Cars Blog's

With latest report about anemic GDP growth in 1st quoter 2007 of just 1.3% annualised, we should carefully examine the situation of US economy and stock market health. Stagflation is a word you should know about at the moment. It is defined as: " Condition of slow economic growth and relatively high unemployment - a time of stagnation - accompanied by a rise in prices, or inflation. Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stagnation increased the inflationary effects." Should I remind you the price of gold in the end of seventies early eighties? Stagnation is becoming apparent with growth below 2%: if you subtract inflation, Real Output is already negative, inverted yield curve has been showing it for months signaling recession. The only way out of recession and to prevent slowing economy out of spiralling into deflation, which has put Japan on hold from nineties, is printing press which has taken many exotic forms now, but they are all the same in one: increasing amount of credit available to consumers and other market participants. Easy credit on domestic scale allowed people to consume without normal boundaries of financial health, liars' loans made it available to become homeowners to those who can never afford it (and should not for their own good). New artificial demand has put pressure on house prices and we had first bubble in housing which is bursting right now. People made their home ATM machines and supported economy by taking equity out of housing "perceived" value to cover real cash outflow - interest payments on credit cards. Everybody became property tycoons. Least prepared people has taken most possible leverage. Go and try to borrow against your gold mining stock portfolio, what discount you will receive if anyone will grant you a loan, but with housing you could get it without any down payment and with interest payment only or even negative amortisation loan. But the most devastating I believe will be financial bubble bursting in the derivatives market. Money creation by FED became multiplied without any control by derivative market in which you can get economic exposure for a fraction of a real cost of asset. In this way using the same capital you can actually take risk on more positions, "academically" it is believed that it will reduce risk, spreading it among market participants. But first it will create "artificial" demand for assets and will drive their prices up. And second risk will be "spreaded" to those who are least prepared. This flood of liquidity chasing all assets classes created bubbles all across US economy, which became financial in its nature and GM was making more money in different financial services then by making cars. But now when liquidity is drying up in form of tightening credit supply bubbles start bursting and consumer becomes squeezed without any more easy credit available: two thirds of economy is without engine for growth now. So in the best case scenario growth will be anemic and we have stagnation. But interestingly enough it will not mean automatically that inflation will come down. The trick is that USA is a net importer of oil and other commodities and is competing for supply on the world markets. Commodities are priced in USD and foreigners are ready to pay more in USD with their own currency rising in order to secure the supply. So USA effectively importing inflation back home with rising oil and other commodities prices which are underlining for all other prices. The problem here is that USA has huge budget and foreign account trade deficit. In order to finance deficit USA is selling IOU - Treasuries and will find buyers only if interest will be attractive. You have to keep "perceived" value of dollar high if you would like to play this game. How long foreigners will be accepting effectively IOU for their oil and commodities? US Dollar is reserve currency of choice and nothing else. You need to tighten credit supply and rise rates in order to protect value of your currency, but your hands are tight: economy is melting and waiting for cut - more money supply. What will be the choice - another war? Economy will not handle it, keep it on hold and we have our scenario: economy is stagnating without stimulus, housing market in painful down slope for years, markets are flat (best dream) accounting for inflation and eroding value in real terms accounted in gold, milk or egg prices. Inflation is rising: you are chasing reluctant foreigners to buy your IOU to finance deficit but they are demanding more and more discount. USD is falling against other currencies and all real assets: foreigners start to diversify from "reserve" currency further eroding its value. US Dollar becomes chosen victim because the only way to pay less on your debts in real terms is to inflate them out and repay in depreciated currency. How can you preserve your wealth? Look for real value: growing population, rising emerging markets creating industrial infrastructure and demanding commodities for its growth, rising new powers and their wealth which they will protect from falling dollar. Commodity hunger will bring spotlight for companies like Tenke mining and Lundin mining which have secured huge deposits of basic metals like copper and zinc with demand for years to come. Falling US Dollar will ignite investment interest to companies leveraged to price of Gold and Silver like Tanzanian Royalty Exploration and Silver Wheaton. It is important to mention that these markets are relatively small and even fraction of money coming out of general market will lift sector in the next bull leg up from its consolidation phase. Sector is very volatile and you need to apply all proper due diligence and asset allocation rules, but until you can buy companies with trustworthy management with copper at 10 cents, gold at 50 dollars and silver at 1 dollar in the ground pay day will be worth the risk.

All these news should not be depressing if you are taking proper steps in your financial planing, it is only food for thinking: you are making your own life. Do not keep your eyes "Wide Shut" thou.

Financial sense broadcast:

Worst Economy Shape in years and "The Best Stock Market"? Something is wrong in this new concept: it could be you and your money:

China overtakes USA in trade with Japan - selfexplanatory:

Bubble mentality:

Everything below 2.0% is actually a recession, if you subtract even official inflation number you will be in Negative Real output growth. Recession will be recognised only after it happen as usually, massaging the numbers is a least of Evil which is happening with the Great Country. USD from here is a very bleak story, it will not crashed but "orderly decline" is inevitable - you can not create wealth out of thin air: it is different to the pieces of paper you are making from it (or electronic records). Bernanke's helicopters are here right above your house.

Mass media and Google would like you to belive that everything is just going fine, growth is strong and valuation of a Search Engine is justified at the market cap of 152 billion dollars. After quick play with Google's own numbers you will be woundering why is Eric Schmidt is "... ecstatic about our financial results this past quarter" particularly if "...I would like to remind everybody as I have each year at this time, that we are about to enter our seasonally slower summer growth period, and make sure you factor that in when thinking about how our business will grow." So what is so "ecstatic"? Maybe EPS at 3.18 which is below EPS of 3.29 in Q4 2006. It is decline in EPS of 3% and Google is facing its seasonally slowest quaters ahead. I found it rather disturbing that company with bubble valuation of Price/Sales=12.6, Price/Book=8.2, Price/Earnings=43.2 and Market cap to free cash flow ratio of 83 (!) has slowing revenue growth rate -20% Y/Y, Google's own sites have slowing growth rate-22% Y/Y and its network web sites revenue growth is falling even faster - 24% Y/Y. It is still one trick pony with licencing and other revenue at just one percent of total revenue and even at this low level rate of growth is slowing Q/Q. Portion of Google own sites is rising in total revenue and Networks share is falling with TAC rising. It is reflecting rising competition and distribution deals which are eating margins. George Reyes at the conference call sad: "The answer is that we're doing a lot more deals and the deals are, in fact, carrying a disproportionate amount of TAC. So, at the end of the day and I think I suggested that in my earlier comments, TAC as a percentage of revenue is likely to increase given the deals that we're doing these days." Net income falls in Q1 2007 to 1,002,162 from 1,030,716 in Q4 2006 ('000USD) showing declining net Income margin from 32% to 27%. Sales per head are stagnating at low end in 2006 range at 299.4 ('000USD) All this analyses is based on GAAP figures presented by Google and accounting for all relating expenses including stock based compensation as it should be done according to Warren Buffet which is admired by Google founders. Regarding the latest corporate development Mark Mahaney - Citigroup asked: "... Secondly, a broader question just on display advertising. Larry and Sergey, when you started search, you clearly had something different in mind, something more targeted than the normal advertising that was out there. What generally changed in your thinking that made you think either that the display advertising market was big enough or that you had a targetable solution that was good enough to make you want to make the moves you made, like buy DoubleClick?" Sergey Brin replied "...Advertisers, in many cases, don't have all the metrics information they need to decide which ads to run where. So we have seen good success with that, and we think we can expand that more to broader kinds of media, not just static images and what not. Of course, with this intent to acquire DoubleClick, we think we can make more advertisers much more efficient." With so flexible motto privacy advocats will be alarmed. Deal in general seams to be based on "overreaction" to threat of losing DoubleClick to competitors which resulted in a price tag of 3.1 billion cash offer from Google and I would like to run a few parallels. It is estimated that Double click had roughly 150 million in revenue last year as reported by Wall Street Journal. So Google is paying 20.7 time sales of the company. Google itself is valued at the moment as Price/Sales=12.6, Yahoo! P/S=5.7, MSFT P/S=6.0, so Google is paying premium of 64% for DoubleClick above its own exaggerated valuation which is 121% higher then nearest competitor. By making payment of 3.1 billion dollars and buying company with 150 million dollars in revenue Google will lose interest income in the amount of 161.2 million dollars per year assuming investing in money market funds at 5.2% p.a. Most importantly Google is spending almost 30% of available at the year end 11.2 billion dollars. With flat free cash flow (1.678 billion dollars in 2006 Vs 1.621 billion dollars in 2005, operational cash flow actually decreased by 9% in Q4 2006 from Q3 to 0.911 billion dollars) and still pending lawsuit of 1.0 billion dollars there is not so much money left to fight competition war against Yahoo!, Microsoft and Old Media Guys. With effect of "law of big numbers" already shown in recent decline in EPS, slowing growth rate will become apparent even to most devoted Google followers, inability of "technological" company to create any new products and monetise already made investment in YouTube should ring alarm bells for any investor.

"Silver Wheaton Corp.'s US$485-million cash purchase of 25% of the life-of-mine silver production from Goldcorp's Penasquito project in Mexico is getting the thumbs-up from analysts."

With new deal SLW has secured supply of Silver at 3.9 USD and it is financed only with debt in USD! If you are a believer in falling USD and rising Silver this is the place where a lot of money will come: company is "pure" silver play - all its revenue is coming from silver sales, it is profitable from the day one. SLW Stock is followed by major investment banks, its market cap can accommodate big institutional investors and hedge funds. Its supply base is diversified between different producers and different countries. Technical picture is pointing to upside break out from its consolidation pattern. Acting like a "Silver bank" company's unique business model allows to secure silver supply "deposits" at lower rate and sell it later at the market rates. Now with this purchase very important step is made and all new silver supply is secured by cash payment without any share dilution. With fixed supply silver prices in the range from 3.9 to 4.0 USD and market price flirting with 14.0 USD, Silver Wheaton becomes leverage play on rising silver prices and its earnings will rise with every uptick in silver prices.

"Merrill Lynch analyst Michael Jalonen, who calls Penasquito a "world class asset" with proven and probable reserves of 9.98 million ounces of gold, 575 million ounces of silver and 3.62 million tonnes of zinc, rates Silver Wheaton a "buy." He has a US$13.50 price target on the stock (SLW/TSX), which represents upside of 3% from yesterday's close of $13.10.

Tony Lesiak at UBS is more optimistic with a US$14.50 price target. "The deal provides significant growth for Silver Wheaton and financial flexibility for Goldcorp," he said in a note to clients.

Blackmont Capital analyst Richard Gray, who said the transaction was highly anticipated, sees Silver Wheaton shares hitting $16, 22% over yesterday's close.

RBC Capital Markets analyst Michael Curran raised his target price by US$1 to US$17.
"We believe Silver Wheaton shares have been held back as investors anticipated a medium- to-large equity financing requirement to fund a Penasquito transaction," he said in a note to clients, adding that this overhang could now vanish."

Do you remember all that hype about Vonage? Is it the future of Google? Once it will lose momentum, more law suits will follow and "enormous" cash pile will be very small "Mini's" airbag on a freight train hitting the wall.

"The Internet phone service provider Vonage Holdings, which a federal court found had infringed on three patents owned by Verizon Communications, said its legal woes could lead to bankruptcy, according to a regulatory filing."

This is like test for me - will anyone bother? You can get it easily from my writing that English is not my native language and I need some help of English native person with some editing experience in order to edit few of my articles to be published.

In order to understand the magnitude of "overreaction" to threat of losing DoubleClick to competitors which resulted in a price tag of 3.1 billion cash offer from Google I would like to run few parallels. It is estimated that Double click had roughly 150 million in revenue last year as reported by Wall Street Journal. So Google is paying 20.7 time sales of the company. Google itself is valued at the moment as Price/Sales=13.67, Yahoo! P/S=6.63, MSFT P/S=6.01, so Google is paying premium of 51% for DoubleClick above its own exaggerated valuation which is 106% higher then nearest competitor. By making payment of 3.1 billion dollars and buying company with 150 million dollars in revenue Google will lose interest income in the amount of 161.2 million dollars per year assuming investing in money market funds at 5.2% p.a. Most importantly Google is spending almost 30% of available at the year end 11.2 billion dollars. With flat free cash flow (1.678 billion dollars in 2006 Vs 1.621 billion dollars in 2005, operational cash flow actually decreased by 9% in Q4 2006 from Q3 to 0.911 billion dollars) and still pending lawsuit of 1.0 billion dollars there is not so much money left to fight competition war against Yahoo!, Microsoft and Old Media Guys. With effect of "law of big numbers" right around the corner slowing growth rate will become apparent even to most devoted Google followers, inability of "technological" company to create any new products and monetise already made investment in YouTube should ring alarm bells for any investor.

Google’s acquisition of DoubleClick may have been the culmination of multiple ‘behind-the-scenes’ relationships between the two companies. Common relationships between Google and DoubleClick that IntellectSpace’s Knowledge Map discovered are:
-Eric Schmidt’s (Google’s CEO and former Chairman) is on the Board of Siebel, and likely crossed paths with Peter Prainik, who was a senior VP at Seibel before assuming the post of Chief Marketing Officer at DoubleClick.
-Ann Mather spent over 10 years at Disney before becoming a Director of Google, and Thomas S Murphy was the long-time Chairman of Disney prior to becoming a Director of DoubleClick.
-Patrick J Healy, Mark E Nunnelly, and David N Strohm, who are all board members of DoubleClick, attended Harvard Business School with John Doerr, who sits on Google’s board of directors.
-Kavitark Ram Shriram sits on the Board of Google and is an alumni of Michigan University with Kevin J O’Connor – DoubleClick’s founder and former Chairman and CEO.
To view an interactive version of the Knowledge Map, follow the following URL with an Internet Explorer: http://fn.intellectspace.com/ispace/GuestMonitor.aspx?id=29021b10-b340-46d0-ba05-d45c568fbce6
Comment by Carter Powers - April 16, 2007 at 2:47 pm

It is all happening so fast: only few weeks ago on April 4th Lundin mining announced all cash offer at CAD 5.0 per share of Rio Narcea for all shares outstanding. And now we have a new deal to buy out Tenke mining with their major asset of 24.75% in Tenke Fungurume copper/cobalt mine in Congo. In announced all share deal shareholders of Tenke mining are offered 1.73 shares of Lundin minig for each share, but I will be surprised if Lundin mining will get Tenke at first price offer. Lundin mining motivation is clear: such asset is still under radar of investment crowd and almost not followed by anyone. With construction of mine at full speed and expected first production in 2008 price for Tenke mining will increase dramatically as soon as story will hit news letters and stock becomes followed by analysts. Definitely Lundins would like to keep Tenke Congo assets inside the family line of business as long as it is possible. Now Lundin family hold around 14% in Lundin mining and almost 20% in Tenke minig. It will be much harder to buy out Lundin mining then Tenke mining even at recent price due to much higher capitalisation. After the merger Lunding mining will have aproximatly 389.9 million shares. At 20 day average price before deal announcement on April 15th of CAD 13.51 per share Lunding mining market cap will be CAD 5.3 billion, not a change even for industry hevyweighters like BHP, RIO Tinto or CVRD. But what is the fair price for Tenke shareholders? Tenke Fungurume 24.75% stake was valued at CAD 1.4 billion at the moment of announcement. After conference call a lot of question need to be addressed by Tenke mining's management and Board members. Tenke Fungurume was always portrayed as one of the largest Copper deposits in the world with only half of the concession beein explored. Assessment of price was done on "flat" production of 115000 t of Cu per year without any consideration for premium for increase to 200000 t and later for 400000 annual production. New resource estimate was supposed to be published by mid 2007 which will incorporate all drilling in 2006 year done by Phelps Dodge. Feasibility study was never published in full details and total price assessment process does not look transparent. Companies have Directors which are sitting on the Boards of both Companies and conflict of interest must be definitely addressed. Now Freeport-McMoRan Copper & Gold Inc move will be very interesting: from Phelps Dodge (company was aquired recently by FCX)perspective it will be much cheaper now to bid for outstanding 24.75% of Tenke Fungurume - who could better know the value then the Operator of the property. Will they allow Lundins to keep it or they will try to bid now? In the end shareholders of Tenke mining will be in good hands with Lundins, but as Tenke shareholder I would prefer better price and if more bidders will come we can get easily ratio of 2.5 - 3.0 of Lundin mining share for 1 Tenke mining share. With proposed 73/27 ratio for Lundin mining and Tenke mining shareholders respectively Lundins will have 14%*73%+20%*27%=15.62% it is not a lot to defend against unfriendly offer, but size of the Company will help to prevent losing assets before their full pricing potential. I think that following scenario will be the best for Tenke shareholders:

1. Clear explanation by the Tenke mining Board on price decision on Tenke mining side and conflict of interest must be addressed from Lundins for their integrity for which they are highly respected in minig industry.

2. Bidding war with FCX or Newcomer will help to get higher premium for world class asset in copper/cobalt mine, but in the end it will be better to stay with Lundins at higher ratio of exchange.

2. Fast development of Russian wild card - Ozernoe zinc deposit: with Tenke Fungurume in production it could bring Lundin mining fast to 10 billion mark in market cap.

3. South American projects spin off is very positive. It will allow to concentrate on exploration and acquisition of promising gold prospects, with Lundins back up financing will be not a problem and Paul Conibear's management grip will help to make second success like Tenke in grass root exploration projects. More information on the deal could be found on:

http://cnrp.ccnmatthews.com/client/tenke_mining/release.jsp?year=2007&actionFor=644917&releaseSeq=0
Author is long Tenke mining shares

This must be the logic in recent move of Google to acquire DoubleClick for 3.1 billion dollars. Sorry Henry it did not work out in 2000 it will not work out now. It is just great investment approach - powerful and simple: nobody is worrying about short term or even any business perspective. Ego and arrogance and Bubble Vision "GBF" - Get Big Fast in its pure essence. Microsoft and Yahoo! are doing their job as competitors masterfully: they are hitting in the Core of Google strength: it is not technology (plenty of competitors and some even claim superior results in relevant Search), it is not product line (there is no really any product line - it is just one product - search and whole business depends on it results), but financial strength of the company before YouTube move - it used to be the company with pile of cash (over 10 billion dollars) and strong increasing cash flow until 3rd Q 2006. I can not see any other reason for this decision, but fear that somebody else could acquire Double click and challenge "near monopoly" in Search. The problem here is with word "monopoly" you can not "corner the market for the "advertising operating system". This "monopoly" in economic sense is completely different from monopoly in Gas supply for example, it is mirage of a "monopoly" of choice. Any monopoly is putting constrain on consumer choice and is giving opportunity for price dictate. If someone will corner the Gas supply market, it will be monopoly, you want to drive - you come to us, only. No hydrogen around, welcome to our shop. With Google or any search company we have "monopoly" of choice when consumers are putting restrictions on themselves and decide to use mostly this particular service. Should trend and fashion change tomorrow all competitors are just click away. With such sensitive and unstable base which is in saturation point of growth you can not "corner" advertisers as well. If tomorrow 30% of your audience moves to Facebook and Joost your advertisers will move with them. Price tag of 3.1 billion dollars for company with 150 million dollars in revenue (DoubleClick had roughly $150 million in revenue last year, according to the Wall Street Journal) even if it is strategic asset shows that bubble mania is back in full force in silicon valley and decisions are not based on any kind of sensible financial analyses. Interesting to note that Microsoft worked away when price surpass 2 billion dollars. "
"Strategically it could make sense but the suggested acquisition price is way out of line.
Google is moving into this space so DoubleClick’s existing revenues and margins are likely to shrink.
Third, as ClickZ points out, AOL, DoubleClick’s largest customer, is likely to leave if a competitor like Microsoft buys them.
Fourth, a fellow Microsoft employee just pointed out to me that, DoubleClick’s DART system has an enormous collection of cookie and clickstream data on its customers that could raise competitive and privacy concerns.Lets look at the numbers. Hellman & Friedman acquired DoubleClick a little over a year ago for $1.1 Billion. Since then, according the WSJ, they have divested two divisions of the company for $525M, leaving a net investment of about $600 million. And they want to sell it for $2 billion? Ya , right.The revenue multiples don’t make sense either. DoubleClick had about $150M in revenue last year with about $100M coming from ad placement. Presumably the rest of the revenue came from businesses that were divested. So, H&F wants 20 times revenues for DoubleClick? Maybe 20 times earnings would make sense, but 20 times revenues? You have got to be kidding?"

Blow after blow, what will be next - missed earnings expectations? Without any tax manipulation they will have to show jump in earnings from $2.8 (with "normalised tax rate") to $3.3 in this Q1 2007 just to meet the numbers. It is 18 percent increase after the strongest seasonal Q4 2006. Can they make it? I am in very big doubt about it. Traffic on google.com is falling and YouTube is bringing only troubles. Nothing of the announced products apart from search is bringing any substantial revenue, company is still one trick pony with all other initiatives eating out margins from the only one revenue stream. Idea to create business on "borrowed for nothing" content did not found admiration among content producers, whole industries close to extinction should this mass scale automated copyright violation be allowed. "Wow. When it rains, it pours for Google (GOOG). First, Viacom (VIAB) decided to sue them for copyright infringement last month. Shortly after that, News Corp (NWS) and GE’s (GE) NBC Universal said they were teaming up to create a new online video joint venture.
Sam Zell, who’s buying newspaper publisher Tribune (TRB), said last week that newspaper companies need to be tougher with Google. Then, adding insult to injury, Viacom announced earlier this week that it would use the search technology from Google’s top rival Yahoo! (YHOO) on 33 of its broadband sites.
But despite all the Google-hating going on among big media, the company could always count on CBS (CBS) to be an ally. Until today, that is."

It is all happening so fast, but I will be surprised if Lundin mining will get Tenke at first price offer. Lunding mining motivation is clear: such asset is still under radar of investment crowd and almost not followed by anyone. With construction of mine at full speed and production in 2008 price for Tenke mining must increase dramatically as soon as it will be covered by analysts. Definitely Lundins would like to keep Tenke Congo assets inside the family line of business as long as it is possible. It will be much harder to buy out Lunding mining then Tenke mining even at recent price due to much higher capitalisation. But what is the fair price for Tenke shareholders? After conference call a lot of question need to be addressed. Tenke Fungurume was always portrayed as one of the largest Copper deposits in the world. Assessment of price was done on "flat" production of 115000 t of Cu per year without any consideration for premium for increase to 200000 t and later for 400000 annual production. New resource estimate was supposed to be published by mid 2007 which will incorporate all drilling in 2006 year done by Phelps Dodge. Feasibility study was never published in full details and total price assessment process does not look transparent. Companies have Directors which are sitting on the Boards of both Companies and conflict of interest must be definitely addressed. Now Freeport-McMoRan Copper & Gold Inc move will be very interesting: from Phelps Dodge perspective it will be much cheaper now to bid for outstanding 24.75% of Tenke Fungurume - who could better know the value then the Operator of the property. Will they allow Lundins to keep it or they will try to bid now? In the end shareholders of Tenke mining will be in good hands with Lundins, but I would prefer better price and if more bidders will come we can get easily ratio of 2.5 - 3.0 of Lunding mining share for 1 Tenke mining share. With proposed 73/27 ration for Lunding mining and Tenke mining shareholders respectively Lundins will have 14%*73%+20%*27%=15.62% not a lot to defend against unfriendly offer, but size of the Company will help to prevent losing assets before their full pricing potential. What will be the best for Tenke shareholders:
1. Clear explanation of price decision on Tenke mining side and conflict of interest must be addressed from Lundins for their integrity.
2. Bidding war with FCX or Newcomer, but stay with Lundins at higher ratio of exchange.
2. Fast development of Russian wild card - Ozernoe zinc deposit, with Tenke Fungurume in production it could bring Company fast to 10 billion mark.
3. South American spin off - will allow to concentrate on exploration and acquisition of promising gold prospects, with Lundins back up financing will be not a problem and Paul Conibear's grip will help second success like Tenke in the making.
http://cnrp.ccnmatthews.com/client/tenke_mining/release.jsp?year=2007&actionFor=644917&releaseSeq=0
Author is long Tenke mining shares

It all happening so fast, I will be surprised if Lundin mining will get Tenke at first price offer. Definitely Lundins would like to keep Tenke Congo assets inside the family as long as it is possible. It will be much harder to buy out Lundin mining then Tenke mining even at recent price. FCX move will be very interesting: will they allow Lundins to keep it or they will try to bid now? In the end we will be in good hands, but I would prefer better price and if more bidders will come we can get easily ratio of 2.5 - 3.0 for 1 Tenke mining share. Assessment was done on "flat" production of 115k of Cu without any premium for increase to 200k and later for 400k annual production. With proposed 73/27 ration for Lundin mining and Tenke mining shareholders respectively Lundins will have 14%*73%+20%*27%=15.62% not a lot to defend against unfriendly offer, but size of the Company will help to prevent losing assets before their full pricing potential. What will be the best for Tenke shareholders:

1. Bidding war with Newcomer, but stay with Lundins at higher ratio.

2. Fast development of Russian wild card - Ozernoe zinc deposit, with Tenke Fungurume in production it could bring Company fast to 10 billion mark.

3. South American spin off - will allow to concentrate on exploration and acquisition of promising prospects with Lundins back up financing will be not a problem and Paul Conibear's grip will help second success like Tenke in the making.

"Larry Dignan (ZDNet) submits: The enemy of your enemy is your best pal. Just ask Viacom (NYSE: VIA - News), which is suing Google's (NasdaqGS: GOOG) YouTube for $1 billion while hopping into bed with Yahoo (NasdaqGS: YHOO).
Viacom and Yahoo announced a "multi-year partnership" where Yahoo will be the exclusive provider of sponsored search and contextual ads on all of Viacom's sites. These properties include MTV.com, VH1.com, Nickelodeon.com, comedycentral.com and BET.com and cover "33 broadband sites." Yahoo added that the deal could expand to 140 more Viacom Web sites worldwide.
Yahoo portrayed the Viacom win as a victory for its project Panama, an ad system designed to close the monetization gap with Google. Expectations are high for Yahoo's Panama and the Viacom deal is likely to push them higher.
And there were plenty of Google digs in Yahoo and Viacom's statement.

For me Henry is too much in Love with YouTube but on this one he is on the money:

"So how much TV, Radio, and Print spending would Google have to capture to, say, double its current operating profit? (Assuming no further growth of the online businesses, which obviously should continue to grow quite nicely). Google generated about $3.5 billion of operating profit last year. To generate this much from an offline TV, radio, and print placement business, assuming a generous 10% operating margin (very generous, I think), Google would have to place $35 billion of gross advertising. This compares to about $4 billion it generated from its wildly successful online ad rep/placement business, AdSense, in 2006.
The conclusion? It seems safe to say that, even if everything goes perfectly, it will be a while before Google's offline initiatives contribute significantly to the company's bottom line. "

Google is desperate with YouTube monetising: Capex is eating out margin from search and revenue still to come:

"Pop-up ads? On a Google website? It seems incredible - but it appears to be true.
In a desperate move to boost YouTube's advertising revenues, Google (GOOG) may be violating some of its most cherished, long-held principles. Beet.TV's Andy Plesser reports that a Best Western ad popped up on a YouTube page he recently visited.
Here's why this is a big deal for Google.
When Larry Page and Sergey Brin decided to allow advertising on Google, they were adamantly opposed to running the pop-up ads that used to carpet the Web, preferring instead to run simple text ads with links.
You can see some traces of this attitude in outdated Web pages on Google's site. The #1 question on Google's FAQ is "Why am I suddenly seeing pop-up ads on Google?" Google's old answer: "Google does not allow pop-up ads of any kind to appear on our site. We find them annoying."
The new answer might as well be "We paid $1.65 billion for YouTube, the whole licensing-content-from-big-media thing isn't really working out, and so we're running pop-ups."

"Overview of comScore Search data This report gives investors a monthly snapshot of internet search trends focusing on the 5 largest sites. We issue this report on a monthly basis, focusing on the same data points. We examine U.S.-only paid-search and world-wide search data as provided by comScore.
U.S. Sponsored Click Data for February Google's sponsored clicks were down 3% m/m, up 45% y/y, and 6% q/q. Yahoo's were up 4% m/m, up 25% y/y, and 4% q/q. MSN's were down 5% m/m, up 95% y/y, and 14% q/q. AOL's were down 4% m/m, down 38% y/y, and down 10% q/q. Ask's were down 6% m/m, up 3% y/y, and down 7% q/q.
World-Wide qSearch Data for February Google's total searches were up 50% y/y, 2% m/m, and 10% q/q. Yahoo's were up 34% y/y, 1% m/m, and 8% q/q. MSN's were up 19% y/y, 3% m/m, and 1% q/q. AOL's were down 35% y/y, -2% m/m, and -14% q/q. Ask's were down 4% y/y, flat m/m, and up 1% q/q.
Key Points For U.S. sponsored clicks, GOOG showed 45% y/y growth vs. 54% y/y in Jan and 62% in Dec (2nd consecutive m/m decline, but was +6% q/q), while YHOO's grew 23% y/y in Feb vs. 23% in Jan and 28% in Dec. YHOO's click through rate increased 43bps m/m (Panama went live 2/5). GOOG's coverage ratio decreased 118bps m/m to 47.5% although the % of searches w/ a sponsored ad and a click was 27% vs. 22% y/y.
Bottom Line If one were to trade on this news (and we do NOT advise doing so because we think this data is only directionally accurate), it was not a good month of data for Google. Sponsored clicks were down for the second consecutive month and year-over-year growth rates are decelerating at a faster pace than expected."

"Sterling Mining Co., headquartered in Wallace, Idaho, controls the Sunshine Mine, currently forecasted to begin production in December 2007. Sterling Mining Co. also owns the producing Barones Tailings Project in the Zacatecas Silver District of Mexico and 4,500 acres in Montana.

Boasting over 100 years of historic production, the Sunshine Mine is one of the largest silver mines in the world. The mine produced over 365 million ounces of silver from 1884 to its closure in 2001 when it went bankrupt as a result of its debt burden and low silver prices. By moving quickly, Sterling Mining Co. management snapped up the Sunshine Mine at a bargain basement price. Sterling Mining currently controls over 19,153 acres in the Silver Valley, which includes the Sunshine's 6,127 acres. The potential for the mine is staggering if one compares the old cap structure of the Sunshine mine to Sterling Mining Co. In 1993, the Sunshine Mining Company had 200 million shares outstanding and $100 million in debt. With silver prices between $3.70 and $5.30 an ounce it had a market cap of $500 million dollars. Compare those numbers with today's 28.8 million shares outstanding, no long term debt, silver prices in the $10.00 to $15.00 range, and a market-cap under $120 million. Current replacement cost estimates of the existing infrastructure are well in excess of $100 million. The Sunshine Mine has produced more than 365 million ounces of silver, but only 15% of the land package has been explored by modern techniques.
Sterling Mining Co. has put together an experienced technical team to ensure that the mine infrastructure operates efficiently and meets high safety standards. As a result, Sunshine Mine won the coveted 2005 Sentinels of Safety Award granted by the U.S. Department of Labor Mine Safety and Health Administration. A multi-phase program is under way to return the past-producing mine to long-term sustainable production. Now in Phase III, Phase I included exploration for mineral potential in some of the top-producing areas of the past and some of the unexplored ``upper country'' target zones. The number of employees is now over 40 and management has installed new transformers and re-established 13,200-volt power, while upgrading the lighting, ventilation, and fire suppression systems. Sterling Mining Co. also recently announced it has hired a Mill Manager and Chief Metallurgist who spent 16 years with Sunshine Mining as Superintendent of the Silver Refinery and Antimony Plant."

With stock successfully resolved "Cup and handle" formation to the upside and hitting new heights of 19.8CAD full scale development in Congo is in the making:

"GRD Minproc has been awarded the EPCM contract for the development of Freeport-McMoRan’s Tenke Fungurume project in the Katanga province of the Democratic Republic of Congo. The project has a capital value of approximately US$650 million and is being developed by Tenke Fungurume Mining, of which Freeport-McMoRan Copper & Gold Inc owns 57.75%. Freeport acquired this interest through its recently completed acquisition of Phelps Dodge."

"As for Tenke Fungurume, Phelps Dodge's 600-square-mile (1,554-square-km) concession in Democratic Congo, Adkerson said he thought it held little value in the Phelps Dodge share price ahead of the merger and was not the driver of the transaction, but provides a "huge something extra."

No equity financing is planned at the time, over 90 million in Cash, new resources update to include drilling in 2006 by mid 2007.

More on Tenke mining.