Shares of Travelzoo (TZOO) are up $20.94, or 28%, at $94.81, after the company this morning reported Q1 revenue ahead of analysts’ estimates and earnings per share well ahead of expectations.

Revenue of $37 million surpassed the average $33.4 million estimate, while EPS of 37 cents was ahead of the average 28-cent estimate.

Travelzoo, based in New York City, claims 22 million subscribers for its newsletters discussing travel deals, and operates search engines for finding deals, including SuperSearch and Fly.com.

It seems the stock may have been set up for a short-squeeze: As Needham & Co.’s Mark May had pointed out in a note to clients on Monday, Travelzoo was among the most heavily shorted of the Internet commerce stocks he tracks, with short interest of 35%.

Travelzoo shares had already risen 79% from the beginning of the year through yesterday’s close.

Article courtesy of Tech Trader Daily

• Hellish travel nightmares may be curtailed by long overdue amendments to the Passenger Bill of Rights, such as limits to how long airlines can hold passengers grounded on the tarmac and fairer refunds for lost baggage. [KABC]
• Massive $4.1-billion modernization construction project at LAX will create a projected 39,900 jobs and generate $6.9 billion in economic activity. [LATimes]
• A year after Deepwater Horizon explosion and Gulf oil spill, the nation’s worst environmental disaster, Congress hasn’t passed any new safety laws on offshore drilling. [HuffPo]
• Poor Rebecca Black is still getting death threats saying she’ll be killed if “Friday” isn’t taken off the internet. [PE]
• The guidos and guidettes will reportedly take on the motherland, specifically Florence, for “Jersey Shore” Season 4. [TMZ]

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One of these days, there will be an “internet of things,” or once-dumb appliances and gadgets smartened up with chips and internet connectivity. Wireless chip maker Atheros Communications believes that day is not so far away.

Today, the San Jose maker of wireless chips is announcing an initiative that will make it easy for internet-aware home appliances to transfer data over electrical wires in the home to a user’s web-connected devices and to the smart grid. This initiative is one of the enabling steps to putting smart appliances on the grid without spending money to wire them with traditional Ethernet-based wiring.

“There will be 100 internet-connected devices per home one day,” said Adam Lapede, senior director of internet of things technology at Atheros, in an interview.

It’s kind of a pipe dream, but it’s a big one that is shared by a lot of companies that want to make everyday appliances smarter, more useful in providing data feedback, and more energy efficient. Atheros has chosen to connect the smart appliances using the HomePlug Green Phy, or a version of the HomePlug AV standard for transferring internet data over home electrical wires.

Atheros, which is in the process of being acquired by Qualcomm, designed the technology so that smart appliances can transfer or receive internet data without consuming a lot of power or taking much of the available internet bandwidth of the home wires, Lapede said. Once connected, these devices will be readable, recognizable, locatable, and addressable. It means they will be able to provide information such as how much energy they are consuming and when is the best time to use them to preserve energy.

“We need to figure out how to reduce the demand during peak usage and improve our efficiency,” Lapede said.

Lapede said the cost of putting internet connectivity is getting smaller and smaller. Atheros, which makes Wi-Fi chips and other related technology, hopes to drive the costs of the connectivity chips even lower by making them in huge quantities and standardizing them across the industry

With the HomePlug Green Phy technology, Atheros is asking software developers to begin developing applications that will use its chip hardware in the future for the internet of things vision. As envisioned, the technology will be integrated into stand-alone gateway devices or into the appliances themselves. It will allow the transfer of data from device to device at a rate of 10 megabits a second or more. That will happen seamlessly, without the need to translate the data from one format to another.

Lapede said that applications will have to use built-in encryption and other security methods to ensure that a neighbor won’t be able to hack another one across the smart grid. Lapede said that the power line technology has rivals, but he believes it is the best way to reach all of the appliances in the home. And while HomePlug AV has a number of rivals, he says chips based on the standard have shipped in the tens of millions of units worldwide. So it makes sense to adapt HomePlug for the internet of things.

Once the applications have been defined and requirements set, Atheros will design chips based on the standard and ship them to customers in the coming years.

“We expect to see traction in 2012,” Lapede said.

Tags: HomePlug AV, HomePlug Green Phy

Companies: Atheros Communications

People: Adam Lapede

Article courtesy of VentureBeat » deals

Bamboom Labs announced yesterday that it has raised $4.5 million in seed financing for developing technology that allows consumers watch live TV over the Internet. New York-based FirstMark Capital led the round, also participating were High Line Venture Partners, SV Angel, First Round Capital, and Highland Capital Partners.

Bamboom Labs is headed by Chaitanya “Chet” Kanojia who’s last startup Navic Networks was acquired by Microsoft in 2008.

The company’s technologies allow customers to access free over-the-air broadcast signals over the Internet and direct it to connected devices.

The team includes people from Navic and Microsoft as well as RF and digital technology engineers from Andrew Corporation, Lucent and others.

Copyright laws make distributing the TV programming over the Internet quite tricky. There needs to be some creativity from Bamboom’s side. The company cannot just redistribute the TV signal over the internet without facing the wrath of copyright holders. That means Bamboom would need to license content to retransmit it over the net — a costly and complicated process that even Google has had trouble with.

Bamboom’s way around copyright issues at the moment is to rent a personal antenna to the customer. That way the customers, not the company, are responsible for recording and retransmitting. And that should take care of the issue, LA Times reports.

Tags: Internet TV, Seed financing

Companies: Bamboom Labs, First Round Capital, Firstmark Capital, High Line Venture Partners, Highland Capital Partners, SV Angel

People: Chet Kanojia

Article courtesy of VentureBeat » deals

The house doesn’t always win.

Today, the founders of PokerStars, Full Tilt Poker, and Absolute Poker are among eleven defendants charged by the Department of Justice with bank fraud, money laundering, and illegal gambling offenses, MarketWatch is reporting.

Authorities issued restraining orders for upwards of 75 bank accounts used by the poker companies and their payment processors. In addition, five Internet domain names used by the companies, the largest U.S. online poker websites, were seized.

Article courtesy of Tech Trader Daily

Group-buying titan Groupon has taken further steps towards an initial public offering by selecting Goldman Sachs and Morgan Stanley to underwrite the offering, according to an article in the Wall Street Journal citing “people familiar with the matter”.

It’s been pretty clear for the past few months that an IPO is in Groupon’s sights, especially after the company walked away from a $6 billion acquisition offer from Google last year then raised a whopping $950 million in funding.

Bloomberg reported last month that Groupon was planning a $25 billion IPO this year. Now the Journal says that the IPO is expected to value the company between $15 billion and $20 billion. A number of consumer Internet companies, such as LinkedIn, have started filing for their IPOs this year. As reported, Groupon’s IPO would dwarf the offerings announced so far, though Facebook is likely to follow with an even larger IPO in the next couple of years.

I’ve emailed Groupon for comment and will update the post if someone responds.

Tags: IPOs

Companies: Goldman Sachs, Groupon, Morgan Stanley

Article courtesy of VentureBeat » deals

Yesterday afternoon, we noted that shares of ARM Holdings (ARMH) rebounded from a significant early drop to close up on the day.

Today, the Financial Times is reporting that the  microchip equipment maker topped the FTSE 100, rising 6.8%, after positive comments from analysts on the European component making sector.

ARM, which trades in London and through ADRs in the U.S., makes microchips used in Apple’s (AAPL) iPad and iPhone.

According to the FT, analysts at ING issued a note to clients saying the industry had had a “solid quarter” in the first three months of the year, and it expected companies “to meet earnings guidance”.

ARM was also mentioned in a note from Morgan Stanley, suggesting the company would benefit from Microsoft’s (MSFT) new Internet Explorer 10, which is designed to run on ARM chips.

Shares of ARM had fallen 4% in the prior London session after the U.S. chip maker Micrel (MCRL) cut its first-quarter forecast.

ADRs are up 1% at $29.01 in midday trading.

Article courtesy of Tech Trader Daily

China’s mass-market consumers are starting to take up applications in Internet entertainment, e-commerce, digital content, and mobile Internet, driven by ongoing urbanization, improving broadband infrastructure, and an influx of affordable smart devices and applications, according to report by Jefferies.

The firm initiated coverage of Baidu (BIDU) with a Buy rating and a $200 price target. It also initiated coverage of Sina Corp. (SINA) with a Buy rating and $150 price target and coverage of Hong Kong-traded Tencent with a Buy rating and a price target of 248 Hong Kong dollars.

“We like Baidu’s dominance in search marketing, Tencent’s conglomerate of Internet with a hidden jewel real name SNS, and Sina’s leadership in social media, ” wrote analyst Cynthia Meng.

Baidu enjoys high barriers to entry, limited competition, a growing market with still-low online market -penetration among small and medium-sized enterprises and an early opportunity in mobile search, Meng wrote.

Over 55% of traffic is still unmonetized, and Baidu’s online video joint venture Qiyi has considerable potential, she added.

Sina has the first-mover social media platform Weibo, Meng wrote.

“Driven by increasing netizen base, the Chinese government-led urbanization and resulting consumption upgrade, Weibo’s addressable market, user base, and effective browsing time are expected to expand,” she added.

Tencent continues to gain market share in online games and mobile Internet. Meng expects the company to overtake Sohu in 2011 for no. 2 in China’s brand advertising market.

Baidu is up 2.7% at $144.57.

Sina is up 5.4% at $117.28.

Tencent closed up 3.2% at $HK 199.80 in Hong Kong trading.

Article courtesy of Tech Trader Daily

Google (GOOG) should report first-quarter results on Thursday that are in-line with consensus amid strong search trends, according to The Benchmark Co.

Analysts are forecasting first-quarter net revenue and EPS of $6.4 billion and $8.13, respectively, for 27% and 20% year-over-year growth.

“With the stock down recently, and trading at only 10 times and 17 times 2011 estimated Ebitda and EPS, we remain bullish,” wrote analyst Clayton F. Moran in a research note.

He rates Google at Buy with a $700 price target.

Google’s U.S. search volume in January and February increased 13% year-over-year, according to comScore, and its international search volumes increased 26% year-over-year. Search pricing, or cost-per-click (CPC), is up around 10% year-over-year domestically, Moran noted.

“While Facebook is gaining market share in online advertising, it does not appear to be at the expense of Google,” Moran wrote. “Google remains the primary Internet advertising vehicle, with marketers raising budgets.”

Google is implementing new products and strategies and has altered processes to facilitate faster decision making and product innovation, Moran added.

Some recent product changes include those designed to increase the quality of links and enhance results with social suggestions.

Moran wasn’t uniformly positive on Google: The company has almost $30 billion of net cash, or about $91 per share, he noted, about $20 billion of which should be used to repurchase Google stock (11%), leaving considerable unused cash.

“It is unfortunate that the company appears unwilling to return capital to shareholders,” he wrote.

Google shares closed down 0.1% at $577.37. It is down 0.3% at $575.74 after hours.

Article courtesy of Tech Trader Daily

Level 3 Communications said it will buy broadband services provider Global Crossing for $1.9 billion plus $1.1 billion in debt assumption. The aim is to create a global broadband network across three continents and reduce overall expenses.

The deal brings a much-needed consolidation to the broadband market, where the potential for traffic growth is huge but the major players have been hurt by low prices.

Broomfield, Colo.-based Level 3 agreed to buy Global Crossing in an all-stock transaction, paying $23.04 a share based on Global Crossing’s closing stock price on April 8. The full value of the deal is $3 billion, since Level 3 will assume Global Crossing’s debt of $1.1 billion.

The combined revenue of both companies is about $6.26 billion, based on last year’s revenues. Overall, the company hopes to cut annual capital spending by $40 million. The deal could reduce a crowded field in the broadband services market and help stabilize prices. Overall, the combined companies will serve more than 50 countries and provide connections to 70.

Gigaom says that the deal will give Level 3 more clout to negotiate with bigger telecommunications players, such as Comcast, even as network ownership consolidates into the hands of fewer players.

Both companies are losing money. Level 3 lost $622 million last year and has been unprofitable since 1998. Global Crossing lost $172 million in 2010 and it last turned an annual profit in 2003.

Tags: broadband, Internet

Companies: Global Crossing, Level 3 Communications

Article courtesy of VentureBeat » deals