The site of the coming-out party for the new Web search engine apparently will be a high-tech conference called “D: All Things Digital,” which is sponsored by The Wall Street Journal. The conference, slated for The Four Seasons Aviara in North San Diego, Calif., begins Tuesday and ends Thursday, and features as speakers some of the top executives in the media, entertainment and high-tech fields. Interestingly enough, Microsoft Chief Executive Officer Steven A. Ballmer is one of the scheduled speakers.

According to a Journal report, the new Microsoft search engine – code-named “Kumo” -has been in private tests inside the company for months. Kumo is aimed at consumers and is supposedly designed to achieve two goals:

• Decrease the amount of time they spend clicking their way across the Web in search of information. The technology is designed to cut down on the length of typical Web searches by grouping the results of a search for, say, a particular model of car into helpful categories like parts, used car listings, online discussion forums and videos showing the vehicle.
• Offer better ways of organizing search results. For instance, the search results for a special-interest car might be grouped into more-helpful categories such as sales listings of that type of car, parts distributors, car clubs and online discussion forums, and even videos of that model car, published reports state.

Microsoft is planning a major promotional push and advertising campaign to boost the search-engine’s visibility and has hired the agency JWT (formerly known as J. Walter Thompson), a unit of London-based WPP PLC (Nasdaq ADR: WPPGY), to develop a campaign for the product, people familiar with the matter say.

Microsoft has a tough road to travel in order to overcome Google’s massive market-share lead in the Internet-search arena. On Monday, research firm comScore Inc. (Nasdaq: SCOR) reported that Google’s share of the U.S. Internet search market during April was 64.2%, an increase of 0.5% from March.

In fact, Google was the only major search engine to post a market-share gain for April. Microsoft and Yahoo! Inc. (Nasdaq: YHOO) both saw market-share declines of 0.1% for the month. That left Yahoo with 20.4% of the market and Microsoft with 8.2%, according to a report by ITProPortal.com.

Ask.com – part of IAC/Interactive Corp. (Nasdaq: IACI) – saw its market share hold steady at 3.8%, while AOL LLC experienced a 0.3% decline to finish April with a U.S. market share of 3.4%, comScore and ITProPortal both said. AOL is a subsidiary of media heavyweight Time Warner Inc. (NYSE: TWX).

A look at actual search queries underscores the huge lead enjoyed by Google. There were 14.8 billion search queries in April, a 3% increase from March. Google accounted for 9.5 billion of the searches, followed by Yahoo (3 billion) and Microsoft (1.2 billion).

This huge chasm between the leaders and the laggards is a key reason Microsoft and Yahoo are still pursuing a possible partnership, even though Microsoft’s proposed $45-plus billion acquisition of Yahoo went sour due to founder ego, greed and internal shareholder disputes, Money Morning has reported. The two tech firms continue to discuss a tie-up in which Yahoo would divest its search and search-advertising technology to Microsoft, in return for an upfront payment and a percentage of the search-ad revenue the partnership generates, sources familiar with the talks reported.

It isn’t known how far the talks have progressed or whether any deal is imminent, as spokesmen for both Microsoft and Yahoo declined comment on the negotiations.

Google search – originally developed by by Larry Page and Sergey Brin in 1997 – remains the most-widely used search engine on the Web, and receives several-hundred-million queries a day via Google’s assortment of services.

Source: Hot Stocks: Microsoft Takes Aim at Google’s Web Dominance With New Search Engine

This from Penny Sleuth:

What do frozen desserts, designer handbags, and underwear have in common? Two of the best investment opportunities this decade. Allow me to explain…

A single company – one you’re probably familiar with – sold all three seemingly unrelated products. A few years ago, Sara Lee Corp (NYSE:SLE) – maker of frozen (yet tasty) pies and cakes – owned hundreds of brands, many of which made no sense.

For instance, the frozen cheesecake manufacturer was the sole owner of Coach handbags and Hanes underwear. These two subsidiaries obviously didn’t make much sense to the company. That’s why – during two separate transactions – Sara Lee’s management and board of directors divested them through a process known as a spinoff.

Spinoffs are common in the business world. They can present smart investors with huge opportunities and sometimes, less fortunate investors with even larger losses. Spinoffs are usually as simple as they sound – a parent company decides it can do without one of its business. So, the subsidiary is spun off onto its own.

There are four basic reasons for a parent to spinoff one of its “children”:

• Unrelated Businesses – many times, companies like Sara Lee own certain subsidiaries – like Coach and Hanes – they have no business owning. This happens often in conglomerates when a certain product takes off and is held back by the organization of the parent company.

• Tax Benefits – taxes can be burdensome and confusing. But every once in a while, the mathematicians and financial wizards find a loophole to save on taxes and preserve shareholder value. Occasionally, it takes a spinoff to do it.

• Refocusing – oftentimes, a large company will take a look at its operations and find one of its businesses lagging behind, which inevitably puts a strain on management to fix the problem. The best solution is to spinoff this business so management of the parent company can get back to growing profitable businesses. This often benefits both the parent and “child” company.

• Pinching Off Debt – some spinoffs are created to unload debt and other burdensome liabilities. This is where many unfortunate investors take enormous losses. As you can imagine, a company created out of a need to unload debt is doomed from the start.

It’s important to decipher between the four reasons because if you find the right one, you stand to make colossal gains. Let’s look back at our top example…

As we noted, Sara Lee’s situation fits the first mold – unrelated businesses. Spinning off a perfectly capable business creates earning potential neither the parent nor the “child” even realized.

Sara Lee first spun off Coach in 2000. Almost immediately, the newly formed Coach Inc (NYSE:COH) began its own marketing program. This turned into an enormous success and unrealized profit potential came to light, which shot shares straight up over the next six years. As you can see in the chart below, Coach outperformed its former parent by more than 2,000% to negative 15%.

The same thing happen in round two, when Sara Lee spun off Hanesbrand Inc (NYSE:HBI) in 2006. Although the gains were not as fantastic, Hanes shareholders watch their shares double as Sara Lee shares stayed flat:

Of course, not all spinoffs work this way. It takes serious studying and an ear to the ground to find out exactly what’s going on.

Many times, when parents spinoff businesses, they keep it quiet. If the media gets a hold of it, shares can crash artificially, or spike prematurely. And, as we mentioned, many spinoffs negatively affect shareholders.

One recent example is InterActiveCorp’s (Nasdaq:IACI) spinoff of Ticketmaster Entertainment Inc (Nasdaq:TKTM) . When Ticketmaster was sent on its way, InterActiveCorp left it with a parting gift of about $750 million in debt, just as the credit crisis began to peak this summer. Shares of Ticketmaster, inevitably collapsed under this weight, falling more than 80 %:

Of course, you have to use your best judgment when you discover a spinoff. You’ll have to make the decision on why you think the parent company spun it off.

More than not, however, buying spinoffs when they’re fresh is a pretty good idea. According to Chris Mayer of Mayer’s Special Situations – a newsletter focused on spinoffs and other unique investments – “spinoffs beat their industry peers and outperformed the S&P 500 Index by about 10% per year in their first three years of existence.”

Those numbers account for both spin offs that lead to gains and those that lead to losses. Obviously, this is something to look into.

If you are lucky enough, and have the right inside knowledge, you can easily take advantage of the next Coach spinoff and leave the next Ticketmaster alone.

Source: Spinoff Stocks: Quick, Proven Way to Grab Easy Gains

Google rubbed more sand in Yang’s eyes Wednesday when it walked away from a plan announced in June to sell advertisements on Yahoo’s pages after the Justice Department threatened to block the deal on antitrust grounds.

Google already has more than 70% of the search-engine driven advertising market. Yahoo has about 10%, according to BusinessWeek.

For Yang, it was a chance to revive falling sales, even if it meant falling on his sword instead of wielding it against its chief rival.

Now, his shareholders are livid. His future is uncertain. And his best option for survival is a partnership with Microsoft Corp. (MSFT) – the company whose generous takeover offer he rebuffed earlier this year.

The dropped advertising deal between Yahoo and Google revealed a major growth problem for each company.

For Google, it shows that the search engine juggernaut has grown so large that it now has far fewer legal avenues of expansion open to it.

For Yahoo, it shows that Yang is running out answers for Google’s market dominance.

Yahoo’s Troubles

Yahoo has had little to cheer about in the past year.

Its sales growth fell to 3% in the third quarter, down from 14% over the same period last year. Profit has dropped in 10 of the last 11 quarters, Bloomberg reported.

Last month, it announced 1,500 job cuts. And, Scott Moore, the senior vice president in charge of the company’s media group, recently announced he, too, is leaving.

In addition to Moore, Yahoo shed five top executives this past summer: Jeff Weiner (executive V.P. of the network division), Brad Garlinghouse (who oversees e-mail and instant messaging), Vish Makhijani (general manager of web search), Qi Lu (top engineer for search marketing) and Joshua Schachter (founder of social bookmarking site, delicious).

In the past year, the company’s stock value has more than halved – from just under $30 per share to under $15 a share, including hitting a 52-week low of $11.25 last week.

During that time, Yang sternly rejected several takeover offers from Microsoft, including a $47.5 billion bid that amounted to $33 a share. The offer at the time valued Yahoo’s share at a 62% premium.

This led to a proxy battle instigated by board member Carl Icahn, who wanted to oust Yahoo’s current board of directors and replace it with candidates of his choosing. Icahn – it should be noted – favored a Yahoo partnership with Microsoft over Google.

“I don’t regret any minute of what happened, even though it wasn’t the most fun thing to go through,” Yang said Wednesday at a press conference, Bloomberg reported.

What’s Next for Yahoo?

With or without the deal, Google’s market dominance will grow. Nothing has slowed it down thus far, and competition such as Yahoo, Microsoft, Time Warner Inc.’s (TWL) AOL, and IAC/InterActiveCorp.’s (IACI) Ask.com aren’t gaining any ground.

Yahoo’s only fighting chance is to team up with one or several of them

Yang’s only real chance may be going back to deal with Microsoft.

“To this day, I’d say the best thing for Microsoft to do is buy Yahoo,” Yang said during an appearance at the Web 2.0 conference in San Francisco, Dow Jones reported. “We’re willing to sell the company.”

Of course, there’s no guarantee Microsoft is still interested.  At the very least, the company could still be jaded from repeated rebuttals in the past year. And the fact that Yahoo also is in talks with AOL won’t help.

JPMorgan Chase & Co. (JPM) analyst Imran Khan wrote in a research note that a good solution would be fir Yahoo to sell its search operations to Microsoft, a deal Microsoft previous proposed and Yahoo rejected.

Striking that kind of a deal would save Yahoo an estimated $1.4 billion and allow it to focus on its aesthetics, such as ad displays, Khan said.

“We think continued investment in search, at the expense of display investment, has given competitors the opportunity to bite into Yahoo’s leading display ad market share,” Khan wrote.

But Yahoo’s board – many of them already feeling slighted by Yang – may consider another move: Have Yang walk to plank.

Since Yang climbed back aboard as Yahoo’s CEO in June 2007, the company’s sales, market share, and market value have all decreased.  That doesn’t bode well for a CEO who could have avoided another horrendous quarter and shareholder insurrection simply by agreeing to Microsoft’s $47.5 billion bid earlier this year.

Source: Yahoo! Searching for Answers After Google Walks Away from Ad Deal

But there are profits to be made in the small-cap market says Laura Cadden in Today’s Financial News. She’s found three great small-cap stocks going for bargain prices. All three have solid valuation ratios and strong short-term growth prospects.

They are Javo Beverage Company (OTC:JAVO), The Home Shopping Network (NASDAQ:HSNI), and Take-Two Interactive Software (NASDAQ:TTWO).

Best Small Cap #1

A poor man’s Starbucks: Javo Beverage Company, Inc. (OTC:JAVO).

Ah… coffee. Coffee addicts NEED their java. But we’ve already seen that in tough times, people are stepping away from the Starbuck’s counter.

That’s where these guys come in.

Good, fast and CHEAP coffee

Javo Beverage Company, Inc.’s main focus is on dispensable tea and coffee. The company manufactures and markets beverage concentrates, as well as formulations, extracts and flavors, to restaurants and retail outlets.

A sampling of their client list includes 7-Eleven, Sysco Food, BP Products North America, Exxon-Mobil, Mrs. Fields, Haagen-Dazs, Caribou Coffee, Sunoco, Shamrock Foods and Speedway.

Javo greatly increased their outlet potential in the second quarter of this year resulting in excellent results primarily from iced coffee sales.

On July 30, the company announced record revenues for the second quarter of 2008 of 6.7 million. A record gross margin of a remarkable 49% was also achieved for the quarter.

Javo’s target for dispenser installation for this year was 7,500. They achieved that goal by the end of July.

Turning to their hot coffee product, they are now ready to have 10,000 dispensers in place by year’s end. Each new location is anticipated to produce between $3,000 and $6,000 in revenue annually.

This company is one of the most promising small caps I’ve seen this year and the price is below $1!

What’s not to love?

I recommend you buy shares of Javo Beverage Company, Inc. (OTC:JAVO) for at or under $0.60 a share.

*****

Best Small Cap #2

On the cutting edge of retail: The Home Shopping Network (NASDAQ:HSNI)

Her name is Mary-Ann and she is an addict.

Her addiction? The Home Shopping Network (HSNi) owned and operated by HSN, Inc.

Mary-Ann (actually NOT her real name) tells me that she can’t help it… the convincing chatter by charming hosts, the phoned-in testimonials, the seemingly reasonable prices, the “limited number available” push, and the countdown clock – it just wins her over every time.

She’s not alone… The 24/7 HSNi channel reaches 90 million households in the U.S.

And in 15 million of those homes, they also have the latest technological advance in TV purchasing – Shop By Remote.

In addition, HSNi has one of the top 10 e-commerce websites (http://www.hsni.com).

Cornering the market

HSN Inc. has another operating segment, Cornerstone, which is made up of seven popular brands including The Territory Ahead, Smith+Noble, Frontgate, Ballard Design, Garnet Hill, Improvements and Travelsmith.

Each brand has its own website and catalog (400 million are mailed out annually!).

HSN, Inc. began trading on its own in late August.

Formerly, it had been part of IAC/InterActiveCorp (NASDAQ:IACI) but was spun off along with Interval Leisure Group, Inc. (NASDAQ:IILG), Ticketmaster (NASDAQ:TKTM), and Tree.com Inc. (NASDAQ:TREE).

Since the separation (and the volatile market in recent weeks) the stock price has decreased in value.

Its current PE ratio is hovering around 6 – always a good thing!

Most importantly, these people KNOW how to sell and with the peak retail season fast approaching, I expect this stock price to climb steeply.

I recommend you buy shares of HSN Inc. (NASDAQ:HSNI) at or under $12.

*****

Best Small Cap #3

Failure to merge = good news for you: Take-Two Interactive Software, Inc. (NASDAQ:TTWO)

After prolonged negotiations, Electronic Arts Inc. (NASDAQ:ERTS) will not be purchasing Take-Two Interactive Software, Inc.

News of this prompted seven-year lows in the stock price of Take-Two providing a great buying opportunity.

Highway robbery

Take-Two’s claim to fame (or infamy, depending on your perspective) is its “Grand Theft Auto” video game series.

Wildly successful, these games often top the list of objectionable entertainment due to their seeming glorification of criminality and excessive violence. (No doubt that accounts for much of their popularity.)

A sampling of Take-two’s other franchises include Sid Meier’s Civilization, Manhunt, BioShock, Sid Meiers’s Railroalds!, Top Spin, Sid Meier’s Pirates, and Max Payne.

Headquartered in New York City, the company’s publishing segment is made up of Rockstar Games, 2K Games, 2K Sports and 2K Play labels.

Can’t argue with the numbers

After a showing a negative balance in 2007 (with a net margin of –14.10%), Take-Two clearly buckled down their operating expenses. That, and the over 6 million(!) copies of Grand Theft Auto IV sold after its April release, resulted in an increased net margin of 11.95% as of Q3 (ending July 2008).

The company’s PE ratio is just under 12, its forward PD is 10.81 and its PEG is an amazing .56. Now with recent market devaluations, these numbers are not the full picture, but they are still indications of a good investment.

On the table

The Take-two executive chairman of the board, Strauss Zelnick, has said that the company is communicating with other parties to consider “strategic alternatives.”

Any additional takeover bids should be good for shareholders.

Besides the decent fundamentals, profits and buyout possibilities, there are all those fans that failed to get “GTA IV” in the spring. They will no doubt be placing it at the top of their hoped-for holiday gift lists, which should give the stock price a nice bump.

I recommend you buy shares of Take-Two Interactive Software, Inc. (NASDAQ:TTWO) at or under $21.

Source: The 3 Best Small Caps to Own This Fall: A TFN Special Report