Motorola Mobility is now officially part of Google. CEO Larry Page announced Tuesday the search giant had closed the deal to acquire the cellphone manufacturer, also revealing that Motorola CEO Sanjay Jha would be stepping down.
In the blog post, Page said the new CEO is “longtime Googler” Dennis Woodside. Page says Woodside, an ironman triathlete, is largely responsible for building Google’s presence overseas, especially in the Middle East, Africa, Eastern Europe and Russia. He has served as Google’s president of the of the Americas for the past three years and played a role in increasing Google’s revenue from $10.8 billion to $17.5 billion over that period.
After Google announced its bid to acquire Motorola Mobility last August, the deal was met with surprise and some confusion, since Google had previously been content to be the steward of the Android mobile platform but to keep out of the hardware business. The acquisition made more sense as an purchase of Motorola’s extensive intellectual property, including some patents fundamental to how Internet communication works. Google, as a relatively young company, had a far weaker IP portfolio.
How Motorola’s hardware business will be integrated into Google’s operations is still an unanswered question, but there have been rumors that Google is planning to begin selling more Android devices directly to consumers (as opposed to selling them all through carrier partners). However, to avoid showing favoritism, Google is said to be planning to partner with several device manufacturers.
Motorola announced it would split into two companies in 2008, creating Motorola Mobility, a mobile communications company focused on consumers, and Motorola Solutions, a telecommunications equipment provider. That plan went into effect in January 2011, about eight months before Google announced the deal to buy Motorola Mobility for $12.5 billion.
Tuesday, 22 May 2012
Thursday, 17 May 2012
Could Facebook Become the First $1 Trillion Company?
You’re right if you think it’s premature to talk about Facebook as a contender to become the first $1 trillion company.
The social network is set to go public Friday at a valuation of around $100 billion. Should Mark Zuckerberg find a way to multiply that value by 10 in the coming years, it would have a value higher than the GDP of all but 17 countries.
The grandiosity of the goal has has not, however, stopped Facebook from reportedly telling its new employees that it aims to be the first company to reach the milestone. Facebook’s high-level employees are fond of saying it is “1% finished,” and, according to a Facebook representative who lead a recent tour of the headquarters, the phrase is one of Mark Zuckerberg’s favorites.
While the idea that a seven-year-old social network could become the world’s first trillion dollar company — blasting by established giants like Apple, Exxon Mobil and Walmart — might seem ridiculous, it’s not out of the question.
To put it in the words of technology analyst and Enderle Group president Rob Enderle:
“It’s not probable, but it’s possible.”
How It’s Possible
Facebook brought in $3.7 billion in revenue last year. It is valued at around $100 billion — 27 times that revenue.
In theory, if this multiple were to remain constant, Facebook would need to bring in $37 billion in order to reach a $1 trillion valuation. Let’s say Facebook somehow managed to continue the 120% annual revenue growth it has experienced on average over the last two years. It would hit $37 billion at some point in 2014.
But by at least one analyst’s watch, that puts it neck-and-neck with Apple. Piper Jaffray analyst Gene Munster predicted in April that Apple shares will reach $1,000 — pushing the company over the $1 trillion valuation mark — in 2014.
To be first, Facebook would have to grow revenues even faster than it has in the past.
The most likely source of this growth would be advertising. Facebook, which depends on advertisers for 85% of its income, announced a new suite of advertising products in February. Meanwhile, a report from BIA/Kelsey released earlier this week predicts social media ad spending will grow from about $3.8 billion in 2011 to $9.8 billion in 2012.
Facebook also has heaps of unleashed mobile advertising potential. Facebook didn’t offer mobile advertising until two months ago, and it hasn’t figured out how to monetize the 500 million users who log in on mobile devices.
“Growth in use of Facebook through our mobile products, where our ability to monetize is unproven, as a substitute for use on personal computers may negatively affect our revenue and financial results,” the company wrote in its IPO filing.
Cracking this problem, however, could open up a new growth area. In any case, as an Internet communication company, rather than a hardware company, Facebook has a huge advantage over Apple in increasing its growth rate.
“You don’t have the distribution problem, you don’t have the manufacturing problems, you don’t have problems that typically limit growth,” says Enderle. “Facebook’s limits are simply the speed at which it can grasp a particular group.”
Why It’s Unlikely
Facebook is not being valued at $100 billion because of its income. If income were the basis, Enderle estimates the company would more likely be valued at around $40 billion. Facebook’s pre-IPO valuation is hinging on the expectation of demand for stock — In other words, it’s a bet on Facebook’s future.
To trade and continue trading at 27 times its revenue, Facebook would need to continue looking like a good growth bet.
Current trends, however, suggest its growth may be leveling. Facebook increased its monthly active userbase by 118% between March 2009 and March 2010. Between 2010 and 2011, it increased by just 43%. And last year, it increased it by even less: 33%. Such is a common plight of the graduating startup.
The discouraging news doesn’t end there. Even as its userbase continues to grow, Facebook’s advertising revenue actually dipped last quarter. And, just in time for Facebook’s IPO, General Motors pulled $10 million of ads from the platform — calling them “ineffective.”
The other 15% of Facebook’s income comes from apps like Zynga games. In 2010, Facebook mandated all games that run on its platform to use its currency, which guarantees it a 30% cut of all purchases. Zynga, which generates 12% of Facebook’s revenue, agreed to abide by the new policy.
But that agreement expires in 2015.
Facebook also faces more competitors than it did in its early years. Twitter and Facebook have evolved to compete with each other; search advertising giant Google has launched a social product; and new social sites such as Pinterest are getting attention from mainstream audiences for the first time.
One of the worst things Facebook could do for its prospects of hitting a $1 trillion valuation, Enderle says, is to promise anybody a $1 trillion valuation.
“If Facebook were to focus on becoming a $1 trillion company, they probably won’t make it,” he says. “You over-set expectations. If employees are led to believe it will be a $1 trillion company, and if investors are led to believe it will be a $1 trillion company, and if Facebook only triples itself, in the eyes of those people it will have failed.
“That would be a textbook mistake.”
The social network is set to go public Friday at a valuation of around $100 billion. Should Mark Zuckerberg find a way to multiply that value by 10 in the coming years, it would have a value higher than the GDP of all but 17 countries.
The grandiosity of the goal has has not, however, stopped Facebook from reportedly telling its new employees that it aims to be the first company to reach the milestone. Facebook’s high-level employees are fond of saying it is “1% finished,” and, according to a Facebook representative who lead a recent tour of the headquarters, the phrase is one of Mark Zuckerberg’s favorites.
While the idea that a seven-year-old social network could become the world’s first trillion dollar company — blasting by established giants like Apple, Exxon Mobil and Walmart — might seem ridiculous, it’s not out of the question.
To put it in the words of technology analyst and Enderle Group president Rob Enderle:
“It’s not probable, but it’s possible.”
How It’s Possible
Facebook brought in $3.7 billion in revenue last year. It is valued at around $100 billion — 27 times that revenue.
In theory, if this multiple were to remain constant, Facebook would need to bring in $37 billion in order to reach a $1 trillion valuation. Let’s say Facebook somehow managed to continue the 120% annual revenue growth it has experienced on average over the last two years. It would hit $37 billion at some point in 2014.
But by at least one analyst’s watch, that puts it neck-and-neck with Apple. Piper Jaffray analyst Gene Munster predicted in April that Apple shares will reach $1,000 — pushing the company over the $1 trillion valuation mark — in 2014.
To be first, Facebook would have to grow revenues even faster than it has in the past.
The most likely source of this growth would be advertising. Facebook, which depends on advertisers for 85% of its income, announced a new suite of advertising products in February. Meanwhile, a report from BIA/Kelsey released earlier this week predicts social media ad spending will grow from about $3.8 billion in 2011 to $9.8 billion in 2012.
Facebook also has heaps of unleashed mobile advertising potential. Facebook didn’t offer mobile advertising until two months ago, and it hasn’t figured out how to monetize the 500 million users who log in on mobile devices.
“Growth in use of Facebook through our mobile products, where our ability to monetize is unproven, as a substitute for use on personal computers may negatively affect our revenue and financial results,” the company wrote in its IPO filing.
Cracking this problem, however, could open up a new growth area. In any case, as an Internet communication company, rather than a hardware company, Facebook has a huge advantage over Apple in increasing its growth rate.
“You don’t have the distribution problem, you don’t have the manufacturing problems, you don’t have problems that typically limit growth,” says Enderle. “Facebook’s limits are simply the speed at which it can grasp a particular group.”
Why It’s Unlikely
Facebook is not being valued at $100 billion because of its income. If income were the basis, Enderle estimates the company would more likely be valued at around $40 billion. Facebook’s pre-IPO valuation is hinging on the expectation of demand for stock — In other words, it’s a bet on Facebook’s future.
To trade and continue trading at 27 times its revenue, Facebook would need to continue looking like a good growth bet.
Current trends, however, suggest its growth may be leveling. Facebook increased its monthly active userbase by 118% between March 2009 and March 2010. Between 2010 and 2011, it increased by just 43%. And last year, it increased it by even less: 33%. Such is a common plight of the graduating startup.
The discouraging news doesn’t end there. Even as its userbase continues to grow, Facebook’s advertising revenue actually dipped last quarter. And, just in time for Facebook’s IPO, General Motors pulled $10 million of ads from the platform — calling them “ineffective.”
The other 15% of Facebook’s income comes from apps like Zynga games. In 2010, Facebook mandated all games that run on its platform to use its currency, which guarantees it a 30% cut of all purchases. Zynga, which generates 12% of Facebook’s revenue, agreed to abide by the new policy.
But that agreement expires in 2015.
Facebook also faces more competitors than it did in its early years. Twitter and Facebook have evolved to compete with each other; search advertising giant Google has launched a social product; and new social sites such as Pinterest are getting attention from mainstream audiences for the first time.
One of the worst things Facebook could do for its prospects of hitting a $1 trillion valuation, Enderle says, is to promise anybody a $1 trillion valuation.
“If Facebook were to focus on becoming a $1 trillion company, they probably won’t make it,” he says. “You over-set expectations. If employees are led to believe it will be a $1 trillion company, and if investors are led to believe it will be a $1 trillion company, and if Facebook only triples itself, in the eyes of those people it will have failed.
“That would be a textbook mistake.”
Tuesday, 15 May 2012
Microsoft + Facebook Taking the Search Engine to a Whole New Level
Search algorithms have used machine learning and artificial intelligence to predict which of the billions of pages on the Internet might be most relevant to your search.
Google has spent so much time, money and effort trying to make their search engine the most accurate when searching on it, but what do people really care about when thImageey look for information?
What really makes a search result the most accurate or best of all online?
Microsoft Bing is revamping its search engine to include a sidebar to enable you to obtain recommendations from users of Facebook when making a search on Bing. It is not just Facebook but they are planning to include many other networks.
Bing will be able to deliver results based on what your trusted sources of information (your friends and acquaintances) think.
They have made this move following the fact that "90% of people consult with a friend or expert before making a decision"
The sidebar appears on the right-hand side of all searches, so when you do a search Bing will suggest "Friends Who Might Know" about the topic based on the information in their Facebook, Likes, profile information, photos, etc.
This move takes searching online to a whole new level, you don't just rely on the information found about it because it seems to be the most popular or the most visited, but you are able to see who in your network may have a recommendation, a suggestion or the expertise to guide you on your search, based on their own experience and knowledge.
This will push companies to increase the quality of their customer experience, customer retention, the influence they have on social networks to gain more recommendations and to put even more effort to grow their brand awareness.
This is only one more step forward to what the future seems to look like when bringing social networks to search engine rankings and optimization.
Google has spent so much time, money and effort trying to make their search engine the most accurate when searching on it, but what do people really care about when thImageey look for information?
What really makes a search result the most accurate or best of all online?
Microsoft Bing is revamping its search engine to include a sidebar to enable you to obtain recommendations from users of Facebook when making a search on Bing. It is not just Facebook but they are planning to include many other networks.
Bing will be able to deliver results based on what your trusted sources of information (your friends and acquaintances) think.
They have made this move following the fact that "90% of people consult with a friend or expert before making a decision"
The sidebar appears on the right-hand side of all searches, so when you do a search Bing will suggest "Friends Who Might Know" about the topic based on the information in their Facebook, Likes, profile information, photos, etc.
This move takes searching online to a whole new level, you don't just rely on the information found about it because it seems to be the most popular or the most visited, but you are able to see who in your network may have a recommendation, a suggestion or the expertise to guide you on your search, based on their own experience and knowledge.
This will push companies to increase the quality of their customer experience, customer retention, the influence they have on social networks to gain more recommendations and to put even more effort to grow their brand awareness.
This is only one more step forward to what the future seems to look like when bringing social networks to search engine rankings and optimization.
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