Archive by Author | melodymark

Nokia’s Turnaround Under Time Pressure

Smartphone designers are rapidly releasing new models into the market because these companies want to gain market share just like Apple and Samsung. In the past, there were more competitors. Nokia, a Finnish company, was once leading in sales of basic mobile phones. However, one of their newer models, Lumia, is unable to keep up with the pace of the market. It is unable to attract consumers to purchase this smartphone. In fact, Nokia’s basic mobile phones are more popular. Thorough restructuring of the company has allowed Nokia to cut costs. Unfortunately, their revenue continues to decrease in every quarter. Chief Executive Stephen Elop hopes to save the company by updating Lumia’s functions.

It appears that Nokia is currently unable to keep up with technological advancements. Although they were able to ship out 55.8 basic mobile phones in the beginning of this year, the company is incurring losses. Because of investors are bearish about Nokia’s performance, its stocks decreased to a five-month low. The CEO intends to invest more resources to further develop Lumia. If it is successful, it may be a driving force to help Nokia regain market share.

 

Written By: Melody Mark

Source: Rossi, Juhana, and Gustav Sandstrom. “Nokia’s Turnaround Under Time Pressure.” Wall Street Journal. Dow Jones & Company, Inc., 18 Apr. 2013. Web. 19 Apr. 2013.

PayPal Slows for EBay

EBay owns three general business services, which are the Marketplace (EBay platform), payment (PayPal) and GSI commerce system. In the past quarters, reports have shown that PayPal and GSI had been expanding quicker than EBay Marketplace. As a result, PayPal’s performance leaves a bigger impact on the general performance of eBay. Through these mediums, EBay’s profit increased by 19%, and revenue increased by 14%. They are also able to attract users from one of their biggest competitors- Amazon.com. However, PayPal’s growth slows down as more competitors appear in the market, such as Intuit Inc and Square Inc. EBay attempts to restructure their system by changing sellers’ price structure and “listing-fees for many items in favor of a flat sales fee based on an item’s category.” This format appears to be similar to Amazon’s structure.

EBay’s dependence on PayPal to drive its revenue may become a problem in the future.  Also, Amazon’s business structure serves as a threat to EBay even though the two websites are based off of different vending methods.

 

Written By: Melody Mark

Source:

Bensinger, Greg. “PayPal Slows for EBay.” Wall Street Journal. Dow Jones & Company, 17 Apr. 2013. Web. 18 Apr. 2013.

Yahoo Profit Rises 36%, Exceeding Expectations

For a long time, Yahoo! has been losing market share as an Internet company. After the company hired Marissa Mayer to be its CEO, the company has shown improvements. Its stocks has risen more than 50% since her arrival nine months ago. In addition, Yahoo owns 20% of Alibaba, a Chinese Internet company. This company has been doing well and is preparing for an initial public offering. Analysts are valuing the company at $55 million and more. Yahoo’s profits increased 36% and exceeded analysts’ speculations because of this investment. Alibaba’s market capitalization may be double to five times Yahoo’s. Other operations of Yahoo are lagging behind. They used to be the biggest seller of display ads, but due to the competitiveness of this industry, they no longer have this advantage. The company hopes to improve users’ mobile experience by hiring more engineers to develop programs. In doing so, they also hope to restructure its core products.

Yahoo! was once a popular site that offered a variety of information. However, it is difficult for them to stay competitive when developers are starting new and improved sites. Yahoo will have to expand its operations to attract the younger audience and retain its users.

 

Written By: Melody Mark

Source: Perlroth, Nicole. “Yahoo Profit Rises 36%, Exceeding Expectations.” New York Times. New York Times & Company, 16 Apr. 2013. Web. 17 Apr. 2013.

Ford Outsells Toyota in China as $4.9 Billion Bet Pays

Ford’s earlier decision to move into global markets has shown positive outcomes. The Ford Focus has helped Ford Motor Co. increase sales by 54%. The figure also exceeds that of Toyota Motor Corp., a long-term competitor. A reason for this is the political tension between China and Japan. Another reason for this progress is Ford’s decision to expand its operations to global markets such as China. CEO Alan Mulally suggests that their goal is to generate one-third of the company’s sales from Asia by 2020. He also plans to invest more money into developing new models. The profitability of this large market has also surpassed that of Europe.

Mulally’s decision to expand Ford Motor’s market into Asia has benefited the company in many aspects. The restructuring of the company’s operations has shown many positive results. Continuous innovation and expanding markets will provide Ford with an opportunity to gain more market share. They also keep competition within the market in check.

 

Written By: Melody Mark

Source:

Naughton, Keith. “Ford Outsells Toyota in China as $4.9 Billion Bet Pays.” Businessweek. Bloomberg L.P., 15 Apr. 2013. Web. 16 Apr. 2013.

NPR Series on Race Aims To Build a Wider Audience

National Public Radio (NPR) is a publicly and privately funded radio station that provides news and cultural programs. When they received a $1.5 million grant from Corporation for Public Broadcasting, they invested the money in reporters, editors and bloggers to research the topic of race, ethnicity and culture. The station’s goal is to expand their audience and including more voices in their programs. The four-part series called “Changing Races” will include a study of how cultures have developed over time. It is also part of the station’s plan to diversify their listeners. They hope attract a younger audience through various marketing strategies.

Some of NPR’s most popular programs, such as “Morning Edition” and “All Things Considered” have up to 13.4 million and 12.5 million listeners, respectively. This is because many people have the time to listen to the news during their broadcasting times (4:00pm to 6:00pm). Also, many people can relate to broadcasted topics. “Changing Races” is a program that will be able to attract the younger audience because it involves their lives, and would help them understand the reasoning behind the shifting culture.

 

Written By: Melody Mark

Source:

Jensen, Elizabeth. “NPR Series on Race Aims to Build a Wider Audience.” New York Times (blog). New York Times Company, 14 Apr. 2013. Web. 15 Apr. 2013.

Citigroup Europe CEO Sees U.S. Universal Banks Gaining Share

Many investment banks are still recovering from the financial crisis several years ago.  Efforts to improve Citigroup’s system were established when representatives stated that they will be hiring investment bankers to enforce the bank’s new regulations. The demand for intellectuals is necessary in the industry. For example, Citigroup hired Luigi de Vecchi, who used to work for Credit Suisse Group, to serve as their chairman of continental Europe for corporate and investment banking.  Citigroup’s European chief, Jim Cowles claims that the bank still has to cut costs and re-determine the focus of the bank. However, they are gaining more market share than European banks because of their ability to “absorb the rising cost of regulation.” Cowles argues that Citigroup, a bank that combines investment, commercial and consumer banking, can deal with these costs better than other banks; this is based on their ability to retreat to another market if one fails.

European investment banks have been improving at a pace that is noticeably slower than U.S. banks’. They are also more hesitant when making decisions because of the insecurities and risks that the bank may come across if the plan fails. Banks like Citigroup, which is one of many U.S. universal banks, is confident that a more senior management team would assist the bank’s recovery from the financial crisis.

Written By: Melody Mark

Source:

Choudhury, Ambereen, and Elisa Martinuzzi. “Citigroup Europe CEO Sees U.S. Universal Banks Gaining Share.” Bloomberg. Bloomberg L.P., 14 Apr. 2013. Web. 14 Apr. 2013.

Verizon Delays Upgrades — Wireless Users Must Now Wait 24 Months to Get Subsidized New Phones

Various U.S. wireless carriers often compete for the same customers and search for ways to lower their costs. Recently, Verizon Wireless extended the amount of time it would take for their contract customers to upgrade their cellphones. They spent billions on smartphone companies, such as Samsung and Apple, to provide subsidized phones for their customers. This service leaves a negative impact on their marginal profit. Carriers subsidize cellphones, instead of having customers pay the full price, because cellphone costs are generally more expensive than customers’ budgets. This service would attract more customers, yet limit the amount of money they would have to spend. However, competitors such as AT&T Inc. and Sprint Nextel Corp. both allow customers to upgrade their cellphones after 20 months. Verizon’s changes may turn customers away. T-Mobile USA chose a different method to attract contract customers. With the iPhone 5 coming out for T-Mobile USA, they are offering interest-free financing for customers because cellphones are full price.

Currently, many people want the newest smartphones and gadgets. Therefore, wireless carriers have to attract customers while keeping low costs. There has been more competition among wireless carriers. Therefore, each of them have to further differentiate their services to attract contract customers.

 

Written By: Melody Mark

Source:

Gryta, Thomas. “Verizon Delays Upgrades — Wireless Users Must Now Wait 24 Months to Get Subsidized New Phones.” Wall Street Journal. Dow Jones & Company, 13 Apr. 2013. Web. 13 Apr. 2013.

Bernanke Backs ‘Multiprong’ Approach to Aiding Low-Income Areas

The U.S. economy is slowing recovering from depression. Low-income communities, however, are recovering slowly than other aspects of the economy. Wages fell 30% when the economy was at its worse. This left a great impact on families who struggle to survive from one day to the next. Ben S. Bernanke, Federal Reserve Chairman, recognizes this problem and is determined to promote monetary policies that can relieve this issue. His plans will require local communities to work as a group to reshape the environment. The “multi-pronged” approach he describes involves improvement in education, jobs and health care sectors. In addition, he intends to pump more money into the market, in hopes of reducing unemployment rates.

The public is generally positive about the growth of the economy. There have been improvements in various industries. Reduction in unemployment rates also signifies the recovery of low-income families from their struggles. Bernanke’s support for low-income neighborhoods will also improve their lives.

 

Written by: Melody Mark

Source:

Torres, Craig, and Jeanna Smialek. “Bernanke Backs ‘Multiprong’ Approach to Aiding Low-Income Areas.” Bloomberg. Bloomberg L.P., 12 Apr. 2013. Web. 12 Apr. 2013.

Tumblr to End Storyboard And Dismiss 3 Employees

Many people blog to connect with people around the world. One of the most popular blogging sites is Tumblr. Its structure allows users to blog and re-blog posts. However, it has decided to close Storyboard, its multimedia news blog. The company does not offer an explanation as to why this service was shut down. Analysts believe that this service is not profiting. Although journalism is different from blogging, Storyboard was designed to market Tumblr and relate news to the community at the same time. This tactic is rarely used in social media sites partly because it does not profit in the industry.

Tumblr attempted to branch out into a new field with Storyboard. Unfortunately, the public is not ready to accept this new approach to business. In the future, Tumblr plans to search for other channels to profit aside from sponsored blogs on the page. Sadly, analysts do not see journalism as a channel that will profit online.

 

Written By: Melody Mark

Source: Kaufman, Leslie. “Tumblr to End Storyboard And Dismiss 3 Employees.” The New York Times. The New York Times Company, 11 Apr. 2013. Web. 11 Apr. 2013.

Lenders Used Aid To Repay TARP

Small businesses are often the driving force of the economy. The government acknowledges this and created a program that permitted small banks to lend money to banks. More than half of the banks participating in the small-business lending program have spent half of the funds allocated to the program. Funds borrowed from it are used to repay the Troubled Asset Relief Program (TARP) that was established in 2008. Just like other programs that have been established, critics claim that this program decreases banks’ loan obligations too easily. The chairman of small-business committee, Representative Sam Graves also points out that the programs may not be able to increase lending and stimulate the economy at the same time. The nature of TARP has also changed over time. Originally, small-business funds were used to relieve banks from TARP. However, now, programs are used to increase lending.

The Obama administration claims that TARP banks have helped increased small business lending and exceeded the Congress’ expectations. The different opinions about various relief programs established for banks and small businesses have made it difficult for Congress to estimate the amount of money it would take to reduce most loans. The current projection is $37.93 billion.

 

Written By: Melody Mark

Source:

Sparshott, Jeffrey. “Lenders Used Aid To Repay TARP.” Wall Street Journal. Dow Jones & Company, 9 Apr. 2013. Web. 10 Apr. 2013.

Portugal Warns Citizens Of More Economic Pain

Portugal was one of the few nations that had strict budget cuts during the euro debt crisis. Unfortunately, citizens are tired of these spending cuts placed in the nation’s budget plan year after year. As a result, the constitutional court overruled multiple spending cuts listed in the budget, giving up $1.8 billion that would have been saved. The court’s argument is that the country should not single out “civil servants.” The government is challenged to create new budget plans for the next fiscal year and to resolve the euro debt crisis. Primarily, the Prime Minister Pedro Passos Coelho claimed that they will reduce spending in the healthcare and education industries.

This is an example of how government often have to sacrifice social services in order to balance the nation’s spending budgets. Rising unemployment and negative growth have also left an impact on the social programs available to the Portuguese. Other European nations are also expecting to revise their budget plans because of the numerous cuts that may seem unfair to their citizens. Portugal is known for sticking to their budget plans. The constitutional court’s move to change this tradition may be the beginning of more benefits for people living in this nation.

 

Written By: Melody Mark

Source:

Minder, Raphael. “Portugal Warns Citizens of More Economic Pain.” New York Times. The New York Times Company, 8 Apr. 2013. Web. 9 Apr. 2013.

With Senate Approval, White Is Set to Run S.E.C.

The Securities and Exchange Commission (S.E.C.), known for its strict regulations on Wall Street, recently replaced their chairman. Mary Jo White was chosen to take Elisse B. Walter’s place on Monday. There has been a lot of attention on this position because Congress wants the agency to enforce more rules that would further limit financial fraud on Wall Street. Although she was chosen unanimously, some critics suspect that she will favor large banks like JPMorgan Chase. Conversely, people who were familiar with her performance as a prosecutor believe strongly that she is the right person for this position. She is known for her ability to prosecute criminals and thoroughly investigate crimes.

With the background of a prosecutor, White will be able to eliminate fraud that occurs in the financial industry. Congress should allow her to oversee Wall Street because she has prior knowledge. Also, she proposes to sever all ties with the private firm she worked with previously to show the public that she has the ability and determination to regulate Wall Street.

 

Written By: Melody Mark

Source:

Protess, Ben. “With Senate Approval, White Is Set to Run S.E.C.” New York Times. The New York Times Company, 08 Apr. 2013. Web. 08 Apr. 2013.

Facebook Introduces Smartphone Software to Boost Ad Sales

As announced before, Facebook explains their new mobile software at an event in Menlo Park, California. Home is Facebook’s software that is designed to run with Google’s Android system. It includes basic features from Facebook that allows users to easily access their personal pages straight from their phones. It will also be a platform for Facebook to earn money from advertisements. Despite rumors, Mark Zuckerberg clarifies that the social-network company will not be developing its own smartphone. It will continue to use Google’s market to expand its own.

The company chose Google over Apple because the Android system is designed to have more flexibility. Home is designed to overlap Google’s original smartphone settings just like GO Launcher EX and Apex Launcher. This becomes a threat for Google because users will be using Facebook’s platform rather than Google’s. Facebook will be able to generate sales from this software because of the large number of people who rely on Facebook these days. The effect of the event was also apparent when Facebook’s stocks closed on Friday with an 1.18% increase.

 

Written By: Melody Mark

Source:

http://www.bloomberg.com/news/2013-04-04/facebook-said-to-plan-android-smartphone-software-debut.html

Anheuser-Busch Merger Deal Clears an Antitrust Hurdle

The government has implemented multiple regulations on businesses to prevent the creation of monopolies in the past. For example, the Justice Department sued AT&T so that this mobile-network company would not be able to take over T-Mobile USA for $39 billion last year. Similarly, the Justice Department sued Anheuser-Busch InBev when this American brewing company tried to buy Grupo Modelo, the maker of Corona, for $20.1 billion. These two brewing companies make up 46% of beer sales in the United States. The government fears that the takeover of one company would give the other too much power within the industry. Anheuser-Busch sees this deal as a vital step to expand their market. Therefore, they made a deal with the Justice Department to sell 50% of Crown Imports, Corona’s importing company, to Constellation Brands for $2.9 million.

Anheuser-Busch would have less control over the company, but they would still be able to expand their markets in Mexico and other Latin American countries. It appears that Obama’s administration is careful about letting companies merge within each industry. There also seems to be a growing fear of companies with big market shares after the financial crisis of 2008.

 

Written By: Melody Mark

Source: De La Merced, Michael J. “Anheuser-Busch Merger Deal Clears an Antitrust Hurdle.” New York Times (blog). The New York Times Company, 5 Apr. 2013. Web. 6 Apr. 2013.