$20 Billion Yahoo Search Deal Total Fiction

The Yahoo/Microsoft soap opera continues. The Times broke a story that Microsoft was going to buy the Yahoo search business for $20 billion. The deal also included a shake up in management. It is thought that Jonathan Miller, ex-chairman and chief executive of AOL, and Ross Levinsohn, a former president of Fox Interactive Media, have been lined up to lead the new management team.

This entire story was discredited by Kara Swisher when she said Ross Levinsohn was quoted on the record saying this is “total fiction”. This whole thing seems to be cooked up with someone with a good imagination. Paying $20 billion for one piece of a company that only has an entire market cap of $16 billion seems to be pretty odd. Even compared to the original search deal highlighted by TechCrunch, Microsoft would pay over double the price for the business and guarantee double the money, all in a down economy. I think Uncle Carl is spreading rumors trying to prop up Yahoo’s poor stock price.

The Kindle Frenzy

Ever since Jeff Bezos launched the Kindle he has underestimated demand. Back in March he issued an apology to customers because they sold out in less than 5 hours and it was a 6 week wait to get one. Now months later Bezos is still underestimating demand for his wireless reading device. If you go to Amazon.com and try and buy a Kindle you will get a 11-13 week wait time.

The Kindle has become the Wii of Christmas 2008. The Kindle ranks #4 on Amazon’s most popular list. Back in August TechCrunch estimated that Amazon had sold over 240K Kindles. Amazon is certainly well on its way to sell over a 1 million Kindles. The Kindle “frenzy” has alreay taken to eBay and Craigslist where people are trying to get up to $1K for this little device.

Asus Eee PC 1000H

The ASUSTek Asus Eee PC 1000H is a 3.2-pound, ultra light notebook computer, that is in the hot category of “netbooks”. Its very inexpensive coming in around $550 and comes with wireless conectivity built in. The Eee PC is built on the new Intel Atom chip which is optimized for ultra portable devices and allows the Eee PC to get up to 7 hours of battery life.

This emerging category of devices will begin to blur the boundaries of netbooks and laptops. Hardware will continue to become more powerful and more affordable and soon the form factor will really drive the differentiation.

Carl Icahn Doubles Down on Yahoo

Caril Icahn bought another 7 million shares of Yahoo (YHOO) according to regulatory filings. Icahn snapped up about $67 million worth of shares over the past three days for an average price of $9.92, bring his total stake at 75 million shares or nearly 5.5% of the company.

Perhaps he thinks they are going to find some superstar CEO to save the company. But the outlook seems to be pretty grim. 

Last week Steve Ballmer, at the Microsoft shareholder meeting reiterated that he was “done” with an acquistion. In October Kirk Kerkorian sold his entire stake in Ford and lost over a half a billion dollars. Carl must be feeling a little luckier than Kirk.

Blockbuster Service to Compete with Netflix

Blockbuster launched its own set-top box and on demand service today. The cost is $99, but includes 25 movie downloads and the additional movies cost $3.99. This move seems to be in direct response to Netflix’s series of announcements from the Roku set-top box to the Netflix XBOX 360 service. This looks like two rivaling business models as much as marketing jujitsu.

The Blockbuster offering does not require any recurring fee or subscription like with Netflix. But Blockbuster seems to be really fragmented on their marketing strategy. First, they have a large investment in brick-n-mortar locations that they need to determine if its an advantage or disadvantage. Second, they need to simplify their distribution options. Right now they have distribution in-store, though mail, set-top box, and PC (through MovieLink) all of which don’t have an intergrated experience.

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Apple Sued Over iPhone

When the Apple iPhone launched Steve Jobs said it had over 50 different patents, but it looks like they failed to file a really important one. EMG Technology is a company that holds patents of Elliot Gottfurcht and others who claim that the iPhone infringes on patent 7,441,196. In a press release, EMG Technology, claims that the iPhone uses the same method as their invention to display a Web page on a mobile device. EMG is seeking unspecified damages and an injunction against Apple.

Since Apple entered the cell phone business more than two years ago, the iPhone has gotten a lot of critical acclaim and has sold over 10 milllion units. This may be one of many lawsuits and come up because of its growing popularity. If the claim has any merit, my guess is Apple will settle for an undisclosed ammount. They have a track record of keeping things quite and paying off the people they need to.

Nvidia to Power Next Windows Mobile Device?

A few months ago Nvidia (NVDA) demonstrated their new Tegra processor platform. This chip set was targeted at the mobile device and MIDs (mobile Internet device) space. The interesting thing is Nvidia has integrated everything onto one piece of silicon, which makes in very compelling to smaller form factors and mobile devices. The entire chip is smaller than a penny. Nvidia made it clear that they were targeting Windows Mobile devices.

Recently CNET interviewed a product manager from Nvidia showing off a new protype. I have to say that the power of this little chip is really compelling. It has some amazing 3D rendering capabilities which deliver a really cool visual experience. It can also output HD quality content and even has a HDMI port. They claim that the battery can output HDMI content for 10-12 hrs of playback. These types of features open up endless possibilities for delivering an incredible user experience. I think we are going to see these types of chips used in many more devices in the future.

Microsoft Takes Control of Kumo

Microsoft recently took control of Kumo.com and according to LiveSide, they are planning to re-brand Live Search early next year. Kumo which means “cloud” or “spider” in Japanese, seems to be a long over do change.

Microsoft seems to have been delaying this move as they pursued the ever allusive Yahoo acquistion. Now that Microsoft has “moved on” it seems that they are kicking in high gear a re-branding effort.

Ever since Live.com launched it has been a failed attempt to rival the Google brand which has become synonymous with search. If Microsoft is going to get serious about search they are going to need to create a world-class brand to rival Google and back it up with a product that is compelling and delivers a significantly better user experience.

Google Looks At Paying For Chrome Distribution

Google (GOOG) is reportedly thinking about doing deals with PC makers to have its Chrome Browser pre-installed on new computers. This is not going to come cheap. PC makers have created a multi billion dollar business out of charging companies to pre-install software on new PCs. If Google does these kinds of pay to play deals, they will certainly bundle other services and software into the deal, most notably the Google Toolbar, Gmail, and Google Apps.

According to a report in The Times, Google will likely start working those deals after it pulls the “beta” label from Chrome in early 2009. This will definitely up the ante on the browser wars. This is a battle that for many has been long over since Microsoft decimated Netscape in the 90s. Even with Firefox eroding some of Microsoft Internet Explorer’s market share the war seemed to be long over. But Google seems to be taking another shot at it and have plenty of resources to pay for disribution. Lets see how long Google is committed to the browser business. If its anything like Lively, Chrome will be killed before the end of the year.

Apple Updates iPhone Firmware

Apple (AAPL) released an update to their iPhone firmware (2.2) to fix a dozen security vulnerabilities and added a few new features like Google Street View and podcast downloads.

Most of the attention was given to the update center on GPS and Google Maps. Now a user can see a 360-degree view of locations taken by Google car’s with cameras mounted to them. It also added walking directions in Google maps with information on public transportation.

In addition the iPhone can now download podcasts over the air using a Wi-Fi or 3G network. Previously users had to rely on syncing their content in iTunes. User can also now turn off the auto-correct feature on the virtual keyboard, which is helpful if the iPhone can’t guess what you are typing. Other additions include several bug fixes to the email and web browsing experience. It also includes fixes on phone quality to reduce dropped calls and improve sound. But with all these fixes how come no one in Cupertino created a “Copy and Paste” feature. This has been one of the most requested features from the iPhone community. I guess Steve Jobs in going to wait until MacWorld for that one.

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