Internet

China’s YouTube makes for uncomfortable viewing

20 Mar 2015

Youku Tudou’s losses are widening, as it bets ever more heavily on movie production, gaming and live broadcasting to offset its loss-making internet video business. These new ventures will further erode profitability. The company’s standalone prospects are far from compelling.

Asia’s Alibaba wannabes buy into wishful thinking

12 Mar 2015

A new generation of Asian e-commerce companies is inviting comparison with Jack Ma’s tech colossus. The analogy is useful but not always flattering. Like Alibaba these young companies benefit from fast-growing online markets - but are less likely to become true giants.

JD.com tries Alibaba’s route to e-commerce profit

5 Mar 2015

Transactions that match buyers with retailers on the Chinese group’s website grew 220 pct in the fourth quarter, far outstripping growth in direct sales. Acting as a middleman, like larger rival Alibaba, may offer better margins. Earnings are still absent, but look less elusive.

Asian telco IPOs show investors still yield-hungry

26 Feb 2015

Investors snapped up shares in Thailand’s Jasmine broadband fund and may do the same for Hong Kong provider HKBN, reflecting the view that U.S. interest rates will remain lower for longer. As long as money remains cheap, shareholders will chase generous and reliable dividends.

Rocket Internet exploits tech stardust

13 Feb 2015

The German tech group raised 589 mln euros in new equity just five months after its IPO. European markets are booming, venture capital is hot, and after a rash of M&A, Rocket wants to buy and build more firms. Still, the aggression and shock dilution will deter some investors.

China web metrics add up to little for investors

13 Feb 2015

Economic indicators stop being useful as they become targets. The numbers tech companies like Alibaba and JD.com bandy around are no exception. Each defines its metrics differently, and there is much room for spin. As business models evolve, these numbers will go from confusing to irrelevant.

Expedia indicates first-class M&A tickets remain

12 Feb 2015

The online travel company’s shares jumped after it agreed to buy smaller rival Orbitz for $1.6 bln. Advertised synergies worth $525 mln today amount to twice the premium being paid. Despite evidence of fewer easy pickings, Expedia shows why the deal boom still has some runway.

Baidu’s mobile success brings lasting pains

12 Feb 2015

Handheld devices make up more traffic than PC for China’s biggest search company. Yet revenue and margins have disappointed because advertisers don’t pay as much on smartphones. Baidu’s self-reinvention is necessary, but investors may not have realized how costly it would be.

Say "ni hao" to Jack Ma’s Amazon-style volatility

29 Jan 2015

Alibaba’s boss, like the U.S. group’s Jeff Bezos, has built online retail dominance. But there are downsides. Unpredictable earnings are Exhibit A. The Chinese group also has fickle regulators. It may not be the last time investors suffer nearly $40 bln of losses in two days.

Google fans flames of wireless price war

22 Jan 2015

The search giant plans to sell relabeled service from Sprint and T-Mobile US. This virtual carrier is a cheap way to intensify the battle for customers raging between these two, AT&T and Verizon. Consumers should benefit – Google, too, if it can avoid getting burned.

How Xiaomi can live up to its $45 bln valuation

21 Jan 2015

Becoming China’s top smartphone maker is impressive, but not enough to justify its rapidly-rising price tag. Xiaomi will also have to make inroads into fast-growing new markets like India without sacrificing margins. Its premium valuation leaves little room for error.

Investors drive blind in China online auto deal

12 Jan 2015

E-commerce group JD.com is buying 25 pct of car portal Bitauto for $1.2 bln. Yet two-thirds of the value is in the form of “resources”, like handing over part of JD.com’s website. Though a tie-up may make strategic sense, shareholders have to take the financial benefits on trust.

Review: Fixing the CIA – a novel approach

26 Dec 2014

Could an outsider best reform the CIA in the wake of torture revelations? In David Ignatius’ novel “The Director,” a pro-privacy tech CEO tries to drag an agency that has lost its way into a new world of tighter rules, leaky secrets and cyberthreats. Good idea, uneven results.

Bank cyberinsurance is overdue to come of age

23 Dec 2014

It’s a confusing market, but growing fast. No wonder with a huge breach at JPMorgan in 2014, never mind monsters at Sony and Home Depot. Add a Washington campaign, and insurance may become standard. As well as financial cover, that could improve security – but only at the margin.

Kim Jong Un could succeed where Dan Loeb failed

23 Dec 2014

While it’s unlikely the North Korean leader wants to become a new kind of activist investor – despite the generous compensation – the hacking of Sony reignites the issue of whether the Japanese conglomerate should spin off its entertainment unit as Loeb’s Third Point suggested.

Goodbye tech conglomerates, hello "ecosystems"

19 Dec 2014

Companies have been using that word to justify building internet-based empires out of a mish-mash of assets with hard-to-identify synergies. Asian players like China’s Alibaba and Japan’s Softbank are amongst biggest fans of this unhelpful jargon.

Baidu’s Uber stake is more hype than substance

17 Dec 2014

The Chinese web giant is already behind rivals Alibaba and Tencent in mobile taxi-apps. Strategically the tie-up looks like a coup. But without financial terms, investors are left in the dark. Uber’s controversial track record and Baidu’s shrinking margins add to the uncertainty.

Facebook’s next goal: crack the Socialist network

11 Dec 2014

Founder Mark Zuckerberg’s attempt to charm China’s censorship tsar has earned justified dislikes. It’s no longer unthinkable though that the social network could be allowed back into the People’s Republic. The challenge is to wrest new friends from huge local rivals.

Richemont and Net-a-Porter are better as separates

3 Dec 2014

The Swiss luxury group is reportedly mulling a sale or IPO of its online subsidiary. That makes sense. The e-retailer fits awkwardly in the Cartier owner’s portfolio. A more tech savvy owner would suit Net and let Richemont focus on the high-margin luxury business it knows best.

Zalando still has much to prove

26 Nov 2014

Europe’s biggest online fashion retailer says it might eke out an operating profit in 2014. That helped propel shares in the recent 5.3 bln euro IPO. Cost discipline is good but may come at the expense of growth, which Zalando needs to sustain its share rating.