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Is E-Commerce Next For Facebook?
April 13, 2012 by admin
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A group of e-commerce start-ups, backed by some of the tech world’s most respected financiers, are hoping that Facebook Inc will become an e-commerce powerhouse to rival Amazon.com Inc and eBay Inc.
As the world’s largest social network moves toward a $5 billion initial public offering, it will come under more pressure from Wall Street to generate new sources of profit growth and reduce its reliance on advertising, which accounted for 85 percent of its 2011 revenue.
Some entrepreneurs and investors increasingly think “f-commerce” – meaning e-commerce on Facebook – is the answer. Start-ups such as BeachMint, Yardsellr, Oodle and Fab.com are coming up with novel ways to persuade Facebook users to not just connect with friends on the social network, but to shop as well.
Backed by tens of millions of dollars from venture capital firms like Accel Partners and Andreessen Horowitz, and other big investors like Goldman Sachs, these start-ups are pushing out shopping apps, hosting online garage sales and testing out new business models on Facebook.
“E-commerce is a huge category with very strong tailwinds and it’s a natural move for Facebook,” said Sam Schwerin of Millennium Technology Value Partners, which owns Facebook shares and has a stake in BeachMint.
Amazon revolutionized online shopping by crunching lots of customer and purchase data to come up with relevant, personalized recommendations. In the same vein, Facebook’s combination of data, analytics and payment technology could fuel the next generation of e-commerce, Schwerin said.
RIM’s Woes Continue
September 23, 2011 by admin
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PlayBook shipments dropped in half for Research In Motion during its second quarter, which also saw revenue continue its steep decline.
RIM shipped just 200,000 PlayBooks in the second quarter, down from 500,000 last quarter, when it started offering the tablet device.
Revenue was US$4.2 billion, hitting the low end of the company’s expectation and down 10 percent from the same quarter last year. Analysts polled by Thomson Financial expected $4.47 billion.
RIM’s net income was $329 million, or $0.63 per share. Adjusted net income was $419 million, or $0.80 per share. Analysts were expecting better: Those polled by Thomson predicted $0.87 per share.
RIM shipped 10.6 million smartphones during the second quarter. In June, RIM warned that the second quarter might be weak because of delays in shipping new phones. The delays meant RIM would miss the back-to-school sales period, negatively impacting sales, it said at the time.
Executives who spoke during a conference call to discuss the results put a positive spin on phone sales, however. The company only began launching phones running the new BlackBerry 7 software within the past few weeks, and so far it’s the “largest and most successful launch in our history,” Mike Lazaridis, co-CEO of RIM, said during the call.
Shareholder Group Demands RIM Shake-up
September 12, 2011 by admin
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An activist shareholder in Research In Motion said on Tuesday it wants the struggling BlackBerry maker to seriously ponder selling itself or spinning off its patent portfolio, sending RIM’s share price higher.
Jaguar Financial Corp said it wants the Canadian company’s board to take control from co-Chief Executives Mike Lazaridis and Jim Balsillie and for up to five of RIM’s independent board members to explore options to maximize shareholder value.
RIM shares were up 1.3 percent at midday Tuesday at $30.52 on the Nasdaq and gained 2.3 percent to C$30.26 on the Toronto Stock Exchange. Both markets were down sharply
overall. RIM shares have lost almost half their value since the start of the year.
“Our call is for (RIM’s board) to take action; no more study, take action. Take action now, before it’s too late,” Jaguar Chief Executive Vic Alboini said in an interview.
Alboini said Jaguar has talked to a select group of shareholders and received broadly positive feedback for its plan.
“We haven’t found one who wasn’t supportive,” he said. “We haven’t found any opposition.”
Is Sprint’s Future Questionable?
August 4, 2011 by admin
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Sprint Nextel Corp’s shares fell sharply on Thursday as heavy subscriber losses in the second quarter called into question the strategy and outlook of the No. 3 U.S. wireless company.
Sprint had spent heavily to promote its service and better compete against larger carriers Verizon Wireless and AT&T Inc. But that strategy backfired as profit margins eroded and customer losses persisted.
The weak results overshadowed Sprint’s announcement of a $9 billion network contract with start-up LightSquared, and sent the stock tumbling to its lowest point since February before recovering a little to close down 16 percent.
Investors questioned whether Sprint would be able to meet its 2011 targets after such a disappointing showing.
“Their cost of doing business went up dramatically,” said Piper Jaffray analyst Christopher Larsen. “People have less confidence they can meet expectations.”
Sprint’s operating profit margin of 16.3 percent was well below the average Wall Street estimate of around 19 percent as the company had changed its product rebate terms in an effort to combat Verizon Wireless’ sale of the Apple Inc iPhone, and an iPhone discount at AT&T.
But the bet did not pay off as Sprint still saw defections of 101,000 net subscribers — also known as post-paid customers — compared with analysts’ expectation for losses of 15,000.
Facebook Is Display Advertising King
Facebook’s U.S. advertising revenue will reach roughly $2.2 billion in 2011, toppling Yahoo Inc to collect the biggest portion of online display advertising dollars, according to a new study.
Facebook’s U.S. advertising revenue will give it a 17.7 percent share of the market for graphical display ads that appear on websites, according to a report released on Monday by research firm eMarketer.
Last year Facebook garnered 12.2 percent share of the U.S. market.
The figures highlights the growing clout of Facebook, the world’s No.1 Internet social network. It has seen its valuation soar to roughly $80 billion in recent transactions for its shares on the private markets as some investors anticipate it could have an initial public offering next year.
While Facebook has grabbed the top ranking, eMarketer analyst David Hallerman said the overall market for display ads, which include banner ads, video ads and Web page sponsorships, is growing robustly enough that it is benefiting numerous companies.