Daily News Digest- 11th Feb'15

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Car Sales Rise 3% in January, Fail to Match December Nos: Car sales returned to a more realistic pace of growth in January, with less than a third of the country’s 17 car manufacturers reporting an expansion. An anticipated withdrawal of excise duty benefits had inflated sales at almost all auto makers in the previous month. With consumer sentiment remaining muted, sales growth has lost the momentum it exhibited in the early month of the fiscal year that started in April 2014. Industry executives now forecast only some slim gains this fiscal year, and are waiting for the Budget announcement with hope. Sales of heavy commercial vehicles, considered a barometer of the economy’s performance, rose at a healthy rate in January, though on a low base. But weak two-wheeler sales brought down the overall automotive market sales growth to 1.66%. Car sales rose 3% in January to just over 1.69 lakh units. Total passenger vehicle sales — cars, utility vehicles and vans — increased 3.17% to 2.30 lakh units, data from the Society of Indian Automobile Manufacturers (SIAM) showed. In December, car sales had jumped more than 15% and passenger vehicle sales 12%. The duty reduction of 4-6%, which the auto industry has been enjoying since February last year, lapsed on December 31, 2014.

• India Key Mkt for Facebook's Internet Plans: Zuckerberg: India is the key to connect billions across the world to the Internet, Facebook chief executive officer Mark Zuckerberg said, as the social networking giant tied up with Reliance Communications to launch the Internet.org app in a country where smartphone sales growth is among the fastest globally . The app will offer users access to free basic Internet services for health, education, jobs and communication. “One day, we will connect everyone, and the power of the Internet will serve every community across India and the world. That day is coming,“ Zuckerberg wrote in a Facebook post. “But to continue connecting the world, we have to connect India.“ Zuckerberg was referring to the over 1 billion of India's 1.2 billion population without an Internet connection, although most of them have mobile phones.As of December end, India had almost 944 million mobile phone users. Comparatively, India had over 243 million Internet users at the end of last year, of which 86 million had broadband access. He recounted his visit in October to Chandauli, a small village in northern India, which recently got connected to the Internet. Students at a computer centre in the village were learning to use the Internet for the first time. “Knowledge and tools were starting to make life better for everyone,“ he said.

• Vedanta to Go Slow on Fresh Investments: Diversified miner Vedanta Resources is facing trouble on two fronts as poor returns in Africa coincide with a commodity bear market. The Anil Agarwal-led Vedanta has spent more than $4 billion across Zambia, South Africa, Namibia and Liberia in the last 10 years and does not foresee making any more new investments until the current projects reap returns.Commodity prices, except zinc, are close to five-year lows, putting a ques tion mark on future spending. “It is going to take some time for the new supply in oil, iron ore and copper to get absorbed in the market. It will easily be another year or two. We have to make sure our business is properly shaped and size of our spending is configured for another two tough years,“ CEO Tom Albanese told ET. Vedanta wants to first get its underperforming copper mining business in Zambia in better order and then develop and grow its zinc business in South Africa and Namibia. It has planned an investment of $782 million over next three years to create a cluster of zinc mining, smelting and refining assets. Zinc is the only bright spot for Vedanta in Africa. Albanese said that the world was moving into an environment where communities were powered and countries wanted a greater say in both how operations are run and proceeds were distributed. There fore, he said, a broad support of communities, employees and government was necessary.

• Bookmyshow Buys Majority Stake in Eventifier for $2 M: Big Tree Entertainment, which owns Bookmyshow, is acquiring Bengaluru-based startup Eventifier as the Mumbai-based company looks to expand across the entertainment value chain. The deal involves Bookmyshow acquiring majority stake in Eventifier for over $2 million in cash with the investors exiting. The move underlines the increasing appetite among well-funded internet companies to make tuck-in acquisitions as they expand to new markets. Co-founded by Mohammed Saud, Nazim Zeeshan and Jazeel Badur Ferry in 2012, Eventifier stitches archives of social media content from conferences and events across the globe. Initially mentored by Chennai's The Startup Centre, it also raised venture capital funding from Accel Partners and Kae Capital. The company has over 1,500 clients like Pearson, UBM Tech, Clinton Foundation and NASA. “Eventifier solves a larger problem of social media, which is fragmented today but is extremely critical to any business need. Companies need to connect the dots on how consumers sitting on various social media platforms are relevant to them,“ said Ashish Hemrajani, co-founder & CEO of Bookmyshow.

• Radio cab majors work on combining tech: Ahead of the likely acquisition of online taxi aggregator TaxiForSure by larger competitor Ola Cabs, technology teams of the two Bengalurubased companies are learnt to be evaluating ways in which the two platforms can be integrated, sources said. The term sheet for the deal had not been signed until last week but sources said the agreement was “ more or less done”. So, the companies want to be prepared for swift integration once the move is formalised. The acquisition is likely to be announced by the end of this month, multiple sources have said. “The two companies need to look at technology integration at several levels, starting from migrating consumers from one app to the other, and then migrating drivers and wallets,” said another source. “ While Ola Cabs platform is superior to that of TaxiForSure, the combined platform might pick some technologies of the latter.” OlaCabsandTaxiForSuredid not respond to a query on the matter. An Ola Cabs spokesperson refused to comment. Sources had earlier said TaxiForSure had an acquisition offer from both its competitors, Uber and Ola Cabs.

• Maruti Celerio Diesel Version Plan Gets Delayed: Maruti Suzuki has decided to go slow on launching the 800cc diesel engine powered small car and a small commercial vehicle due to a slowdown in domestic sales of mini-trucks and consumers’ preference for petrol as diesel loses its price advantage, people aware of the development said. The car maker could delay these two new launches by about 3-6 months, the persons quoted earlier said, adding that the automaker has told vendors that volumes for the first year will be 70-80% lower than projected. As against the earlier expectation of selling 80,00090,000 units of the small commercial vehicle (SCV) and small diesel car per annum, Maruti now expects to produce 600-700 units of SCV and about 1,000 units of diesel Celerio, which comes to only about 20% or 15,000 units per annum. Production of the diesel Celerio, which was to begin in December 2014, is likely to start only after April. Similarly, the start of production of the mini-truck has been pushed to April-end from the earlier plan of January 2015.

• Online FMCG sales to touch $ 5 bn by 2020: Google- Bain study: A study by a technology company, Google, and a consultancy firm, Bain & Company, said online sales in fast- moving consumer goods ( FMCG)’ s categories, such as male grooming, beauty, food and beverages, and infant care would reach $ 5 billion (₹ 30,000 crore) by 2020. This would make up five per cent of total FMCG sales, estimated to reach $ 100 billion (₹ 6 lakh crore) by 2020, the study said. "The current FMCG market size is $ 50 billion (₹ 3 lakh crore). Of this, online FMCG sales are 0.3 per cent only. The increase in the next five years is substantial and speaks of the rapid digital migration of consumers in the timeframe under review," said Nikhil Prasad Ojha, partner, Bain & Company. The study, the findings of which were collated after three months of research last year involving 1,600 internet users across 13 cities, noted a third of the FMCG market in five years would be influenced in some form or the other by the digital medium.

• IKEA India CEO to meet DIPP Secretary, to discuss e-commerce: Swedish furniture retail major IKEA's India Chief Executive Officer Juvencio Maeztu will meet DIPP Secretary Amitabh Kant tomorrow to discuss opportunities in Indian e-commerce business and issues related to sourcing. According to sources, IKEA is keen to participate in the fast growing e-commerce medium in India, which has seen furniture retail portals such as urbanladder.com and pepperfry.com gaining prominence. "The meeting between Kant and Maeztu will discuss its 'make more in India' initiative of the company to increase sourcing from India as the company wants to produce maximum products in India," a source said.

• IT Biggies Scramble for Startups to Keep Abreast with Disruptive Technologies: By the end of March this year, Tata Consultancy Services, India's largest software company, would have screened over 1,000 startups across Silicon Valley , Israel and Helsinki as part of its hunt for the next big, disruptive idea. Of these, TCS will eventually work with around two dozens, taking their solutions to some of its biggest customers. TCS is not alone in this hunt. Rivals Wipro, Infosys and Cognizant Technology Solutions, too, have started wooing startups in the areas of retail, healthcare and data analytics, to ensure they don't miss out on the next big thing. “For these IT companies it is a matter of survival to open new markets and to invest in fresh ideas,“ said Vivek Wadhwa, a fellow at Stanford University's Arthur and Toni Rembe Rock Center for Corporate Governance. “It is very hard to do this in the con fines of a big business because people are afraid of taking risks and challenging authority. But that is what startups do, and that is why they are investing in them,“ said Wadhwa, a former technology entrepreneur. Wipro, which is setting up a corporate venture arm in the Valley has already met over 500 startups this year, while Infosys is doubling down on this strategy with a $500-million (approx `. 3,100 crore) fund to invest in the next set of disruptive ideas. For India's biggest technology firms, coping with a mid-life crisis and scrambling to keep pace with technology shifts, the next big thing is small. VC firms and entrepreneurs are their new partners, as they are moving beyond the old-world alliances with the likes of SAP and Oracle.

• DD to Show India-Pak Match Live on Sunday: Millions of Doordarshan viewers will be able to watch the India-Pakistan World Cup cricket match live on February 15, with the Supreme Court on Tuesday staying a Delhi High Court order that had restrained the public broadcaster from showing the matches on channels such as DD National and DD News that are carried by cable operators. Under the law, cable operators have to compulsorily carry these channels. Rights holder Star had moved the Delhi High Court contending that showing the matches on them would hurt its advertisement revenue and subscription fees. Doordarshan's revenue surges during these matches, and though these are shared with the rights holder in the ratio of 75:25, cable operators are then able to pick up the state-run broadcaster's feed rather than having to subscribe to that of the rights holder. Acting on the plea, the high court had restrained Doordarshan from showing the matches on these two channels. Both the central government and Prasar Bharati, which runs Doordarshan, had appealed against the February 6 high court decision in the top court. Attorney General Mukul Rohtagi mentioned these appeals filed by lawyers Rajeev Sharma and Sahil Bhalaik on an urgent outof-turn basis before Chief Justice HL Dattu to get an immediate hearing.

• Star unit wins Internet, mobile rights for IPL: The Board of Control for Cricket in India (BCCI) on Tuesday awarded the global Internet and mobile rights for the Indian Premier League (IPL) to Novi Digital Entertainment Pvt. Ltd, a unit of Star India Pvt. Ltd, for Rs.302.2 crore for a three-year period ending 2017. The marketing committee of the BCCI met in Mumbai on Tuesday, to receive the bids made for certain media rights relating to the Pepsi IPL for the next three seasons, for which a cumulative reserve price of Rs.120 crore was set. Bids from three entities were received—Times Internet Ltd, Multi Screen Media Pvt. Ltd (MSM), which operates the Sony bouquet of channels, and Novi Digital Entertainment. According to a BCCI official who declined to be named, MSM’s bid price was Rs.286 crore while Times Internet bid Rs.191 crore.

International:

• Italy's Marzotto family completes purchase of Hugo Boss stake: Italy's Marzotto family has completed the purchase of a 7 per cent stake, or 5 million shares, in luxury goods company Hugo Boss through holding companies Zignago Holding SpA and PFC Srl, the firms said in a statement on Tuesday. The deal was supported by a 150 million euros ($169 million) financing arranged by Mediobanca. In a separate statement on Tuesday, Italian merchant bank Tamburi said it had bought 490,000 ordinary shares in Hugo Boss for 50 million euros in a share placement. 

• Closeout Retailer Ollie's Selects Banks for IPO: Deep-discount retailer Ollie's Bargain Outlet, known for the signature catch phrase "good stuff cheap," is preparing for an initial public offering, according to people familiar with the matter. The Harrisburg, Pennsylvania-based company, which is owned by Chief Executive Officer Mark Butler and private equity firm CCMP Capital Advisors LLC, is working with investment banks JPMorgan Chase & CO, Bank of America Corp and Jefferies LLC on a potential IPO, which is expected later this year, the people said. The people requested anonymity because the matter is private. Ollie's could not be immediately reached for comment. CCMP, JPMorgan, Bank of America and Jefferies declined to comment.

• Sally Scott Named U.K. MD of Vente-Privee: Vente-Privee.com has named Sally Scott as U.K. managing director, a new position at the company, the online flash sales site said this week. Scott, whose appointment is effective immediately, was most recently marketing director of Value Retail, the luxury shopping village outlet group, and before that she served as marketing director of Selfridges from 2005 through 2011. Vente-Privee said that Scott will oversee all its business-to-business and business-to-consumer activities in the U.K., and the firm noted that Scott’s appointment “marks a new stage for Vente-Privee’s growth in the U.K., a market of increasing importance for the company.” Scott, a native of Toronto, will report to Jacques-Antoine Granjon, founder and president of Vente-Privee.com, and will be based between London and Paris.

• Gap Raises Guidance Despite Soft Comps: Thanks to a standout performance from Old Navy and a lower effective tax rate, Gap Inc. raised its full-year earnings guidance on Monday to a range of $2.86 to $2.87 from the previous spread of $2.73 to $2.78. That puts fourth-quarter earnings per share between 73 cents and 74 cents, above the 68-cent consensus estimate of analysts. Incoming chief executive officer Art Peck isn’t going to have the benefit of brisk momentum, however, as he looks to turn around the company’s ailing namesake brand. The firm reported its comparable-sales results for January and the fourth quarter and the results hardly could have been encouraging. The company comp slid 3 percent last month as the Gap brand — down 9 percent — erased a 3 percent increase at Old Navy and a 2 percent gain at Banana Republic. Thomson Reuters expected a 1 percent decline overall, a 4.5 percent dip at Gap brand and a gain of 2.6 percent at Banana Republic.

• Jack Ma: Alibaba 'Isn’t Too Big to Fail': Alibaba Group Holding Ltd. chairman Jack Ma met with Chinese regulators to explain his goals in the financial industry, the latest meeting with authorities after a government “white paper” accused the e-commerce company of allowing counterfeit product sales. The online shopping portal which raised $25 billion in an initial public offering last year “definitely isn’t too big to fail,” Ma told officials of the China Securities Regulatory Commission, according to a transcript of the meeting posted on Sina.com. Asia’s richest man reiterated his aim to be a player in the finance sector, citing his Yu’E Bao online money market fund and the credit-scoring system set up by Alibaba affiliate Zhejiang Ant Small & Micro Financial Services Group Co., according to the transcript. Alibaba will develop markets in rural areas, improve its ability to harness large amounts of data and expand cloud computing, Ma said.

• White House Creates Cybersecurity Center: The White House unveiled a new cybersecurity center on Tuesday to coordinate and analyze cyber-threat assessments across agencies and disseminate information rapidly. The move is in response to the growing number of cyber attacks that have impacted a broad swath of the U.S. economy, ranging from Target Corp., Home Depot and Sony Pictures to banks and government agencies. Lisa Monaco, assistant to the president for Homeland Security and Counterterrorism, outlined the scope of the center that is being modeled after the national counterterrorism center.

Tech:

• Apple taps First Solar for renewable energy in $850 million deal: Apple Inc is embracing renewable energy with an $848 million commitment to obtain electricity from a solar farm that’s big enough to power its offices in California, along with 52 retail stores and a data center. The company that revolutionized how people use computers and mobile phones is stepping up efforts to make the entire business more environmentally friendly. Apple is teaming up with First Solar Inc. to secure solar-generated electricity for 25 years, a deal that the energy company described as the largest agreement ever for a single commercial end user. Apple joins Google Inc., Amazon.com Inc. and other companies with intensive data operations that are seeking to get more power from renewable sources. Tim Cook, Apple’s chief executive officer, has made environmental responsibility a key element of his management of the Cupertino-based company, with 100% of its data centers running on renewable energy. “We’re doing this because it’s right to do, but you may also be interested to know that it’s good financially to do it,” Cook said Tuesday at a Goldman Sachs technology conference in San Francisco. “We expect to have a very significant savings because we have a fixed price for the renewable energy — so we’re thrilled to continue on this course of doing things that really leave the world better than we founded.”

• Startup Nutanix Makes Running Apps, OS on Single Server Possible: Going for the jugular is the norm in the predatory world of technology startups that battle for the attention of consumers. Now, a fiveyear-old startup founded by an Indian engineer is preparing to stir up the aggressive instincts of enterprise software makers in Silicon Valley. “There is no large technology company in the world, that does not want to see us dead,“ says founder of Nutanix Inc Dheeraj Pandey, who is girding up to battle the big boys of the technology world with his plan to build an `iPhone' for data centres. The San Jose­based startup makes it possible for businesses to run multiple applications and operating systems on a single server, while large technology companies typically provide storage infrastructure separately. Some of the world's top investors are buying into the proposition. Last August, the company received a valuation of $2 billion raising about$140 million. Pandey , who graduated from the Indian Institute of Technology in Kanpur, is convinced his aggression is well-founded. In five years, his company has bagged over 700 customers including the US departments of defence and energy. “You know when a little brother starts to grow up, starts to assert and becomes big in a competitive environment, (it) becomes testy ,“ he said. Nutanix's technology termed a hyper-converged storage system or virtual compute platform which combines storage and servers reduces the number of information technology managers a business requires. This allows data centres to run more efficiently. To place it in perspective instead of having a single purpose devices like voice recorder, camera and calculator, Nutanix converges all of this on one platform.

• Yelp gets into the delivery business with Eat24 acquisition: Yelp is about to get a bit more useful. The app and site you check before you eat anywhere new just announced that it has acquired food delivery service Eat24. Announced today, Yelp wants to expand Eat24 to work with the one million Yelp restaurants listed on the service. That’s a huge ramp up from the current 20,000 restaurants that have partnered with Eat24 for delivery. Commenting on the acquisition via a press release, Yelp CEO and co-founder Jeremy Stoppelman said, “As more food ordering transactions move online, further integrating Eat24 will enhance our user experience with an easy-to-use product and service that allows our large consumer audience to transact directly with businesses.”

• Microsoft patches massive bug that allowed attackers to take complete control of computers: Today, Microsoft has issued a critical patch to every supported version of Windows that resolves a bug that may have been open for as long as fifteen years could allow attackers to remotely take control of Windows devices that connect to an Active Directory domain. The flaw — named ‘Jasbug’ — could allow someone to hijack a machine in a fairly straightforward manner. According to JAS Advisors, the company that found the bug, it was reported in January 2014 and took over a year to resolve because it was a core Windows design problem, not a implementation problem. The researchers who found the bug said that “all computers and devices that are members of a corporate Active Directory network may be at risk.” If successfully executed, attackers could take full control of a machine, install applications or create new user accounts.

• Google's I/O Conference Is Slated for May 28 and 29: Spring is coming up, and that means Google’s I/O developer conference is as well. Google executive Sundar Pichai announced the event via a tweet; it will take place on May 28 and 29 in San Francisco. Registration begins on March 17 at 9AM PDT and closes on March 19 at 5PM. There’s no word on price yet, but tickets for last year’s event cost $900 for regular attendees and $300 for select students.