Google Sells Motorola Mobility
Just the day before it reported fourth quarter numbers,
) announced its
decision to sell
Motorola to Lenovo for $2.91 billion. Google retained 15,000 of
the 17,000 patents that it acquired from Motorola although it
agreed to license some of them to Lenovo.
It was very important for Google to sell off this unit not
just because it was making losses, but also because it was
outside the area of its core competency. Moreover, Google could
never go all-out with a hardware business and not alienate its
hardware partners, which is a risk it can hardly afford to
Microsoft's Next CEO: Satya Nadella or Sundar
Unidentified sources are saying that Indian-born Satya Nadella
will likely succeed Ballmer as
) next CEO. It's also likely that founder Gates will make way for
a successor to his position as Chairman of the Board.
This may look like an intention to radically change
Microsoft's direction and operation. But like it or not, the
direction was actually set last year with the announcement of
Ballmer's "Devices and Services" strategy and the
multi-billion-dollar acquisition of Nokia's loss-making handset
Granted, Nadella is a cloud-services man, so he is more
focused on the services side of the business, but given his lack
of experience at the top position of any company, it's very
likely that he will not make radical changes on the devices side.
And while he may be up for criticism, the best thing for
Microsoft would probably be for him to do just that until he
After all, the devices side, while not making money, is of
great strategic importance to Microsoft, and execution appears to
be improving on that front. Things may get difficult, however,
once activist investor ValueAct Holdings gets a seat on the
It's also worth noting that several outsiders have refused the
CEO position considering the many challenges. So Nadella
definitely has his hands full.
[Update: Latest media reports say that Sundar Pichai, SVP
of Chrome and Apps at Google is now in the running and is the
top external candidate.]
Earnings Highlights: Here are some of the biggest
) shares jumped 14.1% following the
of its fourth-quarter results. Very strong advertising revenue,
particularly in the mobile business drove up shares.
Computing Sciences Corporation
) shares were up 9.5% following its third-quarter results.
Despite the disappointment on the top line that was severely
impacted delayed spending and deferrals by the government,
earnings came in much higher than expected due to excellent cost
control. Considering lower cost structure and solid bookings,
management was able to raise fiscal 2014 earnings guidance from
3.50-3.70 a share to $3.80-3.90 share
, but shares still appreciated 4.0%, as the euphoria of the
Motorola sell-off spilled over. Google did see solid increase in
paid clicks, but prices did not keep up.
), which lost 11% following its fourth-quarter results. Growth in
the EGM business dropped off sharply in both North America and
internationally. At the same time, Amazon's investments continued
to increase, driving up costs. Guidance was soft. Increase in
Prime fees was a positive.
revenues that were more or less in line with our estimate and
earnings that beat easily. Guidance looked conservative (as
usual). But investors obviously wanted more because they sent the
shares down 8.0%.
) problems were similar to Google's, as pricing remained
weak. Management brushed it aside, saying that the decline
on the Display side was on account of stream ads which had great
long-term potential, while the decline on the Search side was
essentially on account of a mix shift to mobile and emerging
markets. Shares plunged 8.7% following the
Last 6 Months
Other stories you may have missed
Apple Targets BRIC Countries
: Last week, Apple loosened up its sales policy in Russia,
enabling MegaFon, the second-largest operator in the country to
resume selling iPhones. The two signed a three-year agreement.
This follows agreements in Brazil and India the week before and
China Mobile before that. Apple is clearly increasing efforts in
Yahoo Makes a Couple More Acquisitions
: Last week saw speculation about Yahoo's takeover of
and another startup called Incredible Labs. The latter's personal
assistant Donna is similar to Google's Google Now.
Google Acquires DeepMind
Google-Samsung Sign 10-year Cross-licensing
: The agreement covers a large number (though not all) current
and future patents of the companies and is intended to minimize
litigation for both. While it is in Google's interest to have
viable competition to Samsung, this is the strongest competitor
to Apple devices that do not use Android. Therefore, Google needs
to look out for Samsung's interests too.
Stylish New Google Glass Gets Insurance Cover
: Google announced four new frames (bold, curve, thin, split) and
several colors that now enable 40 variations of Glass. Not just
that, but Google tied with insurer VSP Vision Care (which covers
20% of Americans) to reimburse members for frames and
prescription glasses for Google Glass devices.
Android-Powered Gaming Device from Amazon
: The $300-device is reportedly being designed for the living
room with the ability to connect to a TV. Therefore, in addition
to the 50,000-odd games from "Apps for Android," it will also be
able to stream the thousands of videos that Amazon Prime members
already have access to.
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