NEWS AT A GLANCE
AOL buys social networking site Bebo
Time Warner’s AOL unit agreed to buy social-networking site Bebo for $850 million, in a bid to expand its appeal to young Internet users and increase revenue from online advertising. “AOL was in danger of becoming your father’s Oldsmobile,” said TCW Group analyst Anthony Valencia. Bebo is the top social-networking site in Britain, Ireland, and New Zealand, but a distant third in the U.S., behind MySpace and Facebook. (Los Angeles Times, free registration) Analysts said the deal makes a Yahoo!-AOL pairing less likely, as Yahoo! works to fend off a bid from Microsoft. (MarketWatch) Yahoo! reportedly met with Microsoft this week to discuss its offer, their first such meeting. (Reuters)
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Russia’s Evraz buys Canadian steel assets
Russian steelmaker Evraz agreed to pay $4 billion to buy IPSCO, the Canadian steel plate and pipe firm, from Sweden’s SSAB Svenskt Staal. Evraz, part-owned by billionaire Roman Abramovich, is expanding its North American operations, after buying Oregon Steel Mills for $2.3 billion last year. The steelmaker also owns steelworks in Italy and the Czech Republic, and coal firms in Russia. (AP in Yahoo! Finance) Evraz shares rose 2.2 percent in London this morning. “This gives Evraz total dominance of the U.S. plate market,” said Renaissance Capital analyst Robert Edwards. “In our experience, Evraz haven’t done bad deals.” (Bloomberg)
JP Morgan, Target talk credit cards
Discount retailer Target is in talks to sell a half-interest in its profitable credit-card operations to JP Morgan Chase for $4 billion, The Wall Street Journal reported. Target announced its plans late Wednesday, without disclosing its intended partner. (Reuters) Investors greeted the news without much enthusiasm yesterday. “The only reason they proposed this was to satisfy shareholders,” said Steven Jacowitz of Auriemma Consulting Group. “And obviously, shareholders don’t love it.” (Minneapolis Star Tribune) JP Morgan entered the branded credit card business a few years ago, buying portfolios from Circuit City and Kohls. (The Wall Street Journal, paid subscription required)
Collecting debt, with sympathy
Debt collectors aren’t the most welcome of guests, especially during an economic downturn, but the industry is trying to put on a friendlier face. Debt collection is one of the fastest-growing U.S. fields, according to 2006 government figures, on track to employ half a million people by 2016. The move to spruce up its image—calling targets “customers,” say, and pushing personal finance—is partly geared toward increasing collection success rates. It’s also designed to avoid a government crackdown. Charm has its limits with debtors, though. “We’re trying to take people’s money from them,” says Chicago collections lawyer Ira F. Leibsker. “Let’s be honest.” (The New York Times, free registration)
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