Yahoo!'s Local Overture

Is the Securities and Exchange Commission actually turning hip? TIME magazine recently listed SEC.gov as one of its "50 Coolest Websites," saying it's an "invaluable resource for anyone interested in business, investing, and finance, now more than ever, thanks to new search tools and options." It's a great place to start your research.

In today's Motley Fool Take:

Yahoo!'s Local Overture
Shameless Plug: Save $5 on Your Credit Report
Microsoft's Punishment Delayed
Discussion Board of the Day: Rising Rates, Spiraling Debt
United's Out
Quote of Note
No Vacation From Viruses
More on Fool.com Today

Tim Beyers

I remember when the Web was anonymous. You could just spelunk where you wanted to, roaming the cyberspace streets without a care in the world. Better look over your shoulder, because that's all changing.

First, Google decided it wanted to get to know us a little better in March. This morning, Yahoo!'s(Nasdaq: YHOO) Overture advertising unit decided it wants a hug. Specifically, Overture has decided to serve ads from businesses within a half-mile of where you live. Called Local Match, the service appears akin to dialing 411 on your phone to get ads.

Clients don't need a website to use Local Match. Instead, smaller advertisers register with Overture and have their information posted on separate Web pages. Local Match pushes appropriate profiles when a user's search criteria and location merit it. For example, a restaurant in San Francisco's Chinatown might buy a Local Match profile for its area. Registered users nearby would then see a link to the restaurant's profile when looking online for a place to eat.

Is this all a little Orwellian? Yeah, maybe. But it's big business, too. Differing estimates show that online classifieds pulled in $500 million to $1 billion in revenue last year. Researcher The Kelsey Group says the market for online local search could grow to $2.5 billion by 2008, depending on how well Yahoo! and Google fare in their forays. It looks good so far. In addition to Yahoo!, Local Match will be made available through Microsoft's(Nasdaq: MSFT) MSN, Disney's(NYSE: DIS) ESPN.com, and InfoSpace's(Nasdaq: INSP) MyCity.com.

Competitor Google Local isn't much different than the Overture offering, but Yahoo! officials insist that connecting online with businesses as little as a half-mile away is a significant advantage. (Google Local only gets within 20 miles.) Maybe, or maybe it's the marketing equivalent of splitting hairs.

Either way, the numbers suggest the competing services will offer substantial value. A study from Verizon(NYSE: VZ) from 2002 says that 63% of small businesses lack websites. And in published reports, it has been estimated that 11.5 million of 23 million small- to mid-sized U.S. businesses don't have a site of their own. Indeed, this local notion appears to have national appeal.

Fool contributor Tim Beyers could swear his computer is stalking him. He owns no shares in any of the companies mentioned in this story, and you can view his Fool profile here.

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Microsoft's Punishment Delayed

Seth Jayson

Word out of Brussels is that the long-running dispute between Microsoft(Nasdaq: MSFT) and the European Union won't be settled earlier than planned. The European Commission delayed its enforcement action on media-player software until a Luxembourg court can decide on Microsoft's appeal.

If you missed the last exciting episode, Microsoft has been in hot water with the Euro crowd for quite a while. The major sticking point has been the Windows Media Player, which is included with Microsoft's flagship operating system. The Europeans -- to the sound of rooting from competitors like RealNetworks(Nasdaq: RNWK), Roxio(Nasdaq: ROXI), Apple(Nasdaq: AAPL), and others -- have been whining that the very act of bundling media software together with the OS constitutes unfair monopolization of the important media-player market.

Never mind that the so-called market for downloadable digital media barely exists, and the nascent economy is in fact dominated by Apple's iTunes -- as that firm's booming European launch made clear.

In fact, iTunes' success makes mincemeat of the EU's knuckle-headed opposition to Microsoft's original proposed remedy to the dispute: giving consumers the competition's media players on CD. "C'est impossible!" came the EU response. It's too much to ask computer users to use an install disc, they claimed.

Of course, the nearly 1 million iTunes songs downloaded in Europe can't be played on Windows machines without a download and installation of the competition's player, proving that computer users are indeed capable of pointing and clicking.

Those who enjoy watching the bully get whipped for crimes he hasn't committed will likely get their guilty pleasure by September. The commission reiterated its arguments for the punitive measures, including a huge fine -- conveniently calculated on U.S. revenues -- and the forced marketing of a separate version of Windows without the media player. Other big U.S. corporations, like Intel(Nasdaq: INTC), have found themselves in similar positions. As usual, consumers like us will pay the ultimate cost for the EU's quixotic tilts at American corporate success.

For more Fool coverage of the music download biz:

What's in store for Loudeye(Nasdaq: LOUD)?
Are dollar downloads dead?
See how Apple profits off the pod people.

Fool contributor Seth Jayson uses AMD chips and non-Microsoft code whenever he can, but he still has no taste for witch hunts. He owns no position in any company mentioned. View his Fool profile here.

Discussion Board of the Day: Rising Rates, Spiraling Debt

The New York Times reported that since 2000 Americans have accumulated 40% of the $9 trillion in debt they currently owe. Luckily, most is at fixed interest rates, but what will happen to the remaining credit card debt when the Federal Reserve hikes interest rates? If you're already feeling the squeeze, look no further than the Fool. Learn how to rein in your expenses and pay down debt on our Living Below Your Means and Budgeting discussion boards.

United's Out

Nathan Slaughter

You have to give UAL's (OTC BB: UALAQ) United Airlines credit for trying. After twice being rejected by the Air Transportation Stabilization Board for federal loan guarantees, the beleaguered airline scaled back its request to a meager $1.1 billion and made a third appeal. Apparently, persistence counts little with the ATSB, which again said it isn't interested in dating and issued a restraining order against any future submissions.

United first appealed for federal backing with a $1.8 billion request in December 2002, an application that was summarily dismissed, forcing the airline to seek bankruptcy protection. A second request for $1.6 billion was denied on June 17, when the board concluded that "granting the loan guarantee wasn't necessary to ensure the viability of the nation's aviation system." Today's final ruling against United's third bid was a unanimous declaration that the board saw no justification for reversing its earlier decision.

The latest setback will seriously hamper United's plans to emerge from Chapter 11 bankruptcy by year-end. Citigroup(NYSE: C) and JP Morgan Chase(NYSE: JPM) had agreed to finance a $2 billion exit package, but only if the bulk of the loan was government-backed. United's fate is now in the hands of private investors.

The ATSB was originally established to provide liquidity to the airline industry in the wake of the Sept. 11 attacks. It doesn't exist simply to bail out cost-ridden carriers from slowly fading into obsolescence. Just look at US Airways(Nasdaq: UAIR); it received a $900 million loan guarantee and is now facing the harsh possibility of a second bankruptcy filing. United may disagree with the rationale for today's decision, but ultimately it will profit by it.

Pushing United into the capital markets will force the company to clamp down even tighter on costs. Over $5 billion has been slashed (and another $300 million targeted) from the annual budget, including $2.5 billion in payroll savings, but more needs to be done. Critics are quick to point out that United was losing money even before the terrorist attacks, and private investors are going to be reluctant to jump on board without further cost-cutting, a hard look at the company's drastically underfunded pension, and assurances that the nation's second-largest airline has a solid business plan to counter mounting competition from discounters such as Southwest Airlines(NYSE: LUV) and JetBlue Airways(Nasdaq: JBLU).

Even assuming the best, United's shares are likely to be worthless after the company reorganizes out of bankruptcy. Remember what happened to Kmart(Nasdaq: KMRT) last year? The ATSB has wisely chosen not to arbitrarily abrogate the free-market system. United must find a way to compete effectively, or it will not compete at all.

Need some more in-flight reading material? Try these:

United Loses, Airlines Win and Fuel Costs Force Shakeout, by Salim Haji
JetBlue's Soaring Quality, by Alyce Lomax
Ted's Not-So-Excellent-Adventure, by Tim Beyers

Fool contributor Nathan Slaughter wonders why peanuts were replaced by pretzels. He owns none of the companies mentioned.

Quote of Note

"It is a mistake to try to look too far ahead. The chain of destiny can only be grasped one link at a time." -- Sir Winston Churchill

No Vacation From Viruses

Alyce Lomax (TMF Lomax)

There's nothing like a new kind of virus to get computer users on edge, and last week there was a new one to contend with. Although it apparently isn't a widespread threat and has since been contained, what is dubbed the Scob Trojan is another example of a virus that uses a different mode of infection. Experts warned that new versions of this same type of attack could be coming, too.

Hackers planted malicious code into the Web servers for several reportedly popular sites, so that when users of Microsoft's(Nasdaq: MSFT) Internet Explorer visited the sites, their computers were redirected to a Russian one. There, a malicious Trojan program would download keystroke loggers, designed by virus-writing villains to log credit card numbers, account numbers, and passwords as users punch them in on the Internet.

At the beginning of this development, the U.S. Computer Emergency Readiness Team, or CERT, and Internet Storm Center reportedly suggested that Windows users not use the most widespread Web browser out there -- Internet Explorer. (It seems that machines running Apple(Nasdaq: AAPL) and Linux operating systems were safe from the threat, including those using Internet Explorer for Mac.)

For Microsoft's part, it suggested that computer users turn the security to "high" on their browsers and released instructions for PC users to check if their machines are infected (important, since many machines may have been infiltrated unawares, before the Russian site was blocked) and to install anti-virus software updates. In addition, Bill Gates vowed today that his company will shorten the time it takes to develop and release patches dealing with viral threats -- but enlisted users' help by allowing for auto updates, for example.

Just recently, the monetary threat of viruses became clear as we explored how even a hardware maker like Dell(Nasdaq: DELL) had reason to worry. At the same time, Microsoft was planning to get into anti-virus software, despite what many consider its sketchy track record on security. Then, similar threats reared up in a brand-new sector, as W.D. Crotty discussed the first-ever mobile-phone worm.

Microsoft's stake in this is, of course, very high -- security concerns surrounding the giant are not a new topic. If incidents like this continue, might loads of people start using Netscape, Mozilla, Opera, or other Web browsers? Or switch to Apple or Linux? Since this virus was planted in websites' servers, on the corporate side, will it encourage more rapid adoption of Linux servers? After all, many people consider the ubiquity of Microsoft to be a veritable breeding ground for viral threats.

Going forward, though, with e-commerce becoming more and more popular, countless technological concerns have a serious stake in making sure the public retains its trust. Otherwise, the growing popularity of e-commerce could fizzle out.

Alyce Lomax does not own shares of any of the companies mentioned. She occasionally uses Mozilla.

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For a list of all our stories from today, see our Today's Headlines page.

Yahoo!'s Local Overture