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Robert Peston | 17:14 UK time, Tuesday, 5 January 2010

Kraft’s plans to buy Cadbury are in jeopardy, following the decision of Berkshire Hathaway to vote against its plan to issue 370m new shares to pay for the confectionery company.

Berkshire, founded by Warren Buffett, owns 9.4 per cent of Kraft. It is also probably the most respected investor in the world.

So it is embarrassing for Kraft that Berkshire will not authorise the transaction.

Berkshire has two concerns. First it says that Kraft should not be issuing shares at the current price of $27, because it sees this as a “very expensive ‘currency’”.

Second it is concerned that if it were to authorise the issue of the shares, it would in effect be authorising “a huge transaction without knowing its cost or the means of payment”.

There is a paradox here of course.

Berkshire fears that Kraft would be paying too much for Cadbury.

Whereas Cadbury’s board fears that the offer from Kraft is inadequate.

Roger Carr, chairman of Cadbury, says: “In essence Kraft’s offer is limited by powerful Kraft shareholders restricting what they can offer in stock and is constrained by Kraft’s rating agency limiting what they can offer in cash.

The so-called discipline of Kraft [in not wanting to pay more for Cadbury] is a smokescreen to justify an attempt to steal the Cadbury from its shareholders”.

Hmmm.

Unless you are a conspiracy theorist who believes that Berkshire is in cahoots with Kraft’s management to secure Cadbury at a knockdown price, you’d have to assume that the game is up – and that Cadbury will remain independent.

But would “friends” of Kraft’s board point out – as Berkshire has done – that this company spent $3.6bn on its own stock at $33 per share in 2007, presumably on the basis that $33 was too cheap for the stock, and now wants to issue shares when they are even cheaper.

These are the observations of a shareholder who doesn’t appear to have huge respect for the judgement of management.

It is therefore reasonable to assume that Berkshire really doesn’t like the look of the Cadbury takeover.

So Kraft now has till January 19 to persuade Berkshire that its price for Cadbury represents very good value and to persuade Cadbury shareholders that they are getting a fabulous price.

Those two ambitions don’t look altogether consistent.

In other words, there must be a pretty good chance that Cadbury – against prevailing opinion – will remain independent.

That said, I am not sure the penny has dropped in the market place, because if it had surely Cadbury’s share price would have fallen by more than today’s 3 per cent.

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Part Two of the ongoing Best Buy Optimization scandal. Yesterday I highlighted the Geek Squad’s PC optimization, which was silly to say the least. Today we look at their Mac optimization: it consists of creating a username. Cough.

There’s no way around this, so let’s just blockquote this The Big Money post from several months ago, before this optimization business was on our radar:

As even a computer novice might expect, “Mac optimization” is useless. One supposed benefit is putting the user’s name on the computer, according to Best Buy representatives I spoke to. Presumably, anyone who is buying a computer knows how to type in his or her own name, or follow the prompts to do it. Another supposed benefit: checking the Mac’s network connection. This has no value because it is done in the store, while the buyer will use the Mac with a different network at home. Yet a third step involves loading the Geek Squad’s own proprietary software on the computer to scan drives—drives that have never been used and so don’t need to be scanned for trouble. An anti-virus program is also part of the mix, which is an insult to the virus resistance of Macs. “There’s nothing of that sort that any brand-new PC needs, and Macs less so,” Gottheil [a Technology Business Research analyst] said. “Apple requires far less configuration.” Best Buy’s hard sell on “optimization” is like peddling mythic unicorns based on the value of their horsepower.

So, $40 to create a user account and scan a brand new hard drive? I cannot think of a bigger waste of money.

Again, I think the actual Geek Squad guys aren’t to blame, they’re just doing what they’re told. It’s the guys above them looking to squeeze out a few more pennies.

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While it’s technically called the “Android Press Gathering,” we all know what’s coming. Today, Google is expected to formally unveil the Nexus One (the device which some have been referring to as the “Google Phone”). The long event taking place today is expected to have both a presentation as well as demonstrations. Follow our coverage below, live.

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With MySpace buying up some of iMeem’s assets (and leaving many musicians with little hope of getting paid what they’re owed), one of the big complaints was that all of iMeem’s public playlists simply disappeared overnight. This was particularly obnoxious, because plenty of people had relied on iMeem for legal music streaming of playlists they had put together. It appears that last week MySpace decided to add insult to injury and quietly started replacing all iMeem playlists with giant ads. I just checked the one iMeem playlist I had created on a different blog, and, sure enough, in its place was a giant flash ad for Beyonce ringtones.

This should be a warning for anyone using any third party widget maker for placing content on your site. You’re basically giving others control over what they display on your site, but it’s particularly obnoxious to replace something like a music playlist with an advertisement. Many sites that included iMeem playlists were non-commercial, and sneaking ads into them could potentially impact other issues. As we were recently discussing, Vimeo says that you can’t post its videos to sites with ads (even though it seems to ignore most people who do). But what if you had Vimeo videos on a site that also had an iMeem playlist? Suddenly that site has “gone commercial” with ads, even though the owner of the site might not even realize it.

As many people are claiming that streaming services like Spotify and the now-Apple-owned Lala are “the future of music,” including their ability to post streamable playlists, it’s worth remembering what happened in this instance. It’s certainly making me think twice about ever using a third party app for streaming content, knowing that they might just replace it with an ad down the road.

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D-Link just went official on the Boxee Box. But they still didn’t answer our only last question: the price. All they said is that it will be less than $200. Thanks, we kind of figured that along with that the device will stream media from various big-name sources like Netflix, Pandora and Last.fm. Stay tuned though, more info is likely going to drop at CES in a day or two.

D-LINK DEBUTS BOXEE BOX AT CES 2010; DIRECTLY LINKS INTERNET ENTERTAINMENT SERVICES TO TVs EVERYWHERE

Networking pioneer and popular entertainment software
create the best way to get the free entertainment the Internet has to offer with no monthly fee

LAS VEGAS, CES Booth 36232, South Hall, LVCC, Jan. 5, 2010 – D-Link made lots of geeks and early adopters happy today by introducing the revolutionary Boxee Box by D-Link, winner of the CES Best of Innovations award in the Home Entertainment category.

The Boxee Box by D-Link reinterprets what TV should be. The Boxee Box delivers movies, TV shows, music, and photos from a user’s computer, home network, and the Internet to their HDTV with no PC needed. Additionally, Boxee’s core social features make it easy for friends to discover new content from each other through social networks like Facebook, Twitter, and more.

Internet Entertainment
Boxee is a popular PC, Mac, and Linux software program that lets users watch hundreds of thousands of popular TV shows and movies. Instead of sifting through millions of confusing Web sites, when users search on Boxee, TV shows and movies are delivered to them with the click of a remote control. Nearly a million Internet users around the world have already downloaded Boxee to enjoy their online entertainment.

The Boxee Box by D-Link takes the same popular software and offers it up as a great device — the perfect companion to a high definition TV. The Boxee Box by D-Link provides access to more than just traditional TV content. It includes a huge library that spans the Internet, such as university courses, panel discussions, academic lectures, presentations, web-only videos and more from TED, Stanford, FORA.tv, Kid Mango, Next New Networks and others. Boxee also makes it easy for users to add their own favorite entertainment sources with simple RSS or XML feeds available for most online video.

In addition to video content, Boxee users can access great music from sites like Pandora, last.fm, shoutcast, and We are Hunted as well as stunning photos from sites like flickr, Picasa and Facebook.

Personal Entertainment
For entertainment lovers who have built their own collections of digital media stored on their computer hard drive or home network, Boxee automatically identifies their content and downloads relevant cover art, synopses, reviews, subtitles, lyrics and more. This feature turns boring files and folders into beautiful media libraries that make it simple and appealing to navigate a collection of favorite movies, TV shows, and playlists with a simple remote. Furthermore, the Boxee Box by D-Link has extensive format support (see below) which ensures that when users hit the play button, they get instant gratification, with no need to download codecs or drivers. Also, with built-in 802.11n Wi-Fi support, it can transfer files without delay and from longer distances within a user’s home.

Social Features
The Boxee Box by D-Link keeps people connected with social features to help users discover new content from friends, experts, and tastemakers.
The first step to discovery is sharing, and Boxee makes this easy by letting people recommend any playing content to friends. Additionally Boxee automatically uses recommendations from a user’s Twitter and Facebook friends so they can find new content and instantly enjoy it on the big screen. Since anyone can build on top of Boxee’s open App platform, users can craft their own truly custom experience by creating or downloading plug-ins, add-ons, games, and more.

“We are pleased to partner with Boxee and to be the first with such a ground-breaking device,” said Nick Tidd, vice president of sales of D-Link Pan America and vice president of marketing for D-Link North America. “This powerful device with its unique form factor truly leverages Boxee’s service and is the best way for consumers to quickly access the growing volume of Internet content, organize it and stream it to their TVs and home entertainment centers.”

“D-Link’s successful track record in bringing to market, award-winning digital home networking products, and its global marketing, distribution and channel sales capabilities made them a great fit for our first hardware vendor.” stated Andrew Kippen, vice president of marketing for Boxee, “The Boxee Box by D-Link gives consumers what they want – an easy way to watch Internet or personal entertainment in their living rooms with a simple set-top box that costs under $200 and has no monthly fees.”

The Boxee Box by D-Link is scheduled to ship in the first half of 2010 through the company’s vast network of retail and e-tail outlets, and at D-Link’s online store, www.dlinkshop.com.
Supported Codecs & Formats
Boxee can be used to play/view practically all common multimedia formats, including:

VIDEO:
Adobe Flash 10.1
H.264 (MKV, MOV)
VC-1
WMV
MPEG-1
MPEG-2
MPEG-4
AVI
Xvid
Divx
PCM/LPCM
VOB

AUDIO:
MP3
WMA
WAV
AIFF
FLAC
AAC
DTS
Dolby Digital
Ogg Vorbis

PHOTO:
JPEG
TIFF
BMP
PNG

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While much of the technology world is focused on the innovations rolling out at the Consumer Electronics Show this week, Microsoft is priming the pump for Office 2010 sales. The software giant on Tuesday revealed pricing details on the next version of its productivity suite.

Not surprisingly, Microsoft will offer Office 2010 in four versions, Office Professional, Office Home and Business, Office Home and Student, and Office Professional Academic. Microsoft said the multiple packages aim to make it easier for consumers to choose the most appropriate version.

Two pricing schemes are offered for each version: One for the boxed product and another for downloads. The education-only Office Professional Academic sells for $99 on the low end while Office Professional — with Word, Excel, PowerPoint, OneNote, Outlook, Publisher, Access and Office Web Apps — sells at $499 on the high end. The digital versions are $69 for Office Professional Academic and $349 for Office Professional.

Office Home and Student includes Word, Excel, PowerPoint, OneNote and Office Web Apps for $149 boxed and $119 digital. Office Home and Business adds Outlook and a business license for $279 boxed and $199 digital.

The Office Home and Student boxed product is also available in a Family Pack, allowing consumers to install the software on three PCs in one house. The purchase rights for Office Home and Business, Office Professional, and Office Professional Academic boxed products allow usage on two PCs. The product key card downloads are valid for a single installation.

Office Momentum

“Heading into the new year, the Microsoft Office team is motivated more than ever by what we’re hearing about customers’ experiences with [beta] Office 2010,” said Rachel Bondi, general manager for the Microsoft Office team. “Many people think Office is just for the workplace, but millions of people are using Office at home, at school and for…

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Google is holding a press event to showcase the new Nexus One and possibly some other mobile innovations today. We already know quite a few details about the phone itself, but hopefully Google will also have a few surprises up its sleeve. The press conference should get under way at 10am PST and we will live blog the event here.

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We will post updates as they happen. Keep reloading this page to see the latest news.

10:00am As usual, the event is running a bit late.

10:06am Getting started. VP of Product Development takes the stage to talk about the Open Handset Alliance.

“We will unveil the next generation of the evolution of Android today.”

13 new memebers will join the OHC – including: NEC, China Telecom and Freescale.

Recapping the history of Android hardware (G1, myTouch, Droid)

10:10pm “A year ago we had 1 device, now we have 20 devices on 59 carriers.”

Google wants to prevent fragmentation – talking about compatibility test suite.

“Android today is about getting more users onto the mobile web.” Android users search the web over 30x more on Android than on feature phones.

From the beginning, Android was always about being developer friendly.

Talking about being able to multi-task (a subtle swipe at the iPhone?)

The Next Step in the Android Evolution

10:15am “We are only in the early stages of the evolution of Android.

Volume and variety of Android devices has exceeded Google’s expectations. “But we want to do more.

Wants to work closer with hardware partners to showcase the software.

Announcing the Nexus One

“Where Web Meets Phone”

10:18am Google calls this a new category of phones – the “super phones.”

Discuss

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Correction: An earlier version of this story incorrectly reported that BreakingNews.com was opperated by BNO.

MSNBC announced this morning that it is buying the BreakingNews.com URL. This follows November’s purchase of @breakingnews and its 1.4 million followers.

BreakingNews.com has made waves since it first appeared, often breaking news before its mainstream competitors. When we profiled its 19-year-old founder Michael van Poppel in July, the company was just about to release its iPhone app and had over 800,000 followers on Twitter. That number is now over 1.5 million.

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“Not everyone wants news surrounded by commentary or features,” said Charlie Tillinghast, president of the MSNBC Digital Network in the company’s press release about the purchase.

We can only hope, however, that MSNBC can do the job that BreakingNews.com was doing before. If Twitter followings are an indication of how reliable the public perceives a news source to be, when we looked at the purchase of @breakingnews, MSNBC’s own Twitter account was dwarfed by the alternative news outlet.

MSNBC Spokesperson Gina Stikes told us in an email that “Msnbc has acquired the URL only,” so what will happen with the BreakingNews.com staff remains to be seen. She did not disclose any further details, such as the purchase price.

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Filed under: Concept Cars, Detroit Auto Show, Podcasts, Hybrid, Government/Legal, Technology, Ford, GM, Mercedes-Benz, Porsche, Toyota, Fiat, Electric, Luxury, Lancia

Rapier-witted analyst Jim Hall of 2953 Analytics joins Chris, Sam, and Dan for Episode #160 of the Autoblog Podcast. Announcements and news have heated up after taking a holiday break, and we jump right in. First up, it’s the speculation that four million fewer car sales might signal the end of days for the automobile. Once that’s thoroughly mulled over, we move on to the Mercedes S400 Hybrid before talking about new engines that would bolster Porsche’s efficiency, and discuss a turbocharged four-cylinder Mercedes C-Class coupe. Ford’s VEBA payment is next before we touch on what’s coming in Detroit. We wrap it all up by listing our #1 vehicle of the decade in a variety of categories. We hope you have as much fun listening as we did recording. See you next week!

Until next time, quality podcasting exists at Joystiq and Engadget. Let us know what you think of our podcast by dropping us an email at Podcast at Autoblog dot com, reviewing the show in iTunes, filling out our survey, or even leaving us a voicemail on our Google Voice line 734-288-8POD (734-288-8763). Thanks for listening!

Continue reading Autoblog Podcast #160 – Analyst Jim Hall raises the Podcast IQ

Autoblog Podcast #160 – Analyst Jim Hall raises the Podcast IQ originally appeared on Autoblog on Tue, 05 Jan 2010 13:20:00 EST. Please see our terms for use of feeds.

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Kai Wright’s “All together now, Shut up you Lefties!” gathers the latest volleys between the Villagers/Kool Kids, Centrocons, Dirty Hippies and Blognets.

The left-wing critics are right about the conspicuous flaws of the pending health-care reform–its lack of even a weak “public option,” its too meagre subsidies, its windfalls for Big Pharma, its capitulation on abortion coverage, its reliance on private insurance. And there are surely senators and representatives whose motives are base or, broadly speaking, corrupt. But it is nonsense to attribute the less than fully satisfactory result to the alleged perfidy of the President or “the Democrats.”

You see, lefties? You can’t hold your leaders accountable, because it’s the nameless, faceless “system” that’s to blame. Which is pretty much the same street-corner logic that leads millions of people to opt out of democracy altogether. Either the presidency matters or it doesn’t. Either our leaders are accountable for the policies they create or they are not. And if they are not, let’s drop the conceit of democracy and take the reform debate from there.

How about we drop the infighting and try to pass the agenda we came in on, before the crazies regain some seats?

The Open Handset Alliance — the raucous group of firms officially supporting and contributing to Android’s development — has added a staggering 13 new members today, including Freescale (Moto’s former chip unit) and China Telecom, China’s EV-DO carrier. Developing…

Open Handset Alliance adds 13 members originally appeared on Engadget on Tue, 05 Jan 2010 12:41:00 EST. Please see our terms for use of feeds.

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NEWS RELEASE
January 4, 2010                                                       Contact: Erica Jesberger, 544-4916

Columbia Basin College Student Employment is prepping job seekers for this year’s Career Expo with several career development workshops.

The public is invited to learn resume writing skills and interviewing tips through a variety of free workshops beginning this Friday, January 8 and continuing through winter quarter, with 12 workshops leading up to the expo.

Workshops range from Make Your Resume Pop to Speed Interviewing, including a panel to learn about employer expectations. A full list of workshops, descriptions, times, and dates is available here.

Job seekers can also attend a workshop to learn how to present a Live Resume/One-Minute Commercial to a room full of potential employers on the morning of Career Expo.

This year’s Career Expo is Thursday, February 18, 2010 on the CBC Pasco campus from 9 a.m. to 2 p.m. in the HUB Atrium and Byron Gjerde Center with live resumes from 8-9 a.m. in the HUB Osprey Sunroom.

Career Expo allows job seekers to network with as many as 80 businesses and agencies all in one place, at one time. This free informational job and internship fair gives students and community members the opportunity to explore careers, obtain employer information, establish contacts, and submit resumes. By attending these pre-expo workshops, job seekers can learn valuable, life-long skills to put to use during the event.

By DANA CIMILLUCA And CECILIE ROHWEDDER

Warren Buffett waded into the takeover saga surrounding Cadbury PLC Tuesday with an unusually public move to block Kraft Foods Inc.’s issuance of shares to fund its $16 billion offer for the British confectioner.

Mr. Buffett’s move marked a sharp rebuke from Kraft’s largest shareholder and came on the same day the U.S. food giant sweetened its hostile offer for Cadbury.

The Cadbury saga, which has dragged on for four months, has suddenly become a rollercoaster. In addition to Kraft’s new offer, which raises the cash portion, and Mr. Buffett’s tart reply, potential rival Nestlé SA formally removed itself from any deal on Tuesday. Another possible bidder, Hershey Co., remains mum on its intentions.

Berkshire Hathaway Inc., Mr. Buffett’s sprawling holding company, said Tuesday that it voted “no” on Kraft’s effort to issue as many as 370 million shares to fund the cash-and-stock offer for Cadbury, which is now valued at £10.2 billion ($16.4 billion). The Berkshire statement cited a fear that Kraft will overpay in the acquisition. Berkshire said it controls about 9.4% of Kraft’s shares outstanding, making it the company’s largest shareholder.

Associated Press

Warren Buffett in November

The statement appeared to be a response to Kraft’s announcement earlier in the day that the company would amend its offer for Cadbury by increasing the cash component. The overall value of the bid didn’t change.

The sweetened bid accompanied an announcement that Kraft would sell its North American frozen-pizza business to Nestlé for $3.7 billion. Kraft said it would use net proceeds from the Nestlé deal, which it estimates at 60 pence (97 U.S. cents) per Cadbury share, to give Cadbury shareholders a “partial cash alternative” to its existing offer, which had been made up of 60% Kraft stock and 40% cash.

Both Kraft and Cadbury shareholders have a say on whether the deal happens. Kraft shareholders will vote on Feb. 1—a vote that will now take place with Mr. Buffett’s warning ringing in their ears.

“The share-issuance proposal, if enacted, will give Kraft a blank check allowing it to change its offer to Cadbury—in any way it wishes,” Berkshire said.

A number of investors scratched their heads at the statement, given that, according to a timetable set out by U.K. takeover authorities, Kraft has until Jan. 19 to raise its offer—meaning that they will know by then what they are voting on.

Cadbury swiftly rejected the revised bid, a stance it has taken since early September. “Kraft has once again missed the point,” a Cadbury spokesman said. “Despite this tinkering, the Kraft offer remains unchanged and derisory with less than half the consideration in cash.”

In a statement, Kraft said it takes Mr. Buffett’s opinion seriously. “We agree that Kraft Foods shares are deeply undervalued and we would certainly not do anything that hurts shareholder value,” said a spokeswoman. “We intend to remain disciplined in this process.”

John Haynes, head of U.K. equity research at Rensburg Sheppards Investment Management Ltd. in London, said he would recommend his firm’s clients reject Kraft’s new offer. “It’s not really improved. It was 740 before, it is 740 today, which is massively too low as a starting point,” he said. “There is a tiny bit more cash and you give up some shares, but most of our shareholders don’t want Kraft shares anyway.”

Rensburg Sheppards manages individual, segregated trading accounts for private clients, many of which contain Cadbury shares. As of November, the firm accounted for 4.7 million Cadbury shares, according to LionShares.

Tuesday’s moves put the Cadbury sweepstakes in better focus. Kraft remains the only declared suitor, but one under pressure to improve its offer. Nestlé, meanwhile, formally removed itself from the running for Cadbury for the first time. Still weighing its options is Hershey, the U.S. chocolatier that has been considering a bid. Italy’s Ferrero SpA has said it is considering its options with regard to Cadbury but the odds that it will launch a full-blown bid of its own are low.

Kraft’s offer was 745 pence per share when the Northfield, Ill., company made it official in early November. That included 300 pence in cash. Cadbury’s share price fell on the news that Nestlé, which had been considered the potential suitor with the greatest ability to trump Kraft, won’t be making a bid for the company, and as a result of the pressure on Kraft from Mr. Buffett not to overpay.

Cadbury shares fell 3.6% to 776 pence in Tuesday afternoon trading in London. That is still above the Kraft offer price, indicating investors will follow Cadbury management’s cue and reject the offer unless Kraft raises it. That could now be more difficult given Mr. Buffett’s latest missive.

Berkshire, which holds about 138.3 million Kraft shares, said “we worry very much that, indeed, there will be an additional change from the revision announced this morning. What we know with certainty, however, is that Kraft stock, at its current price of $27, is a very expensive ‘currency’ to be used in an acquisition.” It added: “In 2007, in fact, Kraft spent $3.6 billion to repurchase shares at about $33 per share, presumably because the directors and management thought the shares to be worth more.”

Berkshire did note that Kraft has two weeks to announce a final offer for Cadbury. “If we conclude at that point that the offer does not destroy value for Kraft shareholders, we will change our vote to ‘yes’” on the share-issuance plan.

Cadbury plans to report its latest results on Jan. 15, when it will once again explain its reasons for rejecting the offer. Kraft is expected to wait until it sees those results before putting in any new offer.

By selling the pizza business, Kraft is giving up one of its top growing units. Among its brands are Tombstone, California Pizza Kitchen and DiGiorno. In announcing the deal with Nestlé Tuesday, Kraft said it would use proceeds for “deleveraging to maintain its investment grade credit rating.”

Nestlé on Monday had bolstered its own coffers by selling its stake in eye-care company Alcon Inc. to Swiss drug maker Novartis AG for $28.1 billion in cash. As part of Tuesday’s announcement, Nestlé said “it does not intend to make, or participate in, a formal offer for Cadbury,” officially taking itself out of the running for Cadbury for the first time.

That leaves Hershey as the most likely counter bidder. People familiar with the matter have said that Hershey is considering such a move, though it wasn’t expected to make a decision before Kraft puts its final offer on the table as part of the 60-day timetable.

Kraft Pursues Cadbury

See how these global brands have evolved.

Still, Hershey’s ability to make an offer is constrained. The Pennsylvania company is smaller than Cadbury and making an offer would jeopardize its credit rating and risk massive dilution for its shareholders.

Kraft, by Wednesday morning, is expected to detail for the first time the level of acceptances it has received so far from Cadbury shareholders. Cadbury shareholders have until Feb. 2 to tender their shares —unless another suitor emerges, which could extend the timeframe.

—Tess Stynes contributed to this article.

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Samsung Mobile US today announced a forthcoming demo and consumer trial of the new Advanced Television Systems Committee (ATSC) Mobile Digital TV standard. The Samsung Moment – an Android phone currently available on Sprint in the US – will be showing off a new Mobile DTV chip in a demo at CES this week and a near-term consumer trial in Washington, DC this Spring.

From the press release:

“We are delighted to include the Samsung Moment as a key device to be used by Sprint customers during the Consumer Showcase in Washington DC this spring. Mobile DTV technology will allow DC area consumers to watch their favorite live programs with instantaneous access to local news, weather, emergency information, and of course their favorite entertainment programs broadcasted by eight local TV stations,” said Brandon Burgess CEO of ION Media Networks and President of the Open Mobile Video Coalition (OMVC).

The OMVC is actively promoting mobile digital television technology within the U.S. broadcast industry to achieve widespread market penetration in 2010. 

Mobile TV is a big deal in some markets across the globe, but has been more or less a yawnfest here in the US. A lack of real Mobile DTV standards and technologies has been partially to blame for that, but there’s also the part where US consumers are used to hundreds of channels, HD video and audio quality, and timeshifting DVRs powering their viewing experiences. Personally, I could see a quality Mobile TV option coming in handy for sports and other live events, but beyond that I’d just as soon TiVo my programs and watch them at home on a big screen without worry of draining my phone’s battery.

What say you? High quality Mobile TV: Exciting? Yawn? Great if it’s cheap? Sound off now, and we’ll try to get you some hands-on coverage of the demo later this week from Vegas.

Jan. 5, 2010, 12:50 p.m. EST ·

By Alistair Barr, MarketWatch

Investor usually backs management, but issues strong worded statement

SAN FRANCISCO (MarketWatch) — Berkshire Hathaway Inc. Chairman Warren Buffett likes to invest in good businesses with great managers, and then lets them get on with it. But the famed investor broke with that approach Tuesday by publicly criticizing Kraft Foods Inc.

In particular, the investor singled out Kraft’s /quotes/comstock/13*!kft/quotes/nls/kft (KFT 28.37, +0.94, +3.41%) plan to sell new shares to help pay for its attempted acquisition of industry rival Cadbury PLC /quotes/comstock/23s!a:cbry (UK:CBRY 779.00, -26.00, -3.23%) /quotes/comstock/13*!cby/quotes/nls/cby (CBY 49.80, -1.85, -3.58%) . Read more about Buffett’s refusal to support Kraft plan.

Berkshire /quotes/comstock/13*!brk.a/quotes/nls/brk.a (BRK.A 99,691, +91.00, +0.09%) /quotes/comstock/13*!brk.b/quotes/nls/brk.b (BRK.B 3,318, +6.99, +0.21%) issued a statement noting that it is Kraft’s largest shareholder, and argued that the plan to issue new stock would “give Kraft a blank check” to change its Cadbury offer.

Berkshire also criticized Kraft’s board of directors, which authorized a $3.6 billion stock buyback in 2007 at $33 each, and is now allowing the company to issue new shares at the current price of $27.

“Does the board now believe those purchases were a mistake and that Kraft’s true value is only the current price of $27 per share — and that it is therefore fine to structure a major acquisition based upon that price?” Berkshire wrote in its statement.

“It’s very unusual for Buffett to do this,” said Whitney Tilson, head of hedge-fund firm T2 Partners LLC and a Berkshire investor. “It’s unusual both in that Berkshire did this at all and in the very strong wording of the statement.”

‘I’m not sure whether this represents a shift to a more activist Warren Buffett. I hope so.’

Whitney Tilson, T2 Partners

Stepping up?

Berkshire’s main strategy has been to buy or invest in businesses run by talented and trustworthy managers and then remain mostly on the sidelines.

Even when Buffett was on the board of companies in which Berkshire invested, he often stood by when those companies were working in ways that he may not have agreed with, Tilson noted, citing Gillette’s $7 billion acquisition of battery maker Duracell in 1996.

“I’m not sure whether this represents a shift to a more activist Warren Buffett. I hope so,” added Tilson, who’s investment firm owns Kraft shares as well as Berkshire stock.

Another shareholder of Berkshire and Kraft said he was “elated” when he heard the news about Buffett on Tuesday.

“We were frustrated and were wondering how to stop this bidding war getting out of control,” said Jeff Auxier, manager of the Auxier Focus Fund. “Finally [Buffett is] stepping up and saying that these prices make no sense.”

Shareholders often have no constituency to protect their common interest. But in this instance, Buffett is using Berkshire’s large stake in Kraft and a public statement to rally other investors to a common cause, according to Auxier. “CEOs overpay, over-borrow and destroy shareholder value and a lot of big shareholders do nothing. People wonder why you’ve had negative returns on the S&P 500 Index /quotes/comstock/21z!i1:in\x (SPX 1,133, -0.09, -0.01%) over the past decade. Just look at the valuation of deals like AOL Time Warner.”

If Kraft ends up buying Cadbury at a high price, the company’s shares will underperform the market for five years, Auxier warned. “We’ve seen this time and time again. It gets to be a problem of CEO ego vs. shareholder value.”

Behind the scenes

Another longtime Berkshire investor said it’s not unusual for Buffett to actively protect its investments from value-destroying actions such as issuing lots of new stock to overpay for acquisitions.

“Berkshire’s ideal is a world in which there are lots of great businesses and it goes along passively as an investor,” said Thomas Russo, a partner at Gardner Russo & Gardner. “But the world often doesn’t provide that, so you have to do more to get what you want sometimes.”

When the Coca-Cola Co. /quotes/comstock/13*!ko/quotes/nls/ko (KO 56.29, -0.75, -1.31%) was considering buying Gatorade, media reports at the time suggested that Buffett was behind the scenes trying to persuade the company not to overpay for the sports-drink maker, Russo noted. Rival PepsiCo /quotes/comstock/13*!pep/quotes/nls/pep (PEP 61.88, +0.64, +1.04%) ended up winning Gatorade through its $13 billion acquisition of Quaker Oats in late 2000. “Berkshire has been increasingly outspoken on the need for shareholders to speak up about corporate action and corporate governance,” he added.

Berkshire’s statement on Tuesday suggests Buffett thinks that Kraft is more undervalued than the benefit of the discount they will get by buying Cadbury, according to Russo. “Berkshire is choosing not to give up the attractive discount on Kraft shares simply to get an acquisition of Cadbury, where the shares may or may not be trading at a discount according to Berkshire’s calculations. It’s not unusual for Berkshire to have a discussion about what they’re getting and giving up.”

‘Good cop, bad cop’

Buffett’s statement also may be interpreted as an attack on Kraft executives, but the company’s management could use it to their advantage, Tilson said. “Kraft management can use this to play ‘good cop, bad cop.’ They can say, ‘Look, this is our final offer because if we pay any more our shareholders will vote against it.’

“‘Enough is enough, take it or leave it.’ That’s what Buffett is saying,” he added.

Alistair Barr is a reporter for MarketWatch in San Francisco.

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