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In today's Motley Fool Take:

eBay's Better Half


Rick Aristotle Munarriz (TMF Edible)

As an early fan of the trading site -- where folks peddle books, films, games, and music at prices that are no more than their original list price -- I was excited to see eBay(Nasdaq: EBAY) acquire the company four years ago. It's not so much that I wanted to see a quality outfit like run with eBay's deeper pockets. It's just that I figured that was as close as a competitor would ever get to eBay.

Why would folks pay listing fees on eBay when they could stock up on consignment? Apparently, eBay felt the same way and did the smart thing by buying what could potentially be a better mousetrap.

No one really came that close to eBay again. Even as Yahoo!(Nasdaq: YHOO) and Amazon(Nasdaq: AMZN) launched auction sites and online discounters like OSTK) roared to life, eBay became the definitive place to get cool things at even cooler prices.

While it has been years since I had put anything up for sale on, I'll admit that I wasn't looking forward to October 14 -- the day on which eBay had intended to shut down for good.

While I understood why a company could buy a rival just to shut it down, eBay had let flourish for too long. Why kill it now? Both sites had co-existed just fine. That was obvious by eyeing eBay's stunning growth, serving as an intermediary for nearly $30 billion worth of transactions over the past year alone.

But why would eBay shut if that move would simply open up the playing field for someone else to imitate the half-priced model and take swings at eBay? That's just not the way a company protects its moat.

Thankfully eBay realizes this. Yesterday it sent an email to's registered users explaining that the consignment site would not be closing down after all. With business steady and many of its users not ready to migrate over to eBay, is doing the right thing by sticking around. So move on, jealous eBay rivals. There is nothing to see here.

Now that's a moat!

Longtime Fool contributor Rick Munarriz is happy to see has more than a half-life. He does not own shares in any of the companies mentioned in this story.

Discussion Board of the Day: eBay

Have you ever bought or sold on Do you think that eBay is doing the right thing by keeping running? Share your views with other Fools in the eBay discussion board.

Trump Trumped


Tim Beyers

The tables have been turned on The Donald. Yesterday, Trump Hotels & Casino Resorts (OTC BB: DJTC) announced that a bailout deal inked with Credit Suisse(NYSE: CSR) subsidiary DLJ Merchant Banking partners, which would have provided a $400 million cash infusion, has been terminated.

Negotiations began back in February and came to a head last month, when Trump agreed to cut his stake in Trump Hotels from more than 50% to 25% while relinquishing the CEO title. That would have allowed Trump Hotels to enter bankruptcy with $400 million for restructuring debt. Frankly, it looked like the miracle Trump needed to save the company, or at least spare it from a quick death.

When I wrote about this last month, I applauded Trump's ability to pull off the deal. After all, getting bondholders to whom you owe $1.8 billion to agree that defaulting is a good idea is to me a lot like selling ice to Eskimos. It seems the debtors who would have had to approve the deal agreed, opting for tap water and a 99-cent ice tray.

Now that a deal is off the table, Trump Hotels is in a tough spot. Trump himself, however, doesn't appear to have that much to lose.

Come again? Yep, published reports suggest the bulk of The Donald's wealth is tied up with The Trump Organization, his private real-estate development firm. Taj or no Taj -- as in Trump's Taj Mahal casino in Atlantic City, N.J. -- Trump would in all likelihood remain a billionaire. That is, if you believe the recently released Forbes list of the 400 richest people. Forbes puts The Donald at number 74, with $2.6 billion and climbing. About the source of his wealth, the magazine reports Trump owns more than 18 million square feet of prime Manhattan real estate.

No wonder he's bold enough to market "Donald Trump, The Fragrance" with Estee Lauder(NYSE: EL). (No, I'm not joking. A mid-November launch is scheduled with Federated Department Stores(NYSE: FD) as the exclusive retail distributor.)

Ironically, the timing of the launch of the new cologne could coincide with the $73.1 million interest payment Trump Hotels has due. Published reports suggest the company won't be able to come up with the cash in time. And that would leave bankruptcy as the most likely option, unless Trump somehow manages to take the firm private.

Either way, the situation appears at least as odorous as Trump's new cologne professes to be, if a little less sweet-smelling.

Fool contributor Tim Beyers is thankful he doesn't have a comb-over like Donald's. But he also thinks if you have to have a comb-over, you could do a lot worse than Trump's 'do. Tim owns no stake in any of the companies mentioned, and you can view his Fool profile here.

Microsoft's New Suit


Alyce Lomax (TMF Lomax)

Microsoft's (Nasdaq: MSFT) SenderID technology may not be hitting it off with other technology companies, but the company's continuing on the anti-spam crusade that it started talking up back in January. Yesterday, Microsoft said it has filed nine new lawsuits against spam offenders, including a Web host that was allegedly a major purveyor of much-hated spam marketing.

This brings Microsoft's grand total of spam-related lawsuits to 100, with 70 of the suits in the U.S., according to Reuters. The Web host was National Online Sales, which supposedly offered spammers "bulletproof" services for marketing emails (the cads). According to the article, the lawsuit hopes to make it too expensive for spammers and spam-friendly operations to keep up their dastardly deeds.

Back in March, an assortment of technology heavyweights -- Time Warner's(NYSE: TWX) AOL, Microsoft, Yahoo!(Nasdaq: YHOO), and EarthLink(Nasdaq: ELNK) -- joined forces in suing a bunch of high-profile spammers.

That March lawsuit was brought under the auspices of the CAN-SPAM Act, which, quite frankly, doesn't seem to have deterred spammers too terribly much. (I've even received, er, highly inappropriate spam messages that had the gall to claim they were being sent in compliance with the CAN-SPAM Act.)

True, recent developments surrounding Microsoft's SenderID brainchild have indicated that other technology companies, as well as the open-source movement, often distrust the giant's motives. However, when it comes to the spam war, it's a spot where Microsoft's deep pockets and clout could possibly do a lot of good.

Jaundiced anti-Microsoft folks, of course, will point out that Microsoft has a vested interest in spam control, considering spam-borne worms and other electronic vermin that tend to particularly target its products. Regardless, any company that relies on Internet users needs to eradicate unsolicited email marketing.

After all, more and more people are reporting an alarming amount of fatigue and distress caused by the ever-increasing onslaughts of spam in their inboxes. To most of us, it doesn't matter too much who does it, as long as spam does get canned. (Though some have mentioned that a busy hurricane season may have put some spammers at least temporarily out of commission, seeing how many supposedly reside in Florida.)

Although it's a pleasant thought that Microsoft could make mincemeat of spam, the CAN-SPAM Act's outward signs of failure are enough to make one wonder whether the legal system and the establishment can make headway against the resilient workings of the Internet's underground. However, if Microsoft can hit them where it hurts -- the pocketbook -- we could all end up better off.

Alyce Lomax does not own shares of any of the companies mentioned.

Quote of Note

"Real education should educate us out of self into something far finer; into a selflessness which links us with all humanity." -- Nancy Astor, British politician

What's a "Blue Chip"?


Bill Mann (TMF Otter)

You hear it all the time, most often associated in the U.S. markets with the Dow Jones Industrial Average companies. Commentators refer to them as "blue chip" companies. Of course, it's not just the Dow Jones companies such as Motley Fool Stock Advisor selection SBC Communications(NYSE: SBC) that receive this appellation, but some companies are blue chips, and some are not.

So where did the term "blue chip" come from? And how did big companies such as IBM(NYSE: IBM), Home Depot(NYSE: HD), Merck(NYSE: MRK), and General Electric(NYSE: GE) come to be known as blue chips?

Here's what my research turns up. As you might have guessed, "blue chip" comes straight from the color of high value chips one found on poker tables at the turn of the century. In 1904, the term blue chip first came into use to connote something that was valuable. More than two decades later commentators first began attaching this term to the largest, most reliable companies that one could invest in. I note with a certain sense of irony that, according to, the first recorded usage of "blue chip" in this fashion was in 1929.

The cynic in me notes that even back then there existed an unmistakable allusion between the stock market and gambling. What's funny, though, is that the only "chip" designation was for companies deemed to be the safest, well-known companies that had histories of making dividend payments. "Red chips," the second highest typical denomination for poker chips, aren't the mid-cap enterprises like Church & Dwight. In fact, the term "red chips" has come into use in the last decade to connote the stocks of the largest publicly traded Chinese companies. Nor are microcaps and speculative flyers known as "white chips." I can think of a few other choice "chip" designations for some companies, come to think of it.

I also note that the two publicly traded companies that have the highest correlation between their own success and poker's spiking popularity, Lakes Entertainment(Nasdaq: LACO) and WPT Enterprises(Nasdaq: WPTE), are nowhere close to being blue chips.

I wonder, though, given the timing of the original use of "blue chips" in 1929, during one of the biggest speculative booms in the history of the stock market, whether we aren't using it wrong today. After all, in poker, a blue chip doesn't really connote stability, just a large price. And it's still very easy in poker to lose a great deal of money on blue chips very quickly.

Bill Mann is a shareholder in a restaurant chain that signaled its intention to have a limited private offering by placing blue tortilla chips on its tables. Righteous. He holds none of the companies mentioned in this story.

More on Today

Tom Gardner shares his strategy behind Hidden Gems investing in Small Stocks, Big Gains.... In The 20-Bagger That Wasn't, Tim Beyers warns that skyrocketing stock prices never last.... David Meier wonders if there's enough demand for Calpine's supply in If You Build It, Will They Come?... In Stock Options Hurt U.S. Competitiveness, Whitney Tilson mourns companies' failure to expense stock options.... Rick Bay wonders if eBay can be a political hot potato in Is eBay Killing America?

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