After the company’s exceptional 3rd quarter results, the company decided to increase its operating profit in the next 3 years. They have decided to boost its growth and regain the confidence of its investors. Yahoo’s CEO, Carol Bartz on its presentation to investors on Wednesday said Yahoo had left many people confused about its purpose in recent years and disappointed by its lackluster financial performance. Yahoo managed to have only 6% of operating margin in the third quarter, which Bartz described as “pathetic” earlier on Wednesday.
“Along the way, here we are a 14-year-old Internet company that somehow got boring,” said Bartz, who said the company’s 6 percent operating margins were “pathetic” and “unacceptable.”
“Today is the beginning of a journey back to respect,” Bartz said.
Since Yahoo changed its homepage in July, page views have increased 9% while time spent on the site has increased 20%, according to Tapan Bhat, SVP (Integrated Consumer Experience). He also said that, Click-throughs on the advertisements on the front page have increased 10%. Also, since Bartz took over as CEO, the company laid off 5% of its staff and shut down its several businesses.
Yahoo also announced its 10 year partnership with Microsoft Corporation in July. This will let Microsoft provide search technology to Yahoo and compete with Google, the world’s No. 1 search engine.
The oil & gas industry is looking down at huge losses in the present & for the future. Royal Dutch Shell & BP, two of the strongest players have reported plummeting of profits by almost three quarters. Shell reportedly has suffered a 73% reduction in its profits, two days after BP announced quite the same story, its profit going down by ~50%. Also, as expected, Shell cut its workforce by about 5000 in addition to reducing operating costs.
The results might be hard to bear for these companies but the oil demand scenario over the last few months has been pathetic. It has influenced oil & gas companies as the oil prices have been on a continuous decline. Crude oil declined the most in a month yesterday as an Energy Department report showed that U.S. gasoline stockpiles climbed 1.62 million barrels last week.
Peter Voser, Shell’s chief executive says that, “We see some indications that energy demand and pricing are improving, but the outlook remains uncertain, and we are not expecting a quick recovery”, is this some news or is he just stating the fact? Anyways, maybe a CEO can’t say more than this & that too if he’s been on the seat for just over two months. Voser took over the CEO post in July 2009 & he needs to act immediately. The options he has are pretty few. Maybe he needs to forego the plans he has to expand production to add 1 million barrels a day to capacity by the end of 2012. If this happens then maybe by 2012 he’ll be surrounded by oil barrels and no customers. This is where the diversity of a company’s business lines comes handy but I am afraid, oil companies generally have pretty few options.
The situation is such that every company in the industry is keeping a hawk-eye watch on results for each company. Exxon Mobil & Chevron Corp.’s results are next, watch out !!
The world’s one of the most loved and admired company McDonald’s Corporation (NYSE:MDC) is pulling out its operations from Iceland. McDonald’s has decided to close its stores and had no plans to return. Iceland is going through a huge financial crisis and this has made it very expensive to operate its franchises. Besides the economy, McDonald’s blamed the “unique operational complexity” of doing business in an isolated nation with a population of just 300,000.
There is only one company in Iceland which operates all the franchises of McDonald’s Corporation i.e. “Lyst”. The owner of the firm Mr. Jon Gardar Ogmundsson said that the decision was “not taken lightly”. He told that stores imported the goods from Germany and the cost has almost doubled, with the falling Krona, currency of Iceland.
Mr Ogmundsson said the restaurants had “never been this busy before… but at the same time profits have never been lower”. “It just makes no sense. For a kilo of onion, imported from Germany, I’m paying the equivalent of a bottle of good whisky,” he added. Almost all the Iceland’s banks ran into losses at the height of the global credit crisis - devastating the country’s economic condition and forcing it to rely on an $10bn (£6.1bn) international aid package.
Oracle is seriously concerned about the delay in the approval of its Sun Microsystems acquisition. Its fate is hinging on nothing else but what ultimately happens to MYSQL. The stakeholders are quite big in their own standards & also varied in terms of their operating markets.
On one hand Oracle itself is facing tough challenges from state bodies like the European Commission & on the other it’s a tussle between companies like Microsoft,( “actively seeking to scuttle the deal or even purchase MySQL for itself.”) & non-profit foundations & free software groups. Microsoft can be seen to have a massive vested interest in MySQL and whoever ultimately owns it. According to Gartner, via Reuters, SQL Server had a 18.1 per cent market share in 2008 compared to Oracle’s 48.6 per cent continued dominance (this is the market share for ‘paid for’ databases, thus MySQL hardly figures in Gartner’s report). Thus Microsoft is seriously lagging in the commercial database market & would want to use MYSQL to create a niche for itself in the commercial databases market.
Microsoft’s reason for buying MYSQL seems valid. However another school of thought is that of the free software foundation. It says it would preserve the software & make sure that no one else takes advantage of it to threaten Oracle’s position.
From Oracle’s point of view an immediate resolution is important as Sun is losing $100 million a month as rivals like Hewlett-Packard Co and IBM poach customers amid uncertainty about the closing of the deal.
Steve Jobs, CEO of Apple, Inc. is a man always creating something new and unimaginable products. Imagine a situation, While you are starting your computer or notebook, an advertisement pops up and the screen freezes for some time. The ad could be an audio or a plain visual one.
Regardless, it may offer you some product or could even offer the operating system (which enables you to start or boot your computer) free or at a lower cost. Tying you down for a few more seconds, the ad automatically fades away and allows you to continue with the booting process.
If Apple Computer has its way, this is precisely what you may get in some years to come. Steve Jobs, the chief executive officer and co-founder of the company, has aptly titled the patent application as ‘Advertisement in an Operating System’. And he has listed himself as an ‘inventor’ of the application (US Patent Application 20090265214).
Jobs is credited with 133 patents — unusual for a CEO of a large company who may have other important issues to handle — of the 1,250-odd patents that Apple has been granted till date.
Everyone knows about Windows 7 & it being the quick fix for a crushed product , just to add on, Microsoft has chosen Australia to be its inaugural market for this one. As per the management, one of the main reasons for choosing Australia was the high percentage of representatives from the country during the beta testing phase.
“Aussie Windows 7 internet traffic “as big as Obama”? ” (http://www.itnews.com.au/News/144366,aussie-windows-7-internet-traffic-as-big-as-obama.aspx#), it seems now that maybe it actually was. Well, being the giant it is, one can imagine & understand this strategy of choosing a country where the interest has been maximum. Windows Vista was a total failure everywhere & it was important this time that Microsoft carefully chooses a launch market. It gives enough confidence to a company if the potential users are large at one particular place & moreover if they have evidence of that, in this case Australia.
A number of Enterprises globally have shifted to Windows 7 while the pace amongst consumers is a bit slow but nevertheless its catching up. This one’s gonna be big !!
The news is that the rivalry between Google and Microsoft has gone to the next step after Microsoft has launched its search engine - Bing. Now Google made the announcement today that it will let its users to listen and purchase music from top of its search page. Listeners will now be able to listen songs on the search results itself and then eventually buy the songs from services like Apple’s iTunes store and Amazon.com Inc. Google initiated this move as it is facing tough competition from Bing which is now also collabarated with Yahoo.
Internet Giant Yahoo recorded a 12% increase in its third quarter profits, much to the agony of the huge number of employees fired in the last 12 months. Amongst the top four software companies yahoo registered the maximum number of layoffs last year with about 2000 jobs being slashed. On the other hand it earned $186m (£113.6m) compared with $54m in the same period last year.
Yahoo has been constantly trying to launch new features in its web portal supported by huge advertising campaigns. This drive has been a result of falling revenues (although profits have risen) & lesser advertiser interest in their product. The top executives are quite confident & hopeful with their growth strategies & are expecting revenue of $1.6 billion to $1.7 billion in the fourth quarter. Well, that is obviously what any company would say after staging layoffs & then realizing profits.
Unlike Google, Yahoo has had to face ominous situations which resulted in drastic cost reducing measures. In July, Microsoft and Yahoo agreed a deal that will see Yahoo’s websites use both Microsoft’s search technology and search advertising. Yahoo in turn will become the sales team for banner advertising for both companies. However, the deal still awaits regulatory approval and is not expected to be finalized before spring 2010.
On the morning of 7th September 2009 when I was browsing through business section of newspaper, I read the surprise news of Kraft Foods Inc. plans to acquire Cadbury Plc. That day I noticed, Cadbury stocks rose by about 42%. Today, Cadbury Plc announced that the sales in the July-September quarter rose 7%. The targets for the next quarter has been increased. “We have the momentum and the growth,” Mr. Stitzer, CEO, Cadbury Plc told in a telephone briefing after the trading update. This will force Kraft Foods Inc. to increase its bid further. “This upgrade increases the pressure on Kraft to up its offer before the “put up or shut up” period runs out on Nov 9,” analyst Jeremy Batstone-Carr at brokers Charles Stanley told Reuters.
The inverstors, however, are unmoved with the decision of increasing the targets and sales forecasts as the stock price didn’t rose much. The investors were already knowing that this is best Cadbury can think of. “We always thought this was the minimum Cadbury would have to do to persuade Kraft to raise their bid, so there’s no real surprise here,” said one of the trader.
“This puts the ball firmly back in Kraft’s court, and is exactly what Cadbury shareholders would have hope for,” Panmure Gordon analyst Graham Jones, told Reuters, adding that it reduces the chance of Cadbury being acquired “on the cheap.”
Now, we have to wait and watch, what Kraft Foods Inc. come up with.
‘Companies with a better defined corporate governance model do well in almost any situation’. This is the lesson learnt from what’s been happening in the retail space over the year.The recession in the last two years may have shaken the best of industries & companies but there’s been a dual impact on the retail sector. Brands stayed away from new partnerships with retailers (so far, vacancy rates have gone up & ~10% of malls might close) & on the other hand consumers stopped spending. So how are some players gaining in such circumstances ?Here’s what the story is, bankruptcy of some retailers have positively affected other retailers. These strong players have consolidated and have gone bigger.
It’s not about being recession proof for these retailers but about being that much tougher in facing the situation & creating a niche market for products which enable consumers to save money. The bankrupt retailers list includes Dial-a-Mattress, Filene’s Basement, KB Toys, Circuit City, Mervyn’s, Steve & Barry’s, Linens ‘n Things etc.
I found a list of such retailers which have gained since the recession began near the end of 2007:
1). Aaron’s (Revenue increase since 2007: 21%)
2). Aeropostale (Revenue increase: 28%)
3). Amazon.com (Revenue increase: 38%)
4). Priceline.com (Revenue increase: 46%)
5). Staples (Revenue increase: 26%)