Business News Update

Click the below link for musings about Microsoft-Yahoo and economic growth.

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Microsoft-Yahoo

Microsoft

Sometimes the best deals are the ones you don’t make.

If Microsoft truly has walked away from Yahoo it’ll be a damn good thing for Microsoft. The price it originally offered was overblown. The price Yahoo wanted even was more overblown. It would have been, well, Democrat to have paid that much cash for an Internet company. Especially since acquiring Yahoo merely would have granted Microsoft the privilege of eating Google’s dust in online searches in any event.

There are plenty of ways by which Microsoft can enhance shareholder value, including these time-honored methods which have worked like charms since the dawn of publicly-traded companies:

1. Buy back shares.
2. Increase the cash dividend to shareholders.

There’s no reason whatsoever to pay top dollar, much less more than top dollar, for mature businesses in fickle segments of a fickle industry.

Yahoo

As for Yahoo, well, its management currently is vying with Bear Stearns’ management for the title of Most Stupefied Managers of the Year.

Holding out for a higher price and thus scuttling what already was a sweetheart deal has ensured Yahoo’s irrelevance. They have no real future as a stand-alone company. They are to Internet searches and online advertising what Chrysler once was to the automotive industry: Third in a three-horse field and running in place.

Services Sector Growth

The country’s services sector in April grew at a pretty strong clip. Services account for about 80% of all economic activity.

Leftists in the financial media reacted to that bit of news with disbelief and a touch of anger. For reasons that are obvious.

We’ve already mentioned this elsewhere around these parts but for the media/Democrats’ desired recession to come about — in real life — it’ll need to happen quickly. If the economy does not shrink in Q2 and Q3 it’s not going to shrink this year. With the services sector having grown in April it becomes that much less likely the economy will shrink in Q2.