) CEO Mark Zuckerberg was busy in Asia, even as
) founders Larry Page and Sergey Brin settled with dissenting
) pacified critics.
Facebook Shows Method to Its Madness
CEO Zuckerberg met with the South Korean President last week,
promising to increase investment in the region and promote local
businesses and venture firms. Facebook has been extremely popular
with local and small businesses in the U.S., with more than 16
million small business owners creating free pages on the network
(setting the stage for advertising on Facebook). Its mobile ad
revenues went from 0% to 30% over the past year.
For additional leverage, Zuckerberg's next stop was Samsung.
While neither company provided details, TechCrunch reported that
discussions centered on increasing mobile device ad sales. When
Samsung's Tizen handsets hit the market later this year, Samsung
is going to need a strong ally. Tizen is an
)-supported open-platform OS competing with Google's Android, so
it's plain to see why the company needs another strong software
Google is practically the best at everything it does, so it is
expected that Samsung will not drop Android overnight. But it
certainly intends to do in China what it has done in the U.S.,
) into a corner. After paying Microsoft, Android is not as cheap
as it used to be, so Tizen could help push down device prices
It's not clear yet whether Facebook Home will play a key role
since both the parties are so tight-lipped. Of course, the folks
at Mountain View are probably not napping (there's a rumor that
Android is getting into $100 smartphones).
Google Settles, But Not for Less
Google settled a class action lawsuit with the Brockton
Retirement Board in Massachusetts and another Google shareholder,
Philip Skidmore, which will now enable the company to go ahead
with the stock split that was approved by shareholders over a
The stock split will result in a new class of shares with no
voting rights (Class C), ensuring that the founders retain
control of the company. The dilution to existing shareholders was
the main reason for dissention, and Google made some promises to
address the issue.
For one, whenever Class C shares are valued at less than 95%
of Class A shares, Google will pay shareholders the difference.
Second, Brin and Page agreed to sell Class B shares (10 voting
rights per share) if they were to buy Class C shares and Google
agreed to set up an independent board to deal with any requests
for changes to this agreement. Third, Google's board agreed to do
a special review to determine the impact on Class A shareholders
if more than 10 million Class C shares are issued to fund an
The fact that the founders' control has done wonders for the
company, significantly adding to its bottom line and market cap,
went a long way toward convincing the dissenters.
Microsoft Getting Ahead of Itself
Microsoft's Xbox One had great potential, but the radical
changes it introduced scared users and met with criticism from
analysts, the media and just about everyone else. So last week,
the company backtracked, saying that it would remove the need for
constant connectivity and restrictions on disk sales.
), while scoffing at Microsoft's support of a digital revolution,
is wooing its own user base to digital downloads. Sony decided
not to shock anyone, so it didn't impose used game restrictions,
or require constant Internet connection. However, digital
versions of titles for PS4 will be released the same day as the
discs and users can play as a game downloads (PlayGo), so there
will be practically no waiting time.
Microsoft's vision was to automatically save the games to the
console and lock in users' games to their Xbox Live Accounts so
they can be shared with and accessed by their close friends. Not
only would this facilitate a better gaming experience, but it
would also allow seamless switching between games, movie
downloads and Skype calling. Microsoft would have done better if
it had explained what it was doing and also allowed users to
While most of the stocks traded in the same direction as the
market, Facebook, Google and Cisco stayed ahead, while the others
Last Week's Performance
6 month performance
The week ahead -
After making a bid for Xobni, which makes address book apps
and plugins, sources say that Yahoo is contemplating a $50
million acquisition of Qwiki, which makes an iPhone app that
converts photos, movies and videos into movie clips. A formal
offer could be made this week.
Apple and the Justice Department will make their closing
remarks on Thursday regarding ebook price fixing charges against
Apple. The hearing appears to have turned largely in Apple's
favor, especially after key testimony from Theresa Horner,
Barnes & Noble's
) VP of digital content.
Google's shares were trading down toward the end of the week
as the company confirmed that the Federal Trade Commission (FTC)
was investigating its acquisition of Israeli mapping company Waze
for $1.3 billion. Waze has been playing hard-to-get, turning down
Apple's $500 million and Facebook's $1.1 billion.
Google has already stated that it would continue to run Waze
separately, although Google Maps would incorporate some of its
features. It appears that Google was expecting an FTC probe
(think ITA). Expect further details this week.
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