S&P Likely To Downgrade IBM

After dealing with slow sales for consecutive sixteen quarters, International Business Machine Corporation have received a warning from Standard & Poor’s that it is likely to be downgraded by the firm. The news affected the trading session of the company after S&P analysts slashed down their outlook to negative.

The once rapid pace of the tech industry has now declined and in the current year, the company stood at the bottom line of the index.

The enthusiasm of the investors had curbed after the tech giants including Apple, IBM, Alphabet, and Twitter posted disappointing results. The only company who stood at top is the social networking giant, Facebook.

The ratings have been demoted after the company’s years-long strategy to transition to higher-margin businesses failed to turn the company around. The Big Blue has invested a lot in the cloud computing businesses but it has been behind the strong competitors like Microsoft and Amazon.

An S&P credit analyst, John Moore cited, “The negative outlook reflects the company’s protracted negative operating trends and pressures to restore operating growth as it addresses shifting client needs and the increasing market prevalence of cloud-based technology solutions.”

For the latest quarter, the company’s sales declined 5% in comparison with the year earlier and stood at $18.7 billion while the profit fell 13%. Back in 2012, IBM landed on double A minus rating after having a single A plus rating for over a decade.

After the outlook was slashed down, the shares of the tech company fell 1% which accounted for a totaled 13% decline in the share value over the past year.

But the Big Blue opined that it has potential to sustain its position as a strong investment-grade organization. It further said that the company has exhaustive financial flexibility in order to effectively carry out its strategy and capital allocation plans.

According to FactSet, in the first quarter, the tech sector earnings are anticipated to shrink about 7% bearing a 5% decline in sales as the market narrowed down to its record high.

Recently, on Tuesday, the oil giant, Exxon Mobil, has faced demotion in its long-held credit rating of “triple A.” Similarly, a lot of other companies who have been at the high end of its current credit cycle will likely be under the axe of the company’s downgrading.

The McGraw Hill financial unit, S&P, historically downgrades more than four organizations for every group which it has upgraded in the first quarter.

All in all, at the market which closed on Wednesday, IBM stock stood at a price of $150.5.

Google Encourages Ventures To Turn Employees Into Entrepreneurs

Google has started an incubation program to help its workers found startups

Google is interested in keeping workers who want to establish their own company or enter a successful startup. So, it might establish an “in-house incubator” allowing Google workers to establish their startups inside the organization.

Codenamed “Area 120,” the initiative will be headed by the organization’s Vice President of Corporate Development and Bradley Horowitz, who runs Streams and Photos, revealed a technology industry publication, The Information.

 Information is being worked out, but the employees of the company will probably disclose their business plans to the incubator and, if ratified, can build on their own for months. Groups can follow by inviting Google to initially invest in the start-up.

Silicon Valley is full of companies running after ‘the next big thing’ – whether it is drones, augmented or virtual reality, artificial intelligence, or anything even more future-oriented. Huge companies such as Google risk missing out.

Former employees of Google have established huge companies like Instagram and Twitter. Building a program to reach the ground floor might let the Larry Page’s company retain those kinds of budding companies. Historically, incubators have not succeeded.

They are frequently not easy to implement within huge organizations with established bureaucracies. The “Area 120” program will probably make efforts to capitalize on the unique culture of the organization and learn from the most successful incubator of the Silicon Valley.

The Information told this established in-house incubator could be viewed as an expansion of the noted 20% time of Google – the idea that the workers of the organization can allocate one-fifth of their time to work on their own independent ventures.

Similarly, the organization is thinking to have “entrepreneurs in residence”— experienced founders who have managed their owned companies successfully – involved for additional guidance. Many companies are quite interested in startups – corporate project investment reached 15 years high in 2015, revealed National Venture Capital Association. 

Such incubators can be crucial in the quest of the company for innovation. It is a thing to inject cash into a current startup, said managing director of Menlo Ventures Matt Murphy. It requires a very different set of skills to incubate an emerging company or help its founder to turn his or her idea into a business.

The new incubation program could let Google prevent brain drain. Google has refused to comment. Shell, Nike, Samsung and AT&T have introduced similar programs in the past times.

Organizations expect these initiatives will help the development of new technology as well as new businesses with which they can collaborate with or takeover, whereas the founders can benefit from the brand name, personnel and technology of the company in the ideal manner. 

Alphabet Earnings Release

The internet search titan has reported healthy results but they fall short of analysts' expectations

Alphabet Inc. announced its quarterly earnings on Thursday which highlighted strong growth in the profits and revenue of the first quarter all due to the Google’s business’s rapid growth on mobile devices.

Although the company was able to post healthy increases however it did miss to meet the Street expectations. It is due to the widening losses of the company from its bets on blue-sky projects like home automation and driverless cars.

The expenses of the company were a bit higher than expected which slightly pulled down the revenue. According to the executives of Mountain View, Calif. firm, the high cost of advertising had increased the expenses. The advertising costs include payment to advertising partner as the Alphabet Inc.’s subsidiary’s ad revenue is generated through middlemen and from mobile devices.

Google is the frontrunner of digital-ad platform and is looking forward to capitalize on the shift to mobile, globally, by advertisers and users alike to make the accessibility of the Internet through mobile devices convenient.

A vast majority of smartphones come with Google as their default search engine. Last fall, the subsidiary added a third ad ahead of results of mobile-search, just after it declared that, for the first time, the mobile device searches have gone ahead of the traditional computers.

The second most valuable company didn’t disclose segregated account of the results generated from the mobile however Merkle Inc. –a digital marketing firm has cited that, in the first quarter, Google’s mobile-search results have doubled. For the first time ever, research eMarketer has projected that for this year, the majority of the Google’s ad revenue will be generated through such devices.

But the transition does have some unwanted disadvantages as well. The ads on mobile generate less income as users may not prefer following the purchases on the devices’ small screens. The $528 billion organization expressed that its per ad average cost fell by 9% across all devices. Also, Google has to subsequently share the smartphones ad revenue with telecom carriers and device makers.

On the conference call, Alphabet CFO Ruth Porat expressed to the investors that the first quarter showed the healthy momentum gained by the business across the world. She added that the pivotal trigger for such growth was the increasing number of mobile searches by the consumers.

The investors were rejoiced when last year Ms. Porat joined now Alphabet Inc., after serving a considerable amount of time in Morgan Stanley. Ms. Porat brought some spending restraints and the expenses grew slower than revenue by 16.4% and reached at     $14.92 billion. According to the executives, the expenses grew because of the vigorous hiring –around 2,300 employees were hired making the total workforce of 64,115.

Just few months after joining the internet search titan, Ms. Porat           restructured the company into Alphabet Inc. and split the profitable sector Google from its long term loss bearing bets including experimental lab X and Nest –home automation company.

It was the second time for the company, on Thursday, to separately disclose the financial position of those bets and it showed a widening loss of $802 million from a prior year’s same period’s $633 million. Whereas, revenue was reported to be $166 million –more than double in comparison with last year.

For the quarter, the company reported $4.21 billion net income –or an EPS of $6.02. A year earlier, the company had managed to generate an income of $3.52 billion or $5.10 EPS.

According to Thomson Reuters, the analysts had earlier expected the company to disclose an EPS of $7.97. Moreover the revenue was reported to be $20.26 –an increase of 17% from last year’s $17.26 but falling short of the expectations of $20.37 billion.

Yahoo Quarterly Earnings

The internet search engine posted sinking revenue again while simultaneously beating the analysts' expectations

On Tuesday, the internet search giant, Yahoo! Inc., reported its earnings which, once again, showed the shrinking revenue of the company. But, the CEO, Marissa Mayer has said that she is actively involved in making a “beneficial corporate sale” possible. She also acknowledged the company’s shareholders as its “top priority.”

The struggling company reported EPS of $0.8 which was significantly lower than the EPS it had reported in the last year’s same period of $0.15. Additionally, the revenue of the company shrank to $1.09 billion, in comparison with year-earlier figure of $1.23 billion.

Still, the company’s results were slightly better than the analysts’ expectations. According to Thomson Reuters’ consensus estimate, Wall Street analysts project the Internet search portal to declare EPS of $0.7 on revenue of $1.08 billion.

On the conference call, the CEO expressed that the company has had a fairly good start but she also emphasized the point that the company’s management has put the shareholders at top and therefore it is urgently dealing with the auction process.

She said that the company’s management and those charged with governance are dedicated to maximize the shareholders’ value and are open to “any strategic alternatives.” The deadline for preliminary bids passed this Monday however Ms. Mayer didn’t disclose anything regarding the bidding details nor identify any bidders.

Sources privy to the matter, however, have leaked the names of the potential bidders. Verizon Communications Inc., buyout firm TPG, and U.K. publisher Daily Mail are among the few bidders who have submitted their proposals. People familiar with the matter has also revealed that former Yahoo CEO Ross Levinsohn and investor groups like Vista Equity Partners and Bain Capital have also submitted their bids. In addition to them, around the time of Yahoo’s bidding deadline, two private-equity firms Advent International and Silver Lake had shown interest in the bidding process too.

The sources close to the matter added on that the proposed biddings range between $4 billion and $8 billion.

The Silicon Valley Internet search portal has been under a lot of pressure to speed up its process of having an appropriate sale before the annual shareholder meeting this summer. It is probable that the investor may vote in favor of Starboard Value LP’s suggestion of replacing the entire board with new directors. Currently, the board has nine executives.

Earlier, Starboard has complained about the slow progress the company made in the sale and the heavy influence of Ms. Mayer in the sale process as it is likely to create a conflict of interest in the process. According to Wall Street Journal, several people familiar with the matter told it that many potential buyers have been irritated by the company’s managers lacking of providing detailed answers about the company’s business prospects. Probably this is the reason that an analyst at Cantor Fitzgerald, Youssef Squali said in an interview that, “There is a fair amount of skepticism about their willingness to really sell the business.”

Ms. Mayer however said that she and the board have been actively involved in the process and that the company is “moving expeditiously.’

The time will tell whether the company was able to make adequate financial sale. As of now, Yahoo! Inc.’s stock closed at $36.33. 

Apple Diverts Public Attention To Care For Planet

The smartphone maker takes a green initiative to raise money to help WWF advance its environmental and climate initiatives

The recent efforts by Apple to trumpet its environment-friendly initiatives have been majorly concerned about production and supply chain, but on April 14, 2016, the American consumer electronics manufacturer launched a sensational new initiative targeted at a large number of customers.

The smartphone maker is launching out “Apps for Earth,” within which App Store will feature 27 famous applications for 10 days – including Jurassic World: The Game, SimCity BuildIt and Angry Birds 2 – that have included new environment-friendly content for Earth day.

Money paid to purchase any of these 27 apps, or buying within them, will then provide support to the World Wildlife Fund, to help progress it’s environmental and climate initiatives.

Assuming the large size of App Store itself – which has many users in 155 countries – and the large reach of some of the apps (the download of Angry Birds II has been done  85 million times, for example), it just may become one of the far-reaching environment friendly initiatives of the corporate sector.

One of the world’s largest companies, Apple, has announced a range of high-profile green strategies. For example, in October, the organization announced its new solar power plants in China.

In the last month at the recent special event of the organization, VP of Apple for environment, policy, and social initiatives and former director of EPA, Lisa Jackson, announced renewable energy powers 93% of the global facilities of the company. Now, when it is not easy to make people focus on the environment, the company is in effect developing a huge new megaphone.

While giving an interview to Post, Apple's Lisa told the company is seriously expanding its green strategies in new directions. WWF CEO and President Carter Roberts said, “Elevating these issues on a global scale through an unprecedented platform like this is huge,”

WWF’s own app will be among the 27 apps featured, and the environmental activist group will be donated the funds that are raised by featuring applications for Earth and invest those to conserve endangered species,  freshwater, oceans, forest and battle climate change.

The “Apps for Earth,” will start from April 14 to April 24. April 22 is the Earth Day. A large number of app developers who are taking part in the conservation program stated that a green strategy at this scale is comparatively new for them, but suits their values and they are excited to become a part of it.

Jackson claimed that the initiative might be the only means, with which Apple prompts its large number of consumers to help the cause of the environmentalists. 

Alibaba Joins Non-Profit Organization To Fight Against Counterfeit

Alibaba becomes a member of the International AntiCounterfeiting Coalition to get rid of fakes from its online market

Alibaba will be the first online retailer to turn into a member of the biggest non-profit international organization that fights against piracy and counterfeit goods, part of the effort of the Chinese e-commerce company to shed its reputation as haven for cheap brand knockoffs.

The Hangzhou based organization is now part of the International AntiCounterfeiting Coalition, which introduced a recent kind of membership for “intermediaries” like online markets where fakes – anything from sports memorabilia and designer purses to headphones – can thrive.

The company reaches over 400 million online buyers in China, majority through its Taobao and Tmall websites. Two years ago, Chairman Jack Ma called fake items ‘cancer’ for the e-commerce platform and promised to clean the image of the business.

Alibaba has been trying with the anti-counterfeit global organization in the past three years through a program, which has banned 5000 merchants from its market, removed 160,000 item listings and led to a 100% take-down rate when companies stand behind their claims.

Yet, American and Chinese regulatory bodies continue to keep a check on its efforts. In December 2015, the U.S. Office of Trade Representative issued a warning that Alibaba needed to fight with the sales of pirated materials and fake goods if it wanted to keep itself out of the government’s annual “Notorious Markets” list.

The 250 members of IACC include prominent electronics, apparel and luxury goods brands, such as Rolex, Apple and Nike. The group is interested in including ecommerce platforms to collaborate with them in a manner as it did with credit card companies many years ago to battle counterfeits by cutting down payments made to their sellers and makers, according to IACC president Bob Barchiesi.

To bolster the efforts of the company, Alibaba recruited a former counterfeits and cybercrime investigator from Apple and US Justice Department prosecutor Matthew Bassiur, to head its global push to battle with fakes in Dec 2015.

Part of Bassiur’s role is to educate the world about Alibaba’s efforts, including banning and identifying sellers and exploring the sources of fakes so law enforcers can be informed, said Bassisur, the vice president of the company who heads its efforts for intellectual property protection.

The official membership of IACC will let the company access an international network of over 250 sellers and other IP experts, who are working to implement and develop collaborative solutions to piracy and online counterfeiting.

The web retailer will be also able to not only learn from constructive discussions but also contribute to them via Member Engagement Groups of IACC on best IP practices and rising counterfeiting trends with the rest of committed members of the industry.

While working with sellers and makers, Alibaba intends to solve the problem at its roots, improve its technological abilities, keep refining its policies and develop its in-house capability on IP enforcement. 

BYD Acknowledges Success Of Tesla CEO Elon Musk

The Chinese electric carmaker is interested in turning itself into a popular company, like Tesla

On April 11, 2016, the Chinese electric carmaker ‘Build Your Dreams’ (BYD) launched its recent compact SUV version in a lights-and-dance show in Beijing, as the company tries to replicate Tesla-like fame to battle in a competitive market.

BYD’s car ‘Yuan’, named after the 13^th century Chinese empire built by defeating Mongols, has a starting price of $9,250 (59,900 Yuan) for the gasoline-engine model. It arrival – before the Beijing Motor show, which is scheduled to be held later in April – marks the entrance of BYD into the entry-level SUV niche famous among single professionals and younger urban families.

BYD is perhaps well known internationally for raising money from Warren Buffett’s Berkshire Hathaway, which has turned branding into topmost priority for the upcoming 2 to 3 years, the senior vice president of the company, Stella Li spoke while being interviewed.

While comparing the Chairman of the Chinese automaker ‘Wang Chanfu’ to a long-distance runner and CEO of Tesla ‘Elon Musk’ to a short-distance runner, she acknowledged the inability of BYD to lure a large number of customers towards its retail outlets waiting for its vehicles.

By naming its versions after various Chinese designs on Dynasties line, the organization is developing itself in a manner that differs from other automobile manufacturers that use names and letters to denote their line-up, such as Mercedes-Benz S-class, BMW 3 series and Audi A6.

At the same moment, the Buffet-backed organization takes a risk by establishing a brand name too much tied to the culture of China that it booms just a little in markets abroad.

Chinese automakers, like Japanese and Korean brands before them, are not able to easily improve their reputation and move beyond images for developing utilitarian and cheap automobiles sometimes alleged of slashing off more developed rivals.

For BYD, a mass-market reputation weakens its ability to differentiate its brand-image and charge a premium. As the largest manufacturer of Chinese EVs, the company is susceptible to be taken out of the topmost end of the automobile market by organizations like Tesla by its cult-like appeal for which customers pay a premium price.

At the low end, many minor manufacturers are battling on price. A number of organizations, many without vehicle-manufacturing experience, also have claimed to develop connecting EVs as the government of China has persuaded tech organizations to improve the conventional automotive industry.

“With the increasing size of the new-energy vehicle pie, many players are coming in and the industry will enter a period of reshuffle,” Chairman Wang stated on April 11, 2016. “We are thinking about what we should do going forward every single day."

The popularity of the Californian EV maker and the China’s expanding set of EV rivals are pressuring BYD, said Steve Man, an analyst based in Hong Kong covering the automobile industry at Bloomberg intelligence.

“Elon Musk’s recognizable fame and success as an entrepreneur makes him a strong voice for Tesla,” Wang stated. The shares of the US organization have jumped by 19% in 2015, while the Buffet-backed organization’s shares have declined by 15% in HK trading.

Tesla CEO's Space X Aims To Turn Space Into Conducive Environment

Space X resumes deliveries to help the cause of astronauts in the tough conditions of the space

After a nine months delay due to a rocket failure, on April 8, 2016, CEO Musk’s space company, SpaceX , is to recommence its cargo delivery services  for NASA. The recent haul of freight aboard a Falcon 9 rocket includes an inflatable module, which is to be made a part of the International Space Station (ISS), a tech test that could offer enough living space to help astronauts complete their deep-space journeys in future.

As per schedule, the rocket has to be launched on 4:43 pm from the Florida Cape Canaveral Air Force Station. NASA Television will broadcast the event on the internet, starting at 3:30pm. According to weather forecasts, there is a 90% chance of favorable climate. In June 2015, the recent cargo delivery of the space company failed, with the disintegration of rocket in 2 minutes and 19 seconds following its launch.

An inquiry revealed that a strut that was holding a helium bottle in the second phase snapped, beginning a chain reaction, which led to the rocket destruction in just a second. Elon Musk revamped the strut design and its production process, which now tests every strut individually to make sure that each fulfills strength requirements.

CEO Elon Musk’s organization recommenced launching in December 2015 with its Falcon 9 transporting the commercial payload of eleven minor communications satellites to the space.

That rocket launch also proved to be first time the space organization recovered the booster phase of Falcon 9 in a single piece by landing it at Cape Canaveral. For the launch on April 8, 2016, the company will re-try to ensure that the booster is landed on a floating site rather than on a piece of land.

Up till now, out of four landing attempts made at sea, the company has not even succeeded once. Whenever the booster has landed on the landing platform, it has exploded and toppled.

On April 7, 2016, the Dragon Capsule found on the top of the Falcon 9 will reach the ISS on April 9, 2016. It is planned to stay at the ISS until May 2016, and then return to the planet with experimental samples including Scott Kelly’s blood samples.

Scott Kelly is the first astronaut of NASA who returned to Earth in March after approximately 12 months in space. Amongst the approximately 7000 pounds of equipment, experiments and supplies loaded in the capsule are those seeds, which will be produced on the ISS.

In 2015, it was the first time that astronauts at the station didn't only ate the grown red romaine but also harvested in the space. At that time, Chinese cabbage, selected as the most tasty and best growing tested vegetables, was included in the mix.

Other tests include a measure taken to catalog and track the various types of microbes surviving on the ISS, including a study of fungi, as it was being expected that space could grow them to develop new compounds possibly useful as medication.

The payload of the rocket also includes the experiments of 25 students that had been lost on the previous SpaceX flight. 

Amazon Pledges Full Price To Make Itself Into Fashion Hub

Many fashion brands are selling their products on Amazon, but others are concerned about its approach

Amazon has defeated competitors by providing cut-rate prices on products, from electronics to books to diapers. The company has employed a new strategy: pledging full price.

With that promise, the American e-commerce company is making headway enticing masses that for years had rebuffed its strategies. Many companies directly now deliver to Amazon. These include Levi Strauss, Lacoste, Kate Spade, Calvin Klein and Nicole Miller.

CEO of Lacoste North America, Joëlle Grünberg, said, “Amazon understands fashion is different from its core business, they discount when products aren’t selling, but they don’t mark down at crazy rates.” Lacoste North America started delivering select goods on the organization in 2015.

Forrester Research revealed that fashion has continued to be amongst the last e-commerce holdouts because of the importance of fit and feel of clothing to buyers. 65% of computers and 15% of clothing were bought online in 2015 .But just as such many other conventional buying habits, clothing shopping is yielding to the comfort of the web.

Whereas the change provides more convenience and choices for buyers, it is still another blow to conventional departmental stores and shopping centers they anchor. While buyers yet are interested in visiting conventional shops to try garments, the membership of Amazon Prime, which includes free 2-day shipping, helps make delivering clothes across the internet a less risky proposition.

44 years old real estate agent, Karen Gestwicki, bought dresses from Amazon “because Amazon has the biggest selection.” For brands, the company provides growth now when sales by departmental stores are sluggish. Its North American total sales in 2015 grew by approximately one-fourth to $63.7 billion, while Kohl’s Corporation sales grew by 1% and Macy’s sales decreased by 3.7%.

The two departmental chains are cutting staff and shutting down stores. Brands believed to be choosy regarding their distributions are tiptoeing at Amazon, including Ralph Lauren Corporation, which directly sells shoes to the web retailer.

There are yet holdouts, nevertheless, including Rag & Bone, Tory Burch, Nike and a large number of European luxury goods sellers, which are turned off by the down-scale image of the company and concerned regarding third-party merchants registering merchandise at a price lower than suggested pricing.

Spokesman of Amazon refused to share views. Amazon has tried to enter the fashion industry for a long time. 10 years ago, CEO Jeff Bezos had a visit to Seventh Avenue showrooms to try to create interest, but clothing executives were hesitant to entrust their companies to an organization called for cutthroat prices and utilitarian ways to show products, according to people aware of the meetings. 

Passengers Can Now Pay Uber In Cash

Uber introduces cash payment option to win over the Singaporean market and increase its user base

Uber is launching its cash payments technology to Singapore; the transporter announced April 6, 2016, turning it into the first “ developed” city to test launch this method, revealed official of the company, Warren Tseng.

The penetration of credit cards in the city is essential, 69% of consumer expenditure is done via credit cards in the region, revealed MasterCard international report. Uber is looking at the remaining percentage, Warren claims.

The company figures that, by eschewing the requirement of credit cards, it can lure more passengers towards its application, who many have not been logging up before. It can also attract students or seniors who do not necessarily have credit cards.

Ultimately, Warren says cash payment test launched in the rest of markets have demonstrated that many people are those who use Uber app in regions outside the conventional urban, central locations that Uber often serves. Adoption rate can grow by an average 45%, he elaborates.

Essentially, the test launch will demonstrate if the company can enter the phones of more people in this manner, even in transportation markets where a large number of people are demanding for cash payments. At the same time, Warren says, the organization is interested in maintaining the same quality of service, whether in the core business district or in suburbs.

The new update must launch out gradually to phone users from April 6, 2016, and will be available for the Uber Black and Uber X options. The ride sharing service provider has earlier launched cash payments in a number of markets across the globe, including many cities in India, Malaysia, Indonesia, and in the capital of Philippines, Manila.

In recent times, Uber underwent an important restructuring across the globe, with many workers laid off as well as replaced by recently recruited ones from significant Silicon Valley organizations. Warren did not share views on whether the re-organizing had affected its strategy moving forward. He states instead that the transporter will keep trying out new devices and adapting them to every region, and Singapore continues to be a prioritized market for Uber.

The company provides its cab service in over 400 cities across the globe but accepts cash payments in just 40 of them. The test drive will be offered to a "large proportion of new and existing customers", the San Francisco based organization said, though it did not disclose how many.

The Malaysian taxi service, Grab, provides consumers both cashless (like credit card) and cash options for its chauffeur-hire facility and cab bookings, known as GrabCar.