Microsoft’s Remarkable Quarter

Last quarter, Microsoft (Nasdaq:MSFT) announced serious management changes, with CEO Steve Ballmer announcing plans to retire by next year. Meanwhile, the company is doing a surprisingly successful job at pivoting itself to a “devices and services” organization from a software-focused one. The company reported a stellar quarter, surpassing market expectations and reaffirming faith in its ability to reinvent themselves as it has done several times in the past.

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The Breadth and Depth of Amazon’s Expansion

Shopper Trak’s holiday projections peg sales during this season to grow 2.4%, the slowest since 2009. These disconcerting holiday shopping sales forecasts may have dampened e-tailer eBay’s spirits. But it will take more than possible bad news to stop Amazon’s rapid growth. The e-tailer continues to surpass market expectations and remains upbeat about the upcoming holiday season.

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Veeva’s Solid IPO

According to IDC research, the $1.6 trillion life sciences industry spent more than $44 billion in technology investments in 2012. Of this figure, $28 billion was spent on software and services, and $16 billion was spent on infrastructure. As in other industries, cloud computing is also seeing strong adoption within the life sciences industry.

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Netflix Surpasses Expectations with Proprietary Content Strategy

Netflix has been experiencing a remarkable year. The company’s subscriber base surpassed HBO’s subscriber base in the U.S. for the first time, and stock prices have soared more than 400% since the beginning of the year. International expansion is continuing at a strong pace as well. According to NPD Group, Netflix accounted for 89% of the TV streaming market during the first quarter of 2013.

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eBay on a Buying Spree

Recent reports released by Shopper Trak don’t offer a positive outlook for retailers this holiday season. According to the report, holiday sales this season will grow 2.4%, recording the slowest growth since 2009. The downturn in spending is already visible in other metrics. According to a comScore tracker, e-commerce sales in the US grew 13% in Q3 compared with 16% growth reported in Q2. Growth slowed in Q3 to just 13% growth from 16% growth in Q2.

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Google Now the Third Largest U.S. Company

According to eMarketer’s latest report, Google remained the leader in U.S. online advertising last year, with 41% of the market. Google is also a clear leader in mobile advertising and accounted for 53% of the mobile ad market last year. The researcher expects Google’s share to reduce marginally over the next few years to 50.6% in 2015 as Facebook increases its share from 9.4% in 2012 to 13.1% in 2015. Overall, Google’s share in digital advertising in the U.S. market is expected to grow from an expected 41.1% this year to 44% in 2015. Total digital advertising market in the U.S. is expected to be worth $42.26 billion this year and is projected to grow to $52.49 billion by 2015. Google’s impressive performance in the advertising market has helped it become the third-largest U.S. company with its stock price soaring above the $1,000 mark.

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Yahoo Counts on Alibaba, Not Marissa Mayer

Ad agency ZenithOptimedia estimates global ad spending to grow 3.5% this year to $503 billion driven by an increase in digital ad spending. The US remains the largest ad market, with an estimated $109.7 billion in spending. Within the country, digital ads will account for 21.8% of ad spending, compared with 19% a year ago.

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Rocket Fuel’s IPO Soars

According to eMarketer’s latest report, digital ad spending in the US is expected to grow 15% over the year to $42.26 billion this year. Digital advertising will account for 25% of total media ad spending this year. Digital ad spending is projected to grow to $61.35 billion by 2017. This growth in spending is attributed to the increased adoption of mobile advertising.

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How Can Salesforce.com Make Profits?

I recently syndicated a Technology Stocks column to Seeking Alpha. It was titled Salesforce.com’s Platform Strategy Holds Immense Promise. The argument was as follows:

Salesforce has benefited tremendously from its platform strategy. There is still enormous headroom for it to grow in this arena, and I don’t think the opportunity is lost on Marc Benioff. Judging by its recent investment in Apttus, a company that has built on the Force.com platform, and has become quite successful, Salesforce is aware of the vast potential of the platform strategy. Investing aggressively in incubating these start-ups would yield handsomely for the company.

The Seeking Alpha article generated a ton of comments, mostly asking why am I bullish about a company that never generates profits.

Salesforce.com has been wildly successful – look at the 10-year chart and the accompanying revenue growth making it the largest CRM player in the market, up from virtually nothing 10 years ago. It did $3 billion in revenue last year and will do $4 billion this year. When the company achieves scale we should see the 30-40% operating margins we see at ORCL /SAP. Software companies must spend a ton on marketing to generate 25-30% organic growth and can’t generate operating profits while doing so. BUT looking forward to 2015-2016 we should have $6-7 billion in revenue and $2 billion in operating profits. Thus, the $33-34 billion valuation (fully diluted), while expensive, isn’t necessarily crazy. And we’ve got a lot of momentum.
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Chinese Fabless Montage Lists on the Nasdaq

According to researcher iSuppli, the number of Chinese-manufactured set-top boxes sold worldwide is projected to grow 12% annually over 2012 to 2016 to reach 243 million units. The researcher estimates that 58% of Chinese set-top boxes will be exported to the rest of the world. Earlier last month, Shanghai-based semiconductor manufacturer Montage Technology listed on the Nasdaq. Montage is a fabless provider of analog and mixed-signal semiconductor solutions with focus on the cloud computing and home entertainment industries. Here is a quick look of the company and its performance thus far.

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