- Twitter shares pop 6% as it names Jack Dorsey as its permanent CEO but said it would look elsewhere for a chairman, seeking to allay concerns about its co-founder's dual role as head of the mobile payments company Square. Twitter's shares rose as much as 6 percent on Monday after the announcement, which ended months of speculation about who would take the top job at the microblogging service. Dorsey has been running Twitter as interim CEO to much acclaim since his predecessor, Dick Costolo, stepped down on July 1. Twitter is working to rekindle growth after its latest quarterly results revealed the slowest rise in monthly average users since the company went public in 2013 - a performance that Dorsey at the time called "unacceptable." Some investors had expressed concerns about whether Dorsey could run both Twitter and Square, which he also co-founded. Square is expected to go public this year and Dorsey may have to devote substantial time courting investors for the IPO. But others say Dorsey, 38, is a more effective leader now than in 2008, when he was fired from his first stint as Twitter CEO. Investors and analysts have lauded faster product rollouts since Dorsey took the helm in July, including a widely available "buy now" button that allows users to make purchases directly through Twitter.
- Google Told by Russian Regulator to Unbundle Android Search: Russia’s antitrust regulator has ordered Google to amend agreements with smartphone producers that it said disadvantage third-party applications on devices running the Android operating system. Mountain View, California-based Google is abusing its market dominance through Android, the regulator ruled last month after a complaint from local search engine provider Yandex, which has been losing market share to its U.S. rival on mobile devices. Google has allowed Android-phone producers to use its application store Google Play on the condition that they also pre-install services from the company, including search, and prioritize those icons on screens, the Russian regulator said Sept. 14. Yandex has said Android’s default options push mobile users to Google services, limiting consumers’ ability to choose such services from Yandex or other vendors. “To restore competition on the market, Google should amend agreements with mobile-device producers within a month and exclude the anti-competitive clauses,” Russia’s Federal Anti-Monopoly Service said in a statement on its Website on Monday. Yandex shares rose as much as 13 percent in U.S. trading and were up 7.3 percent at $12.17 at 12:40 pm in New York. Yandex’s share in Russian search fell to 50 percent in August versus 54 percent at the start of 2014, while Google’s share rose to almost 42 percent from 34 percent, according to LiveInternet.ru. Google may also face a fine of 1 percent to 15 percent of the revenue from the services where the violation occurred, according to the regulator.
- ‘Yelp for People’ App Founder Says Peeple Won’t Be ‘Shamed Into Submission’: An entrepreneur said she wanted to create an app that would allow people to be reviewed, the way restaurants or vacation spots are, and you’ll never believe what happened next. (Unless you’re familiar with the social web’s climate of Internet shaming. Then you probably can.) In what was perhaps a speed record for attempting to dismantle a product that doesn’t exist yet, angry people circulated an online petition to prevent the project, called Peeple, from ever making it to an app store. Sleuths at the website Snopes, known for debunking rumors, tried to figure out if the whole thing was an elaborate ruse. And the woman behind the app, Julia Cordray, insisted that Peeple was the real thing, and that it would proceed despite receiving a viral heap of negative reviews. Though it appeared to be offline Monday, a cached version of Peeple’s website offered people the chance to sign up for beta testing of the app. Illustrations showed users with number and star ratings, in the manner of Yelp, and comments under a user’s profile. On Monday, Ms. Cordray did not say whether a prototype was available or whether it had been made available to journalists. Though it appeared to be offline Monday, a cached version of Peeple’s website offered people the chance to sign up for beta testing of the app. Illustrations showed users with number and star ratings, in the manner of Yelp, and comments under a user’s profile. On Monday, Ms. Cordray did not say whether a prototype was available or whether it had been made available to journalists. The cached site’s terms also say that users cannot remove themselves from the app. In the LinkedIn post, Ms. Cordray attempted to scale back some earlier assertions about the concept of Peeple: “You will NOT be on our platform without your explicit permission,” she wrote. “There is no 48 hour waiting period to remove negative comments. There is no way to even make negative comments.” In that case, the app would fall in line with a plethora of platforms that offer users the ability to opt in to the service and then review one another, making the app more like LinkedIn than Yelp. Comparisons have also been drawn to Lulu, an app that allows women to rate prospective male dates using hashtags like #motherslovehim (positive) or #longnails (negative). Lulu has seen its share of criticism, receiving complaints from men who say they don’t want to be rated without their permission.
- Legal troubles, market realities threaten Uber's global push: Uber Inc's aggressive global expansion is looking costlier and riskier than ever as the company struggles with regulatory and competitive obstacles in major markets. Just last week, the company faced a police raid on its European headquarters in the Netherlands, a criminal trial of two top executives in France, a ban on its services in Rio de Janeiro and proposed new regulations in London and Toronto that could cripple its services in those cities. The Uber Pop service, known as Uber X in the U.S., which enables people to offer rides in private cars, is now banned outright in most of Western Europe. In Australia, Uber is popular but mostly illegal, with several big court challenges looming. Meanwhile, in China and other Asian countries Uber faces increasingly powerful competitors and idiosyncratic local transportation markets. Uber has in some cases responded by moving into businesses like car rental - which could be viewed as a nimble response to local conditions or a risky move into a low-margin, capital intensive business. That's on top of the challenge to its business model that Uber faces in its home state of California, where a class action lawsuit could force the company to treat its contract drivers as employees. Taken together, Uber's recent troubles raise the question of whether the firm's headlong drive for global market share, underwritten by more than $7 billion in venture capital investment, is a prudent strategy. It has moved far more quickly in its global expansion than any company in memory--it's now in 60 countries after being founded in 2009 --and the cost and complexity of so many legal wars and subsidizing millions of rides in countries like China could tax even a company as wealthy as Uber. In the U.S. alone, Uber has been involved in at least 173 U.S. lawsuits since October 2012, a review of Westlaw dockets shows, while rival Lyft has been involved in 66 and lodging service Airbnb has been a party to just 20. As a private company Uber discloses little about its spending but one indicator of the scale is its $1.2 billion funding for its China unit in September. Leaked financial documents show Uber overall lost more than $100 million in the 2nd quarter of 2014. "Uber is adopting the shock and awe strategy," said Aswath Damodaran, a finance professor at NYU's Stern School of Business. "I think it's a very high risk strategy."
- Samsung Seen Tapping $55 Billion Cash Pile for Share Buyback: Investors in Samsung Electronics are watching their holdings plunge as new Galaxy smartphones get a lukewarm public response. With $55 billion in cash, the company may be poised to offer consolation. Analysts expect the world’s biggest smartphone maker to buy back shares as early as this month in an effort to return some value to stockholders. Removing more than $1 billion of stock from the market could prompt shares to rally by as much as 20 percent, according to the top-ranked analyst covering Samsung, potentially erasing their declines this year. Samsung has lost about $25 billion in market value -- roughly equivalent to a Nintendo -- this year as sales of the S6 and Note 5 devices sputter against new models from Apple and Chinese makers. A buyback would be just the second in eight years and may take the sting out of sliding market share and sales projected to hit their lowest since 2011. “A share buyback should happen anytime now because the earnings haven’t been performing well,” said Dongbu Securities’s Yoo Eui Hyung, who tops Bloomberg Absolute Return rankings for his calls on Samsung Electronics. The possibility of a Samsung buyback comes after the government imposed a 10 percent tax on chaebol conglomerates’ income unless their spending meets certain minimum levels. The measures are aimed at pushing chaebol to increase salaries and boost investment.
- Report: Google Invests In Wall Street Messaging Tool Symphony: Google has participated in a new round of funding for Symphony Communication Services, valuing the company at $650 million, reports Dow Jones. The deal is expected to close this week. Launched last year, the Palo Alto-based messaging service has previously received financing from Wall Street giants including Goldman Sachs, Morgan Stanley, JP Morgan and BlackRock. Symphony hopes its communications software will compete with Bloomberg’s financial terminal business, by providing news and research from Dow Jones. Symphony built a cloud communications service, which is compliant with FINRA and Sarbanes-Oxley, no easy task. Of course, you can have Slack-like conversations and create virtual discussion rooms, both public and private, but the trick is that there are special rules around who can talk to whom and the system has to respect the rules. Users can also do things like follow certain subjects via a hashtag system, so they can easily track a particular industry within the platform by setting up a set of rules, allowing people to track content, conversations and public social chatter about subjects that matter to them. The product is actually available for free for anyone who wants to use it as of last month, but if a company wants the all of the security and tracking ability, of course, they will need to buy the enterprise version. It’s possible that Google sees the potential of this tool beyond the financial services industry and that’s why it’s investing in the company at this point. Secure communication with the ability to track content could have wide reaching use for both consumers and businesses alike and Google could want a piece of that action. In July, the Wall Street Journal reported that Symphony was looking to raise funding at up to a $1 billion valuation.
- Google Starts Rolling Out Android Pay to Challenge Apple: Google is starting to roll out Android Pay this week, seeking to catch up with Apple Pay and grab a chunk of the growing market for mobile payments. The Web company, which announced plans for the service in May, has signed up partners including Macy’s, Staples and Whole Foods Market, Pali Bhat, Google’s director of product management for the new feature, said in a blog post Thursday. Android Pay turns smartphones into digital wallets that store credit and debit cards, which can then be used in physical and virtual stores. The mobile-payments market is projected to top $142 billion by 2019, up from $67 billion this year, according to Forrester Research Inc. Android Pay users will be able to shop for goods in more than 1 million U.S. locations and in over 1,000 apps, according to Google, which competes with Apple Inc., PayPal Holdings Inc. and other rivals that have introduced digital wallets. Google is betting Android Pay will help its smartphones lure more consumers. Like Apple Pay is built into iPhones, Android Pay will be integrated into smartphones running Google’s mobile operating system. Google’s earlier effort, Google Wallet, has been reoriented to focus on sending and receiving money, the company said today. Android Pay is also is working on new features, including the ability to use loyalty cards and special offers.
- Uber’s China Foe Said to Join Alibaba, Tencent in Lyft Deal: Uber’s Chinese rival invested in U.S. ride-sharing service Lyft around the second quarter, according to people familiar with an investment that takes the battle with Uber abroad. Didi Kuaidi joined Alibaba and Tencent in the funding round between March and June, the people said, asking not to be named because the deal was private. Their joint investment was intended to fuel Didi Kuaidi’s expansion abroad and bankroll Uber’s U.S. competitor, the people said. Alibaba invested $25 million, one of the people said. Asia’s two largest Internet companies already back Didi Kuaidi, the leading Chinese car-hailing service formed in February from two competing apps. Uber and Didi Kuaidi are locked in a costly struggle in China, competing for market share with incentives and subsidies to lure drivers and passengers. Both are close to raising more than $4 billion combined from investors in their latest fundraising rounds, people familiar with the plans said previously. Alibaba had been part of a consortium that backed San Francisco-based Lyft, whose cars in the U.S. sport distinctive pink mustaches on their front. The service counts Carl Icahn among its investors and was valued in a March fundraising round at $2.5 billion. Uber, in contrast, was said to be valued at more than $40 billion in its last round.
- Apple Sells Bonds in Euros Extending Debt Binge to $55 Billion: Apple sold bonds in euros for the second time, increasing the amount the iPhone maker has raised in global debt offerings since 2013 to more than $55 billion. The 2 billion-euro ($2.3 billion) sale was split evenly between bonds maturing in eight years and 12 years, according to data compiled by Bloomberg. Apple sold the longer-dated notes at 85 basis points more than benchmark rates. That compares with the 45 basis-point premium for securities maturing in 2026 that the company sold in its debut euro offering in November, the data show. Apple has sold bonds around the world to diversify funding as it works to return $200 billion to investors by March 2017 and expands its global retail network. While the cost of funding has increased since Apple’s debut euro sale, U.S. companies can still raise capital in the single currency at a 2.07 percentage-point average discount to borrowing in dollars, according to Bank of America Merrill Lynch indexes. “It’s slightly more expensive than last year’s euro-bond sale, but you’re still paying less than 2 percent for 12 years,” said Geraud Charpin, a portfolio manager at BlueBay Asset Management in London. “It’s pretty cheap money. What else do you want to ask for?” Apple will use the proceeds from the bond sale for general corporate purposes, as well as to buy back shares, pay dividends, boost working capital and to fund capital expenditure, acquisitions and repayment of debt, according to the person.
- China says Apple unit underpaid $71 million in tax in 2013: A China unit of U.S. tech giant Apple underpaid taxes in 2013 by 452 million yuan ($71 million), according to a report from the country's finance ministry, which comes as China toughens its stance on tax payments by foreign firms. The Ministry of Finance (MOF) report, dated Sept. 9 but cited by official news agency Xinhua on Thursday, said Apple had already repaid the taxes as well as paying 65 million yuan in late fees. The investigation, however, underlines an increasingly hard stance being taken by Beijing against foreign firms underpaying taxes after authorities said in December they would crack down on the practice. The finance ministry report said the Apple subsidiary had understated its revenues by 8.8 billion yuan and its costs by 3.4 billion yuan. It had also overstated its profits by 5.4 billion yuan. China levied around $140 million in back taxes from Microsoft Corp at the end of last year.
- Ubers Are About To Start Carrying Their Own In-Car Magazine: Starting this week in NYC, you can grab a copy of Uber’s new in-car magazine, called “Arriving Now,” from the seat-back pockets. A new print publication isn’t exactly a revolutionary move (airlines have been rocking inflight magazines for a while), but Uber has an interesting opportunity here to test the content waters. At face value, it seems like kind of a funny move for them to get into the truly burgeoning print journalism market, but there are a ton of different directions that this could be taken. Uber is probably more interested here in testing out a content arm where they can push out cool stories that gives people a better “brand experience” with the company. Though most people probably spend their time on a phone in the back of an Uber regardless, seat-back, always-on touch screens could probably be coming soon enough to a car near you, allowing users more ways to interact with Uber’s continually growing on-demand services that don’t necessarily involve getting people from place-to-place.
- The Bloomberg Terminal, a Wall Street Fixture, Faces Upstarts: For nearly three decades, the flickering orange-on-black screens of the Bloomberg terminal have been omnipresent on Wall Street trading floors and executive suite desks, maintaining a vital lifeline of data and communication. In knitting together the world of finance, those $21,000-a-year terminals have generated billions of dollars for Bloomberg, almost single-handedly paying for the company’s journalistic ambitions, as well as the fortune, political career and philanthropic largess of its founder, Michael R. Bloomberg. Now that golden egg — and all that it pays for — is a target for new competitors looking to knock it from its dominant position. Bloomberg has fended off competition before, but the latest upstarts are gunning for the company at a time when Wall Street is already aggressively looking to cut its spending on Bloomberg terminals. Later this month, a start-up called Symphony, created by Goldman Sachs and backed by the large banks, is introducing software that provides an alternative to what many traders say is the most valuable part of the Bloomberg terminal — the chat program used by traders and investors. At Goldman, more than half of the people who have Bloomberg terminals use them primarily for chat and other simple functions, according to people briefed on the subject who were not authorized to speak publicly. At the same time, Money.Net, a start-up that has been built by a former top Bloomberg executive, is looking to challenge Bloomberg head-on and is gaining momentum and stealing away customers. After more than a decade as New York’s mayor, Mr. Bloomberg has been retaking the reins of the company and pushing to refine its focus. Last week, dozens of Bloomberg journalists were laid off as part of a broader effort to reconfigure how journalism fits into the company. Bloomberg’s news offerings — including BusinessWeek and the company’s website — generate less than 4 percent of the company’s revenue and cost more than they earn, according to Burton-Taylor Consulting. The terminals generate 75 percent of Bloomberg’s revenue. All service providers for Wall Street, not just Bloomberg, are unusually vulnerable at the moment. The financial industry is in the middle of an aggressive run of cost-cutting as it grapples with new regulations and changes in the markets. A Bloomberg contract, which can be upward of $100 million at larger institutions, is a tempting target to whittle down. The number of Bloomberg terminals grew only 1.9 percent, to 325,000, last year. In the 10 years before the financial crisis, the number of terminals grew at an average rate of 12 percent each year, with most companies signing on for multiyear contracts. Bloomberg has sustained several challenges to its dominant market position, fending off smaller competitors hoping to bite off a corner of its business. And it has the cash reservoirs to wage a vigorous defense this time around. But Bloomberg’s own history shows that it is not easy to maintain a profitable market position like the one it has held for more than two decades. Bloomberg rose to prominence in the 1990s by nimbly replacing earlier Wall Street data companies — like Quotron and Telerate — that failed to change quickly enough to protect their longtime market dominance. Morgan Downey, the former Bloomberg executive who is building Money.Net, said he decided to leave Bloomberg in late 2013 and create a low-cost challenger after seeing how slowly Bloomberg was changing and how many of the company’s clients wanted a cheaper alternative. “When they go visit the banks, they are being told, ‘We are trying actively, not passively, to get away from being your customers,’ ” Mr. Downey said. “They’ve gotten very lazy and fat.”
