US employment down – a serious sign of slowdown

US employers cut 17,000 jobs from their payrolls in January, US Labor Department figures showed. Economists had been expecting a rise of 80,000.  If this figure proves to be in line with actual events (after adjustments), it shows severe declines in economic activity in the US.  There has been modest wage inflation over the past few years so there is pressure for wage increases.  The combination of declining employment and upward wage pressure makes for a very uncomfortable economy, with potentially volatile political implications especially in an election year.

Microsoft wants to buy Yahoo: desperation and disaster

Microsoft is bidding for Yahoo.  It has offered to buy  Yahoo for $44.6 billion in cash and shares.  The offer, contained in a letter to Yahoo’s board, is 62% above Yahoo’s closing share price yesterday. Yahoo cut its revenue forecasts earlier this week and said it would have to spend an additional $300m this year trying to revive the company.

Microsoft’s intent smacks of desperation as it tries to retain some preeminence in computing.  Its operating system still keeps the company alive, but its technology is lagging behind that of rivals, expecially in the open source space.  Its forays into entertainment are working, but this is not a sector where they can claim excellence or pioneering work.

Our big concern, however, is the danger that MS culture will take over Yahoo, which has provided a far more open and honest search engine than Google. Google’s privacy policy and ownership should be an issue for all internet users – that is why Yahoo is referenced on rather than google.