Tuesday, May 22, 2012
Gavin O'Malley, May 22, 2012, 1:23 PM
Facebook IPO Aftermath DebatedReuters

No wonder Mark Zuckerberg put off an IPO for so long.

Raising more questions about Facebook’s future, we’re now learning that a Morgan Stanley analyst quietly reduced his revenue forecast in the run up to the social net’s big event. 

Coming from Facebook’s lead underwriter, “the sudden caution very close to the huge initial public offering … was a big shock to some,” reports Reuters, citing sources. “They say it may have contributed to the weak performance of Facebook shares, which sank on Monday -- their second day of trading.”

Regarding the pre-event re-evaluation, Business Insider’s Henry Blodget writes: “This by itself is highly unusual (I've never seen it during 20 years in and around the tech IPO business).”

“But, just as important,” Blodget adds, “news of the estimate cut was passed on only to a handful of big investor clients, not everyone else who was considering an investment in Facebook.”

As a result of the company’s struggling stock, “Wall Street is playing the Facebook blame game,” The New York Times’ Dealbook blog writes. “It’s a huge disappointment,” according to David Abella, a portfolio manager at Rochdale Investment Management. “Investors were expecting easy money on this one.”

“Facebook and its promoters were too greedy,” accuses The Guardian. “Almost every detail of this IPO demanded a conservative approach to valuation. Insiders were selling heavily; the business is immature … and the almighty sum of $16bn had to be raised. Yet the pricing of the shares was lifted in the closing week to satisfy demand that turned out to be wafer-thin.”

As Reuters recalls, the change in Morgan Stanley's estimates came on the heels of Facebook's filing of an amended prospectus with the SEC, in which the company expressed caution about revenue growth.

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  • Gavin O'Malley, May 22, 2012, 1:38 PM
  • On word that Google has finalized its acquisition of Motorola Mobility, Web watchers are taking a fresh look at the deal, what it means for Google, and the future of mobile. Confirming many a suspicion, Dennis Woodside, the newly appointed head of Motorola Mobility, says Google plans to use the division to produce smartphones and tablet computers that can help Google set the pace of innovation in the mobile business. “This is a huge opportunity to really show what Android can do in a well-designed, well-packaged, and well-marketed product,” Woodside tells Bloomberg Businessweek. It’s “a huge gamble,” according to the news service. “The search giant became a household name and one of the most profitable businesses ever by sticking to online services and software. Now it will have to figure out the cutthroat, low-margin world of hardware.” Worst-case scenario, Bloomberg Businessweek suggests that the strategy could even slow what it calls “the remarkable rise of Android.” Why? In part, device makers have been willing to embrace Google’s mobile operating system because the search giant wasn’t a direct competitor. Getting into the device game makes it enemy No. 1.   Read the whole story...
  • CAPTCHAs, it seems, were specifically designed to discourage Web users from doing whatever they were trying to do -- post a comment, buy something, etc. -- before a CAPTCHA got in their way. Yes, “the CAPTCHA test … where you have to type in the word that you see in a blurry distorted font image -- is extremely annoying and often leads to multiple failures,” VentureBeat notes. Enter Detroit-based startup Are You a Human, which uses simple games rather than CAPTCHAs to verify that Web users are real person, and not an automated bot. Its human authentication tool, PlayThru, seeks to help companies fight spammers and bots that have begun to circumvent CAPTCHAs. Companies already using the tool include Quicken Loans and Fat Head, and users have played nearly 2 million games to date, VentureBeat reports. “With Are You a Human’s tool, companies can embed a simple game instead,” it reports. “For instance, one minigame requires users to look at a set of five images and pick up the two tools and put them in a tool box.” At least according to Are You a Human, its services are a no brainer for retention-focuses Web publishers and ecommerce sites. According to the company’s own survey of 1,000 users, they preferred PlayThru four-to-one over traditional text-based CAPTCHAs, while sites using the tool have seen their submission rates go up by 40%.   Read the whole story...
  • There’s no telling whether consumers will take to face computers, but that can’t stop gadget makers from pushing such devices. “The rise of Internet-connected smartphones and advances in ‘heads-up’ displays are accelerating the development of all sorts of wearable augmented-reality devices,” reports The Wall Street Journal. “Such gadgets have long faced skepticism because they were uncomfortable to wear, ugly, and expensive, reserved only for corporations and military agencies.” Indeed, the best example the WSJ can find of face-computer adoption is Austrian eyeglasses designer Michael Pachleitner Group, which is giving its warehouse workers the new technology. Sure, each device costs $13,000, but, according to WSJ, the case offers a glimpse at the future of "augmented reality." As for broad consumer adoption, Google -- along with a set of smaller companies, including Lumus, Vuzix, Laster Technologies and Recon Instruments -- are pushing their own wearable gadgets. “Some computer scientists increasingly envision a world in which people wear glasses-like devices with a built-in camera and use apps that can recognize objects and faces -- using technology called ‘computer vision’ -- and automatically retrieve information about those objects from the Web or other sources,” WSJ writes.     Read the whole story...