Give 'Superman' A Chance at Yahoo!

Marissa Mayer's only been on the job for 2 and a half months. Let's give her a chance to prove herself.

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Why Facebook, Zynga, and Groupon All Should Have IPO'ed Two Years Ago Instead of Waiting

Unlike the experts who believe Facebook, Zynga, and Groupon should have waited to IPO, I think the companies' rocky results as a public company show they should have gone public much sooner than they did.

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Why Sarah Lacy and Andrew Ross Sorkin Are Both Wrong about the JOBS Act and Groupon

Sarah Lacy recently attacked Andrew Ross Sorkin for being too "Wall Street-minded" in attacking the JOBS Act and Groupon. Here's why they're both wrong and why Lacy needs to be less "Silicon Valley-minded."

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Tech Bubble? No Way

NEW YORK (Real Money>) -- With Facebook's $100 billion initial public offering coming up later this year, many people are asking: Are we living in another tech bubble?

Although there have other companies with frothy IPO valuations such as Linked In (LNKD_)at $9 billion and Groupon(GRPN_) at $11 billion, I would say that those companies are the exceptions and not the rule.

We are definitely not yet in a tech bubble. Here's why:

Read the full post on TheStreet.com

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Facebook's $100 Billion Valuation Unrealistic?

For Facebook, which will carry a ticker symbol of FB, to receive a $100 billion valuation when it makes its IPO debut, investors will have to make a lot of assumptions about their future growth.


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In the Year of Facebook, Beware the Social Media Stocks

NEW YORK (TheStreet) -- Most believe the stock/business story of 2012 is going to beFacebook -- specifically its rumored IPO which should come before the middle of the year. That's probably true. Yet, ironically, 2012 is also the year in which you need to protect yourself from other falling social media IPOs.

Read the full post in TheStreet

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Zynga's Market Valuation Has Dropped $13 Billion This Week

Zynga's valuation has dropped 65% in 4 days.  It deserves to keep dropping.

Read the full Forbes post

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What If Facebook's IPO Dreams Are Built On As Much Hype As Groupon's?

Bankers hyped up Groupon to get the deal done fast. Beware Facebook's banker who do the same for their IPO. Test the key assumptions built into the business model.

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The Difference Between a Tech "Greenfield Gorilla" and a "Nichey Nancy"

Is Your Tech Company a Greenfield Gorilla or a Nichey Nancy?

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Jackson Says Groupon Share Offering Has `Too Much Risk'

My take on the Groupon IPO: Too much risk

See the video on Forbes here

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Groupon’s Foray Into China Sounds Like a Disaster

Things reportedly aren't going well for Groupon in China.

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Why the “Winner Takes All” Strategy Doesn’t Always Work

Chinese Internet companies are going ga-ga pursuing "winner takes all" strategies. It will work for some, but not others.

Read the full post here at Forbes.

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In Chinese E-commerce, Logistics Is Key

By Eric Jackson06/15/11 - 07:00 AM EDT

BEIJING (TheStreet) -- I've spent the last two weeks in China. Most of the time has been devoted to going around and talking to e-commerce and other Internet companies. The sector is hot despite the pullback in stocks in recent weeks. The mood is very positive about the growth ahead.

Most CEOs and CFOs I spoke to in the sector believe the macro growth fundamentals point to very strong growth for them in the coming quarters. You start to hear the same points repeated: only 30% of Chinese are connected to the Internet, people's incomes are moving up slightly, and people are becoming more and more interested in doing business over the Web.

In virtually every major city right now, you are bombarded with outdoor advertising for major public and private e-commerce companies including Tmall (which is part of Alibaba Group, partly owned byYahoo!(YHOO_)), Groupon competitors, 360Buyand Vancl. The latter two both plan IPOs at the end of this year.

CFOs also discuss how Web companies likeBaidu(BIDU_) and the major portals likeSina(SINA_) and Sohu(SOHU_) keep being able to raise their advertising rates because so many e-commerce Web sites are clamoring to get their ads on the front page.

But what most in the States fail to understand is how challenging logistics is in China. We take it for granted back home how easy it is to get Fedex(FDX_) orUPS(UPS_) to fulfill an e-commerce order.

Back in the early days of the Web 10 years ago, companies like Amazon(AMZN_) had to spend a lot of time getting people over the hump of trying to make an online purchase. They then had to spend some time thinking through building up their logistics infrastructure to support their growth. To Amazon's credit, they've done a fantastic job at the latter with world-class distribution centers and fulfillment process.

In China at the moment, it's really the Wild West for most e-commerce when it comes to fulfilling orders. They are still at the stage where they need to get Chinese consumers to buy. Most Chinese think of Taobao when they think of e-commerce. They know they can usually get something online from there if they want to and they've had a good experience. (It was estimated that last year within China, 50% of deliveries made were for Taobao purchases.) However, they know far less about other vertical e-commerce plays.

......

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

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Groupon Is a Buy, but at What Price?

By Eric Jackson
RealMoney Contributor
6/6/2011 10:45 AM EDT
Click here for more stories by Eric Jackson

Most of the chatter and analysis of the Groupon initial public offering last Thursday was overwhelmingly negative.

I'm bullish on the company and its prospects in the long term and I don't think the bears have much depth to their analysis. That may come in time. But whether you should buy into the IPO all depends on price.

Here are the biggest arguments that the bears have seem to have so far, and my rebuttals:

1. This company is losing a lot of money, about $117 million in operating income in the last quarter.

Yes, it is. But when did you last see a company take its annualized revenue rate to $2.6 billion from $97,000 in three years? Never. To put that in comparison, LinkedIn (LNKD - commentary -Trade Now) went to $830 million from $77 million annualized run rate over the same period. This is not the late-90s dot-com phenomenon that was piling up losses on minimal revenue.

2. The only reason they're making money is that they're selling inventory at a loss, and that's not a business.

This is not Amazon.com (AMZN - commentary -Trade Now) with inventory and warehouses. They're selling virtual inventory. They are selling nothing at a loss. They are fulfilling a service in exactly the same way that Priceline (PCLN -commentary - Trade Now) and many other Web companies do, marketing a service that wouldn't otherwise be sold. That's why they get paid. The real reason they're losing money is because they've been making a huge investment in sales and marketing. They've gone from zero to 7,000 people in three years.

3. They will have to keep hiring people at this same rate in order to keep growing their revenue, so they will keep losing money.

Companies make lumpy investments in people and other capital expenditures all the time. Google just got raked over the coals by its investors for its abnormal bump in labor expenses. But this was a one-time bonus. Amazon.com spent a lot recently on their warehouses. They won't have to do this for the next couple of years again. Groupon does not need to keep hiring people the way they have.

4. The company is trying to fool us by getting us to focus on metrics that are non-traditional.

They suggested investors judge them by something called Consolidated Segment Operating Income (or CSOI). So what? They say right in the filing that this single metric shouldn't be the sole way people judge them. What single metric is effective that way? Yes, CSOI puts Groupon's growth in a very favorable light, but it's not the sign of the apocalypse.

5. The founders have taken $28 million in holdings off the table.

A lot of Web companies these days, compared to 10 years ago, have taken money off the table. That's why SecondMarket and SharesPost are in business. Insiders will still have to hold the majority of their shares for a long time and incentives are still aligned with those of investors.

...

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

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The Groupspawn IPO: What Hath It Wrought?

Groupon’s (GRPN) Andrew Mason is wacky.

Even though he killed at the All Things D conference this week, I just don’t get his sense of humor. And I generally don’t like investing in companies led by 30 year olds with no read work experience.

Read the full post on Forbes here.

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Why US Tech Companies Keep Stumbling in China?

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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.

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Most Competitive Spaces in Chinese Internet

By Eric Jackson05/04/11 - 07:00 AM EDT

NEW YORK (TheStreet) -- China is a hot investment theme -- and, more specifically, China Internet. Stocks like Sina(SINA_), Baidu(BIDU_), Sohu(SOHU_) and Youku(YOKU_)have had great runs this year.

I often see investors talking about relative valuation of Chinese Internet stocks on Twitter: "I think Dangdang(DANG_) is poised to pop here to close the gap with Youku."

However, not all Chinese Internet stocks are created equal. Two sectors within the Chinese Internet space are particularly competitive: group buying and online video. I'm bearish on both sectors for the next year.

What's not to like?

The group buying space in China has existed for years.Groupon is certainly in the space. It recently bought a Chinese company called Groupon.cn that set up shop the moment it became clear that Groupon in Chicago was on to something. More interestingly, Groupon.cn was much more popular in China than Groupon had been.

It looks like Groupon made the acquisition to strengthen its position in China and look more put together for its likely end of year Nasdaq IPO. Groupon might end up being successful in China, with a lot of help from its partner there, Tencent. However, I wouldn't bet on it.

There are literally dozens of group-buying clones in China. Some more popular than Groupon, some less. The big daddy of them all is Taobao (ju.taobao.com) with more than 75 million unique visitors in January. Taobao is the mega-ecommerce site owned by Alibaba Groupprivately (which is 40% owned in turn by Yahoo! (YHOO_)). Taobao has never been shy to compete on price. Ask eBay(EBAY_) about their experience competing against Taobao -- they were driven out of the market.

Lashou.com is the next most popular company with 45 million unique visitors in January. Groupon.cn had 19 million visitors (which presumably Groupon Chicago will take over). Groupon itself (with its Gaopeng.com site which it had been using in China) didn't make the top 10 list of group buying sites in January in China.

There is money pouring into the sector. Lashou just received a Series C round of $110 million. This brings its total capital raised to date to $166 million.

.......

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

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Will You Shut Up About This Being Another Internet Bubble Already?

Another Internet Bubble is not about to collapse. We have a few more years still. So party like it's 1996.

Read my full post at Forbes here.

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4 Things Groupon’s Andrew Mason Needs to Learn from Mark Zuckerberg

Zuckerberg took a personal interest in China and got Facebook a deal done to work with Baidu (BIDU). Groupon's Andrew Mason has made a bunch of mistakes entering the market.

Read my entire post on Forbes.com

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