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Nintendo Betting Record Profit On Switch Console

April 28, 2017 by  
Filed under Gaming

Nintendo Co Ltd is predicting its new Switch console will more than double annual operating profit and end the eight-year sales decline that plagued its previous offering just as players were turning to smartphone gaming.

The Japanese firm entered the mobile gaming market last year to the relief of shareholders fretting about diving console sales. Now the early success of the Switch has fueled hope of a long-term earnings recovery and sent the firm’s share price about 20 percent higher since the console’s March debut.

“We are hoping to change the tide of our business with the Switch,” Nintendo President Tatsumi Kimishima said at a news briefing on Thursday.

Nintendo estimated profit to grow 2.2-fold to 65 billion yen ($584 million) in the year through March 2018, with sales jumping 53.3 percent. That was still far below the 104 billion yen average of 23 analyst estimates surveyed by Thomson Reuters I/B/E/S.

Asked if the outlook was too low, Kimishima said the firm was stepping up marketing costs for the Switch.

Nintendo aims to sell 10 million of the hybrid home console and handheld device this financial year, on top of a higher-than-expected 2.7 million sold in its debut month.

“If the 10 million target is achieved … that means the sales momentum would be close to the Wii,” Nintendo’s most successful console, Kimishima said.

The Wii, launched in November 2006, sold about 20 million units in its first year and exceeded 100 million over its life. The last time Nintendo’s sales grew was in the year ended March 2009, when Wii demand drove profit to a record 555 billion yen.

Profit from a new console typically peaks a couple of years after launch when there is a wide choice of game titles.

Kimishima also said Nintendo’s first own-brand smartphone game, Super Mario Run, has neared 150 million free downloads, but the number of users paying the one-off fee to unlock most of its content is below the target 10 percent.

One reason behind the Switch’s strong start is that unlike its predecessor Wii U, the console has a long list of game titles from independent studios because Nintendo made the Switch compatible with publicly available game development platforms from the start, said Hirokazu Hamamura, a director at Kadokawa Dwango Corp, which publishes games magazines.

Twitter Finally Reports User Growth In More Than A Year

April 27, 2017 by  
Filed under Around The Net

Twitter Inc has announced that it has had its strongest growth in monthly active users in more than a year and a much better-than-expected quarterly profit, despite heavy competition from Facebook and Snapchat.

The microblogging service said average monthly active users increased 6 percent to 328 million in the first quarter from a year earlier.

Analysts on average had expected 321.3 million monthly active users, according to market research firm FactSet StreetAccount.

Revenue fell 7.8 percent to $548.3 million, its first drop since its initial public offering.

Net loss narrowed to $61.6 million, or 9 cents per share, in the first quarter ended March 31, from $79.7 million, or 12 cents per share, a year earlier.

Twitter’s user growth has stalled in the past few quarters and the company has been trying to convince advertisers that it will strengthen its user base.

As part of its efforts, the company has updated its product offerings including live video broadcasts from its app and launched new features to attract users.

Twitter’s weak performance has raised questions about CEO Jack Dorsey’s leadership and whether the company would be bought by a bigger media firm. Financial markets speculated about a sale of Twitter last year, but no concrete bids were forthcoming.

Excluding items, the company earned 11 cents per share, beating the estimate of 1 cent per share.

Twitter’s advertising revenue fell 11 percent to $474 million in the quarter, above the average analyst estimate of $442.7 million, according to market research firm FactSet StreetAccount.

Ant Financial Sweetens Bid For MoneyGram

April 18, 2017 by  
Filed under Around The Net

China’s Ant Financial has increased its bid for MoneyGram International Inc by over a third, beating a competitor’s offer to gain approval from the U.S. electronic payment firm’s board, although it still faces regulatory hurdles.

Ant’s plans to expand globally with the acquisition of one of the biggest firms in remittances hit a major snag last month when U.S.-based Euronet Worldwide Inc made an unsolicited offer and openly lobbied U.S lawmakers, saying Ant’s proposal created a national security risk.

The finance affiliate of e-commerce giant Alibaba Group Holding Ltd hiked its bid 36 percent to $18 per share in cash, valuing MoneyGram at around $1.2 billion.

The new offer handily beats the $15.20 per share proposed by Euronet and represents a 9 percent premium to MoneyGram’s last traded share price on Thursday. Euronet declined to comment on Ant’s fresh bid.

MoneyGram’s global remittance channels for sending money overseas would help Ant build a cross-border network after a string of recent investments in Asia. But the deal must first clear the Committee on Foreign Investment (CFIUS), which looks at acquisitions for national security risks.

CFIUS has been a stumbling block for several Chinese deals in the United States and a deal with Euronet is likely to be more agreeable to U.S. policymakers amid rising tensions between Washington and Beijing over trade and foreign policy.

Analysts said, however, that while CFIUS could certainly hold up any agreement, it wasn’t necessarily a deal-breaker given MoneyGram is likely to push for the deal given the sweetened offer.

“CFIUS may lengthen the process…I don’t think CFIUS would be a deal killer” said Jeffrey Sun, Shanghai-based partner with law firm Orrick, Herrington & Sutcliffe.

Euronet has said Chinese ownership could compromise the relationship between law enforcement and MoneyGram when investigating money laundering and “terrorist financing”.

Ant has sought to allay those fears, reiterating on Monday that any data collected on MoneyGram users in the U.S. will continue to reside on U.S.-based servers and that MoneyGram will operate as an independent unit.

Ant and MoneyGram said in a joint statement they have made progress towards obtaining regulatory approvals, including winning U.S. antitrust clearance and are confident the deal will close this year.

The news comes one day after sources said China’s Anbang Insurance Group will let a plan to acquire U.S. annuities and life insurer Fidelity & Guaranty Life for $1.6 billion lapse, after failing to secure necessary regulatory approvals.

Study Reveals Cyber Attacks Have Cost Company Shareholders Billions

April 13, 2017 by  
Filed under Computing

Cyber security breaches diminish businesses share prices permanently, with financials the worst hit, a study issued by IT consultant CGI and Oxford Economics has revealed.

Severe cyber security breaches, such as those having legal or regulatory consequences, involve the loss of hundreds of thousands of records and hurt the firm’s brand, caused share prices to fall on average 1.8 percent on a permanent basis, the analysis of 65 companies affected since 2013 globally has found.

Investors in a typical FTSE 100 firm would be worse off by an average of £120 million after such a breach, the report said. Overall the cost to shareholders of these 65 companies would be in excess of 42 billion pounds ($52.40 billion).

CGI’s analysis compared each company’s share price against a cohort of similar companies to isolate the impact of cyber breaches from other market movements, during incidents detailed in a breach index compiled by Dutch security firm Gemalto.

Two-thirds of firms had their share price adversely impacted after suffering a cyber breach. Financial firms were the worst affected, followed closely by communications firms.

“Financial services experience the greatest burden in terms of impact, reflecting the high levels of regulation, the importance of customer confidence and the potential for financial fraud to be a facet of the breach,” the report said.

hose least affected were retail, hospitality and travel companies.

Hacking attacks and other cyber security breaches have impacted companies across the world in recent years, from retailer Target in the United States in 2013 to British communications firm TalkTalk in 2015.

Apple To Drop Imagination Technologies, Takes GPU Design In-house

April 4, 2017 by  
Filed under Consumer Electronics

Apple will soon discontinue using intellectual property from Imagination Technologies Group for graphics processing units for its iPhone and other devices, as it is developing a separate, independent graphics design for its products, the chip technology company said Monday.

But the U.K. company is not giving up without a fight as it doubts Apple can develop a brand new GPU without infringing Imagination’s intellectual property.

Apple held an 8.5 percent share of the issued share capital of Imagination as of April 30 last year. The iPhone maker said in a filing in March last year that it had discussions with Imagination about a possible acquisition, though it did not have plans to make an offer at that time. Apple is Imagination’s largest customer and it described the iPhone maker as “essential to the business of the Group” in its annual report for 2016.

The iPhone 7 currently has graphics based on the Rogue architecture from Imagination, which was announced in 2010. Since then Imagination has announced Furian, a new PowerVR graphics architecture as an upgrade.

Imagination said Monday it had supplied under a licensing agreement the technology and the intellectual property that is the basis of GPUs in Apple’s iPhones, iPads, iPods, watches and TVs. The firm said it had been informed by Apple that it will no longer use Imagination’s intellectual property in new products in 15 months to two years time.

Imagination has raised doubts whether Apple can develop a brand new GPU architecture from basics without infringing the U.K. company’s intellectual property rights.

“Apple has not presented any evidence to substantiate its assertion that it will no longer require Imagination’s technology, without violating Imagination’s patents, intellectual property and confidential information,” Imagination said. The company said it had requested evidence but Apple had declined to provide it.

Apple declined to comment on Imagination’s statement.

The iPhone vendor’s notification has led Imagination to discuss with Apple alternative commercial arrangements for the current license and royalty agreement, Imagination said.

Shares of the chip technology company fell by over 60 percent in early trading in London.

Is Facebook Really Trying To Compete Against Nintendo’s Switch?

April 3, 2017 by  
Filed under Gaming

In a move that positions the social giant against video platforms like Twitch and YouTube, Facebook today has announced that people can now live broadcast from a PC or laptop – something that was only possible via mobile devices since last year. More importantly to the game industry and the world of online influencers, this expansion of Facebook Live also extends to live streaming of PC software.

“If you’re a gamer, this new feature makes it easier than ever to stream your PC gameplay to friends and followers and engage with them while you play,” the company stated. “If you’re giving your friends or followers a tutorial or how-to guide, you can incorporate on-screen graphics, titles, and overlays. Or if you’re an artist, you can go live and switch seamlessly between cameras as you narrate the process.”

It’ll be interesting to see how much of the market Facebook will be able to wrangle away from rivals Google (YouTube) and Amazon (Twitch) as the rise of streaming and influencers continues. It’ll also be important for developers to keep a close eye on how Facebook Live streaming fares, as it could be another valuable marketing tool – for both AAAs and indies, as Innervate consultant Becky Taylor observed during the Game Developers Conference.

Courtesy-GI.biz

U.S. Commerce Department Removes ZTE From Trade Blacklist

March 30, 2017 by  
Filed under Around The Net

The U.S. Department of Commerce has agreed to remove Chinese telecommunications equipment maker ZTE Corp  from a trade blacklist after the company pleaded guilty to violating sanctions on Iran and agreed to pay nearly $900 million, the agency said in a notice.

Removal from the list marks the end of a tense period for ZTE, which faced trade restrictions that could have severed its ties to critical U.S. suppliers.

“By acknowledging the mistakes we made, taking responsibility for them … we are committed to a ZTE that is fully compliant, healthy and trustworthy,” said ZTE Chief Executive Zhao Xianming said in an emailed statement.

Last year, the U.S. Commerce Department placed export restrictions on ZTE as punishment for violating U.S. sanctions against Iran. The restrictions would have prevented restricted suppliers from providing ZTE any U.S.-made equipment, potentially freezing the Chinese handset maker’s supply chain.

Over the past 12 months, as ZTE cooperated with U.S. authorities, the U.S. Commerce Department temporarily suspended the trade restrictions with a series of three-month reprieves, allowing the company to maintain ties to U.S. suppliers.

Earlier this month, ZTE agreed to pay a total of $892.4 million and pleaded guilty to violating U.S. sanctions by sending American-made technology to Iran and lying to investigators.

The Commerce Department said on Tuesday it would impose severe restrictions on former ZTE CEO Shi Lirong, whom the agency accused of approving efforts to skirt sanctions and ship equipment to Iran.

The Commerce Department said Shi approved a systematic, written business plan to use shell companies to secretly export U.S. technology to Iran. Reuters could not immediately reach Shi for comment.

The U.S. investigation followed reports by Reuters in 2012 that ZTE had signed contracts with Iran to ship millions of dollars’ worth of hardware and software from some of America’s best-known technology companies.

U.S. authorities have said the size of the financial penalty against ZTE also reflects the fact that the company lied to investigators when executives were approached about the allegations.

As part of the deal, ZTE will be under probation for three years and agreed to cooperate in the continuing investigation.

Emaar Malls Acquisition Of Souq.com May Be Amazon’s Challenger

March 28, 2017 by  
Filed under Around The Net

Dubai’s Emaar Malls, operator of glitzy Middle East shopping centers, has tendered an $800 million offer for regional online retailer Souq.com, setting up a potential bidding war with Amazon.com.

Emaar Malls’ bid has so far not been accepted by Souq.com shareholders, the Dubai-listed firm said in a stock exchange announcement on Monday.

Reuters reported last week that Amazon had agreed in principle to buy Souq.com, which was founded 12 years ago by Syrian-born entrepreneur Ronaldo Mouchawar.

Amazon declined to comment, and Souq.com did not respond to an emailed request for further comment.

However, Emaar Malls’ offer is higher than Amazon’s $580 million bid, a source familiar with the matter said. The Financial Times reported Amazon would pay between $650 and $750 million, quoting two sources familiar with the matter.

However, Souq.com will have to break an exclusivity agreement with Amazon if it is to accept the Emaar Malls offer at this stage, the source said.

The Emaar Malls bid includes a $500 million up-front payment and a guaranteed 15 per cent internal rate of return for Souq.com shareholders, the source said.

A successful bid would give Emaar “a firmer footing in retail and consumer behavior,” said Sanyalaksna Manibhandu, head of research at NBAD Securities.

The offer is not the first move online to be made by Dubai billionaire Mohamed Alabbar, who made his name as chairman of Emaar Properties, the Dubai-government linked-developer of the world’s tallest building. Emaar Malls is the retail unit of Emaar Properties.

Last year Alabbar raised $1 billion from regional investors including Saudi Arabia’s Public Investment Fund to set up his own Middle East e-commerce firm Noon.

Days before announcing Noon, Alabbar and Amazon founder Jeff Bezos met in Dubai, leading to speculation that they would forge some sort of partnership in the region.

Originally set to open for business with 20 million products, Noon quietly missed its January launch date. The company has yet to comment on the delay.

Emaar Malls bid is independent of Noon, the source said, aimed at complementing the retail unit’s brick-and-mortar sales by introducing services such as “click and collect”. Shoppers in the Arab world prefer to make purchases in-store despite a young and tech-savvy population.

Emaar Malls is the operator of the Dubai Mall, which accounts for around 50 percent of the emirate’s luxury goods spending and is one of the Middle East’s largest shopping centers.

“Emaar’s retail division will strengthen the case for online retail for traditional brick and mortar retailers, by providing an avenue of online retail,” Euromonitor research analyst Rabia Yasmeen said in an email.

 

Spotify Crosses 50 Million Paid Subscribers Milestone

March 6, 2017 by  
Filed under Around The Net

Spotify announced, via Twitter, that it now has 50 million paid subscribers, a rise of 25 percent in less than six months, and extending the music streaming service’s lead over its closest rival, Apple Music.

Launched in 2008, Spotify had 40 million paid subscribers in September and the company tweeted the 50 million figure on Thursday, the same day messaging app company Snap Inc pulled off its massive share sale that bodes well for other technology companies considering a flotation.

Apple, which launched its music service less than two years ago, had about 20 million subscribers in December and its entry looks to have done little to slow the rapid growth of its older Swedish-based rival.

Spotify, which has yet to show a profit as it spends to grow internationally, is now looking at a possible stock market listing in the United States, online news portal TechCrunch said last month.

A company spokeswoman declined to comment on Friday on when it might seek a listing.

But a partner at a leading investor in Spotify, venture capital firm Northzone, said late last year the company could start to become profitable as early as 2017 after years of focusing squarely on “growth, growth, growth”.

Spotify is the most highly valued venture backed start-up in Europe and according to media reports is considering a listing on Nasdaq and potentially a dual listing on the Nasdaq exchange in Stockholm, where the company is headquartered.

It was last valued at $8.53 billion, according to venture capital market research firm CB Insights. That valuation alone would make a flotation Europe’s biggest technology start-up listing since the market launch of German e-commerce investor Rocket Internet in 2014.

While still loss-making, Spotify has posted rapid subscriber growth since it was created a decade ago by Swedish founders Daniel Ek and Martin Lorentzon.

Following its announcement  that it had reached 50 million paid subscribers, Ek made a point of retweeting a comment from Wall Street media analyst Rick Greenfield which pointed to how Spotify was adding subscribers at an increasingly rapid rate.

The Stockholm-based company also announced a major expansion in New York last month.

One of Europe’s most highly valued venture-backed start-ups, Spotify will move its New York office to the World Trade Center from the Midtown area of Manhattan, adding more than 1,000 new jobs.

Facebook VR Ambitions Threatened By Fight With ZeniMax Media

March 1, 2017 by  
Filed under Around The Net

Facebook Inc’s big ambitions in the ever expanding virtual reality industry could be threatened by a court order that would prevent it from using critical software code another company is laying claims to, according to legal and industry experts.

Video game publisher ZeniMax Media Inc has requested that a Dallas federal judge issue an order barring Facebook unit Oculus from using or distributing the disputed code, part of the software development kit that Oculus provides to outside companies creating games for its Rift VR headset.

A decision is likely a few months away, but intellectual property lawyers said ZeniMax has a decent chance of getting the order, which would mean Facebook faces a tough choice between paying a possibly hefty settlement or fighting on at risk of jeopardizing its position in the sector.

For now, Facebook is fighting on. Oculus spokeswoman Tera Randall said last Thursday the company would challenge a $500 million jury verdict on Feb. 1 against Oculus and its co-founders Palmer Luckey and Brendan Iribe for infringing ZeniMax’s copyrighted code and violating a non-disclosure agreement.

Randall said Oculus would possibly file an appeal that would “allow us to put this litigation behind us.”

An injunction would require Oculus, which Facebook acquired for $3 billion in 2014, to stop distributing the code to developers or selling those games that use it.

Such a court order “would put a huge stumbling block in front” of Oculus, said Stephanie Llamas, an analyst with gaming market research firm SuperData. It would offer the company’s rivals in the new market, which include HTC, Sony Corp, Alphabet Inc and others an “important opportunity for them to become first movers.”

Sales of the Rift itself would not be barred, but Llamas, said a lack of available titles could hinder Facebook’s offering relative to HTC’s Vive headset and Sony’s Playstation VR.

That market is relatively small at the moment – sales of VR hardware and software totaled $2.7 billion in 2016 – and mainly limited to gaming. But Facebook chief executive Mark Zuckerberg has predicted the technology “will become a part of daily life for billions of people,” revolutionizing social media, entertainment and medicine.

SuperData says the VR market will be worth $37 billion by 2020. Likewise, investment firm Cantor Fitzgerald last year issued a report predicting VR would account for 10 percent of Facebook revenue in four years’ time.

Tesla Plans Three More Gigafactories

February 27, 2017 by  
Filed under Around The Net

Tesla is making plans for a total of five Gigafactories, where it will manufacture solar panels and battery systems for both its electric vehicles and for home and commercial energy storage.

“Later this year, we expect to finalize locations for Gigafactories 3, 4 and possibly 5,” the company stated in a letter to shareholders.

Tesla has already begun installing Model 3 manufacturing equipment in its Fremont, Calif. plant and at Gigafactory 1 in Reno, Nev. It’s first Gigafactory is already producing battery cells for its energy storage products, the Powerwall 2 and Powerpack 2; they have the same form-factor as the cells that will be used in Model 3 sedan, the company said.

Tesla’s Gigafactory 2 is located in Buffalo, N.Y. and is expected to open in the second half of 2017, when it will begin production of solar panels and shingles.

Ahead of the launch of its Model 3 sedan later this year, Tesla is planning to re-engineer and expand its manufacturing operations as it anticipates a major uptick in sales of its most affordable all-electric car, it said. The news of the shareholder letter was first reported in The Verve.

This month, Tesla began building Model 3 prototypes; it plans to begin production of the sedan, which has a base price of $35,000, in mid-2017, the company said.

Tesla expects to produce about 5,000 EVs per week in the fourth quarter of 2017 and plans to increase that number to 10,000 per week in 2018.

“Initial crash test results have been positive, and all Model 3-related sourcing is on plan to support the start of production in July,” Tesla said in its letter. “Model 3 vehicle development, supply chain and manufacturing are on track to support volume deliveries in the second half of 2017.”

Snapchat Wants In On Hardware Development Too

February 21, 2017 by  
Filed under Around The Net

Snap Inc hit the roads of London on Monday promoting its initial public offering with a daring proposition: that it can build hot-selling hardware gadgets and ad-friendly software features fast enough to stay one step ahead of Facebook.

No longer just a purveyor of a smartphone app for disappearing messages, Snap has hired hundreds of hardware engineers, built a secretive product development lab and scoured the landscape for acquisitions as it pursues its newly stated ambition to be “a camera company.”

These efforts, which are aimed at developing hardware and so-called augmented reality technologies, are central to the strategy of a company that is seeking a valuation of up to $22 billion in its early March IPO despite heavy losses and the specter of stiff competition for advertising dollars with a far-larger Facebook.

It is a big gamble and the odds against Snap are long.

There is little precedent for a company with its roots in software and social networking succeeding in the notoriously difficult consumer hardware business. Few U.S. firms aside from Apple have made big profits on hardware, and camera and wearable gadget makers have much lower valuations than Snap is seeking. Once-hot camera start-up GoPro  is a cautionary tale: its stock sits 61 percent below its 2014 IPO price.

More broadly, creating new products and features that have mass-market appeal and cannot be readily mimicked is a huge challenge, analysts say.

“It’s worrisome,” said Paul Meeks, chief investment officer at Sloy, Dahl & Holst, which manages more than $1 billion in assets. “Snapchat is going to have to continue to be really innovative and distinctive. It’s going to be very tough to trump Facebook.”

Snap declined to comment for this story.

Snap first signaled its new focus with the September reveal of Spectacles, funky sunglasses with an embedded video camera for posting to the Snapchat app. The company spent $184 million on research and development last year, nearly half its revenue.

 

Verizon Reportedly Gets Discount On Yahoo Acquisition

February 17, 2017 by  
Filed under Around The Net

Verizon Communications Inc  is close to an updated deal to purchase Yahoo Inc’s core internet business for $250 million to $350 million less than the original agreed price of $4.83 billion, according to a source briefed on the matter.

Since last year, Verizon had been trying to persuade Yahoo to amend the terms of the acquisition agreement to reflect the economic damage from two cyber attacks. A source told Reuters that the deal, which could come as soon as this week, will entail Verizon and Yahoo sharing the liability from potential lawsuits related to the data breaches.

Another person familiar with the situation said the price cut was likely to be around $250 million, a figure that Bloomberg reported earlier on Wednesday.

A representative from Verizon declined to comment. Yahoo did not immediately respond to requests for comment.

“Maybe this isn’t quite as much of a discount as initially thought, but it’s at least something,” said Dave Heger, senior equity analyst at Edward Jones.

Verizon hopes to combine Yahoo’s search, email and messenger assets, as well as advertising technology tools, with its AOL unit, which Verizon bought in 2015 for $4.4 billion. Verizon has been looking to mobile video and advertising for new sources of revenue outside an oversaturated wireless market.

But Sunnyvale, California-based Yahoo has been under scrutiny by federal investigators and lawmakers since disclosing the largest known data breach in history in December, months after disclosing a separate hack.

The U.S. Securities and Exchange Commission has launched a probe into whether Yahoo should have disclosed the breaches, which occurred in 2013 and 2014, sooner, according to a report in the Wall Street Journal last month.

On Wednesday, Yahoo sent a warning to users whose accounts may have been accessed by intruders between 2015 and 2016, as part of a data security issue related to the breach it disclosed in December. A person familiar with the matter said notifications have gone out to a mostly final list of users.

T-Mobile Riding High, Adds Customers And Beats Revenue Forecast

February 15, 2017 by  
Filed under Mobile

T-Mobile US Inc, the No.3 U.S. wireless carrier, has reported higher-than-expected quarterly revenue and profit as its promotional offers aided in adding new customers.

T-Mobile had a number of promotional offers in the fourth quarter, including a free iPhone 7 offer with eligible trade-in around Black Friday.

Riding on the success of these offers, the company gained market share from rivals Verizon Communications Inc, AT&T Inc and Sprint Corp in an oversaturated U.S. wireless market.

T-Mobile said in January that it added 933,000 postpaid phone subscribers, or those who pay monthly bills, on a net basis, in the three months ended Dec. 31.

Chatter around a deal between T-Mobile and Sprint Corp resurfaced in December after Masayoshi Son, whose SoftBank Group Corp is a majority shareholder in Sprint, pledged a $50 billion investment in the United States.

Asked last week about a renewed merger bid with T-Mobile, Son said he was keeping his options open about Sprint.

T-Mobile’s total revenue jumped 23.4 percent to $10.18 billion.

The company’s net income rose to $390 million, or 45 cents per share, for the quarter from $297 million, or 34 cents per share, a year earlier.

Analysts on average were expecting a profit of 30 cents per share and revenue of $9.84 billion for the quarter, according to Thomson Reuters I/B/E/S.

 

Twitter Growth Slump Continues, Value Slides

February 10, 2017 by  
Filed under Around The Net

Twitter Inc reported its slowest quarterly revenue growth since debuting as a public the company continues to face intense competition from Snap Inc’s Snapchat and Facebook Inc’s  Instagram.

Twitter said its user base increased 4 percent to 319 million average monthly active users.

Analysts on average had expected 319.6 million monthly active users, according to market research firm FactSet StreetAccount.

Revenue rose just 1 percent to $717.2 million, missing analysts’ average estimate of $740.1 million, according to Thomson Reuters I/B/E/S. The company’s adjusted profit, however, beat sharply lowered estimates.

“While revenue growth continues to lag audience growth, we are applying the same focused approach that drove audience growth to our revenue product portfolio,” Chief Executive Jack Dorsey said in a statement. “This will take time, but we’re moving fast to show results.”

Twitter’s user growth benefited from the social media frenzy that surrounded the U.S. Presidential election as well as the growing follower base of President Donald Trump.

Trump has been using Twitter to air his views, bypassing traditional media outlets.

Twitter was abuzz with takeover chatter last year involving big names such as Salesforce.com Inc and Walt Disney Co. The rumors died down due to the lack of concrete offers.

Twitter has also upgraded its offerings with several new features, including live video broadcasts from its app.

“While none of them will likely materially change Twitter’s user/usage growth, these product innovations are a positive step,” RBC Capital Markets analysts wrote in a pre-earnings note.

San Francisco-based Twitter was also hit by a string of executive departures in 2016, including in its product team, which has had three heads in less than a year.

Twitter’s net loss widened to $167.1 million, or 23 cents per share, in the fourth quarter ended Dec. 31, from $90.24 million, or 13 cents per share, a year earlier.

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