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from Breakingviews:

Alibaba triangular dealmaking adds to IPO quirks

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By John Foley
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Powerful insiders are the norm in internet companies. Alibaba’s tie-up with a digital TV company adds an extra twist. The Chinese e-commerce group, which is planning a U.S. listing, has signed a three-step deal with China’s Wasu Media that looks a little too clever for comfort.

The agreement to make and distribute content, announced on April 9, has logic. The two companies, both based in the city of Hangzhou, already make television set-top boxes together. Jack Ma, Alibaba’s colourful founder and chairman, has long talked of creating culture for China’s masses.

The financing of the deal is less logical. Alibaba will lend 6.5 billion yuan ($1.05 billion) to its co-founder Simon Xie at an 8 percent interest rate. He is investing the cash in a new vehicle, co-owned by Ma and another internet mogul, Shi Yuzhu. That vehicle in turn is investing in Wasu, in return for a 20 percent stake.

from Breakingviews:

China tech rout sifts IPO haves from don’t-needs

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By John Foley 

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Falling prices of internet stocks are a headache for companies yet to join the market. The sell off that began in the first week of March and broke on April 8 hit Chinese companies particularly hard. It may leave investors pickier about coming initial public offerings of tech companies from the People’s Republic. The haves will be sorted from the don’t-needs.

from The Great Debate:

Cuba’s uneasy Internet connection

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Last week, an Associated Press article, “US Secretly Created ‘Cuban Twitter’ to Stir Unrest,” sparked an uproar. The U.S. Agency for International Development had funded a Cuban version of Twitter called ZunZuneo , the AP reported, that attracted more than 40,000 users before ending in 2012, according to the story.

Commentators have derided the program as boneheaded, dangerously absurd and disrespectful to Cubans. Analysts have discussed its pros and cons. The White House maintains that the program was not “covert.” USAID contests aspects of the AP story.

from Breakingviews:

Official attention will make or break bitcoin

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By Daniel Indiviglio
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Official attention will make or break bitcoin. Scrutiny from tax authorities like the U.S. Internal Revenue Service and financial regulators around the world may deter off-the-grid types from using the digital money. Yet interest from investors and even creators of derivatives could start drawing bitcoin into the mainstream.

from Alison Frankel:

First Amendment protects Internet search results: N.Y. judge

U.S. District Judge Jesse Furman of Manhattan grabbed the chance Thursday to set precedent on a question that has received surprisingly little attention in the courts: Does the First Amendment's protection of free speech extend to the results of Internet searches? Furman was clearly captivated by the issue as an intellectual challenge, delving into the vigorous academic discussion of the First Amendment and Internet search even deeper than the two sides in the case, the Chinese search engine Baidu and the activists who sued the site for supposedly violating their civil rights by blocking their pro-democracy works from appearing in search results. In a supersmart opinion that Furman seems to have written to be widely read, the judge concluded that when search engines exercise editorial judgment - even if that judgment is just algorithms that determine how results will be listed - they are entitled to free speech protection.

That protection, he said, is quite broad in scope. "There is a strong argument to be made that the First Amendment fully immunizes search-engine results from most, if not all, kinds of civil liability and government regulation," Furman wrote. "The central purpose of a search engine is to retrieve relevant information from the vast universe of data on the Internet and to organize it in a way that would be most helpful to the searcher. In doing so, search engines inevitably make editorial judgments about what information (or kinds of information) to include in the results and how and where to display that information (for example, on the first page of the search results or later)."

from Breakingviews:

Time for Sheryl Sandberg to lean out of Facebook

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By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The time has come for Sheryl Sandberg to lean out of Facebook. Not because the social network’s chief operating officer has done a poor job – quite the contrary. She was the adult supervisor as Mark Zuckerberg’s dorm room creation became a $165 billion enterprise. The founder is now doing his own thing, as his latest acquisition shows. For Sandberg, that makes him more of a liability.

from Breakingviews:

Zuckerberg grabs at alternate financial reality

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By Richard Beales

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Mark Zuckerberg is liking a lot of deals. Right after spending $19 billion on WhatsApp, the Facebook founder is splashing out $2 billion – and possibly more – in cash and stock on a virtual reality newcomer, Oculus VR. It’s arguably a riskier punt than the messaging app. Both deals also suggest a buy, not build, approach.

from Breakingviews:

Valuing Tencent’s chat app remains an act of faith

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By Robyn Mak
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Putting a value on WeChat remains an act of faith. Internet giant Tencent has shed some light on its popular messaging and social media service. But sparse details on costs and regulatory risks make future growth and earnings potential hard to pin down. Valuations are still largely based on hope.

from Breakingviews:

Weibo IPO sets bar low for Alibaba

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By John Foley 

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Imagine the riskiest possible share offering. It would be a new, unprofitable company with rapid and uncertain growth in an emerging market. One whose customers are fickle, which lives under the constant threat of being snuffed out by regulators, and where external shareholders are dominated by insiders. The listing of Sina Weibo fits the bill. The Twitter-like microblog has also set a low bar for the upcoming market debut of e-commerce giant Alibaba.

from Breakingviews:

Unicorns stampede through tech fantasyland

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By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

There’s a new stampede in technology’s fantasyland: Unicorns. The single-horned stallion has made the leap from legend to run free through modern-day Silicon Valley, New York, London and the plains of central Israel as a term to describe the most successful startups. In a different and unintended sense, the trope couldn’t be more apt.

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