MediaFile

Tech wrap: Apple teases “Mountain Lion”

Apple released details on the successor to its “Lion” operating system for Mac computers, due out late this summer. OS X 10.8, dubbed “Mountain Lion,” will inherit features already running on iPhones and iPads such as iMessage, Notification Center and AirPlay mirroring, according to an Apple press release. Game Center will give Mac users the opportunity to square off against gamers on iOS devices as well as other Mac users. A new feature called “Gatekeeper” is meant to give OS X users more control over what apps can be downloaded onto their Macs, further distinguishing Apple-approved apps from third-party ones. The plan to introduce more iOS functions to Apple’s desktop and laptop OS comes as Microsoft prepares to make its desktop applications more mobile with a rumored fall release of Windows 8.

Four months after one of Japan’s biggest corporate scandals, police and prosecutors arrested seven men, including the former president of Olympus and ex-bankers, over their role in a $1.7 billion accounting fraud at the medical equipment and camera maker. Three former executives arrested, ex-President Tsuyoshi Kikukawa, former Executive Vice President Hisashi Mori and former auditor Hideo Yamada, had been identified by an investigative panel, commissioned by Olympus, as the main culprits in the fraud, seeking to delay the reckoning from risky investments made in the late-1980′s bubble economy.

Groupon CEO Andrew Mason said that the company’s location-based service Groupon NOW will likely not be a material contributor to results in the next one or two quarters. Mason said customers of the company’s daily deals are using Groupon NOW too. However, he stressed that the new service will likely take time to grow. Groupon NOW is a relatively new service that differs from Groupon’s main daily deal business. Groupon subscribers can check on nearby deals that are happening in the next one or two hours, based on their location.

Transportation Secretary Ray LaHood proposed voluntary steps for automakers that would establish new safety criteria for hands-free calling, navigation, and entertainment systems that have become common in new cars and trucks. The guidelines introduced recommend that automakers adopt technology to disable distracting electronic systems that are accessible to the driver — but not passengers — when a car is moving. The latest government figures show that roughly 10 percent of U.S. traffic deaths in 2010, or 3,092 people, were linked to distracted driving.

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Tech wrap: RIM co-CEOs seen losing chairman role

RIM is close to a decision on stripping its co-chief executives of their other shared role as chairman of the board, The National Post newspaper said, a change that could meet a key demand from angry and disillusioned investors. The Post’s sources said Barbara Stymiest, currently an independent member of RIM’s board, is leading the race to replace Mike Lazaridis and Jim Balsillie in the chairmanship. RIM shares jumped more than 7 percent on the news. But some analysts doubted Stymiest, if named to the chairmanship, would actually assume the transformational role that activist shareholders are calling for.

Groupon shares closed the day down 6.6 percent after a Susquehanna Financial Group – Yipit survey of almost 400 merchants found that while 8 out of 10 merchants enjoyed working with daily deal companies such as Groupon and LivingSocial, 52 percent were not planning to feature deals in the next six months and nearly 24 percent intended to feature only one deal during the same period.

Apple is planning an event to be held in New York later this month that will focus on publishing and eBooks, AllThingsD and Techcrunch reported. The event will unveil improvements to Apple’s iBooks platform, Techcrunch wrote.

Media mogul Rupert Murdoch rung in the New Year with a new Twitter account, tweeting praise for Republican presidential hopeful Rick Santorum, a socially conservative former senator who has risen sharply in the polls, describing him as the “only candidate with genuine big vision” for the country. Also via Twitter, Murdoch called President Obama’s decision on the detention of terrorism suspects “very courageous – and dead right!”. On Walter Isaacson’s biography of Steve Jobs, Murdoch tweeted: “Interesting but unfair, family must hate.”

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Tech wrap: Microsoft allowed looks at Yahoo’s books

Microsoft has signed a confidentiality agreement with Yahoo, allowing the software giant to take a closer look at Yahoo’s business, according to a source familiar with the matter. Microsoft joins several private equity firms that are also poring over Yahoo’s books and operations, as they explore various options for striking a deal with the struggling Internet company. Microsoft’s signing of a nondisclosure agreement with Yahoo occurred “recently,” according to the source.

Shares of Groupon fell for a third day , sinking below the company’s initial public offering price of $20 less than three weeks after the daily deal company went public. Groupon raised more than $700 million in an IPO in early November, making it the biggest IPO by a U.S. Internet company since Google raised $1.7 billion in 2004. Analysts have cited concerns about increased competition, a greater availability of the company’s stock for short-selling, and a sharp reversal of market sentiment that is taking down more speculative companies. Groupon shares ended the day down 15.5 percent at $16.96.

Big-Box retailer Best Buy has no regrets about stocking Research In Motion’s PlayBook tablet, despite the product’s poor reception and subsequent sharp discounting. RIM says it has shipped 700,000 PlayBooks since its launch, a figure dwarfed by the millions of iPads Apple sells each quarter. “When a product is less successful, you do what you need to do, and you move to the next thing,” Best Buy’s president for the Americas, Mike Vitelli, told Reuters. “That kind of quick reaction by the suppliers, whether it is BlackBerry or HP with their product, I actually think that is good for consumers too,” Vitelli said.

Nokia Siemens Networks, the world’s second-largest maker of mobile phone network equipment, is axing 17,000 jobs, nearly a quarter of its workforce, to help save about 1 billion euros ($1.35 billion) a year. NSN, which has struggled to make a profit since being set up in 2007, did not say where it would make the cuts, part of wider changes that analysts said looked aimed at gearing up the company for an initial public offering.

Google said on Tuesday that it was pulling the plug on seven projects, including Renewable Energy Cheaper than Coal as well as a Wikipedia-like online encyclopedia service known as Knol. The plans, which Google announced on its corporate blog, represent the third so-called “spring cleaning” announcement that Google has made since Google co-founder Page took the reins in April.

Apple’s Black Friday deals were revealed ahead of time by tech blog 9to5Mac. The blog said Apple’s offerings were similar to those of years past, but gave better discounts on higher capacities of iPads and iPods. Apple’s Macs will cost $101 less, iPads discounts will range from $41 to $61 discounts and the iPod nano will $11 less for both the 8GB and 16GB versions, the blog wrote. The biggest discount will be on the base level MacBook Air, which will now start at $898 in the U.S.

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Tech wrap: Is intellectual property being used to restrict competition?

EU regulators investigating Apple and Samsung over their patents dispute are worried intellectual property rights may be unfairly used by some firms against their rivals, the EU antitrust chief said. “We need to look at this because IP rights can be used as a distortion of competition but we will need to look at the answers,” EU Competition Commissioner Joaquin Almunia told reporters. “Apple and Samsung is only one case where IP rights can be used as an instrument to restrict competition,” he said.

Netflix’s shares dropped as much as 7 percent after it warned of a loss for 2012, a move that prompted several Wall Street analysts to cut their price targets for the online video and DVD rental company. Netlfix said that it had recently lost a “significant” number of customers, who objected to Netflix’s decisions to raise its prices and split up its streaming and DVD business — an idea it later dropped. “If we do not reverse the negative consumer sentiment toward our brand, and if we continue to experience significant customer cancellations and a decline in subscriber additions, our results of operations including our cash flow will be adversely impacted,” Netflix said. Netflix shares ended the day down 5.4 percent at $70.45.

Groupon stock slumped on concern about increased competition, leaving shares of the largest daily deal company close to their $20 initial public offering price. LivingSocial, Groupon’s closest rival, announced plans on Monday to offer 20 deals with national merchants on the crucial Black Friday shopping period. Groupon shares ended the trading day down nearly 15 percent.

Samsung Electronics, the world’s top TV maker, is in last-stage talks with Google to roll out its Google TVs, the head of Samsung’s TV division told reporters. Samsung in January displayed a new Google TV-enabled Blu-ray player and companion box at the Consumer Electronics Show, but did not commercialize the offerings. The company said it plans to unveil its Google TV at an event next year without elaborating on the schedule.

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Me Too: More funding for HouseTrip.com

Me Too is a scorned strategy among many entrepreneurs, but it sometimes works quite well.

Case in point: HouseTrip.com, which just lined up another $17 million in funding from investors including Index Ventures and Balderton Capital. Think of the company, which was founded in Switzerland and allows homeowners to rent out their properties on a short-term basis, as a kind of HomeAway or Airbnb, but with European flair. Its top destinations include Paris, London and Barcelona; rentals include a houseboat in Amsterdam and a cave house in Santorini.

HomeAway did very well for its VC backers, including Redpoint Ventures and Institutional Venture Partners,  raising $216 million in an IPO in June.  Shortly afterwards,  Airbnb.com — which allows people to rent out rooms and sofas as well as entire houses or apartments– raised $112 million from backers like Andreessen Horowitz and DST Global.

While entrepreneurs say they prefer to get creative, copycat companies often reel in big bucks. LivingSocial, the daily-deals site that followed Groupon, is said to be raising $200 million at a $5 billion valuation. Online-based ventures seem particularly easy to copy; scores of companies are building businesses on variations of existing start-ups such as microblogging service Twitter and games company Zynga.

HouseTrip has some ground to cover before it catches up to the more established sites. It’s generated bookings for about 500,000 nights so far, compared to 2 million nights at Airbnb. But still, that’s not bad for a site that launched early last year, compared to Airbnb’s 2008  headstart.

Earlier this year, HouseTrip won $2.9 million in Series A funding from Index.

HouseTrip has some ground to cover before it catches up to the more established sites. It's generated bookings for about 500,000 nights so far, compared to 2 million nights at Airbnb. But still, that's not bad for a site that launched early last year, compared to Airbnb's 2008 headstart. Join Discussion

What’s the deal with Groupon?

Watch Groupon Stock Soars, but Does It Have Lasting Value? on PBS. See more from PBS NewsHour.

Groupon’s non-stratospheric IPO last Friday is really good news for all concerned:

• The underwriters don’t have to explain their pricing Voo-Doo, because only an acceptable amount of money was left on the table.
• Andrew Mason & Co. get to gloat, at least for a while, about spurning Google and earning a valuation some twice the reported terms — even though Google went into the daily deal business in a way which looks and feels incredibly like Groupon.
• Merchants who might have had reservations about the appeal of Groupon saw just how much attention was lavished on the company. Members will continue to get random offerings and spend money on things they didn’t know they wanted.

Such a deal!

But it may also have lulled some eager high-tech investors into a false sense of security. It’s hard to criticize the valuation of Groupon, and even the long-term viability of the daily deal phenomenon. But it’s not impossible.

In the interest of full disclosure, I signed up for Groupon a long time ago and even installed the iPhone app. I used the service exactly once, and let the deal expire (for which I was out a cool $5) for a couple of reasons, neither particularly Groupon’s or the vendor’s fault.

When a deal seems to good to be true, it probably is. Join Discussion

Lots of IPOs, just one Nasdaq bell

Nasdaq’s senior vice president of new listings and capital markets has some bad news for companies looking to hold an initial public offering: don’t expect to ring the opening bell.

The backlog of companies looking to list in the next few months is so big that “I’m going to disappoint a lot of people,” said Robert McCooey during an IPO panel at the Ernst & Young Strategic Growth conference.  “Some people won’t even get a closing bell ceremony.” He counts 210 companies hoping to list on public markets.

It’s not just the successful IPO of Groupon last week that has changed sentiment. It’s the better — if not outright good — economic news in recent weeks, along with a solid earnings season, that is creating momentum, said David Erickson, co-head of equity capital markets at Barclays Capital. He said the firm was currently working with four companies that hoped to set IPO prices by Thanksgiving, in little more than two weeks’ time.

To hold a successful IPO that holds its value, companies should be certain they will follow up with strong quarterly earnings in the period immediately after the IPO. “You have to beat the first quarter out of the box,” he said. “If you blow up the first quarter out of the box, it takes you two quarters, three quarters, four quarters to rebuild that credibility.”

To capture the interest of the largest fund companies like FMR, companies should reach market capitalizations of at least $500 million, said Fidelity analyst Kristina Salen. Fidelity considers anything in the $500 million to $2 billion region small, she said.

The bigger the listing, the better the shot at that elusive bell-ringing slot. But there are fewer slots than you might think.  Pricing a stock rarely happens on a Sunday or Monday night, McCooey said, essentially eliminating Monday and Tuesday opening bells.

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The dreary details of Groupon’s future

By Kevin Kelleher The views expressed are his own.

Underwriting is usually a cheerless business. Taking a company public involves long regulatory filings, endless hours of due diligence and PowerPoint-driven roadshows. Investors need details, even if the details are dreary.

And then there’s the Groupon IPO. The daily deal company went public at $20 a share Friday and surged as high as 40%, briefly valuing the company at $20 billion. It may not be the hottest tech IPO so far this year — that distinction belongs to LinkedIn, which doubled its value on its first day — but it is the most discussed and divisive deal. Bulls and bears argue over the company and its future with a kind of passion that belongs to the culture wars.

On its face, the IPO is just about a company raising money, but it’s also so much more: It’s a spectacle — a dramatic tale of the fastest growing company in history brushing off a $6 billion bid by Google to go public and quickly become worth three times as much. It’s a scrappy outsider vindicating critics who attacked it mercilessly during an enforced quiet period. It’s a gaudy billboard luring other tech startups to come into the public markets.

What the Groupon story is missing, though, is all those dreary details. For all the metric-filled spreadsheets and PDF files of analysis, Wall Street is still a place driven by emotion. And the debate over Groupon is really about the difference between the emotional appeal of Groupon’s IPO and the less appealing story that lies in the minutiae.

A look at some of the details of the IPO itself suggest that this offering was carefully engineered to create a big splash. The prospectus lists 14 Wall Street firms, including Goldman Sachs and Morgan Stanley, the two biggest underwriters. These firms know that with a sluggish IPO market — only 18 companies went public in the third quarter, compared with 33 in the third quarter of 2010 — a big name IPO like Google or Amazon can whet the market’s appetite for more IPOs.

Groupon had been the biggest tech name in the IPO pipeline, but there were concerns this summer that investors’ interest might not be strong enough. So underwriters responded by ensuring that the supply of shares would be less than the demand. The result, according to Bloomberg, was the smallest float of any Internet IPO in the past decade: only 4.7% of its total shares. That raised $700 million for Groupon, less than the $900 million that Groupon insiders made from selling private shares in January.

Groupon went public at $20 a share Friday and surged as high as 40%, briefly valuing the company at $20 billion. It may not be the hottest tech IPO so far this year -- that distinction belongs to LinkedIn, which doubled its value on its first day -- but it is the most discussed and divisive deal. Join Discussion

Tech wrap: Groupon goes public, super nova

Shares of daily deals site Groupon rose more than 50 percent in their stock market debut, but at least some of the early trading exuberance may have come from limiting the fraction of the company that was sold. The shares rose as high as $31.14, or 55.7 percent above the IPO price, in early trading on the Nasdaq, at one point pushing the market value of the company up to $19.9 billion.  The shares later eased back, closing at $26.11. Despite the early success, there are still lingering questions about Groupon’s business model and about competition from better-funded rivals such as Amazon.com and Google.

Yahoo has signed confidentiality agreements with several parties interested in buying all or part of the company, according to people familiar with the matter. The Internet pioneer said potential buyers had to sign an agreement by Friday to be allowed a close look at Yahoo’s finances. But the Friday deadline could be extended into next week to provide more time for other firms to sign on, the sources said. Some private equity firms have balked at signing Yahoo’s nondisclosure agreement because of restrictions that would prevent them from forming consortiums, sources told Reuters last week.

EU regulators are investigating whether Samsung and Apple may have breached EU antitrust laws with patent infringement claims in their global legal battle over the lucrative smartphone and tablet market. “The (European) Commission has indeed sent requests for information to Apple and Samsung concerning the enforcement of ‘standards-essential’ patents in the mobile telephony sector,” the European Commission said in a statement. Standards-essential patents means they have been incorporated in internationally accepted technology standards, which in the case of Samsung and Apple, means 3G and UMTS technology.

China dismissed a U.S. report on online spying as “irresponsible,” rejecting the charge that China uses cyber espionage to steal lucrative U.S. trade and technology secrets. “Online attacks are notable for spanning national borders and being anonymous. Identifying the attackers without carrying out a comprehensive investigation and making inferences about the attackers is both unprofessional and irresponsible,” Hong told a daily news briefing in answer to a question about the report.

Japan’s Olympus replaced its auditor in 2009 after a disagreement over how to account for several acquisitions, but it decided not to reveal the dispute to investors, an internal document shows. In May 2009, Tsuyoshi Kikukawa, the then president of the camera-maker and medical equipment firm, announced that the contract for its then auditor, KPMG, had ended and that another global accounting firm, Ernst & Young, would take over. Kikukawa made no mention of any row with KPMG, although Japanese disclosure rules require companies to notify investors of “any matters concerning the opinions” of an outgoing auditor.

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Seviche doesn’t love Groupon anymore

Groupon’s IPO roadshow pitch is revving into high-gear this week. But CEO Andrew Mason and the rest of the crew might want to first convince its own clients of the company’s benefits.

Seviche, the merchant prominently featured in Groupon Inc’s now-trundling IPO roadshow, is no longer keen on jumping on the daily deals bandwagon. Worse, one of its general managers is mildly contesting Mason’s account of the benefits of their promotion run in 2010.

Hap Cohan, general manager of the Louisville, Kentucky-based restaurant, said on Tuesday the Groupon was in fact run by previous management (the restaurant brought in new investors over the past year). The new owners do not immediately see the benefits of a Groupon, at least not now.

Groupon launched its IPO marketing effort this week and the company posted a presentation by Mason and other executives online . Early in that presentation, Mason introduced Seviche along with a slide entitled “Why Seviche Loves Groupon.”

He said Groupon ran a daily deal for Seviche in February 2010, offering a $60 voucher for $25 to about 13,000 Groupon subscribers in the Louisville area and about 800 bought it. That deal generated roughly $20 of gross profit per customer, Mason said. And it didn’t include repeat business from the  exposure, he added.

 “That repeat business is what led Seviche a year later to add a new expansion to their restaurant that holds an additional 60 customers,” Mason said.

Seviche’s Hap begs to differ. He said the restaurant’s expansion was related to a real-estate change that his business made, including securing a new lease.

Groupon's IPO roadshow pitch is revving into high-gear this week. But CEO Andrew Mason and the rest of the crew might want to first convince its own clients of the company's benefits. Join Discussion