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July, 2007 Archives | Homepage

Business and Financial News Highlights 7-25-07

Here are some business news highlights from around the web.

  • Dow closes above 14,000 for first time thanks to some strong earnings reports.
  • S&P 500 closes at new record high of 1,552.50.
  • Weak Dollar -> Dollar falls to 26-year low against pound sterling.
  • High iPhone expectations. Some bullish analysts expect sales of 5 million units in iPhone's first year.
  • Largest Canadian deal ever: Canadian telecom BCE Inc. sells for nearly $49 billion.
  • Slow Growth: Economy grew only 0.7 percent in the first quarter.
  • Sales of existing homes fell in May to the lowest level in four years.
  • Financial Times says Rupert Murdoch is searching for more internet acquisitions.
  • Study finds 70% of Americans believe economy is getting worse.
  • Yahoo Inc. Chairman Terry Semel has stepped down as CEO of Yahoo. Yahoo co-founder Jerry Yang named CEO.
  • Mortgage foreclosures soar to new record. California, Florida, Nevada and Arizona hardest hit states.
  • Dow sale a possibility now that Bancroft family has agreed to "meet Mr. Murdoch to discuss his bid."
  • Has U.S. economy dodged a recession? No. Not with unresolved housing, energy price threats remaining.
  • New home prices surged in April. Biggest gain in 14 years.
  • The Motley Fool has an article called Dow 5000 but it doesn't argue that the Dow will fall that much.
  • Economic growth in the 1st Quarter slowed to a crawl. Just 1.3% GDP growth.
  • Existing home sales plunge 8.4%. Biggest one month drop in home sales in 18 years. NAR blames weather.
  • Bush administration makes laughable claim that economy has been stronger under Bush administration than the Clinton administration.
  • New Century Financial, a subprime lender, has filed for Chapter 11 protection. They also fired 3,200 employees. See here, here and here.

    Posted on July 25, 2007
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  • Whole Foods CEO John Mackey's Rahodeb Mess

    You have probably heard of the recent fiasco where Whole Foods CEO John Mackey was busted making comments about rival company Wild Oats on Yahoo's stock market message boards under the pseudonym Rahodeb. If you haven't heard the story Mediapost has a nice recap.
    The latest example: John Mackey, co-founder and chief executive of Whole Foods, posted anonymously about his company and the acquisition target Wild Oats Markets on the Yahoo stock market boards beginning in 1999 until last year. Using the pseudonym "Rahodeb" -- an anagram of his wife's name, Deborah -- he routinely bashed Wild Oats, posting nuggets such as "OATS has no value and no future," The Wall Street Journal reports. That particular post was made in February 2005; this year, Whole Foods agreed to purchase Wild Oats for $670 million in February.

    The information about Mackey's posts came to light this week, thanks to the Federal Trade Commission, which is seeking to block Whole Foods' buyout of Wild Oats, saying the deal would squash competition.

    But, while criticizing a rival anonymously doesn't seem like an especially noble way to run a business, it's also hard to see how, in these circumstances, it proves an antitrust violation.
    A Wall Street Journal article (via The Food Section) goes into detail about Mackey's comments on the Yahoo forum.
    "Would Whole Foods buy OATS?" Rahodeb asked, using Wild Oats' stock symbol. "Almost surely not at current prices. What would they gain? OATS locations are too small." Rahodeb speculated that Wild Oats eventually would be sold after sliding into bankruptcy or when its stock fell below $5. A month later, Rahodeb wrote that Wild Oats management "clearly doesn't know what it is doing .... OATS has no value and no future."
    Obviously, this was a huge mistake by Mackey. CEOs and insiders should stay far away from Internet forums and blog comment sections. The same post from Mediapost.com mentioned above also compares the John Mackey "Rahodep" incident to Wal-Mart's Travel Flog. The flog was pretty bad but Mackey's postings are worse. It has been a much bigger news story and more damaging to Whole Foods than the flog was to Wal-Mart.

    John Mackey's blog has been put on hold. For more coverage of John Mackey's mistake try a Technorati search for Rahodeb. That will give you a number of blogs that are discussing the story.

    Posted on July 22, 2007
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    Ebay Pursues Web Classified Marketshare With Kijiji

    KijijiEbay recently launched an online classifieds service called Kijiji. Kijiji is billed as a local free web classified service. CNET's News.com reports that eBay has one advantage over the popular Craigslist web classified service in that they have an inside view into Craigslist because they own 25% of the company.
    The auctioneer is up against an Internet icon in the privately held Craigslist. The 21-employee company operates on a shoestring budget, is well-entrenched in every major U.S. city and founder Craig Newmark is beloved by users for his reluctance to commercialize the site.

    But eBay enjoys an unusual advantage. For three years, executives at eBay have been allowed to peer deep into Craigslist's operations. Since 2004, the year eBay bought a 25 percent stake in the San Francisco-based Craigslist from a former employee, the auction site has held a seat on the company's board of directors.

    Newmark, Craigslist CEO Jim Buckmaster and eBay founder Pierre Omidyar once made up the three-person board. Another eBay representative has replaced Omidyar, according to Durzy.

    "We've learned a lot from Craigslist," Durzy said. "We think this market has room for several classified services."
    It must be pretty awkward for Craigslist with eBay having such a large stake in the company and now also having Kijiji. Tech bloggers are heavily covering this story. You can find much more discussion of eBay's Kijiji site here, here, here, here, here, here, here, here, here, here, here, here here, here, here, here, here, here, here, here, here, here, here, here, here, here, here and here.

    Posted on July 15, 2007
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    Writers Write Inc. Launches Singers Sing

    Writers Write, Inc., the parent company of ShoppingBlog.com, Watchers Watch and Writers Write, has announced the launch of SingersSing.com. SingersSing.com is a daily music blog featuring music news and music video clips. Recent posts include:

  • Nunatak's Live Earth performance from Antarctica.
  • Katharine McPhee's hot new single Love Story.
  • Merriam-Webster's addition of crunk to its dictionary.
  • Avril Lavigne and Lil' Mama's hot remix of "Girlfriend."
  • The Spice Girls' World Reunion.
  • The top ten most irritating songs.
  • Hillary Clinton's campaign song selection.
  • The Obama Girl's music video.

    Posted on July 13, 2007
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  • Apple Boosted by Strong iPhone Sales

    Reuters reports that Apple shares climbed over 3% on Thursday as investors were excited by the possibility of extremely strong iPhone sales.
    "The stock is obviously anticipating very very strong sales for the iPhone and very good follow-through sales," said Andy Hargreaves of Pacific Crest Securities. "The stock isn't going to be a one-month wonder."

    Apple has said it will start selling iPhones in Europe this year and in Asia in 2008, but gave no further details.

    European media reports this week have said Apple may be close to deals with carriers in France, Germany and Britain, a three-country strategy that would mimic the launch of its popular iTunes online music store in Europe in 2004.

    Apple shares have increased more than 50 percent since the company unveiled in January the cell phone that combines Web browsing with the music and video playing capabilities of its best-selling iPod device.
    500,000 iPhones had already been sold on the launch weekend after geeks waited in long lines to own the gadget. Apple also seems to be keeping up with demand. One sign of this is the fact that eBay sellers have been somewhat frustrated and have been unable to sell iPhones for much more than the retail price. That should be good news for Apple. You want a hot gadget that everyone wants but you also want to keep the supply strong enough that everyone who wants one can buy it.

    Posted on July 5, 2007
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