TAM Money and Finance

$10 for an airline ticket. That’s a gimmick Skybus Airlines is using to hook people into its ultra-low cost flying model. On every Skybus flight ten seats will sell for $10. Other seats can run from $37 to $330 if you buy at the last minute.

How does Skybus plan to make money? You will be charged for everything:

The airline sells soft drinks, juice and water for $2, alcoholic beverages for $5 and, if you really want to splurge, a small bottle of champagne for $10. Candy bars and potato chips go for $2. If you are looking for a little more to eat, a sandwich will run you $10.

Each checked in bag costs $5 and boarding first will set you back $10. Then there’s the catalogs flight attendants push on you. ABC News’ Scott Mayerowitz called it, “the Home Shopping Network at 35,000 feet.” In addition Skybus hopes to sell naming rights for individual planes.

Money is saved by flying into less-trafficked airports, boarding the plane via stairs instead of the more costly gate, self-check in, and buying tickets only on the web.

If you can put up with being nickeled and dimed to death and are willing to fly through Columbus, OH Skybus could be a way to save you a lot of money.

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Microsoft wants to be a bigger fish in the large, online sea. Google has been trouncing them on search and subsequently on online advertising. Google is now moving into the relm of business software, a Microsoft cash cow. The New York Post reports Bill Gates and the gang have had enough and want to buy Yahoo:

While Microsoft and Yahoo! have held informal deal talks over the years, sources say the latest approach signals an urgency on Microsoft’s part that has up until now been lacking. Now, Microsoft shows fear.

The new approach follows an offer Microsoft made to acquire Yahoo! a few months ago, sources said. But Yahoo! spurned the advances of the Redmond, Wash.-based software giant. Wall Street sources put a roughly $50 billion price tag on Yahoo!.

“They’re getting tired of being left at the altar,” said one banking source who has recently had talks with Microsoft. “They now seem more willing to extend themselves via a transaction to get into the game.”

Microsoft spending $50 billion would be unprecedented for the company. They’ve been sitting on billions in cash for years. It put fear in their competitors until Google started reeling in the billions.

Gary Sattler at Bloggingstocks.com is ripping the Redmond giant:

My interpretation of Microsoft’s subliminal message here is that it couldn’t win the game so it’s going to pay the crippled kid down the street to come play with it. The only problem here is that the crippled kid isn’t all too interested in playing, and Microsoft doesn’t even seem to realize that it’s a cripple.

TechCrunch’s Duncan Riley observes, “It certainly is a strange time when Microsoft accuses Google of anti-competitive behaviour one day, then activily seeks to acquire a leading competitor for the sole purpose of trying to compete with Mountain View based uber company the next.”

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Rats couldn’t stop Yum Brands (YUM) from boosting profits 14%. The dirty, nasty rodents who starred on an internet video clip scurrying around a New York City Taco Bell/KFC are the company’s excuse for a 12% decrease in domestic sales. Fortunately for Yum foreigners didn’t care about the sanitary conditions of Big Apple stores. International sales shot up 56% in the first quarter.

Yum’s numbers should make for an enjoyable Kentucky Derby, sponsored by the Louisville-based company. The first round of mint juleps are on CEO David Novak.

In related news Yum announced that KFC and Taco Bell are now trans fat free. The rats rejoice. Nothing is worse than eating food off the floor only to find out it’s plugging up your arteries.

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If you like to drive (or you have to drive) you’re in trouble. Tight gas supplies mean rising gas prices. In the Southeast Wisconsin area where I live gas is comfortably over $3/gal. Analysts say current gas inventories are only slightly higher than just after Hurricane Katrina blasted the Gulf Coast. Expect the average gas price to top the record of $3.06/gal set in 2005.

We’re in a situation where too few refineries mean supply shocks when they go down due to fires or maintenance. High oil prices mean the oil companies have the cash to build more. It requires governments allowing them to build and locals rejecting NIMBY attitudes for the sake more gas. Or we just accept high gas prices and buy a Prius.

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[Photo via Flickr]

News Corp. (NWS) owns the New York Post, one of the few American newspapers improving its circulation. Dow Jones (DJ) owns another one, The Wall Street Journal. News came out that News Corp. wants to buy Dow Jones for $5 billion.

I bet you wish you owned Dow Jones stock this morning. It shot up to $57 dollar/share on the news.

News Corp.’s bid might ignite a bidding war for Dow Jones.

The deal makes a lot of sense for News Corp. The Post and WSJ can combine printing and back office operations to bring the tabloid into the black. There’s also the upcoming Fox Business Channel which could use the WSJ’s cachet.

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Stock options are risky (unless you’re a CEO) but they can help you make money when the market goes up and down. To pull this off you need to understand what you’re buying. InvestorTrip has begun a series on trading stock options by first telling you what they are. This should be an interesting series.

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The faltering housing market placed its stamp on the overall economy with the news that GDP slowed to 1.3% growth in the first quarter of 2007. The negative effects of the housing slump are understandable. What should concern is the possibility of stagflation, inflation plus a stagnant economy:

An inflation gauge tied to the GDP report and closely watched by the Fed showed that core prices — excluding food and energy — rose at a rate of 2.2 percent in the first quarter, up from a 1.8 percent pace in the fourth quarter. Another measure tracking all prices jumped by 3.4 percent in the first quarter, compared to a 1.0 percent decline, on an annualized basis in the fourth quarter.

With President Bush’s troubled the last thing he wants is a slumping economy

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Earning interest on your checking account no longer requires you to have tons of money sitting in the bank. (That whole “you need money to make money” vicious circle.) Charles Schwab is offering a no-fee checking account paying 4.25% no matter what your balance is.

Moving to a new checking account can be a pain. If you have direct deposit–and why not?–you have to make sure your paycheck gets into the new account. Then if you do electronic bill paying or have automatic withdrawals you have to change those. That will keep Schwab from stealing a lot of customers from traditional banks. If you’re about to change banks take a look at what Schwab is offering. Now, if you’re a Schwab customer you have a way to earn some interest on your non-invested funds while having greater liquidity.

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Bad stock market days happen. When you get runs like we’ve been watching these last few months we shouldn’t be surprised to witness a considerable drop like yesterday’s. Two groups who have egg on their faces are the NYSE (NYE) and Dow Jones (DJ). The stock exchange couldn’t handle the massive volume leaving many trades unprocessed. Today the NYSE asked specialist firms to remain open after the closing bell to finish processing trades. Tuesday wasn’t a shining moment for the now publicly-traded exchange.

For Dow Jones their credibility to communicate vital market data took a huge hit. Tuesday, Dow Jones’ computers couldn’t keep up with the massive volume. Their index calculations fell behind what was actually happening. When technicians switched to a backup system the data caught up causing a 178-point drop. That set into motion automatic computer trades linked to the Dow Jones index.

I expect trading houses to build their own DJIA calculators on their own computers so prevent this from happening again. That will cut into Dow Jones’ subscription revenue. I also expect a few trial lawyers to launch a few suits to recoup clients’ losses.

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Last week, a memo from Starbucks (SBUX) founder and chairman Howard Schultz leaked onto the internet. The title briskly states: “The Commoditization of the Starbucks Experience.” In it he writes about “Some people even call our stores sterile, cookie cutter;” automatic espresso machines ruining the site lines to the baristas, and even the lack of coffee smells due to freshness packaging. The “commoditization” of the brand has opened it up to “small and large coffee companies, fast food operators, and mom and pops, to position themselves in a way that creates awareness, trial and loyalty of people who previously have been Starbucks customers.”

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