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MakeMyTrip’s Financial Results Indicate Online Travel Preferences Of Indians

Alap Naik Desai — Thu, 23 May 2013 07:07:10 +0000

Online Travel Agency (OTA) MakeMyTrip’s (MMT) financial results have a few interesting patterns that indicate the progress of the segment & preferences of online travelers. MakeMyTrip generated gross revenue of US$ 228.8 Million in the year ended March 31, 2013, an increase of 16.4% (29.7% if currency fluctuation is not factored) over the previous year. However, the company reported 1.4% decline in its revenues less service costs, which stood at US$ 21.7 Million for the fourth quarter ended March 31, 2013 over the year-ago period.

Air Ticketing segment to blame for the decline: Decline in revenues less service costs (a crucial metric for OTAs) can be attributed to the sharp fall in sales from its key revenue earner; Air Ticketing. This segment declined 26.3% (21.2% in constant currency) to US$ 13.14 Million. All this negatory shift clearly represents deteriorating performance in air ticketing.

How are the OTA doing?

Overall, Air Ticketing was one of the most financially lucrative avenues. Driven by wildly varying pricing structure that fluctuated not only by season or availability, but also time-duration, OTAs had a very good profit margin. By pre-empting demand, these companies routinely pre-booked tickets & hence could offer a holistic holiday package that included air fare too.

The company blamed the decline in revenue less service costs, to a fall in Net Revenue Margin (defined as revenue less service cost as a percentage of gross bookings) to 5.3% from 8.4% a year ago, mainly due to a reduction in airlines’ Base Commission. In other words, the demand has largely remained stable, but OTAs cannot earn well from the transactions as their revenue margin has been almost halved.

Is there an upside? Fortunately for MakemyTrip, it’s Hotels and packages sector is proving very successful. Despite being a relatively smaller contributor of revenues, this segment grew an astonishing 141.6%. Interestingly, this is exactly what MMT desires revealed Deep Kalra, chairman and CEO of MakeMyTrip, “As part of our long-term strategy to grow the hotels and packages business, we significantly improved our annual non-air net revenue mix to over 35 per cent”

Reducing reliance on Air Ticketing is certainly a good business tactic. This could even be a response to big OTAs like IRCTC entering the field. What do you think?

Image Courtesy | kotakcards

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Vodafone Plans Nationwide 3G Services

Alap Naik Desai — Wed, 22 May 2013 12:15:06 +0000

Vodafone India seems to be gearing up to offer a nationwide coverage of 3G internet services. Having earned well from its subscribers who use Data services, the company is contemplating collaborative techniques to offer seamless connectivity via much faster standards than prevalent EDGE & patchy 3G services.

Vodafone’s Operating Profit (adjusted) rose to Rs. 1,854 Crores (US$ 335 Million) in FY13, much higher than Rs. 503 Crores (US$ 91 Million) in the previous financial year. For the 1^st Quarter of 2013 which just ended on March 31^st, Vodafone earned Rs. 9,276 Crores (US$ 1675 Million) as revenue, which is 7.2% higher than the same quarter the previous fiscal. In all, Vodafone India’s Net Profit for the year ended March 2013 rose substantially by almost 40% to Rs. 1,010.93 Crores (US$ 182.6 Million) from Rs. 723 Crores (US$ 130.6 Million) last fiscal.

Vodafone’s India arm seems to be doing well for itself. In fact, by recent figures it has now taken the lead away from Bharti Airtel. Though the Mittal Company still holds the pole position for the highest revenue, Vodafone, along with other players like Idea have been climbing steadily. Interestingly, majority of its upswing can now be attributed to the rising usage of Mobile Internet. Hence the company is now looking seriously at exploring multiple options to ensure a pan-India 3G experience for its subscribers.

Vodafone has confirmed 3G airwaves in 11 circles and was offering nationwide high-end data services through roaming pacts with Bharti Airtel and Idea Cellular. But on numerous occasions, these companies have come under the legal scanner for offering higher speed services, where it had not won spectrum through auction. Hence it has now been restrained from adding new data customers in circles where it does not own 3G bandwidth.

Vodafone may now be contemplating buying airwaves on this platform, from other mobile phone companies like Airtel & Tata, who seem to be struggling. While other companies are finding it difficult to sustain operations under the burden of Auctions & poor revenue, companies like Vodafone have clearly illuminated the path to Telecom’s progress. Will other Telecom Players now follow suit & offer better internet connectivity?

Image Courtesy | fonearena

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Yahoo Looking To Buy Tumblr At $1 Billion

Rohit Singh Jain — Fri, 17 May 2013 09:30:02 +0000

Yahoo is reportedly looking to buy Tumblr as part of its series of acquisitions and buy-outs to improve the service. The deal, according to sources, could reach as high as $1 billion (€778 million), which would put it in the same league as Facebook’s Instagram acquisition last year. Since taking control of Yahoo, CEO Marissa Mayer has pursued a string of acquisitions, including Summly, Astrid, Jybe, and others. Earlier this month, Yahoo had acquired to-do app Astrid.

Yahoo is seriously considering buying the social micro-blogging site Tumblr for almost 1 billion. However, since the talks about the deal between Yahoo and Tumblr are ranked as “rumors” so far, which means neither company wished to comment on the matter.

Tumblr is focussed on generating social content, such as text, photos and links. Since Tumblr’s majority of users are the youth, I think it is highly logical for Yahoo to think about Tumblr in the youth-centric sense. Tumblr has over 107 million blogs and over 50 billion posts, mostly made by young users. That definitely opens up doors to a big new audience for Yahoo. Also, Tumblr made $13 million in 2012 and is looking to bring in about $100 million, thanks to its new advertising initiatives. It also introduced mobile advertising recently.

Yahoo’s CFO has been giving the impression since recent times that the beleaguered search engine wants to sign up more and more young users, and wanted to make themselves cool and visible.

In addition to the failed Dailymotion acquisition, the company has also been rumoured to be looking at Hulu, although Mayer has previously said that the company is shopping for smaller targets valued in the $100 million range.

“If you could pick a company that fits in with what Marrissa Mayer has demonstrated in her career – aesthetics software technology and fast-growing – you could not land on a better choice,” sources said to AllThingsD.

Another thing I can say is certain is that unlike the other acquisitions Yahoo has made over the past months, Tumblr will not close in case they sign the deal. The one thing that the sources have confirmed is that the deal will happen, but whether it might happen in the coming weekend can’t be ascertained.

As far as my opinion is concerned, I believe Yahoo is on the right path but there’s no telling when the deail might get a risky one. I would look at it like Tumblr is one of the few players in digital media who has positioned itself at a sweet spot for brand advertising and youth-friendly, which Yahoo isn’t used to at the moment. The question undoubtedly remains as to how far this deal could make Yahoo relevant to new users who are stepping onto the Internet.

Image Courtesy | allthingsd

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Zomato Revenues Soar To Rs 11.38 Crore In FY 13

Sneha Bokil-Paranjape — Thu, 16 May 2013 13:05:07 +0000

Online restaurant guide Zomato has reported revenues of Rs 11.38 crore ($2 million) at an EBITDA loss of Rs 10.03 crore ($1.8 million) for financial year ended March 31, 2013 (FY13).

Operating revenues of the company were 0.33 Crore in FY 10-11 and 2.4 Crore in FY 11-12 . The revenues of this year has hence catapulted to five times compared to last year. The prime reason for which is its global expansion to Johannesberg and Southeast Asia.

The company’s EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) loss also increased by 38.92%, as it shot up from Rs 7.22 crore in FY12 to Rs 10.03 crore in FY13. Zomato has been busy expanding its presence over the past six months. The company expanded its operations in Europe with Zomato London in January this year. It then entered Middle East and Colombo in November last year. Today the online food guide is 21 cities across seven countries. Founded by Deepinder Goel and Pankaj Chaddah in July 2008 Zomato has plans to launch in Thailand, and also has an eye on developed markets such as Canada, United States and Australia.

Zomato had raised Rs.54 crores ($10 million) from InfoEdge recently. This funding took Info Edge’s total investment in Zomato to Rs 86.06 crore ($15.7 million) and holding to 57.9 per cent (from earlier 48.5 per cent), also making it the majority shareholder in the company. Zomato claims to have a combined web and mobile traffic of over 1.2 crore users per month and covers more than 98,000 restaurants.

Story Source | Techcircle

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What Nokia Is Doing Not Enough, Say Shareholders To CEO Stephen Elop

Alap Naik Desai — Wed, 08 May 2013 09:13:08 +0000

Finnish phone maker Nokia and its CEO, Stephen Elop are being blamed by its investors of not doing enough to ensure long term sustainability, especially in comparison to the rising clout of rivals. At the Annual General Meeting (AGM), Nokia’s CEO Stephen Elop had to field some tough questions about his decisions regarding the company, since he took over the top post two years ago.

Stephen had decided to ditch the decades-old Smartphone OS of Choice for Nokia; Symbian for Microsoft’s iteration Windows Phone OS. Coincidentally, the CEO was an ex-employee of the Redmond based tech giant. After a detailed analysis about the decision, it was estimated that the transition from Symbian to Windows Phone will take about 2 years to complete.

That time period is now over. Though Nokia’s flagship phones from the Lumia Series have shown some promising sales figures, they are nowhere in the league of the ones made by Samsung & Apple Inc. Interestingly though, in the feature phone segment, Nokia’s Asha Series has been doing reasonably well.

What’s Nokia Planning? At one point Nokia was developing a worthy successor to Symbian; MeeGo. But it abruptly decided to infuse the hardware with Windows Phone OS. Though the efficacy of the decision has yet to be felt profoundly, the power of the abandoned OS could soon be experienced as Jolla had adopted the OS & is working hard to build a finalised & refined edition called Sailfish.

Stephen has made it clear the company has no plan to abandon Windows Phone OS, “We make adjustments as we go. But it’s very clear to us that in today’s war of ecosystems; we’ve made a very clear decision to focus on Windows Phone with our Lumia product line. And it is with that that we will compete with competitors like Samsung and (Google’s operating system) Android” he emphasised. Will this decision be honoured by the consumers or will Nokia have to relent & think of something else?

Source | NDTV Gadgets

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Facebook Reports A Sizable Increase In Revenue Fueled By Their Mobile Advertising Business

Alap Naik Desai — Thu, 02 May 2013 12:01:42 +0000

Facebook had been ramping up its mobile-centric endeavors for quite some time. It appears those efforts are paying off. However, the social media giant’s equally rising expenaditure towards the same, has partially diminished the impact.

Ad Revenue, is Facebook’s largest aggregative source of income. Fortunately for the company, its mobile-centric efforts have been reaping benefits on a steadily ascending manner. At present ad revenue from the social portal’s mobile based endeavors contribute about 30% of the company’s total ad revenue. However, the trend should go even higher & at a faster pace to be counted, shared Ben Schachter, a financial trends analyst at Macquarie Research, “It needs to be higher for people to get really excited about trend lines”.

What’s working for Facebook?

Revenue from Advertising had declined abruptly last year. Additionally the downward trend continued for quite some before it plateaued. But, taking a strong note of this disastrous phenomenon, the company worked diligently on almost all of its platforms. Out of the efforts, the company was able to come up with a new news-feed. However, the single biggest feature was the ‘Unified Search’ feature that captured the attention of its users. Riding on the enhanced traction of these new features, Facebook has been able to bring back some of the momentum in its display advertising segment. Least one might forget, there was also Facebook Home, an Android only home screen replacement that positively reinforced the portal’s presence on the mobile front.

Though all the endeavors have won public approval, it also indicated the excessive spending Facebook committed to revamp the entire platform. Hence, though the company has been making more money as compared to last year, it is burning much more. Facebook’s spending has risen 60% on an Year-on-Year Basis, as compared to 38% rise in revenue.

Where Facebook is heading?

The expenditure on such grounds-up rework is only one-time. Once products like Facebook Home & Unified Search have been adopted by the masses, the company has to merely maintain these & add more features to make the same more appealing to advertisers. With selective feeds & promotional posts, the company can easily insert advertisements even within the mobile platforms too & quickly start making more money than it is spending.

What do you think?

Image Courtesy | euronews

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Government To Regulate Foreign Companies Having Online Operations In India Under Companies Bill 2012

Rohit Singh Jain — Fri, 22 Mar 2013 09:30:05 +0000

The Indian government plans to regulate all foreign companies and businesses who have operations in the country through online and electronic means. This move applies to all companies established in foreign countries but have online operations in the country but are not registered here. This will be implemented under the Companies Bill 2012 which has been approved by the Lok Sabha but is yet to get a nod from the Rajya Sabha of the Parliament.

The government has taken this initiative all thanks to scores of businesses and enterprises conducting various forms of online activities and are not registered with the government departments. The move will also help the country legally regulate the various operations of foreign online companies who are not required to register officially with the Registrar.

“The Companies Bill, 2012, Clause 2(42) defining ‘foreign company’ has widened the scope of foreign companies to include companies operating through electronic mode,” Corporate Affairs Minister Sachin Pilot today said in a written statement to the Lok Sabha.

“Further, the provision in respect of inspection, inquiry and investigation proposed in clause 206 to 229 of the proposed Bill shall also be applicable to foreign companies,” the minister added. He also stated later on, “453 foreign companies were registered in the country in the last two financial years. While 231 firms were registered in 2011-12 period, the number stood at 222 during 2010-11 fiscal.” The Companies Bill 2012 has previously also take other strides in bringing together the corporate world with effective governance.

I would tout this move as a good one as it will directly lead to the protect the interests of the consumers, general public and investors of India. This will further strengthen the investors’ confidence. After all, that is what the Corporate Affairs ministry stands for.

I might add that the government has been taking footsteps towards embracing technology with efficient governance methods. Recently, IT Minister Kapil Sibal had said that India is working towards framing a clear and definite cyber security policy, which I think is welcome given the nature of this Digital Age. To speed up fraud detection, the Reserve Bank Of India had performed a few policy reforms regarding online money transfer.

Source PTI

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Nokia India Revenues Saw 23% Dip In 2012

Denzil — Mon, 18 Mar 2013 08:40:42 +0000

Nokia has announced the financial results for 2012 and it shows that their Indian operations are not doing too well. Nokia India’s revenue dropped 23% in 2012 compared to the previous year.

The total sales for the company in 2012 were 2,227 million euros, compared to 2,923 million euros in 2011 and 2,952 million euros in 2010. The sales figure is a total of all the business units that Nokia runs in India. These include mobile devices, Nokia Here and their collaboration with Siemens on telecom infrastructure.

The company has said that the revenue has declined due to a marked increase in competitors and foreign exchange volatility. Companies like Samsung, Micromax and Karbonn are increasingly biting into Nokia’s pie by flooding the market with new devices and options, something Nokia used to do on a large scale before. After their transition towards a Windows based OS and the Asha line, Nokia does not have a whole lot of variety in the smartphone section. Another important factor which has impacted Nokia’s revenue is the currency fluctuation.

The report mentioned this saying,

“The majority of our non-euro based sales are denominated in the US dollar, but our strong presence in emerging markets like China, India, Brazil and Russia also gives rise to substantial foreign exchange exposure. The Indian rupee depreciated by 2.3 per cent against the euro.”

Since India is next biggest market for Nokia after China, currency fluctuation could be a significant factor in the revenue drop. The folks at Nokia have said that they are working on getting back to a better financial year in India as well as global markets.

This year will also be a very big test for Nokia to see if their Lumia line will do well in the market. We have not come across any significant sales numbers from Nokia India which show the rise in sales of the Lumia line. They will need to expand the Lumia portfolio to cover various segments and price them accordingly, to see greater usage and sales.

Story Source | Times Of India

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Samsung Unleashes Galaxy IV With 5″ Screen, 13MP Camera, Gesture Control & More

Sneha Bokil-Paranjape — Fri, 15 Mar 2013 07:02:55 +0000

Months of speculations, hype, leaks and millions of blogs and articles later it is here! In a bid to compete with its nemesis Apple, Samsung has taken off the wraps of its highly anticipated Galaxy SIV smartphone.

The revamped smartphone, which follows last year’s Samsung Galaxy S III and Galaxy Note II is “slimmer yet stronger, less to hold yet more to see, [and] it is simply amazing,” according to Samsung’s mobile chief, JK Shin. The Galaxy S IV sports a five-inch screen with an incredibly high resolution. The 1920×1080 pixel display is as good as you are going to find on any smartphone right now (HTC, LG and Sony). It also comes with  Super AMOLED screen on the front with a very tight 441ppi density.

Design and Specifications:

The Samsung Galaxy S IV appears to be unbelievably thin and is 136.6 by 69.8 by 7.9mm and lightly weighs at 130g, the same height but slightly slimmer both in width and depth than its predecessor Galaxy S III. Color-wise, there’s the choice of “White Frost”and “Black Mist,” although Samsung says “a variety of additional color options will be available later this year.

Equipped with a solid two gigabytes of RAM and the phone sports a powerful Samsung Exynos 1.6GHz processor which has a stunning eight cores!

Camera:

The Galaxy S IV boasts of 13-megapixel rear camera  rear-facing camera, upgraded from 8 megapixel shooter on the Galaxy S III. It is backed by LED flash, autofocus, and 1080p video recording. The phone also comes along with a 2-megapixel camera front camera. Samsung has added few new features to the phone like using a dual-shot mode, users can you use both the front-facing camera and the rear-facing camera at the same time, for both recording and still captures.

LTE, WI FI and battery:

The S IV supports HSPA+42 Mbps and 4G LTE, which Samsung said will provide connectivity anywhere in the world. The LTE version supports up to six different band sets, allowing for global LTE roaming, according to Samsung. A dual-mode TDD/FDD LTE version will be introduced later this year, Samsung said. An infrared transmitter lets the phone work with the built-in WatchOn software to function as a TV remote and electronic program guide. The phone will support wireless charging if carriers demand it, the company said.

The S IV has a larger 2600 mAh battery (up from 2100 mAh), and your choice of 16, 32, or 64 GB of storage. It also supports micro-SD removable storage.

OS:

The SIV runs on Android 4.2.2 Jelly Bean  with Samsung’s TouchWiz user interface.

Plethora of new features:

The device boasts of an array of cool features which Samsung is banking heavily on to set itself apart from other smartphones. With ‘Smart Pause’, user can pause a video by looking away from the screen. Additionally, the “Smart Scroll” software analyses both the user’s eyes and wrist to scroll through emails and other content. The company also highlighted a new S Translator function that allows live text-to-speech and speech-to-text translation of 9 languages. The feature comes with 3,000 embedded “useful sentences” for offline use and is integrated with Chaton, the S4′s email and messaging app. All of these features interact with the new Samsung Hub, a unified app, movie, video, book and music store that will appear on Galaxy S4 phones.

Samsung also unveiled S Voice Drive for the driver that loves to multitask. This feature will activate when you start your car and will read incoming text messages aloud, let you dictate text messages, or use navigation features with your voice so you don’t have to your eyes off the road.

Pricing and Availability:

So when can you actually get your hands on this beauty? Samsung said that the phone will be rolled out in 155 countries starting April 2013. No specific date about India release was given by the company. Also, the company did not reveal the price, but Samsung did say to expect it to be around the same price as a phone like the Galaxy S III.

Samsung is boldly calling the device a ‘life companion‘ and with the amazing ’touchless‘ features it surely be a great one. Samsung has become by far the most successful maker of Android handsets. Both the Galaxy Note and Galaxy S series have been selling in the millions and I think the Galaxy S 4 looks like it will hold up that trend.

What do you think of the latest Samsung Galaxy S IV?

The Samsung Galaxy S4 will roll out with a staggering 327 operators across 155 countries and the Galaxy S4 release date is April 26.

Image Courtesy |   hindustantimes

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InfoEdge Withdraws Investment Of $4.5Million From Fashion Portal 99Labels

Sneha Bokil-Paranjape — Thu, 14 Mar 2013 09:07:27 +0000

InfoEdge which runs site likes Naukri and Jeevansathi is withdrawing its entire investment of $4.5M from Ninety Nine Labels Private Limited, which runs 99labels.com, a fashion ecommerce portal. No information was given by the company about the reason for writing off the investment.

Last year, the company has invested Rs 5 Cr in September and 16 crore in May in 99Labels. Started as a flash sale site in 2010, 99labels deals in fashion apparels, lifestyle products, accessories, footwear, watches, jewellery, fragrances and home décor. It competes with rivals like fashionandyou and exclusively.in.

In November last year 99Labels launched 9rasa.com a  a more conventional e-commerce site that specializes in traditional-style clothes, jewelery, and home decorations.

InfoEdge has been involved in lot of investments in upcoming internet start-ups. Last month, InfoEdge increased its investment in the online education player Meritnation.com to Rs 61.5 crore from Rs 31.5 crore. In the same month, Info Edge announced that it has invested an additional Rs 55 crore in restaurant guide service Zomato.

Info Edge (India) owns and manages some of the brands like 99acres.com, Shiksha.com apart from Quadrangle-an offline executive search firm and Naukri Gulf. Info Edge also owns Brijj.com, a professional networking site and Allcheckdeals.com, a real estate brokerage firm.

We have to wait an see what will be InfoEdge’s next move. Will it take down 99Labels and 9rasa? What do you think?

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InvestmentYogi Announced Fresh Round Of Funding And Additions To Senior Management Team

Denzil — Mon, 11 Mar 2013 12:16:55 +0000

InvestmentYogi, a prominent Indian financial advice website has announced a new round of funding from its existing set of investors led by Silicon Valley angel investor, Safa Rashtchy. The company has been operational since 2008 and it has managed to reach 4.3 million Indians. Reaching these milestones have definitely made their existing investors confident enough to put in one more round. According to the company, it’s product TaxYogi has been very well received. This has been due to growing Internet penetration into newer sectors and the dependency of tech savvy Indians on online services.

The amount has not been disclosed but NextBigWhat estimates that the amount may be in the range of $100K-500K. Besides the funding round, the company has also announced the appointment of new talent to its management team. They have appointed Anirudha Basu as COO and Kranthi Kiran as VP of Technology. Anirudha comes from an operational background, having worked on websites like UPto75.com and NoMoreQueue.com. Kranthi has previously worked on his own social network called DoesAnyone and has done work with other startups in the country. Also, founding investor and board member, Safa Rashtchy has been made the Chairman of the board.

Mamtha Banerjee, who is the founder of InvestmentYogi spoke about the developments,

“We are at an exciting and pivotal time in India where InvestmentYogi is facing tremendous growth. We are confident that our new executive team will help us get to the next stage of growth, helping us fulfill our mission of helping all Indians understand and manage their finances, and create a secure financial future.”

Earlier, personal investment and financial planning was not accessible to many due to lack of knowledge and accessibility and one had to seek the services of a trained professional. With online services like these, the picture has become pretty clear for anyone who is willing to use it. This appification of the web in terms of personal finances and investments is a good way ahead as it solves the need for paying some professional to do it resulting in a knowledgeable users and lesser spending.

How many of you guys have used Investment Yogi? Please share your experiences with us.

Website | Investment Yogi

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Facebook Gets A Notice For Another Lawsuit Pertaining To Its IPO Debacle

Alap Naik Desai — Tue, 05 Mar 2013 12:50:07 +0000

It appears Facebook’s poor show at the Stock Markets is giving the company continual troubles. The latest of which is a string of lawsuits claiming the site withheld critical information.

One such suit has been filed by Gaye Jones who alleges that the Company’s Directors, despite knowing that Facebook did not disclose weaker revenue trends as more users accessed the website through mobile devices, went ahead with the Initial Public Offer (IPO) launch. The complaint alleges that information had been selectively shared with the company’s IPO underwriters and key investors. In simpler words, Jones feels that the company should have taken the moral high ground in informing the broader audience & eventual subscribers to Facebook stocks, that though the company gained traction via its mobile based endeavors, the company wasn’t able to make justifiable money off the same.

When Facebook, famously listed its shares on the NASDAQ Stock Exchange, the stocks did manage to get attention. However, merely 24 hours later, the stock started to plummet & within 15 days had reached the half-value mark, before gradually climbing & settling at US$ 27.72 at Monday’s closing.

It appears Facebook’s IPO was marred by controversies. A technical glitch in the NASDAQ exchange prevented many brokers from booking sales / profits. This incident alone is responsible for over 50 lawsuits. Apart from this, a full-fledged Class Action Suit is already underway in a Manhattan (USA) court. Jones’ case is a typical ‘Derivative Case’, which ironically entitles Facebook to receive the money from CEO Mark Zuckeberg, if found guilty. Four such cases have already been dismissed. Hence it may seem only a matter of time before this case meets with the same fate.

Given the circumstances, it surely appears that Facebook’s IPO was ill-timed, poorly conceived & executed. While it may not be the social media giant’s fault entirely, it did cost a lot. What do you think?

Image Courtesy |   businessenglishpod

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Andrew Mason Leaves Groupon After Company’s Disappointing Performance

Denzil — Fri, 01 Mar 2013 12:30:33 +0000

It has emerged that Andrew Mason, the founder of Groupon and the guy that basically invented the daily deals space has been asked to leave by the Groupon board. This move came after Groupon saw its stock price dropping 24% after it came to public notice that the company had bad earnings this quarter. Groupon announced that Mason will be succeeded by Groupon’s present chairman, Eric Lefkofsky. Eric has been with Groupon since the start as a co-founder and investor.

After Groupon created the daily deals space in the US, the whole thing caught on like wildfire, the effects of which were felt around the world, especially here in India two years back when daily deals companies like Snapdeal, SoSasta, MyDala mushroomed. Although we have spoken earlier about the debacle of Groupon’s IPO and why we thought that the daily deals business was ultimately a very unsustainable one. Andrew has been the driving force behind Groupon’s expansion. Even if that was the case, Groupon did very badly after its IPO. Just after their IPO debut their valuation got halved to $13 billion and there was a lot of talk of the IPO and the company being overhyped. After the IPO, Groupon has been steadily underperforming. Mason was at the center of a lot of negativity surrounding Groupon. While he combated it for the longest time, the company has decided, perhaps wisely, that Groupon needed a change of leadership.

Andrew Mason posted this farewell note to all Groupon employees on his personal blog. I have to say that this was a really classy way to say goodbye.

After four and a half intense and wonderful years as CEO of Groupon, I’ve decided that I’d like to spend more time with my family. Just kidding – I was fired today. If you’re wondering why… you haven’t been paying attention. From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that’s hovering around one quarter of our listing price, the events of the last year and a half speak for themselves. As CEO, I am accountable.

You are doing amazing things at Groupon, and you deserve the outside world to give you a second chance. I’m getting in the way of that. A fresh CEO earns you that chance. The board is aligned behind the strategy we’ve shared over the last few months, and I’ve never seen you working together more effectively as a global company – it’s time to give Groupon a relief valve from the public noise.

For those who are concerned about me, please don’t be – I love Groupon, and I’m terribly proud of what we’ve created. I’m OK with having failed at this part of the journey. If Groupon was Battletoads, it would be like I made it all the way to the Terra Tubes without dying on my first ever play through. I am so lucky to have had the opportunity to take the company this far with all of you. I’ll now take some time to decompress (FYI I’m looking for a good fat camp to lose my Groupon 40, if anyone has a suggestion), and then maybe I’ll figure out how to channel this experience into something productive.

If there’s one piece of wisdom that this simple pilgrim would like to impart upon you: have the courage to start with the customer. My biggest regrets are the moments that I let a lack of data override my intuition on what’s best for our customers. This leadership change gives you some breathing room to break bad habits and deliver sustainable customer happiness – don’t waste the opportunity!

I will miss you terribly.

Love,

Andrew

A change in Groupon’s leadership is definitely a fresh breath of life for the company and they have to work extra hard to make this work. This will be a big challenge.
We wish Andrew all the best in his future endeavors.

Story Source | The Verge

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Flipkart Plans Another Round Of Funding & Puts Off IPO Plans [Updated]

Alap Naik Desai — Thu, 28 Feb 2013 08:47:08 +0000

Online e-Commerce web-portal Flipkart has divulged its financial roadmap. The company ~~will~~ may opt for another funding round. As for its IPO aspirations, they appear to have mellowed down considerably as co-founder and CEO of the company Sachin Bansal confirmed they are still 2-5 years away.

Updated: The folks from Flipkart have got in touch saying that the company has no official plans to raise funding before the year ends. Sachin Bansal, it seems was only talking about how e-commerce companies raise funding to run operations every 24 months or so.

Flipkart’s growth can pose as a good example for other aspiring web-companies. Considering the fact that the company started with only selling physical copies of books, today, the domain has expanded to multiple other categories like music, movies, games, Electronics, mobile phones & such. Apart from these highly generic categories, the site now also boasts of a few relatively niche segments like baby-care, fitness, and lifestyle. Interestingly, Flipkart also has its own brand Digiflip under which it sells digital accessories, footwear & other fitness products vertical.

Flipkart has expanded its horizon both as a company & and as a financially secure investment. Dedicating attention to books, Flipkart first established an exclusive warehouse for centralized distribution. A short duration thereafter, Accel Partners expressed confidence by pumping in US$ 1 Million. Interestingly the VC firm had mandated a crucial milestone of exceeding 1500 orders per day, which Flipkart actually surpassed easily. Though the company appears to have grown from success to success, Bansal revealed that they made some huge follies in the electronics category. Though this segment has become the largest money-spinner for Flipkart, their core, Books, still constitute over 30% of its entire revenue.

As for putting off the IPO plan for such a long duration, Bansal has a clear vision of hitting US$ 1 Billion in revenue before the duo decides to take the company public, “We were targeting a billion dollar in revenues by 2015, but I am pretty sure we will exceed that number now”.

Given the fact that the financial scenario is barely able to stand back on its feet, we think it is a right decision to take the company to newer heights while being away from the public eye. What do you think?

Image Courtesy | ibnlive.in

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Google India Made Rs. 150 Crores In Profit In 2012 Financial Year

Alap Naik Desai — Thu, 14 Feb 2013 09:26:39 +0000

Google’s Indian arm made a good profit last year according to its filing made recently with India’s Registrar of Companies. As per official records the company made a net profit of more than Rs. 150 Crores (US$ 27.8 Million) after deduction of taxes.

Has Google India grown financially?

The answer is a firm YES. Google’s profits, as compared to a year earlier rose almost 10%. Incidentally, if one considers the profit it earned, without considering the taxes, it gained Rs. 229.38 Crores (US$ 42.51 Million). This figure is more than 53.51% as compared to the fiscal year before that. That year Google only made a gross profit of about Rs. 150 Crores. So overall, profit available for appropriation was Rs. 577.99 Crores (US$ 107.3 Million), up from Rs 427.25 Crores (US$ 79.31 Million) the previous fiscal.

Google has always been in the cross-hairs of the Government of India, who strongly felt the company was misleading the Income Tax (IT) Department by deflating income, and crediting the bulk income to Google Ireland. While facts are yet to emerge completely, Google had hereto steadfastly claimed that it only had a ‘Sales Office’ of Google Inc. in India. But the Government was not amused & it slapped a penalty of Rs. 76 Crores (US$ 14.1 Million) on the company. Google India appears to be a carefully orchestrated company to ensure the majority of the profits appear to have been made out of the purview of the Indian Government & its Tax laws. While we cannot comment on the efficacy or company-friendliness of such laws, quite a few companies resort to such tactics to avoid paying significantly high transaction taxes to the Government.

Google India’s ‘reserves’ have inflated by more than 150 Crores as compared to last fiscal & currently sit at Rs 616,72,19,535. Hence one can confidently say, the company has a heavy investment in India. How should the Indian Government demand taxes from these foreign companies?

Image Courtesy | news.mindprocessors

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Adobe Launches New Website For Product Downloads; Targets Students & Teachers

Prakhar — Thu, 07 Feb 2013 09:56:50 +0000

A large number of innovations that change the world happen in educational institutions and students and the flag bearers of such radical ideas. Technology that has seeped into classrooms and teaching methods are benefiting the education sector in a great way with convenience of demonstration and design. Adobe that has some of the pioneering design products and tools has recently launched a website that would aid students and teachers in buying its tools and products off the internet. The store features its flagship software, the Creative suite 6 along with other regular products like InDesign and Acrobat.

Adobe has been one of the companies that were hit by recession in a mildly damaging way and which recuperated with laying off 7% of its global workforce, a decently good statistic for a US based company. The company is doing well as far as talent intake and product output is concerned. It was ranked 41 by the fortune magazine (at money.cnn.com) as one of the best companies to work for. Employees earned 300 patents last year so RnD is efficient and complements the front end marketing.

Adobe flustered in the third quarter in FY 12 but registered 7% excess profits than the last audit. It is in the fast-growing Digital Marketing category with 40 percent year-over-year Digital Marketing Suite revenue growth this quarter. Adobe’s creative cloud features the creative suite desktop applications, adobe touch apps and service together on a cloud platform. The subscriptions for the same went up to 20000 in the last year so the company has created a niche for itself in the cloud scene too, completely evading competitors like Intel and Google.

The company suffers from piracy as the products that it rolled out in the market were expensive when compared to other digital suites. This creates a bridge in affordability which is filled by torrent sites. This launch of the product website is a measure to reduce the conundrum of illegal downloads that marred the sales for long.

Website |  Adobe Education Store India

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50% Of Indian Internet Users Will Access The Web Using Their Mobiles By 2015: McKinsey Report

Denzil — Wed, 19 Dec 2012 13:18:14 +0000

McKinsey and Co. has issued a report titled ‘Online and upcoming: The Internet’s Impact on India’. The report basically says that mobile Internet usage in India is about to shoot even further up. It says that more than half the Internet users will be accessing the web by 2015. The number is even more significant when you consider that the report projects a comparatively smaller growth of 15% in other developing countries.

India’s Internet Industry (covering all alread of Internet enabled business) has already contributed somewhere around $30 billion to the Indian GDP in 2011. This amounts to 1.6% of the total GDP calculation. The report says this figure could reach $100 billion in the next 3 years. This prediction is only favorable if the country follows ‘an inclusive path of Internet expansion’. This means that the country should allow for the Internet to grow in an unfettered way without blocking any aspects. This could be realized if the laws regarding Internet usage and business are fair.

The growth potential for India in the Internet space is tremendous but it can only come to second place behind China by 2015. The number of Indian Internet users is predicted to climb up to 330 million from the present number of 120 million. 120 million maybe a lot but compared to the population of the India, the penetration rate is only 10%, which the report says is the lowest one in the world. Imagine if more people start using the Internet, we could be looking at the beginning of a huge Internet economy in the country. More people will definitely get onto the web due to various factors like cheaper internet enabled phones, easier connectivity to the Internet and the growth of social media. According to McKinsey, even if the country doesn’t take an aggressive approach towards getting everybody online, the country will still grow to 330 million users by 2015. Imagine if we do become aggressive about promoting the Internet! As it turns out, the Internet revolution in the country is only just beginning.

There are great lengths to go yet, but I do see it happening. The next 3-5 years are crucial. Our broadband infrastructure needs to improve. More people should be digitally literate and there should be more impetus and support provided to Internet and Technology startups. We do have some awesome startups in the country who are trying to solve some key problems using the Internet. But we need more of them! We have so many people who have yet to use the Internet. There is plenty of room for many more disruptive businesses, services and solutions in the country if more people get online.

What do you think about the report’s findings? Share your views with us in the comments.

Story Source | Livemint

Image Source | Youbibo

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Bharti Infratel Looks Towards The IPO Route To Raise $ 845Mn

Alap Naik Desai — Mon, 03 Dec 2012 09:15:56 +0000

Bharti Airtel’s telecom tower subsidiary Bharti Infratel, has announced plans of an Initial Public Offer (IPO) & hopes to raise about US$ 845 Million. The IPO is supposedly the country’s largest in the past two years & will run from December 10 to 14.

State run Coal India had managed to raise US$ 3.4 Billion in 2010 via its own IPO. Since then, the Indian investor scenario pertaining to such massive IPOs have virtually dried up. In fact, many companies contemplating to ride on the ‘Sensex Boom’ had announced their own IPOs, but later withdrew, cancelled or postponed their IPO launch citing various reasons. However the real & sole reason was the drying up & slowing down of the Great Indian Economy.

Owing to poor public reactions & downfall of the Indexes, the Sensex has eroded the wealth of investors heavily. But for the past couple of months, some reforms announced by the Indian Government & overseas fund inflows (Foreign Direct Investment or FDI) has brought back some of the enthusiasm in the investors & the Indexes, namely Bombay Stock Exchange (BSE) & National Stock Exchange (NSE), have exhibited gradual upswing. The Indexes have approximately risen by more than 11% in the last three months. Bharti Infratel’s IPO will be the first yard-stick to judge just how well the common investor has made his cautious return to the share trading market.

Though the telecom tower business is very investment heavy, Bharti Infratel has managed to inculcate some green initiatives too. The company recently installed solar cells & hybrid generators which relied on a combination of wind, bio-fuel & sunlight as sources of fuel. Such go-green endeavors will surely enable the company to earn good grades in the minds & hearts of earth-conscious investors.

Paradoxically, a recent amendment in the Telecom Policy will soon abolish the ‘Roaming Charges’ levied on roaming users who offered a good revenue source to such infrastructure providing companies. Hence, it will be interesting to see just how well the IPO does with this dampener in the background. What are your views?

Image Courtesy | myiris

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Intel CEO Paul Otellini Retires; Time For The Chip Giant To Get A New Perspective On Things

Denzil — Tue, 20 Nov 2012 08:45:42 +0000

Intel has had a huge impact on computing since its inception in 1968. Founders Gordon Moore and Robert Noyce left their jobs at Fairchild Semiconductor to start this company which would focus on making processors. From then to now, Intel has always been a pioneer in terms of chips. Many of their successful products like the 4004, 8008, x86, Pentium and so on have been the favorites of computer geeks and device manufacturers. Intel’s success was attributed to its innovation and work culture. However, concerns have now been expressed at the recent news of its CEO Paul Otellini retirement from the company.

Paul was with Intel for nearly 40 years and retired just 2 years ahead of the actual retirement age. Otellini took over as CEO in 2005 and made quite a few strong contributions to the company. During his tenure, the revenue of the company jumped by 57% to reach $55 billion. He was the person behind the introduction of Intel chips in Apple computers. The company’s share price, however, fell 20% in his tenure. As of now, the company is looking for a successor to Otellini.

It is interesting to note that even though Intel might be waxing eloquent about Ultrabooks and the processing power that their PC chips provide, the PC and Laptop industry is on the road to a rough shakedown. For years, PCs were the only way to access the digital world and the Internet. With the advent of smartphones and tablets, PC usage is increasingly showing signs of red. This does not mean that we will all stop using PCs. PCs will always be around but will not dominate like they once did. Now, the part where this new trend affects Intel is in the chips being used in these mobile devices. Though Intel might have a 16% market share of the PC chip segment, it is nowhere when it comes mobile and tablet processors with its market share being some 0.2% . Nvidia and Qualcomm have a good lead on Intel on this one and it looks difficult for Intel to get into the picture. Apple, Samsung and other companies are designing and fabricating their own chips. It is estimated that by 2016 there will be some 750 million tablets sold worldwide. The education sector has been wholeheartedly accepting tablets as computing devices for kids due to their cheapness (at least in India), ready availability, portability and the processing power to do any kind of computation a school or college kid would want. As a large number of people shift towards mobiles and tablets, Intel’s profits will fall further unless they do something about it soon. Here is an excellent article from QZ which lists down 7 reasons why Intel could be the next RIM.

This might be the reason behind Otellini’s retirement as the company and its board must have decided that some radical change is strategy and leadership is needed to get them ahead of the competition. If they do not adapt quickly to mobile, they might lose the mobile race altogether.

Image Source | Engadget

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LinkedIn Reports A Strong Quarterly Performance; Manages To Garner Users & Profit

Alap Naik Desai — Sat, 03 Nov 2012 04:30:07 +0000

LinkedIn, with its third quarter financial results has shown the world that ‘Slow & Steady’ is the way to achieve success. The professional social hangout reported third-quarter earnings of US$ 2.3 Million. However, what’s more astonishing is that its revenue surged 81% to US$ 252 Million.

LinkedIn’s growth cannot be attributed to sudden spurts of interest & subscriptions. The company has proven that to excel at your core expertise, one needs to evolve constantly. LinkedIn regularly updates its site, user interface & mobile apps too. Additionally, it also ensures its core audience are fed with relevant & updated news via its Social news portal. Though the site has its fair share of rivals, LinkedIn has never indulged in any anticompetitive behavior.

Users are the biggest asset: Despite cosmetic & technological tweaks, LinkedIn has perhaps paid most attention to both sides of equation about what it stands for; Career Development. While LinkedIn primarily appears to be a place for job-seekers & self-employed, it has been striving hard to cater to the job-givers or employers as well. In fact, LinkedIn’s localized hiring solutions have enabled it to garner the faith & trust of many multinationals. Additionally, LinkedIn has time & again come up with nifty tools to enhance co-visibility with the big companies.

LinkedIn’s recent subscriber base is pegged at 187 Million & is growing. However, its growth rate in terms of users too has been slow but steady. While other social sites like Pinterest enjoyed sudden bursts in users, LinkedIn has been adding serious users who plan to use the service LinkedIn offers diligently. During this year & perhaps earlier years as well, LinkedIn has added about 10 – 15 Million users every quarter.

While this may be nothing in comparison to sites like Facebook, LinkedIn is the only company who has posted such an impressive Return On Investment (ROI). Hearing the news, the stocks of the company jumped 5% within a single day. Do you think LinkedIn owes its success to its efforts or because it has a first mover advantage?

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