China Embraces Its Inner Tech Bubble

There will be a time when the China tech bubble pops - and it will be a severe reckoning - but that day is still likely at least two years away.

Read the full post here at Forbes.

What’s Material and Immaterial to Yahoo! When Discussing Alipay?

Yahoo! says it has a formula to determine what Alipay is worth so they can properly negotiate with Alibaba Group. Investors should pay close attention.

Read the full post here at Forbes.

Why US Tech Companies Keep Stumbling in China?

The Emperor Carol Bartz Has No Clothes, Mark Haines, Oprah, and Other Shareholder Matters.

Why would Mark Haines and Oprah have wanted Yahoo! CEO Carol Bartz and her fellow director cronies thrown out on June 23rd by shareholders?

Read the full post on Forbes.

CNBC: Ballmer vs. Einhorn

My thoughts on Ballmer vs. Einhorn:

Lighting a Fire Under Microsoft

By Eric Jackson
RealMoney Contributor
5/26/2011 1:45 PM EDT
Click here for more stories by Eric Jackson

I was surprised that David Einhorn spoke out so strongly against Steve Ballmer's leadership of Microsoft (MSFT - commentary - Trade Now) yesterday during his presentation at the Ira Sohn Conference.

Einhorn certainly doesn't mind taking poor management to task -- he famously did so with Lehman Brothers and The St. Joe Company(JOE - commentary - Trade Now) -- but he doesn't usually do it for his long investments. He's not an activist investor in the spirit of Carl Icahn or even his friend Bill Ackman.

Maybe it's because he's been a fan of Microsoft for more than five years -- he once famously compared it to Alex Rodriguez of the Yankees, a comparison he'll likely want to update after buying part of the Mets today -- and he's frustrated that the stock is flat over that period (not including dividends).

But he certainly came out swinging yesterday, saying that 10 years had been long enough for Ballmer to show his stuff to investors. He also called the senior team at Microsoft "Charlie Brown management."

But I don't believe this is the start of a long activist battle between Einhorn and Ballmer. I don't believe he's considering a proxy fight. Why? Steve Ballmer is not going anywhere until Steve Ballmer is good and ready. This is a guy who owns 4.75% of the entire company. (For comparison's sake, Bill Gates himself owns 7.2% of Microsoft.)

Ballmer is effectively a co-founder. Just as with Jim Balsillie and Mike Lazaridis at Research In Motion (RIMM - commentary - Trade Now), Ballmer has assembled his board. He's sold them on his strategy, and he has their backing.

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Why Drastic Change is Needed On June 23rd For Yahoo!'s Board

It's time for change at the top of Yahoo! On June 23rd, investors will get a chance to do just that.

Read the full post here at Forbes.

Wall Street Journal China Opinion: 中国必须正视公司治理危机

Why China must address its crisis of corporate governance.

Read the full post at Wall Street Journal China here.

Alibaba’s Last Offer to Yahoo! Valued Itself at $23.5 Billion. What’s Next?

Alibaba Group reportedly sought to buy back part of Yahoo!'s stake earlier this year, after the Alipay transfer. It suggests a deal between the two companies could come soon.

Read the full post on Forbes.

LinkedIn: Maybe Private Markets Were Right

By Eric Jackson, Senior Contributor05/25/11 - 06:54 AM EDT

NEW YORK (TheStreet) -- There has been endless analysis about what the LinkedIn(LNKD_) IPO means for the company itself and for other tech companies that have yet to conduct IPOs.

There's one area that's been ignored, though, and that is the private market exchanges that now exist for buying and selling private company shares pre-IPO. There are two such exchanges: SecondMarket and SharesPost.

Interest in and media coverage of these exchanges has grown over the past year, as higher-valuation transactions began to occur involving Facebook, Twitter, Zynga, Groupon and LinkedIn.

It became possible for institutional and individual investors within the last couple of years to buy into these private firms' shares before they went public. For employees at these firms looking to sell, these new markets gave them liquidity for their shares.

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Why CNBC's Mark Haines Was Special

Mark Haines was one-of-a-kind. That's the problem with TV business news today.

Read the full post here at Forbes.

Why Jack Ma Needs to Strike a Deal Now with Yahoo!

Jack Ma needs to keep his eye on the ball instead of the Yahoo! negotiations. Competitors 360Buy and Vancl are both planning to raise truckloads of cash in the next 6 months.

Read the full post at Forbes.

Can We Stop Saying Silicon Valley Entrepreneurs Don't Want to Go Public Now?

Web companies don't want to IPO these days because Sarbanes-Oxley makes it too cumbersome? I don't buy it. Just watch.

Read the full post here at Forbes.

Who Cares Where LinkedIn's IPO Was Priced?

By Eric Jackson
RealMoney Contributor
5/23/2011 1:00 PM EDT
Click here for more stories by Eric Jackson

Since LinkedIn's (LNKD - commentary - Trade Now) IPO on Thursday, there's been a lot of chatter about whether the bankers properly priced the deal.

That simple sentence has a lot packed into it -- especially the word "properly."

The stock's offer price was hiked pretty significantly into Thursday's IPO ($42 to $45), and it was priced at the high end of the range. Many people, including me, thought that this IPO price seemed fancifully high.

When the stock immediately doubled on Thursday morning and then, as we approached noon, seemed close to tripling its IPO price, jaws were dropping on Wall Street. Pretty quickly, the armchair bloggers and journalists were asking how the investment banks (Morgan Stanley (MS- commentary - Trade Now) and Bank of America Merrill (BAC - commentary - Trade Now)) could have so mispriced the deal.

Henry Blodget of Business Insider said immediately that the bankers had left $100 million on the table, which investors pocketed instead of LinkedIn. Joe Nocera at The New York Times on Saturday said that this under-pricing by the bankers was a sign that the dangerous ways of dot-com era of the '90s had returned with a vengeance. Josh Brown at the Reformed Broker blog complained that LinkedIn hadn't used a Dutch auction system to price the deal as Google (GOOG - commentary - Trade Now) did (with Morgan Stanley's help, no less) in its 2004 IPO. (In a Dutch auction, bankers solicit bids before the public offering and set the IPO at the highest level at which the stock can be sold.)

Before we shoot the bankers (and I hate to defend them, since they're highly overpaid for what they do), I have to ask, who cares how they priced it?

Was LinkedIn irreparably harmed? Hardly. The company certainly didn't seem to be fuming about the IPO in the hours after the close. All the coverage it was getting from the press was basically crowning it the king of social networking (even though its moonshot IPO is probably going to be less than 10% the size of Facebook's).

LinkedIn raised less than $200 million from the IPO, and it sure looks as though it left money on the table. But management and the board chose to sell only 5.3% of their stock in the IPO. If prices hold up, they will get plenty from future secondary offerings.

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[*** This post is an excerpt of the full article, available by clicking here to go to RealMoney.com. Note: subscription required. ***]

Jim Cramer is Right that LinkedIn's Underwriters Juiced the IPO

LinkedIn's bankers did try create a feeding frenzy yesterday over shares. Mission accomplished.

Read the full post here at Forbes.

Cramer on LinkedIn IPO

In case you missed it from earlier today....

CNBC: LinkedIn IPO Insanity?

How do you stop a bubble? I don't know. That's really for the regulators and the Fed. I don't see this ending soon. We're still in the 3rd inning.

My appearance on CNBC's Closing Bell today:

Eating Crow - or Resumes -- about LinkedIn IPO

Here I am eating crow with Matt Nesto and Jeff Macke this morning, after saying yesterday that LinkedIn (LNKD) was too expensive at $45:

LinkedIn Investors Bank On Growth

By Eric Jackson
RealMoney Contributor
5/19/2011 12:15 PM EDT
Click here for more stories by Eric Jackson

I'm amazed that LinkedIn (LNKD - commentary - Trade Now) has more than doubled in value so far today. I wouldn't have bought it at $45 or $35. Congrats to the backers, insiders and institutional flippers.

The best analysis I've seen on why people are buying LinkedIn is from Henry Blodget, who argues that investors are betting LinkedIn is the next OpenTable (OPEN - commentary - Trade Now).

I think he's right. What is the connection?

OpenTable is valued based on the platform that it is growing and the future profits that it will garner from that platform.

The platform is all the restaurants that sign up for the service. Those restaurants pay a set-up fee and an annual fee. The more that sign up, the more profits that flow to the bottom line.

OpenTable currently has 20,000 restaurants signed up. The company is doing about $130 million in annual revenues.

For LinkedIn, the company doesn't have restaurants; it has corporate clients -- headhunters and large companies that constantly need to hire people -- who pay an annual subscription fee.

At the moment, LinkedIn has about 3,900 of these clients. They are going to do about $400 million to 500 million in revenue this year.

Although I've criticized LinkedIn for lacking profitability and having bloated up its sales, product and general and administration costs in the past 12 months, the one area where the business has seen enormous growth is in corporate clients, making up 43% of its current revenue (up from 23% a few years ago). This is great revenue for LinkedIn -- much better than ads on its site and premium subscriptions to individual users to see who looked at their profiles in the last five days.

The folks buying up LinkedIn today think that the company will grow this significantly in the years ahead. Lots of companies out there need to hire folks.

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[*** This post is an excerpt of the full article, available by clicking here to go to RealMoney.com. Note: subscription required. ***]

Ironfire's Jackson Interview on LinkedIn's IPO

My thoughts on the LinkedIn IPO that will price tonight, from Bloomberg TV earlier today:

The Internet's Brave New World in Our Lives

By Eric Jackson05/18/11 - 08:00 AM EDT

NEW YORK (TheStreet) -- I spoke to NXP Semiconductor(NXPI_) CEO Rick Clemmer about a new announcement they made earlier this week, touting its "GreenChip" light bulbs. The announcement does paint an interesting picture for where the world is heading.

In a nutshell, NXP is putting its chips on light bulbs and partnering with another firm (GreenWave Reality) to help write applications which allow users to manage their energy consumption.

Effectively, every light bulb in your home or office will be able to report to you through a Web connection. According to Clemmer, this development will encourage 30% in energy savings right away, according to studies they've done, once users can see their usage and where they are wasting light bulb energy as heat instead of light.

They have also written an open-software stack that allows others like GreenWave to write applications to interface with this kind of application.

Besides just energy usage tied to the bulbs, GreenWave has developed power adapters and links to smart meters to better judge where energy is being wasted around the home of office to further drive conservation. These adapters track energy consumption at the outlet level.

Local and state governments are already moving to time-shifted energy pricing to try and better cap energy usage. This new technology should be seen as a further ally to them in that battle. Clemmer is hoping they will encourage the growth of the technology.

NXP's goal is to be the chip and middleground between the IP-connected objects and the platforms through which you interface with that data (likely Apple's(AAPL_) iOS andGoogle's(GOOG_) Android).

Most know NXP because of its near-field communication (NFC) chips. NFC will allow us to do secure payment transactions with a tap of our cell phones in the future. The NFC piece of the business is actually relatively small compared to what's making the company today with its chips. Clemmer told me that the lighting opportunity is actually a bigger one for NXP than NFC.

But it is interesting to see how these kinds of smart home applications are going to further drive mobile adoption in the future.

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[** This post is an excerpt of the full article, which is available on TheStreet.com by clicking here. Free Site.**]

Wall Street Journal China Opinion: 阿里巴巴和雅虎如何双赢？

My thoughts on the public feud between Alibaba Group and Yahoo!

Read the full post here at the Wall Street Journal China.

Why You Should Opt Out of the LinkedIn IPO

LinkedIn is the central place to find professional profiles and that could help the company succeed in time. At the moment, though, it's got a problem making money.

Read the full post here at Forbes.

Time for Yahoo! and Alibaba to Reboot Their Relationship

By Eric Jackson
RealMoney Contributor
5/16/2011 12:15 PM EDT
Click here for more stories by Eric Jackson

Last week's press-release war between Yahoo! (YHOO - commentary - Trade Now) and Alibaba Groupwas a car crash you couldn't look away from.

Now it seems as if some adults -- I mean Yahoo! shareholders -- intervened on behalf of their petulant children over the weekend.

After seeing the stock drop 10% at the end of last week, and hearing from the Yahoo! public relations team that the company had been informed on March 31 in a letter to its accounting department that it no longer owned Alipay, Yahoo!'s shareholders virtually stormed the boardroom in Sunnyvale, Calif.

Late Friday, a Chinese website reported that Alibaba Group still owned Alipay. The entity had simply been transferred to a variable interest entity (VIE) for the purposes of obtaining the necessary new online payment license from the Chinese government. But that version of events got no play in the U.S. media. It was simply assumed that Jack Ma -- Alibaba Group's CEO and founder -- had deceived the Americans and Japanese.

Based on a joint statement from Yahoo! and Alibaba Group over the weekend, it's clear that Yahoo! shareholders have read the riot act to the board. They've basically said, "Stop these inane press releases, get your act together and get your facts straight!"

Any talk of suing Alibaba Group by anyone connected to Yahoo! is going to be quickly snuffed out.

It's time to reboot this relationship.

Both sides (and, of course, Japan's Softbank Corp. with its 30% ownership stake) have a lot to gain or lose from how communications are handled going forward.

If you think that Jack Ma can simply take Alipay and Taobao away from Yahoo! and Softbank with no implication to his long-term reputation and to Sino-American business relations, think again. Ma knows this. Just because he doesn't like the 2005 deal he struck, accepting Yahoo!'s $1 billion in exchange for a 43% stake, he can't turn his back on it.

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[*** This post is an excerpt of the full article, available by clicking here to go to RealMoney.com. Note: subscription required. ***]

Why A Deal Might Happen Next Between Yahoo! and Alibaba Group

The Yahoo! - Alibaba soap opera last week has led to many conclusions based on imperfect information. Here's why I think a deal between Yahoo! and Alibaba will happen sooner rather than later.

Read the full post on Forbes here.

Yahoo!'s Alibaba Mess: How to Clean It Up

By Eric Jackson05/13/11 - 02:10 PM EDT

NEW YORK (TheStreet) -- I'm astounded at the series of statements that have come out of Yahoo! (YHOO_) and Alibaba Group over the past few days, which have sent Yahoo!'s stock into a tailspin.

Alibaba said that more than two years ago, the Chinese government required the company's board to transfer ownership to a Chinese-held entity, which Alibaba then started to execute last summer.

Yahoo! said that matter was never brought to its attention, and that both Yahoo! and Softbank were deceived by Alibaba.

It's a "he said, she said" squabble in public that's not professional and has sent Yahoo's stock tumbling to just below $16 this morning.

How could the communication be so poor between Yahoo! and the biggest partner it has to let this happen? Where was the oversight from Yahoo!'s board?

What Yahoo! shouldn't do here is:

Sue Alibaba

Continue blaming Alibaba for deceiving Yahoo!

Keep quiet

What Yahoo! needs to do is:

Hold a conference call with investors immediately to update them on the situation and how Yahoo! is addressing the issue now.

Show that there will be a change from Yahoo!'s board on how Yahoo! handles the Alibaba relationship. At the very least, Chairman Roy Bostock should fall on his sword and Yahoo! should install a new Chairman who makes it clear that this relationship will be handled appropriately.

Yahoo! should spend 98% of the upcoming Investor Day talking about this relationship rather than 98% of it on the "core" business which is an afterthought for most Yahoo! investors. That means that Jerry Yang should join Carol at the meeting and be prepared.

I believe there is still great value in Yahoo!'s shares despite the sharp drop this morning. The stock has already started to rally this afternoon. The fears of Yahoo! getting zero value out of its Alibaba relationship are overblown.

There is potentially some very harmful blowback to all Chinese companies if that scenario played out. U.S. investors would worry that they cannot trust the numbers of any Chinese company -- no matter how good the growth that is expected.

Already, some Chinese CEOs have taken to Sina's (SINA_) Weibo service overnight, expressing their concern about that negative fallout (although others have praised Jack Ma for being a "patriotic maverick" fighting against the Americans and Japanese).

Alibaba wants a good outcome and so does Yahoo! However, if Jack Ma's goal in all this was to put the fear of God into Yahoo! shareholders, congratulations to him -- he succeeded.

Whatever the "status quo" was at Yahoo! for managing the Alibaba relationship, it can't be allowed to continue. Investors need to hear how it's changing immediately.

At the time of publication, Jackson was long YHOO and SINA.

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[** This post is an excerpt of the full article, which is available on TheStreet.com by clicking here. Free Site.**]

Red-Hot Growth for Sina

By Eric Jackson
RealMoney Contributor
5/12/2011 12:15 PM EDT
Click here for more stories by Eric Jackson

Sina (SINA - commentary - Trade Now) reported its earnings last night, and news services accordingly showed their collective ability to cut and paste from the press release, letting you know that the company beat on revenue but came up a bit short on earnings per share. Sina also guided conservatively for the coming quarter on revenue, with the bottom end of the range dipping below analysts' current estimates.

But all that information, which is normally most important for investors, is really irrelevant for Sina -- and it has been so for at least the past six months.

What investors this morning care most about is the growth in Weibo-registered users. Last night, Sina announced this number had recently surpassed 140 million, with 150,000 "verified" users (of which I'm proud to be one). These figures were all as of April, up from 100 million in late February, when the company last reported earnings. So this represents a gain of 40 million new users in two months. Previously, conventional wisdom was that Weibo growth came to 10 million a month. It's actually double that.

CEO Charles Chao also reiterated that the company was continuing to invest a lot in engineering, headcount (censors) and marketing this year. This should ensure that Weibo holds on to a significant share of the social-networking market in China.

Monetization still isn't top priority for Weibo. Still, Chao has hinted at a six possible business models being examined to generate user-based-derived revenue in the months and quarters ahead.

In my view, Chao is doing exactly the right thing. Investors shouldn't be nervous about extra costs related to building out the internal infrastructure in support of more Weibo users. They also shouldn't worry about if revenue is lighter this year, even though sales have certainly grown in comparison with last year's numbers.

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What The Alipay News Yesterday Really Means For Yahoo!

Alipay likely still has great value for Yahoo! and its shareholders despite yesterday's sell-off. Look for some more answers from Carol Bartz in 2 weeks at her Investor Day.

Read the full post here on Forbes.

Will the US Tax Code Be a Boon to Foreign-Based VC-Backed Start-Ups?

Because of the US tax code, expect a bubble in M&A for foreign-based public and private companies in the next 3 years. Yesterday's Skype deal by Microsoft was only the beginning.

Read the full post here on Forbes.

Wall Street Journal China Opinion: 中国市场对苹果公司有多重要？

Apple's growth in China over the coming years could be monstrous. Could China account for 50% of Apple's sales by 2015?

Read the whole post at the Wall Street Journal China.

I Love James Altucher's Chutzpah

eBay Wins With Skype Deal

By Eric Jackson05/10/11 - 09:39 AM EDT

NEW YORK (TheStreet) -- When former eBay(EBAY_) CEO Meg Whitman bought Skype in 2005 for $2.6 billion ($3.1 billion with all the earn-outs added back), most assumed it was the deal that would sink her career.

It seemed like a laughable idea then: that buyers and sellers on eBay's marketplace were going to click on a Skype icon and talk to each other to finalize the details of their transactions.

It was a laughable idea. It was completely strategically flawed at the time. It never should have been done in the first place, and Whitman's successor sought to undo the deal as quickly as he could.

On top of that, Whitman took a lot of heat for overpaying for Skype. Critics said that spending so much money on a private company showed a callous disregard for eBay shareholders.

I believe, in fact, that the size of the Skype deal scared other buyers from anything close to that price range -- until Groupon came along.

The only big Internet deal after Skype (and before the rumored interest in Groupon by Google(GOOG_)) was YouTube for $1.5 billion. Remember when that amount seemed staggering?

When current eBay CEO John Donahoe sold off 65% of Skype in 2009 to outside investors including Andreesen Horowitz and the Canada Pension Plan Investment Board, eBay shareholders and the business media in general seemed relieved.

That deal was struck for $1.9 billion. It was still far below the purchase price from 2005, but eBay seemed to get more pats on the back for at least getting back close to even.

Now, not even two years later, Microsoft(MSFT_) is paying $8.5 billion for all of Skype.

It's difficult to criticize Donahoe for making the 2009 deal to sell off most of the company. Back in 2009, few would have predicted that in only two years Silicon Valley would be seeing huge multiples of the YouTube takeout price paid for private companies. In fact, people would have thought you were crazy.

Donahoe deserves credit for keeping a minority stake of 33% in Skype. That was smart.

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[** This post is an excerpt of the full article, which is available on TheStreet.com by clicking here. Free Site.**]