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1. Monetary Policy

This week, the insiders weren't the only ones selling


(GOOG) - Get Free Report


The world's most hyped-up search engine spurred a brief selling panic late Tuesday with a fourth-quarter earnings shortfall. Blaming an unforeseen rise in its tax rate, Google posted an adjusted profit of $1.54 a share, 22 cents shy of the Wall Street consensus estimate. The stock plunged as much as 17% late Tuesday before recovering Wednesday to end just 7% lower.

Predictably enough, bulls on Google -- which even at reduced levels has more than quadrupled since its August 2004 initial public offering -- soon were out in full throat.

"We continue to believe Google is gaining significant market share of global search queries," wrote JMP Securities analyst William Morrison, who reiterated his strong buy rating while cutting his target price by $25 to $550. "The global search opportunity is no smaller than it was yesterday."

Also no smaller was the stack of sell orders being furiously filled out by Google execs. CEO Eric Schmidt sold $24 million worth of stock Monday under a preplanned selling program, according to regulatory filings.

The selling frenzy is nothing new. According to

The Associated Press

, Schmidt reaped $345 million in stock sale proceeds in the first 11 months of 2005 alone.

He and 13 other insiders pocketed a total of $4.3 billion in stock sales in that period, according to Thomson Financial.

Just last month, Schmidt was joined by finance chief George Reyes and co-founders Larry Page and Sergey Brin in selling even more stock, according to Yahoo! Finance.

Insider selling didn't come up on Tuesday's postclose conference call. More pressing was talk about innovation, mentioned 11 times, and "monetization," which registered more than 20 citations.

"We are relentlessly focused on this new end-user experience," Schmidt told analysts on Tuesday's conference call. "And that is where our future is. It is where the growth is. It is where the revenue and monetization is."

Judging by those insider sales, that's not the only place where the monetization is.

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Dumb-o-Meter score: 93. Those poor Google execs didn't get a single "great quarter, guys!" from analysts on the call.

To watch Colin's video version of this column, please click here


2. Poison Ivy

Merrill Lynch


got schooled this week.

The Wall Street giant has spent years likening itself to a bull nosing around a china shop. But in the name of reaching out to retail investors, Merrill reached this week for a tweedier tag: Merrill Lynch Investment Managers will operate under the brand Princeton Portfolio Research & Management.

Merrill's asset management arm "has made its home in the Princeton area for nearly 20 years and has a strong commitment to the community," explains Robert Doll, president of the unit, in a Monday morning press statement. Expanding on the point, Doll told The Wall Street Journal that the name "has positive connotations given the prestige of the university."

The plan didn't sound positive to everyone, though. Princeton University wants Merrill to drop the name.

"The university feels strongly about defending its name," spokeswoman Cass Cliatt says. "We believe this is a blatant case in which Merrill plans to exploit the university's name for commercial gain."

Merrill, whose asset management unit is actually based in nearby Plainsboro rather than in Princeton itself, tried to make amends by putting out a press release disavowing any link to the university.

"This new name, while no longer using the 'Merrill Lynch' name, draws on the history of MLIM, which has long been based in the Princeton, N.J., area," Merrill waffled Wednesday afternoon. "The rebranded entity has nothing to do with Princeton University, was not named to suggest any association with the University, is in no way affiliated with the University, and any statements suggesting otherwise are inaccurate."

But Cliatt shrugs off Merrill's backpedaling and says the university plans to press its case. A Merrill spokeswoman confirmed Princeton had approached Merrill on the matter but didn't comment further.

Well, say this for the folks at Merrill: They're giving it the old college try.

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Dumb-o-Meter score: 91. Too bad, it looks like "the Tiger Funds" is already taken too.

Testy Time
Parsons passes on Icahn's 'flavor of the day'

3. Freezer Burn

Time Warner


served up some chilly words this week for its loudest foe.

In releasing fourth-quarter earnings Wednesday, CEO Dick Parsons (near right in photo) went out of his way to take a shot at investor Carl Icahn (far right). Icahn and his hedge fund friends have spent more than half a year trying to shake the media giant out of its slumber by demanding bigger share buybacks, deeper cost cuts and possible spinoffs. Time Warner has been content to say it's doing just fine as it is, thanks.

Parsons allowed on Wednesday's conference call that he was unhappy about Time Warner stock being stuck in the $17-$18 range. But he insisted management wasn't at fault and doesn't need to stoop to what he called "flavor of the day" strategies like carving up the company.

The comment came just two days after Icahn got a rare pat on the back for his gadfly routine. On Monday, Icahn gave up his bid for Fairmont Hotelsundefined after the Toronto company accepted a better offer from an investor group led by Saudi Prince Alwaleed. But Fairmont chief William Fatt was far more gracious than Parsons.

"I congratulate Mr. Icahn for identifying an undervalued company and being the catalyst that provided an opportunity for the Fairmont management and board to maximize value for all shareholders," Fatt said. "I'm pleased my activism helped enhance shareholder value for all constituencies," Icahn blushed.

Something else about that deal may have been pleasing to Icahn, too. Toronto's

Globe & Mail

reported that "his five-month foray into the Canadian hotel industry" resulted in an $80 million profit.

Time Warner shareholders probably wouldn't mind a scoop or two of that.

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Dumb-o-Meter score: 88. Equally sweet was the $6 million Icahn said he'd pay former Viacom (VIA) - Get Free Report chief Frank Biondi to run Time Warner after this spring's pivotal proxy fight.

Kodak in Focus
Lost and found

4. Whiz Kids



is developing some bad habits when it comes to accounting.

The Rochester, N.Y., picture company said Monday it lost $52 million for the fourth quarter and $1.37 billion for the year. The company also made clear that 2006 will bring more layoffs -- it has cut 17,600 jobs so far but is aiming for 25,000 -- and additional losses.

That didn't stop Kodak from sketching out a rosy future. "We are now more than halfway through our transformation, and we have proven our ability to drive sales in digital markets and to generate the cash necessary to fund our growth," CEO Antonio Perez said Monday. "We enter 2006 with solid momentum and a stronger emphasis on profitable growth."

Maybe Kodak should be placing a stronger emphasis on getting its math right. The company said Monday it expected to lose around $1 billion from operations in 2006. Yet just a day later, Kodak revised that forecast, saying the loss would be more like $675 million. A spokesman attributed the change to a miscalculation in the results from Kodak's nondigital businesses.

"In its fourth quarter 2005 earnings announcement and related investor presentation on Jan. 30, Eastman Kodak provided certain 2006 digital financial projections, which it reconciled to the most directly comparable GAAP financial measures in the related attached appendices," Kodak's press release said Tuesday. "Those reconciliations are now understood to have included errors."

That line has a familiar ring to it. Kodak

said something very similar back in November about its third-quarter earnings report. Back then, the company said accounting errors involving restructuring accruals led Kodak to recognize $15 million in costs in the wrong periods within 2005.

So is Kodak's supposed momentum actually taking the company deeper into the land of accounting make-believe? Far from it, the spokesman says: "In this case, we identified that there was an error and we corrected it as soon as possible."

Not soon enough, as it turns out.

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Dumb-o-Meter score: 85. Also better late than never: Finance chief Robert Brust (in photo right) said Monday he'll retire next year.

5. Drugged Out

With all the dithering in Davos, it fell to


(PFE) - Get Free Report

chief Hank McKinnell to say something of note.

European regulators cleared the New York pharmaceuticals giant late last Thursday to sell its Exubera experimental inhalant for treating diabetes. A decision on the matter by their stateside counterparts at the Food and Drug Administration was due some time Friday.

McKinnell, appearing in a parka on CNBC after the European approval, said he expected the FDA to approve the drug before trading opened Friday. News reports buzzed with the big announcement. One problem: Pfizer didn't actually mean to say that.

The company hastily rushed out a statement saying as much. "The company expects that the FDA will issue a decision concerning Exubera shortly," Pfizer said Friday morning. "Pfizer regrets an incorrect statement it made to CNBC about the regulatory status of Exubera in the U.S. and is correcting it with CNBC."

The egg on McKinnell's face aside, no harm done: The FDA did indeed approve the drug later Friday. McKinnell "did make a mistake and I think it was just with everything going on," a Pfizer spokeswoman told

Yes, with all due respect to Alan Greenspan, it was just a little case of irrational Exubera.

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Dumb-o-Meter score: 82. As McKinnell lookalike Hal Holbrook once said of another company, "They've got a good new drug."

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