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In today's Motley Fool Take:

Half a Billion for a Freebie


Seth Jayson

Media consolidation remains the rage, and the financial news world firms up a bit today as MarketWatch(Nasdaq: MKTW) agreed to be acquired by Wall Street Journal publisher Dow Jones(NYSE: DJ) for $518 million, or $18 per share.

Today's announcement wasn't any major surprise, as there was a narrow list of suitors for the firm, including Yahoo!(Nasdaq: YHOO), Viacom(NYSE: VIA), and The New York Times Company(NYSE: NYT).

Was it worth the price? There's disagreement on that minor point. On one hand, this looks pretty expensive. The acquisition price of $518 million is 7.3 times the trailing 12 months' sales and 120 times net income.

On the other hand, it's only $90 per pair of eyeballs for September, and that's what Dow Jones is probably after: a larger Web presence. For all its fame and reputation, The Wall Street Journal's online division costs a lot more than what Internet users are used to paying for wired content -- nothing -- and as a result, it has a long way to go to hit a million subscribers.

In contrast, MarketWatch's financial reportage is all over, including here at the Fool. Using the ubiquitous free news coverage to feed the paying services and sell advertising looks like a win-win situation for the old media player. With online synergies and advertising on the upswing, Dow Jones may just realize a long-term payoff from this pricey-looking purchase.

For related Foolishness:

Seth Jayson has no positions in any company mentioned. View his Fool profile here.

Discussion Board of the Day: Pet Lovers

Does Fido have fleas? Do you need advice on how to stop your otherwise-perfect cat from scratching the sofa? Or do you just want to proudly announce the arrival of your brand-new puppy, kitten, fish, bird, or snake? To talk about these topics and more, stop in to the Pet Lovers discussion board. Only on

Lowe's Optimistic Outlook


Phil Wohl

It is true that there are times when words can say it all.

Robert L. Tillman, Lowe's(NYSE: LOW) chairman and CEO, said today, "Continued signs of a robust housing market, improving employment and strong demographic trends provide a foundation for our optimism for the future."

Lowe's, the second-leading home improvement retailer behind Home Depot(NYSE: HD), continues to produce solid results, while holding a strong view for the future. With interest rates still historically attractive, the solid housing market continues to drive sales at both home renovators, as well as at Sears(NYSE: S), and specialty retailers such as Wal-Mart(NYSE: WMT), Target(NYSE: TGT), and Costco(Nasdaq: COST).

The company's third-quarter earnings of $0.66 per share beat the analysts' consensus estimate of $0.65 per share and were 8% ahead of last year's $0.56 per share. Total sales for the quarter increased 16% and same-store sales (stores open at least two years) were up 5.2%. The growth in same-store sales was especially impressive given the company's 12.2% advance last year; Lowe's pronounced that this sales performance was "the best two-year performance in nearly a decade."

Lowe's strong third-quarter performance was paced by the sales growth combined with its effective cost controls, which produced more than a 200-basis-point increase in operating margin. Looking ahead, the company expects sales to increase 16% to 17% in the fourth quarter (4% to 5% growth for same-store sales). Lowe's also expects an 18% increase (6% to 7% same-store sales gain) for the full-year 2004. Earnings of $0.58 to $0.60 per share for the fourth quarter and $2.69 to $2.71 per share for 2004 are in line with current estimates.

The company expects to add 56 new stores in the fourth quarter (a 14% growth in square footage) and should end the year having opened a total of 140 new stores. Lowe's currently operates 1,031 stores in 45 states. Front-runner Home Depot operates 1,826 stores in 50 states, but it had a head start.

The Lowe's shares, which are trading at only 18 times next year's earnings estimate of $3.34 per share, appear to be relatively attractive vs. its projected 24% earnings growth rate. Throw in a 0.27% dividend yield and Lowe's can be a good fix for just about any investor.

Grab a nail and hammer and secure these other views:

Fool contributor Phil Wohl spent more than 12 years on Wall Street and owns shares of Lowe's.

Quote of Note

"Self-confidence is the first requisite to great undertakings." -- Samuel Johnson

Yahoo! Doesn't Get It


Alyce Lomax (TMF Lomax)

If you can't beat 'em, join 'em, or so they say. Yahoo!(Nasdaq: YHOO) plans to double the storage capacity that comes with its free email product, though one might wonder why it didn't just go ahead, pull a Google(Nasdaq: GOOG) and give away a gig and get it over with already. Although it may very well be hoping for subscribers to pay up for massive amounts of storage space, this hope seems likely to backfire.

Seth Jayson covered the Internet giants' "me-too" attitude recently, when Yahoo! said it plans a foray onto your desktop, right on Google's coattails. And it seems that Yahoo!'s increased storage space announcement is piggybacking on Google's announcement last week that it has added some additional special features to Gmail, like POP access.

Here's the trip down memory lane. Last April, Google announced Gmail with its unprecedented gigabyte of storage. This started the equivalent of a free email arms race, with Yahoo! and Microsoft's(Nasdaq: MSFT) Hotmail also upping storage capacity for their free email, but not by as much as Google.

Yahoo! responded by upping its free capacity to 100 megabytes last June. Even at that time, my response was that it was a "me-too move that doesn't quite deliver." Now that it has finally increased storage to 250 MB, it has the same amount as Microsoft's Hotmail. Yep, this could end up being too little, too late, for some users.

For anyone who might still be running Yahoo! mail (or Hotmail) and Gmail (ahem), the difference is probably clear. Yes, it is possible to burn through 100 MB of storage space. It'll take longer, but you can also use up 250 MB. Sure, it'll take much longer than when Yahoo! mail and Hotmail only provided a stingy 4 MB and 2 MB of storage, respectively. (That sounds sort of ridiculous after all the recent changes in the industry.)

It seems Yahoo! and Hotmail are still locked in the realm of supplementary email address for users' other "real" email addresses, or spam sponges. For those users who do use Yahoo! Mail or Hotmail and have no other email accounts, their data is still ultimately expendable -- they have to prioritize, sort, and delete to make space.

Google, in my humble opinion, does get it. Gmail's gigabyte of storage space -- which it has always touted as giving users the ability to forget about inbox cleaning -- makes it crucial, and alleviates information overload with easy searching and organization. In understanding that your email correspondence is important, searchable data, worthy of archiving, Google is positioning Gmail as the gold standard of Web-based email.

And, it seems, Yahoo! and Microsoft are letting it. And making their users pay for more. If you ask me, they just don't get it.

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

More on Today

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In other news:

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