THE "XOIP" CHRONICLES

1. Deutsche Telekom pondering Sprint Nextel takeover
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Deutsche Telekom AG is mulling a bid to acquire Sprint Nextel, a deal that if consummated would establish the European communications giant’s T-Mobile USA unit as the U.S. market’s largest wireless carrier. Citing sources familiar with the matter, The Wall Street Journal reports Deutsche Telekom management is still debating the merits of a Sprint bid and may not act for weeks or even months, if at all. The U.S. wireless industry’s third largest carrier, Sprint Nextel boasts a market capitalization of $22 billion after its revenue fell to $40.1 billion in 2007 from $41 billion a year earlier–the operator also booked a net loss of $29.5 billion in the fourth quarter due to a non-cash goodwill impairment charge of $29.7 billion. With 28.7 million customers at the end of December, T-Mobile USA lags a distant fourth, but a merger with Sprint would roughly triple its subscriber base and vault the company ahead of AT&T and Verizon Wireless. Two major obstacles loom, however: While T-Mobile USA’s network operates on the GSM standard, Sprint relies on the rival CDMA format, posing an integration nightmare. There is also some question whether U.S. regulators would give their blessing to the deal.

For more on the DT/Sprint rumors:
- read this Wall Street Journal article

Related articles:
Sprint upgrades mobile web browsing
Supergirl flies onto Sprint handsets
MySpace Mobile launches on Sprint

2. Microsoft walks away from Yahoo bid
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Microsoft announced it is abandoning its bid to acquire Yahoo after the web services giant rejected its latest offer. Citing sources close to the negotiations, The New York Times reports Microsoft CEO Steve Ballmer met Saturday morning with Yahoo CEO and co-founder Jerry Yang to increase Microsoft’s bid offer to $33 a share–about $47.5 billion–from $29.40 a share. When Yang replied that Yahoo would not accept an offer below $37 per share, Ballmer balked, later issuing a statement reading in part “After careful consideration, we believe the economics demanded by Yahoo do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal.”

With financial analysts expecting Yahoo’s stock price to plunge in the wake of this latest news, the company’s future is cloudy: An unnamed executive told the NYT “If the stock drops as far as I think it will, a lot of employees are going to be angry and many key employees could leave.” Yahoo is also rumored to be discussing a search advertising partnership with rival Google and in merger talks with Time Warner’s AOL unit and News Corp.-owned MySpace. As for Microsoft, the failed Yahoo bid means the software goliath is still no closer to solving the threat posed by Google, which now sets the pace in web services like advertising.

For more on the Microsoft/Yahoo breakdown:
- read this New York Times article

Related articles:
Yahoo to launch voice-enabled oneSearch 2.0
T-Mobile jilts Google for Yahoo oneSearch
AT&T, Yahoo ink advertising deal

3. Study: Digital media revenues rising
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Seventy percent of media and entertainment companies now derive some revenue from alternative channels like on-demand content, digital advertising and user-generated content, according to management consulting firm Accenture’s annual Global Media Content Survey. Even though the advertising, film, music, publishing, radio, web, videogame and television execs surveyed indicate their new media revenues yield less than 10 percent of overall revenues, Accenture notes even that small percentage signifies tremendous growth over last year’s survey.

When asked to identify the largest drivers of revenue growth over the next five years, 66 percent of respondents cited multi-platform content delivery, far ahead of new content types (24 percent) or new geographies (10 percent). Sixty-three percent of respondents said they will pursue a multi-screen distribution strategy embracing television, online and mobile delivery. Short-form video was cited by 38 percent of respondents as the format generating the greatest growth, followed by online portal/publishing (23 percent) and videogames (18 percent). Sixty-eight percent of respondents identified social media and UGC as major growth opportunities, and 56 percent indicated they are already involved in social media in some capacity. Nearly two-thirds of respondents favor ad-supported business models, with 25 percent pointing to subscription-based services and 11 percent citing pay-per-play services.

The Accenture survey found that 55 percent of respondents believe mobile requires three years to emerge as a true mass-market medium, while the remaining 45 percent feel that evolution will require even more time. Consumer readiness remains the most oft-mentioned barrier to mass mobile uptake, according to 51 percent of respondents–42 percent cited the failure of a consistent user experience, while readiness questions surround both mobile operators and content providers according to 37 percent of respondents.

4. Iron Man was fantastic! Must see!!!

-Henri

Filed under: Advertising, Mergers & Acquisitions, Outside the Office