Disrupting payments: A guide for the perplexed 28 Apr 2015 Smartphones are changing how people spend money. Whether from Apple, Google, Facebook or startups, banks face competition in a $700 bln industry they once dominated. There’s plenty of room for all, though: most newcomers cannot operate without the help of the old guard – for now.
Huge Apple payouts play catch-up with China growth 28 Apr 2015 The $760 bln iPhone behemoth is adding $50 bln more to its buyback plans. Quarterly numbers, though, show the Middle Kingdom overtaking Europe as Apple’s second-biggest market after 71 pct growth. CEO Tim Cook is in danger of taking more fire for returning cash too slowly.
U.S. watchdog bites hacking victims too randomly 27 Apr 2015 The FTC has fined the likes of hotelier Wyndham over cyberattacks on the grounds that breached defenses were “unfair” to consumers. That encourages tighter security but doesn’t define what’s sufficient. Rules based on useful standards would be better than arbitrary penalties.
Capgemini reboots with big bet on North America 27 Apr 2015 The once-cautious French group is bidding $4 bln for private equity-backed IGATE. The friendly deal is at a pricey 22 times 2015 earnings. Still, the boldness could pay off. The IT services giant gets a faster-growing, higher-margin business, heft stateside, and tax benefits too.
Tokyo Electron flop shows limits of M&A diplomacy 27 Apr 2015 Applied Materials’ $12.8 bln all-share takeover of the Japanese firm broke taboos in a country that is wary of foreign buyers. But after 19 months, U.S. regulators scuppered the tie-up. Investors will hope it doesn’t discourage other Japanese groups from considering bold deals.
Time Warner Cable’s greed comes home to roost 24 Apr 2015 When boss Rob Marcus lunged for Comcast’s $45 bln bid, he gave in to the buyer’s demand that it pay no fee if the deal got torpedoed. Now Marcus is empty-handed in a rapidly changing industry. Rival suitor Charter may return, but Time Warner Cable’s negotiating power is weaker.
Google’s Schmidt again plays adult in DE Shaw buy 24 Apr 2015 The tech giant’s executive chairman is taking 20 pct of the hedge fund firm off bankrupt Lehman Brothers’ hands. The billionaire was brought into Google to supervise its young founders. Not for him the frivolity of, say, a sports team investment like Steve Ballmer’s.
Amazon Web Services delivers profitable twist 24 Apr 2015 Breakneck expansion at the web retailer’s cloud computing unit recalls Amazon’s glory years. Companies are seeing the benefits of letting someone else handle servers, storage and software. This time, the Jeff Bezos playbook contains a welcome wrinkle: growth and maybe profit.
Silicon Valley might as well embrace Uncle Sam 23 Apr 2015 The Pentagon is setting up shop in tech-land’s backyard, essentially taking their long-standing relationship public. With cybersecurity a rising concern, generals and geeks locking arms will do each some good, even if it further stokes consumer suspicions about Big Brother.
SoftBank put on spot by Yahoo Japan exit 23 Apr 2015 The Japanese conglomerate is the natural buyer of the portal should the U.S. search group offload its 36 pct stake. But beefing up won’t impress investors struggling to see the value of its parts. A spin-off by Yahoo will up pressure for SoftBank to justify its business model.
Facebook growth rate depends on users liking R&D 23 Apr 2015 The social network spent 30 pct of Q1 sales developing new products. That’s proportionately about twice as much as Google and 10 times the outlay at Apple. At 42 pct, top line expansion fell short of expectations. To keep it up, all the investment needs to bear fruit.
Whiskey heist proves potent for cybersecurity age 22 Apr 2015 An old-fashioned case of 200 missing bottles of prized Pappy Van Winkle bourbon, which Kentucky cops cracked on Tuesday, is almost refreshing in an era of daily digital theft. It was an inside job. Watching one’s own is as important and difficult as guarding against intruders.
Hairy deals mean European animal spirits returning 15 Apr 2015 Shell-BG and Nokia-Alcatel are complicated, long-mooted deals finally coming to fruition. Exor’s move is just plain ballsy. American firms powered last year’s $3.5 trln global M&A bonanza. With Old World boards and bosses becoming more daring, Europe looks set to catch up.
Nokia will struggle to cut through Alcatel tangle 14 Apr 2015 An all-stock takeover by the Finnish company would create a roughly 40 bln euro telecoms equipment giant. Nokia investors are understandably sceptical. A deal would mean another big restructuring and stretch the buyer’s industrial expertise. The French connection adds complexity.
Qualcomm activist spat a lesson for Silicon Valley 13 Apr 2015 Jana Partners wants the $114 bln chip maker to consider a breakup and reform its board. Hiding behind dual-class stocks, as some tech rivals do, may limit such meddling. But it wouldn’t fix Qualcomm’s problem of a sleepy board and entrenched management running it below potential.
Uber CEO’s aggressive driving proves contagious 9 Apr 2015 Travis Kalanick keeps defying rules of the road to grow his $40 bln ride-hailing app. Drivers are taking his cues, refusing riders with undesirable destinations and suing to become employees with benefits rather than contractors. Uber’s culture could yet come back to hurt it.
LinkedIn adds mission creep to its bulging résumé 9 Apr 2015 The job-seekers’ social network is buying online learning company lynda.com for $1.5 bln. LinkedIn claims both companies share the same ambition: “help professionals be better at what they do.” That fuzzy goal may encourage the firm to take on jobs for which it’s not suited.
Zynga’s multi-level StockVille proving hard to win 9 Apr 2015 When founder Mark Pincus stepped down as CEO in 2013, the FarmVille maker’s market value jumped. It tumbled again on the news that Pincus, who controls Zynga with three classes of stock, was coming back to officially run it. The super-voting share game is a treacherous one.
Guest view: What’s holding technology M&A back? 9 Apr 2015 Though deal-making is near boom-time highs, most of it’s not about making bold bets on the future, says Andreessen Horowitz’s managing partner. Activism plays a role. But as newly public tech firms that are more resistant to external pressure mature, the dynamic will shift.
Bankers may slink past patrolmen with $5.3 bln LBO 7 Apr 2015 BofA, Goldman and five other lenders are financing the year’s biggest buyout. The valuation of Informatica, at 18 times EBITDA, by Permira and a Canadian fund implies leverage beyond regulatory caps. The tech company’s cash flow and deferred revenue should make the math work – just.