AllThingsD » second quarter

Zynga's Pincus: "None of Us Ever Expected to Face a Day Like Today"

Kara Swisher — Mon, 03 Jun 2013 19:18:57 +0000

Here’s the tough-to-write blog post that Zynga CEO Mark Pincus just put up and also sent to the San Francisco gaming giant’s staff. The company just announced layoffs of 18 percent of the company and also lowered its second-quarter guidance.

In it, Pincus, the founder of what was once a rocket ship of a startup in Silicon Valley, appropriately began on a somber note:

“Today is a hard day for Zynga and an emotional one for every employee of our company … None of us ever expected to face a day like today, especially when so much of our culture has been about growth.”

Indeed, the fall has been fast and hard for Zynga, as it struggles to cope with a massive consumer migration to mobile that happened faster than its management — or, to be fair, anyone in the Internet business — could cope with. Until now, its fast growth has been based on its Web business and flagship franchises such as FarmVille.

But, as several sources noted and Pincus addressed in this note, Zynga must now get smaller again to get larger, doing little things really well rather than a lot of things at scale.

“The scale that served us so well in building and delivering the leading social gaming service on the Web is now making it hard to successfully lead across mobile and multiplatform, which is where social games are going to be played,” he wrote.

Zynga had made smaller cuts of five percent last fall, but the fall-off of its Web business — especially on the Facebook platform — was faster than anticipated, sources said.

That business has, as one person close to the situation noted, been “brittle,” and it broke more easily than expected.

That is not to say there has not been some promise, in games such as Running With Friends and even at its flagship FarmVille, which is still a strong title. And Zynga now has 65 million mobile users.

Pincus had been signaling more changes to come of late, trying to keep the company cash-flow positive, as he sought to rationalize costs.

In the company’s last earnings call, he stressed that 2013 would be “transitional” for Zynga and has rejiggered its top management to better focus the efforts on mobile.

Sources said that severance benefits will extend for several months and include some acceleration of stock options.

Still, it is not a pretty day for Pincus, or for the staff of Zynga, showing a lot of hard-charging entrepreneurs in Silicon Valley the very steep downside of being a public company CEO in a tough and fast-changing environment.

Here’s the full Pincus post and memo:

To our Zynga Community,

Today is a hard day for Zynga and an emotional one for every employee of our company. We are saying painful goodbyes to about 18% of our Zynga brothers and sisters. The impact of these layoffs will be felt across every group in the company.

None of us ever expected to face a day like today, especially when so much of our culture has been about growth. But I think we all know this is necessary to move forward. The scale that served us so well in building and delivering the leading social gaming service on the Web is now making it hard to successfully lead across mobile and multiplatform, which is where social games are going to be played.

These moves, while hard to face today, represent a proactive commitment to our mission of connecting the world through games. Mobile and touch screens are revolutionizing gaming. Our opportunity is to make mobile gaming truly social by offering people new, fun ways to meet, play and connect. By reducing our cost structure today we will offer our teams the runway they need to take risks and develop these breakthrough new social experiences.

Because we’re making these moves proactively and from a position of financial strength, we can take care of laid off employees. We’re offering generous severance packages that reflect our appreciation for all of their work and we hope this will provide a foundation as they pursue their next professional steps.

Although these are hard decisions, I’m confident that our strategy of building leading franchises and supporting them with the largest network is the right one for the long term. I’m encouraged by our recent progress. Running With Friends is a great example of the quality player experience we can deliver, already receiving an average 4.5 app star rating from 22,000 players in less than one month after launching. Our FarmVille franchise teams continue to innovate and deliver ground breaking new social experiences like County Fair which, despite only being available on the web, is engaging 39 million monthly players.

I want to thank every one of you for the spirit, creativity and energy that you’ve invested in Zynga. You’ve reintroduced a generation of people to gaming and through these games offered them new ways to connect with their families, make new friends and even sometimes find love.

Everyone will be affected by these changes and I’m sure there will be many follow up questions to this email. If you have specific questions relating to your project or team, please talk to your manager. For any other feedback or thoughts feel free to email me directly.

Mark

After Zynga Confirms 18 Percent Layoffs, It Lowers Guidance in All-In Mobile Move

Kara Swisher — Mon, 03 Jun 2013 19:08:29 +0000

Zynga confirmed it was laying off 18 percent of its workforce — which represents 520 employees — in a bid to reduce costs, as it seeks to drastically restructure its troubled business.

The move today will affect every part of the San Francisco social gaming company, cutting $80 million in staff costs for its 2,900 current workers. It will also include the closing of its offices in New York, Los Angeles and Dallas, as well as other infrastructure costs, adding to the total expense reduction.

Zynga continues to have big offices in San Francisco; Beijing, China; and Bangalore, India, as well as several small units across the U.S. (such as Seattle and San Diego).

Sources said that severance benefits will extend for several months and include some acceleration of stock options.

In addition, Zynga has now said in a press release that it is downgrading its investor guidance for the second quarter with results at the lower end of what Wall Street has been expecting.

After a rocky IPO and trying to cope with rapid changes in its core businesses, Zynga has been trying to refocus the company’s franchises and network on the shift to mobile and a narrowing of focus at the company.

That refocusing will now have a big impact on Zynga’s financial performance. For Q2, the company had previously said its “bookings” — related to sales of in-game virtual-good purchases and advertising — would be in the $180 million to $190 million range. Today, Zynga said results would now be in the lower half of that range.

In addition, its GAAP net loss for the quarter will be higher than expected, rising from a loss of $26.5 million to $36.5 million to a loss of between $28.5 million and $39 million.

All other metrics are expected to remain the same, including: Revenue ($225 million to $235 million); earnings per share (a loss of three to five cents); adjusted EBITDA (break even to a loss of $10 millon); and non-GAAP EPS (a loss of three to four cents).

Wall Street is not reacting well to the bad news. Zynga’s shares have dropped from 11 to 12 percent since AllThingsD.com broke the news of the layoffs. It is now at about $3 a share, giving the company a market valuation of $2.4 billion. Trading for Zynga was briefly halted, before the company confirmed the cost cuts.

Actually, Amazon Paid About $150 Million for Goodreads

Kara Swisher — Fri, 29 Mar 2013 18:32:26 +0000

According to sources, Amazon paid about $150 million for Goodreads, the popular books recommendation service. But that number could close in on $200 million, if certain performance metrics are met.

And, while BusinessWeek ran a we-are-just-guessing story today that posited a self-described “overly simple, back-of-the-envelope estimate” of $1 billion, sources said that number is simply wrong.

I am still trying to determine how much of the deal was cash — most of it, said sources — and how much was stock.

The San Francisco-based Goodreads had raised close to $3 million from a range of angel investors, as well as True Ventures. The sale is a big win for the firm, which apparently owned between 20 percent and 30 percent of Goodreads.

The online retail giant bought the company to help its book-y social discovery efforts for customers.

Amazon declined to comment, but the Seattle-based company said previously that the deal should close in the second quarter. It’s not the first time Amazon has bought a social book site — in 2008, the company acquired Shelfari for under $10 million.

Fenwick VC Survey: Q2 Funding Valuations Shoot the Moon

Kara Swisher — Thu, 23 Aug 2012 14:00:24 +0000

According to Fenwick & West’s latest Silicon Valley Venture Capital Survey, fundings in the second quarter of this year showed the highest valuation increases in more than five years.

Looking at 115 financings of tech and life sciences companies, in Q2 the well-known tech-focused law firm saw “up” rounds accounting for 74 percent, while “down” ones were 11 percent. Flat rounds were 15 percent.

That was a marked change from the previous quarter, which was 65 percent up, 22 percent down and 13 percent flat.

More importantly, it was the 12th consecutive quarter in which ups were ahead of downs.

Perhaps even more importantly, average funding prices for the quarter rose 99 percent, which is nearly double the 52 percent increase in Q1. Two big-ticket financings upped the Q2 number, which would have been 70 percent if they were removed.

Still, it is the highest amount increase since Fenwick began compiling the numbers in 2004.

Internet/digital media and software was the biggest beneficiary of the rise. Hardware was next, but life sciences and cleantech did not keep pace.

Fenwick said that VC fundraising is still lower than 2007 levels, noting that “venture capital continues to be a tale of two cities, where the Internet/digital media and software industries dominate other industries, and venture capitalists with proven track records can raise large funds but fundraising for others is much more problematic.”

The report, co-authored by Fenwick partners Barry J. Kramer and Michael J. Patrick, noted that Series B rounds were strong in the quarter, although the percentage of them has declined for three straight quarters, “perhaps indicating that companies are having difficulty securing Series B funding, but those that do are being rewarded with substantial valuation increases.”

Here’s the report for your personal perusal:

Q212_VC_Terms_Survey_Report _Spacing_

Video Exclusive: Here's Groupon's Andrew Mason Talking About Daily Deals Site's Stock Smack, Future Plans and IPO Regrets (Or Lack Thereof)

Kara Swisher — Fri, 17 Aug 2012 14:14:50 +0000

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:

[ See post to watch video ]

Groupon Shares Now 80 Percent Off; Hit New Low

Tricia Duryee — Tue, 14 Aug 2012 15:43:04 +0000

Groupon shares are trading at a new low this morning after the company reported mixed second-quarter results yesterday that left investors questioning the company’s long-term growth strategy. In afternoon trading, shares were down nearly 23 percent, or $1.72, to trade at $5.83 a share. That’s 80 percent less than the $31.14 some paid at the stock’s high point, just after it went public in early November.

Before Q2 Earnings, Groupon Book Author Sennett and Former COO Solomon Talk About About Daily Deals Site (Video)

Kara Swisher — Mon, 13 Aug 2012 17:17:00 +0000

With a title like this — “Groupon’s Biggest Deal Ever: The Inside Story of How One Insane Gamble, Tons of Unbelievable Hype, and Millions of Wild Deals Made Billions for One Ballsy Joker” — it’s pretty easy to imagine that Frank Sennett’s book on the formation of Groupon chronicles a pretty wild ride.

And indeed it has been a wild ride for the Chicago-based daily deals site, as depicted in innumerable media accounts and also in Frank Sennett’s book on the juicy subject.

Today, Groupon will report its second-quarter earnings, which Wall Street investors are expecting will finally be better than the company has performed since its IPO.

In fact, its shares rebounded last week by 13 percent, to close Friday at $7.44, although the stock is still down 70 percent since Groupon went public last November.

I did a video interview with Sennett, who brought along former Groupon President and COO Rob Solomon, to talk about where the company has been and where it might be going.

Here’s the chat:

[ See post to watch video ]

Attention Shoppers: Americans Spent $43.2 Billion Online in Q2

Tricia Duryee — Mon, 13 Aug 2012 16:46:21 +0000

No wonder Amazon and eBay reported solid second quarters.

iStockphoto.com/mbortolino

In the U.S., e-commerce sales reached $43.2 billion in the second quarter — up 15 percent compared to the year-ago period, according to comScore.

The quarter marked America’s seventh consecutive quarter of double-digit growth, as consumers get even more comfortable spending online and having products show up on their front porches.

What’s more, Amazon grew twice as fast as the overall market. The big-box retailer of the Web said that in the second quarter, it grew 32 percent if you take away the impact of foreign exchange. Likewise, eBay’s sales rallied in the second quarter, increasing 23 percent.

In contrast, brick-and-mortar retailers are struggling. For example, Best Buy’s same-store sales were down 5.3 percent in the three-month period ended May 5.

The comparisons are not entirely fair, because both Amazon and eBay lump together U.S. and international sales, and Best Buy separately reported that online revenue was up 20 percent, but it provides some perspective on how fast the shift from offline to online is happening.

What’s more, while comScore provides one of the most comprehensive reports for gauging e-commerce spending, its numbers do not take into account shopping conducted over cellphones and tablets — and that’s becoming hard to ignore.

In the second quarter, CEO John Donahoe said, he saw “a staggering surge” in mobile commerce that did not exist just a few years ago. Now eBay is expecting both its marketplaces division and PayPal to transact $10 billion in mobile volume this year, or more than double 2011.

Amazon does not break out mobile sales, but other, smaller, sites are also reporting significant mobile traffic. For example, One Kings Lane, an online home decor site, said mobile is making up 22 percent of the company’s sales.

Two other findings from the Q2 comScore report:

The top-performing online product categories were: Digital content and subscriptions, consumer electronics, flowers, greetings and gifts, computer hardware, and apparel and accessories. Each category grew at least 16 percent compared to the year-ago period.
42 percent of e-commerce transactions included free shipping, representing a seasonal pullback from a fourth-quarter high of 52 percent.

After a Relatively Mellow Quarter, Will Groupon Earnings Surprise?

Tricia Duryee — Sun, 12 Aug 2012 15:45:15 +0000

Over the past three months, Groupon has stayed relatively out of the limelight.

Since reporting first-quarter earnings in May, no board members have stepped down; it hasn’t restated any of its financials, and it even promoted one of its new executive hires, Kal Raman, to an even loftier title.

All of those are good things for the Chicago-based deals company, which for a while appeared to not get anything right. Now, if it can manage to report results that are in line with second-quarter expectations tomorrow, for the second quarter in a row, it might just have a chance to do something about its stock price.

And based on fairly low expectations, just meeting — not exceeding — estimates may be enough to make a big splash.

In fact, investors may already be getting their hopes up.

On Friday, Groupon’s shares saw a small gain, jumping 79 cents, or nearly 12 percent, to trade at $7.44 a share. That’s in the right direction, but it is still down 70 percent since its public offering in October.

In a note to investors, Citigroup’s Mark Mahaney says he’s mixed on the company’s prospects. On one hand, he conducted a survey with 150 local businesses and 1,200 consumers, and discovered that Groupon is gaining market share. On the other hand, Mahaney worried that revenue growth has slowed. In the second quarter, he’s expecting sales to grow by 49 percent year over year compared to the first quarter, in which revenue doubled over last year.

In general, the Wall Street consensus calls for Groupon to do slightly better than the first quarter and report a profit of three cents a share, excluding some non-cash items, on revenue of $578 million. Last quarter, the company reported a two-cent profit per share on revenue of $559.3 million.

Internally, Groupon is also projecting slightly better revenue than the first quarter. It said revenue should fall between $550 million and $590 million, representing year-over-year growth of 40 to 50 percent. Income from operations is expected to fall between $25 million and $45 million, compared to a loss of $101 million in the second quarter of 2011.

Sterne Agee analyst Arvind Bhatia was less optimistic than Citi’s Mahaney, and on Wednesday, he lowered its rating on Groupon to “neutral” from “buy,” based on suspicions that it will report second-quarter revenue and earnings at the lower end of its guidance. Bhatia also worries that Groupon is losing ground to LivingSocial, its next-closest competitor, and would be affected by the macroeconomic climate in Europe. ”Given the recent decline in the share price, we are clearly late in the downgrade,” Bhatia wrote. “However, we see risk to forward estimates and believe the upside in the stock may be limited until Street estimates are adjusted downwards.”

Priceline, Orbitz Coming In for a Hard Landing

Tricia Duryee — Wed, 08 Aug 2012 18:14:37 +0000

Shares of Priceline and Orbitz are in a free fall after both companies provided disappointing outlooks as Europeans cut back their travel plans.

Priceline’s stock was tanking this morning, down more than $100 a share, representing more than 16 percent of the company’s market value. In mid-session trading, the stock was at $567 a share, still safely above its 52-week low of $411.

Orbitz shares were trading around $3.48, down only $1.18 but representing a 25 percent drop.

Both companies said they are feeling a chill from Europe as currency fluctuations and economic troubles continue to plague the region.

This morning, Orbitz reported lower than expected second-quarter results and cut its forecast for the year. Gross bookings for the Chicago travel site declined 1 percent year over year to $2.97 billion. The company said net income was also cut in half to $4.6 million.

Yesterday, Priceline said it, too, was not able to negotiate the headwinds. Where’s William Shatner when you really need him?

The Norwalk, Conn.-based company, which operates as Booking.com in Europe, said it believes Europe’s economic conditions will further deteriorate and that it will likely impact the company’s future results. Priceline is now forecasting that revenue will fall between $1.58 billion and $1.67 billion in the third quarter, short of analysts expectations for sales of $1.8 billion.

Citi’s Mark Mahaney said there are three reasons why Priceline stock is down so drastically: It missed its international bookings estimates for the first time since 2009; its third-quarter guidances suggests a decline in international bookings; and its bookings in the U.S. underperformed compared to Expedia for the second consecutive quarter.

Comparatively, other travel stocks were holding up fairly well today.

Kayak, which went public last month, was down 3 percent to trade at $31.20 a share — a healthy margin above its IPO price of $26 a share. TripAdvisor was off 5.4 percent to trade at $36.59; its former parent company, Expedia, was similarly down 5.5 percent to $55.66 a share.

Demand Media Beats Q2 Expectations, With Revenue Up Strongly; Also Names New President

Kara Swisher — Tue, 07 Aug 2012 20:28:20 +0000

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

Activision Easily Bests Forecasts in Challenging Videogame Market

Tricia Duryee — Thu, 02 Aug 2012 20:43:45 +0000

Activision Blizzard is raising its calendar-year outlook after its second quarter earnings beat analyst expectations.

The company recorded a profit of 20 cents a share on revenues of $1.05 billion, easily beating analyst expectations of a profit of 12 cents a share on revenues of $834.8 million, according to First Call.

But when you factor in official accounting methods, Activision’s results are down compared to the year-ago period.

In the second quarter, the company recorded a GAAP profit of 16 cents a share, down from 29 cents a share, and revenue of $1.08 billion, down from $1.15 billion.

That may be why the company’s stock is trading down 5.2 percent in after-hours trading, to $11.16 a share.

Still, Activision Blizzard remains one of the brighter spots in the videogame industry.

This week, Take-Two Interactive disappointed analysts with a wider than expected loss, and last week, Zynga shocked investors after wildly missing expectations. On Tuesday, Electronic Arts’ results were in line with expectations, although some areas showed signs of weakness.

Some of Activision’s highlights from the quarter include digital revenues of $343 million, representing 32 percent of the company’s GAAP revenues.

The company also had three of the top best-selling games in North America and Europe. They are Skylanders Spyro’s Adventures, Call of Duty: Modern Warfare 3 and Blizzard Entertainment’s Diablo III.

Because Activision was able to report such strong results in the second quarter, it is revising its full-year guidance for the second time. The company said it is now expecting non-GAAP revenues of $4.53 billion and non-GAAP earnings per share of 99 cents. In the second quarter, the company is forecasting earnings of 7 cents a share on revenues of $690 million.

Stock Tanking as Zynga Misses Already Low Expectations

Tricia Duryee — Wed, 25 Jul 2012 20:38:15 +0000

Zynga released second-quarter earnings today that fell below what analysts were expecting — and they weren’t expecting much.

In after-hours trading, the stock was tanking, falling more than 39 percent at one point to drop close to $3 a share. Those shares sold in December for $10 a pop.

Today, Zynga reported the disappointing news that it made one cent a share on revenues, excluding some items, on revenue of $332 million. For the second quarter, analysts were expecting revenues of $344 million and non-GAAP earnings per share of six cents.

It also reported a net loss of $22.8 million for the second quarter, compared to net income of $1.4 million for the same quarter in 2011. The net loss included $95.5 million of stock-based expense compared to $33.1 million of stock-based expense in the year-ago period.

This is a pretty big miss for the company’s third quarter as a publicly held company. Undoubtedly, it will bring up questions on today’s earnings call with analyst about the company’s prospects for growth. Admittedly, the San Francisco-based company is expecting the second half of the year to be stronger, but how much stronger?

Not much.

Zynga is also lowering its outlook to reflect delays in launching new games, a faster decline in existing Web games due in part to a more challenging environment on the Facebook side and reduced expectations for Draw Something. The company is now expecting to record a profit, excluding some items, of four to nine cents a share on bookings of $1.15 billion to $1.225 billion.

As another potential sign of a slowdown, the company’s bookings during the quarter totaled $301.6 million, an increase of 10 percent compared to the second quarter of 2011, but a decrease of 8 percent compared to the first quarter of 2012.

Bookings are often considered a better measure of how the company did during the immediate period. Bookings represent what Zynga actually sold in the quarter, versus revenue, which is amortized over multiple quarters.

Earlier:

2:00 pm: The call is kicking off any minute. As a side note, Zynga filed an additional form with the SEC this afternoon, notifying investors that CEO Mark Pincus now owns more than 50 percent of the voting power of the company’s outstanding stock.

Interpreted one way, that means that even if investors don’t like what they are seeing, it will be hard to do anything about it.

2:02 pm: Call kicks off with all the legal formalities. We’ll be hearing from the CEO, COO and CFO.

Call is being turned over to Mark Pincus.

First, he wants to offer some perspective on the quarter, including where the company sees its growth coming from. He cites some good things that have happened:

Zynga is now reaching 300 million monthly users.
The company’s mobile footprint is now reaching 33 million daily active users, a five-fold increase, to make Zynga the largest mobile game network.

He said three factors led to a disappointing quarter:

Declines in engagement and bookings due in part to changes Facebook made to its network, which favored new games.
The Ville launched late in the quarter.
Draw Something, which they acquired for $210 million, is not meeting expectations and suffered a dramatic decrease in daily active users.

Pincus said they are taking steps to fix these things. They are moving resources from live games to new games to hit launch targets later this year, and working on Draw Something.

Another thing to get investors jazzed about is the company’s plan to launch real-money gaming (a.k.a. gambling) internationally in the first-half of 2013, subject to licensing approval.

COO John Schappert joins the call to go over all the announcements made at its Unleashed event last month, including invigorating its Ville franchise with games, such as The Ville, ChefVille and FarmVille 2.

2:18 pm: Now, Zynga’s CFO David Wehner has joined to go over the numbers.

He is making the point that they have no reason to believe that mobile cannot monetize as well as the Web, and that games like Zynga Poker already do.

Wehner says headcount is now 3,200 employees, with most of the employees joining R&D.

He’s now addressing the outlook, and says they are lowering it because of a delay in games, challenges with the Facebook platform and reduced expectations for the Draw Something acquisition.

Previously, Zynga was projecting non-GAAP earnings of 23 cents to 29 cents a share on bookings in the range of $1.4 billion to $1.5 billion. It is now expecting earnings of four cents to nine cents a share on revenue of $1.15 billion to $1.225 billion.

2:26 pm: The call is now open to questions. This should be interesting.

Question is about the more challenging Facebook environment, and whether Zynga should find other platforms, and insights into real-money gaming prospects.

Pincus: In the near term, we are positive about the ability for growth in our current categories, but also see more opportunities in male-targeted games. But the opportunity is more and more on mobile.

Getting beyond the Facebook Web footprint through mobile will give us more growth opportunities, and for games that we are bringing out that are multiplatform across Web, Facebook and mobile, there’s a bigger opportunity for network effects.

On real-money gaming: Our first products are in development and we intend on releasing them in markets that are regulated and open. The U.S. is an attractive market, but it’s not regulated or open today, so we don’t have immediate plans in the U.S.

Next question is about revenue on mobile vs. Facebook:

Look at our bookings, I mentioned that 80 percent of our bookings are related to the Facebook platform, and then there’s mobile, and then the DAUs are 33 million on mobile and 72 million on the overall business. You’ll see that mobile is less than half of the monetization rate of the Web.

But in some games its comparable, like Poker. Part of our strategy is to come out on mobile with higher monetization of games. We are focused on closing that gap on higher-monetizing games in the near future.

Pincus added that the biggest bookings driver on mobile will be getting to scale and distribution. They’ve found that mobile looks fine in terms of monetization, and sees many of the same players that wthey see on the Web, but “we need to drive distribution to get to the audience sizes that we want.”

2:33 pm: Next question is about the changes Facebook made to its platform.

Schappert: Facebook made a number of changes in the quarter. They favored new game installations, and we saw the 15 percent overall decline, and 34 percent decline for the live games. It impacted the feeds, requests and bookmarks and the like. Our users did not remain as engaged and new games were promoted. On the flipside, we watched Bubble Safari go to the top of the charts. And The Ville set a record for Zynga of having 4.5 million new installs.

Question: Will the Facebook slowdown continue during the second half of the year?

Schappert: I can tell you right now, we just launched The Ville, and are seeing a nice pickup in DAUs. I’ll remind you that they [Facebook] are always making changes to the platform for the better. What we are focused on is delivering a great second half of games, including new Villes. ChefVille is coming soon, FarmVille later this year, and then there’s a third.

2:38 pm: Is Zynga.com meaningful yet?

No color on that. … but as a reminder, it remains in open beta. They are taking feedback from the site to roll out elsewhere, and they haven’t turned on serious cross promotion yet.

Question: Given your experience with OMGPOP and the Draw Something acquisition, does that turn you off on future acquisitions?

Pincus: Our M&A strategy has always been focused on adding entrepreneurial high-performing teams, rather than whole product lines. As we said on the last call, the OMG acquisition is a rare circumstance for us and is the second time we acquired a product line. We are dedicated to growing organically. The two instances — Words With Friends and Draw Something — were an opportunity to expand our product footprint. In terms of other small companies and teams, we stay actively engaged in the market. We’ll continue to look at them and see if any of them are good cultural fits.

John Schappert is jumping in to talk about its mobile publishing platforms, which can be looked at as another way to interact with that entrepreneurial community.

2:47 pm: Question is about Zynga’s relationship with Facebook and the opportunity for FarmVille 2, given the disappointing Mafia Wars 2 sequel.

Pincus: We continue to work closely together on creating a better ecosystem. The launch of Zynga.com was envisioned in the agreement we entered into together. It was an opportunity for us to build a sandbox, where we could build more quickly around the game experience.

In terms of sequels, we were disappointed in Mafia Wars 2, but we think we didn’t bring out a high quality enough game to serve that audience. Our belief is that we have audiences that are interested in genres and styles of play, some are evergreen like Poker, and, we hope, casual arcade games. We think the genre can be evergreen if we do a good job bringing out next-gen sequels, if we bring out new mechanics that excite people.

In terms of FarmVille, we are more excited about bringing a sequel out so that the hundreds of thousands of people who no longer play will pick it back up, in addition to the people who already play.

2:54 pm: Pincus answers analyst question about why investors should invest at $3 a share:

We are the most optimistic believer in social gaming as play, as a mass market opportunity and an even bigger business in the future.

We consistently invested more than any other company. I think we’ve executed well over the past for growing the market for social gaming, and today we have the leading position on social and mobile. We will continue with that strategy in building the best mechanics.

3:01 pm: Longer term, will the changes at Facebook create a net positive?

Schappert: I’m sure they’ve already made changes to the features we are referencing. I think new game discovery is good for us and the whole industry. Part of the reason we saw softness is that we delayed the launch of The Ville.

I think what they are doing to favor new game launches is positive for us and others, but we are also happy we have a network of 72 million daily users and 300 million monthly users. That favors us when we launch a game, like when we launched The Ville and got 4.5 million installs on day one.

That’s all the questions for now folks.

As you can tell, Zynga’s management team is also disappointed in second-quarter results, and from having to revise its outlook. It believes that in the near term the strategy is enough to turn things around, and that its long-term strategy in publishing third-party games and focusing on mobile will be enough to feed its growth and make investors satisfied.

For now, Wall Street is skeptical. The stock is still down, having plunged $2.05, or 40 percent, to $3.03 in after-hours trading.

With AOL Set to Report Q2 Earnings Tomorrow, Tim Armstrong's Feeling Closer to Fine (Video)

Kara Swisher — Wed, 25 Jul 2012 01:34:29 +0000

When I was in New York last week, I got a chance to sit down with AOL CEO Tim Armstrong, the former not-Marissa-Mayer Googler, to talk about how it’s going in his thankless efforts to turn the New York-based Internet company around.

Unlike Mayer, who is just getting started at fixing what ails Yahoo, Armstrong has been at the job for some time now and finally seems to be getting some traction.

He talked about that and more in a video interview with me (which we did at Manhattan media-maven lunch spot Michael’s), including how it’s going with his always watchable acquisition of the Huffington Post and its eponymous founder Arianna Huffington.

Armstrong was feeling upbeat due to recent improvements in AOL’s business, as well as the lucrative sale of some patents and a victory over an activist shareholder proxy battle.

But, as usual, investors will need to focus on AOL’s performance, which will be on display in the morning when it reports its second-quarter earnings tomorrow at 5 am PT.

AOL beat expectations by 11 percent in the last quarter and Wall Street analysts expect the company to earn 10 cents per share, which has been guided down recently.

Still, because of all the recent good news, AOL’s stock has been up 82 percent since the beginning of the year, although it did drop 1.6 percent this past week.

Also important to tomorrow’s report is whether AOL can stem persistent revenue decreases in this quarter. Analysts are now expecting revenue of nearly $519 million for the period.

Here’s Armstrong chatting about the possibility that he can finally say that his long-suffering turnaround is actually turning:

[ See post to watch video ]

Yahoo Stock's Dead-Cat Bounce After Splashy CEO Pick -- And Here Are the Slides Explaining Why

Kara Swisher — Wed, 18 Jul 2012 12:46:12 +0000

Let’s begin by saying it is not new Yahoo CEO Marissa Mayer’s fault that the stock of the company has done a whole lot of nothing since the announcement of her appointment Monday.

After all, she just arrived.

But despite a lot of huzzahs from Wall Street over the solid choice of the high-profile former Google exec — which was being hailed by some as the answer to all of the Silicon Valley Internet giant’s woes — Yahoo shares still closed down yesterday slightly, and continued to fizz in after-hours trading.

Message from investors: Exciting choice, but you still need to prove that there is some light at the end of what has been a very, very long and pitch-dark tunnel for Yahoo.

It’s easy to see why, if you take a serious gander at the second-quarter results Yahoo released – in living color below — yesterday. They show a company that faces very serious and perhaps overwhelming problems that even a superhero CEO choice will find difficult to overcome.

Year-over-year growth of its global properties nearly flat, compared to an 13 to 15 percent rise a year ago; U.S. core search queries down 17 percent; minutes spent on its media properties down 10 percent; flat revenue touted as a good thing, since it was not down, at least.

Not down is the new up? In the land of Yahoo, it is indeed.

As Doug Anmuth of J.P. Morgan noted perfectly in a post-earnings note about the challenges the new CEO faces:

“This will be Marissa Mayer’s task going forward with her strong focus on product innovation and the user experience, but we continue to believe it will be difficult to turn Yahoo! around given mostly deteriorating engagement metrics, structural headwinds in the display space, shrinking search share, and limited mobile traction in the U.S.”

One bright spot is the $2.4 billion in cash that Yahoo has salted away, money that Mayer can presumably go hog wild with to bring in a spate of potentially invigorating start-ups and entrepreneurs, making Yahoo fast friends all over tech.

There is nothing like spreading around a lot of dough to make yourself popular again! And VCs become your BFFs!

That’ll come soon enough, but Mayer started just yesterday at Yahoo, and wisely bowed out of its analyst earnings call, with the company’s CFO Tim Morse noting that she needed to get up to speed on the state of the company before speaking out.

She needs to move fast, since sources said the signs for the third quarter are not promising, either, with Yahoo declining to provide guidance until Mayer can get a handle on the overall trends.

A handle that will take, it seems from the numbers below, a decidedly kung-fu grip:

YHOO_Q212EarningsPresentation

Analysts Expecting eBay to Beat Q2 Estimates, but Cautious on Outlook

Tricia Duryee — Tue, 17 Jul 2012 21:54:16 +0000

Analysts will be looking for signs of weakness in eBay’s results tomorrow when the company releases second-quarter earnings after the bell.

Despite a relatively stable and growing U.S. business from both its marketplace and payments division, Citi’s Mark Mahaney cautioned in a research note, eBay’s results could be adversely impacted by the currency crisis in Europe.

eBay

Earlier this month, Mahaney reduced his estimates for the quarter because of economic uncertainty and the fact that international makes up about half of all of eBay’s revenue.

Analysts surveyed by FactSet Research currently estimate that eBay will earn 55 cents a share, excluding one-time items, on revenue of $3.36 billion, compared with a profit of 48 cents a share on $2.8 billion in sales in the same period a year ago.

Those expectations exceed eBay’s own goals, which forecasted revenue in the range of $3.25 billion to $3.35 billion, with GAAP earnings per share in the range of 49 cents to 51 cents and non-GAAP earnings per share in the range of 53 cents to 55 cents — both on a diluted basis.

Mahaney is expecting a slightly more modest report of $3.33 billion in revenue and 54 cents in non-GAAP earnings per share.

Today, eBay’s shares traded higher, closing at $39.07, or a few dollars shy of its 52-week high of $43.94 a share.

Other analysts believe that the impact won’t be felt for another few months, even though just last quarter, eBay raised full-year guidance, saying that it expects revenue in the range of $13.8 billion to $14.1 billion, with GAAP earnings per share of $1.91 to $1.96.

Chad Bartley of Pacific Crest Securities said that eBay’s results “should be fairly solid,” even though e-commerce trends in the quarter proved to be challenging. In general, the U.S. held up better than Europe, but still there was some softness.

According to MarketWatch, Bartley believes eBay will achieve Wall Street consensus forecasts for this quarter, but that the company’s outlook could end up missing projections.

As a result, analysts tomorrow will be watching eBay’s fiscal third-quarter forecast closely to see if it matches their expectations of earning 55 cents a share on $3.42 billion in sales.

Over the past year, the company has been executing well on its three main businesses: Marketplaces, PayPal and GSI. It is also spending a lot of time formulating its strategy for both mobile payments and working with offline retailers. Expect updates on those initiatives, too, even though it will still take a while for them to produce any material revenue.

EBay, which is typically the first of the major e-commerce companies to report earnings, often sets the tone for others. Amazon will release its second-quarter results next Thursday.

Liveblogging Yahoo's Q2 Earnings: The 100 Percent Less Marissa Edition (Sigh)

Kara Swisher — Tue, 17 Jul 2012 21:03:49 +0000

Today, Yahoo reported fair to middling — although still predictably unspectacular — second-quarter earnings earlier today.

Now it’s time for its financial call with Wall Street analysts, which most notably will not include its spanking new CEO Marissa Mayer.

Giant, prolonged sigh, but not entirely unexpected, since she just got to the Silicon Valley Internet giant today. Of course, that did not stop former CEO Carol Bartz from hopping on right after she was hired and cussing up a storm.

That did not end so well for Bartz, so perhaps Mayer has already made one good decision. Minimize, minimize, minimize expectations!

Here we go:

2:04 pm: The call starts off with the tireless CFO Tim Morse, telling people that he was very excited about the new CEO, but that he could not talk about it much.

Bummer!

But there was a message from Marissa Mayer, though: She cares about investors and you will be hearing from her soon!

2:06 pm: Morse, the numbers guy goes right into the script reciting the meh numbers, which boil down to the fact that earnings were better than expected on lackluster revenue growth.

Getting that up will be Job #1 for the missing Mayer — you just know she is sitting at the table right now — who will have to pull some major rabbits out of the hat to get Yahoo back into the conversation.

That would be the good conversation — about how it is innovative — and not about the bad conversation about what a management goat rodeo it has been for far too long.

2:09 pm: Morse is still repeating what you could read in the press release.

But ho! Morse notes that the problems with Microsoft and its search partnership still has not gotten better and thank goodness for that guarantee. This one’s on the software giant, but it is still not good.

2:13 pm: Morse notes there will be no guidance until Mayer gets up to speed on the situation at Yahoo.

Let me give you the Cliff Notes version, Marissa: Revenue growth flat. Employee morale weak. Product innovation non-existent. Mobile — don’t make me cry. But you do have a video deal with Tom Hanks called “Electric City” that is launching today!

Yay! Except you are now not a media company now that former interim CEO Ross Levinsohn has gotten jacked.

But the Olympics are coming, as are the U.S. elections, so you might want to hold onto that media excellence at Yahoo for a little while longer.

2:17 pm: Morse finishes up the non-news script and we move into the Q&A.

He warns: No Marissa queries!

The Wall Street analysts behave on cue — they never fail me on not asking the tough questions — and ask about the weakness in advertising pricing rates.

Morse talks about weakness in Europe, but gives a non-answer.

2:18 pm: Next a question about the stock buyback that Yahoo announced to get its shares back up to speed, using money from its partial sale of its Alibaba assets.

It’s not working yet, given the stock has remained flat since forever.

A question on the advertising softness and comments on revenue per search. Good one!

Headwinds from broadband advertising! “We’ll have to live through it,” says Morse, which means when crappy comparisons will return to make the revenue fall-off seem less worse.

Onto declining engagement and declining search revenue. And a good query about what to do about Microsoft?

Perhaps another partner, like Google, to replace it? Actually, until Mayer was appointed yesterday, Yahoo execs were in talks with the search giant about various partnerships.

That’s presumably on hold for now, but we’ll see.

Yahoo has about nine months until the Microsoft guarantee falls off the cliff and Morse notes there is an out.

Tasty!

2:25 pm: I’ll be honest — I am getting hugely bored hearing non-news about yet another unremarkable performance from Yahoo.

I needs me some Mayer ASAP — since she is, without a doubt, a fantastic character for Yahoo’s next chapter. As has been reported, it’s correct that she is not talking to me so far, but I am sure there will be plenty of material for me to work with going forward.

The next question is on mobile, which is a “big priority” for Yahoo, says Morse. Actually, it has hardly be a priority at all, despite the fact that the kids seem to love their smartphones.

Another Alibaba question, which is in all the filings. Let me break it down: Yahoo owns less, but it’s still a good investment for the future.

2:33 pm: Did I tell you I am bored. I am at the offices of Vanity Fair magazine blogging this and I am now reading a very good book they have on the shelf here titled “Vanity Fair’s Hollywood.” Does Sophia Loren ever take a bad photo? No, she does not!

Back to Yahoo! A question if Mayer will be talking before the next earnings call.

“I honestly just don’t know,” says Morse. But she is “mindful” of how much investors want to get a good gander at her.

A question on Yahoo Japan, another endless asset sale that the company has not yet completed. “There really is no update,” says Morse, blaming a valuation gap.

What a shock!

Morse is being very polite today and I like it. He’s been through the wringer at Yahoo since he got there, including a short stint as a temporary CEO.

I hope you have been taking notes, Tim!

2:39 pm: A question on Facebook and, thankfully, on the choice of Mayer. I love when someone asks a question they have been asked not to ask.

“I don’t have a whole lot of color,” says Morse, noting her “resume speaks for itself.” It is apparently safe to say, adds Morse, that Yahoo has to be good at both tech and content.

You’re kidding! I had no idea! Thanks, polite Tim!

He also said Yahoo feels good about being on a steady footing with Facebook. Last call, the comments were about how much Yahoo was going to get Facebook to pay.

Bygones!

I am back to the shelf at Vanity Fair, which is as delightfully entertaining as this call is not. Now, I am perusing the book, “Vanity Fair’s Proust Questionaire.”

Did you know Sandra Bernhardt’s motto is: “Kiss ‘em, slap ‘em, send ‘em home.”

I am considering stealing that one as my new operating policy.

I missed the question about Yahoo’s ad consortium with AOL and Microsoft. “We’re making progress,” says Morse.

Aaaaagh. But did you also know that Katie Couric’s motto is: “Nobody puts Baby in the corner.”

That is definitely my motto too if Yahoo PR does not get back to me on my 26 questions from this morning (you would think I would have gotten used to this by now!).

How I wish Mayer was not in the corner right now and we were listening to her. She talks really quickly, like a supernova, so I would love to see how analysts react to it. Not today!

Did you know Keith Richards’ motto is: “I told you I was sick.”

Now that is funny.

There are no more questions, which is unusual, and Tim politely says his goodbyes and says to be in touch any old time.

Thus, I have to have a better ending for this and it comes via Donald Trump, whose motto is: “Think big and get the job done.”

And it’s a pretty good tip for Yahoo and Mayer going forward.

Levinsohn Unlikely to Stay at Yahoo, as Mayer Begins Her Talent Search

Kara Swisher — Tue, 17 Jul 2012 02:23:16 +0000

According to sources both inside and outside of Yahoo, outgoing interim CEO Ross Levinsohn — who lost the race for the company’s top job to Google exec Marissa Mayer — is unlikely to remain at the company.

The board, who unanimously bypassed the media-focused exec to select a candidate with deeper product experience and a much higher tech profile, has apparently hoped that Levinsohn might stay in the company and return back to running its media and sales arm.

But that fat-chance possibility seems remote, according to people close to the board, who said they expect that Levinsohn will only remain for a short amount of time before moving on to another job.

You think?

Last week, in fact, I reported that Levinsohn was considering several exit options, after the Yahoo board declined to name him — as some had expected — at its annual meeting, and was still considering other candidates.

Levinsohn was named interim CEO earlier this year, in the wake of the ousting of Scott Thompson over the appearance of a fake computer science degree on his bio.

Also in question are the members of the team he has put into place at Yahoo, and whether they will remain. The most prominent is Levinsohn’s recent hiring of well-regarded advertising exec Michael Barrett — who came to Yahoo from, yes, Google — to run sales.

According to sources, Mayer is already aiming to attract several former and current Googlers to Yahoo to help her turn around the troubled Silicon Valley company.

Among the names raised is longtime former Googler Ben Ling, who worked closely with Mayer, as well as current Google exec Henrique De Castro, who is president of global media, mobile and platforms there. De Castro has been previously targeted by Yahoo to run global sales.

Mayer is likely to aim at grabbing some top product execs rather than on a big PR hire. In fact, some close to Mayer said that she could minimize her profile in the new role, which would be in stark contrast to her prominent efforts to establish a large public media presence while at Google.

One person close to the situation said she might take a page from new Google CEO Larry Page, who has been initially quiet as he drastically reformed the search giant.

“Marissa likes to be in the press, but she knows she has to manage expectations at Yahoo from the start and cannot over-promise anything,” said one person familiar with her thinking. “While she is well-known, she has never been in such a big job or in such a spotlight.”

No, indeed, a spotlight that starts tomorrow, when Yahoo announces what are likely to be meh second-quarter earnings, and when the world presumably meets the latest of Yahoo’s CEOs.

Mayer will be Yahoo’s fourth top leader in the last 12 months, so it would be nice if she stays for a while.

“So, is Marissa the ‘unicorn’ CEO?,” joked one person, about my description of the Yahoo search as a magical quest for leadership perfection.

We’ll see. Unicorns don’t exist, of course, and Mayer is now living in the real world, where Yahoo will need more than magic to return to its former glory.

Samsung's Forecast Fails to Ease Concerns

Jung Ah-Lee — Mon, 25 Jun 2012 07:01:19 +0000

SEOUL — Samsung Electronics Co., the world’s largest seller of smartphones by units, said Monday it expects its mobile phone business to report better financial results in the second quarter than it did in the first, partly helped by strong sales of its new Galaxy S III smartphone.

However, that forecast apparently hasn’t eased investors’ concerns that the South Korean electronics giant’s overall earnings outlook for the second quarter may not meet the market’s expectations.

Read the rest of this post on the original site »

Still Below Offering Price, but Facebook Stock Got a 10 Percent Boost This Week

Kara Swisher — Sun, 24 Jun 2012 00:15:38 +0000

For those keeping track — and there are many, as the investigations and recriminations into its borked IPO continue — the shares of Facebook moved strongly upward this week.

The stock of the social networking site closed at $33.05 on Friday, up almost 4 percent. For the week, the shares rose 10 percent.

There could be a number of reasons for the gains, including progress on its long-expected advertising network with an appearance on Zynga this week.

Zynga — whose stock has been closely aligned with Facebook’s due to its strong partnership — was also up this week by close to 5 percent.

Still, the online gaming company’s shares are down almost 37 percent since its IPO in December. And Facebook’s stock is still 13 percent below its public offering price in May, when it debuted at a hefty $38 per share.

But the latest prices are better than the lows of about $25.50 that the Silicon Valley company has traded at so far in its very short public life.

The company is now worth almost $71 billion, which is one-third lower than its much-hyped $100 billion valuation.

The next real signals for investors will be when Facebook releases its second-quarter earnings sometime in late July — which might give clues to how it is handling its advertising challenges, including in mobile.

But there is still no news of when that will be on Facebook’s spartan investor relations Web page.

Demand Media Q2 Call Liveblog: Spam-a-Not

Kara Swisher — Tue, 09 Aug 2011 21:20:00 +0000

Today, Demand Media beat Wall Street expectations in its second-quarter earning, growing revenue and lessening losses.

The Santa Monica, Calif., online content maker also announced that it had re-upped and expanded its advertising partnership with Google and also bought two start-ups in social media and advertising.

Now, it’s time for the inevitable conference call to explain it all to Wall Street analysts and the media.

2:02 pm PT: The call starts off with an unusually jaunty CEO Richard Rosenblatt, who quickly got to the real deal: Exactly how badly did Google’s changes to its search algorithm, under a program code-named Panda, hurt Demand’s content business?

Not much, says Rosenblatt, who reels off a list of things the company has done to improve its offerings, which have been dinged by many as, well, spam.

Rosenblatt was not having any of that, talking about removing 300,000 pieces of crappy content and also “quality improvements” with partners such as cheerily demented cooking goddess Rachael Ray. She might cook with spam — here is a delightful Spam Hawaiian recipe — but she ain’t spam!

2:13 pm: Now it is on to the acquisition of IndieClick. Essentially: It’s for the young people.

Then, international. Latin America Demand editorial via eHow en español! (Actually, the acquisition of Emergincast.com, an Argentine start-up. Coming soon to a blog site near you: ¿Cómo se hierve el agua?

Last, social media. Demand will be doing a lot more of it, like everyone else in the world, including more recommendations. I would really like it if some Internet company said it was going anti-social.

2:18 pm: The finance guy comes on, covering everything already in the press releases. Which is why I am cutting out here and getting a gluten-free doughnut at the Whole Foods store where I am writing this post.

It is as delicious as you might imagine a gluten-free doughnut can be. Which is to say: Not very!

2:32 pm: Q&A time from the Wall Street dudes — and, let it be said, they are all dudes.

The first question is about the “cleansing” of its cruddy content and if it is all flushed out.

It might be baked-on sludge, but Rosenblatt assures that Demand has it all figured out.

Then, a query about international and how the company decides what to pick. Algo, of course! And local content writers.

Back to the spam content: Does the need to have better content mean less of it? Kind of, since there is a lot more video. But still a lot of content churning out of Demand!

A question about Facebook and how to program Demand content into it. Good lord, it’s hyper-poking!

“It’s not clear the best way of how you expand into all these properties,” said Rosenblatt, specifically referring to its acquisition today of both IndieClick and RSS Graffiti.

The next question is how successful Demand is in the display and brand business, and how IndieClick, a premium ad company aimed at niche blogs, will be integrated in.

More on social media advertising’s future. Aaaghh, this is as obvious as a store-bought-crust apple pie baked by Rachael Ray.

Rosenblatt notes that its flagship site, eHow, is but one means of distribution, but Demand content is going all over the place and winging by people when they least expect it.

“Social is more effective … to try to find stuff you didn’t know that you needed,” says Rosenblatt, who also would not dis search as a means of discovery.

That’s important, since Google is a major traffic driver and advertising partner, when it is not terrorizing Demand and others with its search algo version of Defence Against the Dark Arts Professor Snape.

And presto, here comes a question about Demand’s Google ad relationship, which Rosenblatt touts nicely.

Of course he does. It’s tastier than spam, after all.

Wall Street's Demand for Demand Media Falls Off

Kara Swisher — Tue, 09 Aug 2011 13:01:06 +0000

After the markets close tomorrow, Demand Media will report its second-quarter earnings.

Wall Street is expecting a solid performance from the Santa Monica, Calif.-based online content maker compared to last year.

The consensus of estimates by analysts is for Demand to lose one cent a share, which is much smaller than the 55 cents a share loss from the same period a year ago. It is also an improvement on a previous loss of five cents a share for this quarter that investors had been predicting.

Nonetheless, the company’s stock hit its all-time low yesterday, after a strong IPO in January. Since the summer, it’s been all downhill, with Demand shares off 50.4 percent since early May.

Since it went public, the stock is off 63.1 percent.

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

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

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

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

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

Thus, the carnage, even worse than last week:

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

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

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

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

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

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

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

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

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

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

Tanked, in fact, does not nearly describe it.

Tech Stocks Get Whacked in Market Downturn -- Yahoo and LinkedIn Twice as Hard

Kara Swisher — Fri, 05 Aug 2011 02:48:32 +0000

Today’s stock market rout hit tech stocks hard, with most declining as much as the broader indices.

With the Dow Jones Industrial Average down 4.3 percent and Nasdaq off 5.1 percent, shares of Google, Microsoft, AOL and Apple managed to stay in that range of losses.

Not so Yahoo and LinkedIn, whose shares were off 7.8 percent and 9.6 percent, respectively.

LinkedIn, the business networking site which reported its second-quarter earnings today, saw its shares seesaw down and up and down and then up again today.

While its results were in line with Wall Street expectations, the company also created some worry after it said profit margins are going to be cut in half for the next quarter.

Still, after its huge fall earlier today, in after-hours trading, LinkedIn has recovered a bit and is now up five percent.

But Yahoo has continued its increasingly troubling stock drop after the markets closed. Its shares are now dipping below $12, which gives the Silicon Valley Internet giant a very low $15.6 billion valuation.

The company’s stock has dropped 34 percent in the past three months, as worries over a range of issues — from its Asian assets to its display advertising business to its talent drain — continue to be a drag.

Nokia's Borked Q2 Charts Make Yahoo's Borked Q2 Charts Look Fantastic!

Kara Swisher — Thu, 21 Jul 2011 15:18:14 +0000

Here are the slide decks and other investor materials from Nokia’s incredibly bad second quarter results announced earlier today.

The Finnish cellphone maker saw net sales in its core devices and services business decline 23 percent from last quarter and 20 percent from a year earlier. Meanwhile, revenue and unit sales for its critical smartphones were down more than 30 percent from both prior quarter and year-ago results.

Earlier this week, Silicon Valley Internet giant Yahoo turned in a weak quarter too, but its depressing charts pale in comparison to this set of Nokia financial data.

In fact, if the charts below had any more minuses, it would start to look like a crime scene for an unfortunate knifing victim on “Law and Order” — whose famous “doink-doink” sound is also below.

Here’s the damage to peruse:

Request-Q2_2011_results_presentation

2Q_2011_ENG

Nokia_results2011Q2e