BI Research Express 11/2/2011

Time Warner reports results in line, but Time Inc subscriptions and ad sales are down, online and off.

Yahoo is talking to the funds circling it about a “leveraged recapitalization”: funds would inject money in the company for a majority or minority/controlling stake without having to buy it up whole. It’s an idea that makes good sense as a deal tactic (Yahoo is too big to be swallowed up by any one fund) but doesn’t solve Yahoo’s actual problems: 1) what to do about the huge Asian assets; 2) finding a new plan for Yahoo’s core business.

SecondMarket raises money at a $200 million valuation. The company seems to be on a roll as interest in secondary markets in private company shares is growing. SecondMarket will get blowback when a company whose shares it lists goes public at a valuation under its “private” valuation, as one inevitably will some day. But over the long term, SecondMarket has latched onto what seems to be a new reality, which is that companies grow up differently, wait longer until they go public, and in that timeframe there is a place for a secondary market in private shares, and therefore for a marketplace.

Facebook generates most of its ad revenue from small advertisers, and is still having trouble cracking into the budgets of the big agencies. Brands love using Facebook, but don’t like buying Facebook ads. The good side of that is that when Facebook cracks it (and it will, it’s just too big) the revenue gusher will explode. 

AOL beats expectations! Beats the Street on revenue and margins. We’ll have more after the earnings call this morning. Keep in mind that for AOL, “beating expectations” means “declining less slowly than expected”; there’s little evidence of a turnaround yet.

Groupon’s core business is slowing. The business overall is still growing because of the addition of new lines. This is mainly due to competition and deal fatigue; Groupon plans to reverse this through personalisation, by making deals more relevant. In theory it’s the ticket, and Groupon is better placed than anyone to succeed because it has more data on its users than anyone, but can it actually pull it off? Prospective investors should ask.

Big agency Aegis Group delivered revenue above expectations and upgraded its revenue forecasts for 2012

Kickstarter helps entrepreneurs and creators raise money online and is successful at it, as this great infographic from Bloomberg Businessweek shows. From Kickstarter which funds small (and not-so-small) projects to SecondMarket selling shares in Groupon’s IPO to other trends like superangels we’re seeing a dramatic shift in how private companies are getting financed.

Japanese mobile gaming company GREE plans to launch a mobile social gaming platform internationally in 2012. The details are scarce, but here are some of the things we do know: 1) GREE is a phenomenally successful mobile social network and mobile gaming company in Japan; 2) GREE acquired OpenFeint, a notable mobile gaming social network in the US. So this is definitely something to watch out for in this red-hot market.

Apple is preparing to significantly improve the selling experience in its stores. According to reports, the big differences would involve letting people pick up online purchases in the store, but also, e.g. buy something from your phone, and 12 minutes later having a push notification and being able to pick it up without having to talk to a salesperson or wait in line. Some say you might also be able to walk into a store, scan an item with your phone–and just walk out, with the payment and everything happening in the background. If the reports are true and it works out, it should make Apple stores much more efficient and therefore, all else equal, much more profitable. Apple is always pushing the envelope in retail so it’s not out of character that they’d be planning this.

Enterprise startup Box.net (think “Sharepoint on the web”) is on a $80 million runrate and $100 million spend rate, according to our own reporting. Box.net is growing bookings at 200%/year. These are impressive figures (with that kind of growth, now’s not the time to focus on profits). As we wrote in our explainer on cloud computing, there is a gigantic opportunity for startups to replace client-based enterprise software with cloud-based software →

OpenTable reported EPS in-line with expectations but revenue a bit short, and its high-flying stock tankedDon’t miss our explainer on OpenTable’s business →

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