Wall Street looks for room to run

Stock futures are pointing higher but Wall Street could have trouble keeping its footing Monday following last week's dismal performance and ahead of housing numbers and the Federal Reserve's policy meeting later in the week.

At 5:30 a.m. ET, futures were mixed, with a comparison to fair value pointing to a to a positive opening for U.S. stocks.

Stocks were battered last week after the near collapse of two Bear Stearns (Charts, Fortune 500) hedge funds highlighted the risk posed by the subprime mortgage sector and raised concerns about trouble ahead for the credit markets. Rising Treasury yields also pressured sentiment.

This week, investors have a slew of economic reports to digest including the latest figures on existing home sales Monday. Trading could also be volatile before the Fed releases its policy statement, due on Thursday.

Following Wall Street's sell off on Friday, European shares opened lower, and most markets in Asia finished the session in negative territory.

In major corporate news, Rupert Murdoch's News Corp. (Charts, Fortune 500) is closer to reaching an agreement with Dow Jones (Charts) over the editorial independence of the Wall Street Journal, according to published reports.

Takeover talks heated up this weekend and the two sides neared an agreement on editorial integrity, the New York Times and Journal reported. News Corp. has made a $5 billion bid for Dow Jones. [via]

Walgreen 3Q Net Income Climbs

Drugstore Walgreen Co. (WAG) said Monday that an increase in prescription sales, especially among profitable generic medications, helped its third-quarter profit climb nearly 20 percent.

The nation's biggest pharmacy chain by revenue reported a profit of $561.2 million, or 56 cents per share, in the quarter that ended May 31. During the same period last year, the Deerfield-based company posted earnings of $469.2 million, or 46 cents per share.

Meanwhile, the company said Monday that it added 129 new stores during the quarter, and was on pace to open nearly 500 stores during the 2007 fiscal year.

"During the past quarter, our main focus - and biggest opportunity - continued to be drugstore expansion," said Rick Hans, the company's director of finance. "This will drive our company's growth well into the future."

At the end of the quarter Walgreen operated 5,751 drugstores in 48 states and Puerto Rico.

Revenue climbed nearly 13 percent to $13.7 billion from $12.2 billion last year, but fell short of Wall Street forecasts. Analysts polled by Thomson Financial expected a profit of 54 cents on revenue of about $13.8 billion.

The retailer's results were boosted by at least $17 million in one-time credits, which analysts at Morgan Stanley (MS) said accounted for a three cent-per-share gain. The company didn't break out the earnings-per-share impact of the gains it received from the credits. Thomson estimates typically exclude such one-time items.

Goldman Sachs analyst John Heinbockel said the company's latest performance was "solid."

"How good was the 3Q? Pretty solid, although certainly not to the extent as the two prior quarters," he wrote in a research note.

Same-store sales, which measure sales in stores open at least one year, rose 7.8 percent during the quarter. Non-pharmacy, same-store sales climbed 5.6 percent.

Same-store sales are considered to be an important measurement of retail performance because it tracks growth from established stores rather than growth from newly opened ones.

Prescription sales, which accounted for 65.9 percent of the quarter's total sales, grew 13.8 percent.

The growth comes while pharmacy companies face mounting pressure from discount retailers, such as Wal-Mart Stores Inc. (WMT), which are offering medicines at deeply discounted prices. To compete, Walgreens has acquired some smaller, independent pharmacies, while ramping up the number of in-store health clinics.

Thanks to its May acquisition of Take Care Health Systems, Walgreen expects to have 400 such clinics in operation by the end of next year.

"Walgreen also appears to be entering higher investment cycle," Bear Stearns analyst Robert Summers wrote in a research note. "Rapidly adding retail health clinics, recently opened distribution center, and continued high unit expansion all contribute to higher expense structure and absorb some of gross margin gains."

Walgreen shares fell 72 cents, or 1.6 percent, to close at $44.26 Monday. [via]

Appeal Heard in Verizon-Vonage Case

A judge suggested a possible compromise in a patent dispute between Internet phone carrier Vonage and Verizon Communications that would allow Vonage to continue signing up new customers while it modifies its technologies.

Judge Timothy B. Dyk, part of the three-judge panel of the U.S. Court of Appeals for the Federal Circuit, made the remark during oral arguments Monday.

The panel is considering Vonage's appeal of a March jury verdict that found Vonage infringed on three Verizon Communications Inc. (VZ) (VZ) patents in constructing its Internet phone system. The jury in awarded Verizon $58 million, plus future royalties for continued patent infringement.

U.S. District Judge Claude Hilton then barred Vonage from signing up new customers, a decision that threatens to cripple the company. The appeals court granted a stay while it considers the case.

Dyk raised the possibility that the appeals court could instruct Hilton to consider softening the injunction.

"Isn't there kind of a middle ground in these cases when the injunction would put someone out of business? Shouldn't that be a consideration?" he asked. "Shouldn't the district court consider allowing time for a workaround as part of the injunction?"

Verizon lawyer Richard Taranto said that Vonage has never asked for such a compromise. He added that Vonage has said publicly that it will be able to find alternatives to the disputed technologies while telling the court that the injunction would kill the company.

Verizon Deputy General Counsel John Thorne said after the hearing that Verizon has always been open to a settlement that would give Vonage more time.

Vonage could accept a modified injunction "if that's the least we got," Vonage attorney Roger E. Warin said. But he stressed that the company wants the entire verdict thrown out and a new trial granted because of what Vonage claims were flawed jury instructions.

Arguing before the judges, Warin said the verdict was invalid because Hilton, the trial judge, failed to provide the jury with adequate definitions for some technical terms.

Shares of Vonage rose 4 cents to $3.09 Monday. Verizon shares fell 13 cents to $41.50. [via]

What Is Search Engine Optimization ie SEO?

Amidst all the terms and acronyms in the web design, hosting and web business world is SEO. SEO is search engine optimization. Simple enough, right? Well, actually SEO is an ever-changing and rather complex process, and one that should be thought of as an ongoing task with each website you own or manage. While there are many aspects to search engine optimization, keeping up to date on the newest is critical for the best search engine rankings and results. While SEO integrates content, keywords, site design and back linking, one new and very critical component to good search engine rankings is unique, high quality content. Meta tags, keywords and phrases and more also play into modern search engine optimization strategies.

Search engines today are looking for more than keywords. Search engine algorithms, including Google’s are being reworked to look for unique, new and quality content. Fortunately, new, unique, well-written good quality content appeals not only to search engine spiders, but also to your site visitors. If you have the keywords, anchor text, and back links in place, but your rankings still are not what you would like, think about making certain that you are keeping your content new and unique.

While you may be familiar with keywords, for instance SEO for an article such as this one, the concept of key phrases may be new. Key phrases are short phrases that are likely to be typed into a search engine together. When planning and working on your site content, include likely key words and key phrases for your topic to increase the likelihood that your site will come up on a given relevant search.

Meta tags are just one part of the answer to the what is SEO question; however, they are an important one. Today, your page title and actual content are more important for search engine rankings and SEO than Meta tags. Visitors to your site cannot see Meta Tags, however search engine spiders can see them. Meta tags are located in the section of an HTML document, and may include the author’s name and email, copyright information, and most importantly, a description and also keywords.

When working to answer questions about what is SEO, keep all elements of search engine optimization in mind. [via]

Small businesses urged to exploit budget measures

Prime Minister Lawrence Gonzi has urged small businesses to take advantage of the measures introduced in the last budget that are of particular help to family businesses.

Dr Gonzi was speaking at the opening of a conference which brought together representatives of government entities and of business organisations and co-operatives to discuss the government's work in the commercial sector, with particular emphasis on small business and the self employed.

Parliamentary Secretary for Small Business and the Self Employed Edwin Vassallo said small and micro enterprises employed 66 per cent of persons in the private sector.

Together they contribute 38.7 per cent of the economy's value added made by the private sector, while 16.9 per cent of investment made by the private sector comes from small and micro-enterprises, he said.

Some 40 per cent of all small and micro businesses are in the wholesale and retail sector. [via]

Mirant sale of Philippines business nets $3.22 billion

Mirant Corp., which produces and sells electricity, said Friday it completed the sale of its Philippine business to a consortium of The Tokyo Electric Power Co. and Marubeni Corp.

Net proceeds after transaction costs and the repayment of $642 million in debt were $3.22 billion.

Mirant said in April it might sell or merge the entire company or take other measures to boost the power provider's shareholder value.

Since then, it sold off six natural gas-fired power plants to Broadway Generating Co. for about $1.39 billion and said it will sell its Caribbean business to a subsidiary of Marubeni Corp. for about $730 million, excluding repayment of debt. [via]

Unilever's Dove ad flies home with top prize

A product-less commercial questioning perceptions of beauty that started as a viral video on the Internet won the top trophy at the advertising industry's version of the Oscars on Saturday night.

The Evolution ad landed a Grand Prix best commercial award ahead of a Coca-Cola videogame and Pfizer Viagra commercial, which both picked up Gold Lion trophies at the industry's biggest annual awards ceremony.

The Evolution ad was created by the Toronto office of advertising agency Ogilvy & Mather for Anglo-Dutch consumer products group Unilever.

"It is interesting that this particular piece of film actually started as a viral video on the Internet," said Bob Scarpelli, who headed the 22-member voting jury.

"It maybe is indicative of the times we are in and the way our industry is changing. The way we are communicating with people has changed and will continue to change," he told a press conference in Cannes announcing the winners.

Unilever's win follows last year's success with a Guinness ad created by the London office of Abbott Mead Vickers BBDO, a division of the Omnicom Group. That ad was built around a campaign called "Noitulove" - evolution spelled in reverse.

The Unilever Evolution ad, which also picked up a Grand Prix trophy in the online digital communications category, uses time lapse to show an ordinary-looking woman worked over by make-up artists, hairdressers, lighting and digital retouching to quickly become a billboard model - ultimately asking the question: How have we so distorted our notions of beauty?

The short digital film was created to encourage girls to participate in Dove-sponsored "real beauty" workshops in conjunction with the brand's self-esteem fund.

However, once on the Internet it generated million of hits within a matter of weeks and became a talking point among media commentators and social commentary television shows.

The commercial had been widely tipped by advertising editors and commentators to pick up the industry's most prestigious award.

The ad also triggered numerous consumer-generated imitations, such as one showing a good-looking teenager digitally transforming into an overweight, smoking and drinking slob that became a hit on sites like Google's YouTube.

Ad executives at the festival were not put off by such maverick reworkings of the hit campaign, saying they simply underscored the rising level of engagement between brands and consumers via digital media.

"We have penetrated a culture in such a way that we all want to play with it," Babs Rangaiah, head of media and entertainment at Unilever, said during a panel debate at the festival on consumer-generated content.

The New York office of Saatchi & Saatchi won the agency of the year award, ahead of DDB in London and Ogilvy & Mather in Singapore. Saatchi's success broke a four-year winning run by the Paris office of TBWA, an Omnicom unit.

Abbott Mead Vickers BBDO picked up the trophy for the top network, a new category in the festival this year, ahead of DDB and Saatchi & Saatchi.

(Reporting by Gavin Haycock; editing by Keith Weir; gavin.haycock@reuters.com; Reuters Messaging: gavin.haycock.reuters.com@reuters.net; +44 0207 5427954))
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