Tag Archive | "internet"

D: NFLX Prepares For Deep Spend

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D: All Things Digital, The Wall Street Journal technology conference, is in full swing in Southern California.

Netflix (NFLX) Chief Executive Reed Hastings led off the proceedings this morning talking about international expansion. The Internet movie outfit is going to launch in Toronto first, a “bold” move, going to Canada, he jested. Then, Netflix will open it’s doors in an undisclosed foreign market shortly thereafter.

The upshot: international expansion could hurt profits. “We tell investors that the better it goes, the more money we are going to lose because we are going to invest” more in expansion, Hastings says. He says it takes one to three years for Netflix to establish itself in a new country, which is relatively fast. Hastings, who is a Microsoft (MSFT) board member, would not comment about hedge fund manager David Einhorn’s call for Microsoft CEO Steve Ballmer’s ouster.

He was wiling to discuss his own open letter to short sellers to cover their negative bets, even calling short-selling “healthy” for markets.

“I’m not trying to have a battle with the shorts,” (but) if you have a friend on the short side and you think he’s losing money, and you think he’s wrong, then you want to tell him.”

The conference, now in its ninth year, got off to a rip roaring start last night when News Corp. “acting CEO” Jane Lynch, the star of the Fox Television hit Glee, recommended comic strips be added to the WSJ and other humorous mandates involving Sara Palin and talk show shock host, Glenn Beck.

Google (GOOG) Executive Chairman Eric Schmidt was the opening night keynote. The former CEO, who serves as an advisor to President Obama, says he has no intention to take a cabinet post or agency job, which had been rumored. But he will be active in the coming campaign just as he was during the President’s first election.

Note: For further ongoing coverage of D, see also former Tech Trader editor Eric Savitz’s blog at Forbes.com.

Article courtesy of Tech Trader Daily

Apple: Explosion At Foxconn Factory (Update)

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Shares of Apple (AAPL) are down $2.34, or 0.7%,a t $338.19 after Blooomberg’s Michael Wei in Beijing reported there has been an explosion at a plant in Chengdu owned by Foxconn, the Taiwanese firm that manufactures many of Apple’s products.

The story appears not to be posted to Bloomberg’s Web site yet; On the terminal, it is under Foxconn news, not Apple news.

The brief item on the Bloomberg terminal only says that seven people have been hospitalized.

Business Insider’s Joe Weisenthal writes that the Chengdu plant is a “major builder of Apple’s iPads,” and writes that the factory has been sealed off by police while the matter is investigated.

Update: Dow Jones’s James Areddy reports the explosion has killed “at least two people,” according to Chengdu authorities. 16 people are now reported to be injured, including three “seriously,” he writes, citing municipal government statements.

“Details of the explosion are sketchy but video posted to the Internet and broadcast by China Central Television shows black billowing smoke from the massive facility,” writes Areddy. Areddy’s report includes a reiteration of background on a series of suicides at Foxconn last year.

Article courtesy of Tech Trader Daily

Ctrip Falls 7% On Weak Q2 View; Morgan Stanley Sees Upside

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Shares of Chinese travel booker Ctrip (CTRP) are down $3.08, or almost 7%, at $43.28 after the company last night reported Q1 results that exceeded analysts’ estimates, but forecast the current quarter’s revenue below expectations.

Q1 revenue rose 30%, year over year, to $117 million, beating the average $112 million estimate, yielding EPS of 24 cents, two cents better than expected.

For the current quarter, the company projected revenue of $118 million to $123 million, which is below the $132 million the Street has been modeling.

Ctrip said its gross margin held steady with the prior-year quarter at 78%, while operating profit margin rose 1 point to 34%.

Morgan Stanley’s Richard Ji this morning reiterated an Overweight rating on the stock. The miss in Q2′s outlook was because the company had a high hurdle with comparison to last year’s Q2, when it got a lift form consolidation of its Wing On Travel unit and also travel related to the World Expo.

Ji expressed some concern that corporate travel business was up only 20%, versus the 56% increase recorded in the year-earlier quarter. Nevertheless, he sees room for growth in the business given that only 3% of China’s Internet users are currently served by Ctrip.

Cowen & Co.’s Chenyi Lu reiterated a Neutral rating on the shares, writing that the stock is currently fairly valued. The forecast for Q2 may yet prove conservative, however, writes Lu, given “continued positive economic development in China and Ctrip’s good business momentum.”

Article courtesy of Tech Trader Daily

Datameer snags $9.25M more to analyze massive amounts of data

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Datameer, a company that allows users to analyze massive amounts of data without technical know-how, today announced a second round of funding for $9.25 million. The money will be used to hire additional employees for its engineering, sales, and marketing teams.

The company created a user dashboard to easily feed and analyze data into Apache Hadoop, an open-source software that processes large amounts of data sets and spits out analytics as well as reporting. The benefit of the tool comes to those that don’t have a technical background and thus wouldn’t be able to use Apache Hadoop.

Companies in several industries have needs to process large amounts of data, including

Microsoft: Street Seeks Silver Lining In Skype Deal

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Microsoft (MSFT) shares are down 2 cents at $25.65 in early trading following yesterday’s 0.6% decline after the announcement the company will buy Internet calling firm Skype for $8.5 billion.

The day after stories, and the analyst notes seem largely to take a positive tone despite the sticker shock the Street experienced yesterday.

The Wall Street Journal’s Nick Wingfield writes this morning that Microsoft’s deal is a sign of the consumerization of technology, and makes passing reference to Cisco Systems’s (CSCO) failed effort with Flip video cameras. And Wingfield ends with a quote from Meg Whitman, who bought Skype when she was head of eBay (EBAY) in 2005. “Is Skype worth $8.5 billion? I don’t know, but it depends on how big the platform grows.” Wingfield notes that eBay will make a profit of about $1.4 billion on the deal.

Steve Lohr writes in The New York Times this morning, “by stitching Skype technology into Microsoft products, used by hundreds of millions of people, the software giant could hasten the mainstream adoption of video communications, especially in businesses.”

DealBook’s Evelyn Rusli writes that Microsoft settled on the $8.5 billion price in mid-April, after CFO Peter Klein travelled to private equity backer Silver Lake’s offices and the parties involved had discussions about valuation for several weeks.

A Reuters’s Breaking Views column by Richard Beales and Agnes Crane write this morning that, “the transaction is unlikely to pay off.” They note that past deals have floundered: the $6 billion purchase of aQuantive in 2007, “hasn’t borne any noticeable fruit in the battle with Google. Neither has the software giant’s search deal with Yahoo.”

Ann Winblad, a venture capitalist with Hummer Winblad, was on Bloomberg television last night, saying, “It’s the kind of bold move microsoft should be making … I think it’s a brilliant strategic move for Microsoft. It’s a chess move they need to remain competitive with Apple and Google, and it gives them an opportunity to partner further with Facebook, one of their core partners.”

And Bloomberg’s Dina Bass, Douglas MacMillan, and Joseph Galante this morning write that Skype refused to settle for less than $7 billion in its talks with Microsoft, citing anonymous sources.

The Financial Times’s Lex column writes that it’s all about Nokia: “If voice and video over the internet is going to become a big presence in mobile, it makes sense for Microsoft, desperate to differentiate its mobile operating system from Apple’s and Google’s, to buy the dominant brand. Will the network operators play along?”

And what of the analysts?

Walter Pritchard with Citigroup reiterates a Buy rating on Microsoft and a $35 price target. The deal “makes sense,” he thinks, and he lays out some possible “leverage”: the Kinect line becomes the “killer home video conference system / Win phone”; the business division, where it can integrate with Microsoft’s “Lync.” “Some of these integrations could potentially drive meaningful competitive advantage and augment existing Skype revenue that today is almost all based on calls to landline and mobile phones.”

Tavis McCourt with Morgan Keegan sees benefit to Nokia (NOK), Polycom (PLCM), Logitech (LOGI) and Plantronics (PLT) as “video and voice services will require more headsets and video bridging hardware. Nokia may benefit if Microsoft builds in any unique features not available on other handsets.” McCourt thinks Microsoft’s negotiations with telcos will become tougher as they view Skype as a threat, but, “Ultimately, we believe carriers will lose this battle.”

On that score, Craig Moffett with Sanford Bernstein this morning observes that Skype threatens the most valuable portion of the telco economy: basic connectivity. Voice service produces about $1 per megabyte in wireless services, whereas data service — Web browsing, etc. — commands only about 5 cents per megabyte. Undercutting that rich voice goldmine is an “arbitrage opportunity,” he writes, and tech companies love arbitrage. “Perhaps it was the threat of Facebook acquiring Skype that moved Microsoft to pay 10 times revenues,” writes Moffett. “Just don’t expect the carriers to be amused.”

Adam Holt with Morgan Stanley notes that while Microsoft has been developing unified communications with Lync and Xbox Live and Win Phone 7, Skype has 13 patents and over 400 patents pending “in areas from video delivery to data compression.” Moreover, though the valuation is rich, Skype’s metrics have been improving, the company is gaining more importance in social networking, and anyway, there are a lot more M&A deals being done in the $6 billion to $8 billion range, so what could Microsoft do? Use of foreign cash, he notes, is “found money.”

Article courtesy of Tech Trader Daily

MSFT: Skype A Use For Int’l Cash; Nokia Rises

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Responses are trickling in to Microsoft’s (MSFT) announcement this morning it will buy Internet phone calling firm Skype for $8.5 billion.

The conference call with Steve Ballmer and Skype executives starts in just a little bit, at 11 am, Eastern, so there’s likely to be more response later today after analysts’ have had a chance to ask some questions and digest the whole thing.

I would note that Nokia (NOK), Microsoft’s partner in smartphones, is beating the market this morning on no particular news, perhaps a reaction to Nokia’s now having another arrow in its quiver given its partnership with Microsoft for phone software. Nokia shares are up 20 cents, or 2.4%, at $8.61.

Sandeep Aggarwal with Caris & Co., who rates Microsoft stock a Buy, writing early this morning before the formal announcement, thinks “an acquisition of Skype by Microsoft makes sense, given how important “communication” and “mobile” are for Microsoft.” The $8.5 billion price tag implies a 25 times multiple of enterprise value to Ebitda, “which is somewhat rich.” It also would imply $2 per share in proceeds to eBay (EBAY), he calculates, given the latter’s 30% stake in Skype.

Aggarwal sees Microsoft working Skype into its “Lync” server for businesses and maybe putting it into Office. There’s lots of ways to enhance Windows Live for consumers and also add to its Windows Phone 7 operating system.

Collins Stewart analyst Kevin Buttigieg, who also has a Buy on Microsoft, this morning writes that this “isn’t the kind of transformative deal investors may have liked to see Microsoft do with $8.5 billion.”

“Skype is a large deal at a relatively expensive price that doesn’t transform any MSFT business quickly or in a way which improves perception about its ability to compete in a post-PC world.”

It will require “solid execution,” he writes, which is not something Microsoft is known for, he writes. The deal appears to be neutral to Microsoft’s non-GAAP EPS.

Is this a hidden plus? Buttigieg points out that as Skype is incorporated in Luxembourg, which means that Microsoft can use some of its international cash, which is 80% of its cash balance, for the deal.

Article courtesy of Tech Trader Daily

Microsoft Sags On $8.5B Skype Deal; eBay Up 4%

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Microsoft (MSFT) announced a short while ago that it will pay $8.5 billion in cash to purchase Skype, the Internet calling firm that was bought by eBay (EBAY) in 2005 and spun out in a leveraged buyout in 2009.

The deal is a confirmation of rumors that circulated yesterday on GigaOm, and then were picked up by The Wall Street Journal later in the evening. And it appears that DealBook was right on the money with their $8.5 billion prediction.

Microsoft this morning said Skype’s technology will advance the use of real-time video and voice communications for both consumers and corporations.

Microsoft CEO Steve Ballmer said that Skype “is a phenomenal service that is loved by millions of people around the world” and that “together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world.”

Ballmer will hold a press conference on the deal at 8 am, Pacific/11 am, Eastern. You can tune into it live here.

Microsoft shares are currently down 46 cents, or 1.8%, at $25.39 in early trading. Shares of eBay, which stands to reap some of that windfall for its remaining 30% stake in Skype, is up $1.38, or 4%, at $34.50.

Article courtesy of Tech Trader Daily

Bing replaces Google as default search engine on BlackBerry devices

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At the BlackBerry World 2011 conference today in Orlando, Florida, today, Microsoft CEO Steve Ballmer announced that its Bing search engine will be replacing Google as the default search and maps provider on all of Research in Motion (RIM)’s BlackBerry devices.

The Bing search engine has been steadily gaining market share — it currently holds 27 percent of the search engine market compared to Google’s 67 percent — and this deal comes as a major breakthrough.

In addition to RIM’s smartphone devices, Bing will also be serving as the default search and maps provider to PlayBook, RIM’s upcoming tablet competitor to Apple’s iPad.

According to The Register, the agreement may also include a clause to make Microsoft’s upcoming mobile browser IE10 the default browser on the BlackBerry. A deal like that would make for an interesting collision in the mobile browser market, with Apple’s iPhone and Google’s Android backing Webkit-based browsers, and Microsoft’s Windows Phone 7 and RIM’s BlackBerry backing Internet Explorer.

Microsoft also showed how some of its more advanced capabilities, such as search with optical character recognition cameras, voice, local restaurants, and deals will be integrated into the BlackBerry platform, as well as its Streetside block view and Photosynth panorama features for Maps.

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Article courtesy of VentureBeat » deals

SEO platform BrightEdge, ComScore partner to put companies in the spotlight

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BrightEdge, a search engine optimization management (SEO) platform, said today that is has partnered with digital performance measurer ComScore to help companies get the highest online ranking possible, Jim Yu, founder and chief executive, told VentureBeat

San Mateo, Calif.-based BrightEdge uses tools to help companies increase their prominence on search engines like Google.

“Search marketers need a holistic view of what is impacting their search rankings,” Yu told VentureBeat. “It makes perfect sense to collaborate with ComScore to combine their competitive intelligence with our organic insights so that our customers can get this complete picture instantly in the BrightEdge platform.”

As part of the new partnership, ComScore’s intelligence into consumer search behavior, which is based on its panel of three million Internet users, will be fully integrated into BrightEdge’s current SEO platform.

BrightEdge said this combination of collective intelligence and “deeper” SEO analytics will enable SEO managers and executives to get a complete view of their competitive position across the Internet.

That view will be crucial for companies hoping to identify new strategies to cut through the Web clutter and drive SEO performance.

“The landscape of SEO is evolving quickly, with new channels like social media and mobile becoming more and more important factors into SEO performance,” said Yu. “Companies who don’t understand these new search behaviors are optimizing for yesterday’s SEO.”

The money at stake is huge. The SEO market opportunity in the U.S. is greater than $40 billion, three to four times larger than paid search which, according to independent technology and market research company Forrester, was close to a $13 billion market in 2009.

BrightEdge’s closest competitors are customized in-house solutions and similar SEO companies Covario and ConductorSearchLight.

It has been growing at a rapid pace. In the last few months, the company says it became the first SEO platform with global capabilities; was joined by the former chief architect of Baidu to consult on international platform expansion; and introduced BrandSafe Link Audit to expose disreputable SEO techniques to brand marketers before they end up in the headlines.

In March, it began integrating social media signals into its platform, allowing its customers to analyze the content of Tweets and Facebook “likes” and “shares” to pinpoint the exact areas in social media that will boost SEO, and offer specific recommendations to increase activity in these places.

Founded in 2007, BrightEdge has so far raised $8.5 million from Battery Ventures, Altos Ventures, and Illuminate Ventures.

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Article courtesy of VentureBeat » deals

Opening Bell: 05.02.11

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Buffett Seeks To Limit Damage (WSJ)
In contrast to his March 30 remarks, when he said he thought Mr. Sokol’s actions weren’t “in any way unlawful,” Mr. Buffett on Saturday called Mr. Sokol’s actions “inexcusable” and said they violated the company’s insider-trading rules and code of ethics. He said Berkshire had turned over “some very damning evidence, in my view” about Mr. Sokol’s trades to the SEC. Mr. Sokol maintains he did nothing wrong, and his attorney late Saturday released a statement calling Mr. Buffett’s stance a “resort to transparent scapegoatism.”

Buffett Extols Berkshire’s CEO Candidates, Faults Sokol’s Trades (Bloomberg)
“There is no real chance the next CEO comes from outside of Berkshire,” the 80-year-old billionaire said yesterday at a press conference in Omaha, Nebraska, site of the company’s annual meeting. “If you picked the worst of the candidates we have, that person would be very, very good.”…Sokol’s stock deals, which Buffett called “inexplicable” considering his wealth, depleted Berkshire’s list of possible CEOs. Berkshire said in February that it had four candidates, without identifying them. “The leading candidate right now, I would lay a lot of money on him being straight as an arrow,” Buffett said at the April 30 meeting.

Buffett: Failure To Raise Debt Ceiling Is Asinine (Reuters)
Warren Buffett said he expects the Congress to raise the nation’s debt ceiling before it expires in mid-May, and said it would be that body’s “most asinine act” ever if it failed.

The Berkshire Hathaway Annual Meeting (Deal Journal)
A question about what Berkshire is doing to protect against the fall of the dollar. Buffett in the past has bet against the U.S. dollar, but said he’s lately been inactive in foreign exchange markets. “There’s no question the purchasing power of the U.S. dollar will decline over time. The only question is at what rate, Buffett said. But other currencies will decline too, and he said he doesn’t have strong feelings about which ones will decline faster or slower. Buffett ends by saying he’d rather be in the U.S. right now than any other place or any other time in history.

Osama Bin Laden Killed in Pakistan, Obama Says (Bloomberg)
Al-Qaeda leader Osama bin Laden was killed in Pakistan yesterday in a firefight with a team of U.S. operatives who raided the compound where he had been hiding, President Barack Obama said. “On nights like this one we can say to those families who have lost loved ones to al-Qaeda’s terror: Justice has been done,” Obama said in a late-night televised address from the White House.

Bin Laden Was Found At Luxurious Pakistan Compound (Reuters)
Few windows of the three-story home faced the outside of the compound, and a terrace had a seven-foot (2.1 meter) privacy wall, officials said. “It is also noteworthy that the property is valued at approximately $1 million but has no telephone or Internet service connected to it,” an administration official said. “The brothers had no explainable source of wealth.”

Buffett, Charlie Munger’s Share Thoughts On Trump (Reuters)
The biggest laughs of the day came from a question on Trump’s prospects for the White House. “Obviously, I think he’s a jerk,” Berkshire’s Vice Chairman Charlie Munger said, with Buffett adding in a more diplomatic way that he did not expect Trump to win the presidency.

Trump Says He’s Decided ‘In My Mind’ To Pursue Presidency (Bloomberg)
“In my mind, I have already decided,” Trump, 64, said in a telephone interview yesterday. “I am going to announce. But I can’t do anything until the show ends.”

Abu Dhabi, Hedge Funds to Back Glencore IPO (Reuters)
The listing, which could be London’s biggest ever, will be aided by strong support from cornerstones, who could buy nearly 30 percent of the shares sold — or some $3.6 billion worth, if the listing raises its maximum target of $12.1 billion.

Facebook Numbers Feed IPO Outlet (WSJ)
Lou Kerner…pegged Facebook’s profit margin—in earnings before interest, taxes, depreciation and amortization—at about 50%. He said Ebitda should be $1.95 billion this year, and he estimated the company’s value in the public market would be $112.9 billion.

Greece Suggests EU/IMF Repayment Extension (Reuters)
In an interview with French daily Liberation published a day ahead of an inspection visit by the lenders, Papaconstantinou became the first Greek official to float the idea of a further easing of conditions on the 110 billion rescue.

Seth Meyers’ White House Correspondent’s Dinner Speech (TRB)

After Roasting, Trump Responds In Character (NYT)
“Seth Meyers has no talent,” Mr. Trump said in an interview on Sunday. “He fell totally flat. In fact, I thought Seth’s delivery was so bad that he hurt himself.”



Article courtesy of Dealbreaker