DealBook: Dell Adjourns Vote on Deal as Some Big Investors Start to Shift

Kimihiro Hoshino/Agence France-Presse — Getty ImagesMichael S. Dell, founder of the computer company that bears his name.

9:21 p.m. | Updated

Dell bought itself six more days to win backing for its proposed $24.4 billion sale to its founder, but the fight for additional support remained tough.

On Thursday, Dell, the computer maker, adjourned a meeting for shareholders to vote on the deal only minutes after opening the gathering. The vote is now scheduled for July 24 at 6 p.m.

Thursday’s decision, which many had expected, prolongs the drama surrounding the former giant of the personal computer industry. Dell has been shrouded in uncertainty for several months, as investors have questioned whether the $13.65-a-share bid by Michael S. Dell and the investment firm Silver Lake would succeed.

The meeting was adjourned after preliminary tallies showed that the deal would almost certainly have been defeated. With more time, a committee of Dell’s board and the company’s proposed buyers will try to twist more arms.

The two groups have already made headway. On Wednesday night, a number of big institutional investors switched their votes to “yes,” people who had been briefed on the matter said. Those investors included big asset managers like the Vanguard Group, BlackRock, the State Street Corporation, the Bank of New York Mellon and Invesco.

For the votes already cast, the race looks like a dead heat, one of these people said. But an estimated 23 percent of Dell votes have not been cast, effectively counting as no votes. And any votes can be changed before the new shareholder meeting, meaning that the landscape may change yet again.

The bar for approving the deal is high. More than 42 percent of Dell’s shares would have to be cast in favor of the deal. The billionaire Carl C. Icahn and Southeastern Asset Management, who have proposed an alternative to the leveraged buyout, together own almost 12.7 percent.

“It is unfortunate, although not surprising, that Dell’s board and special committee have delayed the date of the special meeting at which stockholders can vote on the Michael Dell/Silver Lake freeze out transaction,” Mr. Icahn and Southeastern said in a statement. “We believe that this delay reflects the unhappiness of Dell stockholders with the Michael Dell/Silver Lake offer, which we believe substantially undervalues the company.”

Instead, Mr. Icahn and Southeastern have proposed that the company buy back 1.1 billion shares for $14 each, and offer warrants to buy additional shares for $20 each. The two investors valued their plan at $15.50 to $18. But the committee of Dell’s board rejected the idea as too risky and not in the best interests of other shareholders.

Both sides have argued that Dell must continue to move away from personal computer manufacturing, which once propelled its profits but now weighs down its prospects. The embattled business is trying to build a more profitable corporate software and services operation.

But Mr. Dell and Silver Lake argue that such a transformation can only succeed if carried out in private, away from analysts and public investors. Mr. Icahn and Southeastern dismiss that contention, while arguing that the current offer is too low.

Many investors appear to hope that the prospect of defeat will force Mr. Dell into raising the bid. He acquiesced before, increasing the purchase price to its current level from $13.60.

The committee will try to persuade the bidders in raise their price again, the people briefed on the matter said. But people close to Mr. Dell and Silver Lake insist that no such increase is coming, given the declining financial health of the company and the overall weakness of the personal computer industry.

If that is the case, the Dell committee will likely seek a letter from Mr. Dell and Silver Lake confirming that $13.65 a share is their best-and-final offer, erasing any illusions about an increase. Shares in Dell rose 1.9 percent on Thursday, to $13.12, suggesting that investors feel somewhat more optimistic that the buyout will succeed.

Bits Blog: With Windows 8.1, a New Start That Looks Familiar

Stuart Isett for The New York Times A customer at a Microsoft store gets an introduction to Windows 8 on a tablet.

Yes, Microsoft is bringing back some comforting hallmarks of its Windows operating system, including the Start menu. No, it is not chucking out the modern, touch-friendly, tile-based look of Windows 8, the new version of the software that has sent much of the PC industry, many pundits and some computer shoppers into a tizzy.

That’s the short version of what’s coming in Windows 8.1, an update to Windows 8 that will be out by the end of the year. In one of the first demonstrations of the operating system to an outsider, Microsoft executives showed off a bevy of changes the company has made to the operating system, a number of which were in direct response to some of the more pointed criticisms the operating system received from users after coming out last fall.

Hints from Microsoft in recent weeks about those changes, along with a slump in PC sales that analysts believe was worsened by Windows 8, have led to heated speculation that Microsoft was preparing to backpedal from the most radical changes it made in Windows 8. Not true, executives said.

“This isn’t a U-turn at all,” said Antoine Leblond, corporate vice president of Windows program management. “We really believe in the direction we started on with Windows 8.”

Indeed, Windows 8.1 looks virtually indistinguishable from Windows 8 in many respects. People who dislike its colorful mosaic of tiles will not find much in the new software to change their minds.

That’s because it is unlikely, as a practical matter, that people will be able to entirely escape the tile-based interface in Windows 8.1, even though Microsoft is making it easier to avoid it. As expected, the new operating system will allow people to configure the software so that they start in desktop mode — the “classic” Windows interface with a taskbar at the bottom of the screen, a background image and applications with traditional menus — whenever they boot up their PCs.

Microsoft didn’t allow this with Windows 8. Even if their destination was desktop mode, where Office and millions of legacy Windows applications run, Windows 8 users had to pass through the tile screen, an inconvenience to many. It’s noteworthy that Microsoft will still put users in the tile interface by default when they start up their machines.

Microsoft is also reincarnating the Start button with Windows 8.1, though it won’t behave exactly like the Windows Start buttons of yore, the primary way Windows users found and launched applications for decades.

There will be a Windows flag icon in the bottom left corner of the taskbar in the Windows 8.1 desktop. But clicking — or, if you have a touch device, tapping — the button will simply return you to the tile-based interface, from which you can launch apps. People can get to a more traditional looking menu of applications from the Start button, but they have to configure the system to do that.

What these changes mean is that someone who makes the effort to reconfigure the operating system will be able to spend most of their time in the classic desktop interface. In practice, Microsoft will keep nudging them in the direction of the tile-based interface at every opportunity because it believes that is the future of Windows.

The company thinks most devices are moving inexorably in the direction of touch screens, including laptop computers and desktops. The tile interface of Windows 8 and its successors is how the company is preparing for that future.

If developers want to distribute applications through Microsoft’s app store for Windows, they have to write them so they run through the modern Windows interface. Even if a customer only wants the old-fashioned Windows, they will be bounced into the new interface anytime they launch Netflix and any other modern app.

Over time, Microsoft believes users will become more comfortable in the modern interface. But it doesn’t want to rush them if they’re unready.

“There’s an opportunity here to help people feel more oriented if they don’t feel oriented,” said Jensen Harris, partner director of program management at Microsoft.

There are a variety of other changes in Windows 8.1 that are likely to receive less notice. People using Windows 8.1 in the modern interface will be able to have four different windows open at once, rather than two, which will make it easier for multitaskers to jump among different applications. A new built-in search function will automatically create a slick-looking mash-up of different types of data relevant to a search term, including songs, videos, photos and Wikipedia entries.

The underlying bet Microsoft is making with Windows has not changed, though. Unlike Apple, which has one operating system for the iPad and one for computers, Microsoft believes the software that powers both types of devices should be the same.

“The role of Windows is to unify that experience,” Mr. Leblond said.

Gadgetwise Blog: Tip of the Week: Customize the Windows 8 Start Screen

For many people who upgrade from earlier versions of the system, Windows 8 and its colorful Start screen can be a little overwhelming. The Start screen, like the Start menu in older Windows editions, is meant to be the go-to place for all the computer’s files and programs. Like the Start menu, the Start screen can be customized according to personal needs and tastes.

The Start screen’s tiles — those colorful, clickable squares that serve as shortcuts to files, folders, programs, bookmarked Web sites, contacts, games and more — can be dragged around the screen into an order that makes more sense to the individual user. Tiles can also be sorted into new groups, resized or even removed so the most important things are more easily found. Microsoft has more tips and a demonstration video for customizing the Windows 8 Start screen on its site.

Gadgetwise Blog: Tip of the Week: Start Menu Alternatives for Windows 8

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Bits Blog: Research Firm Says Windows 8 Had a Rocky Start

Elaine Thompson/Associated Press Representatives from personal computer companies whose devices run Microsoft 8.

For much of the week, Microsoft has been trumpeting the strong start of Windows 8. On Tuesday, Tami Reller, chief financial officer and chief marketing officer for Windows, told investors that Microsoft had sold 40 million licenses to the operating system during its first month on the market. Steven A. Ballmer, Microsoft’s chief executive, promoted that figure at the company’s annual shareholder meeting on Wednesday.

But on Thursday, NPD, the retail sales tracking firm, published data that painted a darker picture of the Windows 8 introduction.

Unit sales of Windows PCs in retail stores in the United States fell 21 percent in the four-week period spanning Oct. 21 to Nov. 17, compared to the same period the previous year, according to the firm.

NPD said sales of Windows 8 tablets had been “almost nonexistent,” accounting for less than 1 percent of all Windows 8 device sales. NPD collects sales data in weekly increments, so the week of Oct. 21 was the first in its system to include sales of Windows 8, which went on sale on Oct. 26.

The figures suggest that Windows 8 did nothing to arrest the downward trajectory of the PC business, much less lead to a rebound in a market that has been struggling for some time. “It hasn’t made the market any worse, but it hasn’t stimulated things either,” Stephen Baker, an analyst at NPD, said in an interview. “It hasn’t provided the impetus to sales everybody hoped for.”

There are a few things to keep in mind about what NPD does and does not count in its figures. The firm tracks sales to customers in most, but not all, American retail stores. In other words, it tracks actual consumer demand for products — in this case, Windows PCs.

Microsoft’s 40 million figure, in contrast, represents copies of Windows that Microsoft sells to all of its customers. That includes some consumers but more often it reflects sales to the hardware makers that install Windows on their machines, some of which have not yet been bought by consumers.

Microsoft’s figure also includes sales to people who are buying the new operating system to upgrade existing PCs, along with sales to business customers that don’t happen at cash registers in stores, which NPD doesn’t reflect. Typically, though, new versions of Windows are adopted most quickly by consumers, so it’s not clear that the inclusion of the business market would show a positive direction for the PC business.

It’s possible also that Black Friday, which was not included in NPD’s figures, provided a jolt to PC sales.

The Windows 8 debut looks like it had much less of a positive impact on PC sales than did its predecessor, Windows 7, which went on sale to the general public on Oct. 22, 2009.

At the time, NPD said that unit sales of Windows PCs rose 49 percent during the first week Windows 7 was on sale, compared to the same period the previous year. Mr. Baker said he wasn’t able to provide sales data for the first four weeks of Windows 7’s availability for a more complete comparison to Windows 8.

The PC business in 2007 had much stronger unit sales than it has now, in large part because of a boom in the low-cost laptops known as netbooks. Fast forward to 2012, and sales of netbooks have nearly vanished, replaced by surging sales of the iPad and other tablets.

Jets Teammate Puts Tim Tebow On Blast & Explains Why He Can’t Start

I can NOT stand when players talk trash but don’t want their name attached to it. SMH.  Man up!!!  The Jets circus continues…

The front page of today’s New York Daily News declares that Tim Tebow can’t be the starting quarterback because “He’s terrible” — according to one of his own teammates.

GameTimeGirl

That was the word used by a teammate who didn’t want to put his name behind that assessment, but another teammate who was willing to put his name behind his opinions, left guard Matt Slauson, told the Daily News that Mark Sanchez is the Jets’ best quarterback by far.

“It’s not even close,” Slauson said. “All the other quarterbacks know it. I have all the confidence in Mark. We don’t really have a choice.”

Asked about the Jets’ two backup quarterbacks, Tebow and Greg McElroy, Slauson said the Jets really only have one other quarterback.

“We have Greg . . . and we have an athlete,” Slauson said.

According to the Daily News story, there is no quarterback controversy with the Jets because there is no one in the Jets’ locker room who believes Tebow deserves to start.

“Hell, no!” one starter said. “You got to keep defenses honest. You just can’t line up in the Wildcat all the time. That won’t work.”

Said another teammate, “We can’t win running that sh–.”

Earnings Report Gives Yahoo’s New Chief a Good Start

Yahoo reported stronger earnings than a year earlier, but future growth remained uncertain. “We have a fundamental foundation on which to grow,” Ms. Mayer said in a conference call with analysts. “We believe Yahoo’s best days lie ahead. We intend to win.”

Largely because of a long-awaited sale of its stake in Alibaba last month, Yahoo reported Monday that net income in the third quarter, which ended Sept. 30, rose sharply to $3.16 billion, or $2.64 a share, from $293 million, or 23 cents a share, in the same quarter a year ago. That included a net gain of $2.8 billion related to the Alibaba sale and restructuring charges of $16 million, the company said.

That news sent Yahoo’s shares up 4 percent in after-hours trading, but some analysts were less sanguine. “Earnings were decent — hooray! — the wheels didn’t come off the bus,” said Colin Gillis, an Internet analyst with BCG Partners. “But there are still some serious issues facing her.”

Those problems start with the company’s stagnant revenue, which was $1.2 billion in the quarter. Its income from operations decreased 14 percent, to $152 million from $177 million in the year earlier period.

With 700 million users each month, Yahoo remains one of the most visited sites on the Web, but it has been ceding its share of the online display ad market to rivals like Facebook and Google.

Its search business, which Yahoo outsourced to Microsoft in 2009, is on its last legs, propped up only because of a revenue-guarantee clause in its contract with Microsoft.

In the call with analysts, Ms. Mayer acknowledged that Yahoo’s search deal with Microsoft had been disappointing. “We’ve experienced some disappointment on the monetization, which is why the revenue guarantee is in place,” she said. Yahoo’s revenue guarantee expires in March. Without the guarantee, Yahoo’s revenue could fall next year by $100 million.

Ms. Mayer, who joined the company in July after 13 years at Google, said Yahoo’s top priority was to “make the world’s daily habits inspiring and entertaining.” She said Yahoo would renew its focus on its search business, modernize its home page, mail and messenger services, develop a mobile presence and seek out “double-digit million-dollar” acquisitions.

She said the company was “very well-positioned” to capitalize on the shift of consumers to mobile devices. Noting that the most frequent use of smartphones was checking weather, sports scores, financial information, watching videos, sharing photos, getting news and playing games, she asked, “Does that sound like any particular company that you know?”

To lure engineers to the company and to improve employee morale, one of the first things Ms. Mayer did was offer free cafeteria food and give employees the option to trade in their BlackBerry phones for iPhones and Android-powered smartphones.

“Cultural change can’t be bought and the vast majority of what we’ve done has cost nothing,” Ms. Mayer said of those moves. “I’m already impressed in the change in our applicant pool.”

Bits Blog: Some Analysts Start to Like RIM

Investors, perhaps pleased by any bit of good news from Research in Motion, pushed up the beleaguered BlackBerry maker’s share price on Friday almost 7 percent after a quarterly financial report that, while loss ridden, was not as bad as feared.

Analyst reaction, however, has been more mixed.

A longtime pessimist about RIM, Kris Thompson, with National Bank Financial in Toronto, said he was positive about the company after the release of the second-quarter results. They included a $235 million net loss and revenue of $2.9 billion, an increase from $2.8 billion in the first quarter but well below the $4.2 billion recorded a year ago.

Mr. Thomson, who was one of the first analysts to predict that RIM’s shares would fall below $8 (they were trading at $7.70 at midday on Friday), raised his target price for RIM to $12 and upgraded his rating to outperform.

“My guess is that the stock caught a bottom here, and you’re going to see momentum throughout the holiday season,” Mr. Thompson said in an interview on Thursday. “Everyone was expecting the worst, and they really overperformed on every metric.”

Mr. Thompson said he had expected RIM to generate only average sales per user of $180, but the company reported $230. That, combined with revenue increases in Canada and Britain, he said, suggested that it was having some success selling its current high-end phones,. He said that was a positive sign for the BlackBerry 10 phones, which are expected to arrive next year. RIM hopes to revive BlackBerry with those phones and their new operating system.

“Of course we’re all rooting for them,” said Mr. Thompson. “There’s room for three companies, and we want one of them to be Canadian.”

There was less cheering from several other analysts, even if they did acknowledge that the company’s financial managers had made the best they could out of a bad situation.

Based on the company’s financial statements, several analysts said they thought RIM was selling BlackBerrys for less than it cost to make the devices. In their analyses, RIM’s operating profit now comes entirely from fees it charges wireless carriers for routing BlackBerry users’ data through its unique network and other services.

RIM’s executives declined to answer direct questions about that during a conference call with analysts. But they did indicate that further price cuts would be introduced during the current quarter to maintain BlackBerry sales

Shaw Wu, an analyst at Sterne Agee, said he attributed RIM’s better than expected financial performance to its success at collecting payments on outstanding bills. While Mr. Wu praised the company for that effort, he said the number of uncollected bills would inevitably decline with each quarter, particularly given RIM’s falling sales. In the call with analysts, RIM acknowledged that many carriers had reduced the number of BlackBerrys they stocked.

Almost forgotten in the earnings report was the BlackBerry PlayBook, RIM’s unsuccessful tablet, which is now being cleared out at very low prices, particularly in Canada.

During the quarter, RIM shipped about 130,000 PlayBooks. By comparison, Apple sold 17 million iPads during its last quarter.

While RIM has lots of company when it comes to being unable to break Apple’s hold on the tablet market, the PlayBook’s poor performance is not a good sign for BlackBerry 10. The tablet and the coming phones share the same fundamental operating system. The PlayBook already contains several features that RIM is now showing off on prototypes of the new phone.