Last week was a mixed one with some good news and some bad,
) pulled down tech companies.
Yahoo Stuck with the Bing Thing
Last week saw U.S. District judge Robert P. Patterson ordering
Yahoo to start offering Bing search in Hong Kong and Taiwan, the
last of the 16 markets in which Yahoo operates. The judge's
ruling follows the decision of the arbitrator, which concluded
that Yahoo's delays had caused Microsoft irreparable harm.
Yahoo wanted to delay adoption until 2014, by which time
Microsoft is expected to have a new CEO. Yahoo's concern that the
new CEO could have limited enthusiasm for the deal was thrown out
The search alliance formed in 2010 and running up to 10 years,
remains an albatross for Yahoo although it has proved beneficial
for Microsoft. Bing has been gaining market share mostly at
Yahoo's expense (and not Google as was the original plan). The
business remains a drag, but one that Microsoft is willing to
maintain so Google doesn't increase its dominance. Yahoo
continues to receive the minimum amount guaranteed, since
monetization on Bing remains unsatisfactory.
The agreement requires Microsoft to offer an RPS guarantee
during the transition period if monetization falls below
expectations. And with the transition complete, Microsoft may not
offer the RPS guarantee again. Neither party may opt out until
mid-2015, which means that Yahoo is stuck with Bing for a long
time still, whether it loses money or not.
Twitter Is Hotter Than Facebook
In yet another Facebook-fatigue report, Piper Jaffray says
that teens these days prefer to use
) rather than Facebook, with 26% considering it their most
important social site. Facebook's 23% can't be considered bad,
except in contrast to its own peak share of 42% in the
not-too-distant past. Teens still like Instagram, which has seen
its popularity among teens go from 12% to 23% over the past year.
But Snapchat (where photos self-destruct upon being viewed) is
catching on and could eat into Instagram's success.
Easy monitoring by parents, difficulty in maintaining privacy,
meaningless sharing, Facebook's monetizing initiatives (including
ads in the news feed) and open targeting of teens has been
turning them off. So Twitter's simplicity is gaining momentum
However, a recent study conducted by Pew Internet &
American Life Project, shows that 94% of American teens retain
their Facebook accounts even when they have reduced usage mostly
because of its utility. So Facebook just might become popular
again if other networks make mistakes or if other newer networks
don't come into being.
Microsoft Seems To Know Better
Despite all the criticism flung its way,
) went on to launch the next generation of Surface RT tablets
although it now prefers to call this low end version Surface
(without the RT). That's because Microsoft is actually seeing
some strength in sales, which just goes to show that lower-end
devices with a certain level of functionality sells.
Granted, Microsoft is seeing relatively greater success in the
academic and government verticals, where it may be better
positioned to push sales, but the fact remains that last
quarter's results benefited, even with a very limited number of
apps. So with more apps and better distribution, things can only
improve. Microsoft also launched Surface Pro 2, which includes
Office and is heavily targeted at the BYOD segment. Nokia's Lumia
tablet will join the club once the takeover formalities are
completed next year.
) iPads remain in very strong demand at the high end and
chromebooks based on
) chrome OS are now some of the hottest-selling items on
). Microsoft is pricing its products closer to Apple devices
rather than Google devices because of the margins involved. This
seems to be a good idea though of course there is some risk
The other interesting thing about its results was the success
in the cloud business where both Office 365 and Azure grew triple
digits and total cloud revenue jumped 103%. So the devices and
services strategy appears to be on track.
Last 6 Months
Other stories you may have missed
Apple Product Refresh
: Last week, Apple showcased a new full-size tablet called iPad
Air that weighs a pound and an updated iPad Mini with a faster
processor and a sharper display. While iPad Air launching in a
number of markets on Nov 1, iPad Mini will launch later in the
month. It also launched the new Macbook Pro laptop and Mac Pro
desktop at lower price points. Most notably, it is offering a lot
of free software, including its iWork productivity suite. Apple's
pricing initiatives are obviously in response to Microsoft's
aggressive moves to wrest some market share.
Google Announces uProxy
: Google has funded a new software program called uProxy. The
program was developed by the University of Washington and a
nonprofit group called Brave New Software with the intention of
circumventing censored Internet. A person using the software can
connect to another in a place like the U.S. where thr Internet is
not censored, establishing a VPN-like connection. Therefore,
users in places like China can with the help of friends in other
countries, experience the Internet the way they do.
Yahoo Beats Google Again
: According to comScore's Internet traffic data for September,
Yahoo sites had the greatest number of unique U.S. visitors in
September, the third straight month that it achieved this.
Monetization remains well behind Google, according to eMarketer.
Google is expected to end the year retaining its number one spot
(by a wide margin), followed by Facebook and then Yahoo.
Companies Reporting This Week
: A large number of companies are reporting this week, including
Apple, Facebook, Corning, Expedia, Teradata, IRM and CSC. Catch
our previews in the
Earnings Preview section
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