On a day that brought news stories about a new virus attack on the Web, increased violence in Iraq, the vice president of the United States cussing out a U.S. senator, and Monica Lewinsky resurfacing to say President Clinton lied about their affair (gee, really?), we're ready for an early summer vacation. In fact, we may be ready for early retirement. Are you?
In today's Motley Fool Take:
- Yahoo! Shuts Out Trillian
- Shameless Plug: 60-Second Guides
- Fund Independence Day
- Discussion Board of the Day: SEC Secrets Revealed?
- Boring Best Buy's Boost
- Quote of Note
- More on Fool.com Today
Yahoo! Shuts Out Trillian
Corporate instant messaging has been big news lately, but yesterday there was word on a more general move that makes some techie types edgy. According to CNET, Yahoo!
Programs like Trillian allow their users to instant message people who use different messaging options, such as Yahoo! Messenger or the popular AOL Instant Messenger (AIM), which is offered by Motley Fool Stock Advisor pick Time Warner's
According to Yahoo!, the reason for the move is to head "spim" off at the pass. Spim is the IM equivalent to spam, one of the monster headaches of the Internet. Spam's even caused the heavyweights noted above as well as Microsoft's
Whereas email is an open communication tool -- and the recent email wars have added up to a real plus for consumers -- IM remains relatively balkanized, with no compatibility between the different products unless you use a program like Trillian. (I personally see the lack of compatibility, or an open standard, as a hindrance to growth for players like Yahoo! and MSN, though there's the argument that the programs retain users -- and eyeballs for advertising and potential product upsells -- through their closed natures.)
From the Yahoo! point of view, sure, nobody wants to dodge enlargement, mortgage, or medication ads through IM, seeing how one theory for IM's runaway success has been email fatigue from endless misspelled, inappropriate, word-salad spam marketing. It's a threat to keeping customers.
This isn't the first time Yahoo! and the rest have blocked third parties, and techies say it won't be long before a patch restores communications. On the other hand, last I heard, AIM still possesses about half of the instant messaging market. If Trillian, Gaim, and other users get sick and tired of the ongoing block-and-patch game, given AIM's critical mass of IM users -- which, without compatibility, transforms into a form of free, word-of-mouth, viral marketing -- maybe AOL stands the most to gain.
Alyce Lomax does not own shares of any of the companies mentioned.
Shameless Plug: 60-Second Guides
Sixty seconds can take you farther than you think. Nobody has enough time to do everything we want, and, unfortunately, we put off too many important financial decisions. Have you wanted to open up a brokerage account, sock away some money in a CD, start an IRA, or just get out of debt, but you didn't have the time to figure out what to do? Don't be daunted. Our 60-Second Guides make it easy, so you can take on all of these goals and many more.
Fund Independence Day
Yesterday, the Securities and Exchange Commission turned up the heat on the mutual fund industry by requiring that funds maintain a board of trustees that is at least 75% independent from management. The new rule is expected to take full effect in 18 months.
Frankly, it's about time the Feds took the lead. To date, New York Attorney General Eliot Spitzer has been the main force in busting miscreant mutual fund managers. His work has eliminated the dubious tactic called late trading and reduced mutual fund fees for common investors. Yesterday's ruling mixes in heavily independent boards that will keep an eye on management, ensuring at least some representation for the average Janes and Joes with money in funds.
The news shouldn't come as a shock. It didn't to Janus
But the SEC's cry for freedom couldn't come at a worse time, according to some. Published reports feature interviews with small-fund managers who say they'll be forced to handle costs they can't afford by hiring more staff and holding more meetings. They say those costs will eat into returns and make the mutual fund business undesirable for them and others. You know what? So be it.
As it is, fund tracker Morningstar pegs the number of available mutual funds at more than 14,000, but follows only 1,600 of them. Surely some of those not tracked by Morningstar are worthy. Heck, they might even be candidates for Motley Fool Champion Funds. But surely some are absolute disasters. After all, over the past 10 years, more than 75% of equity mutual funds have underperformed the returns of the benchmark S&P 500 index.
This isn't to say that the SEC has an interest in stifling mutual fund innovation. To the contrary. But, really, haven't we gotten too much of a mediocre thing when it comes to funds today? I'd say so. The spirit of the SEC's ruling is to improve the conduct and performance of the 14,000+ funds already out there, and that's a good thing.
Fool contributor Tim Beyers wishes mutual fund managers would quit whining and get on with the reforms. If they did, he might actually get interested in funds again. Tim owns no shares in the companies mentioned, and you can view his Fool profile here.
Discussion Boardof the Day: SEC Secrets Revealed?
In an effort to be more transparent, the SEC will post online its letters about public companies' and mutual funds' annual reports and filings. Will investors flock to the Edgar site to find new insights, or are they too inundated with information to bother? Discuss what you think the SEC's comments might reveal on our Battle for Business Ethics discussion board.
Boring Best Buy's Boost
Has consumer electronics giant and Motley Fool Stock Advisor recommendation Best Buy
I guess that's the way of things when you're at the top of the game. A company like Roxio
More important to Best Buy investors will be news that the company will boost its dividend from $0.10 to $0.11 per share, effective when it next pays out in October, and increase its stock buyback program to $500 million from $400 million, $282 million of which has already been repurchased. (The company began paying a dividend late last year.)
But in the end, these events have little to say about the strength of the company's business. They're more a reflection of it. We saw it not long ago in Best Buy's fiscal Q1 earnings report, which showed us a company that is still a high performer despite impressive sustained growth and persistent competition from Circuit City
Best Buy's position is well defined -- which is no doubt why good news like yesterday's announcement get a "ho-hum" reaction from investors. Sometimes that's a good thing.
Fool contributor Dave Marino-Nachison doesn't own any of the companies in this story.
Quote of Note
"What power has law where only money rules." -- Gaius Petronius
More on Fool.com Today
Give up the ghost on Netflix if you must, but first read Daniel Hong's bull case in Defying the Naysayers.... Finding the catalyst to revive a stock is never easy, but it's often rewarding, says Rick Munarriz in The 7-Second Solution.... Matt Richey says there's nothing dull about conservative management and hefty dividends in Boring Is Beautiful.
In other news:
- Budgeting Inspiration
- Cool Off Your Cooling Bill
- Paychex Comes Up Short
- Education Stocks Flunk Grade
For a list of all our stories from today, see our Today's Headlines page.
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