Yahoo seals $4.8 bn deal to sell core assets to Verizon

Yahoo – AFP, Sophie Estienne, with Rob Lever in Washington, July 25, 2016

Yahoo will become a separate investment company, changing its name after 

the acquisition by Verizon of its core assets (AFP Photo/Justin Sullivan)

Yahoo sealed a deal Monday to sell its core business to telecom giant Verizon for $4.8 billion, ending a two-decade run as an independent company for the internet pioneer.

The agreement announced by the two companies after months of negotiations comes following a years-long decline for the iconic firm that introduced many people around the world to the internet.

Verizon chief executive Lowell McAdam said Yahoo would be integrated into its recently acquired AOL unit to create "a top global mobile media company, and help accelerate our revenue stream in digital advertising."

The acquisition, expected to close in early 2017, pending shareholder and regulatory approval, will exclude Yahoo's cash, certain patent holdings, and its big share in China's Alibaba Group and stake in Yahoo Japan.

The deal will, however, turn over the popular Yahoo News, Mail and other online services used by more than a billion people worldwide.

Marissa Mayer, CEO of Yahoo, said in a statement: "Yahoo is a company that has changed the world, and will continue to do so through this combination with Verizon and AOL."

She told a conference call that Verizon "offers significant strategic alignments in Yahoo's focus on informing, connecting and entertaining our users."

She added that the agreement is "an exceptional outcome for Yahoo shareholders" and that Verizon was chosen because it "believed in our vision the most."

With the sale of its core, Yahoo will be left as a separate investment company and change its name after the transaction.

Yahoo shares fell 2.7 percent after the long-expected deal was announced. Verizon lost 0.4 percent.

Yahoo President and CEO Marissa Mayer hails "an exceptional outcome

for Yahoo shareholders"

Bringing synergies

The deal comes with Yahoo, a onetime leader in the online space, coping with years of decline and struggling to keep up with rivals like Google and Facebook.

Yahoo will operate independently until the acquisition and then fall under the aegis of the AOL unit chief, Tim Armstrong, a former Google colleague of Mayer.

Mayer's future role with Yahoo was unclear.

In an email to employees, she wrote that "I'm planning to stay... It's important to me to see Yahoo into its next chapter."

But it was not clear if she would remain after the transition. According to documents filed with regulators this year, Mayer would get a severance package of $55 million if removed within a year of a change of control.

Mayer arrived in 2012 from Google seeking to revitalize Yahoo, which at its peak had a market value of over $100 billion.

The company was founded in 1994 by two Stanford University students, Jerry Yang and David Filo, as "Jerry and David's Guide to the World Wide Web." It went public in 1996 in one of the most hotly anticipated stock offerings of the time -- surging 270 percent in the first day of trading.

Yahoo remains a major force online, but has lagged its rivals in its ability to "monetize" its audience through advertising that is linked to customers' browsing and other online activities.

Research firm eMarketer estimated that Yahoo's share of the digital advertising market would fall this year to around 1.5 percent, with Google getting some 30 percent and Facebook 12 percent.

Several other bidders had been in talks, according to reports, including Quicken Loans founder Dan Gilbert, who was being backed by billionaire Warren Buffett.

Verizon chief executive Lowell McAdam says Yahoo will be integrated into its 

recently acquired AOL unit to create "a top global mobile media company"

Verizon strategy

But Verizon appeared to be the leading candidate because of its ability to integrate AOL's advertising technology into Yahoo services.

Technology analyst Jack Gold of J. Gold Associates said the deal makes sense with telecom companies such as Verizon and AT&T seeking to move beyond their role as carriers.

Verizon, he said "is looking at ways to stay competitive primarily with AT&T" and that Yahoo gives it "the ability to expand into the online content arena" and a large base of users.

But Roger Kay of Endpoint Technologies Associates said Verizon should keep its goals more modest and may get a small benefit from the Yahoo brand.

"I don't think they have enough juice to take down Google and Facebook," Kay said.

With better operating efficiencies and lower costs, "they'll be lucky if they get their money back" from the deal, he said.

Some analysts said Verizon is likely to keep the Yahoo brand, which is recognized globally and used by about a billion people.

Delft University attracts one million students for its online courses

DutchNews, July 20, 2016

Photo: Depositphotos.com 

Delft University of Technology has signed up its one millionth student for its online lecture or Massive Open Online Course programme.

The university launched its first courses, on solar energy and water treatment, in September 2013. It now offers 36 different MOOCs, ranging from ‘leadership for engineers’ to aerospace. There is even a programming class, in Dutch, geared towards children ages 8 and up 

Students can select which courses to take via edX, a non-profit platform for online education that is also used by MIT, Harvard and other universities to make their courses available to anyone on the planet with access to the internet. 

Some 20% of Delft’s subscribers hail from the United States and 13% are based in India. The most popular course so far has been solar energy, which has drawn 131,000 enrolments. Creative Problem Solving, the second most popular, has attracted 113,000. 

‘We are now working hard on the next step: ensuring that our students can earn credits for MOOCs from Delft, as well as those from partner universities and vice versa,’ the university vice president Anka Mulde told TU Delta magazine. 

‘This means that they will gain access to a wide range of courses from top lecturers around the world. The challenge lies in agreeing on which courses we recognise and how many credits our students can earn in a certain phase of their degree programme.’

Google boss defends Europe tax practices, warns of Brexit

Google CEO Sundar Pichai has refuted accusations the tech giant failed to pay enough taxes in Europe, saying it was up to politicians to improve the tax system. Pichai also warned of the possible fallout from Brexit.

Deutsche Welle, 17 Jul 2016

In an interview with Germany's "Welt am Sonntag" newspaper, Pichai said that the US company had invested "very heavily" in Europe, where it employs around 14,000 people.

"As a global company, we find ourselves between the conflicting priorities of international tax law," he said, just a few weeks after two of Google's European offices were raided by tax inspectors.

"Based on the structure of existing tax law, most companies pay the bulk of their taxes in their home countries," Pichai insisted, adding that individual governments would have to take action if they wanted more revenue to stay at home.

"Only the further development of the global tax system by politicians can lead to better results," the Google chief told the paper. If new international tax laws were passed, the search giant would adhere to them, Pichai added.

Two tax raids

Sundar Pichai has worked for
Google since 2004

Google's offices in Madrid were searched in a tax probe in late June, just over a month after police raided the Internet behemoth in Paris in a similar investigation. French officials allege the tech company owes them 1.6 billion euros ($1.77 billion) in unpaid taxes and fines.

Tax inspectors are attempting to prove that sales booked by Google in both countries are much higher than those reported to tax authorities.

The swoops are among a series of regulatory worries for Google, which is also confronting a third anti-trust charge by the European Commission over its online search advertising and shopping business. The company already faces action over its Android smartphone operating system.

Tax shaming?

In January, Google settled on a 155 million euro tax agreement with British authorities, a deal heavily criticized as insufficient compared to the revenue it generates in the country.

Tech giants like Google, Amazon and Apple have faced criticism over their tax liabilities as many of the firms take advantage of tax breaks in Ireland, Belgium and Luxembourg for their European headquarters.

Pichai also warned that Britain's decision to leave the European Union may bring difficulties for internet companies as digital regulation diverges.

"As companies we see great value in Europe as a unified digital market," he said, warning that it was a challenge to keep up with varying laws and regulations in every country. "The complexity makes a bigger commitment difficult, which can be seen in investments," he added.

mm/jlw (AFP, dpa)

Back to Basics: The HK start-up taking on fashion giants

Yahoo – AFP, Liz Thomas, July 17, 2016

Australian entrepreneur Luke Grana, 32, seen at his company's, 'Grana', office
space in Hong Kong (AFP Photo/Anthony Wallace)

Hong Kong (AFP) - Luke Grana arrived in Hong Kong with no contacts, cold-calling 'angel investors' he'd found on LinkedIn armed with only his CV, a business plan, and some big ideas to overhaul fashion.

In little more than two years, his eponymous clothing store amassed $6 million in seed funding and has become the go-to shop for under-35s seeking quality staples for their wardrobe.

And yet Grana is not a designer, has little fashion experience, and his inspiration came from a business brainstorming session rather than a passion for couture.

What he does have are plans to shake things up.

"The way we shop for clothes is going to change," the 32-year-old says.

Global fashion sales currently total around $1.8 trillion a year, with online accounting for five percent, he says, citing a Euromonitor report.

"That is forecast to grow to 30 percent by 2030," he adds suggesting Grana, which has no physical stores -- only a fitting room space where customers can try the clothes before buying online -- is well placed to take advantage of this shift.

The current system, with its reliance on expensive shop space, middle men, and vast inventory, he insists is "hopelessly inefficient" -- and results in opaque pricing.

"Gen Y is more focused on transparency," the Australian entrepreneur -- part of Generation Y himself -- says.

"I made things simple. So if a t-shirt costs $7.50 to produce, we'll sell for $15 -- a straight forward mark-up."

Grana brand uses world renowned material such as Chinese silk from Huzhou 

or Peruvian Pima cotton, sourced from the same mills that work with luxury brands

such as Ralph Lauren and Lacoste (AFP Photo/Anthony Wallace)

Ahead of the curve

Quality is his other pillar. The brand uses world renowned material such as Chinese silk from Huzhou or Peruvian Pima cotton, sourced from the same mills that work with luxury brands such as Ralph Lauren and Lacoste.

"We deal direct with the mills and factories, items are then shipped to our warehouse and then shipped to the customer," he explains.

Hong Kong, the world's biggest cargo hub, is well suited for his global audience -- the US, Australia and Singapore are also key markets.

Of the hundreds of cold-calls he made in late 2013, just one replied: banker Pieter Paul Wittgen.

Wittgen, now the company's COO, was impressed enough by both Grana and his ideas that he introduced him to a wider network of 'angels'.

The firm is now has backing by big name investors including BlueBell Group, distributors for the likes of Christian Dior in Asia, and Golden Gate Ventures, a leading backer of start-ups in the region.

Grana's head of design, Anthony Hill, worked for Paul Smith.

On average Grana's customers now spend $120 per order, while sales are above expectations -- rising 25-40 percent each month -- he says.

Earnings are currently being reinvested in expansion to Japan, Korea and eventually China but Grana expects to be in profit by late 2017.

It may seem an overnight success but for Sydney-born Grana this has been a long time coming.

Clothing designer Natasha Pelling takes measurements at Grana's offices

in Hong Kong (AFP Photo/Anthony Wallace)

In his teens, he read company annual reports and business books. Aged 21 and still at university he set up his first business -- a coffee shop -- using $15,000 of life savings.

After nine months he sold for $145,000 and went on to launch and sell -- at profit -- two similar ventures.

At 24, he set up Charge Point, an electric car charging infrastructure but sold up in 2012 when he realised the concept was "ten years ahead of the industry".

He took time off to "surf and brainstorm" with his profits.

"I wasn't demotivated, I was really hungry," he insists. "During brainstorming I realised there was a disruption coming in fashion."

But his next start-up Coachy was a webcam teaching service -- an "Airbnb for tutoring" in his words.

Again he found his ideas were ahead of the curve: internet speeds then could not support his idea, so he closed up.

"I learned the importance of being in the right market at the right time."

'Do things differently'

Grana's eureka moment came during a holiday in Peru, where he came across Pima Cotton. Within the week he had visited mills and bought samples for friends and family.

"Based on their reaction I knew I had found my product. But I didn't know about styles, pricing or how to merchandise," he adds.

On average Grana's customers now spend $120 per order, while sales are above

expectations, rising 25-40% each month (AFP Photo/Anthony Wallace)

So he went and got some shop floor experience working at Zara and French Connection.

Grana seems assured this is his moment.

Certainly the focus on "timeless wardrobe essentials" is prescient: British design house Burberry announced a move to 'seasonless collections' as the trend for decluttering sees fast fashion falling out of favour.

At Grana they focus on timeless colours and and run a limited number of seasonal ones.

"There are no sales, just one standard price year round."

Social media presence has helped spread the word quickly.

Grana's adverts pop up regularly on Facebook, 17,000 follow the Instagram account, and it uses Snapchat to give a glimpse into the mills and factories it uses.

Grana concedes "fashion has a bad reputation" for exploitation but is confident his firm does not use child labour, adding independent safety audits of production will begin this year.

"I don't want to copy anything from the traditional model," he says. "We are doing things differently."

Dutch court orders Apple to replace defective iPhone with new, not refurbished, phone

DutchNews, July 12, 2016

Photo: Depositphotos.com

Apple has been ordered by a Dutch court to give a customer whose phone stopped working a new replacement rather than a refurbished phone containing second-hand parts. 

Apple was taken to court by an Amsterdam woman who bought an iPhone 6 Plus in December 2014 for €799. In August 2015, the phone stopped working and Apple offered her a replacement, made up of old and new parts. 

The woman refused to accept the offer of a refurbished phone and ended up in court. The court ruled on Tuesday that she is within her rights to expect a brand new replacement phone as the original was still covered by the first year’s guarantee. The tech firm was ordered to refund the purchase price and pay all the woman’s legal fees. 

IT legal expert Arnoud Engelfriet told broadcaster NOS that Apple will now have to adjust its policy. It is not yet clear if Apple will appeal. 

New electronic waste recycling plant in Moerdijk

DutchNews, July 7, 2016

Moerdijk port area: Ossipz via
Wikimedia Commons

Mitsubishi Materials Corporation is building an electronic waste recycling centre in the port and industrial area of Moerdijk, North Brabant, reports the Financiele Dagblad.

The Japanese non-ferrous metals and cement manufacturer will inspect circuit boards and other waste electronic parts, transporting recyclable waste to Japan to be processed. 

About 50 new jobs will be created, according to the Brabant Development Agency. Construction has started and the centre should be operational in 2017.