RUMOR: FACEBOOK GOING PUBLIC BETWEEN APRIL AND JUNE 2012

Facebook Inc. is inching closer to an initial public offering that it hopes will value the company at more than $100 billion, according to people familiar with the matter. The social networking firm is now targeting a time frame of April to June 2012 for an initial public offering, said people familiar with the matter. The company is exploring raising $10 billion in its IPO, in a deal that might assign Facebook a $100 billion valuation.

A Facebook IPO has been hotly anticipated for several years, and viewed as a defining moment for the latest Web investing boom. The company has been vague about whether it would even make such an offering and silent on timing of an IPO. "We're not going to participate in speculation about an IPO," said Facebook spokesman Larry Yu.
The company now appears poised to go ahead with a deal.

Facebook Chief Executive Mark Zuckerberg has in the past publicly expressed reluctance to do an IPO. And he has opted to keep Facebook private longer than many suspected he would. But he is warming to the idea. Facebook is now in internal discussions over the timing of its filing with the Securities and Exchange Commission, and is considering filing dates as early as this year, said these people. Mr. Zuckerberg hasn't made any final decisions, these people cautioned. [Wall Street Journal]

HP SAYS TOUCHPAD OFFICIALLY OUT OF STOCK

Hewlett-Packard sent out notices today that it is officially out of TouchPads, meaning there will be no more shipments of those popular $99 tablets. The notice says, "As you signed up for updates on the HP TouchPad, we wanted you to know that we are officially out of stock. Some retailers will have some stock available, but our online inventory is depleted."

The only other avenue for getting a TouchPad is Best Buy. The retailer announced today that it will offer a 32 GB HP TouchPad for $149.99 with purchase of an HP or Compaq Laptop, Desktop or All-in-One computer.

GROUPON IPO ON HOLD

Groupon, which is expected to fetch a $20 billion valuation upon its stock-market debut, canceled its investor roadshow and is reevaluating plans for an initial public offering in the face of stock-market volatility, said a person familiar with the matter. While the Chicago company isn't pulling its IPO, it is reassessing its timing on a week by week basis, this person added.

Groupon had originally been aiming to go public after Labor Day and to price its shares in mid-September, this person said. The roadshow had been planned for next week. A Groupon spokesman declined to comment.

GOOGLE REPORTS RECORD BREAKING REVENUE FOR Q2

Shares of Google stock jumped more than 10% in after-hours trading following the Internet giant’s second-quarter earnings report. “We had a great quarter, with revenue up 32% year on year for a record breaking over $9 billion of revenue,” said Google CEO Larry Page in a statement. “I’m super excited about the amazing response to Google+ which lets you share just like in real life.” Google reported revenue of $9.03 billion in its June quarter, up 32% over the same quarter last year and well above the Street’s $6.5 billion consensus. EPS came in at $8.76, also well above Wall Street’s consensus of $7.86, and Google’s net income for the quarter totalled#2.85 billion, up from $2.08 billion in the second quarter last hear. Google also noted that Android activations are currently up to 550,000 devices per day, and its invite-only Google+ social network now has more than 10 million members. Full press release is below.

Google Announces Second Quarter 2011 Financial Results

MOUNTAIN VIEW, Calif. – July 14, 2011 – Google Inc. (NASDAQ: GOOG) today announced financial results for the quarter ended June 30, 2011.

“We had a great quarter, with revenue up 32% year on year for a record breaking over $9 billion of revenue,” said Larry Page, CEO of Google. “I’m super excited about the amazing response to Google+ which lets you share just like in real life.”

Q2 Financial Summary

Google reported revenues of $9.03 billion for the quarter ended June 30, 2011, an increase of 32% compared to the second quarter of 2010. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). In the second quarter of 2011, TAC totaled $2.11 billion, or 24% of advertising revenues.

Google reports operating income, operating margin, net income, and earnings per share (EPS) on a GAAP and non-GAAP basis. The non-GAAP measures, as well as free cash flow, an alternative non-GAAP measure of liquidity, are described below and are reconciled to the corresponding GAAP measures in the accompanying financial tables.

GAAP operating income in the second quarter of 2011 was $2.88 billion, or 32% of revenues. This compares to GAAP operating income of $2.37 billion, or 35% of revenues, in the second quarter of 2010. Non-GAAP operating income in the second quarter of 2011 was $3.32 billion, or 37% of revenues. This compares to non-GAAP operating income of $2.67 billion, or 39% of revenues, in the second quarter of 2010.
GAAP net income in the second quarter of 2011 was $2.51 billion, compared to $1.84 billion in the second quarter of 2010. Non-GAAP net income in the second quarter of 2011 was $2.85 billion, compared to $2.08 billion in the second quarter of 2010.
GAAP EPS in the second quarter of 2011 was $7.68 on 326 million diluted shares outstanding, compared to $5.71 in the second quarter of 2010 on 322 million diluted shares outstanding. Non-GAAP EPS in the second quarter of 2011 was $8.74, compared to $6.45 in the second quarter of 2010.
Non-GAAP operating income and non-GAAP operating margin exclude the expenses related to stock-based compensation (SBC). Non-GAAP net income and non-GAAP EPS exclude the expenses related to SBC and the related tax benefits. In the second quarter of 2011, the charge related to SBC was $435 million, compared to $309 million in the second quarter of 2010. The tax benefit related to SBC was $91 million in the second quarter of 2011 and $70 million in the second quarter of 2010.
Q2 Financial Highlights

Revenues – Google reported revenues of $9.03 billion in the second quarter of 2011, representing a 32% increase over second quarter 2010 revenues of $6.82 billion. Google reports its revenues, consistent with GAAP, on a gross basis without deducting TAC.

Google Sites Revenues – Google-owned sites generated revenues of $6.23 billion, or 69% of total revenues, in the second quarter of 2011. This represents a 39% increase over second quarter 2010 revenues of $4.50 billion.

Google Network Revenues – Google’s partner sites generated revenues, through AdSense programs, of $2.48 billion, or 28% of total revenues, in the second quarter of 2011. This represents a 20% increase from second quarter 2010 network revenues of $2.06 billion.

International Revenues – Revenues from outside of the United States totaled $4.87 billion, representing 54% of total revenues in the second quarter of 2011, compared to 53% in the first quarter of 2011 and 52% in the second quarter of 2010. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the first quarter of 2011 through the second quarter of 2011, our revenues in the second quarter of 2011 would have been $167 million lower. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the second quarter of 2010 through the second quarter of 2011, our revenues in the second quarter of 2011 would have been $417 million lower.

Revenues from the United Kingdom totaled $976 million, representing 11% of revenues in the second quarter of 2011, compared to 11% in the second quarter of 2010.
In the second quarter of 2011, we recognized a benefit of $4 million to revenues through our foreign exchange risk management program, compared to $79 million in the second quarter of 2010.
A reconciliation of our non-GAAP international revenues excluding the impact of foreign exchange and hedging to GAAP international revenues is included in the accompanying financial tables.

Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 18% over the second quarter of 2010 and decreased approximately 2% over the first quarter of 2011.

Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 12% over the second quarter of 2010 and increased approximately 6% over the first quarter of 2011.

TAC – Traffic Acquisition Costs, the portion of revenues shared with Google’s partners, increased to $2.11 billion in the second quarter of 2011, compared to TAC of $1.73 billion in the second quarter of 2010. TAC as a percentage of advertising revenues was 24% in the second quarter of 2011, compared to 26% in the second quarter of 2010.

The majority of TAC is related to amounts ultimately paid to our AdSense partners, which totaled $1.75 billion in the second quarter of 2011. TAC also includes amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $355 million in the second quarter of 2011.

Other Cost of Revenues – Other cost of revenues, which is comprised primarily of data center operational expenses, amortization of intangible assets, content acquisition costs as well as credit card processing charges, increased to $1.06 billion, or 12% of revenues, in the second quarter of 2011, compared to $735 million, or 11% of revenues, in the second quarter of 2010.

Operating Expenses – Operating expenses, other than cost of revenues, were $2.97 billion in the second quarter of 2011, or 33% of revenues, compared to $1.99 billion in the second quarter of 2010, or 29% of revenues.

SBC – In the second quarter of 2011, the total charge related to SBC was $435 million, compared to $309 million in the second quarter of 2010.

We currently estimate SBC charges for grants to employees prior to July 1, 2011 to be approximately $1.9 billion for 2011. This estimate does not include expenses to be recognized related to employee stock awards that are granted after June 30, 2011 or non-employee stock awards that have been or may be granted.

Operating Income – GAAP operating income in the second quarter of 2011 was $2.88 billion, or 32% of revenues. This compares to GAAP operating income of $2.37 billion, or 35% of revenues, in the second quarter of 2010. Non-GAAP operating income in the second quarter of 2011 was $3.32 billion, or 37% of revenues. This compares to non-GAAP operating income of $2.67 billion, or 39% of revenues, in the second quarter of 2010.

Interest and Other Income, Net – Interest and other income, net increased to $204 million in the second quarter of 2011, compared to $69 million in the second quarter of 2010.

Income Taxes – Our effective tax rate was 19% for the second quarter of 2011.

Net Income – GAAP net income in the second quarter of 2011 was $2.51 billion, compared to $1.84 billion in the second quarter of 2010. Non-GAAP net income was $2.85 billion in the second quarter of 2011, compared to $2.08 billion in the second quarter of 2010. GAAP EPS in the second quarter of 2011 was $7.68 on 326 million diluted shares outstanding, compared to $5.71 in the second quarter of 2010 on 322 million diluted shares outstanding. Non-GAAP EPS in the second quarter of 2011 was $8.74, compared to $6.45 in the second quarter of 2010.

Cash Flow and Capital Expenditures – Net cash provided by operating activities in the second quarter of 2011 totaled $3.52 billion, compared to $2.09 billion in the second quarter of 2010. In the second quarter of 2011, capital expenditures were $917 million, the majority of which was related to land and building purchases, and IT infrastructure investments, including data centers, servers, and networking equipment. Free cash flow, an alternative non-GAAP measure of liquidity, is defined as net cash provided by operating activities less capital expenditures. In the second quarter of 2011, free cash flow was $2.60 billion.

We expect to continue to make significant capital expenditures.

A reconciliation of free cash flow to net cash provided by operating activities, the GAAP measure of liquidity, is included in the accompanying financial tables.

Cash – As of June 30, 2011, cash, cash equivalents, and marketable securities were $39.1 billion.

Headcount – On a worldwide basis, Google employed 28,768 full-time employees as of June 30, 2011, up from 26,316 full-time employees as of March 31, 2011. Net headcount growth (excluding approximately 450 employees hired as part of the acquisition of ITA Software) was similar to the first quarter of 2011.

LIVINGSOCIAL LOOKING TO RAISE $1 BILLION IN IPO

Deal-of-the-day website LivingSocial Inc., which has courted bargain-hunting consumers for the past few years, is now looking to win over public investors.

LivingSocial has selected bankers for an IPO that seeks to raise $1 billion and value the online coupon website between $10 billion and $15 billion.

LivingSocial, which competes with larger rival Groupon Inc., is seeking to raise about $1 billion from an initial public offering, valuing the Web firm at between $10 billion and $15 billion, people familiar with the matter said.

LivingSocial will likely go public in the fall according to sources. A LivingSocial spokeswoman declined comment.

ONLINE GAMES CREATOR ZYNGA FILES FOR $1 BILLION IPO

Zynga, the popular gaming company behind hits such as Farmville — and the owner of other smash titles such as Words with Friends on Android and iPhone — has filed for an initial public offering (IPO), The New York Times reported on Friday. It currently has a $20 billion valuation and has plans to offer 10% of its shares; Morgan Stanley will work on the deal. Mark Pincus, the company’s CEO, expects that Zynga can earn $1 billion through the IPO.

Unlike some other recent tech IPOs, which have caused many to claim the industry is in the midst of a “tech bubble,” Zynga has had solid earnings through its business model, which typically relies on in-app purchases for in-game currency. The firm reportedly recorded a profit of $90.6 million in 2011 on revenues of nearly $600 million.

Zynga currently remains the top-dog when it comes to gaming on Facebook — it has 272.5 million active users across its biggest titles such as Cityville and Farmville.

RIM'S FY Q1 RESULTS SUBPAR; Q2 OUTLOOK REDUCED; JOB CUTS COMING

BlackBerry maker Research in Motion (RIMM) this afternoon reported fiscal Q1 revenue below analysts’ estimates, but profit a penny ahead, and a Q2 revenue forecast well below estimates, and cut its year outlook.

The company will pursue cost reductions, including laying off workers, and will buy back shares, it said.

Revenue in the three months ended in May rose 16%, year over year, and fell 12%, quarter to quarter, to $4.91 billion, yielding EPS of $1.33.

Analysts had been modeling $5.15 billion in revenue and $1.32 in EPS.

Co-CEO Jim Balsillie remarked, “Fiscal 2012 has gotten off to a challenging start. The slowdown we saw in the first quarter is continuing into Q2, and delays in new product introductions into the very late part of August is leading to a lower than expected outlook in the second quarter.”

He added, “RIM will see strong profit growth in the latter part of fiscal 2012.”

The Q1 results were consistent with RIM’s updated forecast, provided April 28th, of revenue slightly below $5.2 billion, and EPS in a range of $1.30 to $1.37.

However, unit sales of 13.2 million were below even the company’s reduced forecast for 13.5 million to 14.5 million units.

Gross profit of 44% was slightly better than the company expected, it said, based on a better mix of devices sold.

One bright spot: RIM shipped 500,000 units of its PlayBook tablet computer in the quarter, it said. That estimate was higher than general expectations on the Street for 400,000 or so units. (Barron's)

PANDORA'S IPO CLOSES 9 PERCENT UP

Pandora, the internet radio company, became the latest web company to go public Wednesday in what has become a full-blown IPO gold rush.

After pricing its shares at $16, Pandora’s [P] stock opened at $20 and then immediately soared to $26, an increase of more than 60 percent. In mid-day trading, the company’s shares had fallen below $20, closing at $17.42, up 9 percent over its opening price.

Like several of its web IPO brethren, Pandora currently loses money. But that didn’t stop the company from raising $235 million at the $16 offering price, well higher than expected range of $10-$12 per share. At the offering price, Pandora was valued at $2.6 billion.

RUMOR: FACEBOOK TO GO PUBLIC IN FIRST QUARTER 2012, VALUED AT OVER $100 BILLION

According to CNBC, Facebook may go public during the first quarter of next year, and sources expect the company could be valued at more than $100 billion. Facebook could find an IPO more attractive once it surpasses a total of 500 investors, because after that milestone it will be required to file financial information with the SEC each quarter — otherwise known as the “500 rule” of the 1934 Securities and Exchange Act. CNBC said that Sheryl Sandberg, Facebook’s Chief Operating Officer, recently said that an IPO would be “the next thing that happens” and that such a move is “inevitabl

MICROSOFT IN ACQUISITION DEAL WITH NVIDIA

Microsoft and Nvidia have an agreement in place that spells out terms relating to a possible acquisition of the graphics and mobile processor manufacturer, regulatory documents indicate.
The deal gives Microsoft the exclusive right to match any offer for 30% or more of Nvidia's outstanding shares by a third-party, according to an SEC filing reviewed by InformationWeek.

"Under the agreement, if an individual or corporation makes an offer to purchase shares equal to or greater than 30% of the outstanding shares of our common stock, Microsoft may have first and last rights of refusal to purchase the stock," Nvidia said in the filing, dated May 27.
The pact puts Redmond in a position to effectively veto attempts by any of its rivals to snap up Nvidia, which makes key components for the red-hot tablet market, which includes forthcoming Windows 8 slates.

Nvidia produces the ARM-based Tegra chip, which is widely used by a number of major mobile device manufacturers. It's employed in Google Android-based tablets and smartphones from Samsung, Motorola, and others. Microsoft itself earlier this week demonstrated Windows 8 tablets running on the new, quad-core "Kal-El" version of Tegra.

There's also been rumblings over the past couple of years that Apple views Nvidia as a possible takeover target. Apple's A5 CPU for the iPad 2 uses ARM's system-on-a-chip design, an architecture in which Nvidia has considerable expertise as Tegra also relies on ARM.

Microsoft and Nvidia negotiated their acquisition deal as part of a broader arrangement under which Microsoft licensed Nvidia graphics chips for use in the Xbox entertainment and gaming console.

GROUPON FILES $750 MILLION IPO WITH SEC

On Thursday, Groupon, the popular location-based coupon service, filed for an initial public offering with the Securities and Exchange Commission. The start-up, which alerts 83 million email subscribers in 43 different countries of local deals that range from restaurant discounts to sailing lessons, hopes to raise $750 million in its IPO. “Expect us to make ambitious bets on our future that distract us from our current business,” Andrew Mason, Groupon’s chief executive officer, said in a statement. “Some bets we’ll get right, and others we’ll get wrong, but we think it’s the only way to continuously build disruptive products,” Mason added.

Groupon launched in November, 2007, has more than 7,000 employees, and reported $645 million in revenues during Q1 2011, however they have never made a profit.

RUMOR: SONY STOPS PSP GO PRODUCTION

A Japanese blogger working for an official Sony retail partner has reported intel from the PlayStation maker that production of its PSP Go handheld has been halted. Moreover, the Sony Style Japan online store no longer lists the portable and searching for it provides no results. You can only access its product page via a direct link, but even that shows it as out of stock. So, what has Sony got to say on the matter to allay fears that its troubled console lives on? Well, demand for "current generation PSPs" will continue to be met, apparently, and the NGP is going be really, really awesome when it launches at the end of the year. Hey, if there's zero demand for the PSP Go and you produce zero PSP Go units, then you are technically matching supply to demand.

LEVEL 3 BUYING GLOBAL CROSSING

Level 3 Communications Inc., the Colorado-based provider of broadband services, agreed to buy Global Crossing Ltd. in a deal valued at about $1.9 billion.

Level 3, based in Broomfield, will acquire Global Crossing in an all-stock transaction worth $23.04 a share, based on Level 3’s closing stock price on April 8, the companies said in a statement today. The value of the purchase is $3 billion, including the assumption of $1.1 billion in debt, they said.

The combination will create a business with fiber-optic networks on three continents, allowing it to provide local, national and international communications services, the companies said. They would have had combined revenue of $6.26 billion in 2010.

“This is a transformational combination that we believe will deliver significant value to investors, customers and employees,” Jim Crowe, chief executive officer of Level 3, said in a statement.

RUMOR: FACEBOOK GOING PUBLIC IN 2011

A rumor is floating around that Facebook will be going public in 2011. What started the rumor? An SEC, the Securities and Exchange Commission, not the Southereastern Conference, investigation. Even though Facebook is a privitely held company, it still issues shares. By law unless Facebook goes public they must keep the number of shareholders in their private company to under 500, but those 499 shareholders can then buy, sell and trade their stock without any oversight and that is what the SEC is irked about.

The SEC believes the unregulated shares have caused Facebook's value to be inflated by billions of dollars. Facebook really doesn't want the SEC to investigate them since some of the trades may not have been kosher and there may be over 500 shareholders. Because of this, Facebook can decide to become a public company and avoid the SEC investigation.

This is not unheard of. Google was forced to go public in 2004 to overcome the 500 shareholder rule. So Facebook really has two options, either buy out the shareholders or go public. Both have advantages and disadvantages, so it will be interesting to see what they do. [SF Gate]

MOTOROLA OFFICIALLY SPLITS ON JANUARY 4

Motorola announced Tuesday that its board has approved a reverse stock split ratio of 1-for-7, and the company will finally split into two separate entities on January 4th, 2011. In just over a month, Motorola will change its name to Motorola Solutions, Inc. and its mobile division will separate to form a new publicly traded company, Motorola Mobility Holdings, Inc. The reverse split will boost the value of Motorola’s current stock, which will be traded as MSI starting January 4th. New stock will be issued for Motorola Mobility, which will trade under the symbol MMI. “Today’s announcement marks another important milestone toward the upcoming separation that is expected to benefit Motorola, its stockholders, as well as each company’s respective customers and employees,” Motorola co-CEOs Greg Brown and Sanjay Jha said in a joint statement. “We look forward to taking advantage of the opportunities before us as we begin the new year as two independent, publicly traded companies.” Following the split, Brown will be CEO of Motorola Solutions while Jha will become CEO of Motorola Mobility. [BGR]

BALLMER CASHES IN 49 MILLION MICROSOFT SHARES

Steve Ballmer has cashed in 49 million shares of Microsoft worth $1.3 billion. In addition he has informed the SEC he will be selling up to 75 million shares. Steve issued a statement to help clear the air around the huge sell off stating "Even though this is a personal financial matter, I want to be clear about this to avoid any confusion. I am excited about our new products and the potential for our technology to change people’s lives, and I remain fully committed to Microsoft and its success,”

This has more to do with taxes than anything else. With the capital gains tax set to increase from 15% to 20% in January, by selling now Ballmer reduces his tax liability significantly. [BGR]