BI Research Express 11/8/2011

A look at yesterday’s earnings:

Priceline continues its remarkable run: Q3 revenue and EPS ahead of consensus, guidance slightly weak. Meanwhile, the company is now much larger than Yahoo, with a $25 billion market capitalisation.

Rackspace has released its quarterly earnings report, and the numbers look strong. Net revenue is up 7% from Q2 and almost 33% year over year. Also check out our earlier analysis of Rackspace’s business.

Demand Media’s Q3 revenue and pageview growth looks fine. But the company continues to capitalise its content costs, a very aggressive accounting practice that makes the company look profitable when it isn’t.

QuinStreet, a lead-gen company primarily in the education and financial services sector, had another weak quarter. The company cut its outlook and now expects 2012 revenue to be flat with 2011.

In other news…

Korean online gaming giant Nexon wants to raise $1.3 billion in an IPO on the Tokyo Stock Exchange, and is seeking a $7.7-9 billion market cap.

Zynga won’t be going public till after Thanksgiving.

HP is selling WebOS, another report says. A previous report had been denied by HP but it stretches credulity. The bidders include Amazon, RIM, IBM and Oracle, and the price is in the hundreds of millions of dollars. We think Amazon should buy it because it needs to own its platform and the price is cheap.

Instagram’s hosting bill is “about two really nice cars per month,” founder Kevin Systrom said. Let’s say that’s $2.5-$3 million a year in hosting costs. Instagram has less than 10 employees, and over 10 million users. That’s simply outstanding capital efficiency. Instagram is the wildly popular iPhone photo-sharing app whose capital efficiency and distribution represents the future of startups.

And now Groupon’s China subsidiary, Gaopeng, has been busted for selling coupons on fake luxury watches. More bad news for the ill-fated JV, which appears to be going nowhere.

Apple adds ‘EasyPay’ and ‘Personal Pickup’ to its Apple Store app. What this means is consumers can now go into the store and select and buy things off the shelves without ever interacting with an Apple Store employee. This should, all else being equal, make Apple stores more efficient and therefore more profitable. Apple is always pushing the boundaries in retail, which explains why it’s so stunningly successful there.


  • A Look At The Biggest Trends In Mobile In One Chart →
  • Our Explainer Of Rackspace’s Business →

DON’T MISS OUR REPORT: The Way Companies Are Getting Financed Is Completely Changing →

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