US air traffic is simply atrocious. The aircrafts are getting older - so are the flight attendants! The snacks and food offered on flights went from complimentary to paid and to disappearance (they don't want to have the inventory management headache!) - LOL.
Safety is in question. First, lack of inspection by the authorities is increasing the risk. Recently, we saw a spate of a large number of flights being canceled due to pending inspection. In a bid to keep the carrier running, safety was prioritized. The rich no longer want to fly with commercial airlines and they fly via NetJets! There were 339 incidents in 2007 when two aircrafts came dangerously close to each other or to objects on the ground. I experience more bumps in landing these days, hmmm.....are those due to reduced paychecks to the flight pilots?
Consolidation emerged much to the disadvantage of the chagrined consumers. Prices were hiked as soon as the Delta-Northwest merger started coming into transition phase. I see further consolidation in form of combining the points, miles, etc. The airlines must be cursing themselves for introducing the points system to begin with.
The options provided to the consumers are causing the issues to a certain degree. To woo the customers, airlines provide tons of options. However, the infrastructure required to support it is simply absent. For instance, take the condition of La Guardia airport. It is no where close to the state-of-the-art airport-designs I have seen at other domestic or international locations. Yet, it is a nerve center for the entire US traffic. Any backlog there causes cascading effect in the system. Such airports need to be corrected in terms of design.
Most of the US airline carriers are trying to improve. Air aviation is a highly leveraged business with huge capex and/or leases (depending on how you laid it out) unless you have a niche target market to focus on luxury flying. The fuel prices are leading airlines to become very insensitive to the consumer needs. Airlines started taxing consumers with charges for checked in luggage in order to make up for prices. Southwest has good hedge against oil. What about others? I saw someone shouting on cnbc when the oil went up by $11 /bbl (chuckles).
I blog this as I am waiting at the airport due to a flight cancellation - they said that there was some weather issue. However, another airlines is letting its flights go at the same time to the same destination. Is this an outright lie? who knows? Can FAA do something about it? Do they care? Blakey unabashed the airlines publicly last year. Does he have enough powers to do something?
Showing posts with label merger. Show all posts
Showing posts with label merger. Show all posts
Sunday, May 11, 2008
Friday, February 01, 2008
microhoooooo
Microsoft bid for Yahoo at $31 a share in a bid to gain some market share in the rapidly evolving online ad industry.
An earlier post on this blog here, expressed the possibility of consolidation with Microsoft buying Yahoo. Microsoft senior leadership was astute and kept this possibility on bay for a while. They made their move with an unsolicited bid when the Yahoo stock was beaten down due to lacklustre performance by Yang and the Gang. Larry Ellison moves in similar ways.
The media expressed that there may be anti-trust problems. Now, you gotta be kidding me! Together Microsoft and Yahoo will cover only a quarter of the total space that Google commands. I learnt at least this much in my Business Law class from Prof Hersch. I am not sure why the popular media made these comments. This just indicates how the media runs hurriedly to create sensational headlines rather than providing any thought to it. None other than CNBC said this and other channels followed suit ! This sad display of journalism reminds me of Prof Chris Telmer, who used to rip apart the pink press (financial press) for spreading false notions in the minds of the naive readers. Astute and educated investors read most of the pink media with a grain of salt due to such incidents.
Of course, Yahoo and Microsoft have huge share of email accounts. However, I am not yet sure if they have good enough products to target ads in that fashion. If they build it together, they will save money on building that. May be both already have products in the pipeline...who knows.
Going ahead, we will witness some interesting times in the search space.
1. MSN Money must leverage Yahoo Finance for their content but not the UI. The international market and eye balls (remember - Jewels at the bottom of the pyramid!) that MSN Money will get with the inclusion of Yahoo Finance content on MSN Money will surpass that of Google Finance easily.
Google Finance does not have any grip in the foreign markets - for instance, the Indian market. Whereas Yahoo Finance has a good set of data (though there is room for improvement for the international markets. Besides they roll no the RIC codes and hence, have a standardized convention for naming the stocks.
2. We will have a very colorful time watching the titans clash for the online ads market. MSFT has been ramping up its Live Search staff with good talent from around the globe. They have some way to go in order to make themselves equivalent to that of GOOG. However, they are on the right path.
3. Will MSFT be able to retain the top talent from YHOO? or will they be bought away by GOOG or facebook? Time will tell. Most of the sources I talk in Yahoo with tell me that they will not like to work for MSFT given that when they chose their careers - they had a choice and they actively chose YHOO over MSFT.
Another take on it is that this was a la The Art of War move by MSFT in which MSFT doesn't engage YHOO into a battle but just surrounds it. YHOO has nowhere to go. Mr. Yang and Gang could not maintain a high valuation for the ailing online giant. GOOG cannot make a bid as they dont want another regulator hassle from the DOJ for another anti-trust trial (this time it will be fatal).
In conclusion, 31 bucks a share is not a bad price to pay considering the additional steady revenues it will bring in. Microsoft senior leadership was astute and kept this possibility on bay for a while. Let us see how YHOO responds to this bid.
An earlier post on this blog here, expressed the possibility of consolidation with Microsoft buying Yahoo. Microsoft senior leadership was astute and kept this possibility on bay for a while. They made their move with an unsolicited bid when the Yahoo stock was beaten down due to lacklustre performance by Yang and the Gang. Larry Ellison moves in similar ways.
The media expressed that there may be anti-trust problems. Now, you gotta be kidding me! Together Microsoft and Yahoo will cover only a quarter of the total space that Google commands. I learnt at least this much in my Business Law class from Prof Hersch. I am not sure why the popular media made these comments. This just indicates how the media runs hurriedly to create sensational headlines rather than providing any thought to it. None other than CNBC said this and other channels followed suit ! This sad display of journalism reminds me of Prof Chris Telmer, who used to rip apart the pink press (financial press) for spreading false notions in the minds of the naive readers. Astute and educated investors read most of the pink media with a grain of salt due to such incidents.
Of course, Yahoo and Microsoft have huge share of email accounts. However, I am not yet sure if they have good enough products to target ads in that fashion. If they build it together, they will save money on building that. May be both already have products in the pipeline...who knows.
Going ahead, we will witness some interesting times in the search space.
1. MSN Money must leverage Yahoo Finance for their content but not the UI. The international market and eye balls (remember - Jewels at the bottom of the pyramid!) that MSN Money will get with the inclusion of Yahoo Finance content on MSN Money will surpass that of Google Finance easily.
Google Finance does not have any grip in the foreign markets - for instance, the Indian market. Whereas Yahoo Finance has a good set of data (though there is room for improvement for the international markets. Besides they roll no the RIC codes and hence, have a standardized convention for naming the stocks.
2. We will have a very colorful time watching the titans clash for the online ads market. MSFT has been ramping up its Live Search staff with good talent from around the globe. They have some way to go in order to make themselves equivalent to that of GOOG. However, they are on the right path.
3. Will MSFT be able to retain the top talent from YHOO? or will they be bought away by GOOG or facebook? Time will tell. Most of the sources I talk in Yahoo with tell me that they will not like to work for MSFT given that when they chose their careers - they had a choice and they actively chose YHOO over MSFT.
Another take on it is that this was a la The Art of War move by MSFT in which MSFT doesn't engage YHOO into a battle but just surrounds it. YHOO has nowhere to go. Mr. Yang and Gang could not maintain a high valuation for the ailing online giant. GOOG cannot make a bid as they dont want another regulator hassle from the DOJ for another anti-trust trial (this time it will be fatal).
In conclusion, 31 bucks a share is not a bad price to pay considering the additional steady revenues it will bring in. Microsoft senior leadership was astute and kept this possibility on bay for a while. Let us see how YHOO responds to this bid.
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