Internet

Facebook at risk of smothering its golden goose

25 September 2018

The departure of Instagram’s founders after six years as part of Mark Zuckerberg’s social network isn’t worrying on its own. But the photo-sharing app could suffer if too closely identified with its parent. Facebook needs Instagram’s growth. Squeezing too hard could kill it.

Rocket half-heartedly recognises SoftBank gravity

20 September 2018

Despite recent successes, the $5 bln German tech investor still languishes below its listing price. Rocket Internet also faces SoftBank’s $100 bln Vision Fund pushing up M&A values. Hence spending dry powder on a share buyback makes sense – though investors may have wanted more.

Google’s car deal is hazard light for auto groups

18 September 2018

Renault and Nissan will install the Android operating system in their cars from 2021, making it more likely others will follow. That extends the search giant’s data dominance beyond smartphones. Consumers will win, but carmakers may give up a valuable source of future income.

Amazon’s next challenge: $1 trillion of revenue

4 September 2018

The U.S. retailer’s 13-digit market capitalization puts it in a club whose only other member is iPhone maker Apple. But market values have limited real-world meaning. Achieving sales of the same magnitude – twice top dog Walmart’s – would be more crunchy. It could happen.

China’s startups can reinvent fewer wheels

17 August 2018

Beijing-based Redcore admits its "100-percent" homegrown browser has a Google base. Its programmers are the latest to dress up open-source software as Chinese, seeking state support. A clumsy localisation strategy does little for security, and distracts from real innovation.

Walmart sharpens as Amazon efficiency edge dulls

16 August 2018

The $270 bln retailer increased quarterly sales 4 pct. That pales next to its Seattle rival’s latest 39 pct rise. But Walmart’s workers are as productive as ever while Amazon is employing many more, and getting less in return, as it expands stores, warehouses and distribution.

Tinder parent gives Facebook a dating lesson

10 August 2018

Owner Match Group said the swiping app will have more than $800 mln in revenue this year. Shares have tripled since its 2015 debut as it rakes in money from subscriptions. The successful model only highlights the shortcomings of the social network’s wannabe status.

Google’s China re-entry plan looks evil and risky

2 August 2018

The internet giant is planning a censored search engine for China, The Intercept reports. Taking share from local champions like Baidu could prove profitable. But Beijing wants to get its hands on Google's AI expertise. Morality aside, a return would be dangerous business.

Baidu’s core strength exercise is underappreciated

1 August 2018

The $85 bln Chinese search giant delivered 45 pct earnings growth last quarter, having shed a few distractions. The market is still cautious on Robin Li’s big AI plan as economic headwinds loom. But applying machine learning to content delivery - and censorship – should pay off.

Amazon’s growth is leaving the shop behind

26 July 2018

Jeff Bezos's outfit gets only about half its revenue from its online stores, down from two-thirds two years ago. E-commerce is growing, but the businesses Amazon has built around it are expanding faster and producing much more profit. That makes its valuation a little less crazy.

New Facebook pessimism overshoots reality

26 July 2018

Forecasts of reduced growth and margins wiped nearly 20 pct, or about $120 bln, off the social network’s valuation. That’s an astonishing hit. Investors now implicitly expect growth to be run-of-the-mill within a few years. That’s replacing excessive optimism with undue glumness.

Investors bet fake-news swamp is left undrained

17 July 2018

U.S. lawmakers grilled Facebook, Alphabet’s YouTube and Twitter about how they filter an ocean of content. Both questions and answers made any plausible bias-free approach seem remote. Yet the companies’ rising stocks suggest confidence that no serious regulation will follow.

Chinese shopping-app IPO travels long last mile

17 July 2018

Shanghai-based Pinduoduo is seeking a $20 bln valuation in a New York debut. Sales are surging, but its social-networking e-commerce business model targeted at lesser-known areas of China may perplex overseas investors. Unwelcome comparisons to Groupon and Zynga are possible.

Xiaomi IPO will punish bankers twice

9 July 2018

The Chinese smartphone-maker’s shares opened below the issue price in their $54 bln debut. It’s not the start tech companies covet. Advisers failed to sufficiently lower an unrealistic valuation goal. Their penalty may be that other big listings in Hong Kong are delayed.

European TV can only dream of rivalling Netflix

5 July 2018

Broadcasters like ProSieben, ITV and Mediaset are losing viewers to streaming services and ad dollars to Google and Facebook. Together they could invest more efficiently in technology, but Europe’s fragmented market makes content hard to share. They look doomed to steady decline.

Tech backlash grows in Silicon Valley’s back yard

2 July 2018

California will force internet companies like Google to give consumers more control over their information and stop it being sold to third parties. The law is narrow but the Golden State is often a litmus test for legislation that takes hold nationwide.

Australia’s ban on Huawei would be a costly call

29 June 2018

Having passed a law on foreign meddling in its politics, Canberra now looks set to block the Chinese telecom giant from working on its next-generation mobile network. There are valid concerns. But a ban carries costs: pricier 5G, and worsening ties with its best export customer.

India will test Xiaomi’s two-pronged strategy

21 June 2018

The Chinese maker of affordable phones has scaled down its IPO with plans now to raise $6 bln. Much of the valuation hangs on internet services, which Xiaomi is starting to roll out in its top overseas market. Rivals in India are plentiful, though, and hungrier for content.

Buffett and pals pick good medic for U.S. tapeworm

20 June 2018

Berkshire Hathaway, Amazon and JPMorgan chose Atul Gawande to lead their fight against rising medical bills. The surgeon has written extensively on how the system rewards excess, but not outcomes. Changing this focus would be a good start, even if neither easy nor sufficient.

SoftBank’s $5 bln staff whip-round could backfire

20 June 2018

Masayoshi Son’s team could kick in that kind of money, using big slugs of debt, to help the Vision Fund hit $100 bln. Having so much skin in the game might prod the giant investment vehicle to spend more cautiously. It could also spell employee disillusionment if deals blow up.