HCL Infosystems Q1 net plunges 74% on tepid sales

NEW DELHI: Quarterly net profit of HCL Infosystems plunged 74 percent as its flagship computer retailing business suffered in an economic slowdown worsened by lesser government investment in computing and office automation business.

The company earned 121.5 million rupees for July-September, compared with 474.6 million rupees a year ago.

Net sales dropped 6 percent to 27.88 billion rupees.

"Their partnership with Nokia hurt. Nokia has not been doing well, and that pressured HCL's margins. This impacts their distribution business," said a Mumbai-based sector analyst.

HCL Info has earlier this year renewed an agreement with Nokia to distribute the Finnish firm's devices. That partnership is due for renewal on Dec. 31, 2014.

A flood of cheap handsets from the likes of China's ZTE and India's Micromax is destroying Nokia's top position in emerging markets, and as Asian handset manufacturers increasingly move to Google's free Android software.

"The desktop market is also very slow. This used to be their bread and butter segment," said the analyst, who declined to be identified.

HCL has a less than 10 percent market share in personal computers. Dell , Acer and Hewlett-Packard lead the Indian market, according to a report by researcher Gartner in August.

HCL Info posted a loss of 6.8 million rupees for its computer systems and services segment, compared with a profit of 358.2 million rupees a year earlier.

"Overall System Integration business continued to be severely impacted by slowdown in projects and customer decision cycles," Chief Executive Harsh Chitale said in a statement.

Profit from the company's telecommunications and office automation business also fell 16 percent before tax to 452.5 rupees.

HCL Info shares, valued at about $300 million, were down about 3 percent at 63.40 rupees at 1.25 pm.

TVS Motor's Q2 net profit up 40 per cent

MUMBAI: Two and three wheeler major TVS Motor on Thursday reported an increase of 40 percent in its net profit for the second quarter of the current fiscal at Rs.76.51 crore from Rs.54.78 crore in the like period of 2010-11.

The company's total income for the period under review reported a growth of 23.23 percent at Rs.1,991.79 crore as against Rs.1,616.24 crore in the corresponding period of last fiscal.

The net sales in the July-September quarter rose 22.79 percent by Rs.1,952.16 crore as compared to Rs.1,589.83 crore in the like period of 2010-11.

The auto majors other income increased by 50.05 percent at Rs.39.63 crore from Rs.26.41 crore in the July-September quarter of last fiscal.

The company also reported an increase of 42.20 percent in its consolidated total income for the fiscal at Rs.135.31 crore from Rs.95.15 crore in the like period of 2010-11.

The total income for the fiscal stood at Rs.3,737.82 crore, an increase of 24.21 percent when compared to Rs.3,009.20 crore in the corresponding period of last fiscal.

Ashok Leyland Q2 net dips 7.76% to Rs 154.08 cr

NEW DELHI: Hinduja Group flagship company Ashok Leyland net profit has declined by 7.76 per cent to Rs 154.08 crore for the second quarter ended September 30, 2011, due to higher expenses.

The company had posted a net profit of Rs 167.05 crore in the same period last fiscal, Ashok Leyland said in a filing to the BSE.

Net sales of the company, however, rose to Rs 3,094.57 crore for the second quarter, as against Rs 2,713.95 crore in the same period previous fiscal.

During the quarter under review the company's total expenditure, including employee cost, stood at Rs 2,849.34 crore, as against Rs 2,473.17 crore in the same period previous fiscal.

For the six months ended September 30, 2011, the company reported net profit of Rs 240.33 crore, as against Rs 289.70 crore in the same period previous fiscal.

Shares of Ashok Leyland today closed at Rs 27.05 on the BSE, up 0.74 per cent from its previous close.

Bharti Airtel Q2 net down 38% at Rs 1027 crore, falls more than expected

NEW DELHI: India's top mobile phone carrier Bharti Airtel on Friday reported a bigger-than-expected 38 percent fall in fiscal second-quarter profit, its seventh straight quarterly profit drop, hit by higher interest costs and foreign exchange losses.

Bharti, nearly a third owned by Southeast Asia's biggest phone firm SingTel, said consolidated net profit fell to Rs 1,027 crore ($210 million) for its fiscal second quarter ended September from Rs 1,661 crore a year earlier, based on international accounting standards.

Bharti, which last year acquired mobile operations in 15 African countries in a $9 billion debt-funded deal, said consolidated revenue rose to Rs 17,276 crore from Rs 15,231 crore in the year-ago quarter.

The net profit was hurt by higher interest expenses that trebled from a year earlier to Rs 1,118 crore for the September quarter.

Currency fluctuations led to foreign exchange losses of Rs 239 crore for the quarter versus profit of Rs 249 crore in the year ago quarter.

Bharti also took on debt to pay more than $3 billion for 3G and broadband spectrum in a state auction last year.

Monthly average revenue per user (ARPU), a key metric for telecom carriers, from Bharti's Indian operations fell an annual 9 percent to Rs 183 for the quarter, while Africa ARPU fell 1 percent to $7.3.

At 10:28AM, shares in Bharti were trading up 0.7 percent at Rs 395.30 on the BSE. The stock, valued at $30.4 billion, are up 9.6 percent this year, outperforming a nearly 14 percent fall in the broader market.

Bharti Airtel, is not averse to mergers and acquisitions in India, Sanjay Kapoor, its chief executive for India and South Asia said.

Bharti, which operates in 19 countries across Asia and Africa, is the world's fifth-biggest mobile phone carrier by subscribers. India is the company's biggest market where it had about 173 million mobile users at the end of September.

Bharti last year ventured into Africa by acquiring most of the African mobile operations of Kuwait's Zain in a $9 billion debt-funded deal and became the world's fifth-biggest mobile carrier by subscribers.

But high costs in Africa have kept margins under pressure and it has yet to turn a profit there.

However, the outlook for India's mobile sector has improved after carriers including Bharti raised voice call prices in July by about a fifth, the first such increase in at least two years in the ferociously competitive market after a vicious price war had sent call prices tumbling and squeezed profits.

Bharti and its rivals in the world's second-biggest mobile phone market of about 870 million users are also betting on a pick up of premium third-generation (3G) mobile data services after they launched high-speed networks this year.

"India has achieved double-digit growth fueled by non voice businesses. The arrest of continuously declining prices in India augurs well for the telecom industry," Bharti Chairman Sunil Mittal said in a statement.

To launch wireless broadband in India this fiscal

Bharti Airtel will launch wireless broadband services in India in the current fiscal year ending March 2012, its chief executive for India and South Asia Sanjay Kapoor said.

The company has already finalised the vendors, Kapoor said, but did not share details.

Trai raises SMS limit to 200 per day per SIM

Mobile phone users will now be able to send 200 text messages a day as sector regulator Trai has doubled the daily cap after it received representations from consumers and service providers to relax the limit.

Trai had introduced the 100-SMSes a day cap to stop unsolicited and pesky text messages from telemarketers selling everything from real estate to weight loss solutions. The cap also put an end to subscribers using multiple SIM cards to send text messages without registering as telemarketers.

However, consumers felt an equal impact because their daily text message communication got restricted to only 100 text messages. After Trai imposed new regulations on telemarketers on September 27, service providers such as Airtel, Vodafone and Idea Cellular stopped offering message packs that, for instance, allowed consumers to send 21,000 text messages a month for Rs 88. In some cases, service providers offered message packs of only 3,000 text messages a month or 100 text messages a day, in accordance with Trai norms.

The regulator said on Tuesday that it had received representations from consumers and service providers to relax the limits. "The authority has received representations from some of the service providers and consumers to increase the limit of 100 SMS per day per SIM. The authority has considered these representations and decided to increase the limit of one hundred SMS per day per SIM to two hundred SMS per day per SIM," Trai said in a statement.

Service providers are likely to begin offering the improved message packs at the earliest as they would like to pass on the benefit of these changes to more than 850 million mobile phone subscribers across the country.

"All operators will begin giving larger SMS packs," a senior executive from a mobile services provider said. Bharti Airtel, the largest telco by subscribers and market share, said, "Trai's extension of the per day SMS limit per SIM to 200 is in response to the needs of customers who are frequent users of SMS services and were in favour of relaxation of this restriction. Bharti Airtel will continue to comply with SMS regulations as per government policy."

2ergo India, a value-added services provider that offers bulk SMS as part of its business, said the change did not impact telemarketers. "Firstly, they should not be using SIM cards for sending promotional messages, and instead buy bulk SMS capacities from service providers. If any small business did intend to use a SIM card, then the increase from 100 to 200 has marginal benefit," said 2ergo India MD Raj Singh. Cellular Operators Association of India welcomed the regulators new decision.

Black Money: IT Dept Sends Notice

The Indian Income Tax Department has started sending notices to persons involved in black money cases on the basis of information received from abroad, even as Indian Finance Minister Pranab Mukherjee said their names would be disclosed after initiation of prosecution proceedings.

The notices are being sent by the Directorate of Criminal Investigation (DCI) to individuals and entities across countries following scrutiny of classified banking data received from foreign countries about Swiss Bank accounts.

"As and when the information (is received), investigation starts, prosecution takes place (and) matter comes to the court. Then, as per the existing treaty terms, we can reveal the names in cases of prosecution by the Income Tax Department," Mukherjee told reporters here when asked whether the government has received information about industrialists and MPs in connection with black money.

The minister had earlier said the government has received information from France about the overseas bank accounts of Indians. "In 69 cases, the taxpayers have admitted to unaccounted income of Rs 397.17 crore. Taxes of Rs 30.07 crore have also been paid," he had said.

India, according to the Finance Ministry, has so far received over 9,900 pieces of information from several countries regarding suspicious transactions by Indian citizens, which are now under different stages of processing and investigation.

The Department of Criminal Investigation will initiate legal proceedings in several cases in the next few months, sources said, adding that the cases would be dealt with under criminal provisions of the IT Act.

In a number of cases being probed by the DCI, the department plans to conducts searches and surveys for obtaining additional information.

The New Google

It is going to be a game changer, and on a big scale, but no one’s clear exactly how. The $12.5-billion acquisition of Motorola Mobility Holdings Inc. gives Google 17,000 registered patents, and another 7,500 pending ones. Google itself has a small number, and in its attempt to buy Nortel’s 6,000 patents, was outbid by a consortium led by Microsoft and Apple (Google offered $900 million, the consortium paid $4.5 billion). So most analysts agree that the Motorola acquisition is a defensive move to give Google teeth in its patent battles.

Google faces several patent challenges against its Android operating systems for mobile phones. Oracle Corp has claimed in court filings that the Android system infringes on its patents that use Java programming tools; Apple has filed suit indirectly, by suing Samsung, HTC and Motorola claiming Android infringes upon its tablet and smartphone patents. Analysts say there are roughly 250,000 patent claims for mobile phones, many of which are questionable.

Rumours about Google’s acquisition of Motorola first surfaced in January 2010, but nothing seemed to come of it then. Is the purchase of Motorola expensive? Not as much as Microsoft’s acquisition of Skype, according to some — Google is paying a 63 per cent premium over market price of Motorola’s shares, at $40 a share.

Google says other Android OS users — in effect Motorola’s competition — will continue use the Android OS; it is not licensed, but Google makes a large amount of money selling advertising with Internet searches conducted using Android phones. The larger question is: if what Google wanted was just the patents, why not buy just them instead of the company? Google did that when it bought IBM’s 1,000 patents.

If Google’s purchase of Motorola is to integrate software and hardware into the same company a la Apple, another company is taking a different route to the same end. Two days after Google’s announced purchase, Hewlett Packard (HP), the world’s largest PC maker, announced it was in talks to buy Autonomy, a Cambridge-based firm that makes software that searches and organises data, for $10 billion. Autonomy is listed on the London Stock Exchange.

At the same time, HP will spin off its printers and PC businesses into a separate entity, if not sell it off entirely. The move is being read as HP’s attempt at becoming more of a software company. When HP hired Leo Apotheker as CEO, it announced that in the future, it would underscore software. Apotheker used to run, SAP, one of the world’s largest software firms. Some time ago, HP bought EDS, a technical services firm that made Ross Perot a billionaire, and subsequently bought Palm, the developer of Web OS.

On Friday, HP announced that it will discontinue operations for webOS devices, specifically the TouchPad and webOS phones. In an earnings call with analysts on Thursday, Apotheker had said “consumers are changing the use of their PC. The tablet effect is real and sales of the TouchPad (HP’s answer to IPad) are not meeting our expectations.” The PC market is contracting, but Apple’s Macs have outsold the rest for 21 consecutive quarters.

Google Buys Zagat

Google Inc has bought popular dining ratings authority Zagat, adding a valuable brand to its content offerings and bolstering its push into the rapidly growing local commerce market.

Local commerce offers services such as finding a discount from a nearby store, or a review of a neighborhood eatery, and the world's No. 1 search engine plans to compete in this market against Yelp and OpenTable.

The deal, for which Google did not provide financial information, gives it valuable content about restaurants, hotels and nightclubs that can be paired with its popular online maps and mobile search services.

Google needs to provide more than just directions to consumers seeking information about restaurants and other local businesses, said Marissa Mayer, Google's VP of Local, Maps and Location services, in an interview with Reuters on Thursday.

"It's also (about) getting them a sense of the place. A sense of what to expect," said Mayer. "Zagat reviews, in a few short lines and a few scores, gives you a great sense of a place very quickly when you're on the go."

The move is part of Google's push to adapt its online services for a world in which consumers increasingly access the Web on mobile phones such as Apple Inc's iPhone and rely on social networking services such as Facebook to get information from friends.

Last month, Google announced plans to acquire mobile phone manufacturer Motorola Mobility for $12.5 billion. The deal, if approved by regulators, will allow Google to produce its own line of smartphones based on its Android software.

"A reasonable person would say that Google may never beat apple in product design by itself. At least not for a sustainable period of time. But Google could better integrate content and have that become another reason to buy those devices," said Stifel Nicolaus analyst Jordan Rohan.

The 32-year-old Zagat, which polls consumers and compiles reviews about restaurants around the world, will become a cornerstone of Google's "local offering", Google said.

"This underscores Google's local and mobile initiatives," said Brian Pitz, an analyst at UBS, who expected the acquisition to provide a boost to Google Maps as customers look for restaurants. Last year, Google moved Mayer, a top search executive, to head its local initiatives.

Google needs reviews and other content for its "Google Places" websites, in part to fend off criticism. It has been accused of using comments from review sites such as Yelp, essentially siphoning off their readers and, more importantly, their clicks. Google has toned down its borrowing of comments recently, Pitz said.

The Federal Trade Commission has been looking into the issue as part of a broad antitrust investigation, a source familiar with the probe has said.

The move raises the question of whether the search giant will start its own restaurant reservation service, building on existing ties with restaurants that advertise on it.

The shares of restaurant-booking service OpenTable, which also publishes reviews and ratings, closed down more than 8 percent at $57.50 on Thursday after hitting a low of 54.50 earlier in the day.

OpenTable is already reeling from financial results that have disappointed investors this year and the departure in May of CEO Jeffrey Jordan, who joined venture-capital firm Andreessen Horowitz. Jordan remains chairman.

Pitz said expanding into reservations would require extra steps such as building out reservation software and getting restaurants to install it, as well as building different relationships with the restaurants.

"It's apples and oranges," he said.

While much of Zagat's content is free and available to anyone, some content remains behind a paywall and it was unclear if Google would remove it.

Founded by Tim and Nina Zagat, the eponymous service provides the familiar burgundy pocket-sized guides to restaurants in more than 100 cities. It may be one of the earliest forms of user-generated content, Google Vice President Marissa Mayer said in a blog post on Thursday.

Zagat gave Google a tongue-in-cheek rating on its home page on Thursday, awarding the Internet company a maximum 30-point rating for its "local, social, mobile and usefulness" categories. Industry analysts regard the local, social and mobile markets as some of the fastest-growing areas of the technology sector.

"We are thrilled to see our baby placed in such good hands and to start today as official 'Googlers,'" the founders said in a joint statement.

Zagat enlisted Goldman Sachs to explore a sale as early as 2008, although no buyers emerged in the middle of a recession. The company might fetch as much as $200 million, it was reported at the time.

In late 2009 Google was in talks to acquire Yelp for at least $500 million, according to news reports at the time, but the deal fell apart.

The Domain Magic

If you had to compromise on your company’s domain name because a cyber-squatter was quicker than your own IT team, brace up to snap up your ideal domain name in the next round. The Internet Corporation for Assigned Names and Numbers (Icann), the apex body that assigns domain names globally, will accept applications for top-level domain (TLD) names between January and April 2012. TLDs are the 22-strong family of domain names such as the .com, .net and .in. According to Icann, entrepreneurs, businesses, governments and communities can apply to operate a TLD of their own choosing. That makes .India — rather than the .in that is used as the country code — as much a possibility as .reliance, .tata or .Rajinikanth, for a substantial price, of course. Currently, there are more than 240 country code TLDs (including applications for dependent territories, etc).

New Forms

Icann, which expects 300-500 TLD applications, will charge $185,000 (about Rs 85 lakh) for every TLD name. Registrants will also have to pay either a quarterly fee of $6,250 (Rs 2.8 lakh) or an annual fee of $25,000 (Rs 11.5 lakh). Any entity can apply for a TLD as long as it fulfils conditions in the Applicant Guidebook for TLD registrations. For the first time ever, applications for Internationalized Domain Names (IDNs) was called for. Simply put, IDNs sport characters used in local languages not written with the basic Latin alphabet (a-z), European-Arabic digits (0-9) and the hyphen. At the Icann meet in June, several companies and communities expressed their interest in registering their own TLDs.

While the communications and IT ministry plans to apply for .bharat and .India, Mumbaikars too are readying for their own identity. A company called India TL Domain has got support from the city administration to register the .mumbai TLD and recover its investment by selling generalised TLDs such as www.narimanpoint.mumbai. Icann expects that all major global corporations and organisations to move to secure their domain names. The interested parties for now include Canon, Deloitte and Unicef.

Icann is primarily looking at four major categories: brands (those who lost out on registering their desired .com), generic names such as .game and .business, those based on geography such as .himalayas, .delhi or .agra, which can be used to promote tourism and local culture, and those for a cause or community such as .indian, .painter, .lawyer or .doctor.

The need for more names was triggered by the overwhelming demand for a .com name — which was the first and the most generic domain name. But the irony is that the more Icann opened up .aero, .biz, .coop, .info, .museum, .name, and .pro in the first round of domain name expansion in 2000, the more registered with .com for exclusivity. As a result, many missed a .com name. More than 200 million domain names are registered in the world today and about 84 million of them are registered in .com. Nearly 15 million are registered in .net. 

Trouble Links


But even as the programme gains momentum, opposition is also building up. Experts say that flooding the Web with new domain names would create new avenues for cyber-squatting and online fraud. “Even now, rogue websites attempt to gain traffic directed to another site,” says Paula Greve, director of Web security research at McAfee.

Clearly, the enormous fees for registering TLDs could deter cyber-squatters who registered names such as tata.com and dhirubhaiambani.com in the first rush (before they were evicted). But how will Icann determine the right authority applying for the domain? Icann says it has defined strict evaluation criteria on who can apply for which domain names. Icann sees greater possibilities of disputes in generic TLDs, which could prolong the process of evaluation. While a non-disputed application may take nine months to process, a highly complex one would require about 20 months.

Icann says it will also examine applications for trademark violations. It has set up a dispute resolution process for cyber-squatting cases. A “clearinghouse” will let brand-owners block third parties from registering their marks under any new domain name. For this, Icann has set up a process — Uniform Domain-Name Dispute-Resolution Policy (UDRP). “In most cases, genuine squatting can be dealt with as routine encroachment and resolved using UDRP and other existing legal mechanisms. Also, the UN’s World Intellectual Property Organization is working on a set of processes, which will make it easier for a brand to complain against cyber squatting,” says Bhavin Turakhia, founder and CEO of Web-hosting firm Directi.

But what will Icann do if a .reliance is applied for by both Reliance Industries (which uses www.ril.com) as well as the current owner of www.reliance.com? “Icann will look if any one applicant has some right to that word. Then the next step could be an auction,” says Manish Dalal, vice-president APAC of naming services division at communications major VeriSign. “Take the word shop for example. It is a generic word and nobody has any intellectual property rights around it. Hence, it may be sold in an auction, too.” Categorisation on the basis of brands, geographies and causes will help reduce multiple applications, as they are generally unique and can be easily evaluated, adds Dalal.

Critics, however, say that though companies can create their own TLDs, mid-level players may not be able to buy domain names due to the high fee. “Trademark protections were identified in the community during programme implementation as an issue that needed to be addressed,” says Icann spokesperson Brad White. “New protections include a rapid takedown process (Uniform Rapid Suspension), the mandatory Trademark Claims and Sunrise processes to be conducted by all registries and a post-delegation dispute process where claims can be made directly against registries.”

In an era where promoters register their domain names before they register companies, the Icann move has come as a breath of fresh air. It is equally important that it irons out all the issues before it goes live with the TLD sales.

Microsoft Considers Bidding For Yahoo

Microsoft Corp is considering a bid for Yahoo Inc, resurfacing as a potential buyer after a bitter and unsuccessful fight to take over the Internet company in 2008, sources close to the situation said on Wednesday.

Microsoft joins a host of other companies looking at Yahoo, which has a market value of about $20 billion and is readying financial pitch books for potential buyers, they said.

Those companies include buyout shops Providence Equity Partners, Hellman & Friedman and Silver Lake Partners, as well as Chinese e-commerce giant Alibaba and Russian technology investment firm DST Global, the sources said.

Yahoo shares jumped 10.1 per cent on the news to close at $15.92 on Nasdaq, but fell back to $15.34 in after-hours trading. Microsoft shares ended 2.2 percent higher at $25.89.

Microsoft may seek a partner to go after Yahoo, one of the sources said, without identifying any parties.

No decision has been made and a bid may not materialize as there are internal divisions at the software company on whether it should pursue Yahoo again, a high-ranking Microsoft executive said.

One camp inside Microsoft is hot for the deal, believing that it would obliterate AOL Inc as a competitor and create a strong Web portal that can offer better products to audiences, advertisers and end users, the executive said.

However, another camp is against the deal, feeling that if Microsoft is going to invest billions of dollars in an acquisition it should be one that has more growth potential. Microsoft last tried buying Yahoo in 2008, offering to pay as much as $47.5 billion, or $33 per share.

"Yahoo's value hasn't grown in years, and some executives feel we should buy something that is more forward-looking," said the executive, who spoke on condition of anonymity.

Yahoo, Microsoft and the other potential buyers declined to comment.

Any auction process for Yahoo is still in the early stages, and the company's financial advisers -- Goldman Sachs and Allen & Co -- are preparing to send financial information to potential bidders, sources have said previously.

Big Bite
Shortly after ousting Carol Bartz as CEO in early September, Yahoo said it was exploring strategic alternatives after receiving "inbound interest" from a number of parties.

The once-dominant Internet pioneer is pursuing parallel tracks, sounding out deal options as well as engaging in a search for a new CEO.

Yahoo would be a big bite for any single private equity firm, especially at a time when financing markets for leveraged buyouts have dried up.

Industry sources said private equity firms could take over the US operations and sell Yahoo's Asian assets to a buyer such as Alibaba.

"There are many reasons why this thing probably makes sense," said Sid Parakh, analyst at fund firm McAdams Wright Ragen. "If you strip out the variety of assets Yahoo owns, you are pretty much paying nothing for the core business."

One Wall Street analyst recently valued Yahoo at just over $20 billion, with its core search and display advertising business worth $7.7 billion, its Asian assets worth $9.2 billion, plus $3.2 billion in cash.

Yahoo owns about 40 percent of Alibaba as well as about 35 percent of Yahoo Japan.

If Microsoft fully combined its Bing Internet search business with Yahoo's, it would give it more than 30 percent of the U.S. search market and make it a credible competitor to Google, said Parakh.

Under a 10-year deal struck in 2009, Microsoft's Bing already powers Yahoo search, but it cedes 88 per cent of resulting advertising revenue back to Yahoo.

Microsoft, with a cash pile of $53 billion, could certainly afford a deal, but some doubted the world's largest software company would actually pursue it, given its previously failed bid and the existing Yahoo agreement.

"I think it's unlikely because they (Microsoft) have been down this path before," said Ben Schachter, an analyst with Macquarie Research.

"In a lot of ways they've gotten what they want out of it already, with the (Yahoo) search deal. I could make a case for a lot of synergies. But it's certainly not a strategic priority in any way."

Silicon Valley sources said Jack Ma, the founder and CEO of Chinese e-commerce giant Alibaba -- who last month expressed interest in buying Yahoo -- could team up with private equity to make a deal.

Or it may make more sense for Ma to team up with Microsoft, said Susquehanna Financial Group analyst Herman Leung.

"If Microsoft gets involved, then you don't need private equity," said Leung. "The problem for Jack Ma is capital. Microsoft has $53 billion in cash. Why have to deal with bondholders and all this stuff when Microsoft can make that all happen for you?"

Culture Clash
Some also have expressed concerns about cultural fit and Microsoft's ability to manage such a large deal.

Microsoft CEO Steve Ballmer has had an antagonistic relationship with Yahoo, and the company has never successfully integrated a large acquisition.

Microsoft's 2007 deal to buy online ad firm aQuantive for $6 billion was a flat-out failure. Its $8.5 billion deal to buy Internet phone service Skype has not yet been completed, so integration efforts have not yet begun.

Microsoft is making slow progress in combating Google's dominance in search advertising. According to the latest figures from research firm comScore, Google has 64.8 per cent of the US search market, Yahoo has 16.3 per cent and Microsoft 14.7 per cent.

But even with traffic from Yahoo, Microsoft still has not attracted enough advertising dollars and profitability in search is a long way off.

Last quarter, Microsoft's online services unit -- which includes Bing and the MSN web portal -- lost $728 million. It has lost almost $6.5 billion over last three fiscal years.

Petrol Price Hiked Again

state-owned oil companies on Thursday effected yet another steep hike in petrol price, by Rs 1.80 per litre with effect from midnight, the 5th increase this year, coming on top of falling rupee and rising cost of imported crude.

Petrol price in Delhi will cost Rs 68.64 per litre, up from Rs 66.64 a litre. The retail selling price in different cities will vary according to the local sales tax.

"Crude oil has been more or less steady but rupee depreciation is a cause of concern. We have been forced to increase prices because of rupee depreciation," BPCL Chairman and Managing Director R K Singh told PTI. The base price has been increased by Rs 1.50 per litre.

"Rupee has depreciated from Rs 46.25 a dollar to Rs 49.40, increasing our cost of imports," IOC Director (Finance) P K Goyal said.

Sources said Oil Minister Jaipal Reddy consulted Finance Minister Pranab Mukherjee before oil companies were given a green signal to raise prices.

The heads of three oil companies ---IOC, BPCL and HPCL-- met here this evening to decide on the price hike after they got a firm green signal from the oil ministry, they added.

This is the second hike in petrol prices in less than two months and it came on a day when the food inflation rose "dangerously" to 12.21 per cent for the week ended October 22.

Oil marketing companies had earlier hiked petrol prices by Rs 3.14 a litre on September 16 when the rupee was ruling at about 48 to a US dollar.

The government had in June last year deregulated or freed petrol from all price controls but the retail rates have not moved in line with cost as high inflation rate forced the oil companies to seek 'advice' from parent oil ministry before revising rates.

This is the sixth price increase since petrol price was deregulated, after excluding minor changes resulting from duty changes and increase in dealers commission.

On Wednesday, Reddy had met Mukherjee to appraise him of the precarious financial health of oil companies. Earlier in the day today, the oil ministry sent a detailed note to the Cabinet Secretariat seeking urgent action on deteriorating financial health of oil PSUs.

The Oil Ministry in its note pointed that Indian Oil, Bharat Petroleum and Hindustan Petroleum together will lose about Rs 1,30,000 crore in revenue this fiscal on selling diesel, domestic LPG and kerosene at government-controlled rates.

Sources said the three companies are losing Rs 333 crore per day on selling fuel below cost.

State-owned oil firms are currently losing Rs 9.27 per litre on diesel, Rs 26.94 per litre on kerosene sold through the public distribution system (PDS) and Rs 260.50 per 14.2-kg LPG cylinder supplied to households for cooking purposes.

While the loss on these three products are compensated through a combination of government cash subsidy and upstream oil firm doleouts, no such mechanism exists for making good the losses on petrol as the product is deregulated.

The three firms are virtually living on borrowed money as they had to raise funds to meet even working capital requirement in the absence of fuel selling price not meeting even operating expenses.

The oil ministry had also requested for an early meeting of the high-powered ministerial panel to decide on ways to deal with the crisis.

The Empowered Group of Ministers (EGoM) meeting is being sought before the winter session of Parliament that begins on November 22.

The ministerial panel is essentially a consensus building body of the Congress-led UPA government and comprises of key allies like DMK, TMC and NC. The allies had in September scuttled plans to limit supply of subsidised LPG cylinders to 4-6 per household a year with a view to reduce subsidies.