Yahoo, Microsoft in Search Deal

Mayank Mehta
29 Jul, 2009
New York City

Yahoo! and Microsoft agree to partner on a search technology and advertising revenue sharing. Microsoft will gain higher visibility for Bing and raise competitive pressures on Google. Yahoo will retain 88% ad revenues for the first ten years but Microsoft will not make any upfront payment.

[R]11:55AM New York – Yahoo! Inc and Microsoft agree to partner on a search technology and advertising revenue sharing. The deal will help Microsoft to secure higher visibility and raise competitive pressures on Google. Yahoo will retain 88% ad revenues for the first ten years but Microsoft will not make any upfront payment.[/R]

Yahoo! Inc ((YHOO)) declined 11.2% or $1.92 to $15.30 after it agreed on a search deal with Microsoft. Microsoft has been trying to acquire Yahoo for the last eighteen months and was prepared to pay as much as $32 a share.

The latest accord will permit Yahoo to use Bing search engine with ads from Microsoft on Yahoo sites. The Microsoft will not make any upfront payments to Yahoo but will share in ad revenues with Yahoo. Yahoo will keep 88% of revenues for the first five years and Microsoft will guarantee revenues for the first eighteen months. The agreement will need antitrust approval.

Of the stocks in S&P 500 index, 74 increased, 417 declined and 9 were unchanged.

Yahoo! Inc led the decliners in the S&P 500 index with a loss of 7.7% followed by losses in Meredith Corporation of 7.2%, in Sprint Nextel Corporation of 6.7%, in The Interpublic Group of Companies, Inc of 6.6% and in Sealed Air Corporation of 6.3%.

McKesson Corporation led gainers in the S&P 500 index with a rise of 8.5% followed by gains in Fidelity National Information Services, Inc 7.9%, in Life Technologies Corp of 6.2% and Massey Energy Company of 6.0%.

Other Movers

Actel Corporation ((ACTL)) added 1.0% to $12.22 after the manufacturer of low-power FPGAs and mixed-signal FPGAs said second quarter revenues fell 21.5% to $45.2 million from $57.6 million a year ago. Net loss in the quarter was $45.1 million or $1.73 per diluted share compared to net income of $2 million or 8 cents per share a year ago.

ArcelorMittal ((MT)) dropped 6.7% or $2.45 to $34.13 after the global steel producer reported second quarter sales fell 60% to $15.2 billion from $37.8 billion a year ago. Net loss for the quarter was $792 million or 57 cents per diluted share compared to net profit of $5.83 billion or $4.20 per share a year ago.

Brookfield Properties Corporation ((BPO)) rose 0.5% or 2 cents to $9.27 after the real estate company reported second quarter sales fell 13.5% to $619 million from $716 million a year ago. Net income for the quarter rose 33.3% to $60 million or 15 cents per diluted share compared to net profit of $45 million or 11 cents per share a year ago.

Calamos Asset Management, Inc ((CLMS)) fell 1.5% to $14.35 an asset manager said second quarter revenues fell 40% to $67.1 million from $112.2 million a year ago. Net income in the quarter fell 5.3% to $1.79 million or 9 cents per diluted share compared to net income of $1.90 million or 9 cents per share a year ago.

Canon Inc ((CAJ)) rose 1.4% or 52 cents to $36.05 after the digital camera and office equipment maker said second quarter revenues fell 28.2% to ¥793.8 million from ¥1.11 billion a year ago. Net income in the quarter fell 86% to ¥15.6 billion compared to net income of ¥107.8 billion a year ago.

Celanese Corporation ((CE)) slid 5.3% or $1.40 to $24.72 after the chemical maker said second quarter revenues fell 33.7% to $1.24 billion from $1.87 billion a year ago. Net income in the quarter fell 23% to $102 million or 66 cents per diluted share compared to net income of $132 million or 80 cents per share a year ago.

Corn Products International, Inc ((CPO)) advanced 1.5% or 43 cents to $27.74 after the corn refiner said second quarter sales fell 11% to $911.6 million from $1.03 billion a year ago. Net loss in the quarter was $84.8 million or $1.13 per diluted share compared to net income of $68.4 million or 90 cents per share a year ago.

ConocoPhillips ((CON)) plunged 2.6% or $1.17 to $43.26 after the nation's third-largest oil company reported second quarter revenues fell 50.4% to $35.4 billion from $71.4 billion a year ago. Net income for the quarter fell 76% to $1.3 billion or 87 cents per diluted share compared to net profit of $5.4 billion or $3.50 per share a year ago.

Conseco, Inc ((CNO)) rose 27.3% or 52 cents to $2.42 after the life insurer reported better than expected earnings.


Daimler AG ((DAI)) rose 2.4% or $1.05 to $44.25 after the maker of luxury cars reported second quarter sales fell 25% to €19.6 billion from €26 billion a year ago. Net loss in the quarter was €1.06 billion compared to net profit of €1.4 billion a year ago.

Delphi Financial Group, Inc ((DFG)) added 6.0% or $1.31 to $23.10 an employee-insurance provider reported second quarter revenues rose 9% to $417 million from $382 million a year ago. Net income for the quarter rose 37.5% to $37.0 million or 74 cents per diluted share compared to net profit of $26.9 million or 55 cents per share a year ago.

Energizer Holdings, Inc ((ENR)) added 3.3% or $2.00 to $61.17 after the manufacturer of batteries and other household products said third quarter sales fell 6.5% to $997.5 million from $1.07 billion a year ago. Net income in the quarter rose 29% to $72.7 million or $1.13 per diluted share compared to net income of $66.7 million or $1.13 per share a year ago.

Elron Electronic Industries Ltd ((ELRN)) soared 66.0% or $3.06 to $7.69 after the Israeli holding company with stakes in communications, technology and medical imaging said Medingo Ltd., a group company held 92% by Elron and its subsidiary, Rafael Development Corporation Ltd., has received formal clearance from the Food and Drug Administration to market its insulin delivery system.

Fidelity National Information Services, Inc ((FIS)) jumped 4.2% or 90 cents to $22.30 after the provider of processing services for financial institutions said second quarter revenues fell 4% to $834.8 million from $869.7 million a year ago. Net income in the quarter fell 18% to $59.2 million or 31 cents per diluted share compared to net income of $71.9 million or 37 cents per share a year ago.

Fresh Del Monte Produce Inc ((FDP)) surged 13.2% or $2.56 to $21.88 after the seller of prepared and fresh fruits and vegetables said second quarter sales rose 1% to $978.4 million from $972.2 million a year ago. Net income in the quarter rose 25% to $52.2 million or 82 cents per diluted share compared to net income of $41.9 million or 66 cents per share a year ago.

Hertz Global Holdings, Inc ((HTZ)) fell 2.0% or 19 cents to $9.20 after the rental car chain said second quarter revenues fell 23% to $1.75 billion from $2.28 billion a year ago. Net income in the quarter fell 92% to $3.9 million or 1 cent per diluted share compared to net income of $51.2 million or 16 cents per share a year ago.

Hospira, Inc ((HSP)) jumped 1.1% or 41 cents to $37.76 after the global specialty pharmaceutical and medication Delivery Company reported second quarter revenues rose 6.1% to $957 million from $902 million a year ago. Net income for the quarter fell 63.1% to $25.5 million or 16 cents per diluted share compared to net profit of $69.1 million or 43 cents per share a year ago.

Lazard Limited ((LAZ)) added 11.2% or $3.44 to $34.00 an international financial advisory and asset management firm reported second quarter revenues fell 19.6% to $375.6 million from $467.4 million a year ago. Net income for the quarter fell 18% to $28.2 million or 34 cents per diluted share compared to net profit of $34.3 million or 54 cents per share a year ago.

Life Technologies Corp ((LIFE)) added 8.0% or $3.41 to $46.32 after the supplier of instruments used in gene based research and drug development said its second quarter ended June 30, 2009. Non-GAAP revenues for the first quarter were $839 million an increase of 2% over second quarter revenues of $822 million in 2008.

Massey Energy Company ((MEE)) climbed 7.7% or $1.77 to $24.51 after the U.S. coal producer said net income of $20.2 million or 24 cents per share for the quarter ended June 30, 2009. These positive results were achieved on the sale of 9.4 million tons of produced coal which generated total produced coal revenue of $603.2 million during the quarter.

McKesson Corporation ((MCK)) the largest U.S. drug distributor rose 10.4% or $5.04 to $51.87.

Panera Bread Company ((PNRA)) increased 1.1% or 66 cents to $57.50 after the restaurant chain said second quarter revenues rose 3% to $330.8 million from $320.9 million a year ago. Net income in the quarter rose 27.4% to $20 million or 65 cent per diluted share compared to net income of $15.7 million or 52 cents per share a year ago.

Peet's Coffee & Tea, Inc ((PEET)) increased 1.3% or 35 cents to $27.25 after the specialty coffee roaster said second quarter revenues rose 5% to $73.6 million from $70.1 million a year ago. Net income in the quarter rose 13.3% to $3.4 million or 26 cent per diluted share compared to net income of $3.0 million or 21 cents per share a year ago.

Penn National Gaming, Inc ((PENN)) the operator of casinos fell 10.1% or $3.42 to $30.25.

Questar Corporation ((STR)) dropped 0.3% or 12 cents to $35.12 an oil and gas company said second quarter revenues fell 26% to $613.1 million from $825.8 million a year ago. Net income in the quarter fell 55% to $77.9 million or 44 cents per diluted share compared to net income of $172.6 million or 98 cents per share a year ago.

United States Steel Corporation ((X)) slipped 2.2% or 92 cents to $40.35 after the steel company said second quarter revenues fell 68% to $2.13 billion from $6.74 billion a year ago. Net loss in the quarter was $392 million or $2.92 per diluted share compared to net income of $668 million or $5.65 per share a year ago.

Yahoo! Inc ((YHOO)) declined 11.2% or $1.92 to $15.30 after it agreed on a search deal with Microsoft. Microsoft has been trying to acquire Yahoo for the last eighteen months and was prepared to pay as much as $32 a share.

The latest accord will permit Yahoo to use Bing search engine with ads from Microsoft on Yahoo sites. The Microsoft will not make any upfront payments to Yahoo but will share in ad revenues with Yahoo. Yahoo will keep 88% of revenues for the first five years and Microsoft will guarantee revenues for the first eighteen months. The agreement will need antitrust approval.