Groupon Q2 2012 Earnings; Revenues Grow 45%

Groupon announced its earnings for Q2 2012, with revenue improving 45% to $568 million, even after significant foreign exchange rate moves against it. Gross billings increased 38% to $1.29 billion, while operating income increased to $46.5 million.

Groupon’s North American revenues grew 66% while its international revenue growth was close to 30%. It also managed to bring its customer acquisition and marketing costs down significantly.

Mobile usage has continued to increase and adoption of its merchant tools also continues to rise, which should help it in its mission to become the “operating system” for local merchants.

Groupon ended the second quarter with its cash and cash equivalents standing at $1.12 billion.

Q2 2012 was the first quarter for Groupon with material direct revenue, generated through the sales of its own products and services. We expect that to become a sizable portion of its total revenue mix in the coming years.

Andrew Mason, CEO of Groupon, said:

“We had a solid quarter despite challenges in Europe and continued investment in technology and infrastructure. We’ve deepened our relationships with a growing base of merchants and customers worldwide, demonstrating progress as we work to unlock the opportunity in local commerce.”

Groupon’s stock crashed nearly 20% after it reported these numbers, and stands much below its IPO price.

via Groupon – SEC

Facebook Stock At Nearly Half of IPO Price

Facebook’s stock has been completely hammered in the last week, after it reported its earnings for Q2 2012. While Facebook’s stock dropped nearly 20% following the earnings of Zynga and itself, the carnage is far from over.

Its stock is currently trading just above $20, which implies a valuation of just around $45 billion, which is much lower than the much touted $100 billion valuation it was supposed to be worth.

Its stock price is now just slightly more than half its IPO price, which means that nearly all investors are in the red. After showing explosive revenue growth in the last couple of years, its numbers in the last two quarters have failed to impress. Its ad offerings have failed to generate any significant revenue so far, and the most recent dip in its share price was triggered by allegations by an advertiser that 80% of all clicks on Facebook ads came from bots. To add to that, came the revelation that around 8% to 9% of Facebook’s users are fake users (duplicate users, misclassified accounts and “undesirable” accounts).

Facebook’s problems are many:

1. It still hasn’t been able to find a way to effectively monetize its growing mobile audience.

2. Its growth in the US and Europe has peaked, and there is not much revenue upside potential left through new user growth in those markets.

3. In developing markets like India, where it is expected to grow the most, the average ad revenue generated per user is much lower than in the US, so it wouldn’t impact its revenue growth much.

Given how Google has been making tons of money from search advertising, Facebook could easily be worth much more if it’s able to prove that social advertising is just as, if not more, effective as search advertising.

LinkedIn Q2 2012 Earnings: Revenues Jump 90%

LinkedIn is one of the few internet stocks which hasn’t completely tanked below its IPO price, unlike recent disasters like Facebook, Zynga and Groupon.

It is trading at around $110, after receiving a boost right after it announced its earnings for the second quarter of 2012.

It had a pretty good quarter by all means, with revenue jumping 89% to $228 million. Its net income was around $2.8 million, and reported strong growth metrics.

Jeff Weiner, CEO of LinkedIn, said:

“LinkedIn had a strong second quarter with all of our key operating and financial metrics showing solid performance. Our ongoing investment in product innovation drove healthy engagement as measured by unique visiting members and member page views, and our three revenue streams all experienced significant growth.”

Revenue from Hiring Solutions, LinkedIn’s most valuable business, almost doubled to $122 million, while Marketing Solutions’ revenue increased 64% to $63 million. Premium Subscriptions’ revenue increased 82% to $44 million.

LinkedIn also made quite a few major advances in the last quarter. It launched its first iPad app, and completely revamped the design for its service. It also rolled out its new social news product, LinkedIn Today. It launched features like Targeted Status Updates, as well as Follower Statistics.

LinkedIn ended the quarter with nearly $616 million in cash and short term investments.

It also revised its earnings guidance for FY 2012 upwards, approaching nearly $925 million.

via LinkedIn – SEC

Yelp Q2 Earnings: Revenue Grows 67% to $33 Million

Yelp announced its earnings for Q2 2012 on August 1. Its revenue grew to $32.7 million, up 67% year-over-year. It also posted a smaller net loss than expected ($2 million), and managed to post impressive growth metrics fueled by its international expansion. Its stock price jumped nearly 20% following the earnings release, and its now trading at nearly $22.

Yelp’s CEO, Jeremy Stoppelman said:

“Yelp’s second quarter performance highlights the underlying power of our model. By focusing almost singularly on cultivating rich, authentic local content, we have created a unique platform that is rapidly becoming the de facto local search engine for connecting consumers with great local businesses. We are now active in 90 Yelp markets around the world and are seeing an increase in our consumer engagement, especially on mobile, where their connection to local businesses is enhanced by the location-based capabilities of their mobile devices.”

Yelp’s cumulative reviews grew to more than 30 million, up more than 54% since Q2 2011. Its average monthly unique visitors also grew 52% to more than 78 million, while registered local business accounts more than doubled to 32,000.

It expanded into 8 new markets in Q2 2011, which brings its total global market presence to 90. Yelp’s mobile app continues to become an increasingly significant part of its business, as it logged nearly 7.2 million monthly unique mobile devices in Q2. It continues to add features to its mobile apps, and the integration with Apple in iOS 6 would only further boost its mobile usage. Yelp also tied up with Microsoft’s Bing to power local search on it.

Yelp ended the quarter with nearly $122.6 million in cash and cash equivalents. Its cash burn rate has decreased in the last couple of quarters, and it seems on track to turn a profit soon.

via Yelp – SEC

Microsoft Wants to End All Patent Disputes with Google

Microsoft, Google, Apple and many other technology / software / internet companies have been embroiled in patent infringement and licensing disputes in the recent past. In the last couple of years, especially, the patent wars have really intensified, with tech giants spending billions of dollars to buy patents and/or license them.

Microsoft, being one of the pros in the game, has been making billions of dollars in patent licensing fees. One of its primary targets has been Android, and it has managed to coerce almost every major Android device maker to enter patent licensing deals with it.

In an unanticipated move, Microsoft has approached Motorola (and Google) rather publicly, in a bid to end all patent licensing disputes and enter cross licensing agreements covering both their patent portfolios at reasonable terms.

Microsoft’s official statement says:

“Microsoft has always been, and remains open to, a settlement of our patent litigation with Motorola. As we have said before, we are seeking solely the same level of reasonable compensation for our patented intellectual property that numerous other Android distributors – both large and small – have already agreed to recognize in our negotiations with them. And we stand ready to pay reasonable compensation for Motorola’s patented intellectual property as well.”

Microsoft is seeking a comprehensive resolution which would end all outstanding patent disputes, and also demanding that all patent licenses be granted at market rates determined by existing patent licensing agreements with other parties and FRAND terms.

One of the main reasons why Google had acquired Motorola was because of its patent portfolio, which provided it enough ammunition to go up against Apple and Microsoft which had been bullying it and its device partners.

Motorola commented on Microsoft’s statement:

“Microsoft wants to undercut Motorola’s industry-leading patent portfolio, licensed by more than 50 other companies on fair and reasonable terms, while seeking inflated royalties tied to standards that Microsoft alone controls. Motorola is always open to negotiations that avoid wasteful and abusive patent claims.”

While I hope that both companies end these time consuming disputes, it seems highly unlikely for now, given their long standing rivalry.

via AllThingsD

Alibaba Raising $8 Billion to Buy Back Shares from Yahoo

Alibaba, the Chinese e-commerce giant, which accounts for most of Yahoo’s value right now, is raising close to $8 billion, in order to buy back nearly 20% of its stake from Yahoo for $7.1 billion.

Alibaba will be selling $1.5 billion worth of convertible preferred shares, $2.6 billion worth of common shares, and will raise close to $4 billion in debt in this round of financing. The sale of convertible shares will value it at nearly $43 billion.

Yahoo will make a windfall on the sale of half of its stake in one of the most valuable private internet companies to date. It acquired a 40% stake for $1 billion in Alibaba more than 7 years ago.

Alibaba has a revenue run rate of more than $3.6 billion this year, with revenues growing more than 60% in the first half of 2012. Its valuation is now more than twice Yahoo’s.

While Alibaba is eager to buy back its stake from Yahoo, the latter is getting back up under the reign of its new CEO, Marissa Mayer, after struggling to stay relevant in the internet space in the last couple of years. The deal is expected to close in Q4 2012.

via NYT

Google Acquires Wildfire, Social Marketing Startup

Google may be the juggernaut in the search advertising space, but Facebook poses a significant threat to it, with its new form of social advertising. While Google targets ads based on search queries by users, Facebook uses their social preferences, likes, shares, and other such data to target ads, which is arguably much more effective.

Today, Google acquired Wildfire, a social media marketing and advertising startup, which makes it easy for brands and companies to advertise on social platforms like Facebook, Twitter, LinkedIn, Google+, Pinterest and more.

The deal size is approximately $250 million, plus earnouts, according to AllThingsD. Wildfire has raised $14 million to date, and serves more than 16,000 customers including 30 of the top 50 global brands.

Google will likely integrate Wildfire’s social marketing/advertising platform with its search and display ad platform, enabling customers to manage their entire online advertising campaign from a single platform.

Google now offers ads across all categories — search, display, video, mobile, offline ads and social.

Google’ official press release said:

“In a complex and changing landscape, businesses want to manage and measure these efforts in an integrated way. We’ve been working towards this end for some time. For example, Google Analytics helps businesses measure the contribution of hundreds of social sites; our Admeld service has helped to serve ads in Facebook developers’ social apps; and our DoubleClick platform enables clients to run and measure ads across social websites. On Google+, brands use services like Vitrue, Buddy Media and others to manage their pages, with many more to come.

With Wildfire, we’re looking forward to creating new opportunities for our clients to engage with people across all social services. We believe that better content and more seamless solutions will help unlock the full potential of the web for people and businesses.”

Box Raises $125 Million to Dominate the Enterprise Cloud Storage Space

Box, the Dropbox for the enterprise, has raised yet another monster round of funding. It has announced a $125 million investment by General Atlantic Partners, at a rumored valuation of nearly $1.2 billion.

Box is one of the top enterprise cloud storage and collaboration services, and has grown at an explosive rate in the last couple of years. It has been expanding internationally and growing at a scorching pace, with enterprise sales up more than 200% year-over-year in the first half of 2012, and the average deal size almost doubling.

It has been adding data centers across the globe to support its expansion. It has more than 120,000 businesses signed up, and is used by individuals at 92% of the Fortune 500 companies.

Aaron Levie, Co-founder and CEO, Box, said:

“The confluence of cloud, mobile and social technology is transforming how every enterprise and individual manages information today. This new funding allows us to invest aggressively in the talent, technology and global expansion efforts required for Box to sit at the center of this shift and define the next generation of enterprise software.”

General Atlantic led this round with existing investors like Bessemer Venture Partners, DFJ Growth, New Enterprise Associates, SAP Ventures and Scale Venture Partners, as well as new investor Social+Capital Partnership. Gary Reiner, operating partner at GA, will join Box’s board of directors.

Box faces competition not only from other cloud storage startups, but also giants like Microsoft and Google, who are also eying the enterprise file sharing and collaboration space.

With this round, Box has now raised a total of $284 million.

via Box PR

Android Loses U.S. Smartphone Market Share to iOS in Q2

Strategy Analytics just released its quarterly report on the state of the U.S. smartphone market in Q2 2012. The overall market shrunk as smartphone shipments fell 5% year-over-year to 24 million units during Q2. Google’s Android lost market share to Apple’s iOS, and saw its market share decline to 56%.

The decline in quarterly shipments could be attributed to a volatile macroeconomic environment, tighter upgrade policies by operators, and the near saturation in smartphone subscribers in the U.S.

The number of Android device shipments were around 13.4 million, while the number of iPhone shipments were 7.9 million. Blackberry device sales dropped further to 1.6 million units, while other smartphones had aggregate sales of 1 million units.

Android lost 4.3% market share, while Blackberry and other platforms lost 4% and 1.6% each. Apple was the major beneficiary, and saw its market share increase from 23.2% to 33.2% year-over-year.

While Q3 2012 might not be as kind to Apple, Q4 will again see Apple’s market share skyrocket as the iPhone 5 is launched in late September or October.

 

9GAG Raises $2.8 Million to Help You Waste More Time

If you have been using the internet for a fairly long time, you would probably know about 9GAG. (If you don’t, congrats! You haven’t been wasting much time and are actually getting some work done. Unlike me.)

9GAG is one of the most popular community websites for memes, comics, videos and all kind of internet humor. It is almost like a curated form of Reddit and 4chan, featuring the best internet humor content voted on by its massive user base. It’s also a complete time sink, and the reason why most of my days are unproductive and I’m dangerously close to getting kicked out of my 12th job. (Yeah, screw you, 9GAG.)

Anyway, 9GAG has just announced that it has raised $2.8 million in seed funding from a host of Silicon Valley VCs and angels including Freestyle Capital, True Ventures, First Round Capital; Greycroft Partners, and 500 Startups as well as individual investors Scott Banister, Chris Sacca, and David Tisch among others.

According to the official press release,

“The investment will be used to increase staffing, expand internationally and deliver continued platform enhancements in order to meet the explosive growth of the 9GAG community, which is taking online comedy to a new level. Since launching in 2008, 9GAG has grown to more than 70 million unique visitors and more than a billion page views per month, representing the highest global traffic of any humor website. In addition, 9GAG’s ability to allow users to easily post and spread entertainment content on Facebook and Twitter has further catapulted the reach of its content, with over five million monthly Facebook ‘shares’ and nearly one million Twitter followers.”

9GAG also launched a mobile version of their website, and an iPhone app. It’s currently working on an Android app too, which be released in the coming months.