Daily News Digest- 12th Feb'15

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Etailers Turn Sponsors Big-Time: Amazon India has bagged the title sponsorship of the India Fashion Week, replacing Wills Lifestyle, as India’s deep-pocketed ecommerce companies increasingly snap up title sponsorship of major television shows, fashion and sporting events to increase their visibility. Amazon, which has ambitious plans for India’s booming online fashion industry, beat peers such as Snapdeal.com and Myntra to bag the sponsorship of the prestigious bi-annual event organised by the Fashion Design Council of India (FDCI), two people familiar with the development said. The US e-commerce major will be shelling out a shade less than ₹100 crore for a multi-year association with the event which will now be called Amazon India Fashion Week, they said. Sunil Sethi, president of FDCI, declined to comment. An email query sent to Amazon India on Tuesday did not elicit any response as of press time on Wednesday. Last year, Snapdeal.com had replaced Vodafone as the main sponsor of popular TV reality show Bigg Boss. The Delhi-based online retailer is also an associate sponsor of the Bangalore Fashion Week. Online fashion retailer Jabong is an associate sponsor of Lakme Fashion Week and official retail partner of marathons in Delhi, Mumbai and Bengaluru, while its rival Myntra is sponsoring a women’s marathon event in Bengaluru.

• M&M to Acquire Pipavav Defence in Rs 3,000-cr Deal: Mahindra & Mahindra, one of India's largest diversified conglomerates, will purchase a majority stake in Pipavav Defence and Offshore Engineering (PDOE) for roughly ₹3,000 crore at ₹66 a share in a three-phase deal, ` two people with direct knowledge of the plan said. Along with debt of around ₹6,800 crore and fresh equity that will be issued, the deal is seen as having an enterprise value of ₹12,000 crore, they said. In the first phase, Mahindra Defence Systems (MDS), which supplies various types of launchers for ships, along with systems and components to customers other than the Indian Navy, will pur chase a 19% stake in Pipavav De fence from the founders, Chair man Nikhil Gand hi and his youngd Managing Director er brother and Managing Director Bhavesh Gandhi, who own about 45% of the company. Later, Pipavav Defence will issue preferential shares to the acquirer to raise the latter's stake to 40%. In the third phase, MDS will make an open offer to purchase an additional 26% stake from the public to abide by takeover guidelines. “The broader contours of the deal involve a three-step transaction -a direct purchase from promoters, issue of shares to the buyer and, later, an open offer,“ said one of the two cited above. Leading Indian groups such as M&M, RIL, Reliance Group and the Tatas have shown keen interest in the defence sector er brother and “Bankers are working on the structure and finer details,” said a person with direct knowledge of the plan.

• Star India Acquires Maa TV for Rs 2.5k Crore: Rupert Murdoch's Star India, which was missing a key piece of southern television entertainment action, has now attempted to set that right with the purchase of the biggest Telugu entertainment network. Maa Television Network Ltd, which runs four channels covering movies, music and general entertainment, will now be owned by Star India. CEO of Star India, Uday Shankar, announced the buyout in Hyderabad on Wednesday.He did not disclose the deal value, but industry officials and people close to the transaction estimated it to be ₹2,000-2,500 crore. The purchase puts Star on top of the second-biggest regional market for general entertainment. “The acquisition gives Star a powerful national footprint and a strong presence in the fast-growing regional space,“ said Jehil Thakkar, partner and head, media and entertainment, KPMG India. “As digitisation takes hold, it will be important for a network to have a strong presence in every package and Star is now very well positioned to do so. As the economy rebounds and advertising growth returns, the Telugu market will be a key component of any national offering to an advertiser.“ The deal takes place nearly three years after the unsuccessful attempt by the Maa TV management to sell 30% equity to Sony Entertainment Television. A Ficci KPMG report of 2014 estimated regional TV channels accounted for 27% of the total television viewership in 2012. This has now grown by more than 35%. Maa has 26% market share among Telugu channels, a revenue of ₹350 crore and profit of about ₹65 crore. Telugu viewership is fourth highest in the country with an average viewership of 1,400 minutes a week, higher than the national average of 1,100 minutes.

• Volkswagen Closes Two India Sales Offices to Cut Cost: Volkswagen is tightening its sales and marketing operations in India to cut cost as local sales remain muted. The auto maker has closed its regional sales offices in Delhi and Bengaluru, and is focusing on exports to utilise capacity. Wolfsburg, Germany-based Volkswagen entered the Indian market in 2007 and started local production in 2009. It has capacity to produce 1.3 lakh cars a year, or more than 10,800 a month, at its plant in Pune, but makes fewer vehicles. Since the start of the current fiscal year in April, it manufactured close to 89,000 cars through January, at an average of 8,900 a month. More than 60% of these vehicles are exported. It started the regional offices ­ in Delhi for north and east India and in Bengaluru for south ­ to streamline marketing and sales functions after facing much flak from customers over the quality of service and supply of spares. Volkswagen has now closed these offices and merged them with its national sales company (NSC) that operates from the local head office in Mumbai, company sources said. The decision was made purely on “operational basis and is only related to the field forces“ of Volkswagen and unit Audi, said Thierry Lespiaucq, managing director of Volkswagen Group Sales India.These functions will now be centrally coordinated, he told ET.

• Zopper to raise $50- 100 million: Zopper, which connects offline retailers to the online community and offers comparisons for products across categories, is set to tap the market within a quarter to raise up to $ 100 million. Started in 2011 as a reviews platform reviews42. com, Zopper’s founders might dilute about 15- 20 per cent equity to raise between $ 50100 million over the next couple of quarters, Neeraj Jain, cofounder and chief executive officer ( CEO), told Business Standard. “ While our target is to raise $ 50- 100 million, the final quantum will depend on many factors,” he added. Zopper had raised $ 5 million from Tiger Global and Nirvana Ventures last June in the Series- A round. The founders received seed funding in October 2011 from Blume Ventures and Ventureast and the second round came from Nirvana Ventures and Blume Ventures in January 2013. “We need the next round of funding to scale up nationwide.

• Lufthansa Scouts for Long-term IT Provider in India: Lufthansa, Europe's largest airline, is looking to consolidate its global IT service providers and strike a long-term deal with an Indian company to tap into digital technologies to stay ahead of the competition. The carrier plans to reduce its spend on legacy systems by improving efficiency and divert to digital projects the money it saves in the process, besides cutting down on its vendors that number over 300 at present. “We want to consolidate and simply our vendor management.Working with a large Indian provider makes sense because our competitors work with them and we want to boost our use of offshore efficiencies,“ Roland Schuetz, Lufthansa's senior vice president and chief information officer told ET. Schuetz and the airline's CEO Karl Ulrich Garnadt, who are in India to attend the Nasscom India Leadership Forum in Mumbai, are working on narrowing down the vendors. The CIO now reports to the CEO, instead of the chief financial officer earlier.

• Zomato to Invest Rs 300 Crore: Online restaurant guide Zomato will begin to take orders for meals on behalf of restaurants listed on its portal, adding muscle for a fight with global leaders Foodpanda and Yelp for top honours in the fast-growing market. “We are allocating $50 million (₹300 crore) to launch the online food ordering business, said Deepinder Goyal the chief executive officer of Zomato. “ The service will also be launched overseas in the next few months.“ In India the service timed to coincide with the start of the Cricket World Cup will cover 2,000 restaurants in March and extend to 10,000 restaurants in the next six months. The move, designed to add a new stream of revenue for the Gurgaon-based company , will allow users to select dishes, see their movement from the kitchen to their table and pay with one click using a mobile app.

• Coke Plans Summer Treat with Fuze Tea: US beverages giant Coca-Cola plans to launch Fuze Tea, its billion-dollar global brand that combines tea and fruit juice, in India this summer, two officials familiar with the company's plans told ET. This will be Coca-Cola India's second shot at ready-to-drink tea after its global joint venture with foods firm Nestle to sell and distribute ready-to-drink Nestea iced tea was dissolved three years ago. “The company is working out plans to bring Fuze Tea to retail shelves latest by the June quarter ­ in time for peak summer season,“ said an official aware of the developments. The fizz drinks major is looking to include a larger number of functional or low-sugar beverages in its portfolio in line with increasing health consciousness among consumers across the world. “The plan is to bottle Fuze Tea initially through Coca-Cola's bottling partner Hindustan Coca-Cola Beverages, and subsequently scale up the brand through its franchise bottlers,“ said the official quoted earlier. Another offi cial involved with the company’s plans said Coca-Cola wants to test the brand first through its own bottling arm before getting franchise bottlers to invest in it. A Coca-Cola India spokesperson declined comment on the matter.

• Cos Now Gel With Movie Content for Fame in Frame: After years of pushing for just a spot in the frame, brands are now integrating with the content of films, taking in-film branding to a new level that is not only helping film makers reduce costs but also giving brands more prominence. In the latest Bollywood production Shamitabh, the brand name Lifebuoy, a soap brand owned by Hindustan Unilever (HUL), is integrated with the film's content. Shamitabh opens with the premiere of another movie where actor Dhanush plays the lead role as Lifebuoy, who fights against the ills of society. The film-in-film goes on to become a big hit and establishes Dhanush as a star. And that’s not all, the film also has the good-old tagline “Tandurusti ki raksha karta hai Lifebuoy”. According to George Koshy, general manager, personal wash, HUL, the film’s writer-director R Balki approached the company with the idea of integration.

• Uninor Operating Profit Up for '14, but Q4 Loss Widens: Mobile phone carrier Uninor posted yearly operating profit in 2014, helped by a rise in its user base, but its operating loss for the fourth quarter widened on year because of an increase in capital expenditure and competition, which outweighed the effect of higher data usage. The Indian unit of Norway's Telenor ASA's operating profit for 2014 came in at NOK 882 million (about Rs 724 crore), compared with a loss of NOK 576 million.Revenue increased nearly 40% on year after its subscriber base increased 31% to end 2014 with nearly 44 million users. For the quarter ended December, Uninor, which operates in six of India's 22 circles, posted an operating loss of NOK 285 million compared with NOK 132 million a year back, as the company invested 54% more in net work expan sion. Quar terly revenue though jumpon-year at NOK ed 42% year-on-year at NOK 1.19 billion on the back of 2.3 million subscribers that the company added in the threemonth period. Growth in rupees was 26% on year.

International:

• Apple Goes Green with $850-m Solar Power Deal: Apple will buy about $850 million of power from a new California solar farm to cut its energy bill, the iPhone maker said on Tuesday. The First Solar plant, with the capacity to power the equivalent of 60,000 homes, will be used to supply electricity for Apple’s new campus in Silicon Valley, and its other offices and 52 stores in the state, CEO Tim Cook said 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, and there’s quite a difference between that price and the price of brown energy,” Cook said. “We know in Apple that climate change is real. The time for talk is passed,” he added. “The time for action is now.”

• Baidu shares plunge after revenue miss: New York listed shares of China's biggest online search engine, Baidu, fell nearly 10% in after-hours trading after its quarterly revenue came in below expectations. Baidu's fourth quarter revenue was 14.05bn yuan ($2.26bn; £1.5bn), missing market forecasts of 14.12bn yuan. The tech giant also forecast revenue for the current quarter well below analyst expectations. The revenue miss was due to more users switching from PCs to mobile devices. That results in less space for different forms of online advertising for the company.

• Robb Giammatteo Named CFO of Ascena: Robb Giammatteo has been promoted to chief financial officer of Ascena Retail Group Inc. Giammatteo, who joined Ascena in September 2013 as senior vice president of financial planning and analysis and investor relations, succeeds Dirk Montgomery, who resigned as cfo last summer for personal reasons. Kevin Trolaro, assistant vice president and assistant controller, had served as interim cfo since Montgomery’s departure. Giammatteo reports to David Jaffe, president and chief executive officer of Ascena, which owns and operates the Dress Barn, Lane Bryant, Maurices, Catherines, Cacique and Justice specialty retailing nameplates. Ascena conducted a search including both internal and external candidates for the post prior to making the appointment.

• Scott Kessler Named Belk's Chief Information Officer: Scott Kessler, most recently senior vice president of omnichannel solutions delivery at Belk Inc., has been promoted to chief information officer of the Charlotte, N.C.-based department store group. He succeeds Mike Laurenti, who left the firm to join Delhaize Group, and reports to John Belk, president and chief operating officer. Kessler joined Belk in his most recent post in March after nearly 10 years with GSI Commerce, most recently as senior vice president of products technology. His post at GSI encompassed Web store, product engineering, architecture, fraud operations, mobility, payments and supply chain. Earlier in his career, he was a senior manager at Accenture and manager of systems development at Dow Jones.

• Wal-Mart to Open 25 Canada SuperCenters: Target may have retreated from Canada, but its competitor Wal-Mart is making a bigger commitment to its business north of the border. The Bentonville, Ark,-based mass retailer on Wednesday said it will spend about $340 million Canadian dollars, or $240 million, to open 29 new SuperCenters during the company's fiscal year, which runs from February 2015 through January 2016. Wal-Mart said it will also expand its distribution network in Canada to support food and ecommerce growth on its Web site, walmart.ca. The expenditure is part of the company's previously announced capex or 2016.

• Mark Hoplamazian Joins VF's Board: Mark Hoplamazian, president and chief executive officer of Hyatt Hotels Corp., has been elected to the board of directors of VF Corp. His appointment expands the size of the Greensboro, N.C.-based company’s board to 13 members. All but Eric Wiseman, chairman, president and ceo of VF, are deemed to be independent. Hoplamazian was named president and ceo of Hyatt in December 2006, a month after his appointment to the company’s board. Prior to that, he served as president of The Pritzker Organization LLC, the principal financial and investment advisor to the Pritzker family that controls Hyatt. Prior to his 17-year tenure at Pritzker, he worked in international mergers and acquisitions at The First Boston Corp.

• Apple becomes first company worth over $700 billion: Apple became the first company to reach a market value of $700 billion Tuesday as shares vaulted amid upbeat news on the US tech giant's gains in the smartphone market and soon-to-arrive smartwatch. Shares rose 1.9 per cent to close at $122.02, lifting Apple's market value to $710 billion, and making it the first company to hit the $700 billion milestone. Apple chief executive Tim Cook, speaking at the Goldman Sachs Technology & Internet Conference, said Apple was hitting its stride. "We've taken (the mobile operating system) iOS and extended it into your car, into your home, into your health. All of these are really critical parts of your life," Cook said. 

Tech:

• Lava Drops Out of Race to Buy Nokia's Chennai Handset Unit: Lava International has dropped out of the race to buy Nokia's Chennai handset factory, once the world's biggest but now non-operational, as the fast-growing home-bred smartphone maker concentrates on developing its own manufacturing facilities in Uttar Pradesh. According to people aware of the development, a large-scale Chinese manufacturer, which was supposed to partner with Lava International to buy and subsequently operate the Nokia plant, decided to invest in its home market, forcing Lava to change its plans. These people said Nokia's mobile phone manufacturing plant located in the special economic zone (SEZ) in Sriperambudur, near Chennai, which had a peak capacity to make 15 million feature phones and smartphones a month, was too big for the Noidabased company to buy and operate on its own. Executives at Lava International declined comment on the development but confirmed that the company was investing in two plants in Uttar Pradesh--one in Noida's Sector 58, where it will assemble phones, and the other near the Yamuna Expressway. Lava said it has proposed to invest ₹600 crore in the second plant, and that 25 acre was nearly finalized, but negotiations were on with the state government for more land.

• Twitter is rolling out swipe to dismiss images: Twitter appears to be rolling out a big change to how you get get out of viewing images on the service once you’re done. Previously, to dismiss an image you’d make a single tap on the image. For many users today, it’s changed to be a simple swipe up or down to return to their Twitter feed. This feature rolled out for me today and I spent a good few minutes confused about why tapping an image wasn’t getting rid of it. After a few confusing moments it becomes natural to swipe away, though. Third-party app Tweetbot has had a similar swipe-to-dismiss feature for a number of years, which might be where Twitter got the inspiration.

• It's official, Microsoft's acquired Sunrise calendar app: A week after the news dropped that Microsoft was acquiring calendar app maker, Sunrise Atelier, the companies have confirmed the acquisition via a YouTube video that has since been made private. The Sunrise calendar app for mobile and desktop is a user favorite. With this acquisition Microsoft is looking beyond its own developers for ways to make its calendar apps better. Earlier reports pegged the purchase price at over $100 million, but there’s no official word on what Microsoft paid. In the year since Satya Nadella became CEO, Microsoft has been working on being more open – including open source – and hopes it can generate the kind of user obsession Apple enjoys. During the Windows 10 event, Nadella repeatedly told the audience that he wants Microsoft to be loved. If the company continues to buy up much beloved startups and their apps without messing them up, it might just get that.

• BitTorrent Takes on Netflix with Original Content Partnership: Everyone’s getting into the original content game now. BitTorrent today announced a partnership with Rapid Eye Studios to debut original content on the BitTorrent Bundle distribution platform. Rapid Eye Studios, created by producer Marco Weber, will be creating and producing the content. It will be released first on BitTorrent, but the platform only has the content exclusively for 30 to 60 days. After that period, it can be made available through any other distributor. Still, the projects receive heavy BitTorrent support, with marketing across all of BitTorrent’s brand. Creators can choose either paid or free (advertising-based) pricing models. BitTorrent says its original programming will focus on “a young, creative, and influential group of 14-25 year-olds,” who make up most of BitTorrent’s audience of 170 million active users.

• Facebook Launches ThreatExchange to Battle Security Issues: The Internet is a dangerous place full of botnets, malware and so many hackers. While recently battling a botnet Facebook realized that if it worked with other organizations and they shared information with each other, their answers could help all the companies involved to squelch the risk. From that initial partnership Facebook has built the ThreatExhange an API-based clearing house for companies to share security information with each other. The initial partners were Pinterest, Tumblr, Twitter and Yahoo with Bitly and Dropbox joining the beta. The ThreatExchange platform is built upon the ThreatData framework and Facebook infrastructure. Partners can share as much or as little information as they want with other companies. They can also determine which companies they want to share data with.