SEO Werkt!

Several months after completing its $12.5 billion acquisition of Motorola Mobility, Google is finally beginning to shape the mobile company for its own purposes by cutting the fat.

Motorola Mobility told employees yesterday that it would lay off 4,000 workers (or 20 percent of its global workforce) and close a third of its 94 offices, the New York Times reports. Additionally, the company will focus on developing a few devices, forgoing unprofitable low-end products, similar to the strategy Taiwanese phone maker HTC has employed.

The streamlining isn’t too surprising since Motorola Mobility has struggled with sales and profitability over the last few years. In Google’s recent Q2 earnings, Motorola Mobility reported an operating loss of $233 million on $1.25 billion in revenues (10 percent of Google’s total revenues).

The restructuring will cost Google no more than $275 million in the third quarter, according to an SEC filing from this morning. Google says it will provide “generous severance packages” and outplacement services for the affected Motorola employees.

So how will Motorola make consumers care about its products again? Dennis Woodside, the company’s new CEO, tells the NYT that it will focus on things like long-lasting batteries, better camera sensors, and technology that can figure out who nearby people are based on their voices. The company will also develop simple and emotional ads — like what Google has started doing recently (and which Apple has been doing for years) — that will focus on Motorola’s product strengths.

Big surprise, right? Motorola may be better off trying to figure out ways to surprise consumers and truly differentiate itself from the competition, instead of pursuing standard marketing and product upgrades.

Via The Next Web;Photo: Devindra Hardawar/VentureBeat

Filed under: mobile, VentureBeat

With Google’s $12.5 billion acquisition of Motorola Mobility closing in May, Google is now moving ahead on getting its new property in order. The New York Times is reporting that Google is preparing lay off 20 percent of the staff, or 4,000 jobs, and close one-third of its 94 worldwide offices — moves that TechCrunch first reported would happen back in May. TechCrunch has now learned that the notifications will start to get sent out to employees beginning today (Monday), along with some other details:

For starters, it looks like these cuts are getting made across the board as part of a general downsizing, rather than a strategic move targeting specific areas of the business. In other words, these cuts won’t give us any additional enlightenment about whether Google will continue to pursue Motorola’s set-top box business, or handset making business, or focus mainly on the 17k+ patents it has picked up in the deal. Nevertheless, the main aim of cuts is to return Motorola’s handset unit to profitability.

Google would not comment on when layout notices would start to be sent out, or what areas will be affected, but it did confirm the layoffs as reported in the NYT. A spokesperson said that the main aim is to return Motorola’s longtime loss-making mobile devices unit to profitability:

“While we expect this strategy to create new opportunities and help return Motorola’s mobile devices unit to profitability, we understand how hard these changes will be for the employees concerned. Motorola is committed to helping them through this difficult transition and will be providing generous severance packages, as well as outplacement services to help people find new jobs.”

The NYT piece notes that one-third of the cuts will be in the U.S. with the remaining two-thirds in the rest of the world. TechCrunch understands that Motorola had already been negotiating with key personnel at the company for weeks already.

Dennis Woodside, the Google transplant who is now Motorola’s new chief executive, told the NYT that Motorola will be streamlining quite a lot: goodbye to unprofitable markets, feature phone devices and a wide range of handset models from 27 introduced last year to “just a few” focusing on new features like better batteries and cameras and sensors that can identify people by their voices. That means more people in R&D and probably significantly less in manufacturing centers.

It’s not surprising that the majority of the cuts will happen outside the U.S., since this is what appears to be driving a lot of the decline at Motorola, as it competes against much bigger players like Apple and fellow-Android licensee Samsung.

Overall, Motorola has been on a downward trajectory, with its Q1 global share of mobile sales, according to Gartner, down to 2% worldwide (from 2.1% in Q1 ). At least in the U.S., Motorola still has a ranking, if small, proportion smartphone business. According to figures out from comScore, for the quarter ended June 30, Motorola accounted for 11.7% of all smartphone activity in the U.S., putting it as the fourth most-used smartphone brand in the U.S. But with that number down 1.1% from a year ago, this points to how the company unit sales are actually in decline there as well.

In Google’s last quarterly earnings, the first to include Motorola, Google noted that Motorola posted a GAAP operating loss of $233 million ($192 million for the mobile segment and $41 million for the home segment), equivalent to -19% of Motorola revenues in the second quarter of 2012. Non-GAAP operating loss for Motorola in the second quarter of 2012 was $38 million, or -3% of Motorola revenues.

Google reported Motorola hardware (and other) revenues of $1.25 billion, compared to $3.3 billion a year ago. (Google didn’t post revenues for Motorola from the year ago, so this may not be a straight like-for-like comparison.)

The fear and loathing of RIM has been well-documented by this point. At the end of June, the company released its Q1 2013 earnings, which were more than a little disappointing, with RIM reporting its first operating loss in eight years, that it would be cutting 5K+ employees and that the release of its new BlackBerry were again being delayed — this time until the beginning of 2013.

The acquisition rumors had already been swirling around the BlackBerry maker, and since then, they’ve intensified, with some big names kicking the company’s tires. This morning, Chris wrote about Samsung’s confirmation that (again) it was neither considering a buy-out nor a licensing agreement, even though it’s been reported numerous times that it, in fact, it’s been considering both. And, today, Bloomberg has reported that IBM has “made an informal approach” to acquire RIM’s enterprise services unit, which is really at the core of BlackBerry’s business.

While RIM has certainly been hurting, the company still has hopes that BlackBerry 10 can reinvigorate consumer interest in its products. That’s obviously part of the reason why RIM’s board has reportedly turned down IBM’s interest in its enterprise unit — after all, as new CEO Thorsten Heins has said (via The Verge), “enterprise is where BlackBerry lives best.” Big Blue obviously knows a thing or two about enterprise, so it wouldn’t be surprising to see it continue to seek an acquisition in the event BlackBerry 10 isn’t the panacea RIM hopes it could be.

What’s more, Heins has said in the past that RIM might consider licensing BlackBerry 10 to hanset manufacturers, which naturally he believes to be a scenario preferable to one in which RIM is broken up into pieces and sold to the highest bidders. In keeping with that preference, RIM’s board has allegedly nixed the idea of selling its divisions, to both Samsung and now IBM.

There are a lot of people (customers and beyond) both quietly and loudly pulling for RIM, hoping that it nails BB 10. However, as the long wait for its arrival continues, the pressure on the company to produce big innovations in the market and release some sort of WonderBerry may be too great.

It’s increasingly likely that RIM will have to, at the very least, undergo a major restructuring, and if BB 10 should fail, the enterprise unit will likely curry the highest price as it’s really the most valuable component of RIM’s business. So this probably isn’t the last time we’ll hear reports of big names jockeying for first dibs.

Excerpt image from MyBankTracker

In the banking world, when you borrow too much money and you fail, you go through a period of de-leveraging.  It is a painful process.


Our worldwide economy is about five years into a de-leveraging process.  Many of us lost jobs, or took a beating on home values, all part of a de-leveraging process.  It stinks.


This happens in our world, too.  You can tell by looking at a profit and loss statement.


Here’s a summary of a reasonably healthy profit and loss statement.

• Net Sales = $50,000,000.
• Ad Cost = $5,000,000.
• EBITDA = $6,000,000.
• Ad to Sales Ratio = 10%.

News Corporation has just reported its quarterly earnings. For Q4 it had revenues of $8.4 billion with earnings per share of $0.32, both down compared to the year before (Q4 2011 the company reported revenues of $9 billion with EPS of $0.35). The earnings per share met analysts expectations, but revenues fell short, with analysts expecting $8.722 billion. Those estimate numbers were down by 11% and 3% respectively on the same quarter a year ago, on the back of pressures in advertising in its publishing sector and a less blockbusters in the entertainment division of the business. The company noted that gains in its cable network business mostly offset declines in all other divisions. Full-year revenue was $33.7 billion, 1% up on the year before.

The company also reported a net loss of $1.6 billion for the quarter, compared to a net income of $683 million in the same quarter a year ago. The company said the figure included a $2.8 billion restructuring charge for its publishing division, which News Corp. is planning to separate from its entertainment division.

And there was other bad news: the company has taken a charge of $224 million for the year on related to “litigation settlement charges,” presumably in connection with the phone-hacking scandal in the UK. The charge for litigation in 2011 was $125 million. The charge for Q4 alone for litigation was $57 million.

In terms of operating segments, all but cable network programming saw declines for the quarter. Here’s how it broke down:

Despite revenues being down on a year ago, News Corp. is also making some significant moves that have pleased the street. In addition to splitting its entertainment and publishing businesses, it has initiated a $10 billion stock buyback plan.

In its last quarter, which ended March 31, 2012, the company had cash reserves of $61 billion and reported annual revenues of $34 billion.

More to come. Refresh for updates.

People are forever looking for convenient ways to achieve a slimmer figure – something that startups such as Thinnerview and WeightNag can attest to. However, French perfume-maker Velds has now come up with the first fragrance that aids weight loss in the form of PRENDS-MOI.

Designed at the Parisian perfume house Robertet, the product contains a ‘feel-good’ chemical that creates a sense of pleasure and wellbeing in the wearer, according to the company, which reduces stress and hinders compulsive eating habits. The main ingredient in PRENDS-MOI is Betaphroline, which reacts with keratinocyte cells in the skin to release beta-endorphins that aid positive emotions. The fragrance also uses caffeine, carnitine and spirulina extract to activate enzymes involved in the breaking down of fat in the body. The company suggests rubbing the perfume onto the areas of the body that the wearer wants to slim for the best effect. As well as providing therapy for slimmers, the fragrance was also designed to offer an attractive odour, with notes of “bergamot, jasmine, ylang-ylang and freshly picked lilac”. One 100ml bottle is priced at EUR 42.

While the jury may be out on how effective the product is at helping its users lose weight, the company claims some 75 percent of women who used the perfume for 28 days said it limited their urges to snack.

Website: www.velds.fr
Contact: www.velds.fr/en/contact.html

Want to win a Gold Lion? Make your clients comfortable.

In advertising, many great ideas never see the light of day. It’s a massive waste of time and energy, but it may also be an unnecessary loss according to a new study by researchers from Cornell, Penn and the University of North Carolina. David Burkus, professor of management at Oral Roberts University, explains the significance of the academic findings on 99u from Behance:

We now know that regardless of how open-minded people are, or claim to be, they experience a subtle bias against creative ideas when faced with uncertain situations. This isn’t merely a preference for the familiar or a desire to maintain the status quo. Most of us sincerely claim that we want the positive changes creativity provides. What the bias affects is our ability to recognize the creative ideas that we claim we desire. Thus, when you’re pitching your creative idea, it may not be the idea itself that is being rejected. The more likely culprit could be the uncertainty your audience is feeling, which in turn is overriding their ability to recognize the idea as truly novel and useful.

So, how do you provide a greater level of comfort before, during and after an important client presentation? Don’t say you just feed the client’s words and desires back to him or her. You may actually do that, but I don’t see it as a difference maker. What else puts a client at ease when you stand before her or him asking for trust and money?

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The Employee Stock Option Fund announced today that it has pooled $25 million for its inaugural loan program that will lend departing employees money to exercise their stock options.

Employees who are leaving a company, but do not have the cash to buy out their stock can purchase a loan from the ESO Fund. In the event that the company goes public or is acquired, the former employee repays the loan and then keeps the rest of the financial gain. If the stock loses value, the fund, not the employee, bears the weight of the loss.

With this unique arrangement, the ESO fund reduces the risk of exercising stock options while also standing to capitalize on a massive amount of future earnings. The company estimates that each year, employees of venture-backed companies forfeit approximately $500 million in future earnings.

“I noticed that the stock option pool was a large, untapped area and that all this equity was essentially being wasted,” said co-founder Scott Chou in an interview. “When people leave a job, they are often pissed off and the last thing they want to do is write a large check, or they don’t know what to do. So they came come to us.”

Leaving a job can be traumatic, and the opportunity to receive a little cash paired with the prospect of future returns can certainly soften the shock of transition. Even if there is no bad blood, most people are wary of putting put tens of thousands of dollars in an investment that won’t necessarily pay out. Venture capital firms, on the other hand, can take much more significant risks because they have a diversified portfolio, but are often not interested in conducting such small transactions.

The ESO Fund strives to bridge this gap.

It was founded by veteran venture capitalists Chou, Stephen Roberts, and Jimmy Lackie. The idea was inspired by their experiences as board members for startups where significant numbers of departing employees did not exercise their options.

ESO Fund is based in Redwood Shores, California.

Filed under: VentureBeat

Dear Catalog CEOs:


Have you recently looked at how your profit and loss statement evolved over the past decade?


I look at a metric called “profit factor”.  It’s the rate, excluding marketing expense, that demand (what a customer wants) flows-through to variable profit (before fixed costs).


Here’s an example, comparing 2012 to 2002:

In 2002, we weren’t as good at fulfilling merchandise.  We’re far better at doing that today.


In 2012, we’ve artificially inflated our gross margins, and we give the gross margin back via discounts and free shipping.  In response to folks like Amazon or Zappos (now the same company), we either increased prices and gave discounts/free-ship, or we kept prices flat, cut expense out of the product, and then gave discounts/free-ship.


Finally, costs have come out of the distribution center.  It costs less, today, to pick/pack/ship merchandise than it did ten years ago.


In 2002, 39.8% of demand flowed-through to variable profit.


In 2012, 43.0% of demand flows-through to profit.


Also look at that fixed costs line.  I increasingly observe that the fixed costs to run a business have actually increased.  I know, this sounds contrary to what you popularly hear, but that’s what I am seeing.  I don’t have a handle on it.  In some cases, increased technology costs seem to get passed into the fixed cost line.


But when it comes to the profit factor, there are significant ramifications to improved profit factors.


For instance, in 2002, a marginal customer generated $2.00 per catalog.

• Profit = $2.00 * 0.398 – $0.80 (book cost) = Break-Even.

Since Facebook went public three months ago, the social media giant’s stock price has nearly been cut in half. Unfortunately, investors and analysts are likely to continue to be underwhelmed by the stock as a slew of bad news continues to come out. To put this loss in perspective, Facebook has now lost nearly $50 [...]