Higher incomes, an expanding pool of Internet users and the rise of smartphones mean online retail in China is booming. In 2011, the number of Internet users rose 12 percent to 513 million. E-commerce transaction value jumped 55 percent to 806 billion yuan ($127 billion), according to data from Analysys.

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Posting fourth-quarter earnings this morning, Sprint said it added 1.1 million total wireless subscribers, 58,000 of them two-year contract customers. Quite a milestone for a company that hasn’t seen a gain in postpaid subscribers in 13 quarters and a sign that Sprint may finally be turning a corner. Another good sign: Postpaid churn fell to 1.86 percent from 2.11 percent in the third quarter, and prepaid churn fell to 4.93 percent from 5.32 percent. And another: For the quarter, Sprint added almost 1.1 million wireless subscribers, its best showing in nearly five years.

All welcome news, even if Sprint is still losing money. The company reported a fourth-quarter loss of $929 million, or 31 cents a share, on revenue of $8.3 billion, up from $7.9 billion a year ago. Analysts polled by Thomson Reuters most recently forecast a loss of 30 cents a share on $8.15 billion in revenue. Said Bernstein analyst Craig Moffett, “Sprint CEO Dan Hesse might be forgiven for the temptation to hang a “Mission Accomplished” banner on the aircraft carrier that is Sprint. To his credit, he expressly declined to do so. Still, the company has at last achieved post-paid and total subscriber growth, customer service levels have improved, churn rates have been brought under control, and revenues were up.”

At $4.41, Sprint shares are up 1.15 percent in early trading as I write this.

However, the company’s shares slid more than 6% after-hours after Activision issued a forecast for the current quarter and fiscal year that were both sharply lower than Wall Street’s expectations.

The company also said it’s discontinuing its once-popular Guitar Hero franchise, citing a sharp slowdown in the sales of music games. Another title, True Crime: Hong Kong, had been expected this year but will also be killed, Activision said.

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Nokia spends about five times as much on mobile R&D as Apple. In fact, Nokia has nearly as many engineers working on its smartphone software platforms as Apple does for its entire product line. Says Dediu, “Symbian alone may cost twice as much to develop than the iPhone (including the hardware).”

A shocking metric, if correct. And a pretty dismal return on investment–unless there’s another version of Symbian in the pipeline that will best iOS.

PREVIOUSLY:

• Not Seeing Much Return on That Massive R&D Spend, Are You, Nokia?
• Nokia: Big and Slow

Hamstrung by institutional inefficiencies and the complexity of its legacy platforms, Nokia is spending a lot of money to gain traction in markets in which its handset lineup is clearly uncompetitive, and with little success. Instead it’s suffering steeper share losses at the high end of the market and margin erosion across its entire portfolio. And it’s spending about 4 times as much on R&D as Apple, which has recast the smartphone space from its own vision.

As Bernstein analyst Pierre Ferragu observes, Nokia’s business appears to be melting like an ice cube. “At this stage, we believe that even a good success of Symbian^3 would barely stabilize the business,” he says. “A real comeback will need much more effort … and a lot more time, unlikely to happen in the next couple of years, in our view.”

So what can be done? Though some observers argue Nokia should scrap Symbian, Ferragu says that’s impossible given the number of assets the company has that depend on it. The company can’t really make a big move to Android, either. That would undermine its current service strategy and alienate partners, European carriers looking for an alternative to iOS and Android, and Nokia’s developer community.

What it should do, he says, is redouble its efforts on MeeGo and make it a viable competitor to Android and iOS in markets like North America, while continuing to push Symbian to the rest of the world. And then it should integrate the two through QT, its cross-platform application and UI framework. Says Ferragu, “By migrating all UI developments of Symbian on QT, the company can generate significant cost savings, progressively drive the platform towards a single UI between MeeGo and Symbian and a single development environment for applications.”

What’s left to do after that?

Hope for the best.

As CEO Stephen Elop said during the company’s last earnings call, “Nokia must compete on ecosystem to ecosystem basis. In addition to great device experiences we must build, catalyse or join a competitive ecosystem. And the ecosystem approach we select must be comprehensive and cover a wide range of utilities and services that customers expect today and anticipate in the future.”

“Whatever the strategy is we outline on Feb. 11, we very clearly ensuring that it will give us the opportunity to reopen markets such as the U.S. and some others, where we have not recently been present.”

KickApps CEO Alex Blum will become KIT’s COO, and Blum and KIT CEO Kaleil Isaza Tuzman say almost all of the three acquired companies’ employees will hang on to their jobs.

Tuzman said his company paid about $62 million in KIT’s Nasdaq-traded stock for the three companies, and the balance in cash.

KickApps and Kyte had collectively raised some $55 million, so the companies’ backers aren’t going to do much more than break even in these deals. And the deal may be a coulda-shoulda for KickApps, which had talked to AOL about a $90 million deal three years ago, but never got it done.

Blum wouldn’t comment directly about the AOL non-deal, except to note that the spring of 2008 “was a different era.” And he says that all of his investors, which include North Atlantic Capital, Spark Capital and Softbank, have gotten “more than their money back,” and that all of them have taken KIT stock instead of cash. Spark general partner Santo Politi will join KIT’s board.

Tuzman, meanwhile, has an interesting story. During the first bubble he ran GovWorks, a failed start-up that happened to have a movie crew documenting its rise and fall. (Sadly, you can’t get “Startup.com” from Netflix or any other obvious place–can anyone point us to a copy?)

But this Forbes profile documents his efforts to build a second career. And at the very least, his newest company appears to be growing. In its last public filing, KIT reported quarterly losses of $8 million on sales of $28 million, which was up 151 percent from the previous year.

And late last year, KIT raised more than $100 million earmarked for acquisitions. None of that money, Tuzman says, was spent on these three deals.

[Image credit: Tyw7 via Wikipedia]

The Dallas-based telecommunications company said Thursday it would now recognize gains and losses in the year in which they are incurred, using a practice called mark-to-market accounting, rather than spread them out over several years.

The accounting change clarifies one of the more volatile aspects of a large employer’s financial results, better tying performance to the current economic state. It would eliminate the “smoothing out” of gains and losses over several years. Under the old system, some of the pension-plan losses recorded during the stock market decline in 2008 would still be on the books for 2010.

AT&T joins a number of large U.S. corporations including Honeywell International, General Electric Co. and International Business Machines Corp. in revamping pension-accounting practices.

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That number could be as much as 50 percent of the 1,100 employees at Myspace, largely based in the U.S., but also in international locations.

While the decision of what cuts to make to its employee base have not been made yet, nearly the entire Myspace staff was given the last week of December off from work to save money. Update: Myspace tells us via email the week off was an employee perk, not a cost-cutting measure.

Sources stressed that management was still working out the details of more drastic cost-cutting measures that owner News Corp. has been wanting from Myspace, as its revenues and traffic have declined.

The layoffs are also part of a larger rethink about the future of the Beverly Hills, Calif.-based company, which has had many difficulties in recent years, including several leadership upheavals and a talent drain, as well as stagnant growth.

Among the many options contemplated has been the sale of the Myspace unit, as has been widely reported. According to sources, Jack Kennedy, EVP of operations for News Corp. Digital Media, has been tapped to explore the sale of Myspace.

Until now, both large-scale cost-cutting and exploration of an acquisition were on hold as Myspace launched its redesign as an entertainment hub, which was rolled out about six weeks ago.

Myspace also recently started user account integration with former foe Facebook.

And the company also revamped its mobile offerings and signed a new search advertising deal with Google (at which time MediaMemo’s Peter Kafka predicted layoffs were around the corner).

But, according to many inside and outside the company, the redesign and strategy moves are not expected to result in a major turnaround of Myspace. Meanwhile, the piles of money the company once got from its Google relationship have also gotten much smaller. It’s not much of a surprise that News Corp. is moving to remedy the situation now.

In fact, during News Corp.’s earnings call in November, COO Chase Carey called attention to Myspace’s ever-weakening performance and said “current losses are not acceptable or sustainable.”

He added: “We judge in quarters, not in years.”

At this point, a sale would be the likeliest save for the media giant.

One juicy rumor that has been going around suggests Facebook game-maker Zynga as a potential acquirer of Myspace. While the two companies had discussed closer ties in the past–back when Zynga COO Owen Van Natta was still CEO of Myspace–those talks went nowhere.

Several sources said a private equity buyer for Myspace is now the likeliest outcome if the online property is sold.

Myspace declined to comment on layoffs or acquisition talks.

(Full disclosure: News Corp. also owns Dow Jones, which owns this site.)

One big surprise: The job market with the strongest growth in tech jobs–with a net gain of 900–was Oklahoma City. Don’t pack up the U-Haul just yet. Yes, it added the most technology jobs of the 60 cities in the survey, but it also had one of the smallest overall tech job pools, accounting for only 18,000 jobs, ranking 57th of the 60.

The New York statistical area, which includes New York City, New Jersey and Pennsylvania, had the largest pool of tech jobs at 317,000. It lost 8,700 jobs during the survey period, which as we all know was during the worst throes of the recession and the catastrophe that struck the data-driven financial industry. Fifty-three out of 60 cities saw job losses. Nationally, the group found that the tech industry lost about a quarter million jobs in 2009.

Statistically, the TechAmerica report considers San Francisco, Oakland and the San Jose areas as separate. But if you added them all together, tech jobs would outnumber New York at 394,000. San Jose led the nation in tech pay, at an average of $132,100 per year, and not surprisingly had the highest concentration of tech jobs as a percentage of the workforce: One job in three is tech-related.

The only markets to see job growth aside from Oklahoma City were places like Huntsville, Ala., and San Diego. You can take a look and see how different cities fared here.

Called as a witness for Oracle, Catz reiterated an earlier point made by Oracle CEO Larry Ellison, saying that had SAP licensed the materials that its TomorrowNow subsidiary ultimately pilfered, it would have cost “billions.” She also reminded SAP’s legal team that her email on SAP/TomorrowNow as a competitive threat was written without knowing about TomorrowNow’s copyright infringement.

Worse, she dismissed SAP’s offer of $40 million in damages as laughable. “SAP paying us damages of $40 million would be a reward for their bad behavior. “It’s like taking someone’s $2,000 watch and hocking it for $20, and then offering to give us $20. It’s crazy. It completely undervalues the entire basis for our industry.”

A powerful jab, and one that’s making the rounds in media reports on the trial today.

PREVIOUSLY:

• Oracle Enlists Process Servers, Not PIs, to Find HP CEO
• Oracle-SAP Trial: Ellison Swaps Katana for Poison Darts
• Objection: Mr. Ellison Is Referring to the Defendant as “Choleric of Temper” Again
• Oracle Lands Early Shots in SAP Trial
• Your Honor, We Object to Mr. Ellison’s Repeated Use of the Term “Slimy Weasels”
• Oracle to HP CEO: Chicken!
• Oracle Vs. SAP: We Got a Right to Pick a Little Fight–Bonanza!
• SAP’s Tab in Oracle Case: $120 Million and Counting
• Gag Order Denied in Oracle, SAP Trial
• Ellison Taunts HP CEO a Second Time
• SAP to Ellison: Save the Drama for Your Mama
• Ellison to HP CEO: “Warrior, Come Out to Plaaeeay!
• SAP: Please Gag Oracle
• HP Scandal Sucks in New York Times Columnist Over Conflict of Interest
• Welch to HP Board: You Don’t Know Jack!
• Insiders Criticize Ellison For HP CEO Slam
• Was Apotheker HP’s First Choice of CEO?
• HP Names Ex-SAP Chief Apotheker as CEO

Sources in a position to know tell me that the PIs rumored to be searching for Apotheker are actually PSs–process servers, agents charged with delivering subpoenas to their intended recipient. And, as federal law dictates, their search extends no farther than 100 miles from the location of the trial, because if Apotheker is outside that 100-mile radius, they can’t serve him. And Oracle can’t compel him to testify. Which means it’s not really worth the company’s time or effort to hire Dog the Bounty Hunter to track him down in some Schwarzwald hideout.

As Oracle attorney David Boies said during a press conference after Monday’s proceedings, “Because of his role, we think it’s important for the jury to be able to see him live. But evidently, the embarrassment of avoiding trial is less than the embarrassment of testifying. We are trying to serve him. Still.”

PREVIOUSLY:

• Oracle-SAP Trial: Ellison Swaps Katana for Poison Darts
• Objection: Mr. Ellison Is Referring to the Defendant as “Choleric of Temper” Again
• Oracle Lands Early Shots in SAP Trial
• Your Honor, We Object to Mr. Ellison’s Repeated Use of the Term “Slimy Weasels”
• Oracle to HP CEO: Chicken!
• Oracle Vs. SAP: We Got a Right to Pick a Little Fight–Bonanza!
• SAP’s Tab in Oracle Case: $120 Million and Counting
• Gag Order Denied in Oracle, SAP Trial
• Ellison Taunts HP CEO a Second Time
• SAP to Ellison: Save the Drama for Your Mama
• Ellison to HP CEO: “Warrior, Come Out to Plaaeeay!
• SAP: Please Gag Oracle
• HP Scandal Sucks in New York Times Columnist Over Conflict of Interest
• Welch to HP Board: You Don’t Know Jack!
• Insiders Criticize Ellison For HP CEO Slam
• Was Apotheker HP’s First Choice of CEO?
• HP Names Ex-SAP Chief Apotheker as CEO

On the stand in an Oakland, Calif., courtroom today, Ellison was such a picture of moderation and restraint that you almost wondered if his handlers had shot him up before his appearance–like sedating a dog for air travel. As one SAP rep told me, Ellison “was anti-climatic given his vituperative statements of the last weeks.”

Which is true. But his testimony was still quite damning–to my ears anyway. For one thing, he said that Oracle could have charged SAP $4 billion to license the programs that its TomorrowNow subsidiary wrongfully downloaded. For another, he said Oracle would have had trouble paying its employees if it allowed its rivals unfettered access to the software and support libraries at issue in this case.

“I’m not sure we would go out of business but pretty close to going out of business,” Ellison said during questioning by attorney David Boies. “If they could get that software for nothing, we’d have a hard time paying 100,000 employees.”

If that was the case, then why didn’t Oracle make a bigger stink over SAP’s acquisition of TomorrowNow when it was first announced? SAP’s legal team was quick to pick up on this and hammered Ellison, claiming there’s “not a shred of documented evidence” demonstrating Oracle’s concerns. But they didn’t get much of anywhere with that because it turned out there is some.

“When SAP announced the TomorrowNow acquisition,” Ellison said, “I made a public statement….I thought they might cheat around the edges in terms of our copyrights…and I publicly warned them that while they have every right to support our software, they have to respect our intellectual property–[they] can’t just redistribute it without paying for it.”

And, indeed, Ellison did do this during the company’s 2005 analyst day. “SAP has every right to provide support for PeopleSoft applications as long as they don’t violate our intellectual and contractual property rights,” he said. “It might make it awkward for them. That’s our intellectual property, and they should be cautious.”

Driving those remarks was Ellison’s fear at the time that with TomorrowNow, SAP might do Oracle real harm. “I thought this was a major program with a huge potential to do severe damage to Oracle,” Ellison said today, adding that his vision of how SAP planned to go about it wasn’t quite how things played out. “It was a brilliant idea to take our customers, but to execute it properly they had to go out and hire hundreds, if not thousands, of engineers to maintain PeopleSoft and JD Edwards and Siebel. That was going to be expensive. I certainly didn’t think they would simply take our intellectual property and then resell it to their own customers. I never thought that could happen.”

SAP’s attorney, Tharan Lanier, challenged Ellison on these points as well, suggesting Oracle is exaggerating when it claims that TomorrowNow’s infringement jeopardized as much as 20 to 30 percent of Oracle’s customers from its acquisition of PeopleSoft and 10 percent of those from the later acquisition of Siebel Systems. And in the end, Ellison conceded that only about 350 customers were lost as a result of TomorrowNow’s infringement. But he also managed to again suggest that potential losses were far, far greater.

“I think taking our intellectual property is a two-edged sword,” he said. “For [SAP] it means they have access to all our engineering output. They have regulatory updates at the same moment we have them. They have new versions of our software at the same time we have them. They have bug fixes at the same time we have them. So they should be able to provide the same quality of support that we’re providing except that they’re doing it at a very low cost, while Oracle bears the cost of all that engineering.”

The other side of that sword is running an irrational risk by taking our software. That’s a risk I certainly would never, ever undertake.”

PREVIOUSLY:

• Objection: Mr. Ellison Is Referring to the Defendant as “Choleric of Temper” Again
• Oracle Lands Early Shots in SAP Trial
• Your Honor, We Object to Mr. Ellison’s Repeated Use of the Term “Slimy Weasels”
• Oracle to HP CEO: Chicken!
• Oracle Vs. SAP: We Got a Right to Pick a Little Fight–Bonanza!
• SAP’s Tab in Oracle Case: $120 Million and Counting
• Gag Order Denied in Oracle, SAP Trial
• Ellison Taunts HP CEO a Second Time
• SAP to Ellison: Save the Drama for Your Mama
• Ellison to HP CEO: “Warrior, Come Out to Plaaeeay!
• SAP: Please Gag Oracle
• HP Scandal Sucks in New York Times Columnist Over Conflict of Interest
• Welch to HP Board: You Don’t Know Jack!
• Insiders Criticize Ellison For HP CEO Slam
• Was Apotheker HP’s First Choice of CEO?
• HP Names Ex-SAP Chief Apotheker as CEO

[Image credit: Pre-Ellison Samurai image by Artem Mirolevioch]

But the troubled Web property is a…really troubled Web property, its News Corp. parent stressed today. And it needs to get its act together before it gets kicked off campus.

That’s the message that COO Chase Carey took pains to get across during his company’s earnings call this afternoon.

Revenue at Myspace was down $70 million compared to the same quarter a year ago, the company said, and “traffic numbers are still not going in the right direction, Carey said. Which means that its “current losses are not acceptable or sustainable.”

Okay. But Myspace has been in decline for some time, and Jon Miller and Mike Jones have been trying to fix it for more than a year. And last year at this time, we heard a similar assessment, only then Carey kept calling the site a “work in progress.” So how much more time do they have?

Carey: “We judge in quarters, not in years.”

My understanding is that when Miller took the job as News Corp.’s chief digital officer in the spring of 2009, he believed he had a real shot at fixing the social network, which had already cooled from red-hot to not at all.

But sources in and out of News Corp. tell me that Miller and his team are now merely hoping to patch the service long enough to find a buyer. Perhaps no one has told Carey, who seems to be conducting an anti-sales pitch.

——————-

EARLIER:

First look at Rupert Murdoch’s latest report card: News Corp. ended the September quarter with revenue of $7.4 billion and earnings of $0.27 a share (after factoring out a one-time tax gain). That’s almost exactly what the Street was looking for–expectations were $7.4 billion and $0.24 per share.

A quick run-through by unit:

• Cable: Up, because ad dollars are up and so are those affiliate fees that cable providers don’t want to pay but do.
• Movies: Down, because last year the company had an “Ice Age” movie in its results, and this year it’s fairly hit-less. It is making money selling reruns of “How I Met Your Mother,” though.
• Broadcast TV: Up, because local TV stations are doing better than last year, when they were still crippled by the recession.
• Satellite: Down, because costs were up.
• Publishing: Up, because newspapers are doing better than last year, when they were terrible. Ad revenue is up 13 percent worldwide. (This is where I note that News Corp. owns Dow Jones, which owns this site.)
• Random other stuff: Down, in large part because of Myspace and the rest of News Corp.’s digital unit, which is still trying to turn around.

I’ll come back to liveblog the conference call at 4:30 eastern, in the hopes that Murdoch says something interesting about politics, pay walls, the economy, Myspace, Apple and/or Google. He usually does!

LIVEBLOG:

BIG bummer: No Rupert on call today–because he’s traveling. (Some place with no phones? What’s up with that?)

CFO Dave DeVoe running through segment performance.

Cable: Some boasting about Fox News, FX, Big 10 Network, etc.

Movies: Nothing new here.

TV: TV stations up, but broadcast network losses up big “from higher cancellation costs.”

Satellite: [Apologies, had to duck out for a second.]

Newspapers: Again, ads up in all big newspapers.

Other/Digital: $70 million lower search and ad revenue at Myspace y/y.

Guidance: Leaving unchanged (though DeVoe notes that Myspace is still under plan).

COO Chase Carey:

Lots of focus on our retrans deals, and they are “critical” to our future. “We will be taking this business to a whole new level of profitability.”

Lots of growth ahead in International pay TV market.

Walk through of “key initiatives” throughout the company.

[Still sulking over Rupert-less call.]

Fox Film hasn’t had breakout hits, but no stinkers “in an industry known for them.”

We’ve got Jim Cameron locked up for Avatar 2 and 3, you know. And Modern Family is going to make us a pile of money in syndication.

Wish the World Series wasn’t such a bummer, and a short one. But NFL on Fox doing great.

WSJ still growing. Building digital business that “will take time to emerge.” “We feel very good” about subscription business in U.K.

“We’ve been clear that Myspace has been a problem.”

But relaunching “and we feel really good about” it. “Current losses are not acceptable or sustainable” and current management knows it, even though it’s not their fault.

But we know that we have to work very hard in coming months to get this thing sustainable.

[This is some of the most negative commentary I've heard yet from News Corp. on Myspace. Hard to sell an asset when you're describing it this way.]

Q&A:

Myspace: How much time do you give the relaunch to figure out if it’s successful. And what if it’s not?

Carey: We judge in quarters, not in years. Goal is to get to a place where top-line revenue is going in the right direction and “a clear path to profitability.”

We feel good about the relaunch. But “our traffic numbers are still not going in the right direction” and we have to stabilize that.

Fox TV content on digital platforms: It’s available on Hulu and Fox.com. How is that strategy going, and will you continue to be open?

Carey: Broadly: “This digital arena is still evolving.” We’re very focused on managing rights. Key issues: Windows, ad load, pricing. [Not answering at all, really.] “We think the digital arena is a very important one” particularly mobile, iPad, but “look, scarcity of our product is a real value.” But we’re learning as we go. “I do think it’s important that the digital platforms continue to develop dual revenue stream options.” That’s critical, and options are just beginning to evolve.

More on Myspace: There are a lot of operations in “other” besides Myspace: Mobile, Fox Audience Network, etc. What else could improve there?

Carey: Only two other businesses in there: Mobile, and outdoor networks, (and IGN). Not a lot of room for growth in those businesses.

So it’s really about Myspace?

Yes.

Avatar: What’s upside here?

Carey: Sequel to the most successful film ever? It should be pretty good! “Enormous events, without comparison or rival.”

[Please bring Rupert back!]

Please talk about terms of new Cameron deal?

Nope.

On retrans: Cablevision said they got better terms by holding out for a couple weeks. How do you react to that? If true, will we see more of these holdouts?

[Also a question about BSkyB I'm not that interested in.]

Carey: Mostly I saw Cablevision complaining that the government didn’t bail them out. But we feel pretty good about where we are. We didn’t think the government needed to get into it, and it would have been nice if the government would have been clear up front “it may not have gone off the air at all,” but whatever–”this was a matter to be dealt with between private parties.” [Ignore all those press releases we sent out!]

Can you talk about advertising trends and expectations?

DeVoe [I think]: They haven’t changed.

Cable margins: How long can you keep growing them?

Carey: We have room to drive a number of our channels, via more distribution, jacking up fees, advertising, etc.

What about getting more money from regional sports networks?

Carey: Won’t get into specifics.

[We want Rupe! We want Rupe!]

International channels seem to be doing well. Where is that growth coming from?

Carey: Part of it is the weak U.S. dollar. But overall, growth is “big and broad.”

Oh man. Even Chase Carey is yawning as he answers the question.

[Skipping accounting question.]

Back to network TV: Please talk about sports programming costs, etc. NFL, baseball, NASCAR. You spend a lot. Does retrans help support those costs? Or will you move some of that to cable?

Carey: I don’t think it makes sense to differentiate broadcast and cable much anymore. That’s the point of retrans–to make broadcast look like cable, with dual revenue stream.

On sports: It’s expensive, and draws big crowds. “It’s a unique strength in a world of DVRS” but “they come with big price tags.” We’d like to continue running it, but we have to do it at the right price.

Retrans does help, though–networks that are only ad-supported won’t be able to pay for these rights over time. Still, gotta be disciplined, etc.

Back to digital: What’s going on with Google TV? Are you thinking about different devices and different screens as a way to window, instead of calendar? I.e.: Make it available on PC but not on the big screen, etc.

Carey: I think within the house, the difference between screens won’t matter. I do think mobile is a discrete platform. [And some general chatter about tablets.]

But generally, “our content is incredibly valuable” and “we’re not going to throw it out there for everybody” unless we get compensated for it.

[Boring question about syndicated TV. Carey flipping through papers]

Hey, what about M&A deals, like Yahoo?

“Things like Yahoo are because the press needs things to write about.” [Zing! Also, hey, Jon Miller!] “We don’t need to make any acquisitions. But if there’s something out there, we should consider it, but we’ll do it in a very disciplined way” like we have in the past. Generally, we’d rather build than buy. “But if we see something we can acquire at a very attractive price that fits, we’ll take a look at it.” We’re not shopping.

[Skipping another cable channel question.]

Time for press Q&A:

How do you make broadcast look more like cable?

Carey: Retrans fees, like we’ve been talking about for the past couple years.

What about doing “premium video” (windowing movie release on TV?).

Carey: Looking at it.

What about further delaying movies to Netflix, Redbox beyond 28-day window (Warner talked about this today)?

Carey: We’re okay right now, but we’re looking at it. But as VOD grows, windows will change and evolve. But right now “we feel what windowing we’ve done has been good for us.”

Color on Apple TV 99-cent rental, please:

Carey: It’s pretty new. Only relevant for the past month or so. Too early to judge.

What’s your vision for European and British markets after you buy Sky? Will you buy Endemol?

Carey: Don’t really want to talk about it, too early.

Please talk about Times of London pay wall performance to date. Also, what are you thinking about your iPad newspaper in the U.S.?

Carey: Re U.K.: “We feel very good about it. Realistically, it’s very early….This is not something that’s a one or two quarter game.”

Same thing with the “whole digital arena” evolving, etc.

Hah. Refuses to talk about iPad newspaper. Which is not a newspaper!

Call finished, mercifully.

Here we go with the Yahoo third-quarter earnings call starring CEO Carol Bartz, who has some–in the immortal words of Ricky Ricardo–‘splaining to do.

Yahoo turned in a much-needed solid quarterly earnings report, with slightly better-than-expected earnings, although still weak revenue.

Of course, there are all the takeover rumors, the exec departures and fights with partners such as China’s Alibaba Group.

2 pm PT: First on is the lovely investor relations lady, Marta, saying stuff I never pay attention to.

But Bartz came on right away and she sounded subdued and very much on script.

Good idea!

She began by explaining what she has been up to and–once again with feeling–exactly what Yahoo is.

“The key words are innovative, content, media and communications,” she stressed.

Technology is all well and good, but Yahoo is the “largest digital media, content and communications company.”

She also briefly addressed the departure of execs: “Some people leave, some get promoted and some good people arrive.”

Well, you could put such turmoil that matter-of-factly, I suppose.

Bartz then asked the question: “What have we done to re-engineer Yahoo?”

She reeled off a list she has repeated many times before, the point of which was to let us all know she has been mighty busy cleaning up the big mess she had to deal with on arrival.

So lay off, all you naysayers! It’s kind of like what President Barack Obama is saying these days, as he looks forward to huge political losses in the upcoming election.

It’s apparently a disciplined approach. “First you walk, then you run.” Then, she added, you FLY!

Don’t look down, Carol!

She promised to talk about what’s on all our minds–as in the takeover swirl related to AOL, News Corp. and a passel of private equity moneybags circling Yahoo.

2:15 pm: Time for the numbers from CFO Tim Morse, which you can see here.

He was much jauntier than usual. I wonder if that was in the script. Smile with your voice, Tim!

I mostly did not listen to this spiel, as it was a recount of the numbers I already read. But there are some nuggets.

Apparently, for example, revenue for owned and operated search is down because users are clicking on the really good new results from the Microsoft algorithmic search transition, so they are not clicking on paid search as much.

Hmmm….I wonder what happens when they get great.

Then it was on to earnings and stock repurchases, designed to goose the shares, which Yahoo considers undervalued.

So do investors.

Next, he moved on to the outlook, which was weak.

And Morse also noted the uncertainty that has to do with the search and online advertising alliance transition. “Caution is warranted,” said Morse.

“We’re pleased with our third-quarter results,” summarized Morse, seemingly ignoring the revenue issue.

2:31 pm: Bartz was then back on discussing the search alliance and the rocky relationship with China’s Alibaba Group. Rocky is my word and actually is also Alibaba’s.

At least all is well with Microsoft, Yahoo’s one-time nemesis.

It has been a big transition, of course, Bartz noted. Indeed.

Then Bartz went out of her way in praising Alibaba CEO Jack Ma, whom many sources said she has treated shabbily in the past.

It is “a good productive business relationship,” said Bartz.

Other than that, she politely suggested we all butt out of what Yahoo is going to do with the asset, a 29 percent stake of Alibaba.com worth $3.1 billion, according to the company.

Finally, Bartz said Yahoo had “potential” and promised a payoff to shareholders in the months ahead.

That would be nice.

2:38 pm: Time for Q&A.

The first question was about the search revenue growth. Soon!

The next was about search revenue and display advertising and a left-field query on engagement on smartphones.

Same answer, and also people will use Yahoo on any screen.

Next question was on display growth. Same answer.

Will any of these analysts ask the good questions about takeover rumors and other thorny management issues?

Wait, finally there came a sheepish request for clarification about the rumors–well, they are real, so realmors–about takeover plans by private equity folks, along with AOL’s Tim Armstrong.

“As tempting as it is to tell you what I really think, you know I can’t comment,” said Bartz, who really sounded like she wanted to comment.

Give in, Carol! In the words of Oscar Wilde, which is BoomTown’s operating motto: “I can resist everything except temptation.”

Nope, she will not utter a word about “hypothetical this and hypothetical that.”

Instead, the boilerplate: “We like our strategy, we like our progress, and that’s what we’re focused on.”

Next, more questions about revenue weakness. Bartz blamed it all on the drag of search revenue. “The main drag on our growth has been search revenue,” she noted.

She said it will get better once the whole transition kicks in.

Bartz did sound convincing, especially when she noted it was part of a six-year trend in decline in search. By the end of 2011, she promised, it will all be different.

But, in the immortal words of Clint Eastwood in “Dirty Harry”: “You’ve got to ask yourself one question: Do I feel lucky? Well, do ya, punk?”

Now, a question about a “bloated” work force. Yahoo employee count is up seven percent, although costs are down 12 percent.

Morse: “No, we’re not bloated.”

Bartz took a question about competition in the display market, as in Yahoo is going to get smacked by rivals, such as Google.

“There is always competition and competition only makes us better,” said Bartz. “We’re running very fast and not going to give up this leadership in display very easily.”

Given Google’s inroads here, she better run faster than the Road Runner.

The last question was about monetization of mobile.

Lots of pretty, empty words from Bartz, especially since Yahoo does not have a really competitive offering compared to Google and Apple.

It should be added that both Google and Apple smoked it in terms of revenue growth in their quarterly earnings this week.

Also, I hear that Facebook social networking site is growing pretty quickly.

And it ended, with nary a decent question from Wall Street analysts about the clear turmoil at the long-troubled Silicon Valley icon and answers about what Bartz is going to do to address it.

The media is in listen-only mode for these calls, which is a shame, since I for one would love to listen to what Bartz has to say.

I know you’re busy and all, Carol, but perhaps you can talk over dinner soon?

From the release:

“The losses at Newsweek in 2007-2009 are a matter of record. Despite heroic efforts on the part of Newsweek’s management and staff, we expect it to still lose money in 2010. We are exploring all options to fix that problem,” said Donald E. Graham, chairman of The Washington Post Company. “Newsweek is a lively, important magazine and website, and in the current climate, it might be a better fit elsewhere.”

In corporatespeak, this is equivalent to hastily scrawling out a “Going Out of Business–Name Your Price” sign and plastering it on the front window.

Anyone want to make a bid? Newsweek saw revenue decline 29 percent last year and ended up losing $29.3 million on sales of $184 million.

Meanwhile, it’s worth noting that things are comparatively awesome for rival Time Magazine: Owner Time Warner’s (TWX) Time Inc. just reported that ad sales are up (unit-wide) for the first time in two years.

Ah. Here’s Time’s grave-dancing statement right now, via a press release: “TIME continues to be healthy and profitable, and a trusted source of news, reporting and analysis for millions of people in America and around the world in print, online and on the iPad. We had a highly profitable year last year and will have an even more profitable one this year.”

But not for any worrisome reason, as the OTR note seemed to imply.

No, Palm handset production was shut down in observance of Chinese New Year. And, contrary to OTR, which suggested that production might not resume in March, production will indeed resume by March. In fact, sources close to the company say current plans call for it to resume near the end of this month.

Anyway, here’s Palm’s statement on the matter. Presumably, now that the statement has been issued, Palm (PALM) shares will recover some of the losses they suffered earlier today because of OTR’s note. But Palm shorts, I’m sure, had a field day with this one.

“Palm regularly adjusts its product manufacturing levels to manage inventory,” the company said in a statement sent to Digital Daily. “In anticipation of the Verizon Wireless launch and Chinese New Year, we increased production levels prior to February, and anticipate ramping production back up after the Chinese New Year ends.”

Palm Inc. Alert
Palm Orders Production Halt of Pre and Pre+ in February
February 11, 2010
PALM, S, VZ, 2038 HK, 8078 TT
Sources: 3 sources Taiwan handset component supply chain (all repeats)
Key sources in the Taiwan handset supply chain said Palm Inc. has ordered assembler Foxconn International Holdings Co. Ltd. to suspend production of both the Pre and Pre+ in February. “The decision is very sudden, and Foxconn was told to reduce all February Pre forecast to zero on Wednesday and nobody knows whether shipment will resume in March,” said a key source. The source said the CDMA2000 Pre to Sprint and the CDMA2000 Pre+ to Verizon were affected.
Pixi Production Suspended Too?
One source said Palm also told Compal Communications Inc. to suspend shipment of the Pixi and Pixi+ in February, while another source said that production is still going ahead with the Pixi+ to Verizon, but actual delivery in February will amount to less than 5,000 units.
Reporter: Van Tran
Editor: Hartmut Leuschner

Tesla’s S-1 form doesn’t specify the share price or where the stock will be traded. It does, however, note that stock will be issued “as soon as practicable”–whatever that means. A few other details worth noting:

• Goldman Sachs (GS), Morgan Stanley (MS), J.P. Morgan (JPM) and Deutsche Bank (DB) are listed as underwriters.
• To date, Tesla has sold 937 Roadsters in 18 countries.
• Tesla had sales for the first nine months of 2009 of $93.4 million. Losses for that same period were $31.5 million
• Since its inception, Tesla has had revenue of $108.2 million, with cumulative losses of $236.4 million.

Real’s (RNWK) share price Wednesday when we broke the news of Glaser’s departure? About $3.80.

Clearly, investors are hoping a shift in strategy will follow this sudden management reorganization and that it will transform Real into a more profitable company.

“There is clearly a lot of work still to be done at Real, but Glaser has set the foundation, leaving a pristine balance sheet, at least one business that is in great shape today (TPS), one that has tremendous value potential in the future (games), a couple of cash cows (RealPlayer, Superpass),” Morgan Keegan & Company Tavis McCourt wrote in a note to investors today.

“Glaser and Real management have also returned Rhapsody to a cash flow neutral position after years of significant losses, and based on an 8K, may be looking to divest more of its ownship in this business in the near term,” McCourt added. “In any event, there are plenty of opportunities for new leadership to create value from a base of some very unique businesses and capabilities.”

Indeed. First step: Unload Rhapsody and the games business.

Even if you don’t follow this stuff, you may have heard of Limelight’s much bigger rival, Akamai (AKAM), which moves a good portion of the Web’s data.

This was supposed to be a booming business, but it hasn’t panned out in recent years. The problem: Big Web players are putting more and more stuff online, but the prices content delivery networks charge to bring it to your desktop keep dropping lower and lower.

So you’re left with a fast-moving industry that doesn’t actually go anywhere, at least in terms of revenue. Citi’s (C) Mark Mahaney, citing industry analyst Dan Rayburn, figures that volume increased around 35 percent this year, but that pricing dropped by the same amount.

Limelight’s most recent financials illustrate the dilemma quite nicely: Third-quarter revenue of $32.5 million was up just one percent from the previous quarter and down slightly from the $33.1 million the company generated the previous year. Its losses, at least, are shrinking.

So diversification couldn’t hurt, right? And this makes sense on paper: Privately held Eye Wonder specializes in selling video and “rich media” ads–the kind of data-intensive stuff that was supposed to help the likes of Limelight grow in the first place.

[Image credit: kamshots]

In a note to investors this morning, Pali analyst Walter Piecyk says he’s not buying predictions about Sprint (S) returning to growth in 2010. Sure, the company is improving post-paid subscriber losses, says Piecyk, but not as quickly as it needs to. And its prepaid business, which already faces a fair bit of competition, will be confronted with even more competition next year.

“Over the past six months our concerns have been rising over the slow pace of change at Sprint and what we view as lost opportunities for growth, but we maintained our Buy rating due to the low valuation on the stock and the depressed expectations of investors,” Piecyk writes.

“Those concerns increased in recent months as the pre-paid business, which Sprint has been accessing for growth, became more competitive and Verizon began executing on a more open device strategy,” the analyst adds. “In the past few weeks, investors have become more optimistic about positive post-paid signs early in Q4 and Sprint’s prospects of even stronger pre-paid results in 2010, in the face of increasing competition.”

In contrast, Piecyk notes that “We are less confident about those trends and as we model out a more competitive market in 2010 for all our companies it becomes evident to us that Sprint will be challenged to stabilize EBITDA. Faced with negative catalysts in the months ahead and the challenge of appropriately valuing a company whose EBITDA is in perpetual decline, we believe now is the right time to downgrade the stock to Neutral.”

Wall Street, then, isn’t underestimating Sprint’s prospects for 2010. It’s overestimating them–or at least it certainly was yesterday.

“For 2010, we expect post-paid losses to be pared by 35% to 2.3 million subs lost compared to our prior estimate of less than 2 million subs lost in that year,” Piecyk concludes. “While pre-paid net adds might offset the losses or even top post-paid losses in Q4 we expect the total customer base to decline by 700,000 in 2010.”

A: Kroes isn’t losing $100 million a month on Sun Microsystems.

Much as Ellison would like to blame the European Commission for yesterday’s bloodletting at Sun, responsibility lies squarely with Oracle (ORCL). For while Ellison complains that every month the $7.4 billion acquisition is delayed amounts to a $100 million loss for Sun (JAVA), he has not yet given the EC good reason to approve it–at least according Competition Commissioner Neelie Kroes, who’s disappointed with Oracle’s cooperation in the commission’s antitrust probe so far.

Kroes said as much in a recent meeting with Oracle president Safra Catz, according to Jonathan Todd, the commission’s spokesman for competition.

“Kroes expressed her disappointment that Oracle failed to produce, despite repeated requests, either hard evidence that there were no competition problems or a proposal for a remedy to the competition concerns identified by the commission,” Todd told Bloomberg. “Kroes reiterated to Catz the commission’s willingness to move quickly towards a decision but underlined that a rapid solution lies in Oracle’s hands. Either they have to give us the information to prove that our competition concerns are not well founded or offer remedies to satisfy our concerns.”

So if Oracle is looking for a quick solution to the case, it best provide one–otherwise, it’s looking at $100 million a month in losses at Sun.

A: Kroes isn’t losing $100 million a month on Sun Microsystems.

Much as Ellison would like to blame the European Commission for yesterday’s bloodletting at Sun, responsibility lies squarely with Oracle (ORCL). For while Ellison complains that every month the $7.4 billion acquisition is delayed amounts to a $100 million loss for Sun (JAVA), he has not yet given the EC good reason to approve it–at least according Competition Commissioner Neelie Kroes, who’s disappointed with Oracle’s cooperation in the commission’s antitrust probe so far.

Kroes said as much in a recent meeting with Oracle president Safra Catz, according to Jonathan Todd, the commission’s spokesman for competition.

“Kroes expressed her disappointment that Oracle failed to produce, despite repeated requests, either hard evidence that there were no competition problems or a proposal for a remedy to the competition concerns identified by the commission,” Todd told Bloomberg. “Kroes reiterated to Catz the commission’s willingness to move quickly towards a decision but underlined that a rapid solution lies in Oracle’s hands. Either they have to give us the information to prove that our competition concerns are not well founded or offer remedies to satisfy our concerns.”

So if Oracle is looking for a quick solution to the case, it best provide one–otherwise, it’s looking at $100 million a month in losses at Sun.

Excluding charges related to stock options and other items, Palm (PALM) said net losses were $13.6 million, or 10 cents a share, for the recent period. Revenue slipped to $68 million from $366.9 million in the same period last year. Excluding revenue deferred from sales of the company’s new Pre handset, Palm said adjusted revenue would have been $360.7 million. Analysts had expected the company to turn in a loss of 24 cents a share on sales of $291 million.

Palm shipped a total of 823,000 smart phone units during the quarter, up 134 percent over the fourth quarter of fiscal year 2009, but down 30 percent year over year. Smart phone sell-through for the quarter was 810,000 units, up 76 percent from the fourth quarter of fiscal year 2009 and down 21 percent year over year.

Speaking to analysts Thursday afternoon, Palm execs claimed that “the vast majority of new sales” for the quarter were generated by the Pre. But they declined to separate Pre sales from those of other handsets.

Skeptics will no doubt look at this and conclude that Palm didn’t meet expectations for Pre shipments of about 520,000. That, or the company is still selling a hell of a lot of Centros.

“We’re making significant progress with Palm’s transformation, and our culture of innovation is stronger than ever,” said Jon Rubinstein, chairman and chief executive officer. “We’re launching more great Palm webOS products with more carriers, and turning our sights toward growth.”

A few more Jon Rubinstein remarks from the earnings call:

On additional form factors:

I’m a big believer in families of products, and we’ll continue to evolve the line in the future and have a family of products for webOS.

On Carrier Customization:

We don’t really talk about our carrier agreements.

On Pre sales:

Sell-in and sell-through…the vast majority of new sales…relate to the Pre.

On the Pixi cannibalizing Pre sales:

The Pixi is a more cost-effective offering, so yes we expect some people might come into the store looking to buy a Pre and end up with a Pixi. But others might come in looking for a Pixi and end up with a Pre. As I said, we’re big believers in families of products. We’re happy to have two webOS products on the market.

On carrier diversification:

Sprint did a phenomenal launch with the Pre. They invested heavily in advertising….We’re looking forward to launching the Pixi with them as well. We don’t talk about our roadmap, but we’ll have more carriers and more products in the future.

On Motorola’s new Motoblur service:

We don’t really know much about it. To build really great consumer products, you have to own the OS and services. And the fact that we have webOS as our asset is really important.

This morning the struggling handset maker tapped Nordberg, executive vice president of Ericsson, as its new president and CEO. He’ll replace Dick Komiyama, who has apparently decided to retire, though he is smack dab in the middle of implementing the restructuring program that was intended to reinvigorate Sony Ericsson.

“The Sony Ericsson transformation program I began over a year ago is more than half way completed, and I am pleased with what we have achieved so far,” Komiyama said in a statement. “I believe it is the right time for me to begin transferring the leadership of the company to a person who is able to complete the transformation program and lead Sony Ericsson through its next phase of development.”

The right time, indeed. Over the past few years, Sony Ericsson has been overtaken in the high-end handset market by Research in Motion (RIMM), Apple (AAPL) and Samsung and beaten into submission in the low-end market by Nokia (NOK). Among the top five cellphone vendors, Sony Ericsson saw the steepest drop in sales from the first quarter, down 40 percent year-over-year, and continued losses at the joint venture have prompted some to speculate that it could be broken up.

That’s clearly not the case at the moment, though it could be if Nordberg doesn’t manage to speed up that transformation program. Said Nordberg: “Sony Ericsson has taken leadership in the music phones and the camera phones with the Cybershot and the Walkman, but there are some weaknesses in the smartphone segment and we need to restore that.”

“We did a long-term supply agreement with Toshiba,” Cook explained. “As a part of that, as part of the terms and conditions, we paid them $500 million as a pre-pay earlier in the quarter. You know, we view Flash as a very key component for us because as you know we use it in so much on so many of our products and also we are a reasonable percentage of the user of Flash on a worldwide basis.”

Indeed, Apple (AAPL) sells millions of NAND flash-enabled devices each year, so many that its needs often constrain supply for the entire market. In 2005, the company arranged to purchase up to 40 percent of Samsung Electronics’ holiday NAND output for use in it iPods. In July of last year Apple bought 50 million 8Gb-equivalent NAND flash chips from Samsung, forcing the company to reduce its supply to other customers.

Then, this past April, Apple ordered 100 million 8Gb–or one-gigabyte (1GB)–chips from Samsung, once again causing flash supplies to tighten. Now we have this $500 million prepayment, which, according to sources, will keep Apple in NAND for about three months.

Great news for Toshiba, which has been suffering mounting losses in the midst of tougher competition, and for the NAND market as well. As Tim Cook said yesterday, “The NAND market has now begun to stabilize and we expect it to move towards a supply/demand balance.”