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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DirectData Networks Continues to Flourish in Storage Array Niche

According to a Mind Commerce report, global spending on big data is projected to grow 48% annually over 2014 through 2019 to $135 billion. Within the market, the researcher estimates that the global big data storage and server market will grow 31.87% annually over 2012 through 2016.

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Rovio’s Angry Birds’ Entertainment Empire

According to a market report by DFC Intelligence, Online Game Market Forecasts, worldwide revenue from online games is projected to grow to $35 billion in 2017 from $19 billion in 2011. The increasing adoption of mobile devices and smartphones is driving the growth within the online gaming industry. But Angry Birds’ maker, Rovio, is moving beyond pure games to all things entertainment.

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