LONDON (AP) - It's amazing how much trouble can be stirred up in 140 characters or less.
But also how much intimacy, excitement, global scope and, yes, general zaniness. For better and for worse, the 2012 Olympics are being shaped, shaken and indisputably changed by a social media revolution that four years ago in Beijing was in its toddlerhood.
Four days into the games, we've already seen (and this is but a partial list):
-an athletes' Twitter campaign objecting to sponsorship restrictions that went viral under the hashtag 'WeDemandChange.'
-a television viewers uprising over Olympic broadcaster NBC's decision not to live stream the opening ceremony.
-two athletes kicked out for racist tweets.
-a fan arrested Tuesday after a series of threatening posts, including one in which he vowed to drown a British diver, and another in which he told the athlete he had failed his dead father by not winning.
For Olympics organizers who pride themselves on putting on a carefully choreographed - obsessively controlled, some would say - 17-day show, the bursts of Twitter activity are like gamma rays escaping from a solar flare. They're impossible to stop and spellbinding to behold.
'I don't think we would seek to control it, nor could we,' said International Olympic Committee spokesman Mark Adams. He said more than 15 million fans are following and participating in the Olympic experience via Twitter and other social media platforms, not to mention a good proportion of the 10,800 athletes. 'Used the right way, we embrace social media,' he said. 'And, if you look at the guidelines, we positively encourage it.'
The problem is, it isn't always used that way.
The immediacy and public nature of Twitter and its propensity to induce off-the-cuff irreverence, and sometimes breathtaking ugliness, has added a new and chaotic element to an event where everything from urine samples to sponsors' logos to London traffic is arranged with overcaffeinated attention to detail worthy of a royal wedding.
'Though organizers have spent months touting this as the first social media Summer Games, many of them seem to have been totally unprepared for the huge impact that Twitter has had,' said Andy Miah, director of the Creative Futures Institute at the University of the West of Scotland. 'I think there was some naivete about the likely role of social media from both participants and from the organizers. Many of them appear to have been wrongfooted.'
Twitter has been used in many ways during its brief life - some very organized and tactical, some more spontaneous and disorderly. It has been a tool of protest and organization for the Occupy Wall Street movement and Arab Spring activists. Yet it has also led to the downfall of click-happy politicians, and the sometimes embarrassing late-night revelations of A-list celebrities.
The social network is now at the fingertips of 140 million users, up from a few million when the Olympics were held in Beijing in 2008. The San Francisco-based company says there have been more than 10 million tweets mentioning the Olympics during the first few days of the games. The exponential jump from four years ago has been driven by the rise of smartphones, now carried by spectators and athletes alike, each watching each other watch each other.
Which of course raises the question: When exuberant, often young athletes are going through the experience of their lives on one hand, and it's unfolding in a deeply controlled environment on the other, how do you make sure everyone gets what they need without it all turning to anarchy?
The IOC, Miah says, has tried to exert control by creating its own social media hub - gathering athletes' tweets and posts from Facebook, the other formidable player in this landscape. But it hasn't always worked out as planned.
On Saturday, U.S. women's soccer goalkeeper Hope Solo launched a Twitter outburst against Brandi Chastain, the former American soccer player who is now an analyst on NBC. 'Its 2 bad we can't have commentators who better represents the team&knows more about the game,' Solo wrote.
Dozens of athletes, including some British soccer players, have taken to Twitter to promote their sponsors' products, a violation of Olympic rules that could theoretically lead to their expulsions. Some Olympians, undoubtedly delighting agents and marketers back home, have started an online campaign to get the rules changed.
And it's not just athletes who are stirring the stew of controversy.
British lawmaker Aidan Burley earned a sharp rebuke from fellow conservatives after he tweeted that Danny Boyle's critically acclaimed opening ceremony, which told the story of Britain's history in a rousing mix of music, symbolism and showmanship, was 'leftie multicultural crap.'
A British journalist said his Twitter account was blocked after he criticized NBC's coverage of the opening ceremony and posted the e-mail of a network executive. And thousands of disgruntled Olympics viewers set up hashtag 'nbcfail' on Twitter to air complaints about the media company's coverage.
Then there's the teenager from Dorset who was arrested Tuesday after a series of offensive and, authorities say, menacing tweets directed at British Olympian Tom Daley. The suspect could be prosecuted under British law.
And yet Twitter has fast become an indispensable part of the Olympic scene. It is as valuable to today's spectators as programs and scorecards were to another generation, and it is just as important to the athletes seeking to connect with supporters from behind the Olympic curtain.
For young fans, 'take away Twitter and you take away part of the experience,' said Steve Jones, a professor who studies online culture and communications at the University of Illinois at Chicago.
Olympians have used Twitter to tell supporters what they are eating, how they are feeling and who they are hanging out with. Jamaican mega-star Usain Bolt tweeted about his craving for chicken. American hurdler Lolo Jones revealed she's a virgin.
Perhaps that is too much information and intimacy for some, but Twitter, Facebook and their many copycats are not going anywhere, and it's time we got used to it.
Andy Hunt, the head of the British Olympic association, found himself dealing with a double whammy of Twitter eruptions - defending his star diver against social-network vitriol while vowing to look into whether the host country's soccer players should be disciplined for using the site for 'ambush marketing.'
'I think everyone knows, if you use social media extensively, you have to accept you get bad as well as good,' Hunt told journalists. 'And sometimes bad is wholly unacceptable.'
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Associated Press reporters David Stringer and Jake Coyle contributed. Paul Haven reported from London, Barbara Ortutay from New York.
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Follow on Twitter: Paul Haven: http://www.twitter.com/paulhaven and Barbara Ortutay: http://www.twitter.com/barbaraortutay
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Tuesday, July 31, 2012
Panasonic returns to profit in 1Q on cost-cutting
TOKYO (AP) - Panasonic Corp. said Tuesday it returned to the black in the April-June quarter, logging a net profit of 12.8 billion ($163 million) mainly on lower costs after cutting more than 38,000 jobs over the last year.
The consumer electronics giant had a net loss of 30.4 billion yen in the same quarter a year earlier.
The Osaka-based maker of Viera TVs and Lumix digital cameras said that it turned a profit despite a 6 percent decline in fiscal first quarter sales to 1.815 trillion yen amid weak demand in its Japanese home market.
The European financial crisis and the strong yen, which erodes overseas sales when repatriated to Japan, also weighed on the company's performance, it said in a release.
Panasonic kept its profit forecast for the full fiscal year through March 2013 unchanged at 50 billion yen ($638 million). Last fiscal year, it reported a record loss of 772.2 billion yen.
The company said it slashed its global workforce to about 327,500 as of the end of June from nearly 366,000 a year earlier.
Sales of its audio-visual products decreased 20 percent to 360 billion yen on poor demand for flat-panel TVs, but the division managed to swing to a profit of 7.4 billion yen after losing money a year earlier.
Profits in its home appliance segment - the biggest of eight business divisions - rose 7 percent on higher sales of refrigerators and washing machines.
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The consumer electronics giant had a net loss of 30.4 billion yen in the same quarter a year earlier.
The Osaka-based maker of Viera TVs and Lumix digital cameras said that it turned a profit despite a 6 percent decline in fiscal first quarter sales to 1.815 trillion yen amid weak demand in its Japanese home market.
The European financial crisis and the strong yen, which erodes overseas sales when repatriated to Japan, also weighed on the company's performance, it said in a release.
Panasonic kept its profit forecast for the full fiscal year through March 2013 unchanged at 50 billion yen ($638 million). Last fiscal year, it reported a record loss of 772.2 billion yen.
The company said it slashed its global workforce to about 327,500 as of the end of June from nearly 366,000 a year earlier.
Sales of its audio-visual products decreased 20 percent to 360 billion yen on poor demand for flat-panel TVs, but the division managed to swing to a profit of 7.4 billion yen after losing money a year earlier.
Profits in its home appliance segment - the biggest of eight business divisions - rose 7 percent on higher sales of refrigerators and washing machines.
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Monday, July 30, 2012
Apple: 3M copies of Mountain Lion out in 4 days
NEW YORK (AP) - Apple says Mac users downloaded 3 million copies of Mountain Lion, its latest operating system, in the first four days it was available.
That makes it the fastest launch of an Apple operating system ever, the company says. It released Mountain Lion Wednesday.
Apple charges $20 for the software. That pays for downloads for all of a buyer's personal computers.
Apple also provides the OS for free to buyers who bought a Mac on or after June 11.
Mountain Lion brings features from the iPhone and iPad to the Mac. The enhancements include tight integration with Apple's online storage service, iCloud, and a 'Notification Center' that shows incoming mail, calendar reminders and other events.
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That makes it the fastest launch of an Apple operating system ever, the company says. It released Mountain Lion Wednesday.
Apple charges $20 for the software. That pays for downloads for all of a buyer's personal computers.
Apple also provides the OS for free to buyers who bought a Mac on or after June 11.
Mountain Lion brings features from the iPhone and iPad to the Mac. The enhancements include tight integration with Apple's online storage service, iCloud, and a 'Notification Center' that shows incoming mail, calendar reminders and other events.
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Levinsohn leaving Yahoo after second CEO snub
LOS ANGELES (AP) - Ross Levinsohn, the interim CEO who was snubbed in the search for a permanent leader at Yahoo, is leaving the Internet portal.
Yahoo announced the departure in a securities filing on Monday.
With much fanfare, Yahoo appointed 37-year-old Marissa Mayer as CEO two weeks ago. Retaining Levinsohn, who had been interim CEO since May, would have been one of her first big triumphs.
Levinsohn's exit is not unexpected. Yahoo's stock barely moved in after-hours trading. Following the announcement, it rose 2 cents to $16. The stock closed Monday's regular session down 13 cents, or less than 1 percent, at $15.98. In the last year, Yahoo's stock has traded between $11.09 and $16.79.
Levinsohn, 48, had been head of Yahoo's global media business and had pushed the company to enter into exclusive partnerships with the likes of CNBC and Tom Hanks to create original content.
But Levinsohn was passed over twice by the company's board in favor of other top executives, including Scott Thompson, who resigned in May over discrepancies on his resume after just four months on the job.
The appointment of Mayer, a former Google top executive who oversaw its email, mapping and news services, suggests the company intends to focus more on the functionality of its products rather than on the media content which was Levinsohn's domain.
Analyst Sameet Sinha with B. Riley & Co., said Levinsohn's exit doesn't indicate a big shift in strategy, although a turnaround plan under Mayer is still unclear.
'This was an issue of retaining an executive who was CEO,' Sinha said. 'To say they will be focused more on products and less on content would be foolish. It's their bread and butter.'
Levinsohn leaves Yahoo with a hefty severance package. As part of the agreement, he was granted 67,000 shares of restricted Yahoo stock and the option to buy another 250,000 shares at $15.80 apiece. Both benefits were immediately available to Levinsohn.
He also received a lump sum equal to his salary and bonus of about $1.5 million along with health premiums and faster vesting of stock options he had accrued already. Levinsohn's compensation package was valued at $12 million last year.
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Yahoo announced the departure in a securities filing on Monday.
With much fanfare, Yahoo appointed 37-year-old Marissa Mayer as CEO two weeks ago. Retaining Levinsohn, who had been interim CEO since May, would have been one of her first big triumphs.
Levinsohn's exit is not unexpected. Yahoo's stock barely moved in after-hours trading. Following the announcement, it rose 2 cents to $16. The stock closed Monday's regular session down 13 cents, or less than 1 percent, at $15.98. In the last year, Yahoo's stock has traded between $11.09 and $16.79.
Levinsohn, 48, had been head of Yahoo's global media business and had pushed the company to enter into exclusive partnerships with the likes of CNBC and Tom Hanks to create original content.
But Levinsohn was passed over twice by the company's board in favor of other top executives, including Scott Thompson, who resigned in May over discrepancies on his resume after just four months on the job.
The appointment of Mayer, a former Google top executive who oversaw its email, mapping and news services, suggests the company intends to focus more on the functionality of its products rather than on the media content which was Levinsohn's domain.
Analyst Sameet Sinha with B. Riley & Co., said Levinsohn's exit doesn't indicate a big shift in strategy, although a turnaround plan under Mayer is still unclear.
'This was an issue of retaining an executive who was CEO,' Sinha said. 'To say they will be focused more on products and less on content would be foolish. It's their bread and butter.'
Levinsohn leaves Yahoo with a hefty severance package. As part of the agreement, he was granted 67,000 shares of restricted Yahoo stock and the option to buy another 250,000 shares at $15.80 apiece. Both benefits were immediately available to Levinsohn.
He also received a lump sum equal to his salary and bonus of about $1.5 million along with health premiums and faster vesting of stock options he had accrued already. Levinsohn's compensation package was valued at $12 million last year.
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IPhone appeal dims as Samsung shines
NEW YORK (AP) - The once-sexy iPhone is starting to look small and chubby.
That's become a problem for Apple, which revealed last week that iPhone sales have slowed. Part of the problem is that the competition has found a formula that works: thinner phones with bigger screens.
For a dose of smartphone envy, iPhone owners need to look no further than Samsung Electronics Co., the number-one maker of smartphones in the world. Its newest flagship phone, the Galaxy S III, is sleek and wafer-thin. It can run on the fastest networks and act as a 'smart wallet,' too - two things the Apple's iconic phone can't do.
Says Ramon Llamas, an analyst with research firm IDC: The iPhone 'is getting a bit long in the tooth.'
Apple has become the world's most valuable company on the back of the iPhone, which makes up nearly half of its revenue. The iPhone certainly has room to grow: Only one in six smartphones sold globally in the second quarter had an Apple logo on its back.
When Apple reported financial results for its latest quarter last week, a new phenomenon was revealed: Buyers started pulling back on iPhone purchases just six months after the launch of the latest iPhone model.
Apple executives blamed the tepid sales on 'rumors and speculation' that may have caused some consumers to wait for the next iPhone, which is due in the fall. But in the past, iPhone sales have stayed strong nine months after the new model is launched, then dipped as people began holding off, waiting for the new model.
In the April to June period, Apple sold 26 million phones, 28 percent more than it did in the same quarter last year.
Most other phone makers 'would kill' for those numbers, says Stephen Baker, an analyst with research firm NPD Group. But since the iPhone's introduction in 2007, the average annual growth rate has been 112 percent.
The competitor that doesn't need to kill for those numbers is Samsung, which has solidified its position at the world's largest maker of smartphones. Analysts believe it sold just over 50 million smartphones in the second quarter, or nearly twice as many as Apple. (The company doesn't release specific figures.) Its smartphone sales have nearly tripled in a year, from 18.4 million, according to IDC.
Most of Samsung's sales comprise cheaper smartphones that don't compete directly with the iPhone. Its flagship phones, though, have emerged as the iPhone's chief rivals.
Samsung and Apple have a complicated relationship. They're rivals in the smartphone and tablet-computer markets, and are set to square off in a high-profile trial over mobile patents in San Francisco this week. Samsung is one of Apple's largest suppliers of chips and displays, and Apple is one of Samsung's largest clients.
Together, Samsung and Apple make half of the world's smartphones, and since competitors are losing money or breaking even, they account for nearly all of the profits in the industry.
Though Apple is known as a relentless innovator, the iPhone's screen has been the same size - 3.5 inches on the diagonal - since the first iPhone came out. It was a big screen for the time, but among the competition, screen sizes have crept up.
Samsung has increased the screen size of its Galaxy series with every model since it debuted in 2010. The Galaxy S had a screen that measured 4 inches diagonally, and was followed by the S II, at 4.3 inches. The S III, the latest model, measures 4.8 inches. The screen is nearly twice as large as the iPhone's. Yet the Galaxy is slightly thinner than an iPhone - 8.6 millimeters versus 9.3 - and lighter - 133 grams versus 140 grams.
Samsung has also achieved surprising success with an even bigger phone, the Samsung Galaxy Note. Its 5.3-inch screen makes it somewhat awkward to hold to the ear, but customers don't seem to mind, or perhaps they value the large screen and included stylus more.
Aside from design, Apple is inflexible in another way: by releasing a new phone only one per year, it lets the competition create new phones with features the iPhone doesn't have and lets them go unchallenged, at least until the new iPhone comes out.
'Apple's schedule leaves the other ten or nine months of the year wide open for everybody else,' says Llamas.
For instance, the newest Samsung phones can use the latest high-speed data networks in the U.S., and it can act as smart 'credit card' at payment terminals in stores, two features the iPhone doesn't have.
Samsung times its product launches to take maximum advantage of the lull in iPhone sales that usually precedes the launch of a new model. The S III went on sale in Europe in May and in the U.S. in June.
The rest of the competition is in disarray, and hasn't been able to capitalize in the same way on Apple's rigid release schedule and conservative design. Nokia Corp., until recently the world's largest phone maker, is in sharp retreat and is conducting a complete revamp of its smartphones. Research In Motion Ltd. is stuck with outdated software for its BlackBerrys at least until it launches a new operating system next year. HTC Corp. of Taiwan is suffering from marketing missteps in the last few years. LG Electronics, another Korean company, hasn't been able to keep up with Samsung when it comes to high-end phones, or with cheaper manufacturers on the low end.
Samsung, LG and HTC all use Google Inc.'s Android operating system, which is seen as the main alternative to Apple's own software. But Samsung is emerging as the company that's able to turn Google's free software into profits.
'Samsung is the only company that didn't really buckle under the weight of the iPhone 4S. Good, solid devices and good, solid marketing behind them,' Llamas says.
Analysts now expect the new iPhone to arrive in September or October, probably with a slightly bigger screen. Sticking to one screen size has served Apple well, Baker says, but he sees the company moving with the times, as it's done many times before.
'When they have the reputation and the brand loyalty that they have, you don't have to be the first to market' with new features, Baker says. 'You don't have to take that risk.'
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That's become a problem for Apple, which revealed last week that iPhone sales have slowed. Part of the problem is that the competition has found a formula that works: thinner phones with bigger screens.
For a dose of smartphone envy, iPhone owners need to look no further than Samsung Electronics Co., the number-one maker of smartphones in the world. Its newest flagship phone, the Galaxy S III, is sleek and wafer-thin. It can run on the fastest networks and act as a 'smart wallet,' too - two things the Apple's iconic phone can't do.
Says Ramon Llamas, an analyst with research firm IDC: The iPhone 'is getting a bit long in the tooth.'
Apple has become the world's most valuable company on the back of the iPhone, which makes up nearly half of its revenue. The iPhone certainly has room to grow: Only one in six smartphones sold globally in the second quarter had an Apple logo on its back.
When Apple reported financial results for its latest quarter last week, a new phenomenon was revealed: Buyers started pulling back on iPhone purchases just six months after the launch of the latest iPhone model.
Apple executives blamed the tepid sales on 'rumors and speculation' that may have caused some consumers to wait for the next iPhone, which is due in the fall. But in the past, iPhone sales have stayed strong nine months after the new model is launched, then dipped as people began holding off, waiting for the new model.
In the April to June period, Apple sold 26 million phones, 28 percent more than it did in the same quarter last year.
Most other phone makers 'would kill' for those numbers, says Stephen Baker, an analyst with research firm NPD Group. But since the iPhone's introduction in 2007, the average annual growth rate has been 112 percent.
The competitor that doesn't need to kill for those numbers is Samsung, which has solidified its position at the world's largest maker of smartphones. Analysts believe it sold just over 50 million smartphones in the second quarter, or nearly twice as many as Apple. (The company doesn't release specific figures.) Its smartphone sales have nearly tripled in a year, from 18.4 million, according to IDC.
Most of Samsung's sales comprise cheaper smartphones that don't compete directly with the iPhone. Its flagship phones, though, have emerged as the iPhone's chief rivals.
Samsung and Apple have a complicated relationship. They're rivals in the smartphone and tablet-computer markets, and are set to square off in a high-profile trial over mobile patents in San Francisco this week. Samsung is one of Apple's largest suppliers of chips and displays, and Apple is one of Samsung's largest clients.
Together, Samsung and Apple make half of the world's smartphones, and since competitors are losing money or breaking even, they account for nearly all of the profits in the industry.
Though Apple is known as a relentless innovator, the iPhone's screen has been the same size - 3.5 inches on the diagonal - since the first iPhone came out. It was a big screen for the time, but among the competition, screen sizes have crept up.
Samsung has increased the screen size of its Galaxy series with every model since it debuted in 2010. The Galaxy S had a screen that measured 4 inches diagonally, and was followed by the S II, at 4.3 inches. The S III, the latest model, measures 4.8 inches. The screen is nearly twice as large as the iPhone's. Yet the Galaxy is slightly thinner than an iPhone - 8.6 millimeters versus 9.3 - and lighter - 133 grams versus 140 grams.
Samsung has also achieved surprising success with an even bigger phone, the Samsung Galaxy Note. Its 5.3-inch screen makes it somewhat awkward to hold to the ear, but customers don't seem to mind, or perhaps they value the large screen and included stylus more.
Aside from design, Apple is inflexible in another way: by releasing a new phone only one per year, it lets the competition create new phones with features the iPhone doesn't have and lets them go unchallenged, at least until the new iPhone comes out.
'Apple's schedule leaves the other ten or nine months of the year wide open for everybody else,' says Llamas.
For instance, the newest Samsung phones can use the latest high-speed data networks in the U.S., and it can act as smart 'credit card' at payment terminals in stores, two features the iPhone doesn't have.
Samsung times its product launches to take maximum advantage of the lull in iPhone sales that usually precedes the launch of a new model. The S III went on sale in Europe in May and in the U.S. in June.
The rest of the competition is in disarray, and hasn't been able to capitalize in the same way on Apple's rigid release schedule and conservative design. Nokia Corp., until recently the world's largest phone maker, is in sharp retreat and is conducting a complete revamp of its smartphones. Research In Motion Ltd. is stuck with outdated software for its BlackBerrys at least until it launches a new operating system next year. HTC Corp. of Taiwan is suffering from marketing missteps in the last few years. LG Electronics, another Korean company, hasn't been able to keep up with Samsung when it comes to high-end phones, or with cheaper manufacturers on the low end.
Samsung, LG and HTC all use Google Inc.'s Android operating system, which is seen as the main alternative to Apple's own software. But Samsung is emerging as the company that's able to turn Google's free software into profits.
'Samsung is the only company that didn't really buckle under the weight of the iPhone 4S. Good, solid devices and good, solid marketing behind them,' Llamas says.
Analysts now expect the new iPhone to arrive in September or October, probably with a slightly bigger screen. Sticking to one screen size has served Apple well, Baker says, but he sees the company moving with the times, as it's done many times before.
'When they have the reputation and the brand loyalty that they have, you don't have to be the first to market' with new features, Baker says. 'You don't have to take that risk.'
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Sunday, July 29, 2012
2 SKoreans arrested for mobile customer data theft
SEOUL, South Korea (AP) - South Korean police said they arrested two men who allegedly stole the personal details of about 8 million mobile phone subscribers and sold it to marketing companies in one of the country's biggest hacking schemes.
Police said in a statement Sunday that the two men developed the hacking program that was used to steal the names, residential registration numbers and phone numbers of customers of KT, which is South Korea's largest fixed-line telephone company and No. 2 mobile operator. The program was uploaded to the company's computer systems and harvested personal data for months.
Police said the two made about $877,000 from the hacking scheme. They sold the program as well as mobile subscriber data to telemarketing companies which used the details to contact customers to solicit them to switch to other mobile operators.
Authorities said a former KT employee and six others were also charged for their roles in the scheme.
The data theft at KT took place over the span of five months from February and affected about half of KT's 16 million mobile customers.
KT apologized and said it will beef up its security system.
The incident is the latest in a series of large-scale hacking attacks that have affected millions in one of the world's most wired countries. Last year, hackers stole personal data of 13 million gamers at Nexon and private details of 35 million members at web portal Nate and Cyworld were leaked.
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Police said in a statement Sunday that the two men developed the hacking program that was used to steal the names, residential registration numbers and phone numbers of customers of KT, which is South Korea's largest fixed-line telephone company and No. 2 mobile operator. The program was uploaded to the company's computer systems and harvested personal data for months.
Police said the two made about $877,000 from the hacking scheme. They sold the program as well as mobile subscriber data to telemarketing companies which used the details to contact customers to solicit them to switch to other mobile operators.
Authorities said a former KT employee and six others were also charged for their roles in the scheme.
The data theft at KT took place over the span of five months from February and affected about half of KT's 16 million mobile customers.
KT apologized and said it will beef up its security system.
The incident is the latest in a series of large-scale hacking attacks that have affected millions in one of the world's most wired countries. Last year, hackers stole personal data of 13 million gamers at Nexon and private details of 35 million members at web portal Nate and Cyworld were leaked.
This news article is brought to you by FREE ROMANTIC DATING SITE BLOG - where latest news are our top priority.
Olympic viewing: NBC critics loud on social media
NEW YORK (AP) - In the age of social media, NBC now has millions of television critics who make their opinions known about every aspect of Olympics coverage instantly.
They've even set up their own hashtag on Twitter: (hash)nbcfail. The online complaints focused Saturday on NBC's decision to air the marquee swimming event won by American Ryan Lochte on tape delay in prime time, and Friday on the network not streaming the opening ceremony online. Sunday's critics started early: people wondering why the U.S. men's basketball team's opening game aired on a cable network while women's cycling was shown on NBC.
The conversation is so active that NBC's executive producer of the games, Jim Bell, took to Twitter to answer critics and even change the way NBC is doing something in response.
'(hash)nbcfail is filled with a lot of crying and snark and humor, but NBC can actually learn something from it,' said Jeff Jarvis, a media critic who writes the Buzzmachine.com blog.
Complaints about tape delayed coverage are an evergreen with Olympics held on foreign soil. But the London Games are the first with Twitter, Facebook and other social media sites in full flower, in a mobile phone era where people carry computers that instantly deliver news in their pockets. It has amplified the impatience of viewers who want to see events on their large-screen TVs instantly and haven't been mollified by NBC's decision to stream the events live online.
James Poniewozik, Time magazine TV critic, tweeted that 'NBC tape delay coverage is like the airlines: its interest is in giving you the least satisfactory service you will still come back for.'
That drew a quick response from NBC's Bell: 'You do know that all sports events are being streamed live right?'
'I do, indeed!' replied Poniewozik. 'Have enjoyed it. Apparently a lot of folks still prefer watching it on TV.'
NBC says it saves big events for prime-time airing because that is when most viewers are available to watch them and where the network makes the bulk of its advertising revenue. Since prime time on the U.S. East Coast coincides with 1 a.m. London time, there are no events to air live then. NBC representatives noted that there were 39 hours of live events Sunday on NBC and its affiliated networks.
Even as it defends its approach, NBC clearly hears those critics. One of Bell's Facebook posts highlighted coverage of Sunday's cycling race by saying it was all-caps LIVE. The network advertised its live streaming on the prime-time broadcast.
Jonathan Wald, who produces Piers Morgan's CNN talk show and used to work at NBC, tweeted that 'the medal for most Olympic whining goes to everyone who complains about what happens every four years. Tape delay.'
One of those complainers, in fact, was Morgan: He tweeted his disdain Friday for NBC's decision not to make the opening ceremony available live.
The advent of Twitter makes it seems as if there's a lot of unhappiness when the majority of viewers are watching NBC on tape delay and appear satisfied with it, Wald said in an interview.
NBC can point to television ratings justifying their approach. The Nielsen company said the opening ceremony drew more than 40 million people Friday, the most ever for one of those Olympic events. Saturday's first night of coverage was seen by 28.7 million, another record, beating every other first night of Olympic competition. In Beijing four years ago, 24 million watched on the corresponding night.
Jarvis said he believes NBC could satisfy fans by, for example, televising events like Lochte's race live in the afternoon and then repeating it at night. He acknowledges, though, that he's not the one who'd potentially be risking millions of dollars in advertising revenue if such a decision cut into prime-time viewing.
NBC has tried to 'hold on to old media strategies in a new media world,' Jarvis said. 'And that's a mistake.'
Some of the online complaints seem to take special glee in bashing NBC, with a few describing it like an Olympic sport of its own. Some are quite personal, like the CNN producer who tweeted Sunday: 'No USA basketball in my hotel room. Why they aren't putting it on NBC's main channel is beyond me!'
Bell, in some of his back-and-forth with online critics Sunday, answered one tweeter who described herself as a St. Louis mom and complained about NBC's 'Nightly News' on Saturday airing results of events that hadn't been shown on the network yet. Bell tweeted that he'd look into it, and shortly after told her that 'Nightly News' would announce a 'spoiler alert' to tell people to avert their eyes if they didn't want to see results.
Not everyone online is a critic. On Sunday, the U.S. Olympic sailing team tweeted that it was 'by far the greatest sailing TV coverage in Olympic history.'
ROWDY vs. PHELPS: Does Michael Phelps need bulletin board material anymore? If so, Rowdy Gaines provided it with his sharp criticism of Phelp's first final this weekend. 'He just didn't train for it ... You can't fake that event,' Gaines said.
UP CLOSE: Understand NBC's need to help us get to know obscure athletes in obscure sports. But the news about two synchronized divers who both collect rubber ducks felt like self-parody.
UPCOMING: Ryan Lochte's bid for a second gold medal is featured on NBC's Monday night coverage.
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They've even set up their own hashtag on Twitter: (hash)nbcfail. The online complaints focused Saturday on NBC's decision to air the marquee swimming event won by American Ryan Lochte on tape delay in prime time, and Friday on the network not streaming the opening ceremony online. Sunday's critics started early: people wondering why the U.S. men's basketball team's opening game aired on a cable network while women's cycling was shown on NBC.
The conversation is so active that NBC's executive producer of the games, Jim Bell, took to Twitter to answer critics and even change the way NBC is doing something in response.
'(hash)nbcfail is filled with a lot of crying and snark and humor, but NBC can actually learn something from it,' said Jeff Jarvis, a media critic who writes the Buzzmachine.com blog.
Complaints about tape delayed coverage are an evergreen with Olympics held on foreign soil. But the London Games are the first with Twitter, Facebook and other social media sites in full flower, in a mobile phone era where people carry computers that instantly deliver news in their pockets. It has amplified the impatience of viewers who want to see events on their large-screen TVs instantly and haven't been mollified by NBC's decision to stream the events live online.
James Poniewozik, Time magazine TV critic, tweeted that 'NBC tape delay coverage is like the airlines: its interest is in giving you the least satisfactory service you will still come back for.'
That drew a quick response from NBC's Bell: 'You do know that all sports events are being streamed live right?'
'I do, indeed!' replied Poniewozik. 'Have enjoyed it. Apparently a lot of folks still prefer watching it on TV.'
NBC says it saves big events for prime-time airing because that is when most viewers are available to watch them and where the network makes the bulk of its advertising revenue. Since prime time on the U.S. East Coast coincides with 1 a.m. London time, there are no events to air live then. NBC representatives noted that there were 39 hours of live events Sunday on NBC and its affiliated networks.
Even as it defends its approach, NBC clearly hears those critics. One of Bell's Facebook posts highlighted coverage of Sunday's cycling race by saying it was all-caps LIVE. The network advertised its live streaming on the prime-time broadcast.
Jonathan Wald, who produces Piers Morgan's CNN talk show and used to work at NBC, tweeted that 'the medal for most Olympic whining goes to everyone who complains about what happens every four years. Tape delay.'
One of those complainers, in fact, was Morgan: He tweeted his disdain Friday for NBC's decision not to make the opening ceremony available live.
The advent of Twitter makes it seems as if there's a lot of unhappiness when the majority of viewers are watching NBC on tape delay and appear satisfied with it, Wald said in an interview.
NBC can point to television ratings justifying their approach. The Nielsen company said the opening ceremony drew more than 40 million people Friday, the most ever for one of those Olympic events. Saturday's first night of coverage was seen by 28.7 million, another record, beating every other first night of Olympic competition. In Beijing four years ago, 24 million watched on the corresponding night.
Jarvis said he believes NBC could satisfy fans by, for example, televising events like Lochte's race live in the afternoon and then repeating it at night. He acknowledges, though, that he's not the one who'd potentially be risking millions of dollars in advertising revenue if such a decision cut into prime-time viewing.
NBC has tried to 'hold on to old media strategies in a new media world,' Jarvis said. 'And that's a mistake.'
Some of the online complaints seem to take special glee in bashing NBC, with a few describing it like an Olympic sport of its own. Some are quite personal, like the CNN producer who tweeted Sunday: 'No USA basketball in my hotel room. Why they aren't putting it on NBC's main channel is beyond me!'
Bell, in some of his back-and-forth with online critics Sunday, answered one tweeter who described herself as a St. Louis mom and complained about NBC's 'Nightly News' on Saturday airing results of events that hadn't been shown on the network yet. Bell tweeted that he'd look into it, and shortly after told her that 'Nightly News' would announce a 'spoiler alert' to tell people to avert their eyes if they didn't want to see results.
Not everyone online is a critic. On Sunday, the U.S. Olympic sailing team tweeted that it was 'by far the greatest sailing TV coverage in Olympic history.'
ROWDY vs. PHELPS: Does Michael Phelps need bulletin board material anymore? If so, Rowdy Gaines provided it with his sharp criticism of Phelp's first final this weekend. 'He just didn't train for it ... You can't fake that event,' Gaines said.
UP CLOSE: Understand NBC's need to help us get to know obscure athletes in obscure sports. But the news about two synchronized divers who both collect rubber ducks felt like self-parody.
UPCOMING: Ryan Lochte's bid for a second gold medal is featured on NBC's Monday night coverage.
This news article is brought to you by TECHNOLOGY NEWS - where latest news are our top priority.
Saturday, July 28, 2012
Did a 'Follow Friday' list reveal the name of Mitt Romney's VP choice?
The head of Romney's search for a running mate thinks you should follow a small, select group of Republicans this …With the 2012 Olympic Games now officially underway in England, it can be easy to forget that 2012 is also notable for being a presidential election year... at least for the next few weeks. Well, former Massachusetts Governor Mitt Romney doesn't want you to stop thinking about the close November election. That's why Beth Myers, the person named to head up his search for a vice presidential nominee, took to social network Twitter today to suggest you follow a small group of Republican conservatives, one of whom is likely to be named as Romney's VP pick in a few weeks' time.
Myers has only tweeted a total of three times, and two of them were shared above. That is leading a number of political observers to interpret Myers' tweets as the Romney campaign's vice presidential short list - the big political names still under consideration for joining Mitt Romney on the November ballot. By announcing the full list, it appears that Romney is trying to avoid the kind of national shock that arose in 2008 when Sen. John McCain picked a largely unknown Alaska Gov. Sarah Palin from out of nowhere to be his running mate.
The names in each of the tweets are somewhat familiar to those who follow politics. Minnesota Gov. Tim Pawlenty and Wisconsin Rep. Paul Ryan have frequently been named as a possible Romney picks, as have the relatively young Florida Senator Marco Rubio and bombastic New Jersey Gov. Chris Christie. There are a number of female names in consideration too: New Mexico Gov. Susan Martinez, former Secretary of State Condoleezza Rice, and New Hampshire Senator Kelly Ayotte.
[Image credit: Gage Skidmore]
[via Mashable]
This article was written by Fox Van Allen and originally appeared on Tecca
More from Tecca:
- 18 record-breaking stories about the 2012 London Olympic Games
- Romney attack ad scuttled by DMCA and the music industry
- Poll: Smartphone owners prefer Obama over Romney
This news article is brought to you by SPACE AND ASTRONOMY NEWS - where latest news are our top priority.
Olympic viewing: NBC sets opening ceremony record
NEW YORK (AP) - A look at media coverage of the London Olympics:
An opening ceremony from the mother country with a Beatle, a queen and Mr. Bean proved irresistible for viewers in the United States, with a record-setting 40.7 million people watching NBC's first night of summer Olympics coverage.
The Nielsen company said Saturday that London's opener was the most-watched opening ceremony of any summer or winter Olympics. It topped the previous mark of 39.8 million people who watched the 1996 Atlanta Olympics begin, and the 34.9 million who watched the colorful first night from Beijing four years ago.
The London ceremony featured an unusual made-for-TV stunt featuring actor Daniel Craig portraying James Bond escorting the real-life Queen Elizabeth II to the ceremony and ended with Paul McCartney's anthemic 'Hey Jude.' But according to Twitter, the biggest spike in tweets came when actor Rowan Atkinson ('Mr. Bean') appeared in a 'Chariots of Fire' homage.
An estimated 5 million comments about the opening ceremony were made on social media, according to the research company Bluefin Labs. It was more interesting to women, apparently, as 58 percent of the comments were from women and 42 percent from men, Bluefin said.
It was the most-watched television event in the U.S. since the winter, when 39.9 million people watched the Grammy Awards and 39.3 million saw the Oscars.
The results were a good sign for NBC and broadcast TV in general, which is increasingly finding that big events draw people to the screen more than regular entertainment programming - most likely encouraged by multi-screen experiences, or people conversing through social media while watching television.
NBC Universal also earned a measure of redemption from critics. The company, which began streaming all of the Olympics competition online live Saturday, was blistered on Twitter on Friday by people who wondered why the opening ceremony wasn't shown live (it was aired on NBC on tape delay, because London's time zone is five hours ahead of the eastern United States). But four years ago in Beijing, NBC learned such complaints only increased buzz and made people more interested in watching it on TV in prime time.
'The audience number for the London opening ceremony is a great early sign that our strategy of driving people to watch NBC in prime time is working,' said Mark Lazarus, chairman of the NBC Sports Group.
Twitter was alight again Saturday with complaints against NBC for not broadcasting live the men's 400-meter swimming race that American Ryan Lochte won, with Michael Phelps finishing fourth. The network said the race was shown live on its website. NBC has been adamant about saving the highest-profile television events for prime time, when it has its largest audience. Because of the time zone, there are no live events for NBC to show during prime time.
Regionally, the top ratings Friday night were recorded in San Diego, Washington, D.C. and West Palm Beach, Fla., Nielsen said.
Despite selling more than $1 billion worth of advertising for the London Olympics, NBC Universal has said it expects to lose money on the games. Higher ratings, however, could help NBC earn more money by selling additional advertising at a higher cost as the games go on.
RERUN: NBC aired a rerun of Olympics competition at 11 a.m. EDT on Saturday. But it was justified: the network showed Michael Phelps' initial qualifying race, which had been aired live shortly after 5 a.m.
CLOSE GAME: The tighter-than-expected women's basketball game between the U.S. and Croatia challenged NBC announcers Bob Fitzgerald and Lisa Leslie. They were in an awkward position, following the 'home team' for U.S. viewers in what was turning into a Cinderella situation for the other side. Before pulling away at the end, the U.S. led 53-49 after three quarters against a team that it had beaten by 54 points a week ago, a team that barely made the Olympics. The announcers could have done a better job exploring the deficiencies of the U.S. play and whether it put an anticipated gold medal run in jeopardy.
QUOTE: 'They'll be partying on the streets of Kazakhstan tonight.' - cycling analyst Paul Sherwen after Alexandr Vinokurov's unexpected win in the men's road race.
UPCOMING: The U.S. women's gymnastics team springs into action on NBC on Sunday night. In daytime viewing, the U.S. men's basketball team opens against France.
This article is brought to you by BUY A NEW COMPUTER.
An opening ceremony from the mother country with a Beatle, a queen and Mr. Bean proved irresistible for viewers in the United States, with a record-setting 40.7 million people watching NBC's first night of summer Olympics coverage.
The Nielsen company said Saturday that London's opener was the most-watched opening ceremony of any summer or winter Olympics. It topped the previous mark of 39.8 million people who watched the 1996 Atlanta Olympics begin, and the 34.9 million who watched the colorful first night from Beijing four years ago.
The London ceremony featured an unusual made-for-TV stunt featuring actor Daniel Craig portraying James Bond escorting the real-life Queen Elizabeth II to the ceremony and ended with Paul McCartney's anthemic 'Hey Jude.' But according to Twitter, the biggest spike in tweets came when actor Rowan Atkinson ('Mr. Bean') appeared in a 'Chariots of Fire' homage.
An estimated 5 million comments about the opening ceremony were made on social media, according to the research company Bluefin Labs. It was more interesting to women, apparently, as 58 percent of the comments were from women and 42 percent from men, Bluefin said.
It was the most-watched television event in the U.S. since the winter, when 39.9 million people watched the Grammy Awards and 39.3 million saw the Oscars.
The results were a good sign for NBC and broadcast TV in general, which is increasingly finding that big events draw people to the screen more than regular entertainment programming - most likely encouraged by multi-screen experiences, or people conversing through social media while watching television.
NBC Universal also earned a measure of redemption from critics. The company, which began streaming all of the Olympics competition online live Saturday, was blistered on Twitter on Friday by people who wondered why the opening ceremony wasn't shown live (it was aired on NBC on tape delay, because London's time zone is five hours ahead of the eastern United States). But four years ago in Beijing, NBC learned such complaints only increased buzz and made people more interested in watching it on TV in prime time.
'The audience number for the London opening ceremony is a great early sign that our strategy of driving people to watch NBC in prime time is working,' said Mark Lazarus, chairman of the NBC Sports Group.
Twitter was alight again Saturday with complaints against NBC for not broadcasting live the men's 400-meter swimming race that American Ryan Lochte won, with Michael Phelps finishing fourth. The network said the race was shown live on its website. NBC has been adamant about saving the highest-profile television events for prime time, when it has its largest audience. Because of the time zone, there are no live events for NBC to show during prime time.
Regionally, the top ratings Friday night were recorded in San Diego, Washington, D.C. and West Palm Beach, Fla., Nielsen said.
Despite selling more than $1 billion worth of advertising for the London Olympics, NBC Universal has said it expects to lose money on the games. Higher ratings, however, could help NBC earn more money by selling additional advertising at a higher cost as the games go on.
RERUN: NBC aired a rerun of Olympics competition at 11 a.m. EDT on Saturday. But it was justified: the network showed Michael Phelps' initial qualifying race, which had been aired live shortly after 5 a.m.
CLOSE GAME: The tighter-than-expected women's basketball game between the U.S. and Croatia challenged NBC announcers Bob Fitzgerald and Lisa Leslie. They were in an awkward position, following the 'home team' for U.S. viewers in what was turning into a Cinderella situation for the other side. Before pulling away at the end, the U.S. led 53-49 after three quarters against a team that it had beaten by 54 points a week ago, a team that barely made the Olympics. The announcers could have done a better job exploring the deficiencies of the U.S. play and whether it put an anticipated gold medal run in jeopardy.
QUOTE: 'They'll be partying on the streets of Kazakhstan tonight.' - cycling analyst Paul Sherwen after Alexandr Vinokurov's unexpected win in the men's road race.
UPCOMING: The U.S. women's gymnastics team springs into action on NBC on Sunday night. In daytime viewing, the U.S. men's basketball team opens against France.
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Friday, July 27, 2012
Facebook's stock sinks, so who should buy it?
NEW YORK (AP) - Investors are dumping Facebook's stock, spooked by slowing revenue growth, the lack of a financial outlook and plans to spend more money in the coming months.
Are they right?
Only if they are thinking in the short term. Investors can expect Facebook's stock to be volatile for a few years. But analysts say those willing to wait will likely be rewarded - someday.
'I view it as a tomorrow stock,' says Christian Bertelsen, chief investment officer at wealth management firm Global Financial Private Capital.
'The whole thing on Facebook is, look, if your time horizon is hourly, weekly or even monthly, this is not the stock for you,' he adds. 'You need to take a much longer-term view on it.'
That's about three or four years, he says.
Founded in CEO Mark Zuckerberg's Harvard dorm room in 2004, Facebook was a product of the PC era. Now, in the age of mobile computing, a growing number of people are accessing Facebook through their iPhones, Android gadgets and tablet computers. Yet Facebook is only now starting to figure out how to make money from its mobile audience.
'The company is going through an almost painful transition from desktop to mobile,' Baird analyst Colin Sebastian says.
He calls Facebook 'a speculative investment,' but one with plenty of potential.
'With almost one billion users, Facebook is amassing the most comprehensive user profile database in existence,' Sebastian says. This, he adds, offers a 'significant opportunity' to reap a big chunk of the global advertising market, which is currently at $500 billion a year.
'Amazon comes to mind immediately,' Bertelsen says.
After that company went public in 1997, at the time mainly just an online bookstore, critics were quick to cry dot-com bust, call its business a broken, and so on. Today, it is the world's biggest online retailer, selling everything from DVDs to vacuum cleaners to Web storage.
'Now they are the retailer to the world,' he adds.
Amazon.com Inc.'s stock price grew to more than $200 a share, from less than $2. Of course, Facebook has started out much higher, at $38.
Facebook's first earnings report since its rocky initial public offering on May 18 was the second coming that didn't quite materialize. So investors sent Facebook's stock to its lowest level ever on Friday. Shares fell $3.14, or nearly 12 percent, to close at $23.71 after hitting $22.28 in the morning. The previous low was $25.52, reached on June 6.
The stock dropped despite the fact that Facebook's second-quarter results met Wall Street's expectations, with revenue one-third higher than last year.
Given the rocky economy and investors' heightened sensitivity to a stock's value, betting on a company becomes a 'show-me story' for many of them, Sebastian says. That means investors want proof rather than Facebook's word that it can grow its revenue and make a profit.
Facebook, for now, is more of a tell-me story, one whose success or failure will play out in the coming quarters, or even years. The company hasn't shown all it can do. Its revenue growth slowed. The company's revenue nearly tripled in 2010, compared with 2009.
In the first quarter of this year, revenue climbed 44 percent, higher than the 32 percent increase in the second quarter. Following in Google's footsteps, it did not offer financial guidance for the coming quarters, which makes it a riskier bet for investors.
Facebook also said it plans to increase its investments in the coming quarters. Higher expenses could mean lower profits.
Facebook, which is based in Menlo Park, Calif., was valued at $104 billion when it went public two months ago. That means investors placed a higher value on its stock than established companies such as McDonald's, Pepsi and even Amazon.
With Facebook's stock hitting a new low on Friday, the company lost as much as 39 percent of its value. It's now around $66 billion, a little more than 3M, the company that makes Scotch tapes, stethoscopes and sandpaper. It's also in the same range as American Express.
Despite the doubts, Mike Magan of Carmel, Ind., plans to keep the 10 shares he bought at $34.25 each a few days after Facebook went public.
'I bought this thinking it was going to be something I was going to pass down to my kids,' said Magan, who works for an industrial marketing firm. 'I see this as a company that will be an Apple.'
Other stocks he owns include Apple, naturally, which he bought a decade ago. Back then, it was trading at around $8 to $10. Now, it's pushing $600 as the world's most valuable company, thanks to successes with the iPhone and the iPad - the same devices confounding Facebook.
'My purchase of Facebook was a vote of confidence,' Magan says, adding that he buys stock about every three to four years.
Analysts are generally positive on Facebook. Of the 27 analyst ratings available from FactSet, 15 are 'Buy' or equivalent, while just three are a 'Sell.' Analysts tend to have longer-term views of stocks than many day-to-day investors.
'We don't view these results as dramatically good or bad,' Citi analyst Mark Mahaney says. 'Key questions remain: the future of Facebook mobile monetization and the future of Facebook user engagement.'
This news article is brought to you by GAMING NEWS - where latest news are our top priority.
Are they right?
Only if they are thinking in the short term. Investors can expect Facebook's stock to be volatile for a few years. But analysts say those willing to wait will likely be rewarded - someday.
'I view it as a tomorrow stock,' says Christian Bertelsen, chief investment officer at wealth management firm Global Financial Private Capital.
'The whole thing on Facebook is, look, if your time horizon is hourly, weekly or even monthly, this is not the stock for you,' he adds. 'You need to take a much longer-term view on it.'
That's about three or four years, he says.
Founded in CEO Mark Zuckerberg's Harvard dorm room in 2004, Facebook was a product of the PC era. Now, in the age of mobile computing, a growing number of people are accessing Facebook through their iPhones, Android gadgets and tablet computers. Yet Facebook is only now starting to figure out how to make money from its mobile audience.
'The company is going through an almost painful transition from desktop to mobile,' Baird analyst Colin Sebastian says.
He calls Facebook 'a speculative investment,' but one with plenty of potential.
'With almost one billion users, Facebook is amassing the most comprehensive user profile database in existence,' Sebastian says. This, he adds, offers a 'significant opportunity' to reap a big chunk of the global advertising market, which is currently at $500 billion a year.
'Amazon comes to mind immediately,' Bertelsen says.
After that company went public in 1997, at the time mainly just an online bookstore, critics were quick to cry dot-com bust, call its business a broken, and so on. Today, it is the world's biggest online retailer, selling everything from DVDs to vacuum cleaners to Web storage.
'Now they are the retailer to the world,' he adds.
Amazon.com Inc.'s stock price grew to more than $200 a share, from less than $2. Of course, Facebook has started out much higher, at $38.
Facebook's first earnings report since its rocky initial public offering on May 18 was the second coming that didn't quite materialize. So investors sent Facebook's stock to its lowest level ever on Friday. Shares fell $3.14, or nearly 12 percent, to close at $23.71 after hitting $22.28 in the morning. The previous low was $25.52, reached on June 6.
The stock dropped despite the fact that Facebook's second-quarter results met Wall Street's expectations, with revenue one-third higher than last year.
Given the rocky economy and investors' heightened sensitivity to a stock's value, betting on a company becomes a 'show-me story' for many of them, Sebastian says. That means investors want proof rather than Facebook's word that it can grow its revenue and make a profit.
Facebook, for now, is more of a tell-me story, one whose success or failure will play out in the coming quarters, or even years. The company hasn't shown all it can do. Its revenue growth slowed. The company's revenue nearly tripled in 2010, compared with 2009.
In the first quarter of this year, revenue climbed 44 percent, higher than the 32 percent increase in the second quarter. Following in Google's footsteps, it did not offer financial guidance for the coming quarters, which makes it a riskier bet for investors.
Facebook also said it plans to increase its investments in the coming quarters. Higher expenses could mean lower profits.
Facebook, which is based in Menlo Park, Calif., was valued at $104 billion when it went public two months ago. That means investors placed a higher value on its stock than established companies such as McDonald's, Pepsi and even Amazon.
With Facebook's stock hitting a new low on Friday, the company lost as much as 39 percent of its value. It's now around $66 billion, a little more than 3M, the company that makes Scotch tapes, stethoscopes and sandpaper. It's also in the same range as American Express.
Despite the doubts, Mike Magan of Carmel, Ind., plans to keep the 10 shares he bought at $34.25 each a few days after Facebook went public.
'I bought this thinking it was going to be something I was going to pass down to my kids,' said Magan, who works for an industrial marketing firm. 'I see this as a company that will be an Apple.'
Other stocks he owns include Apple, naturally, which he bought a decade ago. Back then, it was trading at around $8 to $10. Now, it's pushing $600 as the world's most valuable company, thanks to successes with the iPhone and the iPad - the same devices confounding Facebook.
'My purchase of Facebook was a vote of confidence,' Magan says, adding that he buys stock about every three to four years.
Analysts are generally positive on Facebook. Of the 27 analyst ratings available from FactSet, 15 are 'Buy' or equivalent, while just three are a 'Sell.' Analysts tend to have longer-term views of stocks than many day-to-day investors.
'We don't view these results as dramatically good or bad,' Citi analyst Mark Mahaney says. 'Key questions remain: the future of Facebook mobile monetization and the future of Facebook user engagement.'
This news article is brought to you by GAMING NEWS - where latest news are our top priority.
Facebook shares sink to new low after 2Q results
NEW YORK (AP) - Facebook's stock hit a new low Friday after it reported lukewarm second-quarter results and didn't give an outlook for the coming months.
The stock fell $3.83, or more than 14 percent, to $23.02 in morning trading Friday. Facebook Inc.'s initial public offering of stock priced at $38, and its low had been $25.52, hit on June 6. The stock is now about 39 percent below its IPO price.
Facebook issued its first financial report as a public company after the market closed Thursday. The company reported slightly stronger-than-expected revenue and a gain in user numbers, but investors weren't impressed.
Although revenue grew 32 percent in the second quarter, growth has slowed from earlier this year and from previous years. That's a concern for a newly public company. Investors are willing to value new companies highly, even if they are not making a profit, because they expect booming revenue.
Baird's Colin Sebastian also pointed out that the company is spending more on technology and hiring, driving up expenses.
But he's not overly concerned. He backed his 'Outperform' rating for Facebook, saying advertising revenue was better than expected and the company is improving its ability to make money from users who access Facebook from apps on their phones and tablet computers.
Other analysts remained positive, too. Of 27 analysts available from FactSet, 15 have 'Buy' ratings or equivalent, while just three are a 'Sell.' Analysts tend to have longer-term views of stocks than many day-to-day investors.
Mobile and users in developing countries are driving growth in active monthly users, Sebastian said. Facebook had 955 million active monthly users as of June 30, up 29 percent from a year ago.
'We don't view these results as dramatically good or bad,' said Citi analyst Mark Mahaney. 'Key questions remain: the future of Facebook mobile monetization and the future of Facebook user engagement.'
Analysts also cautioned that the stock could be volatile because Facebook didn't offer investors and financial analysts its outlook for the rest of the year.
Overall the company reported a loss of $157 million, or 8 cents per share, in the April-June period, mainly because of compensation expenses it incurred when it paid $1.3 billion in restricted stock and related taxes for employees as part of the IPO. The loss compared with earnings of $240 million, or 11 cents per share, in the second quarter a year ago.
The company's adjusted earnings of $295 million, or 12 cents per share, matched Wall Street's expectations.
Facebook's revenue of $1.18 billion was slightly higher than the $1.16 billion expected by analysts surveyed by FactSet.
The results came two months after Facebook's stock flopped on its first trading day, on May 18. The day began with glitches with the Nasdaq Stock Market that delayed trading by half an hour. It didn't get much better from there. Despite months of hoopla that had investors thinking it would soar, the stock closed just 23 cents above its $38 IPO price. It has not reached that level since.
Investors were holding out hope that Facebook would far exceed expectations - even though the company effectively warned investors before its IPO that Wall Street's expectations were too high. In a filing issued a week before its IPO, for instance, Facebook said its mobile users are growing at a faster pace than the number of ads on its mobile platform.
Analysts took that as a sign that their estimates were out of whack and many of them reduced their estimates for Facebook's projected revenue and earnings.
Even though the number of people who use mobile devices and tablet computers to access Facebook had been growing fast, Facebook didn't start showing ads on its mobile app until this spring. Facebook had 543 million active monthly mobile users at the end of the quarter, a 67 percent increase from a year earlier.
In a conference call with analysts Thursday, CEO Mark Zuckerberg said Facebook's mobile users are more active than those who use the personal computer version.
'On average mobile users are around 20 percent more likely to use Facebook on any given day,' he said. 'So mobile not only gives us the potential to connect more people with our services and also gives us the ability to provide more value and more deeply engaging experience.'
Facebook said its revenue from advertising totaled $992 million, a 28 percent increase from the same quarter last year. That number accounted for 84 percent of total revenue. The company did not say what portion was from mobile advertising. The rest came from payments and other fees, money Facebook makes from Zynga games and other apps.
___
AP Business Writer Bree Fowler contributed to this report.
The stock fell $3.83, or more than 14 percent, to $23.02 in morning trading Friday. Facebook Inc.'s initial public offering of stock priced at $38, and its low had been $25.52, hit on June 6. The stock is now about 39 percent below its IPO price.
Facebook issued its first financial report as a public company after the market closed Thursday. The company reported slightly stronger-than-expected revenue and a gain in user numbers, but investors weren't impressed.
Although revenue grew 32 percent in the second quarter, growth has slowed from earlier this year and from previous years. That's a concern for a newly public company. Investors are willing to value new companies highly, even if they are not making a profit, because they expect booming revenue.
Baird's Colin Sebastian also pointed out that the company is spending more on technology and hiring, driving up expenses.
But he's not overly concerned. He backed his 'Outperform' rating for Facebook, saying advertising revenue was better than expected and the company is improving its ability to make money from users who access Facebook from apps on their phones and tablet computers.
Other analysts remained positive, too. Of 27 analysts available from FactSet, 15 have 'Buy' ratings or equivalent, while just three are a 'Sell.' Analysts tend to have longer-term views of stocks than many day-to-day investors.
Mobile and users in developing countries are driving growth in active monthly users, Sebastian said. Facebook had 955 million active monthly users as of June 30, up 29 percent from a year ago.
'We don't view these results as dramatically good or bad,' said Citi analyst Mark Mahaney. 'Key questions remain: the future of Facebook mobile monetization and the future of Facebook user engagement.'
Analysts also cautioned that the stock could be volatile because Facebook didn't offer investors and financial analysts its outlook for the rest of the year.
Overall the company reported a loss of $157 million, or 8 cents per share, in the April-June period, mainly because of compensation expenses it incurred when it paid $1.3 billion in restricted stock and related taxes for employees as part of the IPO. The loss compared with earnings of $240 million, or 11 cents per share, in the second quarter a year ago.
The company's adjusted earnings of $295 million, or 12 cents per share, matched Wall Street's expectations.
Facebook's revenue of $1.18 billion was slightly higher than the $1.16 billion expected by analysts surveyed by FactSet.
The results came two months after Facebook's stock flopped on its first trading day, on May 18. The day began with glitches with the Nasdaq Stock Market that delayed trading by half an hour. It didn't get much better from there. Despite months of hoopla that had investors thinking it would soar, the stock closed just 23 cents above its $38 IPO price. It has not reached that level since.
Investors were holding out hope that Facebook would far exceed expectations - even though the company effectively warned investors before its IPO that Wall Street's expectations were too high. In a filing issued a week before its IPO, for instance, Facebook said its mobile users are growing at a faster pace than the number of ads on its mobile platform.
Analysts took that as a sign that their estimates were out of whack and many of them reduced their estimates for Facebook's projected revenue and earnings.
Even though the number of people who use mobile devices and tablet computers to access Facebook had been growing fast, Facebook didn't start showing ads on its mobile app until this spring. Facebook had 543 million active monthly mobile users at the end of the quarter, a 67 percent increase from a year earlier.
In a conference call with analysts Thursday, CEO Mark Zuckerberg said Facebook's mobile users are more active than those who use the personal computer version.
'On average mobile users are around 20 percent more likely to use Facebook on any given day,' he said. 'So mobile not only gives us the potential to connect more people with our services and also gives us the ability to provide more value and more deeply engaging experience.'
Facebook said its revenue from advertising totaled $992 million, a 28 percent increase from the same quarter last year. That number accounted for 84 percent of total revenue. The company did not say what portion was from mobile advertising. The rest came from payments and other fees, money Facebook makes from Zynga games and other apps.
___
AP Business Writer Bree Fowler contributed to this report.
Wednesday, July 25, 2012
Game maker Zynga stock tanks after weak 2Q report
NEW YORK (AP) - Zynga Inc. lost money and received less revenue than anticipated in the second quarter because "CityVille," ''FarmVille" and other games are not attracting as many paying players as they should.
Its stock tanked in after-hours trading and dragged Facebook's shares as well because the social networking icon relies on Zynga for a good chunk of its revenue - 12 percent last year. The news comes just as Facebook prepares to report quarterly earnings on Thursday, its first as a public company.
Though Zynga's revenue grew, Wall Street wanted more. The number of players increased, but only because it got more players from its acquisition of OMGPop, the maker of the mobile game "Draw Something." Expenses grew, too.
Faced with a dismal quarter, Zynga lowered its outlook for the year on Wednesday, citing game delays, reduced expectations for "Draw Something" and what it called a "more challenging environment on the Facebook Web platform."
In short, not all is well in Zyngaville.
"The largest reason for us decreasing our guidance has to do with the performance of our existing games," Chief Financial Officer David Wehner said in a conference call with analysts.
It's not clear if this means people are growing tired of Zynga's games, of Facebook games in general, or if they are just not paying as much for virtual cows and poker chips as they used to. Zynga offers its games for free and makes money when players buy those virtual goods to enhance game play.
To Michael Pachter of Wedbush, the reasons Zynga gave for its weak outlook were not good enough.
"Why did they do so badly? I wish I knew," he said. But he was more concerned about the reduced forecast.
The game delay, the weak "Draw Something" performance and changes Facebook made to its website - which can make older games such as "FarmVille" more difficult to discover - helped explain why Zynga did badly in the second quarter. But Pachter said these reasons don't explain the weak outlook for the rest of the year.
The company said it now expects adjusted earnings of 4 cents to 9 cents per share for all of 2012. In April, it had forecast adjusted earnings between 23 cents and 29 cents per share. Analysts were expecting 26 cents.
Zynga derives nearly all of its revenue from games played on Facebook. A growing number of Facebook users are accessing the social network using mobile devices rather than computers, which hurts Web-based games such as Zynga's.
Zynga had a lot riding on this quarter. Investors had been punishing its stock because of worries about declining user numbers. Zynga said the number of active monthly users grew by 34 percent from a year ago, to 306 million. But the number wouldn't have gone up were it not for the OMGPop acquisition. Zynga didn't break out the OMGPop numbers.
The results provided no relief. Zynga's stock sank $1.89, or 37 percent, to $3.19 in after-hours trading after the results came out. That is below its all-time low of $4.45 and means Zynga will likely start trading Thursday at its lowest level since going public in December.
The stock had closed up 16 cents at $5.08 during the regular session. Zynga's stock priced at $10 when it went public.
Facebook's stock also declined after Zynga's announcement. The bad news from Zynga could hurt Facebook, whose stock fell $2.23, or 7.6 percent, to $27.11 in after-hours trading.
Zynga said Wednesday that it lost $22.8 million, or 3 cents per share, in the April-June quarter. That's down from earnings of $1.4 million a year ago when it was still privately held. Its per-share results a year ago were at breakeven.
Adjusted earnings in the latest quarter were a penny per share, below expectations of 5 cents per share.
Zynga's revenue grew 19 percent to $332 million. Analysts surveyed by FactSet had expected $342.8 million.
Zynga also said Wednesday that its chairman and CEO, Mark Pincus, became the beneficial owner of more than 50 percent of the company's voting power through stock he owns.
Its stock tanked in after-hours trading and dragged Facebook's shares as well because the social networking icon relies on Zynga for a good chunk of its revenue - 12 percent last year. The news comes just as Facebook prepares to report quarterly earnings on Thursday, its first as a public company.
Though Zynga's revenue grew, Wall Street wanted more. The number of players increased, but only because it got more players from its acquisition of OMGPop, the maker of the mobile game "Draw Something." Expenses grew, too.
Faced with a dismal quarter, Zynga lowered its outlook for the year on Wednesday, citing game delays, reduced expectations for "Draw Something" and what it called a "more challenging environment on the Facebook Web platform."
In short, not all is well in Zyngaville.
"The largest reason for us decreasing our guidance has to do with the performance of our existing games," Chief Financial Officer David Wehner said in a conference call with analysts.
It's not clear if this means people are growing tired of Zynga's games, of Facebook games in general, or if they are just not paying as much for virtual cows and poker chips as they used to. Zynga offers its games for free and makes money when players buy those virtual goods to enhance game play.
To Michael Pachter of Wedbush, the reasons Zynga gave for its weak outlook were not good enough.
"Why did they do so badly? I wish I knew," he said. But he was more concerned about the reduced forecast.
The game delay, the weak "Draw Something" performance and changes Facebook made to its website - which can make older games such as "FarmVille" more difficult to discover - helped explain why Zynga did badly in the second quarter. But Pachter said these reasons don't explain the weak outlook for the rest of the year.
The company said it now expects adjusted earnings of 4 cents to 9 cents per share for all of 2012. In April, it had forecast adjusted earnings between 23 cents and 29 cents per share. Analysts were expecting 26 cents.
Zynga derives nearly all of its revenue from games played on Facebook. A growing number of Facebook users are accessing the social network using mobile devices rather than computers, which hurts Web-based games such as Zynga's.
Zynga had a lot riding on this quarter. Investors had been punishing its stock because of worries about declining user numbers. Zynga said the number of active monthly users grew by 34 percent from a year ago, to 306 million. But the number wouldn't have gone up were it not for the OMGPop acquisition. Zynga didn't break out the OMGPop numbers.
The results provided no relief. Zynga's stock sank $1.89, or 37 percent, to $3.19 in after-hours trading after the results came out. That is below its all-time low of $4.45 and means Zynga will likely start trading Thursday at its lowest level since going public in December.
The stock had closed up 16 cents at $5.08 during the regular session. Zynga's stock priced at $10 when it went public.
Facebook's stock also declined after Zynga's announcement. The bad news from Zynga could hurt Facebook, whose stock fell $2.23, or 7.6 percent, to $27.11 in after-hours trading.
Zynga said Wednesday that it lost $22.8 million, or 3 cents per share, in the April-June quarter. That's down from earnings of $1.4 million a year ago when it was still privately held. Its per-share results a year ago were at breakeven.
Adjusted earnings in the latest quarter were a penny per share, below expectations of 5 cents per share.
Zynga's revenue grew 19 percent to $332 million. Analysts surveyed by FactSet had expected $342.8 million.
Zynga also said Wednesday that its chairman and CEO, Mark Pincus, became the beneficial owner of more than 50 percent of the company's voting power through stock he owns.
Zynga stock tanks after weak 2Q report
NEW YORK (AP) - Zynga's stock is tanking after the online game maker reported a loss in the second quarter, with adjusted earnings and revenue below Wall Street's already-low expectations.
The company behind games such as "CityVille" and "FarmVille" also lowered its outlook for the year because of delayed games, reduced expectations for its "Draw Something" game and what it called a "more challenging environment on the Facebook Web platform."
Zynga derives nearly all of its revenue from games played on Facebook, and a growing number of Facebook users are accessing the social network using mobile devices rather than computers. That hurts Web-based games such as Zynga's.
Zynga Inc. said Wednesday that it lost $22.8 million, or 3 cents per share, in the April-June quarter. That's down from earnings of $1.4 million a year ago when it was still privately held. Its per-share results last year were at breakeven.
Adjusted earnings in the latest quarter were a penny per share, below expectations of 5 cents per share.
Zynga's revenue grew 19 percent to $332 million. Analysts surveyed by FactSet had expected $342.8 million.
Zynga had a lot riding on this quarter. Investors had been punishing its stock because of worries about declining user numbers.
But the results provided no relief. Zynga's stock sank $2.09, or 41 percent, to $2.99 in after-hours trading after the results came out. The stock had closed up 16 cents at $5.08 during the regular session.
Facebook's stock also declined after Zynga's announcement. The bad news from Zynga could hurt Facebook, which reports its earnings on Thursday. Facebook's stock fell $2.54, or 8.7 percent, to $26.80 in after-hours trading.
Zynga also said Wednesday that its chairman and CEO, Mark Pincus, became the beneficial owner of more than 50 percent of the company's voting power through stock he owns.
The company behind games such as "CityVille" and "FarmVille" also lowered its outlook for the year because of delayed games, reduced expectations for its "Draw Something" game and what it called a "more challenging environment on the Facebook Web platform."
Zynga derives nearly all of its revenue from games played on Facebook, and a growing number of Facebook users are accessing the social network using mobile devices rather than computers. That hurts Web-based games such as Zynga's.
Zynga Inc. said Wednesday that it lost $22.8 million, or 3 cents per share, in the April-June quarter. That's down from earnings of $1.4 million a year ago when it was still privately held. Its per-share results last year were at breakeven.
Adjusted earnings in the latest quarter were a penny per share, below expectations of 5 cents per share.
Zynga's revenue grew 19 percent to $332 million. Analysts surveyed by FactSet had expected $342.8 million.
Zynga had a lot riding on this quarter. Investors had been punishing its stock because of worries about declining user numbers.
But the results provided no relief. Zynga's stock sank $2.09, or 41 percent, to $2.99 in after-hours trading after the results came out. The stock had closed up 16 cents at $5.08 during the regular session.
Facebook's stock also declined after Zynga's announcement. The bad news from Zynga could hurt Facebook, which reports its earnings on Thursday. Facebook's stock fell $2.54, or 8.7 percent, to $26.80 in after-hours trading.
Zynga also said Wednesday that its chairman and CEO, Mark Pincus, became the beneficial owner of more than 50 percent of the company's voting power through stock he owns.
Apple sags as consumers buy cheaper iPhones
NEW YORK (AP) - More consumers are buying the least expensive iPhones and iPads, a new phenomenon that is causing Apple's breakneck growth rate to slow.
On Tuesday, Apple Inc. revealed that both revenue and net income posted increases of just over 20 percent - cause for celebration at most companies, but meager by Apple standards.
Apple's growth was the slowest in more than two years, and failed to meet analyst expectations.
"The sheen is off the apple: It was a miss, no question about it," said David Rolfe, chief investment officer at Wedgewood Partners Inc.
Apple routinely blows past analyst expectations. It has only come in under their earnings expectations twice in ten years.
"We became too confident, in our expectations, that Apple had literally a perfect pulse on end demand throughout the globe... and quite simply, that wasn't the case this quarter," Rolfe said.
It wasn't so much the volume of sales that disappointed: Apple sold 17 million iPads in April to June period, beating expectations, and 26 million iPhones, at the low end of expectations.
But Apple's average selling prices for the gadgets declined to levels last seen in 2010 for the iPhone and the lowest levels ever in the case of the iPad.
Part of the reason was that consumers bought less expensive versions of the devices, said Apple's chief financial officer, Peter Oppenheimer. Apple introduced a new iPad in March, but kept the older model in stores while cutting its price.
The strengthening dollar also meant that overseas sales at constant prices translated into fewer dollars for Apple.
Sales in China, which have been a growth engine for the company, also declined compared to the previous quarter. CEO Tim Cook said that was because the iPhone 4S went on sale in China during the quarter that ended in March, and the company stocked inventories in the country.
Cook is known as an efficient manager of production and supply. He took over after founder and CEO Steve Jobs, who died in October.
Cook said he didn't see any effect of the economic slowdown in China. The troubles in Europe were evident, however. Sales to the continent grew just 16 percent.
Cook also blamed the tepid iPhone sales - up 28 percent from a year ago, but down from the previous quarter - on anticipation building for the next iPhone model. Apple hasn't said when it's arriving, but most company watchers now expect it in October.
Rolfe had expected stronger iPhone sales, and said he's surprised that consumers are holding off on buying iPhones as much as six months before the arrival of a new model. Previously, iPhone sales started tapering off about three months before the arrival of a new model.
Net income in Apple's fiscal third quarter was $8.8 billion, or $9.32 per share. That was up 21 percent from $7.3 billion, or $7.79 per share, a year ago.
Analysts polled by FactSet were expecting earnings of $10.37 per share.
Revenue at the Cupertino, Calif., company was $35 billion, up 23 percent. Analysts were expecting $37.5 billion.
Investors sold off Apple shares, but the reaction was muted compared to the earnings miss. Apple shares fell $31.92, or 5.3 percent, to $569 in after-hours trading, after the release of the results.
With its market value of $539 billion, Apple is by far the world's largest company.
Apple forecast earnings of $7.65 per share for the current quarter, well below the average analyst forecast at $10.26. Normally, Apple's forecasts are ignored, because the company routinely exceeds them. But for the just-ended quarter, Apple's cautious forecasts were more accurate than those of analysts.
Apple's forecast points to year-over-year profit growth of just 9 percent.
For revenue, Apple forecast $34 billion, while analysts have been expecting $38.1 billion.
Apple last missed expectations when it reported results for the quarter that ended in September last year. That was due to the iPhone 4S's launch being pushed from that quarter to the following one, and it made up the shortfall with very strong sales in the holiday quarter.
Apple's chief financial officer, Peter Oppenheimer, said the new version of its operating system for Macs, Mountain Lion, will go on sale Wednesday.
This news article is brought to you by INTERNET NEWS - where latest news are our top priority.
On Tuesday, Apple Inc. revealed that both revenue and net income posted increases of just over 20 percent - cause for celebration at most companies, but meager by Apple standards.
Apple's growth was the slowest in more than two years, and failed to meet analyst expectations.
"The sheen is off the apple: It was a miss, no question about it," said David Rolfe, chief investment officer at Wedgewood Partners Inc.
Apple routinely blows past analyst expectations. It has only come in under their earnings expectations twice in ten years.
"We became too confident, in our expectations, that Apple had literally a perfect pulse on end demand throughout the globe... and quite simply, that wasn't the case this quarter," Rolfe said.
It wasn't so much the volume of sales that disappointed: Apple sold 17 million iPads in April to June period, beating expectations, and 26 million iPhones, at the low end of expectations.
But Apple's average selling prices for the gadgets declined to levels last seen in 2010 for the iPhone and the lowest levels ever in the case of the iPad.
Part of the reason was that consumers bought less expensive versions of the devices, said Apple's chief financial officer, Peter Oppenheimer. Apple introduced a new iPad in March, but kept the older model in stores while cutting its price.
The strengthening dollar also meant that overseas sales at constant prices translated into fewer dollars for Apple.
Sales in China, which have been a growth engine for the company, also declined compared to the previous quarter. CEO Tim Cook said that was because the iPhone 4S went on sale in China during the quarter that ended in March, and the company stocked inventories in the country.
Cook is known as an efficient manager of production and supply. He took over after founder and CEO Steve Jobs, who died in October.
Cook said he didn't see any effect of the economic slowdown in China. The troubles in Europe were evident, however. Sales to the continent grew just 16 percent.
Cook also blamed the tepid iPhone sales - up 28 percent from a year ago, but down from the previous quarter - on anticipation building for the next iPhone model. Apple hasn't said when it's arriving, but most company watchers now expect it in October.
Rolfe had expected stronger iPhone sales, and said he's surprised that consumers are holding off on buying iPhones as much as six months before the arrival of a new model. Previously, iPhone sales started tapering off about three months before the arrival of a new model.
Net income in Apple's fiscal third quarter was $8.8 billion, or $9.32 per share. That was up 21 percent from $7.3 billion, or $7.79 per share, a year ago.
Analysts polled by FactSet were expecting earnings of $10.37 per share.
Revenue at the Cupertino, Calif., company was $35 billion, up 23 percent. Analysts were expecting $37.5 billion.
Investors sold off Apple shares, but the reaction was muted compared to the earnings miss. Apple shares fell $31.92, or 5.3 percent, to $569 in after-hours trading, after the release of the results.
With its market value of $539 billion, Apple is by far the world's largest company.
Apple forecast earnings of $7.65 per share for the current quarter, well below the average analyst forecast at $10.26. Normally, Apple's forecasts are ignored, because the company routinely exceeds them. But for the just-ended quarter, Apple's cautious forecasts were more accurate than those of analysts.
Apple's forecast points to year-over-year profit growth of just 9 percent.
For revenue, Apple forecast $34 billion, while analysts have been expecting $38.1 billion.
Apple last missed expectations when it reported results for the quarter that ended in September last year. That was due to the iPhone 4S's launch being pushed from that quarter to the following one, and it made up the shortfall with very strong sales in the holiday quarter.
Apple's chief financial officer, Peter Oppenheimer, said the new version of its operating system for Macs, Mountain Lion, will go on sale Wednesday.
This news article is brought to you by INTERNET NEWS - where latest news are our top priority.
Tuesday, July 24, 2012
Netflix's 2Q numbers disappoints, stock tumbles
SAN FRANCISCO (AP) - Netflix is making money again, but its recovery wasn't impressive enough to soothe investors worried about rising licensing fees and stiffer competition confronting the video subscription service.
Second-quarter results announced Tuesday included a 91 percent drop in net income and came after a rare loss to start the year.
The drop underscored the financial pressures squeezing Netflix Inc. as TV and movie studios demand more money for the right to distribute their content through a service that charges customers just $8 per month to view an unlimited amount of video over the Internet.
As the costs climb, Netflix's subscriber growth has slowed since the company infuriated customers a year ago by raising its prices by as much as 60 percent.
In the latest quarter, for instance, Netflix added just 420,000 Internet video and DVD-by-mail subscribers in the U.S. That compares with an increase of 1.8 million U.S. subscribers at the same time last year, a period that was completed before the company boosted its prices.
Netflix also cautioned that it may be tougher to get more people to sign up during the current quarter as the Summer Olympics capture the attention of many households for two weeks of the 12-week period. The Olympics start Friday and conclude on Aug. 12.
The company, which is based in Los Gatos, Calif., also reiterated earlier warnings that it's likely to sustain another loss at the end of the year as it pays for an expansion into its fourth market outside the U.S. Netflix hasn't said where that will be. It already has about 3.6 million subscribers in Canada, Latin America and the United Kingdom. Those international operations lost $89 million in the second quarter.
"We have enormous challenges ahead, and no doubt will have further ups and downs as we pioneer Internet television," Hastings wrote in a letter accompanying the results.
Investors didn't like the message telegraphed by the second-quarter results and management's outlook. Netflix shares shed 17 percent in extended trading Tuesday. The sell-off erased the gains that had accumulated during the past three weeks as some investors bet the company's second-quarter subscriber growth would at least hit the top end of what management had predicted back in April.
Instead, the second-quarter gains merely hit the mid-range of Netflix's stated target. Hastings had raised hopes for more robust growth earlier this month when he disclosed that Netflix's subscribers collectively had streamed more than 1 billion hours of video in June, an implied increase of about 33 percent from the end of last year.
In the latest quarter, Netflix added 1.1 million subscribers to the Internet streaming service worldwide. The increase left Netflix with 27.6 million Internet video subscribers through June, including nearly 24 million in the U.S.
While Netflix focuses on online video these days, it still hangs onto a DVD-by-mail rental service that initially made the company a household name. The DVD business shed another 850,000 customers during the second quarter, leaving 9.2 million subscribers still paying to receive the discs. The company expects to lose as many as 900,000 more DVD customers during the current quarter ending in September.
Netflix ended June with 26.5 million unique U.S. subscribers, up from 26.1 million in March. It now has 30.1 million worldwide.
Among Netflix's U.S. subscribers, about 6.7 million pay for both Internet streaming and DVDs. That's down from 7.4 million hybrid subscribers in March. About 2.6 million Netflix subscribers pay only for DVD rentals, down from 2.7 million DVD-only customers at the end of March.
The erosion hurts Netflix in the short term because DVD customers are currently more profitable than the company's streaming subscribers.
"People are moving away from DVD rapidly," Hastings said in a Tuesday interview. "It really depends on someone's tastes. If they want new movies, they tend to stick with DVDs. If it's a Friday night, and they just want something good to watch, then they'll tend to use streaming."
Netflix earned $6.2 million, or 11 cents per share, in the latest quarter. That compared with $68 million, or $1.26 per share, a year ago. The company suffered a $4.6 million loss during the first three months of this year as it paid for its expansion in the United Kingdom.
The second-quarter earnings topped the average estimate of 4 cents per share among analyst surveyed by FactSet.
Revenue for the period rose 13 percent from last year to $889 million, matching analyst projections.
Netflix's stock fell $13.39 to $67 in extended trading. During the regular session, it gained 45 cents to close at $80.39.
This article is brought to you by COMPUTERS.
Second-quarter results announced Tuesday included a 91 percent drop in net income and came after a rare loss to start the year.
The drop underscored the financial pressures squeezing Netflix Inc. as TV and movie studios demand more money for the right to distribute their content through a service that charges customers just $8 per month to view an unlimited amount of video over the Internet.
As the costs climb, Netflix's subscriber growth has slowed since the company infuriated customers a year ago by raising its prices by as much as 60 percent.
In the latest quarter, for instance, Netflix added just 420,000 Internet video and DVD-by-mail subscribers in the U.S. That compares with an increase of 1.8 million U.S. subscribers at the same time last year, a period that was completed before the company boosted its prices.
Netflix also cautioned that it may be tougher to get more people to sign up during the current quarter as the Summer Olympics capture the attention of many households for two weeks of the 12-week period. The Olympics start Friday and conclude on Aug. 12.
The company, which is based in Los Gatos, Calif., also reiterated earlier warnings that it's likely to sustain another loss at the end of the year as it pays for an expansion into its fourth market outside the U.S. Netflix hasn't said where that will be. It already has about 3.6 million subscribers in Canada, Latin America and the United Kingdom. Those international operations lost $89 million in the second quarter.
"We have enormous challenges ahead, and no doubt will have further ups and downs as we pioneer Internet television," Hastings wrote in a letter accompanying the results.
Investors didn't like the message telegraphed by the second-quarter results and management's outlook. Netflix shares shed 17 percent in extended trading Tuesday. The sell-off erased the gains that had accumulated during the past three weeks as some investors bet the company's second-quarter subscriber growth would at least hit the top end of what management had predicted back in April.
Instead, the second-quarter gains merely hit the mid-range of Netflix's stated target. Hastings had raised hopes for more robust growth earlier this month when he disclosed that Netflix's subscribers collectively had streamed more than 1 billion hours of video in June, an implied increase of about 33 percent from the end of last year.
In the latest quarter, Netflix added 1.1 million subscribers to the Internet streaming service worldwide. The increase left Netflix with 27.6 million Internet video subscribers through June, including nearly 24 million in the U.S.
While Netflix focuses on online video these days, it still hangs onto a DVD-by-mail rental service that initially made the company a household name. The DVD business shed another 850,000 customers during the second quarter, leaving 9.2 million subscribers still paying to receive the discs. The company expects to lose as many as 900,000 more DVD customers during the current quarter ending in September.
Netflix ended June with 26.5 million unique U.S. subscribers, up from 26.1 million in March. It now has 30.1 million worldwide.
Among Netflix's U.S. subscribers, about 6.7 million pay for both Internet streaming and DVDs. That's down from 7.4 million hybrid subscribers in March. About 2.6 million Netflix subscribers pay only for DVD rentals, down from 2.7 million DVD-only customers at the end of March.
The erosion hurts Netflix in the short term because DVD customers are currently more profitable than the company's streaming subscribers.
"People are moving away from DVD rapidly," Hastings said in a Tuesday interview. "It really depends on someone's tastes. If they want new movies, they tend to stick with DVDs. If it's a Friday night, and they just want something good to watch, then they'll tend to use streaming."
Netflix earned $6.2 million, or 11 cents per share, in the latest quarter. That compared with $68 million, or $1.26 per share, a year ago. The company suffered a $4.6 million loss during the first three months of this year as it paid for its expansion in the United Kingdom.
The second-quarter earnings topped the average estimate of 4 cents per share among analyst surveyed by FactSet.
Revenue for the period rose 13 percent from last year to $889 million, matching analyst projections.
Netflix's stock fell $13.39 to $67 in extended trading. During the regular session, it gained 45 cents to close at $80.39.
This article is brought to you by COMPUTERS.
Netflix's 2Q numbers disappoints, stock tumbles
SAN FRANCISCO (AP) - Netflix is making money again, but its recovery wasn't impressive enough to soothe investors worried about rising licensing fees and stiffer competition confronting the video subscription service.
Second-quarter results announced Tuesday included a 91 percent drop in net income and came after a rare loss to start the year.
The drop underscored the financial pressures squeezing Netflix Inc. as TV and movie studios demand more money for the right to distribute their content through a service that charges customers just $8 per month to view an unlimited amount of video over the Internet.
As the costs climb, Netflix's subscriber growth has slowed since the company infuriated customers a year ago by raising its prices by as much as 60 percent.
In the latest quarter, for instance, Netflix added just 420,000 Internet video and DVD-by-mail subscribers in the U.S. That compares with an increase of 1.8 million U.S. subscribers at the same time last year, a period that was completed before the company boosted its prices.
Netflix also cautioned that it may be tougher to get more people to sign up during the current quarter as the Summer Olympics capture the attention of many households for two weeks of the 12-week period. The Olympics start Friday and conclude on Aug. 12.
The company, which is based in Los Gatos, Calif., also reiterated earlier warnings that it's likely to sustain another loss at the end of the year as it pays for an expansion into its fourth market outside the U.S. Netflix hasn't said where that will be. It already has about 3.6 million subscribers in Canada, Latin America and the United Kingdom. Those international operations lost $89 million in the second quarter.
"We have enormous challenges ahead, and no doubt will have further ups and downs as we pioneer Internet television," Hastings wrote in a letter accompanying the results.
Investors didn't like the message telegraphed by the second-quarter results and management's outlook. Netflix shares shed 17 percent in extended trading Tuesday. The sell-off erased the gains that had accumulated during the past three weeks as some investors bet the company's second-quarter subscriber growth would at least hit the top end of what management had predicted back in April.
Instead, the second-quarter gains merely hit the mid-range of Netflix's stated target. Hastings had raised hopes for more robust growth earlier this month when he disclosed that Netflix's subscribers collectively had streamed more than 1 billion hours of video in June, an implied increase of about 33 percent from the end of last year.
In the latest quarter, Netflix added 1.1 million subscribers to the Internet streaming service worldwide. The increase left Netflix with 27.6 million Internet video subscribers through June, including nearly 24 million in the U.S.
While Netflix focuses on online video these days, it still hangs onto a DVD-by-mail rental service that initially made the company a household name. The DVD business shed another 850,000 customers during the second quarter, leaving 9.2 million subscribers still paying to receive the discs. The company expects to lose as many as 900,000 more DVD customers during the current quarter ending in September.
Netflix ended June with 26.5 million unique U.S. subscribers, up from 26.1 million in March. It now has 30.1 million worldwide.
Among Netflix's U.S. subscribers, about 6.7 million pay for both Internet streaming and DVDs. That's down from 7.4 million hybrid subscribers in March. About 2.6 million Netflix subscribers pay only for DVD rentals, down from 2.7 million DVD-only customers at the end of March.
The erosion hurts Netflix in the short term because DVD customers are currently more profitable than the company's streaming subscribers.
"People are moving away from DVD rapidly," Hastings said in a Tuesday interview. "It really depends on someone's tastes. If they want new movies, they tend to stick with DVDs. If it's a Friday night, and they just want something good to watch, then they'll tend to use streaming."
Netflix earned $6.2 million, or 11 cents per share, in the latest quarter. That compared with $68 million, or $1.26 per share, a year ago. The company suffered a $4.6 million loss during the first three months of this year as it paid for its expansion in the United Kingdom.
The second-quarter earnings topped the average estimate of 4 cents per share among analyst surveyed by FactSet.
Revenue for the period rose 13 percent from last year to $889 million, matching analyst projections.
Netflix's stock fell $13.39 to $67 in extended trading. During the regular session, it gained 45 cents to close at $80.39.
This article is brought to you by BUY COMPUTERS.
Second-quarter results announced Tuesday included a 91 percent drop in net income and came after a rare loss to start the year.
The drop underscored the financial pressures squeezing Netflix Inc. as TV and movie studios demand more money for the right to distribute their content through a service that charges customers just $8 per month to view an unlimited amount of video over the Internet.
As the costs climb, Netflix's subscriber growth has slowed since the company infuriated customers a year ago by raising its prices by as much as 60 percent.
In the latest quarter, for instance, Netflix added just 420,000 Internet video and DVD-by-mail subscribers in the U.S. That compares with an increase of 1.8 million U.S. subscribers at the same time last year, a period that was completed before the company boosted its prices.
Netflix also cautioned that it may be tougher to get more people to sign up during the current quarter as the Summer Olympics capture the attention of many households for two weeks of the 12-week period. The Olympics start Friday and conclude on Aug. 12.
The company, which is based in Los Gatos, Calif., also reiterated earlier warnings that it's likely to sustain another loss at the end of the year as it pays for an expansion into its fourth market outside the U.S. Netflix hasn't said where that will be. It already has about 3.6 million subscribers in Canada, Latin America and the United Kingdom. Those international operations lost $89 million in the second quarter.
"We have enormous challenges ahead, and no doubt will have further ups and downs as we pioneer Internet television," Hastings wrote in a letter accompanying the results.
Investors didn't like the message telegraphed by the second-quarter results and management's outlook. Netflix shares shed 17 percent in extended trading Tuesday. The sell-off erased the gains that had accumulated during the past three weeks as some investors bet the company's second-quarter subscriber growth would at least hit the top end of what management had predicted back in April.
Instead, the second-quarter gains merely hit the mid-range of Netflix's stated target. Hastings had raised hopes for more robust growth earlier this month when he disclosed that Netflix's subscribers collectively had streamed more than 1 billion hours of video in June, an implied increase of about 33 percent from the end of last year.
In the latest quarter, Netflix added 1.1 million subscribers to the Internet streaming service worldwide. The increase left Netflix with 27.6 million Internet video subscribers through June, including nearly 24 million in the U.S.
While Netflix focuses on online video these days, it still hangs onto a DVD-by-mail rental service that initially made the company a household name. The DVD business shed another 850,000 customers during the second quarter, leaving 9.2 million subscribers still paying to receive the discs. The company expects to lose as many as 900,000 more DVD customers during the current quarter ending in September.
Netflix ended June with 26.5 million unique U.S. subscribers, up from 26.1 million in March. It now has 30.1 million worldwide.
Among Netflix's U.S. subscribers, about 6.7 million pay for both Internet streaming and DVDs. That's down from 7.4 million hybrid subscribers in March. About 2.6 million Netflix subscribers pay only for DVD rentals, down from 2.7 million DVD-only customers at the end of March.
The erosion hurts Netflix in the short term because DVD customers are currently more profitable than the company's streaming subscribers.
"People are moving away from DVD rapidly," Hastings said in a Tuesday interview. "It really depends on someone's tastes. If they want new movies, they tend to stick with DVDs. If it's a Friday night, and they just want something good to watch, then they'll tend to use streaming."
Netflix earned $6.2 million, or 11 cents per share, in the latest quarter. That compared with $68 million, or $1.26 per share, a year ago. The company suffered a $4.6 million loss during the first three months of this year as it paid for its expansion in the United Kingdom.
The second-quarter earnings topped the average estimate of 4 cents per share among analyst surveyed by FactSet.
Revenue for the period rose 13 percent from last year to $889 million, matching analyst projections.
Netflix's stock fell $13.39 to $67 in extended trading. During the regular session, it gained 45 cents to close at $80.39.
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Apple sags in 3Q as iPhones go for less
NEW YORK (AP) - Consumers are buying cheaper Apple products. That's a disappointment for investors who thought the company would keep boosting profits and revenues at its previous breakneck pace.
On Tuesday, Apple Inc. revealed that both revenue and net income posted increases of just over 20 percent - cause for celebration at most companies, but meager by Apple standards.
The growth was the slowest in more than two years, and failed to meet analyst expectations.
It's a huge swing and a miss for a company that usually knocks the cover off the ball," said Jack Ablin, chief investment officer of Harris Private Bank.
It wasn't so much the volume of sales that disappointed: Apple sold 17 million iPads in April to June period, beating expectations, and 26 million iPhones, at the low end of expectations.
But Apple's average selling prices for the gadgets declined to levels last seen in 2010 for the iPhone and the lowest levels ever in the case of the iPad.
Part of the reason was that consumers bought less expensive versions of the devices, said Apple's chief financial officer, Peter Oppenheimer. Apple introduced a new iPad in March, but kept the older model in stores while cutting its price.
The strengthening dollar also meant that overseas sales at constant prices translated into fewer dollars for Apple.
Sales in China, which have been a growth engine for the company, also declined compared to the previous quarter. CEO Tim Cook said that was because the iPhone 4S went on sale in China during the quarter that ended in March, and the company stocked inventories in the country.
Cook said he didn't see any effect of the economic slowdown in China. The troubles in Europe were evident, however. Sales to the continent grew just 16 percent.
Cook also blamed the tepid iPhone sales - up 28 percent from a year ago, but down from the previous quarter - on anticipation building for the next iPhone model. Apple hasn't said when it's arriving, but most company watchers now expect it in October.
David Rolfe, chief investment officer at Wedgewood Partners Inc., had expected stronger iPhone sales, said he's surprised that consumers are holding off on buying iPhones as much as six months before the arrival of a new model. Previously, iPhone sales started tapering off about three months before the arrival of a new model.
Net income in Apple's fiscal third quarter was $8.8 billion, or $9.32 per share. That was up 21 percent from $7.3 billion, or $7.79 per share, a year ago.
Analysts polled by FactSet were expecting earnings of $10.37 per share.
Revenue at the Cupertino, Calif., company was $35 billion, up 23 percent. Analysts were expecting $37.5 billion.
Apple shares fell $31.10, or 5.2 percent, to $569.82 in after-hours trading, after the release of the results.
Rolfe said the results were a "big miss" after two blowout quarters.
"We became too confident, in our expectations, that Apple had literally a perfect pulse on end demand throughout the globe... and quite simply, that wasn't the case this quarter," Rolfe said.
Apple forecast earnings of $7.65 per share for the current quarter, well below the average analyst forecast at $10.26. Normally, Apple's forecasts are ignored, because the company routinely exceeds them. But for the just-ended quarter, Apple's cautious forecasts were more accurate than those of analysts.
Apple's forecast points to year-over-year profit growth of just 9 percent.
For revenue, Apple forecast $34 billion, while analysts have been expecting $38.1 billion.
Apple last missed expectations when it reported results for the quarter that ended in September last year. That was due to the iPhone 4S's launch being pushed from that quarter to the following one, and it made up the shortfall with very strong sales in the holiday quarter.
Apple's chief financial officer, Peter Oppenheimer, said the new version of its operating system for Macs, Mountain Lion, will go on sale Wednesday.
This article is brought to you by COMPUTERS.
On Tuesday, Apple Inc. revealed that both revenue and net income posted increases of just over 20 percent - cause for celebration at most companies, but meager by Apple standards.
The growth was the slowest in more than two years, and failed to meet analyst expectations.
It's a huge swing and a miss for a company that usually knocks the cover off the ball," said Jack Ablin, chief investment officer of Harris Private Bank.
It wasn't so much the volume of sales that disappointed: Apple sold 17 million iPads in April to June period, beating expectations, and 26 million iPhones, at the low end of expectations.
But Apple's average selling prices for the gadgets declined to levels last seen in 2010 for the iPhone and the lowest levels ever in the case of the iPad.
Part of the reason was that consumers bought less expensive versions of the devices, said Apple's chief financial officer, Peter Oppenheimer. Apple introduced a new iPad in March, but kept the older model in stores while cutting its price.
The strengthening dollar also meant that overseas sales at constant prices translated into fewer dollars for Apple.
Sales in China, which have been a growth engine for the company, also declined compared to the previous quarter. CEO Tim Cook said that was because the iPhone 4S went on sale in China during the quarter that ended in March, and the company stocked inventories in the country.
Cook said he didn't see any effect of the economic slowdown in China. The troubles in Europe were evident, however. Sales to the continent grew just 16 percent.
Cook also blamed the tepid iPhone sales - up 28 percent from a year ago, but down from the previous quarter - on anticipation building for the next iPhone model. Apple hasn't said when it's arriving, but most company watchers now expect it in October.
David Rolfe, chief investment officer at Wedgewood Partners Inc., had expected stronger iPhone sales, said he's surprised that consumers are holding off on buying iPhones as much as six months before the arrival of a new model. Previously, iPhone sales started tapering off about three months before the arrival of a new model.
Net income in Apple's fiscal third quarter was $8.8 billion, or $9.32 per share. That was up 21 percent from $7.3 billion, or $7.79 per share, a year ago.
Analysts polled by FactSet were expecting earnings of $10.37 per share.
Revenue at the Cupertino, Calif., company was $35 billion, up 23 percent. Analysts were expecting $37.5 billion.
Apple shares fell $31.10, or 5.2 percent, to $569.82 in after-hours trading, after the release of the results.
Rolfe said the results were a "big miss" after two blowout quarters.
"We became too confident, in our expectations, that Apple had literally a perfect pulse on end demand throughout the globe... and quite simply, that wasn't the case this quarter," Rolfe said.
Apple forecast earnings of $7.65 per share for the current quarter, well below the average analyst forecast at $10.26. Normally, Apple's forecasts are ignored, because the company routinely exceeds them. But for the just-ended quarter, Apple's cautious forecasts were more accurate than those of analysts.
Apple's forecast points to year-over-year profit growth of just 9 percent.
For revenue, Apple forecast $34 billion, while analysts have been expecting $38.1 billion.
Apple last missed expectations when it reported results for the quarter that ended in September last year. That was due to the iPhone 4S's launch being pushed from that quarter to the following one, and it made up the shortfall with very strong sales in the holiday quarter.
Apple's chief financial officer, Peter Oppenheimer, said the new version of its operating system for Macs, Mountain Lion, will go on sale Wednesday.
This article is brought to you by COMPUTERS.
Apple sags in 3Q as iPhone gets cheaper
NEW YORK (AP) - Apple products have been getting cheaper. That's good news for consumers but not for investors, who thought the company would keep boosting profits and revenues at its previous breakneck pace.
On Tuesday Apple Inc. revealed that its growth slowed in the most recent quarter. In both revenue and net income, the company posted the smallest increases in years, and failed to meet analyst expectations.
It wasn't so much the volume of sales: Apple sold 17 million iPads in April to June period, beating expectations, and 26 million iPhones, at the low end of expectations.
But Apple's average selling prices for both gadgets declined to levels last seen in 2010 for the iPhone and the lowest levels ever in the case of the iPad.
Apple introduced a new iPad in March, but kept the older model in stores while cutting its price.
The average selling prices of Macs also fell.
Net income in Apple's fiscal third quarter was $8.8 billion, or $9.32 per share. That was up 21 percent from $7.3 billion, or $7.79 per share, a year ago.
Analysts polled by FactSet were expecting earnings of $10.37 per share.
Revenue at the Cupertino, Calif., company was $35 billion, up 23 percent. Analysts were expecting $37.5 billion.
Apple shares fell $34.99, or 5.8 percent, to $565.93 in after-hours trading, after the release of the results.
This article is brought to you by BUY A NEW COMPUTER.
On Tuesday Apple Inc. revealed that its growth slowed in the most recent quarter. In both revenue and net income, the company posted the smallest increases in years, and failed to meet analyst expectations.
It wasn't so much the volume of sales: Apple sold 17 million iPads in April to June period, beating expectations, and 26 million iPhones, at the low end of expectations.
But Apple's average selling prices for both gadgets declined to levels last seen in 2010 for the iPhone and the lowest levels ever in the case of the iPad.
Apple introduced a new iPad in March, but kept the older model in stores while cutting its price.
The average selling prices of Macs also fell.
Net income in Apple's fiscal third quarter was $8.8 billion, or $9.32 per share. That was up 21 percent from $7.3 billion, or $7.79 per share, a year ago.
Analysts polled by FactSet were expecting earnings of $10.37 per share.
Revenue at the Cupertino, Calif., company was $35 billion, up 23 percent. Analysts were expecting $37.5 billion.
Apple shares fell $34.99, or 5.8 percent, to $565.93 in after-hours trading, after the release of the results.
This article is brought to you by BUY A NEW COMPUTER.
AT&T smartphone sales fall in 2Q, boosting net
NEW YORK (AP) - AT&T Inc. on Tuesday said it saw declining smartphone sales in the second quarter, leading to the best profitability ever in its wireless arm as it saved on phone subsidies.
The largest telecommunications company in the U.S. says it activated 5.1 million smartphones in its latest quarter, down from 5.5 million in the same period a year ago.
Much of the decline came because AT&T subscribers are holding on to their phones longer: the company said the rate of upgrades to new phones was at a record low.
That's good news for the company because it needs to subsidize each smartphone by hundreds of dollars to be able to sell it to customers for $99 or $199. IPhones, in particular, are expensive to sell, because Apple charges AT&T an average of around $650 for each one.
In March last year, AT&T started telling subscribers that they had to stay on contract for 20 months before they would be eligible for a new phone at the fully subsidized price. Before that, some high-paying customers had been eligible for upgrades after just 12 months.
"It appears our policy is working," John Stephens, AT&T's chief financial officer, told analysts on a conference call. He said another big contributor to the low upgrade rate was that many people upgraded late last year, when the latest iPhone debuted.
Wireless operating income in the quarter was $4.9 billion, up 18 percent from a year ago.
Analysts still expect AT&T's profits to take a dive this fall, when the new iPhone comes out. In what's become an annual ritual, buyers flood AT&T and Apple stores, and AT&T pays dearly for the privilege of having the nation's most popular network for iPhones.
The tighter upgrade policies don't seem to be scaring off AT&T subscribers. They were more loyal than ever in the quarter, helping AT&T outdo analyst expectations by adding a net 320,000 subscribers on contract-based plans in the quarter.
However, more than half of the new subscribers were tablet users, who pay less than smartphone users. Also, AT&T continues to lag Verizon Wireless, which already has more subscribers. Last week, Verizon reported adding 888,000 subscribers to its rolls in the quarter.
The strong wireless results helped boost Dallas-based AT&T's net income to $3.9 billion, or 66 cents per share, for the April to June period. That's up 8.7 percent from $3.6 billion, or 60 cents per share, a year earlier.
For the latest quarter, analysts expected earnings of 63 cents per share.
Revenue edged up 0.3 percent to $31.6 billion. Analysts were expecting $31.7 billion. If it weren't for the sale of its phone-books business in May, revenue would have risen 2 percent.
AT&T sold a controlling stake in the Yellow Pages division to private-equity firm Cerberus Capital for $950 million. The unit was profitable but shrinking, and AT&T wants to be a growing company.
AT&T's stock slipped 74 cents to $35.28 in morning trading Tuesday, retreating from levels close to its three-year high of $36.21, hit three weeks ago.
This article is brought to you by COMPUTERS FOR SALE.
The largest telecommunications company in the U.S. says it activated 5.1 million smartphones in its latest quarter, down from 5.5 million in the same period a year ago.
Much of the decline came because AT&T subscribers are holding on to their phones longer: the company said the rate of upgrades to new phones was at a record low.
That's good news for the company because it needs to subsidize each smartphone by hundreds of dollars to be able to sell it to customers for $99 or $199. IPhones, in particular, are expensive to sell, because Apple charges AT&T an average of around $650 for each one.
In March last year, AT&T started telling subscribers that they had to stay on contract for 20 months before they would be eligible for a new phone at the fully subsidized price. Before that, some high-paying customers had been eligible for upgrades after just 12 months.
"It appears our policy is working," John Stephens, AT&T's chief financial officer, told analysts on a conference call. He said another big contributor to the low upgrade rate was that many people upgraded late last year, when the latest iPhone debuted.
Wireless operating income in the quarter was $4.9 billion, up 18 percent from a year ago.
Analysts still expect AT&T's profits to take a dive this fall, when the new iPhone comes out. In what's become an annual ritual, buyers flood AT&T and Apple stores, and AT&T pays dearly for the privilege of having the nation's most popular network for iPhones.
The tighter upgrade policies don't seem to be scaring off AT&T subscribers. They were more loyal than ever in the quarter, helping AT&T outdo analyst expectations by adding a net 320,000 subscribers on contract-based plans in the quarter.
However, more than half of the new subscribers were tablet users, who pay less than smartphone users. Also, AT&T continues to lag Verizon Wireless, which already has more subscribers. Last week, Verizon reported adding 888,000 subscribers to its rolls in the quarter.
The strong wireless results helped boost Dallas-based AT&T's net income to $3.9 billion, or 66 cents per share, for the April to June period. That's up 8.7 percent from $3.6 billion, or 60 cents per share, a year earlier.
For the latest quarter, analysts expected earnings of 63 cents per share.
Revenue edged up 0.3 percent to $31.6 billion. Analysts were expecting $31.7 billion. If it weren't for the sale of its phone-books business in May, revenue would have risen 2 percent.
AT&T sold a controlling stake in the Yellow Pages division to private-equity firm Cerberus Capital for $950 million. The unit was profitable but shrinking, and AT&T wants to be a growing company.
AT&T's stock slipped 74 cents to $35.28 in morning trading Tuesday, retreating from levels close to its three-year high of $36.21, hit three weeks ago.
This article is brought to you by COMPUTERS FOR SALE.
Monday, July 23, 2012
How Apple's phantom taxes hide billions in profit
NEW YORK (AP) - On Tuesday, Apple is set to report financial results for the second quarter. Analysts are expecting net income of $9.8 billion. But whatever figure Apple reports won't reflect its true profit, because the company hides some of it with an unusual tax maneuver.
Apple Inc., already the world's most valuable company, understates its profits compared with other multinationals. It's building up an overlooked asset in the form of billions of dollars, tucked away for tax bills it may never pay.
Tax experts say the company could easily eliminate these phantom tax obligations. That would boost Apple's profits for the past three years by as much $10.5 billion, according to calculations by The Associated Press.
While investors might rejoice if Apple suddenly added $10.5 billion to its profits, unilaterally erasing a massive U.S. tax obligation could tarnish its reputation as a relatively responsible payer of U.S. taxes. Instead, the company is lobbying to change U.S. law so that it can erase its liabilities in a less conspicuous fashion. The issue has become part of the presidential campaign.
Like other companies, Apple typically keeps profits on overseas sales in overseas accounts. When someone buys an iPad in Paris or Sydney, for instance, the profit stays outside the United States.
Apple may pay some corporate income taxes on that profit to the country where it sells the iPad, but it minimizes these by using various accounting moves to shift profits to countries with low tax rates. For example the strategy known as "Double Irish With a Dutch Sandwich," routes profits through Irish and Dutch subsidiaries and then to the Caribbean.
When it comes to using creative tax techniques, Apple is no different from other multinational corporations, says Robert Willens, an independent accounting expert.
And just like other corporations, Apple leaves cash overseas. If it brought it home to the U.S., it would have to pay federal income taxes on the money (though it would get a credit for foreign taxes already paid). In Apple's case, those overseas accounts have grown to a staggering $74 billion - equal to the market value of Citigroup Inc.
The money is accumulating overseas because corporations are counting on lower U.S. tax rates in the future. At 35 percent, the U.S. corporate tax rate is among the highest for developed countries. In 2004, Congress enacted a one-year "tax holiday" for overseas earnings, and multinationals are hoping for a repeat of that. Presidential candidate Mitt Romney wants to permanently eliminate federal taxes on overseas profits. President Barack Obama attacked that idea last week, saying it won't create U.S. jobs, like the Romney campaign contends.
Where Apple does differ from other companies is that it sets aside a portion of these overseas profits, marking them as subject to U.S. taxes sometime in the future. Essentially, it's saying "this is money that we'll likely have to pay U.S. federal income taxes on" because we intend to repatriate it, says Willens.
But because Apple doesn't actually bring the profits into U.S. accounts, it doesn't pay the taxes. Instead, it records a tax liability. When Apple reports quarterly results, it subtracts these liabilities from its profits, even though it hasn't actually paid the taxes.
The liabilities accumulate, and as Apple's profits grow, they're piling up faster and faster.
"When you capitalize that into the future, it might be tens of billions of dollars," said Martin Sullivan, an economist with Tax Analysts, a nonprofit publisher.
The company had a net $6 billion of tax liabilities at the end of September, the last reported figure. It's had two blow-out quarters since then and is expected to report another one Tuesday. Based on reported and expected profits for the last three quarters, the liabilities can be estimated at around $10.5 billion.
Apple declined to comment on the specifics of its tax strategies or why it records tax liabilities that other multinationals avoid.
"Apple has conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules," the Cupertino, Calif., company said in a statement.
Yet Apple has made clear that it has no intention of repatriating its profits from overseas at the current U.S. tax rate. When CEO Tim Cook announced that the company would start paying a dividend this summer, he said the board determined the size of the dividend solely by looking at the amount of cash the company has in U.S. accounts.
"We do not want to incur the tax cost to repatriate the foreign cash at this time," Chief Financial Officer Peter Oppenheimer told investors in March.
Apple's net tax liabilities started building three years ago, when its sales started rocketing because of the iPhone. In that time, the company has reported a total of $69 billion in net income. If it had applied the same accounting practices as other multinational technology companies, and not marked some overseas profits as subject to U.S. taxes, its profits would have been about $78 billion, or 13 percent higher.
The boost to net income could mean a boost to the stock, since companies are usually valued on their earnings. If investors were to value Apple based on the last 12 months of earnings, with the tax liabilities added to earnings, the stock might be 13 percent higher.
Willens and Sullivan say that Apple could erase its liabilities by considering the profits "permanently reinvested" overseas, acknowledging that they will never be brought home. That would erase the tax liability, but it could make Apple look like a less responsible corporate citizen.
"I doubt they're going to do that on their own, because they don't want to be set up for criticism," said Willens.
Groups such as Citizens for Tax Justice compile lists of the tax rates corporations report. Apple looks like a relatively good taxpayer on such lists, with a 24 percent rate. But Apple doesn't actually pay the 24 percent, since it isn't repatriating its overseas profits. The actual taxes Apple pays are 13 percent of profits, as computed by Sullivan. That's a relatively low rate compared with other multinationals.
But keeping the money overseas limits what Apple can do with it. It means, for instance, that Apple can't use it to buy another U.S. company, or give it to shareholders.
To get the money home without paying full U.S. taxes on it, the company advocates a change in U.S. tax law. It's a member of Working to Invest Now in America, or WinAmerica. The coalition is lobbying for two congressional bills that would temporarily reduce the tax rate on such earnings to 5.25 percent. That would encourage the repatriation of some of the $1.4 trillion in cash that U.S. companies have sitting in overseas accounts, the group says.
The temporary tax amnesty enacted in 2004, resulted in hundreds of billions being brought home to the U.S. But according to the Congressional Research Service, it didn't create jobs or stimulate the economy, as had been hoped.
Google Inc., Oracle Corp., Microsoft Corp. and Cisco Systems Inc. are also members of WinAmerica, but none of them stand to gain as much as Apple from a tax amnesty, because they have less cash overseas.
This news article is brought to you by ANIMALS AND PETS - where latest news are our top priority.
Apple Inc., already the world's most valuable company, understates its profits compared with other multinationals. It's building up an overlooked asset in the form of billions of dollars, tucked away for tax bills it may never pay.
Tax experts say the company could easily eliminate these phantom tax obligations. That would boost Apple's profits for the past three years by as much $10.5 billion, according to calculations by The Associated Press.
While investors might rejoice if Apple suddenly added $10.5 billion to its profits, unilaterally erasing a massive U.S. tax obligation could tarnish its reputation as a relatively responsible payer of U.S. taxes. Instead, the company is lobbying to change U.S. law so that it can erase its liabilities in a less conspicuous fashion. The issue has become part of the presidential campaign.
Like other companies, Apple typically keeps profits on overseas sales in overseas accounts. When someone buys an iPad in Paris or Sydney, for instance, the profit stays outside the United States.
Apple may pay some corporate income taxes on that profit to the country where it sells the iPad, but it minimizes these by using various accounting moves to shift profits to countries with low tax rates. For example the strategy known as "Double Irish With a Dutch Sandwich," routes profits through Irish and Dutch subsidiaries and then to the Caribbean.
When it comes to using creative tax techniques, Apple is no different from other multinational corporations, says Robert Willens, an independent accounting expert.
And just like other corporations, Apple leaves cash overseas. If it brought it home to the U.S., it would have to pay federal income taxes on the money (though it would get a credit for foreign taxes already paid). In Apple's case, those overseas accounts have grown to a staggering $74 billion - equal to the market value of Citigroup Inc.
The money is accumulating overseas because corporations are counting on lower U.S. tax rates in the future. At 35 percent, the U.S. corporate tax rate is among the highest for developed countries. In 2004, Congress enacted a one-year "tax holiday" for overseas earnings, and multinationals are hoping for a repeat of that. Presidential candidate Mitt Romney wants to permanently eliminate federal taxes on overseas profits. President Barack Obama attacked that idea last week, saying it won't create U.S. jobs, like the Romney campaign contends.
Where Apple does differ from other companies is that it sets aside a portion of these overseas profits, marking them as subject to U.S. taxes sometime in the future. Essentially, it's saying "this is money that we'll likely have to pay U.S. federal income taxes on" because we intend to repatriate it, says Willens.
But because Apple doesn't actually bring the profits into U.S. accounts, it doesn't pay the taxes. Instead, it records a tax liability. When Apple reports quarterly results, it subtracts these liabilities from its profits, even though it hasn't actually paid the taxes.
The liabilities accumulate, and as Apple's profits grow, they're piling up faster and faster.
"When you capitalize that into the future, it might be tens of billions of dollars," said Martin Sullivan, an economist with Tax Analysts, a nonprofit publisher.
The company had a net $6 billion of tax liabilities at the end of September, the last reported figure. It's had two blow-out quarters since then and is expected to report another one Tuesday. Based on reported and expected profits for the last three quarters, the liabilities can be estimated at around $10.5 billion.
Apple declined to comment on the specifics of its tax strategies or why it records tax liabilities that other multinationals avoid.
"Apple has conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules," the Cupertino, Calif., company said in a statement.
Yet Apple has made clear that it has no intention of repatriating its profits from overseas at the current U.S. tax rate. When CEO Tim Cook announced that the company would start paying a dividend this summer, he said the board determined the size of the dividend solely by looking at the amount of cash the company has in U.S. accounts.
"We do not want to incur the tax cost to repatriate the foreign cash at this time," Chief Financial Officer Peter Oppenheimer told investors in March.
Apple's net tax liabilities started building three years ago, when its sales started rocketing because of the iPhone. In that time, the company has reported a total of $69 billion in net income. If it had applied the same accounting practices as other multinational technology companies, and not marked some overseas profits as subject to U.S. taxes, its profits would have been about $78 billion, or 13 percent higher.
The boost to net income could mean a boost to the stock, since companies are usually valued on their earnings. If investors were to value Apple based on the last 12 months of earnings, with the tax liabilities added to earnings, the stock might be 13 percent higher.
Willens and Sullivan say that Apple could erase its liabilities by considering the profits "permanently reinvested" overseas, acknowledging that they will never be brought home. That would erase the tax liability, but it could make Apple look like a less responsible corporate citizen.
"I doubt they're going to do that on their own, because they don't want to be set up for criticism," said Willens.
Groups such as Citizens for Tax Justice compile lists of the tax rates corporations report. Apple looks like a relatively good taxpayer on such lists, with a 24 percent rate. But Apple doesn't actually pay the 24 percent, since it isn't repatriating its overseas profits. The actual taxes Apple pays are 13 percent of profits, as computed by Sullivan. That's a relatively low rate compared with other multinationals.
But keeping the money overseas limits what Apple can do with it. It means, for instance, that Apple can't use it to buy another U.S. company, or give it to shareholders.
To get the money home without paying full U.S. taxes on it, the company advocates a change in U.S. tax law. It's a member of Working to Invest Now in America, or WinAmerica. The coalition is lobbying for two congressional bills that would temporarily reduce the tax rate on such earnings to 5.25 percent. That would encourage the repatriation of some of the $1.4 trillion in cash that U.S. companies have sitting in overseas accounts, the group says.
The temporary tax amnesty enacted in 2004, resulted in hundreds of billions being brought home to the U.S. But according to the Congressional Research Service, it didn't create jobs or stimulate the economy, as had been hoped.
Google Inc., Oracle Corp., Microsoft Corp. and Cisco Systems Inc. are also members of WinAmerica, but none of them stand to gain as much as Apple from a tax amnesty, because they have less cash overseas.
This news article is brought to you by ANIMALS AND PETS - where latest news are our top priority.
News Corp brands education business Amplify
NEW YORK (AP) - News Corp. is naming its grade school education business Amplify.
The unit, which is being spun off from News Corp. along with newspapers, brings together the student assessment software business Wireless Generation and partners it with AT&T.
Joel Klein, the former New York City schools who joined News Corp. in January 2011 to head up its education initiatives, will lead the company.
News Corp., which is based in New York, announced in November 2010 that it would take a 90 percent stake in Wireless Generation for $360 million.
Wireless Generation creates software tools to help educators.
Amplify and AT&T will launch pilot projects in U.S. schools in the coming school year, the company said Monday.. AT&T will provide tablet computers that work on its 4G network and Wi-Fi network.
The unit, which is being spun off from News Corp. along with newspapers, brings together the student assessment software business Wireless Generation and partners it with AT&T.
Joel Klein, the former New York City schools who joined News Corp. in January 2011 to head up its education initiatives, will lead the company.
News Corp., which is based in New York, announced in November 2010 that it would take a 90 percent stake in Wireless Generation for $360 million.
Wireless Generation creates software tools to help educators.
Amplify and AT&T will launch pilot projects in U.S. schools in the coming school year, the company said Monday.. AT&T will provide tablet computers that work on its 4G network and Wi-Fi network.
Big tech stocks rally after early earnings reports
SAN FRANCISCO (AP) - That wasn't so bad, after all.
That's the sentiment among investors as they digest last week's smorgasbord of quarterly results from technology companies that included Intel Corp., IBM Corp., Microsoft Corp. and Google Inc. Although reports from the industry bellwethers all featured some troubling signs, their performances indicate the technology sector is largely holding up, even as Europe's debt crisis undercuts sales and threatens to topple a still-shaky U.S. economy into another recession.
"What you are hearing now is a huge sigh of relief," said ISI Group analyst Brian Marshall.
As they exhaled, many investors latched on to Intel, IBM, Microsoft and Google. All four of their stocks ended last week higher than they began. That was good news for the Dow Jones industrial average, which also edged upward. The index includes computer chip maker Intel, corporate technology specialist IBM and software maker Microsoft in its basket of 30 stocks that are supposed to reflect the state of U.S. industry.
As a whole, the technology sector is in better shape than Wall Street envisioned. That's especially heartening amid signs that Europe's debt woes could cascade into a financial crisis similar to the 2008 meltdown in the U.S. that deepened the Great Recession. The technology-driven Nasdaq composite index ended last week 7 percent higher than where it stood at the beginning of June.
The rally could still lose steam if other major technology companies flop in their upcoming earnings reports for the three months spanning from April through June.
Apple Inc., which has ridden the success of the iPhone and iPad to become the world's most valuable company, is scheduled to release its quarterly financial results this week. Other major technology companies on this week's earnings calendar include: chip maker Texas Instruments Inc., computer disk-drive makers Western Digital Corp. and Seagate Technology PLC, business software maker SAP AG, data storage equipment maker EMC Corp. and business software maker VMware Inc.
EMC, VMware and SAP have already revealed their quarterly results either topped or matched analyst estimates, helping to propel their stocks higher in recent weeks. Seagate has said its quarterly revenue missed analysts' targets, but its stock is still slightly higher than before the warning.
Investors haven't been as sanguine about the pratfalls of other companies. Business software maker Informatica Corp., computer printer maker Lexmark International Inc. and chip maker Advanced Micro Devices Inc. have all been severely punished for earnings letdowns in their latest quarters. Since they issued warnings about their disappointing performances, their stocks have plunged by 18 percent to 33 percent.
AMD spooked investors late Thursday with a glum forecast that included a frank assessment of the personal computer industry, which has been slumping as more people surf the Web on smartphones and tablet computers.
"We expect macro headwinds will continue for the third quarter," AMD CEO Rory Read told analysts on conference call. "We also believe the PC industry may be resetting to a new baseline and that full-year industry growth estimates will be reduced."
Intel, AMD's much bigger rival, also experienced a slowdown in the second quarter and sees sluggish conditions persisting in the third quarter. Unlike AMD, though, Intel still produced second-quarter earnings above analyst projections and investors appear confident in the company's ability to manage its way through whatever difficulty might be ahead. The same appears to hold true for IBM, which raised its earnings guidance for the second half of the year, even though it expects Europe's weakened currency to decrease revenue slightly from last year.
The swing in currency rates also represents a drag on Google's revenue growth, but the Internet search leader is offsetting some of that by tweaking its technology to aim more online ads at Web surfers most likely to click on them. The additional clicks translate to more revenue for Google.
The shift away from PCs shaped Microsoft's redesign of the Windows operating system, which runs on most desktop and laptop computers. Microsoft has tailored Windows 8 so it can also power touch-based tablet computers, including a device called Surface that the software maker plans to release to compete against the iPad.
Investors have such high hopes for Windows 8 -due to hit the market Oct. 26- that they have been betting Microsoft will end the year with a bang as consumers and businesses snap up new machines running on the revamped operating system. Not even last week's announcement of Microsoft's first quarterly loss in its 26-year history as a public company could dampen the good vibes that have been lifting Microsoft's stock. The loss stemmed from a $6.2 billion charge for a soured acquisition from five years ago. But it was an afterthought for investors as they gaze into the future and try to figure out what's ahead.
That's the sentiment among investors as they digest last week's smorgasbord of quarterly results from technology companies that included Intel Corp., IBM Corp., Microsoft Corp. and Google Inc. Although reports from the industry bellwethers all featured some troubling signs, their performances indicate the technology sector is largely holding up, even as Europe's debt crisis undercuts sales and threatens to topple a still-shaky U.S. economy into another recession.
"What you are hearing now is a huge sigh of relief," said ISI Group analyst Brian Marshall.
As they exhaled, many investors latched on to Intel, IBM, Microsoft and Google. All four of their stocks ended last week higher than they began. That was good news for the Dow Jones industrial average, which also edged upward. The index includes computer chip maker Intel, corporate technology specialist IBM and software maker Microsoft in its basket of 30 stocks that are supposed to reflect the state of U.S. industry.
As a whole, the technology sector is in better shape than Wall Street envisioned. That's especially heartening amid signs that Europe's debt woes could cascade into a financial crisis similar to the 2008 meltdown in the U.S. that deepened the Great Recession. The technology-driven Nasdaq composite index ended last week 7 percent higher than where it stood at the beginning of June.
The rally could still lose steam if other major technology companies flop in their upcoming earnings reports for the three months spanning from April through June.
Apple Inc., which has ridden the success of the iPhone and iPad to become the world's most valuable company, is scheduled to release its quarterly financial results this week. Other major technology companies on this week's earnings calendar include: chip maker Texas Instruments Inc., computer disk-drive makers Western Digital Corp. and Seagate Technology PLC, business software maker SAP AG, data storage equipment maker EMC Corp. and business software maker VMware Inc.
EMC, VMware and SAP have already revealed their quarterly results either topped or matched analyst estimates, helping to propel their stocks higher in recent weeks. Seagate has said its quarterly revenue missed analysts' targets, but its stock is still slightly higher than before the warning.
Investors haven't been as sanguine about the pratfalls of other companies. Business software maker Informatica Corp., computer printer maker Lexmark International Inc. and chip maker Advanced Micro Devices Inc. have all been severely punished for earnings letdowns in their latest quarters. Since they issued warnings about their disappointing performances, their stocks have plunged by 18 percent to 33 percent.
AMD spooked investors late Thursday with a glum forecast that included a frank assessment of the personal computer industry, which has been slumping as more people surf the Web on smartphones and tablet computers.
"We expect macro headwinds will continue for the third quarter," AMD CEO Rory Read told analysts on conference call. "We also believe the PC industry may be resetting to a new baseline and that full-year industry growth estimates will be reduced."
Intel, AMD's much bigger rival, also experienced a slowdown in the second quarter and sees sluggish conditions persisting in the third quarter. Unlike AMD, though, Intel still produced second-quarter earnings above analyst projections and investors appear confident in the company's ability to manage its way through whatever difficulty might be ahead. The same appears to hold true for IBM, which raised its earnings guidance for the second half of the year, even though it expects Europe's weakened currency to decrease revenue slightly from last year.
The swing in currency rates also represents a drag on Google's revenue growth, but the Internet search leader is offsetting some of that by tweaking its technology to aim more online ads at Web surfers most likely to click on them. The additional clicks translate to more revenue for Google.
The shift away from PCs shaped Microsoft's redesign of the Windows operating system, which runs on most desktop and laptop computers. Microsoft has tailored Windows 8 so it can also power touch-based tablet computers, including a device called Surface that the software maker plans to release to compete against the iPad.
Investors have such high hopes for Windows 8 -due to hit the market Oct. 26- that they have been betting Microsoft will end the year with a bang as consumers and businesses snap up new machines running on the revamped operating system. Not even last week's announcement of Microsoft's first quarterly loss in its 26-year history as a public company could dampen the good vibes that have been lifting Microsoft's stock. The loss stemmed from a $6.2 billion charge for a soured acquisition from five years ago. But it was an afterthought for investors as they gaze into the future and try to figure out what's ahead.
Ex-Yahoo CEO becomes head of ShopRunner
NEW YORK (AP) - ShopRunner, a site that gives members two-day shipping from some e-commerce sites, says its new CEO is Scott Thompson, the former CEO of Yahoo.
Thompson left Yahoo in May after it emerged that his resume inaccurately ascribed him a degree in computer science. He had the job for only four months.
Much like Amazon's Prime service, ShopRunner provides faster shipping from shopping sites in exchange for membership fees. It's also planning to introduce an online payment service, and says Thompson's experience as the CEO of PayPal would be valuable
ShopRunner says CEO and co-founder Mike Golden will stay on as president.
This news article is brought to you by WOMEN'S BLOG - where latest news are our top priority.
Thompson left Yahoo in May after it emerged that his resume inaccurately ascribed him a degree in computer science. He had the job for only four months.
Much like Amazon's Prime service, ShopRunner provides faster shipping from shopping sites in exchange for membership fees. It's also planning to introduce an online payment service, and says Thompson's experience as the CEO of PayPal would be valuable
ShopRunner says CEO and co-founder Mike Golden will stay on as president.
This news article is brought to you by WOMEN'S BLOG - where latest news are our top priority.
Saturday, July 21, 2012
DirecTV, Viacom fight to draw in channel punch-out
LOS ANGELES (AP) - Viacom and DirecTV fought a bruising bout over fees to a draw Friday and agreed to a long-term deal that ended a 10-day channel blackout.
Their new deal restored MTV, Comedy Central, Nickelodeon and other channels to 20 million DirecTV customers and ensured those channels will be available to subscribers on computers and mobile devices in the coming months.
Fans on Twitter expressed relief.
According to terms shared by both sides on Friday, DirecTV Group Inc. will pay about 20 percent more to carry Viacom Inc. channels on satellite TV lineups. That works out to about $600 million in the first year of a seven-year deal. The companies agreed to annual single-digit percentage increases in subsequent years.
DirecTV was able to save itself about $500 million over the entire term by not taking the premium pay TV channel Epix. It said it also was able to send a message that it won't roll over every time a media company threatens to pull channels over fees.
'They realized we were not going to capitulate,' said Derek Chang, DirecTV's executive vice president of content strategy.
Investors met the outcome with a ho-hum as the deal was largely in line with expectations.
Shares of both companies edged downward Friday in a declining market. Since the dispute resulted in a blackout the evening of July 10, Viacom shares are down 0.9 percent, closing Friday at $46.41, while DirecTV shares are down 0.7 percent, closing at $48.33. Over the same period, the Dow Jones industrial average rose 1.3 percent.
'I'm not going to engage on who was the winner and who was the loser,' said Todd Juenger, an analyst with Bernstein Research. 'What we've learned is the fair value of Viacom services, fully tested and vetted in a real marketplace negotiation.'
By eking out a large fee increase, Viacom said DirecTV is now paying a rate that is more in line with that of other distributors.
DirecTV's Chang even acknowledged that it had been paying significantly less than competitors for Viacom channels because the deal that just expired had been locked in seven years ago.
Viacom had argued that its networks account for 20 percent of what DirecTV subscribers are watching but cost DirecTV just 5 percent of its overall programming expense. Under the new deal, the Viacom fees will come out to 6 percent.
'It was important to get fair value for our networks,' Viacom spokesman Carl Folta said. 'We are still one of the most efficient programmers in their bouquet.'
By refusing to add Epix to its premium pay TV channel stable, DirecTV was able to save itself a big fixed cost over its entire subscriber base, as the flat fee would have been charged no matter how many subscribers choose to pay more for Epix, a movie channel that is half owned by Viacom.
Media companies typically try to sell rights to their channels as a package, so that fledgling channels are bundled with those already in high demand. Adding Epix to DirecTV would have been a big win for Viacom, as it's now carried by only a handful of distributors, including rival satellite TV provider Dish Network Corp. But that was seen as unlikely, partly because Epix movies are available to Netflix subscribers 90 days after debuting on TV and the channel might have been hard to sell to customers.
The damage from the blackout to both sides was real but not permanent.
DirecTV spokesman Darris Gringeri said the company lost subscribers because of the dispute, 'but against our subscriber base, it was not a significant number.'
Viacom lost out on 10 days' worth of fees from DirecTV - roughly $14 million - and took a short-term audience hit that will cost the company advertising revenue.
Both sides suffered brand damage - Viacom because it was tagged for being a root cause of rising monthly TV bills, and DirecTV for not giving subscribers what they paid for. Even Comedy Central's Jon Stewart slammed network parent Viacom for acting like China in pulling some shows from the Internet as part of the dispute, hurting people who weren't DirecTV subscribers.
But the fight was short enough to forget about and move on. Plenty of disputes have lasted just a heartbeat - like ABC's 15-minute blackout of the Oscars to Cablevision subscribers in March 2010. Others have dragged on for months.
'It was fortunate they were able to resolve it before the back and forth got any worse than it did,' Barclays analyst Anthony DiClemente said.
DiClemente said the relatively quick resolution boded well for an end to AMC Networks Inc.'s continuing dispute with Dish, which has gone on since July 1.
This news article is brought to you by RELATIONSHIPS ADVICE - where latest news are our top priority.
Their new deal restored MTV, Comedy Central, Nickelodeon and other channels to 20 million DirecTV customers and ensured those channels will be available to subscribers on computers and mobile devices in the coming months.
Fans on Twitter expressed relief.
According to terms shared by both sides on Friday, DirecTV Group Inc. will pay about 20 percent more to carry Viacom Inc. channels on satellite TV lineups. That works out to about $600 million in the first year of a seven-year deal. The companies agreed to annual single-digit percentage increases in subsequent years.
DirecTV was able to save itself about $500 million over the entire term by not taking the premium pay TV channel Epix. It said it also was able to send a message that it won't roll over every time a media company threatens to pull channels over fees.
'They realized we were not going to capitulate,' said Derek Chang, DirecTV's executive vice president of content strategy.
Investors met the outcome with a ho-hum as the deal was largely in line with expectations.
Shares of both companies edged downward Friday in a declining market. Since the dispute resulted in a blackout the evening of July 10, Viacom shares are down 0.9 percent, closing Friday at $46.41, while DirecTV shares are down 0.7 percent, closing at $48.33. Over the same period, the Dow Jones industrial average rose 1.3 percent.
'I'm not going to engage on who was the winner and who was the loser,' said Todd Juenger, an analyst with Bernstein Research. 'What we've learned is the fair value of Viacom services, fully tested and vetted in a real marketplace negotiation.'
By eking out a large fee increase, Viacom said DirecTV is now paying a rate that is more in line with that of other distributors.
DirecTV's Chang even acknowledged that it had been paying significantly less than competitors for Viacom channels because the deal that just expired had been locked in seven years ago.
Viacom had argued that its networks account for 20 percent of what DirecTV subscribers are watching but cost DirecTV just 5 percent of its overall programming expense. Under the new deal, the Viacom fees will come out to 6 percent.
'It was important to get fair value for our networks,' Viacom spokesman Carl Folta said. 'We are still one of the most efficient programmers in their bouquet.'
By refusing to add Epix to its premium pay TV channel stable, DirecTV was able to save itself a big fixed cost over its entire subscriber base, as the flat fee would have been charged no matter how many subscribers choose to pay more for Epix, a movie channel that is half owned by Viacom.
Media companies typically try to sell rights to their channels as a package, so that fledgling channels are bundled with those already in high demand. Adding Epix to DirecTV would have been a big win for Viacom, as it's now carried by only a handful of distributors, including rival satellite TV provider Dish Network Corp. But that was seen as unlikely, partly because Epix movies are available to Netflix subscribers 90 days after debuting on TV and the channel might have been hard to sell to customers.
The damage from the blackout to both sides was real but not permanent.
DirecTV spokesman Darris Gringeri said the company lost subscribers because of the dispute, 'but against our subscriber base, it was not a significant number.'
Viacom lost out on 10 days' worth of fees from DirecTV - roughly $14 million - and took a short-term audience hit that will cost the company advertising revenue.
Both sides suffered brand damage - Viacom because it was tagged for being a root cause of rising monthly TV bills, and DirecTV for not giving subscribers what they paid for. Even Comedy Central's Jon Stewart slammed network parent Viacom for acting like China in pulling some shows from the Internet as part of the dispute, hurting people who weren't DirecTV subscribers.
But the fight was short enough to forget about and move on. Plenty of disputes have lasted just a heartbeat - like ABC's 15-minute blackout of the Oscars to Cablevision subscribers in March 2010. Others have dragged on for months.
'It was fortunate they were able to resolve it before the back and forth got any worse than it did,' Barclays analyst Anthony DiClemente said.
DiClemente said the relatively quick resolution boded well for an end to AMC Networks Inc.'s continuing dispute with Dish, which has gone on since July 1.
This news article is brought to you by RELATIONSHIPS ADVICE - where latest news are our top priority.
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