Internet

Facebook infected by Google’s antitrust limbo

23 Apr 2012

The social network isn’t even public, yet acquisition targets may already be concerned. Instagram commanded a 20 pct break fee if its $1 bln sale isn’t consummated by December. That’s a wise safety measure given the life cycle of apps and Facebook’s lurking antitrust risks.

Google rejoins tech’s governance race to bottom

12 Apr 2012

Zynga and Facebook show little regard for common shareholders. Google is copying its rivals’ shenanigans by adding a third class of non-voting shares eight years after leading the dual-stock charge. That’ll entrench insiders and enable the future abuse of minority shareholders.

Facebook’s defensive Instagram M&A raises red flag

9 Apr 2012

Online photos are supposed to be a core Facebook competence. Paying $1 bln for the picture-sharing app may boost the social network in mobile. But paying over the odds for revenue-free rivals is usually what anxious, mature firms do - not growth companies seeking to go public.

Microsoft opens pricey new front in patent wars

9 Apr 2012

The software giant is spending $1.1 bln to buy some 800 patents from AOL. At over $1 mln apiece, the rate tops even the huge ones paid last year for intellectual property for mobile phones. This first salvo in the Internet space throws down the gauntlet at Google and Facebook.

What’s Facebook really worth?

22 Mar 2012

A look at Google’s revenue and profit history suggests that even $75 bln is a stretch for the social network’s IPO valuation - at least on a rational discounted cash flow basis. But in Facebook’s hyped offering, anything is possible. A new Breakingviews calculator does the math.

Amazon hedges against the rise of the machines

20 Mar 2012

That’s one way to explain the kooky $775 mln purchase of Kiva. Either that or Jeff Bezos has a robot fetish. It’s not clear what the deal offers shareholders. Automating Amazon’s warehouses makes sense. Buying Kiva droids, rather than their maker, seems the more rational approach.

Cisco’s John Chambers falls off the M&A wagon

15 Mar 2012

Less than a year ago, the networking giant’s boss, in an unusual mea culpa, forswore big deals and promised discipline. Now, he’s shelling out $5 bln for NDS, a pay TV software firm. But this acquisition might deliver justifiable returns and fit nicely with Cisco’s strategy.

Youku-Tudou price pop not only about synergies

14 Mar 2012

The Chinese video portals’ combined market value swelled by $1.5 billion after they unveiled a merger. Cost savings of $50 million a year only partly explain it. Other factors may include a squeeze on short sellers, and hopes that an enlarged Youku could itself be a bid target.

Silicon Valley’s undeserved moral exceptionalism

12 Mar 2012

The ruthless overlords of technology and the Internet at Google, Facebook and elsewhere paint themselves as saints of American capitalism. But like other big business, they’re really the successors to the robber baron magnates of the Gilded Age, Rob Cox argues.

Facebook’s underwriter friends are cheap insurance

12 Mar 2012

The social network’s IPO now has 31 banks working on it. There’s no evidence having more underwriters affects early stock performance either way, and some may be friends of convenience rather than necessity. But for Facebook it’s extra reassurance at little, if any, cost.

Merger of China’s YouTubes shows web maturity

12 Mar 2012

The $3 bln tie-up of China’s two pure-play online video groups looks like a defensive move in the country’s fiercely competitive Internet market. Diversified players like Baidu and Sina are investing in their own video portals. Profits are coming – but only for those with scale.

Zynga has less to fear from mobile than Facebook

2 Mar 2012

The online gaming company is diversifying away from the social network. But one trend affecting its giant symbiotic partner shouldn’t much worry Zynga - the shift to mobile devices. Ad-dependent firms like Facebook and Yelp could lose out, but Zynga’s revenue model is different.

Yelp IPO: four reviews, 2 stars out of 5

29 Feb 2012

Categories - user review websites, stock sales, unprofitable enterprises, Google rivals. Location - Silicon Valley and New York Stock Exchange; Attire - casual; Price range - $ to $$ per share; Good for bankers and backers - yes; Good for investors - no.

Yahoo activist hasn’t yet earned four board seats

27 Feb 2012

Dan Loeb’s Third Point hedge fund correctly diagnosed the board as the problem. But investors should demand he provide a sound prescription to cure ailing Yahoo before voting for his full slate of directors. Until then, Loeb merits just one spot - to keep the pressure on.

Alibaba.com minorities should hold out for more

27 Feb 2012

The Chinese e-commerce provider wants to buy out public shareholders at a third of the valuation at which it sold shares in 2007. Yet Alibaba.com’s potential has arguably grown since then. The China opportunity remains barely tapped. Founder Jack Ma is getting too big a bargain.

Twitter revolt could march next on proxy season

23 Feb 2012

Social media enabled uprisings in the Middle East, Occupy protests and even blowback against banking fees. A logical next step would be to give a stronger voice to shareholders. And lighting a fire under complacent institutional investors would be a real coup.

Alibaba $2.5 bln buyout looks opportunistic

22 Feb 2012

The 46 pct premium founder Jack Ma has offered to take the Chinese e-commerce company private is decent, but the shares are far below former highs. Minority shareholders have few options, but Ma’s wily dealmaking may haunt him if he returns to float his crown jewel, Taobao.

Congratulations Google, you’re now a conglomerate

15 Feb 2012

U.S. and EU antitrust authorities have cleared the search firm’s $12.5 bln purchase of Motorola. Its hardware foray might open new markets - or be a vital means of defending its advertising business. But on Wall Street, diversification like this merits a valuation discount.

Alibaba and Yahoo could live unhappily ever after

15 Feb 2012

Talks on Alibaba buying back Yahoo’s stake in the Chinese tech giant may have hit an impasse. The deal’s valuation, structure and its financing are key roadblocks. This adds more strain to their relationship. They may want to rebuild trust before going back to the table.

Complexity caps allure of Yahoo’s Alibaba solution

13 Feb 2012

A mostly cash split-off promises a tax-efficient way for the troubled U.S. Internet firm to cut its stake in a Chinese rival. Yahoo also would accept a group of assets as part of the deal being discussed. But the more elaborate it gets, the more diluted the benefits may be for Yahoo.