Sunday, April 6, 2008

Charles Cooper on Yahoo, Microsoft & Salesforce.com Forget Yahoo, Salesforce.com still remains the better fit for Microsoft. If Jerry Yang & Co. are too thick to understand they're being bailed out of a impossible situation, Microsoft should wish them well and move on. [CNET News.com] 10:11:12 AM

Very Big Things Citi's big failure "Ten years ago this Sunday, on April 6, 1998, Sandford J. Weill rewrote the rules of Wall Street." That's the opening sentence of recent New York Times article "A Stormy Decade for Citi Since Travelers Merge". April 6 was the day Citigroup was formed, out of the acquisition of Travelers UInsurance by Weill's Citibank, making (as the article notes) "the biggest financial services company the world had ever seen." The thought was that the synergies between the largest US bank and one of the biggest insurance companies would change the map in finance, offering a one-stop shop for banking, insurance, brokerage, and other financial services. But a decade later, "is regarded by some as one of the worst mergers of all time." Citigroup is in real trouble in spite of its size and scope." Even with a workforce over 300,000 and a presence in over 100 countries, the company has gone from #1 in value in the banking industry to #3, behind Bank of America and JP Morgan Chase. A new CEO (Vikram Pandit) is trying to keep the ship afloat with the tenth reorganization in the last six years. The stock value is down, thee company has written off $200 billion in bad credit. And Citigroup spun off most of its insurance assets in 2004) to merge with the St. Paul Companies. So now, the new strategy is getting rid of low-profit operations rather than adding new services. Expect more and more spin offs and sell offs as Citigroup trades raw size for profitability. It's ever thus. Companies had from one extreme to the other. JP Morgan Chase and Banco Santander, as we have seen lately, is an expansionist mood. UBS, on the other hand, looks likely to split up. Think of the major banks (and many other companies) as accordions, they get squeezed in and pulled out in alternation. First growth of gross income, and when that shows no new profits, an attempt to deacquire in order to boost profit, at least until the easy improvements for added profits run dry, and it is time to go shopping again. [Oligopoly Watch] 10:07:09 AM

More Snowfall Around the World April Snow 2008. Comment [CURRY.COM] 10:03:09 AM