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Tech Stocks -- Even Those With Strong Results -- Tank Hard With the Market Today

Kara Swisher — Mon, 08 Aug 2011 23:41:14 +0000

Despite mostly strong results recently, public tech stocks were not spared the red ink that spilled all over yesterday, as the Dow Jones Industrial Average slid 5.5 percent.

The result of Standard & Poor’s downgrading of the federal government’s credit rating late Friday, the markets were in turmoil, as investors fled from stocks and presumably were busy stuffing gold doubloons under their mattresses.

Most tech stocks took it especially hard, even those — such as Google and Apple — whose recent financial results were stellar. That’s because investors are waiting for the next quarter shoe to drop with the unwelcome influence of the current economic crisis.

Thus, the carnage, even worse than last week:

Apple, down 5.5 percent today and 11 percent in the last five days.

Google, down 5.7 percent today and 10 percent in the last five days.

Microsoft, down 4.7 percent today and 10.2 percent in the last five days.

EBay, down 8 percent today and 18.4 percent in the last five days.

Amazon, down 4.4 percent today and 12.9 percent in the last five days.

Yahoo, down 5.5 percent today and 15.3 percent in the last five days. (Special note: Yahoo’s shares dove below $11 a share in after-hours trading, closing in on its late-2008 low of $9.39 and making it even tastier takeover bait.)

AOL, down 6.5 percent today and 11 percent in the last five days. (These are also historic lows for the Internet company, which reports its second-quarter earnings tomorrow.)

Demand Media, down 9.7 percent and 17.6 percent in the last five days. (The online content company will also be reporting its Q2 results tomorrow — Demand’s stock is off 63.1 percent since its January IPO.)

Pandora, down 7.6 percent today and 17.2 percent in the last five days.

And, worst of all, LinkedIn, down 17.4 percent today and 27.5 percent in the last five days.

Tanked, in fact, does not nearly describe it.

Worldwide IT Spending Growth Speeds Up, Gartner Says

Arik Hesseldahl — Thu, 06 Jan 2011 15:48:55 +0000

Research firm Gartner has released its latest forecast for worldwide IT spending in the coming year, and at first glance it looks like good news for tech companies across the board.

The good news is that Gartner has revised its outlook upward. Companies and governments will spend $3.6 trillion on IT this year, which is more than the prior $3.4 trillion forecast, amounting to growth of 5.1 percent. Sounds great, right?

Yes, but it’s complicated, especially from the U.S. point of view. The weak dollar makes the figures look a little better than they are. In 2010, Gartner says, IT spending grew 2.2 percent, but more than half of that–1.6 percent–can be attributed to the devaluation of the dollar against other currencies. Companies and governments spending other currencies can get more dollars for their money, and so this tends to inflate the appearance of growth, Gartner’s Richard Gordon told me.

A weak dollar is generally good news for U.S. companies that do a lot of global business. U.S. products and services look more attractive to non-U.S. buyers. But in cases like this, U.S. companies end up paying more for items that get imported and for raw materials.

That’s not to say there isn’t actual growth. Gartner says spending is picking up fastest on telecom equipment, with computing hardware and enterprise software following close behind.

Spending on discretionary items like IT services and consulting is coming back the slowest. When the economic crisis hit in late 2008 and early 2009 these were the first items on the chopping block, and spending on them is only now beginning to make a comeback.

If Speed Matters, Why Is American Broadband So Slow?

Arik Hesseldahl — Wed, 15 Dec 2010 20:57:11 +0000

The Communications Workers of America have completed their latest survey of broadband connections in the U.S., and if the point wasn’t already well-established, then they’re here to remind you: Broadband connections in America are slow and service availability is lousy or non-existent in many areas, and that’s leaving a lot of people–millions actually–at a severe educational, economic and cultural disadvantage.

Here are a few highlights:

Half of all U.S. residential broadband connections fall below the minimum speed established by the Federal Communications Commission of four megabits per second down and one megabit up. That definition of what constitutes “broadband” is however all of six months old.
The median download speed was three megabits per second and 595 kilobits up, and these have only improved a little bit since the 2009 survey. At the rate the U.S. is going it will take 60 years to catch up with South Korea, where broadband network speeds are legendary, averaging 34 megabits per second.
Only one percent of broadband connections in the U.S. run at 50 megabits per second down and 20 up, meeting the FCC’s goal for the year 2015.

The report points out a few other findings from the FCC’s research: As many as 100 million people–roughly one in three–don’t have access to broadband at home, and of those, 24 million can’t get it if they want it, usually because they live on the wrong side of a seemingly arbitrary line on some map. Others say it’s too expensive or that they simply don’t know how to use it.

The 68-page report (PDF) goes on to break down the broadband situation in each state and a few U.S. territories.

The CWA released the report at a press conference in Washington, D.C., today, and FCC Chairman Julius Genachowski was on hand to lend his support and talk about his plans to reform the Universal Service Fund so that besides funding telephone service in rural areas, which was the reason it was created, it can be used to help fund broadband deployments in markets where service is limited for one reason or another. He also talked about getting some of the hurdles out of the way of private companies, so that when they choose to build infrastructure they can move fast. Simply cutting red tape can reduce the deployment costs by 40 percent.

Below is a grab of the CWA’s speed map of the U.S. (Click on it to zoom in.)

Update: And here’s a video of today’s press conference at the National Press Club. Genachowski is the second speaker.

Superpoke! Facebook Chooses N.C. for $450M Data Center

John Paczkowski — Thu, 11 Nov 2010 17:50:51 +0000

Add Facebook to the list of tech titans building data centers in North Carolina. The social networking phenom today said it plans to build a $450 million data center in Rutherford County, N.C.–about 65 miles west of Charlotte.

Facebook will get $1.4 million in incentives from Rutherford County plus an economic development grant that could top out at $10 million if it meets certain goals. Construction will provide about 250 jobs for 18 months or so. Once up and running, the data center will employ 42 people.

Facebook’s is the latest of several high-profile data center efforts located in North Carolina. Google opened its data center in Lenoir back in 2008. And as I reported here last month, Apple is considering doubling the size of its Maiden data center operations.

PREVIOUSLY:

Apple Owns Another 70 Acres Near NC Data Center

Was Apple Planning on Doubling Its North Carolina Data Center All Along?

Apple Reaching for the Cloud With MacBook Air and N.C. Data Center

Ad Dollars Shrink at the New York Times, Again

Peter Kafka — Tue, 19 Oct 2010 12:48:57 +0000

Three months ago, the New York Times seemed to have halted its advertising skid after a very long slide.

Perhaps it has started up again. Ad revenue dropped one percent during Q3: Digital revenue jumped 14.6 percent, but that wasn’t enough to counter a 5.8 percent drop in print ads–which CEO Janet Robinson had thought would move up again this quarter. This morning, though, she cited “uneven economic conditions” and “marketplace volatility.”

Meanwhile, circulation revenue dropped 4.8 percent, and the company’s overall revenue sank by 2.7 percent.

The Times isn’t terribly optimistic about the fourth quarter: It thinks prints ads may improve “modestly,” while digital will grow by 10 percent, which is a deceleration from both this quarter as well as the previous quarter’s 21 percent growth rate.

Here’s the full breakout for the Times’ digital properties (NYT.com, About.com, etc), which appear to be doing pretty well:

Total Internet revenues increased 13.3 percent to $89.4 million from $78.9 million.
Internet advertising revenues increased 14.6 percent to $78.3 million from $68.3 million.
Internet advertising revenues at the News Media Group increased 21.6 percent to $47.4 million from $39.0 million, mainly due to strong growth in national display advertising.
Internet businesses accounted for 16.1 percent of the company’s revenues for the third quarter of 2010 versus 13.9 percent for the third quarter of 2009.

Meanwhile, the Times doesn’t have anything new to say about its plan to move its main Web site to a “metered model” pay wall next year. Perhaps we’ll hear something about it during the 11 am earnings call.

Liveblogging Microsoft’s Financial Analyst Meeting (Afternoon Session): Hey, Steve Ballmer is All In!

Kara Swisher — Thu, 29 Jul 2010 20:15:07 +0000

BoomTown has been in Redmond, Wash. today to attend Microsoft’s annual Financial Analyst Meeeting, where top execs from the software giant have been taking the stage to talk about All Things Microsoft.

I liveblogged this morning’s sessions here, and now the afternoon opened with CEO Steve Ballmer.

The pugnacious exec has been under a little bit of pressure from Wall Street, due to the company’s naggingly limp stock price, even though Microsoft (MSFT) just turned in record results for its fourth quarter

He has even been subject to an ongoing series of rumors, scuttling around the tech sector, that Ballmer would even be replaced due to the moribund shares.

That did not happen today, with Ballmer appearing as confident as ever, very loud and proud, hanging out and kibitzing with investor dudes (they are all dudes here, for the most part) at the technology showcase after the morning session.

Like a particularly aggressive tour director on “The Love Boat,” in fact, he even ordered the analysts to go see all the stuff on display, such as a mobile data center, Windows 7 Phones and its gesture gaming technology now called Kinect.

We complied.

After a lovely lunch, here is a report of the action at the afternoon session at FAM:

1 pm PT: Ballmer took to the stage to talk about Microsoft’s consumer businesses.

First to get praise: Xbox, a money-losing, but very innovative business.

Read the screen: FY10 A Great Year. FY11: Even better.

Ballmer was hot on Kinect, which will be “wow.”

Next: Bing!

Share was from eight to 12.7 percent, frequent releases, mobile focus and strong brand awareness.

Yay. Except the part about Google (GOOG) still having a 70 percent share of the search market.

“We’re not confused, we have a lot of work to do here,” said Ballmer, who noted the price tag for competing in search was high. “It’s going to take a lot more.”

A lot.

Office 2010 was next and it’ll be cloudier, touchier, socialier than ever.

Next up: Windows 7–a definite home run, with an almost 93 percent share on laptops.

“Suffice it to say, Windows is the tide that floats all boats,” said Ballmer.

That is, of course, except that PCs are being inevitably supplanted by many other types of other consumer devices.

Thus, Ballmer moved onto tablets, which he called slates and convertibles.

He took some shots at Apple (AAPL), and promised something would be coming soon.

It better.

Ballmer did admit the truth: “They’ve sold certainly more than I’d like them to sell, let me just be clear about that.”

Then it was onto a demo of some new stuff, including the availability of a “Personal Cloud” for users of Windows 7 and Windows Phone 7.

Essentially, as many companies have been trying to do, it a way for consumers to have access to photos, music and more anywhere on any device.

There was also a new Windows synch feature, which is part of this anything-anywhere-anytime-any device theme.

At this point in the afternoon, I have to say that the thought of a hyper-sharing world of endless data shooting all over the place was exhausting.

I suddenly started thinking about starting a site called Hermit.com–please don’t visit, as I have nothing to share with you and I don’t care what you’re doing either.

Where were those sugary donuts, Microsoft?

I perked up at the demo of the Windows Phone 7, which is very slick and looks terrific. As with Bing, it is nicely differentiated from Apple’s iPhone or Google’s Android mobile operating system.

There is some nice automatic integration in the Windows 7 Phone with Facebook, the powerful social networking platform, with cool blue dots as the updating signal.

2:06 pm: Ballmer was back, declaring he’s not only a PC, but “I’m a Phone too!”

Not quite as catchy a motto, but I like the effort.

Ballmer also touched on Microsoft’s retail stores, which I like to call Not-Apple-But-They-Look-Like-Them Stores.

Next up: CFO Peter Klein, whom I have never seen in person. Let me say, compared to most Microsoft execs, he is unusually young looking, as if he just got his driver’s license.

But he is clearly a smartie, pulling out all the big graphs of money stuff, discussing the economics of the cloud and how it will will result in profit growth.

Many wish the boxed software business did not have to die, but it is on its last legs, so it’s time to hug the cloud for dear life

Klein’s argument that it will all be okay: Microsoft will sell to more users, they’ll earn more per customer and customer satisfaction is increased.

He walked through the numbers, which have been good, noting he hoped for more of the same.

2:31 pm: It’s Q&A time, with Ballmer coming out and calling for “ENERGY!” from the group.

If there were donuts, perhaps! Otherwise, it’s more of a snoozy afternoon situation. Zzzzzzz.

While waiting for other execs to get onstage, Ballmer made a kind of humble-pie statement for shareholders, noting he is a big one too and wanted the stock price higher.

“I’m all in,” he declared, noting he still held 86 percent of his shares in Microsoft since he arrived decades ago.

Of course, that 14 percent represents billions of dollars to have to scrape by on.

The first question was: Wassup with tablets? “It feels like right now you are not completely clear,” said the questioners.

Ballmer was a bit defensive, with his voice going up and up some more. It’ll use Intel (INTC) chips and Windows, but he was still not more specific.

“We’ll be in market as soon as we can,” he said, which was to say that he was not saying.

The next few questions were about financial details and costs. Again, Ballmer noted the returns were strong and other execs said the company had discipline.

More about the cloud, which COO Kevin Turner continued to declare was a big focus. “The proof’s in the pudding,” he said. “But clearly, we have to execute.”

Another question about the tablet, which seemed to annoy Ballmer, who made a lot of noise about being ready to compete.

One tidbit: The Windows 7 tablet will print.

Wheeeee!

After declaring Google’s Android, a “weird collection” of phones, he repeated that Microsoft was all in with its tablet.

Well, get in then!

A good question is asked about what Ballmer thought would be a good sign of progress on mobile phones a year from now.

Well, more share and to stop the downward slide of it.

Then a key question: What if Windows 7 Phone does not work, if it is like the failed Vista operating system software.

For the first time, Ballmer answered quietly: “It won’t be.”

And, then much louder, he’s all in.

United Might Break Guitars and the Funky Wedding Video Has Buzz, But Will It All Have a Susan Boyle Ending?

Kara Swisher — Thu, 06 Aug 2009 15:30:48 +0000

Oh, who doesn’t just love, love, love the two latest viral videos to hit the Web?

One, called “United Breaks Guitars,” is a very funny music video about an experience singer Dave Carroll had when the airline murdered his guitar and then refused to say sorry.

It has had close to 4.7 million views on YouTube.

The other, even better, is a joyful wedding dance of Minnesotans Jill and Kevin, along with their many grooms and bridesmaids, all of whom hilariously boogeyed down the aisle.

Current count: 17.1 million views.

While that’s all well and good, like a lot of these kinds of viral phenoms, neither is likely to go the distance in economic rewards.

While Google (GOOG), owner of YouTube, has been making noise about the wedding video causing a spike in sales of Chris Brown’s “Forever,” which is the music the wedding party shimmies to, this kind of one-off is not really a sustainable way to make video a true financial windfall.

And herein lies the problem–the Internet is most excellent at surfacing and distributing these delightful videos, but it still is not so good at revealing an organized, massive way they will all pay off.

That’s because much of it relies on buzz, which is simply unguessable.

And, even though more advertising efforts are being aimed at premium content on sites like Hulu, the revenue still remains much smaller than costs.

Consider the Susan Boyle sensation, which can doubtlessly be called 2009′s Web powerhouse. The video of her astonishing rendition of “I Dreamed a Dream” from the musical “Les Miserables” on the television show, “Britain’s Got Talent,” was a huge hit.

So far, the show’s YouTube post alone has 75.2 million views, but–due to a number of reasons–it did not make such sensational amounts of money.

Obviously, as consumers shift more and more time to watching Internet video, advertising allocations will be shifted too.

And, with media moguls like News Corp. (NWS) CEO Rupert Murdoch making copious noise about charging for content, it’s likely the most popular videos might begin to get some lucrative gating at some point.

But for delightful hits like the wedding dance or “United Breaks Guitars,” it will be interesting to see if they ever become more than watercooler wonders.

In any case, please enjoy the videos gratis!

Jill & Kevin:

United Breaks Guitars:

Susan Boyle:

eBay Plans Options Water Safety Course

John Paczkowski — Wed, 11 Mar 2009 19:00:32 +0000

Apparently, fear of a deepening recession alone isn’t enough to maintain tech worker loyalty these days–mounting job losses be damned. This week, Google (GOOG) repriced millions of employee stock options that had gone underwater as the company’s share price declined. Now eBay (EBAY) hopes to do the same. The reason: employee retention.

In a regulatory filing today, the company said it has asked shareholders to approve a plan to offer employees the opportunity to swap underwater stock options for restricted stock. “Like many companies, we have experienced a significant decline in our stock price over the last year in light of the current global financial and economic crisis,” eBay explained in its argument for implementing the plan. “Because of the continued challenging economic environment and the uncertain impact of our efforts to change our business, we believe these underwater stock options are no longer effective as incentives to motivate and retain our employees.”

And this may well be the case. That said, you’d think that the widespread and fast-mounting job losses in the tech sector would be enough to keep most folks still collecting paychecks coming in to work. Nice gesture, though.

And to Think They Used to Trade at $741…

John Paczkowski — Mon, 09 Mar 2009 19:41:31 +0000

“Number of times in 2008 that the S&P 500 closed up or down 5 percent in a single day: 17

Number of times between 1956 and 2007 it did this: 17”

– Harper’s Index

If Google shares drop any further, the company may have to reprice its employees’ underwater stock options a second time. Google shares (GOOG) slipped below $300 on Friday and remain there today, trading at $292 as I write. That’s less than half their 52-week high of $602.45. Clearly, Google CEO Eric Schmidt’s grim economic commentary last week has had a deleterious effect on the company’s once stratospheric stock price. But how else were investors to interpret his comments? “We are not immune” to current economic conditions and “I view the situation as pretty dire” don’t exactly hint at surprisingly strong quarterly results.

Here Come Tech Earnings–Or, This Quarter, Maybe Not So Much

Kara Swisher — Tue, 20 Jan 2009 16:30:06 +0000

Over the next two weeks, tech companies will be reporting their fourth-quarter earnings and the expectations are pretty much what you might imagine: Bad to very bad to very, very bad.

That’s bad, of course, because tech has been one of the bright spots in the U.S. economy, with strong returns quarter after quarter for a long time now.

But the economic meltdown–which began in the financial sector–has infected everything, including digital companies that have heretofore been healthy and strong.

IBM (IBM) kicks off today at 1:30 pm PST with its fourth-quarter results.

Then tomorrow, it’s eBay (EBAY) and Apple (AAPL) on deck.

Obviously, Apple will be of great interest because of what its execs will say about CEO Steve Jobs, who recently announced he was taking a medical leave due to ongoing health issues.

As to eBay, many believe the online auction site will report its first quarterly revenue decline in nearly 10 years.

Then Thursday come the two archrival powerhouses, Google (GOOG) and Microsoft (MSFT), which are both expected to look a little less powerful.

Both are bellwethers, with analysts expecting weaker results, even though they will both probably have the sunniest stories in the very cloudy outlook.

Yahoo (YHOO) is another story next week, when new CEO Carol Bartz will get the privilege of delivering what most expect to be a very weak performance. Some analysts are estimating that Yahoo’s results could scrape the bottom of a very well-scraped barrel.

Let’s hope, in Yahoo’s case and for others, that it is always darkest before the dawn.

What the Hell's Going On With Sun?

John Paczkowski — Wed, 07 Jan 2009 16:03:17 +0000

Who said the M&A market is dead? Sun Microsystems said this morning that it has acquired Q-layer, a company that automates cloud computing deployments. A noteworthy move for Sun (JAVA), which has been refocusing its attention on the cloud computing space–or trying to, anyway. Presumably, the company has been preoccupied with other matters these past few months–like “aligning its massive and struggling hardware business with the global economic climate” and aligning 18 percent of its workforce with unemployment benefits.

Sun shares are trading up on the news. That said, they’ve been trading higher for a few days now, inexplicably up about 20 percent versus Nasdaq, which isn’t doing nearly as well.

Odd, that, isn’t it?

What the Hell's Going On With Sun?

John Paczkowski — Wed, 07 Jan 2009 16:03:17 +0000

Sun shares are trading up on the news. That said, they’ve been trading higher for a few days now, inexplicably up about 20 percent versus Nasdaq, which isn’t doing nearly as well.

Odd, that, isn’t it?