Yahoo’s Turnaround Story Could Have Legs
These are trying times for Yahoo, which has spent handsomely on acquisitions with little to show on the bottom line. But a couple of stories made the headlines last week and had investors rejoicing.
For the first time, eMarketer published Tumblr usage figures and also provided growth estimates for the next few years. The research firm estimates that the number of Tumblr users (people who logged in to their Tumblr accounts at least once a month over the past year) increased 46.2% in 2013 to 13.7 million.
While growth rates are expected to come down, the number of users will nearly double to 24.2 million by 2018. Actual usage is likely higher because many Tumblr users have multiple blogs running at the same time. Another encouraging statistic is the high concentration of users in the 18-24 and 25-34 age groups. While Yahoo hasn’t made much progress monetizing the platform yet, it continues to integrate it into the core platform, so ad revenues may be in the offing.
The other story was about the newly-appointed CIO Mike Kail, who talked to the Wall Street Journal about his plans for streamlining Yahoo’s infrastructure to create a seamless experience for Yahoo users across devices. He will continue the company’s owned-and-operated strategy, moving away from co-leased and co-operated data center facilities. Kail came from video streaming company Netflix and his initiatives will likely position Yahoo to handle and deliver more video content to a larger number of mobile devices. With ad dollars increasingly moving to online video, this is an important area for Yahoo.
Apple Riding New Product Wave, Again
Apple is set to refresh its line of products on Sep 9 and share prices have started mounting in typical fashion. Also typical is the rising speculation about the new features, including the announcement of a launch date for its smartwatch. Key enhancements we are looking for are larger screen sizes for the iPhone and higher screen resolutions for the iPad line.
There is also some speculation about the cover glass it will be using: some media reports say that it could replace Corning’s Gorilla Glass with GT Advanced Technologies’ Sapphire glass. Display assembly apparently hit a snag earlier on, but suppliers say that production is back on schedule.
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Other stories you may have missed-
Cisco Employees Get the Memo: Cisco (CSCO) is putting on a brave face after announcing that it was letting go of 6,000 employees, or roughly 8% of the workforce. CEO Chambers issued a memo saying that the decision was intended to help the company invest in its growth and that he had already mentioned to analysts that total headcount would not go down (meaning that there will be sufficient new hires).
Severance charges will amount to $700 million. Cisco is seeing its high-end networking hardware market melt away and is facing issues related to government spying actions in several growth markets.
Ad-free Music Streaming from YouTube: Google’s (GOOGL) YouTube may be about to launch its long-anticipated music streaming service. The company has registered the YouTubeMusicKey.com domain name, acquired 20 million tracks, secured agreements with the three large record labels and strong-armed the independent labels for the purpose. Through the Songza acquisition, it also acquired the filtering capabilities required to offer personalized recommendations. As a result, Google Play Music All Access will be rebranded Google Play Music Key.
China to Launch Rival OS: Everyone wants a piece of China but the Chinese government has other plans. Xinhua has reported that a new Chinese operating system would be launched by October this year to take on rival systems from U.S. companies like Apple and Google. Edward Snowden’s exposure of the U.S. government’s snooping mechanisms and the subsequent anti-hacking measures taken by the government against Chinese companies have had a significant impact on technology companies operating in China.
Facebook Studying Shopping Habits: Facebook (FB) isn’t happy serving you ads on Facebook, it’s not even content tracking what you do on sites other than Facebook. It has now decided to track the devices you use and pass on that information to advertisers. It wants to do all this so advertisers know what device you log on and at what time, in order to identify how and when you make a purchase, how much you spend and so forth. It’s kind of hard to understand why privacy watchdogs are against Google’s customer profiling, but consider Facebook tracking cool.
Amazon Could Be Getting into Advertising: The Wall Street Journal has reported that Amazon (AMZN) apparently has a search tool in the works that will help it garner advertising revenue. Google may be search king today, but Amazon does have a whole lot of data about its 2.5 million odd users and it knows a thing or two about studying customer behavior. This could be quite valuable for advertisers and the high-margin revenue could improve Amazon’s profitability. Successful or not, this will challenge Google, which has ventured into both retail and cloud infrastructure, two traditional Amazon markets.
Google Makes Some Acquisitions: Google has acquired Jetpac and Gecko Design, the first to acquire some photo analytical tools and the second to add product design capabilities to its X Labs. Jetpac has raised $2.4 million and developed an app called Jetpac City Guides by drawing on photos posted to Facebook’s Instagram. Jetpac has since withdrawn the app, served notice about the withdrawal of its service from Sep 2014 and announced that it was joining Google.
Lenovo Acquisition of IBM Server Unit Gets U.S. Approval: The government panel that screens deals with possible national-security implications has cleared the acquisition, which the two companies are expecting to close by year-end. The deal attracted special attention because the government uses IBM’s (IBM) x-86 based servers.
ADP’s Dealer Services Business to be Christened CDK Global: CDK will trade on the Nasdaq under the ticker symbol CDK and will focus on the automotive market where it has over 26,000 dealer sites in over 100 countries and nearly 9,000 employees.
VMware Acquires CloudVolumes: CloudVolumes offers real-time application delivery technology enabling the delivery of native applications to virtualized environments on demand. The acquisition is intended to facilitate desktop virtualization and improve application delivery and performance. It is not expected to have a material impact on VMware’s results.
Amazon/Apple Lead eCommerce Growth: Industry observer Internet Retailer, in its 2015 Mobile 500 report, said that Amazon and Apple were ranked #1 and #2, respectively with a combined market share of 37%. The two are expected to generate $30.8 billion from mobile commerce in 2014. The top 500 mobile e-commerce businesses will see sales jump 80% this year.
Twitter Tops comScore Estimates: Unique visitor adds on Twitter (TWTR) surpassed other social networks in July although average time spent on the portal shrank from June. User engagement remains an issue on Twitter despite a number of initiatives by the company.
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