In a three-story building in Palo Alto, Calif. — formerly occupied by Danger, the developer behind the T-Mobile Sidekick — Groupon has been trying to build out a Silicon Valley technology center, one acquisition at a time.

The pursuit was kicked off two years ago with the purchase of mobile app development shop Mob.ly. Mihir Shah, the company’s CEO, started recruiting for the social buying company, and then became the Groupon’s VP of mobile.

Since then, there has been a hodgepodge of acquisitions, including Campfire, which builds chat, calendar and media-sharing tools, as well as Zappedy, which makes a platform for merchants to redeem Internet-based offers more easily.

Last week, it continued with Adku, a low-profile San Francisco start-up that helps e-commerce retailers fine-tune their recommendation engines using external factors, such as whether it is hot or cold outside.

None of the teams have been extremely big or expensive, but Groupon insists that they already are having a major impact on the company.

That may be hard to believe in a company of more than 10,000 employees, most of which are salespeople who are not working on technology.

But Adku’s co-founder Carlos Whitt, who is joining the company along with five others from his team, said the entrepreneurial vibe in the building is “ridiculously exciting.”

“The opportunity, the innovation and entrepreneurs are all there,” he said. “It’s a good intersection.”

Still, Groupon has not been able to attract every entrepreneur it pursues. It had been actively trying to buy other social start-ups, such as Gowalla. That particular deal went to Facebook. Another would-be Groupon acquisition target, Clever Sense, was won by Google.

No matter, according to Mob.ly’s Shah, who said Groupon is actively evolving beyond a daily deals service into a company that builds a set of key marketing tools for local merchants that increases sales, cuts costs and boosts productivity.

Some of the early tools include online calendars to make it easy for spas or gyms to book appointments online, and rewards programs that allow merchants to identify loyal customers who return and spend a lot of money.

Groupon also recently revamped its merchant center, where its customers can manage their daily deals and other programs in an online dashboard.

Shah said the idea is to create a marketing suite that makes small businesses more efficient and productive.

“We never want to stand still and be a big company,” he said.

But the big question is whether those tools will be sticky enough to keep merchants coming back to offer new deals, which is where Groupon gets all of its revenue from. That’s because most of the new tools are expected to be given away for free and not generate any additional income — at least for now.

It will also have to be enough to keep away other close competitors, such as LivingSocial, Google and Amazon.

The ability to spur innovation and keep ahead of rivals will be on the minds of analysts when Groupon reports its first financial results as a publicly held company this afternoon.

Wall Street is expecting the company to report three cents per share profit on revenue of $475 million in its fourth quarter earnings, according to Thomson Reuters.

That’s up from $430 million in revenues in the third quarter and will be Groupon’s first profitable quarter in nearly two years

In particular, analysts will be listening for updates on some of the company’s core programs, such as Groupon Now, which is its mobile product that allows consumers to purchase deals minutes or hours before redeeming them based on their location. Other metrics may be shared regarding loyalty and retention programs.

This is also Groupon CEO Andrew Mason’s first big chance to speak to the investment community since the end of the company’s quiet period (which he wasn’t really good at keeping, anyway).

Groupon’s stock increased nearly three percent yesterday to close at $24.19, which is just above its IPO price of $20 a share.

Because of that, Zynga’s stock is soaring today, trading up 16.5 percent, or $1.75 a share, at $12.35, to easily beat its 52-week high of $11.50.

Up until today, Zynga’s stock had struggled to stay at its IPO price of $10 a share.

Baird Equity Research analyst Colin Sebastian tried to do some backward math based on Facebook’s disclosure yesterday that 12 percent of its revenue was coming from the social games company.

Based on that alone, we know that Zynga accounted for roughly $450 million of Facebook’s $3.7 billion revenue in 2011.

But Sebastian took it a step further and estimated that, based on Facebook’s 20 percent jump in payment revenue during the fourth quarter, Zynga’s net bookings likely totaled $315 million in Q4, versus the $300 million he was previously forecasting.

He maintained the company’s “outperform” rating on the stock, and a $12 price target.

Here’s how he did the math:

We estimate that 12% of Facebook revenues came from Zynga in Q4, which implies roughly $135 million in Zynga-related revenues. We assume 75-80% of this amount is fees related to virtual good sales, with the remainder coming from advertising. Adjusting this amount for the 30% toll, we estimate implied net bookings to Zynga of nearly $250 million from virtual good transactions on Facebook. We estimate that Zynga also generated roughly $65 million in Facebook advertising bookings and transactions on other platforms (e.g., iOs, Android), which would suggest total net bookings of $315 million vs. our estimate of $300 million. Again, this a rough estimate and a directional indicator based on Facebook filings.

AOL said it earned 23 cents a share for the fourth quarter on revenue of $576.8 million, compared to 60 cents per share on $596 million in the same quarter a year ago.

Wall Street analysts had expected the New York-based Internet company to earn 16 to 17 cents on revenue of $572 million.

While the results are still down significantly from a year ago, AOL’s stock has been rising — gaining more than 25 percent in the quarter — since CEO Tim Armstrong has improved advertising revenue.

That was up 10 percent in the quarter, the third consecutive quarterly increase.

Subscription revenue from its access business continued to fall — down 18 percent — although that was the lowest rate of decline in five years.

AOL also noted that it had encouraging improvements in certain areas of its business:

Video: AOL grew its videos, video views, video ad impressions and revenue at double-digit rates.

Brand Advertising: Project Devil advertisers, impressions and revenue grew at double-digit rates.

Local: Patch grew traffic, advertisers and ad impressions more than 100% year over year.

Traffic: Consumer usage was flat to Q3 2011, as growth in the Huffington Post Media Group sites offset declines at MapQuest and AIM.

But read for yourself — here are all kinds of charts and graphs from AOL:

AOL_Q4_2011_Earnings Release

AOL_Q4_2011_Earnings_Presentation

AOL_Q4_2011_Trending_Schedules

The comments follow a less than stellar fourth-quarter performance in which the gigantic e-commerce provider spent nearly as much money as it brought in the door — even during its busiest quarter of the year.

Profits for the quarter fell 58 percent, while annual earnings were cut nearly in half.

Some analysts were hoping that the end of the year would be a low point for margins and that Amazon would start growing in 2012 as it benefited from the steep investments made the prior year.

But that’s not part of the plan.

“We’re incredibly optimistic about the opportunity that we have, and that’s why we have invested the way we have and why we’re continuing to invest in the business,” said Amazon’s CFO Tom Szkutak in a conference call with analysts.

For clarity, Piper Jaffray analyst Charles Munster asked again: “So, your outlook in terms of investment philosophy hasn’t changed versus last quarter going forward?”

“No, no,” Szkutak said. “We are continuing to look as we always do. We learn every week, month and quarter about customer adoption. We are looking at a lot of positive things across the business in terms of adoption, specifically Kindle growth from a device standpoint and content that’s following that.”

Other categories seeing growth, he said, include clothing, consumables, consumer electronics and Amazon Web Services.

“There’s a lot of interesting opportunities that we continue to invest in. So we are pleased with the performance in Q4 and what it means going forward for us.”

Over the past year, Amazon has invested heavily in infrastructure, including 17 fulfillment centers around the globe. At the end of the year, it had 56,200 employees, up 67 percent year over year, with most of the hiring coming in operations and customer service.

It has also invested heavily in the digital content business, including the Kindle.

It’s widely assumed that Amazon is breaking even or taking a slight loss on the sale of each Kindle Fire. It’s also securing expensive partnerships with content companies across music, video and books, and giving some of that content away as part of the $80 Prime membership, which also includes free two-day shipping.

All of those are bets that Amazon is hoping will reap profits over the long term, as customers continue to consume after they purchase an e-reader or tablet or sign up for Prime.

So far, it’s too early to see how the investment is faring, especially when it comes to new categories.

“It’s very, very early,” Szkutak said, “but so far, we like what we see, so that’s why we are continuing down the path of adding more content and making Prime better. … Because we are investing a lot, we are making sure we understand it very well.”

A lot of details, like Kindle sales numbers, are still being kept under wraps, but he promised Amazon will someday share more about how it is doing.

Unfortunately, the market isn’t as patient. In after-hours trading, the stock was down almost 10 percent at one point. During the session, it ended up down, 8.7 percent, or nearly $17 , to close at $177.50 a share.

Yahoo will report its fourth quarter earnings tomorrow, after the markets close, which most expect to be lackluster compared to a year ago.

To call this report a surprise would be, well, wrong.

In fact, it will be the 13th quarter in which the Silicon Valley Internet giant has done worse that the previous year. (This has happened as Internet advertising has boomed for sites like Google and Facebook, as a point of reference.)

Welcome aboard, new CEO Scott Thompson! Now, what are you going to do about it?

Probably cut costs first, including staff, and try to quickly figure out an all-new, this-time-it’ll-take strategery about what to do to turnaround the much beleaguered Yahoo.

But, first, the depressing quarter to deliver again.

The estimates for that weak performance have a range, but the consensus of analysts is expecting revenue to be $1.19 billion on profits of 23 to 24 cents. If Yahoo has managed to rein in costs more than expected, some analysts are hoping for a slightly better report.

Still, all the indications are for more negative signs in user engagement, search share, display advertising stats and more.

Thus, we await the light at the end of the tunnel.

As Citigroup’s Mark Mahaney noted in his cheat-sheet analysis:

“Valuation remains intriguing, but we’re still waiting for convincing Top-Line Turnaround Story Proof. With new CEO Scott Thompson, we believe YHOO will be another wait-and-see turn-around story.”

Of course, much of the action is taking place elsewhere, with the company ferreting away at the deal to sell off a big stake in Yahoo’s Asian assets and also subtracting and adding new board members.

But tomorrow, it’s once more unto the Wall Street breach, dear friends, or close the wall up with our purple dread.

Until the results are in, here’s a recent video I did for WSJ.com’s online Digits show on the possible layoffs at Yahoo:

According to sources close to the situation, Yahoo has instituted a hiring freeze across the company and is considering a reduction in force in support units of the company.

While the details of any layoffs — which are expected to be small and selective for now — are still being worked out, sources said that the stricture not to fill hundreds of open positions is the first step toward significant cost-cutting initiatives across the Silicon Valley Internet giant, in the wake of what it expects to be another weak quarterly report next week and a looming proxy fight.

Yahoo reports its fourth quarter earnings Tuesday. While the company has managed to improve the results in the last part of the quarter, sources said they will still show continued weakness in its key businesses and consumer usage.

That’s as competitors such as Google and Facebook have been showing significant growth, especially in the display advertising market.

Thus, new Yahoo CEO Scott Thompson appears to be zeroing in on costs and managing for margins, said multiple sources, much as his predecessor Carol Bartz did at the start of her tenure.

But many think Yahoo needs even more drastic changes, including massive cuts in staff and also product arenas, to give the company new life.

That includes shifts in leadership at the top levels too. In a major move this week, co-founder Jerry Yang stepped down from the company’s board and all roles there. More directors are expected to leave soon, too.

That will likely come after negotiations to sell part of its lucrative stakes in both the Alibaba Group and Yahoo Japan are successfully completed.

While not a certainty, Yahoo’s board hopes that will happen sometime before activist shareholder Daniel Loeb initiates a proxy battle against the company in the coming month.

Sound complex?

It is, and also troubling to Yahoo’s long beleaguered rank and file, who have been worried about more layoffs.

The Yahoo troops have been under intense pressure and have suffered from ongoing attrition. Just yesterday, for example, Yahoo lost one of its top advertising execs, Seth Dallaire, to Amazon.

The company can ill afford such departures of key talent, even as it seeks to pare employee numbers in other parts of its business.

At the end of its last quarter, Yahoo reported that it had 13,700 staffers, down from 14,100 in the previous year.

Yahoo, of course, declined comment.

If you thought things were going to quiet down with Yahoo now that it has installed new CEO Scott Thompson in place, think again!

That’s because of a very unusual — well, to be fair, unusual for most companies, but not for perpetually storm-tossed Yahoo — confluence of important events about to take place all at once over the next six weeks.

And, like a very dicey game of corporate Jenga, each has the ability to upend and impact the other significantly, either for the good or, well, for the bad.

Here are the four horsemen of the possible Yahapocalypse, all riding into town very soon:

Q4 Results: Yahoo will report its fourth quarter earnings on January 24th, after the markets close. While sources said the company has managed to turn around what was looking like a first-class disaster, it’s still not going to be a pretty picture when it comes to advertising growth, consumer engagement and other key metrics.

Simply put, Yahoo needs to show investors a fast-growing business. Instead, sources said the Q4 results will likely come in at the bottom of the expected range, which should be unimpressive, even though this has been business as usual at Yahoo for some time.

If Google and others have strong reports, of course, it will make the situation worse.

Along with goosing its ad business again, Yahoo needs to spur innovation and intro some cool new products in new arenas to make Silicon Valley and others perk up.

Proxy Fight?: Weak results will give a nice lift to potential efforts by activist investor Daniel Loeb of Third Point — a major Yahoo shareholder — to wage a proxy fight for control of the company. He’s already here in Silicon Valley this week searching for possible board members for an alternate slate of directors.

As I wrote earlier today, the earliest nominations for directors can be submitted is February 24. Loeb then has a month after that to submit a competing roster.

Worse for Yahoo, many of Yahoo’s major investors are mulling backing Loeb if he initiates a battle for control of the company.

There’s no doubt that Loeb is and means to be a thorn in Yahoo’s side — he already made a lot of noise about its consideration of partial investments from private equity firms, due to low share prices — until major changes take place at the company.

And by major, Loeb’s intent seems to be along these baseball lines: Throw the bums out!

Board in Flux: Speaking of the board, it’s not the pretty picture of solidarity as you might think.

Actually, no one in their right mind thinks that. This board is about as dysfunctional as they come. (It’s like that group on “American Horror Story,” minus the bald dwarf in the basement.)

Right now, several sources report, various factions are jockeying over which board members go and which stay. The Wall Street Journal reported last week on a formal search for new board members to replace outgoing ones, but it’s much more complex than just that.

While some departures seem most obvious — longtime board members Vyomesh Joshi, Arthur Kern and Gary Wilson — the really interesting part will be the possible exit of Chairman Roy Bostock.

While it now is more of a when rather than an if, many sources report, how it goes down is the key part of the move. And who will be the chairman then will be the big conundrum — either an internal candidate, such as David Kenny, or a fresh-eyed outsider.

Another question mark: Whether co-founder Jerry Yang could also move along off the board with Bostock. While Internet company founders usually stick on boards, it’s not a given, especially with all the turmoil at Yahoo, some of which is related to Yang.

For now, make no mistake, Bostock is still in charge of the board and Yang is the only real power behind that power, despite the recent influence of director Brad Smith.

But, with all the pressure by shareholders, some sources suggest that it might finally be time for some significant change at the board level, starting with the pair most associated with all its troubles.

Or, um, not.

If there is going to be any action at all, expect it before February 24th — when Loeb can start making real trouble.

Asian Solution: A lot of the above hinges on whether Bostock and Yang can deliver the promise of a deal with its long disgruntled Asian partners, Alibaba Group and SoftBank.

The trio is now engaged on negotiations about a tax-free deal, in which Yahoo would sell back some of its stakes in its Asian properties and get money and other operating assets in return.

While it’s good news that the talks are finally proceeding with some level of normal functionality, it’s still a complex situation and one with a lot of outstanding questions.

Most important: Which operating assets will be bought in the deal to hand over to Yahoo? And also, what will the valuations be?

Sources close to the situation said that the talks remain slow-going and frustrating — “The stop-and-go of all time,” joked one person involved. But they are moving forward, which is no small thing when it comes to these three.

That’s critical for Yahoo, which can ill afford to disappoint shareholders if no lucrative, cash-rich deal happens in Asia. And, it needs to happen before Loeb can act on a proxy fight too, since a successful end to its Asian issues will negate his momentum dramatically.

Oh Yeah, Running the Core Business Stuff: As usual, a full and fraught month for Yahoo and its directors, who have other things to do, I assume.

But not me and not new CEO Thompson. By the way, the former eBay exec will presumably be very busy doing some significant rejiggering of the core Yahoo business in the meantime.

Could that mean a new product direction for Yahoo, for example, around data? Could it mean a passel of new execs? Could it mean layoffs?

Or, could it mean Thompson will finally solve the ultimate sword-in-the-stone question: What is Yahoo?

And that, in the end, will be the real victory.

Microsoft had a solid fourth quarter, which is why the conference call with Wall Street analysts should be relatively short and sweet.

Or sweet, at least.

Microsoft reported beat expectations on profits that rose 30 percent, as well as on revenue. Of particular note were its Office, Entertainment and Devices and Servers and Tools units. Even the revenue at its perpetually money-sucking Online Services division was up 17 percent.

(You can see Microsoft’s charts and other data here, if you really want more.)

Here’s a liveblog of the call:

2:31 pm PT: Well, Microsoft investor relations dude-in-chief Bill Koefoed sounds unusually jaunty in his greeting.

And why not? The results are good for Microsoft, even a little giddy, with a lot of impressive numbers and solid launches of several products, from Xbox Kinect to Office 365 to Bing, the very pricey but pretty search service.

Next up is CFO Peter Klein, who also sounds like this particular call is a relief.

He talks about the results a bit, most of which are up.

“In summary, we are pleased,” says Klein about the quarter and the year. He also notes that he is “excited.”

It’s party time in Redmond!

2:38 pm: Peppy Bill is back, going through the numbers. Solid!

Klein then moves onto the future and he remains “excited.”

Now, it is onto Q&A from the analysts.

This is where I zone out a little and start to wonder if a doughnut is a wise choice for an afternoon tasty treat.

That would make me “excited.”

Lots of congrats, which only makes me hungrier. One analyst asks why it was so much stronger than expected.

Klein: The economy has improved, businesses are expanding, peeps love them some cloud.

There is a question about how the troubled Yahoo search partnership is going. Klein promises some improvement by the end of the year.

Still, bummer!

But it is quickly back to happy, with a question about the strength of Xbox and its subscribers.

“It’s fantastic,” says Klein.

Like I said, sweeeeeeet.

Microsoft has a lot to crow about in its fourth-quarter earnings today, including a 30 percent jump in profits and strong overall revenue growth in its many divisions.

It is sure a lot better than what Yahoo and Nokia turned in this week in their quarterly results.

Here’s all the charts and other data to peruse before I start liveblogging the Microsoft conference call with Wall Street analysts at 2:30 pm PT:

SlidesFY11Q4

PressReleaseFY11Q4

FinancialStatementFY11Q4

The bigger picture is that Armstrong’s turnaround is still in progress. Ad revenue was down 29 percent in the last quarter, though that number is worse than it looks. A big chunk of the decline comes from moves AOL has intentionally made that will cut revenue in the short run in return for more profitable sales down the road.

A more representative data set for Armstrong are his display ad sales, which are down 14 percent overall and 8 percent in the U.S..

The bad news is that the rest of the Web ad industry is well into rebound mode; the good news is that AOL has trained Wall Street to expect numbers like these. If you’re waiting to see positive sales numbers, Armstrong said during AOL’s earnings call this morning, wait until the second half of this year.

While many division leaders might just release a dull memo, the former Google exec went right to the videotape, and I mean really went for it.

The adorkable result is an all-hands Q4 music video, which BoomTown acquired, in which a suit-wearing Eun moves into Lady Gaga territory and shakes his very buttoned-up booty.

While I like to see this kind of corporate playfulness and fun-poking, let’s hope AOL’s fourth-quarter earnings–being announced in a little more than a week and expected to remain weak–show as many jazz hands as Eun’s effort below does.

Enjoy:

]]> http://allthingsd.com/20110124/viral-video-aol-media-head-david-eun-gets-jiggy-in-internal-all-hands-video/feed/ 0 http://allthingsd.com/20110119/ebay-beats-street-on-revenue-profit/ http://allthingsd.com/20110119/ebay-beats-street-on-revenue-profit/#comments Wed, 19 Jan 2011 22:30:51 +0000 Voices http://voices.allthingsd.com/?p=35353 Helped again by its thriving PayPal unit, eBay today reported Q4 revenue of $2.5 billion, a five percent increase year-over-year, and non-GAAP income of $683.8 million, or 52 cents per diluted share. Analysts had been expecting 47 cents EPS on $2.49 billion in revenue, on average. The PayPal unit saw a 26 percent jump in total payment volume, to $26.87 billion, adding more than $5 billion in additional payment volume.

]]> http://allthingsd.com/20110119/ebay-beats-street-on-revenue-profit/feed/ 0 http://allthingsd.com/20101212/what-privacy-problem-web-ad-targeter-media6degrees-raises-17-million/ http://allthingsd.com/20101212/what-privacy-problem-web-ad-targeter-media6degrees-raises-17-million/#comments Mon, 13 Dec 2010 05:00:45 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=26951 One way to gauge what’s really going on with privacy and Web advertising: Follow the money. If investors really think privacy problems are going to weigh the industry down, it’s going to be a lot harder to get checks out of them.

So use that context to think about this news: Media6Degrees, a behavioral advertising technology start-up, has raised a $17 million funding round led by Menlo Ventures.

Earlier investors U.S. Venture Partners and Venrock, which had helped the 2-year-old company raise another $12 million before the new B round, are re-upping.

The money is targeted for general expansion, not M&A, says CEO Tom Phillips, who joined the company in 2009 after a three-year stint at Google.

Phillips says his company will end up booking $20 million in revenue in 2010. And he says that by Q4 it had ramped up to a $30 million annual run rate–that is, it will do about $7.5 million in the last three months of the year.

Media6 describes what it does as “Social Targeting,” which sounds as if it’s trying to find links between your various social networks. But the company’s work has nothing to do with your Facebook or Twitter profiles. While it doesn’t like the term “behavioral targeting,” that’s essentially what it’s doing.

In a nutshell, Media6 Web marketers track the surfing behavior of their existing customers, then try to find similar behavior patterns–a matching “social signature”–for other surfers, so they can show them ads.

Depending on your perspective, that’s either creepy or a common-sense strategy to help advertisers spend their money more efficiently. If it does weird you out, you can go ahead and opt out. But Phillips and his company would like you to know that the company never tracks individuals–only their anonymized browsers.

Still don’t want any part of this stuff? In theory, companies like Media6 will be in trouble if lots of surfers really do start opting out of data collection. They can do that by telling individual Web sites and ad networks not to track them–or, more ominously, by using browsers with “do not track” filters built into them.

But we’re a very long way from that kind of change. And the start-up’s investors seem to be betting that it’s never going to come.

]]> http://allthingsd.com/20101212/what-privacy-problem-web-ad-targeter-media6degrees-raises-17-million/feed/ 2 http://allthingsd.com/20101202/50-percent-of-smartphones-sold-in-china-last-quarter-run-android/ http://allthingsd.com/20101202/50-percent-of-smartphones-sold-in-china-last-quarter-run-android/#comments Thu, 02 Dec 2010 22:41:58 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=53550 The smartphone market in China is growing at an extraordinary rate, largely thanks to Google’s Android OS. Chinese consumers purchased 8 to 10 million smartphones last quarter, up from an estimated 2 to 3 million in the same period last year. And according to Morgan Keegan analyst Tavis McCourt, the bulk of them ran Android.

Interesting, when you consider that prior to 2010, the Chinese smartphone market was ruled largely by Nokia’s Symbian OS and Windows Mobile.

How quickly things change. According to McCourt, Android now represents nearly 50 percent of smartphone volume in the country, up from zero last year. And Apple’s iOS, while a niche player with less than 500,000 iPhones sold last quarter, is ramping up quickly, thanks to the successful launch of the iPhone 4 in the country last month.

“Apple (must be) viewed as somewhat disappointing through Q3:10, but we suspect iPhone 4 and a WiFi-capable iPhone 3GS will substantially improve iPhone results in Q4:10 and beyond in China,” McCourt said in a note to clients. “The bigger picture is that the Chinese market for smartphones is exploding, but is at a much earlier stage of development than North America or Western Europe.”

Which means it’s a major geographic growth opportunity for the smartphone industry. Certainly, Apple views it that way. As COO Tim Cook said during an earnings call earlier this year, “If you look at greater China, which we define as mainland China, Hong Kong and Taiwan, the iPhone units were up year-over-year over nine times. We added another 800 points of distribution in China. The revenue, we have never released this number before but I will do this in this particular case, through the first half of the fiscal year that we just completed, for the six month period, our revenue from greater China was almost $1.3 billion and this is up over 200 percent year-over-year. So we are well pleased with how the company is positioned to take advantage of the growth in greater China.”

]]> http://allthingsd.com/20101202/50-percent-of-smartphones-sold-in-china-last-quarter-run-android/feed/ 0 http://allthingsd.com/20101119/jupiter-networks-to-acquire-trapeze-networks/ http://allthingsd.com/20101119/jupiter-networks-to-acquire-trapeze-networks/#comments Fri, 19 Nov 2010 20:15:04 +0000 Beth Callaghan http://voices.allthingsd.com/?p=32888 Juniper Networks announced on Tuesday that it will acquire Trapeze Networks in a bid toward strengthening its position in the enterprise WLAN market. The $152 million cash deal should close in the fourth quarter of 2010.

]]> http://allthingsd.com/20101119/jupiter-networks-to-acquire-trapeze-networks/feed/ 0 http://allthingsd.com/20101108/priceline-q3-greeted-with-unreserved-enthusiasm/ http://allthingsd.com/20101108/priceline-q3-greeted-with-unreserved-enthusiasm/#comments Mon, 08 Nov 2010 23:16:13 +0000 Voices http://voices.allthingsd.com/?p=32178 Fresh on the heels of positive earnings reports from rivals Orbitz and Expedia, online travel agency Priceline posted Q3 results today that, excluding one-time items, handily topped analysts’ forecasts. Revenue jumped 37 percent to $1 billion, and gross bookings climbed 47 percent, largely on the strength of its hotel business. The company’s Q4 outlook was also better than expected, and the stock–which has been on a nice run since July–jumped almost 6 percent in after-hours trading.

]]> http://allthingsd.com/20101108/priceline-q3-greeted-with-unreserved-enthusiasm/feed/ 0 http://allthingsd.com/20101020/netflix-earnings-revenue-in-line-and-an-eps-beat/ http://allthingsd.com/20101020/netflix-earnings-revenue-in-line-and-an-eps-beat/#comments Wed, 20 Oct 2010 20:28:16 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=24918 First look at Netflix earnings: Revenue of $553 million and GAAP earnings of $0.70. Non-GAAP earnings were $.078. Wall Street was looking for $551 million and $0.71 from Reed Hastings’s company.

Netflix ended the quarter with 16.9 million subscribers, which beats the Street’s 16.6 million consensus, and should please investors. And it has also pushed up its Q4 expectations–it now expects to have between 19 million and 19.7 million subscribers at the end of the year, up from earlier projections of 17.7 million to 18.5 million.

Other guidance: Revenue of $586 million to $598 million, versus $580 million to $596 million. The Street was looking for $592 million.

GAAP net income of $32 million to $40 million, unchanged.
GAAP EPS of $0.59 to $0.74 per diluted share, unchanged.

Two important points deep into the accompanying “management commentary“:

• The company, which moved into Canada this year, is contemplating moving “beyond North America” in the second half of 2011. If it does, it will spend about $50 million on the effort.
• A bit more info on the possibility of a streaming-only option in the U.S., which the company had previously talked about. It is testing one now, and says, “If our results are as strong as we think they will be, then we will look to start this offering later in this Q4.“

Earnings “cheat sheet” via Citi’s Mark Mahaney:

Netflix earnings are getting progressively more interesting, as the company pushes further and further into digital video, which brings it into competition (and/or cooperation) with…everybody: Apple, Google, Amazon, etc. I’ll be back at 6 pm ET for the conference call.

]]> http://allthingsd.com/20101020/netflix-earnings-revenue-in-line-and-an-eps-beat/feed/ 1 http://allthingsd.com/20100224/the-washington-posts-sales-slump-gets-less-bad-too/ http://allthingsd.com/20100224/the-washington-posts-sales-slump-gets-less-bad-too/#comments Wed, 24 Feb 2010 14:37:57 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=16674 This makes sense: Just like the New York Times (NYT), the Washington Post Company (WPO) says things have gotten less bad at its flagship newspaper.

The Post’s print ads, in fact, are recovering more quickly than the Times. But its online turnabout has been more modest.

The numbers you care about: Newspaper revenue declined four percent in Q4, and print ad revenue dropped nine percent. Much better than the drops of 20 percent and 28 percent, respectively, that the Post recorded in Q3.

Online revenue, meanwhile, edged up by one percent, and online display ads bumped up 13 percent. A big turnaround from the 18 percent and 14 percent drops last fall.

As always: Remember what the economy was like a year ago when you think about these year-over-year comparisons.

]]> http://allthingsd.com/20100224/the-washington-posts-sales-slump-gets-less-bad-too/feed/ 0 http://allthingsd.com/20100218/cnet-boss-joe-gillespie-has-left-the-building/ http://allthingsd.com/20100218/cnet-boss-joe-gillespie-has-left-the-building/#comments Thu, 18 Feb 2010 20:01:24 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=16442 Joe Gillespie, the CBS executive who oversaw the company’s CNET and CBS News.com sites, has left the company amid a reorg.

Gillespie’s old unit, the CBS Interactive News Group, has been folded into a group with the company’s “business brands,” including BNET and MoneyWatch. Greg Mason, who was running the business group, now oversees the whole thing.

This one is literally old news, since it was announced internally all the way back on Jan. 26. But as you may recall, tech and business outlets were under a government mandate that week not to write about anything that wasn’t related to what we then called the Apple (AAPL) tablet. (Remember those days?)

The move would be bigger news if it augured a bigger shake-up at CBS’s digital side, especially since CBS Interactive head Quincy Smith has finally left the company to open up his own M&A shop. But CBS spokeswoman Sarah Cain says that’s not the case.

In a few hours, we’ll get a better sense of how CNET has performed for CBS (CBS) since the company acquired it in a $1.8 billion deal in 2008. CBS is set to announce Q4 earnings shortly, and estimates range widely depending on which analyst you listen to. Anthony DiClemente of Barclays Capital, for instance, thinks Interactive revenue will increase 10 percent, while the unit’s earnings will decrease by 8.8 percent; the consensus calls for an increase of 31 percent and a 36.2 percent drop respectively.

Meanwhile, for completists: Here’s Interactive boss Neil Ashe’s announcement explaining Gillespie’s move and the subsequent changes.

From: Neil Ashe
To: CBSi-ALL
Sent: Tuesday, January 26, 2010 1:15 PM
Subject: Tech, News & Business Announcement

Team:

We begin 2010 in an exciting position. Our brands are growing, and we continue to attract huge audiences and many of the world’s largest advertisers. As we look to the future, our focus remains on creating great content and experiences for our users, and great marketing solutions for our customers.

To that end, we are making changes today that streamline our division by bringing two business units into one. Tech & News and Business will now operate as a single business unit led by Greg Mason. Dave Morris will directly manage the sales organization for this new business unit while remaining in his role as Chief Client Officer for CBS Interactive. Joe Gillespie will work closely with me, Greg and Dave on making this transition a success. He’ll be with us until the end of March, at which time he has decided to leave the company to pursue new opportunities and his other interests, including a new appointment to the board of Jinni.com.

The creation of this new business unit will let us capitalize on the combined power of some of our biggest and most influential brands including CNET, CBSNews.com, CBS MoneyWatch, BNET, ZDNet and TechRepublic. It will also allow us to create better alignment between properties like CBS MoneyWatch and CBSNews.com where there are natural synergies between the content and audiences. This is good for CBS Interactive, as well as CBS as a whole.

For our marketing partners, this change helps simplify how clients work with us.  Individually, each business unit has seen great success cross-pollinating content and selling programs. Combined, we have the ability to do even more of these types of programs, but even faster and on a much larger scale. Dave will work closely with the sales team to create programs that take advantage of the combined power of these leading brands.  And of course, Dave will continue to be our primary representative in the marketplace for CBS Interactive as a whole.

Those of you that have worked with Greg know that he has an incredible track record of building and operating world-class brands, and repeatedly transforming businesses into success stories. He joined CNET Networks in 2000 and was instrumental in rebuilding our business after the bubble burst. He helped lead the charge to launch the Messaging Plus ad units in 2001, which put CNET Networks on the map in terms of industry leadership and innovation. From 2004-2007 Greg led CNET Content Solutions, which he transformed into one of our fastest growing and most consistently profitable businesses. Since 2007, Greg has been at the helm of our business portfolio, during which time he has launched two important new brands–BNET and CBS MoneyWatch, as well as led the continued success of our storied IT brands–ZDNet and TechRepublic.

Greg’s unique ability to manage large businesses, as well as infuse them with his entrepreneurial spirit will serve this new team well as we build upon our success and look to the future.

During his 6 years at CNET Networks and CBS Interactive, Joe has been a driving force in the continued success of CNET.  Under his leadership, CNET is recognized today as the #1 tech media brand in the world, and CBSNews.com became a site worthy of the legacy of CBS News. In 2008, Joe architected the complete relaunch of CNET, which has resulted in record traffic growth ever since. The site recently eclipsed 100 million users for 3 consecutive months (an all-time record). Early on, Joe initiated the use of video across the site, taking CNET beyond just product reviews and making it the definitive resource for people who love technology and want to get the most out of it. This vision also included broadening the coverage model with new content additions like Car Tech and Crave.

At CBSNews.com, Joe led a major site redesign, which has reinvigorated the site, driving growth and attracting new advertisers with a renewed focus on photos and original content. Since its debut in mid-June, unique users are up 22%, page views are up 12% and video streams are up 28%. Joe and his team were also instrumental in helping Katie Couric launch her online presence, executing her Campaign and Inauguration webcasts, and most recently the @KatieCouric webcast.

In addition to being a good friend, Joe has been an invaluable member of my management team and I want to thank him for all his contributions over the years. Please join me in wishing him all the best in his new endeavors.

I’m excited about the possibilities this new business unit creates for us. We’ve got great leaders in Greg and Dave, and world class brands with exciting opportunities in front of them. I know that this new, combined team will achieve great success and I look forward to a prosperous 2010 with the entire CBS Interactive team.

Best, NA

]]> http://allthingsd.com/20100218/cnet-boss-joe-gillespie-has-left-the-building/feed/ 0 http://allthingsd.com/20100210/as-predicted-a-not-terrible-quarter-for-the-new-york-times-print-ads-shrink-less-and-the-web-actually-grows/ http://allthingsd.com/20100210/as-predicted-a-not-terrible-quarter-for-the-new-york-times-print-ads-shrink-less-and-the-web-actually-grows/#comments Wed, 10 Feb 2010 13:55:07 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=16121 As predicted, a nice Q4 for the New York Times, at least by newspaper standards: Revenue shrank, but not as badly as in the past, and operating costs continued to come down.

The paper reported earnings of 44 cents per share (after factoring out one-time items) on revenue of $681 million; Wall Street was expecting earnings of 38 cents on revenue of $653.7 million.

Both official and unofficial word from inside the Times indicated that the paper had a not-terrible Q4. In December, the company had already told Wall Street that it expected to see print ads decline about 25 percent and Web advertising bounce back by 10 percent.

Today’s numbers were a little better than that: Print ads were down 20 percent, and digital ads were up 11 percent. Overall ad revenue was down 15 percent, while Internet revenue was up 10.3 percent.

In Q3, the paper saw ad revenue drop 26.9 percent, while Internet revenue dropped by 7.2 percent. Bear in mind that year-ago numbers were miserable, so improving on them is a tempered success.

Expect more of the same going forward, the paper said: “Looking ahead, visibility remains limited for advertising. In the first quarter of 2010, we expect the rate of decline for print advertising to continue to improve modestly from the fourth quarter of 2009, while digital advertising is expected to perform in line with the fourth-quarter level.”

Given that the New York Times (NYT) was already relatively optimistic about the quarter before it announced plans to erect a pay wall, it’s safe to assume that today’s results will have zero impact on that schedule.

But given that the paper hasn’t said a lot about those plans publicly, it will be worth listening to today’s earnings call to see if it offers more clarity. Plus, of course, the obligatory discussion about the Times’s plans for Apple’s (AAPL) iPad. I’ll be covering the call live at 11 am Eastern.

]]> http://allthingsd.com/20100210/as-predicted-a-not-terrible-quarter-for-the-new-york-times-print-ads-shrink-less-and-the-web-actually-grows/feed/ 0 http://allthingsd.com/20100205/smartphones-evidently-quite-popular/ http://allthingsd.com/20100205/smartphones-evidently-quite-popular/#comments Fri, 05 Feb 2010 15:30:52 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=34336 The fourth quarter was a record one for smartphone sales. Research firm IDC reports that the industry shipped 54.5 million of the devices during the period. That’s a 39 percent increase year-over-year and one that benefited most top smartphone peddlers, particularly Apple.

The company shipped 8.7 million iPhones in Q4, up from 4.4 million a year ago, for a whopping 97.7 percent in year-over-year growth. With a 14.4 percent share of the worldwide smartphone market, Apple (AAPL) is now the No. 3 maker in the world, behind Nokia (NOK) and Research in Motion (RIMM), which hold 38.9 percent and 19.8 percent of the market, respectively (see table below; click to enlarge).

But it’s becoming increasingly difficult for Nokia and RIM to maintain their leads. Though it shipped 10.7 million BlackBerrys in the fourth quarter–a nice increase from about 7.6 million–RIM’s market share for the period remained nearly flat at 19.6 percent. Meanwhile, market leader Nokia saw its share drop slightly to 38.2 percent from 40 percent in 2008, even though it shipped 20.8 million phones during the quarter, one third more than in the prior year.

So, 97.7 percent growth for smartphone upstart Apple and 37.7 percent growth for Nokia, the undisputed smartphone leader worldwide. Quite a disparity.

]]> http://allthingsd.com/20100205/smartphones-evidently-quite-popular/feed/ 0 http://allthingsd.com/20100204/another-googler-goes-to-aol-youtube-boss-dave-eun-replaces-bill-wilson-as-content-boss/ http://allthingsd.com/20100204/another-googler-goes-to-aol-youtube-boss-dave-eun-replaces-bill-wilson-as-content-boss/#comments Thu, 04 Feb 2010 19:46:44 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=15959 Former Google sales boss Tim Armstrong has brought a slew of former colleagues with him to AOL, but this may be his highest-profile hire so far: Dave Eun, who has been in charge of content deals at Google and YouTube, will replace Bill Wilson, one of the last high-profile AOL guys from the pre-Armstrong era.

The deal to bring Eun on board was finalized last night, Armstrong told employees in an all-hands email (see below). It’s not a huge shock to see him leave–he’s done a lot of heavy lifting there already, and sources say that like many Google (GOOG) executives who have left recently, Eun felt he couldn’t move much higher in the company.

Eun used to have a role that paralleled Armstrong’s at Google: Make peace with traditional content companies. But instead of trying to sell them ads or negotiate search deals, Eun was supposed to hammer out deals to help get their content onto Google. Most recently, he was focused on getting TV networks and movie studios to put stuff on YouTube, which involved new ad-supported deals (see: Turner, ESPN, etc.) as well as the possibility of renting clips by the stream.

Wilson is a longtime AOL (AOL) guy who rose up the ranks and was pushing for the original content strategy that Armstrong embraced even before the last regime change. He seems to be leaving on better terms than other pre-Armstrong executives, as he’ll be staying with the company until May to manage the transition.

By leaving just as AOL has spun off on its own, Wilson is giving up a chance at some significant upside via low-priced stock options. But sources say Wilson doesn’t have another job lined up.

In an interview this afternoon, Armstrong says that Wilson approached him about leaving the company “several weeks ago”. When I asked him if Eun’s last role–developing partnerships with big media outlets–signaled a shift in AOL’s “roll your own–cheaply” strategy, he made a point of saying that’s not the case. Eun’s hire will simply “supercharge” AOL content plans, he said.

Nonetheless, Armstrong did allow that AOL has some significant content partnerships to announce in the coming months.

Here’s an interview I conducted with Eun late last year, focused on YouTube’s efforts to turn a profit and add new content:

And here’s Armstrong’s note to the troops:

As you know, content is at the core of our strategy and we have broad aspirations in this space. We’re focused on scaling our content platforms, production and partnerships to offer quality, original content that will engage consumers and bring them–and their friends–back to our properties time and again.

The fact that we have such a strong foundation in the content space is due to the determination and dedication of Bill Wilson. He saw the opportunity presented by audience fragmentation on the Web and positioned AOL’s content offerings in a number of key verticals. Early in the new year, Bill told me that although he remains committed to the vision and strategy of AOL, he’s ready for a break.

After nine years with the company and after the significant changes we made this year moving from licensing content to becoming a principle in content, he wants to take a step back. Bill built a strong management team and laid the groundwork for the content strategy that we’re now pursuing. While I’m disappointed by his decision, I respect his intent and have asked him to work with me, not only to find his replacement but also to transition with that person to ensure that, as a company, we don’t miss a beat on the execution of our content strategy.

Bill is a talented executive and great person, and I’ll be working with him closely and supporting his transition. Bill cares about AOL, he cares about the content and the products, and he has worked incredibly hard to keep AOL on the media map.

I’m pleased to announce that David Eun will be coming on board in March to head up our content business. Some of you may remember David from his tenure at Time Warner where he helped to oversee AOL as Vice President, Operations, for the Media & Communications Group reporting to Don Logan.

David, who joins us now from YouTube and Google, has had a long career in offline and online content and is the person responsible for managing Google and YouTube’s content partnerships. David brings an impressive breadth of media experience to AOL at an exciting juncture as AOL forges a new future as a high-scale producer and partner in the content space. He will be based in New York.

Bill will be staying on until May 1 to help ensure a smooth transition with David, who begins work March 1.

You may wonder why this topic wasn’t raised during yesterday’s Q4 employee call. My preference is always to share this type of news with you in person, but the facts are that there were elements of this announcement that were not finalized until last night. This drove us to announce this news this morning–to our employees first.

As we have discussed, AOL is now in a phase of transition from playing defense to playing offense. As I said on the employee earnings call yesterday, AOL’s back in the game and we’re playing to win. We have a lot of work to do, but we’re going to do it. Please join me in welcoming David back to AOL and in thanking Bill for his dedication and leadership at AOL – TA

And here’s the release:

AOL NAMES DAVID EUN PRESIDENT OF AOL MEDIA AND STUDIOS

Eun Will Oversee All AOL Content, SEED.com and Studio Operations

New York, NY, February 4, 2010 – AOL Inc. (NYSE: AOL) today announced that David Eun will join the company as President of AOL Media and Studios, effective March 1. As AOL’s chief content executive, Eun will be responsible for the company’s more than 80 content sites, its new SEED.com publishing platform, as well as the newly acquired StudioNow video platform and AOL’s NYC and LA studios.

Eun will report to AOL Chairman and CEO Tim Armstrong and will be based in New York. He succeeds Bill Wilson, President, AOL Media, who will transition out of the role after nine years with AOL.

Until 2006, Eun helped to oversee AOL as Vice President, Operations for the Media & Communications Group at Time Warner Inc. In that role, he helped provide operational oversight and develop new businesses, particularly in digital distribution and broadband content and services, for the company’s AOL, Time Warner Cable and Time, Inc. divisions. Eun joins AOL from Google, where as Vice President, Strategic Partnerships, he was responsible for managing global content partnerships with Google and YouTube.

“David brings an impressive breadth of media experience to AOL at an exciting juncture for the company as we focus on scaling our content platforms, production and partnerships to offer quality, original content that will engage consumers and bring them–and their friends–back to our properties time and again. I’m delighted to welcome him back to AOL as we continue to pursue our strategy and mission in digital content and journalism,” Armstrong said.

“Bill Wilson has been a driving force for content at AOL and under his leadership the quantity and quality of our premium branded and niche offerings have expanded significantly. On behalf of AOL, I want to thank Bill for the energy and dedication he has brought to the role. Bill has been an outstanding leader at AOL,” Armstrong added.

“AOL has a unique opportunity to bring together its core strengths in the key areas of content and journalism, distribution, and advertising to engage its users, partners and advertisers in a way very few companies can. These three elements will be fundamental to success as the media and technology industries evolve and converge,” Eun said. ”And after nearly 15 years of seeing this convergence approach, I couldn’t be more excited to be returning to AOL to help Tim and his team capture that great promise.”

AOL is one of the largest producers of original content on the Web, with more than 80 official AOL and custom-built sites including more than 20 which rank in the top five in their U.S. comScore Media Metrix category. Approximately 80 percent of AOL’s content is originally produced by a growing team of staff and freelance journalists, including nine Pulitzer Prize Winners. AOL also produces more than 50 original video productions a month at state-of-the-art studios in New York and Los Angeles as well as through a network of freelance video producers.

SEED.com, AOL’s premium content management system, assigns, buys and distributes work for all of AOL’s properties.  StudioNow, which AOL acquired in January, allows the company to integrate a fully functional video creation platform into SEED and leverage a national network of creative professionals to develop and produce quality video in a way that is rapid, efficient and scalable.

Before joining Time Warner, Eun was a partner at Arts Alliance, a venture capital firm focusing on digital media, information technology and business services. He started his career in media at NBC, where he led some of NBC’s first cross-media initiatives involving television programming, the Internet, and retail consumer products. He is a former management consultant with Bain & Co., and attended Harvard Law School and Harvard College, where he graduated magna cum laude in government.

]]> http://allthingsd.com/20100204/another-googler-goes-to-aol-youtube-boss-dave-eun-replaces-bill-wilson-as-content-boss/feed/ 0 http://allthingsd.com/20100203/time-inc-s-magazines-get-less-bad-with-some-help-from-people/ http://allthingsd.com/20100203/time-inc-s-magazines-get-less-bad-with-some-help-from-people/#comments Wed, 03 Feb 2010 18:41:24 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=15921 If you’re waiting for Apple’s (AAPL) iPad to rescue the magazine business, you may have to wait a very long time indeed. But the present-tense magazine industry–the ink-and-paper version everyone has left for dead–may be limping its way to a recovery.

It’s not close yet. But we are seeing signs that things are at least getting less bad. As Nat Ives notes, the slide in newsstand sales seems to have slowed in the second half of last year, and some titles are even reporting an uptick.

Meanwhile, industry heavyweight Time Inc. also had comparatively good news to report today-things are still down, but not as dire as they have been.

The numbers: The Time Warner (TWX) unit says Q4 subscription revenue was down six percent and ad sales were down 12 percent. Not stellar, but better than Q3, when they were down 13 percent and 22 percent, respectively.

The bottom line, in the meantime, helped by two rounds of major layoffs, stayed steady, with an operating margin of 14 percent.

It’s hard to tell how widespread the recovery is, because different titles have different stories to tell. Time Warner did note that its News unit–that includes Time, Fortune, etc.–lagged behind and that its Style group–overseen directly by CEO Ann Moore–did well.

“Well,” that is, by magazine standards: Revenue was flat in Q4, aided in large part by People magazine. (Now you can see why the Time Warner executive I talked to last year said it was hard to see the company dumping that title in particular.)

The company said that while ad dollars were down nine percent in the U.S., ad rates only shrank by “low single digits,” which is a bit encouraging. And Time Warner said numbers for the current quarter are improving over Q4.

Requisite caveat here: These numbers, and the ones you’re going to see for the next couple quarters, are being compared with really terrible numbers from previous quarters. So the fact that Time Inc. can’t show actual growth tells you that this is still an industry with really big problems. But maybe they’ll be more manageable than we thought–even without the help of a “magical and revolutionary device.”

Here’s the Q4 breakdown (click tables to enlarge):

And, for comparison’s sake, here are the Q3 numbers:

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