Tag: alibaba

Alibaba’s Ma says Internet should be a utility

Alibaba Executive Chairman Jack Ma said the internet should be a utility available to the whole world.

Ma is putting his weight behind a UN call for e-commerce to boost developing economies and help fight poverty.

Ma has some weight as a UN advisor to its trade and development agency UNCTAD for small business and young entrepreneurs.

He said that the internet should be treated as a utility and should be treated also as the infrastructure of global development.

“Everything will be online and everything online will have data. And data will be the energy for innovation.”

UNCTAD Secretary-General Mukhisa Kituyi said he and Ma would meet in Kigali in July with 10 African presidents and young entrepreneurs, aiming to persuade the politicians of their responsibility to help their young populations realise their potential.

Ma said his first trip to Africa would focus on e-commerce payment to support inclusive and sustainable development, as well as education and environmental protection.

He said Alibaba had created 33 million jobs in China because each small business online could create at least three jobs. He met US President-elect Donald Trump in January and said the firm would create a million US jobs.

Earlier, a group of developing countries launched a roadmap for using e-commerce to drive growth, narrow the digital divide and help poorer countries develop.

Yahoo continues to tank as sale gets close

marissa_new4Troubled search outfit Yahoo’s quarterly earnings disappointed the cocaine nose jobs of Wall Street in what may be the company’s last financial report before it flogs off its core business.

Yahoo announced a $482 million write-down on the value of Tumblr, the social media service that it bought in 2013 for $1.1 billion.

Yahoo is in the process of auctioning off its search and advertising business, and is expected to choose a winner this week. The company said its board has made “great progress on strategic alternatives” but did not comment further on the auction process.

Verizon  and AT&T Inc are said to be in the running to acquire the core business, along with private equity firm TPG Capital and a consortium led by Quicken Loans founder Dan Gilbert and backed by Warren Buffett.

Yahoo is not in trouble of course.  It owns large stakes in Chinese ecommerce giant Alibaba and Yahoo Japan, which are worth far more than the company’s internet business.

After the Tumblr write-down, the company posted a net loss of $439.9 million compared with a loss of $21.6 million a year earlier.

Although total revenue rose to $1.31 billion from $1.24 billion a year earlier, the seeming improvement was the result of a change in the way the cost of acquiring traffic is counted. After deducting fees paid to partner websites for traffic, revenue fell to $841.2 million from $1.04 billion.

Analysts can’t work out what is taking Yahoo so long to complete the sales, unless it wants too much dosh for some of its assets.

Revenue in the company’s emerging businesses such as mobile, video, native and social advertising – showed some life, rising 25.7 percent to $504 million in the second quarter ended June 30.

However Yahoo continues to be canned by decreases in gross search revenue that is only expected to get worse.  Gross search revenue for the quarter was $765 million, down 17 percent from the same period last year.

 

Apple Pay is floundering

flounder-6001While it was released with all the hype you would expect from an Apple product,  Apple Pay is failing to interest people in the world.

After 18 months, Apple Pay has made a tiny dent in the global payments market, thanks to being stuffed up by technical challenges, low consumer take-up and resistance from banks who don’t see why they should support something that makes them sod all while making Apple rich.

The service is available in six countries and among a limited range of banks but it has failed to gain much traction outside the US. Apple Pay usage totalled $10.9 billion last year and that was mostly in the US. Although the figure looks high it is really sod all when you consider how much cash is moved around in mobile payments.

In China Alibaba and Tencent made an estimated $1 trillion worth of mobile transactions last year.

Basically Apple Pay is only popular with the hard-core Apple fanboys which we estimate total six million worldwide. These are the people who do what ever Apple tells them and would buy a dog poo if it had an Apple logo on it.

Other iPhone users are not bothering with the service.  Apple Pay transactions were a fraction of the $84.5 billion in iPhone sales for the six months to March, which accounted for two-thirds of Apple’s total revenue.

It has not been helped by the fact that the hardware that Apple Pay uses has been as reliable as Jobs’ Mob’s Apple IIc’s. While the do not appear to be catching fire.

In Australia, where Apple Pay launched a month ago, payment machines supported by one mid-sized bank reported frequent failures.

Apple Vice President Jennifer Bailey said such experiences were premature and not representative. “Like any set of major technology changes, it takes time. We want to move as quickly as possible, we push it as quickly as possible.”

Apple is also finding that the banks are harder to roll over than the movie, music and book trade. Apple is used to telling its partners what to do, but the banks have long experience of telling politicians and businesses what they can do.  Some country’s banks have even managed to negotiate lower transaction fees or have been holding out for Apple to offer something more reasonable.

Then there is the small matter that banks are starting to build their own products and don’t need Apple Pay at all. This situation is mirrored in the US where stores are starting to test their own services which will make Apple Pay redundant.

Verizon thinking of buying Yahoo

marissa_new4The dark satanic rumour mill has manufactured a hell on earth yarn claiming that the US telco Verizon is thinking of buying the very troubled search outfit Yahoo.

Verizon wrote a cheque for the supplier of beer mats during the 90s AOL last year and according to Bloomberg, the wireless telecom giant has tasked AOL CEO Tim Armstrong with figuring out how to buy Yahoo.

Yahoo is currently working out how to spin off its core businesses and keep the original company as a holding entity for the Alibaba shares. The company explained that the tax climate for spinning off Alibaba holdings was simply unfavourable for investors.

CEO Marissa Mayer also noted that the move would give more “transparency” to the operations of Yahoo’s core businesses, and analysts believed that implied Yahoo would be selling itself off bit by bit.

Verizon’s huge user base and mobile video ads would likely bring in quite a lot of revenue if it bought the company. It also needs to get its feet under the table of the online video scene.

Yahoo close to new cunning plan

marissa_new4Yahoo is about to release its next glorious turnaround plan after releasing quarterly earnings next month.

It is not clear what this cunning plan actually is and if it includes its current CEO Marissa Mayer.  Her cunning plans including drastic staff cuts have so far failed to turn the company around.

The company continues to resist investor calls to explore a sale of its core Internet assets and has  rebuffed several potential buyers for its core Internet assets, including private equity firms.

Yahoo wants to gauge shareholder reaction after presenting its strategic vision during the earnings conference call, one of the people said.

Yahoo said last month it would pursue a tax-free spinoff of the core Internet business, which could take at least a year.

The company has abandoned plans to spin off its stake in Alibaba and announced it would instead spin off other assets, including its stake in Yahoo Japan, into a new company.

Yahoo might find it hard to avoid a formal sales process for long, however, as investors, including Starboard, push more aggressively for a sale.

Other investors, including Canyon Capital Advisors and Mason Capital have also been urging Yahoo to sell its Internet business.

Yahoo investors have a one-month window to nominate a slate of board members and the end of next month and Starboard has indicated in its last two letters to the board it is prepared to launch a proxy contest.

Hon Hai joins internet of things bandwagon

Robby the Robot - Wikimedia CommonsGiant Asian manufacturer Hon Hai’s chairman has said that the company is to turn its gaze on the internet of things (IoT).

And he also told Chinese media that industrial robots are the key to the future.

The Taipei Times quotes Terry Gou as saying that Hon Hai will cooperate with Alibaba and Japanese company Softbank to offer “robotic services”.

Gou doesn’t think that these industrial robots will replace people any time real soon. Hon Hai is a major employer in mainland China, and makes Apple products and others.

It has already installed 48,000 industrial robotic arms in its factories.

Soft bank’s famous Pepper robot was made by Hon Hai and sold out in minutes when it was launched last June.

Yahoo was broken before Mayer got there

marissa_new4Yahoo supremo Melissa Mayer made a huge mistake when she thought she could turn the search engine outfit around.

The press is claiming that the mess that is Yahoo is all her fault, but what they have been forgetting is that the company was doomed before she took over. Her only mistake was taking the job in the first place.

In the 1990s, dotcom boom Yahoo was king but as a search engine and web portal that was superseded by Google and Facebook.

It is still the world’s fifth most popular website and an enormous business: its revenues were $1.2 billion in the last quarter; that’s more than Twitter, or LinkedIn. But its biggest problem is that no one could work out what to do with it.

Terry Semel in the early 2000s failed to buy Google and then tried to become a gigantic media company. Then a series of chief executives failed to turn the company around and specularly failed to see the writing on the wall for the company. Jerry Yang turned down $45 billion from Microsoft and his successor Carol Bartz hacked off everyone and Scott Thompson, who left. For hacks like me who were around then Yahoo really was a joke and could do nothing right.

In 2012 Yahoo hired Marissa Mayer, a former Google superstar who looked like she could return the company to its glory days. She started off rather well. She wrote a billion dollar cheque for the social blogging service Tumblr and $30 million for Summly. She invested heavily in mobile apps.

Yahoo stock value doubled but this was mostly because of the only good decision the company ever made – to spend a billion getting a 40 percent stake in Alibaba, China’s internet retail goliath.
It still has 15 percent of Alibaba which is worth $30 billion when Yahoo itself is only valued at $31 billion.

Yahoo’s stake in Yahoo Japan, a separate company, is worth about $8.5 billion, this actually ascribes a negative market value to the core business.

As a result Yahoo’s internet business is worthless and it would be better off if it shut down and became a holding company for Alibaba shares.

It is a scenario which Mayer could not actually win or change. If she flogged the Alibaba shares she would be hit with a tax bill and she would be investing in rubbish. Instead the only sensible move is to spin off the core business and that would mean she failed.

She did make a few mistakes. Hiring and firing a chief operating officer who earned $58m in 15 months, cancelling working from home while bringing her baby and a full-time nanny to the office.

But these are minor to the central problem. Yahoo was a company which was designed to help people find their way around the web and it was no longer needed. Yahoo could not become something else without doing what Apple did – it went from making expensive PCs which no one was buying, to a maker of smart toys which were very “now.” Yahoo stuck to being consumer internet and doomed itself.

Revenues up at Alibaba

Ali Baba by Aubrey BeardsleyOnline retailer Alibaba which sells into the lucrative Chinese market said it turned in revenues of $109 billion for the quarter ended the 30th June.

That’s up $28 billion from the same period last year.

It also said it successfully monetised the mobile marketplace with revenues from transactions made on mobile devices exceeding desktop revenues.

The company, which is listed on the New York Stock Exchange (NYSE:BABA) said it grew its cloud computing and internet infrastructure business by 106 percent year on year, amounting to $78 million. It claims number one position in cloud computing services in China.

Alibaba has more customers in China than there are US citizens.

Grocery sales in Beijing increased by 740 percent in the quarter compared to the same quarter last year, with 90 percent of those orders coming from mobile devices.

AliBaba buys back half of itself

Alibaba has bought back half the stake Yahoo owned in the company for about $7.6 billion. The move ends years of horse trading which has cost the careers of a couple of Yahoo CEOs and clears the way for Alibaba to make an iPO.

Alibaba has paid Yahoo about $6.3 billion in cash and $800 million in preferred shares in Alibaba Group. It also made a one-time cash payment of $550 million in connection with an amendment to the two companies’ intellectual property licence agreement.

According to ReutersYahoo is going to give shareholders $3 billion of the $4.3 billion of after-tax proceeds from the sale.

This is in addition to the $646 million down payment that it has already returned to its shareholders through buybacks.

Most of Yahoo’s value was tied up in Alibaba and for a variety of reasons the company did not want to let its Chinese investment go. As it is, Yahoo continues to own about 23 percent of Alibaba’s common stock, valued at $8.1 billion and with its preferred stock, its stake is valued at about $8.9 billion.

Before the transaction Yahoo owned about 40 percent of Alibaba.

Alibaba added that when it comes to its IPO it will have the right to buy back half of Yahoo’s remaining stake.

Alibaba CEO Jack Ma said that the completion of the transaction begins a new chapter in the company’s relationship with Yahoo. We assume this is the chapter where the hero escapes the evil troll with half the treasure.

Yahoo is still laughing all the way to the bank. It acquired its stake in Alibaba Group in 2005 in exchange for $1 billion and the sale of its Yahoo China business to Alibaba Group. 

Alibaba claws its company back from Yahoo

Jack Ma is writing a cheque for $7.1 billion to buy back 40 percent of his Alibaba Group from Yahoo.

Under the agreement, Yahoo will sell half of its stake in Alibaba for at least $6.3 billion in cash and up to $800 million in new Alibaba preferred stock. The move is the end of over two years worth of negotiations.

It will also help Yahoo, which has been facing a slump in advertising revenue, give its stockholders a Christmas bonus to get them off its back.

Yahoo, along with analysts, think that Alibaba is going to go for an IPO soon. It did not want to sell its shares because these would go up in value. However Alibaba was not going to arrange an IPO when Yahoo was sitting on most of the stock.

According to the joint statement, Alibaba would buy back half of Yahoo’s remaining stake, or 10 percent, at the IPO price or allow Yahoo to sell those shares in the offering before end-2015. Alibaba Group is valued at $30-35 billion.

Yahoo’s Alibaba cash and its 35 percent holding in Yahoo Japan are one of the few significant assets the outfit owns.

Investors want Yahoo to sell them and return the proceeds to shareholders because too much of Yahoo’s value is locked up in its Asian assets.

Yahoo said it would return “substantially all” of the after-tax cash proceeds from the deal to its stockholders – and would increase its share buyback authorisation by $5 billion.