- After stellar year, Facebook stock finds doubters on rising opex, slowing growth (2015F 37% Y/Y, 2014F 57% Y/Y) : Facebook, up 195 percent in two years and trading at a record last month, is starting to draw skeptics in the options market. Options betting on a decline in Facebook cost the most versus bullish contracts since July 2013, according to data compiled by Bloomberg. Options with an exercise price 10 percent below the shares cost 3.1 points more than calls and climbed to 3.3 points above on Dec. 23, according to three-month implied-volatility data compiled by Bloomberg. That compares with the one-year average of 1.3 points. “We’re not banking on seeing Facebook repeat the same great performance it had in 2014,” said Uppington, a technology portfolio manager at Lombard Odier in Geneva. His company oversees $50 billion. “It’s also seeing an increase in operating expenses. The company needs to invest in growth to overcome the law of large numbers.” Operating expenses rose in the third quarter at the fastest pace since the first three months of 2013, data compiled by Bloomberg show. The Menlo Park, California-based company has purchased applications such as Instagram and WhatsApp Inc. to increase its appeal to younger users and drive mobile advertising sales. Now analysts predict profit and revenue growth in 2015 won’t keep pace with the increases from last year. Facebook earnings will gain 12 percent this year after nearly doubling in 2014, according to analyst estimates compiled by Bloomberg. Sales will climb 37 percent after rising 57 percent last year, the projections show.
- Can Apple Do for Wearable Ads What Facebook Did for Mobile? Marketers predict brands will latch onto smartwatches TapSense this week unveiled what its programmatic ads for the soon-to-be-released Apple Watch will look like, exhibiting a buy-one-get-one-free mock offer from Starbucks. It's at least the second tech company to reveal a programmatic offering for wearables in the last few months, coming on the heels of FitAd's debut with Amtrak. This will be a space to watch in 2015—especially if Apple Watch becomes remotely close to as popular as the iPhone. Wearable device sales are generally expected to achieve significant growth over the next few years, according to researchers. Rest assured, marketers will pay to test return on investment with the emerging formats, and the additional revenue stream could be a boon to CEO Tim Cook's company. "Apple has the opportunity to seize this market of wearable ads, just like Facebook has seized mobile," said Esha Shah, manager of mobile strategy and innovation at Fetch. "Hyper-local ads and coupons could be part of that, as should larger ad opportunities, like voice-based mobile search," he added. Indeed, advertisements on one's wrist seem ripe for direct-response opportunities.
- Glassdoor raises $70M, valuation ~ $1B, preps for IPO: Glassdoor Inc, the operator of jobs website Glassdoor.com, said it raised $70 million from Google Capital and existing investors Tiger Global, Battery Ventures and Sutter Hill Ventures. Glassdoor, whose rivals include Monster Worldwide Inc, said it had raised about $160 million so far. Glassdoor has a valuation of close to $1 billion and is planning for an initial public offering, the Wall Street Journal said. Glassdoor said it had more than 27 million registered members worldwide. The company has over 2,000 employer clients including Groupon Inc, Goldman Sachs Group Inc, Facebook Inc, Chevron Corp, Procter & Gamble Co and Twitter Inc. Glassdoor raised $50 million in December 2013 from a group led by Tiger Global.
- Payments story#1: Kickstarter abandons Amazon as payment processor, opts for Stripe instead: Crowdsourced fundraising site Kickstarter has dropped Amazon.com Inc as its global payments processor in favor of Stripe, the fast-growing startup used by Twitter Inc, Facebook Inc and Apple Inc. The switch comes as the Internet retailer begins to move clients from its customizable checkout service to an Amazon-branded one. In a blog post on Tuesday, Kickstarter said it made the switch after Amazon decided to drop its Flexible Payments Service, which allows a company to develop its own checkout process. The new Amazon-branded Login and Pay service does not offer as much flexibility. Some analysts have said Amazon has been held back in payments because merchants are wary of handing over customer data to the company, which is rapidly expanding into new areas and competing with sellers. In early December, Stripe raised $70 million from Sequoia Capital and other investors that valued the startup at $3.5 billion, double from a year earlier.
- Payments story #2: Rocket ties up with Philippines telco for payments solution in SE Asia: Ecommerce giant Rocket Internet and Philippine Long Distance Telephone Company (PLDT) today took a big step towards their goal of becoming a strong contender in online payments in the region. In a joint statement, the companies announced they’ve inked an agreement to form a 50-50 joint venture for online and mobile payment solutions, with a focus on emerging markets. This follows PLDT’s US$445 million investment in the Germany-based startup incubator. The joint venture particularly targets Rocket Internet’s ecommerce operations under brands such as Zalora and Lazada in Southeast Asia. Prior to this deal, the companies had begun making use of PLDT’s MePay. MePay is a payment service for shopping on Zalora’s site without a credit card.
- Big news in the US TV Market: Dish to launch Sling TV, a web TV service: What is Sling TV? Sling TV is a service by Dish Network, one of the country's largest satellite TV providers. When it officially goes online in a few weeks, it will cost $20 a month. For that you'll get access to about 30 channels — including TNT, Cartoon Network and CNN. These channels will be streamable over the Internet — or "over the top," in industry parlance. But the real kicker is that Dish is throwing in ESPN (more on that in a second). Why is Dish launching something like this? Dish wants to go after cord-cutters — a growing segment of TV watchers who don't subscribe to pay-TV and instead watch only free, over-the-air television, on-demand services like Netflix, or a mix of both. The drawback to being a cord-cutter is that you sometimes sacrifice channel choices. You don't get to watch HBO, for example, if you're a cord-cutter. But many people, particularly young viewers, don't seem to mind — and that's a problem for traditional pay-TV companies. What's the big deal about ESPN? Live sports is pretty much the foundation for all paid television.
- Coverage here, here, here and everywhere that Instagram is now bigger than Twitter, will launch verified accounts: Instagram announced Wednesday that it now has 300 million monthly active users, up 50 percent in just nine months. That makes the service, a photo- and video-sharing app owned by Facebook, more popular than Twitter, which had 284 million monthly active users as of the third quarter. More than 70 percent of Instagram’s users are outside the United States, the company said Instagram users are highly engaged with the service, with users interacting with posts at 18 times the rate they do with Facebook posts, according to a report issued last month by the research firm L2. Kevin Systrom, Instagram’s chief executive, said in a statement that the service was also going to begin verifying the Instagram accounts of celebrities, athletes and brands. Verified accounts will be identified with a badge so that fans know that they are really what they say they are. Instagram is also cracking down on spam accounts, deleting them from the service instead of just deactivating them.
- Twitter slipping: behind Instagram in users, behind Yahoo in 2015 mobile revenues, out of Glassdoor's top 50 best employers list: “Instagram is adding an average of 360k new active users per day; For comparison Twitter is adding 160k new users per day,” Colin Sebastian, an analyst at Robert W Baird & Co., said today in a tweet. Twitter declined to comment on Instagram’s announcement. San Francisco-based Twitter has recently been on a campaign to promote its prospects after several quarters of slowing user growth and questions about whether it can ever reach the scale of Facebook, which has about 1.3 billion members. Monthly active user count at Twitter rose 23 percent in the third quarter, down from 24 percent growth the prior quarter.
- Reliance Capital is set to sell its 16% in Yatra.com for INR 500 Crore; Yatra valuation ~ USD 500 Million: per cent stake in travel portal Yatra.com for an estimated Rs 500 crore ($80 million) and is in talks with two-three international investors. The deal would mark an over 12x appreciation for this investment by Reliance Capital, the financial services arm of Anil Ambani-led business conglomerate Reliance Group, which had acquired a 16 per cent stake in the online travel company for Rs 40 crore in 2006. While the spokesperson did not give further details, sources said Reliance Cap aims to close the transaction in four-six weeks and the deal would put the total valuation of Yatra.com at around $500 million (Rs 3,000 crore). In the fast-growing Indian online travel business, Yatra.com competes with NASDAQ-listed MakeMyTrip, which commands a market value of $1.2 billion. During the last fiscal 2013-14, MakeMyTrip is estimated to have clocked total transaction value of $1.38 billion on its platforms, as against $763 million by Yatra. The operating income of MakeMyTrip and Yatra stood at $116 million and $51 million, respectively, for the year.
- eBay might cut 10% of its workforce, primarily in marketing, and increases its (small) investment in Indonesia: Ebay is considering eliminating almost 10 percent of its workforce, or about 3,000 employees, the WSJ cited one source as saying. The cuts are expected to be localized in the company'smarketplace division, the report said. Separately, US-based ecommerce giant eBay plans to increase its ownership in Indonesia’s MetraPlasa from 40 percent to 49 percent, local media outlet Berita Satu reports. “Ebay can increase to 49 percent and they can also have the option to become the majority shareholder. There are stages for them to get there and they want to do it quickly. But I can not disclose anything more,” said Telkom’s acting president director Indra Utoyo in Jakarta on Monday. Ebay remains a strategic partner for Telkom as it will allow for future cross-border trading, and for products on the Blanja site to eventually be sold overseas. Blanja claims to have one million products on its site from only 600 sellers. It recieves a mere 50,000 visitors per day. “Currently, the revenue contribution of ecommerce to our business remains small,” says Utoyo. “But we estimate the contribution could reach 10 percent within two to three years.”
- Coupang, Korea's Amazon" raises USD 300M, valuation > USD 1B, GMV runrate USD 2.2B: Coupang, a fast-growing e-commerce company in South Korea, has raised $300 million of additional financing to aid its expansion plans. While Bom Kim, the chief executive, declined to disclose the company’s valuation, he said it was higher than the roughly $1 billion price tag the company achieved in its previous financing round. He also said the company now had about $500 million of cash in the bank. Coupang, based in Seoul, calls itself the Amazon of Korea. In addition to selling its own inventory, the company allows third-party merchants to sell through its site. While it competes in Korea with eBay and a site called 11th Street, Coupang says its competitive edge stems from its focus on ordering through mobile devices and from its delivery network. Like Amazon, Coupang has built its own warehouses, called fulfillment centers. But it has gone a step beyond Amazon by also employing its own delivery workers, whom it calls “Coupang men.” (Mr. Kim said the fleet includes some women as well.) These workers, who try to build relationships with customers by doing things like leaving handwritten notes, can often deliver packages on the day they are ordered. Mr. Kim, 36, who started Coupang in late 2010 after dropping out of Harvard Business School, said the company was now generating gross sales — the total value of goods passing through the site — of $2.2 billion on an annualized basis. He said roughly one in three people in South Korea had downloaded the company’s app.
