Opening Bell: 6.19.06

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When Ben Burped (Barron's)
Oh praise be to the heavens. Alan Abelson is back! Apparently, Abelson's absence from his excellent "Up & Down Wall Street" column was due to some health issues, as he starts his column by referencing a man in a white smock and scalpel. Given that his departure was timed brilliantly with the dramatic turn of the market, he takes the opportunity to give his assessment of where things have been and where they might be going, making this one a particular must-read. To him, it all comes back to inflation, and we should listen to Abelson when he says it's not fair to just blame Bernanke, who as he put it "never went to obfuscation school". And we were worried our favorite would be gone forever, just when he was needed the most.
Flash cashing in on growth of Web video (Mercury News)
Remember in the early days of email, people were fond of sending chain emails with jokes or touching stories along to 100 of their friends? Pretty soon (though some would argue not soon enough) people got the message that their friends, by and large, found these 'forwards' really, really lame and that they should cut it out. Well we've come full circle, except now these forwards don't contain stories, but just innocuous YouTube links, usually pointing to some hee-larious clip of a man blowing milk out of his nose, or something like that. True, you don't have to click on it, but what are you gonna say later on when that person asks you if you check it out? One difference between email forwards and YouTube clips is that there was never any money behind email forwards (unless you count AOL, which arguably had a whole empire based on them). Now YouTube is big business, and behind that you have Adobe's Flash format fueling the whole thing. The company's acquisition of Macromedia has been timed perfectly with the rise of Flash as an online video format -- it has now surpassed Apple's Quicktime and Real's, er, Real format. If people continue to develop flash videos, such as those on YouTube, and use Adobe software to do so, the company could bank handsomely.
Starbucks targeted over high-fat products (Reuters)
"The health police live inside of my head, the health police they come to me in my bead, The healthpolice, they're coming to arrest me, oh no." It looks like Starbucks may get the KFC treatment -- some of the company's baked goods contain, get this, trans fatty acids, the Center for Science in the Public Interest's current bete noir. The spokesman for the group says that it's ok for Dunkin Donuts to get away with this, but that people expect more from Starbucks. That simply has to be the weakest argument on the planet; unfortunately, we won't be rid of these pest-like scolds with name-calling alone. If we could, you know we'd be the first to engage in it. That being said, if you're overweight, and you drink Starbucks, there's certainly a lawyer out there who will take up your case. Good luck.
The Vacancy Fit for a King (BusinessWeek)
Now that Gates is finally leaving the stage, the questions aren't just about the future of Microsoft, but of the next generation of faces in the tech world. Will the Google guys assume the mantle? What about Linus Torvalds, the Linux guy? This is bound to be a popular game over the coming months and years. When the first generation of major tech superstars came about, people liked to compare them to leaders of previous eras ("Michael Dell is our Henry Ford"). Now people will have to be satisfied as the "next Larry Ellison". Psst, on that tip, check out Marc Fleury of the recently acquired JBoss software, which went to Red Hat.


Nokia, Siemens to merge phone equipment units (Reuters)
Nokia and Siemens have agreed to merge their network equipment businesses, which will make for a $20 bln infrastructure powerhouse. Though they may talk about how the units are a "good fit" and some may even use the S word, the hookup is a bowing to reality. The telecom world continues to consolidate, as does their industry -- being small doesn't help any company at the negotiating table. The new firm, Nokia Siemens Networks, will be owned 50-50 by the two companies.
Oil Prices Fall Slightly Over Iran Anxiety (AP)
Here's another classic for our "what could this headline possibly mean"-dept. Seriously, what could this headline mean? Oil prices fall over Iran anxiety? Don't oil prices rise on anxiety about nuclear war breaking out? Wouldn't falling oil prices have something to do with easing of anxiety... or much more likely have nothing to do whatsoever with Iran at all? It seems like the drop in oil prices was just an unfortunate detail that messed up a really good story about some Iran news over the weekend. Just a minor detail.
Fitfully Blending Papers and TV (NYT)
Above, we made reference to the "S word", which could only ever mean one thing, "Synergy". Synergy only comes about at two different times. First, there are pre-merger discussions of synergies, which are always basically bunk. At best, two companies might see some layoffs, which isn't nearly as attractive sounding. The other common area of usage -- and this is much more interesting -- is the evergreen article about the "failed synergy" or the "synergies that didn't materialize". This is exactly what we get in a discussion of the Tribune Co.'s failed synergy strategy, whereby they bought out media properties, hoping to blend TV and print assets, to build a rich presence in the community. The model actually works in their Chicago home base. WGN, which brought the Bozo show to kids all over the country, shares resources with the Trib, etc. But the model hasn't fared so well at other Tribune properties such as the L.A. Times or Newsday. The markets are different, and no local station is as beloved as WGN is to Chicago. So if you're looking for yet another post-mortem on a classic business term, check out this article.
Airbus Woes Weaken Forgeard's Grip at EADS
It always starts with a seemingly insignificant wiring glitch. Then the plane gets delayed. Then come reports about stock sales and the "what did he know and when?" questions. Just like that, a comfy position can go careening off course, which is the situation for EADS boss Noel Forgeard. Last week's news about delays on the new Airbus was devastating, as it already was losing the battle with Boeing. Now more orders are at risk, billions in market value are gone, and even the French government is angry. This is the problem with being a company so indebted (and in bed) to the government. They'll help you when things are good, but at times when they're really needed, not so much. Let's start the clock on this guy.
Judge delays sentencing for Lay, Skilling (CNNMoney)
They say when you're facing life-in-prison, every day you can avoid sentencing is a victory for the defense. Now, stories have emerged that Skilling's defense team is still owed several million dollars of a nearly $65 million lawyer tab. Of course, given the results, the two cons might have gone with the public defender instead, and still gotten the same result. So it's nice to see that the defense has finally won a victory, albeit a minor one as sentencing has been delayed just over a month. That's gotta be worth at least $10 million.

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