Mon - Telefonica bids for the UK's O2

Telefonica has just announced a $31.5bn acquisition of the UK's O2. O2 was itself spun out from the UK's British Telecom. It was their mobile phone unit, with ooperations today in the UK, Germany and Ireland.

This is a major move by Telefonica, which is now the 3rd most valuable telco on the planet. But, their bid may flush out a competing offer from Deutsche Telekom. All the same Telefonica would have far less regulatory issues as they don't really have businesses in the UK or Germany.

This is yet another major move in the rapidly accellerating consolidation of the European telco market. It looks like a big five group of truly pan-European operators is emerging that could force considerable change in the Euro telco market. They include Vodafone, Deutsche Telekom, France Telecom, Telecom Italia and Telefonica. It will be interesting to see what moves Telecom Italia makes as they are now lagging the group in European presence.

O2's management team must be applauded for creating such a valuable target in a reasonably short period of time. I wonder what will happen to the O2 brand? If I was Telefonica I would hang on to it hard.

Mon - AT&T lives on!

It may be that AT&T is fast becoming the gopher of business. Ya just can't squash 'em. Just when everyone thought the AT&T brand was dead it's now back with a vengeance!!

When Cingular bought AT&T mobile they were quick to jettison the AT&T brand in favour of cingular.

As SBC bought the rest of the AT&T empire everyone thought they would do the same. So, the AT&T brand and institution seemed to be finally dead and buried.

But no! AT&T is back as never before. SBC has instead surprised everyone by jettisoning their brand in favor of AT&T. Apparently one of the reasons is that in research they found that 98% of people in the US were aware of the AT&T brand - and just think how much more relevant it is in the international market place.

So, SBC will be re-branded AT&T. But, no news yet on whether they will also adopt AT&T's iconic T ticker.

Thurs - Yahoo launches into online travel

Yahoo yesterday launched an online travel agency that helps consumers not only book flights and hotels, but plan, organise and share trips via the internet.

The move reflects a wider trend going on in online travel, where the industry moves beyond travel booking to a more comprehensive service including maps, reviews, photos and user-generated content such as weblogs.

Yahoo seems to have spent 18 months putting together Trip Planner and it weaves together many of Yahoo's existing services and recent acquisitons, including maps, bulleting boards, local lsitings and online photo sharing form Flickr.

Well, you can't blame Yahoo, after all online travel is the largest e-commerce segement and worth a huge amount annually. All the leaders in the market are pure play travel sites so its probably time that a portal shakes the market up. And Yahoo sure have a huge dedicated customer base to sell to.

Thurs - Time Warner board meets today to discuss AOL

Time Warner's board meets today to discuss the AOL deal in particular.

I'd love to be a fly on that wall. Just imagine:

"So, Dickie, what do you think we should do with AOL?"
"Well, guys, the MSN joint venture could create one heck of a competitor to Google and Yahoo. And lets face it Google is worth over $100bn today and their value's only going up. So, if an AOL/MSN portal becomes worth half that, Time Warners share price will shoot up. On the other hand, doing a deal with Google could mean that we ride their coat tails while hanging on to a larger portion of AOL."
"Oh no, it sounds like six of one and half a dozen of the other Dickie. Maybe we should do what all good boards do and postpone the decision to the next board meeting or to next year."
"Yeah, but we have this active investing guy called Carl Icahn crawling all over us and he can be a real pain up the you know where - so I think we should try and make a decision."
"OK, ok lets decide to make a decision at the next board meeting. That's bold for us - eh?"

Come on guys - just go for it. Both are pretty good options, but my gut still says you should go with an AOL/MSN merger. Maybe just try and ensure you have a controlling stake, given AOL is worth more and you have all that lovely Time Warner content. But, I don't think there's really room for 4 global portals in the market - so better that MSN merge with you than say Yahoo!!

Thurs - Apple creates havoc with chip shortage

Well, you know that Apple are back in a big way when one of their product categories creates a world chip shortage. I guess Apple only ever dreamed of reaching such product power with their computers. But, instead they are now achieveing such lofty heights with the venerable iPod!

Creative Technologies, Apple's biggest rival in the portable digital music player market has come out screaming that Apple have hogged supplies of flash memory chips in advance of this Xmas buying season to the extent that they are now creating worldwide shortages and even forcing consolidation amongst MP3-player manufacturers.

Apples seems to have struck such a far reaching and price efficient deal with Samsung, the biggest memory chip maker, that they have created an industry-wide shortage of 1 gigabyte flash memory chips such as those used in the Nano.

Not that Apple's iPod really faces much competition at the moment, but this sure seems one hell of an efficient way for them to keep strengthening their market leadership position.

Thurs - RIM rejected by Supreme Court

The US Supreme Court has rejected a request by RIM for it to intervene in its patent dispute over RIM's Blackberry device.

The case now reverts to a lower court that is likely to be asked by NTP to impose a ban on sales of Blackberry devices in the US after the two failed to reach agreement on a $450M settlement. I gues NTP is looking for more money.

This is not good for RIM.

Wed - Google launches into commerce and listings

Google looks set to launch yet another major intitiative. They are apparently testing a new service that could enable them to compete more directly with Ebay in particular.

Known as Google Base (odd name!!), the service should let internet users submit information about a wide range of personal items, free of charge, to a publically searchable database managed by Google.

It sounds to me like one huge internet listings or directory service for people to promote the sale of goods and services. Google as always will make money from advertising. Sounds necessary, and painful for Ebay, who's already received shockwaves as their shares fell 4% yesterday on the back of the news.

This looks like a natural extension for Google. We welcome the move.

Wed - Cablevisions future?

The Dolan family, the largest shareholders in Cablevision, the successful New York cable group has just pulled a plan to take the group private in a deal valued at $7.9bn.

This has to raise the question of whether the Dolan's may now push instead for the group to be sold. After all, cable groups are about to come under a wave of competitive attacks from powerful US phone companies launching their own triple plays and TV on demand.

If I had to bet I'd put my money on Time Warner or Comcast having a run at Cablevision - after all, they have one hell of a valuable, if localised franchise.

Wed - Amazon weakens

Amazons shares fell yesterday as they offered a cautious revenue forecast for the next period and the key Xmas buying quarter. They also reported earnings for the 3rd quarter below expectations.

It also looks like Amazon's margins are taking a toll from their free/fixed shipping promotions.

I can't help wondering if Amazon are feeling greater comptetive pain now from a healthier Yahoo and an increasingly aggressive Ebay. With Google set to launch more and more into commerce as well, it is hard to be quite so bullish on Amazon going forwards.

But, Bezos is driving forwards as always and ramming through a much needed set of new technologies and features, including getting Amazon more and more into music, book and video downloading. This seems a no-brainer - but they'll have to move fast!

Wed - TeliaSonera latest European telco struggling with international growth

On monday we looked at mid sized regional telco's in Europe who were struggling to find the right acquisitions to spur their international growth which is so necessary to give them the necessary pan European scale and to get away from slowing local markets.

Well, TeliaSonera seems the latest European telco to face the same issue. The part Swedish and part Norwegian outfit has invested huge amounts of money to buy mainly mobile assets in regions such as Russia and Turkey. But, as they are now descovering, these developing countires are a far cry from managing in a stable Nordic environment.

TelaSonera is battling to gain a controlling interest in one of its key investments, in Turkcell, the fast growing Turkish mobile operator. And these attempts have been thwarted as a major investor that promised to seel them their stake has just rescinded and is instead selling out to a Russian group. This will leave TeliaSonera with only a minority stake in what was supposed to be the hub investement for them at the geographic epicentre of their international expansion.

This just goes to prove how hard it is for the European mid sized players to try and build scale and international operations in far flung countries and and at the boarders of Europe. I can't help feeling that their will be more pain to come and not all those attempting this international reach will survive as independent entities.

Tues - Intel announces more problems with Itanium

Intel has delayed by months the release of the next three major versions of the Itanium processor, a new blow for the processor family. But the chipmaker also plans a change it said will boost the performance of its more widely used Xeon line.

The next Itanium, a major revision code-named Montecito, recently had been scheduled for debut this year, holding volume production until the first quarter of 2006 so the chipmaker can address quality problems. Now, however, it will debut in mid-2006. Its successor, "Montvale," was pushed from late 2006 to 2007, and the next major redesign, "Tukwila," was pushed from 2007 to 2008.

This is a blow for Intel, that a few years ago hailed Itanium as a major breakthrough, but has since only found a small niche server market for it. This could play into AMD's hands as they continue to ramp products and production. If Intel can fight effectively with its new Xeon line, that could prove their best defence in the short term.

Tues - Leading UK games publisher soars on bid talk

SCi Entertainment, the UK's leading games publisher soared to a massive valuation of nearly $800M, four times their worth only a year ago, as they are rumoured to be in talks to be bought.

SCi is perhaps best known for publishing Lara Crofts Tomb Raider and Hitman, the titles they themselves acquired earlier this year in what now looks like a sneakily smart deal.

It seems as though lead bidders include Electronic Arts and Midway Games, a Chicago-based publisher controlled by Sumner Redstone. EA apparently needs the deal to help them prop up a few quarters of declining sales and Midway because Sumner thinks electronic games is the next big thing. Sling in a few prowling private equity groups and it looks like SC1 could even go for $900M.

Given that for the 9 months to June 2005 SCi has racked up a loss of $24M on sales of $30M they could end up selling for a huge multiple. Mind you, with the next generation of games consoles about to debut and the usual buying frenzy surrounding this, games is becoming a huge and critical media segment.

Tues - Ericcson to buy Marconi for $1.77bn

Well, thats the end of the UK's attempts at restoring the fate of the once powerful industrial conglomerate of GEC. Today it looks as though the vast majority of the remaining pieces of the beleaguered group, trading as Marconi, will be sold off to Ericcson.

Ericcson, who has proven that you can pull off remarkable transformations with messed up telco equipment suppliers, and providing a starkly different scorecard to the folk at Marconi, will now gobble the group up at a sensible price and bolster their fixed line business. To pull off their turn around, Ericcson, of late has focused on the mobile infrastructure market.

Ericcson is cherry picking at the smitten Marconi, taking all of their network equipment business, including R&D and the data neworking business in the US. Marconi will continue as an independent concern retaining its UK services business, an operation with annual sales of around $500M and a similar sized cash balance.

This ends a tough few years for Marconi when they battled desperately to turn the group around. Their final death knell came as they were excluded from a huge BT contract at the end of last year. Marconi had always enjoyed BT's considerable business. The biggest irony of all is that they lost the business to Ericcson! - proving that customers always come first.

Tues - Texas Instruments hits record sales

TI reported a 10% rise in quarterly revenues to a record $3.59bn as more of its chips were used in mobile phones and electronic devices. TI adjusted their earnings for the first timer to take account of stock options and their stock price was later hit by the weaker than expected earnings per share.

They predicted revenues largely flat for the 4th quarter with earnings a little higher. Analysts wanted more, but TI seems to be delivering solid results and gains on the back of their leadership position in both the high and low end of the cellphone market.

It was interesting to note that revenues from 3G phones looks like they will exceed $1bn for this year, up significantly on last year.

Mon - European telco operators on the move again

It looks like a couple of mid-sized European telco operators are shaking up the telco puzzle yet again as Swisscom and a Virgin Mobile with the Carphone Warehouse go hunting abroad.

Today rumours that Swisscom, the long standing Swiss PTT is on the search for a major acquisition in Europe. The list of possible suitors include TDC, the danish group, that also owns one of Swisscom's local competitors, Sunrise. Swisscom is apparently also looking at Telekom Austria and Eircom of Ireland.

The fact that Swisscom's highly successful local competitor, Cablecom, has recently been taken over by Liberty Media makes Swisscom depserately in need of a deal to find growth abroad.

So too for Virgin Mobile who seems to be teaming up with the Carphone Warehouse to jointly bid for France's fourth mobile license. This all points to a continued accelleration in the consolidation of the Euro telco landscape as regional players are forced to consider merging to compete against larger pan-European players as well as to strengthen themselves as their local markets get liberated and competition intensifies.

This is of course all good for consumers as prices will continue to come under pressure and services improve with the convergence of internet access and telephony.