Saturday, July 21, 2012

IPO market heats up after Facebook freeze

NEW YORK (AP) â€" Investors showed their appetite for freshly public technology stocks on Friday, but a decidedly old-school company â€" Fender Instruments â€" bowed out of its planned initial public offering citing market conditions.

Analysts were quick to isolate the guitar maker as a solo act, out of tune with the broader IPO market. The rest of the bunch did well, after all. The stock of security software company Palo Alto Networks popped 27 percent in its market debut. The stock of Kayak, the travel-booking website jumped 28 percent.

So much for the "Facebook freeze." There are eight IPOs scheduled for next week. There's a security software maker from the Netherlands, a high-end steakhouse from Texas and a natural-food grocery store chain from Lakewood, Colo., among others. The diversity of companies taking the plunge, along with their sheer number during the usually slow summer season, shows that the market for initial public offerings is in the midst of a rebound after a lull that followed Facebook's mid-May debut.

Yes, the IPO market is "back, for the time being," said Francis Gaskins, president of researcher IPOdesktop. Though the companies going public are small, they also hail from various industries, which is a good sign for the IPO market as well as the broader economy. It means the market is not dependent on just one sector doing well. That was an issue last year, when a slew of high-profile Internet companies focused on social networking went public. Several â€"including Groupon and Zynga â€" flopped despite the hype.

Now, investors are looking for companies that have proven they can grow.

"At best, this economy is flat, and it's hard to find growth opportunities," Gaskins said. He added that both Kayak Software Corp. and Palo Alto Networks Inc. are growing their revenue and doing well in spite of the economy.

"There are a few companies that fit that criteria. And the ones that do get demand," he said. "Tech stocks are the ones that are showing consecutive quarterly growth and good gross (profit) margins."

Facebook, of course began trading May 18, the Friday that capped the worst week for the U.S. stock market this year. After months of hoopla, the social network saw its stock land with a thud. It is now trading 24 percent below its $38 IPO price. After Facebook, the IPO market was frozen for five weeks. It began to thaw in the last week of June when natural gas company EQT Midstream Partners went public on the 26th.

Next week's planned IPOs include computer-security software maker Avast Software, which is looking to raise $90 million, Del Frisco's Restaurant Group, which wants $105 million and Natural Grocers by Vitamin Cottage Inc., which is looking at $100 million. Even combining all eight companies doesn't add up to $1 billion â€" one sixteenth of the size of Facebook's massive public offering.

"Facebook was an enormous IPO at $16 billion," Gaskins said. "These companies are small, but at least it's happening."

Although Fender cited market conditions and Europe's economic woes as the reason for its pullout, the 66-year-old company is very different from its tech-industry counterparts. It's not growing as fast as investors expect of a company that is about to go public. And while it has an interesting story, that's not enough to attract big institutional investors, said John Fitzgibbon, the founder of

"It's an isolated situation," he added.

The rest of the market looks better. If startups are opening their books and courting wider investments, experts say, they're likely upbeat about their future business and the economy. And a strong market for initial public stock offerings could drive growth, as companies loaded with fresh cash hire new workers.

"The market is a little stronger than people realized," said John Fitzgibbon, the founder of

Gaskins is also upbeat about the next few weeks. Then, it'll get quiet until Labor Day.

"After the first 10 days of August it all goes dead," he said. "Investors want to go to the beach instead of roadshows."

Friday, July 20, 2012

Yahoo CEO Mayer's pay package worth more than $59M

NEW YORK (AP) â€" Yahoo is giving its new chief executive Marissa Mayer a compensation package worth more than $59 million over the next several years.

Yahoo Inc. said in a regulatory filing Thursday that Mayer will receive an annual salary of $1 million. She's also eligible for a $2 million bonus, and $12 million in restricted stock and stock options that will vest over several years.

Meyer, who is 37 and was lured away from Google Inc., will also receive $30 million in the form of a one-time retention award if she stays at Yahoo for 5 years.

Yahoo says it will also give Mayer restricted stock valued at $14 million to partially compensate her for forfeiting money she would have received at Google.

That said, the most she will take home this year is $5.4 million. That includes her salary, bonus and part of the "make-whole" compensation, according to Yahoo spokeswoman Dana Lengkeek.

The typical CEO of a public company in the U.S. made $9.6 million last year, according to an analysis by The Associated Press using data from Equilar, an executive pay research firm.

Yahoo's previous â€" and short-lived â€" CEO, Scott Thompson, had a $27 million pay package. Thompson's salary and bonus were the same as Mayer's, but Yahoo dangled more incentives in front of Mayer to lure her away from Google. Thompson stepped aside in mid-May amid an uproar over misleading information on his resume.

On Tuesday, Mayer became Yahoo's fifth CEO in five years. She spent the previous 13 years at Google. She was the Internet search leader's 20th employee and helped build some of its most iconic products.

Wednesday, July 18, 2012

Marissa Mayer's top 3 challenges as Yahoo CEO

SAN FRANCISCO (AP) â€" Like a lot of math geeks, Marissa Mayer enjoys tackling complex problems. She will find plenty of those as the latest CEO at Yahoo. The troubled company has turned into a vexing brain-twister as its financial performance has steadily deteriorated even though it still boasts one of the Internet's biggest audiences and best-known brands.

Yahoo announced Tuesday another lackluster set of financial results in the second quarter. The company earned $227 million, a 4 percent decrease from a year ago. In the last five years, Yahoo's stock has tumbled 41 percent. It closed Tuesday at $15.60.

Mayer, 37, will try to reverse the financial malaise as Yahoo tries to match the growth of rivals Google and Facebook Inc. Both companies have been prospering as advertisers spent more money on Internet advertising.

Consider some of the challenges that greeted Mayer Tuesday as she took over Yahoo's helm after a highly successful 13-year career at Google.


Mayer's to-do list probably will start with deciding the fate of Ross Levinsohn, who had made a positive impression among analysts during his two-month stint as interim CEO. He took over after the mid-May ouster of Yahoo's previous leader, Scott Thompson, who left amid a flap over misinformation on his official biography.

Levinsohn had envisioned Yahoo's website becoming the hottest spot on the Internet to get a mixture of exclusive content and material produced by a wide range of other media outlets. He was particularly focused on improving the quality of Yahoo's video offerings, figuring more people would stick around the company's website if it was serving up professionally produced news and entertainment clips. That in turn would help Yahoo sell more online advertising and revive revenue growth.

Mayer has previously worked with Levinsohn while she was overseeing Google's Internet search team and he was running the digital operations at Rupert Murdoch's News Corp. In 2006, News Corp.'s MySpace social network struck a lucrative advertising partnership with Google that was widely seen as a coup for Levinsohn.

But it's not clear if those past ties will be enough to smooth things over with Levinsohn, who has now been snubbed twice for the Yahoo CEO job in less than a year. He was also interested in running Yahoo after the company fired Carol Bartz as CEO last September, but didn't even get an interim tryout that time. Yahoo instead relied on Tim Morse, its chief financial officer, as its temporary CEO.

Levinsohn, 48, was widely seen as the leading candidate to be permanent CEO this time. So being passed over for a younger outsider such as Mayer may have bruised his ego.

In a Monday interview, Mayer declined to discuss her plans for Levinsohn.

Some analysts believe the two could form a powerful combination at Yahoo if Mayer can win Levinsohn over. That's because Mayer specializes in developing products and managing how online services interact with users while Levinsohn's strong suit is negotiating media partnerships and selling advertising.


Whether Levinsohn stays or leaves, Mayer will have to answer a question that has stumped the four other full-time CEOs that have steered Yahoo during the past five years: Where does Yahoo Inc. fit in an Internet and mobile market that is increasingly tilting toward Google Inc., Apple Inc., Facebook Inc. and Inc.?

As Mayer ponders this one, she is likely to draw on her experience as one of Google's top executives. She probably knows Google's weaknesses, as well its strengths. And her perch at Google may have given her a better vantage point on the potential vulnerabilities at Apple, Facebook and

Yahoo is trying to build on its monthly audience of 700 million users and develop more effective ways to connect with people on smartphones and mobile devices. Mayer's insights could help identify revenue-generating opportunities where Yahoo has the best chance to succeed.

In a Monday interview, Mayer said it was still too early to discuss her vision for Yahoo. "My first order of business is to meet with the senior leadership team and get a product road map," she said, adding that she is confident she can make Yahoo's services "even more innovative and inspiring in the future."


Once she draws up a coherent strategy, Mayer will need to find the right people to execute on it. That means she will need to recruit elite computer programmers, a breed that has been more inclined to work at Google, Facebook and Apple. Yahoo's morale suffered another blow in April when Thompson announced plans to lay off 2,000 people, or 14 percent of the work force.

Mayer's hiring, though, may help reshape the largely negative perceptions of Yahoo on Wall Street and in Silicon Valley. Her track record at Google and her intellect gives her credibility in Silicon Valley, where Yahoo's Sunnyvale, Calif. headquarters are located. She specialized in artificial intelligence while getting her master's degree at Stanford University in 1999 and is conversant in the arcane vernacular of computer coders.

As she tries to nurture Yahoo, Mayer will be taking on a huge challenge that figures to test her ability to find the right balance between her job and home life. Shortly after the news broke about her move to Yahoo, Mayer announced she is pregnant. The baby boy's due date is in early October, just before Yahoo will be reporting how it fared under Mayer's leadership.

Tuesday, July 17, 2012

Google exec Mayer named Yahoo CEO, 5th in 5 years

SUNNYVALE, Calif. (AP) â€" Yahoo is hiring longtime Google executive Marissa Mayer to be its next CEO, the fifth in five years as the company struggles to rebound from financial malaise and internal turmoil.

Mayer, who starts at Yahoo Inc. on Tuesday, was one of Google's earliest employees and was most recently responsible for its mapping, local and location services. Mayer, 37, began her career at Google in 1999 after getting her master's degree in computer science from Stanford, the school Google's co-founders attended.

Ross Levinsohn has been running the company on an interim basis and was thought to be the leading candidate after Hulu CEO Jason Kilar dropped out from consideration. Levinsohn filled in after Scott Thompson lost his job two months ago in a flap over misinformation on his official biography.

Fred Amoroso, Yahoo's chairman, says the board was drawn to Mayer's "unparalleled track record in technology, design, and product execution."

Yahoo's website remains among the most popular destinations on the Internet with 700 million monthly visitors, but the company has struggled to turn those visits into ad revenue growth. Yahoo's decline has been exacerbated by the success of Internet search leader Google Inc. and social networking leader Facebook Inc.

Levinsohn, 48, who once ran Internet services at News Corp., made a positive impression by closing a long-delayed deal to sell part of its stake in Alibaba Group, one of China's most successful Internet companies. He also negotiated a truce with Facebook, averting a legal fight over patent rights that threatened to poison Yahoo's partnerships with the social network.

Now, the job of devising a new vision for Yahoo will fall to Mayer. She will need to quickly communicate how her strategy differs from the plans of four previous CEOs who have unsuccessfully tried to turn the company around during the past five years.

Mayer has a list of talents and accomplishments that could serve Yahoo well. She gained a reputation at Google as an effective leader with a long string of successes. Known for a folksy demeanor that harks back to her roots in Wausau, Wis., she is a math whiz with a photographic memory. In her time at Google, she led teams that produced many of the company's most recognizable products, including the development of its flagship search product and the iconic Google homepage.

Mayer managed the launch of more than 100 features and products including Google News, and Gmail. She is credited with overseeing the creation of much of the clean, uncluttered "look and feel" of many Google products.

"I'm incredibly excited to start my new role at Yahoo tomorrow," Mayer wrote to friends and followers on Twitter Monday afternoon.

Yahoo needs that kind of enthusiasm. The company will release quarterly financial results on Tuesday. Net income for the three months ending in June will be clipped by an anticipated charge of up to $145 million to cover severance costs for laying off 2,000 employees, or about 14 percent of its workforce. The jobs cuts, announced while Thompson was still CEO, are supposed to trim Yahoo's annual expenses by about $375 million.

Some analysts believe Yahoo needs to prune even more from its operations as it tries to increase its profits and elevate a stock that has been sagging since the company balked at a takeover offer from Microsoft Corp. for $33 per share more than four years ago. Yahoo's stock closed at $15.65 on Monday.

Levinsohn hinted that Yahoo might cut even deeper when he met with shareholders at the company's annual meeting last week. Thompson had planned to close, sell or combine dozens of Yahoo's little-used services before he was dumped.