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Well, color me shocked. As I’ve blogged before, I am a happy customer of XM. I really never thought that they would try to merge with Sirius despite all the talk that they would. Well, looks like I am wrong.

I really can’t imagine that the FCC would allow the only two satellite radio companies to merge without significant concessions. As a matter of fact, there is currently a specific rule stating that they cannot merge. When DirecTV and Dish Network discussed merging, the FCC put the smack down on the two companies instantly. FCC Chairman Kevin Martin is clearly not amused as the AP has him quoted as saying “[t]he companies would need to demonstrate that consumers would clearly be better off with both more choice and affordable prices” and that the hurdle would be high to any merger.

I’m excited about the prospect of having both the NFL and MLB on the same radio. I’m not a huge fan of football, but it’s a nice way to pass a Sunday drive back home from one of our families when baseball is out of season. I couldn’t care less about getting Stern and I’d imagine some of the music channels would get whacked (please not Lucy or Fungus) but overall I think it’s good for the customers of the services.

Unless prices get pushed up because of the lack of competition. I wouldn’t be at all surprised to find a rate freeze being negotiated to get the deal done.

For investors, I think it’s a great deal and one that may save both companies. Neither one appeared to be on the path to profits competing against one another but together they may be able to wring out enough costs to become profitable. Certainly, they should be able to lower the number of satellites that they need to reach their combined subscriber base.

I think it’s a win for just about everybody as long as the FCC carefully considers the deal and does get some concessions from the company that they won’t jack up rates just because they are the only game in town. I have little doubt that XM and Sirius will be glad to agree to concessions to get the deal done as both probably see this as the only profitable endgame.

This isn’t something that I particularly care about, but if you are interested in valuing your blog Raj Dash over at Performancing has a long writeup on how to value blogs for purchase.

There are a lot of ideas that bloggers can use even if they are not interested in selling. Basically, he goes through a total Search Engine Optimization (SEO) profile of your blog.

But why is SEO important? There is a whole industry on optimizing content for search engines. Basically, the more you are seen on search engines the more visitors you get. The more visitors you get, there are more ads you can sell. More ads equals more money.

I don’t sell ads on this site currently. I have dabbled in the past, but I have never found a way to make them unobtrusive with Adsense. I haven’t tried Text Link Ads or any of their competitors out of sheer laziness. But before I do, I will certainly run through Raj’s steps to make sure that the site is fully SEO compliant.

I will be covering this site more in detail in the coming weeks as I am able to digest all of the information, but I wanted to point out Paul Graham’s website on startups. He has some fantastic ideas and advice for anyone that is looking seriously at starting their own business.

Ok, I might have to eat my words. What the Hell is going on at Ford? I understand that Mulally is trying to clean up the mess of Bill Ford and Jacques Nassar, but I don’t think this is the way.

First, Ford decides to let the car that saved them (the Taurus)  die a slow, horrible, painful death as they do not update it for nearly a decade. They dump the car on rental fleets for almost nothing as no one besides the rental companies know the model is even still around. The car was once a revolutionary design and was the best selling model in America for half of the 1990s. They simply abandon the midsize platform before coming out with a replacement for the Taurus (the 500) .

Now, they want to rebrand the three year old 500 as the Taurus beginning in 2008? Whatever brand cachet the name Taurus had is gone because of the horrible way that Ford treated the brand. Their only real hope is that enough people forgot the “Taurus is dead” stories from two months ago and don’t realize the brand didn’t stop production in 2000.

There are plenty of reasons to rebrand the 500, which is a retread of a brand name from the 50s and 60s. However, using the Taurus name to do it is simply a terrible decision. There is a reason that the best selling brands have the same names they’ve had for 20 years (Civic, Corolla, Camry, and Accord). How many domestic cars have the same name they had 20 years ago? It’s tough to constantly rebrand and consumers are easily confused.

Maybe that’s why I don’t work in Detroit?

I’ve written previously on why I believe that Google gets it. I use several Google products myself, including Gmail and Reader because I’ve found that these are best in class apps that literally blow everything else out of the water.

Google Maps has been a work in process for me. I do use it whenever I need to find a business or a phone number but that was because it was linked from my personalized homepage more than anything else. Google’s tool to allow you to make free long distance calls from Maps was a step in the right direction, but it still wasn’t a killer app.

For me, Google Maps has now gone killer app for me. I just upgraded my phone to the sexay T-Mobile Dash and am on T-Mobile’s $5.99/mo internet plan. It’s enough for me to check my Gmail and Reader on the road or while I am waiting in a doctor’s office but I had heard that T-Mobile blocked a lot of ports to try and get people to upgrade to the $29.99/mo internet plan. I’ve found I can use AvantGo and Handango on the handheld, so I decided to try and download Google’s new Maps for Mobile program.

Oh. My. God. I had been using the Java app with some success, but it wasn’t that great. It threw out all kinds of nasty errors that had to be clicked through in order to get to the application. It was buried in my Java menu so it was rather difficult for me to find.

The downloaded version has a shortcut in my Start menu, which makes it easier to find for a newbie. I also don’t get any of the Java errors and warnings that I received earlier. Not only can I get up to the minute traffic information, but the app integrates itself with your contacts. This is the true killer app for me. Need directions to Aunt Mabel’s house? Pull up her contact in your phone and click “find with Google Maps”. Find a business and want to add to your contacts? Click “Add to Contacts” from Google Maps. While the integration from Maps to your Contacts isn’t perfect, it’s a whole heck of a lot easier than manually inputting from two screens.

Right now, Gmail is in a similar state with the Java application. I get the same errors, even though it does work (as does the browser version but the Java version has several enhancements). If anyone at Google is listening, I would love to see Gmail get a similar treatment with a download app. Integration with my calendar, contacts, and Maps similar to the online version would be wonderful as well, but I’d just take a download app at this point.

I still wouldn’t buy its stock, but Google gets it and gets it faster than anyone else. That’s why I will continue to use Google and be an evangelist for its services.

The agency dilemma is an often studied issue in management classes. Basically, the dilemma states that an agent will do what is in their best interest more times than they will do what is in the best interests of the principal if the principal is not watching them like a hawk. In a stock market context, management are the agents of the shareholder principals and their job is to do what is in the best interest of shareholders.

This has failed again and again as management has gorged themselves on rich pay packages while the Board of Directors (the shareholders’ representatives) have been asleep at the wheel. Backdated stock options are another symptom of this broken system that rewards agents at the expense of the principal.

I’ve previously blogged on another large section of the principal-agent problem in response to a Ben Stein article. He’s back with another excellent article on how management has completely turned the buyout process on its head to enrich themselves at the expense of shareholders.

There is no better example than the current battle over Caremark RX. Caremark is the largest pharmaceutical benefits manager, which if you have prescriptions filled via mail you know what they are. It’s a big local story because the spurned suitor is one of the largest companies in St. Louis. Basically, Caremark’s CEO shopped his company to suitors that met two conditions. The first was that he would keep his job. The second is that the company would personally indemnify him from any suits due to backdated options that enriched Mr. Crawford, his son, and other executives to the tune of hundreds of millions of dollars.

CVS, the drugstore chain, who desperately wanted to get Caremark’s mail-in order business to help compete with Walgreens which started their own PBM. They agreed to Mr. Crawford’s conditions and set the price of the merger at $48.50/share. They also gave huge change of control agreements to most of Caremark’s executives so that if they lost their jobs in the merger they would be taken care of to the tune of tens of millions of dollars. Oh, and for negotiating the deal Mr. Crawford would receive $50 million.

Seems pretty sweet, huh? Well, if you are a Caremark executive it is. Shareholders got hosed in the deal. The price of $48.50/share was 21.6% below where the stock traded a month prior to the deal. It also banned Caremark from seeking higher offers and included a $650 million penalty if the deal did not go through.

Enter Express Scripts, who offered 25% more than CVS. The Caremark board refused to even listen to the offer. They cited the breakup fee and the fact that the deal was already done in refusing Express Scripts’ offer. What they didn’t cite was more telling. Express Scripts refused to include large payments to Caremark’s executives or offer golden parachutes. They refused to indemnify Mr. Crawford for the sins under his watch (which makes me wonder if this is the primary motive for the deal?). They made an offer that was better for the shareholders but worse for management. And management stuck its fingers in its ears and hummed.

The classic principal-agent dilemma personified. This is what happens when shareholders (and their “representatives”, the Board) are asleep at the wheel. Unfortunately, most large shareholders, the mutual fund companies, don’t want to upset the apple cart and go along with management as well so the individual shareholder is left out to dry.

Unfortunately, there is no real fix in the era of mega-global corporations. Congress has trotted out fixes but they won’t work. Giving massive equity to management didn’t work either and led directly to the stock option scandal. It seems that as smart people come out with ways to fix the current system, smart people on the other side come up with ways to exploit that system. Wall Street is (and always has been) a chummy atmosphere, which is why the Fidelitys of the world don’t want to upset the apple cart because it is their friends that they would be outing.

I don’t know what the solution is other than to have shareholders take back the companies from executives. But that ain’t gonna happen any time soon. And the Crawford’s of the world will continue to get their windfalls from the skins of the shareholders they are supposed to be representing.

There are very few websites that I pimp on mine because there are very few that I really fall in love with. I mentioned footnoted last week in relation to the Home Depot mess. One website that I have recently discovered that falls into this category is TechCrunch. Two of my main interests are tech and business and TechCrunch is an excellent site that covers both really, really well.

One of the first articles that I starred in Google Reader (coverage here) was a list of Web 2.0 apps that they can’t live without. Web 2.0 is the buzzword for reader generated content like this blog and Myspace and led to Time copping out and naming me and you as persons of the year.

I respect this list highly because TechCrunch literally reviews thousands of startups per year and clearly would have an idea of the best of the best. I use a couple of the items on the list (Wordpress and Gmail) and have put a couple of others on my radar for future use (Skype mobile, Techmeme) but all are wonderful suggestions.

Since I subscribed to TechCrunch I’ve starred various articles relating to services for my next cellphone, services for my desktop, and just general stories about startups doing interesting things.

I give TechCrunch the rare gold star for excellent reporting on a combination of two areas that very few can grasp intelligently.

Here’s $210 million to go away.

I really hope that if I ever get fired for poor performance, my company gives me $210 million to ease my pain. That’s probably not counting tax gross-ups and “other items” that will undoubtedly show up in the SEC filing (I can’t wait for footnoted to take a whack at the severance agreement).

During Nardelli’s term as CEO, he was noted for doing away with local control of Home Depot’s substituting a military style top-down approach for the stores. Businessweek did a series of articles on Home Depot last year including one on his military style approach to management. That approach has led to a marked decline in customer service scores and many consumers (myself and my wife included) dread going to Home Depot because of the lack of people to actually help the customer find what they need in their poorly labeled warehouse-type stores.

The main reason for the decline in customer service is that Nardelli’s top-down style forced managers to cut costs at all costs. All stores were micro-managed by regional managers who were micro-managed by their managers. The easiest way to cut costs was to cut customer service people, the race to the bottom many companies seem to be engaged in.

Luckily, Lowe’s (who has been eating Home Depot’s lunch during Nardelli’s tenure) is building a new store that is closer to our house than even the Home Depot. Under Nardelli, Home Depot has lost market share and the stock price is down 8% during his six year tenure. Of course, his pay package hasn’t suffered along with the stockholder. He has made at least $225 million in his six years on the job and refused to listen to shareholders at an Annual Meeting when they dared to question his pay.

Now, he’ll receive another $210 million. He’s received almost a half billion dollars for six years work. Nice work if you can get it. I don’t think Home Depot shareholders feel the same way.

I often slag my local paper (the St. Louis Post-Dispatch) as second rate. Growing up in a city with two first rate papers will do that to you. When they have real stories, the P-D does a great job with them and they have good reporters, but the cost cuts of the past several years have eliminated a lot of those top notch reporters and left the paper largely rerunning AP wire stories.

One of the stories that they have been following really well is that of our local electric utility, AmerenUE. Ameren is a conglomerate of all of the smaller electricity companies that were in the area and they have most of Eastern Missouri and Southern Illinois locked up.

They have had, let’s say, problems in the past 18 months. A storm in August 2005 left nearly half a million people without power for up to four days.

Last December, a reservoir at the top of a hill gave way unleashing a torrent of one billion gallons of water on a national forest and literally washing away the forest ranger’s house. Luckily, nobody in his family that was in the house at the time was seriously injured. Ameren is currently paying hundreds of millions of dollars to repair damage as the reservoir gave way because of human error and lax inspections.

Then, this summer two storms packing 75 mph winds hit the area two days apart. Another half a million people lost power as the temperatures soared to over 100 degrees. Some people lost power for almost two weeks. After the summer storm, the P-D began reporting that Ameren had been chastised by the Missouri Public Service Commission (it’s “regulator”) for cutting their tree trimming budget and falling several years behind on trimming trees away from power lines. Despite blaming trees toppled by the winds for the outages, Ameren claimed it was keeping up on tree trimming and had spent enough on upgrades to keep the system going.

Just before the summer storm, Ameren filed for a rate increase. In the filing, Ameren claimed that they were falling behind on system upgrades and that a rate increase was needed to fund further improvements. Yup, exactly the opposite logic that had so publicly trumpeted after the storms.

Last month, a major ice storm hit the state of Missouri. One of the worst in recent history according to most people. Again, half a million people lost power, some for two or more weeks as crews could not reach the downed lines in wooded areas. Though once again defending their spending on the electrical system, Ameren changed course and said these outages proved that they needed increased rates for upgrades and everybody should just shut up and pay, even if they have lost power for weeks at a time several times over the past couple of years.

Another P-D article that appeared two or three Sundays ago (but is not online) showed what a lackadaisical job Ameren did with line inspections. Most of the inspections that are done are done by the tree trimmers themselves, who have no electrical training other than “cut tree away from line”. Even the tree trimmers union has filed complaints against Ameren for this practice. But Ameren continues to say that lines are routinely inspected (though it fails to say by whom) and that the system is doing just fine.

Everyone expected the PSC to turn over and let Ameren rub it’s fuzzy belly like it has time and time again. However, PSC staffers shocked everybody but saying Ameren should not only be denied their rate increase, but actually have their rates cut. Apparently having three major outages and a hilltop reservoir give way in 18 months was enough for the PSC to notice that Ameren is doing a crappy job.

It probably helps that the political appointees of the PSC (and their bosses) are a little nervous now that Ameren’s approval rating rivals that of President Bush and that not doing something will make them look like the powerless bureaucrats who are sleeping with the utilities they regulate that they are.

The decision is not final and has to go to the PSC board, which is all politically appointed unlike the staff positions that are civil service jobs. It will be interesting to see if the PSC makes a big public display and then quietly approves the rate increases.

So, what happens when an unstoppable force meets an unmovable rock? I have no idea, but I bet it’s a lot like the CEO of Craig’s List meeting a bunch of Wall Street bankers.

Those behind Craig’s List, as well as Craig himself, are vehemenently anti-capitalist when it comes to the website. They refuse to run ads, they only charge certain postings enough to pay for expenses, and they have the general ethic that would make Marx proud.

On the other side of the room were Wall Street vultures bankers. They kept asking the CEO how he planned to maximize revenues from the wildly popular website that doubles in pageviews every year. They apparently didn’t get the memo and kept asking leading to this amusing exchange.

Wendy Davis of MediaPost describes the presentation as a “a culture clash of near-epic proportions.” She recounts how UBS analyst Ben Schachter wanted to know how Craigslist plans to maximize revenue. It doesn’t, Mr. Buckmaster replied (perhaps wondering how Mr. Schachter could possibly not already know this). “That definitely is not part of the equation,” he said, according to MediaPost. “It’s not part of the goal.”

“I think a lot of people are catching their breath right now,” Mr. Schachter said in response.

Apparently, that exchange didn’t stop the enterprising analyst from writing a research bit on the company. In an apparent shot at the company he wrote: Craig’s List “does not fully monetize its traffic or services.”

That probably made Craig Newmark’s day.