Posted by Barry Silverstein on November 7, 2012 01:08 PM
Japanese technology giant Softbank's $20 billion takeover of Sprint is already proving to be an uphill battle. Sprint reported that it lost 423,000 U.S. subscribers from July 1 to Sept. 30, while only gaining 19,000 non-contract subscribers, the smallest number in over three years. That churn contributed to Sprint losing $767 million in the quarter, compared to a $301 million loss for the same period a year ago.
The downward spiral for Sprint was even more obvious in comparison to its two main competitors, Verizon Wireless, which added 1.8 million subscribers, and AT&T, which added 228,000 subscribers. In addition, Verizon Wireless and AT&T saw a spike in iPhone 5 sales while Sprint's activation of iPhones in Q3 was flat. Ironically, the 2012 American Customer Satisfaction Index ranked Sprint first among all national carriers in customer satisfaction and most improved, across all 47 U.S. industries, during the last four years.
In an attempt to shore up its flagging business, Sprint is acquiring PCS broadband spectrum and customers in parts of Illinois, Indiana, Michigan, Missouri and Ohio from smaller wireless competitor U.S. Cellular for $480 million. Sprint CEO Dan Hesse stated that "Acquiring this spectrum will significantly increase Sprint's network capacity and improve the customer experience in several important Midwest markets including Chicago and St. Louis." Even though U.S. Cellular is exiting the Chicago market, its brand name will remain on the city's U.S. Cellular Field stadium and it will maintain its corporate headquarters in the market.
Being acquired by Softbank means Sprint, meanwhile, will officially shed the Nextel part of its corporate name.Continue reading...
Posted by Sheila Shayon on November 7, 2012 10:51 AM
Last week, educational and consumer (via Penguin) publishing giant Pearson and Bertelsmann combined their book publishing divisions, Random House and Penguin, exponentially increasing their reach and scale in light of prodigious growth from e-books and digital retailers. Now comes word that Pearson's The Financial Times newspaper brand is in play and could be sold for as much as £1bn in a "trophy hunt" by potential buyers following John Fallon’s appointment as head of parent Pearson’s education division, replacing CEO Marjorie Scardino, one of the UK's highest-profile female corporate leaders, who is poised to step down in January after 16 years at the helm.
While Fallon affirmed Pearson’s commitment to the FT, saying it is a "highly valued and very valuable part of Pearson" to the Guardian, analysts predict the £1bn may be hard to forgo. Fallon is said to have no “emotional commitment" to the FT Group, which also own a 50% stake in the Economist and analysts at Deutsche Bank see his ascension as accelerating Pearson's digital transformation, including the "value tied up in non-core assets such as FT."Continue reading...
chew on this
Posted by Dale Buss on November 5, 2012 05:03 PM
One of the main reasons for Kraft to split into its new Kraft Foods and Mondelez International units was to free the latter to pursue the beckoning opportunities in the global snacking business without being tied down to the slower-growth, mature North American groceries business, which now alone comprises Kraft Foods.
But in the early going, at least, both newly independent entities are pursuing something of the same strategy to tap into their separate growth opportunities: paring back non-performing, small or relatively insignificant brands, and applying innovation resources and expansion ambitions to brands that have a chance to make the most of them.
Mondelez, for example, already has said that it may divest some products as it seeks to streamline its range. The company will pursue a "simplification agenda," Tom Cofer, head of Europe for Mondelez, confirmed to Bloomberg.Continue reading...
Posted by Mark J. Miller on October 31, 2012 04:43 PM
The Walt Disney Company's announcement that it's buying Lucasfilm — the production company owned by producer/director George Lucas — for $4.05 billion means every last bit of the Star Wars franchise is now part of the Mickey Mouse Empire. The deal shouldn't come as a huge surprise, given the success of Star Wars-themed weekends luring amateur Jedi warriors and Darth Vaders to Disney parks.
Even though series creator Lucas says that there is such “a large group of ideas and characters and books and all kinds of things” that new Star Wars movies could be coming out for the next 100 years, fans of the franchise are a little confused that their cinnamon-roll-haired Princess Leia is now on the same squad with such gals as Pocahontas, Snow White, Ariel, and Cinderella.
Fans won’t have to wait 100 years for the next film, however. The first one under new ownership, Star Wars VII, will hit screens in 2015. Some, though, are not happy about the news.Continue reading...
Posted by Sheila Shayon on October 29, 2012 11:39 AM
In a defensive and offensive move, two major European media companies, Bertelsmann and Pearson, are combining their book publishing divisions, Random House and Penguin, exponentially increasing their reach and scale in light of prodigious growth from e-books and digital retailers.
"Together, the two publishers will be able to share a large part of their costs, to invest more for their author and reader constituencies and to be more adventurous in trying new models in this exciting, fast-moving world of digital books and digital readers," stated Pearson CEO Marjorie Scardino in a press release.
The merger seals Random House’s leadership as the largest English-language consumer book publisher worldwide, and parent Bertelsmann will have the majority share at 53%. And no, web wags, it won't be called Penguin House or Random Penguin.Continue reading...
Posted by Sheila Shayon on October 15, 2012 12:53 PM
Japanese firms, fueled by a strong yen and low interest rates, have spent $75bn this year on foreign deals with no evidence of a slowing down. Now Japanese mobile operator SoftBank has agreed to pay $20.1 billion for a 70 percent stake in Sprint, marking the company's largest overseas acquisition to date.
“This transaction provides an excellent opportunity for SoftBank to leverage its expertise in smartphones and next-generation high speed networks, including LTE, to drive the mobile internet revolution in one of the world’s largest markets," stated SoftBank's billionaire founder and chief, Masayoshi Son, in a joint press release.
"As we have proven in Japan, we have achieved a v-shaped earnings recovery in the acquired mobile business and grown dramatically by introducing differentiated products to an incumbent-led market. Our track record of innovation, combined with Sprint’s strong brand and local leadership, provides a constructive beginning toward creating a more competitive American wireless market.”Continue reading...
Posted by Sheila Shayon on October 3, 2012 01:47 PM
T-Mobile's 10th anniversary gift to itself: buying a smaller rival to grow its U.S. market share. America’s fourth-largest wireless carrier is about to get bigger as T-Mobile parent company Deutsche Telekom and MetroPCS have approved a merger between the two American wireless carriers.
T-Mobile US CEO John Legere, who was only named to that post on Sept. 19, took to YouTube today to pitch the ‘game-changing’ deal that aims to create "a bigger, better and bolder wireless provider" and the "value leader in the marketplace."
Legere elaborated in a blog post, "This isn't a deal to survive – it's to thrive. This is a terrific opportunity for two companies with a shared commitment to innovation and customer service to come together to improve the way you communicate. We're here to compete. We're here to unlock value."Continue reading...
Posted by Dale Buss on October 1, 2012 02:22 PM
A major part of the logic behind the split-up of Kraft into snacks go-getter (and naming-challenged) Mondelēz International and its more tired North American grocery business is to create a "global snacking powerhouse" — and spur growth in the latter enterprise.
As Forbes noted, Kraft is moving from the New York Stock Exchange to NASDAQ with the move to spin off its North American business and rebrand its corporate parent: "Kraft is keeping its faster-growing global snacks business into a new company named Mondelēz International, ticker MDLZ, while its spun-off North American grocery business will keep the Kraft Foods name but trade under ticker KRFT. Both stocks will list on the Nasdaq when the breakup is complete, and the KFT symbol will be retired."
Now that Kraft Foods Group can begin selling shares with its own listing as an independent company after the market's close on Oct. 1st, it's time for Kraft to fulfill investor expectations as Mondelēz (which will debut on Oct. 3rd, with a defiant macron over its final 'ē') is considered to be the higher growth stock.Continue reading...