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Android Wear takes on the Apple iWatch

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Google to launch Moto 360 smartwatch

Google (NASDAQ:GOOG, GOOGL) is expected to release its Moto 360 smartwatch ahead of Apple’s (NASDAQ:AAPL) September 9th event. The android wear version has notable upgrades, including its ability to perform a number of functions independently, without necessarily being linked to an Android smartphone. The search company will be seeking to seize the moment in the lucrative wearable market with huge growth potential.

About Android Wear

Android wear is a modified version of Android operating system designed for the wearable, such as the smartwatch. The platform was launched at Google’s June I/O developer conference.

Earlier, the wearable market had problems with apps as developers had lacked a common platform to build them on. But now with Google’s android wear, apps in Google Play can be upgrade to support Android wear. According to the company’s engineering director for Android Wear David Singleton already thousands of apps on Google Play support Android Wear.

The wearable market has become the next battle ground for tech giants, with Apple rumoured to launch its iWatch perhaps in its next week’s event. The iPhone maker is known for its exquisite and elegant products, and its wearable will definitely be well received.

Banking on the first mover advantage

The iPhone maker is expected to unveil its iPhone 6 in a much waited event that might also see it unveil its first wearable product, the iWatch. However, if the company goes by its tradition of giving each of its products enough shinning moment, then it is likely that the market may have to wait a while longer for the wearable device from Apple. And this is exactly what the King of internet search business is counting on.

Google is seeking to benefit from the first mover advantage with its Moto 360 smartwatch as Apple still procrastinate. While this may not be possible as the iWatch may hit the market as early as next week, there is still a possibility that the iPhone maker may yet wait a little longer to launch its iWatch.

Capabilities of the new wearable

There are already existing Android-based wearable, but these devices have limited capabilities if not paired with other devices Smartphone or tablets. However, the yet to unveiled version is expected to improve on this. Such functions include:

  • Moto 360 GPS capabilities can also use geo-location data to track their user’s fitness sessions.
  • Comes with a set of Bluetooth headphones
  • Can store music and thus the user can go for a run and leave his phone at home, but still listen to music through the headphones.

Generally, Google has expanded non-paired functionalities of its new device. The company further plans to offer frequent updates to Android Wear extending the platforms capabilities.

Conclusion

The new Android Wear version is expected to give developers a platform that make easier to develop apps. This will further position Google to continue perform in businesses outside its core search business. While next week’s Apple’s event may put pressure on Google stock, the stock is worth holding on.

 

Apple Payment Ecosystem on the Horizon

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Will Apple Launch a Payment Ecosystem on November 9 Event?

It is increasingly becoming evident that Apple Inc. (NASDAQ: AAPL) is going to venture into mobile payment ecosystem. The past few weeks has seen a number of sources claim that the much awaited iPhone 6 will have a mobile wallet or something of similar kind. So as investors and other stakeholders look forward to the September 9th event, the question they ask is will Apple unveil its payment ecosystem?

Apple has a glut of opportunities resulting from its massive credit card data. The data includes high user engagement metrics which positions the company strategically to venture into mobile payments. In fact, sometimes back Sanford Bernstein analysts suggested that the iPhone maker could pose a real challenge to eBay Inc’s (NASDAQ:EBAY) subsidiary PayPal.

Apple’s rumoured mobile Payment System

The rumours surrounding the possible launch of a payment system together with the new iPhone is based on a number of clues. They include:

Printed Circuit Board (PCB)

Experts have examined the leaked photos of the iPhone 6 PCB and have agreed that Near Field Communication Chip (NFC) is going to be used in iPhone 6. It is possible that the chip may also be used in the iWatch. NFC is combined with a host of other features including a larger RAM and a faster Wi-Fi component. These traits are in line with a  combination of patents associated with structures needed for a secure mobile payment ecosystem.

Apple recent Partnership deals

Bloomberg reported that Visa (NYSE:V), MasterCard (NYSE:MA) and American Express (NYSE:AXP) have entered an agreement with Apple an iPhone wallet deal that will be unveiled on September 9th.

What Mobile Payments means for Apple

While Google Inc’s (NASDAQ: GOOGL, GOOG) android has dominated the Smartphone market, the iPhone still commands the lead in the U.S. market. If Apple is introducing mobile payment service as expected, it is going to sweep the U.S. market by storm. This is according to Creative Strategies LLC’s analyst Ben Bajarin. He was responding to Bloomberg about Apple’s rumoured venture.

There are other players who have tried to introduce mobile payment system, though none has really seen the light.  However, Apple is known for its ingenuity and I’m certain that if its mobile wallet will take off, setting grounds for more players to join.

Apple has about 800 million global iTunes accounts, and it banks on this if indeed it is going to create its own payment ecosystem. PayPal has just over 152 million registered accounts but processed $180 billion worth of payments in 2013 generating $6.6 billion in revenues. If Apple will be turn a good number of its iTunes account holders to the ecosystem’s customers, the system is likely to pick up quickly. While this will not be easy, its rumoured partnerships with plastic card companies will help it in this quest.

Conclusion

It seems Apple has heeded to the mounting pressure on it to monetize its data by venturing into the payment market. In the past few weeks, there has been piling clues that September 9 may see iPhone users get a new payment ecosystem. Though it is not clear how exactly the iPhone maker is planning to do this, investing in mobile payment could be a real game changer.

 Sept18 or 19 maybe the probable IPO Date

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Alibaba IPO likely to be launched Next Week

Alibaba IPO launch is likely to happen next week according to Seeking Alpha (SA) News Editor Yoel Minkoff. In an email sent to SA subscribers, the lunch will probably happen in the week of Sept 8 and the IPO date could be Sept 18 or 19. The e-mail cited WSJ as its source.

The Chinese e-commerce giant is expected to go public in the U.S. this month in an IPO that is tipped to be the largest in tech IPO history. If all goes well, the IPO could raise more than $20 billion, toppling Facebook Inc’s (NASDAQ: FB) $16 billion.

The date of this IPO has been subject of speculations as no official date has been announced. The initial plan was to have the IPO in August, but the date was rescheduled due to regulatory approval and the just ended U.S. summer break.

Alibaba still waits SEC approval

Alibaba has been waiting for a thumps up from the Securities and Exchange Commission. It is about four months since the company submitted its application for listing. Generally, it takes companies 3 to 4 months to go through the normal listing procedure. However, a large IPO as this one could probably take longer. The period may also be longer if the company has to go through several filing amendments.

Until now Alibaba has revised its initial IPO filing five times responding to the concerns raised by both the regulator and investors. Among the amendments include explaining Alibaba’s complex VIE and corporate structures.

Its corporate structure has been a subject of concern to investors and was also the main reason why Alibaba backed out of Hong Kong Listing. The structure involves a group of 27 partners with ability to nominate a majority of the company’s board members, despite the group’s stake inferiority. Alibaba’s largest shareholder is Japanese multinational SoftBank Corp with 34.4%, followed by Yahoo! (NASDAQ: YHOO) which owns 22.6%. The group (Alibaba Partnership) owns just 15%.

Until SEC gives its approval, Alibaba cannot set its price or the IPO date. So in the interim, Alibaba has been familiarising itself with the U.S. market, through a number of strategic acquisitions. The Huang Zhou based firm had planned to launch once it has received the final word from regulatory body. Nevertheless, it appears that the regulator is not far from giving its confirmation now that the company is hinting a next week launch.

Probable IPO Date

The earlier reports indicate that Alibaba, which owns over 80% of China’s e-commerce market, planned a two-week road-show crossing through all the potential markets before the IPO date. So if the launch happens early next week, then it is possible that by the end of the subsequent week the market will be ready for the debut of the juicy stock.

Final Word

An Alibaba Group holding is an e-commerce company headquartered in eastern Chinese city of Hangzhou. It operates the Taobao , Tmall and Juhuasuan online marketplaces among other online products. Taobao and Tmall alone general merchandise volume stood at $248 billion. The company is more like a combination of eBay Inc. (NASDAQ: EBAY) and Amazon.com (NASDAQ: AMZN).

If all goes to plan, Alibaba IPO date is likely to be on Thursday or Friday of the week that the road show comes to an end. The stock will trade under the symbol BABA on the New York Stock Exchange (NYSE).

Twitch Deal: Its Amazon and not Google

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Amazon outwits Google in battle for Twitch

On July 25, we reported that Google Inc. (NASDAQ: GOOG) was in the verge of acquiring Twitch for $ 1 billion fee. Things seems to have taken a different turn and now Twitch has confirmed that it has been acquired by Amazon.com (NASDAQ: AMZN) instead. It is emerging that e-commerce giant pounced on the deal after Google and Twitch arguably failed to agree on a breakup fee due to the antitrust issues.

Google has courted Twitch, a video game streaming website, since May when the first reports emerged that the two tech companies were in talks. While neither Twitch nor Google ever confirmed these reports in public, VentureBeat confirmed the deal saying it was only awaiting official confirmation.

Amazon Twitch Deal

On Monday Amazon confirmed the deal is happening. The e-commerce giant said in a press release that it is investing in Twitch, which dominates the online video streaming.

Twitch CEO Emmett Shear has also confirmed that Amazon has acquired his company. Through a statement posted on the company websites, he praises Amazon and justifies why the company accepted the e-commerce company’s offer.

“Today, I’m pleased to announce we’ve been acquired by Amazon. We chose Amazon because they believe in our community, they share our values and long-term vision, and they want to help us get there faster.” – Emmert Shear, Twitch CEO.

“Like Twitch, we obsess over customers and like to think differently, and we look forward to learning from them and helping them move even faster to build new services for the gaming community.” – Amazon CEO Jeff Bezos.

Amazon will pay $970 million in cash and potential add ons that may value the whole deal at $1.1 billion. The deal will be completed next year.

Amazon and Google battle on all fronts

The Twitch deal is just but one battle among the many battles these two American tech companies are involved in.

While both companies were conventionally not rivals, both companies have diversified their portfolios through innovations and acquisitions that they are now obvious rivals. Amazon’s co-business is e-commerce, while Google’s is digital marketing.

After acquiring Nest labs, Google now makes thermostats and smoke alarms, it has invested in Smartphone market through its Android Operating system, it operates an online retail store known as Google Shopping Express and it is still the leading digital medium of advertising. Amazon on the other hand ventured into electronics, has recently revamped its digital media investment especially T.V. programs, and is working on delivery drones. Google and Amazon are already offering same-day delivery in select markets for their retail sites.

Why Google wanted Twitch

Had Twitch deal gone through as thought, Google would have folded the live video game streaming service into its video division, YouTube. Twitch is YouTube’s biggest challenger in broadcasting and live-streaming on-demand videos, especially game sessions. Nevertheless, Google’s video unit is the world’s largest and most-visited content streaming website.

Gamers have preferred to use YouTube for posting game ads, highlights and tutorials, while using Twitch as the live broadcast platform. More than half of Twitch viewers spend at least 20 hours a week watching, with every viewer watching 106 minutes per day on average. In short, gamers spend more time on Twitch than YouTube. Consequently, fusing the two video giants would not only have helped the search engine giant eliminate competition, but also expand its video community.

Conclusion

The Twitch deal is strategic for Amazon given its recent foray in digital media. This acquisition will definitely help Amazon in its quest to become a heavyweight in digital advertising, a market which is currently dominated by the search Company.  To Google, missing Twitch is not just a big miss, but losing 50 million potential online viewers to its now sworn rival, Amazon.

12-inch iPad, 5.5-inch iPhone and the iWatch

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12.9-inch ipad joins large display iPhone and iWatch in Apple’s pipeline

Just a couple months after Apple Inc. (NASDAQ: AAPL) signed a deal with International Business Machines (NASDAQ: IBM), now Apple is set to produce a 12.9-inch iPad, its largest ever tablet. The move is part of the general plan to rescue the declining sales of Apple’s second revenue generator.

iPad sales have been declining for two straight quarters and the iPhone-maker, courtesy of the partnership with IBM, is now targeting enterprise customers. It appears that the larger tablet would be a perfect replacement for laptops that these enterprises have been using. The current iPad are sized 9.7″ and 7.9″.

As reported by Bloomberg, the production of the 12-inch iPad will begin early next year.

Apple’s product pipeline is already busy with the company expected to release iPhones with larger display at Sep. 9 iPhone event. Also there are unconfirmed reports that the company may also unveil its first wearable.

The Wearable device

Re/code’s John Paczkowski is reporting that on September 9, at the iPhone 6 unveiling event, Apple will also unveil its new wearable. However, he does not name the wearable.

Paczkowski is well known to be privy to Apple affairs. His track record speaks for itself and anything he says regarding the company’s pipeline is taken seriously. He is the one who hinted the Sep. 9 iPhone event date.

While he avoided using the term “iWatch”, all the hints points towards it. He says in the report that the wearable will “make good use” of HealthKit and HomeKit platforms. iWatch features have often been associated with these two platforms that have been recently launched. So it is pretty obvious that the wearable device is an iWatch.

The iWatch

Earlier reports indicated that 3-5 million units of iWatch will be produced per month at the onset. The device will be available in multiple models including one with sapphire cover glass and at least 10 sensors for monitoring health and fitness parameters. Nevertheless, all the models are expected to have a flexible OLED display.

The iPhone 6

iPhone 6 has been tipped to be the game changer for Apple. The tech giant is expected to reclaim part of its market share lost to Samsung when it launches this next generation of iPhones.  It is expected that other than the larger display, iPhone 6 will have a powerful A8 processor.

In the previous quarter, Apple registered strong revenue growth in China, a country where a 5.5 inches iPhone model would definitely do well. Apple saw its revenue jump 28% year over year in this country, with iPad sales leading the growth with 51%. iPhone sales were 48% higher than the previous year, thanks to the tech giant’s partnership with China Mobile.

While China is key to Apple’s growth, I don’t know what the future might hold for this market after Beijing reprimanded its mobile carriers to stop subsidizing foreign brands. Nevertheless, iPhones with larger screens will attract huge demand and perhaps register a recording breaking sales growth.

The company has been reinventing itself to claim its market dominance in the smartphone market. While this is not easy given Google Inc.’s (NASDAQ: GOOG, GOOGL) Android dominance, Apple can yet again distinguish itself as the number one brand for the affluent.

Conclusion

Apple’s pipeline is the major reason why the stock has rallied to trade over $100. After a successful quarter, Apple is not resting on its laurels. The company has studied the market and is working on product lines to continue driving this growth. The 12-inch iPad, the 5.5-inch iPhone 6 and the iWatch might all be game changers in their respective markets.

Alibaba to displace less attractive Stocks

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Less attractive Stocks to be replaced by BABA as the IPO looms

It is exactly a week to the U.S. Labour Day, after which Alibaba IPO preparations kicks off. Already plans are underway with investors and fund managers looking for stocks to get rid of to create room for BABA.

Alibaba Group Holdings is a Chinese e-commerce giant, based in Hangzhou – the Capital city of Zhejiang Province Eastern China. The company is set to go public in an initial public offering that could value the company among the 8-thousand pound gorillas of the stock market. Its IPO is expected to top Facebook Inc.’s (NASDAQ: FB) $16 billion offering and become the largest technology company IPO in history.

Alibaba’s presence in the U.S. stock markets will trigger sale of some stocks investors and fund managers deem less attractive. So which stocks may soon be offloaded from investors’ portfolios?

E-commerce Stocks

Alibaba is an e-commerce company controlling over 80% of China’s online market. The company handles more trade volume globally than any other company in the industry. It has an operating margin of 47.5%, which dwarfs its peers such as Amazon.com (NASDAQ: AMZN) and eBay Inc. (NASDAQ: EBAY) with 20% and 0.8% respectively (Thomson Reuters). Here are some of the stocks that analysts say may be affected by upcoming debut of Alibaba:

NASDAQ: AMZN

attractive stocks, alibaba, IPO. amzn, ebayAmazon has continued to be less attractive to Wall Street owing to its recent investment overtures that have weighed down its profitability. Its share price has already lost over 15% of its value this year alone.

While Amazon’s revenue stood at $74.4 billion compared to Alibaba’s $8.4 billion, the Chinese giant is much profitable since it does not stock its own inventory that culminates to fewer expenses.

Amazon may yet survive the Alibaba scare as both companies’ have an iron grip on their local markets. Amazon controls the much advanced U.S. e-commerce market, which will be a herculean task for Alibaba to crack without strategic acquisitions.

NASDAQ: EBAY

In the last fiscal year, Alibaba had 231 million active buyers, which is just 17% of China’s population. Its gross merchandise volume was larger than that of Amazon and eBay Inc combined. So if e-commerce companies are to make room for the Eastern Dragon, obviously eBay would fall.

Tech Stocks

While the aforementioned e-commerce stocks can also be listed under this category, there are more technology companies that are not involved in e-commerce but would be candidates for replacement when Alibaba come calling. One such stock is none other than the U.S. web portal and Alibaba shareholder Yahoo! (NASDAQ: YHOO).

Yahoo holds 22.5% of Alibaba, and for this reason it has seen its share price double over the last two years. However, Yahoo has failed to reinvent its core business and there have been suggestions that the company should be acquired by the Chinese internet juggernaut.

Many investors who may be locked out of the upcoming IPO are looking for it as a consolation to capitalize on the Alibaba IPO pop. Nevertheless, once the IPO burst is over, investors are likely to exit Yahoo.

Chinese Stocks

There are quite a number of Chinese stocks listed in the U.S. stock markets. Such stocks include Alibaba Chinese rivals JD.com (unprofitable but raised $1.8 billion in its IPO), Baidu Inc., and Tencent Holdings Ltd.

Many U.S. investors buy Chinese internet stocks to enjoy the benefits of the growing Chinese internet community. Baidu, Chinese answer to Google, presented them with such an opportunity. However, Alibaba controls 80% of the e-commerce market in China and it is obviously the best alternative to tap into this growing market.

Conclusion

Alibaba will be conducting a roadshow to familiarize itself to investors ahead of its IPO in New York. The two-week event may attract different types of funds, from technology to emerging market funds. Its IPO will give investors the opportunity to capture the Chinese online retail market, which by 2020 will be worth at least $420 billion (McKinsey Global Institute).

JetPac and Gecko deals extend Google’s Domestic acquisitions

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Google Acquires Gecko Design and may use JetPac to strengthen its navigation app

Google Inc. (NASDAQ: GOOGL) has acquired JetPac, amobile app, and Gecko Designs, which has a design company that has worked with renowned industries players such as DellHewlett-Packard Co. and wearable-device provider Fitbit Inc. The fees involved in both cases have not been revealed. The company had dedicated at least $20 billion of its foreign earnings for acquisitions. However, its latest acquisitions, which both bring different values in the own ways, could have been funded by holdings from its domestic coffers.

JetPac Deal

Here is what JetPac wrote on their website: “We are joining Google…we look forward to working on exciting projects with our colleagues at Google.” JetPac is an iPhone application that amasses picture data to identify trends in the data and in turn use it to identify trending locations. It is not clear why Google acquired the start-up, but given the capabilities of the app it is definitely something to do with location, that is Google Maps to be precise.

JetPac Features and uses

  • The start-up has two image recognition technologies, spotter and Deep Belief. These allow its users to locate top joints and restaurants. The apps customized suggestions may be what Google is interested in, because this can be fused with Google Maps just like Google’s “Near You” feature.
  • JetPac City Guides offer customized geographic information which could come in handy in Google’s quest to be the best personal electronic tour guide.

Gecko Designs Acquisition

Gecko Designs has been in business of product design and engineering for the past 18 years. The firm is headquartered in Los Gatos, California, but will now be joining Google’s X lab. The firm’s president Jacques Gagne confirmed the acquisition reports on a web post. He wrote: “This is an incredible opportunity for everyone at Gecko… We are very excited and honoured to join Google(x) and work on a variety of cutting edge projects.” Even though Google confirmed that it was bringing Gecko to X, it did not give out any details. Google has several projects in the pipeline including Android Car, Computerised Eyewear and other Wearable. Gecko Designs employees are experienced in design and they may prove very useful in giving the Google Glass final touches before its commercial launch.

Conclusion

Google is known for its never ending acquisition binge. The California-based search engine giant has built its empire through innovations and acquisitions. It has spent over $22 billion in acquisitions, and it has acquired at least 100 businesses including Android, YouTube, Nest Labs and Double Click. As a start-up, Google was merely meant to help estimate and rate importance of sites using back links, but 14 years down the road, the company has turned into a global tech conglomerate with unparalleled success. While its latest acquisitions, JetPac and Gecko, will soon vanish in the face of the earth, they are going to work behind the shadows to make life easier, as Google has always done. The two companies’ employees are now Google’s employees and will work together with in-house developers.

AAPL Records a new 52-Week High

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After recording a new high, how long can AAPLE hold on at over $100?

Apple Inc. (NASDAQ: AAPL) today has recorded its new 52-week high of $101. 09. Thanks to the hype of the iPhone 6’s eminent launch, and other products in the pipeline, AAPL has had a bullish run and is expected to topple the Sept. 19, 2012 split-adjusted record of $100.30.

The bullish run has seen Apple trade over 53,450 shares over the last three months and gaining about 40.1%  from August last year to date. Generally, since January last year the stock has gained 27.3%, yet analysts are still declaring AAPL a buy, just like last time. Will the stock hold on trading at over $100, or is it headed for another precipitous fall?

AAPL 2012’s abrupt fall and the current Rally

In 2012, Apple’s run was built around the then eminent release of iPhone 5, like it is happening again with iPhone 6. However, iPhone 5that was competing with the Samsung debutant Galaxy S3.The Samsung flagship had been released in May that year, and it was the first Google Inc.’s (NASDAQ: GOOGL) android phone made to counter iPhone’s dominance. S3 had set the bar so high that iPhone 5 fall shot and performed miserably. The Steve Jobs’ factor was also still in play, as many investors thought that the company was hollow without his hit products ideas.

The current situation is very different. Smartphone users are not only waiting for the release of the Steve Jobs’ phenomenal “…one last thing”, but the Smartphone that will address areas where Apple has not been getting it right. The phone expected to have larger display made from Sapphire Glass. What’s more, there are other products in the pipeline that are scheduled for release. These products include the iWatch and iPad Air.

Besides Apple’s pipeline, the other factors that have helped the price rally include:

Stock buyback plan: The iPhone maker has been buying back its stock since June 2013. Its CEO, Tim Cook announced in early February that they had bout back shares worth $14 billion in less than two weeks. In April the company added $30 billion to the plan and also raised its dividends. Its board raised the purchased plan budget from the $60 billion a year earlier to $90.

Expansion in emerging markets: Apple saw its iPhone sales shoot up 55% year over year in the Brazil, Russia, India and China (BRIC countries) during its just ended quarter. Its partnership with China Mobile was to thank for this. However, there are emerging reports in China that Beijing has ordered the three government back Telco’s, China Mobile included, to sever links foreign mobile manufacturers to help the local companies. This might affect iPhone prices, as the carrier had subsidized the smartphones. This might be a huge blow to not only Apple, but also its close rival Samsung.

Partnership with IBM: Apples partnership with International Business Machines (NASDAQ: IBM) caught many by surprise but it has been held with high regards. The partnership is expended to rescue iPad’s floundering sales. The tablet, Apple’s second most valuable product, has continued to perform a miserably. However, the upcoming iPad Air 2 that has  Microsoft (NASDAQ: MSFT) Office is expected to have a long term adoption among business enterprises courtesy of the partnership

Conclusion

This is not the first time Apple has topped $100 a share.  Its record high came in September 2012 and after which the stock dipped to below $400 while analysts expected it to run past $1000 mark. Many analysts believe the current situation is different, but is rally different?

Alibaba Pictures in accounting noncompliance

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Alibaba Pictures Suspended from Hong Kong listing amidst accounting problems

Just a couple of weeks to its IPO, Alibaba group holdings has discovered major accounting problems at its new film division, Alibaba Pictures.

The film company, formerly know as ChinaVision Media Group is a public listed firm in the Hong Kong stock market. The new development has led to indefinite suspension of its shares in the stock market.

While the unfolding events may not stand in the way of Alibaba’s much awaited IPO, it is likely to cause unwarranted attention to the company’s recent acquisition gambits.

The Chinese e-commerce outfit has surprised many by some of its latest acquisitions which include $192 million for Guangzhou Evergrande, China’s most successful football club, and $249 million for 10.35% stake in SingPost (Singapore’s national postal service).

The SingPost investment was strategic and inline with its planned penetration of Southeast Asian e-commerce market, but the investment in football raised eyebrows because the deal was hatched and sealed in an absurd manner.

Alibaba Pictures Reshuffle

The said irregularities come in two months after the Chinese e-commerce giant stepped up its stake to 60% worth $804 million in the film and TV production company. It is afterwards that the firm changed its name to Alibaba Pictures. It was earlier known as ChinaVision Media Group. The new name was concurrent with management restructuring that saw Jack Ma sent his confidants to man the new outfit.

Under the new management, Zhang Qiang, the former vice president of state-owned China Film Group, took over as chief executive officer under a one year renewable contract, replacing then the then acting CEO Liu Chunning, who became an executive director under the new management. The others brought in the process include Shao Xiaofeng as the chairman and Li Lianjie, Tong Xiaomeng, Zhang Yu and a renowned martial arts superstar Jet Lee as non -executive directors.

It is worth noting that Liu Chunning is the head of digital entertainment at Alibaba group, while Shao Xiaofeng is its chief risk officer.

Accounting Irregularities

On Friday the new management disclosed that ChinaVision might have engaged in noncompliant accounting practices. As a result, the firm will have to delay its financial results as the management continues with investigation.

Alibaba Group, while commenting on the matter, said it is fully behind Mr. Qiang’s team as it exhausts the review and correction of the possible irregularities in the accounts.

The noncompliant practices detected in the accounts has put ChinaVision’s long-term auditor Deloitte Touche Tohmatsu in the dark spot. However, while responding to the matter, the firm said it is barred from discussing confidential matters related to its clients in public.

Conclusion

There has been growing confidence in Chinese stocks, so it will be interesting to see how US investors respond to this news given that accounting scandals have tainted the image of Chinese companies listed in the US.

While it would be wrong to crucify the e-commerce company for any wrongdoing, many investors would be bothered to know the due procedures Alibaba group follow while making such acquisitions. The accounting irregularities may therefore cause discomfort to US investors which the company targets in its upcoming September IPO expected to raise close to $20 billion.

Could Google Play take over from Google Search?

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Mobile transition will benefit Google in the long-run if it explores Google Play and in app advertisements

Since going public in exactly a decade ago, Google Inc. has expanded its business to include all the tech spheres. Virtually all its businesses are revolutionary, especially its core search business which has continued to experience unrivalled success thanks to its omnipresent mark on the internet. However, the increasing use mobile devices is slowly eating on Google’s search business and particularly its -per-click (CPC).

YouTube has been tipped as the frontrunner to take over from Google Search as the next big growth driver for the search engine multinational. Google acquired YouTube, a video streaming website, in 2006 for $1.65 billion. Those who tipped YouTube must have ignored the perpetually growing Google Play and the strategic position it holds in this company.

Google Play and its Revenues

Google Play is a digital app store whose contents include games, books, magazines, TV programs, movies and music. According to consensus estimates, the venture is expected to contribute close to $4.4 billion in the FY 2014. Correspondingly, Google Play’s annual gross sales are expected to be $9 billion with net revenue of $1.5 billion. Though this still trails Apple Inc.’s (NASDAQ: AAPL) App Store revenues, the two digital stores are predicted to be level at $19 billion with a net revue of $5.7 billion by 2016.

As the Android community continues to grow, so does Google Play and its subsequent revenues. In this app marketplace, mobile games are the leading revenue earners accounting for almost 90% the total app revenue.

The mobile transition and the future of Google

In the past couple of years, there has been a mass migration of users from PCs to mobile gadgets. As result, mobile internet traffic has been on the rise at the expense of PC traffic, right from 1% in January 2009 to over 30% so to speak. During the same period PC internet traffic has declined to 70% from 99%. At this rate, it is predicted that mobile traffic will dominate the internet come 2015.

In preparation of this, Google Inc. (GOOGL) has heavily invested in Android, an operating system for mobile gadgets such smartphones and tablets. While it is yet to monetize this platform, it has opened it for handset manufacturers such as LG, the South Korean electronic outfit Samsung, and a host of Chinese handset makers including Lenovo and Huawei.

Since the Android users have Google’s email service as the default account, the growth of the android community helps Google secure more users for its search services. Also this helps it earn more from Google Play given that the search engine giant earns 30% of subscription payments from its developers, and which it only uses to cater for the credit card fees, but share the rest with its telecom partners.

Google Play can earn more through in app advertisement

Mobile apps have transformed how people surf the web today. While the mobile internet traffic has increased over the years, many consumers spend time on mobile apps rather than the internet. The number of people who are directly using apps without passing through the normal searches has also increased substantially in recent times.

But Google has made impressive inroads in the world of mobile apps during this mobile revolution through Google Play. As a result it has positioned itself strategically to exploit the more than $3.5 billion in app advertisement of the mobile advertising market.

What if Google introduced in-store advertisement, or it cohorts with the app owners to initiate in app advertisement? Or isn’t this why Google acquired AdMob,a company with focus on in-app advertising, back in 2009?