Google revamps Orkut &Yahoo personalises site

THE battle between the Internet firms for a pie of the Indian market seems to be getting intense with each passing day.

So, while Google has completely revamped the socialnetworking site Orkut, Yahoo has launched a massive advertising and marketing campaign to woo domestic users.

The economics of Internet companies is simple — more the clicks and hits, more the number of advertisers flocking to the use the platform. In the case of Orkut, the social platform was fast acceding share to its new rival Facebook. This was one of the main reasons for the launch of the revamped Orkut.

The company, however, has denied such compulsions, and claims it was part of an ongoing exercise in product innovation.

” The new Orkut adopts the latest Google web toolkit Google Web Toolkit (GWT) is an open source Java software development framework that allows web developers to create Ajax applications in Java. It is licensed under the Apache License version 2.0.
platform and includes features such as built- in simultaneous chat, photo tagging with automatic face detection and private sharing of photo albums including new safety features. This is the beginning of a new direction for Orkut where users will be able to increasingly share and communicate with groups of friends from their lives,” said Rahul Kulkarni, product manager, Google.

Oil prices rise as Libya burns

Ranjana Kaushal

Oil prices  jumped to near $103 a barrel Monday in Asia after Libyan leader Moammar Gadhafi vowed a “long war” amid a second night of allied strikes in the OPEC nation.

Benchmark crude for April delivery was up $1.82 to $102.89 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 35 cents to settle at $101.07 per barrel on Friday.In London, Brent crude was up $1.83 at $115.76 a barrel on the ICE futures exchange.A military coalition of the U.S., France, U.K. and other nations bombed tanks and anti-aircraft sites Sunday and deterred Libyan fighter jets from flying. Gadhafi said he would not resign and pledged to continue to attack the eastern rebel stronghold of Benghazi.

Fierce fighting during the last month has already shut down most of Libya’s 1.6 million barrels per day of crude output. Investors are now concerned international intervention could extend the conflict and keep Libya’s oil production out of the market longer than perviously estimated.

 

 

Business of Royal Wedding : Even Balconies on hire

Ranjana Kaushal

Balconies, rooms with glass windows and rooftops that would offer a great view of the wedding procession of Prince William are now on hire for as high as 100,000 pounds. William will wed Kate Middleton at the Westminster Abbey April 29. A horse-drawn carriage will take the prince and his bride to B

uckingham Palace after the ceremony.Property owners, including religious groups, charities and government departments, are now offering space along the route, the Daily Express reported.The most-wanted spot is the Sanctuary beside Westminster Abbey that offers a view of its west entrance.

Another spot in a 19th century Gothic building – with nine rooms and four balconies – is on offer for 100,000 pounds.

The nearby National Iranian Oil Company will hire out two of its offices on the second and third floors, also overlooking the west entrance of the abbey, for the same amount.The cheapest is a 60-pounds-per-person breakfast spot for 500 guests in a windowless lecture hall at the Methodist Central Hall. The building’s rooftop looks down on the west entrance

Buffett cautions social-networking investors

Ranjana Kaushal

Warren Buffett is warning investors to be careful about which social networks they friend with their investment dollars.

Buffett, the chief executive of the Berkshire Hathaway investment empire, warned investors Friday at a conference in New Delhi to be wary of social networks such as Facebook and Twitter–a sector that has recently generated great interest and anticipation on Wall Street.

“Most of them will be overpriced,” Buffett said, according to a Bloomberg report. “It’s extremely difficult to value social-networking-site companies.”

“Some will be huge winners, which will make up for the rest,” he said, without specifying which companies he expects to be winners and which will be losers.

Facebook, with an estimated value of $50 billion, is expected to be one of those players testing the IPO waters this year. With a user base of 500 million, the social-networking giant is estimated to be recording revenue in excess of $1 billion on the back of its Social Ads program.

Of course, Facebook is still a private company and is under no obligation to reveal its financial details. However, should Facebook hit the threshold of 500 individual shareholders, it will be required to either start trading publicly or at least begin disclosing its financial information, according to rules set by the U.S. Securities and Exchange Commission.

Twitter, another social-networking company rumored to be looking at a public offering later this year, will generate about $150 million in advertising revenue this year, up from the $45 million it made last year, according to market research firm eMarketer predictions. The microblogging site recently completed a $200 million funding round that gave the company a $3.7 billion valuation.

 

 

 

Vestas :Harsh winds

Ranjana Kaushal

Troubles began for the wind major when Europe plunged into economic recession, its business in Denmark started waning and cost of manufacturing spiralled. As a result, the work force of the company was cut by 3,000.

Chief executive officer Ditlev Engel termed it a “European problem” and remarked it was cheaper for Vestas to produce a wind turbine in Spain and ship it to Sweden than to send it out of Denmark.

According to Peter Wenzel Kruse, senior vice president of communications for Vestas, “We did announce lay offs to the tune of 3,000 people and out of this 2,300 were in Denmark. At present we have 6,000 employees in Denmark. I can’t say what will happen five years down the line but there will not be any more lay offs this fiscal [year].”Last year, Vestas caused upset in the UK when it closed its blade-making factory in the Isle of Wight, with the loss of 600 jobs. While the company shut its factory in UK its close competitors General Electric, Siemens and Spain’s Gamesa have planned investments of more than £300m ($475m) in the UK in the next three to four years, creating an estimated 3,600 jobs.

The growth in new wind energy installations in Europe is forecast to shrink from 14 per cent in 2010 to 1 per cent this year, according to Citigroup analysts.

Vestas’s share price has declined nearly 44 per cent over the past 12 months amid concern over the European outlook and intensifying competition from Chinese manufacturers such as Sinovel and Goldwind. The company has gained in the US, but high costs of transmission act as a limiting factor.Amidst all these problems Vestas is trying hard to bounce back much stronger.

Future play

The company has been diversifying in different geographical territories since 2005 and top of its agenda have been the Asian and US markets.Says Mr Wenzel: “We wanted to hedge the currency risks and we are expanding in China and the rest of Asia. In the next few years we see the Latin American, African and Eastern European markets developing fast. Now we are manufacturing and exporting from China and India because of the cost factor.”

While the strategy of diversifying in different markets has worked out in favour of most large corporations, the same can hold true for Vestas as clean energy is a focus area for developing countries.

Another factor that will play in its favour is a resurgence in oil prices. Analysts fear oil prices in the near future could cross the $100 per barrel mark.

“Going forward the IEA has said that oil prices will go up and our prices are going down,” says Mr Wenzel.

Wind power fulfils 20 per cent of the energy needs of Denmark, and Vestas is hopeful that 10 per cent of global energy needs by 2020 will be met by the same. The company is also working on new technologies for the production and transmission of wind power. The company has increased its research and development workforce to 300.

Mobile Data to drive Vodafone in Europe

Ranjana Kaushal

With the voice market showing signs of saturation in the European market Vodafone is banking on data to fuel its growth in future. Leading telecom operator Vodafone is looking at data services to drive its future growth in Europe. According to a company spokesperson “ As per our new  strategy  in November 2010 we plan to create a more valuable business and establish Vodafone as the leading operator in mobile data across Europe, Africa and India and further develop our market position in total communications”.

Recently, the telecom regulator Ofcom opened frequency access to 3G technology. The move this will help players such as Telefonica SA’s O2 and Vodafone Group Plc to offer more applications such as video on new smart phone models .Earlier  addressing an analyst meet Vittorio Colao ,chief executive, Vodafone Group, stated that the company had focused on the right areas of growth, especially mobile data. “We got a fantastic 23 per cent  average increase over the period.  The business is today £5 billion.   These are 27 operations, and 22 number one or number two positions in the market.  There is good balance, 70/30 consumer/enterprise, and good balance, more or less 70/30 mature/emerging”, Mr Colao said.

In the second quarter Vodafone saw a strong recovery in  UK, the revenue growth rates were up as the improved device range and the extended distribution led to good customer growth. As a result  there was an improvement in mobile ARPU.The company added 122,000 UK customers during the third quarter of this year, taking its total base to 18.98 million.

Andy Halford ,chief  financial officer, Vodafone Group, stated during analyst call “The three highest growth established businesses in the group in the half year were, in order: Turkey, 27% increase; Ghana, 18% increase; and India with a 15% increase in revenue”

The company during the  interim results in November 2010, reported revenue from data and emerging markets contributed more than mature voice services for the first time. The mobile data grew at nearly 26% in the last reported quarter.The group data as a percentage of service revenue is forecast to rise to close to 16% by 2013.Says the company spokesperson , “We are transitioning our data pricing plans to tiered plans and differentiated service levels to encourage data adoption and adjust pricing to usage. This will give customers more control, avoid confusion over so-called ‘unlimited data plans’ and drive better returns on our investment”.

The spokesperson says  “ Vodafone continues to believe that it is not liable for any tax on this transaction involving the transfer of a company outside of India. Further, Vodafone was the acquirer and not the vendor and has made no gain on the transaction.   In this “test case”, the tax authority is attempting to interpret Indian law as it has never been interpreted for the past 50 years, and this interpretation also goes against internationally recognised tax norms”.

SCI : Sailing through turbulent tides

Ranjana Kaushal

On a volatile Monday morning this week when Indian public sector undertaking Shipping Corporation of India (SCI) announced plans to add two anchor handling towing and supply vessels of 120T bollard pull capacity to its offshore fleet, the company‘s stock touched a high of  Rs 108.30. By the end of the trading session, SCI’s stock was still trading at a high of Rs 108.30. Buoyed by the rally in the market and SCI’s performance, analysts from leading brokerage houses immediately put a ‘buy’ on the stock.While Monday might seem to be a lucky day for this ‘navratna’ or ‘precious jewel’ of the  Indian Government, the company has underperformed the benchmark indices by over 22 per cent in the past three months. According to Hetal Shah, analyst, Angel Broking, “the difficult charter rate scenario is likely to assert an increased pressure on earnings in the next couple of quarters, but given that the stock trades at a significant discount to its peers,  it can  still be accumulated at current levels”.Last November the company’s follow-on public offer was oversubscribed 4.92 times. The issue received applications for 19.34 crore shares as against a reserved portion of 2.9 crore shares in rthe etail category, which was 6.56 times oversubscribed. The non-institutional investors’ portion was oversubscribed 3.67 times. The main reason cited behind this response was that investors with a long-term perspective of at least two to three years had applied at cut-off in the follow-on public offer (FPO) of SCI, the country’s largest shipper (with a 35 per cent market share) in terms of Indian -lagged tonnage.The company’s diversified fleet (bulk carriers, crude and oil product tankers and container vessels, among others) caters to a wide gamut of chartering requirements, in domestic and international markets and all this  together made the FPO look more attractive.

‘Video in digispace is the next big thing’

Ranjana Kaushal

Internet and Google could well be synonymous in many parts of the world.And that is music for the ears of Nikesh Arora, president of global sales and business development at Google Inc., who sees the near future witness content being largely consumed digitally.

Speaking at a session on ‘The World According to Google’, Arora said: “Consumption of video is the next big thing in the digital space. Almost 30- 50 per cent of the content in the world will be consumed digitally.” Arora said the company’s experience with different products shows that people will consume information on demand.

“This would also mean that the global trillion-dollar advertising revenue will see its share shift to the online space,” he added.The value of global online advertising is $ 100 billion at present and this figure could almost double in the next few years, Arora said. He said one of the biggest trends in the online world as of today is that the web is going mobile.Citing an example of India, Arora said: “The country has seen an almost revolutionary increase in the number of mobile phones and this has led to a phenomenal usage of data on mobile. Data transfer on mobile phones has seen much more traction than that on computers because the latter’s number is still restricted to less than 100 million in India. The number of cellular users, on the other hand, has crossed the 500- million mark.”

Is Northern Rock fair in a axing 680 jobs by the end of the year ?

Ranjana Kaushal

The taxpayer-owned bank, recently posted an annual loss in 2010, said the cuts are necessary as it tries to return to profit and prepares for a return to private ownership.But the move comes just weeks after it announced it would pay staff bonuses worth a total of £13.1million despite making a £232million loss.The banks staff will be reduced to about 2,000 – 4,500 down from its peak. The bank was nationalised in February 2008 after it collapsed amid the credit crisis, sparking the first run on a UK bank for 150 years.It employed a workforce of around 6,500 in 2007; this latest announcement reduces the workforce to fewer than 2,000.The Government split Northern Rock in two at the start of last year, forming a mortgage and savings bank called Northern Rock plc and Northern Rock Asset Management (NRAM) to house the more toxic loans.Earlier this year, the Government launched a tender for advisers to look at options for Northern Rock plc, including a possible sale.UK Financial Investments, which owns and manages the Government’s bank stakes, recently announced the appointment of Deutsche Bank to advise it on options including a sale or flotation.On one hand where the Government saved the bank it is axing the very tax payers who bailed it out. Is the Government listening?

China Banks surprise Jim O’Neill!

By Chloe Zhang

Picture is from Geoffrey Foster's article on Mail Online

China took over Japan to become the world second largest economy behind the US with total GDP of $5.58 trillion.

China offers the most attractive investment prospects according to experts at a Bloomberg London conference. Many believed that the work of the Chinese government to suppress speculative activity will lead to a slow down of its economy this year, which means it will quickly become extremely good value for money.

With government’s encouragement, many Chinese companies, including state-owned firms and private ones, are seeking opportunities in overseas market. Especially some financial service firms, such as China International Capital Corporation Limited (CICC), Bank of China and Construction Bank of China, already settle down in London for many years.

Maybe those China’s banks are not very famous yet in the western countries, such as the UK, few people heard of their names before. However, bankers from City of London know those names very well. Some of them gave positive feedbacks for China’s banks performance in overseas market.

Jim O’Neill, Chairman of Goldman Sachs Asset Management, said: “I am surprised that the Chinese banks have been tried to do more in the UK and elsewhere.”