How Analysts See Microsoft-LinkedIn Deal?

Analysts have mixed reviews relating to software company's largest deal till date

LinkedIn has been downgraded by several analysts after its acquisition by Microsoft Corporation. The software giant announced the acquisition on Monday after which the social network’s shares shot up. But, now the analysts have lowered the shares rating and put them at “Neutral” or the equivalent.

The latest acquisition has been the largest deal made by Microsoft to date –hefty sum of $26 billion indicates that the Redmond, Washington firm intends to buy the Mountain View, Calif. firm for $196 per share. According to the analysts, that’s the threshold for the social network firm and they’ve set the price target at or close to $196.

Last week, analyst from RBC Capital Markets Mark Mahaney upgraded Californian social network to “Outperform” while setting the price target at $160. Later, this week, following the surprising acquisition of the company he modified the price target and took it at $196 –mirroring the offer price –while simultaneously downgrading the stock to “Sector Perform.” 

Overall, Mahaney is quite optimistic in relation to the deal and has been speculating impressive synergies in the areas of Marketing and Sales. He also highlighted that the deal terms reflect LinkedIn’s pre-February’s valuation.

In the similar fan Heath Terry and team –analysts from Goldman Sachs –increased the previous price target of $162 to $203 and downgraded the stock rating to “Neutral.” They also moved the social network up in their ratings for mergers and acquisitions.

Amidst all the optimism, there are several analysts which are wary of Microsoft’s decision at such exorbitant price. This pessimism cannot be passed as the software giant had recently had worst experience in the field relating to Nokia’s acquisition. The company had to waive a major chunk off its financials to reflect the loss.

Post the announcement, Walter Pritchard, an analyst from Citi has been quite bearish on the software company. He has maintained a “Sell” rating for the stock while placing the stock at a price target of $36. Mr. Pritchard has speculated that most of the revenue for the software giant will be coming from its core products –Office and Office 365 instead of social selling. Although he agrees with the integration of social network in selling its product however he believes that the price paid for such strategic rationale is too high. According to him, CEO’s Satya Nadella experience of three years is a bit pre mature for him to form an opinion relating to Mr. Nadella’s ideology behind this acquisition. In the past, the management of the software titan had only opted for acquisition when it had found itself “stuck in a tough place strategically.”

In the strong competitive market, Microsoft ought to come up with solid strategies which can help it strengthen its bottom line. For LinkedIn, the acquisition is very fruitful but the software firm had had bad experience with regards to acquisition.

Mr. Nadella and LinkedIn’s Jeff Weiner could transform their methodologies into reality then the largest acquisition of Microsoft can guarantee strong and bolstering revenue figures for Washington based organization.

Microsoft's Xbox Leak Images Prior To Gaming Conference

The software giant shrugged off when asked about the accidental leak

Just few hours before E3 gaming conference in Los Angeles, Microsoft Corporation’s new Xbox One Slim leaked images sprawled all over the internet. The sleeker console carries a larger hard drive than the original.

One of the users of the forum NeoGAF –Ekim –spotted and subsequently posted the image. It is believed that the image leak was accidental on part of the tech giant. The company refers to the latest console as “Xbox One S.”  According to Attack of the Fanboy, the soon to be launched console is close to 40% smaller than the very first Xbox One which surfaced in 2013.

In comparison to the previous Xbox One’s storage space of 1TB, the latest console will be accompanied with hard drive of 2TB, giving enough space for the users to safe a large amount of data. The gadget is capable of supporting 4KB ultra high definition (UHD) and is likely to be accompanied with vertical stand and slimmer controller. The image poster has also claimed that the gadget has a built in power supply.

Unlike current version, power brick is excluded from the latest Xbox Slim. More details of the gadget will be disclosed by the software giant in E3 conference. Reportedly, the gadget will be available sometime later this year however by the looks of it, and as assumed by the leaked images, the latest version of Xbox will be available through pre-order post gaming conference.

Reportedly, Microsoft’s new gadget should outperform its rivals by great margin. Earlier, several analysts had expressed that tech giant’s Xbox One S –alternative name of Xbox One Slime and Xbox One Scorpio –have the capability to give better performance than Sony’s PS Neo.   

However, in related news, Sony has recently announced that a better version of its PS4 Neo is in the pipeline. The news expressed last Friday indicated that the gadget is likely to be more powerful. Sony’s CEO Andrew House further added –during his conversation with Financial Times –that the revamped version will cost a little more than the current price of $350 of original model. The gadget will work with 4K TV sets along with giving smooth performance with PlayStation VR headset.

This highlights that the competition is hot and high. According to the partial details, accidentally leaked by the software giant, the latest version of Xbox has the potential to perform beyond expectations.

At the market which closed on Friday, Microsoft Corporation stock stood at a price of $51.48. The 52 week range of the stock is $40 to $57.        

Qiantu Motor looks to hit Tesla CEO Elon Musk's dreams

The Chinese company Qiantu Motor has decided to establish an electric vehicle manufacturing facility in China

Tesla Motors’ dream of progressing in China is on the verge of getting crushed. A local company Qiantu Motor is establishing a factory in the country to manufacture electrically powered vehicles to battle with Tesla models, as reported by Bloomberg after verifying from company’s chairman Lu Qun. Dubbed as the K50, the vehicle will feature a carbon fiber body, and will be offered at a retail price of $106,000(700,000 yuan). The all-electric roadster will be developed to contest with Model S –Tesla’s popular model.

Lu further expressed that the decision of launching an electric car was made after carrying out thorough analysis of US automaker giant’s business. He stated that Tesla has been source of learning for the organization.

China is haven for electric car makers. Recently, the country has been under severe criticism for causing pollution. Therefore, the state has been formulating new rules to make the region green. Likewise, it rewards the organizations which produce environmental friendly products. Indeed, some critics have made an argument that the country’s latest environmental efforts are one of the strongest in the globe.

It was these reforms which made the California based organization to make efforts to enter China. Tesla had expectations of enticing a huge upper-middle class wishing to have a green vehicle. The automaker introduced its first vehicles in the country two years ago, but its sales in the region were disappointing.

CEOElon Musk claimed that the sluggish sales were because of the consumer misunderstanding that charging his organization’s vehicles would be quite difficult. In 2015, Musk stated he held the belief that the automaker could turn its business in the Chinese region around by getting more vehicles on roads and educating consumers in a better manner.

Nevertheless, Elon’s predictions were off. Last year, the automaker had a tough year which compelled it to cut down job opportunities in the country. The disappointing results have not gone unseen amongst shareholders and analysts, who state that China could be a crucial market for the electric car maker to establish in the upcoming times.

CTO of Tesla JB Straubel stated last month that the organization is still not ready to establish a facility in the country. JB did state, nevertheless that the electric car pioneer could finally take the move once demand for the organization’s vehicles reaches “critical mass” in China.

But it has not completely lost. Despite of these problems, there are indications that the company might be blending into the region. In fact, Chinese consumers turned out to be the second largest pre-order group previously this year when Tesla Motors launched its Model 3, an affordable alternate to its expensive Model X and Model S vehicles.

How Tesla will strategize its move to contest with the local competitors will be on acute watch of the analysts and investors.

SoftBank Sold Its Stake In Alibaba

The Japanese telecom has earned $10 billion by selling shares in the competitive world

SoftBank Group Corp. is selling its stake in Alibaba Group Holding Ltd., worth $10 billion. The amount has been so set after the bank consumes the option to sell more stakes through a trust. The move has been taken first time in 16 years as the Japanese telecommunication service provider looks for a cash injection to strengthen its balance sheet and make it more flexible in making strategic investments.

On June 3^rd 2016, the telecom fully exercised an option to purchase extra $1.1 billion or one-fifth, of trust securities redeemable for Alibaba stock, the Osaka based organization stated. That takes the total money raised by the spin-off of those trust securities to a sum of  $6.6 billion.

The online retailer is also paying $74 per share to purchase back its stock worth $2 billion from the organization, which will also sell shares worth half a billion dollar apiece to two state investment organizations in Singapore at the same price per share, the two Asian organizations stated.

Additional shares worth $400 million will go to the leading executives of the E-commerce organization. President Nikesh Arora is heading the initiative to re-examine the portfolio of the organization that will possibly include further sales of assets, source privy to the matter said.

Founder and CEO of SoftBank Masayoshi Son has divided SoftBank into overseas and domestic divisions, entrusting Nikesh with overseas operations and to find out the upcoming Alibaba. 16 years ago, Masayoshi began his investment in the online trading platform operator and currently owns 32% of the Hangzhou based organization. The holding is about to fall after the sale.

In other news, as per reports by Business Insider, while Alibaba’s accounting practices are being investigated by the American regulatory body U.S. Securities and Exchange Commission (SEC) its Chairman and founder Jack Ma has expressed that his company is not easy for the US to comprehend. He was quoted stating "Alibaba's business model does not have any references in the U.S., so it's not just a matter of one or two days for the U.S. to understand Alibaba's business model, "We want to thank the SEC for giving us an opportunity to interact,"

The SEC concentrated on the accounting of the web retailer’s logistics affiliate Cainiao Network, accounting methods generally applicable to related-party transactions, as well as operating data from its yearly report filed recently. Jack stated he didn’t know when the probe results would come, but he wished that then the regulatory body would be able to clearly explain his organization.

Google's New Tool -An Assistance To Small Business

The search engine developer has introduced the website testing tool to help the cause of businesses in the competitive world

 On 2^nd June 2016, Google introduced its new tool intended to help business owners. The tool will help businessmen to decide how effectively their site gives performance on the mobile internet, including both on tablets as well as smartphones. In the last fall, provided that desktop search was surpassed by mobiles searches for the first time, it is important for site owners- but also for the US search engine developer- that the websites showed in search results are performant, functional and accessible.

The newly introduced site testing tool (offered at testmysite.thinkwithgoogle.com) doesn’t involve technical complexities and is easy for everyone to use. One can just enter his or her website address, and find the test scoring of his or her website. The site will offer a more thorough report that provides suggestions on things needed to be repaired on website.

Today, the search company provides many testing tools for sites. These include Page Speed Insights, Mobile-Friendly Test and Page Speed Tools, which is concentrated on the website’s design and are targeted at site designers, developers as well as other more technical users. However, the newly rolled out tool is aiming at business owners themselves, who might not have been aware about the existence of these tools, or did not comprehend their output.

The new high-tech testing tool makes the user interface simpler and indicates scores as Poor (red), Fair (yellow) and Good (in green). Its “Page Speed Insights” scores for grading desktop speed, mobile speed as well as mobile-friendliness, on the newly introduced website. The idea behind the tool is to rapidly show one, at a glance, the quality of the experience consumers would have while they browse from phones and significant details up front, desktop speed and mobile speed (meaning website loading times).

The tool has been launched at a time when the Mountain View based organization is heavily concentrated to transition its business to the mobile internet, where it has invested in newly introduced technologies such as Accelerated Mobile Pages (AMP), which load rapidly on mobile products as well as use less data. It also has updated its own search algorithm to make keeping a mobile-friendly site more significant. As users move to products where applications dominate today, the company too needs to do anything it can to ensure that the mobile internet is as valuable as the desktop internet before it.

The Next web has reported that Google states a regulator leaves the website if it is unable to load on mobile within 3 seconds, so if one’s site  takes a longer time than that, his or her site will be positioned lower.

Alibaba Chairman Jack Ma Refuses to Speak at the IACC Conference

Chairman Jack Ma refuses to speak after brands left out IACC to protest against Alibaba's membership in it

Amidst a growing controversy regarding whether Alibaba Group Holding Limited is acting sufficiently to battle with counterfeits on its online marketplaces, the Chinese E-commerce company has cancelled its co-founder and Chairman Jack Ma’s participation this week at the yearly conference of an important anti-counterfeiting group. The company’s spokesperson stated Michael Evans, who serves as the president of the Hangzhou based organization, will speak at the International AntiCounterfeiting Coalition(IACC) in the US city of Orlando, on 19^th May instead of Jack

The IACC had admitted the online retailer as its members in April this year, but stated recent week it was removing the newly-developed category under which the web retailer was admitted “in consideration of some of the concerns raised by our membership.” In the recent week, Mr Jack was yet scheduled to address. Micheal Kors, which left from the coalition in April to protest against the membership of Alibaba, stated permitting the organization to become a member of the IACC, provided “cover to our most dangerous and damaging adversary.” 

Gucci America has also quitted the group and the French luxurious band Longchamp stated it would not participate in the yearly meeting. IACC, which is amongst the biggest groups working to fight pirated as well as fake goods, was not immediately available for sharing views. Having President Mr Michael speak“just adds insult to injury,”  stated lawyer Kristina Montanaro Schrader representing over 12 brands.

Michael Kors had censured the coalition’s email in April 2016 to members “enthusiastically”  Jack as the key note speaker. Some members of IACC stated they might yet boycott any Alibaba speech. “I am not interested in hearing Mr. Ma speak nor anyone from Alibaba speak” regarding the move it’s taking to battle akes stated IPCybercrime CEO Rob Holmes, which lets brands monitor fake goods online. 

On 17^th May 2016, Alibaba stated it has a “zero tolerance” policy for fake items and holds the belief that the most effective means to resolve the matter is by jointly working with brands. The category suspension by the coalition under which the online trading platform operator was given membership is a  move “in the wrong direction and regrettable,” the company stated.

Instead of preparing for the important address, Mr Jack toured the White House and had a meeting with President of the United States Barak Obama in an off-the-record, unpublicized meeting. The web retailer confirmed that the meeting took place, but refused to further comment. In November 2015, Obama and Jack had a meeting during which President Barak interviewed Jack on the stage at the Asia- Pacific Economic Cooperation (APEC) summit.

Last week,a nameless letter  that stated  it was from international brands asked the board of IACC to hold a  town-hall meeting  to deliberate upon the concerns of the brand or risk an “empty room” if Mr Jack took the decision to address the conference. The sender wasn’t verified by the Wall Street Journal.

Alibaba Joins Hand with SoftBank to Establish a Cloud Services Venture

The online retailer has collaborated with SoftBank to establish a cloud venture for getting access to a large number of Japanese customers

The Japanese telecommunications service provider and Chinese E-commerce company Alibaba Group Holding Limited have established a joint-venture cloud service provider known as SB Cloud to offer Alibaba Cloud’s solutions and technology to Japan based businesses. SB cloud will have its headquarters in Minato-ku, Tokyo, and will set up a datacenter to provide the online retailer’s data storage, middleware offerings, processing solutions and cloud security facilities.

In return, the Hangzhou based organization will attain access to the current Japanese customer base of SoftBank. According to CEO of SB Cloud Eric Gan, who also offers services as SoftBank’s EVP—Alibaba’s major shareholder—the organizations working on the joint project for many months before the announcement was done on 13^th May 2016.

"I believe the JV team can develop the most advanced cloud platform for Japanese customers, as well as for multinational customers who want to use the resources we have available in Japan," stated Gan. The 2 organizations have earlier cooperated on robotics, with the online marketplace operator investing $118 million in SoftBank Robotics in June 2015.

In April 2015,Jack Ma’s organization also introduced its cloud startup program in Singapore, paying a credit of $10,000 for specific startups and help from engineers of the web retailer to develop cloud-enabled applications; dedicated information technology support; and access to the associated incubators of the E-commerce organziation, industry partnerships, funding and working spaces like Hong Kong Science Park as well as Silicon Valley Association of Chinese Entrepreneurs.

In Singapore, Alibaba runs a cloud datacenter, which is also the global head office for its cloud operations. In recent times, it announced sales revenue of $3.7 trillion( $24 trillion yuan) for the 3 months ending at  31^st March next year, a growth by 39% on an annual basis. Its cloud computation business grew its sales revenue by 175% on an yearly basis to over $153 million, recording half a million paying consumers.

"Our focus on long-term strategic priorities -- globalisation, rural expansion, building a world-class cloud computing business, and creating a comprehensive media and entertainment platform -- has laid a strong foundation for future growth,"  stated CEO of Alibaba Group Daniel Zhang.

In April 2016, the company purchased a controlling stake worth a billion dollars in the Lazada Group, which is a Singaporean E-commerce operator, in order to boost its global presence: in Feb 2016 purchased shares worth $101,224,000 in Groupon and shares of Weibo worth $1.1 million, and has paid a total of $455 million on the Singaporean postal and telecommunication service provider SingPost

In March 2015, SoftBank announced it would be dividing its company into 2 distinct entities for global operations and local operations by late 2016. As per reports by Bloomberg, Japan’s third biggest phone business owner SoftBank, will have a 60% share in the newly established project while the online retailer will keep the rest.

The online trading organization previously collaborated with American management service provider Accenture Plc to aim at clients in Southeast Asia, and stated in April it would collaborate with the German organization SAP Se.