Internet

Fake exclusive: Zuckerberg memo to Facebook staff

1 Jun 2012

The social network’s CEO will soon return from an Italian honeymoon to find his troops coping with the busted IPO. His message to them should be humble, yet ambitious: ignore the market, focus on the job and deliver. Breakingviews pens a first draft using Zuckerberg’s own words.

Blackstone loss could be gain for Facebook owners

31 May 2012

Judges are citing a ruling against the LBO shop to push firms for more pre-offering disclosure. That could help shareholders claiming the social network downplayed revenue doubts ahead of its IPO. The suits are still iffy, but the precedent should at least keep them in court.

CIC investment could improve Alibaba’s prospects

25 May 2012

A possible $2 billion investment from China’s sovereign fund would help Alibaba fund its buyback of half of Yahoo’s stake. Alibaba can appear patriotic by becoming more Chinese. It might also help the group reclaim its valuable and politically sensitive payment division, Alipay.

Facebook flop damages friends and enemies alike

23 May 2012

Shares of Zynga, Yelp and Renren were proxies for the social network before its IPO. But the benefits of such firms are less obvious. Facebook’s debut sucked capital from them and growing skepticism over its future may translate into pessimism about these companies’ prospects.

One reason for Facebook IPO mess: Zuck didn’t care

23 May 2012

From the get-go, Mark Zuckerberg made clear he had little interest in welcoming public shareholders. His voting advantage codified the fact. A strong CEO can temper short-term urges elsewhere. But when he’s indifferent, it makes a failed process like Facebook’s more likely.

China diversified dot-coms avoid Facebook pitfalls

22 May 2012

Fears that the advertising-led model is weak drove down shares in Renren, but other Chinese dot-coms are better positioned. Many have traditionally focused more on gaming, where revenues are still surging. Diversified players like Tencent are more recession proof.

Nasdaq howler can’t explain Facebook flop for long

21 May 2012

The exchange is still clearing up after a systems snafu left the social network’s stock trading in the dark after its Friday IPO. Nasdaq’s blunder dinged confidence and the bourse may be on the hook financially. But Facebook’s valuation must soon stand, or fall, on its own.

Yahoo’s Alibaba deal has simplicity on its side

21 May 2012

The internet firm has spent years trying to unravel its Asian assets while avoiding capital gains tax. This straightforward $7.1 bln transaction allows the convoluted and gaffe-prone firm to unlock value while giving Uncle Sam his due. It’s a lesson other U.S. firms should heed.

Long-awaited Yahoo deal heaps pressure on Alibaba

21 May 2012

The Chinese e-commerce giant wants new investors to fund a $7 billion buyback of shares from Yahoo. Takers may include funds who just cashed in from Facebook’s IPO. But Alibaba’s valuation leaves little room for error. New investors will want growth and, one day, an exit.

Facebook IPO features best and worst of capitalism

18 May 2012

Execrable hype accompanies the entrepreneurial achievement. Poor governance, Silicon Valley cronyism, breathless pundits spewing misinformation, manic investors and bankers in hoodies are all on display. Yet the genius of capitalism is precisely its ability to harness excess.

Facebook tax witch hunt looks in wrong place

17 May 2012

Two U.S. senators object to co-founder Eduardo Saverin’s tax “duck” on his stake in the social network now that he has given up U.S. citizenship. But becoming a non-American is expensive and complicated. Lawmakers might ask what they’re doing wrong for expats even to consider it.

Oracle suit gives Google a chance not to be evil

15 May 2012

The search giant has been thumped on privacy, antitrust and governance grounds. But it looks almost virtuous in a patent spat with troll-like Oracle. Investors and watchdogs may still have beefs, but for now Google can milk its role as defender of software’s right to be free.

Facebook winning Keynesian beauty contest

15 May 2012

Investors devouring the social network’s IPO shares have pushed its top valuation to over $100 bln. To justify the lofty figure, buyers are using everything from eyeballs to credit scorers. But such analytical gymnastics are merely a way to rationalize the Facebook hype.

Dan Loeb enters pantheon of bad-ass investors

14 May 2012

Résumé-gate claimed Yahoo CEO Scott Thompson. But the hedge fund manager still needs to articulate a credible plan to return the internet also-ran to relevance. What’s undeniable is that Loeb has proven to Corporate America that underestimating him can prove perilous.

Yahoo needs more than a revolution at the top

14 May 2012

The dysfunctional web firm is much like a failing country. It has been mismanaged and suffers from bureaucracy and an anachronistic business. Until recently it even had a dictator for life. Third Point’s shareholder revolt promises a fresh start, but fixing Yahoo won’t be simple.

Facebook reality tops out near bottom of IPO range

8 May 2012

The social network is aiming for an IPO at $28-$35 a share, for a value up to $96 bln. Though the final price could go higher, that’s a ratcheting down of expectations. But an update of Breakingviews’ DCF calculator shows that sanity is still at the low end of the valuation scale.

Resumé lies have longer shelf lives than degrees

3 May 2012

Yahoo’s CEO embellished his accounting sheepskin with a computer science major. It’s easy to see the temptation in Silicon Valley’s engineering culture, even if tech degrees are quickly outdated. But the lesson to learn here isn’t a new one: dishonesty has a stubborn longevity.

Dependence on Facebook spreads beyond its users

3 May 2012

It’s not just social networking junkies that have grown reliant on Mark Zuckerberg’s firm. Businesses such as Zynga have been created on its back. Bankers are pegging their careers on floating the firm. And California needs the impending IPO to help close its yawning budget gap.

Amazon’s investment habit looks less healthy

27 Apr 2012

The Internet retailer’s quarterly sales grew 34 pct and income was better than expected as sales of the Kindle Fire soared. That sent the stock spiking. But Amazon’s returns on its heavy investment are turning more and more anemic. Investors should be wary.

People’s Daily website shows profit in propaganda

27 Apr 2012

The flotation of People.cn, the online version of China’s People’s Daily, gives it a value larger than the New York Times. It gets government subsidies and advertisers love that it reaches so many officials. Western media companies can hardly ape its ways. But they are enviable.