Murdoch gets refresher course on capital usage 13 Aug 2015 The media mogul’s News Corp took a big charge on its digital education unit and is seeking a buyer for it. Amplify joins MySpace, Photobucket, Delphi and others on Murdoch’s scrapheap of quixotic investments. The market reaction suggests he should stick to what he knows.
Lenovo turnaround will take more than cost-cutting 13 Aug 2015 The electronics group will slash $1.35 bln from annual expenses after falling PC sales and slowing smartphone demand halved its quarterly earnings. That may halt losses at the Motorola unit Lenovo bought for $2.9 bln last year. But any return to growth depends on a demand pickup.
SunGard LBO club may yet find reason to cheer 12 Aug 2015 The seven private-equity owners are selling the financial software firm to FIS for $9.1 bln. The 10-year investment yielded a dismal 4 pct internal rate of return. Getting out may alone offer relief, but the firms hold a big, spun-off unit that could still sweeten the end result.
Alibaba’s golden-child status hangs by a thread 12 Aug 2015 The Chinese e-commerce group’s disappointing quarterly revenue growth pushed the shares close to last year’s float price. Investors haven’t much challenged founder Jack Ma’s free rein so far. A weakening business and over $100 bln of lost market capitalisation may change that.
Hackers show news-release business past deadline 12 Aug 2015 Cyber thieves stole company announcements before PR Newswire and others could make them public, reaping some $100 mln from illicit trades. The distributors’ security flaws may give clients more reason to dump the pricey services - especially with social media options on the rise.
Symantec’s Veritas sale tells truth about tech M&A 11 Aug 2015 Offloading the data storage business for $8 bln to Carlyle and Singapore’s GIC ends a decade-long disaster of a deal. Like HP, eBay, Microsoft and others, Symantec discovered it’s often harder to buy than build. Trouble is, breakups and writedowns tend to perpetuate the problem.
Google learns ABCs of conglomerate life 10 Aug 2015 The web search giant is separating cars, balloons and such from its main ad businesses under a new Berkshire Hathaway-like structure called Alphabet. The move suggests Google sees how its sprawl spells trouble. It’s an easy way to erase some, but not all, the valuation discount.
Thruppence: Unlimited time off vs unlimited stress 7 Aug 2015 Netflix is giving new parents as much time off as they want, on top of an existing policy that puts no limits on vacation. Breakingviews columnists deferred their limited holiday time to debate whether Netflix is doing the right thing – or just giving employees one more worry.
Fiat cyber mess is another reason to back Tesla 6 Aug 2015 The Italian-American automaker’s 1.4 mln vehicle recall for software upgrades sends another message about the growing importance of technology to car producers. Vulnerability to hacking is a serious problem, and tech-led players like Tesla have the edge in addressing it.
Auto rivals carpool in $2.8 bln bid for map assets 31 Jul 2015 Daimler, BMW and Audi are offering 2.6 times revenue for HERE, Nokia’s investment-heavy digital maps unit. The price is high, but the German luxury carmakers’ strategic logic is solid. Map systems are scarce, and a good one will be a competitive advantage for driverless cars.
At least Facebook has firepower to buy growth 29 Jul 2015 Costs, notably R&D, rocketed 82 pct in Q2, twice the rate of top-line growth. The likes of Twitter and Yelp are also spending heavily for future revenue. With $4 bln in quarterly sales, plenty of cash and a record of savvy deals, Mark Zuckerberg has the clout to succeed.
Twitter’s mealy-mouthed strategy is hard to follow 29 Jul 2015 Interim boss Jack Dorsey said the micro-blogging site isn’t satisfied with just a 66 pct increase in Q2 revenue. His prescription for what ails Twitter, however, is cryptic. Companies that can’t express goals clearly, especially ones seeking a CEO, reduce chances for success.
Baidu reinvention needs a roadmap to profit 28 Jul 2015 The Chinese search engine giant has begun to explain its big bets on “online-to-offline” services. There’s promise, but competition is fierce and subsidies are rife. Investors have cut $15 bln from Baidu’s market cap in 2015. They need a clearer idea of where it is headed in O2O.
Amazon rides cloud to value bigger than Wal-Mart 23 Jul 2015 Investors cheered as Jeff Bezos’ burgeoning web services business helped Q2 sales grow 20 pct. Flat capex meant free cash flow ballooned despite wafer-thin profit margins. Amazon, now the world’s most valuable retailer at $264 bln, just has to live up to its potential.
Apple has time on its side 21 Jul 2015 The iPhone’s frenetic Chinese growth powered a 33 pct rise in revenue. Marginally softened forecasts for the next few months nevertheless knocked $50 bln off Apple’s value. Minimal information about Watch sales also disappointed. A little patience, however, will go a long way.
KKR’s First Data charges into tech-ier second life 21 Jul 2015 Its turnaround on track, the U.S. payments processor filed for an IPO eight years after its LBO. The equity value may reach $20 bln, bringing private equity owners a modest profit despite overpaying. The credit card pioneer’s challenge, though, is to be disruptor – not disrupted.
Google’s new CFO recalibrates investment algorithm 16 Jul 2015 Ruth Porat uttered a few words about capital discipline to accompany solid quarterly results. Fears over profit bummers, R&D moon-shots and Facebook’s mobile prowess quickly ebbed, as Google’s market value leapt by $40 bln. It’s a high new standard for boss Larry Page to honor.
Micron would be a less-than-fab deal for China 14 Jul 2015 A state-backed group is reportedly eyeing a record $23 bln bid for the U.S. memory-chip maker. Beijing is already building a standalone semiconductor industry via smaller takeovers. But completing this deal, and getting the most out of the acquired business, will be much harder.
Uber’s French lesson: disruption has limits 3 Jul 2015 The upstart taxi app has suspended its service in France after a fortnight in which it was the target of violence. Two executives were also detained. Uber’s truculent approach has driven growth. But agents of renewal sometimes have to work with the status quo to change it.
China pours cold water on Xiaomi’s growth 3 Jul 2015 Falling sales over the past six months come as a nasty shock from a handset maker that commanded a $45 bln valuation just months ago. Xiaomi is grappling with a slowing home market and competitors catching up. China’s tech prodigy will have to look elsewhere for opportunities.