Facebook abandons #Socialmedia. Goes Olde School $FB, $TWTR, $GOOG, $YHOO, $MSFT, $LNKD

Facebook (Nasdaq:FB) launches mandatory video ads. That’s olde school television. you know when your watching a reasonably interesting show and suddenly these ads come on. Madison Ave Madmen call that Interruption Marketing. similar to tele-marketing which has annoyed tens of millions.

So where is the promise of social marketing. You know engaging the follower with relevant compelling offerings which have a high sell through rate. This is like watching the Swedish Bikini cheerleading team during a commercial break exhorting you to drink a particular beer while you are ignoring your girlfriend as you watch a very important football game. Very important to be emphasized.

Facebook will become no more powerful than network TV. Which right now is not very powerful at all.

George Gutowski writes from a caveat emptor perspective

Perfect Way to Screw Up Facebook Ads $FB, $GOOG, $TWTR, $LNKD, $YHOO,

Facebook (Nasdaq:FB) is poised to launch video ads for a reputed $2 million a day to reach everyone between 18-54. If they hang onto the business they will gross $730 million. hopefully without annoying the users.

Despite the fact it is free I’m pretty sure I don’t want to see the ads. So what if you go into your profile and change some of your settings. Age comes to mind. Tell em you’re over 55. This demographic apparently does not watch video’s. Change other aspects that makes it difficult for them to figure you out.

The ads will play automatically so watch for creative resistance from an ungrateful public who do not care to pay the bills for billionaire and multi-millionaire geeks working at Facebook.

George Gutowski writes from a caveat emptor perspective.

Google still does not know where the chop sticks are. Is that Bullish or Achilles Heel $GOOG, $FB, TWTR, $BIDU, $YHOO

Google (Nasdaq:GOOG) is surging, charging and bulling; creating a lot of excitement. Longs and Bulls are making money. Today. Just remember while you guzzle victory’s champagne. Google still does not have China figured out. They still have not recovered  from what Beijing views as intransigence.

If they cannot establish a large foot print in China they will be missing a critical piece which others will capture. Global scale means global as in planet earth. Global does not exclude China. If Google can skate that one on side than $2,000 a share will be cheap.

Google does not know where the chop sticks are.

George Gutowski writes from a caveat emptor perspective.

More Reasons for Facebook’s Demise. The child’s play dynamic. $FB $LNKD $GOOG $TWIT $YHOO

On a personal note; [personal notes being the only one's that really count] I have become a grandfather for the second time. The family Facebook pages are full of baby pictures and nice family comments. There is joy in the house and all branches of the family tree.

Facebook with its vaunted advertising machine serves up advertising for an eaves trough product that blocks out falling leaves. No baby products or anything else remotely appropriate.

So special note to Mark Zuckerberg. My new-born grand-daughter does not as yet own any real estate in her own name. It will be some time before she takes an interest in property management issues.

There are lots of other compelling product offers that I and family would be willing to consider. But you seem to be missing it. Hmm $50 @ share plus. Not a candidate for the education fund. Grand Dad may take the responsibility for shorting the stock. The risk is too much for a new-born. Or is it child’s play?

I must admit to renewed insights in diapers and infant clothing.

George Gutowski writes from a caveat emptor perspective. follow him on Twitter @financialskepti

Microsoft’s Next CEO will be a Lawyer. Here’s how they F it up. $MSFT $GOOG $AAPL $YHOO $FB

Microsoft (Nasdaq:MSFT) is looking for a new CEO. What do they need? A lawyer of course and here’s why. Big Tech is subject to much legal and regulatory scrutiny if not outright interference. Antitrust actions are constant. Law suits against competitors are daily events. If you develop something or buy it the competition immediately attacks it because they were working on something just like it. If  they don’t attack it you will attack them.

This has nothing to do with engineering. There are thousands of engineers. some of them are even good.

What you need is a good war-time consigliere.

Yahoo (Nasdaq: YHOO) stole an attractive engineer from Yahoo who is playing the engineering and development card. Marissa Meyer if you must ask.

Apple (Nasdaq: AAPL) is post Steve Jobs but still very much in the developer super product mode.

Google (Nasdaq: GOOG) is still in the grips of its two founders Larry Page and Sergey Brin. Uber developers in their own right and employers of tens of thousands of brilliant and near brilliant engineers. They came the closest to breaking out of the mould and hiring a grey hair to help lead but they yanked the chain back recently.

Facebook (Nasdaq: FB) is still in the validation stage. Mark Zuckerberg must prove himself and validate his social media concept. But as any casual observer will notice they are spending more time on legal and regulatory issues; like it or not.

So the narrative at Microsoft is we need the next big general to lead us into battle. You can almost see the biblical imagery of an angel wielding a big ass sword slaying dragons and beasts.

The most effective leader for Microsoft would be a lawyer with good infighting instincts. The engineers you can hire and fire.

The market would be very confused because tech expects and evangelical type of CEO. A Steve Jobs who walks onto a stage holding something and fervently saying this is it and you need it now. The next day the law suits start-up.

If Microsoft hires a lawyer as CEO the competition would be very confused. If you hire an engineer you parse his résumé and you can guess what direction he will take. A lawyer well you just don’t know. And a lawyer is just what you need.

This radical idea would confuse investors in the interim but work big time in the long run.

But like the story title says. They will F it up for sure.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti

Microsoft Investors will be bribed, pampered, coddled and other neat stuff. Read how! $MSFT $GOOG $AAPL $YHOO

Steve Ballmer (Nasdaq:MSFT) is leaving in the next twelve months. Here are a few things Microsoft will do to keep investors loyal, happy warm and fuzzy.

 

  1. Serious dividend increases. Money talks and Microsoft has some. Lots actually. To keep investors focused the board will increase the payouts. A strong dividend will keep a floor under the stock price. Many of Microsoft’s businesses are steady predictable earners.
  2. To unlock value some businesses may be spun out and or sold off. Anyone new to Microsoft will want to write on a clean slate so let’s get going with the divestitures.
  3. No new major products and/or  initiatives will be undertaken before the new boy wonder arrives and starts putting his fingerprints on projects and idea’s. So in the meantime capex will shrink and cash flow will grow. Not a good thing but a real thing.

 

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti

The correct way to analyze Yahoo $YHOO

Yahoo (Nasdaq:YHOO) shares have done well for the past year mainly because of faith in the new CEO Marissa Mayer. But revenues have fallen and some investors are worrying. Tech stocks are not used to rebuilds and restructure and perhaps this is a good time to think about a process old line industrial stocks have followed for years.

Firstly restructures do not happen over night. It takes a long time to hire the correct staff get them focused and start producing commercial results.

Secondly a lot of existing revenue sources are declining and are or will be abandoned shortly. Temporarily this will cause short-term dips.

Thirdly the real catalysts for driving shareholder wealth will come from my products and new applications. Watch this space like a hawk. This is what will determine Yahoo’s success. Getting into a fist fight with Google or Facebook only results in a war of attrition with declining profit margins. Much like reading a history of World War One. Much bloodshed little progress. World War Two you had tanks, aircraft and new thinking on both sides.

Lastly watch the acquisitions space. Yahoo knows they have to buy and buy quickly.

So a classic financial analysis of quarterly earnings will profit little. So for those of you who like to analyze the crap out of everything don’t bother. The winning cards have not yet been dealt.

George Gutowski writes from a caveat emptor perspective.

Jim Rogers did what with smallcap Fab Universal. Watch Black Swan. $FU $GOOG $YHOO $FB $AMZN $NFLX

Fab Universal (NYSE:FAB) announced that the very famous investor Jim Rogers long beloved by Financial TV has joined the Board of Directors. Fab is a small cap trading under $5. They are in the digital media space in China and creating lots of cash flow. So why would Jim Rogers accept a seat on the Board. He is rich and another buck may not be as exciting as it used to be. If he truly believes in the potential and no one doubts his integrity why not just buy a lot of shares, let the market know you are long and wait to cash in.

The Chinese market is seductive and enigmatic. Digital is a real play for the future. Jim Rogers is long recognized as an astute commodities investor and China is a huge commodities buyer. So he gets into China with a digital play. Google (Nasdaq:GOOG) has difficulties in China. Yahoo (Nasdaq:YHOO) has stubbed its toe in China and is still not sure if it was cheated outright or just diddled a little in the back seat of puppy love. But someone with deep pocketed books will most likely appreciate all the heavy lifting that`s been done and open up the cheque book. Amazon (Nasdaq:AMZN) Netflix (Nasdaq:NFLX) Facebook (Nasdaq:FB) are all looking for big bold plays and think nothing of billion dollar acquisitions. So on a current market cap of $72 million the numbers will work out rather well.

The communist party is still totalitarian if it got pushed strongly enough. But the China market is huge and enticing.

Fab Universal is still readily unknown. The Wall Street Journal at time of writing still says no news on Fab for the past two years. So this is what I think Jim Rogers is up to as he swings for the fences.

Buy in and arrange some preferably financing.

Expand services and get yourself on the map. Annual revenues are just in the tens of millions. With a compelling product and enough working capital the China market can be very kind to shareholders.

So as you are expanding and growing and creating cash flow and profits you will attract the attention of the big dogs who will want to buy a growing concern in the China Market. That’s when the take-over offer is made at huge multiples and Jim Rogers cashes in yet again. So far so good. I can just see investors hit the buy button very hard.

Oh look here comes the Black Swan. We may have to wring its neck. The China market is not a private property driven liberal democracy with enshrined rights of ownership. They play by their rules which they make up as time goes on. Fab Universal will need to keep the Chinese political and economic power élite engaged, warm and fuzzy. If Beijing decides it wants to crown another king it will do so. The Chinese consumer will be switched over to other choices and forget about Fab.

The risk is political. We are speaking about media which politicians will watch over carefully. If Jim Rogers understands the China Market he needs to ensure the political factors are well ties down and stay in favourable trends as time goes on.

George Gutowski writes from a caveat emptor perspective.

Googles Tax Problem; Uncle Sams Opportunity; Thank You Europe $GOOG, $YHOO, $FB, $TWIT

Google (Nasdaq:GOOG) is being hunted down by european tax collectors controlled by austerity starved politicians. Google and other American companies are seen as fat cows. Minimal local political consequences to extracting a few pounds of flesh.

Google rolls up the revenues to Google Ireland and then shunts the cash off to an affiliate in Bermuda. Pretty clever except UK, France and Germany feel they are not getting their fair share.

Come back to USA. Huge amounts of corporate cash are parked off shore. Corporations do not want to pay US income taxes on funds earned elsewhere. Not a bad argument if local taxes had been paid. But if the funds are in Bermuda and Ireland no one has paid something substantial.

So far the argument has been a classic push. Competing governments have not been able to break the logjam. Several corporations have huge off shore cash reserves with no immediate plans to deploy.

US politicians are under increasing pressure to resolve the issue. The uninformed electorate sees big buck off shore held by uber-large entities and joins the local Occupy Wall Street movement. End of electorates analysis. One person one vote does not equal sound financial/economic thought.

Corporations to be frank are motivated by stupid tax rules. Most of the key executives are  domiciled in the US and would probably prefer to see capital returned to US and then move globally without restrictions.

Congress will most likely mandate local state taxes be paid on internet transactions. Politicians also would love to be able to say they forced the repatriation of billions from overseas back to US. This will appease the Occupy crowds.

Watch for tax treaties between  the US and major European governments (EU as well) which will disadvantage off shore cash.

Investors after the initial sticker shock of increased tax rates will see cash coming into play more easily. Demands for effective economic deployment will grow. Investors did not buy to hold cash they can do that on their own.

George Gutowski writes from a caveat emptor perspective.

Google Achilles Heel; European Income Taxes; Not so Good for Google $GOOG $YHOO $FB $TWIT

Google (Nasdaq:GOOG) pays next to no income taxes on European revenues. UK, France and Germany all have Google in their sights. Google currently designates units in those countries as providing marketing and support services to Google Ireland which in turn transfers most of its turnover to an affiliate in Bermuda.

The structure is legally sound for now. except the guys who make the laws no longer like it. Google is advertising for sales and marketing staff in UK, France and Germany. So if the sale becomes local because of the local sales and distribution arms taxes will become local as well.

European governments are all fighting austerity and other financial issues. Quite frankly they have no political choice but to increase tax revenues. Google is a fat cow which will be slaughtered as quickly as possible. The UK, France and Germany constitute and will always constitute the overwhelming bulk of Google European revenue.

While Google is currently in the tax mans sniper scope. Yahoo (Nasdaq:YHOO), Facebook (Nasdaq:FB) and Twitter (To be announced) who all will depend on European revenues will be treated in the same fashion.

Big increases coming to global income tax rates which means negative pressure on EPS and potential dividend rates.

Death and taxes are inevitable. Google is not on its death-bed so it must be taxes.

George Gutowski writes from a caveat emptor perspective.