Groupon said it had revenue of $601.4 million, up eight percent, in the first quarter, and earnings of three cents. Those profits were in line with Wall Street expectations, but sales were better than the expected $590 million at the daily deals site.

The stock was up nearly 12 percent in after-hours trading to $6.21. Shares have risen 42.6 percent in the last six months, although that’s down 43.9 percent from a year ago.

There was no news of the search for a new leader for Groupon, which fired its CEO, co-founder Andrew Mason, in the quarter.

On a conference call later, co-CEO Ted Leonsis said that Groupon’s board had formed a search committee, but that it was “not in a hurry” to find a new company head.

But, in a statement, co-CEO Eric Lefkofsky said: “We are encouraged by our results, as our local revenues accelerated and our margins improved over the prior quarter.”

Anything up is good news for the suffering Groupon, which has been pilloried by Wall Street since its late 2011 IPO, although sentiment has improved since Mason’s ouster.

Gross billings, which is the amount consumers buy from Groupon overall, without subtracting payments to merchants, were up four percent, to $1.04 billion, on strong growth in North America. Sales were off internationally, though, by 9 percent.

International business, which has a bigger active customer base than North America, was the cause of much of Groupon’s declines, a problem execs have been trying to address with a new “One Playbook” strategy to consolidate systems.

On the conference call, COO Kal Raman called the situation “a tale of two Groupons.”

On a GAAP basis, Groupon had a loss of one cent, from two cents in the same period a year ago.

Groupon also said North American transactions on mobile devices accounted for 45 percent of the overall number, up from 30 percent last year, while email fell to less than 45 percent of the deals sold.

On a less happy note, Groupon said that its outlook for the second quarter would be below consensus.

Here’s the the Chicago-based Groupon’s official press release, as well as some tasty financial slides, so you can read it all for yourself:

GRPN

GRPN_1Q13_Earnings_Slides

Alibaba Group said it had selected Jonathan Lu Zhaoxi to replace its co-founder and CEO Jack Ma, starting on May 10. Ma, who is only 48 years old, will remain executive chairman, and will be involved in the Chinese Internet e-commerce giant’s business strategy and management development. Alibaba has seen tremendous growth in the last year, as it is has increased both its revenue and profit, and many expect it will go public within the next 12 months. The strong performance has, in turn, boosted the stock of Yahoo, which owns a 20 percent stake in the company.

Lu, 43, has been at Alibaba for more than a dozen years, leading major divisions of the company, including its massive and important Taobao unit. He is currently Alibaba’s chief data officer and president of Aliyun Mobile OS.

“Serving as Alibaba Group CEO is an extremely challenging and difficult job, especially succeeding a founder CEO like me. One can only imagine the responsibilities and pressure that Jonathan will shoulder,” said Ma in a letter to employees. “Alibaba has never been only the CEO’s business, it is everybody’s business.”

Here’s Ma’s full letter to employees on the change:
alibaba

And here is some of Lu’s bio, according to Alibaba:

Lu joined Alibaba in 2000, a year after the company was founded as an Internet directory allowing China’s increasingly competitive factories to more easily connect with international buyers. After forming Alibaba.com’s sales team for South China, including manufacturing powerhouse Guangdong Province, Lu in 2004 led the launch of Alipay, the company’s online payments affiliate. He later served as Alipay’s president.

In early 2008 Lu moved to Taobao, China’s dominant online retailing platform. During his tenure Taobao’s GMV (total sales generated by sellers using the platform) soared eightfold, and the online shopping unit began developing and integrating social networking into e-commerce.

Lu, who holds a master’s degree in business administration from China Europe International Business School in Shanghai, was named chief executive officer of Alibaba.com in early 2011, presiding over the privatization of the business-to-business trading website the following year.

Since July 2012, Lu has been an Alibaba executive vice president and the Group’s chief data officer. In this role, he has been responsible for driving the company’s strategically important Big Data initiative, centered on the creation of a data-sharing platform that can be accessed by the millions of small businesses that use Alibaba services. He is also responsible for Alibaba’s Aliyun mobile device operating system.

In its first full quarter under new Chief Executive Hubert Joly, the Richfield, Minn., retail chain delivered improved free cash flow while gross profit margins fell less than expected despite stepped up efforts to match rivals’ prices.

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But investors in recent years found a solution they like, plowing money into real-estate investment trusts that own the buildings housing the server computers that run websites. REITs pay out 90% of their pre-tax income in the form of dividends. So, despite heavy expenses on land and property, many investors consider it sort of a sure thing that these outfits will continually lever up and return money to shareholders.

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Yahoo reported its fourth-quarter earnings today, with earnings higher than expected, but with a continued flattish revenue.

The Silicon Valley Internet giant aid its non-GAAP net profits were 32 cents a share, compared to 25 cents in the same period a year ago. But GAAP net earnings per diluted share were 23 cents in the fourth quarter of 2012, compared to 24 cents last year.

Shares jumped just above four percent in after-hours trading to above $21 a share, given Wall Street analysts were estimating a profit of 27 cents per share in Q4.

Net revenue, without traffic acquisition costs, was expected to be $1.21 billion. It was $1.22 billion and which is essentially flat from a year ago’s $1.17 billion. Search revenue was up nicely, while display sales declined.

Overall the results showed a non-sinking but none-too-powerful ship and not very impressive given almost every other Internet company grew revenue significantly in comparison. For example, Google reported last week that core revenue was up 21 percent in the quarter.

Still, up is up, even if it is not up that much. “I’m proud of Yahoo!’s 2012 and fourth quarter results. In 2012, Yahoo! exhibited revenue growth for the first time in 4 years, with revenue up 2 percent year-over-year,” said Yahoo CEO Marissa Mayer in a statement.

In other words, she’ll take two percent, given the nearly persistent revenue declines of recent years. It is progress, of course, even if investors are looking for more robust increases ahead.

Also of note: Yahoo said it repurchased 79.6 million shares at an average price of $18.24 for $1.45 billion in the fourth quarter, which most definitely was one of the reasons for its recent stock run-up.

Yahoo did not release information on consumer engagement and traffic in the Q4 report, which it had done until Mayer took over. As AllThingsD.com had previously reported, most metrics in the quarter were down significantly over last year.

The fourth quarter was the first that was entirely under the new regime of Mayer, who arrive at Yahoo in July from Google.

She’s gotten a big break from Wall Street, which has sent Yahoo’s stock up in recent months on the hopes of her turnaround plans.

Last week, Mayer said the long-suffering Silicon Valley giant would be returning “back to its roots,” as part of an effort to finally turn it around. It’s actually part of a bigger plan which AllThingsD.com had reported on previously, to focus Yahoo on being a center of content discovery on the Web, across multiple devices, with wide-ranging and “very friendly” partnerships with other companies.

More to come at the 2 pm PT, conference call with Mayer, which I will be liveblogging as usual.

Until then, here’s the official press release and deck from Yahoo:

YHOO_News_2013_1_28_General

Q4’12_Earnings_Presentation.vsFINAL

Stopping by the Detroit Auto Show earlier this week, Tesla founder Elon Musk said one of the company’s big goals for the year is to reach profitability.

“Now, the tough thing for Tesla is to actually make a profit for the first time,” Musk said, adding that such a milestone is far more likely at the end of the year than it is now. “I’m hoping we’ll have a profitable quarter this year. Shame on us if we can’t achieve that.”

With that goal in mind, Tesla is moving forward with some agressive plans for retail expansion. The automaker intends to open 25 new stores this year. Half are to be in the United States, the other half overseas, including a Beijing store that’s expected to open its doors in the spring. Also on Tesla’s plate for the year ahead: Increasing the number of Supercharger charging stations in the U.S. to the point where Tesla owners can actually take a reasonable road trip.

Nintendo’s Wii U has managed to outperform the launch of its original Wii, at least in terms of revenue, but only because it costs more.

In the U.S., Nintendo sold 460,000 Wii U devices in December and more than 890,000 since it launched in mid-November, according to NPD, which tracks monthly sales figures for the videogame industry.

As a result, Nintendo said it recorded $300 million in revenue, which is more than the $270 million that the original Wii made at the same point in its life cycle.

But the original Wii, which launched in 2006, cost only $250, and today’s Wii U is setting players back between $300 and $350 apiece. So, the only reason it was able to exceed prior sales is because it upped the price — not because it sold more units.

That didn’t stop Nintendo of America’s EVP of Sales & Marketing Scott Moffitt from singing the company’s praises: “While the Wii launch established new benchmarks in the United States, Wii U has surpassed its predecessor in perhaps the most important category: revenue generation.”

Moffitt, however, did not comment on profits.

The Wii U has two editions: The deluxe offering that costs $350 and the basic offering for $300. The deluxe edition sold out at retail this holiday, and both editions were difficult to find after the Nov. 18 launch. But it was nothing like the launch of the Wii, which experienced shortages for months. Nintendo did run into a few hiccups at launch with customers experiencing long waits for mandatory software updates. Additionally, some of the device’s most notable features, like its TVii service, did not launch until later in the month.

Microsoft also reported strong revenue for the Xbox. The company holds the envious position of having the top-selling piece of hardware for the past 17 months straight. It sold 1.4 million units in December, or three times the number of Wii U’s sold. (When you add up all the hardware Nintendo sold, it totals more than 2.65 million units).

In all, Microsoft said, consumers spent more than $1.27 billion on the Xbox 360, including games, consoles and accessories.

Following the release of the NPD data, Sony did not immediately break out the PlayStation’s performance for the month of December.

Even so, the numbers are staggering, especially given the amount of pressure that smartphones and tablets are putting on the game console industry. But some impact can be seen. The amount of money being generated by mobile games and online gaming still has not been enough to offset the declines that the traditional console gaming market is seeing — at least that’s NPD Group’s position.

Historically, the research firm has monitored sales through purchases made at physical retail locations. In recent years, it has expanded its methodologies as more content is sold digitally over services like Valve’s Steam on the PC or as expansion packs inside of console games.

Overall, it reported for December that new physical retail sales of hardware, software and accessories totaled $3.2 billion, falling 22 percent year over year. It calculates that the physical channel accounts for nearly 50 percent of the total consumer spend on games.

When NPD considers revenue from other channels, such as used and rentals, and digital formats, like full games, micro-transactions, mobile apps and social gaming, its preliminary estimate is that consumer spending in December hit $4.1 billion in all. A final analysis of non-physical spending however, is expected to be released in February.

It’s hard to say how serious this is right now, but Yahoo was ordered to pay $2.7 billion in a lawsuit related to a breach of contract and lost profits of a yellow pages listing service by Worldwide Directories and Ideas Interactivas.

In a statement and a filing with the Securities and Exchange Commission, the Silicon Valley Internet giant said it “believes the plaintiffs’ claims are without merit and will vigorously pursue all appeals.”

We lobbed a call into Yahoo to get more details about the “non-final” judgment from the 49th Civil Court of the Federal District of Mexico City — not that the company’s PR will actually call back on important multi-billion matters — but here is the company’s SEC filing:

SEC-YHOO-1193125-12-487828

An analysis of the company’s latest securities filing reveals that unless Facebook significantly improves its operating margin, these costs — which totaled $2.3 billion as of Sept. 30 — will be enough to prevent the social network from earning a bottom-line profit for at least two more quarters.

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Some news cannot wait, of course, and sources at Apple said the company had planned to release news of the sudden exit of Scott Forstall, one of its major execs, this afternoon.

Maybe so, but it’s also unusual timing. Due to Hurricane Sandy — which was poised to hit landfall in central New Jersey just as Apple made its announcement about the iOS mobile software chief’s leaving, along with that of Apple Store retail head John Browett — Wall Street reaction to what appears to be a major management move by CEO Tim Cook will not take place until at least Wednesday.

That’s because the massive storm has led to the closure of the stock markets today and tomorrow, leaving investors to mull on the major reorganization without a lot of ability to react.

Apple shares closed at $604 on Friday, up about 49 percent over the past year. Its stock had declined slightly recently, after last week’s quarterly earnings did not meet the enormous profit expectations of Wall Street. Still, Apple had — for anyone else — a blockbuster fourth quarter.

The tech leader reported $8.67 per share of profit on sales of $35.97 billion.

How the departure of Forstall and, to a much lesser extent, Browett (who has been a largely unpopular exec since he was hired a year ago), will be greeted by shareholders when markets open should be interesting.

On one hand, Forstall has been a major exec at the company for a very long time, in charge of key areas of success for Apple, including the software for its hugely popular iPhone and iPad. Forstall has even been called CEO-in-waiting in some media accounts.

That said, many sources report that he has wrangled with other top execs, including Cook, and he has been known as someone with a doesn’t-play-well-with-others personality. One source told me today that Forstall had made numerous “open challenges” to the Apple leader over the last year.

While that’s not necessarily a negative at Apple — the late CEO and co-founder Steve Jobs was also someone who did not suffer fools or even simple mistakes among trusted staff — the recent troubles as it replaced Google’s mapping software with its own had clearly tarnished Forstall’s image.

In addition, while Apple does great at hardware, as well hardware/software integration, it has often fallen down in other key software efforts, such as MobileMe, iTunes and more.

This is not all Forstall’s fault, of course, but his sudden departure — which will take place officially next year — means that Cook is consolidating control over the top management.

Thus, the did-he-jump-or-was-he-pushed meme will doubtlessly increase over the next few days. Pushed seems to be the consensus so far.

But here’s a little insight into Apple’s often opaque culture to better discern management Kremlinology there: iTunes is still advertising competitors’ maps instead of its own failed product, and Forstall got no stage time at Apple iPad mini event last week.

Clearly, the removal of Browett, who had made a series of moves that were negatively greeted by Apple’s retail unit, will make Cook look decisive, especially since he had hired him. But whether that extends to how the influential Forstall was dispatched — and it looks like he was — will be another story to grok for Wall Street.

Big management shifts at Apple are now taking place.

Scott Forstall, the man in charge of its iOS mobile software efforts and a major and longtime executive at the tech giant, is leaving next year and will remain an adviser to CEO Tim Cook until then.

In addition, new retail head John Browett is headed out the door.

As part of the move, Apple noted that four key execs — Jony Ive, Bob Mansfield, Eddy Cue and Craig Federighi — would “add responsibilities to their roles.”

Ive gets “Human Interface”; Cue will take over Maps and Siri voice recognition responsibilities; Mansfield will run a new unit called Technologies, “which combines all of Apple’s wireless teams across the company in one organization”; and Federighi gets the big job of iOS and OS X.

More to come on what happened, but Forstall’s departure is very big news and a drastic move for such an important player in the tech space.

He had big fans and also many detractors for his sharp-edged personality, as well as what some described as exhibiting “growing open challenges” to Cook himself. Forstall had previously been called “CEO-in-waiting” in one media account in Fortune.

In addition, numerous sources noted persistent tension between Forstall and several other key execs, especially the powerful design chief Ive.

Veiled internal politics at Apple aside, Forstall has been a key part of Apple’s success over the last decade, especially in the development iPad and the iPhone.

Recently, there has been some level of ire at Apple over the troubled rollout of its own mapping software and the replacement of Google’s popular service, which was Forstall’s responsibility. (No, this move does not mean everyone gets Google mapping back, as one person asked me.)

Browett’s leaving is a little less of a surprise. Since he got the job, he has alienated many within the highly successful retail organization at Apple, many sources said.

His departure comes less than one year after the former Dixons CEO was hired by Apple to succeed Ron Johnson, who left for J.C. Penney in November 2011. Recently he’s been criticized by some Apple Store employees for unfriendly policy changes aimed at increasing Apple’s retail profit margins.

More to come, obvi, but here is the official press release from Apple, which it put out with the most understated title of all time:

Apple Announces Changes to Increase Collaboration Across Hardware, Software & Services

Jony Ive, Bob Mansfield, Eddy Cue and Craig Federighi Add Responsibilities to Their Roles

CUPERTINO, California — October 29, 2012 — Apple® today announced executive management changes that will encourage even more collaboration between the Company’s world-class hardware, software and services teams. As part of these changes, Jony Ive, Bob Mansfield, Eddy Cue and Craig Federighi will add more responsibilities to their roles. Apple also announced that Scott Forstall will be leaving Apple next year and will serve as an advisor to CEO Tim Cook in the interim.

“We are in one of the most prolific periods of innovation and new products in Apple’s history,” said Tim Cook, Apple’s CEO. “The amazing products that we’ve introduced in September and October, iPhone 5, iOS 6, iPad mini, iPad, iMac, MacBook Pro, iPod touch, iPod nano and many of our applications, could only have been created at Apple and are the direct result of our relentless focus on tightly integrating world-class hardware, software and services.”

Jony Ive will provide leadership and direction for Human Interface (HI) across the company in addition to his role as the leader of Industrial Design. His incredible design aesthetic has been the driving force behind the look and feel of Apple’s products for more than a decade.

Eddy Cue will take on the additional responsibility of Siri® and Maps, placing all of our online services in one group. This organization has overseen major successes such as the iTunes Store®, the App Store℠, the iBookstore℠ and iCloud®. This group has an excellent track record of building and strengthening Apple’s online services to meet and exceed the high expectations of our customers.

Craig Federighi will lead both iOS and OS X®. Apple has the most advanced mobile and desktop operating systems, and this move brings together the OS teams to make it even easier to deliver the best technology and user experience innovations to both platforms.

Bob Mansfield will lead a new group, Technologies, which combines all of Apple’s wireless teams across the company in one organization, fostering innovation in this area at an even higher level. This organization will also include the semiconductor teams, who have ambitious plans for the future.

Additionally, John Browett is leaving Apple. A search for a new head of Retail is underway and in the interim, the Retail team will report directly to Tim Cook. Apple’s Retail organization has an incredibly strong network of leaders at the store and regional level who will continue the excellent work that has been done over the past decade to revolutionize retailing with unique, innovative services for customers.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

Yahoo is nothing if not consistent, turning in yet another weak quarter that met weak expectations from investors.

The 98-pound weakling is still weak!

In the third quarter, the Silicon Valley Internet giant had $1.089 billion in revenue, a hair above expectations and just two percent higher than a year ago. (Please note that competitors, such as Google and even Facebook, are growing revenue like gangbusters.)

Profits were also weak, despite an apparent pop from a gain from its sale of some of the shares it holds in China’s Alibaba Group. But let’s focus on operations, people, which are the real numbers to gauge. As Yahoo noted: “On a GAAP basis, income from operations decreased 14 percent to $152 million in the third quarter of 2012, compared to $177 million in the third quarter of 2011.”

Minus traffic acquisition costs, display revenue was down to $451.6 million, compared to consensus estimates of $484 million; search revenue was up only a tiny bit to $414.1 million (consensus was $411 million).

Interestingly, Yahoo left out detailed information it has usually provides about engagement and other user metrics. Let me take a big guess: The numbers are simply not impressive, or else they would have been touted.

Also left out was any guidance going forward — new CFO Ken Goldman just came on today, so that’s no surprise. Guess it’s time to throw out the trash, as they say in politics!

But here’s an interesting factoid in the press release: “In October 2012, Yahoo! entered into a 364-day, $750 million unsecured revolving credit facility. The facility is currently undrawn and is expected to be used for general corporate purposes.”

More available cash to go with the pile of cash that Yahoo has already piled up for purposes unclear right now.

To be clear, this meh quarter does not matter at all — with Yahoo getting a financial equivalent of a hall pass for these results — as investors look to hear from new CEO Marissa Mayer about her plans to make all the bad go away. Until she charts a course and sets out on it, it is likely that no one is going to blame her for Yahoo’s past woes.

As Mayer said in a statement today: “Yahoo! had a solid third quarter, and we are encouraged by the stabilization in search and display revenue. We’re taking important steps to position Yahoo! for long-term success, and we’re confident that our focus on quality and improving the user experience will drive increased value for our advertisers, partners and shareholders.”

Everyone is looking forward to hearing how, which the former Google exec will presumably explain in more detail on a conference call with Wall Street analysts — her first as a public company CEO — at 2 pm PT. Tune in for my live blog.

Until then, here are Yahoo’s Q3 slides to peruse:

YHOO_Q312EarningsPresentation_FINAL

U.S. District Judge Lucy Koh on Thursday denied Apple’s request to seal many of the documents the company used to make its damages case, ordering it to release key financial information regarding “product-specific unit sales, revenue, profit, profit margin, and cost data.” Koh argues that Apple cannot both use its financial data to seek multibillion dollar damages and product injunctions, and keep that data secret.

“Apple’s motion seeks to permanently enjoin the sale of 26 Samsung products that have already been on the market for varying lengths of time, and seeks an enhancement of $535 million on top of the $1.05 billion in damages awarded by the jury,” Koh said in her ruling. “Such remedies would have a profound effect on the smartphone industry, consumers, and the public. As the extensive media coverage indicates, this is a truly extraordinary case of exceptional interest to the public. Apple’s reasons would have to be very compelling indeed to overcome the unsually robust public interest in access.”

And, in Koh’s opinion, they’re simply not. Apple’s main argument for protecting this data is that they are trade secrets that would provide its rivals with a competitive advantage. But evidently that’s not reason enough. And while Koh agreed to a temporary stay, pending federal court appeal, Apple may soon find itself forced to reveal important sales data that it has long kept private. A blow to the company, but great news for investors and analysts that have long guessed at what it might be.

It’s not well known, but last year, before it went public, Groupon almost didn’t.

With pressure from former board member Howard Schultz, and also doubts about timing expressed to CEO Andrew Mason by outside investors such as Silicon Valley luminaries Marc Andreessen and Mary Meeker, the Chicago-based daily deals site pressed forward, anyway.

Since then, it has been a tough ride for Groupon and, perhaps most of all, for Mason.

Yesterday afternoon, I got on Skype to do a video interview with him about the continued swirl — much of it very negative — around the company he co-founded and leads.

“I love Groupon,” he said. “Groupon is my life.”

Not so much everyone else these days — who are starting to compare the company to Web 1.0 flameout Webvan and even, in the ultimate digital insult, Pets.com.

That’s a false comparison — those were both never profitable, and had negative cash flow, unlike the much larger Groupon.

Still, Groupon’s stock has been under pressure pretty much since the time of its IPO last year, with critics hammering on everything from whether its business plan is fundamentally flawed to its controversial accounting to the goofy nature of Mason himself.

He even got dinged for drinking a beer at a Groupon all-hands employee meeting. (I’m fine with that one, by the way.)

Groupon shares hit a new low last week, after it reported second-quarter earnings that showed better profits, but a revenue miss. Growth prospects in its core coupon business, or lack thereof, was pointed to by Wall Street investors for the continued sell-off.

One bright spot was its nine-month-old Groupon Goods, which sells a variety of products and which has grown to $200 million in annualized revenue. But the lower-margin offering makes up a smaller part of the company’s overall results, as does its impressive improvements in mobile commerce.

These two positive developments have failed to impress, though, with the stock at even lower lows today — at $4.74 a share. That’s down 82 percent since Groupon went public, making the company worth $3 billion, or about half of what Google had once offered to buy it, and a little more than double its cash on hand.

In other words, it is crunch time for Mason, who must answer to shareholders, employees and his board, and must somehow get Groupon to a better place, and fast.

Among the myriad of risks for him as he does: Everything from new management to the sale of Groupon.

That is not in the cards right now, of course. And, as usual, the affable exec talks with confidence about the company.

To his credit, in this long interview, he is also pretty candid about the struggle.

It’s well worth a watch (except for me looking like I just got off a red-eye flight, which I did).

Here’s Mason:

]]> http://allthingsd.com/20120817/video-exclusive-heres-groupons-andrew-mason-talking-about-daily-deals-sites-stock-smack-future-plans-and-ipo-regrets-or-lack-thereof/feed/ 0 http://allthingsd.com/20120807/demand-media-beats-q2-expectations-with-revenue-up-strongly/ http://allthingsd.com/20120807/demand-media-beats-q2-expectations-with-revenue-up-strongly/#comments Tue, 07 Aug 2012 20:28:20 +0000 Kara Swisher http://allthingsd.com/?p=238780

Santa Monica, Calif.-base Demand Media beat earnings expectations today, with a strong revenue performance up 17 percent in the second quarter and a small profit.

The social content company also said it had added Michael Blend as its new president and COO, noting he would be “expanding his current responsibilities overseeing content and media to include leading the company’s domain registration services.”

Blend — who came to Demand via an acquisition — will continue to report to CEO Richard Rosenblatt. But other major execs will also continue to do so despite the title addition for Blend.

Demand had a profit of $94,000, essentially break even on a diluted share basis, but it is its first quarter of positive net income as a company. That is up from a loss of three cents last year in the same period. But its adjusted earnings per share was nine cents, compared to an expected three cents.

Revenue was $93.1 million, a nice bump from the $89 million that Wall Street analysts had expected Demand to report.

Cash flow from operations was also up 30 percent.

“In addition to accelerating revenue growth, expanding our EBITDA margin and growing our cash flow from operations, we delivered our first quarter of positive net income as a public company in Q2,” said incoming CFO Mel Tang in a statement. “Based on our strong first half performance and outlook for the remainder of 2012, we are increasing guidance for fiscal year 2012.”

Demand’s stock, which has been on an upward swing recently, was up more than 3 percent in after-hours trading, to $12.

Here’s the full press release, and I will be listening in on its call at 2 pm PT to see if there is any more news:

PDF.Q2

]]> http://allthingsd.com/20120807/demand-media-beats-q2-expectations-with-revenue-up-strongly/feed/ 0 http://allthingsd.com/20120806/apple-gorging-on-mobile-industry-revenue/ http://allthingsd.com/20120806/apple-gorging-on-mobile-industry-revenue/#comments Mon, 06 Aug 2012 11:00:16 +0000 John Paczkowski http://allthingsd.com/?p=238031 Samsung shipped about 50 million smartphones last quarter — about double the number Apple sold and, according to IDC, the largest number of units ever shipped by a handset vendor in a single quarter. But does it matter?

No.

Because when you look at the broader mobile industry, Apple — thanks to the higher gross margins of the iPhone and iPad — far outshines its rivals in both revenue and operating profits.

Though it shipped only about 6 percent of the industry’s smartphones and tablets in the second quarter, Apple captured about 43 percent of the industry’s revenue, according to Raymond James analyst Tavis McCourt. And it generated an astonishing 77 percent of the industry’s operating profits. This, even in a seasonally weak period for iPhone sales.

So while Samsung outselling the iPhone two to one is a nice milestone and, no doubt, a point of pride for the Korean company, it’s not the financial victory that it might first appear. Samsung might be the mobile industry’s king, but Apple still rules overall in the most important metric of all: Profit.

“Ultimately, profits are the feedstock of innovation; and, innovation drives profits,” McCourt writes. “Until Samsung starts generating more profits than Apple, we would not be overly concerned with who has the unit share lead. Remember, HP and Dell still sell a lot more PCs than Apple sells Macs, but does it matter?”

Probably not to Apple.

]]> http://allthingsd.com/20120806/apple-gorging-on-mobile-industry-revenue/feed/ 0 http://allthingsd.com/20120704/google-tablet-analysis-points-to-thin-margins/ http://allthingsd.com/20120704/google-tablet-analysis-points-to-thin-margins/#comments Wed, 04 Jul 2012 17:00:06 +0000 Don Clark http://allthingsd.com/?p=227417 It’s not surprising that the first tablet to carry Google’s brand would attract attention from hardware analysts. Nor is one of their key conclusions much of a shock — the $199 price tag on the new Nexus 7 doesn’t leave Google much of a profit margin.

The Nexus 7 tablet costs $199 handheld computer and features a 7-inch screen. The research firm UBM TechInsights has come up with a $184 preliminary estimate for the costs of components in the Google tablet. That compares with its $153 estimate in November for the components inside Amazon.com’s identically priced Kindle Fire.

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]]> http://allthingsd.com/20120704/google-tablet-analysis-points-to-thin-margins/feed/ 0 http://allthingsd.com/20120427/as-nintendo-fades-zynga-continues-to-grow/ http://allthingsd.com/20120427/as-nintendo-fades-zynga-continues-to-grow/#comments Fri, 27 Apr 2012 16:48:12 +0000 Tricia Duryee http://allthingsd.com/?p=200553 It’s a battle between Mario and the farm, and the farm seems to be winning.

Yesterday, Nintendo reported an annual loss — its first in more than three decades — after revenues fell 36 percent. Hours later, five-year-old upstart Zynga reported nearly the opposite results, saying that first-quarter revenues jumped 32 percent year over year.

“Social, accessible and free are changing things,” said Zynga’s COO John Schappert in an interview. “We were built for this market; we live on free and in-app purchases. We never grew up on $60 games and consoles. It’s a different world, and it’s hard for some companies as they make the transition.”

For more than a year, the game industry has worried about the shift toward social and mobile from more traditional platforms like the home console. And now, after yesterday’s two drastically different financial reports, there is more than anecdotal evidence for concern.

Zynga continues to gain momentum and attract larger audiences with titles like FarmVille and CastleVille on Facebook and Words With Friends on mobile. On the flipside, Nintendo is facing yet another hardware cycle, with consumers waiting for its newest console, the Wii U, coming later this year.

Generally, experts believe that social and mobile games are expanding the overall games market. But yesterday it was hard not to see Nintendo’s first loss in three decades — totaling $531.1 million — as a hint of where things are headed.

Michael Pachter, an analyst with Wedbush Securities, is bullish on Zynga’s prospects but is not optimistic about the future of console games.

“Nintendo is living in the past, repeating what got them to where they are, and hoping that the recent downturn is a fad,” he said. “They aren’t adapting to the times, and it’s hurting them.”

To be fair, the companies approach the market completely differently, so it’s hard to compare the two.

Nintendo sells proprietary portable and home gaming units as well as the games that work on top of them. Meanwhile, Zynga gives away its games for free and lets them work across most computers and mobile phones. It makes money on advertising and microtransactions.

The two approaches lead to drastically different audience sizes.

Zynga said the number of monthly active users playing its games increased to 292 million in the first quarter, up 24 percent. The game company, which got its start on Facebook, is also expanding rapidly to mobile, reporting that it had 22 million monthly users on mobile, up from only 12 million one quarter ago.

Nintendo does not break out quarterly figures, but the number of new customers it reached during its fiscal year pales in comparison. Over the past year, it sold 13.53 million 3DS units, and expects to sell 18.5 million this year. Nintendo sold 9.84 million Wiis over the past year, down 35 percent.

This year, Nintendo is banking on the Wii U to revive the company and to better position itself against mobile devices like the iPad. The new console will come with a 6.2-inch touchscreen that will allow users to interact in a new way with games on TV screens. It plans to sell 10.5 million Wii units this year, including the Wii U.

Last year, Nintendo Global President Satoru Iwata told AllThingsD in an interview that he is not willing to gamble on free-to-play games, because consumers are willing to pay for Nintendo’s superior experiences and brands.

“If we were simply going to say okay, the only the way we could sell more products is by decreasing the price, then there wouldn’t be a bright future, and the entire industry will fold,” he said.

His point is not entirely lost.

Zynga makes far less money per user than Nintendo. In fact, the gap between them is enormous.

Each console or portable game unit Nintendo sells has the opportunity to generate hundreds of dollars in income, since console games cost $60 and portable games cost around $40 (not to mention the initial cost of the hardware).

Meanwhile, Zynga makes very little on each player. It reports a metric called average daily bookings per average daily active users (ABPU). Yesterday, Zynga said ABPU increased to $0.055 in the first quarter from $0.051 in the same period a year earlier.

For Nintendo to switch from one model to the other would be like giving up the farm.

And to be entirely fair, Zynga wasn’t profitable, either. In the first quarter it lost $85 million, primarily due to stock-based compensation.

]]> http://allthingsd.com/20120427/as-nintendo-fades-zynga-continues-to-grow/feed/ 0 http://allthingsd.com/20120416/another-down-day-for-apple-shares/ http://allthingsd.com/20120416/another-down-day-for-apple-shares/#comments Mon, 16 Apr 2012 19:33:19 +0000 John Paczkowski http://allthingsd.com/?p=196835 Looks like Apple shares’ meteoric rise has been paused for the time being. The stock is down for its fifth straight trading day after hitting an all-time high of $644 last week, a high that pushed the company’s market capitalization past $600 billion.

This morning alone, Apple shares fell more than 3 percent. And they’re down nearly 8 percent from last Monday’s close (caveat: The stock is still up well over 40 percent this year).

So what’s dragging the stock down?

Any number of things, really. The antitrust charges recently filed against Apple and major book publishers by the Department of Justice. Concerns that Apple’s carrier partners are tired of offering high subsidies on the iPhone and will soon begin to rein them in, cutting into the company’s high margins on the device.

Another thought: This could be profit-taking, plain and simple.

Or, as ISI Group analyst Brian Marshall suggests, the stock could just be cooling off a bit. “We believe this could be a simple ‘collapsing’ on its own weight given the year-to-date move (i.e., AAPL up ~45 percent vs. S&P 500 up ~10 percent).”

]]> http://allthingsd.com/20120416/another-down-day-for-apple-shares/feed/ 0 http://allthingsd.com/20120320/oracles-profit-rises-18-percent-on-growth-from-software-licenses/ http://allthingsd.com/20120320/oracles-profit-rises-18-percent-on-growth-from-software-licenses/#comments Tue, 20 Mar 2012 22:36:03 +0000 Drew Fitzgerald http://allthingsd.com/?p=188530 Oracle Corp.’s fiscal third-quarter profit rose 18 percent as new licenses from the technology giant’s software business continued to offset weaker hardware revenue.

Shares rose 2.1 percent to $30.75 after hours on a stronger-than-expected core profit. Oracle’s shares had climbed 17 percent so far this year through Tuesday’s close.

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]]> http://allthingsd.com/20120320/oracles-profit-rises-18-percent-on-growth-from-software-licenses/feed/ 0 http://allthingsd.com/20111021/groupon-to-raise-up-to-540-million-at-11-4-billion-valuation/ http://allthingsd.com/20111021/groupon-to-raise-up-to-540-million-at-11-4-billion-valuation/#comments Fri, 21 Oct 2011 10:28:34 +0000 Tricia Duryee http://allthingsd.com/?p=135466 Groupon has filed an early-morning surprise, putting to rest speculation about its IPO. It is on, albeit at a slightly lower valuation than originally expected.

It intends to raise $480 million to $540 million in the public markets, setting a valuation range between $10.1 billion and $11.4 billion. Here’s the entire document Groupon shared with Wall Street investors while on its road show.

In addition, the daily deals giant released third-quarter results today, which included improved numbers and a profit in North America.

It will trade on the Nasdaq exchange under the ticker “GRPN.”

The company said it plans to sell 30 million shares at $16 to $18 apiece, which will raise about half of the original $750 million it had intended to raise when it filed for the IPO back in June.

There will be an over-allotment of 4.5 million shares. In all, the company will end up selling nearly 5 percent of its Class A common stock before the allotment.

Since the company’s original filing, the Chicago-based darling has gone through the wringer. Updated amendments led to questions about the company’s strength, or whether it could sustain a profitable business over the long term. Additionally, a number of top-level executives have left the company under the watch of Groupon’s CEO Andrew Mason.

Some of those concerns will be muted, given the company’s financial performance in the quarter ended Sept. 30. In that period, it helped to demonstrate it can scale back its marketing costs and still grow.

Q3 revenues increased 426 percent year over year and 9.6 percent sequentially to $430.2 million. The company’s third-quarter net loss totaled $10.6 million, narrowed substantially from the prior quarter and year-ago period when it lost $101.2 million and $49 million, respectively.

Contributing to improved results was a profit in North America of $18.8 million, reversing a loss of $10.5 million in the second quarter. This is primarily due to a decrease in marketing expenses while still maintaining customer growth, which resulted in higher revenue.

The international markets had similar improvements; however, Groupon continued to invest heavily in countries such as South Korea, Australia and Japan, which adversely affected results. A bulk of the company’s revenues, or about 64 percent, occur in North America.

Critics skeptical that Groupon would have a hard time swapping losses for growth definitely have something to think about.

It now has $244 million cash on hand, up 8 percent since the prior quarter, and 255 percent since last year.

Groupon said in the filing that it plans to use the money to increase revenues by expanding domestically and internationally through gaining new subscribers and investing in technology.

]]> http://allthingsd.com/20111021/groupon-to-raise-up-to-540-million-at-11-4-billion-valuation/feed/ 0 http://allthingsd.com/20110907/yang-says-not-for-sale-all-hands-on-yahoos-slippery-deck/ http://allthingsd.com/20110907/yang-says-not-for-sale-all-hands-on-yahoos-slippery-deck/#comments Wed, 07 Sep 2011 16:36:38 +0000 Kara Swisher http://allthingsd.com/?p=118042

At a prequel for the many VPs of Yahoo to the all-hands meeting for all 13,500 employees of the Silicon Valley Internet giant that is taking place at 11 am, Yahoo co-founder, director and former CEO Jerry Yang told the group the company was “not for sale.”

Even though, of course, it was hiring advisory firms, such as Allen & Co., to explore strategic options. Many justifiably feel “for sale” is just what Yahoo is.

Instead, Yang reassured the troops that it was business as usual at the company, in spite of the abrupt firing of its current CEO Carol Bartz yesterday.

One attendee emailed me: “Really?“

Yang told the group that the aim was to grow revenue and profit, but did not put forth a specific plan as yet. He also said the search was on for a new CEO.

Meanwhile, interim CEO Tim Morse spoke only at the end of the meeting, for the last 10 minutes.

Morse continued to be Yang’s sidekick at the all-hands meeting later, in which they reiterated their no-sale motto.

Still, the troops were restless and the event included a lot of pointed questions from employees about the ouster of Bartz and how that was going to get the company growing again.

One employee asked the board to give Bartz’s $10 million severance package to charity, to much applause.

Another query was about the shift on Bartz by Yahoo’s Chairman Roy Bostock, who praised her performance earlier this summer at the annual meeting.

How, asked the employee, did Yahoo go from full support of Bartz to fired? The basic answer from Yang: Things change!

Another employee asked about the bid to buy the Hulu premium video service. Americas head Ross Levinsohn’s answer: Yahoo did not need it to win.

Both Levinsohn and product head Blake Irving stressed how big Yahoo still is, although Yahoo’s kind of big today might not mean better.

Employees — I love them for channelling exactly what I would have asked — pressed Morse on when the strategery would be done this time. A few months, he said.

But perhaps the toughest query was about how did the board fire the CEO without first having a plan in place, which the questioning employee noted had further worsened trust issues with Yahoo leadership.

It got the biggest applause.

Trust us, said Yang.

That’s a big ask for beleaguered Yahoo staffers these days.

Meanwhile, Yahoo filed a new-less 8-K regulatory filing today about the Bartz firing.

In it, Yahoo wrote: “No new compensatory or severance arrangements were entered into in connection with these leadership changes. Ms. Bartz will receive severance benefits
for termination without cause as provided in her employment and equity award agreements.”

Here it is:

YHOO-20110907-8K-20110906

Related posts

• As Yahoo Continues to Wobble, Investors (And Board) Eye Options
• Exclusive: Carol Bartz Out at Yahoo; CFO Tim Morse Named Interim CEO
• Carol Bartz’s Last F%*& You — Now Aimed at Yahoo Board
• Yahoo’s Statement on Bartz Ouster
• Wall Street Likes Bartz’s Firing — Yahoo Stock Spikes on News
• My Picks for Yahoo’s Next CEO — Maybe Snoop Dogg, Ya Digg?

]]> http://allthingsd.com/20110907/yang-says-not-for-sale-all-hands-on-yahoos-slippery-deck/feed/ 0 http://allthingsd.com/20110824/zillows-first-quarter-as-a-public-company-also-marks-first-profit/ http://allthingsd.com/20110824/zillows-first-quarter-as-a-public-company-also-marks-first-profit/#comments Wed, 24 Aug 2011 20:54:38 +0000 Tricia Duryee http://allthingsd.com/?p=113563 Zillow reported its second quarter earnings today after raising more than $70 million in a public offering one month ago.

The Seattle real estate company reported that revenues totaled $15.8 million, more than doubling from $7.3 million in the second quarter 2010.

The company also reported a net profit of $1.6 million, representing the first time the company has been profitable on a quarterly basis. In the year-ago period, Zillow lost $2 million.

In addition, the company said its monthly unique users during the quarter jumped 93 percent to a record 20.8 million, and that in July, it marked another record traffic month with 23.2 million unique users to both its Web sites and mobile applications.

Zillow’s largest source of revenue comes from agents, who subscribe for special listings. The company said premier agent subscribers totaled 13,385 as of the end of June, up 180 percent from 4,777 at the end of second quarter 2010.

]]> http://allthingsd.com/20110824/zillows-first-quarter-as-a-public-company-also-marks-first-profit/feed/ 0 http://allthingsd.com/20110818/lenovos-net-profit-nearly-doubles/ http://allthingsd.com/20110818/lenovos-net-profit-nearly-doubles/#comments Thu, 18 Aug 2011 12:00:03 +0000 Owen Fletcher and Joanne Chiu http://allthingsd.com/?p=111487 Lenovo Group Ltd.’s fiscal first-quarter net profit nearly doubled because of strong growth in personal-computer shipments, and the Chinese computer maker said it expects continued growth in commercial PC demand and in its core home market.

The results come as PC makers benefit from a wave of companies upgrading their computer hardware. Lenovo has also benefited from business in China and other emerging markets, where demand is outperforming a weak consumer segment in the U.S. and other developed markets.

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]]> http://allthingsd.com/20110818/lenovos-net-profit-nearly-doubles/feed/ 0 http://allthingsd.com/20110811/nvidias-profit-share-price-rise/ http://allthingsd.com/20110811/nvidias-profit-share-price-rise/#comments Thu, 11 Aug 2011 22:25:26 +0000 Don Clark http://allthingsd.com/?p=109088 Nvidia Corp. reported solid quarterly results and upbeat guidance, a sign that the company is taking market share in chips for laptops and enjoying strong demand for game consoles and other products.

The company’s shares surged in after-hours trading Thursday.

Nvidia swung to a profit in the second quarter and predicted revenue in the current quarter would grow 4% to 6%, while analysts had called for growth of 4%.

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