IBM Reports Q3 2012 Earnings; Revenues Down 5% to $24.7 Billion

IBM reported its earnings for the third quarter of 2012 yesterday, with its net income growing to $3.8 billion, nearly flat year-over-year, and its revenues shrinking 5% to $24.7 billion. Most of the decline in revenue growth can be attributed to the economic slowdown in Europe and other parts of the world.

Virginia Rometty, IBM chairman, president and CEO, said:

“In the third quarter, we continued to drive margin, profit and earnings growth through our focus on higher-value businesses, strategic growth initiatives and productivity.

Looking ahead, we see good opportunity with a strong product lineup heading into this quarter and annuity businesses that provide a solid base of revenue, profit and cash. We are reiterating our full-year 2012 operating earnings per share expectation of at least $15.10.”

IBM makes money primarily from three segments — services, software and hardware. Its technology services revenue declined 4% to $9.9 billion while business services revenue declined 6% to $4.5 billion.

Software revenue declined marginally to $5.8 billion, while hardware revenue totaled $3.9 billion, down 13% year-over-year. The global financing segment contributed $472 million to its top line.

IBM’s cash and cash equivalents grew to almost $12 billion this quarter.

via IBM – SEC

Intel Reports Q3 2012 Earnings; Revenues Flat at $13.5 Billion

It’s the earnings season again, and Intel was one of the technology giants to report its third quarter earnings. Its revenue in Q3 2012 was $13.5 billion, almost flat compared to the last sequential quarter. Its net income, however, was $3 billion, up 5.1% sequentially. It reported an operating income of nearly $3.8 billion, an generated $5.1 billion in cash from operations.

Paul Otellini, Intel president and CEO, said:

“Our third-quarter results reflected a continuing tough economic environment. The world of computing is in the midst of a period of breakthrough innovation and creativity. As we look to the fourth quarter, we’re pleased with the continued progress in Ultrabooks and phones and excited about the range of Intel-based tablets coming to market.”

The PC Client group which is primarily the consumer PC division generated $8.6 billion in revenue, while the Data Center Group which is the server chip business generated $2.7 billion in revenue.

Intel also projected Q4 2012 revenue at $13.6 billion, slightly higher than current revenue. Intel is trying hard to get a strong foothold in the mobile processor market, which is dominated by ARM. Intel’s future also depends on the success of Microsoft’s Windows 8 on tablets to some extent. The next couple of years might be decisive for Intel.

via Intel – SEC

eBay Q3 2012 Earnings: Revenue Jumps 15%, Profit Up 22%

eBay reported its earnings for Q3 2012, with its revenue increasing 15% to $3.4 billion year-over-year. Its net income was up to $597 million, up 22% year-over-year. Its core Marketplaces product and PayPal contributed to most of the growth.

John Donahoe, President and CEO of eBay, said:

“We had a great third quarter across our company, with Marketplaces and PayPal accelerating customer growth. Mobile continues to be a game changer for us, and we continue to be a clear leader in mobile commerce and payments. With our strong portfolio and global reach, we are consistently demonstrating our capabilities to help consumers shop anytime, anywhere. And we are enabling retailers of all sizes to compete in a rapidly evolving, multichannel commerce environment.”

PayPal saw its user base expand to 117.4 million active registered accounts, up 14% year-over-year. Revenue from PayPal increased 23% while the total payment volume grew 20% to $35.2 billion. PayPal continues to focus on mobile to drive most of its growth and also gained traction with PayPal Here, its competitor to Square.

In Marketplaces, the gross merchandise value increased 11% to $16 billion, while the revenue increased 9%, driven primarily by growth in the US and Asia Pacific. eBay’s cash and cash equivalents increased to $7.3 billion in the last quarter.

eBay is undergoing a significant change, as it recently introduced a new redesign, and also launched a new marketing campaign. PayPal is its prime focus now, led by David Marcus, who is now focusing on the product and customers to grow the dominant online payments service.

via eBay – SEC

Facebook Launches Mobile App Install Ads

Facebook has announced that it will be making its new mobile app install ad units available to all developers. It had been testing them in beta since August. These new ad units are being positioned as a great way for developers to drive installs and aid social app discovery for their mobile apps. Facebook noted that its testing partners saw more than 50% higher CTRs compared to their existing channels as well as much greater reach.

The official announcement by Facebook said:

Today we’re making our new mobile app install ads available to all developers. We announced these ads in beta in August as a new and effective way for mobile app developers to drive installs and increase app discovery.

For years, many apps and games on have used ads as an important part of their growth strategy. Now we are bringing these opportunities to mobile apps. With these new ads, mobile apps and games of all sizes across any category can reach the right audience, at scale.

In coming months, we’ll continue to make updates that improve the user experience and the performance of mobile app install ads. For example, you may be able to customize your ad unit based on your audience, ensure that your ads are only shown to people who have not installed your app on iOS or Android devices, and allow people to start installing your app without leaving Facebook.

These new ad units work in conjunction with Facebook App Center, and could help Facebook shore up its mobile ad revenues by monetizing its rapidly increasing mobile user base.

Microsoft Acquires MarketingPilot to Bolster Dynamics CRM

Microsoft seems to be back on a mini acquisition spree. It acquired a cloud storage vendor, StorSimple, earlier this week. Today, it made yet another small acquisition, a marketing software company called MarketingPilot. MarketingPilot makes automated marketing solutions which could be integrated with Microsoft’s own offerings like Dynamics CRM.

MarketingPilot offers an integrated marketing management solution for lead and advertisement buying management. It was apparently a quick acquisition and a rather small one.

While Microsoft continues to focus on the Windows 8 launch, it also works to improve its enterprise offerings, which form a major chunk of its overall revenue.

With Dynamics CRM, Microsoft competes with Oracle, SAP and among others.

Here’s the entire press release by Microsoft:

Microsoft Dynamics CRM Steps Forward in the Marketing Automation Space

The Microsoft Dynamics CRM team continues to execute against a vision to help organizations better attract, retain, and grow their customers. Our goal is to deliver more compelling finished applications, modern user experiences with simplified user interfaces, and an open and extensible platform for Cloud and On-premise deployments.

With the explosion of new channels, emerging markets, and shifts to online and digital customer engagement, there’s tremendous opportunity ahead in the marketing automation space. In fact, according to IDC, “Marketing Automation is expected to grow faster than any other segment of CRM over the next 4 years,” and according to Gartner, “by 2017, CMOs may have a bigger IT budget than CIOs do.” More and more, marketers are being asked to drive the overall strategy and execution of customer interactions across multiple channels and touch points, and to measure ROI on those interactions.

As part of these industry trends and emerging business opportunities, I am excited to announce that Dynamics CRM has closed on the acquisition of MarketingPilot. MarketingPilot provides Integrated Marketing Management solutions that allow organizations to better understand their customers, manage and streamline marketing operations and create automated and measurable multi-channel marketing campaigns. This acquisition is a very exciting step forward for us, and will accelerate our ability to better meet the needs of CMO’s through rich business intelligence, and better enable marketers to successfully plan, execute, monitor, and optimize customer interactions across digital, social and traditional channels, and measure ROI.

Microsoft, along with our partners, has been helping marketing organizations for several years now. Customers like Volvo Construction Equipment and the Portland Trailblazers are using Microsoft Dynamics CRM today to better attract and retain their customers. We are committed to helping marketers plan, execute, monitor and optimize customer interactions across digital, social and traditional channels and measure the impact on revenue. With this acquisition, we believe we will be well positioned to deliver highly valuable marketing automation solutions to new and existing customers.

Please join me in welcoming MarketingPilot employees and customers to the Microsoft Business Solutions Division and the broader Microsoft family. At Convergence, this coming March, we will further describe our product vision in this area, including our plans with MarketingPilot.

Today’s news is a welcome step forward for Microsoft Dynamics CRM and our customers. We look forward to MarketingPilot contributions in this exciting emerging space, and delivering highly valuable marketing automation solutions to our customers and partners.

Bob Stutz
Corporate Vice President, Microsoft Dynamics CRM

Braintree Raises $35 Million to Dominate Online Payments

Braintree, one of the most popular online payment gateways for the web and mobile, has raised $35 million in another round of funding led by New Enterprise Associates, according to a report by Techcrunch. This deal brings its total funding up to almost $70 million.

Braintree competes primarily with the likes of PayPal, providing a merchant account and payment gateway for web and mobile support. It has a massive customer base which includes biggies like Rovio, Uber, OpenTable, Airbnb, Heroku, Engine Yard, Shopify etc. It has seen its transaction volumes increase to $5 billion in total payments in the last year and has around 3,000 merchants signed up for its payment offerings. It supports more than 30 countries and 130 different currencies.

While PayPal is ideal for consumers, Braintree is targeted more towards small businesses, startups and enterprises. After acquiring Venmo, they are now also going after the consumer market, specifically after small developers.

Mobile Payments are expected to be huge in the next couple of years, and Braintree will compete with PayPal and Square in that space. While PayPal is backed by eBay, Square recently raised $200 million. It’s going to be an interesting war.

via Techcrunch

Smartphones Hit the One Billion User Mark

“A million dollars isn’t cool. You know what’s cool? A billion dollars.”

Apparently even that quote applies to not only dollars, but even users now. On the heels of Facebook announcing that it had hit the one billion users milestone, Strategy Analytics announced today that we will have hit a major milestone in Q3 2012. There are now more than a billion smartphones in active use, and the smartphone penetration continues to grow at an increasing rate.

The report didn’t delve into much detail, but most of the growth in the last couple of years would have to come from Samsung, Apple and then Nokia. The growing popularity of iOS and Android has led to the rapid acceleration in the use of smartphones. While it took 16 years to hit the first billion, we are expected to reach the next billion in just 3 more years.

One out of every seven people on the planet now have a smartphone. However, many more still have feature phones, but that is expected to change in the near future. China, India and other emerging markets are expected to be on the forefront of this smartphone revolution as markets like the US and UK already have pretty high penetration.

via Techcrunch

Twitter Acquires Cabana, A Mobile App Platform

Twitter has acquired Cabana, a mobile app development platform, which specializes in making social apps for Facebook and Twitter. Cabana has a popular product called Fan Page Mobilizer which lets small businesses convert their Facebook pages into a new mobile website in just a few easy steps.

Twitter could use Cabana’s team to develop offerings targeted at enterprises and small businesses to attract them to its platform, and eventually monetize them using its new ad offerings.

Cabana has announced this in an official blog post, and like all such acquisitions, this will mean the end of all development on its existing products. Cabana has stated that they will be building tools that will help developers create apps for Twitter and contribute to its ecosystem.

“We are writing today with some exciting news: Cabana has been acquired by Twitter and our team is #JoiningTheFlock!

We built Cabana because we are passionate about empowering people to develop interactive content in new and innovative ways. That same passion for innovation and the democratization of content creation is also shared by the amazing team at Twitter.

Over the past few months, we’ve gotten to know the Twitter team and discovered the tremendous amount of technological synergy and alignment of our visions. The more we explored this synergy, the more excited we became about joining forces and working together.

Starting today we will be joining Twitter’s platform team, and will build tools to help third-party developers create new experiences on Twitter and empower the larger Twitter ecosystem.

This means that we will no longer be offering Cabana as a standalone mobile app development environment.

Cabana will be shutting down on December 1st 2012. If you have any questions about our rolldown, please email us at [email protected]

Rest assured that the ideas and passion behind Cabana will live on, albeit in a slightly different form – at Twitter!

We want to thank all of you, from our users and investors to our family and friends, who made this journey possible.

We’re excited for what the future with Twitter holds!”

via Techcrunch

Softbank to Acquire 70% of Sprint for $20.1 Billion

Last week, rumors had started floating that Softbank may be looking to acquire a majority stake in Sprint Nextel, for more than $12.8 billion, or 1 trillion Japanese yen. Today, it was officially announced that Softbank and Sprint have reached a deal. Softbank will be acquiring roughly 70% of the full diluted share count of Sprint Nextel through an entity called “New Sprint” for $20.1 billion.

Softbank will be buying $8 billion worth of shares from Sprint directly for $5.25 a share, and $12.1 billion worth of shares from external shareholders for $7.3 billion a share. The $8 billion payment will also include a convertible bond worth $3.1 billion.

If the deal doesn’t go through due to regulatory intervention or any other reason, Softbank would have to pay a termination fee of $600 million to Sprint. However, if Sprint’s shareholders don’t approve the transaction, it will have to pay $75 million to Softbank to cover its expenses. Softbank will be taking on significant debt to finance this deal.

This is a great deal for both parties, as Softbank would have an easy way to enter the U.S. market, while Sprint will get access to Softbank’s deep pockets and finance its network upgrades. Both are also developing LTE, which should give them the “economies of scale” advantage. They would also be in a much better position to take on AT&T and Verizon.

via Techcrunch

Amazon May Buy Texas Instruments’ Chip Business

According to a report by Calcalist, Amazon may be in the process of buying the smartphone and tablet chip business of Texas Instruments. TI recently announced that it will be shutting down its operations in the smartphone and tablet space, and focus on its core strengths – embedded device platforms.

Amazon is one of the perfect buyers for that business. By having its own chip manufacturing operation, it can have greater control over the chips running its Kindle devices. Given the rumors that it may enter the smartphone space and the fact that its Kindle device sales are growing significantly, this seems like a logical move.

Amazon’s competitors like Barnes & Noble use TI’s chips, so such an acquisition could also help Amazon gain a competitive advantage and make things tough for its rivals.

TI’s chip business could be worth billions of dollars, and Amazon could also be willing to pay a huge premium, given the high strategic value to it. Google, Apple and Samsung are all moving towards an operational model wherein they are trying to increase their control over the components that make their devices.

via TNW