Monthly Archive for October, 2011

Amazon’s Disruptive Growth Strategy

Published on October 31, 2011 in Global Strategy. 0 Comments Tags: .

This year Amazon invested heavily in disruptive-growth opportunities — and investors were not pleased.

On Tuesday, Amazon.com reported third-quarter earnings that fell far short of Wall Street’s expectations. Its earnings were down 73% from the quarter a year earlier and it missed the analysts’ consensus estimate of $0.24 per share by nearly a dime

Amazon missed its earnings because the company has been investing more heavily than Wall Street expected. And these investments are being made in the infrastructure to support not just a single disruptive business, but a number of disruptive-growth opportunities. Below is a snapshot of Amazon’s portfolio of disruptive businesses:

  • Amazon Retail — disrupting traditional retailers
  • Amazon Kindle — disrupting the paper book format and paper book retailers
  • CreateSpace — a self-publishing solution that disrupts traditional publishing houses
  • Kindle Fire Tablet — a new market disruption enabled by business model innovation
  • Amazon MP3 and streaming audio and video — disrupting traditional content distribution companies
  • Amazon Web Services — disrupting the companies that sell on-site servers and native software applications

But Amazon looks at the world in a different way. The company has a set of organizational capabilities and is not afraid to leverage them to pursue almost any disruptive opportunity. It’s as if Amazon does not view itself as a retail company, but rather as an incubator for disruptive businesses. And in the process of building those businesses, the company is disrupting pretty much everyone except itself. By their nature, disruptive opportunities are small for a long time before they can contribute meaningfully to a large company’s bottom line [Source].

For Google, a New High in Deal-Making

Published on October 31, 2011 in High Tech & Media and Social Media. 0 Comments Tags: , .

With 57 completed deals under its belt this year, Google has already smashed its 2010 record of 48 acquisitions — and it is only October.

According to a filing submitted on Wednesday, Google announced it had spent $1.4 billion in the first nine months of 2011 on acquisitions.

That tally includes its $151 million purchase of Zagat, the online restaurant reviews site, $114 million for Daily Deals and $676 million for ITA Software, the travel software company.

Beyond those three transactions, Google largely focused on completing smaller transactions of $10 million or less. The remainder of its deals, 54 in all, accounted for about [Source].

Related stories: Google Cranks Up M&A Machine; Inside Google’s M&A machine: 3 months, $145 million, 9 deals; Google M&A boss presides over record year.

Samsung’s new phones will have flexible screens

Published on October 30, 2011 in High Tech & Media. 0 Comments Tags: , .

Samsung‘s new mobile device lineup will feature flexible screens starting in 2012, the company announced today.

In its quarterly earnings call, Samsung’s vice president of investor relations, Robert Yi, told investors, analysts and press, “The flexible display we are looking to introduce sometime in 2012, hopefully the earlier part. The application probably will start from the handset side.”

After flexible-screen mobile phones roll out, the company plans to introduce the same technology for tablets and other devices.

In January 2011, Samsung purchased Liquivista, a strategic acquisition that will allow it to produce the kinds of displays that were announced today. Liquivista made electrowetting display technology, which is used to create mobile and other consumer electronic displays that are bright, low-power, flexible and transparent [Source].

That was fast: Samsung topples Apple as top smartphone maker

Published on October 29, 2011 in High Tech & Media. 0 Comments Tags: , .

Samsung has now become the world’s largest smartphone manufacturer, leaping past Apple, which held the title for just one quarter.

For Samsung, success not only came from Android, but also from Bada, its platform for inexpensive smartphones. In August, Bada appeared to be selling better than Windows Phone worldwide. Those numbers will only continue to rise for Samsung.

In July, we reported that Apple’s smartphone sales surpassed those of Nokia, the former leader, making it the No. 1 smartphone maker for several months. But Apple’s lead slipped due to the delayed launch of the iPhone 4S and the introduction of strong Samsung entries like the Galaxy S II.

Overall, global smartphone shipments grew 44 percent over last year to reach 117 million units. Samsung saw the biggest growth over the past year — it only shipped 7.5 million smartphones last year — while Nokia, unsurprisingly, fell the most, from 26.5 million smartphones shipped last year to 16.8 million this year [Source].

India: outpacing China by 2013?

Published on October 29, 2011 in Emerging Markets. 0 Comments Tags: , .

After months of bad news flow – high inflation! interest rate hikes! corruption! high petrol prices! weak currency! – India is finally getting some good news, even if it’s a good two years off.

In 2013, according to an Ernst & Young report released Monday, India will grow at 9.5 per cent, bouncing back from this year’s 7.2 per cent, and outpacing China’s projected 9.2 per cent.

But the report’s projections might be a tad optimistic, given that they are premised on: 1) whether India’s inflation – which hit 10.6 per cent for food articles earlier this month – will fall by the end of this year, and 2) that the US and EU economies do not fall into recession [Source].

Roubini: Goodbye China, hello Indonesia

Published on October 29, 2011 in Emerging Markets. 0 Comments Tags: , , .

If economist Nouriel Roubini was a betting man, he’d be cashing out of China and doubling down on Indonesia.

On his first trip to south-east Asia’s largest economy, Roubini argued the case for countries with growth models like Indonesia, where nearly two-thirds of GDP is domestic consumption, rather than China, at roughly one third and, as he has previously warned , “could be headed toward a hard landing.”

On the other hand, ”China needs to move away from the growth model and find balanced growth of the other emerging markets, like Indonesia, India and Brazil,” he said.

“It is the time of rising power of the emerging markets and emerging Asia is the fastest growing region in the world. Indonesia is a country that can be very important in the global economy. By the end of the decade it will be the 10th largest economy and by 2030, it could be the 6th.” [Source]

Klout raising new $30M round at a $200M valuation

Published on October 28, 2011 in Real-Time Web and Social Media. 0 Comments Tags: , , , .

Klout, the startup best known for its ability to measure a person’s online influence, might be raising a new, third round of investment that would significantly add to the company’s total funding and valuation.

Klout works by measuring a person’s activity on a variety of social networks such as Twitter, Facebook LinkedIn Google+ and others. Based on that individual’s interaction within those social networks, Klout calculates the true reach of that person’s communications and issues them a 1 to 100 Klout score.

A company spokesperson told VentureBeat it doesn’t comment on rumors. However, the new round, possibly led by Kleiner Perkins with participation from IVP, might be as high as $30 million at a $200 million valuation, according to a report from Business Insider [Source].

China: growing taste for European M&A

Published on October 27, 2011 in Emerging Markets and Global Strategy. 0 Comments Tags: , , .

Chinese companies are increasing their appetite for corporate acquisitions in Europe.

As Jamil Anderlini writes in today’s FT, the Rhodium Group, an economic consultancy, predicts Chinese groups will invest up to $1,000bn in overseas acquisitions over the next decade, with a big slice of this investment heading to Europe.

In the past decade, China has mostly focused on companies in the US and Australia, as the chart below shows. But wobbly stock markets and declining valuations in Europe have also made assets there attractive.

Europe is China’s most targeted region this year, attracting more than $12bn via 64 deals, and accounting for nearly 30 per cent of all Chinese outbound M&A in terms of deal value, according to Dealogic. This is up from just $2.5bn via 35 deals during the same period a earlier year, accounting for only 6 per cent of total Chinese outbound M&A [Read more].

Shopping by phone at South Korea’s virtual grocery

Published on October 26, 2011 in International Business. 0 Comments Tags: , , , .

Online shopping is nothing new, especially in plugged-in South Korea. But one company says it’s going further. It’s testing out a virtual supermarket in a public place.

At Seolleung underground station in Seoul, there’s a row of brightly lit billboards along the platform, with hundreds of pictures of food and drink – everything from fruit and milk to instant noodles and pet food.

Standing on the platform, a man in his 60s who gives his name as Mr Bae, says it looks to him like an advertisement for a convenience store.

When I explain it’s a virtual supermarket that you access with your smartphone, he doesn’t seem impressed. He says he doesn’t have a smartphone, so it’s not for him. But he says, it’s a good idea for younger Koreans.

And that’s who this virtual supermarket is primarily designed for, according to Homeplus, the South Korean affiliate of the British supermarket chain Tesco [Read more].

KKR Said to Seek Up to $6 Billion for Second Asia Buyout Fund

Published on October 25, 2011 in Emerging Markets. 0 Comments Tags: , , .

KKR & Co., the U.S. buyout firm co- founded by Henry Kravis, is seeking as much as $6 billion for its second Asian buyout fund, according to a person with direct knowledge of the plan.

The firm, based in New York, is planning to wrap up the first round of fundraising by the middle of next year, said the person, who asked not to be identified because the talks are private. KKR gathered $4 billion for its first fund making Asia investments in 2007.

Private-equity firms attracted $25.6 billion for Asia- Pacific funds this year through Aug. 31, compared with $38 billion in all of 2010, according to market researcher Preqin Ltd. Fund-raising in the region peaked at $88.4 billion in 2008, before the impact of the collapse of Lehman Brothers Holdings Inc. rippled through global markets, the London-based firm said in a report last month [Read more].