Opening Bell: 2.15.07

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Buyout Firm Said to Be in Deal to Unite No. 2 and No. 3 Chains in Premium Ice Cream (NYT)
When Ben & Jerry's made its splash in the ice cream market, before being snapped up by Unilever, the company preached the gospel of flavor mash-ups, to use some hip business parlance. In other words, while the old guard of ice cream favored mono-flavored products like "strawberry", the company favored more radical concoctions, like "marshmallow, walnut, cherry". That was game changing. Now a buyout firm is looking to mix ice creams from the second and third biggest premium chains, Marble Slab and Maggie Moo's in hopes of competing with the number one chain, Cold Stone. Now, it's not clear whether the firm is going to just meld the two chains, or if it's going to take the next logical step, and mix their ice cream flavors into inspired, delicious mixes. It really should do the latter, as Ben & Jerry's taught us.
Coke Overseas Sales Bolster Turnaround (WSJ)
Earlier this week, Coke Enterprises, the big bottler of Coca-Cola products, announced some weak earnings, leading to layoffs and restructuring. But the stoff the Coke Enterprises is bottling, Coca-Cola itself, is doing well, particularly overseas. Soda volume rose 3% for the company in 2006, which may not seem like much, but it's not bad for the drink. And other carbonated beverages, which includes the still-hot energy drink market, rose by 4%. The company's never really found a successor to Coke, but it seems to be finding a lot of smaller successful products -- no, we're not talking about Coca-Cola Blak, although that's actually not that bad. If you're ever in the mood for something different, go to Japanese grocery store and get a bottle of Coca-Cola's iced green tea. It's great on a hot day.
Singapore Cuts Company Tax, Trims Gap With Hong Kong (Bloomberg)
In theory, governments really ought to compete for business. In practice, they rarely do. Perhaps they take this "monopoly on force" idea a little too far, and think they don't need to respond to competition. That's not what Singapore is doing. The city-state is slashing its corporate tax rate, hoping to keep pace with Hong Kong, in a bid to lure businesses and create jobs on the Island nation. It really makes us rather envious, actually. In those countries, politicians talk about tax cuts and mean them, and the thought of luring corporation with major tax breaks isn't a taboo subject -- that's a far cry from one of our leading candidates, talking about taxing an oil company's entire year of profits and putting that money into an alternative energy fund.
State Farm won't write new Mississippi policies (LA Times)
Could the homeowners insurance market start to resemble the health insurance market in terms of regulation and difficulty of getting coverage? Mississippi's largest home insurer, by market share, State Farm, announced that it is pulling out of the market there due to legislative "saber rattling" post-Katrina. There is apparently a lot of frustration with the way the company handled claims after the storm. This isn't the first time that insurers have threatened to dump entire states -- in Texas there was a crisis after mold abatement in homes started piling up as a cost for insurers. These kinds of things are a cycle; insurance companies threaten to pull out, then states up their regulation of them (looking out for homeowners), and then more companies seek to quit the market, leading to a situation like we have in healthcare, where it's really difficult to buy coverage on the open market. So, unless you have a brand new Toll Brothers home 1,500 miles inland, it may be tougher, in the future, to get it covered.


The ‘Toyota Way’ Is Translated for a New Generation of Foreign Managers (NYT)
As Toyota expands its vaunted production facilities around the globe (i.e. the American South), the famed Toyota Production System is spreading like the gospel. There was a time when Toyota took its cues from the Detroit automakers, copying their manufacturing innovations. Now the ball is firmly in the other court, and Toyota's years of stored up corporate wisdom on how best to efficiently manage a plant are spreading back through the rest of the world. Now that the company is hiring more managers in the US, it's easy to see the company becoming the next GE, a breeding ground for business talent. Do a few years in a key position at Toyota, and what company wouldn't want to hire you for a position of power.
Metals prices will drop 10% this year (Purchasing.com)
Purchasing.com predicts that after years of heavy gains, the market in industrial metals will cool off in 2007, as prices on aluminum, copper, nickel, steel and tin all abate this year. You can read their rationale for each metal, though utlimately it comes down to something about supply and demand. More interestingly, we wonder, who will be the Amaranth of metals. Surely there's some fund out there that's been making a killing that would get killed itself if many metals reversed course. Any guesses?
Nobody likes hedge funds (Houston Chronicle)
The anti-hedge fund sentiment that we discussed yesterday really seems to be picking up steam. At a recent conference in Houston, hedge fund bashing was in full force. At a panel, one person asked, "Hedge funds, can we take them outside and beat them?", while another person wondered, "Are hedge funds the anti-christ?". Is it too early in the trend to get pro-hedge funds again?
Attack of the mini-Googles! (Business2.0)
This article is a little old, but it just came online, and it's a worthwhile read. In case you didn't know, nobody is really counting on Yahoo or Microsoft (or even Ask!) to supplant Google anytime soon, let alone kill Google, as they'd all like to do. But search is still real hot, particularly vertical search -- search engines with a very specific focus. They search things like travel fares, blogs, housing prices, jobs, classifieds etc. Of course, there's always the fear that Google could crush anyone of them if it wanted to, and it is expanding into narrower search itself, like video search and blog search. But, if there's a way to attack Google, it's probably this "death by a thousand cuts" method, whereby it takes it on the chin from a range of attackers.

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