Tech Business Weekly Recap: Zynga IPO Flops, Netflix Rumors Fizzle
Google (NASDAQ:GOOG) looks set to get serious about rewarding artists with royalties for songs used on YouTube. With the purchase of licensing tech firm RightsFlow for an undisclosed amount, will make it easier for Google to implement its plans. YouTube Product Manager David King says the deal will help provide ”smart copyright management” on the site.
Activision’s (NASDAQ:ATVI) claims Call of Duty: Modern Warfare 3 achieved $1B in sales in its first 16 days. The company expectations come in a year when movie box office receipts are expected to fall 4%. Thus the sales number is indicative of gaming’s growing share of consumer entertainment spending. Fair enough, but long-term trends within gaming spending may not be entirely in Activision’s favor.
Investing Insights: David Miller: Upgrading Tivo For These Reasons .
Intel (NASDAQ:INTC) cuts Q4 guidance, expecting revenue of $13.4B-$14B against a previous estimate of $14.2B-$15.2B. The firm blames a reduction in inventories and microprocessor purchases across the PC supply chain due to hard disc drive supply shortages.
Apple’s (NASDAQ:AAPL) manufacturing transition to the next-gen iPad is expected to be abrupt, DigiTimes claims. Q1 production is totaling 9.5M-9.8M units (compared with just 4M-5M for the iPad 2). Investors in major iPad 2 component suppliers, such as BRCM, STM, SWKS, and TQNT, will want to keep a close eye on which names Apple decides to rely on for its next tablet.
H-P (NYSE:HPQ) warms to building servers using ARM-based (NASDAQ:ARMH) chips, as engineer Michael Wolfe argues it’s time for them to be considered for high-performance computing applications. Compared with the Intel (NASDAQ:INTC) and AMD-based chips that dominate the market, Wolfe claims ARM-based chips not only consume less power, but could offer integration and customization benefits.
Groupon (NASDAQ:GRPN) is down as Yipit downwardly revises October gross billings because it accidentally double-counted some of the online daily deal company’s more complex deals involving multiple price points. Yipit now says gross billings rose just 1.5% to $147M, vs. previous 22% to $176M.
Pandora (NYSE:P) retreats again as Ganaxi Capital reports the company has fallen out of favor with fund managers right and left.
Jive Software (NASDAQ:JIVE) prices its IPO above the expected range of $8-$10 at $12/share. The company sells 13.4 million shares, 2.4 more than anticipated and allowing it to raise $161.3 million.
Investing Insights: Jive Beats Own Target With IPO.
Apple’s (NASDAQ:AAPL) iAd mobile ad business is undergoing a strategy shift after being faces with competition from Google’s (NASDAQ:GOOG) AdMob and others. Advertisers no longer have to commit at least $1million to a campaign or for screen taps. IDC estimates iAd has 15% of the mobile display ad market, 24% for Google and 17% for startup Millenial Media.
AOL (NYSE:AOL) will combine its dial-up Internet business with its Web services in its new reorganization. It plans to have four business units under the new structure, the others being advertising, local services and the Huffington Post media group. The hope is to get consumers to use more of the company’s features.
JPMorgan (NYSE:JPM) is remaining bullish on NetApp (NASDAQ:NTAP) in spite of the company’s soft FQ3 guidance and market share losses. The firm feels recent execution issues have been overcome. They expect the debut of version 8.1 of its Data ONTAP operating system to act as a catalyst by bolstering NetApp’s offerings for “scale-out” storage deployments. EMC, HPQ and HIT have each recently acquired scale-out specialists.
Zynga (NASDAQ:ZNGA) was given starting coverage with an Underperform and $7 PT by Sterne Agee’s Arvind Bhatia ahead of the social gaming giant’s IPO. Bhatia thinks “Zynga’s growth is slowing even faster than what is obvious at first,” and notes traffic for CityVille is 50% lower than traffic for FarmVille at the same time in its history. CityVille is currently Zynga’s most popular title.
Intel (NASDAQ:INTC) has more losses after yesterday’s cut in Q4 guidance. Susquehanna keeps a Neutral rating on shares: “We think the pre-announcement is a good step toward resetting expectations… [it] opens considerable uncertainty regarding the impact to the first quarter, and we believe it would be difficult for the stock to perform well until that uncertainty is resolved.”
PayPal (NASDAQ:EBAY) is taking on Groupon (NASDAQ:GRPN) and LivingSocial with plans to enter the market for online daily-deals. It’s a market which could potentially more than double in size by 2015 to $4.2B. PayPal plans to target its 103M customers with coupons tailored to their buying habits and mobile-phone locations.
IBM’s (NYSE:IBM) concessions have been accepted by EU regulators to end an antitrust investigation and avert a possible fine; which could have reached a maximum of 10% of the company’s global turnover. The EU had accused IBM of abusing its dominant position in relation to its mainframe maintenance services.
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Broadcom (NASDAQ:BRCM) is guiding for its Q4 revenue to be at the high end of a prior guidance range of $1.7B-$1.8B, ahead of today’s Analyst Day. Broadcom is also lifting its gross margin guidance. Analysts will likely press Broadcom on whether its strength was broad-based, or as is the case with other chipmakers centered around wireless chips.
It’s shaping up to be an ugly day for solar stocks, as the guidance cut delivered by top module vendor First Solar (NASDAQ:FSLR) raises new fears about the ability of industry players to survive the current downturn without wiping out equity holders – especially since First Solar, with its relatively high margins, has been seen as one of the stronger names.
Amazon (NASDAQ:AMZN) is reportedly in talks with Sony (NYSE:SNE), Warner Bros (NYSE:TWX) and other movie studios to rejoin UltraViolet, their service that lets consumers store films online and play them on any device. Amazon would be enabled by a deal to increase content for the Kindle Fire and help the studios speed adoption of UltraViolet.
Focus Media (NASDAQ:FMCN) continues its efforts to counter Muddy Waters’ fraud allegations, releasing survey data from global marketing research firm Ipsos that finds the number of displays in Focus Media’s ad network to be roughly in-line with the company’s stated figures. Muddy Waters is likely to be skeptical of the survey data’s validity.
YouTube (NASDAQ:GOOG) is simply in a league of its own: comScore estimates Google’s video sites (mainly YouTube) accounted for 43.8% of the 201.4M web video views that happened worldwide in October. The #2 site, China’s Youku.com (NYSE:YOKU), accounted for just 2.3%, while Facebook accounted for 1.3%. Barclays believes YouTube is on track to generate $1.6B in 2011 revenue.
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According to Digitimes, sources are saying Apple(NASDAQ:AAPL) will have 7.85-inch display iPad on the market by Q4 2012. These sources also claim that Apple will buy LCD panels from AUO and LPL. Amazon’s Kindle Fire (NASDAQ:AMZN), with its 7-inch screen and cost of only $199 may be the impetus behind Apple pursuing a less expensive iPad. Steve Jobs, though, expressed firm disapproval of 7-inch iPads.
Putting resources in Bing as led to a $2.5 billion operating loss for the Online Services division of Microsoft (NASDAQ:MSFT) in FY11. That loss, however, is not accompanied by significant market share gains. U.S. search data showed Bing and Yahoo(NASDAQ:YHOO) at just 30.1% of the market in November, which is nearly the same as findings in April. These figures are according to comScore, and matched by data from NetMarketShare.
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Unimpressive earnings and FQ4 guidance have put Research in Motion (NASDAQ:RIMM) at its lowest levels since early 2004. Fueling that fall is information about RIM’s QNX-based BlackBerrys not appearing on the market until late next year. Also not helping are RIM’s plans to spend $100 million to advertise and cut prices on BlackBerry 7 devices.
According to The Register, Dell (NASDAQ:DELL) is getting out of netbooks, planning a discontinuance of its Mini netbook products. Margins were never high on the product, which run mostly on Intel (NASDAQ:INTC) Atom chips, and netbooks have been hurt further by the popularity of tablets.
Zynga (NASDAQ:ZNGA) has taken a hit today, falling from above $11 to less than its IPO price of $10 to $9.76.
It’s been reported that Cisco (NASDAQ:CSCO) will be restructured again. New employees will lead the company’s Data Center and Security divisions, on the heels of prior reorganization efforts: 8 months ago Cisco shook up its consumer business, only 7 months after its management-by-committee organization changed, and one month following the formation of a Cloud and Systems Management Technology Group.
Thanks to impressive cash flow and reserves available to reduce debt, AT&T‘s (NYSE:T) quarterly dividend has risen a cent to $0.44/share. This increases the company’s dividend yield to a little more than 6%.
Like deals it made in earlier quarters with Comcast (NASDAQ:CMCSA) and Time Warner Cable (TWC), Verizon (NYSE:VZ) will purchase $315 million in wireless spectrum licenses from Cox cable company. As part of this collaboration, both companies will sell each others’ services. In part because of struggling to keep up with companies like Verizon, Cox recently terminated its mobile phone service.
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