Warner Bros Discovery makes case against media M&A 23 Feb 2024 The HBO owner’s first full year since the merger of Warner and Discovery was a grim one. Boss David Zaslav lived up to cost-cut goals but missed nearly everywhere else. Even well-run deals can’t stem industry woes, making future tie-ups - with, say, Paramount - look ill-advised.
Capital Calls: Temu’s spending 12 Feb 2024 Concise views on global finance: The Chinese shopping app’s Super Bowl commercial is part of a broader effort to win market share. It’ll help companies like Meta, but Temu now has a chance to muscle in on Amazon’s turf and force the e-commerce giant to compete.
Publicis lead over WPP looks hard to overturn 8 Feb 2024 The $25 bln French ad giant is growing faster than its $11 bln UK rival. Publicis’s relative lack of exposure to the tech sector is one key advantage, but it’s also run more efficiently and has made better strategic choices. WPP’s plan to stop the rot looks unlikely to do so.
Google antitrust trial crystallizes Apple’s risk 15 Nov 2023 Court testimony revealed that Alphabet’s search giant gives the iPhone maker 36% of ad revenue generated through its devices. The cost allows Google to argue it’s in a pay-to-play market. It also suggests that Apple and its shareholders have more to lose from the deal unwinding.
Netflix’s future is gaming, not streaming 19 Oct 2023 The $155 bln company’s jump in subscribers helped revenue growth pick up pace. But tweaks to its business model will only get tougher with cash-rich rivals Apple and Amazon. Netflix’s shift to gaming is a better bet. Warner Bros Discovery shows it can be a golden goose.
Elon Musk could use X to settle old PayPal spat 18 Oct 2023 The site formerly known as Twitter is testing a $1 fee for users. Its billionaire owner says it’s to fight spam, but customer credit card information also could help turn it into a super-app. Adding payments would challenge a company that unceremoniously dismissed him long ago.
Apple may be poisoned by Google antitrust fallout 27 Sep 2023 Founder Steve Jobs once threatened “thermonuclear war” against his rival for copying the iPhone. Now, more than 15% of Apple's operating profit might be coming from fees paid by the search giant. The big risk is that an unfavorable verdict will taint its rich valuation multiple.
Klaviyo is better bellwether than Arm or Instacart 13 Sep 2023 Unlike its hyped peers, the marketing firm is paving the way for garden-variety tech IPOs, targeting an $8 bln valuation. It’s profitable, growing and even has its own invented metric, making it a better gauge of investor sentiment. One wrinkle is its reliance on backer Shopify.
Adland consumer-goods boon has limited shelf-life 4 Aug 2023 Food and beverage giants like PepsiCo are ramping up marketing amid soaring sales. That’s a fillip for WPP and peers, which have seen revenue from tech clients stumble. The risk is that, with inflation falling, consumer goods’ momentum slows before Big Tech gets back on its feet.
Digital ad vultures descend on TV’s carcass 28 Jul 2023 Meta and Alphabet got their mojo back thanks to renascent marketing activity. Ebbing fears of recession and Chinese vendors are helping. With $130 bln still earmarked for commercials on dying television, the pack of scavengers has grown to include Uber, Netflix and others.
KKR’s FGS deal sets new bar for comms valuations 6 Apr 2023 The private equity group may buy 30% of the WPP-owned financial communications firm. The high price allows employees to cash out over $200 mln, meaning a few may leave. The best hope for KKR is that FGS’s revenue is increasingly stable and growing, justifying the higher multiple.
Google ad lawsuit reaches back to the future 24 Jan 2023 The Alphabet-owned search giant is in hot water with U.S. prosecutors who say its digital ad business is anticompetitive, citing deals it did 15 years ago. Google may be dominant, but regulators let it get that way. Meanwhile, the market has already started to create its own fix.
Battered fintech sector’s next play: sell ads 20 Jan 2023 Erstwhile financial technology stars like $47 bln Block and Klarna are suffering from falling valuations and slowing sales. Yet they’re sitting on potentially valuable insights about punters’ spending habits. That points to an opportunity in helping retailers reach their users.
Adland veterans play tortoise to Big Tech’s hare 10 Nov 2022 Once deemed ex-growth, WPP and peers collectively grew revenue faster than Snap and Meta last quarter. New services like building apps and crunching client data helped. But if big adland clients like Nestlé keep spending while small businesses drop out, it may be no one-off.
Big Tech risks a reversion to Web Finance 1.0 24 Oct 2022 Meta, Alphabet and Twitter were noobs to the ad game during the last recession. Back in 2009, digital claimed just a 16% share. Now, the online giants are far more heavily exposed to deep marketing budget cuts. With costs also out of whack, it could start to feel more like 2000.
Capital Calls: U.S. jobs 7 Oct 2022 Concise views on global finance: Employment numbers reported Friday show a robust market. But just like a sudden glut of inventory inflicting major retailers, businesses could find themselves overflowing with employees, too.
Capital Calls: Ralph Lauren 19 Sep 2022 Concise views on global finance: The $6 bln retailer known for its iconic Polo shirts is cheaply valued compared to European counterparts.
Instacart’s fast growth isn’t fast enough 23 Aug 2022 The grocery delivery service is expanding into advertising and offering services to rivals, as boss Fidji Simo preps to potentially go public. Yet even with double digital revenue growth it only looks to be worth around $11 bln, far less than a private valuation a few months ago.
Alibaba offers false ray of China’s economic dawn 4 Aug 2022 Quarterly revenue at the $260 bln e-commerce giant was flat, beating horrid expectations. As lockdowns ease, the hope is that consumers will spend more. But online advertisers, Alibaba’s core customers, are cutting budgets, suggesting a protracted slowdown is on its way.
Video game deal shows late-cycle identity crisis 13 Jul 2022 Graphics-maker Unity is buying Israeli ad-tech firm IronSource for $4.4 bln, a 94% premium. That suggests optimism. But insider Silver Lake will make a $1 bln convertible investment while Unity buys back stock, buffering dilution. Classically, smart investors protect themselves.