Monthly Archives: July 2009

Richard Waters

After seeing gains for 12 trading days in a row, Nasdaq investors were due for a wake-up call. The news from the tech sector during this earnings season has been less dire than feared, but that doesn’t mean the recovery is here yet.

Microsoft duly brought things down to earth on Thursday. What was most striking in its weak second quarter results was a 29 per cent slump in revenues from the Windows client business. Didn’t Intel just report a snap-back in the PC business as manufacturers corrected for their earlier aggressive inventory reductions – and didn’t Microsoft itself say that sales of PCs to end-customers only fell by 5-7 per cent in the latest quarter? Read more

David Gelles

PayPal said in March that it planned to double revenues in two years, growing from $2.4bn to $5bn by 2011. It was an audacious goal, but today PayPal gave some indication of how it hopes to achieve as much.

With the official introduction of its platform on Thursday, PayPal invited third-party developers to tap into the PayPal experience and weave it into their own applications and websites. Called Adaptive Payments, the platform should expand PayPal’s reach, bringing it to iPhone, Facebook and Twitter applications, and perhaps into the physical retail world. Read more

Chris Nuttall

Qualcomm’s lengthy legal battles mean no rest for the leading wireless chipmaker’s general counsel Don Rosenberg (pictured).

After a sleepless night dealing with the Korean Fair Trade Commission’s decision to fine it a record $207m for its “unfair” business practices, he told me about the remaining outstanding complaints facing the San Diego-based company. Read more

Richard Waters

It’s still very early days for the “Googlephone”, but there are already signs that the strategy is working.

Google’s aim was to create a mobile platform for its services and, eventually, to drive more advertising. Data from Admob (which serves up 8bn mobile adverts a month and so has as good a view as anyone of where those ads are going) show the plan is unfolding on schedule.

The HTC Dream – the first Google phone, launched by T-Mobile late last year – first appeared in March on Admob’s list of top-20 handsets, based on the volume of advertising they consume. By last month, it had risen all the way to the number six slot. Read more

David Gelles

The fog is finally starting to lift. That was the message from storage maker EMC as it reported second quarter earnings and for the first time this year offered guidance. Until now, EMC had declined to issue a formal outlook, saying the economic picture was too murky and tech spending remained unpredictable.

But in projecting full year earnings that beat analyst expectations, EMC signalled that the worst of the downturn was over for it, and perhaps the tech sector. “We now have better visibility and more confidence in the second half of 2009,” said chief financial officer David Goulden. Read more

Richard Waters

It’s official. The final Windows 7 bits have been set in stone. With today’s Release to Manufacturing, Microsoft can finally close its sorry Windows Vista chapter. Along with the global consumer launch on 22nd October, Microsoft is planning a business launch for the new versions of both the Windows client and server operating systems on 9th November.

This will be the first time the new server software is launched at the same time as a new client, says Bill Laing, head of the Windows server division. Expect some heavy “better together” marketing later this year as Microsoft tries to convince IT departments of the cost savings and greater manageability from upgrading both client and server at the same time. Read more

Chris Nuttall

An increase in prices for Nand Flash memory and deep cost-cutting have helped memory-chip maker SanDisk to a surprising profit.

Analysts had expected a loss of 17 cents a share, according to Reuters Estimates, but the leading flash memory card maker reported a second-quarter profit of 36 cents. Sales of $731m beat Wall Street expectations of $711m. Read more

Paul Taylor

Is Brett Brewer, president of Adknowledge and co-founder of Intermix Media, MySpace’s parent before it was sold for $673m to Rupert Murdoch’s News Corp in October 2005, onto something else big?

Adknowledge, which claims to be the largest independent advertising network, has acquired KITN Media, owner of Super Rewards which provides the virtual currency platform for casual games on social networks such as Facebook and yes, MySpace.

 Read more

Paul Taylor

The pace of announcements surrounding next generation e-book readers and competition for Amazon’s Kindle family of devices is quickening.

Earlier this week Barnes & Noble announced that it was opening an online e-book store with 700,000 titles and had struck a strategic partnership with Britain’s Plastic Logic which is planning to launch a new reader aimed at the business market next year. (The Financial Times has also announced a partnership with Plastic Logic.) Read more

Richard Waters

There aren’t many companies that could challenge Amazon.com. Now there’s one less.

From its early days, Zappos was built to become the next Amazon. It picked one category – shoes – to hone a  relentless focus on customer service and create enough scale to become an online category killer. From there, like Amazon, it hoped to use its low-cost fulfillment system to move relentlessly across the ecommerce waterfront.

Not many pure ecommerce companies have made it to the $1bn revenue mark, so getting this far is quite a feat (our earlier coverage is here and here.) Read more

Chris Nuttall

World of Warcraft, the world’s biggest online role-playing game with more than 11.5m subscribers, looks set to receive a serious treatment by Hollywood.

The record of video games being translated to the big screen is not great, but WoW the movie will be directed by Sam Raimi, director of the Spider-Man trilogy, Blizzard Entertainment announced today. Read more

Joseph Menn

Apple’s iPods on occasion catch fire or explode, but federal officials and the company have declined to issue a recall because the accidents are so rare, according to a Seattle television news report. After battling for months, station KIRO obtained 800 pages of documents from the US Consumer Product Safety Commission.

Those files include 15 complaints of smoking or fire, including some depictions of iPods igniting while teenagers slept. With 175m units sold, however, fewer than one in a million have been reported for that defect to the CPSC, though of course, not all such problems are reported. This being America, litigation is pending.

Joseph Menn

Yahoo is set to acquire Xoopit for $20m in a deal that could be announced as soon as today, according to a person familiar with the companies’ plans. Xoopit makes browser plug-ins that allow consumers to find photos and other media quickly within email.

The acquisition, Yahoo’s largest since CEO Carol Bartz took control of the company in January, will give Yahoo more social tools at a time when it is trying to capture some of the audience time that Facebook and other networking sites are carving out.

David Gelles

Film, television and music companies are all losing the fight against the illicit use of their products as consumers tap into new means of access. On the FT’s Analysis page, Salamander Davoudi and Tim Bradshaw consider the controversial issue of file-sharing.

Ten years after the launch of Napster, the first online file-sharing service, the music industry is no closer to solving the problems created by digital piracy. As advances in technology make television, film and video games companies more vulnerable to piracy, that decade-long failure to change consumer behaviour threatens to undermine business models across the media industry. Read more

David Gelles

Marc Andreessen is on a roll. Earlier this month he raised a $300m venture capital fund with his business partner, Ben Horowitz. Now Ning, the social networking startup he co-founded, has raised $15m from Lightspeed Venture Partners at a whopping $750m valuation, according to All Things Digital.

Valuing Ning at $750m seems more than generous, considering the company has never said it is profitable. Even before the economic crisis, these would have been favourable terms. Slide, which makes applications for social networks, last January raised money at a $550 valuation, while LinkedIn, a social network for professionals, got a $1bn valuation last JuneRead more

Joseph Menn

Even sceptics would agree, that’s a lot of iPhones: Apple just said it sold 5.2m of them in the three months through June.

True, it’s not as many as the company sold when it introduced the iPhone 3G a year ago, a blockbuster 6.9m units in the initial quarter. But the 3G had just shy of three months to help rack up the overall shipment numbers. Read more

Richard Waters

When I caught up with him earlier today, Yahoo’s new CFO, Tim Morse, said he’s certainly open to reshuffling the company’s portfolio of businesses in ways that help it make more money.

He was responding to a question about talks with Microsoft about a search partnership – though, of course, he wouldn’t comment directly on the negotiations themselves.

On the surface, it certainly looks like Yahoo could do with some help with search. Its search revenues, just released, took a tumble this quarter, even as the volume of queries from users held up. Google, which reported numbers last week, did much better. Read more

Chris Nuttall

Blogs are going mainstream, writes Lex. The days are long gone when they could be dismissed as the preserve of pyjama-clad commentators with something to get off their chest. Some, such as the Huffington Post, have become fully fledged news organisations. Now, similar sites are attracting cash-rich backers.

Continue reading “Investing in Blogs”

David Gelles

Shoemaker Steve Madden has picked a fight with Ebay, suing the e-commerce site for allowing the sale of counterfeit watches. This is becoming a well-trodden path for retailers feeling burned by illicit activity on Ebay — Tiffany, LVMH and L’Oreal have all filed similar suits.

But if history is a guide, Steve Madden will have a hard time recouping any alleged losses. Courts have tended to rule in Ebay’s favour, arguing that the e-commerce site is not responsible for ensuring the authenticity of goods sold by outside sellers. Only LVMH won compensation, to the tune of $63m. Read more

Chris Nuttall

Advanced Micro Devices,  Intel’s smaller microprocessor rival, is backing up chip industry earnings reports of a recovery in the second quarter and a seasonally stronger second half to come.

Like Intel, AMD saw strong sales of its mobile chips and growth in Asia.  But it reported sales were flat in the US and gross margins suffered as it tried to clear out older 65-nanometre chips and its factories remained underutilised.  It is still short of its break-even target and the Q2 loss of $330m sent shares down 13 per cent in extended trading.