Google takes aim at Yahoo!-Microsoft merger
Google has taken an active stance against Microsoft’s proposed $44.6 billion takeover of Yahoo!, criticizing the deal on antitrust grounds and offering to help Yahoo! fend off the bid. Google CEO Eric Schmidt called Yahoo! CEO Jerry Yang last Friday to extend an unspecified helping hand. (The Wall Street Journal) Yahoo! is reportedly mulling over a business alliance with Google, and Google is sending out “back channel” feelers offering help to potential rival suitors. (Reuters) Regardless, most analysts think Microsoft’s offer will be too good for Yahoo! investors to refuse. “It’s hard to look shareholders in the eye and say it doesn’t make sense,” said Robert Doll at BlackRock. (Bloomberg)
Writers strike enters possible endgame
The striking Writers Guild of America and Hollywood producers resolved their key differences over the weekend, raising hopes that the four-month-old work stoppage could be near an end. (Dow Jones in MarketWatch) The deal is reportedly modeled on a pact reached with the directors’ guild, which included royalties for some content viewed over the Internet. The strike has cost the writers about $240 million in pay, and nonwriter union members, including stagehands, about $414 million, according to the Los Angeles County Economic Development Corp. (Bloomberg)
Ryanair hits turbulence
Dublin-based Ryanair, Europe’s largest discount airline, reported an adjusted 27 percent drop in profits in the last quarter, to $52 million, and warned that high fuel prices and weak demand could cut net income by 50 percent in the next year. (MarketWatch) The report sent Ryanair shares down as much as 15 percent in Irish trading early today, to their lowest level in four years. Ryanair CEO Michael O’Leary said the airline would add flights and cut fares to grab market share. “The lowest costs in the industry and a strong balance sheet will see them emerge on the other side of this in better shape than their competitors,” said Goodbody Stockbrokers analyst Joe Gill. (Bloomberg)
In new Mideast conflict, Coke takes on Pepsi
Coca-Cola is taking on Pepsi’s dominance in the Middle East, in a fight for the loyalty of young Arab cola drinkers. Both soft-drink makers have seen more than 10 percent sales growth in the region in the past few years, and the Arab world’s large youth population makes it fertile ground for further expansion. Coke, seen as supportive of Israel for a long time, has gained 35 percent market share since reentering the region in 1990. But Pepsi is not taking it lying down, recently producing a $5 million full-length musical film staring Arab pop stars. “We wanted to offer our consumers fun and hip new ways to communicate with their brand,” explained Pepsi’s Moussa Mustafa. (Los Angeles Times, free registration)