Posts Tagged ‘internet news’
As Facebook‘s stock continues its slump, now trading even lower than yesterday’s low, the Internet has reached a consensus on why the IPO of the year isn’t performing: Advertising. It’s how Facebook makes its dollars. And, it has made a lot of dollars this way. But it’s not clear Facebook’s very good at it, or will get good enough at it to justify a $38 per share price. Hence the investor worry.
RELATED: Why Mark Zuckerberg Needs His Hoodie
- The Internet ad model is broken and Facebook is only making it worse, writes Michael Wolff in Technology Review. “As Facebook gluts an already glutted market, the fallacy of the Web as a profitable ad medium can no longer be overlooked. The crash will come. And Facebook—that putative transformer of worlds, which is, in reality, only an ad-driven site—will fall with everybody else,” he writes.
- Facebook’s both more expensive and less valuable than Google, which already won the Internet ad game, explains Smart Money‘s Jack Hough. “Google has found a way to multiply its revenues 17 times since its initial stock offering, to $40 billion. If Facebook can do likewise, investors should expect its stock to do half as well, considering that it’s starting at twice the price. But it may be unrealistic to expect that kind of revenue growth from Facebook,” he says.
- Investors got jittery after Reuters reported that underwriters cut their revenue forecasts for Facebook based on mobile, where it doesn’t know how to advertise, explains both The Wall Street Journal and Reuters. “It said the cut came after Facebook released an updated prospectus ahead of the share sale that cautioned about revenue-growth challenges presented by a shift to mobile devices,” explains WSJ.
- Even before the price was set, underwriters questioned Faceboook’s advertising model, explain DealBook’s Michael J. De La Merced, Evelyn Rusli and Susanne Craig. “Some of the firms resisted, arguing that the company’s fundamentals did not justify a higher valuation, according to people with knowledge of the talks,” they explain, in a walk through of how Morgan Stanley lost at the Facebook IPO. (This is another money quote: “Investors were expecting easy money on this one,” David J. Abella, a portfolio manager at Rochdale Investment Management told DealBook.)
- The smart investors are getting out now because they know Facebook’s ad model isn’t sustainable, explains CBS MoneyWatch’s Constantine von Hoffman. “Remember what Joe Kennedy said before crash of 1929: ‘You know it’s time to sell when shoeshine boys give you stock tips.’” he ends his piece.
Still, no one is predicting Facebook will fall into oblivion. Facebook’s still rolling in revenues which it can use to invest and improve its business explains Business Insider’s Nicholas Carlson. And, Mark Zuckerberg’s still a billionaire 16 times over, per The Wall Street Journal’s wealth-o-meter.
RELATED: Internet Delights in Facebook IPO Filing’s Juicy Details
Article source: http://news.yahoo.com/big-reason-facebooks-fizzled-ipo-advertising-pains-155813988.html
As Facebook‘s stock continues its slump, now trading even lower than yesterday’s low, the Internet has reached a consensus on why the IPO of the year isn’t performing: Advertising. It’s how Facebook makes its dollars. And, it has made a lot of dollars this way. But it’s not clear Facebook’s very good at it, or will get good enough at it to justify a $38 per share price. Hence the investor worry.
RELATED: Why Mark Zuckerberg Needs His Hoodie
- The Internet ad model is broken and Facebook is only making it worse, writes Michael Wolff in Technology Review. “As Facebook gluts an already glutted market, the fallacy of the Web as a profitable ad medium can no longer be overlooked. The crash will come. And Facebook—that putative transformer of worlds, which is, in reality, only an ad-driven site—will fall with everybody else,” he writes.
- Facebook’s both more expensive and less valuable than Google, which already won the Internet ad game, explains Smart Money‘s Jack Hough. “Google has found a way to multiply its revenues 17 times since its initial stock offering, to $40 billion. If Facebook can do likewise, investors should expect its stock to do half as well, considering that it’s starting at twice the price. But it may be unrealistic to expect that kind of revenue growth from Facebook,” he says.
- Investors got jittery after Reuters reported that underwriters cut their revenue forecasts for Facebook based on mobile, where it doesn’t know how to advertise, explains both The Wall Street Journal and Reuters. “It said the cut came after Facebook released an updated prospectus ahead of the share sale that cautioned about revenue-growth challenges presented by a shift to mobile devices,” explains WSJ.
- Even before the price was set, underwriters questioned Faceboook’s advertising model, explain DealBook’s Michael J. De La Merced, Evelyn Rusli and Susanne Craig. “Some of the firms resisted, arguing that the company’s fundamentals did not justify a higher valuation, according to people with knowledge of the talks,” they explain, in a walk through of how Morgan Stanley lost at the Facebook IPO. (This is another money quote: “Investors were expecting easy money on this one,” David J. Abella, a portfolio manager at Rochdale Investment Management told DealBook.)
- The smart investors are getting out now because they know Facebook’s ad model isn’t sustainable, explains CBS MoneyWatch’s Constantine von Hoffman. “Remember what Joe Kennedy said before crash of 1929: ‘You know it’s time to sell when shoeshine boys give you stock tips.’” he ends his piece.
Still, no one is predicting Facebook will fall into oblivion. Facebook’s still rolling in revenues which it can use to invest and improve its business explains Business Insider’s Nicholas Carlson. And, Mark Zuckerberg’s still a billionaire 16 times over, per The Wall Street Journal’s wealth-o-meter.
RELATED: Internet Delights in Facebook IPO Filing’s Juicy Details
Article source: http://news.yahoo.com/big-reason-facebooks-fizzled-ipo-advertising-pains-155813988.html
For all the faults of electric vehicles (in general), the Chevy Volt does have some pretty good selling points. It was named North American Car of the Year, 2010. Its selling price of $31,645 is pretty good for an EV, and the … Continue …
Article source: http://news.yahoo.com/fcc-boss-pay-internet-much-poll-161311991.html
For all the faults of electric vehicles (in general), the Chevy Volt does have some pretty good selling points. It was named North American Car of the Year, 2010. Its selling price of $31,645 is pretty good for an EV, and the … Continue …
Article source: http://news.yahoo.com/fcc-boss-pay-internet-much-poll-161311991.html
Yelp, like all Internet forums, draws some insidious awful voices, which can present particular problems for businesses trying to solicit customers. The way Yelp works, these businesses can’t remove comments, even of the most trollish sort, because that would ruin Yelp’s whole set-up. Yelp wants to act as an accurate portrayal of local businesses, after all. The review site does, however, have a filter, which gets rid of the top-shelf garbage. But not all bad reviews constitute spam. And sometimes, a bad burger deserves a rant. When faced with these negative customer reviews, some restaurants and shops might just look the other way. But, others do something about it, which is only sometimes a good idea. Let’s take a look.
RELATED: Google Buying Zagat Makes Instant Sense
The Best Ways to Handle a Bad Yelp Review
Tactic 1: Put the negativity on a sign.
RELATED: Google Pays Chump Change for Zagat
Business: JoeDough, a New York City sandwich shop.
RELATED: How Yelp Helps Steer People Away from Fast Food Chains
The Bad Review: The Yelp page is actually sprinkled with some 1 star reviews, giving the place a 3 star rating. But the one in particular that has the shop riled says the following:
Probably the worst meatball sandwich (special of the day) I have had in the tri-state area in my 32 years of living here, especially for $12. In all fairness I have not had the other sandwiches but with prices like that coupled with underwhelming food and slow service this will be a skip in the future. Joe Hell No!
Why This Is Smart: This establishment embraced the bad review, using it to its benefit. Rather than let customers read about it on the Internet, JoeDough took this IRL, putting it on a sign for passers-by to see, we learn via Neatorama. Though this won’t help the company’s ranking on Yelp, it will not only entice potential buyers who pass it on the street — we’re intrigued, aren’t you? — but thanks to its cleverness, the sign has gotten the restaurant publicity all over the Internet. Good job, JoeDough for this creative and grown-up way to handle criticism.
RELATED: Yelp’s IPO Filing Highlights Its Reliance on Google
Tactic 2: Put the bad reviews on a shirt.
RELATED: The Reality of Augmented Reality
Business: Pizzeria Delfina, a Bay Area eatery.
The Bad Review: Though this restaurant has four stars, it has a handful of one-stars mixed in with the 1,503 musings. Here’s a snippet of a particular rant with which Delfina took issue:
The pizza was soooo greasy. I am assuming this was in part due to the pig fat. A rather large puddle of grease actually pooled on my friends plate. We tried to get our waitress’s attention but to no avail. I think it is important that you all know this place is rather small so to not get someones attention means they are really trying to ignore you.
What This Is Smart: This has the same effect as the sign. BoingBoing’s Cory Doctorow put it well: “Instead of simply bitching about Yelp, they’ve made Yelp their bitch.” Both the sign and the shirt also aim to make a general point about Yelp reviews: These people are inelegant trolls. One of Delfina’s shirts just reads: “This place sucks.” That is not a very helpful guide.
Tactic 3: Respond to bad reviews
Business: Anonymous wine and cheese shop owner.
The Bad Review: When this owner sees anything negative in a reivew, he engages with the reviewer.
What This Is Smart: This is the Yelp sanctioned way to handle reviews. As we learn from this handy video, a little attention can butter up a sour reviewer. (This works for comment trolls, too, by the way.) Yelp even has some guidelines for how to handle the most scathing writers. “Before responding to a negative review, take a deep breath and think very carefully about what you are going to write. Or even better, don’t think too much: just keep it simple by thanking your customer for the patronage and feedback,” explains Yelp’s support page. And, here’s why it often works: “By contacting your reviewer and establishing a genuine human relationship.” It’s harder to be evil to a human.
The Worst Ways to Handle a Bad Yelp Review
Tactic 1: Sue Yelp
Business: Haakon’s Hall, a Morningside Heights, NY restaurant
The Bad Review: This place gets a four star review. But back in April 2010 owner James Lenzi accused Yelp of extortion, saying the site promoted bad reviews, when he refused to advertise with Yelp. “They’re blackmailing me to advertise with them,” he told The Columbia Spectator‘s Marc Kilstein. “They called me three times trying to get me to advertise. When I told them I couldn’t afford it, they said they could move around the reviews once I became a business client.”
Why This Is Not Smart: Lenzi looks like a paranoid baby — a rare combination of ugly traits. Yelp denies the extortion. It sounds like Lenzi just doesn’t know how the review filter works. “This automated process sometimes creates the perception that reviews are being deleted and re-added over time; what’s actually happening is users are becoming more-or-less established over time,”Chantelle Karl, East Coast public relations manager for Yelp.
Tactic 2: Sue the Reviewer
Business: Advanced Chiropractic Center, a chiropractor in San Francisco.
The Bad Review: The posting no longer exists on Yelp, but Christopher Norberg posted a negative review suggesting the doctor was dishonest, according to CNET. Dr. Steven Biegel cried libel, claiming the review caused “loss of reputation, shame, mortification, and hurt feelings,” and “injury to his business and profession,” per the complaint.
Why This Is Not Smart: If you can’t stand the trolls, get off the Internet. The two eventually settled, but this is the Internet, doctor. And on these here Webs, people can and will say things that hurt your feelings.
Tactic 3: Cajole users into posting good reviews, to push away the bad ones.
Business: Boundless Yoga, a Washington, D.C. yoga studio.
The Bad Review: There isn’t a particular review, but this studio offered a free yoga class to those who wrote a review on Yelp. To get the class, one would have to send the link to the studio. So, the incentive to be nice was high.
Why This Is Not Smart: As Yelp’s director of Business Outreach, Luther Lowe explained to The Atlantic Wire, its robot filter knows. “Businesses that are pretty aggressive about soliciting almost always have a lot of reviews filtered,” he told us. Boundless indeed has 53 filtered reviews out of 75 total, much higher than the site wide average of 20 percent. “Your behavior in sharing that info was governed by the market, you didnt do that because for no other reason than to share with the world,” continued Lowe. “Yelp thinks thats not good for creating the best user experience offline.”
Article source: http://news.yahoo.com/best-worst-ways-handle-bad-yelp-review-182510428.html
Yelp, like all Internet forums, draws some insidious awful voices, which can present particular problems for businesses trying to solicit customers. The way Yelp works, these businesses can’t remove comments, even of the most trollish sort, because that would ruin Yelp’s whole set-up. Yelp wants to act as an accurate portrayal of local businesses, after all. The review site does, however, have a filter, which gets rid of the top-shelf garbage. But not all bad reviews constitute spam. And sometimes, a bad burger deserves a rant. When faced with these negative customer reviews, some restaurants and shops might just look the other way. But, others do something about it, which is only sometimes a good idea. Let’s take a look.
RELATED: Google Buying Zagat Makes Instant Sense
The Best Ways to Handle a Bad Yelp Review
Tactic 1: Put the negativity on a sign.
RELATED: Google Pays Chump Change for Zagat
Business: JoeDough, a New York City sandwich shop.
RELATED: How Yelp Helps Steer People Away from Fast Food Chains
The Bad Review: The Yelp page is actually sprinkled with some 1 star reviews, giving the place a 3 star rating. But the one in particular that has the shop riled says the following:
Probably the worst meatball sandwich (special of the day) I have had in the tri-state area in my 32 years of living here, especially for $12. In all fairness I have not had the other sandwiches but with prices like that coupled with underwhelming food and slow service this will be a skip in the future. Joe Hell No!
Why This Is Smart: This establishment embraced the bad review, using it to its benefit. Rather than let customers read about it on the Internet, JoeDough took this IRL, putting it on a sign for passers-by to see, we learn via Neatorama. Though this won’t help the company’s ranking on Yelp, it will not only entice potential buyers who pass it on the street — we’re intrigued, aren’t you? — but thanks to its cleverness, the sign has gotten the restaurant publicity all over the Internet. Good job, JoeDough for this creative and grown-up way to handle criticism.
RELATED: Yelp’s IPO Filing Highlights Its Reliance on Google
Tactic 2: Put the bad reviews on a shirt.
RELATED: The Reality of Augmented Reality
Business: Pizzeria Delfina, a Bay Area eatery.
The Bad Review: Though this restaurant has four stars, it has a handful of one-stars mixed in with the 1,503 musings. Here’s a snippet of a particular rant with which Delfina took issue:
The pizza was soooo greasy. I am assuming this was in part due to the pig fat. A rather large puddle of grease actually pooled on my friends plate. We tried to get our waitress’s attention but to no avail. I think it is important that you all know this place is rather small so to not get someones attention means they are really trying to ignore you.
What This Is Smart: This has the same effect as the sign. BoingBoing’s Cory Doctorow put it well: “Instead of simply bitching about Yelp, they’ve made Yelp their bitch.” Both the sign and the shirt also aim to make a general point about Yelp reviews: These people are inelegant trolls. One of Delfina’s shirts just reads: “This place sucks.” That is not a very helpful guide.
Tactic 3: Respond to bad reviews
Business: Anonymous wine and cheese shop owner.
The Bad Review: When this owner sees anything negative in a reivew, he engages with the reviewer.
What This Is Smart: This is the Yelp sanctioned way to handle reviews. As we learn from this handy video, a little attention can butter up a sour reviewer. (This works for comment trolls, too, by the way.) Yelp even has some guidelines for how to handle the most scathing writers. “Before responding to a negative review, take a deep breath and think very carefully about what you are going to write. Or even better, don’t think too much: just keep it simple by thanking your customer for the patronage and feedback,” explains Yelp’s support page. And, here’s why it often works: “By contacting your reviewer and establishing a genuine human relationship.” It’s harder to be evil to a human.
The Worst Ways to Handle a Bad Yelp Review
Tactic 1: Sue Yelp
Business: Haakon’s Hall, a Morningside Heights, NY restaurant
The Bad Review: This place gets a four star review. But back in April 2010 owner James Lenzi accused Yelp of extortion, saying the site promoted bad reviews, when he refused to advertise with Yelp. “They’re blackmailing me to advertise with them,” he told The Columbia Spectator‘s Marc Kilstein. “They called me three times trying to get me to advertise. When I told them I couldn’t afford it, they said they could move around the reviews once I became a business client.”
Why This Is Not Smart: Lenzi looks like a paranoid baby — a rare combination of ugly traits. Yelp denies the extortion. It sounds like Lenzi just doesn’t know how the review filter works. “This automated process sometimes creates the perception that reviews are being deleted and re-added over time; what’s actually happening is users are becoming more-or-less established over time,”Chantelle Karl, East Coast public relations manager for Yelp.
Tactic 2: Sue the Reviewer
Business: Advanced Chiropractic Center, a chiropractor in San Francisco.
The Bad Review: The posting no longer exists on Yelp, but Christopher Norberg posted a negative review suggesting the doctor was dishonest, according to CNET. Dr. Steven Biegel cried libel, claiming the review caused “loss of reputation, shame, mortification, and hurt feelings,” and “injury to his business and profession,” per the complaint.
Why This Is Not Smart: If you can’t stand the trolls, get off the Internet. The two eventually settled, but this is the Internet, doctor. And on these here Webs, people can and will say things that hurt your feelings.
Tactic 3: Cajole users into posting good reviews, to push away the bad ones.
Business: Boundless Yoga, a Washington, D.C. yoga studio.
The Bad Review: There isn’t a particular review, but this studio offered a free yoga class to those who wrote a review on Yelp. To get the class, one would have to send the link to the studio. So, the incentive to be nice was high.
Why This Is Not Smart: As Yelp’s director of Business Outreach, Luther Lowe explained to The Atlantic Wire, its robot filter knows. “Businesses that are pretty aggressive about soliciting almost always have a lot of reviews filtered,” he told us. Boundless indeed has 53 filtered reviews out of 75 total, much higher than the site wide average of 20 percent. “Your behavior in sharing that info was governed by the market, you didnt do that because for no other reason than to share with the world,” continued Lowe. “Yelp thinks thats not good for creating the best user experience offline.”
Article source: http://news.yahoo.com/best-worst-ways-handle-bad-yelp-review-182510428.html
Google closed Tuesday its $12.5 billion deal for Motorola Mobility, a key manufacturer of smartphones and other devices that puts the Internet giant in head-to-head competition with Apple.
“The acquisition will enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing,” the California-based Internet giant said in a statement.
Chief executive Larry Page said Google was acquiring “a great American tech company, with a track record of over 80 years of innovation.”
The completion of the deal dubbed “Googorola” follows approval by Chinese, US and European regulators, amid concerns on restrictions for Android, a Google-created free operating system for mobile devices.
Conditions from China’s Ministry of Commerce included Google keeping its Android software for smartphones and tablet computers free and open for at least five years.
Regulators in the US and elsewhere have stressed that they will be watching to make sure that the Mountain View, California-based company does not use Motorola Mobility to obtain an unfair advantage in the market.
Google acquires 17,000 patents with the purchase of Motorola Mobility and has been strengthening its patent portfolio in the fight for dominance in the booming smartphone and tablet market.
The Android system snagged 51 percent of the US mobile phone operating system market in the three months ending in March, according to comScore, while Apple’s operating system had 30.7 percent.
But in the global tablet market, Apple’s iPad outmuscled its Android-powered rivals in early 2012, according to research firm IDC.
Some analysts have said Google may be content with the patent portfolio, and sell the handset and other hardware operations.
But Page’s comments suggest Google will move headfirst into devices.
“The phones in our pockets have become supercomputers that are changing the way we live,” he said.
“It’s a great time to be in the mobile business, and I’m confident that the team at Motorola will be creating the next generation of mobile devices that will improve lives for years to come.”
Charles Golvin of Forrester Research said he expects little change in the smartphone market because Google and Motorola already have Android phones.
“I expect more impact in tablets… that fully exploit the latest innovations in hardware and software,” he said.
Greg Sterling of the website Marketing Land said the deal “could result in some exciting new products,” including “interesting, new Internet-access devices that aren’t phones,” such as the previously announced “Google Glasses.”
Google said it will run Motorola Mobility as a separate business unit that will be a licensee of Android, the Google operating system for mobile devices.
“Android will remain open,” the company said.
Heading the unit will be “long-time Googler” Dennis Woodside, who will take over from Sanjay Jha, who led the company through this acquisition.
Woodside, who has overseen integration planning for the acquisition, previously served as president of the Americas region for Google.
“Motorola literally invented the entire mobile industry with the first-ever commercial cell phone in 1983,” Woodside said.
“Thirty years later, mobile devices are at the center of the computing revolution. Our aim is simple: to focus Motorola Mobility’s remarkable talent on fewer, bigger bets, and create wonderful devices that are used by people around the world.”
Motorola Mobility was created in 2011 when US-based Motorola Inc. split the company into a mobile devices unit on the one hand and a government and public safety division known as Motorola Solutions on the other.
Article source: http://news.yahoo.com/google-completes-takeover-motorola-mobility-134024248.html
Google closed Tuesday its $12.5 billion deal for Motorola Mobility, a key manufacturer of smartphones and other devices that puts the Internet giant in head-to-head competition with Apple.
“The acquisition will enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing,” the California-based Internet giant said in a statement.
Chief executive Larry Page said Google was acquiring “a great American tech company, with a track record of over 80 years of innovation.”
The completion of the deal dubbed “Googorola” follows approval by Chinese, US and European regulators, amid concerns on restrictions for Android, a Google-created free operating system for mobile devices.
Conditions from China’s Ministry of Commerce included Google keeping its Android software for smartphones and tablet computers free and open for at least five years.
Regulators in the US and elsewhere have stressed that they will be watching to make sure that the Mountain View, California-based company does not use Motorola Mobility to obtain an unfair advantage in the market.
Google acquires 17,000 patents with the purchase of Motorola Mobility and has been strengthening its patent portfolio in the fight for dominance in the booming smartphone and tablet market.
The Android system snagged 51 percent of the US mobile phone operating system market in the three months ending in March, according to comScore, while Apple’s operating system had 30.7 percent.
But in the global tablet market, Apple’s iPad outmuscled its Android-powered rivals in early 2012, according to research firm IDC.
Some analysts have said Google may be content with the patent portfolio, and sell the handset and other hardware operations.
But Page’s comments suggest Google will move headfirst into devices.
“The phones in our pockets have become supercomputers that are changing the way we live,” he said.
“It’s a great time to be in the mobile business, and I’m confident that the team at Motorola will be creating the next generation of mobile devices that will improve lives for years to come.”
Charles Golvin of Forrester Research said he expects little change in the smartphone market because Google and Motorola already have Android phones.
“I expect more impact in tablets… that fully exploit the latest innovations in hardware and software,” he said.
Greg Sterling of the website Marketing Land said the deal “could result in some exciting new products,” including “interesting, new Internet-access devices that aren’t phones,” such as the previously announced “Google Glasses.”
Google said it will run Motorola Mobility as a separate business unit that will be a licensee of Android, the Google operating system for mobile devices.
“Android will remain open,” the company said.
Heading the unit will be “long-time Googler” Dennis Woodside, who will take over from Sanjay Jha, who led the company through this acquisition.
Woodside, who has overseen integration planning for the acquisition, previously served as president of the Americas region for Google.
“Motorola literally invented the entire mobile industry with the first-ever commercial cell phone in 1983,” Woodside said.
“Thirty years later, mobile devices are at the center of the computing revolution. Our aim is simple: to focus Motorola Mobility’s remarkable talent on fewer, bigger bets, and create wonderful devices that are used by people around the world.”
Motorola Mobility was created in 2011 when US-based Motorola Inc. split the company into a mobile devices unit on the one hand and a government and public safety division known as Motorola Solutions on the other.
Article source: http://news.yahoo.com/google-completes-takeover-motorola-mobility-134024248.html
SAN FRANCISCO (AP) — Google has completed its $12.5 billion purchase of device maker Motorola Mobility in a deal that poses new challenges for the Internet’s most powerful company as it tries to shape the future of mobile computing.
The deal closed Tuesday, nine months after Google Inc. made a surprise announcement that it wanted to expand into the hardware business with the most expensive and riskiest acquisition in its 14-year history. The purchase pushes Google deeper into the cellphone business, a market it entered four years ago with the debut of its Android software, now the chief challenger to Apple Inc.’s iPhones.
In Motorola, Google gets a cellphone pioneer that has struggled in recent years. Motorola hasn’t produced a mass-market hit since it introduced the Razr cellphone in 2005. Once the No. 2 cellphone maker, Motorola now ranks eighth with 2 percent of the worldwide market share, according to Gartner.
As had been expected, Google CEO Larry Page immediately named one of his top lieutenants, Dennis Woodside, as Motorola’s CEO. He replaces Sanjay Jha, 49, who will stay on just long enough to assist in the ownership change.
Woodside, 43, has spent the past three years immersed in online advertising as president of Google‘s America region, which accounted for $17.5 billion of Google‘s revenue last year. Motorola Mobility Holdings Inc. booked $13.1 billion in revenue during its final year as an independent company.
Nevertheless, Woodside’s background in online advertising is likely to raise questions about whether he is the best choice to oversee a company that specializes in making smartphones, tablet computers and cable-TV boxes.
“It’s a bit concerning because online advertising is quite different than the hardware business,” Gartner Inc. analyst Carolina Milanesi said. “Google is so focused on advertising that it doesn’t consider that kind of thing.”
Google depends on digital ads for 96 percent of its revenue, which totaled $38 billion last year.
In a statement, Page praised Woodside as an outstanding leader who has “been phenomenal at building teams and delivering on some of Google‘s biggest bets.”
The takeover became possible only after government regulators were satisfied that the acquisition wouldn’t stifle competition in the smartphone market. China removed the final regulatory hurdle by granting its approval Saturday. Regulators in the U.S. and Europe had cleared the deal three months ago.
Google wants Motorola largely for its trove of 17,000 cellphone patents, which the search company can use to defend Android phones against lawsuits accusing them of copying key features from the iPhone.
But in recent months, Google has been signaling that it has been drawing up more ambitious plans for the newly acquired hardware business.
Macquarie Securities analyst Benjamin Schachter believes Google is particularly interested in developing a snazzier tablet computer powered by its Android software to compete against Apple’s hot-selling iPad and Amazon.com Inc.’s Kindle Fire.
Owning a handset and tablet manufacturer will also allow Google to exert more control over how Android runs on the devices. That has been difficult for Google to do because it gives away Android to other hardware manufacturers, which can tweak the software to suit their own agenda.
In moving beyond its expertise in search and software into manufacturing a wide range of equipment, Google will test its ability to keep Android partners, shareholders and employees happy.
Google will have to reassure its Android partners such as Samsung Electronics Co. and HTC Corp. that Motorola’s devices won’t get souped-up versions of the software or receive other preferential treatment.
If it appears Google is favoring Motorola, manufacturers might consider building their own mobile operating system or defect to Microsoft Corp.’s Windows software, which is getting a major facelift this year.
“This gives Google a chance to develop and showcase a ‘next generation’ device for mobile computing,” said N. Venkat Venkatraman, a Boston University professor specializing in technology and management. “But it could also create a complex issue for Google. How do you balance the desire to create something that consumers love without upsetting the rest of the Android ecosystem?”
Milanesi suspects Google might also try to design a Motorola smartphone that caters to the needs of companies and government agencies.
“Like almost everything Google does, I think they will try a lot of different things and then do whatever is best for them,” Milanesi said.
Signaling its intention to experiment, Google said it has created an “advanced technology and projects group” at Motorola. It will be run by Regina Dugan, a former director of the U.S. Defense Advanced Research Projects Agency, or DARPA, which specializes in coming up with national security innovations. DARPA was how the Internet got its start more than four decades ago.
In a statement Tuesday, Motorola spokeswoman Jennifer Weyrauch-Erickson said the plan under Google’s ownership is to make “fewer, but bigger launches.” She said Woodside wasn’t available for an interview.
Motorola’s cable-TV boxes could provide Google with a springboard for delivering more of its services, including advertising, to living rooms. However, cable companies control the market for set-top boxes, and they resist any intrusion into their realm.
Google also will likely have to do some hand-holding with investors who have been worried about Motorola’s troubles eroding Google’s hefty profit margins.
“If it looks like Motorola is just a lab or toy for Google, investors are going to be asking themselves whether the company is spreading itself too thin,” Venkatraman said.
As its line of smartphones has waned in popularity, Motorola has suffered losses totaling $1.7 billion during the past three years. Google has earned $25 billion over the same stretch.
Page already has decided to operate Motorola separately partly because of the contrasting fortunes of the two companies. That will make it easier for investors to track how the different lines of business are faring. For now, Motorola will continue to have its headquarters in Libertyville, Ill., far from Google’s Silicon Valley home in Mountain View, Calif.
Google shares fell $13.17 or more than 2 percent, to close Tuesday at $600.94.
Turning around Motorola will likely require layoffs, a painful process that belies Google’s carefully cultivated image as a cuddly employer.
Google laid off about 300 people in 2008 after it paid $3.2 billion to acquire online advertising service DoubleClick Inc., which was previously the biggest deal in the company’s history. The cutbacks represented about one-quarter of the workforce that Google inherited from DoubleClick. If Google imposes a similar reduction on Motorola’s 20,500-employee payroll, it would translate into about 5,000 layoffs.
Taking on so many new employees also raises the risk of cultural clashes with the 33,000 people already working at Google.
Motorola Mobility is one half of the old Motorola Inc. It split at the beginning of last year. The other half, Motorola Solutions Inc., is still independent. It sells police radios, barcode scanners and other products aimed at government and corporate customers.
___
AP Technology Writer Peter Svensson in New York contributed to this story.
Article source: http://news.yahoo.com/google-completes-motorola-deal-heralding-era-193920395--finance.html
SAN FRANCISCO (AP) — Google has completed its $12.5 billion purchase of device maker Motorola Mobility in a deal that poses new challenges for the Internet’s most powerful company as it tries to shape the future of mobile computing.
The deal closed Tuesday, nine months after Google Inc. made a surprise announcement that it wanted to expand into the hardware business with the most expensive and riskiest acquisition in its 14-year history. The purchase pushes Google deeper into the cellphone business, a market it entered four years ago with the debut of its Android software, now the chief challenger to Apple Inc.’s iPhones.
In Motorola, Google gets a cellphone pioneer that has struggled in recent years. Motorola hasn’t produced a mass-market hit since it introduced the Razr cellphone in 2005. Once the No. 2 cellphone maker, Motorola now ranks eighth with 2 percent of the worldwide market share, according to Gartner.
As had been expected, Google CEO Larry Page immediately named one of his top lieutenants, Dennis Woodside, as Motorola’s CEO. He replaces Sanjay Jha, 49, who will stay on just long enough to assist in the ownership change.
Woodside, 43, has spent the past three years immersed in online advertising as president of Google‘s America region, which accounted for $17.5 billion of Google‘s revenue last year. Motorola Mobility Holdings Inc. booked $13.1 billion in revenue during its final year as an independent company.
Nevertheless, Woodside’s background in online advertising is likely to raise questions about whether he is the best choice to oversee a company that specializes in making smartphones, tablet computers and cable-TV boxes.
“It’s a bit concerning because online advertising is quite different than the hardware business,” Gartner Inc. analyst Carolina Milanesi said. “Google is so focused on advertising that it doesn’t consider that kind of thing.”
Google depends on digital ads for 96 percent of its revenue, which totaled $38 billion last year.
In a statement, Page praised Woodside as an outstanding leader who has “been phenomenal at building teams and delivering on some of Google‘s biggest bets.”
The takeover became possible only after government regulators were satisfied that the acquisition wouldn’t stifle competition in the smartphone market. China removed the final regulatory hurdle by granting its approval Saturday. Regulators in the U.S. and Europe had cleared the deal three months ago.
Google wants Motorola largely for its trove of 17,000 cellphone patents, which the search company can use to defend Android phones against lawsuits accusing them of copying key features from the iPhone.
But in recent months, Google has been signaling that it has been drawing up more ambitious plans for the newly acquired hardware business.
Macquarie Securities analyst Benjamin Schachter believes Google is particularly interested in developing a snazzier tablet computer powered by its Android software to compete against Apple’s hot-selling iPad and Amazon.com Inc.’s Kindle Fire.
Owning a handset and tablet manufacturer will also allow Google to exert more control over how Android runs on the devices. That has been difficult for Google to do because it gives away Android to other hardware manufacturers, which can tweak the software to suit their own agenda.
In moving beyond its expertise in search and software into manufacturing a wide range of equipment, Google will test its ability to keep Android partners, shareholders and employees happy.
Google will have to reassure its Android partners such as Samsung Electronics Co. and HTC Corp. that Motorola’s devices won’t get souped-up versions of the software or receive other preferential treatment.
If it appears Google is favoring Motorola, manufacturers might consider building their own mobile operating system or defect to Microsoft Corp.’s Windows software, which is getting a major facelift this year.
“This gives Google a chance to develop and showcase a ‘next generation’ device for mobile computing,” said N. Venkat Venkatraman, a Boston University professor specializing in technology and management. “But it could also create a complex issue for Google. How do you balance the desire to create something that consumers love without upsetting the rest of the Android ecosystem?”
Milanesi suspects Google might also try to design a Motorola smartphone that caters to the needs of companies and government agencies.
“Like almost everything Google does, I think they will try a lot of different things and then do whatever is best for them,” Milanesi said.
Signaling its intention to experiment, Google said it has created an “advanced technology and projects group” at Motorola. It will be run by Regina Dugan, a former director of the U.S. Defense Advanced Research Projects Agency, or DARPA, which specializes in coming up with national security innovations. DARPA was how the Internet got its start more than four decades ago.
In a statement Tuesday, Motorola spokeswoman Jennifer Weyrauch-Erickson said the plan under Google’s ownership is to make “fewer, but bigger launches.” She said Woodside wasn’t available for an interview.
Motorola’s cable-TV boxes could provide Google with a springboard for delivering more of its services, including advertising, to living rooms. However, cable companies control the market for set-top boxes, and they resist any intrusion into their realm.
Google also will likely have to do some hand-holding with investors who have been worried about Motorola’s troubles eroding Google’s hefty profit margins.
“If it looks like Motorola is just a lab or toy for Google, investors are going to be asking themselves whether the company is spreading itself too thin,” Venkatraman said.
As its line of smartphones has waned in popularity, Motorola has suffered losses totaling $1.7 billion during the past three years. Google has earned $25 billion over the same stretch.
Page already has decided to operate Motorola separately partly because of the contrasting fortunes of the two companies. That will make it easier for investors to track how the different lines of business are faring. For now, Motorola will continue to have its headquarters in Libertyville, Ill., far from Google’s Silicon Valley home in Mountain View, Calif.
Google shares fell $13.17 or more than 2 percent, to close Tuesday at $600.94.
Turning around Motorola will likely require layoffs, a painful process that belies Google’s carefully cultivated image as a cuddly employer.
Google laid off about 300 people in 2008 after it paid $3.2 billion to acquire online advertising service DoubleClick Inc., which was previously the biggest deal in the company’s history. The cutbacks represented about one-quarter of the workforce that Google inherited from DoubleClick. If Google imposes a similar reduction on Motorola’s 20,500-employee payroll, it would translate into about 5,000 layoffs.
Taking on so many new employees also raises the risk of cultural clashes with the 33,000 people already working at Google.
Motorola Mobility is one half of the old Motorola Inc. It split at the beginning of last year. The other half, Motorola Solutions Inc., is still independent. It sells police radios, barcode scanners and other products aimed at government and corporate customers.
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AP Technology Writer Peter Svensson in New York contributed to this story.
Article source: http://news.yahoo.com/google-completes-motorola-deal-heralding-era-193920395--finance.html