Facebook Acquires Acrylic, Maker of iOS and Mac Apps

There have been so many acquisitions this week, that it’s getting hard to keep count. Oracle acquired Involver and Skire, Google acquired Sparrow, and now Facebook has acquired Acrylic Software, a Mac and iOS app development studio. Acrylic makes apps like Pulp, a news reader, and Wallet, a security app.

Facebook has acquired Acrylic primarily for its team, not for its products, which makes this a talent acquisition. Pulp and Wallet will remain available for download, but the team will stop further development on them.

Dustin MacDonald of the Acrylic team says:

“Facebook is an invaluable service that we all use daily, and a company I believe is one of the most innovative and important around today. After visiting late last year, I discovered that we shared many of the same core product design goals and principles, and it soon became obvious that it was a natural fit. Simply put, there’s an opportunity at Facebook to have a big impact in many people’s lives. More importantly, Facebook is full of extremely talented people who will be able to help realize its full potential in the years to come.”

Facebook has made a number of acquisitions in the last couple of months, most of them related in one way or another to its mobile ambitions. Notable among them are Instagram, Spool, Lightbox, Face.com etc.

Not being able to properly monetize its rapidly growing active mobile user base has been one of Facebook’s greatest shortcomings in the last couple of quarters. With these acquisitons, it might be able to finally crack that puzzle and reach that much hyped $100 billion valuation.

via Acrylic

Google Reports Earnings for Q2 2012; Revenue Jumps to $12.2 Billion

Google reported its earnings for Q2 2012, with its quarterly revenue growing to $12.2 billion. Of that, nearly $1.25 billion was due to its acquisition of Motorola, while organic growth contributed nearly 21% growth. Its overall gross margins also took a hit following the Motorola acquisition, due to much higher relative cost of revenues for the hardware business.

Google’s operating income was nearly $3.2 billion and its net income was around $2.8 billion.

Of the $12.2 billion, advertising revenue from its own website was close to $7.5 billion, while ad revenue from its network was about $3 billion. Other revenues added up to $0.44 billion, while revenue from Motorola added up to $1.25 billion.

There weren’t many surprises this earnings season; Google’s aggregate paid clicks increased 42% this quarter, while its cost-per-click declined nearly 16%. Both changes can be attributed to the increasing penetration of mobile devices and mobile search.

Traffic acquisition costs, or the portion of ad revenue shared with partners, increased from 24% of revenue to 25%.

Interestingly, Google’s cash reserves have ballooned up to almost $43 billion.

Larry Page, CEO of Google, said:

“Google standalone had a strong quarter with 21% year-on-year revenue growth, and we launched a bunch of exciting new products at I/O – in particular the Nexus 7 tablet, which has received rave reviews. This quarter is also special because Motorola is now part of the Google family, and we’re excited about the potential to build great devices for users.”

via Google

Microsoft Reports Q4 FY2012 Earnings; First Ever Loss

Microsoft has reported its earnings for Q2 2012 (Q4 FY12) and while it continues to see steady revenue growth with revenue rising to $18.06 billion, it has reported its first loss ever ($492 million), primarily due to a non-cash goodwill writedown it took due to its failed acquisition of aQuantive in 2007. If we adjust for the impact of the writedown, Microsoft would have reported a profit of more than $5 billion.

As expected the Business (Office and Enterprise) division posted revenue of $6.29 billion, up 7% year-over-year, while the Server & Tools business posted revenue of $5.09 billion, up 13%. The Windows division saw a 1% decline in revenue to $4.15 billion, as Microsoft decided to defer revenue from its Windows 8 upgrade offer to the next quarter. Entertainment & Devices continued to grow the most, with revenue increasing to $1.79 billion, up 20% year-over-year.

Online Services, as usual, continued to be a disappointment, and posted a modest increase in revenue but a massive operating loss, thanks to aQuantive and Microsoft’s other failed endeavors.

The next couple of quarters are going to be very crucial for Microsoft. Sales should be driven primarily by the launch of Windows 8 and Office 15. We also expect Entertainment and Devices revenue to be boosted by sales of the Surface tablets, and the expected launch of the next Xbox sometime in the next year.

 

Steve Ballmer, CEO of Microsoft, said:

“We delivered record fourth quarter and annual revenue, and we’re fast approaching the most exciting launch season in Microsoft history. Over the coming year, we’ll release the next versions of Windows, Office, Windows Server, Windows Phone, and many other products and services that will drive our business forward and provide unprecedented opportunity to our customers and partners.”

via Microsoft

Will Nokia Make the First Windows Phone 8 Device?

Nokia has had a very disappointing quarter in terms of earnings. It lost nearly $1 billion in Q2 2012, on revenue of around $9.3 billion. While it sold 4 million Lumia units, it still lags way behind the top Android manufacturers like Samsung, as well as Apple.

In the post-earnings conference call, he may have hinted that Nokia may be the first handset maker to build and launch a Windows Phone 8 device, given its close ties with Microsoft.

When asked about it, Elop didn’t say yes directly, but he did say that Windows Phone 8 has been demonstrated only on a Nokia device to date, and that they have a very close relationship with Microsoft, which is unlike what anyone else has.

Nokia has every reason to be pissed at Microsoft, since it has committed to Microsoft’s Windows Phone platform exclusively, but Microsoft is apparently planning to launch its own smartphone, just like it launched the Surface tablet.

Its current Lumia handset sales might even take a hit since Microsoft announced that the current generation Windows Phones won’t be upgradeable to Windows Phone 8.

However, if Nokia is the first device maker to launch a Windows Phone 8 device, that could give it a major advantage over the other makers, and could help it boost device sales.

In the call, Elop also stated that Nokia will continue to sell Windows Phone 7 devices even after the launch of Windows Phone 8, but position them in the budget segment to compete with low end Android phones.

via TechCrunch

Nokia Reports Q2 2012 Earnings; Loses $1 Billion

The much awaited earnings (not really) of Nokia in the second quarter of 2012 have been released, and they are disappointing. Nokia has reported an operating loss of more than $1 billion, with revenues dropping to just $9.3 billion, down nearly 20% year-over-year.

Net sales have been down across the board, with both smartphones and mobile sales showing a decline.

It sold nearly 4 million Lumia units worldwide in Q2 2012, which is in line with consensus estimates, but much lower than its competitors on Android. Even the feature phone unit volumes increased marginally to 73 million units, but Nokia hardly makes much profit on those.

It ended the quarter with nearly $5.2 billion in net cash.

Stephen Elop, Nokia’s CEO, said:

“Nokia is taking action to manage through this transition period. While Q2 was a difficult quarter, Nokia employees are demonstrating their determination to strengthen our competitiveness, improve our operating model and carefully manage our financial resources.

We shipped four million Lumia Smartphones in Q2, and we plan to provide updates to current Lumia products over time, well beyond the launch of Windows Phone 8. We believe the Windows Phone 8 launch will be an important catalyst for Lumia. During the quarter, we demonstrated stability in our feature phone business, and enhanced our competitiveness with the introduction of our first full touch Asha devices. In Location & Commerce, our business with auto-industry customers continued to grow, and we made good progress establishing our location-based platform with businesses like Yahoo!, Flickr, and Bing. We continued to strengthen our patent portfolio and filed more patents in the first half of 2012 than any previous six month period since 2007. And, we are encouraged that Nokia Siemens Networks returned to underlying operating profitability through strong execution of its focused strategy.”

At the rate Nokia is incurring operating losses, it seems like Microsoft’s cash infusions are the only thing keeping it alive.

It needs to figure out a way to make money off its Windows Phone powered Lumia devices or face oblivion. At this point, the latter seems more likely.

While it remains a leader in mobile shipments, it needs to focus on becoming a leader in the smartphone space, which offers much higher margins.

Maybe it should shift to a multi-platform strategy, and hedge its bets on Windows phone by building devices powered by Android too. After all, if Microsoft isn’t exclusive to Nokia, why should it be exclusive to Microsoft’s platform?

via Nokia

Qualcomm Reports Great Earnings; Set to Ride the Mobile Wave

Qualcomm reported its earnings for Q3 FY12 on July 18. It has had a pretty good quarter with revenues jumping 28% year-over-year to $4.63 billion. Its operating profit was up 24% to $1.38 billion, but the operating cash flow declined to $922 million. It ended the quarter with around $26.5 billion in cash, cash equivalents and marketable securities.

Dr. Paul E. Jacobs, chairman and CEO of Qualcomm, said:

“Adoption of 3G and 3G/4G technologies continues around the world, driving strong year-over-year growth in our chipset and licensing businesses this quarte. Looking forward, our growth estimates for 3G/4G device shipments in calendar 2012 have moderated slightly, and we now expect the demand profile of the calendar year to be more back-end loaded as new devices are launched for the holiday season. Although our outlook for semiconductor volumes in the fiscal fourth quarter has been reduced from our prior expectations, we are ramping supply of our 28 nanometer chipsets to help enable what we expect to be a strong December quarter for our semiconductor business.”

We expect Qualcomm’s chipset shipments to benefit greatly from the boom in the mobile and tablet segments of the processor market.

The launch of Windows 8 tablets should also boost Qualcomm’s earnings, given its good relations with Microsoft. The increase in demand from emerging markets should lead to an uptrend in 3G and 4G chipset shipments. Snapdragon should account for a major portion of Qualcomm’s sales growth going forward.

Having Apple as a major client with the iPhone and iPad should also help its earnings in the coming quarters.

via Qualcomm – SEC

eBay Reports Q2 2012 Earnings; PayPal Shines Bright

It’s earnings season again, and eBay has reported its earnings for the second quarter of 2012. Its revenue for Q2 2012 increased to $3.4 billion, up 23% year-over-year. Its net income growth was a bit lower at around 16% year-over-year, primarily due to the impact of increased capital investments and acquisitions.

eBay’s President and CEO, John Donahoe said:

“We delivered a great second quarter, driven by eBay Marketplaces’ best performance in years, strong growth at PayPal and strong same-store-sales growth for GSI’s large retail customers. Our entire company is strong, but we’re particularly pleased with eBay Marketplaces, which delivered its strongest organic growth in gross merchandise volume, excluding vehicles, since 2006. And mobile continues to be a game changer. We now expect eBay and PayPal mobile to each transact $10 billion in volume in 2012 — that’s more than double 2011, a staggering surge in mobile shopping and payments on devices that did not exist just a few years ago. Retail is at an inflection point, and we are helping to reshape how people around the world shop and pay.”

While eBay’s Marketplaces business continued to show impressive growth, PayPal was the business that grabbed the limelight. It ended the quarter with nearly 113.2 million active registered accounts, and continues to be the leader in the online payments space, which is expected to explode in the coming years.

eBay is working aggressively to fend off startups like Stripe, Square and others who are trying to disrupt the payments space. PayPal saw its total payments volume increase 20% to $34.5 billion. Its mobile payments volume has been growing rapidly. With PayPal Here, and PayPal is targeting retailers and merchants primarily in the U.S. and will soon target them across the globe. This week, it also acquired Card.io, which should help it bolster its point-of-sale offerings like PayPal Here.

PayPal could easily become its largest business in terms of net revenue in the coming years, considering the tremendous rate it has been growing at.

eBay ended the quarter with nearly $4 billion in cash and cash equivalents. All in all, a pretty good quarter.

via eBay – SEC

Google Launches Gmail SMS in Africa

Google has launched a new service — Gmail SMS — which enables users to access, receive and send email from their phones via SMS. While smartphone shipments are at an all-time high, a significant amount of the population, especially in third world countries is still using feature phones with no mobile internet access.

In order to enable access to email for them, and grow its user base further, Google has launched Gmail SMS in three African countries – Ghana, Nigeria and Kenya. This might be a test run, following which Gmail SMS would probably be rolled out in many other countries.

“Gmail SMS works on any phone, even the most basic ones which only support voice and SMS. Gmail SMS automatically forwards your emails as SMS text messages to your phone and you can respond by replying directly to the SMS. You can control the emails received by replying with commands such as MORE, PAUSE and RESUME. Additionally, compose a new email as an SMS and send to any email address recipient – who will find your message in the right email conversation thread!”

Gmail SMS can be enabled from the Account tab in Gmail Settings. Users can just add their phone numbers and verify them to enable Gmail SMS on their numbers. They can also customize notification and forwarding settings on their phone.

Do note that while the service is free from Google’s end, users will still incur the standard SMS messaging charges.

All in all, a pretty cool move by Google to bring email to the unconnected masses.

via Google Africa Blog

Intel Reports Q2 2012 Earnings; Revenue of $13.5 Billion

Intel reported its earnings for the second quarter of 2012 today, with revenue of $13.5 billion and operating profit of $3.8 billion. It generated nearly $4.7 billion in operating cash flow, and distributed nearly $2.2 billion back to shareholders by way of dividends and share buybacks.

Paul Otellini, Intel president and CEO, said:

“The second quarter was highlighted by solid execution with continued strength in the data center and multiple product introductions in Ultrabooks and smartphones. As we enter the third quarter, our growth will be slower than we anticipated due to a more challenging macroeconomic environment. With a rich mix of Ultrabook and Intel-based tablet and phone introductions in the second half, combined with the long-term investments we’re making in our product and manufacturing areas, we are well positioned for this year and beyond.”

While Intel continues to dominate the desktop and notebook processor scene, it faces increasing competition from ARM powered competitors in the mobile processor segment. Last quarter, it saw impressive revenue growth only in the Data Center Group, while the PC Client Group revenue was up only marginally.

It has projected revenue of nearly $14.3 billion in Q3 2012, with most of the growth expected to be driven by the sales of Ultrabooks powered by Windows 8, and Intel based phones and tablets.

Intel is backing tablet makers who are working on Intel powered Windows 8 tablets. Otellini said that more than 20 Windows 8 tablets will be launched later this year, following the launch of Windows 8.

Though both Intel and Microsoft have been trying to reduce their dependence on each other, their futures are still pretty much intertwined. Intel’s earnings in the coming year will be largely driven by the success or failure of Windows 8 in the marketplace.

via Intel

Yahoo Has Another Lackluster Quarter; Flat Earnings in Q2

Yahoo’s troubles just don’t seem to ever end. Following a very public shitstorm which led to the ouster of its former CEO Scott Thompson after he misstated his academic credentials, almost everyone had given up hope. However, it managed to bring Marissa Mayer on board as its CEO yesterday, which has renewed interest in the dying internet giant.

Today, it reported its earnings for Q2 2012, which have been pretty lackluster, as expected. It reported gross revenues of $1.2 billion, which was actually 1% down year-on-year. Its operating income actually dropped 71% to just $55 million due to restructuring costs and deal expenses related to the offloading of part of its stake in Alibaba.

While no one expected Yahoo to post very impressive earnings growth, the reported numbers just confirm Yahoo’s decline over the years.

Hopefully, Marissa Mayer will be able to turn Yahoo around, by focusing more on its flagship products which still attract a large number of users despite being much worse compared to the competition.

Yahoo also did some actual work last quarter, instead of just hiring and firing CEOs. It settled with Facebook and entered a new ad partnership with it. It also sold off about half of its stake in Alibaba for $7.1 billion. It launched new products like the Axis browser and Genome, an online ad solution. It also partnered with CNBC and Spotify to get additional news and media content on its platform.

It still depends on search and display advertising for its revenues, both of which grew a couple of percentage points this quarter.

via Yahoo – SEC