Good day everyone … and thank you for joining us. For the past few years, we have been very open in outlining the major steps for AMD’s transformation into a processing powerhouse:

• From the acquisition of ATI Technologies;
• To the formation of GLOBALFOUNDRIES; and
• The creation of AMD-The Product Company,
  o with a single business unit,
  o a reinvigorated roadmap,
  o a new business model,
  o And a close relationship with a world-class leading-
  edge foundry.

Today, I am pleased to announce the last major component of that transformation–in the form of a transparent and public agreement with Intel to create a level playing field in the x86 processor industry–taking us one big step closer to achieving our bold vision.
There are three key components to the agreement:

• First, Intel has agreed to an important set of ground rules that we hope will define the path to a free and open market in the microprocessor industry;
• Second, we have agreed to a new patent cross-license agreement that gives AMD broad rights and the freedom to operate a business utilizing multiple foundries,
• And third, GLOBALFOUNDRIES has agreed to terms that allow them the freedom to operate as an independent world-class leading-edge foundry company, going forward, without being a subsidiary of AMD.

In addition, Intel has agreed to pay AMD $1.25 billion.

Today marks the beginning of a new era… one that confirms that the game has changed for AMD. It is an important milestone for us, for our customers, our partners, and most important–for consumers and businesses worldwide. In addition, it represents the culmination many years of litigation and regulatory engagement.

And we are optimistic that it will usher a new era for our industry. We recognize that it will take time for people to understand how operating conditions in the processor business have changed–but make no mistake–they have changed.

I would like to thank the regulatory agencies around the world for their diligence and consistency. Their work has enabled us to achieve this milestone. We are optimistic they will continue their vigilance in maintaining a level playing field, especially with respect to exclusionary practices in our industry.

Looking forward to three keys to our continued success: Compelling offerings; Access to customers and channels, And a winning business model.

We are optimistic this agreement addresses concerns about customer and channel access and our business model. We look forward to healthy competition with the mutual respect one would expect between world-class competitors.

Why? As research house Jefferies & Co. explains in a research note to clients today, if Twitter hasn’t yet managed to transform its popularity into significant revenue, how will Microsoft (MSFT) or Google (GOOG)?

“While we believe Microsoft pulled off a little bit of a media/PR coup by announcing the Twitter deal and forcing Google to rush into a similar deal, we do not believe Microsoft will be able to capitalize on its first mover advantage in the short run since neither search engines nor Twitter have figured out how to monetize the data streams from Twitters (affectionately known as Tweets),” Jefferies analysts wrote.

“We believe that users focused on real-time data would be less tolerant to advertising,” the research note adds. “That said, we can see new business models emerging down the line where the realtime tweets blended with local information (traffic conditions, flight arrivals, etc.) could be more easily monetized and where ‘premium’ tweets from celebrities could be included for a premium subscription. For now, the real-time data integration would mean more refreshes from the users to get up to the minute updates, which should translate into higher query volume, all else equal.”
 

Earnings were $2.32 per share, up from $1.97 per share in the same period last year, and well above the $2.02 per share the Street was looking for. Sales were $23.25 billion, lower than the $23.59 billion predicted by analysts, but second-quarter net income was $3.1 billion, up 12 percent year-over-year.

IBM, it seems, is generally weathering the econalypse pretty well (investor presentation). Indeed, the company raised EPS guidance for the full year, saying it now expects to earn at least $9.70 per share this year, compared to its previous forecast of $9.20. (Click on Highlights summary below to enlarge.)

“As a result of our strategic transformation, we have a very strong business model that is delivering superior earnings, cash, and client value,” said IBM CEO Sam Palmisano in a statement. “We are optimistic about how IBM is positioned to make the most of current growth opportunities as well as those that emerge as the economy recovers.”

I guess IBM’s practice of sacking U.S. employees and shifting their jobs to lower-cost countries is serving it quite well in this souring economy.

IBM (IBM) shares, which are already up more than a quarter this year, rose another 2.1 percent to $112.93 on the news.

“Eventually we’d like to make money out of it.”

– Google CEO Eric Schmidt on YouTube

It’s been well over two years since the $1.65 billion acquisition and Google has yet to truly monetize YouTube. And while the company persists in claiming it has the “luxury of time” to develop the business model through which it will recoup its investment in the popular video site, it’s clear that time is running out. To wit, a report this week from Credit Suisse that predicts YouTube will earn $240 million in revenue in 2009. Which wouldn’t be half bad were it not for the fact that YouTube is on track to lose $470 million in 2009. The research house figures YouTube will rack up about $711 million in operating expenses this year–$360 million on bandwidth alone.

An unfortunate disparity, that. Is it one that can be corrected? Credit Suisse seems to think so. “In our view, the issue for YouTube going forward is to increase the percentage of its videos that can be monetized (likely through more deals with content companies) and to drive more advertiser demand through standardization of ad formats and improved ad effectiveness,” it explained in a research note. Of course, this is exactly what YouTube is doing. On Monday the company said it has agreed to an ad revenue-sharing partnership with Disney (DIS) that will see it putting ABC and ESPN videos on YouTube. A small first step, but one that could portend a trend. Especially, if as Google (GOOG) CEO Eric Schmidt says, the company hopes to eventually make money out of it.

An open-ended timetable for an employee stock sale program.

Perhaps it’s the same “open-ended timetable” Facebook’s using for that mythical liquidity event, hmm? Without a silver bullet business model and no stable revenue stream to speak of, investors were bound to question Facebook’s perceived valuation sooner or later. And, apparently that’s exactly what happened, according to Valleywag’s Owen Thomas. “Facebook’s common shares…have a value that put the whole company’s worth at around $4 billion,” Thomas explains. “Or they did. A source close to potential investors said they wanted to buy shares from employees at a lower valuation, or with guarantees similar to Microsoft’s. To reward a small number of employees who had enough shares to benefit from the program, [Facebook] would have had to give away something for nothing.”

For YouTube, which has been struggling to monetize the 330 million visitors coming its way each month, this may be the beginning of the business model that has so far eluded it. That said, the company is going to have to offer those visitors a bit more than grainy “MacGyver” reruns if it hopes to prevent them from turning to Hulu for premium long-form video content.

In three years or so when Facebook finally settles on a business model. Assuming, of course, that it’s a viable one. And that it doesn’t send privacy advocates into paroxysms of angry status updates.

In an interview with Frankfurter Allgemeine Zeitung this week, Facebook CEO Mark Zuckerberg trotted out the old “growth over profits” cliché as explanation for the company’s long-absent business model. “… what every great Internet company has done is to figure out a way to make money that has to match to what they are doing on the site,” Zuckerberg said. “I don’t think social networks can be monetized in the same way that search did. But on both sites people find information valuable. I’m pretty sure that we will find an analogous business model. But we are experimenting already. One group is very focused on targeting; another part is focused on social recommendation from your friends. In three years from now we have to figure out what the optimum model is. But that is not our primary focus today. … Growth is primary, revenue is secondary.”

Yeah. Tell that to the stock market …

[Image Credit: The Onion]

iPhone is launching in one carrier in one country. We’re in about 100 countries and 300 carriers. … The momentum we are seeing in terms of product launches, carrier support in terms of product launches of BlackBerries, and subscriber additions is exceptional, and we believe it will continue on into the second half of the year.”

– Research in Motion Co-Chief Executive Officer Jim Balsillie, June 2007

Looks like somebody’s got a case of the Mondays–Research in Motion. Shares in the company slipped more than 6 percent to a new 52-week low today. This after charting a new 52-week low last Friday driven by the 27 percent drop RIM took after it issued a lower-than-expected forecast for the current period. That decline was the company’s steepest in eight years, belying CEO Jim Balsillie’s claims that emerging competition from new handset makers isn’t undermining its competitive position. And though RIM’s product roadmap is relatively strong heading into the fall season, the company still has its work cut out for it scrapping with Apple (AAPL) and its iPhone and now T-Mobile (DT) and the Android-based G1.

“RIM’s business model is starting to show its pressure points. The company has become increasingly dependent on hardware sales. As a result, the timing of new product launches can have a big impact on their results,” wrote Brian Modoff of Deutsche Bank in a report. “We think this trend will only worsen and their numbers are now, more than ever, dependent on a steady stream of hit products.”

Needham and Company analyst Craig Bisagna was even more dubious of prospects for Research in Motion (RIMM), criticizing the company for its foolishly dismissive attitude toward new rivals. Just because Windows Mobile handsets haven’t proven themselves worthy competitors to the Blackberry doesn’t mean the iPhone or the G1 won’t.

“We continue to believe that the company has its head in the sand,” Bisagna said in a note to clients. “It’s delusional to think [Apple and HTC] won’t cut into BlackBerry sales as well, especially in the consumer market.”

This morning the company announced slotMusic, a compact memory card-based music format that can be played on cellphones, PCs and some MP3 players. It relies on MP3s without digital rights management schemes and is backed by Universal Music Group, Sony BMG Music Entertainment, Warner Music Group and EMI Group, all of which apparently believe that more physical media is the best way to reinvent their business model in the era of digital distribution. Though as SanDisk VP Daniel Schreiber notes, they do have their reasons. “There’s a billion phones out there and a lot of them can play music and a lot of them have a microSD slot,” he explained. “We think there’s still a need for a tangible, physical product. People will appreciate walking out of the store playing music on their phones.”

Perhaps. But will they appreciate carrying that music around on a 0.6″ x 0.4″ medium that’s about the size of a fingernail? Seems easy to lose, doesn’t it (maybe Case Logic is planning a slotMusic binder)? And wouldn’t they rather carry around hundreds of songs, instead of the dozen or so stored on each slotMusic card? And what if the memory card in their phone is already in use, filled up with contacts, applications and other data? What then? And beyond this, haven’t iTunes and Amazon MP3 made consumers more accustomed to purchasing music à la carte? Why purchase a full album at $15, when all you really want are the only two good songs on it?

For AMD, the sale frees it of a business that’s been a drain on capital expenses and, in the words of CEO Dirk Meyer, will make the company “leaner and more focused” while it seeks to “create a business model to deliver sustainable profitability.” For Broadcom it’s an easy way to immediately scale its DTV business from low-end to mid-range to high-end interactive platforms and panel processors.