SINGAPORE (Thomson Financial) - Oil prices were mixed in Asian trade Friday, with the market taking a hit from the escalating contagion sparked by troubles in the US subprime credit sector.There are concerns that the financial impact of US lending to borrowers with poor credit records would lead to slower economic growth in the US and elsewhere which would dampen demand for oil.At 11:55 am (0355 GMT), New York's main contract, light sweet crude for September delivery, was down one cent at 71.58 US dollars a barrel from 71.59 dollars in late US trades Thursday.Brent North Sea crude for September added seven cents to 70.28 dollars."There are concerns about the impact of the US credit woes on economic activity and hence oil demand," said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz."Some investors have also moved their money out of oil to cover losses in other sectors."
The problems in the high-risk subprime home loan sector has been sending shockwaves through the markets worldwide.In the latest development, BNP Paribas Investment Partners, a unit of French bank BNP Paribas, said it had suspended three of its funds exposed to the subprime market, triggering heavy selling in equities globally.Oil prices have fallen sharply after hitting a fresh all-time high of 78.77 dollar on August 1.
"After establishing the new record high last week, the market was really vulnerable to a reversal," Shum said."All the market needed was a trigger and the market foundthat trigger in the concerns over the US subprime market."But he said there appeared to be strong support for prices at 70 dollars, with falling US energy inventories and a refusal by the OPEC cartel to raise output expected to help keep prices buoyant.
US crude inventories fell 4.1 million barrels to 340.4 million barrels for the week ended August 3, against the consensus forecast for 2.75 million barrels.US gasoline stocks dropped a surprising 1.7 million barrels against expectations for a rise of 775,000 barrels.Shum said that with the US hurricane season around the corner, "weather remains a wild card" as storms could threaten US oil production facilities in the Gulf of Mexico.
Hit Counter
Tuesday, August 14, 2007
Asian Stocks, Forex Extend Global Selloff;Yen Rallies
SINGAPORE (Dow Jones)--Extending a global selloff Asian stocks plunged Friday as traders sought to shore up capital wherever possible amid renewed jitters about the impact of a liquidity crisis in U.S. credit markets. The selling also made its way to several Asian currencies and to the region's offshore bond and credit markets, though the yen was buoyed amid unwinding of the carry trade. "This is what happens in a liquidity crisis, where they have positions which can be translated back into cash quickly, they will sell them," said Khiem Do, manager of the Asia Pacific Fund and head of Asian Multi-Asset at Baring Asset Management in Hong Kong. Japan's Nikkei Stock Average was recently off 2.5% to 16746.50; Korea's Kospi index was off 4.1% to 1831.19, Singapore's Straights Times Index lost 3.3% to 3298.42, the Standard & Poor's Australia Stock Exchange 200 slid 2.9% to 5986. In Hong Kong the Hang Seng Index fell 3.1% to 21,754.04.
As with U.S. and European markets overnight, selling in Asia was broad-based. Brokerages and banks were among the worst hit. Australia's Macquarie Bank (MBL.AU), lost 6.1% to A$72.79, Korea's Samsung Securities fell 5.6% to KRW79,300, and in Singapore, DBS Group slid 4.1% to S$20.90. On Friday Citigroup cut its price target on DBS and other Singapore banks to reflect, "re-pricing of risk," that might limit what traders are willing to pay for these stocks amid credit market worries. Still, the firm, in a note to clients, retained a buy rating on the group - arguing that the recent slide is a buying opportunity and that the banks' exposure to now illiquid credit instruments is limited.
The yen-carry trades unwinding hit the Australian dollar and New Zealand dollar particularly hard. The New Zealand dollar plunged below Y88 to its lowest level since May 25. The selling began late in the trading session Thursday following word from France's BNP Paribas (13110.FR) that it suspended three of its asset-backed securities funds because of a "complete evaporation of liquidity." Also fueling the fire was a report in the Wall Street Journal that U.S. lender Countrywide Financial Corp. (CFC) is facing "unprecedented disruptions" in debt and mortgage-finance markets that could hurt earnings and the company's financial condition. Countrywide is the largest U.S. home mortgage lender in terms of loan volume. Traders said moves by the European Central Bank and U.S. Federal Reserve to inject billions of dollars of fresh funds into money markets contributed to uncertainty overnight, prompting some head scratching about how worried regulators are. Both the Bank of Japan and Reserve Bank of Australia made similar moves Friday, though Australian regulators played down the liquidity injection as routine operations
The Monetary Authority of Singapore also injected S$1.5 billion into the local money market Friday, traders said. The move came after MAS said earlier in the day that it was ready to intervene to stabilize the local market. Still, analysts expectations for further interest rate hikes were mixed. "We are still expecting the BOJ, ECB, BOE, BOC to hike rates the next few weeks, but if this panic gets worse, we may need to change that outlook," said JPMorgan Chase Bank currency strategist Tohru Sasaki. Barclays Capital's chief JGB strategist, Masuhisa Kobayashi, said the sudden supply of liquidity by the world's central banks can be interpreted either as a reaction to crisis or as a step to prevent one. "Taking the latter, more optimistic interpretation, we believe the possibility of an August rate hike should not be ruled out," he said. According to Credit Suisse, the likelihood of a rate increase by the BOJ at its meeting in late August fell to 37% from 64% the day before.
-By Mohammed Hadi, Dow Jones Newswires; 65-6415-4147; mohammed.hadi@dowjones.com. (END) Dow Jones Newswires
As with U.S. and European markets overnight, selling in Asia was broad-based. Brokerages and banks were among the worst hit. Australia's Macquarie Bank (MBL.AU), lost 6.1% to A$72.79, Korea's Samsung Securities fell 5.6% to KRW79,300, and in Singapore, DBS Group slid 4.1% to S$20.90. On Friday Citigroup cut its price target on DBS and other Singapore banks to reflect, "re-pricing of risk," that might limit what traders are willing to pay for these stocks amid credit market worries. Still, the firm, in a note to clients, retained a buy rating on the group - arguing that the recent slide is a buying opportunity and that the banks' exposure to now illiquid credit instruments is limited.
The yen-carry trades unwinding hit the Australian dollar and New Zealand dollar particularly hard. The New Zealand dollar plunged below Y88 to its lowest level since May 25. The selling began late in the trading session Thursday following word from France's BNP Paribas (13110.FR) that it suspended three of its asset-backed securities funds because of a "complete evaporation of liquidity." Also fueling the fire was a report in the Wall Street Journal that U.S. lender Countrywide Financial Corp. (CFC) is facing "unprecedented disruptions" in debt and mortgage-finance markets that could hurt earnings and the company's financial condition. Countrywide is the largest U.S. home mortgage lender in terms of loan volume. Traders said moves by the European Central Bank and U.S. Federal Reserve to inject billions of dollars of fresh funds into money markets contributed to uncertainty overnight, prompting some head scratching about how worried regulators are. Both the Bank of Japan and Reserve Bank of Australia made similar moves Friday, though Australian regulators played down the liquidity injection as routine operations
The Monetary Authority of Singapore also injected S$1.5 billion into the local money market Friday, traders said. The move came after MAS said earlier in the day that it was ready to intervene to stabilize the local market. Still, analysts expectations for further interest rate hikes were mixed. "We are still expecting the BOJ, ECB, BOE, BOC to hike rates the next few weeks, but if this panic gets worse, we may need to change that outlook," said JPMorgan Chase Bank currency strategist Tohru Sasaki. Barclays Capital's chief JGB strategist, Masuhisa Kobayashi, said the sudden supply of liquidity by the world's central banks can be interpreted either as a reaction to crisis or as a step to prevent one. "Taking the latter, more optimistic interpretation, we believe the possibility of an August rate hike should not be ruled out," he said. According to Credit Suisse, the likelihood of a rate increase by the BOJ at its meeting in late August fell to 37% from 64% the day before.
-By Mohammed Hadi, Dow Jones Newswires; 65-6415-4147; mohammed.hadi@dowjones.com. (END) Dow Jones Newswires
Philippine central bank chief sees limited impact from US subprime crisis
MANILA (Thomson Financial) - Philippine central bank chief Amando Tetangco Friday downplayed any impact from the US subprime market woes on the domestic financial system, saying local banks have no significant exposure to collateralized debt obligations (CDOs), which are at the heart of the
US credit problems.He said any impact on the Philippine economy "will be largely indirect, mainly in the form of risk aversion.""It is expected to be limited. Philippine banks are not exposed in any significant way to CDOs," he said in a mobile phone text message.CDOs are securities backed by bonds and loans and which could include US subprime mortgages."There is sufficient liquidity.
More fundamentally, the increased availability of longer-term funding in pesos has also reduced the country's vulnerability to adverse external market developments," he said.Philippine equities plunged Friday following another major slump in markets worldwide after BNP Paribas, France's biggest bank, froze withdrawals from three of its funds that had invested in subprime mortgages in the US.At 11.42 am here, the composite index was down 97.19 points or 2.9 percent at 3,288.01.The peso fell to 45.73 against the US dollar from Thursday's close of 45.36.
US credit problems.He said any impact on the Philippine economy "will be largely indirect, mainly in the form of risk aversion.""It is expected to be limited. Philippine banks are not exposed in any significant way to CDOs," he said in a mobile phone text message.CDOs are securities backed by bonds and loans and which could include US subprime mortgages."There is sufficient liquidity.
More fundamentally, the increased availability of longer-term funding in pesos has also reduced the country's vulnerability to adverse external market developments," he said.Philippine equities plunged Friday following another major slump in markets worldwide after BNP Paribas, France's biggest bank, froze withdrawals from three of its funds that had invested in subprime mortgages in the US.At 11.42 am here, the composite index was down 97.19 points or 2.9 percent at 3,288.01.The peso fell to 45.73 against the US dollar from Thursday's close of 45.36.
BOJ Official: O/N Rate Rise May Be On Subprime Woes
TOKYO -(Dow Jones)- A Bank of Japan official said Friday that the central bank injected Y1 trillion into money markets after the overnight call rate rose from the BOJ's target of 0.50% to 0.54%-0.55%. The Japanese central bank's fund injection followed similar steps overnight by the U.S. Federal Reserve and the European Central Bank, as market worries about the U.S. subprime loan crisis escalated. The BOJ official said it was "possible" that the rise was tied to the subprime crisis, but that the bank didn't know for sure. "We're not certain if that is related (to subprime) or not. It all depends on why the overnight call rate was a little bit high this morning," the official said. "We're not sure why some of the financial institutions were raising funds at a higher rate than on other days.
" The official called the step "an extension of our normal day-to-day operations," but noted that the last time the BOJ made such a large cash injection was June 29 - just as the U.S. subprime crisis flared. The injections follow French banking giant BNP Paribas' decision to freeze three funds that trade in mortgage-backed securities, saying the dramatic absence of liquidity in the market for such products as the subprime crisis spreads has made it impossible to accurately value the funds' holdings. A BOJ official said the bank acted after the overnight call rate rose to 0.54%-0.55%, above the bank's target rate of 0.5%. It is "possible" that the rise in the key rate was related to the subprime chaos, the official said, though he added that the BOJ is "not certain" of the cause. "We're not certain if that is related (to subprime) or not. It all depends on why the overnight call rate was a little bit high this morning," said the BOJ official. "We're not sure why some of the financial institutions were raising funds at a higher rate than on other days." The official described the move as "an extension of our normal day-to-day operations. The rates were a bit high, deviating a little bit away from our target, so we thought it might be necessary to inject some liquidity.
" The ECB took the almost unprecedented step of injecting nearly EUR95 billion into European money markets overnight, and the Fed funneled $24 billion into U.S. credit markets. "Suddenly, central banks have changed their tune from a wait-and-see stance on the subprime issue to a move to stabilize the financial system," Barclays Capital analyst Masuhisa Kobayashi wrote in a research note Friday. He said the start of action could either mean that the credit market and financial system have destabilized to the extent that central banks had to take action, or that the action was meant to prevent such a situation, and things should calm down going forward. He added: "The market seems to have taken the former, more pessimistic view." But the BOJ official suggested that the central banks had not coordinated their moves. "We're all responding to the situation in our domestic markets. It might mean that something common behind our domestic markets is happening, but we're not certain," he said.
-By Michael S. Arnold, Dow Jones Newswires; 81-3-5255-2929; michael.arnold@dowjones.com (END) Dow Jones NewswiresAugust 09, 2007 23:39 ET (03:39 GMT)
" The official called the step "an extension of our normal day-to-day operations," but noted that the last time the BOJ made such a large cash injection was June 29 - just as the U.S. subprime crisis flared. The injections follow French banking giant BNP Paribas' decision to freeze three funds that trade in mortgage-backed securities, saying the dramatic absence of liquidity in the market for such products as the subprime crisis spreads has made it impossible to accurately value the funds' holdings. A BOJ official said the bank acted after the overnight call rate rose to 0.54%-0.55%, above the bank's target rate of 0.5%. It is "possible" that the rise in the key rate was related to the subprime chaos, the official said, though he added that the BOJ is "not certain" of the cause. "We're not certain if that is related (to subprime) or not. It all depends on why the overnight call rate was a little bit high this morning," said the BOJ official. "We're not sure why some of the financial institutions were raising funds at a higher rate than on other days." The official described the move as "an extension of our normal day-to-day operations. The rates were a bit high, deviating a little bit away from our target, so we thought it might be necessary to inject some liquidity.
" The ECB took the almost unprecedented step of injecting nearly EUR95 billion into European money markets overnight, and the Fed funneled $24 billion into U.S. credit markets. "Suddenly, central banks have changed their tune from a wait-and-see stance on the subprime issue to a move to stabilize the financial system," Barclays Capital analyst Masuhisa Kobayashi wrote in a research note Friday. He said the start of action could either mean that the credit market and financial system have destabilized to the extent that central banks had to take action, or that the action was meant to prevent such a situation, and things should calm down going forward. He added: "The market seems to have taken the former, more pessimistic view." But the BOJ official suggested that the central banks had not coordinated their moves. "We're all responding to the situation in our domestic markets. It might mean that something common behind our domestic markets is happening, but we're not certain," he said.
-By Michael S. Arnold, Dow Jones Newswires; 81-3-5255-2929; michael.arnold@dowjones.com (END) Dow Jones NewswiresAugust 09, 2007 23:39 ET (03:39 GMT)
Yen Rallied after BNP Froze Funds
The yen rose sharply BNP Paribas, France’s biggest bank, froze three investment funds worth 1.6 billion euros, raising concern the US subprime mortgage sector woes is spreading worldwide. The ECB today injected 94.8 billion euros into the region’s banking market to meet the sudden liquidity demand. The US subprime worries prompted investors to unwind carry trades, driving the yen higher against high-yielding currencies.The euro slumped from 165 to 161.55 versus the yen, while the sterling slid from 244 to test the 239 level. The yen strengthened from 119.75 to as low as 118.20 versus the dollar. As a safe haven currency, the dollar also benefited from anti-risk trades. The euro fell off the 1.38 handle and was supported by the 1.3650 level versus the dollar. The sterling dipped from 2.04 to as low as 2.0212.
Rate Sentiment Drives FX
The dollar was mixed in the Wednesday session amid a dearth of fresh US economic news, climbing higher against the yen but falling sharply versus the sterling. The data release was limited to June wholesale inventories, which was slightly higher than expected at 0.5%, unchanged from the previous month. Interest rate expectations continue to play a key role in the FX market, with the Aussie and sterling regaining its footing on hawkish sentiment from both respective central banks.
Dollar Slipped after FOMC
The Fed kept interest rates at 5.25% unchanged as widely expected. The Fed acknowledged tightening credit conditions and slowing economy, but maintained its bias against inflationary pressure for fear that inflation may not moderate as expected. The dollar fell slightly against the euro and sterling after the post-meeting statement.The euro will face resistance at 1.3750, followed by 1.3780 and 1.38. Additional gains will target 1.3830 and 1.3850. Meanwhile, on the downside the pair will encounter support at 1.3720 followed by 1.37 and 1.3680. Subsequent floors will emerge at 1.3650, backed by 1.3620 and 1.36.
Saturday, August 11, 2007
Yahoo’s Search Assist There When you Need It
Search Engine Land takes a close look at Yahoo’s new Yahoo Search Assist tool . Unlike normal search suggestion tools, Search Assist predicts when you might need a little help with your search and then shows up.
As Danny Sullivan explains…
Ever had one of those moments when you start to type in a query, enter a word and then pause because you’re not quite sure what other words to add to it? Search Assist senses this. It notes that you’ve paused, takes that as a sign you need help and magically makes suggestions appear below the search box. Cool!
In addition, you don’t just get suggestions that contain some of the letters you initially type. Search Assist goes beyond the original word to suggest related topics.
As Danny Sullivan explains…
Ever had one of those moments when you start to type in a query, enter a word and then pause because you’re not quite sure what other words to add to it? Search Assist senses this. It notes that you’ve paused, takes that as a sign you need help and magically makes suggestions appear below the search box. Cool!
In addition, you don’t just get suggestions that contain some of the letters you initially type. Search Assist goes beyond the original word to suggest related topics.
Yahoo Fully Acquires Right Media
After investing in online advertising company Right Media, in October (and getting 20% of the company in the process), Yahoo has now shelled out $680 million to secure the remaining 80%.
In a move that many suspected and most see as an answer to Google’s acquisition of DoubleClick, Yahoo’s acquisition of Right Media will strongly boost the companies online display advertising options.
“The acquisition of Right Media will further Yahoo!’s goal to create the industry’s most open, accessible and vibrant advertising marketplace, which will help democratize the buying and selling of digitally enabled advertising,” said Terry Semel, chairman and CEO of Yahoo!, in a statement. “This acquisition is an important step in our long-term vision to build the industry’s leading advertising and publisher ecosystem. We believe that Yahoo!’s open approach is a clear differentiator from others in the industry and provides significant benefits to advertisers, publishers and Yahoo! itself.”
Before the acquisition, Yahoo’s display advertising had been mostly confined to its own network of properties. With Right Media’s open exchange model, Yahoo will combine its content with many other third-party offerings, providing an expansive network for publishers and advertisers to buy and sell online ad placements in a real time auction system.
Here’s what Yahoo is promising will come from the acquisition:
*Advertisers will have greater inventory and audience options from Yahoo! and other participants in this exchange, as well as increased control and visibility into the buying process.
Publishers will be able to bundle their own ad inventory with Yahoo!’s inventory and the exchange’s inventory - thereby boosting demand and generating the highest returns for each ad placement.
*Advertising networks will reap the same benefits as advertisers and publishers, and additionally, the exchange will benefit those ad networks with unique value propositions, giving them an opportunity to compete with the largest players, thanks to reduced friction and increased transparency.
*For Yahoo!, this more open approach will allow the company to increase liquidity, allow advertisers to more efficiently ascertain the true value of display ad inventory, and generate greater returns for Yahoo!’s own display inventory. It will give Yahoo! a new channel and inventory for excess demand and provide an opportunity to derive more value from non-premium inventory.
The deal is a mixture of stock and cash and is expected to close within 3 months.
In a move that many suspected and most see as an answer to Google’s acquisition of DoubleClick, Yahoo’s acquisition of Right Media will strongly boost the companies online display advertising options.
“The acquisition of Right Media will further Yahoo!’s goal to create the industry’s most open, accessible and vibrant advertising marketplace, which will help democratize the buying and selling of digitally enabled advertising,” said Terry Semel, chairman and CEO of Yahoo!, in a statement. “This acquisition is an important step in our long-term vision to build the industry’s leading advertising and publisher ecosystem. We believe that Yahoo!’s open approach is a clear differentiator from others in the industry and provides significant benefits to advertisers, publishers and Yahoo! itself.”
Before the acquisition, Yahoo’s display advertising had been mostly confined to its own network of properties. With Right Media’s open exchange model, Yahoo will combine its content with many other third-party offerings, providing an expansive network for publishers and advertisers to buy and sell online ad placements in a real time auction system.
Here’s what Yahoo is promising will come from the acquisition:
*Advertisers will have greater inventory and audience options from Yahoo! and other participants in this exchange, as well as increased control and visibility into the buying process.
Publishers will be able to bundle their own ad inventory with Yahoo!’s inventory and the exchange’s inventory - thereby boosting demand and generating the highest returns for each ad placement.
*Advertising networks will reap the same benefits as advertisers and publishers, and additionally, the exchange will benefit those ad networks with unique value propositions, giving them an opportunity to compete with the largest players, thanks to reduced friction and increased transparency.
*For Yahoo!, this more open approach will allow the company to increase liquidity, allow advertisers to more efficiently ascertain the true value of display ad inventory, and generate greater returns for Yahoo!’s own display inventory. It will give Yahoo! a new channel and inventory for excess demand and provide an opportunity to derive more value from non-premium inventory.
The deal is a mixture of stock and cash and is expected to close within 3 months.
Yahoo Buyout Rumors Echoing Loudly
The good news of increased revenue received a splash of cold water as investors also digested Yahoo's drop in earnings for the recent fiscal quarter. Wall Street pummeled the stock overnight, leading to an open of $26.07 that has been largely unchanged through the day after Yahoo's earnings report.
It has reopened talk that the company rests at the cusp of being taken over, with the only questions being how soon and for how much. Microsoft has long been discussed as a new corporate master for the Sunnyvale-based portal.
A Bloomberg report cited analyst Clayton Moran of Stanford Group in discussing the latest wave of rumors that Yahoo will soon find a home within the Microsoft arcology:
"Given a seemingly increasing disconnect between management commentary and operating results, a sale of Yahoo seems more likely," Moran wrote in a note to clients. "In the near-term, we believe this stock will linger in the mid-$20s, unless a suitor arises."
Steve Ballmer and company could make that deal, and plenty of banks would be more than willing to help Microsoft take on some debt to acquire Yahoo. If one can accept Precursor president Scott Cleland's assertion that Yahoo simply cannot make up ground against Google in online advertising, a takeover may be inevitable.
It has reopened talk that the company rests at the cusp of being taken over, with the only questions being how soon and for how much. Microsoft has long been discussed as a new corporate master for the Sunnyvale-based portal.
A Bloomberg report cited analyst Clayton Moran of Stanford Group in discussing the latest wave of rumors that Yahoo will soon find a home within the Microsoft arcology:
"Given a seemingly increasing disconnect between management commentary and operating results, a sale of Yahoo seems more likely," Moran wrote in a note to clients. "In the near-term, we believe this stock will linger in the mid-$20s, unless a suitor arises."
Steve Ballmer and company could make that deal, and plenty of banks would be more than willing to help Microsoft take on some debt to acquire Yahoo. If one can accept Precursor president Scott Cleland's assertion that Yahoo simply cannot make up ground against Google in online advertising, a takeover may be inevitable.
Microsoft Buying Yahoo: Rumors Reappear
A pairing in the spirit of a superhero teamup could happen if the latest chatter about Yahoo and Microsoft proves true. Once again, a potential merger is being considered, as neither company has made gains against Google's search and advertising dominance.
The Wall Street Journal said last year's talks have become this year's discussions. Both Yahoo and Microsoft have been rejiggering their online advertising products, but have not been able to eat into Google's lead.
"Short of a wholesale merger, Microsoft could spin its online group into a separately-run Yahoo, in return for a Yahoo stake," the WSJ said. "Though a person familiar with the matter says Microsoft would likely want to acquire Yahoo."
Microsoft would have to take on some debt to do that, despite its massive pile of cash and equivalents. Yahoo is up to a market cap of over $38 billion, thanks to rumors of the Microsoft talks that began in the New York Post.
The Post carried a story earlier in the week that claimed Microsoft was ready to purchase 24/7 Real Media, in order to offset Google's DoubleClick deal as well as Yahoo's Right Media purchase. A Microsoft spokesperson would not comment on the story to WebProNews, citing the article as rumors and speculation.
If Microsoft were to make a deal with Yahoo, the WSJ thinks there could be some massive upheaval in Yahoo's executive ranks. Considering Yahoo's performance for shareholders over the past couple of years, it's hard to think of that as a negative here.
The Wall Street Journal said last year's talks have become this year's discussions. Both Yahoo and Microsoft have been rejiggering their online advertising products, but have not been able to eat into Google's lead.
"Short of a wholesale merger, Microsoft could spin its online group into a separately-run Yahoo, in return for a Yahoo stake," the WSJ said. "Though a person familiar with the matter says Microsoft would likely want to acquire Yahoo."
Microsoft would have to take on some debt to do that, despite its massive pile of cash and equivalents. Yahoo is up to a market cap of over $38 billion, thanks to rumors of the Microsoft talks that began in the New York Post.
The Post carried a story earlier in the week that claimed Microsoft was ready to purchase 24/7 Real Media, in order to offset Google's DoubleClick deal as well as Yahoo's Right Media purchase. A Microsoft spokesperson would not comment on the story to WebProNews, citing the article as rumors and speculation.
If Microsoft were to make a deal with Yahoo, the WSJ thinks there could be some massive upheaval in Yahoo's executive ranks. Considering Yahoo's performance for shareholders over the past couple of years, it's hard to think of that as a negative here.
Yahoo Again Linked To Partner Click Fraud
In April 2006, spyware researcher Ben Edelman implicated Yahoo in click fraud problems stemming from the company's arrangements with a trio of third parties delivering phantom clicks on ads. Those clicks cost legitimate advertisers money, while Yahoo and the company enabling that click profit each time.
BusinessWeek's recent expos of click fraud provided more ammunition for critics of search advertising companies like Yahoo and Google. Greater calls for transparency of how those businesses protect against fake clicks will be a hot topic this fall.
Part of the BusinessWeek report focused on the saga of advertiser MostChoice.com. That website's CEO, Martin Fleischmann, claimed click fraud cost his firm a significant sum, and blamed Oemji for this:
(I)n the past year, Yahoo charged the online financial-information provider an estimated $10,300 for 2,690 clicks from visitors to Oemji. Ninety percent of the clicks came from such places as Mongolia, Vietnam, and Honduras, where MostChoice does no business. Only eight clicks, less than 0.3%, turned into sales, compared with 30% or more from clicks on ads on Yahoo's own Web site.
Oemji's parent firm, Oemtec, may be receiving more scrutiny from Yahoo. The article cited Yahoo's Joshua Meyers, a senior director of the search engine's publisher network group, in noting the company would review its connection to Oemji.
Oemtec contested accusations of illicit activity that would be counter to its partnership agreement with Yahoo:
Oemtec calls the negative ratings of its products "patently and demonstrably false." Oemji Bar is similar to toolbars distributed by major online companies, and SpySpotter "is a legitimate and effective anti-spyware application," Craig Marcus, an attorney for the company, said in a Sept. 8 letter to BusinessWeek. Denying any involvement in click fraud, Marcus wrote: "Every single Oemji-generated click to MostChoice.com, and every other Web site, was and remains legitimate and genuine."
As of this month, the report noted Yahoo still has its partnership with Oemtec in force, and delivers advertising to the Oemji product.
BusinessWeek's recent expos of click fraud provided more ammunition for critics of search advertising companies like Yahoo and Google. Greater calls for transparency of how those businesses protect against fake clicks will be a hot topic this fall.
Part of the BusinessWeek report focused on the saga of advertiser MostChoice.com. That website's CEO, Martin Fleischmann, claimed click fraud cost his firm a significant sum, and blamed Oemji for this:
(I)n the past year, Yahoo charged the online financial-information provider an estimated $10,300 for 2,690 clicks from visitors to Oemji. Ninety percent of the clicks came from such places as Mongolia, Vietnam, and Honduras, where MostChoice does no business. Only eight clicks, less than 0.3%, turned into sales, compared with 30% or more from clicks on ads on Yahoo's own Web site.
Oemji's parent firm, Oemtec, may be receiving more scrutiny from Yahoo. The article cited Yahoo's Joshua Meyers, a senior director of the search engine's publisher network group, in noting the company would review its connection to Oemji.
Oemtec contested accusations of illicit activity that would be counter to its partnership agreement with Yahoo:
Oemtec calls the negative ratings of its products "patently and demonstrably false." Oemji Bar is similar to toolbars distributed by major online companies, and SpySpotter "is a legitimate and effective anti-spyware application," Craig Marcus, an attorney for the company, said in a Sept. 8 letter to BusinessWeek. Denying any involvement in click fraud, Marcus wrote: "Every single Oemji-generated click to MostChoice.com, and every other Web site, was and remains legitimate and genuine."
As of this month, the report noted Yahoo still has its partnership with Oemtec in force, and delivers advertising to the Oemji product.
Yahoo Opens Traffic Quality Center
Yahoo touted its proprietary Click Protection System as the most stringent in the industry, in their humble opinion. If it is that, VP Reggie Davis and the development team have been really busy.
Some of their efforts receive a little publicity on the Traffic Quality Center, recently opened at Yahoo Search Marketing. The company provided some insights into the ways they protect advertising customers.
They also offered a peak at what is to come with their search marketing platform. On quality based pricing:
Later in 2007, we plan to apply quality-based pricing to a broader group of keywords.
There's nothing you need to do to take advantage of quality-based pricing. Discounts are applied automatically based on Yahoo!'s Quality Based Pricing technology.
On domain blocking:
While quality-based pricing provides discounts based on traffic performance, you might identify certain domains that you don't want to receive traffic from due to branding considerations or other reasons. To help meet this need, we plan to launch a product that will provide our advertisers with the controls and tools to block their ads from appearing on certain domains.
Advertisers who want to report possible click fraud but aren't familiar with the procedure can view a walkthrough of the process on the Traffic Quality Center website. Yahoo said they will contact the submitter within 48 hours, and will try to resolve the issue within ten business days.
Some of their efforts receive a little publicity on the Traffic Quality Center, recently opened at Yahoo Search Marketing. The company provided some insights into the ways they protect advertising customers.
They also offered a peak at what is to come with their search marketing platform. On quality based pricing:
Later in 2007, we plan to apply quality-based pricing to a broader group of keywords.
There's nothing you need to do to take advantage of quality-based pricing. Discounts are applied automatically based on Yahoo!'s Quality Based Pricing technology.
On domain blocking:
While quality-based pricing provides discounts based on traffic performance, you might identify certain domains that you don't want to receive traffic from due to branding considerations or other reasons. To help meet this need, we plan to launch a product that will provide our advertisers with the controls and tools to block their ads from appearing on certain domains.
Advertisers who want to report possible click fraud but aren't familiar with the procedure can view a walkthrough of the process on the Traffic Quality Center website. Yahoo said they will contact the submitter within 48 hours, and will try to resolve the issue within ten business days.
The agency that oversees Internet domain names has asked VeriSign to voluntarily suspend a new service that redirects Web surfers to VeriSign's site w
The Internet Corporation for Assigned Names and Numbers (ICANN) on Friday posted a notice on its Web site with its response to the so-called wildcard service, which launched Sept. 15. The wildcard service sends people to a VeriSign page with search results, including links to paid advertisements. Until now, Web surfers would have gotten an error message. VeriSign runs the registry for the .com and .net domains--among the most widely used top-level domains on the Web. The wildcard service is for .com and .net domains.
ICANN said it is investigating complaints about the wildcard service and asked VeriSign to pull it, pending further study.
"Recognizing the concerns about the wildcard service, ICANN has called upon VeriSign to voluntarily suspend the service until the various reviews now under way are completed," the agency wrote in a notice posted on its Web site.
On Saturday, the Internet Architecture Board also weighed in on the controversy with an analysis of domain name system (DNS) wildcards. The group recommended that "DNS wildcards should not be used in a zone unless the zone operator has a clear understanding of the risks, and that they should not be used without the informed consent of those entities which have been delegated below the zone."
Criticism has been growing over Mountain View, Calif.-based VeriSign's surprise decision to take control of unassigned .com and .net domain names, which has confused antispam utilities and drawn angry denunciations of the company's business practices from frustrated network administrators.
Verisign could not immediately be reached late Sunday.
Last week, the company stood by its new service.
"There is a lot of fiction about the actual technology and the service," VeriSign spokesman Brian O'Shaughnessy had said. "What we are doing is trying to determine fact and fiction, and we're doing so by reaching out to the technology community and helping them to understand exactly what is fact and fiction."
VeriSign is not alone in seeking to replace DNS errors. Microsoft has also directed people who use its Internet Explorer Web browser to a Microsoft search page when they mistype certain domain names in the browser's URL bar.
ICANN said it is investigating complaints about the wildcard service and asked VeriSign to pull it, pending further study.
"Recognizing the concerns about the wildcard service, ICANN has called upon VeriSign to voluntarily suspend the service until the various reviews now under way are completed," the agency wrote in a notice posted on its Web site.
On Saturday, the Internet Architecture Board also weighed in on the controversy with an analysis of domain name system (DNS) wildcards. The group recommended that "DNS wildcards should not be used in a zone unless the zone operator has a clear understanding of the risks, and that they should not be used without the informed consent of those entities which have been delegated below the zone."
Criticism has been growing over Mountain View, Calif.-based VeriSign's surprise decision to take control of unassigned .com and .net domain names, which has confused antispam utilities and drawn angry denunciations of the company's business practices from frustrated network administrators.
Verisign could not immediately be reached late Sunday.
Last week, the company stood by its new service.
"There is a lot of fiction about the actual technology and the service," VeriSign spokesman Brian O'Shaughnessy had said. "What we are doing is trying to determine fact and fiction, and we're doing so by reaching out to the technology community and helping them to understand exactly what is fact and fiction."
VeriSign is not alone in seeking to replace DNS errors. Microsoft has also directed people who use its Internet Explorer Web browser to a Microsoft search page when they mistype certain domain names in the browser's URL bar.
Wednesday, August 8, 2007
Cisco beats Q4 earnings expectations
Cisco surpassed analyst expectations again when it posted fourth-quarter earnings of $2.3 billion on sales of $9.4 billion.
The results exceeded analyst estimates of $9.29 billion in revenue and earnings of $2.24 billion.
Earnings do not include expenses and other items. Including those items, Cisco recorded a profit of $1.9 billion for the fourth quarter ended July 28.
Revenue was up 18% over last year’s fourth quarter, and earnings for the same period were up 21.2%.For the 2007 fiscal year, Cisco recorded sales of $34.9 billion and earnings – excluding expenses and other items – of $8.4 billion. Revenue was up 22.6% over fiscal 2006 and earnings increased 21.6% over the last fiscal year.
Scientific-Atlanta, acquired in February 2006, contributed $2.8 billion to net sales for fiscal 2007, compared with $989 million for fiscal 2006. Fiscal 2007 results again exceeded analyst expectations, which were $34.78 billion in revenue and earnings of $8.34 billion.
At $1.9 billion, routing revenue was up 14% in the quarter from the fourth quarter of FY 2006. Orders for high-end routers grew in excess of 30% from the fourth quarter of 2006.
Switching revenue was $3.3 billion, up 18%.
Revenue from Advanced Technologies -- unified communications, storage, security, and others -- was $2.2 billion, up 24% from last year's fourth quarter, and services revenue, $1.5 billion, was up 19%. U.S. business improved in the quarter after two soft quarters in the enterprise market in Q2 and Q3. In U.S. business overall, average growth was in the upper teens, "the best we've seen in a number of quarters," said Cisco CEO John Chambers. In enterprise specifically -- excluding federal government business -- orders grew 12% in Q4, vs. mid single digit order growth in the second and third quarters.
Federal orders grew 40% over the fourth quarter of FY 2006, and U.S. service provider orders grew 30% over the same period.Cisco's new video-based TelePresence virtual meeting system is relied upon by the company to drive enterprise demand. Orders for that system in Q4 grew 400% over the third quarter of fiscal year, and Cisco has deployed 110 systems since its introduction last fall.
On a global basis, enterprise orders -- including public sector -- grew in the mid-teens. Service provider orders grew in the low 20% range. Q4 was the sixth consecutive quarter of record revenue and net income, excluding expenses, for Cisco. The company has grown earnings an average of 22% on a yearly basis for the past 16 quarters, CFO Dennis Powell said during a conference call on the fourth quarter results.
With that momentum, Cisco is raising its long-term guidance to grow 12% to 17% annually, from previous targets of 10% to 15%. For the first quarter of fiscal 2008, Cisco expects revenue of $9.45 billion to $9.55 billion, a hike of 13% to 16% from the first quarter of 2007.
The results exceeded analyst estimates of $9.29 billion in revenue and earnings of $2.24 billion.
Earnings do not include expenses and other items. Including those items, Cisco recorded a profit of $1.9 billion for the fourth quarter ended July 28.
Revenue was up 18% over last year’s fourth quarter, and earnings for the same period were up 21.2%.For the 2007 fiscal year, Cisco recorded sales of $34.9 billion and earnings – excluding expenses and other items – of $8.4 billion. Revenue was up 22.6% over fiscal 2006 and earnings increased 21.6% over the last fiscal year.
Scientific-Atlanta, acquired in February 2006, contributed $2.8 billion to net sales for fiscal 2007, compared with $989 million for fiscal 2006. Fiscal 2007 results again exceeded analyst expectations, which were $34.78 billion in revenue and earnings of $8.34 billion.
At $1.9 billion, routing revenue was up 14% in the quarter from the fourth quarter of FY 2006. Orders for high-end routers grew in excess of 30% from the fourth quarter of 2006.
Switching revenue was $3.3 billion, up 18%.
Revenue from Advanced Technologies -- unified communications, storage, security, and others -- was $2.2 billion, up 24% from last year's fourth quarter, and services revenue, $1.5 billion, was up 19%. U.S. business improved in the quarter after two soft quarters in the enterprise market in Q2 and Q3. In U.S. business overall, average growth was in the upper teens, "the best we've seen in a number of quarters," said Cisco CEO John Chambers. In enterprise specifically -- excluding federal government business -- orders grew 12% in Q4, vs. mid single digit order growth in the second and third quarters.
Federal orders grew 40% over the fourth quarter of FY 2006, and U.S. service provider orders grew 30% over the same period.Cisco's new video-based TelePresence virtual meeting system is relied upon by the company to drive enterprise demand. Orders for that system in Q4 grew 400% over the third quarter of fiscal year, and Cisco has deployed 110 systems since its introduction last fall.
On a global basis, enterprise orders -- including public sector -- grew in the mid-teens. Service provider orders grew in the low 20% range. Q4 was the sixth consecutive quarter of record revenue and net income, excluding expenses, for Cisco. The company has grown earnings an average of 22% on a yearly basis for the past 16 quarters, CFO Dennis Powell said during a conference call on the fourth quarter results.
With that momentum, Cisco is raising its long-term guidance to grow 12% to 17% annually, from previous targets of 10% to 15%. For the first quarter of fiscal 2008, Cisco expects revenue of $9.45 billion to $9.55 billion, a hike of 13% to 16% from the first quarter of 2007.
Has Cisco founder Bosack again unveiled the Next Big Thing?
Twenty-three years ago, the husband and wife team of Stanford University computer support staffers Len Bosack and Sandy Lerner founded the most powerful and valuable company in networking: Cisco Systems. This week, Bosack rolls out what he believes is another breakthrough product for enterprise networks that may make as much of an impact as Cisco routers. He shared some thoughts on his new product, the DXM optical transport system, and 16-year-old company, XKL LLC, with Network World Managing Editor Jim Duffy.
The IT Manager's Toolbox: Microsoft Virtual Server & Virtual PC
A critical component of the IT manager’s toolkit should be virtualization software.
In our mostly heterogeneous Windows™ server and client environments, we use Microsoft’s Virtual PC and Virtual Server products.
In fact, virtual machines (VMs) containing server images and default client desktops for each client are part of the tools out technical consultants take with them on site visits. For service and technical support, the ability to roll back a server, or client for that matter, to an earlier, more stable image is a blessing.
In x64, R2 SP1 form, Virtual Server is capable of running 512 virtual machines and supporting up to 256 GB of memory when operated on Windows Server 2003 x64. Yes, not a typo! 256 GB of memory! 512 virtual machines! Talk about taking advantage of the performance allowed by 64-bit addressing!
Microsoft Virtual Server 2005 R2 SP1 can be downloaded from here, and Microsoft Virtual PC download is here. Microsoft has also made available a library of ready-to-use virtual hard disks, or VHDs, containing time-bombed OS installs. These VHDs cover almost the entire gamut of Microsoft offerings.
In our mostly heterogeneous Windows™ server and client environments, we use Microsoft’s Virtual PC and Virtual Server products.
In fact, virtual machines (VMs) containing server images and default client desktops for each client are part of the tools out technical consultants take with them on site visits. For service and technical support, the ability to roll back a server, or client for that matter, to an earlier, more stable image is a blessing.
In x64, R2 SP1 form, Virtual Server is capable of running 512 virtual machines and supporting up to 256 GB of memory when operated on Windows Server 2003 x64. Yes, not a typo! 256 GB of memory! 512 virtual machines! Talk about taking advantage of the performance allowed by 64-bit addressing!
Microsoft Virtual Server 2005 R2 SP1 can be downloaded from here, and Microsoft Virtual PC download is here. Microsoft has also made available a library of ready-to-use virtual hard disks, or VHDs, containing time-bombed OS installs. These VHDs cover almost the entire gamut of Microsoft offerings.
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