D: All Things Digital, The Wall Street Journal technology conference, is in full swing in Southern California.

Netflix (NFLX) Chief Executive Reed Hastings led off the proceedings this morning talking about international expansion. The Internet movie outfit is going to launch in Toronto first, a “bold” move, going to Canada, he jested. Then, Netflix will open it’s doors in an undisclosed foreign market shortly thereafter.

The upshot: international expansion could hurt profits. “We tell investors that the better it goes, the more money we are going to lose because we are going to invest” more in expansion, Hastings says. He says it takes one to three years for Netflix to establish itself in a new country, which is relatively fast. Hastings, who is a Microsoft (MSFT) board member, would not comment about hedge fund manager David Einhorn’s call for Microsoft CEO Steve Ballmer’s ouster.

He was wiling to discuss his own open letter to short sellers to cover their negative bets, even calling short-selling “healthy” for markets.

“I’m not trying to have a battle with the shorts,” (but) if you have a friend on the short side and you think he’s losing money, and you think he’s wrong, then you want to tell him.”

The conference, now in its ninth year, got off to a rip roaring start last night when News Corp. “acting CEO” Jane Lynch, the star of the Fox Television hit Glee, recommended comic strips be added to the WSJ and other humorous mandates involving Sara Palin and talk show shock host, Glenn Beck.

Google (GOOG) Executive Chairman Eric Schmidt was the opening night keynote. The former CEO, who serves as an advisor to President Obama, says he has no intention to take a cabinet post or agency job, which had been rumored. But he will be active in the coming campaign just as he was during the President’s first election.

Note: For further ongoing coverage of D, see also former Tech Trader editor Eric Savitz’s blog at Forbes.com.

Article courtesy of Tech Trader Daily

Another week, another surging debut for an Internet company: Shares of Yandex (YNDX), which bills itself as the most popular search engine in Russia, are up $10.66, or 43%, from their offer price at $35.66, after opening at $35, on their first day of trading. The company this morning priced its initial public offering of 52 million class A shares at $25, above an expected range of $20 to $22.

The offering is expected to net the company $362 million, after fees, bringing its cash balance to $478 million, the company said.

Shareholders are selling the vast majority of that offering, 37 million shares, and the total shares outstanding after the offering will be 321.3 million shares, consisting of both A and B shares, the company says in its prospectus. The class B shares control 94% of the voting power in the company.

The offer price would make the company worth roughly $8 billion.

Yandex, which has offices in the Hague, The Netherlands, and in Palo Alto, California, claims to have the most revenue of any Russian Internet company, and said it has 64% of Russia’s search traffic, with 38.3 million unique visitors to the site in March.

The Russian version of the site, yandex.ru, was founded in 1997, and the current company came out of a restructuring in 2007 of what had been a Cypriot company.

Yandex made $137 million in revenue in the three months ended in March, which in Russian rubles, is a 65% year-over-year increase. The company made $29 million in net income in the quarter, or 9 cents per share, up from roughly 6 cents per share a year earlier.

Yandex lists among its global competitors Google (GOOG) and Mail.ru, which runs a free email service.

It will be interesting to see how the offering affects trading in last week’s star, LinkedIn (LNKD), given that access to Internet high-flyers is believed by some to be behind LNKD’s sharp rise. LNKD shares this morning are down $2.30, or 2.6%, at $86, still quite a bit above the offer price last week of $45.

What about the name? Well, echoes of the past, really: the company has two principal founders — where have I seen that before? — Ilya Segalovich, and Arkady Volozh, and in their attempts to formulate a unique name, they decided to call it “yet another index.”

Hmm. Wait, where have I heard that? Yes, yes, it’s: “Yet Another Hierarchical Officious Oracle,” the name Jerry Yang and David Filo came up with when they formed Yahoo! (YHOO).

Maybe we need a new term: Yet Another Internet Company Selling, “YAICS!”

Article courtesy of Tech Trader Daily

Datameer, a company that allows users to analyze massive amounts of data without technical know-how, today announced a second round of funding for $9.25 million. The money will be used to hire additional employees for its engineering, sales, and marketing teams.

The company created a user dashboard to easily feed and analyze data into Apache Hadoop, an open-source software that processes large amounts of data sets and spits out analytics as well as reporting. The benefit of the tool comes to those that don’t have a technical background and thus wouldn’t be able to use Apache Hadoop.

Companies in several industries have needs to process large amounts of data, including

Responses are trickling in to Microsoft’s (MSFT) announcement this morning it will buy Internet phone calling firm Skype for $8.5 billion.

The conference call with Steve Ballmer and Skype executives starts in just a little bit, at 11 am, Eastern, so there’s likely to be more response later today after analysts’ have had a chance to ask some questions and digest the whole thing.

I would note that Nokia (NOK), Microsoft’s partner in smartphones, is beating the market this morning on no particular news, perhaps a reaction to Nokia’s now having another arrow in its quiver given its partnership with Microsoft for phone software. Nokia shares are up 20 cents, or 2.4%, at $8.61.

Sandeep Aggarwal with Caris & Co., who rates Microsoft stock a Buy, writing early this morning before the formal announcement, thinks “an acquisition of Skype by Microsoft makes sense, given how important “communication” and “mobile” are for Microsoft.” The $8.5 billion price tag implies a 25 times multiple of enterprise value to Ebitda, “which is somewhat rich.” It also would imply $2 per share in proceeds to eBay (EBAY), he calculates, given the latter’s 30% stake in Skype.

Aggarwal sees Microsoft working Skype into its “Lync” server for businesses and maybe putting it into Office. There’s lots of ways to enhance Windows Live for consumers and also add to its Windows Phone 7 operating system.

Collins Stewart analyst Kevin Buttigieg, who also has a Buy on Microsoft, this morning writes that this “isn’t the kind of transformative deal investors may have liked to see Microsoft do with $8.5 billion.”

“Skype is a large deal at a relatively expensive price that doesn’t transform any MSFT business quickly or in a way which improves perception about its ability to compete in a post-PC world.”

It will require “solid execution,” he writes, which is not something Microsoft is known for, he writes. The deal appears to be neutral to Microsoft’s non-GAAP EPS.

Is this a hidden plus? Buttigieg points out that as Skype is incorporated in Luxembourg, which means that Microsoft can use some of its international cash, which is 80% of its cash balance, for the deal.

Article courtesy of Tech Trader Daily

Microsoft (MSFT) announced a short while ago that it will pay $8.5 billion in cash to purchase Skype, the Internet calling firm that was bought by eBay (EBAY) in 2005 and spun out in a leveraged buyout in 2009.

The deal is a confirmation of rumors that circulated yesterday on GigaOm, and then were picked up by The Wall Street Journal later in the evening. And it appears that DealBook was right on the money with their $8.5 billion prediction.

Microsoft this morning said Skype’s technology will advance the use of real-time video and voice communications for both consumers and corporations.

Microsoft CEO Steve Ballmer said that Skype “is a phenomenal service that is loved by millions of people around the world” and that “together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world.”

Ballmer will hold a press conference on the deal at 8 am, Pacific/11 am, Eastern. You can tune into it live here.

Microsoft shares are currently down 46 cents, or 1.8%, at $25.39 in early trading. Shares of eBay, which stands to reap some of that windfall for its remaining 30% stake in Skype, is up $1.38, or 4%, at $34.50.

Article courtesy of Tech Trader Daily

The Microsoft (MSFT) -for-Skype rumor is gaining ground.

GigaOm’s Om Malik earlier today offered a recap of rumors that “have been swirling around Skype” for a week now, with Reuters having written that Google (GOOG) and Facebook were looking for a deal with the Internet calling firm, or maybe looking to buy it. Malik wrote that Microsoft “has entered the mix.”

And tonight, The Wall Street Journal’s Anupreeta Das and Nick Wingfield are writing that Microsoft is “close to a deal to buy Internet phone company Skype Technologies SA for more than $7 billion,” citing anonymous sources.

Negotiations have been “wrapping up” this evening, they write.

eBay (EBAY), which bought Skype for $2.6 billion in October of 2005,  later sold the company in November of 2005 for $1.9 billion in cash, for a net gain of $1.4 billion, and a 30% stake in Skype to private equity shop Silver Lake, the Canada Pension Plan Investment Board, and venture firm Andreessen Horowitz in a leveraged buyout.

eBay listed its 30% stake at $620 million in last year’s 10-K filing, implying a value of roughly $2 billion for Skype.

Obviously, then, a Microsoft bid of this size would represent not just a premium t0 recent valuation, but multiples of the 2009 buyout, if it happens.

Some people thought eBay was crazy when they paid $2.6 billion in 2005, and there were also stories from Silicon Valley that some Skype backers at the time thought they should have asked for much more.

Microsoft ended the fiscal Q3 in March with $50 billion of cash, cash equivalents and short-term investments, and long-term debt of $12 billion.

Remember that bidding for Skype has been a spectator sport for some time. Back in August of last year, TechCrunch reported Cisco Systems (CSCO) was interested, which was then refuted by sources, Eric reported the next day.

Malik himself proposed back in September that Facebook should buy the company, and that it might have to pay $7 billion to $7.5 billion.

Remember, too, that Skype filed for a $100 million public offering last August, led by Goldman Sachs, JP Morgan, and Morgan Stanley, which has since been amended multiple times. The latest version, filed last month, lists $860 million in revenue for all of 2010. That would represent 20% revenue growth from the $719 million the company reported in 2009.

Effectively, then, Microsoft would be paying on the order of seven or so times trailing revenue. Skype had a pre-tax loss of $57 million in 2010, according to the filing.

The prospectus from April also records $690 million in long-term debt that was racked up to facilitate the leveraged buyout in 2009, against $142.5 million in cash and equivalents.

Microsoft shares ended the day down 4 cents at $25.83.

Article courtesy of Tech Trader Daily

Microsoft is close to a deal with Skype to buy the internet phone company for $7 – $8 billion, according to the Wall Street Journal.

If it’s true, it would be an aggressive move by Microsoft to become a big player in the convergence of communication, information and entertainment. The deal could be announced as early as Tuesday, according to sources cited by the Journal. Microsoft and Skype declined comment to the Journal.

The deal could still fall part. Including Skype’s long-term debt, the value could be about $8.5 billion. Skype allows users to make calls for free to each other over the internet. The service makes money when those users want to connect to someone with a land line or hold a video phone call with multiple parties.

Microsoft could use Skype’s name value to build out a bigger consumer business and integrate the popular service with its Xbox Live online gaming service. The deal could be one of the biggest that Microsoft has ever undertaken in hits 36-year history. In 2007, Microsoft bought aQuantive, an online ad firm, for $6 billion. And it almost bought Yahoo for $48 billion nearly three years ago.

While Microsoft has successfully moved into video games, most of its profit still comes from its Windows and Office franchises. Microsoft has a a communications platform called Linc, which ties together email, instant messaging, and voice communications into a single application. Skype could help enhance that. But for the most part, Skype would be a major diversification for Microsoft.

Of course, Skype has been part of a failed diversification in the past. The company was founded in 2003 by Niklas Zennstrom and Janus Friis, the creators of the Kazaa file-sharing technology that was associated with music piracy. Skype was disruptive, offering free phone calls when most carriers still charged for such service. Then eBay bought Skype for $2.6 billion in 2005, presumably so buyers and sellers could communicate in eBay auctions. That didn’t work out.

eBay sold a 70 percent stake to Silver Lake Partners, Index Ventures, Canada Pension Plan Investment Board and Andreessen Horowitz. Skype hasn’t had the best of luck making a profit. The company posted revenue of $860 million in 2010 and a net loss of $7 million. It has debt of $686 million. Skype had been planning to go public since last August, seeking to raise $1 billion.

Tags: acquisition

Companies: Microsoft, Skype

Article courtesy of VentureBeat » deals

Is this change you can believe in?

Cisco Systems (CSCO) this morning released a rather dramatic-sounding press release promising a more “streamlined” operating model, responding to complaints that have circulated about how its corporate decision-making is burdened by bureaucracy, and promising to have changes in place by the start of the company’s fiscal year 2012, which begins July 31st. 

I have to say, you’d have to be a Kremlinologist to understand what a lot of the jargon in the press release means. The company will roughly organize around five “areas driving the growth of networks and the Internet.” Roughly, they are core routing, switching, and services; collaboration; data center and cloud; video; and “architectures for business transformation,” whatever that means. 

The company’s sales team decision making will be organized into three geographic theaters: Americas, Europe, Middle East and Africa; and Asia (Including China).

I think many will not know what any of this means, other than that Cisco is saying they’re making changes. And becoming “streamlined,”.

In any event, the stock is up, rising 

The stock is up this morning, rising 3 cents to $17.50. 

Article courtesy of Tech Trader Daily

If you’ve got a regular thing going with a hooker in Greenwich, please note she may be lying low for a while. Perhaps somewhat more urgently, if you have a scheduled meeting for this week, you ought to consider backing out now as that hooker is a cop and you’re about to get nailed.

Greenwich Police say that the string of prostitution arrests they made are the result of a widespread web of activity in the region. Greenwich Police Capt Mark Marino said, “We came to realize that it was fairly widespread throughout the region. Obviously, it was easy to arrange these rendez-vous. It didn’t appear to be a shortage of women who offer their sevices and there didn’t appear to be a shortage of men who wanted their services.”

Police were tipped off to the activity by Stamford Police in early April. It took about a month for Greenwich Police to investigate and make the arrests after using the Internet and surveillance…“Hopefully, the word will get out,” Marino said of the arrests. “If we can deter them from coming to Greenwich, I’ll be satisfied.”

The men and the undercover officer agreed to meet at a pre-arranged location within Greenwich so the undercover officer could perform a sexual act on the men in exchange for a cash payment.

[New Canann Patch]

Article courtesy of Dealbreaker

At the BlackBerry World 2011 conference today in Orlando, Florida, today, Microsoft CEO Steve Ballmer announced that its Bing search engine will be replacing Google as the default search and maps provider on all of Research in Motion (RIM)’s BlackBerry devices.

The Bing search engine has been steadily gaining market share — it currently holds 27 percent of the search engine market compared to Google’s 67 percent — and this deal comes as a major breakthrough.

In addition to RIM’s smartphone devices, Bing will also be serving as the default search and maps provider to PlayBook, RIM’s upcoming tablet competitor to Apple’s iPad.

According to The Register, the agreement may also include a clause to make Microsoft’s upcoming mobile browser IE10 the default browser on the BlackBerry. A deal like that would make for an interesting collision in the mobile browser market, with Apple’s iPhone and Google’s Android backing Webkit-based browsers, and Microsoft’s Windows Phone 7 and RIM’s BlackBerry backing Internet Explorer.

Microsoft also showed how some of its more advanced capabilities, such as search with optical character recognition cameras, voice, local restaurants, and deals will be integrated into the BlackBerry platform, as well as its Streetside block view and Photosynth panorama features for Maps.

Tags: Blackberry, deal, default, ie10, maps, search engine, Windows Phone 7

Companies: Microsoft, Research In Motion, RIM

People: steve ballmer

Article courtesy of VentureBeat » deals