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%)
There are few companies where even recession cannot hit. Technology giant Apple has recorded its best 4th quarter results mostly driven by sales of Mac Computers and smartphone iPhone. The company exceeds its expectations and recorded a 47% rise in net profits. Apple CFO said in a statement “We are delighted with our September quarter and fiscal 2009 results”. The company calls it as a ‘most profitable quarter ever’and assures the same for the next quarter. “Looking ahead to the first fiscal quarter of 2010, we expect revenue in the range of about $11.3 billion to $11.6 billion and we expect diluted earnings per share in the range of about $1.7 to $1.78,” Oppenheimer said.
Apple has continued to give tough competition in the computer segment and smartphone market. The company’s Mac computers are in great demand and selling like hot cakes. The iPhone continues to be the leader in smartphone segment. Apple announced the iPhone on 9th January 2007 and introduced it in the US on 29th June 2007 and since then it has been quite a revelation. After the 4th quarter results announced, Apple CEO Steve Jobs said,”We are thrilled to have sold more Macs and iPhones than in any previous quarter. We’ve got a very strong line up for the holiday season and some really great new products in the pipeline for 2010.”
After the results, the company’s stock prices jumped sharply on the Nasdaq Stock Exchange.
Two days ago, Google announced its 3rd quarter results and they were better than expected even in this tough market situation. And today, management announced the bonuses for its employees to celebrate Diwali. “The bonuses we rewarded our employees is a part of the annual bonus that nearly 20000 employees worldwide were given. Job-holders across all levels were handed out a bonus,” said Mr. Manoj Varghese, Head-Human Resources, Asia Pacific Region, Google.
This is a committment which is shown by Google management that they do care about their employees. The employees received the surprise mail today that they will be given bonuses. The quarter has been good for them and they recorded 7% growth rate. “While there is a lot of uncertainty about the pace of economic recovery, we believe the worst of the recession is behind us and now feel confident about investing heavily in our future.” said Eric Schmidt, CEO of Google during the earnings call last week.
