orcl

Several years ago, Oracle (NASDAQ: ORCL)'s CEO, Larry Ellison, said there were too many software companies, and that as a result, there would be a trend towards consolidation.

However, with the credit crunch – and the slowing economy – things have gone off track somewhat. But now we may see more dealmaking.

Take a look at NetManage (NASDAQ: NETM). The company has been "in play" for a while. Last year, Rocket Software tried to buy the company for $69 million, but the deal fell-through because of difficulties with obtaining financing.

Well, NetManage was able to find a new suitor, Micro Focus International, and both parties recently agreed to a $73.3 million buyout deal.

NetManage has a strong set of technologies that deal with integration and web services. The company has also been revamping its platform. In Q4, the company posted a 27% increase in revenues to $10.9 million and net income came to $1.7 million, or $0.17 per share.

Micro Focus, though, is probably more interested in NetManage's customer base, which is about 10,000 or so. The company cranks out about $22 million in maintenance fees, which are fairly reliable and high margin.

And despite the recent improvement with NetManage, the company still faces tough competition. So, selling out -- especially at its 70%+ premium -- makes a lot of sense.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

I was convinced that Microsoft (NASDAQ: MSFT) would go hostile on Yahoo! (NASDAQ: YHOO). Microsoft is known as a tough player, right? And Yahoo seems to be a good strategic fit.

But of course, Microsoft's CEO, Steve Ballmer, has thrown in the towel on the $31 buyout offer. Apparently, he lobbed $33 per share – but the folks at Yahoo wanted $4 extra.

I can certainly understand why Ballmer doesn't want to overpay. After all, many M&A studies show that this is often deadly for dealmaking.

At the same time, Microsoft had the option of a proxy fight and a direct offer to Yahoo shareholders. However, Ballmer thought such things would be too distracting. But doesn't Microsoft have legions of attorneys and investment bankers?

It is always interesting to see the changes in short interest, particularly when you are right in the middle of earnings season. It seems the short sellers have gotten a little less confident on the "digital four" of the NASDAQ. In fact, the only one of the four that saw an increase was only a tiny increase.

As you will see below, the major components of the NASDAQ top digital companies saw real short covering ahead of earnings. Keeping conviction against stocks is frequent, but the lessons of eternal pessimism have historically shown to not be a winning strategy.

Microsoft Corp. (NASDAQ: MSFT)
Short Interest Change Avg, Day Vol. Days to Cover
04/15/2008 109,056,265 (7.88%) 48,450,376 2.25
03/31/2008 118,383,897 (3.82%) 57,762,166 2.05

Google Inc. (NASDAQ: GOOG)
Short Interest Change Avg, Day Vol. Days to Cover
04/15/2008 4,905,775 (5.84%) 5,368,787 1.00
03/31/2008 5,210,156 7.07% 6,382,427 1.00

Yahoo! Inc. (NASDAQ: YHOO)
Short Interest Change Avg, Day Vol. Days to Cover
04/15/2008 36,104,797 (12.54%) 22,789,737 1.58
03/31/2008 41,280,401 (17.13%) 25,874,919 1.60

Oracle Corp. (NASDAQ: ORCL)
Short Interest Change Avg, Day Vol. Days to Cover
04/15/2008 42,655,256 2.94% 34,868,017 1.22
03/31/2008 41,436,043 6.57% 51,966,613 1.00

As Oracle's earnings are still a ways out, the need for traders to cover there probably wasn't as critical as it was otherwise.

Jon Ogg is an editor and producer of the "10 Stocks Under $10" weekly newsletter for 247WallSt.com.

It seems like an inevitable trend – that is, large companies finding ways to cut costs by offloading non-core functions. And one of the leading outsourcers is EDS (NYSE: EDS).

However, the space is highly competitive – and unpredictable. For example, EDS had to deal with the termination of a major customer, Verizon (NYSE: VZ).

But, as seen with the latest Q1 report, EDS is getting traction. Profits came to $62 million, or 12 cents per share as revenues increased from $5.22 billion to $5.37 billion. There was also a 66% increase in signed contracts to $5.6 billion.

After all, EDS was able to snag mega contracts with Royal Dutch Shell and the Infocomm Development Authority of Singapore. In fact, there were 12 contracts in excess of $100 million.

EDS is also getting some growth with its integration services for SAP (NYSE: SAP) applications. Actually, the company is going to do the same with Oracle (NASDAQ: ORCL) software. Oh, and EDS is a key partner for Microsoft's (NASDAQ: MSFT) CRM offering.

Interestingly enough, the slowing US economy is actually helping. That is, companies – as well as governments -- need to find a way to cut costs. So, why not go offshore?

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Wal-Mart Tops Fortune 500 List
The retail giant is on top for the second year in a row, while AT&T moves up and GM slips. See who ranks where on the definitive list of America's largest companies and why.
FORTUNE 500 2008: Annual ranking of America's largest corporations from Fortune Magazine


Stocks: Where the Big Bucks Lurk
A closer look at S&P's list of stocks with big cash hoards and top analyst rankings show these 20 companies are sitting pretty. They include Apple, Boeing, Coca-Cola, Disney, EMC, Hewlett-Packard, IBM, J&J, Microsoft, Oracle, Paychex, P&G to name a few.
Cash-Rich Companies


Mom's New Battle: The Food Price Bulge
As American families face the double whammy of higher gas and food prices, moms nationwide are resorting to considerable ingenuity to stretch their monthly grocery budget. Beyond clipping coupons, families are embracing generic grocery brands, and making their own baby food and detergent.
Soaring food prices elicit creative solutions from moms - CNNmoney

MAJOR PAPERS:

• A newly published report by Standard & Poor's said that the performance of organizations such as Federal National Mortgage Association (NYSE: FNM), or Fannie Mae, and Federal Home Loan Mortgage Corporation (NYSE: FRE), or Freddie Mac, could directly affect the U.S. economy and the country's credit rating, especially if they have to be rescued by the government, according to the Wall Street Journal's "Credit Markets" column.
• Seagate Technology LLC (NYSE: STX), a hard drive maker, filed a patent infringement suit in San Francisco against STEC Inc (NASDAQ: STEC) over four patents related to technology used to store data on computer chips, the Wall Street Journal reported.
• The Financial Times reported that Citigroup Incorporated (NYSE: C) is allowing private equity groups such as Apollo, The Blackstone Group LP (NYSE: BX) and TPG that are bidding for up to $12B of its leveraged loans to 'cherry-pick' from a wide range of assets with different credit ratings and prices.

WEB SITES:

• According to analysts, Reuters reported that technology industry leaders that include International Business Machines Corporation (NYSE: IBM), Oracle Corporation (NASDAQ: ORCL), Cisco Systems Inc (NASDAQ: CSCO) and Hewlett-Packard Company (NYSE: HPQ) are among the companies with large cash reserves that could be used to fund acquisitions.

5 Foreign Stocks to Love
Concerned about your domestic investments in today's troubled economy? Consider these international companies, which can be easily purchased right here in the U.S. They include Finland's Nokia, China's CNOOC, Brazil's Embraer, U.K's InterContinental Hotels Group and Ireland's Allied Irish Banks.
5 foreign stocks we love - How we chose the stocks (1) - CNNMoney.com


Highest Paid CEOs
Stocks may have fallen in 2007, but executive pay sure didn't. And if the multi-million dollar paydays for CEOs doesn't raise eyebrows, the 'perks' that go along with the money certainly will. These include corporate jets, special security, private cars with drivers to country club dues and vacations. Among the top paid CEOS including base pay, perks and other compensation are Merrill Lynch's new CEO John Thain, Oracle's Larry Ellison, Goldman Sachs' Lloyd Blankfein and American Express' Kenneth Chenault who each made over $50 million last year.
List: Highest Paid CEOs Stocks may fall, but execs' pay doesn't - USATODAY.com CEO perks often include use of company jet, security - USATODAY.com


Retirees Turn to Communes
With living costs spiraling upward and empty-nesters feeling a need for a greater sense of community in their lives, some baby boomers are reconsidering the concept of group living. This time around, the idea holds appeal as a cost-efficient, socially engaging way to spend their golden years.
Baby boomers go back to the commune -Bankrate


12 Tips for Midnight Tax Filers
These tips will help ensure that you get your return into Uncle Sam's hands on time while mailing at the last possible moment.
Many happy, but last-minute, returns


The Best Credit Cards Today
From low fees to frequent-flyer miles: 6 cards that give you something back.
The best credit cards - CNNMoney.com


Secrets of Lawn Pros
We reveal seven tips to get your yard looking great this year. Plus, how do lawn services compare?
ConsumerReports.org - Lawn care: Steps to a great yard, Lawn care services
Plus: Lawn Care Services: How Do They Stack Up?
Review: Comparing Nationwide Lawncare Service Providers - Lawn Doctor, Naturalawn, Scotts & TruGreen

Speaking to friends, the $1 trillion question that keeps arising is "when do we start buying?" Astute investors, they've certainly lightened up on their exposure to stocks over the past few months and have cash sitting on the sidelines. "Are we making a bottom here?" they ask, readying themselves to start moving back into the stock market. As asset allocation and modern portfolio theory tells us, stay in the market, be diversified, and don't trade on emotion. The problem is that investors doing that since 2000 would have seen little investment returns in exchange for taking on stock market risk.

So, with this info in hand, more aggressive investors are looking to spot a bottom and make a buck along the way. So, it's interesting to read weekly Barron's article out over the weekend entitled For the Bold Investor, This Could Be the Time to Buy Tech Stocks. The article, written by one of this author's favorite journalists, Eric Savitz, looks at Oracle's (NASDAQ: ORCL) recent performance as indicative for what's happening to tech. Citing Oracle's Chief Financial Officer Safra Catz, Savitz explains that deals were getting harder to close with some business slipping into the May quarter. Tough times for tech.

So why does Barron's think we should start buying now?

There's much concern in the information technology (IT) world. Might companies cut back on spending in light of the slowing economy?

Well, as for Red Hat (NYSE: RHT), the environment seems to be OK. For example, in Q4, the company posted a 27% increase in revenues to $141.5 million. What's more, bookings are bulging (above $200 million).

While RedHat has a strong business with its Linux offerings, the company is also seeing lots of traction with its middleware platform, known as JBoss. Interestingly enough, with Oracle's (NASDAQ: ORCL) buyout of BEA Systems (NASDAQ: BEAS), there's been a surge in downloads of JBoss. Basically, customers want an alternative.

Going forward, Red Hat forecasts revenues of $665 million to $680 for the upcoming year. Earnings are expected to range from $0.78 to $0.82 per share.

And Red Hat recently purchased Amentra, which is a systems services company. Basically, the deal will allow Red Hat to continue to turbocharge its sales of JBoss.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• AAR Corp. (NYSE: AIR) posted record third-quarter earnings and revenue.
• Adobe Systems Inc. (NASDAQ: ADBE) posted better-than-estimated first-quarter results and raised its outlook.
• CKE Restaurants Inc. (NYSE: CKR) posted third-quarter results that missed estimates.
• ConAgra Foods Inc. (NYSE: CAG) third-quarter profit surged as strong sales offset commodity prices.
• Darden Restaurants Inc. (NYSE: DRI) beat third-quarter expectations and offered guidance.
• FactSet Research Systems Inc. (NYSE: FDS) second-quarter results beat estimates and it raised its outlook.
• Fortress Investment Group (NYSE: FIG) remained upbeat despite a fourth-quarter loss.
• Guess Inc. (NYSE: GES) record fourth-quarter results beat Wall Street expectations.
• Inter Parfums Inc. (NASDAQ: IPAR) posted better-than-estimated fourth-quarter results and raised its outlook.
• Jabil Circuit Inc. (NYSE: JBL) beat second-quarter expectations but lowered its guidance.
• JC Penney Co. Inc. (NYSE: JCP) lowered its first-quarter outlook on weaker-than-expected sales.
• KB Home (NYSE: KBH) swung to a larger-than-expected first-quarter loss on write-downs.
• Lennar Corp. (NYSE: LEN) posted a smaller-than-expected first-quarter loss.
• Monsanto Co. (NYSE: MON) raised its second-quarter and full-year guidance.
• Oracle Corp. (NASDAQ: ORCL) merely met earnings expectations, sending shares lower.
• Tiffany & Co. (NYSE: TIF) posted better-than-estimated fourth-quarter results and raised its outlook.
• Usana Health Sciences Inc. (NASDAQ: USNA) posted lower-than-expected first-quarter results.
• Walgreen Co. (NYSE: WAG) posted solid second-quarter results, including same-store sales growth.

Also, auction-rate securities issues may hurt some tech company results. Analysts keep cutting earings estimates for the big banks, but some are eyeing Yum! Brands (NYSE: YUM) earnings prospects as it expands in China, as well as Archer Daniels Midland (NYSE: ADM) on soaring demand for commodities.

Upcoming results to watch for include Best Buy (NYSE: BBY), Monsanto (NYSE: MON), and Research in Motion (NASDAQ: RIMM).

Visit AOL Money & Finance for more earnings coverage.

The Commerce Department's Q4-2007 final revision for GDP came in at +0.6%, but that was in-line and the data is now more than 75-days old. But it does highlight the concerns that the growth rates this quarter just can not be good. It also set the tone for more selling. It just goes to show that it still pays in today's climate to sell when you are feeling good about the market and buy when you feel overly concerned.

The Federal Reserve also auctioned off some $75 billion in treasury securities after receiving bids for some $86.1 billion. This was the first auction of its kind and the next auction is set for April 3. Below are the unofficial closing prices:

• DJIA 12,302.70 (-120.16; -0.97%)
• NASDAQ 2,280.83 (-43.53; -1.87%)
• S&P500 1,325.77 (-15.36; -1.15%)
• 10YR-TBond 3.534% (+0.04%)
• Key 52-Week Lows

If you look at the unusual increase seen in short selling in many of the NASDAQ names from this morning, you might scratch your head. But that's the world we live in.

Oracle (NASDAQ: ORCL) is recently trading at $19.26 in pre open trading, below its close of $20.94.

Friedman, Billings, Ramsey says: "Mixed results – want to own ahead of FY4Q. Maintain Outperform."

ORCL April option implied volatility of 50 is above its 26-week average of 35 according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Oversold Stocks Worth a Closer Look
These stocks have taken a pounding in the past few months. But they're looking ripe for smart buyers now. They include Nvidia, Game Stop and Seagate.
Timely Trio Of Oversold Stocks - Forbes.com

How to Pay Zero Taxes
Nearly 50 million Americans do it. But once you see how, you'll be glad you're not one of them. Here are top ways you can get your taxes to zero.
How to pay zero taxes - MONEY Magazine

Oracle (NASDAQ:ORCL) is off almost 8% on weaker-than-expected earnings.

Clear Channel (NYSE:CCU) is up over 12% on news of a court order that banks must fund a private equity buy-out.

MF Global (NYSE:MF) is up 9% on news that it has freed up $800 million in liquidity.

SAP (NYSE:SAP) is down 6% on bad news from riva Oracle.

Stocks may trade differently in the pre-market than they do in the regular session.

Douglas A. McIntyre is an editor at 247wallst.com.

U.S. stock futures pointed to a higher open at the start of trading Thursday with Oracle likely to drop after reporting disappointing earnings yesterday. Sentiment could change, however as economic growth reading will be reported an hour before the opening bell.

On Wednesday, U.S. stocks dropped on renewed credit concerns after after news that the Clear Channel deal may be stalled due to financing issues. Declining durable goods orders didn't help sentiment and markets ended up declining with a day that exhibited patterns only too familiar as of late, a surge in commodity prices while the dollar weakened. The Dow industrials dropped 109 points, or 0.88%, the Nasdaq Composite lost 16 points, or 0.71%, and the S&P 500 fell 11 points, or 0.88%.

Today, several more economic readings will help shape the session, especially with the final reading on fourth-quarter gross domestic product -- due out at 8:30 a.m. EDT -- which is expected to remain the same as previous reading and show a 0.6% economic growth, a near standstill, and the weakest pace in five years. The deepening housing slump has probably tipped the U.S. economy into a recession. The situation may not be much better in 2008 as consumer spending has slowed and business investment and the housing market has continued to decline. Despite actions taken by the Federal Reserve and the government, these measures' effect will be a while in stimulating the economy and may not do so soon enough to avoid recession.

Also at 8:30, the Labor Department will release its weekly initial claims report.