What could a Microsoft takeover of Yahoo Inc. mean for L.A.?
Microsoft Corp. doesn’t have a huge local presence, but Yahoo has 1,000 employees at the entertainment media operation in Santa Monica and another 1,000 at the company’s search marketing business in Burbank.
This means the deal could potentially give Microsoft access to the entertainment industry here, said Larraine Segil, a Los Angeles-based alliance expert.
An Internet business is a technology business, but media is the platform.
In 2005, Yahoo’s then-chief executive Terry Semel set up a media group in Santa Monica to house its games, news, sports, movies and music services and especially to court Hollywood.
Semel’s dream of marrying Yahoo and the movie industry never really panned out, but the company’s content business continues to be a key differentiator from Google Inc. Yahoo drives traffic with celebrity and entertainment news, while Google drives traffic with its search engine and ever-improving algorithms.
Given Yahoo’s recent announcement of layoffs and its drop in stock prices, it’s apparent the company’s strategy has not panned out. Revenue speaks for itself: Yahoo brought in $6.4 billion in 2006 while Google reported $10.6 billion.
But with Yahoo’s founder and technologist Jerry Yang now at the helm, analysts have said the company may have an opportunity to close its search gap with Google while bolstering its media content.
“Yahoo’s Burbank operation couldn’t be closer to studios like Disney and Universal,” Segil said. “They would be remiss to close down or reduce Yahoo’s presence here.”
Even if the deal survives the scrutiny of antitrust regulators, it’s unclear whether the sum of Microsoft and Yahoo would equal that of Google, said Zorik Gordon, chief executive of ReachLocal Inc., a Woodland Hills-based digital advertising company.
The merger “doesn’t solve some of the fundamental issues that kept Yahoo and Microsoft from claiming more market share in the first place,” Gordon said. “But Yahoo, with Microsoft, would become a more valuable proposition for advertisers in both search and display.”
Brainy Canines
Want to know just how smart your dog really is?
Stacy Stubblefield and her friends believe they have the answer: PoochIQ.com.
The recently launched Web site is selling their home-brewed “Dog Intelligence Kit” that tests a dog’s memory, persistence, problem-solving and reasoning skills. Already, the e-commerce site has sold 5,300 tests, offered in $50 or $80 versions, in two months, for a total of at least $265,000.
Stubblefield and three other founders only spent $10,000 creating the kit and launching the site, so that’s an impressive return on investment.
“We’re pretty happy about it,” said Stubblefield, who runs the company from her Beverly Hills home.
A USC graduate, Stubblefield, 26,
worked in Web design and development for four years before starting PoochIQ.com. She traces the genesis of the company back to one night when she and a friend traded
stories about how smart their beagles were. When they researched the breed’s intelligence, they were surprised to find Snoopy was low on the list.
“I couldn’t believe it,” Stubblefield said. “We knew there had to be a more precise way to measure their intelligence.”
Stubblefield and her co-founders devised an IQ test for dogs based upon problem-solving and reasoning skills. They tested 100 dogs, using treats as motivators, and came up with exercises for the kit.
For example, according to the test, dogs react to an unfamiliar situation like a mask over the owner’s face by barking or sticking their tails up, but intelligent dogs quickly figure out what’s going on.
The process of developing the test took several months and the patent for the product was approved in January.
PoochIQ.com also has a sister social networking site called BrightPup.com where owners can brag about their doggie geniuses.
THQ’s New CFO
The appointment of Colin Slade as chief financial officer of THQ Inc. comes at the lowest point of the video game publisher’s recent history.
The Agoura Hills-based company reported a 75 percent plunge in its net income for the third quarter ending in December. This follows a 30 percent drop in shares to $18 on Jan. 31. In May, shares sold for $37.
For the third quarter, THQ brought in net income of $15.5 million, down from $62.1 million in the same period a year ago.
The decline is attributed mostly to the company’s noncash charges of $27 million from canceling the PlayStation 3 version of
“Frontlines” and the PlayStation 2 version of “Destroy All Humans”; pulling the plug on unannounced XBox 360 and PlayStation 3 titles scheduled for release in 2010; and shutting down the “Juiced” and “Stuntman” franchises.
Slade was previously chief financial officer of Tektronix Inc., a $1 billion test and measurement company. The company was acquired by Danaher Corp. in November.
Staff reporter Booyeon Lee can be reached at (323) 549-5225, ext. 230, or at [email protected].
