A lot of things happened last week, not all of which had a
material impact on share prices. Here is a brief recap of the top
Intel Raised Guidance
its guidance for the following quarter and also sounded more
optimistic for the year. The main thing driving share prices is
improvement in the core PC business, which is an offshoot to the
stabilization in the PC market (recall that IDC now expects PCs to
decline 6% this year). Intel gains because tablet cannibalization
is petering off, a phenomenon that had the greatest impact on its
core desktop business. The fact that Microsoft has withdrawn
support to XP thereby pushing enterprise demand is another
positive. To top it all, Intel appears to have found itself in the
tablet/convertible segment (it seems en route to becoming the
partner of choice for both Surface devices and Chromebooks). The
recently-announced Broadwell could mean deeper entrenchment within
this market in 2015.
Priceline Grabbed OpenTable
Online travel company
agreed to spend $2.6 billion
to acquire OpenTable, which focuses on getting people seated at the
restaurants of their choice. The purchase price gave OpenTable
investors a 48% premium to their holdings when markets closed the
previous day. Priceline has proved good at digesting acquisitions
in the past: it acquired Active Hotels, booking.com, TravelJigsaw
(rental cars) and Agoda.com (China) in the last few years.
Restaurant reservation adds a new dimension, but given the history,
Priceline is likely to turn it into a success. The deal pushed up
valuations of companies in a similar line of business, such as
Yelp, GrubHub and Groupon.
PayPal Chief Joined Facebook
) PayPal suffered a setback as its President,
David Marcus decided to leave
the company to join
). PayPal has been in the news for both good and bad - the business
is an extremely profitable, fast-growing one for eBay, so it has
stolen a few earnings-related headlines. And eBay management has
hung on to it, despite Carl Icahn's repeated attempts to spin it
off (which also made headlines). But PayPal is based on solid
technology and helps eBay offer the entire range of tools that a
traditional retailer requires in order to expand online. It is
therefore strategically important. Particularly at a time when
technology companies are swarming into the space, the most notable
of which are Google and Amazon.
The departure is a big positive for Facebook, which has been
trying to build Facebook Messenger into a successful product.
Marcus could help to do that and also improve monetization of other
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Other stories you may have missed
Apple Planning Internal Ad Agency
) has built an internal staff of 1,000 to take care of its
advertising efforts, so says AdAge, as quoted by endgadget. The
company has apparently gone after top talent from leading
advertising agencies and invited advertising firms to pitch in.
It's also not pushing outTBWA/Media Arts Labs, which has
traditionally handled its advertising. Apple is probably looking to
re-build its brand in order to regain its leading position.
EU Rejects Intel Plea
Amazon Launches Amazon Payments
Microsoft Is Making a Smartwatch
) has announced that it is making a smartwatch that will be
compatible with Windows Phone, iOS and Android. It will be a simple
band with a screen on the inside of the wrist for the sake of
privacy. It's also being rumored that the device will be
similar to Samsung's Gear Fit wearable and use biometrics
Amazon Music Service, Sans Universal
: The New York Times says that
) is ready to unleash a music streaming service for its Prime
subscribers, for which it has signed on Sony and Warner Music as
well as a host of smaller labels. Universal Music Group, the other
big provider turned down Amazon's offer. The attraction for the
music companies is the 20 million-odd Prime subscriber base, but
Amazon is holding the purse strings so tight that no one is willing
to offer new releases. This is a business that will cannibalize its
own media sales, but Amazon has to make a mark here, first because
it needs to follow the market trend to protect and grow sales and
second because it yields better margins.
H-P Launches Water-Cooled Apollo
Video Game Stock Roundup: E3 Event
More on M&A
Google acquires Skybox
Rumor: Google Wants Songza
: Google is apparently willing to spend around $15 million on a
music streaming business called Songza to fall in line with market
trends and complement YouTube. The service has 5.5 million active
users, which is quite small considering that rival streaming
services such as Pandora and Spotify have roughly 77 million and 24
million users, respectively.
IGT Up on Rumored Sale
: A Reuters report stating that IGT had singled out Morgan Stanley
to assess a sale of the business sent shares soaring. The company,
which makes machines for casino games has struggled in recent times
because of weak demand and has been trying to sell the business for
the last two months.
IBM To Sell its Chip-making Unit to
: Bloomberg reported that IBM is close to finalizing a sale of its
chip-making unit to Globalfundries. But since it is lagging-edge
facility, Globalfoundries is likely more interested in the
engineering talent and IP.
Canaccord Lauds Broadcom's Exit From Baseband
: Canaccord resumed coverage of Broadcom with a buy rating,
commending its decision to exit the wireless baseband market.
Broadcom was a leading supplier of 3G basebands, a market that many
technology companies including Analog Devices, Freescale, Infineon,
NXP, ST-Ericsson and Texas Instruments have exited. The 4G-LTE
business is owned by Qualcomm, which doesn't look about ready to
cede share. Broadcom's investment in the baseband business has
impacted its profitability.
Gartner Announces Leading Software Security Makers
: Gartner has announced that IBM became the third largest provider
of security software in 2013, behind Symantec and Intel's McAfee.
As a result, Trend Micro has dropped to number four.
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