Jim Cramer Blog

AOL parent company Time Warner is cutting 2,000 jobs across the AOL division, including 750 positions in Northern Virginia.
About 1,200 of the cuts will be in the U.S., with the balance of layoffs coming at AOL operations outside of the U.S. The company will notify affected U.S. employees Tuesday, says AOL spokeswoman Anne Bentley. The rest of the reductions are expected to be made by the end of the year, she says.
The cuts represent about 20 percent of AOL's worldwide workforce. AOL has about 4,000 employees in Northern Virginia.
"This realignment will allow us to increase investment in high-growth areas of the company - as an example, we added hundreds of people this year through acquisitions - while scaling back in areas with less growth potential or those that aren't core to our business," Time Warner chief executive Randy Falco said in a memo to AOL employees obtained by the Washington Business Journal. "Everyone impacted by this reduction deserves our thanks and respect for their contributions to the company."
Falco's memo promised "generous severance packages" to affected employees.
Time Warner (NYSE: TWX - News) has shifted AOL's business from a subscriber-driven company to one supported by advertising. The division lost 1.1 million paid subscribers in the second quarter, trimming overall revenue by 38 percent, although advertising sales continue to rise.
Last month, the company announced plans to move AOL's corporate headquarters from Dulles to New York.
Published October 15, 2007 by the Washington Business Journal

Labels: America Online, AOL, Time Warner, TWX

Shares of online advertising company ValueClick Inc. jumped for a second day Tuesday on what an analyst attributed to speculation that the company could be purchased by AOL.
ValueClick shares rose $2, or 9.1 percent, to $24 in trading. On Monday, the company's shares rose $1.52, or 7.4 percent, to finish trading at $22. During the past year, the stock has traded between $17.12 and $36.70.
In a phone interview Tuesday, Merriman Curhan Ford & Co. analyst Richard Fetyko said he heard rumors that Time Warner Inc.'s AOL LLC business is considering buying the company to boost its online advertising properties.

Labels: AOL, Valueclick Inc., VCLK

New York City-based Ferrari Driving School -- the largest driving school in the New York metropolitan area -- will be holding a "Paris, Nicole, Lindsay DUI Awareness Day" on August 17th.
The idea has received major media attention. Top entertainment website TMZ picked up the story late this afternoon, under the title "Paris, Nicole, Lindsay Driving Day." The article can be found here: www.tmz.com/2007/08/05/paris-nicole-lindsay-driving-day/
"Ferrari Driving School has trained thousands upon thousands of drivers -- both for passenger and commercial vehicles -- over the last four decades. We are dedicated to turning out safe drivers. Unfortunately, there has been a spate of young Hollywood starlets getting into trouble while driving. Because of this we will be holding a 'DUI Driver Awareness Day' on August 17th," said Michelangelo Pinto, the director of operations for the school.
In an interview with Chris Yandek of popular sports and entertainment website www.thesportsinterview.com, Pinto was dubious about some of the alleged driving antics ascribed to Lindsay Lohan -- things like driving in circles on a highway at high speed -- and wondered aloud if she was in Herbie, the magical car from Lohan's 2005 film, "Herbie Fully Loaded." He maintained though, that it was possible that she was "fully loaded." The link to the interview is www.thesportsinterview.com/lohanstory.html
"Paris Hilton went to jail, Nicole Richie is jail-bound and Lindsay Lohan is yet to have her day in court. DUI is very serious. People can be killed, lives can be ruined," Pinto emphasized. "As the largest driving school in New York, with 40 years in the business, we have a responsibility to the public to educate all drivers and perspective drivers, young and old, that DUI can be deadly. It can also send you to jail. Our driver awareness day is meant to save lives."
Ferrari Driving School, Inc.: Web Site www.ferraridrivingschool.com

Labels: AOL, GOOG, Lindsay Lohan

Despite the blast of $50 billion in mergers announced Monday, the value of U.S. deals still hasn't topped the record in 2000. But don't feel bad for the Wall Street firms arranging the marriages: Their pay has already hit a record. So far this year, investment banks have earned $14.8 billion in fees for helping along the year's deals, says Thomson Financial. That tops the previous record of $14.6 billion in 2000 amid the frenzied AOL-Time Warner (TWX) era. With five weeks left in 2006, the value of U.S. deals could still hit a record, especially if there are more days like Monday: Private equity firm Blackstone offered $20 billion for office owner Equity Office; Freeport-McMoRan offered $25.9 billion for rival metals producer Phelps Dodge; Bank of America offered $3.3 billion for Charles Schwab's U.S. Trust unit; and Russia's Evraz offered $2.3 billion for Oregon Steel Mills. The value of U.S. deals this year is now $1.3 trillion, up 9.3% from all of 2005, and bearing down on the record $1.5 trillion in 2000, says Dealogic. Monday's marriages: Blackstone/Equity Office. Equity Office (EOP) is the nation's largest office manager and third-largest public real estate investment trust, says Glenn Doggett at SNL Financial. It also is the latest target of deal-hungry private equity crowd. Taking on such a big target shows Blackstone thinks it can extract value from REITs despite their stock price run-ups. Investors have enjoyed a 89% gain on Office Equity including dividends over the past three years. Still, Blackstone's $48.51-a-share offer was 8.5% higher than Friday's close. The shares jumped $3.42 to $48.14. Freeport-McMoRan/Phelps Dodge. Here's a case of an industry using its strength to consolidate, says Victor Lazarovici, analyst at BMO Capital. With copper prices expected to be strong, Freeport-McMoRan (FCX) was able to line up financing needed to pull off the large deal, he says. Phelps Dodge (PD) jumped $25.45 to $120.47. Freeport-McMoRan fell $1.77 to $55.63. Bank of America/U.S. Trust. Expecting further consolidation in banking, Bank of America (BAC) took the opportunity to buy a company that advises wealthy customers on managing their money, says Jefferson Harralson at Keefe Bruyette & Woods. By buying U.S. Trust, BofA goes from No. 2 in wealth management to No. 1. Schwab stock gained 38 cents to $18.94 and BofA rose 5 cents to $54.90. Will U.S. mergers hit a record this year, as global deals have? That will likely depend on private equity firms, which are behind about 25% of deals in 2006, says Thomson's Richard Peterson. "Private equity is the big fuel," he says.
Source: USA Today

Labels: AOL, BAC, Blackstone Group, Deals, Equity Office Properties Trust, FCX, TWX, Wall Street