Internet

Weibo set to get duller but more valuable

16 Dec 2011

China’s Twitter has proved a thorn in the side of the Party. Now comes the clampdown, including new plans to force microbloggers to use their real names. Being brought to heel will make Sina Weibo less controversial and less interesting. But it needn’t hurt its commercial value.

Delay takes shine off Zynga’s IPO

2 Dec 2011

Revenue at the maker of FarmVille and other Internet games is still rising fast. But on more telling measures, growth has slowed. Zynga’s hoped-for $9 bln valuation isn’t too far-fetched. But the price tag might have been even higher had it harvested IPO investors’ cash earlier.

Gloomy outlook doesn’t thwart Netflix optimism

22 Nov 2011

The company is selling shares for a third of the price at which it recently bought them. Claims that it has enough capital despite shrinking cashflow, an expected loss next year and $3 bln of content costs due by 2014 add to the misguided cheer. Netflix prospects aren’t so rosy.

China’s Tencent slows as new Internet models bloom

9 Nov 2011

China’s second-biggest dot-com by market value saw its slowest quarterly earnings growth in four years. Gaming customers are defecting to new Internet models. Higher costs in micro-blogging and video are hurting margins. Tencent needs a strategy beyond simply getting bigger.

Amazon keeps digging costly moat around business

25 Oct 2011

The Internet retailer shocked Wall Street with low profitability due to heavy investment. This expenditure may eventually pay off - that’s why the stock trades at 100 times estimated earnings. But it’s a timely warning that even Amazon must keep girding the barriers to entry.

Netflix’s melting core spells value disaster

25 Oct 2011

Up till now, the company has been cagey about the respective profitability of the two units it was planning to separate. New figures show Netflix makes about 10 times more from a DVD customer than an online streaming subscriber. Trouble is, the wrong arm is shrinking - and fast.

Cisco stops descent, stuck in purgatory for now

20 Oct 2011

After years of chasing growth - and seeing its stock crumble - the company is now focusing on profit. This should buy CEO John Chambers enough time from investors to retire gracefully. But outsized gains for shareholders look elusive, if rival big tech valuations are any guide.

Apple’s rare letdown looks more form than function

18 Oct 2011

The firm known for perfectly marrying technology with design usually manages the same élan with its finances. Under Steve Jobs, Apple blew by forecasts. The latest results, without him, missed. But there’s still plenty of value substance beyond issues of Wall Street style.

Shanda’s opportunistic MBO may start a trend

18 Oct 2011

Its founder looks to be exploiting the plunging share prices of China’s U.S.-listed dotcoms. Shanda’s cash pile will cut the amount he has to put in. Delisting from the United States paves the way for a relisting in China. Others frustrated by rising U.S. scrutiny may follow suit.

Google investors "like" mobile and social results

14 Oct 2011

The Internet giant’s dazzling earnings report, showing adjusted sales up 37 pct, brought an after-hours share price jump. In mobile search, Google is making inroads the numbers don’t yet show, and its social network is gathering steam. But grappling with Facebook will be tough.

Yahoo could find closure by way of Chinese bid

3 Oct 2011

Talk that Alibaba founder Jack Ma might buy Yahoo outright sounds like overkill: what he really wants is the 40 pct of his company Yahoo owns. But if U.S. regulators can stomach it, a Ma-led buyout and break-up of the search engine would be a neat solution to Yahoo’s woes.

Latest tech valuation evokes bad dot-com memories

27 Sep 2011

Tumblr’s funding round values the popular blogging site at $800 mln. The service is growing fast, but there’s precious little revenue. While that makes profitless dot-coms relying on sales multiples look good by comparison, valuing eyeballs again is bad for tech.

Time to close China’s VIE loophole

26 Sep 2011

No-one benefits from the fuzziness around the VIE, a structure that lets foreigners take quasi-ownership of Chinese companies in restricted sectors like the web. Their usage is spreading. VIEs make regulators look weak, and investors risk losing their shirts. Clarity is needed.

UBS, Yahoo and HP have made failure traditional

23 Sep 2011

The Swiss bank’s $2 bln rogue trading loss echoes its U.S. mortgage misadventures while persistent strategic drift led the two tech companies to chuck out their bosses. All three have self-images that are badly out of date. Few companies can recover from this cognitive disorder.

Netflix’s clumsy divide could have one step to go

20 Sep 2011

The once-soaring video service angered customers again by separating mail-order from streaming. It will take far more subscribers to justify even its vastly shrunken valuation and to pay off rising obligations. Netflix may yet need to sell the DVD arm to preclude a cash crunch.

Settlements feed U.S. prosecutor overreach

16 Sep 2011

From Google to tire-maker Bridgestone, firms pay big money to avoid fights with the government in U.S. courts. Trouble is, these deals encourage prosecutors to go after what they can punish, not what the law prohibits. It’s another unpredictable cost of doing business.

Early start on mobile ads brings hope for Pandora

13 Sep 2011

The Internet radio service is growing by leaps, but giants such as Clear Channel have now entered the fray with similar offerings. That isn’t good for a company still losing money. But being out in front of the trend toward mobile advertising is still an opportunity for Pandora.

Forget the IPO, Facebook could reverse into Yahoo

12 Sep 2011

Offering Facebook shares to Yahoo owners sounds downright barmy. But Yahoo’s core is just a bunch of apps with a decent display ad business that belong in a social network. Facebook has the traffic, vision and possibly management in Sheryl Sandberg to exploit the assets.

Google’s Zagat purchase looks cheap and cheerful

9 Sep 2011

The restaurant reviewer’s brand is well regarded, but its model of selling user-generated content had little future in a post-Yelp world. Google can integrate Zagat reviews with its maps, social network, and other services and sell related ads. This deal should score highly.

Jingdong IPO tests U.S. appetite for China stocks

8 Sep 2011

The Amazon lookalike, unknown outside China, hopes to raise up to $5 billion in a U.S. listing. Jingdong’s scale and growth speed are exciting. But rising doubts about Chinese Internet darlings will test demand. It is a bold bet in a tough market.