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(Reuters) – Akamai Technologies Inc’s (AKAM.O) forecast for third quarter revenue largely missed Wall Street expectations on Tuesday, even as its second quarter profit topped estimates on strength in its cloud security business.
Shares of the company, which were initially up after results, fell 3.5 percent to $ 72.60 in after-hours trading.
It forecast current-quarter revenue of $ 656 million to $ 668 million, while analysts on average were expecting $ 668 million, according to Thomson Reuters I/B/E/S.
Akamai provides services to companies to speed up their web pages, but has been under pressure as larger customers such as Apple Inc (AAPL.O) and Amazon.com Inc (AMZN.O) develop their own in-house know-how to handle web traffic.
The company has been responding by shifting its focus to cloud security.
Revenue from Akamai’s web business rose nearly 11 percent to $ 351 million in the second quarter. However, this growth was the slowest in at least six quarters.
“(Revenue) is a little lower than what we’d like to see from the web division,” Chief Executive Officer Tom Leighton said on an earnings call with analysts.
On the same call, Chief Financial Officer James Benson said the company was nonetheless “optimistic” about web division growth.
Revenue from the company’s cloud security business – which provides data centers with safe ways to operate and deliver content – rose 33 percent to $ 155 million in the quarter.
The company’s overall revenue rose 9 percent to $ 663 million, narrowly beating the average analyst estimate of $ 662 million.
Net income fell to $ 43 million, or 25 cents per share, in the quarter ended June 30, from $ 57 million, or 33 cents per share, a year earlier, as expenses rose 16 percent.
Excluding items, the company earned 83 cents per share, beating the average analyst estimate of 80 cents.
Akamai said in quarter three it expects to report adjusted earnings of 80 cents to 86 cents per share. Analysts were expecting earnings of 80 cents.
Reporting by Pushkala Aripaka in Bengaluru; Editing by Arun Koyyur and Rosalba O’Brien
SINGAPORE (Reuters) – Toyota Motor Corp has agreed to invest $ 1 billion in Southeast Asian ride-hailing firm Grab as a lead investor in the company’s ongoing financing round, which was launched after it bought the regional business of Uber Technologies Inc [UBER.UL].
The investment by Toyota is the largest-ever by an automaker in the global ride-hailing sector, the six-year old start-up said in a statement on Wednesday.
It is also the latest collaboration between a global vehicle maker and a technology firm as ride-hailing companies dominate the fast-growing field of mobility services, raising the risk of a future where car ownership declines in favor of such services.
Japan’s SoftBank Group Corp last month announced it would invest $ 2.25 billion in the Cruise autonomous vehicle unit of General Motors Co, while Fiat Chrysler Automobiles NV and Jaguar Land Rover Automotive PLC [TAMOJL.UL] have agreed to supply vehicles for Alphabet Inc’s self-driving car subsidiary Waymo.
Toyota’s investment will allow Grab, which counts peer Didi and Japan’s SoftBank Group Corp as investors, to further expand its range of online to offline services, such as food delivery and digital payments, deeper into the region.
Grab will be valued at just over $ 10 billion after Toyota’s investment, said a person familiar with the matter.
A Toyota executive will be appointed to Grab’s board of directors and a dedicated Toyota team member will be seconded to Grab as an executive officer, the ride-hailing firm said.
Wednesday’s announcement deepens Toyota’s partnership with Grab, following an earlier, undisclosed investment by the automaker’s trading arm last year.
Toyota has installed its driving recorder devices in some vehicles operated by Grab, using the collected data stored in its mobility services platform to analyze driving patterns and develop vehicle services.
The automaker on Wednesday said by deepening the partnership, it hoped to achieve connectivity for Grab’s rental car fleet across Southeast Asia and offer financing, insurance and maintenance services to drivers based on data collected on its platform.
“Going forward, together with Grab, we will develop services that are more attractive, safe and secure for our customers in Southeast Asia,” Toyota executive Shigeki Tomoyama said in a statement.
Data collected from the recorders could also help Toyota in its own development of next-generation mobility services, including a self-driving electric vehicle it plans to develop for companies to use for tasks such as ride hailing, package delivery and mobile shops.
South Korea’s Hyundai Motor Co and Japan’s Honda Motor Co Ltd have also previously funded Grab, which said it has achieved run-rate revenue of over $ 1 billion. The company’s app has been downloaded onto over 100 million mobile devices and the firm logs over 6 million rides per day.
Earlier this year, Uber exchanged its Southeast Asian operations for 27.5 percent of Singapore-headquartered grab, ending a battle between the two for regional dominance.
Southeast Asia, home to about 640 million people, is a major arena for tech firms offering services from digital payments and ride-hailing to e-commerce.
Last month, Indonesian ride-hailing and online payment firm Go-Jek said it would enter Vietnam, Thailand, Singapore and the Philippines in the next few months, investing $ 500 million in its international push.
Reporting by Aradhana Aravindan in SINGAPORE and Naomi Tajitsu in TOKYO; Editing by Himani Sarkar and Christopher Cushing
WASHINGTON (Reuters) – U.S. President Donald Trump on Tuesday floated a plan to fine ZTE Corp $ 1.3 billion and shake up its management, as U.S. lawmakers vowed to keep sanctions that crippled the Chinese telecommunications firm.
Trump, speaking to reporters at the White House about ongoing trade negotiations with China, said there was no deal with Beijing on ZTE. In addition to the fine, Trump said ZTE should come under new management and name a new board of directors.
Republicans and Democrats in Congress, however, accused the president of bending to pressure from Beijing to ease up on a company that has admitted to violating sanctions on Iran. Their reaction could complicate U.S. efforts to win trade concessions from China to narrow a $ 335 billion annual trade gap.
“The proposed solution is like a wet noodle,” said Senate Democratic Leader Chuck Schumer, who accused Trump of jeopardizing national security for what he described as minor trade concessions.
Schumer, speaking before Trump detailed his latest thinking on ZTE, added that the possible remedies floated earlier by the Trump administration were inadequate.
According to sources familiar with the discussions, a proposed trade deal with China would lift a seven-year ban that prevents U.S. chipmakers and other companies from selling components to ZTE, which makes smartphones and telecommunications networking gear.
In return, China would eliminate tariffs on U.S. agriculture or agree to buy more farm products from the United States.
The U.S. Commerce Department imposed the ban in April after it determined that ZTE had broken an agreement after it pleaded guilty to shipping U.S. goods and technology to Iran.
The ban has threatened the viability of China’s second-largest telecoms maker by cutting off access to companies that supply 25 percent to 30 percent of its components. Suppliers include some of the biggest U.S. tech companies, including Alphabet Inc’s Google, which licenses its Android operating system to ZTE, and chipmaker Qualcomm Inc.
ZTE last week said it had suspended its main operations.
The U.S. Department of Defense has also stopped selling ZTE’s mobile phones and modems in stores on its military bases, citing potential security risks.
U.S. Treasury Secretary Steven Mnuchin told lawmakers that the treatment of ZTE was not “a quid pro quo or anything else” related to trade, and said national security concerns would be taken into consideration.
“I can assure you that whatever changes or decisions that are made in Commerce will deal with the national security issues,” Mnuchin told a U.S. Senate appropriations subcommittee.
Republican and Democratic lawmakers said they were looking at ways to block any possible changes. “We will begin working on veto-proof congressional action,” Republican Senator Marco Rubio said on Twitter.
Lawmakers are considering several possible options and aim to act “soon,” said Dick Durbin, the Senate’s No. 2 Democrat.
The Senate Banking Committee voted 23-2 on Tuesday to adopt a measure that would make it harder for the president to modify penalties on Chinese telecommunications firms. It was added to legislation that would tighten oversight of foreign direct investment.
The Republican-controlled House of Representatives is weighing several possible changes to a defense-policy bill that would also keep up the pressure on ZTE. One proposal would block the sale of ZTE products and those of another Chinese company, Huawei Technologies, until national security officials certify they are safe.
Another proposal would require the director of national intelligence to consider the security implications of any changes to the ZTE ban, while a third would require reports on quid pro quo offers between the U.S. and Chinese governments over any possible plan.
(This version of the story corrects first paragraph to show lawmakers vowed to keep sanctions, not block them.)
Additional reporting by Susan Heavey, Doina Chiacu and David Lawder; Writing by Andy Sullivan; Editing by Chris Sanders and Paul Simao
NEW DELHI (Reuters) – Indian ride-hailing firm Ola, backed by Japan’s SoftBank Group will launch 10,000 electric three-wheelers in the country over the next 12 months as part of a broader electrification plan, the company said in a statement on Monday.
The move is part of a broader push by Ola to launch 1 million electric vehicles on its platform by 2021, it said in the statement, adding that it will work with various state governments, vehicle manufacturers and battery companies to meet its target.
Reporting by Aditi Shah; Editing by Swati Bhat
BEIJING (Reuters) – Meituan Dianping, China’s largest provider of on-demand online services, is buying bike-sharing firm Mobike for $ 2.7 billion excluding debt, in a deal that will intensify the rivalry of their common backer Tencent Holdings with Alibaba Group.
Meituan announced the deal on Wednesday but did not disclose the value of the deal. Two sources told Reuters the equity value of the deal was $ 2.7 billion.
The deal consolidates the resources of the two firms, which are backed by Chinese gaming and social media giant Tencent, as Mobike faces off against Alibaba-backed Ofo, which also counts ride-hailing firm Didi Chuxing as a major investor.
The two bicycle-sharing companies have waged a costly war of subsidies in a bid to win the Chinese market as well as overseas markets.
Earlier this week, Alibaba said it would assume full control of Chinese food delivery platform Ele.me, a rival to Meituan.
Mobike, which counts over 30 million rides a day, will maintain its brand following the deal and keep its current management team, Meituan said.
Reporting by Cate Cadell in BEIJING, Julie Zhu and Kane Wu in HONG KONG; Editing by Muralikumar Anantharaman
SAN FRANCISCO/LONDON (Reuters) – Opinion polls published on Sunday in the United States and Germany indicated that a majority of the public were losing trust in Facebook over privacy, as the firm ran advertisements in British and U.S. newspapers apologizing to users.
Fewer than half of Americans trust Facebook to obey U.S. privacy laws, according to a Reuters/Ipsos poll released on Sunday, while a survey published by Bild am Sonntag, Germany’s largest-selling Sunday paper, found 60 percent of Germans fear that Facebook and other social networks are having a negative impact on democracy.
Facebook founder and chief executive Mark Zuckerberg apologized for “a breach of trust” in advertisements placed in papers including the Observer in Britain and the New York Times, Washington Post and Wall Street Journal.
“We have a responsibility to protect your information. If we can’t, we don’t deserve it,” said the advertisement, which appeared in plain text on a white background with a tiny Facebook logo.
The world’s largest social media network is coming under growing government scrutiny in Europe and the United States, and is trying to repair its reputation among users, advertisers, lawmakers and investors.
This follows allegations that the British consultancy Cambridge Analytica improperly gained access to users’ information to build profiles of American voters that were later used to help elect U.S. President Donald Trump in 2016.
U.S. Senator Mark Warner, the top Democrat on the Senate Intelligence Committee, said in an interview on NBC’s Meet the Press” on Sunday that Facebook had not been “fully forthcoming” over how Cambridge Analytica had used Facebook data.
Warner repeated calls for Zuckerberg to testify in person before U.S. lawmakers, saying Facebook and other internet companies had been reluctant to confront “the dark underbelly of social media” and how it can be manipulated.
“BREACH OF TRUST”
Zuckerberg acknowledged that an app built by a university researcher had “leaked Facebook data of millions of people in 2014”.
“This was a breach of trust, and I’m sorry we didn’t do more at the time,” Zuckerberg said, reiterating an apology first made last week in U.S. television interviews.
Facebook shares tumbled 14 percent last week, while the hashtag #DeleteFacebook gained traction online.
The Reuters/Ipsos online poll found that 41 percent of Americans trust Facebook to obey laws that protect their personal information, compared with 66 percent who said they trust Amazon.com Inc, 62 percent who trust Alphabet Inc’s Google, 60 percent for Microsoft Corp.
The poll was conducted from Wednesday through Friday and had 2,237 responses. (reut.rs/2G9hvrv)
The German poll published by Bild was conducted by Kantar EMNID, a unit of global advertising holding company WPP, using representative polling methods, the firm said. Overall, only 33 percent found social media had a positive effect on democracy, against 60 percent who believed the opposite.
It is too early to say if distrust will cause people to step back from Facebook, eMarketer analyst Debra Williamson said in an interview. Customers of banks or other industries do not necessarily quit after losing faith, she said.
“It’s psychologically harder to let go of a platform like Facebook that’s become pretty well ingrained into people’s lives,” she said.
Data supplied to Reuters by the Israeli firm SimilarWeb, which measures global online audiences, indicated that Facebook usage in major markets and worldwide remained steady over the past week.
“Desktop, mobile and app usage has remained steady and well within the expected range,” said Gitit Greenberg, SimilarWeb’s director of market insights. “It is important to separate frustration from actual tangible impacts to Facebook usage.”
Additional reporting by William James in London, Dustin Volz in Washington D.C. and Chris Kahn in New Editing by Kevin Liffey
(Reuters) – Facebook Inc on Friday said it was suspending political data analytics firm Cambridge Analytica, which worked for President Donald Trump’s 2016 election campaign, after finding data privacy policies had been violated.
Facebook said in a statement that it suspended Cambridge Analytica and its parent group Strategic Communication Laboratories (SCL) after receiving reports that they did not delete information about Facebook users that had been inappropriately shared.
Cambridge Analytica was not immediately available for comment. Facebook did not mention the Trump campaign or any political campaigns in its statement, attributed to company Deputy General Counsel Paul Grewal.
“We will take legal action if necessary to hold them responsible and accountable for any unlawful behavior,” Facebook said, adding that it was continuing to investigate the claims.
Cambridge Analytica worked for the failed presidential campaign of U.S. Senator Ted Cruz and then for the presidential campaign of Donald Trump. On its website, it says it “provided the Donald J. Trump for President campaign with the expertise and insights that helped win the White House”.
Brad Parscale, who ran Trump’s digital ad operation in 2016 and is his 2020 campaign manager, declined to comment on Friday.
In past interviews with Reuters, Parscale has said that Cambridge Analytica played a minor role as a contractor in the 2016 Trump campaign, and that the campaign used voter data from a Republican-affiliated organization rather than Cambridge Analytica.
Facebook’s Grewal said the company was taking the unusual step of announcing the suspension “given the public prominence” of Cambridge Analytica and its parent organization.
The suspension means Cambridge Analytica and SCL cannot buy ads on the world’s largest social media network or administer pages belonging to clients, Andrew Bosworth, a Facebook vice president, said in a Twitter post.
Trump’s campaign hired Cambridge Analytica in June 2016 and paid it more than $ 6.2 million, according to Federal Election Commission records.
Cambridge Analytica says it uses “behavioral microtargeting”, or combining analysis of people’s personalities with demographics, to predict and influence mass behavior. It says it has data on 220 million Americans, two thirds of the U.S. population.
It has worked on other campaigns in the United States and other countries, and it is funded by Robert Mercer, a prominent supporter of politically conservative groups.
Facebook in its statement described a rocky relationship with Cambridge Analytica and two individuals going back to 2015.
That year, Facebook said, it learned that University of Cambridge professor Aleksandr Kogan lied to the company and violated its policies by sharing data that he acquired with a so-called “research app” that used Facebook’s login system.
Kogan was not immediately available for comment.
The app was downloaded by about 270,000 people. Facebook said that Kogan gained access to profile and other information “in a legitimate way” but “he did not subsequently abide by our rules” when he passed the data to SCL/Cambridge Analytica and Christopher Wylie of Eunoia Technologies. (bit.ly/2FZU1Ir)
Eunoia did not immediately respond to a request for comment.
Facebook said it cut ties to Kogan’s app when it learned of the violation in 2015, and asked for certification from Kogan and all parties he had given data to that the information had been destroyed.
Although all certified that they had destroyed the data, Facebook said that it received reports in the past several days that “not all data was deleted”, prompting the suspension announced on Friday.
Additional Reporting by Ismail Shakil in Bengaluru; Editing by Jonathan Weber, Leslie Adler and Joseph Radford
Carbon Black, a private cybersecurity firm headquartered in Waltham, Mass. that is rumored to be seeking an IPO this year, has appointed a chief cybersecurity officer.
The company has hired Tom Kellermann, a former executive at Trend Micro, a rival Japanese firm, where he held the same title. Kellermann most recently served as CEO and co-founder of Strategic Cyber Ventures, a cybersecurity-focused venture capital firm based in Washington, D.C., which is backed by Hudson Bay Capital, a New York-based hedge fund.
“I decided I needed to stop armchair quarterbacking and get back into the fight,” Kellermann tells Fortune. He says he had an epiphany while hiking in Boulder, Colo. last summer.
Kellermann, who started in the new role on January 22, says he will remain on at Strategic Cyber Ventures as vice chair of the board. The company has invested millions of dollars in a number of startups, including TrapX, E8 Security, ID DataWeb, and Polarity.
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Patrick Morley, Carbon Black’s CEO, said in a statement that Kellermann’s “experience perfectly matches the balance between innovative technology, security, and evangelism that we’re looking for at Carbon Black.”
Carbon Black, which sells subscriptions to software designed to detect and defend against digital threats, filed confidential paperwork in the fall for an initial public offering, the Wall Street Journal reported last year. The company has also been in talks with possible acquirers, such as IBM, VMware, and Microsoft, The Information reported at the beginning of the year.
HONG KONG (Reuters) – Tencent Holdings Ltd is leading a deal to invest 10 billion yuan ($ 1.59 billion) in Chinese menswear group Heilan Home Co Ltd, upping a retail rivalry with fellow internet giant Alibaba Group Holding Ltd, sources with knowledge of the matter said.
China’s second-largest e-commerce company JD.com Inc and online clothing platform Vipshop Holdings Ltd will also be among the group that plans to acquire less than 10 percent of the company for 5 billion yuan, one source said.
Another 5 billion yuan would help set up an industrial investment fund to focus on deals that fit with Heilan’s business, the person said, requesting anonymity because they were not authorized to speak to the media.
Heilan had a market value of about $ 8.13 billion as of Monday, when it halted shares from trading, pending deal announcements.
Tencent, JD.com and Vipshop declined to comment. A Heilan spokesman was not immediately available to comment.
The proposed deal, which could be announced as early as Friday, extends a recent push by Tencent, China’s biggest social network and gaming company, into bricks-and-mortar retail to further compete with Alibaba.
Heilan which has clothing brands such as HLA and SANCANAL, has been a long-time partner of Alibaba’s online marketplace Tmall.
But last month Tencent, which has a market capitalization of $ 563 billion, said it would invest 4.2 billion yuan for a stake in Yonghui Superstores. It is also looking to take a stake in the China business of French supermarket retailer Carrefour.
The recent moves reflect a wider, long-running stand-off between Tencent and Alibaba, which have made competing investments in areas as diverse as bike-sharing apps, food delivery and gaming.
JD.com, in which Tencent is a top-10 investor, traditionally leads against Alibaba in online retail sales of electronics and home appliance products, but lags behind in the fashion business.
Tencent and JD.com last month jointly made an $ 863 million investment in Vipshop, in a bid to tap the country’s young female shoppers and gain access to consumer and transaction data to help them compete with Alibaba’s online payment platform Alipay.
Jiangsu-based Heilan was set up by Zhou Jianping, one of the richest people in China’s fashion industry, in 1997. It runs more than 5,000 stores, mostly in China, and recorded 12.5 billion yuan in operating income in the first three quarters last year, its website showed.
Reporting by Julie Zhu; Editing by Stephen Coates
TEL AVIV (Reuters) – Swiss-Israeli technology firm Sirin Labs said on Thursday it had raised $ 118 million in an initial coin offering (ICO) to support the development of an open source blockchain smartphone.
ICOs allow startups founded on cryptocurrency technologies such as blockchain to quickly raise capital by issuing virtual tokens to investors.
Such offerings have become more common in the past year, but Europe’s top markets regulator warned last month they were “extremely risky and highly speculative investments.”
Sirin, which has recruited soccer superstar Lionel Messi to be its brand ambassador, said it had raised the money from 5,600 people globally within the first 24 hours and would continue the offering for another 12 days.
“These are our potential clients. We think they will be the first to buy the phones,” Moshe Hogeg, CEO and founder of Sirin, told reporters.
The ICO will help fund its secure blockchain phone, as well as a blockchain personal computer. The company said the phone, which should be on the market near the end of next year, benefits from enhanced security and the ability to carry out fee-less transactions.
Hogeg said his target had been to raise $ 75 million – the amount needed to develop the phone. The additional funds will enable the company to increase its production and invest more in sales and marketing.
Reporting by Ari Rabinovitch and Tova Cohen; Editing by Mark Potter