Yahoo Shares Tumble After Alibaba Hits the Stock Market

Google (GOOGL) launched its Android One initiative targeting India, Alibaba (BABA) completed the biggest IPO ever and Yahoo (YHOO) shares slumped in response.

Google’s Android One Launches in India

Google is making a big splash in India with Android One. This is a project that involves a Google-made OS and Google-designed hardware created in conjunction with local hardware-makers like Micromax, Karbonn and Spice (Micromax and Karbonn have 16.6% and 9.5% market share in India).

The OEMs can make their own choices regarding the CPU, GPU, storage, battery-type and camera-type. It is expected that these choices plus the automated OS updates will reduce the cost of ownership while offering a more consistent experience at the very low end of the market. Google has tied with hardware makers and carriers to ensure that the phones take off with no hiccups.

Worth noting is the recent entry of Chinese handset giant Xiaomi in India, which makes phones based on Android. Xiaomi has seen very strong uptake of its phones in India (although it has dumped older versions in the country to date). So Google’s comprehensive attack could also be a defense.

Making Sense of Yahoo Post Alibaba IPO

On Friday, Yahoo shed 27% of its holdings in Alibaba as well as a chunk of its market cap. While the shares have risen in recent times as investors tried to get a piece of Alibaba through Yahoo, the question is, does the post IPO sell-off make sense. After all, Yahoo still has a 16%+ stake in Alibaba, $4 billion of cash on its balance sheet, around $5 billion after taxes in Alibaba proceeds and a popular web portal.

After paying out to investors, there still would be a sizeable amount of cash to pursue strategic alternatives. While the tax payout could have peeved investors, it’s time to face the reality that key business metrics will not change overnight. And this is what is killing the stock right now.

Microsoft Layoff Phase 2

GOOG = Class C shares (new, non-voting)

GOOGL = Class A shares (old, 1 vote per share)

Other stories you may have missed-

Corporate

Larry Ellison Lets Go, Kind Of: Larry Ellison is stepping down as CEO of Oracle (ORCL), but this is what he isn’t letting go: a 25% stake in the company and the title of CTO. Not only that, he’s also replacing Jeff Henley as Chairman of the Board. So basically, his successors (Mark Hurd and Safra Catz as co-CEOs) are now required to prove themselves suitable for the position. They will have separate functions: Hurd on the marketing side and Catz on manufacturing, finance and legal.

Microsoft Replaces Directors: Two members of Microsoft’s (MSFT) board, Dave Marquardt and Dina Dublon are being replaced with Teri List-Stoll, executive VP and CEO of Kraft Foods Group and W. Scharf, CEO of Visa. Reasons for the change remain unclear but analysts have speculated that it could have been necessitated by Microsoft’s new strategic focus as well as the probability of its raising some debt (Microsoft holds the bulk of its cash offshore).

Google Loses Satellite Exec to Facebook: This isn’t the first time that Google lost an executive involved in its connectivity-via-satellite project. This time it’s Michael Tseytlin and earlier this month, it was Greg Wyler, along with Brian Holz and David Bettinger. The fact that there appears to be a brain drain in the area leads you to wonder if there is any change in Google’s satellite plans.

Former Qualcomm Exec to Head Google Fiber: Dennis Kish, who was the VP and GM of Qualcomm’s MEMS Technology Division until 3 months ago when he joined Google, has now been chosen to head its Google Fiber project. Fiber is an initiative to offer high-speed Internet to customers. Kish will report to Craig Barratt, Google’s SVP, access and energy. Notably, Barratt is also a former Qualcomm executive and was recently given entry into the inner circle of advisors to CEO Larry Page.

Twitter to Open Office in Indonesia: Not unexpectedly, Twitter is opening an office in a country that loves its service. The office will be in Jakarta (Indonesia), the city that posts the largest number of tweets in the world. Indonesia has a growing number of netizens and other technology companies such as Facebook and Apple also have offices in the country.

Regulatory

Apple Hiring for China Govt Data Requests: Apple (AAPL) is looking for a person to manage and handle data requests by and issue appropriate responses to the Chinese government. This has become necessary since Apple started storing user information on Chinese servers for the first time last month. Governments of countries where data servers are located generally have the right to demand information from such servers.

Germany Wants to See Google Search Algorithm: Google’s position as the dominant search engine in Europe is working against it. The problem is simply that when any company is the first stop that people make in their search for goods or information, it creates a position of great power that may be exploited against public interest.

This problem has been exacerbated by the fact that Google is increasingly becoming a retailer itself, thus increasing the chances of anti-competitive behavior. German justice minister Heiko Maas seems to think that Google can be forced to reveal its search algorithm so government agencies can determine fair play, but revealing its key business secrets would be nothing short of suicidal and the service could also be jeopardized by spammers.

Google’s search success stems from the quality of its service, which until now had been enough to prove its worthiness. Things may be changing now, although there doesn’t appear to be any easy solution.

New Technology/Products

Cisco Launches First Threat Protection Firewall: The next generation firewall integrates for the first time Cisco’s ASA 5500 Series firewall with application control, Intrusion Prevention System (IPS) and Advanced Malware Protection (AMP) from the recently-acquired Sourcefire. The idea is to create an advanced threat detection system that works before, during and after an attack.

Amazon Refreshes Hardware Line

IBM Announces Watson Analytics: The company’s artificial intelligence technology is now being marketed as Watson Analytics to answer simple everyday questions asked in plain English. This doesn’t immediately sound like a big deal, but when you consider the IoT and related big data opportunity, the announcement suddenly makes sense.

Watson is basically a super-computer that will collect disparate data across departments in an organization to solve regular business problems. For instance, it may be able to say which business deals are likely to close in a certain period or which employee benefit plans are more effective for employee retention.

eBay to Launch Enterprise Commerce Marketing Platform

Acquisitions

Cisco’s Tiny Acquisition Aimed at Big Data Plans: Cisco is buying Metacloud, which deploys and operates private clouds within a company’s data center. Metacloud uses an OpenStack-as-as-service model, which enables tremendous scaling and interoperability between clouds. The technology is likely to play a big role in the development of Cisco’s “Intercloud,” which is a network of Internet services. It should also help Cisco address the growing demand for big data storage with a globally distributed secure platform as necessitated by the growing interconnectedness of things.

Oracle Buys Front Porch Digital: The company has software that manages storage, retrieval and delivery of media content across networks. Oracle believes that the acquisition will enable the combined entity to offer an enterprise-grade cloud with the ability to deliver on-premise content storage management. The growing volumes of rich-media content have created complexities related to its migration, integration, storage and delivery and this is the problem the company seeks to solve.

Cognizant to Buy TriZetto In Its Biggest Acquisition To Date

Some Numbers

iPhone 6 Record Pre-orders

Intel Leads In Mobile Data Protection: Intel (INTC) Security (McAfee) retained a Leadership position in the Gartner Magic Quadrant for Mobile Data Protection, scoring highest for its ability to execute. This is the seventh straight year that Intel Security was thus adjudged, although its significance continues to increase given the growing use of mobile, cloud and the Internet of Things.

Microsoft Raises Dividend: Microsoft’s 11% dividend increase this September didn’t go down that well because shareholders are used to bigger jumps in the payout. But management said that the company usually pays in line with operating profits, which grew 4%. Moreover, the yield compares favorably with Intel and Apple. While activist investors continue to push for greater returns, it helps to remember that a chunk of its cash is generated and held overseas.

Yelp To Pay Up

RedHat (:RHAT) Reports Q2 Results

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