I wrote earlier that Brazil's economy has improved because of its anti-globalist nature... meaning that much of Brazil's growth has been powered by its relatively insular market and strong internal consumption.
That may be true of the past, but Brazil needs a strong globalized system in order to grow in the future.
But Brazil’s ethanol-fueled economy may have hit a rough patch. The country’s stock market went into bear territory this week, falling 20 percent from its recent high. The collapse of the Doha world trade round has put the brakes on Brazil becoming a major exporter of agricultural products to the United States market. Meanwhile, a drop in oil and metal prices could send the country’s economy into a tailspin.
Can Brazilian M&A Stay Hot?
All this probably explains why Lula is so keen to restart the failed Doha talks.
Showing posts with label M and A. Show all posts
Showing posts with label M and A. Show all posts
Monday, August 04, 2008
Monday, June 02, 2008
The World Is Upside Down
NAN, that's a new acronym for me. It means (apparently) newly acquisitive nations and refers to companies from Brazil, Mexico, India and China going on a global buying spree usually snatching up US or European (or Canadian) assets.)
A lot of the action is in commodities, oil and gas, and manufacturing. Those markets are where all the money is currently flowing (well, maybe not manufacturing) so it is not surprising.
The most interesting story mentioned here Grupo Mexico battling with Vedanta Resources for Asarco; a Mexican company fighting with an Indian company to buy an American copper company.
With China being an increasingly larger consumer of commodities, the battle over American assets won't be to better serve the American market, but to make more of an in-road in the Chinese one.
Some may be inclined to think this represents the end of the US market as the world's most influential one, I don't think I would agree with that proposition. However, it does indicate that we are entering an increasingly multipolar era where global companies and "must-win" markets originate from every corner of the globe.
Op-Ed Columnist - The World Is Upside Down - Op-Ed - NYTimes.com
A lot of the action is in commodities, oil and gas, and manufacturing. Those markets are where all the money is currently flowing (well, maybe not manufacturing) so it is not surprising.
The most interesting story mentioned here Grupo Mexico battling with Vedanta Resources for Asarco; a Mexican company fighting with an Indian company to buy an American copper company.
With China being an increasingly larger consumer of commodities, the battle over American assets won't be to better serve the American market, but to make more of an in-road in the Chinese one.
Some may be inclined to think this represents the end of the US market as the world's most influential one, I don't think I would agree with that proposition. However, it does indicate that we are entering an increasingly multipolar era where global companies and "must-win" markets originate from every corner of the globe.
Op-Ed Columnist - The World Is Upside Down - Op-Ed - NYTimes.com
Saturday, February 23, 2008
Microhoo! Let the lawsuits begin
The longer Yahoo! stonewalls, the more and more of these lawsuits are going to pile up.
You can't blame the shareholders for wanting to see a deal after patiently holding on to Yahoo! stock, and you can't blame Yahoo! management for seeking a better deal; but eventually everything has to find an equilibrium and if no better offer presents itself, Yahoo will have to sell.
Right now, it just feels like Yahoo! is delaying the inevitable.
You can't blame the shareholders for wanting to see a deal after patiently holding on to Yahoo! stock, and you can't blame Yahoo! management for seeking a better deal; but eventually everything has to find an equilibrium and if no better offer presents itself, Yahoo will have to sell.
Right now, it just feels like Yahoo! is delaying the inevitable.
Saturday, February 16, 2008
MicroYahooNews
Hi, I’m back taking a look at the Microsoft-Yahoo-Anybody else but Microsoft deal. I gotta admit, I’m having fun looking at this from all the crazy angles that are being thrown out there but as I’ve said before, the only deal that makes sense is Microsoft and Yahoo.
The only way to answer the question over which is the best suitor for Yahoo is to answer the Yahoo existential question… is it a technology company or a media company.
Apparently News Corp is looking at Yahoo as well. Not sure what I see is the gain here but who am I to quibble with the genius of Rupert Murdoch?
Yahoo would gain the social networking site MySpace, while Rupert Murdoch’s News Corp would take a 20 per cent stake in Yahoo, according to those close to the situation.
So where does that leave us on the quest for Yahoo existential meaning? Yahoo: I’m a media company… no I’m a search company… no wait, with MySpace I’m now a social networking company!
MySpace is a formidable property but for a company that couldn’t fend off one innovative competitor, it seems hard to imagine how Yahoo will fend off two; Google on one side and Facebook on the other. And where’s the (sorry readers) synergy? Yahoo search on MySpace pages? They could displace Google’s ads so I guess that is worth something. Taking down all the Google ads will distract Google for about a nano-second until they find other outlets, Yahoo and MySpace will be distracted for years trying to find interesting ways to integrate the two services.
Shahid Khan, an analyst at IBB Consulting, pointed to the massive internet audience that a Fox Interactive-Yahoo merger would create, and its power in particular content verticals. The two groups could combine Yahoo Sports, for example, with Fox Sports, and Yahoo Finance with the Wall Street Journal and MarketWatch websites.
“If you take a step back, it could make a lot of sense for them,” Mr Khan said.
Huh? Why? A lot of these sites recycle the same content anyway, so where’s the benefit? Firing a couple of writers? Besides FoxSports is on MSN and it doesn’t seem to be doing them a world of good. I get the feeling I’m missing something.
YahooFinance already links to WSJ online content so again, I don’t see the benefit. Firing some of YahooFinance’s writers I suppose? Big savings there! The average cost of running the two sites may be a bit lower, so there are some cost savings there. I bet the two sits share a lot of the same users so the marginal increase in traffic by merging the two sites would probably be low.
At least this part of the deal answers the existential Yahoo question… it is a media site.
YahooNews would just further fragment the market. Yahoo would be on life-support, News Corp has a search engine that it can merge with MySpace for some as yet unimagined benefit, and MSN…well… who knows what happens to MSN.
Google for its part maintains its customer captivity because there is no compelling reason for customers to leave. And as there are no existential mysteries to Google’s technology-being, it is free to continue its assault on MSFT and the rest of the IT industry while MicroYahooNews all try to figure out what it really means to be a “portal.”
The only way to answer the question over which is the best suitor for Yahoo is to answer the Yahoo existential question… is it a technology company or a media company.
Apparently News Corp is looking at Yahoo as well. Not sure what I see is the gain here but who am I to quibble with the genius of Rupert Murdoch?
Yahoo would gain the social networking site MySpace, while Rupert Murdoch’s News Corp would take a 20 per cent stake in Yahoo, according to those close to the situation.
So where does that leave us on the quest for Yahoo existential meaning? Yahoo: I’m a media company… no I’m a search company… no wait, with MySpace I’m now a social networking company!
MySpace is a formidable property but for a company that couldn’t fend off one innovative competitor, it seems hard to imagine how Yahoo will fend off two; Google on one side and Facebook on the other. And where’s the (sorry readers) synergy? Yahoo search on MySpace pages? They could displace Google’s ads so I guess that is worth something. Taking down all the Google ads will distract Google for about a nano-second until they find other outlets, Yahoo and MySpace will be distracted for years trying to find interesting ways to integrate the two services.
Shahid Khan, an analyst at IBB Consulting, pointed to the massive internet audience that a Fox Interactive-Yahoo merger would create, and its power in particular content verticals. The two groups could combine Yahoo Sports, for example, with Fox Sports, and Yahoo Finance with the Wall Street Journal and MarketWatch websites.
“If you take a step back, it could make a lot of sense for them,” Mr Khan said.
Huh? Why? A lot of these sites recycle the same content anyway, so where’s the benefit? Firing a couple of writers? Besides FoxSports is on MSN and it doesn’t seem to be doing them a world of good. I get the feeling I’m missing something.
YahooFinance already links to WSJ online content so again, I don’t see the benefit. Firing some of YahooFinance’s writers I suppose? Big savings there! The average cost of running the two sites may be a bit lower, so there are some cost savings there. I bet the two sits share a lot of the same users so the marginal increase in traffic by merging the two sites would probably be low.
At least this part of the deal answers the existential Yahoo question… it is a media site.
YahooNews would just further fragment the market. Yahoo would be on life-support, News Corp has a search engine that it can merge with MySpace for some as yet unimagined benefit, and MSN…well… who knows what happens to MSN.
Google for its part maintains its customer captivity because there is no compelling reason for customers to leave. And as there are no existential mysteries to Google’s technology-being, it is free to continue its assault on MSFT and the rest of the IT industry while MicroYahooNews all try to figure out what it really means to be a “portal.”
Wednesday, February 06, 2008
So why should Google care?
OK... I know what you're saying... you're saying "I read your post on Google's competitive advantage and there is no way Microhoo! can break Google's lock on the customer, so they have nothing to worry about, right?"
Nope, they've got plenty to worry about. In a 1:1 match-up Microhoo! can now directly challenge many, if not all of Google's revenue sources. Because Microhoo! has multiple lines of business (crappy OS immediately comes to mind), it has the resources to enter into a long and protracted price war with Google.
Say goodbye to those profit margins Google! If Microhoo is successful it is going to drive prices straight down. This is probably in retribution for Google thinking it can get into the office productivity space (word processing, spreadsheets and whatever.)
A price war would rendering Google's main sources of revenues (ads, monetizing search) relatively worthless, leaving Google unable to fund further expansions into Microsoft's software space.
Hat tip again Greenwald
Nope, they've got plenty to worry about. In a 1:1 match-up Microhoo! can now directly challenge many, if not all of Google's revenue sources. Because Microhoo! has multiple lines of business (crappy OS immediately comes to mind), it has the resources to enter into a long and protracted price war with Google.
Say goodbye to those profit margins Google! If Microhoo is successful it is going to drive prices straight down. This is probably in retribution for Google thinking it can get into the office productivity space (word processing, spreadsheets and whatever.)
A price war would rendering Google's main sources of revenues (ads, monetizing search) relatively worthless, leaving Google unable to fund further expansions into Microsoft's software space.
Hat tip again Greenwald
Competitive advantage of Google
A few thoughts on the proposed Microsoft/Yahoo deal.
People have been throwing around all sorts of ideas, pro and con, on the deal but at its core, the question on the merits of this deal boils down to one of customer captivity.
For whatever reason, people like to use Google and while it is very easy to click and use another search engine, many people don't. While there are no financial switching costs, there may be some psychological ones (I know how to "Google" something on the net, I have no idea how to "Yahoo" or "Microsoft" something.) So this psychological hold Google has on customers is its one and only competitive advantage.
There is no technology competitive advantage. I think for most users, Google, Yahoo and MSN are essentially the same. Hard-core techies could probably point out some performance differences, but my mother can't.
It isn't about scale. Marginal costs are meaningless online, each new user costs nothing to the company. Maybe Microhoo's! fixed costs will come down somewhat due to synergy (whatever) but ultimately the average costs between Google and Microhoo will remain little changed, so there aren't any cost advantages to be had.
So what other competitive advantages are there? I can't think of any. The only thing Google has to protect its position is the fact that users are simply accustomed to using Google. Microhoo! therefore has only one goal, to break users of the Google habit.
If Ballmer and co. can do that, then this deal is worth something. If they can't, then adding the number 2 position with the number 3 position will not equal a number 1 position.
Hat tip: A lot of this thinking is powered by the writings of Bruce Greenwald. Prof. Greenwald, in the unlikely event you're reading this, I hope I got it right.
People have been throwing around all sorts of ideas, pro and con, on the deal but at its core, the question on the merits of this deal boils down to one of customer captivity.
For whatever reason, people like to use Google and while it is very easy to click and use another search engine, many people don't. While there are no financial switching costs, there may be some psychological ones (I know how to "Google" something on the net, I have no idea how to "Yahoo" or "Microsoft" something.) So this psychological hold Google has on customers is its one and only competitive advantage.
There is no technology competitive advantage. I think for most users, Google, Yahoo and MSN are essentially the same. Hard-core techies could probably point out some performance differences, but my mother can't.
It isn't about scale. Marginal costs are meaningless online, each new user costs nothing to the company. Maybe Microhoo's! fixed costs will come down somewhat due to synergy (whatever) but ultimately the average costs between Google and Microhoo will remain little changed, so there aren't any cost advantages to be had.
So what other competitive advantages are there? I can't think of any. The only thing Google has to protect its position is the fact that users are simply accustomed to using Google. Microhoo! therefore has only one goal, to break users of the Google habit.
If Ballmer and co. can do that, then this deal is worth something. If they can't, then adding the number 2 position with the number 3 position will not equal a number 1 position.
Hat tip: A lot of this thinking is powered by the writings of Bruce Greenwald. Prof. Greenwald, in the unlikely event you're reading this, I hope I got it right.
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