Robert's Feed
Aug 10, 2012
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Yahoo investors counting on Mayer burning cash

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

This looks like a case of lost in translation for Yahoo. The internet group led by Marissa Mayer says it may use much of the bounty from selling its stake in Alibaba, the Chinese web conglomerate, for acquisitions, rather than returning it to shareholders in the form a special dividend or buyback. As crummy as that sounds, it is already baked into Yahoo’s value. Investors seem resigned to Mayer wasting a chunk of their cash. 

Yahoo obviously did not hire Mayer to wind down the troubled company. The former Google hotshot is ambitious. And the $70 million pay package the company granted her must be predicated on bigger things than acting as a caretaker or liquidator. Yet investors seemed startled that Mayer now may hang on to the $4.2 billion or so Yahoo will reap after taxes from the sale of half of its stake in Alibaba. Yahoo’s shares fell almost 6 percent. 

Aug 9, 2012
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Market geniuses don’t even get milk

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By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.When the most pedestrian of groceries can surprise investors, something has clearly gone off. Along with an unexpected profit, Dean Foods unveiled a corporate split – of one sort of milk from another. By sending the company’s valuation soaring 40 percent, the dairy engineering exposed glaring inefficiencies.

Selling milk is a low-margin business. Most shoppers just pick the cheapest gallon they can find. Many commodity prices, from diesel to grain, can hit margins hard. Passing along such costs to customers isn’t easy.

Aug 6, 2012
via Breakingviews

Best Buy bid looks about as shaky as its target

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


The bid for Best Buy looks about as shaky as the target. Richard Schulze, the electronics chain’s founder, wants to take it private for up to $8.8 billion. His 20 percent stake adds credence to the offer, but financing and backers remain elusive. And given the laws where Best Buy is based, a takeover could be tough.

Jul 27, 2012

Amazon and Facebook divide is a matter of faith

By Robert Cyran

NEW YORK, July 27 (Reuters Breakingviews) – Both companies’
quarterly reports showed strong sales growth, feeble earnings
and heavy investment. Yet the online retailer’s stock rose and
the social network’s plunged. Investors believe Amazon will
stick around to reap the benefits. They may have more doubts
about Facebook.

Full view will be published shortly.

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Jul 27, 2012

Facebook loses more friends with fizzle

By Robert Cyran

NEW YORK (Reuters Breakingviews) – Facebook (FB.O: Quote, Profile, Research) has lost a few more friends with its first-time fizzle. The social network’s revenue grew 32 percent from the same period last year in its inaugural earnings report as a public company. While such growth would look fantastic to a company selling toothpaste or beer, it’s not spectacular for a company that was recently sold to investors as the hottest in tech. Worse, profit and margins took a hit even after ignoring stock compensation. Facebook is investing heavily, but investors counted on having cake and eating it. Instead, they’re going hungry.

It’s clear that Facebook has a mobile problem. The number of people checking up on their friends via a smartphone continues to rise sharply and is now well over 500 million. That’s more than half of all users. This has the distinct advantage of allowing people onto the network more often because they don’t have to be sitting in front of a computer. Unfortunately, the downside – so far – is larger. Advertisers haven’t adjusted budgets to this shift, so they pay less per impression and click. The number of ads delivered in the United States per user on Facebook actually fell. And gaming payments have been flat for several quarters due to the growth of mobile, according to the company.

Jul 20, 2012
via Breakingviews

Yahoo pays up for dream of CEO stardust

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By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.Yahoo is paying up for the dream of a chief executive sprinkling stardust. After churning through several CEOs in quick succession, it’s easy to see why Google hotshot Marissa Mayer snagged a $70 million pay deal from the fading internet search firm. But as J.C. Penney with its ex-Apple boss shows, there are no quick fixes.

The motivations of Mayer and Yahoo are easy enough to discern. Mayer was the 20th employee at Google, in charge of several of its most important businesses, and a natural candidate for chief executive. But that path was blocked by co-founder Larry Page. Now she will have the chance to be a CEO and to make her mark at the fourth biggest site on the Internet. At 37, Mayer is also young enough – and Yahoo sufficiently troubled – that if she fails to reinvigorate the company she will surely get more chances.

Jul 20, 2012

Google bogged down by shift to mobile hardware

By Robert Cyran

NEW YORK (Reuters Breakingviews) – Google (GOOG.O: Quote, Profile, Research) is pressing hard in computing on the go. The internet search giant’s second-quarter results show strong growth in Android handsets and mobile search. Google’s numbers also now include Motorola Mobility. But the upfront costs of owning the handset maker mean progress isn’t yet translating into profit.

The company’s underlying business is doing well enough. It generated $12.2 billion of revenue in the quarter – 21 percent more than a year ago, ignoring Motorola. And another $3.5 billion of free cash flow means its prodigious war chest – now $43 billion – is growing apace. Any chief executive would crow – any, that is, except Google boss Larry Page, whose mysterious, long-running voice problems continue.

Jul 18, 2012
via Breakingviews

Purge likely after U.S. obesity drug binge

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

Two U.S. biotech firms are bingeing on obesity drugs. Their concoctions for weight loss have both been approved by the Food and Drug Administration in the last month. With American obesity rates rocketing, analysts are eyeing fat sales and bankers are weighing mergers.

Jul 13, 2012
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Replacing P&G boss may be Bill Ackman’s best hope

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

Procter & Gamble is a hulking target for an uppity investor like Bill Ackman. Typical activist tactics like a breakup won’t work at the $178 billion Pampers-to-Crest giant. New leadership could be one thing to help get P&G back on track, though. Maybe Ackman could even recruit vaunted former Chief Executive A.G. Lafley to help.

Jul 10, 2012
via Breakingviews

Intel deal closes circuit to faster chips, growth

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By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.Intel has found a way to close the circuit on faster growth. Next-generation chips are cheaper, quicker and require less electricity. But toolmakers haven’t spent the sums necessary to make the switch. Intel’s $4.1 billion investment in ASML should remove such bottlenecks.

The clever deal has multiple components. First, Intel will give the Dutch company $1 billion over five years for research and development into the production of 450-millimeter wafers and extreme ultra-violet lithography. These should cut costs and make chips more powerful. Intel also will buy a 15 percent stake in ASML in two increments, for a total of $3.1 billion.

    • About Robert

      "Robert Cyran, U.S. tech columnist, joined Breakingviews in London in 2003 and moved four years later to New York, where he continues to cover global technology, pharmaceuticals and special situations. Robert began his career at Forbes magazine, where he assisted in the start-up of the international version of the magazine. Before working at Breakingviews he worked as a market researcher and reporter covering the pharmaceutical industry. Robert has a Masters degree in economics from Birmingham University and an undergraduate degree from George Washington University."
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