Archive for January, 2010

John Doerr 11/25/09 Stanford Business School Presentation Notes

January 16th, 2010 No comments

-view themselves as company builders than financiers
-3 generations of partners
-Al Gore is “a nerd, a techie”, gives great investment insight, not a door-opener for them
-475 investments in 33 years, $100B annual revenue, 400K jobs, 173 IPOs, 166 M&As, $500B+ market cap
-mercenary vs. missionary culture, both work, but he prefers the latter
-3 sectors: digital/IT, life sciences, and greentech
-renewable sources only 6% of U.S energy, most of it wind
-almost 1/2 of U.S. energy is wasted in heat, inefficient engine, or transmission lines
-top 30 greentech companies, only 4 are American. 1 battery, 1 wind, 2 solar
-Zynga is the fastest growing company he has ever seen
-3000 business plans came in for the iFund
-iTunes on 150M desktops
-iPhone is outselling iPod in its 2.5 year launch period by a factor of 12
-Appstore is outselling iTunes in its 2.5 year launch period by factor of 20
-super verticals: advertising, commerce, real-time content creation, communication, and location based services

Career Advice
-prioritize learning. opportunity to learn and grow vs. compensation
-development strong foundation of experiences: commercial, financial, sales, management
-learning great management processes from the best: Amazon, Cisco, Intel, GE, Google
-there will come a time where you swing for the fences, where you own and run your own business

You will be judged on your
-ability to listen actively, think critically
-and above all, communicate: speaking on your feet, debating the merits of issues, whether large or small groups
-art of confronting problems, not people
-don’t forego learning how to recruit, to sell, to hire and fire, inspire, manage, develop, and motivate with tough love
-extra points for humor, very powerful social and business weapon

Ideas are easy, execution is everything, teams win
-takes a team to win
-the ways you as leaders are going to inspire teams, is by your ability to think and speak on your feet and rally others to go after that cause

-always network. develop and sustain personal, lifelong networks. face-to-face
-network one person 10 minutes a day
-integrity is a binary state
-great books: Startup: A Silicon Valley Adventure, Monk and the Riddle, Good to Great, Banker to the Poor, World is Flat, Hot Flat and Crowded, An Inconvenient Truth, Our Choice

-very long on solar, looking at solar-thermal, wind, geo-thermal
-you want diversity of ideas and perspectives. 1/3 of their partners are not Caucasians

Winning traits in entrepreneurs
-huge idea and can motivate a large group of people to pursue it
-great judgement above and beyond their experience
-great leaders, inspire others to the mission/vision
-always learning, attempt to do the impossible

-any individual partner can veto an investment
-work in teams than other venture firms
-multiple partners are involved in every single venture
-returns have been lousy since 2000. overall a loser. VC industry needs to shrink
-priority at Kleiner. help entrepreneurs build really successful significant companies who are going to make a difference

-Android is second dominant platform. 10-20M devices end of 2009. open source OS. fragmentation of the eco-system by hardware OEMs, different keyboard/hardware
-30-35% of book sales are through the Kindle, when digital version is available

-Kleiner values: 1. family first 2. partners 3. portfolio (CEOs, the clients, serve them every day) 4. new ventures 5. public/community service

Categories: News

Intel (INTC) December 2009 Q4 Earnings Notes

January 16th, 2010 No comments

Press Release
-revenue $10.6B (10.17B est) up 28% y/y, gross margin 65% (62.2% est), EPS 55c (30c est)

-Q1 revenue $9.7B (9.35B est), gross margin 61% (58.8% est)
-FY2010 gross margin 61%

Conference Call
-broad based strength across all products and regions
-servers had a very strong quarter
-will refresh entire server line in next 3 months, 32nm Xeon multi-processor
-highest gross margin in its history

-Q4 had a rich mix. 2010 will have more normal one with ramp of 32nm mainstream products
-assuming normal seasonal year, double digit growth with a modest recovery in PCs
-Q2 is typically seasonally down and gross margin is down q/q
-Q4 ASP accounted for 2 points of gross margin increase. Q1 should be 1/2 point down q/q due to ASP
-Q1 will have higher CPU ramp costs due to first 32nm wafers, this will come down later in the year. Mix will be a little less rich
-pricing should come down some in the second half

-great beat and raise quarter
-analysts wanted more in terms of ASP and gross margin guidance for 2010

Categories: News

NPD U.S. December 2009 Videogame Sales

January 14th, 2010 3 comments

Category / Total / Change
Video Games: $5.53 billion +4%
Video Games Hardware: $2.19 billion +16%
Video Games Software: $2.58 billion -7%
Video Game Accessories: $760.2 million +15%

Hardware Sales (in units sold)
Wii: 3.81 million
Nintendo DS: 3.31 million
PlayStation 3: 1.36 million
Xbox 360: 1.31 million
PlayStation Portable: 654,700
PlayStation 2: 333,200

Game Software (in units sold)
1. New Super Mario Bros. Wii (Wii, Nintendo) – 2.82 million
2. Wii Fit Plus (Wii, Nintendo) – 2.41 million
3. Wii Sports Resort (Wii, Nintendo) – 1.79 million
4. Call of Duty: Modern Warfare 2 (360, Activision) – 1.63 million
5. Call of Duty: Modern Warfare 2 (PS3, Activision) – 1.12 million
6. Wii Play with Remote (Wii, Nintendo) – 1.01 million
7. Mario Kart Wii with Wheel (Wii, Nintendo) – 936,100
8. Assassin’s Creed II (360, Ubisoft) – 783,100
9. Left 4 Dead 2 (360, Electronic Arts) – 728,500
10. Mario & Luigi: Bowser’s Inside Story (DS, Nintendo) – 656,700

Categories: News

Gartner Q4 2009 PC Unit Numbers

January 13th, 2010 No comments

-Q4-2009 world-wide units +22.1% y/y, more than 90 million units
-strongest quarter in the last 7 years
-Europe/Middle East/Africa was the weakest region
-driven by low cost laptops and mini-notebooks
-Windows 7 did not create additional demand
-U.S. PC shipments +26.5% y/y with 19.8 million units
-EMEA +3.6% y/y with 29.7 million units
-Asia Pacific +44.4% y/y with 27.1 million units
-Latin America +42.7% y/y, Japan +4.7% y/y
-2009 +5.2% y/y with 306 million units Source

Categories: News

Google Threatens to Leave China

January 12th, 2010 2 comments

A new approach to China
1/12/2010 03:00:00 PM
Like many other well-known organizations, we face cyber attacks of varying degrees on a regular basis. In mid-December, we detected a highly sophisticated and targeted attack on our corporate infrastructure originating from China that resulted in the theft of intellectual property from Google. However, it soon became clear that what at first appeared to be solely a security incident–albeit a significant one–was something quite different.

First, this attack was not just on Google. As part of our investigation we have discovered that at least twenty other large companies from a wide range of businesses–including the Internet, finance, technology, media and chemical sectors–have been similarly targeted. We are currently in the process of notifying those companies, and we are also working with the relevant U.S. authorities.

Second, we have evidence to suggest that a primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists. Based on our investigation to date we believe their attack did not achieve that objective. Only two Gmail accounts appear to have been accessed, and that activity was limited to account information (such as the date the account was created) and subject line, rather than the content of emails themselves.

Third, as part of this investigation but independent of the attack on Google, we have discovered that the accounts of dozens of U.S.-, China- and Europe-based Gmail users who are advocates of human rights in China appear to have been routinely accessed by third parties. These accounts have not been accessed through any security breach at Google, but most likely via phishing scams or malware placed on the users’ computers.

We have already used information gained from this attack to make infrastructure and architectural improvements that enhance security for Google and for our users. In terms of individual users, we would advise people to deploy reputable anti-virus and anti-spyware programs on their computers, to install patches for their operating systems and to update their web browsers. Always be cautious when clicking on links appearing in instant messages and emails, or when asked to share personal information like passwords online. You can read more here about our cyber-security recommendations. People wanting to learn more about these kinds of attacks can read this U.S. government report (PDF), Nart Villeneuve’s blog and this presentation on the GhostNet spying incident.

We have taken the unusual step of sharing information about these attacks with a broad audience not just because of the security and human rights implications of what we have unearthed, but also because this information goes to the heart of a much bigger global debate about freedom of speech. In the last two decades, China’s economic reform programs and its citizens’ entrepreneurial flair have lifted hundreds of millions of Chinese people out of poverty. Indeed, this great nation is at the heart of much economic progress and development in the world today.

We launched in January 2006 in the belief that the benefits of increased access to information for people in China and a more open Internet outweighed our discomfort in agreeing to censor some results. At the time we made clear that “we will carefully monitor conditions in China, including new laws and other restrictions on our services. If we determine that we are unable to achieve the objectives outlined we will not hesitate to reconsider our approach to China.”

These attacks and the surveillance they have uncovered–combined with the attempts over the past year to further limit free speech on the web–have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down, and potentially our offices in China.

The decision to review our business operations in China has been incredibly hard, and we know that it will have potentially far-reaching consequences. We want to make clear that this move was driven by our executives in the United States, without the knowledge or involvement of our employees in China who have worked incredibly hard to make the success it is today. We are committed to working responsibly to resolve the very difficult issues raised.

Posted by David Drummond, SVP, Corporate Development and Chief Legal Officer


Categories: News

Goldman Sachs Email on Potential Conflict of Interest with Internal Trading Desk

January 12th, 2010 2 comments

Dear client,

We may from time to time discuss with you Trading Ideas generated by our Fundamental Strategies Group. As part of our commitment to managing conflicts of interest appropriately, this message is to explain how the Fundamental Strategies Group interacts with other parts of our organisation and how that impacts on the Trading Ideas.

The Fundamental Strategies Group is a group of cross-capital structure desk analysts employed by our Securities Divisions to assist our traders. They develop Trading Ideas in conjunction with traders. We may trade, and may have existing positions, based on Trading Ideas before we have discussed those Trading Ideas with you. We may continue to act on Trading Ideas, and may trade out of any position, based on Trading Ideas, at any time after we have discussed them with you. We will also discuss Trading Ideas with other clients, both before and after we have discussed them with you.

You should not consider Trading Ideas as objective or independent research or as investment advice. When we discuss Trading Ideas with you, we will not be acting as your advisor (including, without limitation, in relation to investment, accounting, tax or legal matters) and the provision of Trading Ideas to you will not give rise to any fiduciary or equitable duties on our part. We will not be soliciting any action based on Trading Ideas and it is your responsibility to seek appropriate advice.

Any opinions that we express when we discuss Trading Ideas with you will be our present opinions only and we will not have any obligation to update you in the event of a change of circumstances or a change of our opinions. We prepare Trading Ideas based upon information that we believe to be reliable but we make no representation or warranty that such information is accurate, complete or up to date and accept no liability, other than for fraudulent misrepresentation, if it is not.

If you have any concerns about any of these matters, please do not hesitate to contact us.

Kind Regards

Jane Lattin

Assistant to Thomas Mazarakis – Head of Fundamental Strategies


So basically their trading ideas may not be objective and they can trade against you or before you at anytime. That is great news for Goldman Sachs clients!

Categories: News

Retail Store Channel Checks – KIRK WTSLA HOTT ANF GME UA TJX BBY

January 12th, 2010 No comments

Kirkland – small crowds. First time in their store, interesting array of paintings/frames, decorations

Wet Seal – small crowds

ANF/Hollister/Gilly Hicks – empty. Clerks at Gilly Hicks gave me strange looks when I walked in

Hot Topic – medium crowds. They have a T-shirt for everything, skater boi demo

Gamestop – small crowds. Plenty of New Super Mario Bros in stock, which they didn’t have last time. Noticed some used game prices down 30% in 2 weeks (Fable 2 and Gears of War 2) = used game margin compression

Under Armour – saw a bunch of UA sneakers at local Marshalls. Not a good sign for their foray into athletic foot-wear

Marshalls/TJ Maxx – medium crowds

Best Buy – medium crowds. Plenty of New Super Mario Bros in stock. Looks like shortage is over

Categories: News

Morning Notes (GME, Game Group, AAPL)

January 12th, 2010 No comments

Game Group (GME of UK): reports 5 weeks sales ending January 9, 2010 of -12.1% y/y and 49 weeks -11.1% y/y. Company notes significant improvement since Christmas

Gamestop (GME): new 2010 capital allocation strategy. $300M share buyback when completed 10% EPS accretion. Believes cash flow will be at or above existing levels. $600M cash flow from ops, $200M cap ex for 400 new stores, $100M for acquisition activity, and $300M for share buyback. Expects to end FY09 and FY10 with $700M cash at hand. Net-net: forecasting $400M of FCF

People’s Bank of China: raising reserve requirements for nation’s lenders by 50bps on January 18th

Japan Airlines: down 45% (daily limit) on bankruptcy speculation

Apple – online reports that Apple snapped up all the supply for 10.1 inch LCD and OLED screens for its upcoming tablet

Spiderman movie delayed – Sony Pictures and Marvel Studio (Disney) announced they will delay the 4th movie by 1 year to 2012 with new director and new cast

Netease (NTES) – report that GAPP asks company to resume free of charge beta testing or it will face suspension and a huge fine Link

Categories: News

Electronic Arts (ERTS) December 2009 Q3 Warning

January 11th, 2010 2 comments

Press Release
-Q3 29-33c (56c est), revenue $1.33-1.35B (1.42B est)
-FY2010 40-55c (79c est), revenue $4.125-4.2B (4.26B est)

Conference call
-Europe especially weak. -15% y/y vs. flat expectation
-forecasting flat to negative high single digits for overall industry packaged goods this year

-fabulous title plan this year including Medal of Honor, Need for Speed, Sims for console, Fifa in a World Cup year, Dead Space 2, new Crysis game, MMA game
-distribution business will be sharply down this year
-major MMO launch (obviously Bioware Star Wars) for Spring 2011. Won’t include it in FY2011 guidance to be conservative
-CY2009 digital business had 25-30% growth. In Christmas quarter 25%
-very confident in Mass Effect 2 and Battlefield Bad Company 2 titles
-Pogo has 75% gross margin
-seeing strength in mobile, console DLC (Dragon Age)
-pricing didn’t play a role in December quarter. Retail competition for market-share drove volumes
-Europe had $90 million short-fall vs. their expectations

-Bad December quarter was expected by any half-decent fundamental videogame analyst. Look at my prescient tweet (Link)
-March quarter title pipeline is strong. Pulling previous year sports game support for online multiplayer should drive demand for current year Madden

Categories: News

Morning Notes (BBY, TSM) – Computer Business is Rocking

January 8th, 2010 No comments

BBY: December 2009 sales +13%, comp store +8.2%. U.S. domestic home office +28.5% (notebooks, cellphone driven), consumer electronics +4.5%, appliances +16.2%, services 0%, entertainment software -0.6% (increases in videogames offset by music/movies)

Sick (as in good) computer and cellphone numbers.

TSM: Digitimes reports 2010 capex will be $4.5 billion up from initial internal forecast of $3 billion

DRAM: DDR3 spot prices up 4.22% yesterday

December 2009 non-farm payrolls: -85K vs. 0 est. Unemployment rate 10% vs. 10% est.

Categories: News