Google --- Deirdre (slow)
NYSE --- Lisa (slow)
>> google shares surging after beating analysts’ forecasts. internet sales rising in the u.s. and overseas. deirdre bolton has details. $216 on that stock we just saw!
>> google really benefiting from the fact they are expanding overseas, opening offices in india and adding a portuguese version of google email. one analyst with piper jaffray saying the overseas market is the wave of the future for google.
>> the international market to be in parity in terms of the generation with the u.s. in five years so it is really important for google to dominate that market the way they dominated the u.s. market , as well.
>> net income soared sixfold resulting in earnings per share of $1.29, sales also leaping last quarter to a higher-than-expected $794 million. google does face competition from m.s.n. and yahoo, the analyst says the company’s technology is the most innovative.
>> google established a very strong brand and brand loyalty and googling is a verb and as hard as others may try, it is difficult to unseat google.
>> in the past, investors had been concerned about internet ad revenue. one analyst with r.b.c. capital markets changed his outlook on google only yesterday after seeing yahoo’s results last evening. there is a tidal wave taking place with the internet advertising space, according to john tinker.
>> there’s a tidal wave taking place with internet advertising and it will only accelerate as more people go the cable and more time is spent on the internet and advertising is proved effective.
>> since the i.p.o., google shares up over 100%.
>> certainly during the day, we had stronger-than-expected earnings and economic news, both of those together lifting the major stock indexes from 2005 lows. we’ll get more on the trading action with a report from lisa leiter at the big board.
>> this was the dow industrials and s&p 500’s best rally in a year and a half, ending a string of losses that sent the dow down nearly to 10,000 on wednesday in both indexes to their lows of 2005. the rally primarily driven by a spate of better-than-expected earnings reports. money managers saying the tone of recent reports is more positive offsetting pessimism prevailing in the markets in recent days. the dow was down five out of the past six sessions and almost fell bow low 10,000 on a fear of inflation, following a bigger-than-expected jump in consumer prices on wednesday. warren buffett does see value in the market , at least in budweiser beer. the market gained momentum after anheuser busch announced berkshire hathaway became a significant shareholder in the company. another catalyst, economic news. a report from the philadelphia federal reserve showing that manufacturing activity in the region was at its highest level in the year and first-time claims for unemployment benefits dropped more than expected last week to a 10-year low, both of those reports allaying concerns about a slowdown in the economy and stocks supporting the rally, motorola, its quarterly profit, excluding an investment, topped estimates. u.p.s. with a 16% gain in profits and archipelago shares soared on news of the new york stock exchange buyout of the electronic market and that stock has almost tripled since going public last august. drugmakers, also big winners, schering-plough increased sales of cholesterol drugs, stemming losses from a year ago earlier. merck stocks higher after its quarterly earnings topped profit estimates, as well. i’m lisa leiter at the new york stock exchange, for bloomberg news.
>> we’ve been telling you the latest headlines crossing the last few minutes on the bloomberg terminal having to do with qwest raising its offer to $30 a share for m.c.i. more details available in the last empty or so, qwest saying it has $850 million in equity commitments from shareholders and qwest saying isis is its best and final offer for m.c.i. m.c.i. has accepted a lower offer to be taken by verdson -- verizon and qwest coming out with a higher offer, $30 a share, and also has $850 million in equity commitments from shareholders. we’ll bring you details as they are available. time for a break and coming up, time warner and comcast with a deal to buy the cable tv assets of brupt adelphia. devil ,
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Listen Market briefing --- Ellen (fast)
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Interview: Both traders and investors win
biggest in in a year -- [captioning made possible by bloomberg television] investors are signaling they like the deal between the new york stock exchange and archipelago holdings. archipelago shares closed up nearly 60% on the day. now it is up to the members of the big board to decide if they like the terms. allan dodds frank is outside the new york stock exchange with the chief executive of revere data.
>> johna thain is upstairs explaining to members why he thinks the deal should go through. we are joined by the head of revere data and was a long-time employee of bloomberg. why does the new york stock exchange need to do this deal?
>> i think it’s a great deal because it gives investors what they’ve wanted all along, which is choice. archipelago has done a phenomenal job of developing a great o.t.c. business, derivatives business and are well along in that, have developed a fairly good listings effort and it pls a lot of destinations at this time and is better for investors.
>> how much was the stock exchange lacking in terms of what the deal brings them, especially electronically.
>> a lot of the criticism leveled against the stock exchange was the specialist system didn’t have the anonymity that an electronic system would have, it didn’t have the speed of execution, things like that. many of those topics were debated recently in washington with the s.e.c. i think this brings the best of both worlds to the stock exchange and is a phenomenal deal.
>> do you expect anyone else to make a bid? if this is such a great deal, the stock went up so much today?
>> it’s hard to say. it’s very hard to say.
>> how do you expect the management to work?
>> they’re working that out now, i guess, right. i guess they also announced they would be going public, as well. that takes a lot of the conflict out out of some of the things people were saying where it was a not-for-profit and so i think it’s―they’re making all the right moves.
>> two quick questions, do you expect the specialists to disappear in a couple of years and do you think the average man on the street buying stock will get better prices?
>> no and yes. i think the specialist system may be different from what it is now. certainly you don’t need a specialist to buy i.b.m. or g.e. or johnson & johnson but for a stock that doesn’t trade as liquidly as that, you do need a specialist and they provide tremendous value and i think where you have an electronic system, it will be the best of that world and the human system, the best of that world.
>> do you expect the stock to keep going up more if the deal is approved?
>> it’s hard to say but it should be. i think it’s a great deal for both parties.
>> glen woylner, thanks for joining us.
>> thank you very much. for more, we’re joined by c.e.o. of cybertrader and chief executive of options express holdings. thank you very much for joining us. vince, you think both traders and investors win. start with the investors. how do they win?
>> well―investors, because what we’re going to see here is more automated trading and that’s why the new york stock exchange want dodd this deal. they were tiptoeing with the hybrid system they had been working on but now with archipelago they’ve gone whole hog into electronic trading and will drive down costs for investors.
>> we have headlines our viewers want to hear about, qwest raising its offer for m.c.i. to $30 a share. we’ll bring you more details as they’re available. we turn our attention back to the conversation and david, let me ask you, how much of a threat is this to your company? i want to point out that you list your company on archipelago.
>> we are listed archipelago firm but we are so excited about the innovation archipelago will bring to the new york stock exchange. archipelago has made an aggressive move into the options space and that is our sweet spot and archipelago, with their acquisition of the pacific options exchange, now with the backing of the new york stock exchange, we think this is big for options and we think archipelago will bring the innovation, the technology and passion to the new york stock exchange system and remain in the leadership role that they so need.
>> how is that not a threat to you?
>> as we are a brokerage firm, we are there working with retail investors ensuring they are getting the best possible execution on their trade so we like exchanges. we like competition. we think archipelago has a great business model and what they will bring to the new york will only enhance the overall market . we benefit by having great liquidity and great exchanges.
>> vince, what’s your perspective? is this a threat to you?
>> it’s definitely not a threat and our customers and the clients of schwab, as well, have driven up the volume at the archipelago because they are an innovative company and that speaks for itself.
>> in terms of that innovation, what can that mean in terms of better pricing and faster execution? how quickly can people expect to see improvements.
>> vincent, i’m sorry about that. i would expect that immediately archipelago would be able to get access to the listed market and intface with specialists in a way that would allow new york stock exchange-listed stocks to trade at a better price quickly even while rolling out their hybrid.
>> i know jerry putnam will be aggressive and work towards integrating with the new york stock exchange environment.
>> i would say that that may be one place they struggled, not capturing a lot of the listed volume and this gives archipelago an opportunity to take a chunk of that.
>> how do you think nasdaq will respond, vince?
>> they’ve already made a deal or at least one in the making here with instanet so what we’re seeing now is the new york stock exchange, archa may be responding to that so you’ll have two large players in the u.s. equity markets competing aggressively head to head, i think that’s good stuff.
>> david, does this give you incentive to get bigger through a merger. you have done an i.p.o. recently and have that cash and i know expansion is a goal.
>> we’re very focused on our business and see great growth opportunity, organic growth on the existing business. we are always looking for opportunistic synergies, more so on technology side. our goal is to continue growing, our core business is the options space and we see tremendous opportunity ahead as a standalone firm.
>> where will that growth come from specifically?
>> that growth comes from growth overseas, growth in australia, singapore, hong kong, the pacific rim. we see great growth opportunities in our technology partnerships where we’ve leveraged our platform to interface with other software and financial service firms.
>> and, vince, what other consolidation do you think we can see in this space? we talked about the fact that nasdaq is reportedly in talks with instanet. what else can we see?
>> i think this definitely may be represents a wave of consolidation in the exchange area and i think that probably will lead to more looking around, what deals could be made. i don’t want to predict one but i think there are opportunities out there and some of the players will look around and say, what can i do to compete with these two gigantic players now.
>> we wrap it there and appreciate your perspective.
>> thank you.
>> have a great afternoon. right now, we want to bring you the latest on the headlines coming out having to do with qwest. qwest communications, fourth biggest u.s. local phone company, raising its bid for m.c.i. to $30 a share or $9.75 billion. this is part of the company’s attempt to derail m.c.i. what, it has done, it’s agreed to be bought by verizon communications. all along, qwest has offered more money and m.c.i. repeatedly has accepted verizon’s lower offer, saying the liquidity and other issues having do with verizon make it a better combination. the latest salvo in this ongoing battle for m.c.i., qwest raising its offer to $30 a share, according to those familiar with negotiations. qwest will pay, it says, $16 a share in cash and $14 a share in stock, increasing the previous offer from $27.50 a share. this is according to people familiar with the talks. m.c.i. shares currently up 3.4% in after hours trade. so we’ll bring you more details as they do become available. that is all we currently have. in the meantime, another stock higher in after-hours trade, google. after the earnings beat forecast.% deirdre bolton has the story% behind the numbers and joins us next.
