Technology Stock Roundup: Yahoo and Facebook Lead Good Week For Tech
Last week was quite eventful as Yahoo (YHOO) and Microsoft (MSFT) announced original shows and other video initiatives, Facebook (FB) launched new technologies and Apple (AAPL) scored a small win in court.
Yahoo Determined to Succeed In Video
Last week, Yahoo announced two new original comedy series of eight episodes each that will be aired some time next year. Other Space and Sin City Saints, as they are called will not come cheap. The company will pay the standard rate applicable to any cable or broadcast network, which means anywhere between $400,000 and $1 million. Yes, that is a lot of money, but it is also an opportunity Yahoo can’t afford to miss.
Yahoo, Google (GOOG) and Microsoft in particular are basically vying for high-budget TV ads, which have the potential to get diverted to online video. eMarketer expects this ad spend to jump 41% this year to $5.89 billion. Yahoo is therefore acquiring content and wooing marketers.
The Internet company has gone all out to beef up Yahoo Screen (its video platform) and it has decided that original content is the way to go. Other than the comedy series, Yahoo acquired streaming rights to the series Saturday Night Live and original Katie Couric interviews. The company also announced a partnership with Live Nation for broadcasting music concerts on a daily basis.
It has also agreed to adopt comScore’s vCE tool for advertisers that simplify the setting up of an ad campaign and its adjustment and optimization. The idea is to facilitate comparisons with TV ad campaigns.
Yahoo appears to be on track. comScore estimates that video views on Yahoo platforms jumped 39% year on year (albeit on a much smaller base) compared to Google’s 3%.
Facebook Launches App Links
Facebook’s F8 Developer Conference was eventful, with the company launching a number of firsts. Here’s a recap of its deep-linking technology that the company has dubbed App Links. Deep-linking refers to the links within apps that take the user directly to other apps. The technology has assumed greater importance now because of the way in which mobile devices are used. Unlike desktop platforms, mobile usage is largely through apps, so the smooth switching between apps greatly improves the user experience.
The idea is to get the technology accepted as a standard, so Facebook users can stay more consistently connected to Facebook. This will in turn provide Facebook better access to their information and enable it to serve them more customized ads. Companies appear to love the idea: Facebook has already signed on Spotify, Pinterest, Goodreads, Hulu, Dropbox, Venmo and Flixster among others.
Microsoft Issues Security Patch, Can’t Silence Investors
Microsoft shares reacted strongly to the security loophole discovered by FireEye in Internet Explorer versions 6 through 11. The security company found that the loophole had been utilized by a known hacking group, which organized an attack on U.S. finance and defense companies. Microsoft was quick to warn users and come out with a fix (that also covers XP, which it is no longer supporting), but considering the stiff competition in browsers mainly from Mozilla and Chrome, investors got a bit jittery.
But Microsoft is not to be outdone so easily. It’s very unlikely that the problem will result in a customer drain, as the company remains extremely well positioned in the enterprise. In fact a Gartner analyst has said that the next 2 years will see Microsoft’s cloud focus pushing out Google to become the leading provider of cloud services to enterprise customers.
If a recent report from cloud security firm Bitglass is to be believed, Office 365 is gaining on Google Apps as we speak. While the overall position still favors Google (16.3% versus Microsoft’s 7.7%), Microsoft has edged past Google in companies with more than 1,000 employees.
Company | Last Week | Last 6 Months |
AAPL | +3.12% | +12.78% |
FB | +5.02% | +20.65% |
YHOO | +6.84% | +11.83% |
GOOG | +2.39% | |
GOOGL | +1.90% | +4.42% |
MSFT | -1.79% | +8.32% |
INTC | +0.23% | +9.90% |
CSCO | -0.74% | -0.56% |
GOOG = Class C shares (new, non-voting)
GOOGL = Class A shares (old, 1 vote per share)
Other stories you may have missed-
Apple Wins Some, Loses Some: The court has ruled that Samsung infringed on 2 of the 6 patents Apple named in the latest lawsuit, fixing a penalty of $120 million as damages. Samsung’s defense was rightly taken: the problem was with Android and not Samsung, so it should not be held responsible. Apple has gone down that road before, so it isn’t about to sue Google. But since Samsung was indemnified by Google, its only hope was to get at Google indirectly by suing Samsung. So Apple may have won a small battle but it appears to have lost the war.
Microsoft Takes Aggressive Approach With Xbox Originals: Microsoft has announced a full stable of original programs intended to capture the attention of its not-insignificant user base. Granted that the company hasn’t sold nearly as many new consoles as Sony, but then it hasn’t launched in quite as many markets either. That could be something it will rectify this year as it starts selling Xbox One in China and other Asian markets. Video streaming is of course a different ballgame, and the software giant is now pitted against heavy-weights like Netflix (NFLX) and Amazon (AMZN), in addition to upstarts Google and Yahoo.
IBM Raises Dividend: Following a surge in its share prices in the last few months, IBM (IBM) has decided to slow down the pace of share repurchases and raise the dividend instead. Revenue growth remains elusive as the transformation from hardware to cloud services and data analytics continues.
LinkedIn Takes Short-term Pain to Ensure Long-term Gain
Of Twitter (TWTR) Slumps And Yelp (YELP) Jumps: These two Internet-focused companies had opposing reactions to their earnings results last week. Twitter investors were concerned at the decelerating user growth and declining engagement despite the fact that revenues exceeded expectations. Yelp on the other hand impressed investors with both top and bottom lines exceeding expectations.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Read the Full Research Report on YHOO
Read the Full Research Report on GOOG
Read the Full Research Report on AMZN
Read the Full Research Report on AAPL
Read the Full Research Report on MSFT
Read the Full Research Report on IBM
Read the Full Research Report on NFLX
Read the Full Research Report on YELP
Read the Full Research Report on FB
Read the Full Research Report on TWTR
Zacks Investment Research
