Market News: Yahoo, HP, and Sprint

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Today’s breaking news includes Yahoo! Inc. (NASDAQ:YHOO) receiving coverage initiation by Wedbush, Hewlett-Packard Company (NYSE:HPQ) to launch tablet PCs, and Sprint Nextel Corporation (NYSE:S) dropped some pocket change on lobbying for Q2.

Wedbush analyst Lou Kerner this morning launched coverage of Yahoo (NASDAQ:YHOO) with an Underperform rating and $13.25 price target. “While we’re impressed with the strategy outlined by [CEO] Carol Bartz, Yahoo is a massive ship to turn around, and competitors are moving forward at a rapid clip,” Kerner writes in a research note. “With page views decreasing and uncertainty surrounding the timing and impact of the transition of the search business to Microsoft, we believe that Yahoo is now an execution story, with no catalysts on the near-term horizon.” Kerner (knows) that display advertising is “emerging as the largest part of Yahoo,” but he notes that monthly visitor levels have been decreasing on a year-over-year basis in 11 of its 16 major content and communications properties. “While Yahoo is well positioned to leverage ’science, art, and scale’ to drive higher pricing, without an ability to organically grow traffic, we believe that Yahoo will be limited in its ability to create shareholder value.” The analyst contends that the rapid growth of Facebook and other new content site poses a serious challenge for the company. He says Yahoo is going to have to combined acquisitions with innovation, - “not a Yahoo strength of late” - to maintain the scale needed to drive pricing and revenue growth. “Yahoo’s increasing focus on innovation is to be applauded, but results, not strategies, are needed to drive shares higher,” he writes.  – Barron’s

Hewlett-Packard Company (NYSE:HPQ) confirmed Thursday that it will unveil new tablet computers soon. The confirmation came in a conference call with analysts after the Palo Alto company reported earnings on Thursday. Todd Bradley, executive vice president HP's personal systems group, was asked about HP's tablet plans. "Well, as we look at tablet sales and slate sales that was a big part of the reason we acquired Palm," he said. "You'll see us with a Microsoft product out in the near future, and a webOS-based product in early 2011." HP is expected to produce two types of tablets. The Microsoft product Bradley refers to is being called the Slate 500 and will be aimed at the business market running Windows 7. The webOS tablet is taking on the market that Apple Inc.'s iPad has been so successful in and is expected to be called the PalmPad. – Silicon Valley / San Jose Business Journal

Sprint Nextel Corp. (NYSE:S) spent $512,100 in the second quarter to lobby the federal government on taxes, wireless regulation and other issues, according to a disclosure report. That's down from the $756,000 the cell phone company spent a year earlier, and it's less than the $774,100 it spent in the first quarter of 2010. Sprint, based in Overland Park, Kan., also lobbied the federal government on legislation involving texting while driving and public safety communications, according to the report filed on July 19. In April through June, the company lobbied Congress, the Department of Commerce, the Department of Homeland Security and the Federal Communications Commission, according to the report filed with the House clerk's office. – AP

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