Feeds:
Posts
Comments

Posts Tagged ‘google’

Article from GigaOM

“Foursquare has raised $50 million in a new funding round led by venture capital firm Andreessen-Horowitz, the company announced Friday. This latest batch of funding brings Foursquare’s total venture capital investment to just over $70 million.

The New York City-based startup, which provides a service that allows users to share their current location with friends, plans to put the money toward hiring more engineers, developing more offerings for merchants, and expanding internationally, co-founders Dennis Crowley and Naveen Selvadurai wrote in a company blog post announcing the new funding. The blog post reads: “The opportunity to build something meaningful in the location space is HUGE [emphasis theirs], and we feel well-positioned to capitalize on it.”

Foursquare has grown by leaps and bounds since its launch in March 2009. The company, which is set to open a new San Francisco office this month, says it currently has more than 10 million users and more than 70 employees. With a growing list of solid competitors in the location-based social networking space — think Facebook and Google, as well as an ever-expanding list of smaller apps such as Trover — the new backing will certainly come in handy as Foursquare works to keep its edge.”

Read original post here.

Read Full Post »

Article from SFGate.

“The lofty language in Groupon’s initial public offering filing is prompting comparisons to Google’s highly anticipated premier seven years ago, as are the lofty valuations.

Various sources have pegged Groupon’s implied worth at $20 billion to $30 billion, dropping it squarely in the neighborhood of Google’s $27 billion at the time of its 2004 IPO.

Groupon is a fast-growing business, luring 83 million subscribers to its daily deal e-mails in 2 1/2 years. And it might end up a perfectly solid one. But for one simple reason and a lot of complicated ones, Groupon is no Google.

Here’s the simple one: Google reinvented an industry. Groupon tweaked one.

There are limits on how transformative a force the Chicago company can ever be, at least pursuing its current business model.

Why?

Strip away all the hope and hype surrounding Groupon and you’re left with this: It’s a coupon company. Its major innovation was to distribute them through e-mail instead of the Sunday paper.

Granted, Groupon does this very well, with a colorful corporate culture that has deservedly won it plenty of fans and attention. Andrew Mason is one of the most refreshing, entertaining and straightforward CEOs in the last decade. His letter in the IPO filing last week carried loud echoes of the “Don’t Be Evil” sentiment in Google’s S-1.

“We want the time people spend with Groupon to be memorable,” he wrote. “Life is too short to be a boring company.”

He added that the business is “better positioned than any company in history to reshape local commerce.”

But coupons have long had limited appeal among retailers and consumers for very specific reasons, and thus restricted sway over the larger retail market.

Small fraction used

In 2010, marketers distributed $485 billion worth of consumer packaged goods coupons, according to a report by NCH Marketing Services. But only about 1 percent of coupons are actually redeemed.

Everyone will occasionally take advantage of a deal that lands in their lap (or inbox), or wait for a sale on a high-priced item. But it’s a limited subset of people who routinely start their shopping by thinking, what can I buy, do or eat that’s on sale. Most people, most of the time know the brand, model or service they want and go from there. There’s no particularly compelling evidence that this is changing.

Here then is a key difference with Google: Thanks to the query you enter into its search engine, Google knows what you’re interested in at the precise point you’re ready to buy, and serves up ads to match.

Even its worst critics acknowledge this revolutionized advertising, bringing to the marketplace a level of scale and targeting never before seen. It unleashed a tectonic shift in how businesses spent their marketing dollars.

Since then, the Internet giant has plowed its huge profits into cutting edge research and development, pushing ahead the fields of information retrieval, language translation, image recognition, satellite imagery, self-driving cars and much, much more. There’s simply an order of magnitude difference in the respective levels of imagination and innovation on display at the two companies.

Reticent retailers

Groupon does remove some of the traditional friction surrounding discounts, by directly delivering deals that are increasingly personalized, while also – not incidentally – eliminating the stigma and hassle of clipping coupons. But the real sandpaper remains on the retail side.

Coupons are typically loss leaders, the discount a business is willing to swallow in order to get new customers in the door. By definition, such marketing tactics can only ever represent a sliver of the retail pie.”

Read original post here.

Read Full Post »

Article from SFGate.

“LinkedIn Corp. raised the expected price of its initial public offering by $10, to a new range of $42 to $45 per share, making it even more overvalued by any conventional metric.

In my Sunday column (sfg.ly/k0PpDv), I pointed out that LinkedIn was going public at valuations that far exceed established tech companies such as Google, Apple and Amazon – and that was based on its previous expected IPO range of $32 to $35.

At $45 per share, LinkedIn would trade at roughly 17 times its 2010 revenues and 100 times its earnings before interest, taxes, depreciation and amortization, according to Morningstar analyst Rick Summer. That metric, dubbed EBITDA, is seen as a proxy for cash flow. With just $15.4 million in 2010 profit, LinkedIn’s price-to-earnings ratio is meaningless.

By comparison, Google is trading at just under six times revenue and about 14 times EBITDA, Summer says.

LinkedIn still plans to sell between 7.8 million and 9 million shares, which would raise up to $406 million and give it a market value of up to $4.3 billion.

The Mountain View company, which operates an online network for professionals, is expected to set a final IPO price tonight and begin trading Thursday under the ticker LNKD.

Investors are often willing to pay inflated price-to-sales or price-to-cash-flow multiples for fast-growing companies like LinkedIn, Summer says. However, for a higher-risk situation such as LinkedIn, you could argue that investors should be paying a lower multiple.

Less than 10 percent of the company’s shares will trade publicly, which could keep the price up in the short term if demand runs high. But eventually, the venture capitalists and insiders who own the rest of the shares will want to unload some and that could send the price down.

As the first major U.S. social-networking company to go public, LinkedIn could become a favorite of investors who like “pure-play investable themes,” Summer says.

But that also makes it hard to come up with an appropriate value for the company. “This is not an industry we understand incredibly well,” he adds.

Unlike the dot-com companies of yore, some investors argue that social-networking companies deserve lofty valuations because they have “real businesses and real business models,” Summer says. He agrees that LinkedIn has a strong business model and a competitive advantage. “But that’s like looking at a house and saying, ‘It’s livable, it has four bedrooms and two bathrooms. It’s worth any price because it’s a real house.’ ”

Read more here.

Read Full Post »

Article from SF Gate.

“Facebook tapped a major public relations firm to plant negative stories about archrival Google’s competing services, the social-networking giant acknowledged after being effectively caught red-handed by an online news site.

The episode highlights the increasing friction between two of the most prominent companies in Silicon Valley as they battle over talent, acquisition targets and now public perception. It also underscores the growing importance of strategic communications in the competitive arsenal for information companies, whose success depends on winning the trust of users.

But largely, it’s an embarrassing backfire for Facebook, as the clumsy PR stunt has grabbed attention instead of the issue the company was hoping to spotlight.

“This allows Google to appear to be the good guys and Facebook the bad guys,” said Carl Howe, analyst with the Yankee Group.

In recent weeks, public relations firm Burson-Marsteller reportedly shopped around stories that raised privacy concerns about Google’s Social Circle service to influential voices, including USA Today reporters and privacy blogger Christopher Soghoian.

The plan began to unravel after Soghoian posted the pitch online, revealing that Burson had offered to help write and place an opinion piece in the Washington Post, Politico and elsewhere. USA Today followed up with a story suggesting the firm was engaged in a “whisper campaign” to spread negative news about Google and concluded that the claims were “largely untrue.”

The mystery remained about which client was behind the PR effort until the Daily Beast reported that Facebook, when confronted with evidence, had fessed up.

Facebook mostly defended its actions Thursday, saying no “smear” campaign was “authorized or intended.”

“Instead, we wanted third parties to verify that people did not approve of the collection and use of information from their accounts on Facebook and other services for inclusion in Google Social Circles,” the statement read. “We engaged Burson-Marsteller to focus attention on this issue, using publicly available information that could be independently verified by any media organization or analyst. The issues are serious and we should have presented them in a serious and transparent way.”

Social features

Google has increasingly been weaving social features into its services, notably adding “social search results” that include things like the public Twitter updates from a person’s connections that might be relevant to a given query. Google pays Twitter for that information feed.

The initial pitch from Burson claimed that Google is also scraping data from sites like Facebook, MySpace and Yahoo, and revealing secondary connections – say, the friends of your friends – without the permission of users. Google didn’t respond to inquiries from The Chronicle.

Facebook has been on the receiving end of plenty of privacy criticism itself for, among other things, increasing the amount of information that is accessible without asking permission from members.

Burson both defended and apologized for its role in the incident. The company said it was raising fair questions, but acknowledged that the approach “was not at all standard operating procedure and is against our policies, and the assignment on those terms should have been declined.”

The fact that one tech company was pitching negative stories about another comes as little surprise to many journalists, but for the general public, it sheds a glaring and unflattering light on how parts of the industry operate. Big-league public relations is often a bare-knuckle affair, focused as much on bashing rivals as lauding oneself or clients.

Not uncommon

Different companies operate according to different standards, but it’s not uncommon for major businesses to attempt to draw the eyes of journalists to the questionable practices of rivals, by highlighting issues they might not have noticed or sharing damning documents.

“It is a staple of the political and public relations world to not only tell the attributes of your own client, but to voice the demerits of one’s opposition,” said Sam Singer, president of Singer Associates Inc., a crisis PR firm in San Francisco.

The major reason this incident became big news is that Burson didn’t disclose the client it was working for, a violation of standard industry practice, he said. The ethics policies of the Public Relations Society of America state that members shall: “Reveal the sponsors for causes and interests represented.”

Journalists readily take the off-the-record bait, often without disclosing the source of the information, because the information helps them produce scoops or uncover new angles.

Reporters shouldn’t dismiss such information out of hand, because sometimes it’s the only way it can be obtained, but they shouldn’t simply run with it either, said Joe Skeel, executive director of the Society of Professional Journalists.

“It’s like any tip you get anywhere,” he said. “It’s incumbent on every journalist to check out the facts and make sure it’s credible before going forward.”

Read original here.

Read Full Post »

Article from GigaOm.

“Microsoft confirmed that it has agreed to buy Skype for $8.5 billion and plans to integrate it into a wide array of products, from Kinect and Windows Phone 7 to Lync, Outlook and Xbox Live. The deal caps a sudden turn of events for Skype, which had previously been the target of interest from Google and Facebook, but then attracted attention from Microsoft. Om first broke the news about Microsoft’s interest in Skype, and last night nailed the purchase price. With the deal, Microsoft is taking a product that eBay couldn’t integrate well and will try and use it to compete against Google, Apple, Cisco and others in the collaboration and communications space.

Microsoft said Skype will become a new business division with Skype CEO Tony Bates assuming the title of president of the Microsoft Skype Division. The company said the acquisition will enhance its work in real-time communications, which includes Lync, Outlook, Messenger, Hotmail and Xbox LIVE. And it expects it to bring in new revenue and provide more benefits to both consumers and enterprise customers.

“Skype is a phenomenal service that is loved by millions of people around the world,” said Microsoft CEO Steve Ballmer in a statement. “Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world.”

For Skype, the deal allows it to extend its reach and introduce new ways to communicate, said Bates. Microsoft said Skype currently has 170 million connected users and logged more than 207 billion minutes of voice and video conversations in 2010. For all its popularity, however, Skype has had trouble making money and posted a $7 million net loss in 2010.

Microsoft will have a big job on its hands in trying to make Skype work — in part because at $8.5 billion, it is Redmond’s biggest acquisition ever. As Om points out, Skype could give Microsoft a boost in the collaboration market and improve its Windows Phone 7 offering. It could also be an intriguing video-calling combination for Kinect, the gesture-based system for the Xbox. But big acquisitions also have a history of failure, so it remains to be seen whether Microsoft has the ability to turn Skype into a money maker — especially considering its other online efforts haven’t seen much success.”

Read original post here.

Read Full Post »

« Newer Posts - Older Posts »