Weekly Tech Business Recap: Amazon Denies Rumors, Microsoft Dominates Gamers
In Facebook’s initial public offering filing last week, it admitted it doesn’t generate any “meaningful revenue” from its mobile products, which “may negatively affect our revenue and financial results.” Next month its plan is to start showing advertisements to cellphone users in an attempt to succeed where Google (NASDAQ:GOOG) and Twitter have so far fallen flat, the FT reports.
Amazon (NASDAQ:AMZN) reportedly plans to open a Seattle retail store. It will focus on selling Kindle e-readers, the Kindle Fire tablet and related accessories.
Investing Insights: Paradigm Shift: Smartphones Eclipsed PCs in Fourth Quarter.
TiVo (NASDAQ:TIVO) is up over 5% premarket on a Barron’s weekend report. The report says Microsoft (NASDAQ:MSFT) or Google (NASDAQ:GOOG) could target the provider of digital-video recorders for acquisition. Software patent victories and advanced hardware also have made shares attractive again, the article says.
Verizon (NYSE:VZ) and Coinstar (NASDAQ:CSTR) announce a joint venture, the product result of which will be introduced in the second half of 2012. The firms say it will create a subscription service combining new release DVD and Blu-ray rentals with streaming download options.
Microsoft (NASDAQ:MSFT) continues to develop its mobile app portfolio announcing plans to sell iOS, Android, BlackBerry, and Windows Phone versions of its Dynamics customer relationship management software in the second quarter. The software and related services will sell for $30/month. This is $35/month cheaper than services from Salesforce.com (NYSE:CRM). In the fourth quarter Microsoft’s Dynamics business posted double-digit growth.
Barnes & Noble (NYSE:BKS) Books-A-Million (NASDAQ:BAMM) and Canandian bookstore chain Indigo Books join forces refusing to stock titles published by Amazon (NASDAQ:AMZN). The boycotts come ahead of Amazon’s release of high-profile titles brought to market by former Time Warner CEO Larry Kirshbaum.
Sohu.com (NASDAQ:SOHU) guidance is a disappointment. Majority-owned online game developer Changyou.com (NASDAQ:CYOU) share decline also takes a toll on some recent gainers from the Chinese Internet stocks. Sina Corporation (NASDAQ:SINA), Baidu.com Inc. (NASDAQ:BIDU), and Renren Inc. (NYSE:RENN) are all dwindling. However, gaming concern Perfect World (NASDAQ:PWRD) is up interestingly enough; perhaps out of a belief that Sohu/Changyou’s loss is Perfect World’s gain.
Halliburton Company (NYSE:HAL) plans to phase out use of employee Blackberries in favor of using the iPhone and iOS platform, according to a leaked internal memo. Research In Motion’s (NASDAQ:RIMM) goal to keep a decided edge over rivals in the enterprise market is defeated and Apple (NASDAQ:AAPL) will be able to compete for large corporate accounts.
Don’t Miss: Halliburton: iPhones Rule.
Sprint (NYSE:S) announces a partnership with Orange Business Services. It will provide a network of global machine-to-machine connectivity, which could add entirely new business segments for the company.
InterActiveCorp (NASDAQ:IACI) plans to sell a $50 million stake in its Vimeo online video site at a $300 million valuation, reports Pando Daily. The company is looking to maintain a 50% “non-controlling stake” in Vimeo following the deal, while claiming over 55 million unique visitors, despite revenues of just $5 million.
Investing Insights: IACI Investors Not Happy About Vimeo’s Valuation.
Microsoft (NASDAQ:MSFT) takes an equity stake in business software player 24/7 and signs a research and development partnership agreement. The firms say that the deal will generate over $250 million in annual revenue from large companies using its predictive software to track consumer behavior and preferences for 24/7.
Verizon (NYSE:VZ) files a shelf registration statement with the Securities Exchange Commission. In it, Verizon discloses its intent to sell a mix of securities worth up to $10 billion.
Apple (NASDAQ:AAPL) reports The Globe and Mail is in talks to sell its much-rumored television set through Canadian cable/wireless providers Rogers Communications (NYSE:RCI) and BEC (NYSE:BCE). This comes a day after Best Buy (NYSE:BBY) inadvertently leaked details about the set. It’s claimed Rogers and BCE already have prototype sets, and that the device can be controlled by either voice (NASDAQ:SIRI) or hand gestures.
Nokia (NYSE:NOK) will cut 4,000 jobs at plants in Finland, Hungary and Mexico in order to lower costs and help get products to market more quickly. Smartphone assembly will be moving closer to suppliers in Asia. The latest layoffs bring to over 30,000 the number of cuts announced under Stephen Elop.
TiVo (NASDAQ:TIVO) is getting much of the credit for Virgin Media’s (NASDAQ:VMED) solid fourth quarter showing, which included a 30% jump in net profit driven by a doubling of consumer demand for its new pay-television service and for super-fast broadband. Virgin now has 12% of its pay-television customers on TiVo, just six months after the product’s launch.
Investing Insights: Cisco in the Hot Seat as Investors Await Earnings Details.
Rambus (NASDAQ:RMBS) jumps up after announcing it signed a patent license agreement with NVIDIA (NASDAQ:NVDA). The agreement covers the use of Rambus patented innovations in a broad range of integrated circuit products offered by NVIDIA. The two companies settle all outstanding claims, which includes resolution of past use of Rambus’ patented innovations.
Akamai (NASDAQ:AKAM) has acquired Blaze. The acquisition was of a developer of technology for accelerating the speed at which web pages load. Blaze’s solutions complement the site acceleration capabilities provided via Akamai’s content delivery network (CDN). In December, Akamai acquired rival CDN owner Contendo.
Level 3 (NASDAQ:LVLT) jumps up after its fourth quarter report revealed the debt-laden carrier, which is in the process of digesting Global Crossing, to be in better financial shape than investors feared. Free cash flow for the quarter was $126 million, compared with -$34 million in the year-ago period. Level 3 is also guiding for adjusted Earnings Before Interest, Taxes, Depreciation and Amortization to grow 20%-25% in 2012. It expects free cash flow for the year to be negative.
AOL Inc.’s (NYSE:AOL) money-losing Patch local news unit plans to cut staff. It will also focus on producing “easy, quick-hitting, cookie-cutter copy,” a source tells Jim Romensko. Moreover, while the source believes AOL is committed to Patch for 2012, it thinks the plug could be pulled in 2013 if Patch has not made “real moves towards profitability.” Patch is believed to have lost over $100 million in 2011.
Investing Insights: Google Will Provide Fair Licensing After Motorola Merger.
Yahoo (NASDAQ:YHOO) may be forking over the 40% stake it owns in Alibaba. Six banks are reportedly in the process of getting internal credit approval to underwrite a $3 billion loan to Alibaba in order for the company to buy back its shares previously sold to YHOO. Shares of Alibaba’s Hong-Kong listed unit were halted today.
Investing Insights: Groupon CEO: IPO Earnings Call Hypes the Future.
Dish Network (NASDAQ:DISH) loses an appeal. Jurors in the trial will now hear about the erased e-mails in a development. Sanctions were levied against it for destroying e-mail evidence in an ongoing contract case against Cablevision (NYSE:CVC). Sanford Bernstein analyst Craig Moffet says this will be “clearly negative” for Dish.
Electronic Arts (NASDAQ:EA) lost its Chief Financial Officer to Polycom. Shares are trading lower as a result. How well titles Star Wars: The Old Republic and Battlefield 3 resonate with gamers, will be a more telltale sign for the company than the loss of the CFO.
Don’t Miss: Finally: Google Releases Chrome for Android.
Facebook (FB) has been shut out of China for the last three years, during which time Renren (NYSE:RENN) and Sina’s (NASDAQ:SINA) Weibo have flourished. Facebook is looking to re-enter, but the company will have to placate government censors to get the go-ahead. Even then, deep-rooted local competition could make things very difficult. Twitter and YouTube also remain blocked in China.
Verizon (NYSE:VZ) and AT&T (NYSE:T) want more spectrum after the Federal Communications Commission helped block the T-Mobile deal. These behemoths are in support of a clause requiring the Federal Communications Commission to ignore factors such as market dominance when determining a company’s eligibility for a spectrum auction. On the other hand, Sprint (NYSE:S), T-Mobile, Leap Wireless (NASDAQ:LEAP) and others oppose it. The clause is buried in a giant Congressional bill.
Don’t Miss: Apple: iPad 3 is Coming in March.
Alcatel-Lucent (NYSE:ALU) shares are down trading after reporting fiscal year 2011 profit of 1.1 billion pound ($1.74 billion) compared with a 334 million pound ($528.59 million) loss in 2010. It is also targeting an additional 500 million pounds ($791.30 million) of cost savings in the coming year. It is also expecting an increase in adjusted operating profit as a percentage of sales from the 2011 level of around 3.9%.
Alibaba plans to take Albiba.com private. The privatization is in order to help smooth the wheels for a Yahoo (NASDAQ:YHOO) deal, according to Reuters. The 27% of Alibaba.com that Jack Ma’s doesn’t control has a market value of $1.6 billion.
Don’t Miss: Alibaba Looks to Buy Back Yahoo’s Shares.
Amazon (NASDAQ:AMZN) will not offer a standalone streaming video service to compete with Netflix (NASDAQ:NFLX) stating Prime Video will only be available to those who pay $79 for an annual Prime Membership, “at least into the near future.” On an annual basis, that still makes Prime Video cheaper than Netflix’s $96/year. But, the lack of a monthly payment option could deter some buyers.
Microsoft’s (NASDAQ:MSFT) Xbox 360 was again the top-selling home console. Its 270,000 shipments gave it a 49% share. United States retail video game hardware and software sales each fell 38% year-over-year in January, claims research firm NPD. In December, the year-over-year declines were only 28% and 14%, respectively.
Investing Insights: Zynga: Get Ready for Tons of Hasbro Games.
LinkedIn (NYSE:LNKD) is surging after posting strong fourth quarter results and 2012 guidance, as well as a healthy jump in registered users. Canaccord is impressed with the performance of the Hiring Solutions business, noting it added 1,870 corporate customers. During its earnings call, LinkedIn said it would begin selling mobile ads soon.
Nuance (NASDAQ:NUAN), shares nearly doubled since August but it is off sharply after its first fiscal quarter raises fears that Apple’s (NASDAQ:AAPL) Siri may not be as profitable as hoped. Wedbush who gives Nuance Underperform notes the top-line miss which occurred in spite of the acquisition of Vlingo. Needham who rates Nuance at Buy is optimistic about attempts by phone vendors to catch up to Siri will drive demand for Nuance’s software.
Don’t Miss: Facebook: China Could Be Out of Reach.