Photo Credit: eBay

But the CEO has done well during his tenure at eBay thus far, kickstarting the company out of a period of stalled growth, spurring the Marketplace and PayPal payments businesses and continuing to see consecutive quarterly growth.

To keep this up, Donahoe is singing the same tune as the rest of the industry: Focus on mobile and target international markets. We caught up with him for a bit this week, where he expanded on eBay’s ambitions.

On the Rise of Mobile and Spurring Engagement

“We know that mobile users are more engaged than non-mobile users. To keep that going, the simplest thing we can do is to just be present and continue to make it easy for our customers. To do that, we’re building useful, compelling mobile apps and making the registration process very easy.

“For us, the registration flow on mobile devices in particular is easier — the best one we’ve got. You’ll remember we bought Card.io (a startup that makes mobile purchases much easier). You can just take out your credit card, take a picture and boom — you’ve made an account.

“During that first three to 18 months after registering, we see a kind of ramp up to what they buy, and the frequency with which they visit.

“Second, it’s the multiscreen users that tend to be more engaged over time. For example, we’ve seen you browsing on your smartphone and then you buy an item on your desktop. That’s increasingly the wave of the future. You’re going to have screens on everything — your smartphone, your laptop, your car, your watch, almost anything with a surface.”

On International Growth

“Here’s some facts in rough terms. There’s more than two billion Internet users today, and that number will double over the next two years. Think about who’s going to make up those new users — 78 percent of those new users will be in BRIC and emerging markets. You gotta go to where the people are, and the majority of those people will be accessing the Web by the smartphone.

“They’ve become global Internet citizens, if you will, but they want to trade, and in many cases there won’t be a local e-commerce option. Russia, for example, wants goods and services that aren’t available there. So they’ll shop on eBay. Because such a large portion of our business is cross-border, we see many consumers coming in from these emerging markets.

“Again, that’s where our mobile leadership really helps. There’s a lot being said about mobile first right now. We’re not saying it, we’re doing it.

“We’ve launched Russian mobile apps. We’ve got a large team of mobile app developers. We bought Critical Path Software. We bought Duff Research. The innovation and the cycle time with which we can build innovative work is getting faster and faster.”

“[In Latin America] the smartphone will be your whole connection to the Internet,” said Bloisi, in an onstage interview at the D: Dive Into Mobile conference in New York. “I think Wi-Fi is a big, big trend.”

The fast-growing Movile is trying to find better ways for consumers in its market to be able to connect to take advantage of rich media. “We believe the best of the mobile opportunity will be in the next four years,” said Bloisi, who noted that most users are on pre-paid phones in the important region.

More to the point, “We really need cheaper phones,” said Bloisi, especially since Latin American countries like Brazil are among the most expensive places to buy a device by a factor of 10 times or more.

Why is that so? “Taxes, taxes and the mystery of the Brazilian economy,” he joked, while pointing to efforts to produce phones in the region that would be less expensive.

Bloisi also thought that the focus away from HTML5 — a once-hot area of mobile development that has recently fallen out of favor — was wrong.

“It is not a religious discussion,” he said. “[But] on the long term, I am more HTML5.”

The Chinese like emerging markets because, for a change, they don’t have to start way behind established American companies. By moving into Brazil aggressively, Chinese PC maker Lenovo Group Ltd. and Internet-search company Baidu Inc. hope to gain an edge over companies like Hewlett-Packard Co. and Google Inc. In addition, some U.S. companies that are leaders at home and in Europe have a smaller footprint here because of Brazil’s long history of protectionism and red tape and its high cost of labor, particularly compared with Asia.

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With incubators, entrepreneurs and venture capitalists from around the world mingling in the Brazil tech scene, it already has a lot to show for itself. Here are some of the notable start-ups making names for themselves in Latin America:

Myreks: Socializing e-commerce and product recommendation on Facebook.

Linking e-commerce leads and social networking is a huge challenge, even for big folks like Google, Amazon and Facebook. Myreks, a start-up out of Santa Catarina in Southern Brazil, was spun out of Brazilian IT company Suntech as a unique approach to social e-commerce. Integrated with Facebook, Myreks lets consumers efficiently recommend products they love to their friends — from books and music to clothes, wine and movies.

Not only does this social marketing platform generate real leads for companies and vendors, but it also rewards consumers for making recommendations — with “rekpoints.” As users make more and more recommendations to their Facebook friends, their rekpoints add up and can be redeemed for gift cards to their favorite stores and online shopping destinations, like iTunes and Amazon.

Myreks is unique in how it capitalizes on social recommendations and generates leads through stellar technology and interface. Soon Myreks plans to unveil its mobile version, which should appeal to Facebook as another means of engaging users and generating revenue.

Free Zone: Internet everywhere.

This free app allows mobile consumers to connect to Wi-Fi networks wherever they are. In the absence of 3G and 4G networks, Free Zone automatically finds and connects users’ smartphones to available Wi-Fi networks for speedy Internet access in seemingly dead zones. Even when people aren’t aware of available nearby networks, Free Zone picks up on local Wi-Fi, and constantly updates email, contacts, Twitter and Facebook. The app is currently available on Android, iOS and HTML5, and Free Zone has already built a network of more than six million Wi-Fi connections.

Free Zone entrepreneur Andreas Blazoudakis joined Movile’s team earlier this year, and the mobile entertainment company intends to advance its Wi-Fi strategy using Free Zone.

ResolveAÍ: Bringing Brazil’s massive taxi network into the future.

ResolveAÍ is notable not only because of its business model, but also because of its origins — the company was born out of accelerator 21212, which promotes start-ups in both Brazil and New York, and aims to build a thriving network around the two tech hubs. One of 21212’s success stories, ResolveAÍ offers users access to more than 10,000 taxis, allowing travelers to quickly order a nearby cab via mobile or online. ResolveAÍ’s service is growing into an expansive network, allowing travelers to summon black town cars and yellow cabs.

At a 21212 Demo Day, ResolveAÍ’s founders made it clear that it wants to distinguish its model from Uber’s, with a focus on streamlining Brazil’s current cab system. São Paulo alone has 33,000 cabs — compared to New York City’s 13,000 — and across the country, Brazil has more than 136,000 taxis. Rather than adding to the noise and becoming a competitor to Brazil’s existing taxi network, ResolveAÍ partners with it — and rather than outfitting each vehicle with the necessary technology, ResolveAÍ taps into cabs’ existing communications and payment systems.

Qranio: Online learning with real rewards.

Qranio takes a unique approach to education technology by combining online learning with gamification, and offering users the opportunity to earn real-life rewards. Users go through a series of brainteasers and quizzes to collect virtual currency (called $iQs). Once players accumulate enough iQ dollars, they can shop Qranio’s online store and select real-world items to have delivered to them at home.

Qranio is gradually making its way in front of an English-speaking audience, too. According to AppData, the Qranio Facebook app in English has 4,000 monthly active users, a number that nearly doubled over just one week. Recently, Qranio surpassed 1,000 daily active users on Facebook.

Wabbers: Know where the traffic is before you get there.

Wabbers is an iOS and Android app based on crowd-sourced traffic information. Users report traffic and accidents in their vicinity, helping other drivers avoid existing pitfalls. Wabbers also sends customized push notifications to users about their regular driving routes when starting out on their commutes to work or home.

Wabbers’ developer, Mobwise, was one of five finalists in the IBM Global Entrepreneur Startup Smartcamp Brazil competition. With 50,000 users thus far, Wabbers is set on big growth: Co-founder André Paraense has stated that it aims to hit 500,000 users by the end of the year. The company plans to release an updated iOS app with more features, and to grow into new cities to support these ambitions. Wabbers is also looking to expand its offerings beyond traffic mapping to include a potential carpooling app, based on commuters in a common area.

Ilusis: Revolutionizing mobile game graphics.

Ilusis Interactive Graphics is an excellent example of companies spearheading innovation in the Latin American mobile games space. Ilusis used to work solely on a contract basis, helping other companies build and refine their 3-D capabilities in games. But Ilusis soon ventured into creating its own games from the ground up, and has since seen a boost in demand for mobile games with high quality graphics. The company’s most popular title, Skyrise Runners, was a finalist in the mobile gaming category at the Brazil Game Show Fair.

Ilusis has some deeply rooted experience in 3-D graphics, with a history in developing for PC and handheld games before moving to mobile. Now the company continues to create graphics for handheld platforms like Sony PSP, in addition to iOS and Android. For its next move, Ilusis is experimenting with touch-gesture technology in the hope of continuing to push the envelope for the Latin American mobile games industry.

With Latin America’s burgeoning mobile market of more than 620 million users and growing, and the ever-expanding flock of investors heading south of the equator, it’s clear that the region has caught the entrepreneurship bug, and is on the path to keep innovating — and the rest of the world should stay tuned.

Note: Eduardo Henrique is a co-founder of the angel investment group Inova Ventures in Brazil, which has invested in Mobwise, the developer of Wabbers, mentioned in this article.

Eduardo is a Movile co-founder, and currently leads Movile’s U.S. operations. Previously, he led development of Movile’s micropayment strategy for Latin America, and established partnerships with corporate customers. Eduardo has undergraduate degrees in advertising and marketing from the School of Higher Education in Marketing & Communication Management (ESPM), and in computer science from the University of Campinas (Unicamp). He also holds an MBA in digital marketing from FECAP, Brazil’s oldest business management school.

The earliest indicator so far isn’t a good one: Intel rival Advanced Micro Devices (AMD) warned last week that sales are going to be much lower than previously expected, and cited anemic markets in Europe and China as the reason. Intel often has the muscle to resist these swings in demand more readily than AMD does, but in some measure, the trends can’t help but hit them both.

Enough signs of trouble were there for analyst Mike McConnell of Pacific Crest Securities in Portland, Ore., to lower his estimates on Intel in a note to clients issued July 15. Demand for PC motherboards is down and expected to grow only 5 percent, versus the previous quarter where expectations had been for growth of 10 to 15 percent.

The reason: Demand from PC makers and resellers in China is weakening. That led to a buildup of inventory among motherboard manufacturers, who are now carrying five to six weeks worth of parts in their warehouses, whereas they normally have only a three to four week supply on hand. Inventory buildups are a classic sign of a slowdown in overall chip demand.

McConnell also thinks that in partial response to the inventory buildup, Intel has delayed shipment of a new desktop processor. Fearing a dreaded inventory correction that always slams chip stocks, McConnell trimmed his estimates for Intel’s fiscal year 2012, but not for the quarter Intel is reporting today. He now thinks Intel will finish the year with $2.52 in per-share earnings on sales of $59 billion 2012 EPS versus a prior estimate of $2.64 on $60.2 billion.

For the quarter, he expects Intel to deliver 52 cents a share on $13.6 billion in sales. That’s pretty much in line with the consensus of other Wall Street analysts who expect Intel to report 52 cents on $13.56 billion.

Intel has in recent memory had a tendency to defy the conventional wisdom of the market research houses Gartner and IDC by reporting strong results in markets they don’t track, like Brazil. Now China — long the boomingest of all the booming developing markets — is slowing down. The ripple effect can’t help but sting Intel. The question is: How badly?

It’s another big miss for AMD, and for the tenure of its still relatively new CEO, Rory Read. AMD in April reported a quarterly loss of more than half-a-billion dollars as it continue to carry costs associated with the spinoff of its former manufacturing division, now called GlobalFoundries. The loss was triggered by a restructuring of AMD’s relationship with GlobalFoundries that forced AMD to take a $703 million one-time charge.

Here, the problem appears to be market conditions, primarily demand. Investors will likely hammer shares of AMD rival Intel tomorrow, worrying that the market conditions in Europe and China must be impacting it as well. But Intel has long been arguing with investors and analysts alike that it continues to see strong growth opportunities in the developing economies, like China and Brazil. It will be interesting to compare AMD’s and Intel’s results in the coming weeks.

AMD shares fell by 33 cents, or nearly 6 percent, in after-hours trading in response to the news.

AMD’s announcement is below. Intel shares fell by 27 cents, or about 1 percent, though it had news of its own that may be affecting shareholder sentiment. It’s taking a 15 percent stake in the Dutch chipmaking equipment concern ASML.

AMD Announces Preliminary Second Quarter Results

Revenue Expected to Decrease Approximately 11 Percent Sequentially; Company Effectively Manages Gross Margin

SUNNYVALE, CA–(Marketwire -07/09/12)- AMD (AMD) today announced that revenue for the second quarter ended June 30, 2012 is expected to decrease approximately 11 percent sequentially. The company previously forecasted second quarter 2012 revenue to increase 3 percent, plus or minus 3 percent sequentially. The lower preliminary revenue results are primarily due to business conditions that materialized late in the second quarter, specifically softer-than-expected channel sales in China and Europe as well as a weaker consumer buying environment impacting the company’s Original Equipment Manufacturer (OEM) business.

The company expects second quarter gross margin to be approximately in line with prior guidance. Operating expenses for the second quarter are expected to improve and to be approximately 8 percent less than prior guidance of approximately $605 million, a result of tightly controlled expenses in the quarter.

AMD will report second quarter 2012 results after market close on Thursday, July 19, 2012. AMD will hold a conference call for the financial community at 2:00 p.m. PT (5:00 p.m. ET) that day to discuss second quarter financial results and to provide information regarding expected third quarter results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page at http://www.amd.com. The webcast will be available for 10 days after the conference call.

Facebook filed an updated version of its S-1 public offering document today, which included somewhat disappointing first-quarter financials.

In the new filing with the Securities and Exchange Commission, its fourth update for its upcoming public offering, the social networking giant’s revenue was $1.058 billion, up 46 percent for the year, but down six percent from the previous quarter.

In the first quarter of 2012, Facebook’s net income was $205 million, which was down from $233 million a year ago. The company attributed the decline to rising costs, including in marketing and in research.

Facebook also said its current share price was $30.89 each, which values the entire company at about $77 billion.

Some investors might worry about the latest results, which show a slowing in Facebook’s torrid growth. But Facebook said the quarterly decline was due to seasonality — it was flat in the same period a year ago.

As it noted in the document:

“We believe that our rates of user and revenue growth will decline over time. For example, our revenue grew 154% from 2009 to 2010, 88% from 2010 to 2011, and 45% from the first quarter of 2011 to the same period in 2012. Historically, our user growth has been a primary driver of growth in our revenue. We expect that our user growth and revenue growth rates will decline as the size of our active user base increases and as we achieve higher market penetration rates.”

Its audience, though, was still growing strongly: Facebook also said it had 532 million daily active users, up from 372 million a year ago and 483 million in December. Its monthly active users were up from 680 million last year to just over 900 million and up from 845 million from December.

Facebook also added an explicit figure for average revenue per user, which was $1.21, up six percent year over year. It also said the number of full-time employees grew 46 percent from last year to 3,539 at the end of March.

The last update to Facebook’s regulatory filing for its mid-May IPO was in late March. That one gave investors more information about a patent infringement lawsuit waged by Yahoo — Facebook noted its counter claim in the newest filing — and also its motion to dismiss Paul Ceglia’s legal attempt to garner half of the company. It then included more information about growing engagement by users of the social networking site.

Along with some other minor changes in the new document, Facebook noted, in news that was already known, that it would trade its stock on the Nasdaq market under the ticker symbol “FB.” It also said it had bought photo-sharing start-up Instagram, another piece of old news, and noted its just-struck patent deal with Microsoft.

One new detail about Instagram: Facebook forked over “approximately 23 million shares of our common stock and $300 million in cash” to buy it.

Also, said Facebook, in an interesting new section on its global business:

“In the first quarter of 2012, 50% of our revenue was generated by users in the United States and Canada, a decrease from 54% of our revenue for the first quarter of 2011, and in 2011, 52% of our revenue was generated by users in the United States and Canada, as compared to 58% in 2010, as we experienced more rapid revenue growth in markets such as Germany, Brazil, Australia, and India.”

Here is the whole updated file, if you want to peruse yourself:

4thfbs1update

IBM has agreed to buy a 20 percent stake in Batista’s SIX Automacao, a company that specializes in providing technology services to sectors including oil and gas, mining, naval construction, naval ports and others, said EBX, Mr. Batista’s holding company. The partnership will allow SIX to move into the industrial technology solutions market, and establish joint research and development capabilities for EBX Group companies, it said.

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“There’s an excellent growth opportunity for U.S. retailers outside the U.S.,” said Michael DeSimone, CEO of FiftyOne, a logistics company. “E-commerce is much more nascent [outside the U.S.], but our merchants are seeing extraordinary growth by building their brand with a new customer base.”

As it turns out, however, shipping and selling goods internationally is extremely complex.

First, there’s currency translation, then there’s the complexity of dealing with customs. And there are other considerations: For instance, a down pillow or a snakeskin purse may have to be cleared by the U.S. Department of Fish and Wildlife or require a permit if the animal is on an endangered list.

“The opportunity for a bad customer experience is very high, unless you have a repeatable process in place,” DeSimone said.

In other words, done well and executed efficiently, it can be a moneymaker, but if done poorly, you can hurt the brand.

FiftyOne helps U.S. retailers ship products to 106 countries worldwide, by assisting retailers with currency conversion and global shipping logistics, including customs and returns. It manages a central distribution in Columbus, Ohio, where all the packages exit and enter the U.S.

The New York company works with dozens of online retailers, including Macy’s, J.Crew, Overstock.com, Saks Fifth Avenue, Nordstrom, Pottery Barn, Gilt Groupe and Wet Seal. Since FiftyOne started focusing on international logistics, back in 2008, it has seen e-commerce start to take off internationally, DeSimone said.

Last year, the company’s gross merchandise volume, accounting for the total amount of all international purchases made, was $136 million, almost up twice from the year before, when it recorded $78 million. In 2009, its business totaled $26 million.

The biggest international markets for U.S. retailers today, FiftyOne said, are English-speaking countries such as Canada, Australia and the U.K. But South Korea, Brazil and Mexico are also all growing close to 50 percent year over year.

In addition, DeSimone said, the average order size increased to $265 in 2011, up from $237 the year earlier.

Here’s a graphic detailing some of the challenges in shipping internationally:

When pressed for an assessment, Cook pointed to the company’s just-reported monster earnings.

“You can see our results,” Cook said during a conference call with analysts. “I think the team is doing a fantastic job. We feel really good about where we are.”

And it’s tough to argue otherwise. Apple’s profits for last quarter, at more than $13 billion, were more than what most tech giants report in revenue. Apple also posted twice as much revenue and profit as Microsoft did in its holiday quarter.

Apple’s quarterly iPhone sales, at more than 37 million smartphones, were numbers that its rivals would kill to have for a year, let alone a quarter. And recent data for the U.S. shows Apple alone nearly even with the entire Android world in market share.

Cook said he is focused on remaining the lead horse in the race, but said he doesn’t see Android as the only competitor.

“I wouldn’t say it is a two-horse race,” he said. “There’s a horse in Redmond that always suits up and always runs.”

On the tablet side, Cook said that Apple continues to dominate the market despite the flood of would-be rivals. And that market, Cook notes, is huge and growing, recently surpassing the market for desktop PCs. Eventually, Cook said, many people expect it to be larger than the PC market as a whole.

“In terms of competitiveness, the ecosystem for iPads is in class by itself,” Cook said, noting that there are 170,000 apps customized for Apple’s tablet as compared with what he said appears to be only a few hundred designed specifically for rival tablets.

Last year, Cook said, was supposed to be “the year of the tablet.”

“I think most people will agree it was the year of the iPad for the second year in a row.”

As for where Apple is headed, Cook stuck to the company’s standard secretiveness, though he did offer a few insights, at least geographically. China, he reiterated, remains the company’s big bet with regards to emerging markets, with Brazil a distant second in terms of focus and investment. India, he noted, saw its sales go threefold from a year earlier, but from a very small base.

While not mentioning any rumored plans for an Apple-badged television, Cook said the company sold 1.4 million Apple TV units in the December quarter, as compared to 2.8 million devices for the entire prior fiscal year.

“We still classify this as a hobby,” he said. “However, we continue to add things to it.”

The New York Times published something of an exit interview with Palmisano over the weekend. It read a bit like a victory lap, and that’s not undeserved. The record books will show that IBM shares during the Palmisano era (2003-2011) rose by 125 percent; sales grew from $81 billion in 2002 to an expected $107 billion; and annual profits on a per-share basis went from $3.07 to a consensus forecast of $13.38.

But it got me to thinking about one of the highlights of the Palmisano era; one that generated a great deal of attention at the time: IBM’s decision to sell its personal computer division to Lenovo, the Chinese PC maker. It was a relatively small deal, worth less than $2 billion at the time, but it was a controversial move. Despite the fact that IBM wasn’t making much money on the business, IBM PCs, especially its ThinkPad line of notebooks, were generally considered to be pretty good.

Nearly seven years later, it’s worth noting that Lenovo is now the world’s second-largest PC vendor, behind Hewlett-Packard, having vaulted past Dell earlier this year, according to the market research firm IDC. It’s also worth noting that Lenovo is in fifth place in the U.S., behind HP, Dell, Apple and Toshiba, in that order.

IBM initially owned 15 percent of Lenovo and maintained a stake in that company until February of this year, when it sold its remaining 4.3 percent shares at a profit of more than a quarter-billion dollars.

Lenovo’s biggest shareholder is Legend Holdings, of which 36 percent is owned by the Chinese Academy of Sciences, a.k.a. CAS Holdings, a state-controlled entity. The state has pared back its stake, though: When the IBM-Lenovo deal was announced in 2005, Lenovo was 57 percent state-owned.

There was a lot of natural controversy, and even national security concerns in 2005, about selling so red-blooded an American product as the IBM PC to China. But there was also a solid business case to consider. The PC business was a drag on earnings because of downward price pressure exerted by Dell and all the others, and it wasn’t even leading the market, as was the case with Hewlett-Packard, which engaged in some very public contemplation about spinning off its own PC division.

But there was also a potential strategic benefit, which Michael Useem, a professor a the University of Pennsylvania’s Wharton School of Management, pointed out at the time: Making friends with China.

By selling an underperforming asset to a buyer willing to take it and run with it, IBM got solid access to the exploding Chinese market. In paraphrased remarks to the Times, Palmisano concedes the point:

Palmisano says he deflected overtures from Dell and private equity firms, preferring the sale to a company in China for strategic reasons: the Chinese government wants its corporations to expand globally, and by aiding that national goal, IBM enhanced its stature in the lucrative Chinese market, where the government still steers business.

So how has that worked out? It’s a little hard to tell from reading Big Blue’s Byzantine financial statements. In fiscal 2005, the year the deal closed, IBM reported $18.6 billion, or about 20 percent of revenue, came from the Asia-Pacific region, including China.

And though it declined to provide specific dollar amounts, it said that year that sales in China had dropped by 19 percent, but after after stripping out the PC division, would have grown by 8 percent.

For the first nine months of fiscal 2011, IBM reported that the Asia-Pacific region accounted for exactly the same dollar figure — $18.6 billion — amounting to 24 percent of its overall sales of $77.4 billion, and there’s still a quarter to go. That would put Asia on track to account for a little less than a quarter of IBM’s revenue.

In its earnings statement, IBM also makes a point of calling attention to what it calls “growth markets,” which are generally the BRIC countries — Brazil, Russia, India and China. These markets combined for 23 percent of sales in IBM’s most recent quarter.

This is about as close to understanding the size of IBM’s business in China as we’re going to get. On balance, it looks to have been a positive move, especially when you consider that if IBM had kept its PC division, it would have likely only gotten smaller and become more of a profit drag on a company that’s increasingly focused on high-margin businesses like services and consulting.

Nor can we judge by IBM’s headcount. Globally, as of the publication of its last annual report, IBM employed 426,751 people. But it has stopped providing a geographical breakdown. A report in the Times of India in 2010, mentioned by The Wall Street Journal, suggested that Big Blue’s headcount in India might be as high as 130,000; which, if true, would make it one of that country’s top 10 employers.

There is no question that IBM’s presence in China has grown. You can tell by the press releases. There was for example, a new IBM Research lab in Shanghai in 2008, and another in 2010. Just last month, IBM announced that it had closed a significant IT deal for a major health-care provider in Hong Kong, and another with a Chinese province to improve the safety of pork (which included a food-safety video I embedded below).

For better or worse, Palmisano will be remembered as the man who traded PCs for access to China. On balance, it seems to have been a good trade, but the jury is still out.

Tomorrow is the first business day of IBM’s Rometty era. Assuming she retires at age 60, a well-established IBM tradition, she’ll have about six years to make her mark. One wonders what she’ll be remembered for most.

As The Wall Street Journal reported today, Lenovo’s profits rose by 88 percent, and it eclipsed Dell as the world’s No. 2 manufacturer, behind Hewlett-Packard. The company has been growing in part through acquisitions — it recently paid 465 million euros (about $640 million) for the German PC outfit Medion — but also by playing well in markets where people are still buying their first PCs, says Peter Hortensius, the president of Lenovo’s Global Product Group.

Lenovo’s results did good things for shares of rival HP, which last week announced that it will keep the PC unit it had previously considered spinning off. Its shares rose 1.8 percent to $26.06. Shares in Dell rose more than 1 percent to $15.29, while Intel fell 17 cents, or less than 1 percent.

Hortensius told me that much of Lenovo’s strength comes from being the top vendor in the world’s leading market, China, and also in its No. 3 market, Japan. In the world’s No. 2 market, the U.S. — not so much. Lenovo is fifth there, but that’s an improvement from prior periods, he says.

Another strength he noted is in emerging markets like Brazil, where lots of people are still buying their first device and just getting their first Internet connection and not ready to think about buying tablets or smartphones just yet. But Lenovo’s a big player there, too, and sells Android based smartphones and tablets in China. It also plans to sell tablets running Windows 8 when it’s released. And as part of a four-screen strategy, he said, the company will have more to say on the subject of smart TVs soon.

What it doesn’t have, at least in the U.S. yet, is a strong brand presence. And so it has crafted a marketing campaign around “people who do.” So what do you do when you need to get attention for a less-well known PC brand? You drop a laptop out of a plane, naturally. Of course there was a technical reason for doing it: Proving that the machine could boot up in time to deploy a parachute and land safely, though I have to wonder just how soft that landing was in reality. I embedded the spot below just because it looks cool.

China, which is the company’s second-largest market, accounted for 16 percent of Apple’s sales during the past quarter, with $4.5 billion in revenue, a year-over-year increase of 270 percent.

By comparison, in fiscal 2009 China accounted for only 2 percent of Apple revenue. Now “the sky is the limit,” Cook said.

Meanwhile, Cook said, Brazil was up 118 percent year over year, Russia looks “promising” and the Middle East should be a “significant opportunity.”

Apple is not launching as full an assault in other countries as in China, Cook noted. The company’s approach in China is basically the same as in the U.S., with six retail stores, 200 approved resellers, an online store and advertising. Other countries only have “portions of that” so far, Cook noted.

Around the world, Apple has 40,000 iPad points of sale, 50,000 for the iPod and 120,000 for the iPhone, Cook said.

Apple CFO Peter Oppenheimer said Apple plans to open 40 new stores in fiscal 2012, with three quarters of them outside the United States.

In a study conducted by SuperData Research on behalf of Viximo, a social games and applications platform, it found that non-Facebook social gaming will explode to $5.6 billion in 2014, up from an estimated $3.2 billion this year.

At that level, the study found that it will represent 65 percent of the overall projected revenue, including both Facebook and non-Facebook social gaming networks, which together are expected to hit $8.6 billion in 2014.

Most of the non-Facebook revenue will be driven by international markets, where Facebook is not dominant, including Asia, Russia, Brazil and Turkey.

Some of the social networks include Hyves in the Netherlands; Tuenti in Spain; StudiVZ, a student-focused site in Germany; and Badoo, a dating site in the U.K. The study does not take into account the entrance of Google into the industry with its games network on Google+.

Other findings:

• Asia is the largest market for social games, with an estimated $2 billion in total revenue for 2011.
• Russia and Brazil also have large social gaming audiences, with 35 million and 32.6 million people, respectively.
• Germany’s social gaming revenue is expected to increase to $250 million in 2014, up from $173 million in 2011.

According to sources close to the situation, Guilherme Ribenboim, VP and managing director of Latin America and U.S. Hispanic markets, has left Yahoo for another job at a start-up.

The 12-year Yahoo veteran, who is located in Brazil, is widely respected at the troubled Silicon Valley Internet giant and leads an area that is growing for it.

[UPDATE: A Yahoo spokeswoman confirmed the departure of Ribenboim.]

[UPDATE NO. 2: Also leaving: Connie Lee Schiefer, the well-regarded Yahoo veteran of more than eight years. She was VP of product management at Yahoo's cloud platform group.]

Sources said that attrition — already a big problem at Yahoo — is about to hit the company hard. While the board and its top leaders try to figure out a strategy — either a sale or whatev — in the wake of the firing of CEO Carol Bartz, Yahoo has yet to put in place a new plan to hold onto talent.

“The people walking out the door is about to become a flood, unless management acts,” said one employee in a common sentiment among people I have interviewed at Yahoo.

VeriFone CEO Douglas Bergeron told Bloomberg that his company anticipates acquiring one company a year at roughly $500 million to $700 million, along with several smaller transactions. In all, its purchases could add up to as much as $1 billion annually.

The San Jose, Calif.-based company is eyeing emerging markets. such as Turkey and Brazil, and is seeing investment opportunities by teaming up with Google and other players. Google Wallet enables Android phone users to link their bank accounts to their phones and use them to pay for items in a store, using near field communications.

The move to mobile payments may still be in its infancy, but as a major maker of credit card terminals, VeriFone must consider new entrants — such as Google –very disruptive. Earlier today, I wrote about how Apple products are becoming fairly mainstream at retail locations, and may increasingly reduce the need for registers.

In March, VeriFone lashed out against Square, the San Francisco start-up that has been getting a lot of press for offering a mobile-phone-based payments solution to small merchants. VeriFone claimed that the devices Square was handing out to anyone looking to accept credit card payments were not secure, but many considered the attack a sign of VeriFone’s insecurity in the market.

Since then, Square has started adding an additional level of encryption, and VeriFone has unveiled its own copycat product, which will allow retailers to use an iPad or Android tablet for in-store checkout. It also has other handheld devices for sale, along with iPhone-based swiping solutions.

VeriFone did not provide any hints as to what it may be interested in acquiring. However, Bloomberg suggested that VeriFone could be looking into adding distribution in Asia through an acquisition of a major terminal maker. Likewise, it could also be interested in a payment processor in countries where credit card penetration remains low but is growing. A payment processor would get VeriFone closer to merchants in those markets, and could enable it to offer additional services, such as coupons, daily deals and other loyalty programs.

What gives? The research firms don’t have access to the same kinds of sales-channel data that Intel does, especially when it comes to emerging markets. Namely Brazil, Turkey, Russia and other rapidly developing revenue streams.

Intel CEO Paul Otellini called this “channel revenue” during the conference call with analysts. Channel is industry lingo for the business Intel does that’s not with major PC manufacturers like Apple or Hewlett-Packard or Dell, but instead goes through indirect sales channels to smaller companies that make PCs with lesser-known brands geared toward specific markets.

This channel revenue grew 17 percent during the quarter, Otellini said, because demand for PCs remains healthy in these countries. Turkey and Indonesia were both up 70 percent over last year. India was up 17 percent. Russia, 15 percent. China, 14 percent. Latin America as a whole was up 12 percent.

But then there’s Brazil. Otellini said it’s growing like crazy and is on track to become the world’s third-largest PC market next year, after the U.S. and China.

This channel business in emerging markets helps explain at least part of the dichotomy between the results that Gartner and IDC report in their quarterly market surveys — both of which show a market that grew by less than three percent — and Intel, which saw sales in its PC division grow 11 percent.

Later, Otellini and Chief Financial Officer Stacy Smith addressed this issue in response to a question from Evercore analyst Patrick Wang. You can hear their exchange, which runs less than three minutes, below.

Intel-q2-2011-call by ahess247

“For the past 50 days we’ve been disrupting and exposing corporations, governments, often the general population itself, and quite possibly everything in between, just because we could,” the group wrote in its statement.

The collection of files it released — LulzSec’s “booty” — which I downloaded, contained a mishmash of text and images intended to demonstrate, one last time, the group’s hacking prowess. Among the collection was an image of a U.S. Navy web site civilian jobs board that had been defaced with 11 entries reading “PabloEscobar AntiSec.”

Another file, entitled “Office Networks of Corporations,” is a text file containing what appear to be the IP addresses of internal corporate networks belonging to several media and telecommunications companies. Among those on the list are the Walt Disney Company, Sony — a favorite LulzSec target — Qwest Communications and the EMI Group.

By far the biggest file — clocking in at more than 600 megabytes — was a folder containing what appeared to be internal documents taken from AT&T. They include what seem to be planning documents, timelines, internal memos related to testing and other documents concerning the construction of AT&T’s LTE wireless network.

Another file appears to be an internal memo concerning the structure of an AOL network.

Another text file, entitled “silly routers,” contains a long list of IP addresses of routers, the networking equipment that functions as the traffic cops of the Internet. Next to each IP address are the creditials used to log in and make changes to the settings of those routers; however, in each case the username and password are “root” and “admin” or “root” and “root.”

The significance here is that “root” is the highest level of administrative access that can be gained on any computer. A user with “root” access has complete control over the system, and “gaining root” is the gold standard of practically any hacker attack. In this case the joke — or Lulz — is that the root accounts are guarded by default passwords, either “root” or “admin,” meaning they’re essentially unguarded. I traced a few of the IP addresses and found they correspond with addresses in Brazil, where a LulzSec branch — really more of a copycat group — has emerged in recent days.

So why is LulzSec calling it quits now at the height of its infamy? For one thing, the heat is clearly on. At least one person said to have ties to the group, a 19-year-old named Ryan Cleary, has been arrested in the U.K., and assuming the person they’ve arrested is guilty as charged, chances are that when the pressure is on, he’ll give Scotland Yard as much evidence as he can in exchange for a lighter sentence.

Additionally, more information has started to emerge about the group via rival gangs and people who are former members. The Guardian Newspaper on Friday published a fascinating account, including a lengthy chatroom transcript that provides a great deal of insight into the group’s inner workings. That this much information has wound up in the hands of a newspaper means that the cone of silence the groups members have relied upon to cover their tracks is starting to break down. Law enforcement agents looking to make more arrests will be combing through the logs looking for connections.

They’ll be looking for someone else like Cleary, who has a history of hanging around on the periphery of groups like LulzSec, and who may have knowledge of how they operate, or other identities they use online. If it plays out as other cases have, eventually investigators will hit upon another clue that will lead to the arrest of key member who will, when the pressure of the law is brought to bear, start naming names of the other members.

With that kind of heat, it behooves LulzSec’s members to go silent and split up, and stop creating any kind of digital trail that might lead to them. Chances are that each member will destroy any evidence in their possession that might implicate them personally: Hard drives will be wiped and perhaps physically destroyed. At the same time they’ll probably retain somewhere enough evidence that will help them finger other members in the event they’re arrested.

Then again, there may never be any more arrests. There are untold scores of infamous computer crimes committed for which no one ever got arrested.

One such group that comes to mind is Hacking for Girliez, which in 1998 defaced the Web site of the New York Times. (See a mirror of what they put up here.) The people who carried out the attack later granted an interview to Forbes Magazine, but were never heard from again. No one ever faced charges in that incident, and the statute of limitations has long since expired.

LulzSec’s members could find a way to quietly fade into digital obscurity in the same way that Hacking for Girliez did more than a decade ago. But then much depends on how well its members can keep their mouths shut. Part of their appeal was their ability to brag about their conquests so publicly and with apparent impunity. If each of the group’s six members can resist the urge to brag that they were once part of the Internet’s most infamous gang of troublemakers, they might just get away with it.

LulzSec’s farewell Tweet and statement are below.

50 Days of Lulz statement: http://t.co/GbAD070 | Torrent: http://t.co/lGsJ4PU Thank you, gentlemen. #LulzSec

June 25, 2011 4:03 pm via webReplyRetweetFavorite

@LulzSec

The Lulz Boat

PREVIOUSLY:

• Despite All the Attention, LulzSec Hackers Failed
• At The Height Of Their Infamy, LulzSec Hackers Call It Quits
• Arizona Confirms LulzSec Docs Are Authentic, Worries About Officer Safety
• LulzSec Goes All Wikileaks On Arizona State Cops
• LulzSec Shrugs After Scotland Yard Nabs Hacking Suspect (Updated)
• LulzSec And Anonymous Team Up to Hack Governments and Banks
• Viral Video: LulzSec Gets Taiwanesed
• CIA Web Site Goes Down; LulzSec Takes Credit
• LulzSec Blasts Space Game Eve Online, Other Gaming Sites
• LulzSec Strikes Again, Hits Bethesda Softworks And U.S. Senate
• Turkey Arrests 32 Alleged Members of Anonymous, Days After Arrests in Spain
• Web Security Start-Up Cloudflare Gets Buzz, Courtesy of LulzSec Hackers
• No Hacks to Report at Xbox, But Microsoft Isn’t Letting Its Guard Down
• No LulzSec Hackers Have Been Arrested–At Least Not Yet
• LulzSec Posts More Sony Data, Amid Claim One of Them Is Arrested
  LulzSec Strikes Again, Claims Attack On Nintendo Server
  Sony Hacked for What Seems To Be the Umpteenth Time

• Sony’s Playstation Network Is Back. Sony’s Reputation Will Take a Little Longer.
• Exclusive: Sony Considers Offering Reward to Help Catch Hackers
• Anonymous Claims It Took No Credit Card Numbers From Sony
• Sony Implicates Anonymous in Attack; Group Denies Involvement
• Sony Apologizes For the Playstation Network Breach
• Sony Blames PlayStation Outage on “External Intrusion”

To commemorate the occasion, the company made a fancy infographic (click to expand, or view the full-page version here) depicting some stats and trivia, such as 44 million of its users are based in the U.S., and its fastest-growing countries in 2010 were Brazil, Mexico, India and France.

NetworkEffect was planning to interview CEO Jeff Weiner for a keynote interview at the Web 2.0 Expo in San Francisco next week, but he had to pull out over concern about public disclosures in the lead-up to the IPO. (LinkedIn co-founder and Executive Chairman Reid Hoffman, who’s also a very active investor at Greylock Partners, is graciously stepping in.)

But LinkedIn hasn’t been entirely quiet lately; earlier this month the company launched a personalized news site called LinkedIn Today based on content shared by its members on its own site and through an extended integration with Twitter.

One of the tidbits from the call was just how strong Apple’s business has been in Asia, particularly China. Apple’s four stores in China, on average, get more visitors and generate more revenue than the company’s stores anywhere else. And, if you have been to Apple’s stores in New York or San Francisco, that’s saying something.

Chief Operating Officer Tim Cook said the company decided several years back that of the largest developing economies–Brazil, India, Russia and China–it was China that represented the greatest opportunity. As a result, he said, the company has invested enormous energy there.

“The results of that have been staggering,” he said.

In the latest quarter, Apple had $2.6 billion in revenue from Greater China (mainland China, Hong Kong and Taiwan). That’s up four times from a year ago and nearly what the company did in the entire prior fiscal year. Apple launched a China-specific online store back in October to go along with the four physical locations (including the one in Pudong, shown here).

The company also saw strong results in Korea, led by sales of the iPhone and iPad. For the Asia-Pacific region as a whole, Apple had nearly $5 billion in sales, more than two and a half times what it had a year ago. Sales in Japan, which Apple counts separately, were up 83 percent year-over-year, to more than $1.4 billion.

“We’re placing more and more resource in these areas and continue to look for expansion possibilities,” Cook said.

• Apple’s Cook Aims to Reassure Wall Street on Apple’s Future
• A lot of iSales: Apple sold 7.3 Million iPads, 16.2 Million iPhones in December Quarter
• Apple’s Earnings Insanely Great

Mobile messaging is also big, though in most parts of the world young women are far more likely than young men to send text and picture messages. There were some exceptions, such as India, where men were twice as likely as women to send texts and four times more likely to send pictures.

The Nielsen research was conducted in 19 countries, though the report broke out results only for the U.S., UK, India, Italy, Brazil, China, Spain, Russia and Germany. In most countries Nielsen surveyed 5,000 young people, though in the U.S. it surveyed 75,000 youths. In some countries the research was done face-to-face and in others the survey was done online.

In most countries across the globe, young men are more likely than women to have smartphones, though the U.S. is an exception with young women making up 55 percent of smartphone owners between 15 and 24. The adoption of smartphones versus feature phones also varies widely. In India, for example, feature phones outnumber smartphones 9 to 1 among young people, while in Italy smartphone adoption is nearing 50 percent among the younger set.

Advanced data usage was highest in the U.S and China, where about 17 in 20 young people did more than just make calls and send text and picture messages. That type of data use was least common in India, where only 13 percent did so, However, another 51 percent of Indian youths used their phones for text and/or picture messages.

The Nielsen study also looked at other patterns including use of more than one SIM card and whether phones are prepaid or postpaid, although those trends seemed to have more to do with how the country’s cell phone industry is set up as opposed to indicative of trends among youth.