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Best Buy (NYSE:BBY) finished up some outstanding business and hired a new President of the e-commerce and on-line divisions. Scott Durchslag former president of online travel company Expedia (Nasdaq:EXPE). He is also a former partner at McKinsey & Co. and has previously served as Skype’s chief operating officer prior to its sale by EBay (Nasdaq:EBAY) as well as a vice president at Motorola Inc. which partly has been swallowed by Google (Nasdaq:GOOG). Resume looks good.
But here is the bias to be concerned over. Hubert Joly the current President, CEO and Director is also from the online travel business. CW Travel Holdings long based in Minneapolis is also a major player in the travel business. While corporations need to make sure the fit in the executive suite works you need to be concerned about too much background commonality.
The next question becomes: What do you do with the big boxes? The online guys will need big money to spend and the bricks and mortar environment is clearly not cutting it.
George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti
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Microsoft (Nasdaq:MSFT) has become a major surprise player in the telephony market. Microsoft by passes a lot of legacy issues that traditional Bell companies are still struggling with. Has Microsoft become a global monopoly that troubles AT&T (NYSE:T) and perhaps even Carlos Slim.
What is to stop AT&T from demanding anti-trust action. Remember the European Union does not have soft fuzzy feelings for Microsoft so what is to stop them from soul sapping investigations.
Just a thought but when you make such a large move other large players see their vested interests being threatened and will move to protect themselves. investors need to get past the noise and see how the other players see it.
Disclosure: “George Gutowski” writes from a “Caveat Emptor Perspective” I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.
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Microsoft (Nasdaq:MSFT) will buy Skype for some $8.5 billion. Internet telephony potential remains huge but Skype has not been able to show a profit. Given the low yield on cash reserves the small losses that Skype generates should not be material in the short run.
The deal is an inflection point for Microsoft’s image. They are buying infrastructure and risk becoming a Ma Bell stock. Grind out the traffic and create growing yields for investors. This is not exactly what Microsoft is saying but what else can happen. Watch for Microsoft with its enterprise solutions start to market internet telephony to large corporate and government clients. This is cash flow from the get go.
The question becomes one of intellectual honesty. Will Microsoft have the maturity to admit that it should be a dividend paying stock constantly increasing its dividend yield. Steve Ballmer does not yet speak this way and perhaps he is still wrestling with the concept. After the past ten years many traders call the stock dead money. The hot frothy day traders do not play here.
So when your market cap is some $220 billion the next obvious move is to become a dividend yield play and attract the buy and hold forever crowd.
Disclosure: “George Gutowski” writes from a “Caveat Emptor Perspective” . I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.