Insiders' Blog

Google Inc. (NASDAQ: GOOG) might be starting to hear a "Bing-ing" in its ear as MSN from Microsoft Corp. (NASDAQ: MSFT) is slowly gaining market share from its search engine rivals.

According to comScore's January research on search volume for the U.S., Microsoft's Bing increased its share of the Internet search market to 11.3 percent from 10.7 percent in December.

Conversely, Google slowed to 65.4 percent in the first month of 2010 from 65.7 percent in December, the largest single month decline in traffic for the world's Internet search leader since the same month a year ago. Meanwhile, Yahoo! Inc.’s (NASDAQ: YHOO) dropped from 17.3 percent to 17 percent.

Google may not have anything to worry about just yet, as the company still has a stranglehold on both Microsoft and Yahoo!, but it should be considering the rapid growth of Bing over the last year as significant.

Microsoft's search engine has saw its search volume surge 49.6 percent in January over the same month last year as it continues make a name for in the market.

Yahoo! may have to start considering its new partner as a considerable threat. Search engine volume in the last year for Yahoo! has dipped 8.9 percent, a considerable higher loss than the 1.9 percent drop in December.

Bing may be on the road to becoming the No. 2 search engine in terms of traffic in the foreseeable future if it continues to siphon users away from Yahoo! and Google.

One key to the movement in the market for 2010 will be the potential impact of Bing replacing Google as the default search tool on Apple's (NASDAQ: AAPL) iPhone, iPod Touch and soon to be released iPad.

“We continue to believe that search will lead the recovery in advertising spending as marketers focus on their highest return investment segments," analysts from FBR Capital Markets stated.

FBR analysts see the search advertising industry as being more resilient to the current economic downturn, allowing growth to continue in the market.

A number of Wall Street's finest are commenting on Chinese search giant Baidu, Inc. (Nasdaq: BIDU) today after the company reported blow-out fourth quarter results and provided a better than expected outlook after the close. Baidu reported Q4 earnings of $1.88 per share, 20 cents better than the market consensus of $1.68 per share, and up 48.2 percent from the same quarter last year. Revenue for the company was $184.7 million, up the 39.8 percent from the $132 million in the same quarter last year. Analysts had expected revenue for Baidu in the quarter at $180 million. Shares of Baidu are up 8.6% in early trading.

• Goldman Sachs: Solid guidance for a seasonally weak qtr suggests advertisers are responding positively to the new bidding system, and consensus for 2010 and 2011 appears materially too low. Expenses exceeded estimate but do not unduly concern, given several non-recurring items in 4Q2009 (office relocation, 10th anniversary celebration, Baidu Professional transition). Reiterate Buy rating, raises price target from $550 to $575.
  
  
• Susquehanna: "A beat and raise - Baidu's 4Q earnings results yesterday have sent a bullish message on its shares. Investors should pay attention to the company's record-high cash flow generation. The transition to the Phoenix Nest (PN) system has been better than expected, especially benefiting large ad customers. eCommerce fits well in the context and represents a significant driver. Baidu remains as a secular growth story in the Chinese Internet industry." Reiterate Positive rating, raises price target from $520 to $540.
  
  
• Kaufman Bros: "BIDU reported 3% upside to 4Q revenue operating income...Gross revenue of $185M (40% Y/Y) vs. Street at $180M, due to better-than-anticipated adoption of Phoenix Nest... 1Q10 revenue guidance of $176M-$181M (down 2%-5% Q/Q) vs. Street at $169M, due to better 4Q and PN transition...Increase 2010 Revenues and PF EPS by 4%" Maintain Hold rating, raises price target to $540.
  
  
• Piper Jaffray: "Last night, Baidu delivered above-expectation December quarter results and March quarter guidance. The company guided the midpoint of March revenue to $178M, above the Street at $170M. Baidu management mentioned this guidance does not factor in the potential revenue from Google shutting down google.cn, but suggested they expect to benefit if Google.cn shuts down." Maintain Neutral rating, raises price target from $315 to $454.
  
  
• Deutsche Bank: "The earnings surprise was largely due to 1) lower than expected SG&A and 2) other income of RMB28m, which we believe is related to govt subsidies...Active advertisers in 4Q09 totaled 223k, up 13% YoY and 3% QoQ. We believe the sequential growth proves that Baidu new customer acquisition was smooth in Oct and Nov...we think margins in 1Q10 could improve YoY, given the substantial marketing campaign launched in 1Q09 to recover brand image." Maintains Buy rating, $604 price target.
  
  
• Morgan Stanley: "What we liked: 1) Paying customers and ARPU (average spending per customer) rose 13% and 24% YoY each. Notably, Baidu’s total paying customers account for less than 1% of total SMEs in China. 2) Sales from Baidu Union outpaced its “organic” paid listing sales (+50-60% YoY, vs 20-30%, on our estimates). 3) Baidu has attracted more large corporate customers for paid listings, who often spend significantly more than SMEs. 4) Baidu offered strong 1Q2010 guidance, with sales likely up 48-52% YoY...What concerned us: 1) Japanese venture trimmed Baidu's earnings by 10%. 2) ARPU dipped 3.4% QoQ, affected by the customer transition to Phoenix Nest." Maintains Equal-Weight rating

• BofA/Merrill Lynch: Maintains Buy, raises price target from $480 to $545
  
• RBC Capital: Maintain Outperform, raises price target from $554 to $594
  
• JP Morgan: Maintains Overweight rating, raises price target from $460 to $540

Shares of Sprint Nextel Corp. (NYSE: S) are trading higher ahead of the company's fourth quarter earnings release, expected before the market opens on Wednesday, February 10, 2010. Shares are up 3.13% to $3.62 in the mid-afternoon session.

Shares of Sprint have seen a 100% rise through 2009, from a close of $1.83 on December 31, 2008 to a close of $3.66 on December 30, 2009. Through Q409, Sprint saw a moderate decline of 7%. Shares are currently trading down about 1% YTD.

The company is expected to report a loss of $0.19 for Q409, on revs of $8.03 billion.

Data from Bloomberg shows us that 8 analysts have a Buy rating on the stock, 23 have a Hold, and 4 recommend to Sell Sprint.

The analyst consensus price is $4.65. The 'Street high' price is $8.00, and the low is $2.50.

Sprint posted a slightly wider loss than expected on lower than estimated revs for Q309, and beat the Street on earnings for Q408.

News Through Q409
Sprint acquired iPCS at a rate of $831 million, or $24 per share, back in October. Sprint also assumed $405 million in debt in the transaction.

Sprint said that it is taking actions in Q409 to reduce internal and external labor costs by $350 million on an annualized basis.

The actions would include elminating 2,000 - 2,500 positions within the company.

Sprint also contributed to a $1.56 billion equity raise by Clearwire (NASDAQ: CLWR).

Sprint also reiterated its commitment to 4G technology from CEO Dan Hesse's comments and naming Matt Carter to President of 4G. Click here for more color on Carter.

Analysts Through Q409
November saw S&P put Sprint's credit rating on CreditWatch Negative list.

Credit Suisse upgraded S to Outperform from Neutral, and an increased price target of $6 up from $4. Click here for more color from Credit Suisse.

December had Wells Fargo resuming coverage with a Market Perform rating and valuation range from $3.30 - $4.20. Their estimate included the recent acquisition of Virgin Mobile, which was completed in November 2009.

Pali Research downgraded Sprint from Buy to Neutral. Click here for more color.

Citi upgraded to Buy from Hold, with a raised price target of $5.00 - $5.50.

Summary
Sprint is still a strong contender in the highly-competitive wireless community, and certainly at the forefront of the 4G revolution. Look for a decent report resulting from the labor cuts, which should play out nicely into FY10. Additionally, Sprint may make a move to carry Apple's (NASDAQ: AAPL) iPhone, which would certainly add to the company's top line and subscriber base.

Sprint will issue its Q409 results via press release at approximately 7:00 AM (EST) on February 10, 2010. Stay tuned to StreetInsider.com's Earnings section to see our analysis of the highly-anticipated quarterly results within seconds of their release.

NYSE Euronext (NYSE: NYX) reported Tuesday that it topped Wall Street expectations with a 12 percent rise in quarterly earnings bolstered by cost-cutting efforts at the transatlantic exchange operator. Shares are up more than 5 percent on the news.

The New York Stock Exchange parent company reported fourth-quarter core earnings of $151 million, or 58 cents per share, 10 cents better that the analyst estimate of 48 cents per share. Including one-time items, NYSE Euronext earned $172 million, or 66 cents per share, compared to a loss of $5.06 in the same period last year.

Quarterly revenue for the company was down 6 percent to $640 million, slightly ahead of the market consensus of $638 million, while chief operating expenses fell 16 percent as the company cut its staff by 14 percent.

"Our fourth quarter and full-year results were solid, reflecting growing revenue and earnings power driven by our new businesses and our continuing efforts to harmonize our technology infrastructure and trading platforms," Duncan L. Niederauer, CEO, NYSE Euronext said in a statement.

Shares of NYSE Euronext are up 5.69 percent to $23.78 today.

Shares of Walt Disney (NYSE: DIS) are trading higher ahead of the company's first quarter earnings release, expected after the market closes today. Shares are up 0.17% to $29.53 currently.

DIS gained about 18.8% through Q110, and 44% through 2009, hitting a 52-week low of $15.14 on March 10, 2009.

Data from Bloomberg shows that 15 analysts have a Buy rating, 15 have a Hold, and 4 suggest to Sell. The analyst price consensus is $33.55. The 'Street high' is $40, and the low is $20.

DIS is expected to post an EPS of $0.39 on revenues of $9.63 billion. For Q109, DIS reported an EPS of $0.41, and revs of $9.6 billion, both missing views.

NEWS THROUGH Q110:
In October, the company named Rich Ross to the position of Chairman of the Board.

Early November saw Disney get the O.K. to build a theme-park in China. Disney will have a 47% stake in the park, named the Shanghai Disney Park [Editor's Note: Not sure why they didn't name it 'Disney Shanghai']. The investment was announced to be $3.5 billion, and is set to open in 2014.

Disney's Q409 conference call highlighted the upcoming film "The Princess and the Frog," which premiered in December 2009. The films was one of the best grossing over the holiday season. Sources have the film raking in about $100 million [IMDB.com] as of January 29, 2010, and had a budget of $105 million [est'd.].

The last day of the quarter saw Marvel shareholders approve the company's $4.3 billion merger with Disney.

ANALYST RATING CHANGES:
In early October, Morgan Stanley boosted their price target to $35 while maintaining their Overweight rating.

Bank of America Merrill Lynch upgraded DIS from Underperform to Neutral, and raised their price target on the stock to $30 from $22.

Caris & Co. raised their price target to $35 from $30, and maintained their Above Average rating on DIS.

November had Deutsche Bank raise their price target on Disney to $39 from $31 while maintaining their Buy rating.

FINAL THOUGHTS:
Media outlets are having a fun earnings season so far, after weathering a rough tail-end 2008 through most of 2009. News Corp. posted a Q210 earnings report that beat estimates on the top and bottom, and Time Warner also posted a strong Q409 report. Families may have been expanding a little more on entertainment through the last quarter, as can bee seen by the impressive results at the box office and through the 2009 holiday sales season. Look for Disney to surprise investors again this quarter.

Disney will issue its Q110 results via press release at approximately 4:00 PM (EST) on February 9, 2010. Stay tuned to StreetInsider.com's Earnings section to see our analysis of the highly-anticipated quarterly results within seconds of their release.