Tag Archives: msft

Facebook Doubles Length Time On Instagram Video Ads

In its ongoing ad expansion, Facebook ( FB ) has doubled the length of video ads on Instagram to 60 seconds, with T-Mobile ( TMUS ) and Warner Bros. the first to jump aboard. Facebook derives more than 96% of total revenue from advertising, with video ads deriving a premium price. The social networking giant has been methodical in rolling out video ads on its products, including its photo- and video-sharing app Instagram, as the company says that its priority is user experience. “We recognize that advertisers have a variety of creative resources and want to bring more choice to help them reach their business goals,” an Instagram spokeswoman told IBD in an email exchange. “Instagram allows brands to amplify campaigns and build anticipation heading into key moments in time,” such as the Super Bowl football game Sunday or a highly anticipated movie premiere, she wrote. T-Mobile is using the new 60-second ad format to promote bonus scenes of their Super Bowl ad spot. Warner Bros. Entertainment, a division of Time Warner ( TWX ), used the 60-second format to promote its new movie “Me Before You.” On June 3rd #LiveBoldly. Based on the best-selling novel by @jojomoyesofficial, here’s the first trailer for #MeBeforeYou, starring @emilia_clarke and @mrsamclaflin. A video posted by Me Before You Movie (@mebeforeyouofficial) on Feb 3, 2016 at 8:00am PST Instagram has more than 400 million users; Facebook and Instagram are the two most important mobile advertising platforms. Facebook continued to show that it is king of social media last week with a report of fourth-quarter earnings that soundly beat expectations on booming mobile ad revenue. Facebook reported ad revenue of $5.84 billion, up 52% year over year. Mobile advertising revenue shot up 69% vs. a year earlier, accounting for 80% of total ad revenue. We’re in the #BigGame with @ChampagnePapi. #YouGotCarriered A video posted by tmobile (@tmobile) on Feb 3, 2016 at 8:37am PST Facebook does not break out Instagram revenue, but COO Sheryl Sandberg in the Q4 earnings conference call said, “We’re pleased with the growth on Instagram.” Facebook has more than 2.5 million active advertisers, with 98 of the top 100 advertisers on Facebook also advertising on Instagram. In the past year, Facebook has been more aggressively expanding ads on Instagram and offering better analytics and measurement tools. Facebook competes with Apple ( AAPL ), Alphabet ( GOOGL ), Microsoft ( MSFT ), Twitter ( TWTR ) and others to attract more advertisers. Facebook is also expected to introduce ads on its messaging platforms, WhatsApp and Messenger, down the road. Facebook CEO Mark Zuckerberg, in the Q4 earnings call, suggested that ads on WhatsApp and Facebook Messenger, which now has 800 million users, are in the works . Facebook stock fell 1.8% to close at 110.66 in the stock market today . Facebook stock hit an all-time high of 117.59 on Tuesday.

Red Hat Warms Up, And Microsoft Azure Hasn’t Even Kicked In Yet

Didn’t take long for investors to follow analyst Gregg Moskowitz’s upgrade clue. Red Hat ( RHT ) stock turned red hot again briefly, up 3% in morning trade in the stock market today , before cooling to close up 1.4% at 68.62 Thursday, 19% off a 16-year high of 84.44 touched Dec. 30. An analyst for Cowen, Moskowitz had just issued a research report Thursday morning, making the case that Red Hat’s “valuation looks compelling once again” and upgrading the stock to outperform from market perform with an 86 price target. Red Hat, based in Raleigh, N.C., is the fast-growing developer of software, built on the open-source Linux operating system, that manages vast enterprise data, be they in the cloud or in traditional on-premise operations. Microsoft ( MSFT ) announced in November that it would run Red Hat hybrid software on Azure, Microsoft’s cloud service. How fast is Red Hat moving? Earnings grew 14% and revenue 15% in the third quarter ended Nov. 30, although analysts polled by Thomson Reuters think that for the current quarter, Q4, profit will moderate to 9% growth from a year earlier of 47 cents per share minus items, on sales up 15.7% to $537 million. “While we have been positive on the stock for a long time, our recent market perform rating was largely valuation-based,” Moskowitz said. “However, the stock has significantly underperformed this year (down 18%, vs. the Nasdaq down 10%), which has presented investors with a favorable risk/reward once again.” Moskowitz said that his crew’s recent checks with midsize and big IT customers suggest that Red Hat Enterprise Linux (RHEL) — its core software, first issued 13 years ago — is likely to grow faster than the 2% annual pace that research firm Gartner gives the overall Linux market. “Meanwhile, though not yet inflecting, demand for OpenStack continues to rise, and we expect another year of high growth (off a still relatively low base),” Moskowitz wrote. OpenStack is a free, open-source software platform for cloud computing. “We also believe RHT’s recent partnership with Microsoft Azure (not in our numbers) should create significant revenue synergies for RHEL (and Azure) over time,” Moskowitz added. “Further, one of our public cloud contacts we recently spoke with sees material upside from the partnership and believes the power of Microsoft’s distribution could also drive an inflection in sales for RHT’s CloudForms hybrid cloud management software. “Longer term, we believe containers will become increasingly prevalent and that RHT is very well placed to benefit from this unfolding trend, with native support built into RHEL and OpenShift, and with RHEL Atomic Host specifically targeting the opportunity.” Containers allow software to run reliably in a variety of computing environments. OpenShift is a Red Hat platform-as-a-service product; RHEL Atomic Host is an operating system. With a market cap of $12.5 billion, Red Hat is the third largest member of IBD’s Computer Software-Desktop industry group — led, of course, by Microsoft with about a $409 billion market value. Adobe Systems ( ADBE ) is second-largest at just over $43 billion. Red Hat’s stock, however, earns a 79 Composite Rating, which means that it performs better than 79% of all publicly traded firms on a variety of metrics. Microsoft carries a slightly better Composite Rating of 83 and Adobe a strong 96. Microsoft closed down 0.4% Thursday and Adobe fell 1.3%.        

Tableau Software Stock Crashes On Weak Guidance, Amazon Threat

Tableau Software ( DATA ) late Thursday posted Q4 earnings minus items and sales that beat expectations, but shares were down more than 35% in after-hours action amid signs that  Amazon.com ( AMZN ), Microsoft and others were grabbing Big Data market share. Tableau’s outlook for the current quarter missed Wall Street views, at least one analyst said Q4 licensing revenue missed and at least one analyst said the Q4 sales beat lagged many analyst expectations. Tableau reported earnings minus items of 33 cents, down 21% from the year-earlier quarter but well ahead of the 16 cents expected by analysts polled by Thomson Reuters. But Tableau’s net loss, using generally accepted accounting principles, soared to 57 cents a share from 27 cents. In its earnings release, the maker of Big Data analytics software said its Q4 “tax expense was $34.1 million due to the recognition of a valuation allowance. We believe that it is more likely than not that the benefit from our U.S. federal and state deferred tax assets will not be realized. In recognition of this risk, we have provided a valuation allowance of $46.7 million on the deferred tax assets relating to these jurisdictions.” Q4 revenue rose 42% to $202.8 million, $2 million above analyst estimates, but “the buy side was looking for sales upside of $20 million-plus,” William Blair analyst Bhavan Suri wrote in a research note emailed after the earnings release. License revenue rose 31% to $133.1 million in Q4, but Global Equities analyst Trip Chowdhry said the missed Wall Street expectations and indicated the “market is moving away from (Tableau) products, to alternatives like (Amazon.com’s) AWS QuickSight,” financial news site Benzinga reported. Tableau also gave weak revenue guidance for Q1 and 2016. In the company’s earnings conference call with analysts, Tableau CFO Tom Walker guided Q1 to an 8- to 12-cent loss per share minus items, worse than the 6-cent gain expected by analysts. Walker guided revenue at $160 million to $165 million, up 27% at the high end but well below the $179.5 million analysts expected. For the year, Tableau sees revenue of $830 million to $850 million, up 30% at the high end but short of the $871 million analysts expected. Its EPS outlook also missed. In an email, Summit Research analyst Srini Nandury reminded IBD that he’d warned that “Tableau is perceived as expensive.” in a post-Q3 research note. “We have data and have heard anecdotally that the Tableau solution is the most expensive in the market when compared with” products from rivals Microsoft ( MSFT ) and Qlik Technologies ( QLIK. ) “It would not be a surprise if (Microsoft’s) PowerBI finds greater traction with Excel users, precisely the same users Tableau is targeting,” Nandury said. In a subsequent phone interview, Nandury told IBD “the company is going to remain in the penalty box for a long time to come, basically because they blew up in such a massive scale. They have not only guided down Q1 but they also guided down the full year. “Microsoft is giving away their software for free. Amazon is coming up with their own … our thesis on the stock has always been that Tableau is a one-trick pony.” In a Jan. 15 research note, Nomura analyst Aashiv Shah warned of competition faced by Tableau and Qlik from Microsoft: “Competition is increasing, with (Qlik) partners noting increased customer interest in Microsoft’s Power BI, which is a freemium product and sells at a cheaper price compared to Qlik and Tableau. While Power BI continues to lag Qlik and Tableau in terms of user experience and functionality, its lower price point could eventually lead to pricing pressure in the analytics market.” Tableau stock was 36% in after-hours trading, after rising nearly 3% in Thursday’s regular session. Tableau also competes with much-larger  Oracle ( ORCL ), Splunk ( SPLK )  and others. Shares of both Splunk and Qlik were down 11% after-hours Tableau is spending heavy to compete. Research and development costs in Q4 soared 155% vs. the year-earlier quarter, to $17.9 million, while sales and marketing costs rose 135%, to $13.9 million. The company said it hired more than 1,000 employees in 2015, bringing its headcount to more than 3,000. It also opened seven new offices in the year, bringing the number of total offices to 16 worldwide. “In Q4, a record 3,600 new customer accounts chose Tableau, bringing our total to more than 39,000 worldwide,” Tableau CEO Christian Chabot said in the earnings release. “This speaks to the immense popularity of Tableau’s products and continued strong demand from customers around the world.”