Damox's Business Blog

The Sirius/XM satellite radio merger is one step closer to completion now that the Department of Justice has approved the deal. The DOJ decided that the two companies would not be able to use their potential monopoly to profitably increase prices to customers.

While I often disagree with mergers that create monopolies, the Sirius/XM deal makes sense to me. The monthly charge for satellite radio right now is about the maximum that most customers are willing to pay, and the two competing services make it hard for customers to get everything they want from satellite radio. The major sports and the popular DJs and shock jocks are split among the two services, forcing customers to make a choice that they wouldn't have to make if the two merged. I know several people who actually own both and pay two bills for satellite radio each month, so they will likely see their costs cut in half.

The American auto industry is in even worse trouble than initially feared. American automakers are prepared for what could be the slowest sales in a decade, thanks in large part to rising commodity prices and the declining purchasing power of the dollar. At least that's what the automakers will likely claim... but we all know the real reason:
American cars are boring and far behind on new technologies. They aren't fuel efficient, they aren't safe, they aren't reliable. Is there a good reason not to buy a fuel efficient hybrid from Japan or a meticulously-engineered German sports car instead of a boring and sluggish U.S. pile of junk?

If this post disappears due to mysterious circumstances (auto industry lawyers), remember that the money the auto industry is paying for executives and lawyers is money that could have been spent building better cars.

--> See my huge encyclopedia of car information

Last Thursday, Bear Stearns was worth billions of dollars and CEO Alan Schwartz was assuring investors that the company was not in trouble. By Sunday afternoon, JP Morgan agreed to buy the company for $236.2 million worth of stock, or about $2 per share.

Surprise, surprise, it turns out Bear Stearns was in trouble. Without the JP Morgan buyout, the company would have had to file for bankruptcy, and the domino effect could have taken down several more firms (some of which are going to be crashing anyway, thanks to risky subprime mortgage loans).

There is no doubt about it, our economy is in very big trouble. Bear Stearns is no Enron. This is not a case of the top executives cooking the books to inflate the stock price. Sure, the CEO received far more than he was worth last year in total salary and compensation, but all that information was publicly-disclosed. This is a company that made some risky bets during its normal course of business, and they lost nearly everything.

You've got an intruder in your house and you have to call 9-1-1. No problem, you've got your cell phone on you. You can just sneak into a closet or under a bed, and you'll have the fuzz on the way before the burgler/serial rapist will even know you're home. Then you realize you have a Verizon cell phone, and you're screwed.

Newer Verizon phones have a "feature" that causes them to sound a loud alarm when a user dials 9-1-1. Verizon believes that alarm is required under Section 255 of the Telecommunications Act, but once again, Verizon employs a lot of idiots. An FCC spokesman replied to Verizon's claim that no part of Section 255 requires the use of tones for 9-1-1 calls.

Why did Verizon decide that it would be a good idea to sound a loud alarm to alert everyone in the vicinity of your location? Please write to them and ask them why, and tell them that I called Verizon employees a bunch of idiots.

Facebook, the popular online social network, has shunned multiple media giants offers of big bucks and avoided being bought out. Now they might be looking to become a media giant of their own, as all signs point to a Facebook IPO in the near future.

This is a smart move for Facebook's owners, which include a small group of kids who for the most part are just a couple years out of college, for many reasons. The Facebook hype has never been greater, and we all know that hype can play a significant part in having a successful IPO. While offers for Facebook have ranged from $500 million all the way up to $1 billion in stock, I think an IPO would value the company closer to 3-4 billion dollars. The current owners could retain a controlling interest and still raise more money than a buyout ever would have.

Facebook: "F--- you, Yahoo, they're going IPO!" - Valleywag

Technorati Tags: facebook, ipo

Yahoo CEO Terry Semel has stepped down from his position. He will be replaced by Yahoo co-founder Jerry Yang, who is currently a member of the company's board. Semel made $40 million last year despite leading a company that has been lagging further and further behind #1 competitor Google in the search advertising market. Yahoo had a head start of nearly 6 years on Google.

Stockholders have been perhaps most disappointed with Yahoo's new advertising platform, which was given the project name "Panama" last year. That platform has quietly launched, but it has failed to offer anything innovative compared to similar offerings from Google and their Adwords/Adsense system.
ABC News: Yahoo's $40 Million CEO Steps Down

EBay has paid $75 million cash to acquire "social discovery" service StumbleUpon. The service allows users to see what sites other users like and even recommend similar sites. It's a great way to waste a lot of time looking at sites you're interested in.

Although eBay claims to be keeping the service the same as it has been, chances are we will see a StumbleUpon Auctions service in the near future. Imagine seeing similar auctions to the one you are looking at, as recommend by real people. EBay already has a script that recommends similar auctions, but it never seems to work that well. Let's hope this does a little better.
eBay’s StumbleUpon Acquisition: Confirmed at $75 Million