If you're feeling good about the market, you're not alone. Take my hand as we go over some of this week's more uplifting headlines.
1. Don't leave home without this
American Express (NYSE:AXP) is buying Steve Case's Revolution Money in a $300 million deal. Given the fast-growing popularity of Revolution's MoneyExchange online financial platform, many are speculating that this is AmEx's play to challenge eBay's (NASDAQ:EBAY) PayPal.
That's not going to happen. Better-suited challengers have fired blanks when PayPal was way smaller. No one is going to catch up to PayPal now.
Where this deal really begins to make sense for American Express lies in the RevolutionCard. Tied to MoneyExchange accounts, the RevolutionCard can be swiped as a debit card. Revolution is now being accepted at a growing number of retailers, won over by the card's dirt-cheap transaction fees. American Express charges retailers substantially more in transaction and settlement charges, so now AmEx can make sure that RevolutionCard doesn't get in the way of its namesake plastic.
American Express isn't out to kill PayPal. It's buying a live grenade that it can turn around and bury in its back yard.
2. Cover charges for coverage maps
Fed up with Verizon Wireless' "there's a map for that" ads, AT&T (NYSE:T) is on the attack. It's enlisting Luke Wilson for a television commercial that promotes some of the features AT&T has over Verizon (NYSE:VZ), including the nation's fastest 3G network, the ability to talk and surf at the same time, the most popular smartphone, and access to more than 100,000 apps.
Sure, a few of those features are iPhone-based, and if AT&T ever loses Apple (NASDAQ:AAPL) exclusivity, it would have to go back to the drawing board. However, it's clear that that Verizon Wireless' ad has had an effect on AT&T's psyche. It had to counter the coverage-map attack because silence would speak volumes -- assuming the silence wasn't the result of a dropped call caused by spotty coverage.
3. Don't believe the Skype
It's done. eBay completed the sale of a 70% stake in Skype last night, in a deal that values the voice-chat platform at $2.75 billion.
We can blast eBay for its inability to integrate Skype into its eBay.com, PayPal, or even Kijiji sites. It was just a bad fit from the beginning, but let's give eBay a pat on the back anyway. After all, the company was still able to grow Skype's reach over the past few years. It's also unloading a majority stake in Skype for a price that's probably more than most cynics figured it would be able to command after previous writedowns.
Oh, and it's also still keeping a 30% chunk of the company, just in case its new buyers figure out better ways to monetize the wildly popular platform.
4. Way to go, IPO
A surprisingly busy week for new offerings got off to a good start, when Fortinet (NASDAQ:FTNT) opened at $17 on its first day of trading.
The network-security specialist was originally expecting to price its offering between $9 and $11, before an uptick in demand caused underwriters to bump up the IPO price to $12.50 a stub.
Clearly, even that wasn't enough.
Not every debutante is as promising as tech hotshot Fortinet, but it's a good sign for underwriters when demand is outstripping supply.
5. Jam on, MySpace
News Corp.'s (NYSE:NWS) MySpace is acquiring social music site imeem, reportedly for between $8 million and $10 million, some pocket lint, and a case of Grateful Dead vinyl.
The popular and interactive aural destination was running into some stiff legal obstacles, so cashing out to MySpace at a pittance is better than fading away like some forgotten B-side.
I still like this move on MySpace's behalf. Even if all it ultimately acquires is a staff of music-savvy techies, MySpace is repositioning itself as an entertainment destination. It's not going to close the gap with Facebook as a social network, but it can play to its strengths as a hub for indie musical artists and profile-page design flexibility.
What MySpace is paying is a great price for a handful of lottery tickets. These days, that's a major score for MySpace.
