Nokia (NYSE: NOK) to cut 10,000 jobs as Q2 weak

Northern, WI 6/14/12 (StreetBeat) – Nokia (NYSE:NOK) plans to cut one in five jobs at its global cellphone business as it loses market share to rivals Apple (Nasdaq:AAPL) and Samsung (OTCBB:SSNLF) and burns through cash, raising new fears over its future.

In a second profit warning in nine weeks, Nokia said on Thursday that its phone business would post a deeper-than-expected loss in the second quarter due to tougher competition.

Once the world's dominant mobile phone provider, Nokia was wrongfooted by the rise of smartphones and is struggling to keep up with Apple, Samsumg and Google (Nasdaq: GOOG). It is also losing market share in cheaper, more basic phones.

Chief Executive Stephen Elop is placing hopes of a turnaround on a new range of smartphones called Lumia, which use largely untried Microsoft Corp (Nasdaq: MSFT) software. But Lumia sales have so far been slow, disappointing investors.

"The job cuts and profit warning underline the seriousness of the challenges Nokia is facing, particularly in light of the eye-watering competition from Apple and Samsung," said Ben Wood, head of research at CCS Insight.

Nokia, whose cash position is increasingly scrutinized by investors, also said restructuring-related cash outflows would be around 650 million euros in the remaining three quarters of 2012 and around 600 million in 2013.

Shares in Finland-based Nokia were down 10.5 percent to 1.99 euros, below the psychologically important 2 euros mark last, not seen since 1996. The stock has crashed more than 70 percent since it announced the switch to Microsoft's software in February 2011.

Analysts have said that even with the dramatic fall in the share price, the worsening outlook made it hard to judge how much lower the shares could go.

"I won't comment on the stock price anymore, since it's been seen over and over, that there is no definitive bottom," said Evli analyst Mikko Ervasti.

"People are worried over Lumia sales. I think expectations for the third quarter will be cut," said Nordea analyst Sami Sarkamies.

The job cuts, which include the closure of Nokia's only plant in Finland, bring total planned cuts at the group since Elop took over as chief executive in 2010 to more than 40,000.

The move will result in additional restructuring charges of around 1 billion euros by the end of 2013.

The company said it expects its operating margin in the second quarter to be below the negative 3 percent level reported in the first quarter. It previously forecast it would be similar to or below that level.

Nokia also said it would sell luxury phone business Vertu to venture firm EQT and revamp its management team.

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U.S. says Google’s (Nasdaq: GOOG) acquisition of Motorola is a go

Tallahassee, FL 2/14/12 (StreetBeat) -- Google (Nasdaq: GOOG) headquarters must be all high-fives today. Just hours after the European Commission cleared the company’s proposed acquisition of Motorola (NYSE: MMI), the U.S. Department of Justice has given its approval on the deal as well.

“The division concluded that the specific transactions at issue are not likely to significantly change existing market dynamics,” the Department of Justice said in a press release today that concerned Google’s Motorola acquisition and its approval of the Nortel and Novell patent sales to other major tech companies.

The U.S. and EU had been looking closely at the Google acquisition of Motorola because of possible antitrust issues. There were apparent concerns that Motorola could be given unfair advantage when it came to Android mobile operating system that is developed by Google and embedded in Motorola phones and tablets.

Google deflected those concerns by saying that it is in the company’s best interest to maintain the Android ecosystem and not give Motorola advantages over mobile device manufacturers such as Samsung, HTC, and LG.

The primary reason Google said it wants Motorola is to own its patents, which will help Google better defend Android from lawsuits. Motorola Mobility has some 17,000 patents, and it has another several thousand patents pending approval. That will make for one heck of a shield when other companies like Microsoft, Apple, and Oracle try to attack Android and its manufacturing partners.

In a related note, the Department of Justice’s press release about Google and Motorola also announced that it had approved a deal for a consortium including Microsoft, Apple, and RIM to buy Nortel’s patent portfolio. The release also states that Apple has won approval to buy some of Novell’s patents.

“After a thorough review of the proposed transactions, the Antitrust Division has determined that each acquisition is unlikely to substantially lessen competition and has closed these three investigations,” the DOJ said. “In all of the transactions, the division conducted an in-depth analysis into the potential ability and incentives of the acquiring firms to use the patents they proposed acquiring to foreclose competitors.”

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Apple's (Nadaq: AAPL) Stock Surges to $500; Market Value Near $500 Billion

Orlando, FL 2/13/12 (StreetBeat) – Apple (Nasdaq: AAPL), whose price hit $500 for the first time on Monday, could be the first company ever to reach a trillion dollar valuation.

The tech giant's valuation is now nearly halfway to the 10-figure mark, with speculation Apple will launch iTV later this year driving shares to new record highs. Yet, Apple still has a way to go to become the most valuable company of all time.

Apple shares are up more than 20 percent year to date.

And with its price now around $500, the company's valuation is about $460 billion-roughly $8 billion more than the market caps percent of Google (NASDAQ: GOOG) ($198 billion) and Microsoft (NASDAQ: MSFT) ($257 billion) combined.

If Apple shares continue to hit new record levels, its market cap will reach $500 billion when the price reaches $537. Still, shares will need to rise another $100 above that level to put Apple in contention for the most expensive company ever.

According to Standard and Poor's, ExxonMobil (NYSE: XOM) was the most recent company to see a valuation north of $500 billion, back in 2007 when oil prices were at record highs.

Not surprisingly, it was the Tech Bubble of the last decade that first launched companies into rarified half trillion dollar market valuations levels. Between 1999 and 2000 Intel (Nasdaq: INTC), Cisco (NASDAQ: CSCO) and General Electric (NYSE: GE) all saw their valuations peak at around $500 billion. (GE is a minority shareholder in NBCUniversal)

While Microsoft may not excite investors like it did in Y2K, the software behemoth still holds the record for the most expensive valuation. Its market cap closed out 1999 at just over $600 billion according to Standard and Poor's, before peaking north of $650 billion during the tech bubble in 2000.

The high analyst price target on the street for Apple right now is $700. At that price, its market cap will handily surpass Microsoft's Y2K record.

The Apple TV was one of the last product initiatives spearheaded by Apple co-founder Steve Jobs, before his death. If the entertainment device and platform prove as big a game changer as the company's iTunes, iPhone and iPad, Apple shares could well continue their record run.

With its current float of about 932 million shares outstanding, Apple shares would need to top $1073 to reach the Trillion Dollar mark.

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Apple's (Nasdaq: AAPL) Gain Is Nuance's (Nasdaq: NUAN) Pain

Palm Beach, FL 2/10/12 (StreetBeat) – Apple (Nasdaq: AAPL) is edging ever closer to $500 a share, but not all of its suppliers are basking in the iPhone maker's glow. Just ask Nuance Communications (Nasdaq: NUAN).

Apple has long been known to drive a hard bargain with its suppliers. The company continually tries to find a way to maximize its own margins, while squeezing those of its partners. Apple products are largely deemed must-haves, and suppliers are willing to do whatever they can to insert their products into the iPhone and iPad.

CEO Tim Cook may continue to drive harder bargains in the future than his predecessor Steve Jobs did, as Cook's experience and intellect are on the operational side of the business.

Nuance Communications reported weaker-than-expected first-quarter earnings as the company said its relationship with mobile companies has become "more comprehensive and complex" lately. Nuance makes part of the technology that goes into Siri, the personal and voice recognition assistant in the iPhone 4S.

This could eventually mean that Apple and other handset makers like Research In Motion (Nasdaq: RIMM) and phones that use Google's (Nasdaq: GOOG) Android operating system may wind up developing their own technology, or potentially moving on to another partner, squeezing Nuance shares even further.

Wedbush Securities analyst Scott Sutherland believes this could eventually happen, as he wrote in a recent earnings note. He believes Apple could eventually build its own automatic speech recognition (ASR), as Google has already done and Microsoft (Nasdaq: MSFT) has done with Kinect.

"...[W]e believe Apple will follow Microsoft's and Google's lead and build its own ASR, especially after Siri's co-founder indicated Nuance ASR could be swapped out," Sutherland wrote in his note. He rates Nuance shares underperform with a $18 price target.

Sutherland also said he believes that the other handset makers Nuance works with could squeeze Nuance even more..

Deutsche Bank analyst Nandan Amladi also suggested that other handset makers may eschew Nuance's products in the future, as they have developed in-house alternatives. Amladi maintained his buy rating and $30 price target on Nuance following the earnings report.

Nuance reported quarterly earnings of 34 cents a share on revenue of $360.6 million, well below what analysts were looking for. Analysts polled by Thomson Reuters expected the company to report earnings of 36 cents a share on $391.6 million in revenue.

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Facebook, Google, And Brand Bombing

Tallahassee, FL 12/12/11 (StreetBeat) -- Brand recognition is key to company's success--you know, in addition to quality goods and services--and the Internet provided an enormous new landscape upon which to build via advertisements.

Advertisements are everywhere--storefronts, snail mail, Web-based email, TV, radio, streaming media, social media, and just about every webpage you visit--and whatever one may think about them, they pay for just about everything, including those things we enjoy for free and rely upon on a daily basis.

Two of those things include Google (Nasdaq: GOOG) and Facebook, and both are about to introduce us to heavier doses of branding.

Facebook, which has been gradually introducing more branded/sponsored content over the last year or so, is going to start putting sponsored content in your Newsfeed. According to comments made by Facebook spokesperson Annie Ta to ClickZ News, the social network will be introducing Sponsored Stories to Newsfeeds as early as next month.

Essentially, it’s a way for the brands you or your friends have liked or pages you’ve interacted with to reach you. "You will only see Sponsored Stories in your news feed about your friends or people you are connected to. You will never [see] a post from a page you are not a fan of, or from people who are not your friends," said Ta.

This is already occurring in a roundabout way; when a friend likes a page or checks in to a business, that can be turned into a de facto ad in your Newsfeed or on your ticker. You see “So-and-so likes Widgets R Us” and the company’s logo underneath the post.

Now, however, if your friends check into a Starbucks, you might just see a Sponsored Story for Starbucks in your Newsfeed. And you can’t opt out. Purportedly, these ads will have limits--Ta mentioned one per day--but that very well could turn into more.

Google, in an effort to direct Web traffic to its own Google+ social network, is putting brands’ Google+ Pages in regular search results. We knew this was coming, but now it’s gradually rolling out.

It of course makes sense that a brand’s social network page shows up in Google search results--that’s already been the case with the likes of Facebook and Twitter. However, the G+ result appears to rank higher, and in a different place, than it probably should.

For example, a search for “AT&T” brings up AT&T’s own website first, with some of the site’s sub-pages indented underneath. The company’s G+ page is under the sub-pages with the same indentation. Again, this makes some sense--the G+ page is an official AT&T page, so it’s nice to have it lumped in with other official AT&T pages, but so is AT&T’s Twitter feed and Facebook page--which are closer to the middle of the search results. (In a search for “Toyota”, the Facebook page doesn’t appear until the middle of the second page of results.)

Not only does the G+ page get included with the official company website, you can add the page to your G+ Circles, effectively ensuring that you’re on the hook for receiving messages from that brand. Further, the G+ Pages result includes a sentence or two with the link, giving brands a chance to throw out something like a promotion to draw you in.

In Facebook’s case, the social network is making money off of letting other brands bomb you. Granted, the brands you'll see more of are more likely to be ones you're actually interested in, and companies will no doubt offer some sweet deals and specials with this method, so there's a slight benefit there.

In Google’s case, the brand being bombed is Google itself. Google's money will come from increased Web traffic, which its competitors are not going to be happy about.

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Zynga Inc (Nasdaq: ZNGA) Raises $1 Billion in IPO

Tallahassee, FL 12/16/11 (StreetBeat) --Zynga Inc. (Nasdaq: ZNGA) raised $1 billion in its initial public offering, pricing shares at the top of its marketed range.

The developer of such popular games as CityVille, FarmVille, and Mafia Wars sold 100 million shares for $10 each. Zynga had offered the stock for $8.50 to $10 a share. It will start trading today on the Nasdaq under the symbol ZNGA.

Zynga’s is the biggest offering by an American Internet company since Google (Nasdaq: GOOG) raised $1.9 billion in its 2004 IPO. It planned to offer about 14 percent of its common stock, according to a regulatory filing. Other Internet companies making their public debuts this year — Groupon , LinkedIn , and Pandora — offered less than 10 percent, using smaller free floats to boost initial demand for their stock, pushing the price higher.

Founded in 2007 by CEO Mark Pincus, Zynga doubled sales to $829 million in the first nine months of 2011. The IPO values Zynga at as much as $7 billion, or 6.8 times revenue in the year through September 30. Rival Electronic Arts (Nasdaq: ERTS) has a market value of $6.9 billion, or about 1.8 times sales.

The game maker’s increasing ubiquity and expansion prospects appeals to investors, said Colin Sebastian, an analyst at Robert W. Baird & Co. in San Francisco.

“Zynga and its games are becoming consumer brands and there is a lot of recognition for growth potential,” he said. “My guess is that the shares will be well-received.”

Zynga planned to sell all of the shares in the IPO, and to use the net proceeds, or about $889 million, for game development, marketing, and general corporate purposes.

Zynga gets more than 90 percent of its revenue from Facebook , which is currently preparing for its own IPO, which could value the company at more than $100 billion, a person with knowledge of the matter said last month.

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Facebook gearing up for 2012 IPO

Palm Beach, FL 11/29/11 (StreetBeat) --Facebook, the world's largest Internet social network, is preparing for a initial public stock offering next year, according to a source familiar with the matter.

Facebook is exploring raising $10 billion, the Wall Street Journal said on Monday. It hopes the offering will value the company at more than $100 billion, according to WSJ, which first reported the story. Facebook's Chief Financial Officer, David Ebersman, had discussed a public float with Silicon Valley bankers but founder and Chief Executive Officer Mark Zuckerberg had not decided on any terms and his plans could change, the Journal said.

The social network, which now claims more than 800 million members after seven years of explosive growth, has not selected bankers to manage what would be a very closely watched IPO. But it had drafted an internal prospectus and was ready at any moment to pull the IPO trigger, the Journal cited people familiar with the matter as saying.

At $100 billion valuation, the company started by Zuckerberg in a Harvard dorm room would have double the valuation of Hewlett-Packard, the Journal said. A formal S-1 filing could come before the end of the year, though nothing was decided, the newspaper added. A Facebook representative declined to comment.

Silicon Valley start-ups have this year begun to test investor appetite for a new wave of dotcoms. If it does debut in 2012, Facebook's IPO would dwarf that of any other dotcom waiting to go public.

"Farmville" creator Zynga has filed for an IPO of up to $1 billion. In November, daily deals service Groupon debuted with much fanfare, only to plunge below its IPO price within weeks. LinkedIn and Pandora are now also trading significantly below the levels their stocks reached during their public debuts earlier this year.

Facebook has become one of the world's most popular Web destinations, challenging established companies such as Google Inc and Yahoo Inc for consumers' online time and for advertising dollars. Facebook does not disclose its financial results, but a source familiar with the situation told Reuters earlier this year that the company's revenue in the first six months of 2011 doubled year-on-year to $1.6 billion.

Eric Feng, a former partner at venture capital firm Kleiner Perkins Caufield & Byers who now runs social-networking site Erly.com, said that the cash Facebook will get in an IPO would allow them to make more acquisitions and refine or work on new projects, such as a rumored-Facebook phone or a netbook.

Having tradeable stock will also allow Facebook to attract more engineering talent who might have been more attracted to the company in earlier days when it was growing faster but now perhaps might be attracted to other companies. "It'll be a powerful bullet for them," said Feng.

Investors have been increasingly eager to buy shares of Facebook and other fast-growing but privately-held Internet social networking companies on special, secondary-market exchanges. Facebook said in January that it will exceed 500 shareholders this year, and that in accordance with SEC regulations, it will file public financial reports no later than April 30, 2012.

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Youku Oh No!

Tallahassee, FL 11/17/11 (StreetBeat) --It isn't easy to turn a profit streaming video in China.

Niche leader Youku.com (NYSE: YOKU) posted mixed quarterly results last night. Net revenue soared 129% to $41.2 million. The site's net loss narrowed to $0.07 a share -- or $0.04 a share if you back out stock-based compensation. Either way, Youku missed Wall Street's bottom-line target calling for a deficit of $0.03 a share, though it did beat analysts' top-line forecast of $39.8 million.

Despite the rough sledding, Youku continues to trade above the $12.80 price it went public at nearly a year ago. However, the profitless speedster that peaked at nearly $70 back in April has now fallen all the way down to the teens. Rival Tudou (Nasdaq: TUDO) -- which went public this summer at $29 -- has shed more than half of its value.

Making money streaming video for free through an ad-supported model is hard. Just ask Google's (Nasdaq: GOOG) YouTube, which continues to make strides in monetizing its website but it will never be the high-margin business that Google's flagship search engine has become. Bandwidth isn't cheap, and there's a limited pool of display advertisers. Youku also pays for a lot of its professionally produced content.

Youku has turned to Tinseltown for a new revenue stream. DreamWorks Animation (Nasdaq: DWA) and Time Warner (NYSE: TWX) have gotten behind the Youku Premium pay-per-stream venture, though Youku will probably be as successful as YouTube has been to get folks to pay up for content. Youku's growth will continue to be tied to the willingness of advertisers to pay more to reach the Internet television website's growing audience.

Youku is targeting 90% to 100% in revenue growth for the current quarter, a slight deceleration from its triple-digit pace of the past. Clearly, this is still an impressive growth rate, though Youku's still lofty valuation begs for profitability to begin entering the picture around here.

Narrower deficits are moving Youku in the right direction, but now it needs to get to the finish line before it becomes the next of the many busted Chinese IPOs.

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Google to Unveil Online Music Download Store

Swan Lake, MS 11/16/2011 (PennyPayDay) – Google Inc is expected to unveil on Wednesday an online music download store featuring songs from three major music companies, the Wall Street Journal reported, citing people familiar with the matter.

Sony Corp's Sony Music Entertainment, Vivendi SA's Universal Music Group and EMI Music are expected to have deals with Google in place in time for a Wednesday afternoon announcement in Los Angeles, the Journal reported.

The Google Music store will compete with Apple Inc's dominant iTunes and other digital music services.

Google's store will sell songs for around $1 apiece, the Journal reported. The store also is expected to allow users who buy songs to share one or two free listens with contacts on the Google+ social networking service, the newspaper reported.
A Wednesday evening event tied to the announcement will feature pop group Maroon 5 and R&B singer Drake, among others.

Representatives for Google, Sony and Universal Music Group did not immediately respond to requests for comment. An EMI spokesman declined to comment.

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Google Squares Off Against Facebook

Google isn’t going to share its data with just any company–not anymore, at least. The search giant, known for promoting the open web, is getting stern with its data, especially where it relates to Facebook, reports Reuters. Google is blocking data access to its Gmail and Android contacts lists to any company that refuses to give open access back to Google. In essence, the search company is no longer giving away its data like a charitable person; it expects a gift in return.

The move is a direct attack on Facebook, but there are no stats on how many other companies this block will affect. Until now, someone signing up for Facebook could instantly add Gmail contacts who happened to have a Facebook account to their friend list. This feature will be deactivated by Google.

“We have decided to change our approach slightly to reflect the fact that users often aren’t aware that once they have imported their contacts into sites like Facebook, they are effectively trapped,” Google said in a statement. ”We will no longer allow websites to automate the import of users’ Google Contacts (via our API) unless they allow similar export to other sites.”

A bitter rivalry

Google has accused the social network of trapping user data, like contacts and posts. Though Google has given Facebook free access to its information, Zuckerberg and company have not reciprocated, instead opting to sign a huge search deal with Bing and limit Google’s search access to Facebook information.

“Google is trying to use the leverage that it has to get as much access to the Facebook social graph (network of friends and interests) that it can, so it can provide the best search function that it can. The more data Google has access to the better its search results are going to be,” said Wedbush Securities analyst Lou Kerner.

The battle between Facebook and Google is only getting worse. Facebook continues to launch services like Places that compete with Google products. Google, for its part, is not innocent either. The company is in the advanced stages of creating its own social network that competes with Facebook.