Author: Serkadis

  • Yahoo Earnings Better Than Expected With Some Help From Search

    Yahoo just released its earnings for the fourth quarter and full year 2012, beating analysts’ expectations, and perhaps more noteworthy, showing solid signs for Yahoo’s search business.

    GAAP revenue for the quarter was $1,346 million. For the year, it was $4,987 million. Revenue ex-TAC for the quarter were $1,221 million. For the year, they were $4,468 million. Non-GAAP income from operations was $283 million. For the year, it was $825 million.

    GAAP search revenue for the quarter was $482 million, up 4% year-over-year. GAAP search revenue was $1,886 million for the year, up 2% year-over-year. Search revenue ex-TAC was $427 million for the quarte (up 14% year-over-year) and $1,611 million for the year (up 9% year-over-year). Paid clicks were up 11% year-over-year and 8% quarter over quarter. PPCs increased by 1% year-over-year, but decreased by 2% quarter-over-quarter.

    CEO Marissa Mayer said, “I’m proud of Yahoo!’s 2012 and fourth quarter results. In 2012, Yahoo! exhibited revenue growth for the first time in 4 years, with revenue up 2 percent year-over-year. During the quarter we made progress by growing our executive team, signing key partnerships including those with NBC Sports and CBS Television, and launching terrific mobile experiences for Yahoo! Mail and Flickr. At the same time, we achieved tremendous internal transformation in the culture, energy and execution of the Company.”

    Here’s the release in its entirety:

    SUNNYVALE, Calif.–(BUSINESS WIRE)– Yahoo! Inc. (NASDAQ: YHOO) today reported results for the fourth quarter and full year endedDecember 31, 2012.

    Q4 2012 Full Year 2012
    GAAP revenue $1,346 million $4,987 million
    Revenue ex-TAC $1,221 million $4,468 million
    GAAP income from operations $190 million $566 million
    Non-GAAP income from operations $283 million $825 million
    GAAP net earnings per diluted share $0.23 $3.28
    Non-GAAP net earnings per diluted share $0.32 $1.17

    “I’m proud of Yahoo!’s 2012 and fourth quarter results. In 2012, Yahoo! exhibited revenue growth for the first time in 4 years, with revenue up 2 percent year-over-year,” said Yahoo! CEO Marissa Mayer. “During the quarter we made progress by growing our executive team, signing key partnerships including those with NBC Sports and CBS Television, and launching terrific mobile experiences for Yahoo! Mail and Flickr. At the same time, we achieved tremendous internal transformation in the culture, energy and execution of the Company.”

    GAAP revenue was $1,346 million for the fourth quarter of 2012, a 2 percent increase from the fourth quarter of 2011. Revenue excluding traffic acquisition costs (“revenue ex-TAC”) was $1,221 million for the fourth quarter of 2012, a 4 percent increase compared to the fourth quarter of 2011. GAAP revenue was $4,987 million for the full year of 2012, flat compared to the prior year. Revenue ex-TAC was $4,468 million for the full year of 2012, a 2 percent increase from the prior year.

    Adjusted EBITDA for the fourth quarter of 2012 was $509 million, an 8 percent increase from the same period of 2011. Adjusted EBITDA was$1,699 million for the full year of 2012, a 3 percent increase from the prior year.

    GAAP income from operations decreased 22 percent to $190 million in the fourth quarter of 2012, compared to $242 million in the fourth quarter of 2011. Non-GAAP income from operations was $283 million in the fourth quarter of 2012 compared to $259 million in the fourth quarter of 2011. GAAP income from operations for the full year of 2012 was $566 million, compared to $800 million for the prior year. Non-GAAP income from operations was $825 million in both years.

    GAAP net earnings for the fourth quarter of 2012 was $272 million, an 8 percent decrease from the same period of 2011. Non-GAAP net earnings for the fourth quarter of 2012 was $370 million, a 20 percent increase from the same period of 2011. GAAP net earnings for the full year of 2012 was $3,945 million, compared to $1,049 million for the prior year. For the full year of 2012, GAAP net earnings included a net gain of $2,755 million related to the sale of Alibaba shares. Non-GAAP net earnings for the full year of 2012 was $1,407 million, a 35 percent increase from the prior year.

    GAAP net earnings per diluted share was $0.23 in the fourth quarter of 2012, compared to $0.24 in the fourth quarter of 2011. Non-GAAP net earnings per diluted share was $0.32 in the fourth quarter of 2012, compared to $0.25 in the fourth quarter of 2011. GAAP net earnings per diluted share was $3.28 for the full year of 2012, compared to $0.82 for the prior year. For the full year of 2012, GAAP net earnings included a net gain of $2,755 million, or $2.29 per diluted share, related to the sale of Alibaba shares. Non-GAAP net earnings per diluted share was$1.17 for the full year of 2012, compared to $0.81 for the prior year.

    Business Highlights

    • Yahoo! further strengthened its board of directors, appointing Max Levchin, a computer scientist, serial entrepreneur and angel investor with extensive experience building enduring Internet companies.
    • The Company made significant improvements to two of its core products, Yahoo! Mail and Flickr. The new Yahoo! Mail is faster, easier to use and available across the Web and on Windows 8, iPhone/iPod touch and Android. Yahoo!’s redesigned Flickr app for iPhone and iPod touch makes it easier to capture, share and discover photos. The new app allows users to share photos by email, with the Flickr community or via Facebook, Twitter or Tumblr.
    • Yahoo! signed distribution and branding deals to strengthen two of its leading media properties.
      • Yahoo! Sports and NBC Sports announced a partnership to deliver news, fantasy games, and video coverage of sporting events — combining two of the most trusted names in sports.
      • Yahoo! and CBS Television Distribution launched omg! Insider, a multiplatform entertainment news series that combines the popularity of CBS Television Distribution’s The Insider with the online reach of omg!.
    • The Company also announced a deal with Wenner Media to further enhance the content and reach of omg! and Yahoo! Music by joining forces with the Us WeeklyRolling Stone, and Men’s Journal franchises.
    • Yahoo! acquired mobile app developers Stamped and OnTheAir, accelerating the Company’s efforts to build a world-class team of mobile engineers, product managers and designers.
    • Yahoo! expanded its partnership with Samsung, enabling Samsung SmartTV users to engage more with their favorite shows and commercials. With the touch of a remote, connected tablet or phone, Samsung SmartTV viewers who use Yahoo!’s Connected TV technologies, can easily access content or offers related to their favorite TV shows or commercials.

    Fourth Quarter and Full Year 2012 Financial Highlights

    Display

    • GAAP display revenue was $591 million for the fourth quarter of 2012, a 3 percent decrease compared to $612 million for the fourth quarter of 2011. GAAP display revenue was $2,143 million for the full year of 2012, a 1 percent decrease compared to $2,160 millionfor the prior year.
    • Display revenue ex-TAC was $520 million for the fourth quarter of 2012, a 5 percent decrease compared to $546 million for the fourth quarter of 2011. Display revenue ex-TAC was $1,899 million for the full year of 2012, a 2 percent decrease compared to $1,932 millionfor the prior year.
    • The number of ads sold on core Yahoo! Properties decreased approximately 10 percent compared to the fourth quarter of 2011 and increased approximately 3 percent compared to the third quarter of 2012.
    • Price-per-ad on core Yahoo! Properties increased approximately 7 percent compared to the fourth quarter of 2011 and increased approximately 15 percent compared to the third quarter of 2012.

    Search

    • GAAP search revenue was $482 million for the fourth quarter of 2012, a 4 percent increase compared to $465 million for the fourth quarter of 2011. GAAP search revenue was $1,886 million for the full year of 2012, a 2 percent increase compared to $1,853 million for the prior year.
    • Search revenue ex-TAC was $427 million for the fourth quarter of 2012, a 14 percent increase compared to $376 million for the fourth quarter of 2011. Search revenue ex-TAC was $1,611 million for the full year of 2012, a 9 percent increase compared to $1,478 millionfor the prior year.
    • Paid clicks, or the number of clicks on sponsored listings on Yahoo! Properties and Affiliate sites, increased approximately 11 percent compared to the fourth quarter of 2011 and increased approximately 8 percent compared to the third quarter of 2012.
    • Price-per-click increased approximately 1 percent compared to the fourth quarter of 2011 and decreased approximately 2 percent compared to the third quarter of 2012.

    Cash Balance

    • Cash, cash equivalents, and investments in marketable debt securities were $6 billion at December 31, 2012 compared to $2.5 billionat December 31, 2011, an increase of $3.5 billion.
    • During the fourth quarter of 2012, Yahoo! repurchased 80 million shares for $1.5 billion. During the year ended December 31, 2012,Yahoo! repurchased 126 million shares for $2.2 billion.

    Conference Call

    Yahoo! will host a conference call to discuss fourth quarter and full year 2012 results at 5 p.m. Eastern Time today. On the conference call,Yahoo! will also provide its business outlook for the first quarter and full year of 2013. A live Webcast of the conference call, together with supplemental financial information, can be accessed through the Company’s Investor Relations Website athttp://investor.yahoo.com/results.cfm. In addition, an archive of the Webcast can be accessed through the same link. An audio replay of the call will be available for one week following the conference call by calling (888) 286-8010 or (617) 801-6888, reservation number: 30622830.

    Non-GAAP Financial Measures

    This press release and its attachments include the following financial measures defined as non-GAAP financial measures by the Securities and Exchange Commission (“SEC”): revenue ex-TAC; adjusted EBITDA; non-GAAP income from operations; non-GAAP net earnings; non-GAAP net earnings per diluted share; and free cash flow.

    Revenue ex-TAC is GAAP revenue less traffic acquisition costs. Adjusted EBITDA, non-GAAP income from operations, non-GAAP net earnings and non-GAAP earnings per diluted share exclude certain gains, losses, and expenses that we do not believe are indicative of ongoing results. Adjusted EBITDA also excludes taxes, depreciation, amortization of intangible assets, stock-based compensation expense, other income, net (which includes interest), earnings in equity interests, and net income attributable to noncontrolling interests. Free cash flow is GAAP net cash provided by (used in) operating activities (adjusted to include excess tax benefits from stock-based awards), less acquisition of property and equipment, net and dividends received from equity investees.

    These measures may be different than non-GAAP financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles (“GAAP”). Explanations of the Company’s non-GAAP financial measures and reconciliations of these financial measures to the GAAP financial measures the Company considers most comparable are included in the accompanying “Note to Unaudited Condensed Consolidated Financial Statements,” “Supplemental Financial Data and GAAP to Non-GAAP Reconciliations,” and “GAAP to Non-GAAP Reconciliations.”

    About Yahoo!

    Yahoo! is focused on making the world’s daily habits inspiring and entertaining. By creating highly personalized experiences for our users, we keep people connected to what matters most to them, across devices and around the globe. In turn, we create value for advertisers by connecting them with the audiences that build their businesses. Yahoo! is headquartered in Sunnyvale, Calif., and has offices located throughout the Americas, Asia Pacific (APAC) and the Europe, Middle East and Africa (EMEA) regions. For more information, visit the pressroom (pressroom.yahoo.net) or the company blog (yodel.yahoo.com).

    “Affiliates” refers to the third-party entities that have integrated Yahoo!’s advertising offerings into their Websites or other offerings (those Websites and other offerings, “Affiliate sites”).

    “Alibaba” means Alibaba Group Holding Limited.

    “Search Agreement” refers to the Search and Advertising Services and Sales Agreement between Yahoo! and Microsoft Corporation, as amended.

    “TAC” refers to traffic acquisition costs. TAC consists of payments to Affiliates and payments made to companies that direct consumer and business traffic to Yahoo! Properties.

    “Yahoo! Properties” refers to the online properties and services that Yahoo! provides to users.

    This press release contains forward-looking statements concerning Yahoo!’s expected financial performance and Yahoo!’s strategic and operational plans (including, without limitation, the quotation from management). Risks and uncertainties may cause actual results to differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties include, among others, the impact of changes to our management, organizational structure and strategic business plan;Yahoo!’s ability to compete with new or existing competitors; reduction in spending by, or loss of, advertising customers; risks associated with the Search Agreement with Microsoft Corporation; risks related to Yahoo!’s regulatory environment; interruptions or delays in the provision of Yahoo!’s services; security breaches; acceptance by users of new products and services; risks related to joint ventures and the integration of acquisitions; risks related to Yahoo!’s international operations; adverse results in litigation; Yahoo!’s ability to protect its intellectual property and the value of its brands; dependence on third parties for technology, services, content, and distribution; and general economic conditions. All information set forth in this press release and its attachments is as of January 28, 2013. Yahoo! does not intend, and undertakes no duty, to update this information to reflect subsequent events or circumstances. More information about potential factors that could affect the Company’s business and financial results is included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, as amended, and Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, which are on file with the SEC and available on the SEC’s website at www.sec.gov. Additional information will also be set forth in those sections in Yahoo!’s Annual Report on Form 10-K for the year ended December 31, 2012, which will be filed with the SEC in the first quarter of 2013.

    Yahoo!, the Yahoo! logos, omg! and Flickr are trademarks and/or registered trademarks of Yahoo! Inc. All other names are trademarks and/or registered trademarks of their respective owners.

    Yahoo! Inc.
    Unaudited Condensed Consolidated Balance Sheets
    (in thousands)
    December 31, December 31,
    2011 2012
    ASSETS
    Current assets:
    Cash and cash equivalents $ 1,562,390 $ 2,667,778
    Short-term marketable debt securities 493,189 1,516,175
    Accounts receivable, net 1,037,474 1,008,448
    Prepaid expenses and other current assets 359,483 460,312
    Total current assets 3,452,536 5,652,713
    Long-term marketable debt securities 474,338 1,838,425
    Alibaba Group Preference Shares 816,261
    Property and equipment, net 1,730,888 1,685,845
    Goodwill 3,900,752 3,826,749
    Intangible assets, net 254,600 153,973
    Other long-term assets 220,628 289,130
    Investments in equity interests 4,749,044 2,840,157
    Total assets $ 14,782,786 $ 17,103,253
    LIABILITIES AND EQUITY
    Current liabilities:
    Accounts payable $ 166,595 $ 184,831
    Accrued expenses and other current liabilities 846,044 808,475
    Deferred revenue 194,722 296,926
    Total current liabilities 1,207,361 1,290,232
    Long-term deferred revenue 43,639 407,560
    Capital lease and other long-term liabilities 134,905 124,587
    Deferred and other long-term tax liabilities, net 815,534 675,271
    Total liabilities 2,201,439 2,497,650
    Total Yahoo! Inc. stockholders’ equity 12,541,067 14,560,200
    Noncontrolling interests 40,280 45,403
    Total equity 12,581,347 14,605,603
    Total liabilities and equity $ 14,782,786 $ 17,103,253

     

    Yahoo! Inc.
    Unaudited Condensed Consolidated Statements of Income
    (in thousands, except per share amounts)
    Three Months Ended Year Ended
    December 31, December 31,
    2011 2012 2011 2012
    Revenue $ 1,324,153 $ 1,345,807 $ 4,984,199 $ 4,986,566
    Operating expenses:
    Cost of revenue – Traffic acquisition costs 155,453 124,961 603,371 518,906
    Cost of revenue – Other 263,609 287,147 983,626 1,101,660
    Sales and marketing 289,366 274,122 1,122,193 1,101,572
    Product development 235,810 240,417 919,368 885,824
    General and administrative 112,614 144,610 497,288 540,247
    Amortization of intangibles 8,525 7,926 33,592 35,819
    Restructuring charges, net 16,329 76,634 24,420 236,170
    Total operating expenses 1,081,706 1,155,817 4,183,858 4,420,198
    Income from operations 242,447 189,990 800,341 566,368
    Other income, net 9,768 17,730 27,175 4,647,839
    Income before income taxes and earnings in equity interests 252,215 207,720 827,516 5,214,207
    Provision for income taxes (78,287 ) (83,007 ) (241,767 ) (1,940,043 )
    Earnings in equity interests 127,063 148,939 476,920 676,438
    Net income 300,991 273,652 1,062,669 3,950,602
    Less: Net income attributable to noncontrolling interests (5,419 ) (1,385 ) (13,842 ) (5,123 )
    Net income attributable to Yahoo! Inc. $ 295,572 $ 272,267 $ 1,048,827 $ 3,945,479
    Net income attributable to Yahoo! Inc. common stockholders per share – diluted $ 0.24 $ 0.23 $ 0.82 $ 3.28
    Shares used in per share calculation – diluted 1,241,009 1,168,336 1,282,282 1,202,906
    Stock-based compensation expense by function:
    Cost of revenue – Other $ 1,010 $ 2,207 $ 3,489 $ 10,078
    Sales and marketing 22,291 22,161 65,120 82,115
    Product development 25,291 19,955 89,587 74,284
    General and administrative 10,255 13,139 45,762 57,888
    Restructuring expense accelerations (reversals), net 1,492 214 (3,429 )
    Supplemental Financial Data:
    Revenue ex-TAC $ 1,168,700 $ 1,220,846 $ 4,380,828 $ 4,467,660
    Adjusted EBITDA $ 469,453 $ 509,024 $ 1,654,583 $ 1,698,839
    Free cash flow(1)(2) $ 327,013 $ (2,044,502 ) $ 725,801 $ (834,865 )
    (1) The year ended December 31, 2012 includes a payment of $550 million from Alibaba in satisfaction of certain future royalty payments under the existing technology and intellectual property license agreement with Alibaba.
    (2) The three months and year ended December 31, 2012 include a cash tax payment of $2.3 billion which is related to the sale of Alibabashares.

     

    Yahoo! Inc.
    Unaudited Condensed Consolidated Statements of Cash Flows
    (in thousands)
    Three Months Ended Year Ended
    December 31, December 31,
    2011 2012 2011 2012
    CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income $ 300,991 $ 273,652 $ 1,062,669 $ 3,950,602
    Adjustments to reconcile net income to net cash provided by operating activities:
    Depreciation 125,693 148,213 530,516 549,235
    Amortization of intangible assets 29,939 21,279 117,723 105,366
    Stock-based compensation expense, net 60,339 57,462 204,172 220,936
    Non-cash restructuring charges 990 69,434 990 109,896
    Accrued dividend income related to Alibaba Group Preference Shares (20,000 ) (20,000 )
    Tax benefits (detriments) from stock-based awards 23,523 (21,969 ) 33,497 (31,440 )
    Excess tax benefits from stock-based awards (25,966 ) (5,093 ) (70,680 ) (35,844 )
    Deferred income taxes 1,652 121,968 70,392 (769,320 )
    Earnings in equity interests (127,063 ) (148,939 ) (476,920 ) (676,438 )
    Dividends received from Yahoo Japan 75,391 83,648
    Gain related to sale of Alibaba Group shares (4,603,322 )
    Gain from sale of investments, assets, and other, net (8,416 ) 6,468 4,405 (11,840 )
    Changes in assets and liabilities, net of effects of acquisitions:
    Accounts receivable, net (117,992 ) (52,190 ) 38,100 34,752
    Prepaid expenses and other 87,441 37,470 97,849 78,529
    Accounts payable 27,000 35,204 (316 ) 12,747
    Accrued expenses and other liabilities 61,012 (2,373,163 ) (290,070 ) 255,799
    Deferred revenue (7,809 ) (49,671 ) (73,912 ) 465,140
    Net cash provided by (used in) operating activities (1)(2) 431,334 (1,899,875 ) 1,323,806 (281,554 )
    CASH FLOWS FROM INVESTING ACTIVITIES:
    Acquisition of property and equipment, net (130,287 ) (149,720 ) (593,294 ) (505,507 )
    Purchases of marketable debt securities (95,232 ) (1,681,467 ) (1,708,530 ) (3,520,327 )
    Proceeds from sales of marketable debt securities 441,719 56,968 1,508,948 741,947
    Proceeds from maturities of marketable debt securities 89,305 130,750 1,316,197 381,403
    Proceeds related to sale of Alibaba shares, net 6,247,728
    Purchases of intangible assets (799 ) (711 ) (11,819 ) (3,799 )
    Proceeds from the sale of investments 21,271 26,132
    Acquisitions, net of cash acquired (255,018 ) (5,716 ) (323,830 ) (5,716 )
    Other investing activities, net (818 ) 9,604 (6,581 ) 183
    Net cash provided by (used in) investing activities 48,870 (1,640,292 ) 202,362 3,362,044
    CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from issuance of common stock, net 49,529 101,951 156,226 218,371
    Repurchases of common stock (416,237 ) (1,451,462 ) (1,618,741 ) (2,167,841 )
    Excess tax benefits from stock-based awards 25,966 5,093 70,680 35,844
    Tax withholdings related to net share settlements of restricted stock awards and restricted stock units (8,712 ) (12,842 ) (44,761 ) (60,939 )
    Other financing activities, net (11,029 ) (1,373 ) (19,362 ) (4,892 )
    Net cash used in financing activities (360,483 ) (1,358,633 ) (1,455,958 ) (1,979,457 )
    Effect of exchange rate changes on cash and cash equivalents (21,550 ) 6,178 (34,247 ) 4,355
    Net change in cash and cash equivalents 98,171 (4,892,622 ) 35,963 1,105,388
    Cash and cash equivalents, beginning of period 1,464,219 7,560,400 1,526,427 1,562,390
    Cash and cash equivalents, end of period $ 1,562,390 $ 2,667,778 $ 1,562,390 $ 2,667,778
    (1) The year ended December 31, 2012 includes a payment of $550 million from Alibaba in satisfaction of certain future royalty payments under the existing technology and intellectual property license agreement with Alibaba.
    (2) The three months and year ended December 31, 2012 include a cash tax payment of $2.3 billion which is related to the sale of Alibabashares.

     

    Yahoo! Inc.

    Note to Unaudited Condensed Consolidated Financial Statements

    This press release and its attachments include the non-GAAP financial measures of revenue excluding traffic acquisition costs (“revenue ex-TAC”); adjusted EBITDA; non-GAAP income from operations; non-GAAP net earnings; non-GAAP net earnings per diluted share; and free cash flow, which are reconciled to revenue; net income attributable to Yahoo! Inc. (in the case of adjusted EBITDA and non-GAAP net earnings); income from operations; net income attributable to Yahoo! Inc. common stockholders per share — diluted; and net cash provided by (used in) operating activities, which we believe are the most comparable GAAP measures. We use these non-GAAP financial measures for internal managerial purposes and to facilitate period-to-period comparisons. We describe limitations specific to each non-GAAP financial measure below. Management generally compensates for limitations in the use of non-GAAP financial measures by relying on comparable GAAP financial measures and providing investors with a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure or measures. Further, management uses non-GAAP financial measures only in addition to and in conjunction with results presented in accordance with GAAP. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. These non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, revenue, net income attributable to Yahoo! Inc., income from operations, net income attributable to Yahoo! Inc. common stockholders per share – diluted and net cash provided by (used in) operating activities, calculated in accordance with GAAP.

    Revenue ex-TAC is a non-GAAP financial measure defined as GAAP revenue less TAC. TAC consists of payments made to third-party entities that have integrated our advertising offerings into their Websites or other offerings (those Websites and other offerings, “Affiliate sites”) and payments made to companies that direct consumer and business traffic to Yahoo!’s online properties and services (“Yahoo! Properties”). Based on the terms of the Search Agreement with Microsoft, Microsoft retains a revenue share of 12 percent of the net (after TAC) search revenue generated on Yahoo! Properties and Affiliate sites in transitioned markets. Yahoo! reports the net revenue it receives under the Search Agreement as revenue and no longer presents the associated TAC. Accordingly, for transitioned markets Yahoo! reports GAAP revenue associated with the Search Agreement on a net (after TAC) basis rather than a gross basis. For markets that have not yet transitioned, revenue continues to be recorded on a gross basis, and TAC is recorded as a part of operating expenses. We present revenue ex-TAC to provide investors a metric used by the Company for evaluation and decision-making purposes during the Microsoft transition and to provide investors with comparable revenue numbers when comparing periods preceding, during and following the transition period. A limitation of revenue ex-TAC is that it is a measure which we have defined for internal and investor purposes that may be unique to the Company, and therefore it may not enhance the comparability of our results to other companies in our industry who have similar business arrangements but address the impact of TAC differently. Management compensates for these limitations by also relying on the comparable GAAP financial measures of revenue and total operating expenses, which includes TAC in non-transitioned markets.

    Adjusted EBITDA is defined as net income attributable to Yahoo! Inc. before taxes, depreciation, amortization of intangible assets, stock-based compensation expense, other income, net (which includes interest), earnings in equity interests, net income attributable to noncontrolling interests and other gains, losses, and expenses that we do not believe are indicative of our ongoing results. Yahoo! presents adjusted EBITDA because the exclusion of certain gains, losses, and expenses facilitates comparisons of the operating performance of our Company on a period to period basis. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for results reported under GAAP. These limitations include: adjusted EBITDA does not reflect tax payments and such payments reflect a reduction in cash available to us; adjusted EBITDA does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our businesses; adjusted EBITDA does not include stock-based compensation expense related to the Company’s workforce; adjusted EBITDA also excludes other income, net (which includes interest), earnings in equity interests, net income attributable to noncontrolling interests and other gains, losses, and expenses that we do not believe are indicative of our ongoing results, and these items may represent a reduction or increase in cash available to us; and adjusted EBITDA is a measure that may be unique to the Company, and therefore it may not enhance the comparability of our results to other companies in our industry. Management compensates for these limitations by also relying on the comparable GAAP financial measure of net income attributable to Yahoo! Inc., which includes taxes, depreciation, amortization, stock-based compensation expense, other income, net (which includes interest), earnings in equity interests, net income attributable to noncontrolling interests and the other gains, losses and expenses that are excluded from adjusted EBITDA.

    Non-GAAP income from operations is defined as income from operations excluding certain gains, losses, and expenses that we do not believe are indicative of our ongoing operating results. We consider non-GAAP income from operations to be a profitability measure which facilitates the forecasting of our operating results for future periods and allows for the comparison of our results to historical periods. A limitation of non-GAAP income from operations is that it does not include all items that impact our income from operations for the period. Management compensates for this limitation by also relying on the comparable GAAP financial measure of income from operations which includes the gains, losses, and expenses that are excluded from non-GAAP income from operations.

    Non-GAAP net earnings is defined as net income attributable to Yahoo! Inc. excluding certain gains, losses, expenses, and their related tax effects that we do not believe are indicative of our ongoing results. We consider non-GAAP net earnings and non-GAAP net earnings per diluted share to be profitability measures which facilitate the forecasting of our results for future periods and allow for the comparison of our results to historical periods. A limitation of non-GAAP net earnings and non-GAAP net earnings per diluted share is that they do not include all items that impact our net income and net income per diluted share for the period. Management compensates for this limitation by also relying on the comparable GAAP financial measures of net income attributable to Yahoo! Inc. and net income attributable to Yahoo! Inc.common stockholders per share – diluted, both of which include the gains, losses, expenses and related tax effects that are excluded from non-GAAP net earnings and non-GAAP net earnings per diluted share.

    Free cash flow is a non-GAAP financial measure defined as net cash provided by (used in) operating activities (adjusted to include excess tax benefits from stock-based awards), less acquisition of property and equipment, net and dividends received from equity investees. We consider free cash flow to be a liquidity measure which provides useful information to management and investors about the amount of cash generated by the business after the acquisition of property and equipment, which can then be used for strategic opportunities including, among others, investing in the Company’s business, making strategic acquisitions, strengthening the balance sheet, and repurchasing stock. A limitation of free cash flow is that it does not represent the total increase or decrease in the cash balance for the period. Management compensates for this limitation by also relying on the net change in cash and cash equivalents as presented in the Company’s unaudited condensed consolidated statements of cash flows prepared in accordance with GAAP which incorporates all cash movements during the period.

    Yahoo! Inc.
    Supplemental Financial Data and GAAP to Non-GAAP Reconciliations
    (in thousands)
    Three Months Ended Year Ended
    December 31, December 31,
    2011 2012 2011 2012
    Revenue for groups of similar services:
    Display $ 612,047 $ 590,627 $ 2,160,309 $ 2,142,818
    Search 464,530 481,957 1,853,110 1,885,860
    Other 247,576 273,223 970,780 957,888
    Total revenue $ 1,324,153 $ 1,345,807 $ 4,984,199 $ 4,986,566
    Revenue excluding traffic acquisition costs (“revenue ex-TAC”) for groups of similar services:
    GAAP display revenue $ 612,047 $ 590,627 $ 2,160,309 $ 2,142,818
    TAC associated with display revenue (66,426 ) (70,218 ) (227,822 ) (243,557 )
    Display revenue ex-TAC $ 545,621 $ 520,409 $ 1,932,487 $ 1,899,261
    GAAP search revenue $ 464,530 $ 481,957 $ 1,853,110 $ 1,885,860
    TAC associated with search revenue for non-transitioned markets (89,027 ) (54,743 ) (375,409 ) (275,349 )
    Search revenue ex-TAC $ 375,503 $ 427,214 $ 1,477,701 $ 1,610,511
    Other GAAP revenue $ 247,576 $ 273,223 $ 970,780 $ 957,888
    TAC associated with other GAAP revenue (140 )
    Other revenue ex-TAC $ 247,576 $ 273,223 $ 970,640 $ 957,888
    Revenue ex-TAC:
    GAAP revenue $ 1,324,153 $ 1,345,807 $ 4,984,199 $ 4,986,566
    TAC (155,453 ) (124,961 ) (603,371 ) (518,906 )
    Revenue ex-TAC $ 1,168,700 $ 1,220,846 $ 4,380,828 $ 4,467,660
    Revenue ex-TAC by segment:
    Americas:
    GAAP revenue $ 884,780 $ 960,118 $ 3,302,989 $ 3,461,633
    TAC (45,072 ) (52,357 ) (160,110 ) (182,511 )
    Revenue ex-TAC $ 839,708 $ 907,761 $ 3,142,879 $ 3,279,122
    EMEA:
    GAAP revenue $ 164,238 $ 113,527 $ 629,383 $ 472,061
    TAC (54,559 ) (16,982 ) (221,916 ) (114,230 )
    Revenue ex-TAC $ 109,679 $ 96,545 $ 407,467 $ 357,831
    Asia Pacific:
    GAAP revenue $ 275,135 $ 272,162 $ 1,051,827 $ 1,052,872
    TAC (55,822 ) (55,622 ) (221,345 ) (222,165 )
    Revenue ex-TAC $ 219,313 $ 216,540 $ 830,482 $ 830,707
    Total revenue ex-TAC $ 1,168,700 $ 1,220,846 $ 4,380,828 $ 4,467,660
    Direct costs by segment (3):
    Americas $ 187,467 $ 183,236 $ 696,103 $ 733,316
    EMEA 41,615 41,325 165,750 161,990
    Asia Pacific 55,361 60,046 225,417 224,114
    Global operating costs (4) 414,804 443,272 1,638,975 1,671,958
    Restructuring charges, net 16,329 76,634 24,420 236,170
    Depreciation and amortization 151,830 168,769 625,864 649,267
    Stock-based compensation expense 58,847 57,574 203,958 224,477
    Income from operations $ 242,447 $ 189,990 $ 800,341 $ 566,368
             
    Reconciliation of net income attributable to Yahoo! Inc. to adjusted EBITDA:
    Net income attributable to Yahoo! Inc. $ 295,572 $ 272,267 $ 1,048,827 $ 3,945,479
    Costs associated with the Korea business and its closure (5) 99,485 99,485
    Deal-related costs related to the sale of Alibaba shares 6,500
    Depreciation and amortization 151,830 168,769 625,864 649,267
    Stock-based compensation expense 58,847 57,574 203,958 224,477
    Restructuring charges, net (5) 16,329 (6,794 ) 24,420 152,742
    Other income, net  (9,768 )  (17,730 )  (27,175 )  (4,647,839 )
    Provision for income taxes  78,287  83,007  241,767  1,940,043
    Earnings in equity interests  (127,063 )  (148,939 )  (476,920 )  (676,438 )
    Net income attributable to noncontrolling interests  5,419  1,385  13,842  5,123
    Adjusted EBITDA $ 469,453 $ 509,024 $ 1,654,583 $ 1,698,839
    Reconciliation of net cash provided by (used in) operating activities to free cash flow:  
    Cash provided by (used in) operating activities $ 431,334 $ (1,899,875 ) $ 1,323,806 $ (281,554 )
    Acquisition of property and equipment, net (130,287 ) (149,720 ) (593,294 ) (505,507 )
    Dividends received from equity investees (75,391 ) (83,648 )
    Excess tax benefits from stock-based awards 25,966 5,093 70,680 35,844
    Free cash flow (1)(2) $ 327,013 $ (2,044,502 ) $ 725,801 $ (834,865 )
    (1) The year ended December 31, 2012 includes a payment of $550 million from Alibaba in satisfaction of certain future royalty payments under the existing technology and intellectual property license agreement with Alibaba.
    (2) The three months and year ended December 31, 2012 include a cash tax payment of $2.3 billion which is related to the sale of Alibabashares.
    (3) Direct costs for each segment include cost of revenue (excluding TAC) and other operating expenses that are directly attributable to the segment such as employee compensation expense (excluding stock-based compensation expense), local sales and marketing expenses, and facilities expenses. Beginning in 2012, marketing and customer advocacy costs are managed locally and included as direct costs for each segment. Prior period amounts have been revised to conform to the current presentation.
    (4) Global operating costs include product development, service engineering and operations, general and administrative, and other corporate expenses that are managed on a global basis and that are not directly attributable to any particular segment. Prior to 2012, marketing and customer advocacy costs were managed on a global basis and included as global operating costs. Prior period amounts have been revised to conform to the current presentation.
    (5) For the three months and year ended December 31, 2012, costs associated with the Korea business and its closure include $83 million of restructuring charges.

     

    Yahoo! Inc.
    GAAP to Non-GAAP Reconciliations
    (in thousands, except per share amounts)
    Three Months Ended
    December 31,
    2011 2012
    GAAP Income from operations $ 242,447 $ 189,990
    (a) Costs associated with the Korea business and its closure 99,485
    (b) Restructuring charges, net (6) 16,329 (6,794 )
    Non-GAAP Income from operations $ 258,776 $ 282,681
    GAAP Net income attributable to Yahoo! Inc. $ 295,572 $ 272,267
    (a) Costs associated with the Korea business and its closure 99,485
    (b) Restructuring charges, net (6) 16,329 (6,794 )
    (c) To adjust the provision for income taxes to exclude the tax impact of items (a) and (b) above for the three months ended December 31, 2011 and 2012 (5,192 ) 4,626
    Non-GAAP Net earnings $ 306,709 $ 369,584
    GAAP Net income attributable to Yahoo! Inc. common stockholders per share – diluted $ 0.24 $ 0.23
    Non-GAAP Net earnings per share – diluted $ 0.25 $ 0.32
    Shares used in per share calculation – diluted 1,241,009 1,168,336
    Year Ended
    December 31,
    2011 2012
    GAAP Income from operations $ 800,341 $ 566,368
    (a) Costs associated with the Korea business and its closure 99,485
    (b) Restructuring charges, net (6) 24,420 152,742
    (c) Deal-related costs related to the sale of Alibaba shares 6,500
    Non-GAAP Income from operations $ 824,761 $ 825,095
    GAAP Net income attributable to Yahoo! Inc. $ 1,048,827 $ 3,945,479
    (a) Costs associated with the Korea business and its closure 99,485
    (b) Restructuring charges, net (6) 24,420 152,742
    (c) Deal-related costs related to the sale of Alibaba shares 6,500
    (d) Gain related to sale of Alibaba shares (4,603,322 )
    (e) Non-cash gain related to the dilution of the Company’s ownership interest in Alibaba Group, which is included in earnings in equity interests (25,083 )
    (f) To adjust the provision for income taxes to exclude the tax impact of items (a) through (d) above for the year ended December 31, 2011 and 2012 (7,764 ) 1,805,940
    Non-GAAP Net earnings $ 1,040,400 $ 1,406,824
    GAAP Net income attributable to Yahoo! Inc. common stockholders per share – diluted $ 0.82 $ 3.28
    Non-GAAP Net earnings per share – diluted $ 0.81 $ 1.17
    Shares used in per share calculation – diluted 1,282,282 1,202,906
    (6) For the three months and year ended December 31, 2012, this amount excludes the restructuring charges related to the Korea business and its closure of $83 million, which is included in item (a) above.

     

    Yahoo! Inc.

  • Android stomps all over iOS

    Keeping with an ongoing trend, Android solidified its global smartphone dominance in fourth quarter and for all 2012, according to Strategy Analytics. The Android Army sent iOS idolaters into retreat during Q4, iPhone 5’s first full three months of sales. Like I explained in September, “Android wins the smartphone wars“.

    During fourth quarter, iOS share fell to 19 percent from 23.6 percent a year earlier. Meanwhile, Android rose to 70.1 percent from 51.3 percent. For all 2012, iOS nudged up to 19.4 percent from 19 percent share, while Android reached 68.4 percent, up from 48.7 percent. The differences between the quarter and year, strongly suggest sales surge at the end, for Android, which forebodes poorly for Apple when iOS got big lift from iPhone 5’s recent launch.

    Duopoly

    “Android’s challenge for 2013 will be to defend its leadership, not only against Apple, but also against an emerging wave of hungry challengers that includes Microsoft, Blackberry, Firefox and Tizen”, Neil Mawston, Strategy Analytics executive director, says.

    Four-hundred seventy-nine million Android smartphones shipped in 2012, compared to 135.8 million iPhones, according to Strategy Analytics. Rest of the market: 85.3 million. That puts combined Android/iOS share at 92.1 percent and 87.8 percent for the year.

    “The worldwide smartphone industry has effectively become a duopoly as consumer demand has polarized around mass-market Android models and premium Apple designs”, Mawston says. Combined dominance leaves little room for competitors, and refutes earlier IDC predictions about three dominant platforms emerging. The more perplexing question: How skewed will be the split among the two?

    Cumulative Android shipments (phones and tablets) reached 500 million in September, according to Google. By comparison, iOS, which had long led the green robot, only reached that number three months later, according to Apple. The company shipped 75 million iOS devices during fourth quarter, which works out to about 834,000 per day. Android activations are more than 1.3 million per day.

    Back to handsets, IHS iSuppli now predicts that cumulative Android smartphone shipments will reach 1 billion this year, but iOS not until 2015.

    Saturation

    Android and iOS compete in a rapidly growing, and in some countries quickly saturating, device category. Annual shipments grew to 700.1 million from 490.5 million. But Android and iOS success rely heavily on two companies — Apple, obviously, and Samsung. For 2012, Samsung shipped 213 million smartphones (mostly Android) and Apple 135.8 million (all iOS). Apple’s problem is the Other category (316.3 million), largely dominated by manufacturers shipping Androids.

    “Samsung and Apple together accounted for half of all smartphones shipped worldwide in 2012”, Linda Sui, Strategy Analytics analyst, says. “Large marketing budgets, extensive distribution channels and attractive product portfolios have enabled Samsung and Apple to tighten their grip on the smartphone industry”.

    Respective share: 30.4 percent and 19 percent, up from 19.9 percent and 19 percent, respectively. Still, the Other bucket slight trails (45.2 percent) Apple and Samsung combined (49.8 percent).

    Still, from another perspective, iPhone had a great quarter, with 47.8 million units shipped, up from 37 million year over year and 26.9 million quarter on quarter. iPhone revenue rose to $30.67 billion in Q4 from $16.25 billion three months earlier. In fourth quarter, iPhone accounted for 56.3 percent of all Apple revenue and 52.7 percent a year earlier.

    But success comes with risks. As Android share continues to rise, iOS recedes — and that in a device category destined to rapidly saturate. Market share Android takes today, it is more likely to keep tomorrow, if other platform categories, PC operating systems among them, are comparable.

    The question: Is Apple willing to do anything to gain share against Android? During last week’s Apple’s earnings call, Toni Sacconaghi, Sanford Bernstein analyst, asked: “Is holding share in the smartphone market in 2013 a priority for Apple, yes or no and why? And realistically how does Apple hold share given that the market segment and price point that you play in is expected to grow a lot slower and you have pretty dominant share in that high end”.

    Apple CEO Tim Cook deflected the answer. But the market will require one. Lower price isn’t the answer, as iPhone 4 is free to buyers, with two-year carrier contract, and Apple couldn’t make enough to meet demand during fourth quarter. Too bad iOS licensing is sacrilege in Apple’s sacred halls. Mr. Cook, perhaps it’s time for some new religion.

    Photo Credit: Joe Wilcox

  • Payvment Shuts Down, Team Reportedly Acquired By Intuit

    Facebook ecommerce platform company Payvment announced that it is shutting down as its team joins a new, unspecified company. The platform will be shut down on February 28.

    The company in question is Inuit, according to TechCrunch, though it’s unclear why this piece of information was left out of the announcement, and why Intuit itself did not make an announcement.

    On Payvment’s home page, the company says:

    As part of this transition, you will have one month to transfer your store to Ecwid, which will allow you to continue selling on Facebook. Ecwid is a global leader in Social Commerce with over 200,000 sellers in 174 countries and a robust Facebook application very similar to Payvment. For details, visit ecwid.com/payvment.

    Payvment and Lish stores and the Payvment Dashboard will be active through February 28, and on March 1, the service will shut down. People will be able to transfer their stores to Ecwid from one click from the dashboard. More FAQs here.

  • UCLA to play key role in worldwide effort to map human brain

    UCLA’s Laboratory of Neuro Imaging (LONI) has entered into a partnership with academic centers from Europe and around the world in a massive, unprecedented effort to understand the human brain.
     
    The European-led Human Brain Project (HBP), announced Jan. 28, will pull together all the world’s existing knowledge about the brain and reconstruct it, piece by piece, in super-computer–based models and simulations. The 10-year, 1.19 billion–euro ($1.6 billion) effort is backed by the European Commission and will begin with 87 partners in 27 countries.
     
    UCLA’s LONI has long been at the forefront in developing computational algorithms and scientific approaches for the comprehensive and quantitative mapping of brain structure and function. As a result, the laboratory is perfectly positioned to play a similar role as part of the HBP.
     
    “This is an ambitious and worldwide collaborative effort to understand the human brain and the diseases that attack it,” said Arthur Toga, LONI’s director and a professor of neurology at UCLA. “Our role will be to focus on harmonizing all of the data that will be pouring into our computers. The trick will be to find a way to aggregate all this information in order for it to be useful. We will be receiving brain images and all the data that goes with it, both recent data as well as images that were done years ago.
     
    “Combining disparate data is difficult,” he added, “so sophisticated new computer algorithms will be needed.”
     
    LONI’s portion of the HPB funding will be approximately $10.8 million. In addition to UCLA, other U.S. institutions involved in the project are Yale University, the University of Tennessee and the Seattle-based Allen Institute for Brain Science.
     
    The HBP will provide new tools to help scientists understand the brain and its fundamental mechanisms and to apply this knowledge in future medicine and computing.
     
    Central to the project is information and computing technology. The HBP will develop information and computing technology platforms for neuroinformatics, brain simulation and super-computing that will make it possible to combine neuroscience data from all over the world, to integrate the data in unifying models and simulations of the brain, to check the models against data from biology, and to make the data available to the world scientific community.
     
    The ultimate goal is to allow neuroscientists to connect the dots leading from genes, molecules and cells to human cognition and behavior.
     
    Combining such data is LONI’s expertise. Since the 1990s, the lab has been building universal brain atlases, each describing sub-populations with similar characteristics in health and disease. The algorithms written and constantly updated by LONI take millions of brain images and modify them to make a certain number of brains look “the same” in order to describe, for example, a specific population, such as right-handed females, or to show the early stages of Alzheimer’s disease.
     
    “Thus, we are well positioned to contribute to these important and challenging goals,” Toga said.
     
    The Laboratory of Neuro Imaging at UCLA, which seeks to improve understanding of the brain in health and disease, is a leader in the development of advanced computational algorithms and scientific approaches for the comprehensive and quantitative mapping of brain structure and function. It is part of the UCLA Department of Neurology, which encompasses more than a dozen research, clinical and teaching programs. The department ranks in the top two among its peers nationwide in National Institutes of Health funding.
     
    For more news, visit the UCLA Newsroom and follow us on Twitter.

  • Food for thought: Killing a cow is the least effective way to make a steak

    Innovation could utterly transform the way meat is created and consumed in the world, making it more efficient and removing some of the problems like greenhouse emissions. While I didn’t get a chance to attend The Intersection conference at the Googleplex recently, a sentence from notes on a discussion between VC Steve Jurvetson and Microsoft co-founder Nathan Myhrvold at the event stood out for me on the subject of meat and innovation: “Killing a cow is the least effective way to make a steak.”

    Over the years the meat industry has delivered efficiency in animal raising, slaughtering and meat production through factory farming, which reduces the time it takes for animals to mature with corn-based diets, antibiotics, hormones and other industrial feeding and slaughtering techniques. But maximizing the efficiency of industrial meat production has led to a lot of unintended negative consequences and a growing movement of people who will pay more for organic, local meat or will forgo meat altogether.

    But what if you could reduce, or eliminate, the whole traditional meat production industry completely? That’s the idea behind new types of plant-based proteins, so-called in-vitro meat production and more integral approaches to reducing meat consumption. Because the world’s population is rapidly growing to 9 billion by 2050, and developing countries have emerging middle classes that want a higher standard of living, alternative protein and meat production could find a market in the developing world first.

    Here’s three new technologies being developed that can reduce eating animals:

    • Peter Thiel’s Breakout Labs invested in a food startup called Modern Meadow, which aims to combine in-vitro meat with 3D printing. The idea is to print out a meat product from biological materials.
    • Beyond Meat is a startup backed by Obvious Corp — the group that created Twitter — which is creating next-gen plant-based meat substitutes. The product is on sale in a few select locations at Whole Foods in Northern California.
    • Foodpairing is a food industry research company and app developer that has broken down flavor to its molecular components and compiled databases that can identify vegetable or seafood ingredients that reinforce the flavor of different meats, or can act as a substitute for a meat entirely.

  • 128GB iPad Could Be In The Works

    Some are speculating that Apple might release a 128GB iPad model this year.

    As previously reported, a complete redesign is expected to grace the iPad 5, which is expected to be launched in October. A report from iLounge claims to have seen a “supposedly accurate” model of the iPad 5, saying it will be smaller than past (non-mini) models.

    Separately, developers have discovered a reference in to 128GB iOS devices in the code in a beta of iOS 6.1. 9to5Mac reports:

    Following the latest beta release of the upcoming iOS 6.1 iPhone, iPad, and iPod touch operating system, developers have begun tearing away at the software to see what secrets it may hold about the future of Apple’s devices. @iNeal made the discovery that iOS 6.1 beta 5 holds a reference to compatibility with 128GB iOS devices. Jeff Benjamin dug up the code that @iNeal is referring to, and he has provided screenshots of the evidence. He notes that iOS 6.0 does not include the “128″ system partition code.

    Update: We understand that this 128GB code is also found in iOS 6.1 beta 3, which was released in early December.

    Still, this may not mean that we’ll be seeing the 128GB model this year. ZDNet’s Adrian Kingsley-Hughes is particularly skeptical.

    Apple released iOS 6.1 today for iPads, iPhones and iPod Touches, bringing LTE capabilities to more carriers.

  • Etsy Had A Really Good Year In 2012

    2012 was a good year for Etsy, to say the least. CEO Chad Dickerson took to the company blog this morning to share some stats about the year as Etsy’s growth continues to accelerate.

    “Growth of highly-personal shopping categories like wedding goods and home decor was strong in 2012,” an Etsy spokesperson tells WebProNews. “Jewelry, our #1 category, is still hugely popular, but others, like clothing and housewares, are quickly gaining steam. Furniture was the fastest-growing category on Etsy this year, growing 134% year-over-year.”

    Here are some more highlights from Dickerson’s post:

    • Overall sales by the community in 2012 grew 70.3% over the previous year, to $895.1 million from $525.6 million in 2011.
    • Sales in December 2012 were 72.9% higher than 2011 (compared to 69.9% from Dec 2010-Dec 2011).
    • Sales in November 2012 sales increased by 74.9% over the previous year (compared to 65.7% from Nov 2010-Nov 2011).
    • New buyers increased by 83% in 2012.
    • 10 million new members joined Etsy last year, nearly doubling the total number of members to 22 million around the world, in nearly 200 countries.

    Etsy will celebrate its 8th birthday this year. Since opening in 2005, the site has seen over 14 million shoppers buy over 100 million items.

    Etsy has only made more moves in recent months to help its growth continue. Consider that it only laumched its iPad and Android apps in the last two months. The site also continues to expand into more languages.

    Last week, Etsy announced its acquisition of Mixel.

  • Apple Launches iOS 6.1, Increases LTE Support

    Apple announced today that it has updated iOS to version 6.1, adding LTE capabilities to 36 more iPhone carriers and 23 more iPad carriers around the world. Now, more iPhone 5, iPad Mini and iPad with Retina Display users can utilize faster wireless performance.

    “iOS 6 is the world’s most advanced mobile operating system, and with nearly 300 million iPhone, iPad and iPod touch devices on iOS 6 in just five months, it may be the most popular new version of an OS in history,” said Apple SVP Philip Schiller. “iOS 6.1 brings LTE support to more markets around the world, so even more users can enjoy ultrafast Safari browsing, FaceTime video calls, iCloud services, and iTunes and App Store downloads.”

    According to Apple, iOS users have uploaded over nine billion photos to Photo Stream, sent over 450 billion iMessages and received over four trillion notifications to date.

    iOS 6.1 is now available as a free software update, an dis compatible with the following devices: iPhone 5, iPhone 4S, iPhone 4, iPhone 3GS, iPad (third and fourth generation), iPad mini, iPad 2 and iPod touch (fourth and fifth generation). Still, some features are not available for all products.

    LTE, specifically, is available on iPhone 5, iPad mini and fourth generation iPad Wi-Fi + Cellular models through certain carriers.

  • While we waste four cores, scientists use a million at a time

    Chances are, the quad-core processor powering your desktop computer or high-end laptop is vastly underworked. But it’s not your fault: Writing code that executes in parallel is difficult, so most consumer applications (save for some compute-intensive video games that really need help, for example) continue to run on just one core at a time. Which makes it all the more impressive that a group of Stanford researchers recently ran a jet-engine-noise simulation across 1 million cores simultaneously.

    As anyone even casually familiar with parallel processing knows, running applications across more nodes means jobs execute faster because they’re able to share the computing workload. The more cores, the faster it runs. This what makes Hadoop, for example, so great at processing large chunks of data. The MapReduce framework on which it’s based divvies up the work across nodes and everything they find is stitched back together as the result of a job.

    But even Hadoop can only scale to tens of thousands of nodes and, because of its focus on “nodes,” actually isn’t really good at utilizing multi-core processors to their fullest (expect to hear more about the limitations of Hadoop at our Structure: Data conference March 20-21 in New York). The IBM-built Sequoia supercomputer (housed at Lawrence Livermore National Laboratory) that the Stanford team used consists of 98,304 processors (or nodes), each containing 16 computing cores. That’s a grand total of 1,572,864 cores, and the researchers were able to use the majority of them, which they claim is a record of some sort.

    Sequoia, decomposed

    Sequoia, decomposed

    But record or not, that’s an incredibly complex undertaking. Programming the jet-engine simulation meant figuring out how to divvy the code into more than a million different tasks that could run across tens of thousands of nodes and 16 cores within each of those nodes. If even one of those processes is buggy, it could slow down or ruin the whole simulation.

    Even in the world of supercomputing, where systems now regularly contain hundreds of thousands of cores — some of them special-purpose GPU co-processors — there’s a shortage of programming talent to actually use them all to their fullest potential. As my colleague Stacey Higginbotham explained in some time ago, the world of high-performance computing is hurtling toward exascale computing but a bigger problem than energy-consumption might be finding applications that need that much computing power and the algorithms capable of operating at that scale.

    Still, the implications of advances in parallel programming are huge — like potentially life-altering huge. This is true not only because of the scientific questions we’ll soon be able to answer at speeds inconceivable even a decade ago, but also because of the computing power we’ll all soon be carrying around in our pockets and purses. If you think those multi-core smartphones and tablets are great now because they can run multiple applications at the same time, just wait until their processors are even bigger and badder and we have more applications — photo- and video-editing, computer-aided design, games and who knows what else — that can actually get the most out of them.

  • German court says the internet is pretty much required for modern life

    The German high court has weighed in on the value of a web connection (as well as faxes and VoIP lines) and determined that the internet is pretty much essential to modern life (hat tip to TechDirt). This puts the German court closer to agencies such as the ITU and countries such as Finland where internet access is considered a right.

    Apparently back in Dec. 2008, a German citizen found himself disconnected from his DSL line because of some error and was stuck without a connection for two months. He sought compensation for his expenses (he spent more time using his mobile phone instead of his wireline VoIP service) as well as €50 ($67) per day he had no connection. He didn’t get that much because the courts felt he was overeaching in seeking compensation from his ISP beyond actual costs for his fax line and VoIP line, but it did send the case back to a lower court telling it to set the fine accordingly.

    The court’s rationale was that so much of modern life is conducted via the internet that going without was worthy of some compensation when it was cut off. A Google translation of the court’s press release notes:

    The internet replaces, because of the easy availability of information, more and more other media, such as encyclopedias, magazines or television. It also allows the global exchange between its users, for example via e-mail, forums, blogs and social networks. In addition, it is increasingly for the initiation and conclusion of contracts, used for making transactions and to fulfill public service obligations. The majority of people in Germany uses the Internet daily.

    The release goes on to say that because of these things it is not easily replaced and essential to modern life. Thus, it sent the case back so the man might get his compensation. In light of AT&T’s massive service failure last week that affected thousands of users, I’m curious how our own court system might view access to the web and what type of compensation — above and beyond a service credit — might be due those affected by multiday outages.

  • Twitter Launches New Transparency Report Home, Releases Second Report

    Twitter announced today that it is launching a new Transparency Report home page at transparency.twitter.com. The announcement comes on Data Privacy Day, and the week following the latest release of Google’s Transparency Report.

    Twitter first released a Transparency Report of its own last July, publishing six months of data. We should be seeing these regularly from here on out, but you can go to the new destination anytime.

    Twitter Launches Transparency Report site

    “In addition to publishing the second report, we’re also introducing more granular details regarding information requests from the United States, expanding the scope of the removal requests and copyright notices sections, and adding Twitter site accessibility data from our partners at Herdict,” says Twitter Legal Policy Manager Jeremy Kessel.

    “We believe the open exchange of information can have a positive global impact,” he adds. “To that end, it is vital for us (and other Internet services) to be transparent about government requests for user information and government requests to withhold content from the Internet; these growing inquiries can have a serious chilling effect on free expression – and real privacy implications.”

    Google, in addition to putting out its latest data last week, also addressed data privacy today, highlighting three initiatives that it is focusing on. More on all of that here. Meanwhile, the company is facing new legal action in the UK related to its privacy conduct.

    Additionally, Facebook has launched its “Ask Our CPO” (Chief Privacy Officer) initiative.

  • Acer Chromebook sales eating away at Windows 8 revenues

    Google Chromebooks, not Microsoft Windows 8 computers, are selling well for Acer. In a weekend report, Bloomberg noted that Chromebooks account for between 5 and 10 percent of Acer’s recent shipments to the US; an interesting data point considering the timing. Microsoft’s Windows 8, hoping to re-ignite the PC market, launched in late October, or just about the same time Acer began selling Chromebooks.

    google-chromebookAcer’s president, Jim Wong, has been one of the most vocal critics of Microsoft’s partners of late, first announcing disappointment in Microsoft’s decision to launch its own Surface computers and now suggesting that Windows 8 “is still not successful.” For its part, Microsoft has turned the finger-pointing back at PC makers, with The Register reporting last week that Microsoft feels partners didn’t build enough attractive Windows 8 tablets for the 2012 holiday season.

    Blame game aside, the numbers are telling. This month, Microsoft announced sales of 60 million Windows 8 license sales, but that figure includes sales to hardware makers for new PCs that may not have been sold yet. And the overall PC market is down in terms of sales. In the final quarter of 2012, the industry experienced a decline of 6.4 percentage points over the year ago quarter.

    lots of tabletsA few reasons explain the sales decline. For starters, consumers and businesses may be holding on their older computers longer; unless you have a budget PC from a few years ago, you can very likely upgrade to Windows 8 or simply keep using Windows 7 for now.

    Cheaper options for PC-like tasks are available as well: Smartphones to some degree and tablets to a much larger extent can handle many activities once reserved for computers. Plus, you can remotely connect to and use a computer from these tablets if needed.

    The popularity of Google’s Chromebook is another example of less need for a traditional computer. It’s clearly not a full computer replacement but after using one since June of last year, it fits nearly all of my needs, for example. So much of today’s computing activities take place in a browser that the Chromebook can be a secondary device allowing an old computer to suffice for more resource intensive tasks or apps.

    Ironically, Acer’s Chromebook entries are simply low-priced Windows laptops repurposed for Google’s Chrome OS. That cuts out any licensing fees to Microsoft, which if the market for Chromebooks grows, can hurt the company down the line. No Windows also means no Office; essentially a double whammy for Microsoft revenues if Acer’s Chromebooks become a hot seller. Samsung sells both Windows 8 computers as well as Chromebooks and it appears HP is entering this non-Microsoft market too.

    Acer Iconia W510

    Don’t think Acer is divorcing Microsoft, however. The company still builds Windows devices and surely makes the bulk of its PC division revenues from these.

    In fact, I just received a Windows 8 tablet review unit from Acer — the Intel Atom-based W510 — and my initial impressions are mostly positive. The $599 tablet offers the benefits of touch when desired plus full Windows compatibility and an optional keyboard dock: A handy combination. But if that’s too much money for you, Acer’s Chromebooks start at a low $199; a price that will command more attention than any Windows 8 laptop on the market.

  • Old AdWords Impression Share Columns Almost Officially Gone

    Google announced back in November that it was rolling out changes for AdWords Impression share reporting (the number of impressions received in a campaign or ad group divided by the estimated number of impressions you were eligible to receive).

    The company added new columns to separate search and display impression share, and added hour of day segmentation and the ability to apply filters, see charts and apply automated rules using impression share metrics. They also improved the accuracy of how data is calculated.

    Today, Google reminds users that it is continuing its plans to phase out the old impression share columns on February 4th, which is coming right up.

    “Any saved reports using the old IS columns will need to be updated to use the new columns,” says product marketing manager Rob Newton. “If you don’t remove/replace those columns before they’re retired on February 4th, you won’t be able to run those saved reports.”

    Saved reports will be updated to use the new columns.

  • Google Facing Legal Action In UK Over ‘Safari-Gate’

    Google continues to deal with the fallout from “Safari-gate” privacy scandal that led to a record fine (for a single company) from the U.S. Federal Trade Commission last August. The company was fined $22.5 million.

    Now, iPhone users in the UK are getting together to sue Google over the debacle. The Guardian reports:

    At least 10 British iPhone users have started legal proceedings and dozens more are being lined up, according to Dan Tench, the lawyer behind the action at the London-based firm Olswang.

    “This is the first time Google has been threatened with a group claim over privacy in the UK,” he said. “It is particularly concerning how Google circumvented security settings to snoop on its users. One of the things about Google is that it is so ubiquitous in our lives and if that’s its approach then it’s quite concerning.”

    There is a Facebook Group called “Safari Users Against Google’s Secret Tracking,” which has been set up by the law firm in connection with the users who are going after Google. In the “About” section, the description says:

    This group has been set up to provide information for anyone who used the Safari internet browser between September 2011 and February 2012, and who was illegally tracked by Google.

    Any users in the UK may have a claim against Google for this breach of their privacy. Other users, who have set up this group, are taking action against Google to hold them to account.

    Members of this informal group have instructed the leading technology and media law firm, Olswang, to begin an action against Google.

    If you have concerns or want to join the action, contact us via this group and we will share your views or put you in touch with the legal team.

    It will be interesting to see how many users get on board with this, and what it ends up meaning for Google. A press release from Olswang has more on the case.

  • Audit reveals some mismanagement of smart grid demonstration stimulus funds

    Over three years ago the Department of Energy allocated around $4.5 billion in stimulus funds for smart grid projects in the U.S. That included $700 million for demonstration projects that helped install technology like wireless data networks and battery farms for the power grid. With such a large amount handed out over a relatively short period of time, the chances of problems were high. And according to a newly released report from the Department of Energy’s Inspector General, the smart grid demonstration program had some management issues.

    Those problems included:

    1. Handing out funds for a couple projects for estimated costs instead of actual costs of projects, which resulted in over payments.
    2. Funding a project that also received a grant from another DOE program, the ARPA-E program, for the exact same project.
    3. Funding a project that had not handed in proper documents, and had not begun making the energy storage units that it claimed for the award.

    The audit looked at just 11 projects, with a total of $279 million in awards, out of the $700 million smart grid demonstration program. Out of that section alone they found $12.3 million in questioned costs, and they have now recovered $6.6 million of those misspent costs, and plan to recover another $5 million. It’s probably safe to assume there’s similar levels of mismanagement throughout the entire $4.5 billion.

    The report says:

    The Department had not always managed the Program effectively and efficiently. . . .In the absence of significant improvements, the Program is at risk of not meeting its objectives and has an increased risk of fraud, waste and abuse.

    As a result the report recommends that the program:

    • Ensure adequate review of payments made to recipients
    • Provide training to recipients on proper submission of reimbursement packages
    • Ensure that recipients contribute their required cost-share from allowable sources
    • Ensure the elimination of any potential overlapping funding among awards authorized by various Department programs
    • Contracting officers should resolve the questioned amounts in our report.

    The stimulus funds delivered an unprecedented, and game-changing amount of federal support for the next generation of power grid technology. It’s natural that with such a large amount of money allocated that mismanagement would happen.

    One of the things not addressed in the report is how effective — or not — this type of stimulus program for smart grid projects actually was. Many in the industry back in 2010 complained that the funds actually had a sort of chilling effect on the sector, because the funds took awhile to actually get delivered, which meant utilities waited on these projects and didn’t put money into other new ones.

  • The ‘Symphony of Cables’ at Equinix

    equinix-sv-images

    This photo of the Equinix SV5 data center shows the colorful overhead trays housing the miles of cabling for interconnections. (Photo: Equinix Inc.)

    The social media team at Equinix recently posted some cool photos of the company’s SV1 and SV5 data centers in San Jose. “Do you love the symphony of cables like we do?” asked Equinix’s Phil Schwarzmann. It’s the latest example of data center companies showcasing the visual interest of their mission-critical facilities. Check out 10 Beautiful Photos of Equinix Data Centers on the Interconnections blog.

    For more “data centers as art,” see The Top 10 Data Center Images of 2012.

  • Why 2013 won’t be the year for super speedy WiGig products

    There could be a delay in planned WiGig products that transfer data at super fast speeds up to 6 gigabits-per-second across short distances. What’s the holdup? According to Mobile World Live: The merger between the WiGig Alliance and the Wi-Fi Alliance, which was announced earlier this month.

    wigigAlthough the merger activities may delay products, the two groups working together will help product development and adoption of WiGig technology. This will make it easier for product manufacturers to use both standard Wi-Fi and WiGig in devices and make it simple for consumer to understand the different wireless capabilities since WiGig is very different.

    The technology is meant for fast transfers between devices close to each other or in the same room by using 60 GHz spectrum. Expect to see wireless computer docks, easier ways to stream content from a mobile device to a large screen and other similar use cases where WiGig can replace today’s data transfer cables.

    WiGig started as a 2009 initiative with bold plans to deliver products as early as 2010, but that date came and went a while ago. And recently, the WiFi Alliance has spent much effort on the new 802.11ac standard for Wi-Fi, which uses wider channels and multiple data streams to boost wireless speeds and range well beyond 802.11n products. But this market is just getting started, so 802.11ad product certifications that include WiGig functionality, originally expected for 2013, are looking like a 2014 event at this point.

    According to a video interview with Dr Ali Sadri, WiGig Alliance Chair,  “Based on our existing plan we should have certification in place later this year so there’s a little slip of the programme, maybe even beginning of ‘14.”

  • Seann William Scott Grabs Headlines Alongside ‘Dude, Where’s My Car?’ Co-Star Ashton Kutcher

    Ashton Kutcher is not the only “Dude, Where’s My Car?” star making headlines today (the actor portraying Steve Jobs in the upcoming “jOBS” talked about being hospitalized for two days because of a fruitarian diet and tweeted an intriguing split image of himself and the real Steve Jobs).

    Seann William Scott, who in addition to playing opposite Kutcher in the cult hit, is best known as Stifler form the American Pie films, has broken off his engagement to model Lindsay Frimodt, as confirmed by his rep to US Weekly (to set your soul at ease, the publication says the split was “amicable”). The two had been engaged at least since last March.

    Prior to his engagement to Frimodt, Scott had reportedly been linked to Mad Men’s January Jones and Sin City’s Jaime King.

    Seann William Scott can be seen in Movie 43, which opened on Friday. Here’s the red band trailer:

  • Google Adds Regions To Flight Search

    Google has updated its Flight Search tool to let users search for regions. Now, you can search for places in addition to just airports. Google made the announcement on its ITA Software blog. ITA Software is, of course, what powers the Flight Search feature.

    “Let’s say you want to take your family to Hawaii for spring break, but you’re not sure which of the islands sounds most appealing,” says Google software engineer Peter Balsiger. “There is now a way to quickly and easily search for a broader set of destination information. In this case, instead of checking prices to Kailua-Kona or Kahului, you could type ‘Hawaii’ into Flight Search. Live prices would then appear on the map, so you can quickly compare the cost of the different options.”

    “Whether you’re planning a trip on your desktop, tablet or phone, you can use Flight Search to search for countries, states, islands and even continents from any U.S. or Canadian origin,” he adds.

    Balsiger encourages users to try searches like “Australia,” “Europe” or “Florida”.

    Last month, Google upgraded Flight Search with a handful of new features, including Flight Explorer, which lets you browse flights by trip length, number of stops, airline, duration, outbound times and return times. The feature is still under the “experimental” label.

    Also in December, MileWise began letting its users search with its ITA Software QPX pricing and shopping technology on their iPhones.

  • Ashton Kutcher: Diet Like Steve Jobs’ Put Me In Hospital

    Actor Ashton Kutcher, who plays the role of Apple co-founder Steve Jobs in the film jOBS, told reporters after the film’s Sundance premiere, that he was hospitalized for two days before the movie started shooting. He reportedly said (via TV Guide) that he had adopted the “fruitarian diet” that Jobs was known to have lived on (as documented in Walter Isaacson’s biography of Jobs), and that it led to him spending two days in the hospital.

    Last week, the first clip from the film hit the web. In case you missed it, you can see it again here. It features Kutcher and co-star Josh Gad, who plays Apple co-founder Steve Wozniak, discussing Wozniak’s operating system, planting the seeds (pun semi-intended) for what would become Apple.

    It should be noted that the real Wozniak has already made comments about the scene saying it didn’t happen that way, but it is, after all, a movie.

    The film itself has received mixed reviews so far, but that’s to be expected from any film, let alone any film documenting the life of the controversial Steve Jobs.

    Kutcher and Gad are set to appear at MacWorld/iWorld this week to talk about their experiences playing Jobs and Wozniak respectively. My guess is that we’ll hear more about Kutcher’s diet and hospitalization when that happens. They’ll speak on the main stage on Thursday.

    jOBS hits theaters on April 19.