Finance Matters

Archive for February 9th, 2010

The January search share numbers are in.

The big story is that Microsoft’s Bing continues to gain share, jumping another half-point to 11.3%.  We think Bing is buying these share gains, which means that they won’t be building a profitable search business anytime soon (on the contrary). 

But the gains at least show that Microsoft is committed to the business, regardless of cost.  And Bing’s progress is more sustained than we thought it would be.

Microsoft’s share gains came from Yahoo (no surprise) and Google (surprise).  Yahoo’s search business is just imploding (which won’t help Yahoo OR the impending Microsoft-Yahoo partnership.

JP Morgan’s Imran Khan has the details:

• According to the data, total US core search volume increased 12.4% Y/Y in January, a deceleration from 16.5% growth in December. The January growth level was also below 4Q’s 15.8% Y/Y growth.

• Google domestic core search market share was 65.4% in January, down slightly from 65.7% in December. Google domestic core search volume growth of 16.7% Y/Y in January was below December’s 20.6% growth, as well as 4Q’s 19.9% growth.

• Yahoo! domestic core search market share fell slightly to 17.0% in January from 17.3% in December. Yahoo! January core search volume decreased by 8.9% Y/Y, a deceleration from December’s 1.9% decline, and 4Q’s 0.5% decline.

• Microsoft sites domestic core search market share increased to 11.3% in January from 10.7% in December. Microsoft sites grew January core search volume by 49.6% Y/Y, up slightly from 49.4% in December, and ahead of 41.9% growth in 4Q.

• Ask Network domestic core search market share increased slightly to 3.8% in January from 3.7% in December. Ask grew January core search volume by 15.5% Y/Y, up from 11.8% growth in December, and 8.8% growth in 4Q.

• AOL January domestic core search market share dropped slightly to 2.5% from 2.6% in December. AOL January core search volume declined by 27.8% Y/Y, vs. a 20.0% decline in December, and a 15.5% decline in 4Q.

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See Also:

• Microsoft Buying More Market Share For Bing: Default Search Engine On More HP PCs
• Microsoft Still Flushing $2 Billion A Year Down The Online Drain
• Microsoft Spends Big To Promote Bing At The Olympics

As we observed earlier, today’s stunning market surge reminded us of the day back in October 2008, when news first broke that Hank Paulson was mulling a program that we’d come to learn would be called TARP.

We had a brief surge before ultimately plunging soon thereafter.

The bottom line is that like the initial TARP — which bore no resemblance to the later TARP — nobody has any idea how a Greek bailout is going to work.

What we do know is that any effort by Central Europe to stem the crisis in periphary Europe is going to be fraught with complications, risk, moral hazard, and confusion.

Who else will be bailed out? How does union credibly maintain fiscal discipline?

Those are a couple of issues that scratch the surfaced.

While markets are feeling good right now, nervousness could come back violently in an instant as a plan fails to go smoothly.

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See Also:

• Darkness Falls Over A Europe In Chaos, As German, Swedish, And UK Leaders Have Different Ideas For Solving Greece
• Bone Up On The 9 Possible Scenarios For A Greek Bailout
• Now French CDS Are Soaring, And They Make For A Monster Buying Opportunity

Germany came out today saying they are not going to back stop Greece, and now they want to build a “firewall” around it so it doesn’t hurt its neighboring countries, according to the FT.

While the Germans are talking about containing the problem, The UK and Sweden want to call in the big guns.

“The IMF has the technical knowledge,” said a Swedish official to the FT. Their UK equivalent agreed, “The fund has the expertise and the resources.”

Even the rest of the Euro zone hasn’t come to a single conclusion.

All this leaves is Asian markets with no idea what is happening in Europe overnight.

Check out RBS’ scenarios for a Greek bailout >

Picture from NASA.gov

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See Also:

• Investors Place The Biggest Short Bet In The History Of The Euro
• The Greek Crisis Spurs A Global Margin Call As Confidence Ebbs
• The Euro Experiment Failed: Europe Is Less Unified Than Ever

More news in the slow-growth trend toward merit-based pay in law firms appeared today in the form of Bingham’s new compensation model.

According to the WSJ Law Blog, the firm is unfreezing base salaries for associates who bill more than 1,900 hours, meaning their compensation will be commiserate with their class year had salaries never been frozen.

The associates with between 1,500 and 1,900 hours will keep the same, “frozen” salary level — i.e. one class level behind where they would have if they had hit 1,900. 

The merit-based aspect of the plan comes at bonus time, as practice leaders will have discretion on bonus amount based on the quantity and quality of their work.

According to an earlier post by Above the Law, the plan is a way to keep both partners and clients happy. Internal Bingham research showed that partners and associates were in favor of a hybrid pay schedule and clients are in favor of less emphasis on billable hours.

Read the all the pay details at WSJ’s Law Blog.

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See Also:

• Lateral Moves Increased In 2009
• Morgan Lewis Decides Merit-Based Pay Is Hard
• Pillsbury And Foley & Lardner Too Skittish To Get Rid Of Lockstep Entirely

A lawsuit is afoot at the Playboy mansion.

An investor is suing Hugh Hefner, the head honcho and majority shareholder of Playboy Enterprises Inc.

David Brown is representing a group of investors who filed yesterday in a Los Angeles court. They claimed Hefner turned down acquisition suitors so he could keep living his luxurious lifestyle, according to Bloomberg.

Iconix Brand Group Inc., based in New York, in December decided to break off purchase discussions with the company after determining it would be too complicated to divest, shut down or find partners for Playboy units it didn’t want to operate, according to two people familiar with the matter. Hefner also rejected an offer from San Francisco-based Golden Gate Capital Corp., Brown said.

“According to published reports, one of the main reasons why these deals failed was Hefner’s insistence on maintaining the lifestyle to which he has grown accustomed,” Brown wrote.

A spokeswoman for Playboy told Bloomberg they had not been served any complaints yet, so she couldn’t comment.

Read more at Bloomberg.

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See Also:

• Playboy CEO’s Master Plan: Saucy Clubs, Partnerships And Price Hikes
• Playboy Says Woman Is Not The Lawyer Of Love
• Playboy’s On The Block. Hmmmm. Silicone Alley Insider, Anyone?