Pakistanis angry over detentions in Times Sq. case Monday, May 24, 2010
ISLAMABAD – Relatives of three men detained by Pakistan for alleged links to the suspect in the attempted Times Square bombing say the men are innocent.
They
AFP - Thursday, August 6TAIPEI (AFP) - - Taiwan's Beijing-friendly government on Wednesday denied boycotting an Australian film festival amid a row over the e
BERLIN (Reuters) - Chancellor Angela Merkel suffered a double blow on Thursday as a senior party ally in east German
Minister seeks closure of anti-Berlusconi websites Wednesday, December 16, 2009
ROME (AFP) - – The Italian government moved Tuesday to close down Internet sites encouraging further violence against Prime Minister Silvio Berlusconi, who
By ELAINE KURTENBACH,AP Business Writer AP - Wednesday, March 18SHANGHAI - Asia's stock market rally seemed to be running out of steam Wednesday, despite an
Edition:
U.S.
Africa
Arabic
Argentina
Brazil
Canada
China
France
Germany
India
Italy
Japan
Latin America
Mexico
Russia
Spain
United Kingdom
Home
Business
Business Home
Economy
Technology
Media
Small Business
Legal
Deals
Earnings
Social Pulse
Business Video
The Freeland File
Markets
Markets Home
U.S. Markets
European Markets
Asian Markets
Global Market Data
Indices
M&A
Stocks
Bonds
Currencies
Commodities
Futures
Funds
peHUB
World
World Home
U.S.
Brazil
China
Euro Zone
Japan
Mexico
Russia
India Insight
World Video
Reuters Investigates
Decoder
Politics
Politics Home
Election 2012
Issues 2012
Candidates 2012
Tales from the Trail
Political Punchlines
Supreme Court
Politics Video
Tech
Technology Home
MediaFile
Science
Tech Video
Tech Tonic
Social Pulse
Opinion
Opinion Home
Chrystia Freeland
John Lloyd
Felix Salmon
Jack Shafer
David Rohde
Bernd Debusmann
Nader Mousavizadeh
Lucy P. Marcus
David Cay Johnston
Bethany McLean
Edward Hadas
Hugo Dixon
Ian Bremmer
Lawrence Summers
Susan Glasser
The Great Debate
Steven Brill
Jack & Suzy Welch
Breakingviews
Equities
Credit
Private Equity
M&A
Macro & Markets
Politics
Breakingviews Video
Money
Money Home
Tax Break
Lipper Awards 2012
Global Investing
MuniLand
Unstructured Finance
Linda Stern
Mark Miller
John Wasik
James Saft
Analyst Research
Alerts
Watchlist
Portfolio
Stock Screener
Fund Screener
Personal Finance Video
Money Clip
Investing 201
Life
Health
Sports
Arts
Faithworld
Business Traveler
Entertainment
Oddly Enough
Lifestyle Video
Pictures
Pictures Home
Reuters Photographers
Full Focus
Video
Reuters TV
Reuters News
Article
Comments (0)
REUTERS TV
Tech Tonic
Facebook's next big purchase
Mark Zuckerberg says Facebook won’t make many deals like its $1 billion agreement to buy photo-sharing site Instagram. But venture capitalist Jason Mendelson of Foundry Group says Facebook has other holes it may need to fill through sizable acquisitions. Video
Groupon learns why going public sucks
Sony to post biggest-ever annual loss
Rocky first year for Google's Larry Page as CEO
Best apps for watching Major League Baseball
Follow Reuters
Facebook
Twitter
RSS
YouTube
Read
Defiant North Korea begins injecting fuel into rocket
|
3:56pm EDT
Huge quakes off Indonesia stir panic, but no big tsunami
|
5:11pm EDT
Trayvon Martin call was "mistake, not deliberate": NBC
08 Apr 2012
Wall Street rises after five losing days, Alcoa soars
|
4:33pm EDT
Charges expected in shooting of black Florida teen
4:27pm EDT
Discussed
316
Tyler Perry Pulled Over, Accuses White Cops of Racial Profiling via Facebook
292
Analysis: Justice Kagan–Giving liberals a rhetorical lift
291
Trayvon Martin call was ”mistake, not deliberate”: NBC
Watched
Transgender beauty says she wants to compete for Miss Universe
Tue, Apr 3 2012
Horror hits the runway in Japan
Fri, Mar 23 2012
Quake off Indonesia sparks tsunami alert
7:25am EDT
Targeting the mobile market
Tweet
Share this
Email
Print
Related News
Google view on mobile ads awaited at CEO's 1-year anniversary
2:20pm EDT
Getting defensive before earnings season
Tue, Apr 10 2012
Facebook to buy Instagram for $1 billion
Tue, Apr 10 2012
Facebook picks Nasdaq for marquee listing: source
Thu, Apr 5 2012
Facebook e-commerce: the next big thing?
Thu, Apr 5 2012
Analysis & Opinion
Looking at Greece’s entrepreneurs
Counterparties: Why Facebook bought Instagram
Related Topics
Tech »
Media »
A photo illustration shows the applications Facebook and Instagram on the screen of an iPhone in Zagreb April 9, 2012. Facebook announced on Monday that it will pay $1 billion in cash and stock for photo-sharing application Instagram, making its largest-ever acquisition months before the No. 1 social media website is expected to go public. The popular Instagram application, which allows users to add filters and effects to pictures taken on their smartphones, has gained about 30 million users since it first launched in January 2011.
Credit: Reuters/Antonio Bronic
By David Randall
NEW YORK |
Wed Apr 11, 2012 4:08pm EDT
NEW YORK (Reuters) - It's not often that a two-year-old start-up becomes a $1 billion company.
Yet Instagram, a popular smartphone application that allows users to tweak photos and share them with their friends, was paid that by Facebook Inc in a deal announced on Monday.
The purchase of the San Francisco-based private company helps Facebook both strengthen its core photo-sharing services and take out a possible competitor all at once, analysts said. Venture capitalists that invested in Instagram before the Facebook deal reportedly doubled their money in the span of a few days.
Few retail investors can take part in these early funding rounds that become hugely profitable once a company goes public or is taken over by a competitor. But there are ways to profit from the growing social media and mobile computing sectors that don't involve giving money to a VC firm in Silicon Valley.
TECH M&A HEATING UP
The high price that Facebook paid for Instagram may be a sign mergers and acquisitions will pick up across the cash-rich technology sector, potentially making large companies more attractive.
"Facebook is very acquisitive and has a pretty robust M&A strategy which is only going to get more robust once they go public," said Ed Zimmerman, the head of the technology group at Lowenstein Sandler, a law firm that works with venture capital and private equity firms to negotiate and close deals.
Michael O'Bryan, the co-head of the M&A practice at Morrison & Foerster, said large-tech companies such as Google Inc, Apple Inc and Microsoft Corp will likely step up their acquisitions this year to keep up with the rapidly expanding social media and mobile markets.
These deals are focused more on finding products or apps that have buzz and momentum than on those that are profitable, he said. Purchases are typically meant to help them expand their platform of products and services in ways they may be lacking.
Google may be especially prone to signing new deals to better position itself for growth as its core business of web search and advertising faces new challenges.
"We see the growth of semi-closed and prominent networks including Facebook, Twitter and Siri/Apps in general as an increasing threat to Google - not only as competition for ad dollars, but also to search quality and therefore monetization," Daniel Ernst, an analyst at Hudson Square Research, said in March 29 note to clients.
Google shares have been stagnant lately, despite the market's 2012 rally. The stock price is down 2.9 percent since the start of the year, compared with an 8 percent jump in the S&P 500 index, based on afternoon trading on Tuesday. At around $633 per share, the company's shares are well below the average analyst target price of $721, according to Thomson Reuters data. The company reports its earnings on April 12 after the bell.
A jump in M&A activity would also mean more fees for the financial firms that structure deals. The value of global M&A deals dropped to $416 billion in the first quarter of 2012 from $737 billion over the same period in 2011, according to preliminary Thomson Reuters data. Mergers in the United States totaled $127 billion, a 60 percent drop from 2011. JPMorgan Chase & Co, Goldman Sachs Group Inc and Citigroup Inc were the most active firms in the industry.
JPMorgan may be one of the strongest firms of the group because of a diversified base that includes a strong credit card arm, according to analysts at Trefis, an online stock analytics service. The company recently announced it would raise its dividend by 20 percent, paying out 30 cents per quarter instead of 25 cents.
JPMorgan trades at a price to earnings ratio of 9.6, well below the nearly 14 multiple of the broad Standard & Poor's 500 index, and pays a dividend yield of 2.8 percent. It is down 8 percent over the last 12 months, a figure that includes its 29 percent jump since the start of 2012.
BUY THE TOLLTAKERS
A less risky way to play the social media and mobile market could be to look at the telecommunications sector.
AT&T Inc and Verizon Communications Inc, for instance, are the largest U.S. wireless data carriers and should be attractive to income investors, said John Manley, chief equity strategist at Wells Fargo Funds.
"These are classic yield plays. They are bond substitutes, with the kicker that they are in a pretty good growth business," he said.
AT&T offers a dividend yield of 5.8 percent. The company's shares are largely unchanged since the start of the year, dropping only 0.3 percent. Verizon offers a yield of 5.4 percent. Its shares are down 8 percent since the start of the year.
The iShares S&P Global Telecommunications ETF offers a way to expand this bet overseas. AT&T, Vodafone Group Plc, Verizon and Telefonica SA make up its largest positions. The $436 million fund yields 5.4 percent and costs $48 cents per $100 invested. It is up 1.3 percent since the start of the year.
(Editing by Walden Siew and Andre Grenon)
Tech
Media
Related Quotes and News
Company
Price
Related News
Tweet this
Link this
Share this
Digg this
Email
Reprints
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (0)
Be the first to comment on reuters.com.
Add yours using the box above.
Edition:
U.S.
Africa
Arabic
Argentina
Brazil
Canada
China
France
Germany
India
Italy
Japan
Latin America
Mexico
Russia
Spain
United Kingdom
Back to top
Reuters.com
Business
Markets
World
Politics
Technology
Opinion
Money
Pictures
Videos
Site Index
Legal
Bankruptcy Law
California Legal
New York Legal
Securities Law
Support & Contact
Support
Corrections
Connect with Reuters
Twitter
Facebook
LinkedIn
RSS
Podcast
Newsletters
Mobile
About
Privacy Policy
Terms of Use
AdChoices
Copyright
Our Flagship financial information platform incorporating Reuters Insider
An ultra-low latency infrastructure for electronic trading and data distribution
A connected approach to governance, risk and compliance
Our next generation legal research platform
Our global tax workstation
Thomsonreuters.com
About Thomson Reuters
Investor Relations
Careers
Contact Us
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.