March 21, 2023

Yahoo to Move Into Old New York Times Headquarters

Yahoo, the giant Web company that agreed on Sunday to buy Tumblr for $1.1 billion, is moving its New York headquarters to the former home of The New York Times, on 43rd Street, east of Eighth Avenue, where it plans to expand.

Yahoo is talking to city officials about erecting a large illuminated sign with its name on the cupola at the top of the building, where The Times once had its own sign.

The move, announced on Monday, illustrates the rapid growth and importance of the technology industry in the city’s economy.

Yahoo, which has signed a long-term lease for the 9th through 12th floors in the 15-story building, is joining two other tech tenants there: 10gen, which makes database software, and Citysearch, the local search engine.

Yahoo is based in Silicon Valley. The company, which now has about 500 employees in three buildings in New York City, said it expected to expand its work force in the city to 700 within the next couple of years, particularly in the engineering area. Microsoft is moving to 11 Times Square and Facebook is nearby.

“For a while now,” Marissa Mayer, Yahoo’s chief executive, said, “Yahoo has been looking for a home here in New York. We have several hundred employees spread across several offices. And I’m proud to say that we’ve found it.”

The company’s New York employees currently work at 1065 Avenue of the Americas (at 40th Street), 1540 Broadway (at 45th Street) and 11 West 19th Street.

Lately, Ms. Mayer has focused on reinvigorating the company, armed with billions of dollars in cash from the sale of half its interest in the Chinese Internet company Alibaba. On Sunday, Yahoo agreed to pay cash for Tumblr, a blogging service.

Tumblr’s 175 employees work from offices at 35 East 21st Street, and they will not move to Times Square. In order to attract employees, Yahoo plans to install the kind of amenities at the former Times building that are common at tech companies, including outdoor terraces and a cafeteria with an extensive menu of free food.

It would be similar to the setup at Google, which paid $1.8 billion for a building in Chelsea, at 111 Eighth Avenue. Google now has about 3,000 employees in the city.

“Since the Lehman Brothers collapse, tech has been carrying the New York City economy,” said Jonathan Bowles, director of the Center for an Urban Future, a research organization. “It’s been an engine of growth and has helped diversify New York’s economy beyond Wall Street. They’re creating jobs and eating up more real estate.”

The fortunes of the former Times building have closely followed the rise and fall of the real estate market. Tishman Speyer Properties bought the property from The New York Times Company in 2004 for $175 million, after The Times announced plans to build a new headquarters several blocks away, on Eighth Avenue between 40th and 41st Streets.

Less than three years later, Tishman Speyer sold the building to Africa Israel USA for $525 million. The buyer spent $100 million on gutting and renovating the property in an effort to transform it into a first-class office building.

But the real estate market went into a tailspin, and Africa Israel was crushed under the weight of $711 million in loans. The company scrapped plans for wooing office tenants, and instead signed deals with Bowlmor Lanes, an upscale bowling alley, and Discovery Times Square, an exhibition hall, for the lower floors.

In 2011, the Blackstone Group, an investment firm, bought the bulk of the building, the top 11 floors, for $160 million. Blackstone abandoned plans for luring financial institutions and other corporations to the building, focusing instead on the growing tech sector.

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DealBook: Bank Analysts Shower Praise On LinkedIn

7:36 p.m. | Updated

LinkedIn’s stock is a long way from its first-day pop, when it traded above $100 a share. But its underwriters are feeling pretty optimistic about the Internet company.

On Tuesday, JPMorgan Chase, UBS, Morgan Stanley and Bank of America Merrill Lynch all initiated coverage with bullish ratings on the social networking site. The price targets ranged from $85 to $92.

Amid the vote of confidence, shares of LinkedIn jumped more than 12 percent, to close at $85.56.

The banks — which had to wait several weeks from the initial public offering in May before publishing research — all offered rosy outlooks.

Bank of America Merrill Lynch weighed in with the most optimistic price target of $92, calling LinkedIn a “$10 billion long-term revenue opportunity.” Last year, the Internet company notched sales of $243 million.

Such strong expectations rest on their assessments of LinkedIn’s business model. UBS, which set a price target of $90, called LinkedIn “disruptive,” saying it would most likely record “better-than-expected growth in the user base, with corresponding revenue outperformance.” The social network’s lead underwriter, Morgan Stanley, which placed an overweight rating on stock, said LinkedIn could become a “standard utility” for recruiters.

“Every once in a while, a company comes around that transforms an industry in such a way that investors have difficulty grasping just how big it may one day become,” the Morgan Stanley note said. “We believe LinkedIn can be one of these companies.”

Douglas Anmuth of JPMorgan had similar praise. The analyst, who has an overweight rating on the stock and an $85 price target, said the Internet company was “disrupting both the online and offline job recruitment markets.” Given its leading position as a social network for professionals, he said, LinkedIn should also be able to capture a greater share of the $27 billion global market for staffing.

But Mr. Anmuth did temper his predictions. He cautioned that LinkedIn could be worth $60 a share if economic conditions deteriorated and the job market slowed.

Banks that did not participate in the I.P.O. offered the most subdued take on LinkedIn. Evercore Partners, which published a note earlier this month, initiated coverage with an equal-weight rating and a price target of $70. That’s roughly 18 percent below where the shares are trading now.

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Stocks Retreat on Concern About Industrial Slowdown

Crude oil and Brent futures rose after Goldman Sachs raised its forecast for oil, citing growh in demand for fuel.

The energy sector, which was one of the weakest Monday because of anxiety about Europe’s debt crisis, led the day’s gainers, while industrials pushed the market down for a second day.

Financial stocks also pressured the market.

“There isn’t much for the market to get excited at this point, especially going into summer months and the QE coming to an end soon,” said Randy Frederick, director of trading and derivatives at the Schwab Center for Financial Research in Austin, Tex.

The Dow Jones industrial average was down 12.86 points, or 0.10 percent, at 12,368.40. The Standard Poor’s 500-stock index was down 1.43 points, or 0.11 percent, at 1,315.94. The Nasdaq composite index was down 10.06 points, or 0.36 percent, at 2,748.84.

Stocks closed on Monday at their lowest level in a month.

Following weaker-than-expected New York and Philadelphia Fed manufacturing surveys last week, the Richmond region reported on Tuesday an outright contraction as its index fell, the first negative reading since September, according to Peter Boockvar, equity Strategist at Miller Tabak + Company in New York.

“The Richmond survey is never market moving as it’s not widely followed. But it’s another piece in the anecdotal puzzle of the moderation seen in manufacturing in May, with the obvious hope that it’s just a mid-cycle misstep before the next acceleration,” he said.

Occidental Petroleum rose 3.4 percent to $102.33.

On the Nasdaq, shares of the Russian Internet company Yandex NV surged as much as 68 percent in their debut.

Yandex raised $1.3 billion in its Initial public offering on Monday by selling 52.2 million shares for $25 each. The offering valued the overall company at about $8 billion.

By midday, Yandex shares were up 41.4 percent at $35.35.

The United States Treasury is expected to sell 15 percent of its stake in the American International Group when the insurer prices its stock offering after the market closes. A.I.G. was down 1.2 percent at $29.63.

Data showed new single-family home sales in the United States rose unexpectedly in April to notch their second straight month of gains, but analysts said home builders still have a bumpy ride ahead.

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Wall Street Shares Slide After Weak Jobs Data

Wall Street shares fell sharply after the payroll processor ADP said that 179,000 new private sector jobs were added in April. That figure was lower than the 195,000 analysts had expected.

The ADP report is closely watched because it can provide insights into the government’s monthly jobs report for April, which comes out Friday.

Shortly after noon, the Dow Jones industrial average was down 128.51 points or 1 percent. The broader Standard Poor’s 500-stock index lost 14.23 points or 1 percent. The technology heavy Nasdaq fell 29.04 points, or 1 percent.

The Institute for Supply Management also said its service sector index rose at the slowest pace in eight months. That raised concerns for the health of the service industry, which employs about 90 percent of the work force.

The latest round of earnings were mixed on Thursday. The Kellogg Company, the world’s biggest cereal maker, said its net income fell 12 percent because of higher costs. The results missed analysts’ expectations and its shares dropped 0.8 percent.

Time Warner, the owner of Warner Brothers and HBO, said its first-quarter earnings fell 10 percent because of a lack of hit movies in the period. But advertising revenue rebounded, and the results surpassed the expectations of analysts. Its shares were down 2.7 percent.

AOL’s net income dropped sharply as the Internet company reported lower advertising and subscription revenue. Its shares slipped by 0.7 percent.

Bond prices rose, sending yields lower. The yield on the 10-year Treasury note fell to 3.22 percent from 3.26 percent late Tuesday.

In Europe, fears of more interest rate increases in China weighed on markets Wednesday, while the euro headed up toward 18-month highs against the dollar despite confirmation of a $116 billion bailout for Portugal.

The FTSE in London fell 1.62 percent, while the DAX in Frankfurt lost 1.69 percent. The CAC 40 in Paris was 1.31 percent lower.

After an interest rate increase by India’s central bank, the People’s Bank of China expressed its continued concerns over inflation, stoking speculation that it may raise interest rates again in the months ahead.

“Fears about further Chinese monetary policy tightening are being linked with the poorer tone after the People’s Bank of China said stabilizing prices is critical,” Jane Foley, an analyst at Rabobank International, said.

As a result, Chinese shares were the big losers Wednesday, with mainland Chinese shares posting their biggest loss in over two months. The Shanghai composite index fell 2.3 percent to 2,866.02, while the Shenzhen composite index lost 2.2 percent to 1,187.28. Shares in oil, coal and real estate industries weakened.

While jobs take center stage in the United States, Europe will focus on interest rate decisions from the European Central Bank and the Bank of England. Neither is expected to change interest rates, though the European bank is expected to indicate Thursday that it will follow April’s first interest rate increase in nearly three years with another rise in June.

That belief has bolstered the euro over the last couple of months despite ongoing debt problems, most notably in Greece, Ireland and Portugal. While the European Central Bank is poised to raise interest rates again in the coming months, the Federal Reserve has shown few signs that it is ready to lift its super-low interest rates. That’s added to the dollar’s recent weakness against the euro.

The euro was trading $1.4861 after briefly rising above the $1.49 level.

The euro gained despite figures showing a 1 percent decline in retail sales in the 17 countries that use the euro in March, and confirmation that Portugal has agreed to a bailout of 78 billion euros ($116 billion) from its partners in the European Union and the International Monetary Fund.

“For the foreign exchange markets, the details of Portugal’s bailout terms are of little relevance with the focus still firmly on diverging policy between the U.S. and elsewhere,” said Derek Halpenny, European head of global currency research at the Bank of Tokyo-Mitsubishi UFJ.

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