US telecom behemoth AT&T (T) reported that it has successfully completed a real-time field trial of 100-Gigabit Ethernet technology, a next-generation backbone network standard. The technology is expected to be available commercially over the next few years.

In the trial, AT&T tested Cisco’s (CSCO) newly unveiled CRS-3 core router in a live network environment. Moreover, the carrier used leading IP network test solution provider Ixia’s (XXIA) “K2” 100-gigabit Ethernet test solution and Opnext’s optical equipment. The trial demonstrated a single-carrier 100-gigabit data transmission on a 900-kilometer ultra-long-haul transport link between New Orleans, Louisiana and Miami, Florida. The 100-gigabit standard supports a data rate of 100 gigabits per second (Gbps), representing a significant increase from the current peak speeds of 40 Gbps enabled by the existing industry standard of 40-gigabit Ethernet. The technology has been designed to effectively support the burgeoning volumes of wireless and wireline broadband data traffic. Leading carriers across the globe are increasingly focused on accelerating Internet network speeds, given the rapidly growing demand for greater bandwidth. Total bandwidth consumption significantly increased in 2009, driven by the growth of video and other high-bandwidth applications. 100 Gbps networks have emerged as the next major Ethernet standard. Demand for 100 Gbps service in enterprise data centers is ten times greater than the existing fastest deployments. At this speed level, users can enjoy super fast data transmission speeds, which can transmit a 2-hour high-definition movie in 9 seconds or fully loaded 500-gigabyte hard drive in 46 seconds. AT&T's trial follows a similar live trial by Verizon (VZ), which was recently conducted using Juniper’s (JNPR) core router and NEC America Inc’s network routes in North Dallas, Texas. Verizon is optimistic in deploying the 100 Gb technology in late 2010. The ongoing initiative to deploy 100 Gbps capability should render greater overall network efficiency while improving cost effectiveness. Additionally, this advancement will enable AT&T to address increasing customer demand for higher network throughput for both wireless and wired Internet applications.

By MG Siegler

Business to business software can be a tough sell. Online B2B can be even a harder sell. While there is certainly money to be made, unless you’re one of the big players, the likelihood you’re going to succeed is pretty small. Now, Google (GOOG) is taking their roll as one of the big players and extending a platform to boost some smaller players.

EasyLink Services International Corporation (ESIC)

Fiscal Q2 2010 Earnings Call

March 4, 2010, 8:30 a.m. EST

As Google Inc. (GOOG) has proceeded to steamroll most of its competition on the global advertising roads, they are learning to tread a little more lightly in hopes of avoiding unneeded scrutiny. There are very few places to hide, when your company is on track to achieve more than $20 billion in annual sales and is valued at more than $175 billion in the marketplace.

As Google revenues continue to rise and they look to take over the world (including their position in China), they are enlisting others to assist them in Washington as well. Through three quarters of 2009, the company increased their lobbyist budget by 41% to approximately $3 million, according to the Associated Press (AP).

I went on Kudlow’s show on CNBC last night to discuss the new Cisco (CSCO) announcement that, as CSCO put it, “will change the Internet forever.” I mentioned that this was a classic “sell the news” reaction with CSCO stock falling off into the close. Although I didn’t note, CSCO stock had had a nice rise going into this so some profit-taking is very normal and the stock is still significantly higher than where it was a few weeks ago.

I buy into the hype. I do think CSCO’s CSR-3 will change the Internet. Everyone was saying they thought CSCO would put out some new iPhone-like product for consumers so that was why the market was supposedly disappointed. This is far bigger. Think about what this will eventually mean: the dream is finally beginning to come true: a world where everywhere you go you are connected to the Internet, all the time, at super high speeds. It won’t happen tomorrow, but its getting there and the CSR-3 will be leading the charge. Here are the initial companies that I think will be long-term beneficiaries:

Apple (AAPL), which competes with Amazon’s (NASDAQ:AMZN) Kindle, is expected to launch iBookstore alongside its tablet PC, the iPad, in April 2010. iPad owners will be able to download books to their iPad through iBookstore, an application which will be available on Apple’s iTunes store. We estimate that iTunes and iPhones Apps constitute about 6% of the $267 Trefis price estimate for Apple’s stock.

We expect Apple to generate ebook revenue of $400 million in 2010 by selling around 48 million ebooks at an average price of $8. You can access our full forecasts and rationale for AAPL here:

I think that most people over the age 30 are familiar with Earthlink (ELNK), from the dotcom days. It was one of the big dial-up ISPs that boomed during the first wave of the internet adoption, but then crashed as people moved to faster DSL and cable access from the big providers.

However, it's been showing up on my value screens for several reasons: large cash hoard as a percentage of its enterprise value, high return on tangible assets, and very low EV/EBIT and P/E ratios. At first glance, it seems management has the right sense of running this company to maximize cash generation and not waste shareholder value on corporate adventures.

comScore has just released its US online video rankings for January 2010, and the results aren’t positive. Overall views dropped by around 2.5%, with 32.4 billion in January vs. 33.2 billion in December. And Hulu, which celebrated crossing the 1 billion view milestone for the first time in December, dipped back down to 903 milion views. The drop can’t be blamed entirely on seasonality, either, — January 2009’s overall video views were up 4% over December 2008.

Rankingwise, there weren’t many changes. Google Sites (which is essentially YouTube) is still the reigning champion, with Hulu and Microsoft Sites still rounding out the top three. Fox Interactive Media fell from 4th to 6th place as its views dropped from 550 million December to 293 million in January.

By David Russell

VeriSign (VRSN) has fought its way back to a key chart level, but traders apparently think that it will take a breather.

Online retail sales aren’t growing at the torrid pace they once were, but they continue to grow steadily. Forrester Research put out a new five-year forecast today predicting that e-commerce sales in the U.S. will keep growing at a 10 percent compound annual growth rate through 2014. It forecasts online retail sales in the U.S. will be nearly $250 billion, up from $155 billion in 2009. Last year, online retail sales were up 11 percent, compared to 2.5 percent for all retail sales.

Yahoo’s (YHOO) search partnership with Microsoft (MSFT) is expected to be a financial boon to the company and boost free cash flow by 20 percent in the years ahead, but there are multiple wild cards that could hamper the deal.

The Microsoft-Yahoo pact received regulatory approval last month. Under the 10 year deal, Microsoft will power Yahoo’s algorithm and paid search. Yahoo sells ads for the Microsoft’s search properties. Microsoft will hire Yahoo employees and the implementation will be complete in 24 months, or first quarter of 2012. Yahoo will get a $275 million boost to operating cash flow.

Cyber attacks against Google (GOOG) have recently been in the news. Yahoo (YHOO) and other companies have been attacked, as well. Microsoft (MSFT), in turn, has gone to court to attack a network of malicious botnets.

With all this activity in the cyber security arena, it is worth investigating which companies are at the forefront of the battle against hackers. With a wave of concern over hacking attempts, there should be some good investment candidates in the network security sector.

For hedge funds, Apple (AAPL) is the battleground of a broad market war. If they can move Apple up, the rest of the market will follow. If they can move Apple down, the rest of the market will follow. Since October this Apple slingshot action has happened six times; it's time to document a seventh.

On February 25th Apple was at $196 and it jumped $23 in the next six trading days. The slingshots move in approximately $20 increments. At economictiming.com we reinvested in our Apple/QQQQ slingshot trade on the morning of February 25th, and the Apple January 2011 $250 call options have gone from 8.55 to 13.95 (a gain of 63 percent). The QQQQ June 2010 $41 call options have gone from 3.95 to 5.89 (a 49 percent gain). Not bad for six trading days. So what should we do now?

This is the tale of two online travel companies – company A and company B.

Company A raked in $21.8 billion of gross travel bookings in 2009 and is by far the largest online travel company. It generated $3 billion in fees, or revenues, from those bookings. Those fees are expected to grow 17% in 2010, according to consensus. EBITDA is expected to reach nearly $950 million in 2010, up 12% YoY. Its market cap is $7 billion and the shares trade at an EV/EBITDA multiple of 6.7x. The company is levered at 1.1x debt to TTM EBITDA and pays a quarterly dividend of 7 cents a share, the only Internet company to do so. It also trades at a PE multiple of 14.7x 2010 EPS with a PEG of 1.1x and has a 10.5% free-cash-flow yield with FCF per share growing 16% in 2010.

Excerpts from John Mauldin's weekly newsletter published on March 7th:

We are in an era of accelerating change, moving toward a future that will be profoundly different from the past we grew up in. But what will the nature of that change be? What will the future look like?

While many content delivery vendors continue to add new services tied into the video ecosystem, the CDNs as a whole have been very slow to diversify their product portfolio outside of delivering video, software and small objects. For a long time, Akamai (AKAM) has been the only game in town for services tied to commerce and application acceleration and has dominated the market with very robust offerings.

Today, Akamai still has the vast share of the market for services outside of CDN that Akamai classifies as "value added services," of which application acceleration is one of those offerings. But over time, Akamai is going to start to see some competition for these services because the other CDNs know that services like application acceleration have very high margins, aren't being sold purely on price and will enable CDNs to diversify their revenue away from video.

Today (Friday, March 5th) a new TV series will air that just might cause more people to wonder about their family history.

The Federal Communications Commission (FCC) plans to spend lavishly on expanding broadband access in the U.S. The FCC’s forthcoming National Broadband Plan (NBP) will propose up to $25 billion in new federal spending to Congress to expand nationwide broadband lines and build a wireless Internet network.

The estimate includes $12 billion to $16 billion to be spent over the next 10 years to construct a wireless broadband network for police and firefighters (emergency public safety broadband system).

It is fairly rare that MagicDiligence has an unabashed negative opinion towards a Magic Formula stock. Joel Greenblatt's strategy is mechanically designed to find what should be good companies that are trading at cheap valuations. A number of provisions are made in the mechanical formulas to prevent poor stocks from making it in. For example, companies with a lot of debt and little cash are penalized by using enterprise value instead of market capitalization. While there are certainly bad stocks in MFI, the truth is that a solid majority of the stocks filtered by the official screen are "OK" to "great" potential investments.

That said, SuperMedia (SPMD) is just a bad Magic Formula stock. The company is the post Chapter 11 re-spawn of Idearc (formerly IAR), a stock so bad that it was one of the reasons for starting MagicDiligence in the first place. After reorganizing in bankruptcy court, SuperMedia's balance sheet is better - but still pretty ugly. Moreover, the business itself has basically not changed at all. Let's take a look.

Giant Interactive Group Inc. (GA)

Q4 2009 Earnings Call

March 4, 2010 8:00 pm ET