as a lowly editorial slave, I've harbored an almost visceral fear of Murdoch (left). I can still remember the first time I picked up a phone and heard "It's Rupert," causing my blood to instantly chill by a few degrees. And not only me: when I passed on the call to the mid-level executive "Rupert" was calling for (everyone seemed to call him "Rupert") the guy looked like someone from the old Andrássy út 60 was on the line. It was common for Rupert to nitpick over the smallest detail - he was notorious for his headline-writing "skills" - and to blow his stack when he didn't get exactly what he wanted. I've never had the pleasure of working for Bill Gates, but from what I've read about the guy, he seems to be a younger (and richer) clone of Rupert. Both seem to have an insatiable appetite for power and control, and even the idea that they are the rightful "owners" of their respective industries. And both play hardball.

But all that said, I find that the notion of them rolling up these two jumbo media "properties" scares me about as much as a little yapping dog tied to a short leash behind a really big fence.

Okay, so maybe a big yapping dog. But still, not big enough to break that leash and jump the fence, or otherwise to do me any harm. The thing is, however hyped it may be, the idea that the Internet radically changes the balance of power between big-shot media types and little fry like me is actually true. Back when I worked for Rupert, the Journal was more or less the only "channel" for high-quality daily business news available in New York. Because of this, back then the idea of him getting on the phone to DJ HQ and dictating the next day's "news" would have been pretty terrifying. But if he tried that now, the news of him trying to do it would probably get out faster than the news he was trying to dictate, and he'd lose millions faster than the money being made on Yahoo! stock as I type. Same goes for Microsoft and Yahoo! I already have so many choices for thing to read online I wouldn't think for a second about leaving this one particular portal (and its annoying exclamation point) behind. And the same general rule goes for Hungary and other national media markets. Don't like what the party-linked dailies or corporate portals are publishing? Click. Sure, the ad market will take a while to catch up, for now leaving the money for "professional" content generation in the hands of the wicked already established. But still: click.

Not that this story is entirely happy. If it were, I would have been holding 100,000 shares of YHOO this morning, and the same amount of DJ on Monday night.

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Eddigi hozzászólások (16)

1

Author Profile Page ervin, 2007. május 4. péntek, 19:43 (#)

The Economist is also positive about a potential take-over - possibly also motivated by the fact that it would come after Rupert's failure to acquire Pearson, their own part owner. ;)

http://www.economist.com/business/displaystory.cfm?story_id=9110781

2

Anti, 2007. május 4. péntek, 22:27 (#)

A G AdSense azt reklámozza itt, hogy Kill Bill. Hehe.

3

Prof, 2007. május 4. péntek, 23:49 (#)

What I'm happy about is, that this won't change the world. Billy may have more clicks, more revenue on ads and such, but he will not be able to control what we say, or read. Earlier (on the dawn of the internet) this would have been deadly...
The same applies for Rupert. He may control the Wall Street Journal, but the news will still find its way, there are other channels. Hopefully these alternatives will be numerous and fast.
I really hope the possibility of total media domination is over.

4

Dr. Minorka, 2007. május 5. szombat, 00:24 (#)

Good! Who will produce the WSJ/Financial/Reuters class information ("the news").
Dunno why I mention dept.:
Nem akarta fényezni a szponzorokat, inkább felmondott a főszerkesztő
http://it.news.hu/c.php?mod=10&id=23435

5

Dr. Minorka, 2007. május 5. szombat, 00:26 (#)

Damn! "Good! Who will produce the WSJ/Financial/Reuters class information ("the news")? "

6

Author Profile Page NagyGa1, 2007. május 5. szombat, 20:46 (#)

At the end of the day it was +9.94% for YHOO and -1.32% for MSFT. It seems the market have concluded that the deal is not a good one for MSFT. YHOO owners are hoping for a higher buyout price.

7

nyelv-ész, 2007. május 5. szombat, 22:22 (#)

Nem tudom, mire ez a nagy pánik. Nagy Testvér majd vigyáz ránk, megmondja, mit gondoljunk. A renitenseket meg majd a gondolatrendőrség jól elfogja és ketrecbe dugja a patkányok közé (1984).

8

Author Profile Page Erik, 2007. május 6. vasárnap, 10:16 (#)

NagyGa1 (#6)

What's interesting is that when takeovers like this become public knowledge, the stock of the company doing the taking over almost always takes a hit, no matter how good of a deal everyone says it is.

One conclusion I have generally drawn from this is that the markets believe that the markets themselves are overvalued, meaning that whoever cashes out is probably the winner.

9

Author Profile Page NagyGa1, 2007. május 6. vasárnap, 11:30 (#)

Interesting.

MSFT itself is certainly overvalued on long term. It is already dead as an IT firm for a few years, just takes a few more while it all comes to results - although Vista seems to be the first major sign that the public might recognize.
Just like others, e.g. SAP. Both has reserves and has no idea what to do in the future.

(I have no data supporting the above. ;))

10

Author Profile Page Erik, 2007. május 6. vasárnap, 13:03 (#)

Meanwhile, MSFT's record in expanding beyond its core quasi-monopoly business is pretty dreadful. So the bigger and broader they get, the weaker they are likely to be as a creator of value over the long term.

BTW, I'd also say that GOOG is overvalued at a current market cap just under $150 billion; at some point their price-earnings multiple has to come down to that of a maturing business and I just don't see how they are going to be netting $15 billion a year as others creep into their own core business of online ads. Then again, I thought this when their cap was under $100 billion.

11

Author Profile Page NagyGa1, 2007. május 6. vasárnap, 13:24 (#)

Same here.

There are some traces of me advocating that there is no way GOOG can worth the current price.

There are traces of me losing quite a piece of money on GOOG shorts in the past. :)

So now even though I fully agree, I stay out of GOOG shorts for a while (1.5 years now). But I don't want to miss the chance.

Shorting MSFT is much safer though, no much upside.

12

Author Profile Page NagyGa1, 2007. május 6. vasárnap, 13:25 (#)

I mean traces on Kispad. :) I wasn't very popular with that.

13

Dr. Minorka, 2007. május 6. vasárnap, 22:21 (#)

Hm, Reuters is a célkeresztben van:
http://observer.guardian.co.uk/business/story/0,,2073214,00.html

14

Author Profile Page NagyGa1, 2007. május 7. hétfő, 15:00 (#)

Actually I do not get why the media was selling this news (now down the drain) as the new entity would be a 'rival' to Google.

As far as I understand, size does not really matter in this internet search / advertising business. What matters is the technology, how comfortable and useful is the interface to the end user. Switching sides is one click away.

Microsoft had some hopeless trials to compete with GOOG, but who would switch to a heavy and slow search engine from a thin and quick one, even if it is full with the latest Ajax hype? (I already had to think five minutes to dig up its name...)

Same applies to Yahoo's miserable mail (have a look on its beta). Or have a look on www.yahoo.com. If I want to search, I do not want to download a bloathed heavywheight page with news and so. I just want to search as quick as possible.

So if MSFT does not have the technology nor the idea to hit Google, and YHOO does not have it, how come anyone thinks that their merger will miraculously bring in the missing element?

(As long as they are not complementers to each other technically, but they are not.)

15

Author Profile Page eszpee, 2007. május 17. csütörtök, 12:59 (#)

Ugyanez fordítva: hogyan esik egy pletyka hatására 4 _milliárd_ dollárt az Apple értéke?

http://webisztan.blog.hu/2007/05/17/a_hireszteles_ereje

16

Author Profile Page ervin, 2007. május 17. csütörtök, 13:26 (#)

"People lost a lot of money" írja a Webisztán a Gizmodót idézve. Hogy ez mekkora hülyeség már (szerintem).

Az egész 4 milliárd dollár általában véve is eleve virtuális pénz volt/van/lesz, amíg valaki meg nem próbálja készpénzre váltani. Konkrétan ezen a történeten meg a leginkább azok buktak (de még az ő esetük is vitatható, pl. nem tudjuk, mennyin vették a részvényt), akik az esés hallatán felkapták a telefont, és azonnal eladták a papírjaikat, nehogy azok még jobban essenek. Na, ők meg is érdemlik.

A többiek meg legfeljebb egy érdekes árkot látnak majd utólag a grafikonon, de az nem fogja zavarni őket.


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