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Apr 12, 2012
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Google rejoins tech’s governance race to bottom

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By Robert Cyran

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

Google is no stranger to bad corporate governance. It set off the trend in Silicon Valley when it established super-voting shares in its 2004 market debut. Insiders Larry Page, Sergey Brin and Eric Schmidt now control 66 percent of the votes with about a quarter of all shares. But the three have watched newcomers Zynga and Facebook surpass them in the governance race to the bottom. So Google’s founders are getting back in the race by adding a third class of non-voting shares. That’ll do little more than entrench insiders and enable the future abuse of minority shareholders.

Apr 9, 2012
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Facebook’s defensive Instagram M&A raises red flag

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

Facebook’s defensive purchase of Instagram raises a red flag. Online photos are supposed to be a core Facebook competence. Paying $1 billion for the popular picture-sharing app may boost the social network in mobile. But paying over the odds for revenue-free rivals is usually the hallmark of anxious, mature firms – not a growth company seeking to go public at a $100 billion valuation.

It’s impossible to say exactly what Facebook gets for the oodles of cash and stock it is handing over to Instagram, founded just two years ago by Kevin Systrom and Mike Krieger. Traditional metrics don’t apply – Instagram is just embarking on an actual business plan, and the firm was worth just $20 million a year ago. What it does have are lots of users – more than 30 million – and super-fast growth. More than 1 million more users signed up in 12 hours for its new Android app last week.

Apr 9, 2012

Microsoft opens pricey new front in patent wars

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

By Robert Cyran

NEW YORK, April 9 (Reuters Breakingviews) – Microsoft
(MSFT.O: Quote, Profile, Research) has opened up a pricey new front in the patent wars.
The software giant is spending $1.1 billion to buy over 800 of
them from AOL (AOL.N: Quote, Profile, Research). At more than $1 million apiece, it tops
even the huge rates paid recently for other intellectual
property. This first salvo in the Internet space throws down the
gauntlet at Google (GOOG.O: Quote, Profile, Research) and Facebook.

Apr 3, 2012
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Gun bubble reloads on Obama re-election fears

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

The gun bubble has reloaded on fears of a second term for President Barack Obama. His election in 2008 triggered massive growth in firearms sales. Buyers apparently expected the first Democratic White House in eight years to push for stricter gun control laws. That never happened, sending weapon sales tumbling – until now. The prospect of Obama’s re-election is boosting sales, and shares of gunsmiths, once again.

Mar 20, 2012
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Amazon hedges against the rise of the machines

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

Is Amazon hedging itself against the rise of the machines? That’s one way to explain the kooky $775 million purchase of Kiva Systems. Either that or the online retailing giant’s founder Jeff Bezos has a robot fetish. It’s not clear what the deal offers Amazon shareholders. Automating Amazon’s warehouses makes sense. But buying Kiva droids, rather than their maker, seems the more rational approach.

Mar 19, 2012
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U.S. housing hangover finally wearing off

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By Robert Cyran and Agnes T. Crane

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Six years into the U.S. housing downturn, the worst finally seems to be over. The overhang of inventory is no longer so daunting as population growth and reduced construction continue to cut the glut of unsold homes. Throw in rising employment and improved affordability, and young Americans cooped up with too many roommates or, worse, their parents may finally get a chance to strike out on their own.

Mar 19, 2012

BreakingViews: So what’s Apple really going to do with its cash?

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

By Robert Cyran

NEW YORK, March 19 (Reuters Breakingviews) – Apple is finally giving its shareholders a bite of its cash pile. The company will hand out about $45 billion over three years, including some $30 billion of dividends and $10 billion of buybacks. While that’s a good start, Apple could make $50 billion in free cash flow in the fiscal year ending in September. With sales and profit rocketing — and the bulk of its huge cash hoard still stuck overseas — bigger payouts will surely follow.

Mar 19, 2012
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So what’s Apple really going to do with its cash?

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

Apple is finally giving its shareholders a bite of its cash pile. The company will hand out about $45 billion over three years, including some $30 billion of dividends and $10 billion of buybacks. While that’s a good start, Apple could make $50 billion in free cash flow in the fiscal year ending in September. With sales and profit rocketing – and the bulk of its huge cash hoard still stuck overseas – bigger payouts will surely follow.

Apple had $98 billion of cash and investments on its books at the end of December. Close to two-thirds is held overseas, and repatriating it to the United States would involve a big tax hit. So Apple is keen to avoid tapping this, preferring to let it grow while it awaits a possible tax holiday.

Mar 15, 2012
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Cisco’s John Chambers falls off the M&A wagon

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

Cisco’s John Chambers has fallen off the M&A wagon. Less than a year ago, the networking giant’s chairman and CEO, in an unusual mea culpa to employees, forswore big deals and promised discipline. Now, Cisco is shelling out $5 billion for NDS Group, a pay TV software firm. But this acquisition might just deliver justifiable returns and fit nicely with Cisco’s revised strategy.

Cisco had a long history of overstretching prior to last year’s shift. The company’s deals had transferred oodles of Cisco cash to other firms’ shareholders, hurting Cisco’s valuation and leaving the firm sprawling and a struggle to manage. That distracted executives from core businesses in routers and switches, which were under attack from rivals like Juniper Networks and Huawei. Profit warnings ensued with alarming regularity.

Mar 13, 2012
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Splitting AT&T CEO and chairman roles a no-brainer

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By Robert Cyran

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

Randall Stephenson’s botched plan to buy T-Mobile USA came with a $4 billion tab. The board didn’t see fit to hold him fully accountable. But shareholders can have their own say – and should vote to strip Stephenson of his chairman title and install an independent.

    • 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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