Tech Stocks

Tech Stock Updates: LinkedIn Shares Fall, Skype Sacks Execs, Google Library and Patent Wars

It seems that tech stocks are always in news these days and today has seen 3 big tech stocks in the news.

LinkedIn Share Price Drops

First up is the update on the LinkedIn flotation – LinkedIn shares have fallen today. When LinkedIn floted on the stock market their share price doubled on the first day of trading as investers scrambled to purchase the latest tech stock to hit the markets. However, already shareholders are showing signs of doubt over the futuer of the stock and some are selling out already. LinkedIn is down 4.39% already today, dropping to $62.70.

Skype Sacks Executives

Skype has been making some big changes prior to the Microsoft takeover being finalised. Skype has sacked many of its executives which were expected to be made redundant after the Microsoft takeover. It is expected that this is a simple cost cutting measure as once Microsoft have taken over it will cost a lot more to let these executives go.

Google Partners With British Library

The British Library and Google have announced a partnership to make 250,000 texts available online. These texts all date from the 18th and 19th centuries and are now out of copyright but sitting in the vaults of the British library largely ignored. By digitising these books Google will make them available to anyone in the world and take one step closer to achieving its mission to organize the world‘s information.

Apple and Google Fighting Over Mobile Patent

Nortel Networks has many patents up for sale and Google, Apple and Intel are fighting over control of these patents. Google wishes to buy the patents to incorporate the ideas into its Android operating system.

Google does not currently have many patents which means that it needs to invest in patents to provide it with more options for future developments.

Groupon IPO To Stretch the Tech Bubble Further

The Internet bubble is still expanding at an alarming rate. The latest news is that Groupon are planning to list on the stock exchange in an IPO thought to be worth around $750 million.

Groupon have always set their targets high. In 2010 they rejected an offer from Google and turned down $6 billion. Some web analysts felt that this was a very brave move on the part of Groupon as Google continues to work on its range of eCommerce solutions, which include affiliates and coupons products.

Groupon is making good progress in terms of raising revenue. They have been operating some very aggressive advertising campaigns over the last year, often utilising Google’s Adwords platform to reach a wider Internet audience. According to Alexa they spend around $71-120K a month on advertising. It seems that this has really paid dividends as the 2011 first quarter figures show a huge increase in sales.

Groupon started in October 2008 when it offered half price pizza deals in its Chicago office. It has grown massively in the last 2 1/2 years.

So what do Groupon actually do?

The company name Groupon is derived from Group Coupon and is dedicated to providing its customers with the latest discounts and deals. Many businesses offer discount codes to encourage new customers and one common method to market these deal is through affiliates who run their own websites to advertise the latest coupons in return for a revenue share. Groupon are essentially doing this on a massive scale.

Every day Groupon offers one new discount in each market. Its customers buy the money off coupons and deals from Groupon who then keep around half of the face value. So if a company offers a 1/2 price deal through Groupon, Groupon will take half of the purchase price and the company will receive the other half, and the customer gets a half price deal.

They work by operating a mailing list and contact their customers direct when deals come up in the product ranges chosen by their clients.

They operate several websites, with www.groupon.co.uk in the UK and www.groupon.com in America.

Increasing Revenues

Groupon’s monthly revenue increased from $11 million in January 2010 to $89 million in January 2011. Its total estimated revenue for 2011 is in the region of $3.5 billion.

Groupon currently focus on providing discounts to young women, so most deals are in the health and fitness sectors.

Groupon’s Alexa rank is currently 302, meaning Alexa (who rate websites based on popularity) believe that it is the 302nd most popular website in the world.

There seems to be a demand for tech stocks at the moment so the Groupon IPO could be another big one. The LinkedIn IPO saw its share price double in one day, can Groupon do the same? And how long will the tech bubble last for this time?

The rise of tech stocks could mark a recovery of stock markets and the global economy. Then again it could just be that investors are desperate to put their cash somewhere and there are not many other exciting options on the cards at the moment.

Yandex IPO at $25 a Share – The Russian Search Engine

52.2 million shares have been sold in the Yandex IPO. Yandex is a Russian search engine which was founded in 1997. Yandex is short for “Yet Another Index“.

The 52.2 million shares consist of 15.4 million new shares and 36.8 million shares from existing shareholders.

The IPO was oversubscribed by 17 times as the demand for leading tech stocks is rapidly rising again. This is leading to new concerns over the precarious tech stock bubble. It is only a week since LinkedIn floated in a record tech IPO.

As the shares start trading on the US Stock Exchange stock price increases are expected. Yandex IPO was $25. LinkedIn doubled on the first day of trading last week and as the Yandex IPO was so over subscribed it is expected that there will be an early rally today and continue to rise for a few days.

Yandex is now valued at $8 billion. It will be listing $1.3 billion of stock on the US Nasdaq exchange which means that it is the largest US internet listing since Google’s IPO in 2004.

Baring Vostok Capital Partners is a large investor in Yandex. They purchase 36% of the shares in 2000 for $5 million.

Yandex is very much like Google in that it provides a free Internet search engine and raises revenues through advertising products.

For English language searches Yandex currently offers Web search, Image search and Video search. Its homepage is very clean and minimalist much like Google.com.

Unlike Google though, Yandex utilizes technology to allow the grammatical complexities of the Russian language to be indexed. The core of of the engine is that it provides a “non-structured information with Russian morphology”.

In March 2007 Yandex took over moikrug.ru, a Russian social network which provides both professional and personal services.

In 2010 Yandex launched Yandex.Start program to help people find new business start-ups to aid economic growth in Russia.

In September 2010 Yandex launched Yandex.Music service which provides a searchable index of free and legal music.

Yandex also offers services such as Yandex.Money which provides electronic payments, Yandex.Traffic which provides the latest traffic news to aid navigation and Yandex.Images which not only indexes images but also allows you to find copies of any image to help fight plagiarism and copyright theft online.

Yandex is the default search engine in the Russian distribution of the Firefox web browser. Ir replaced Google as the default search engine in 2009.

It was founded by Arkady Volozh and Ilya Segalovich who have backgrounds in retrieval technologies and computer sciences. They were room-mates at college and both went on to work for CompTek International before building the Yandex search engine.

Website: www.yandex.com

Skype Has Abandoned Its IPO – Microsoft Takeover Likely

Skype was due to be one of the big tech IPOs of the year, however, they have announced that they will not be floating on the stock exchange.

Instead it is increasingly likely that Microsoft will be purchasing Skype. In fact, the latest news in is that Skype have agreed to a $8.5 billion deal from Microsoft.

Yesterday Skype served official notice to the stock market that it will not be going ahead with an IPO, i.e. it does not plan to float on the stock market.

Skype is currently privately owned by a group of investment funds and eBay. It announced in August 2010 that it was planning to float on the stock markets.

This will prove to be the biggest takeover that Microsoft has been involved in its 36 years of operating.

Skype was the first VOIP and Internet video conference calling software to prove to be very popular. Voice over internet, text messages and video calling are all free on Skype, you just need a computer with an Internet connection. It is estimated that there are around 170 million regular Skype users worldwide.

Microsoft is planning to integrate Skype into its Outlook email system in a similar way in which Google has its own free video/chat system, Google Talk, built into its Gmail service.

Skype is also likely to be available on Microsoft mobile phones and also built into the XBox games consoles. However, mobile operators generally do not allow customers to use their 3G services for Skype calls.

Orange And Barclaycard Start Quick Tap Payments Today

Orange and Barclaycard are due to roll out their mobile payment system today. To start with Orange customers will be able to make a maximum payment of £15 by tapping their mobile phone against a payment sensor. The new payment system is called Quick Tap.

Currently 50,000 retail outlets have signed up for this service, including the fast food chain McDonalds.

This is not actually cutting edge technology. Some developing nations have been using mobiles for payment for a few years as for many people it is the only way to electronically “store” their money – they have no bank account.

ShareholdersPortal Tip: Barclaycard is providing Orange customers with £10 cash added to their account upon activation, and 10% cash back on all Quick Tap purchases made in the first three months. So get in quick to save some money!

Barclaycard, Barclays debit card or Orange credit card

As the partnership is between Orange and Barclaycard only Orange mobile customers and Barclays bank / credit card customers will be able to make use of this system. I am as it happens both an Orange and Barclays customer and can report that neither company has actually told me anything about this at the moment!

The technology behind this is called Near Field Communication (NFC). Google have grasped the importance of this new service by installing NFC technology onto their latest range of Nexus Android smartphones. A full list of smartphones with NFC installed can be found on Wikipedia.

According to the BBC website “Quick Tap is a collaboration between Orange and Barclaycard. It will require a NFC-enabled Samsung Tocco Lite handset, which also goes on sale on Friday”. I am still trying to verify this as the Tocco is not an Android phone which seems to contradict the information that Google are in on the deal. Also, Slashgear.com says that the NFC enabled Nexus-S will not work with Quick Tap. The Samsung Tocco Quick Tap goes on sale today too and is a Pay As You Go phone.

The payments are secured with passwords and controlled by the Android operating system which sends the communication via the Orange SIM to the Barclay payment sensors. In a way it is like the London Underground Oyster payment system, but with phones and linked direct to your bank so you can do your own “top ups”. As you can only “carry” £100 at a time with a maximum transaction of £15 – this makes your £300 smartphone slightly less likely to be targeted by thieves.

The most successful tech businesses are those which make the strongest partnerships. MasterCard are also involved as they provide the payment capability for the contactless mobile transactions. Orange have secured the early adoption of this technology by working with Samsung, Google Android and Barclays. This places all in a very strong position if the Quick Tap payment system turns out to be a commercial success.

Learn More about Quick Tap from Orange and Barclaycard

Visit www.orange.co.uk/quicktap to learn more about the service.

Google Expands London Office Space – Central Saint Giles

Today Google UK agreed to rent 160,000 square feet of office space at the new Central Saint Giles development in the West End of London.

The new office space is a collaboration between Legal & General Property and Mitsubishi Estate. Google’s agreement means that the development is now fully let.

The Central Saint Giles area also includes a public plaza which will link Covent Garden, Bloomsbury, Fitzrovia and Soho.

It is certainly the style that Google is associated with, so whether Google is planning to expand into the new offices or move is not known at present, although there are reports that its current lease will expire in 2016.

Google will be based on the 4th, 5th and 9th floors with parts of the 3rd and 6th floors also taken. It is expected that Google will move in later this year once they have installed a games room, some palm trees and some other amusements for their staff.

Google UK’s CEO said:

“This is a fabulous building and we’ll be working hard over the next few months to fit it out in Google style, ready for some of our teams to move later in the year. As well as its size and green credentials, it has the advantage of being even closer to some of our major customers and partners. This is all part of our continued investment in our UK operations, and we’re hiring rapidly across all our teams.” – Matt Brittin.

There are rumours that Google were competing with Facebook for this office space – maybe the first of many new battles over the next few years.

It is certainly well sited though, being 30 minutes from the City and about 1 hour from Gatwick, Heathrow, Stansted and Luton airports. Google’s current offices are at Belgrave House, 76 Buckingham Palace Road.

The Central Saint Giles offices were designed by Renzo Piano, the renowned Italian architect who is the man behind the Shard London Bridge which will be the tallest building in Europe when it is completed next year. He also designed Kansai International Airport, for which he won the Pritzker Architecture Prize.

Renzo Piano has won several architectural awards including the Pritzker Architecture Prize (1998), AIA Gold Medal (2008) and Sonning Prize (2008).

You can learn more about the development from Legal and General’s website: www.legalandgeneralmediacentre.com/Press-Releases/160-000-Sq-Ft-Google-deal-secures-full-office-occupancy-For-Legal-General-and-MEC-s-Central-Saint-Giles-399.aspx

LinkedIn Surges – Tech Stock Bubble Not Burst Yet as IPO Goes Viral

It seems that the tech bubble never really burst, it just went flat for a while. But someone has managed to repair the small puncture. LinkedIn.com floated today and their share price is rocketing.

LinkedIn started trading at $45, valuing the company at $3 billion. At the time of writing (16.09hrs BST, 19/05/11) the price is $87.75, up $42.75 since it opened trading in the USA. This is a rise of 95%. It has dropped a little since the morning surge.

Get the current share price here: www.google.com/finance?q=linkedin

LinkedIn is like Facebook but for professionals and business managers. It is a way to connect with buyers, clients, partners and generally build new business relationships.

LinkedIn now boasts having over 100 million professionals and 2 million companies on its database. This represents a huge database of new business relationships that you could form. This is why it is now valued so highly.

Like Google, LinkedIn is another tech giant in Mountain View, California. Also like Google, its shares are in demand. LinkedIn opened trading at $45 today and shot up to $92.99 within hours.

Not everyone is convinced that the share price matches its true value. Much like Facebook, it is taking LinkedIn a while to work out exactly how it should monetize on its massive user base.

LinkedIn differs from Facebook, Twitter and Google in one important way though. People become members of the website as this helps them to promote their business and build relationships. It does not rely on volatile advertising revenues – it controls the membership rates and there can predict revenue and growth very accurately.

Many people on LinkedIn pay the highest membership rates which are currently $99.95 per month for the Executive package. This allows you to contact anyone in the LinkedIn database by their internal mail system – even people that you have no connection with.

As more people become aware of LinkedIn’s potential, which will happen when the news of the floatation hits the mainstream media, LinkedIn will win more clients and make more profits. The shareholders will be pleased!

LinkedIn Prepares To Go Public By Raising Shareprice

LinkedIn is expecting to float on the stock market this Thursday. It is expected also that this will be the largest tech floatation since the tech bubble of 2000.

LinkedIn was in the news earlier this year after it was noted that it was considered a higher quality site by Google. Between February and April 2011 Google released a new and improved website ranking system codenamed Panda. This new system ranks websites based on their quality as well as many of ranking factors. LinkIn came out well according to web analysts, and started receiving more search traffic and as a result more users.

Recently LinkIn’s projected value has increased by 30%. Once LinkIn has gone public is is expected that others will follow suit. Many people are still waiting for the mighty Facebook to sell shares, although it is not clear why its founders wound actually need to raise any extra capital.

Other giant Internet brands that are being carefully monitors by shareholders and investors are Groupon , Twitter and Zynga. However, the wise money seems to all be going on LinkIn at the moment.

Unlike Facebook, LinkIn makes a large part of its revenue from premium members. It has recently launched its own advertising platform, much like the one Facebook uses, however uptake appears to have been slow so far. Most members are their purely for business networking, although it is certainly more “social” than it was a few years ago.

LinkIn still has not realised its potential. Whereas Facebook is making a fotune through advertising, LinkIn has built up a massive user base (around 1 million members) but so far has not come close to matching Facebook’s revenue.

The biggest risk for LinkIn today is Facebook. Facebook is building a more professional image with many companies using it to reach out and connect with their customers. LinkIn remains mostly a business network.

Of course, this is all likely to change in the near future as Google unveils its own Social Networking platform that is speculated to combine all of its current offerings, which could quite simply blow away the competition – both LinkIn and Facebook. Watch this space.

AOL Cuts 900 Jobs In Huffington Restructure

AOL, the Internet giant from America (AOL was previously called America Online).

In 2010 AOL’s revenue was US$ 2.417 billion however its net loss was US$783 which was partly due to the purchase of the Huffington Post (a popular online news and celebrity newspaper) which it paid £196 million for.

Some of the jobs will be lost from the web content and web development offices in America. Many jobs are likely to be lost in its overseas offices in India, with a reported 700 positions being lost, although 300 jobs will be transfered to AOL outsourcing partners. The main reason for the loss of jobs is the duplication of work from the AOL web teams and the Huffington Post content teams.

AOL’s CEO Tim Armstrong said that “our strategy remains clear: create high quality content experiences for consumers, at scale”.

Their plan is to use more in house editors and fewer web content freelancers to save money.

AOL is a web content provider and this part of the Internet has recently been hit hard by an update by Google to its search engine ranking methods (in project Panda / the farmer update). Many websites that were receiving a lot of traffic from Google are now receiving much fewer customers each day which has resulted in falling advertising revenues.

Huffington Post was founded by Arianna Huffington who is now one of America’s richest women and a very influential blogger.

Over the last decade subscribers to AOL’s Internet services has fallen sharply due to increased competition in the ISP market. Its client base by around 75%.

In 2006 AOL sold its UK ISP business to Carphone Warehouse for £370 million. It seems that AOL is moving away from direct services and trying to become a key web content provider, much in the way that Demand Media has started to dominate the market.

T-Mobile & Orange To Merge

Following yesterday’s news that T-Mobile was the subject of bids from Vodafone and Telefonica (the Spanish owner of the O2 brand), comes today’s announcement that T-Mobile is to merge with France Telecom’s UK brand Orange.

This wedding of the third and fourth largest UK mobile phone companies will create a new market leader, with 36.4% of market revenues.  O2 will be in second place with 27.2%, and Vodafone in third place with 24.7%.

The combined company will have a staggering 28.4m customers, with O2 and Vodafone lagging on 19.6m and 16m respectively (source Ofcom Q1 2009).

These figures go some way to highlighting the need for T-Mobile to do a deal – with such a massive client base they simply have not been able to generate sufficient returns.

The mobile phone market is a very different place these days – EC regulations have been imposed in order to drive down prices for roaming calls, text messages and termination rates (the wholesale tariffs charged by the operator of a customer receiving a phone call to the operator of the caller’s network).

As such, mobile phone companies are often viewed as utilities these days – high volume, low margin, and heavily regulated.

This deal will be looked at by the Office of Fair Trading, which considers all deals where an entity with over 25% market share is created.

The companies have indicated that there are significant cost savings to be made over the medium term.