Tag Archives: GOOGL

Amazon Widening Moat With Prime, Alexa And Echo Integration


source: Cnet

For the first time ever, Amazon recently released its full-year shipping numbers for Amazon Prime, saying for 2017 it delivered more than 5 billion products around the world, and increased its prime subscriber base at a pace it never has reached in the past.

It also said in the Christmas season of 2016 it delivered 1 billion products – although it didn’t release full 2016 shipping figures.

It also said the biggest seller among its Prime members in the U.S. was Echo Dot and Fire TV Stick. The Fire TV Stick can communicate with Alexa if the remote has a Voice button, further locking in consumers to Amazon’s ecosystem. Most if not all the things you can do using an Echo can be done with a Fire TV is you want.

Besides the lock-in, Amazon (AMZN) has revealed where it’s taking all of this: Developing an ad model around the devices it makes that use Alexa. The significance of Prime members buying the two devices in large numbers points to Amazon having a sizable consumer base to work from.

Combined with other Prime perks, it’s going to be difficult for competitors to dislodge customers from the integrated services and products.

Ad potential

Even though Amazon is easily the market leader in e-commerce, that’s not the case with its advertising business, which is fifth among U.S.. companies. The bulk of Amazon’s ad revenue comes from sponsored placements on its website.

In the third quarter of 2017 ad sales came in at over $1 billion. According to eMarketer, that will grow by 42 percent in 2018, to $2.4 billion. That pales in comparison to Facebook’s (NASDAQ:FB) $21.6 billion and Google’s (NASDAQ:GOOG) (NASDAQ:GOOGL) $40.1 billion. From that reference point, Amazon has nowhere to go but up with its ad growth.

As for voice search and related ad potential, Google said as far back as May 2016 that 20 percent of searches on mobile were from voice. Looking ahead, comScore has said it believes voice-initiated searches will account for about half of all searches by 2020.

This is a powerful ad revenue catalyst for Amazon, which holds close to 75 percent market share at this time, and may have increased that in the Christmas shopping season.

A report from CNBC noted that sources tell them it is in negotiations with a number of large brands, including Clorox (NYSE:CLX) and P&G (NYSE:PG), either to promote products within Alexa skills, or to sponsor products when Alexa provides suggestions. That would be similar to shopping within the existing Amazon interface, with the exception of it being a combination of audio, and now it appears video, with the move toward offering Echo with a screen.

It’ll be interesting to see if it innovates with Fire TV and moves in a similar direction.

The future of Alexa and Echo will probably be immersive

Based upon the response of Amazon to audio ads launched by VoiceLabs in May 2017 for devices using Alexa, it appears the company wasn’t impressed with the results, as it was shut down by Amazon.

Interestingly, CEO Adam Marchick said consumers were highly receptive to the audio ads. He also said there was a lot of advertiser demand from CPG companies, to prompt people to add products to their shopping carts.

It’s possible the results were OK, but Amazon may have been looking for a lot more. I think Amazon sees video being a part of the future of Alexa and Echo, and is probably positioning itself to offer a more immersive ad experience for consumer, by which I mean one that includes all the senses.

The strong sales of Echo Dot doesn’t lend itself to that, since it doesn’t include a screen at this time. But the strategy to me seems to be to get the devices in the home and grow and retain hefty market share, and then promote the idea of a premium device and experience, led now by Amazon Echo Show, which does have a screen.

I think we’ll probably see Amazon eventually roll out a lower cost Echo with a screen in the not-too-distant future, if it is in fact looking to ramp up its video business by including visuals with the audio of Alexa.

Conclusion

Not to be lost in all of this is the ongoing growth of Amazon Prime. While we all know a percentage of the people getting temporary free Prime subscriptions during the Christmas season are going to drop out, but a significant number will stay on as well.

Amazon is obviously building an ecosystem with its Prime, Alexa, Echo, and probably Fire TV, which will make it extremely difficult to compete against.

As it builds that out, not only is it generating more revenue from its Prime members, which most investors know about, but it seems like those using Alexa are highly engaged when ordering from the e-commerce giant.

This is prepping Prime subscribers for the convenience of using Alexa and Echo to accept ads in the future on the device. Ads that won’t be considered intrusive, but part of the experience of being offered suggestions that are based upon the comprehensive database Amazon has on its customer’s buying habits and interests.

Once again, I think Amazon has outmaneuvered its competitors and is about to become a strong player in the digital ad space. This should add yet another solid revenue stream to its growing business.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

About this article:ExpandAuthor payment: Seeking Alpha pays for exclusive articles. Payment calculations are based on a combination of coverage area, popularity and quality.Tagged: Investing Ideas, Long Ideas, TechnologyWant to share your opinion on this article? Add a comment.Disagree with this article? Submit your own.To report a factual error in this article, click here

Top 10 Bank Stocks To Buy Right Now

Deutsche Bank’s Gregg Gilbert argues that shares of Endo International (ENDP) are “undervalued” despite “concerns aplenty.” He explains why:

Endo shares have been under significant pressure this year for a variety of reasons, including but not necessarily limited to soft generic trends in 4Q15/1Q16, earlier-than-expected generic competition to Voltaren Gel, product liability (mesh) concerns, opioid demand concerns, and the debt load, all in the context of an unpopular sector. While we are not dismissive of these issues, it does feel like the stocks sell-off has been much more extreme than fundamentals would support, perhaps suggesting non-fundamental or forced selling (~35% of the float traded in the past two weeks). We see Endos Q1 call in early May as an important milestone in that new money may prefer to see Q1 trends and updated 16 guidance. Our below-consensus revenue and EPS estimates for 16 ($4.1bn and $5.34 vs. consensus of $4.3bn and $5.80) build in a hit from generic Voltaren Gel and some cushion to account for softness in Endos own generics business.

Top 10 Bank Stocks To Buy Right Now: International Lithium Corp. (ILHMF)

Advisors’ Opinion:

  • [By SEEKINGALPHA.COM]

    International Lithium [TSXV:ILC] (OTCPK:ILHMF) – Price = CAD 0.13

    International Lithium (ILC) is a small lithium explorer/project generator with four joint venture lithium projects, and one fully-owned lithium project:

Top 10 Bank Stocks To Buy Right Now: TTM Technologies, Inc.(TTMI)

Advisors’ Opinion:

  • [By Anders Bylund]

    How do you pick the top names in this broadly lucrative industry? I’m here to show you my three favorites in the printed circuit board market: Sanmina (NASDAQ:SANM), Benchmark Electronics (NYSE:BHE), and TTM Technologies (NASDAQ:TTMI), each one tailor-made for a different type of investor.

  • [By Evan Niu, CFA]

    Shares of circuit board manufacturer TTM Technologies (NASDAQ:TTMI) have jumped today, up by 10% as of 3 p.m. EST, after the company reported fourth-quarter earnings.

Top 10 Bank Stocks To Buy Right Now: Guidewire Software, Inc.(GWRE)

Advisors’ Opinion:

  • [By Monica Gerson]

    Guidewire Software Inc (NYSE: GWRE) is estimated to post its quarterly earnings at $0.06 per share on revenue of $92.43 million.

    Analogic Corporation (NASDAQ: ALOG) is projected to post its quarterly earnings at $0.88 per share on revenue of $127.30 million.

  • [By Peter Graham]

    A long term performance chart shows Ebix Inc actually performing well since the end of 2014 while mid cap peer Guidewire Software Inc (NYSE: GWRE) has been outperforming over a longer period of time and small cap Benefitfocus Inc (NASDAQ: BNFT) has underperformed:

Top 10 Bank Stocks To Buy Right Now: Transcananda Pipelines Ltd.(TRP)

Advisors’ Opinion:

  • [By Matthew DiLallo]

    Energy infrastructure companies ONEOK (NYSE:OKE) and TransCanada (NYSE:TRP) are both emerging from the energy market downturn as stronger entities. Each made smart acquisitions, with TransCanada buying U.S. gas pipeline company Columbia Pipeline Group, while ONEOK is in the process of gobbling up its MLP,ONEOK Partners (NYSE:OKS). While these deals enhanced the growth profiles of both companies, TransCanada still stands out as the better buy for long-term income investors. Here’s why.

  • [By Ben Levisohn]

    In a number of articles recently, following the US recent revival and potential approval of the previously blocked Keystone XL pipeline, a number of estimates have been provided suggesting a pending boom for the US steel industry is on the horizon (and US steel stocks have reacted in kind). In fact, this optimism, we believe, peaked today when a report from one of our competitors was published claiming that, the keystone XL pipeline could increase line pipe demand by 14.7% for 2 years. The problem here, we believe, rests with the facts that: (a) TransCanada (TRP) has already taken, and paid for, the steel to build the Keystone XL pipeline (the steel currently sits in storage facilities in both Regina, Canada and Arkansas, United States), (b) neither US Steel (X; SELL), AK Steel, Steel Dynamics, or Nucor have the ability to make the specialized steel required for the miles of pipe associated with this project, to include both the thickness and pressure requirements, according to this article from Reuters, and (c) assuming some of the pipe does need replacement, this would likely come from international steel makers who are capable of producing the specialized steel (again, as highlighted in this Reuters article).

  • [By Matthew DiLallo]

    After a series of setbacks in its attempts to build new oil pipelines, Canadian pipeline giant TransCanada (NYSE:TRP) completed a transformation transaction to acquire U.S. natural gas pipeline company Columbia Pipeline Group for $13 billion, which includes the assumption of debt. The key to that deal was that it increased the combined company’s near-term project pipeline to 23 billion Canadian dollars, which supports TransCanada’s ability to increase its dividend by 8% to 10% annually through 2020. After completing that deal, TransCanada made a bid to acquire all of the outstanding units that it did not own of affiliated MLP Columbia Pipeline Partners (NYSE:CPPL) in a transaction valued at $915 million. These acquisitions solidified TransCanada’s natural gas pipeline growth ambitions, enabling it to diversify away from oil pipelines.

  • [By Paul Ausick]

    That includes pipeline companies like Kinder Morgan Inc. (NYSE: KMI), which already operates a pipeline transporting natural gas from Texas into Mexico, and master limited partnerships (MLPs) Energy Transfer Partners L.P. (NYSE: ETP) and TransCanada Corp. (NYSE: TRP), the company that has (so far) failed to get U.S. approval for its Keystone Pipeline expansion from Canada’s oil sands across the U.S. border.

  • [By WWW.KIPLINGER.COM]

    Energy stocks were driven by a hefty dose of M&A during the third quarter. And that will drive returns for TransCanada Corporation (TRP) during the next one.

Top 10 Bank Stocks To Buy Right Now: Alphabet Inc.(GOOGL)

Advisors’ Opinion:

  • [By John Rosevear]

    There are already fleets of autonomous vehicles testing on public roads around the world — with humans ready to take over if needed, of course. Automakers likeGeneral Motors(NYSE:GM), software giants likeAlphabet’s(NASDAQ:GOOG)(NASDAQ:GOOGL)Waymo subsidiary, and newer entrants like Uber Technologies — along with a host of start-ups and “stealth” ventures — are all out on the roads testing now.

  • [By Sreekanth Anasa]

    Amazon.com Inc. (NSDQ:AMZN)stock fell by more than 5 % over the last week. There were a series of service announcements last week by Amazons cloud-computing business, AWS, but they also didn’t do much to support the falling AMZN stock. However, AWS re:Invent 2016 has reaffirmed that AWS is one strong reason to buy AMZN stock now. AWS is expected to top $12 billion in revenue this year, compared with $7.9 billion last year. The public cloud pioneer has gone from being the largest, most dominant public cloud service for web developers and startups to providing the most important technology to businesses: the enterprise cloud. Amazon has sustained its aggressive cloud approach, even though competitors like Microsoft (NSDQ:MSFT) and Alphabet (NSDQ:GOOGL) are trying to catch up, using their deep pockets. Here’s why AWS is not slowing down anytime soon and will continue to drive AMZN stock to greater heights.

  • [By Shudeep Chandrasekhar]

    The impact of that shift can already be seen in the way Alphabets aggregate cost per click has declined in the last two years. At the same time, the total number of clicks has increased. The shift to mobile as well as the increasing traffic from new markets are jointly giving more click volume, but lower revenue per click. This trend will continue, it is not something that Alphabet can snap itself out of that easily; and in all likelihood we might see this accelerate in the next few years as mobile usage in developing markets increases. (See Also:FB Stock: Is Facebook Inc (FB) Eating YouTube’s Lunch- Alphabet Inc (GOOGL) ?)

  • [By Shanthi Rexaline]

    Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) has another class of shares called the Class C shares, which came into being after the split in April 2014. Google’s Class A share has one vote, Class B shares, owned by the founders, are vested with ten votes and the Class C shares have no voting right. The Class A shares trade under the ticker symbol GOOGL and the Class C shares under the ticker symbol GOOG.

  • [By Virendra Singh Chauhan]

    Apple stock is currently trading at a PE multiple of 14.09, in line with the valuation multiples of other hardware companies like HP Inc (NYSE:HPQ) and Qualcomm (NSDQ:QCOM). However, the Apple services segment is significantly different from a ‘hardware’ business, whether in terms of operations or associated cost structure. It would, therefore, be more accurate to evaluate the segment as a services business in order to gauge its ‘value.’ Two popular companies which generate a ton of services revenue are Alphabet (NSDQ:GOOGL) and Facebook (NSDQ:FB).

  • [By Lee Jackson]

    Alphabet Inc. (NASDAQ: GOOGL) had the president of the company selling shares this past week. Brin Sergey parted with a total of 33,332 shares of the stock at a reported price of $802.38. The total for the sale came in at a stunning $26,751,574. The traded closed on Friday at $792.45, so the timing looks solid.The 52-week trading range for the search giant is $672.66 to $839. The Wall Street consensus price target is $967.

Top 10 Bank Stocks To Buy Right Now: OMNOVA Solutions Inc.(OMN)

Advisors’ Opinion:

  • [By Monica Gerson]

     

    General Mills, Inc. (NYSE: GIS) is expected to report its quarterly earnings at $0.60 per share on revenue of $3.86 billion.
    Pier 1 Imports Inc (NYSE: PIR) is projected to post a quarterly loss at $0.05 per share on revenue of $420.05 million.
    Acuity Brands, Inc. (NYSE: AYI) is estimated to report its quarterly earnings at $2.03 per share on revenue of $847.79 million.
    Monsanto Company (NYSE: MON) is projected to report its quarterly earnings at $2.40 per share on revenue of $4.49 billion.
    Worthington Industries, Inc. (NYSE: WOR) is expected to report its quarterly earnings at $0.64 per share on revenue of $692.48 million.
    Progress Software Corporation (NASDAQ: PRGS) is projected to post its quarterly earnings at $0.29 per share on revenue of $94.64 million.
    UniFirst Corp (NYSE: UNF) is estimated to report its quarterly earnings at $1.34 per share on revenue of $366.28 million.
    Exfo Inc (NASDAQ: EXFO) is expected to post its quarterly earnings at $0.06 per share on revenue of $60.87 million.
    OMNOVA Solutions Inc. (NYSE: OMN) is projected to report its quarterly earnings at $0.14 per share on revenue of $205.40 million.
    8Point3 Energy Partners LP (NASDAQ: CAFD) is estimated to post a quarterly loss at $0.01 per share on revenue of $11.60 million.
    Park Electrochemical Corp. (NYSE: PKE) is expected to report its quarterly earnings at $0.22 per share on revenue of $35.30 million.
    Xplore Technologies Corp. (NASDAQ: XPLR) is projected to post its quarterly earnings at $0.01 per share on revenue of $24.00 million.
    Investors Real Estate Trust (NYSE: IRET) is expected to post its quarterly earnings at $0.14 per share on revenue of $56.87 million.
    Tel-Instrument Electronics Corp. (NYSE: TIK) is estimated to post earnings for the latest quarter.
    Aethlon Medical, Inc. (NASDAQ: AEMD) is expected to post a quarterly loss at $0.20 per share.
    Ossen Innovation Co Ltd (ADR) (NASDAQ: OSN) is projected to post ea

  • [By Lisa Levin]

    OMNOVA Solutions Inc. (NYSE: OMN) shares were also up, gaining 11 percent to $5.97 after the company reported better-than-expected Q1 earnings.

    Equities Trading DOWN

  • [By Lisa Levin]

    Shares of OMNOVA Solutions Inc. (NYSE: OMN) were down 14 percent to $8.64 after the company reported weaker-than-expected Q3 earnings.

    Sorl Auto Parts, Inc. (NASDAQ: SORL) was down, falling around 8 percent to $3.68. Greenridge Global downgraded SORL Auto Parts from Buy to Hold.

Top 10 Bank Stocks To Buy Right Now: New Residential Investment Corp.(NRZ)

Advisors’ Opinion:

  • [By Chris Dier-Scalise]

    Thge Vetr crowd upgraded its rating for New Residential Investment Corp (NYSE: NRZ) on Friday from the company's previous standing at 3 stars (Hold), issued 10 days ago, to 4 stars (Buy). Crowd sentiment at the time of the upgrade was mostly positive, with 80 percent of Vetr user ratings bullish.

  • [By Lisa Levin]

    Ocwen Financial Corp (NYSE: OCN) shares were also up, gaining 42 percent to $3.25. New Residential Investment Corp (NYSE: NRZ) revealed it owned some servicing rights to the troubled Ocwen Financial. During today's conference call, New Residential’s executive suggested the company will pay $425 million for Mortgage Servicing Rights to Ocwen.

  • [By ]

    New Residential (NYSE: NRZ) is a U.S.-based REIT that specializes in managing investments in residential real estate. With a market cap of $5.5 billion, NRZ is one of the largest REITs in the United States, so this is no fly-by-night company. NRZ offers one of the best dividends in the industry. The trust made four dividend payments in 2017 totaling $1.94. That gives shares a current yield of 11.3%, more than a 400% premium to the S&P 500’s average 2.0% yield.

  • [By Sean Williams]

    Today’s lawsuit has spilled over to the company’s peers as well. New Residential Investment Corp. (NYSE:NRZ), which invests in excess mortgage servicing rights (MSRs), wound up falling as much as 13% during the day’s trading session. Ocwen is one of the three companies mentioned as being one of the primary servicers in New Residential Investment’s MSRs, according to its 10-K. If mortgage owners or bondholders terminate Ocwen as the servicer, the excess MSRs tied to Ocwen could lose some or all of their value.Altisource Portfolio Solutions S.A.(NASDAQ: ASPS)fell 42%.

Top 10 Bank Stocks To Buy Right Now: Ducommun Incorporated(DCO)

Advisors’ Opinion:

  • [By Lee Jackson]

    These companies also reported insider buying last week: Cidara Therapeutics Inc. (NASDAQ: CDTX), Ducommun Inc. (NYSE: DCO), HealthEquity Inc. (NASDAQ: HQY), Panhandle Oil and Gas Inc. (NYSE: PHX) and PolarityTE Inc. (NASDAQ: COOL).

  • [By Lee Jackson]

    These companies also reported insider buying last week: Armour Residential REIT Inc. (NYSE: ARR), Ducommun Inc. (NYSE: DCO), PJT Partners Inc. (NYSE; PJT), Sonic Automotive Inc. (NYSE: SAH)and Tandy Leather Factory Inc. (NASDAQ: TLF).

Top 10 Bank Stocks To Buy Right Now: Sunoco Logistics Partners LP(SXL)

Advisors’ Opinion:

  • [By Matthew DiLallo]

    Meanwhile, a noteworthy project in the midstream segment finally finished construction in the quarter, after the company and its joint venture partners Energy Transfer Partners (NYSE:ETP) and Sunoco Logistics Partners (NYSE:SXL)completed the controversial Dakota Access Pipeline and Energy Transfer Crude Oil Pipeline. The partners expect commercial operations to begin this June, which means that this pipeline should drive incremental earnings for Phillips 66 in the back half of this year.

Top 10 Bank Stocks To Buy Right Now: Basilea Pharmaceutica Ltd. (BPMUF)

Advisors’ Opinion:

  • [By SEEKINGALPHA.COM]

    Leuven, Belgium-based Tigenix (OTC:TGXSF) filed to go public in the U.S. in late 2015, only to become entangled with Bavarian Nordic (OTC:BVNKF) and Basilea Pharmaceutica (OTC:BPMUF) as the European drugmakers pulled back from NASDAQ. Tigenix subsequently increased its bank account following a 23.75 million placement in Belgium, and added an additional 25 million via a relationship with Takeda, before coming back to Wall Street in October 2016 with a revamped slate of underwriters.

Will Uber’s Mistakes Delay the IPO?

Uber’s mistakes in 2017 led to the ouster of the company’s founder and CEO Travis Kalanick.

In early September, ride-hailing platform Uber brought on a new chief executive officer, Dara Khosrowshahi, to replace Kalanick and restore investor confidence in the company.

The new CEO made it immediately known he wanted the company to go public between 2019 and 2021, according to an Aug. 30, 2017, CNBC report.

uber's mistakesmoneymorning.com/wp-content/blogs.dir/1/files/2017/12/uber-75×48.jpg 75w” sizes=”(max-width: 300px) 100vw, 300px” title=”uber’s mistakes” />But even with a new CEO, Uber’s controversies under Kalanick could still delay the IPO…

Uber’s Mistakes in 2017 Piled Up

Uber has been in the news throughout 2017 because of missteps and scandals.

Under Kalanick’s watch, Uber was accused of everything from promoting a culture of sexual harassment to deceiving regulators.

On Feb. 19, a former engineer for the company, Susan Fowler, alleged in a blog post that she was sexually harassed. On Feb. 23, Alphabet Inc. (Nasdaq:GOOGL) sued Uber for intellectual property theft.

Then on Feb. 27, Kalanick asked former Uber Senior Vice President of Engineering Amit Singhal to step down amid emerging sexual harassment allegations from when he formerly worked at Google.

Video Who Is Dara Khosrowshahi?

That was all just in February.

March was another notably bad month for the ride-hailing service. Uber was accused of deceiving authorities in areas it wasn’t allowed to operate in by using a tool called “Greyball.” The tool allowed Uber to circumvent law enforcement efforts to track the company.

On top of that, both Uber’s president and vice president of product and growth resigned in March.

And the bad news continued right before Uber hired Khosrowshahi as CEO at the end of August.

Uber had knowingly leased unsafe cars to its drivers in Singapore, according to an Aug. 4NPRreport.

One of the cars caught on fire and melted the interior while a driver was in the car. Fortunately, the driver was unharmed.

But overcoming scandals isn’t the only roadblock in the way of the Uber IPO. Khosrowshahi wants to make the company profitable before the Uber IPO date.

Breaking: California Marijuana Legislation Sparks the Most Profitable Opportunity of 2018. Click Here for Details…

He has a long way to go, as the company lost $2.8 billion in 2016.

And Uber is on track to lose $2.7 billion in 2017.

But if Khosrowshahi can lead Uber past its scandals and make it profitable, should you buy Uber stock?

Here’s the answer, plus a way to make money before theUber IPO datethat you can’t afford to miss…

What You Need to Know Before Buying Uber Stock

Join the conversation. Click here to jump to comments…

Uber Technologies Inc. Is a Massive Risk for Softbank

Uber Technologies Inc. has been valued at $48 billion after Softbank Group Corp. (OTCMKTS:SFTBF) has completed its purchase of 20% of the ride-hailing company.

A previous private funding round said the company was worth $68 billion, making this new round a “down round.” Anyone who bought shares at the $68 billion valuation — and then sold to Softbank — took a loss.

Since most of those exiting were early investors, however, they have taken huge profits. Founder and former-CEO Travis Kalanick sold 29% of his personal stake to Softbank and is now a billionaire. Menlo Ventures, First Round Capital and Benchmark Capital were also among the early backers to take profits. 

Kalanick ran Uber from a startup to a dominant player in the new world of app-based ride-hailing, which has been putting taxi services out of business around the world. But the company now faces challenges from well-heeled competitors and governments bent on regulating or even banning it.

Can Uber Be Saved?

The Softbank deal was designed to put a period on Uber’s past troubles and re-launch the company with $1.25 billion of fresh capital.

Uber tried further distract by announcing on January 7 that they have testing self-driving car chips from Nvidia Corp. (NASDAQ:NVDA), and will use them in their fleet of autonomous vehicles.

Former Expedia Inc. (NASDAQ:EXPE) CEO Dara Khosrowshahi is now in charge at Uber. He hopes to make people forget a hellish year during which the company faced allegations of sexual harassment, a backlash by government regulators, a “delete Uber” campaign, and revelations that it paid to cover up a massive data breach.

A lawsuit filed by Alphabet Inc. (NASDAQ:GOOGL) last February may be the company’s greatest headache. Google is accusing their former employee, Anthony Levandowski, of taking trade secrets from the Waymo self-driving car unit to Uber with him.

That trial has been delayed by the discovery of a letter from former Uber employee Ric Jacobs which alleged that Kalanick personally directed the theft of Waymo’s technology and spied on competitors. 

Is Uber Worth Saving?

Make no mistake. There is something worth saving at Uber, a service that powered 4 billion car rides in 2017. The company has a huge infrastructure, thousands of drivers, and enough brand loyalty to make the word “uber” a verb.

Khosrowshahi has recruited Barney Harford, former CEO of Orbitz — which Expedia bought in 2013 — as the new chief operating officer. Harford is charged with cutting costs so Uber can look profitable in an initial public offering planned for 2019. The company lost nearly $2.5 billion during the middle quarters of 2017 and has yet to announce its fourth-quarter results.

Along with their purchase, Softbank has brought Sprint Corp. (NYSE:S) CEO Marcelo Claure and Rajeev Misra, who runs Softbank’s $100 billion “Vision Fund,” to the Uber board, which now numbers 17 people. Softbank controls Sprint, which has pre-loaded Uber’s app onto its phones in the past.

The Bottom Line

Bigger than all of Uber’s other problems is the fact that its backers were greedy.

They delayed their planned IPO long enough for the company attracted big competitors like Didi Chuxing, a Chinese clone that claims to have powered 7.3 billion rides last year and driven Uber from that market.

Uber has also remained private through government backlash. Taxicab companies and liberal groups claim that Uber used private capital to subsidize the elimination of good (often union) jobs.

The City of London has refused to renew Uber’s operating license, adding itself to the list of places where Uber is banned. This list now includes Denmark, Bulgaria, and Hungary, as well as parts of the U.S., Canada, Australia and many European countries.

My own view is that Uber has missed its moment. And Softbank is going to find it got into the business too late. The Google lawsuit takes Uber out of the self-driving car market, Didi is going to keep it out of most of Asia, and politicians are going to war against it.

That is not a good position to be in. This is a corporate turnaround with all the risks of a venture capital investment. The Softbank “Vision Fund” may prove short-lived if Uber fails.

Dana Blankenhorn is a financial and technology journalist. He is the author of the historical mystery romance The Reluctant Detective Travels in Time available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this story.

 

Compare Brokers

2018 IPO Prospects: Lyft Appears To Be Changing Gears To List

According to a Goldman Sachs report, the global ride-hailing market is expected to grow from $36 billion in 2017 to $285 billion by 2030. The average number of ride-hailing trips a day globally are expected to grow from 15 million in 2017 to 97 million by 2030. The ride-hailing companies are expected to charge an average 23% commission on the gross sales, translating to net revenues of $65 billion by 2030 for the industry. While Uber (Private:UBER) continues to remain the market leader in the industry, its recent troubles have helped drive usage for competitors, such as Lyft (Private:LYFT), to higher levels. Lyft may even beat Uber to an IPO listing this year.

Lyft’s Growth

Lyft, still largely focused in the US, has grown significantly during the past year. According to its Co-Founder and President John Zimmer, Lyft more than doubled the 162.6 million rides it provided in 2016. It is now available in all the 50 US states. Last year, Lyft also made its first international presence when it began operating its service in Toronto, Canada. Lyft has clearly benefited from all the turmoil at Uber. Here is an interesting infographic, courtesy recode, that shows how Lyft made big advances in San Francisco and New York, when compared with Uber.

Besides market expansion for the ride-sharing service, Lyft also has been actively focused on the autonomous driving market. Last year, Lyft entered into several partnerships with automakers such as Ford (NYSE:F), Tata Motors’ (NYSE:TTM) Jaguar Land Rover, and General Motors (NYSE:GM) to test self-driving vehicles in the network. It launched an open platform that is designed to give these automakers and tech companies the ability to work on self-driving cars that will be accessible to its ride-sharing network.

It officially launched the service last month in Boston when it sent autonomous vehicles, developed by the startup NuTonomy, to pick passengers in Boston’s Seaport district. The riders are randomly paired with one of NuTonomy’s self-driving cars when they use the Lyft app in the Seaport area. The car comes with a driver behind the wheel who is ready to take control, when needed. The partnership will help establish user confidence in the driverless car model along with helping improve the performance through feedback from pilot participants. Later this month, Lyft will also launch a similar service for the Consumer Electronics Show happening in Las Vegas. Attendees will be able to ride the autonomous cars on 20 pre-defined routes and destinations. The service will be provided in collaboration with Aptiv, which will work on the automated driving vehicles, while Lyft will take on the dispatch.

Lyft is not the only ride-sharing service to offer autonomous cars. Uber already has the service running in Pittsburgh and Phoenix. But Uber is being sued over its autonomous driving technology by Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) and has also been involved in a few traffic incidents in these markets.

Lyft’s Financials

Lyft’s user growth has translated to higher revenues in 2017. While the company still does not disclose detailed financials, recent reports revealed that its gross revenues grew from $150 million in the first half of 2016 to $483 million for the first half of 2017. During the same period, losses have reduced from $283 million to $206 million. During the same period, Uber is estimated to have earned $3 billion in revenues with losses of $2 billion.

Lyft has been venture funded so far and has raised $4.2 billion from investors including Fidelity Management & Research Company, Ontario Teachers’ Pension Plan, Capital G, Icahn Enterprises, Rakuten, Coatue Management, Andreessen Horowitz, Founders Fund, Mayfield Fund, FLOODGATE, K9 Ventures, and fbFund. Its last funding round was held in December 2017 , when it raised $500 million at a valuation of $11.5 billion from investors including Fidelity Management & Research Company and Ontario Teachers’ Pension Plan. Valuation has grown steadily from $10 billion back in October 2017 and $7.5 billion in April 2017. It is still a far cry from Uber’s valuation of $68 billion.

Many believe that Lyft is very close to going public as it is about to select its IPO advisors to help it list. It also added Kristina Omari as its first-ever vice president of corporate development and customer relations – a move expected to be part of the IPO initiative.

About this article:ExpandTagged: Investing Ideas, IPO Analysis, TechnologyWant to share your opinion on this article? Add a comment.Disagree with this article? Submit your own.To report a factual error in this article, click here