Positive Earnings, an Evolution for Snapchat, and a Cash Infusion for Yahoo
This was a week of good news for many, with
several companies posting better than expected earnings. Disney surpassed
expectations, posting a net income of $1.9 billion for the quarter, up from
$1.5 billion last year. This was largely on the strength of their blockbuster
film ‘Frozen’, as well as the success of their Infinity Disney video game.
Electronic Arts (EA) also beat forecasts, posting $100 million more in net
revenue than expected ($914 million in the 4th quarter vs. $812
million expected), with much of this growth coming from the digital side of the
business, and the success of their titles on the Xbox One and PS4. Activision,
through the success of its Call of Duty franchise and recent Diablo III
release, also posted almost $100 million more in revenue than experts
forecasted ($772 million earned vs. $688 million forecasted). They look to continue growing with a new game in the COD series being released in November (Advanced Warfare), as well as new first person shooter game called Destiny. However the
revenue for EA and Activision was still lower than their previous years. I find
it very interesting that companies’ stock prices go up or down based on how
much their revenue differed from the experts predictions, not based on how they
did compared to the previous year. Presumably it’s because the experts also
take into account the health of an industry, overall consumer trends,
inflation, regulatory changes, etc.
Another interesting piece of tech news is the
fact that Snapchat has added more features to its app. Users can now chat in-app,
as well as send live video if both parties are in the chat. Very similar to the
features of Skype, Snapchat is looking to expand its user base, as well as
increase the engagement of current users. Although it has no direct
competitors, Snapchat knows that they must stay innovative if they wish to
remain relevant, and with this update they look to add a new dimension to their
app: presence. Now users can see the reactions of their friends to various
pictures or events (to see the ad explaining this: https://www.youtube.com/watch?v=Z9h30NcVy4E).
From a marketing perspective, it’s very neat to see how they distributed the ad
– they snapchatted it to all their users. This makes me wonder if users will
start to receive snapchat video ads, considering they already receive “you’ve
won xxx contest” snapchats from various brands (who clearly got your snapchat
handle without your permission). It will be interesting to see how tolerant
users are of ‘snapchat spam’, and what kind of restrictions will be placed on
these ads.
I also want to quickly mention the fact
that Alibaba, the huge Chinese technology company, has officially filed its IPO
papers. While it may still be several months before the IPO happens, many are
predicting that it will be one of the biggest IPO’s in U.S. history. Alibaba
accounts for 80% of all Chinese e-commerce, stating revenues of $6.5 billion
($2.8 billion in profits) in the first 9 months of the 2014 fiscal year. It had
231 million active buyers as of the end of December, up 44% from the previous
year, and it has been valued between $170 billion and $250 billion. The part
that I find quite amusing about all of this is that Yahoo has a 22.6% share in
Alibaba (after selling back part of its share in 2012), and depending on the
final valuation, their share in Alibaba will most likely be worth more than the
entire valuation of Yahoo. By this I mean that, Yahoo is currently valued at $36.7
billion, while their share in Alibaba will probably be worth anywhere between
$38 billion and $56 billion. All of this from a $1 billion investment in 2005.
It should cause quite a shakeup in the tech industry now that Yahoo will have a
large amount of cash on hand to continue its comeback. I’m curious to see how
Melissa Mayer (Yahoo’s CEO) will approach the coming months.
This was a week of good news for many, with
several companies posting better than expected earnings. Disney surpassed
expectations, posting a net income of $1.9 billion for the quarter, up from
$1.5 billion last year. This was largely on the strength of their blockbuster
film ‘Frozen’, as well as the success of their Infinity Disney video game.
Electronic Arts (EA) also beat forecasts, posting $100 million more in net
revenue than expected ($914 million in the 4th quarter vs. $812
million expected), with much of this growth coming from the digital side of the
business, and the success of their titles on the Xbox One and PS4. Activision,
through the success of its Call of Duty franchise and recent Diablo III
release, also posted almost $100 million more in revenue than experts
forecasted ($772 million earned vs. $688 million forecasted). They look to continue growing with a new game in the COD series being released in November (Advanced Warfare), as well as new first person shooter game called Destiny. However the
revenue for EA and Activision was still lower than their previous years. I find
it very interesting that companies’ stock prices go up or down based on how
much their revenue differed from the experts predictions, not based on how they
did compared to the previous year. Presumably it’s because the experts also
take into account the health of an industry, overall consumer trends,
inflation, regulatory changes, etc. 
Another interesting piece of tech news is the
fact that Snapchat has added more features to its app. Users can now chat in-app,
as well as send live video if both parties are in the chat. Very similar to the
features of Skype, Snapchat is looking to expand its user base, as well as
increase the engagement of current users. Although it has no direct
competitors, Snapchat knows that they must stay innovative if they wish to
remain relevant, and with this update they look to add a new dimension to their
app: presence. Now users can see the reactions of their friends to various
pictures or events (to see the ad explaining this: https://www.youtube.com/watch?v=Z9h30NcVy4E).
From a marketing perspective, it’s very neat to see how they distributed the ad
– they snapchatted it to all their users. This makes me wonder if users will
start to receive snapchat video ads, considering they already receive “you’ve
won xxx contest” snapchats from various brands (who clearly got your snapchat
handle without your permission). It will be interesting to see how tolerant
users are of ‘snapchat spam’, and what kind of restrictions will be placed on
these ads. 
I also want to quickly mention the fact
that Alibaba, the huge Chinese technology company, has officially filed its IPO
papers. While it may still be several months before the IPO happens, many are
predicting that it will be one of the biggest IPO’s in U.S. history. Alibaba
accounts for 80% of all Chinese e-commerce, stating revenues of $6.5 billion
($2.8 billion in profits) in the first 9 months of the 2014 fiscal year. It had
231 million active buyers as of the end of December, up 44% from the previous
year, and it has been valued between $170 billion and $250 billion. The part
that I find quite amusing about all of this is that Yahoo has a 22.6% share in
Alibaba (after selling back part of its share in 2012), and depending on the
final valuation, their share in Alibaba will most likely be worth more than the
entire valuation of Yahoo. By this I mean that, Yahoo is currently valued at $36.7
billion, while their share in Alibaba will probably be worth anywhere between
$38 billion and $56 billion. All of this from a $1 billion investment in 2005.
It should cause quite a shakeup in the tech industry now that Yahoo will have a
large amount of cash on hand to continue its comeback. I’m curious to see how
Melissa Mayer (Yahoo’s CEO) will approach the coming months. 
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