(Reuters) - Cisco Systems Inc (CSCO.O) posted stronger-than-expected quarterly results and Chief Executive John Chambers said his customers were seeing more stability, adding to hopes that business conditions would soon recover.
His comments, which came a day after similarly optimistic remarks by U.S. Federal Reserve Board Chairman Ben Bernanke, helped shares of the network equipment maker rise 2.5 percent in after-hours trading on Wednesday as investors looked beyond the double-digit fall in sales in the last quarter.
"They are seeing some stabilization, a leveling out, or in other words, they are finally beginning to have something reasonably solid underneath their feet," Chambers said of how Cisco customers are describing their current business.
Cisco, the biggest maker of routers and switches, forecast revenue in the current quarter falling 17 percent to 20 percent from a year earlier. The midpoint of that outlook was slightly better than Wall Street's expectation for a 19 percent decline to $8.36 billion, according to Reuters Estimates.
Revenue and earnings for Cisco's fiscal third quarter ended April 25 were also better than expected. While sales for the quarter fell 17 percent to $8.2 billion, that was higher than Wall Street's average outlook of $8.1 billion.
"I think you could make some fairly broadbased conclusion that the environment appears to be stabilizing and doesn't appear to be getting worse," said Morgan, Keegan & Co analyst Simon Leopold, adding that Cisco's report boded well for the overall market.
"I don't expect a rapid recovery but this is what we need to see happen before we can even consider a recovery."
Cost cuts, underscored by a 12 percent fall in operating expenses to $3.6 billion, bolstered Cisco's bottom line.
Net profit fell to $1.3 billion, or 23 cents a share, from $1.8 billion, or 29 cents a share, a year ago. Earnings excluding items was 30 cents, above the average analyst forecast of 25 cents, according to Reuters Estimates.
Cisco shares rose about 4 percent after the results, before settling at around $20.10, up from their Nasdaq close on Wednesday at $19.61.
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Wednesday, May 6, 2009
Tuesday, May 5, 2009
Carol Bartz may actually be fixing Yahoo
(Reuters) -- Four months into her fix-it job at Yahoo, CEO Carol Bartz has worked through an impressive checklist.
The 60-year-old executive has moved swiftly to rebuild the Internet company to her specifications, upending the organizational structure, replacing executives and cutting costs including 675 jobs, or 5% of the workforce.
Analysts say that is exactly the kind of shake-up needed at Yahoo, which has seen its sales growth slow and its market share overtaken by Google Inc. in recent years.
For Yahoo's ranks, still shell-shocked from deep cuts in 2008 - including 1,600 axed jobs - the hope that Bartz brings is increasingly mixed with a dose of fear and uncertainty.
Yet broad support remains for Bartz despite the tough talk, canceled holiday parties and forced vacations that have come to define her era.
"We are all sort of wanting to believe in her because we really want to see Yahoo turned around," said one Yahoo insider who wished to remain anonymous for fear of retribution. "But it still doesn't make it any less scary when you don't hear about what's coming up."
With a new round of layoffs under way, and a steady stream of Yahoo sites getting axed, anxiety within the ranks has been exacerbated by what some say is a growing sense of secrecy.
Bartz' famous penchant for tight lips, which initially showed in her emphatic displeasure toward news leaks, is increasingly evident in other aspects of Yahoo's operations. The informal flow of information once common within the company has come to a halt. "Everything is on a need to know basis," the Yahoo source said.
Bartz has taken steps to keep employees in the loop with weekly emails about her activities and changes at the company. But the communiques don't always provide the full picture.
Decisions to shutter parts of the business such as GeoCities, which Yahoo acquired for more than $4 billion in 1999, have not been announced throughout the company. Some employees worry that their project will be next.
"If your property is not making a lot of money, or making a small amount of money, you know you should be looking over your shoulder because you could be the next person to get that tap," said another Yahoo employee who wished to remain anonymous.
Yahoo declined to comment for this story.
Read more here
The 60-year-old executive has moved swiftly to rebuild the Internet company to her specifications, upending the organizational structure, replacing executives and cutting costs including 675 jobs, or 5% of the workforce.
Analysts say that is exactly the kind of shake-up needed at Yahoo, which has seen its sales growth slow and its market share overtaken by Google Inc. in recent years.
For Yahoo's ranks, still shell-shocked from deep cuts in 2008 - including 1,600 axed jobs - the hope that Bartz brings is increasingly mixed with a dose of fear and uncertainty.
Yet broad support remains for Bartz despite the tough talk, canceled holiday parties and forced vacations that have come to define her era.
"We are all sort of wanting to believe in her because we really want to see Yahoo turned around," said one Yahoo insider who wished to remain anonymous for fear of retribution. "But it still doesn't make it any less scary when you don't hear about what's coming up."
With a new round of layoffs under way, and a steady stream of Yahoo sites getting axed, anxiety within the ranks has been exacerbated by what some say is a growing sense of secrecy.
Bartz' famous penchant for tight lips, which initially showed in her emphatic displeasure toward news leaks, is increasingly evident in other aspects of Yahoo's operations. The informal flow of information once common within the company has come to a halt. "Everything is on a need to know basis," the Yahoo source said.
Bartz has taken steps to keep employees in the loop with weekly emails about her activities and changes at the company. But the communiques don't always provide the full picture.
Decisions to shutter parts of the business such as GeoCities, which Yahoo acquired for more than $4 billion in 1999, have not been announced throughout the company. Some employees worry that their project will be next.
"If your property is not making a lot of money, or making a small amount of money, you know you should be looking over your shoulder because you could be the next person to get that tap," said another Yahoo employee who wished to remain anonymous.
Yahoo declined to comment for this story.
Read more here
Monday, May 4, 2009
Boston Globe talks suspended, union says
(Reuters) -- The Boston Globe and its biggest union suspended talks Monday over concessions that parent company The New York Times Co. is seeking to keep the 137-year-old newspaper open.
That leaves the future of New England's largest newspaper in doubt for at least another day, even after the Globe reached agreements with three smaller unions that represent those who print and deliver the paper, according to local media reports.
The Boston Newspaper Guild, which represents some 600 workers including the newsroom staff, is now the sole holdout in talks over cost-cutting. A major sticking point has been lifetime job guarantees that the union wanted to preserve and management wanted to end.
"The negotiations are done today," union President Daniel Totten told reporters in Weymouth, Mass., where talks were held over the weekend.
"We will reconvene in short order," Totten said, according to a report on the Globe Web site.
The agreements with the other unions included some changes to a system that provides lifetime employment to certain workers, though the unions did not provide specific details. The unions have argued that ending lifetime job guarantees would pave the way for layoffs of senior staff.
Management rejected the Newspaper Guild's offer, which includes a 3.5% pay cut for most employees, an unpaid furlough, an increase in the early retirement age and a reduction in pension and 401(k) contributions, the Globe said.
The two sides have not set a time or location for the next round of talks, said a source who was not authorized to discuss the matter.
The source said it was possible that talks could resume later Monday or on Tuesday.
A New York Times spokeswoman declined to comment.
Read more here
That leaves the future of New England's largest newspaper in doubt for at least another day, even after the Globe reached agreements with three smaller unions that represent those who print and deliver the paper, according to local media reports.
The Boston Newspaper Guild, which represents some 600 workers including the newsroom staff, is now the sole holdout in talks over cost-cutting. A major sticking point has been lifetime job guarantees that the union wanted to preserve and management wanted to end.
"The negotiations are done today," union President Daniel Totten told reporters in Weymouth, Mass., where talks were held over the weekend.
"We will reconvene in short order," Totten said, according to a report on the Globe Web site.
The agreements with the other unions included some changes to a system that provides lifetime employment to certain workers, though the unions did not provide specific details. The unions have argued that ending lifetime job guarantees would pave the way for layoffs of senior staff.
Management rejected the Newspaper Guild's offer, which includes a 3.5% pay cut for most employees, an unpaid furlough, an increase in the early retirement age and a reduction in pension and 401(k) contributions, the Globe said.
The two sides have not set a time or location for the next round of talks, said a source who was not authorized to discuss the matter.
The source said it was possible that talks could resume later Monday or on Tuesday.
A New York Times spokeswoman declined to comment.
Read more here
Sunday, May 3, 2009
IPhone Developers Regroup After ‘Anything Goes’ Era
(Bloomberg) -- IPhone developers, who flocked to Apple Inc.’s App Store in search of a quick profit, are finding it’s getting more difficult to come up with breakout hits.
With more than 35,000 applications now available for the iPhone, consumers are more discerning about what apps they download. A new version of the iPhone operating system due for release in the next few months will have users clamoring for even more sophisticated programs, said Chris James, who runs SnapDat Networks Inc., an iPhone app company in New York.
“The early apps that came out had a distinct advantage because there weren’t a lot of them to compete for attention,” said James, a former Wall Street trader. Now, “you better have a high-quality app or don’t even try.”
Sales of mobile programs industrywide may exceed $25 billion by 2014, with games being the largest category, according to a report this week from Juniper Research in Basingstoke, England. Apple has sold more than 37 million units of the iPhone and iPod Touch, which also runs iPhone apps. The company doesn’t break out sales from the App Store.
For developers, Apple serves as a gatekeeper, reviewing every program before including it on the App Store and deciding which ones to promote. Developers get a 70 percent cut of each program sold, with Apple retaining 30 percent. Free programs are distributed at no cost.
‘Anything Goes’
“Anything goes right now,” said Sean Lyons, whose Los Angeles-based startup, HK Apps, created a $2.99 program that delivers jokes that start with the words “Yo Mama.” Creating a future hit may not be so easy as users demand more features, he said. “Apple is trying to put the better programs out there.”
For apps that aren’t free, prices start at 99 cents. The costliest program, as of yesterday, is a $900 mobile video surveillance app called iRa Pro. It lets people view live video from hundreds of security cameras.
Apple, based in Cupertino, California, rose $1.41 to $127.24 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have climbed 49 percent this year.
Apple’s vetting process for apps fueled debate last week after the store began selling “Baby Shaker,” a 99-cent program that let users vent their frustration by shaking on-screen infants.
The company removed the program after a child-welfare group, the Sarah Jane Brain Foundation, called it “horrific.” Apple apologized, saying the application was “deeply offensive” and should never have been offered.
‘Yo Mama’
More than 800,000 developers have downloaded the kit needed to write programs for the iPhone, and users have downloaded more than 1 billion programs.
Apple doesn’t provide many details about the vetting process. In March, when it unveiled a software upgrade for the iPhone, the company said 96 percent of programs get approved. Of those, 98 percent are accepted in seven days or less.
Lyons, 23, spent a week recording 320 jokes for his “Yo Mama Extreme: Voice Edition.” The program reads jokes aloud when people shake the iPhone. Among the offerings: “Yo Mama has so much hair on her upper lip, she braids it!”
Users have downloaded thousands of copies of “Yo Mama Extreme” since its release in March -- even though six other developers began selling similar programs at the same time, Lyons said. Sales have been brisk enough to convince Lyons and his partner that creating iPhone apps could be a full-time job.
Read more here
With more than 35,000 applications now available for the iPhone, consumers are more discerning about what apps they download. A new version of the iPhone operating system due for release in the next few months will have users clamoring for even more sophisticated programs, said Chris James, who runs SnapDat Networks Inc., an iPhone app company in New York.
“The early apps that came out had a distinct advantage because there weren’t a lot of them to compete for attention,” said James, a former Wall Street trader. Now, “you better have a high-quality app or don’t even try.”
Sales of mobile programs industrywide may exceed $25 billion by 2014, with games being the largest category, according to a report this week from Juniper Research in Basingstoke, England. Apple has sold more than 37 million units of the iPhone and iPod Touch, which also runs iPhone apps. The company doesn’t break out sales from the App Store.
For developers, Apple serves as a gatekeeper, reviewing every program before including it on the App Store and deciding which ones to promote. Developers get a 70 percent cut of each program sold, with Apple retaining 30 percent. Free programs are distributed at no cost.
‘Anything Goes’
“Anything goes right now,” said Sean Lyons, whose Los Angeles-based startup, HK Apps, created a $2.99 program that delivers jokes that start with the words “Yo Mama.” Creating a future hit may not be so easy as users demand more features, he said. “Apple is trying to put the better programs out there.”
For apps that aren’t free, prices start at 99 cents. The costliest program, as of yesterday, is a $900 mobile video surveillance app called iRa Pro. It lets people view live video from hundreds of security cameras.
Apple, based in Cupertino, California, rose $1.41 to $127.24 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have climbed 49 percent this year.
Apple’s vetting process for apps fueled debate last week after the store began selling “Baby Shaker,” a 99-cent program that let users vent their frustration by shaking on-screen infants.
The company removed the program after a child-welfare group, the Sarah Jane Brain Foundation, called it “horrific.” Apple apologized, saying the application was “deeply offensive” and should never have been offered.
‘Yo Mama’
More than 800,000 developers have downloaded the kit needed to write programs for the iPhone, and users have downloaded more than 1 billion programs.
Apple doesn’t provide many details about the vetting process. In March, when it unveiled a software upgrade for the iPhone, the company said 96 percent of programs get approved. Of those, 98 percent are accepted in seven days or less.
Lyons, 23, spent a week recording 320 jokes for his “Yo Mama Extreme: Voice Edition.” The program reads jokes aloud when people shake the iPhone. Among the offerings: “Yo Mama has so much hair on her upper lip, she braids it!”
Users have downloaded thousands of copies of “Yo Mama Extreme” since its release in March -- even though six other developers began selling similar programs at the same time, Lyons said. Sales have been brisk enough to convince Lyons and his partner that creating iPhone apps could be a full-time job.
Read more here
Tuesday, April 28, 2009
US Justice Department looks into Google books deal
(Reuters) - The U.S. Justice Department is making inquiries about a class action deal that Google Inc struck giving it the right to digitize and sell entire libraries, two experts on digitization told Reuters Tuesday.
Under a proposed settlement last October between Google and the Authors Guild and the Association of American Publishers, Google agreed to pay $125 million to create a Book Rights Registry, where authors and publishers can register works and receive compensation from institutional subscriptions or book sales.
Google's plan is to let readers to search through millions of copyrighted books online, browse passages and purchase copies.
But the deal also would allow Google -- and only Google -- to digitize so-called orphan works, which has raised some eyebrows in antitrust circles. Orphan works are books or other materials that are still covered by U.S. copyright law, but it is not clear who owns the rights to them.
"Essentially, it gives Google a free pass for infringement for selling all these books," said James Grimmelmann, who teaches at the New York Law School. "Publishers (who are part of the settlement) would be happy to share the monopoly with Google."
Grimmelmann said he was part of a recent conference call with Justice Department lawyers, who asked questions about Google's proposed settlement.
Grimmelmann said the Justice Department lawyers did not indicate what their concerns were.
"I have no idea what they're thinking," he said.
Peter Brantley of the Internet Archive, which also digitizes books, said his organization had "multiple conversations" with the Justice Department about the Google plan.
"There are legitimate antitrust issues related to Google's ability to solely commercialize this content," Brantley said, adding he hoped the settlement agreement would be rejected by U.S. District Judge Denny Chin.
Read more here
Under a proposed settlement last October between Google and the Authors Guild and the Association of American Publishers, Google agreed to pay $125 million to create a Book Rights Registry, where authors and publishers can register works and receive compensation from institutional subscriptions or book sales.
Google's plan is to let readers to search through millions of copyrighted books online, browse passages and purchase copies.
But the deal also would allow Google -- and only Google -- to digitize so-called orphan works, which has raised some eyebrows in antitrust circles. Orphan works are books or other materials that are still covered by U.S. copyright law, but it is not clear who owns the rights to them.
"Essentially, it gives Google a free pass for infringement for selling all these books," said James Grimmelmann, who teaches at the New York Law School. "Publishers (who are part of the settlement) would be happy to share the monopoly with Google."
Grimmelmann said he was part of a recent conference call with Justice Department lawyers, who asked questions about Google's proposed settlement.
Grimmelmann said the Justice Department lawyers did not indicate what their concerns were.
"I have no idea what they're thinking," he said.
Peter Brantley of the Internet Archive, which also digitizes books, said his organization had "multiple conversations" with the Justice Department about the Google plan.
"There are legitimate antitrust issues related to Google's ability to solely commercialize this content," Brantley said, adding he hoped the settlement agreement would be rejected by U.S. District Judge Denny Chin.
Read more here
Monday, April 27, 2009
Credit Suisse’s Zhu Said to Start Private-Equity Firm
(Bloomberg) -- Zhu Lei, a managing director in Credit Suisse Group AG’s Beijing office, is leaving to set up his own private-equity firm, a person with direct knowledge of the matter said.
Beijing-based Zhu, 36, plans to raise 9 billion yuan ($1.3 billion) in the local currency for two private-equity funds and $200 million from overseas investors, the person said, asking not to be identified as the fundraising is still in progress. Zhu will focus on investments in China, the person said.
Zhu follows Goldman Sachs Group Inc.’s China partner Fang Fenglei who set up a private-equity firm focused on investments in the world’s fastest-growing major economy. Zhu’s departure comes after those of three other senior Credit Suisse executives in Asia-Pacific since February, including Paul Raphael, former head of investment banking in the region.
Josephine Lee, a Hong Kong-based spokeswoman for Credit Suisse, declined to comment. Zhu has resigned though is still with the Zurich-based bank, the person said.
Zhu will seek about 4.5 billion yuan from Chinese investors, including state-owned companies, for each of the two local- currency funds, the person said. One of the funds will focus on industries such as infrastructure and utilities, according to the person.
Zhu joined Credit Suisse in September from Deutsche Bank AG as a Beijing-based managing director covering state-owned companies. He’s responsible for helping government-controlled Beijing Enterprises Holdings Ltd. raise as much as HK$2.18 billion in a convertible bond sale to expand a gas and water pipeline unit.
Read more here
Beijing-based Zhu, 36, plans to raise 9 billion yuan ($1.3 billion) in the local currency for two private-equity funds and $200 million from overseas investors, the person said, asking not to be identified as the fundraising is still in progress. Zhu will focus on investments in China, the person said.
Zhu follows Goldman Sachs Group Inc.’s China partner Fang Fenglei who set up a private-equity firm focused on investments in the world’s fastest-growing major economy. Zhu’s departure comes after those of three other senior Credit Suisse executives in Asia-Pacific since February, including Paul Raphael, former head of investment banking in the region.
Josephine Lee, a Hong Kong-based spokeswoman for Credit Suisse, declined to comment. Zhu has resigned though is still with the Zurich-based bank, the person said.
Zhu will seek about 4.5 billion yuan from Chinese investors, including state-owned companies, for each of the two local- currency funds, the person said. One of the funds will focus on industries such as infrastructure and utilities, according to the person.
Zhu joined Credit Suisse in September from Deutsche Bank AG as a Beijing-based managing director covering state-owned companies. He’s responsible for helping government-controlled Beijing Enterprises Holdings Ltd. raise as much as HK$2.18 billion in a convertible bond sale to expand a gas and water pipeline unit.
Read more here
Thursday, April 23, 2009
Bank of Japan chief says U.S. stimulus not enough
(MarketWatch) -- Japan's central bank chief said Thursday that U.S. stimulus efforts will not be sufficient to revive the economy without additional measures to address ills such as excessive household debt, according to reported comments.
Bank of Japan Gov. Masaaki Shirakawa made the comments in New York ahead of the annual World Bank and International Monetary Fund meetings in Washington, reports said.
Shirakawa nonetheless welcomed stimulus packages being enacted in the U.S. and around the world, according to Agence France-Presse.
But he warned that the U.S. economy "needs to work out excesses" including household over-indebtedness if the economy is to truly become stable again.
Read more here
Bank of Japan Gov. Masaaki Shirakawa made the comments in New York ahead of the annual World Bank and International Monetary Fund meetings in Washington, reports said.
Shirakawa nonetheless welcomed stimulus packages being enacted in the U.S. and around the world, according to Agence France-Presse.
But he warned that the U.S. economy "needs to work out excesses" including household over-indebtedness if the economy is to truly become stable again.
Read more here
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