Organic SEO Blog

231-922-9460 • Contact UsFree SEO Site Audit

Wednesday, May 29, 2013

Review: Pinterest update cleaner, easier to manage

Story originally appeared on USA Today.

NEW YORK (AP) — Don't worry, Pinterest fans: Your sprawling virtual pegboards of wedding dresses, handmade jewelry, craft projects and food porn haven't changed dramatically. They're just easier to manage.

The popular link- and photo-sharing website has rolled out an update, one offering people simpler navigation and new ways to arrange their boards to fit their needs. Although the haphazard spirit of Pinterest remains, the site is much less overwhelming.

I wasn't a Pinterest user before, so the redesign gave me a chance to take a good look at the site for the first time. Before that, I had refused to be sucked into yet another form of social media. I figured I didn't have much use for it.

In the months since I started testing out Pinterest's new look, though, I've found the service helpful in organizing and sharing my continually expanding recipe collection. And it's fun to check what other people around the world are looking at and to see which strangers choose to follow me or respond to what I'm sharing.

Although it is not a replacement for Facebook or Twitter, and doesn't pretend to be, it is a beautiful and vast world with more than 25 million users around the world.

For those who have never used Pinterest, the free site lets people "pin" pictures from websites they want to share on online peg boards. You can choose to share the boards with just a few close friends or the entire Pinterest world. Others can comment on the boards and pins, "like" them or repin items on their own boards.

The result is an eclectic mix of millions of boards spanning just about as many topics. Although it doesn't offer as much of a chance to communicate and debate the way Facebook and Twitter do, Pinterest is an interesting and often beautiful supplement to those social media networks.

Pinterest's recent redesign is intended to cut down on clutter and make the site easier to manage, without drastically changing its look. The new look continues to evolve. Most of the changes are very subtle, and some have been tweaked or reversed already, helping Pinterest avoid the kind of backlash that Facebook has weathered in the past. Pinterest promises even more updates in the weeks and months ahead.

One of the most noticeable changes so far is Pinterest's move to larger pins, so you get four rather than five items per row. The site looks cleaner and less overwhelming because you don't see as many items on the screen at once. Much of the text previously found on Pinterest boards is smaller or gone. Menus have been streamlined.

What impresses me most about Pinterest — and also what drove me crazy — is its vast variety. Although there's no shortage of boards devoted to food, clothing, gadgets and home decor, there are also ones devoted to obscure topics such as doors, hockey goalies and the character Daryl from the TV show "The Walking Dead."

Some boards are very artistic and personal, while others, like mine, are more practical than pretty. The possibilities are endless, and so is the potential for wasting time — another reason I held off on joining for so long. Basically, whatever you're obsessed with, there's something on Pinterest for you.

For me, that's food.

I have hundreds of food-related sites bookmarked on my work and home computers, plus my iPhone and my iPad. They cover healthy recipes geared toward using up ingredients from my weekly farm share, tips for cooking a filet mignon and lists of New York restaurants with the best ramen and pizza. Other people have shared everything from the most ornate wedding cakes to those old-fashioned casseroles held together with canned soup.

Pinterest became a handy way to organize all that. First, I set up a Pinterest board simply titled "Recipes." That quickly spawned separate boards for easy meals, desserts and New York City restaurants. Although they pale in size so far to many of the countless other recipe boards out there, I find myself adding a couple things every day as I browse Twitter, Facebook and, of course, other Pinterest boards.

The boards also serve as a handy way for me to share recipes. Want my go-to red velvet cake, mac and cheese and turkey chili recipes? They're all on my Pinterest page. It also gives me easy access to my recipes when I need them. Rather than emailing myself links to recipes that I've bookmarked on my office computer, I can just pin them to my board and open up it later on my iPhone as I walk through the grocery store or on my iPad as I stir something on the stove.

After just a few months, some of my boards have grown pretty large. The new, less cluttered version of Pinterest helps me find what a need a little faster.

The activity feed, which details who likes and repins your pins along with other information, is in the process of moving to a drop-down menu on the right-hand side, clearing more space for the pins and their often beautiful photos. Its content is expanding as well. Notifications go back further in time than what users previously saw.

Filtering boards and pins by topic, such as "Art," ''Food & Drink" and "Geek," is now easier, too. Instead of one long list dropping down from the middle of your page, the categories fall from the upper left in three shorter columns. It's a simple change that makes the list less daunting to read through. Meanwhile, all of the profile and account settings have been consolidated in a dropdown menu on the right.

A plethora of new information also pops up now when you take a close-up look at a pin. To the right of the pin is a mini version of the board it came from, which you can scroll through. There is a mini board showing other pins from the same website, so you can discover related recipes, for instance. Below all of that is a collection of pins from people who pinned the pin you're looking at. It's a way to discover material from like-minded people. It's a lot of content on one page, but surprisingly manageable.

Pinterest has also boosted its search capabilities, so that when you start typing something in the search box located in the upper-left corner of the page, a list of suggested words appears below it. That's helpful if you don't know exactly how to spell something.

But some popular features have also been eliminated. Gone is the site's "originally pinned by" feature, which showed which user was the first to pin a certain item. But Pinterest notes that many users have requested its return. I wouldn't be surprised if it did. Based on user feedback, Pinterest has already brought back other features, including one that allows users who have just pinned something to look at related pins or go straight to their pin by clicking on its "see it now" button.

What makes Pinterest different from other social media services is that it's not so much about posting your opinions or even letting your friends know about what's going on in your life. Instead of creating new content, it's about sharing and organizing what's already out there, preferably content that's attached to cool photos.

You get a beautiful visual experience and links to just about everything online right now.

If that's something you're interested in, you might want to give the new and improved version a shot. Just don't spend too much time at the office looking at recipes for 1950s-style casseroles made with cream-of-whatever soup. It's 2013, after all.

Exploring Google Glass: A fitting appointment, step-by-step (slideshow)

Story originally appeared on ZDNet.

MOUNTAIN VIEW, CALIF. -- It's been nearly a year since approximately 2,000 developers, journalists, and other geeky tech enthusiasts signed up for the Google Glass Explorer Program.

For months, there have been morsels of availability information doled out along with some (confusing) Hangouts and mysterious glass paperweights sent out in the mail.

Now, the time has come for all of us to pick up our Glass prototypes (and fork over $1,500 plus tax).

The Internet giant is certainly pulling out all the stops in introducing these new “Explorers” to Glass.

Glass recipients are treated with a concierge-like service, starting with a phone call to schedule an appointment fitting to the pick-up itself at one of three location options: New York, Los Angeles, and the Googleplex headquarters in Mountain View.

Of course, with anything technology-related, there are bound to be some hiccups -- and Google is no exception.

'Fresh proposals' planned over cyber-monitoring

Story originally appeared on BBC News.

Fresh proposals to investigate crime in cyberspace are being promised, after the so-called "snoopers' charter" was dropped from the Queen's Speech.

The measures to be brought forward would help protect "the public and the investigation of crime in cyberspace".

The main plan is to find a way to more closely match internet protocol (IP) addresses to individuals, to identify who has sent an email or made a call.

The Communications Data Bill was dropped after opposition from Lib Dems.

That bill, which proposed internet companies be obliged to store for a year details of all Britons' online activity, was blocked by Deputy Prime Minister Nick Clegg, who said it went too far.

The Home Office has, however, said action is needed to reflect the fact criminals are increasingly using internet phone calls, or social-media sites to communicate.

Instant messaging

In the briefing notes on the Queen's Speech, the government makes clear it remains "committed to ensuring that law enforcement and intelligence agencies have the powers they need to protect the public and ensure national security".

"These agencies use communications data - the who, when, where and how of a communication, but not its content - to investigate and prosecute serious crime," it says.

"Communications data helps to keep the public safe - it is used by the police to investigate crimes, bring offenders to justice and to save lives.

"This is not about indiscriminately accessing internet data of innocent members of the public."

The proposals to be brought forward would address the fact the police - who can already tell when, where and who made a mobile phone call or sent a text message - cannot always trace the origin of an email, a message sent via instant messaging or a phone call made over the internet.

The government says one of the problems is IP addresses are shared between a number of people, or devices.

"In order to know who has actually sent an email or made a Skype call the police need to know who has used a certain IP address at a given point in time," it says.

They government says it is "looking at ways of addressing this issue... it may involve legislation".

International action

There have been questions raised about how, or whether, it might be possible to achieve the goal of matching IP addresses more closely to devices or individuals.

"The problem stems from the way that the fixed internet has been designed," said Prof Rahim Tafazolli, director of Surrey University's Centre for Communications Systems Research.

"Many people can share a single IP address and the IP address may be dynamic - meaning there's a new address issued each time they log on - while a communication traverses across different networks. It can be difficult to link all these addresses and trace them back to the origin.

"One possible solution would be to find a way to associate a person's internet use with a fixed and unique number such as their mobile number or a device's MAC [media access control] address.

"But that would require changes in the way addresses are allocated on the internet and changes would need to be adopted internationally because we couldn't just change it in the UK."

YouTube star: Charging a 'bad idea'

Story originally appeared on BBC News.

The man behind one of the UK's most popular YouTube channels says charging people to watch videos is "a really bad idea".

Nineteen-year-old JJ has more than two million subscribers to his KSIOlajidebt channel.

He said that whilst the plan, reportedly due to be announced by YouTube, could work for big artists he "won't be doing it any time soon".

YouTube has confirmed it's looking into creating a new "subscription platform".

The plan could see content providers such as TV companies making videos available for a monthly fee.

YouTube executives have hinted several times at a plan to launch paid channels.

A spokesperson said YouTube is looking to "provide our creators with another vehicle to generate revenue".

JJ said charging people to watch his videos would risk alienating his audience.

"I like it that it's free for people to subscribe, whenever you put money in the way it brings conflict and will just bring in this divide," he said.

'Generate revenue'
YouTube allows users in the UK to rent major film titles and US users have been able to buy and rent films and TV episodes since 2008.

It is reported that users could pay as little as $1.99 (£1.28) per month to access videos from certain providers.

YouTube insists the new charging model will benefit those using the site to watch videos, not merely those publishing content.

A spokesperson said the company had nothing to announce at this time but added "We're looking into creating a subscription platform that could bring even more great content to YouTube for our users to enjoy..."

They added the new model would "provide our creators with another vehicle to generate revenue from their content, beyond the rental and ad-supported models we offer."

JJ agrees the move to charge users could be good for YouTube.

"It puts it on a more professional platform and will push TV even further out of the limelight than it already is," he said.

In March, YouTube vice-president Robert Kyncl told reporters: "It's a whole new skill set to develop, to convince people to actually take out their credit card."

YouTube, which is owned by Google, claims it has more than one billion unique users each month.

Alibaba profit nearly triples as revenues rise

Story originally appeared on BBC News.

Alibaba, China's biggest e-commerce group, has seen its profits nearly tripled, according to a regulatory filing by shareholder Yahoo.

Net profits for the three months through December rose to $642m (£415m) from $237m a year earlier. Revenues were more than 80% higher.

Privately-held Alibaba is widely expected to have a share sale as early as this year.

The company is the biggest player in China's fast-growing e-commerce market.

The company operates online platforms, Taobao and Tmall, which connect small sellers and major companies with consumers and business partners.

Alibaba's revenues come from advertisements on the websites and customer fees.

Yahoo has a 24% stake in Alibaba, after the e-commerce company bought back some of its shares last year. Included in the terms of that buyback were incentives for Alibaba to list its shares before the end of 2015.

Alibaba has not publicly announced the details or timeline of the share sale. However, industry observers expect it could be as early as this year.

The strong earnings are part of wider growth in China's ecommerce industry, which is set to surpass the US in the coming years.
Story originally appeared on Bloomberg.

Yahoo Blockage Shows Conflicts in France Inc.’s Digital Ambition

Dailymotion SA, a YouTube competitor, has come to symbolize all the contradictions in France Inc.

After years of watching French startups snapped up by foreigners, the government last week put its foot down when Yahoo! Inc. (YHOO) sought to take control of the video site. Using the state’s shareholding in Dailymotion owner France Telecom SA, Industry Minister Arnaud Montebourg ruled that the “strategic” company, one of the few with technology to rival Google Inc. (GOOG)’s Youtube, couldn’t be sold to the U.S. group.

The move has sparked debate over everything from the state’s heavy hand and what it will mean for foreign investment to the inability of French startups to catapult their ideas on to the world stage. Montebourg’s action has divided the finance ministry, brought him support from unlikely quarters in the opposition and drawn the ire of entrepreneurs, laying bare the conflict within France on the role of the state in business.

“The moral of this story is that if you’re an entrepreneur and want to have control over your destiny, best keep away from state funding, especially in France,” Pierre Chappaz, former head of Yahoo Europe and founder of price-comparison website Kelkoo, which he sold to the U.S. company about a decade ago, wrote on his blog yesterday.

The hullabaloo coincides with President Francois Hollande’s efforts to attract foreign investors as he struggles to stem record-high joblessness amid a deepening economic slump. The European Commission forecasts a 0.1 percent contraction of the French economy this year.

‘Catastrophic Message’

“It’s hard to talk to foreign investors when your ministers are telling them ‘Go home, we want to live in autarky’,” Pierre Kosciusko-Morizet, founder and chief executive officer of Priceminister, a French rival to EBay Inc. sold to Japan’s Rakuten Inc. in 2010, was quoted as saying by website Rue89. “We’re sending a catastrophic message.”

Montebourg has ruffled feathers before. In November, the minister sparked a furor by calling for the nationalization of a troubled local unit of ArcelorMittal, which the world’s largest steelmaker was looking to shut down. In February, Montebourg got into a war of words with Titan International Inc. Chairman Maurice Taylor, who turned down a proposal to buy a tire plant that Goodyear Tire & Rubber Co. is closing in France.

Montebourg defended himself on Dailymotion, saying France is opposed to Yahoo’s plan to buy 75 percent of the video site, with an option for 100 percent, preferring a 50-50 partnership. He was watching out for French strategic interests, he said.

‘Unfounded Concerns’

“The French appreciate it when the state intervenes when it can,” he said on France 2 television last week.

He denied his actions might drive investors away. “The concerns of foreign investors are unfounded,” he said in an interview. “We are very happy to work with our American friends.”

While Finance Minister Pierre Moscovici distanced himself from the decision, Montebourg’s defenders put it down to a learning process in an increasingly global digital world.

“There’s massive growth potential in digital innovation,” said Yves Gassot, who heads Montpellier, France-based technology researcher Idate Digiworld. “France, like other European governments, is slowly learning how to tap into it, through trial and error.”

France, which has elite math and science universities and produces the highest number of graduates in these fields in the European Union, has struggled to come up with a winning formula to spawn the next technology giant to take on the likes of Google, Apple Inc. (AAPL) or Facebook Inc.

‘French and Dead’

The record shows that most of France’s successful entrepreneurs in the past decade have chosen to sell their businesses to foreign investors. Germany’s SAP AG in 2007 acquired Business Objects for 4.8 billion euros ($6.3 billion).

Axel Springer AG bought web portal that same year, and real estate ads website in 2010. Dating site Meetic (MEET) was acquired by the U.S.’s in 2011.

Priceminister has tripled its sales and doubled the number of employees since it was sold to Rakuten, CEO Kosciusko-Morizet said.

“Joining a global group saved us,” said Kosciusko-Morizet, who also helped create Isai, a French fund that invests in local startups. “Had we stayed French, we’d be dead.”

A similar search for a global footprint led France Telecom, 26.94 percent owned by the French government, to talk to Yahoo.

Dailymotion’s Journey

France Telecom bought its initial 49 percent stake in Dailymotion in 2011 for 58.8 million euros, and boosted the holding to 100 percent in January this year for 61 million euros more, according to its annual earnings report.

With the talks with Yahoo failing, France Telecom (FTE), which intends to keep a stake in Dailymotion, has resumed its search for a partner for the site.

Dailymotion, created in 2005 by Frenchmen Benjamin Bejbaum and Olivier Poitrey, gets 112 million unique visitors per month according to its website, a 10th of the number for YouTube.

Yahoo had planned to invest massively in video technology, which would have benefitted Dailymotion, Dailymotion CEO Cedric Tournay said in an interview in Le Monde.

“Our roots are French, a majority of our teams too...but it’s about more than just France,” Tournay said. “We live in a global environment in which we have, for the good of our companies, to make choices that maximize our chances of success over the long term.”

‘Entrepreneurial Adventure’

For France, keeping prized assets in French hands isn’t new. Former President Nicolas Sarkozy in 2009 created the Fonds Strategique d’Investissement, or FSI, a sovereign fund charged with investing in “strategic” companies.

The FSI had a stake in Dailymotion, which it sold to France Telecom in January.

Sarkozy’s former adviser, Henri Guaino, last week expressed support for Montebourg’s stance, saying the minister’s intervention protects the country’s interests.

France Telecom CEO Stephane Richard was less supportive. French daily Les Echos cited him as saying that Dailymotion is a unit of France Telecom, “and not of the state. It’s the group, its management and its board that are managing the dossier.”

Rather than buy stakes, the government should be focused on creating an environment that’s conducive to technological innovation, Idate Digiworld’s Gassot said.

France’s private equity association Afic last year said the lack of capital available to finance small and medium sized companies had become an “emergency”.

The amount of private equity capital raised in 2012 in France was 5 billion euros, compared with 6.5 billion euros the previous year, according to Afic data.

“The solution isn’t necessarily to be obsessed with turning local startups into global brands,” Gassot said. “Maybe you’ll have a series of smaller companies, maybe they’ll be sold off. The important thing is to make sure the money is reinvested here so the next generation of young engineers also gets a chance at the entrepreneurial adventure.”

Michigan lawmakers target Internet sales taxes

Story originally appeared on the Detroit News.

Lansing — Michigan lawmakers are pushing measures aimed at going after the hundreds of millions of dollars in outstanding taxes each year from sales over the Internet, but they may have to wait for a federal measure to pass for the dollars to really start rolling into the state.

Under bipartisan bills being debated in the state House, Internet retailers like Amazon or eBay would have to charge sales tax if they have distribution centers or warehouses in Michigan or are affiliated with in-state businesses whose websites steer customers to the larger retailer.

Supporters — like the Michigan Retailers Association — say the bills taken up by the House Tax Policy committee will bring in revenue and help level the playing field for local businesses that must collect sales taxes.

But Michigan's Treasury Department, while supporting the bills, estimates that the proposed law won't generate much revenue — unless the federal government takes action.

The U.S. Senate is expected to vote on legislation this week that would give states power to compel online retailers to collect state and local taxes for purchases made over the Internet.

States now can only require stores to collect taxes if the store has a physical presence in the state. Consumers are supposed to declare all remote sales — which includes items bought over the phone and on the Internet — when they complete tax returns and pay a 6 percent use tax. But since that isn't enforced, it rarely happens.

Tom Scott, spokesman for the Michigan Retailers Association, said the competitive advantage for online retailers hurts brick-and-mortar business' cash registers every week.

"This is a huge challenge for them," he said.

The Treasury Department estimates that $460 million in taxes from remote sales is due in Michigan this fiscal year and most of that will go uncollected.

While Michigan's proposed law would allow some of that to be collected, it doesn't apply to all Internet retailers and they can get around the law by breaking ties with their in-state partners or moving their warehouses to other states, House Fiscal Agency said in its analysis.

Scott said that while the bill won't bring in all of the uncollected revenue, it would require some of the largest online retailers, like Amazon, to start charging sales tax, which could have a huge impact on the state's small businesses.

Even if federal legislation gets through the U.S. Senate this week, it likely has a long road ahead of it in the House.

"Everybody would like a federal solution, but we can't sit around and wait. We have to start doing something as a state," said Republican Rep. Eileen Kowall of White Lake, who is sponsoring one of the bills.

Other states like New York and Illinois have passed similar legislation. Kowall said that if more states follow, it will encourage Congress to finish the job.

Republican Gov. Rick Snyder has also called on Congress to take action. In a letter to the U.S. Senate last year, Snyder said "it's time for Congress to grant states the authority to enforce sales tax and use laws on all retailers in their state."

Others contend that the Michigan legislation could hurt the affiliate marketers, the small online-based businesses that have advertising agreements with larger Internet retailers, like Amazon.

Under the bills as introduced, online retailers would have to charge sales tax if they advertise on websites owned by these in-state businesses, said Rebecca Madigan, executive director of the Performance Marketing Association.

In states where similar legislation has passed, Internet retailers have cut advertising relationships with these businesses to avoid collecting the tax, which in-turn hurts those businesses, she said.

But James Hallan, president and CEO of the Michigan Retailers Association, said in his written testimony to the committee that "in other states where affiliates have been terminated by Internet-only retailers, like Amazon and Overstock, the companies have often reinstated those agreements."

The Michigan bill is likely to advance soon to the House floor.

Republican Rep. Jeff Farrington of Utica, chairman of the Tax Policy Committee, said it has broad support in the committee and members plan to vote on it in two weeks.

Majority Republicans in the House have suggested that they may want to see action on the issue this year. Their legislative agenda for this session includes closing the Internet tax loophole.

Scott said it is far from certain that the U.S. House will take up the measure once it passes the Senate and — if it does — it likely won't be for a while. In the meantime, Michigan must ease the burden on brick-and-mortar businesses, he said.

"It ends up costing them sales it ends up costing our state jobs and the problem keeps getting worse," Scott said, "which is why we are going to get action, it's just a matter of how soon."

Energy Journal: Australia’s Golden Soil and Wealth for Toil

Story originally appeared on the Wall Street Journal.


Australia’s been doing pretty well out of the resources boom. Take Perth – from backwater to bona fide city, according to The Wall Street Journal, thanks to Asian demand for raw materials.

The entire Australian economy has prospered where others have stalled thanks to its golden soil, where men plunder iron ore. There has been no recession Down Under.

The oil and gas industry looked for a while like it would move in to add to the mining boom. Some big offshore players have moved into Perth – Shell, Inpex Chevron and Apache have all expanded their local operations – but they may have to supplant rather than complement the mining boom.

Now there is a race against time to construct gas-export facilities before the U.S. gives the all-clear to do likewise, or before Russia strikes a deal with Japan.

The Chevron-led Gorgon project is due to cost at least 52 billion Australian dollars; ExxonMobil is planning a groundbreaking floating LNG-processing plant.

The costs are huge, but being first in the race to ship LNG to Asia is everything. Australia’s decade-long mining boom is ebbing away as Asian demand for coal and iron ore has evaporated, but the need for fuel there could be maintained.

The Australian government will hope so for, as Alen Mattich reports, it long ago chose the British route to dealing with its mineral wealth, rather than the Norwegian one.

The U.K. used the windfall to cut taxes and spend more on services – writing in the Guardian, William Keegan describes North Sea revenue being described by one acolyte of Margaret Thatcher as “what we are using to finance unemployment.”

Norway, by contrast, squirreled much of its revenue away into what is now the world’s biggest sovereign-wealth fund.

Now mining tax revenues are falling and Australia is heading into deficit territory. What that means for Perth’s gleaming new skyscrapers rests on the success of the oil and gas industry.


Wait, what? The U.S. has double the amount of oil and three times the amount of natural gas than previously thought? Where did that all come from?

The previously unaccounted Three Forks shale formation explains the substantial increase, according to the National Journal. Good news for refiners like Phillips 66, which is moving toward the goal of processing only discounted crudes extracted in North America.

Clearly there is no shortage of oil in North America, although highlights that 47% of oil and gas wells are located in high or extremely water-stressed areas – water of course being crucial to the fracking process that is crucial to getting all this energy out of the ground.

The U.S. government will soon publish draft rules to regulate this technology.

That aside, the biggest threat to getting as much of this oil out as possible is this: who wants it?

Bloomberg Business Week says increasing vehicle fuel efficiency, substitution of natural gas for crude oil and recent elasticity of demand in the U.S. mean the concept of Peak Oil is now being approached from the demand side.


A big day for big oil earnings — Shell beat expectations but attention is on the retirement of CEO Peter Voser; Statoil disappointed as production was hit in part by the attack on the Algerian In Amenas natural-gas plant; and BG Group reported a slight slip in profits but said it was on track with three flagship projects.


Brent crude eked out moderate gains in London Thursday morning trade, regaining a little ground back above $100 a barrel after the previous session’s big losses.

Cautious trading is likely ahead of the European Central Bank’s interest rate decision, due at 0745 ET, at which there is broad expectation of a 0.25 percentage point cut to the main refinancing rate. The Journal’s market report is here.

First Take: Facebook earnings don't address uncertainty

Story originally appeared on USA Today.

Investors still uncertain on Facebook's future a year after its initial public offering got little to convince them either way after it reported first-quarter earnings Wednesday.

The company's posted results were inconclusive. Adjusted earnings per share came in at 12 cents, a penny under Wall Street estimates. But unadjusted earnings per share of 9 cents beat the Street 's estimate by 2 cents.

Meanwhile, the company's revenue growth continues to slow even as the number of users keeps climbing, up 26% to 665 million in March.

Soaring costs, up 60% in the first quarter vs. a year ago, are cutting into the social media giant's bottom line.

Net income rose just 6.8% to $219 million vs. the same quarter in 2012. Uncertainty about Facebook's outlook is reflected in the stock price.

Shares rose 13 cents a piece to $27.56 each in after-hours trading Wednesday. That's 57% above the stock price's 52-week low hit in September, no doubt a welcome development for shareholders. But the price remains 39% below the all-time $45 a share intraday high hit on the first day Facebook was public, when shares debuted at $38 a share.

Investors are wondering whether CEO Mark Zuckerberg can ramp up revenue growth. It was 37.8% in the first quarter, down from the 44.7% revenue growth in the same quarter a year ago and the 40.1% pace Facebook achieved in the final quarter of 2012.

Another big issue is skyrocketing costs, which others companies in the Internet industry are confronting. First-quarter expenses totaled $1.1 billion, a 60% increase over the same period a year ago.

And rising costs are eating away at profit growth. Facebook's first-quarter net income grew just 6.8% to $219 million vs. the same quarter in 2012.

But while Facebook financials may not have been a home run, the company's customer base hasn't stopped growing -- no small feat. In March, the number of people who use its service actively on a daily basis is heading toward 700 million.

Wednesday, May 01, 2013

Baidu Valuation Cut in Half as Ad Sales Slide Dims Profit

Story originally appeared on Bloomberg.

Baidu Inc. (BIDU) is trading more than 50 percent below its average valuation over the past five years as the Chinese Internet company struggles to diversify while maintaining profit growth amid a slowdown in advertising.

American depositary receipts of Baidu, owner of China’s most-used search engine, sank 7.9 percent April 26 to trade at 15 times estimated earnings. That compares with an average multiple of 36 since 2008, data compiled by Bloomberg show. The slump drove a 1.4 percent drop in the Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S.

Baidu tumbled the most since February in New York after reporting net income rose 8.5 percent in the first three months of 2013. Profit growth has slowed from an average 64 percent in the previous five quarters as revenue from advertising dwindled. The Beijing-based company, which most recently acquired online video firm, wants to buy up mobile applications as consumers shift to smartphones from personal computers, Chief Executive Officer Robin Li said April 25.

“Baidu is spending a lot of money to maintain its market position and search for new growth engines,” Echo He, an analyst at Maxim Group LLC in New York who rates the stock sell, said in a phone interview April 26. “The investment doesn’t necessarily translate into revenue growth. The profit margin will continue to be under pressure.”

Baidu’s first-quarter gross margin, a measure of profitability, was 65 percent, down from 71 percent a year earlier. The company’s net income of 2.04 billion yuan ($331 million) in the first three months was 6.8 percent below the median of eight analysts’ estimates compiled by Bloomberg. Revenue per online advertising customer fell 6.5 percent from the fourth quarter, according to the earnings statement.

Competition Intensifying

The ADRs, which slid to an almost three-week-low of $85.02 April 26, have retreated 36 percent over the past 12 months as Baidu grapples with rising competition from companies such as Qihoo 360 Technology Co. (QIHU), a software developer that debuted a search engine in August. Qihoo, also based in Beijing, said last month that its operating margin will “see the bottom” in the first quarter due to costs associated with expanding into mobile Internet.

Baidu -- which accounted for 82.3 percent of Chinese search-engine queries in the fourth quarter, according to Bloomberg Industries -- wants to extend its dominance of China’s search market to mobile devices and favors acquisitions over building the company, CEO Li said on an April 26 conference call. The purchase was still “burning money,” he said.

“Nobody can prove they can make money from online videos, and to keep up with the growth rate of the past they need to invest in new businesses which are just not as profitable as the search business,” Jeff Papp, a senior analyst at Oberweis Asset Management Inc., which manages $700 million in assets including Chinese equities, said by phone from Lisle, Illinois April 26. “The company is undergoing a transformation and it’s hard to get visibility.”