Breakingviews

China taxi apps speed towards subsidy showdown

June 29, 2015

Local taxi-hailing app Didi Kuaidi is raising up to $2 bln less than a month after rival Uber said it will invest $1 bln in the People’s Republic. Both are racing for market share by spending heavily on subsidies for drivers. The question is whose investors lose patience first.

SoftBank’s $1 bln Korean deal needs to travel well

June 4, 2015

The Japanese giant has added a stake in South Korea’s Coupang to its portfolio. It’s a big bet on a young company in a relatively small country. The online retailer is leading the shift to mobile shopping. SoftBank may need to export its expertise to justify the investment.

Tencent’s discount to Facebook harder to justify

April 7, 2015

The Chinese social media giant generated about the same revenue as its U.S. counterpart last year and was more profitable, despite having fewer users. Yet it trades at a lower multiple of earnings. As the two business models converge, the valuation gap needs a rethink.

Alibaba deal spree strains its financial strength

March 24, 2015

The e-commerce giant barely explained its recent investments in an Israeli venture capital fund or U.S. chat app Snapchat. Similar purchases absorbed 75 pct of Alibaba’s operating cash flow in 2014. Though its core business is robust, returns on the new ventures are uncertain.

Expedia indicates first-class M&A tickets remain

February 12, 2015

The online travel company’s shares jumped after it agreed to buy smaller rival Orbitz for $1.6 bln. Advertised synergies worth $525 mln today amount to twice the premium being paid. Despite evidence of fewer easy pickings, Expedia shows why the deal boom still has some runway.

Alibaba gives crash course on government relations

January 29, 2015

The e-commerce group’s shares fell after a Chinese regulator lambasted its sales habits. Alibaba must convince investors it was blindsided, and prevent its beef with the watchdog escalating. It’s an insight into how contradictory and value-destructive the Chinese state can be.

SpaceX satellite dream is throwback to 1990s

January 21, 2015

Google is investing in Elon Musk’s company, which is planning a broadband network of 4,000 satellites. The pioneering Teledesic tried something similar two decades ago but failed. Falling costs and rising demand have changed the equation. But SpaceX could still be too early.

New tech battlegrounds pitch East against West

January 9, 2015

Tech titans that have conquered their home markets are targeting new ones, like India and Indonesia, where leaders are yet to be crowned. Tie-ups between Japan’s SoftBank and e-commerce groups in Asia may signal a trend that could put Silicon Valley at a disadvantage.

Alibaba in 2016: an imagined letter to investors

December 29, 2014

The e-commerce group’s first year as a listed company brought growth and change, departing chairman Jack Ma writes in a hypothetical memo. Profitability is falling, regulators circling, and new projects have uncertain returns. Even a thoroughbred is tested on a long journey.

Goodbye tech conglomerates, hello “ecosystems”

December 19, 2014

Companies have been using that word to justify building internet-based empires out of a mish-mash of assets with hard-to-identify synergies. Asian players like China’s Alibaba and Japan’s Softbank are amongst biggest fans of this unhelpful jargon.