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Oct

2011

The unofficial tech IPO calendar for 2012

by Fred Mason

Social games maker Zynga is one of dozens of highly-anticipated planned Tech IPOs in 2012.

The tech IPO pipeline is officially clogged. Renaissance Capital claims there are 330 IPOs (across all industries) in the IPO pipeline looking to raise $180 billion. Renaissance predicts that capital raised from 2011 IPOs could fall 36 percent shy of last year’s $39 billion. Should the market recover, 2012′s IPO market will be massive, and there are lots of great tech companies eager to raise capital. Here’s our unofficial 2012 tech IPO calendar…

360Buy.com IPO (Jingdong Mall). One of the largest business-to-consumer sites in China, 360Buy.com often draws comparisons to Amazon. Revenue was expected to hit $4.4 billion in 2011. Expect that keep climbing as online sales in China rose 77 percent in China last year. See our post 3 reasons to invest in the 360Buy.com IPO (Jingdong Mall) for more.

58.com IPO. China’s largest Craigslist-like online classifieds site, 58.com filed for an IPO on June 20,2011. The site makes money by charging a small fraction of its posters for premium-placement on the site.

Angie’s List IPO ($75 million+). Angie’s List lets paying subscribers read reviews of local businesses and contractors. The company’s something of an anomaly in the fast-paced world of tech start-ups as it’s now in its 16th year of operation. During that time, Angie’s List has accumulated a database of more than 2.2 million reviews (per CNN) and has more than 800,000 paying members.

Alibaba’s HiChina IPO ($200 million+). A subsidiary of Alibaba.com Ltd., HiChina Group Ltd.’s something like GoDaddy.com. The company offers domain names, hosting accounts and website building tools for small businesses in China. An IPO will help finance expansion into new businesses including email and website design (per WSJ).

Bazaarvoice IPO ($85 million+). You’ve probably seen or used Bazaarvoice’s software without realizing it. The company sells its code to online retailers (like Best Buy and Macy’s), so those retailers can pull in online reviews of the products they sell. Bazaarvoice is expected to generate $64.5 million+ in revenue this year, and CEO Brett Hurt claims the company could stop expanding now and immediately become profitable.

Brightcove IPO ($50 million+). Brightcove offers a cloud-based video serving platform for paying customers. All told, they serve up some 700 million video streams a month (second only to YouTube) for more than 3,300 clients (per GigaOm). Unfortunately, the business doesn’t reap a huge amount of revenue. Brightcove will likely book somewhere in the neighborhood of $50 million in revenue this year.

Eloqua IPO ($100 million+). Eloqua makes it easier for large Web sites to run and analyze marketing campaigns. Specifically, the company’s analytics software allows businesses to predict how much revenue marketing campaigns will generate.

Facebook IPO. Now boasting more than 800 million registered users, Facebook’s IPO will rank among the largest IPOs of all time. The latest media reports peg Facebook’s IPO date as sometime late in 2012. Interestingly, though, SEC rules will require the company to start making public its revenue, profits and losses in April 2012 (since the company’s total number of shareholders now exceeds 500).

Gilt Groupe IPO. A flash-sales site that offers temporary discounts on luxury goods, one of Gilt Groupe’s smaller competitors (HauteLook) was recently acquired by Nordstrom, Inc. (NYSE:JWN) for $180 million. Contrast that with the much larger Gilt Groupe where revenue alone is expected to hit $500 million this year.

Groupon, Inc. IPO ($750 million+). A series of pre-IPO missteps may push Groupon’s IPO to 2012. The Chicago-based daily deals email marketing company generated $688 million in revenue during the first half of 2011. See our post 3 reasons NOT to invest in Groupon’s IPO for more.

Guidewire IPO ($100 million+). A 10-year-old company that develops technology for the insurance industry, Guidewire’s services help streamline claims by processing them online. The company generated revenue of $144.7 million in 2010. That was good for net income of $15.5 million. Guidewire will IPO under ticker symbol GWRE.

Jive Software IPO ($100 million+). Jive creates social networking software for corporations. And it counts some major companies among its clients – including Nike, Cisco and Toshiba. Revenue from each of their customers averages a whopping $7,874 a month (per OregonLive). See our post 3 reasons to buy shares in a Jive IPO (Jive Software) for more.

LivingSocial IPO ($1 billion+). In light of the recent turmoil in financial markets, LivingSocial has temporarily shelved IPO plans. The company is instead fishing around for private equity (per Bloomberg). The daily deals site faces a lot of competition in Groupon and Google, which recently purchased restaurant-review company Zagat and German daily-deals site DailyDeal.de.

MobiTV IPO ($75 million+). A video provider for mobile phones, MobiTV has contracts with all the major telecoms: AT&T, Sprint and T-Mobile. Their software gives mobile users the ability to download video or watch it on-demand via their phones. Of course, the merger between AT&T and T-Mobile could drive down revenue at the company. An IPO could help them expand internationally. See our post 3 reasons NOT to invest in the MobiTV IPO for more.

Qunar.com IPO. A China-based travel search site, Qunar’s majority-owned by China’s largest search engine, Baidu.com, Inc. (NASDAQ:BIDU). Qunar’s already a Top 100 site in China, and I expect the backing from Baidu will cement Qunar’s position as the leading travel site in China. See our post Qunar IPO: 5 reasons to invest in China’s travel site for more.

SecondMarket IPO. The rumors haven’t started flying about a SecondMarket IPO yet, but the company did start listing its own shares on its Web site. SecondMarket provides a marketplace for high-net-worth individuals and institutions to invest in private companies.

Trulia IPO. An online real estate search and marketing company akin to Zillow Inc. (NASDAQ:Z), Trulia announced IPO plans in February 2011. The site’s been doubling revenues year over year and has an estimated value of $700 million (per Inman).

Twitter IPO. Look for a Twitter IPO late in 2012 or early 2013. The ubiquitous micro-blogging site now claims 100 million active users. Questions remain about the company’s business model, but Twitter’s reach offers some tantalizing possibilities. See our post Twitter’s secret key to making money for more.

Vancl IPO ($1 billion+). An online-only clothing retailer in China, Vancl’s advertising campaigns blanket the Internet behind the Great Firewall. It seems to be working, too, as the company targets price-conscious consumers. Vancl comes from good pedigree, with the company’s founder, Chen Nian, having sold his last venture, Joyo.com, to Amazon. Joyo has since morphed into Amazon.cn.

Yelp IPO. Yelp provides local reviews for businesses and restaurants. According to CEO Jeremy Stoppelman, the company gets 63 million unique monthly visitors who add more than 1 million new reviews to the site every month. Yelp’s been particularly successful with its apps. The right partnerships could drive revenue growth for the company moving forward.

Zynga IPO ($1 billion+). Zynga, which makes social-networking games for Facebook, iPhones and Androids, is tentatively planning to IPO in November 2011. Don’t be surprised if Zynga’s IPO date gets pushed back to 2012, though. The company’s has perhaps the best financials of all the company’s on the list. As of March, the company held nearly $1 billion in cash and was generating cash flow of $104 million per quarter (per Fortune). See our post 8 facts about Zynga before the IPO for more.

Interesting 2012 non-tech IPOs: U.K. soccer team Manchester United.

WHY THE TREND WILL CONTINUE 10 reasons why we’ll see gold over $2,000 an ounce	START-UPS-TURNED-TITANS The unofficial tech IPO calendar for 2011
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POWERING THE FUTURE How to invest in lithium stocks	TOO MUCH HYPE? Lashou IPO: 5 reasons avoid investing in China’s Groupon

Tags: 360buy.com, 58.com, Angies List, Bazaarvoice, Brightcove, Eloqua, Facebook IPO, Gilt Groupe, Groupon, Guidewire, HiChina, Jingdong Mall, Jive, LivingSocial, MobiTV, Qunar, SecondMarket, Trulia, Twitter, Vancl, Yelp, Z, Zynga, Zynga IPO
Posted in Chinese stocks, Internet stocks, IPOs, private companies, tech stocks | No Comments »

Sep

2011

Lashou IPO: 5 reasons avoid investing in China’s Groupon

by Fred Mason

It’s looking like Groupon’s going to get beat to market. Lashou.com’s IPO plans, which were announced last week, could make the Chinese company the first daily deals coupon site to go public in the U.S. Here are five reasons why I plan to steer clear of the stock:

Ge You

1) Metoric growth can’t be sustained. One of the first daily deals sites in China, it’s hard to believe Lashou was founded in March 2010. That makes it just 18 months old, and already, it’s the 74th most-visited web site in China (per Alexa). In April, a $110 million round of funding from China’s GSR Ventures valued the company $1.1 billion. That valuation was $600 million higher than a similar valuation just five months earlier. Thanks to aggressive marketing campaigns (including one starring well-known Chinese actor/comedian Ge You), the company now has more than 10 million registered users and has the widest reach of any daily deals site in China covering more than 170 cities (per Business Insider). Sales revenue in July hit RMB167 million ($26 million USD). But how long can it last?

Already research firm Analysys International is predicting a dramatic slowdown in growth for daily deals sites in China. First quarter growth of 65.7 percent, could tumble to 21.3 percent in the fourth quarter as user activity on the sites declines.

2) The demise of Gaopeng.com. Groupon operates in China at Gaopeng.com – a site that launched earlier this year and experienced rapid growth before hitting a few stumbling blocks earlier this year. Traffic has fallen off dramatically at the site:

Last month, Groupon fired a big chunk of its staff at Gaopeng, but the company insists it’s “financially viable and still hiring” (per Bloomberg). The rapid plunge in traffic at Gaopeng should give investors pause and serve as a warning that continued growth at Lashou is far from guaranteed.

3) Shady business practices = lukewarm reception from investors. Chinese firms in just about every industry from coal mining to timber, lighting and media have U.S. investors nervous about dumping dollars into Chinese companies. Any rumor of shady accounting or business practices can be enough to push a Chinese ADR down 20 percent in a day.

Earlier this year, an expose aired by CCTV (China Central Television) showed Lashou employees admitting that they’d exaggerated on the number of deal participants the company touted on its web site (per Business Insider). That could be the very last thing you want to happen when you’re planning to hit up American investors for cash. If nothing else, it’s enough to convince me to steer clear of the stock.

4) Price gouge. It’s little wonder that Lashou has garnered a lot of interest from consumers considering the fact that they offer merchandise that’s as much as 70 to 80 percent off retail price. That’s much higher than Groupon’s 30 to 50 percent discounts. Convincing groups of merchants to sell their products at 80 percent off might be easy enough if you’re tapping a new market that’s never been exposed to daily deals sites, but if you’re competing in an established market with dozens of daily deals sites trying to lure the same group of merchants, business gets tougher. Merchants will likely burn out, and that’ll leave Groupon and Lashou selling discounts to obscure products or discounting much less.

5) Copy and paste. One of the biggest reasons I’m not an advocate for investing in Groupon is the fact that the company’s business model is so easily copied (see my post 3 reasons NOT to invest in Groupon’s IPO). Lashou faces the same problem. It’ll have to add value to its service beyond just being a place to go for coupons. If it can strike a balance between innovation and top-line growth, the stock could reward investors. I’m just not prepared to take that risk.

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Tags: daily deal sites, Gaopeng.com, Groupon, Lashou
Posted in Chinese stocks, Internet stocks, IPOs, private companies, tech stocks | No Comments »

May

2011

RenRen IPO: 5 things you don’t know about ‘China’s Facebook’

by Fred Mason

RenRen’s IPO date has arrived. Shares in the “Facebook of China” will begin trading today (May 4, 2011) on the NYSE under ticker symbol “RENN.” The whole affair has the feel of being backstage before a Justin Bieber concert, which is to say traders are giddy.

Finally, we’ll get to sink our hands into a genuine social networking stock. Better yet, it hails from behind the Great Firewall in the world’s largest Internet market. Expect fireworks.

While the mainstream media has flooded the tubes with news stories on RenRen, here are five things you might not have known about the “Facebook of China”:

1) Pony up for those brand pages. RenRen may have copied the master (Facebook) in the beginning, but it’s taken a slightly different tact toward advertising. Rather than giving away “fan pages” to businesses for free, RenRen charges companies upwards of $90,000 to launch branded “mini-sites” on RenRen. That’s one way to solve the revenue problem that’s hanging over Facebook’s head.

2) It’s messy behind the scenes. News broke yesterday that one of RenRen’s audit-committee chairmen was stepping down after alleged financial fraud at a different Chinese tech company where he serves as CFO. Perhaps that’s not a big deal (since it stems from allegations at a different company), but this might give you pause: RenRen’s had trouble spitting out just how many users the site has. First, they claimed user growth of 29 percent during Q1. A week and a half later, the social networking site backpedaled, saying growth was actually more like 19 percent. Hmmm… As it stands right now, RenRen claimed to have 117 million activated users as of March 31, 2011. Take it for what it’s worth.

3) Strength in numbers. The PRC is home to the world’s largest Internet market with more than 420 million Web users, according to Internet World Stats. That’s nearly twice the number of surfers in the U.S., and China’s Internet penetration rate is just 31 percent! Compare that to the U.S., where 77 percent of the population has Web access. Clearly, the Internet growth story moving forward is going to be told on the other side of the Pacific.

4) Coupons anyone? RenRen operates a Groupon-style deal of the day clone at Nuomi.com. Launched last summer, Nuomi’s already a Top 200 site in China (per Alexa), but it does face stiff competition. The Xinhua News claims there are already more than 2,600 group buying websites in the PRC. Fortunately, RenRen’s IPO warchest might help the company market Nuomi. Execs appear more than willing to do just that as they announced plans to spend more than $30 million in advertising the site in February. They won’t lose the Groupon war without a fight.

5) Multiple social networks in one. Early in April, RenRen launched a second social networking site dubbed “Jingwei.” Jingwei targets professionals who are interested in networking opportunities. If it catches on, we might not have the opportunity to invest just in the “Facebook of China” but the “LinkedIn of China” and the “Groupon of China,” too – all in one stock. What more could you ask for in a country where only the privileged few have access to shares in Facebook, Twitter, Groupon and LinkedIn?

THE FACEBOOK OF CHINA?

3 reasons TO invest in the RenRen IPO

LOOKING FOR LOVE IN CHINA

Jiayuan.com IPO: 3 reasons to invest in Chinese dating site

WILL RENREN FLOP?

5 reasons NOT to invest in the RenRen IPO

THE GOOGLE OF RUSSIA

Yandex IPO: 5 reasons to invest in Yandex stock

THE FACEBOOK(S) OF CHINA

RenRen IPO’s biggest hurdle might be PengYou

TWEETING IN CHINESE

A Sina Weibo IPO could be in the works as China’s Twitter moves to Weibo.com

Tags: Facebook, Groupon, Jingwei, LinkedIn, Nuomi, RenRen, RenRen IPO, social networking stocks
Posted in Chinese stocks, Internet stocks, IPOs, private companies, tech stocks | No Comments »

Apr

2011

3 MORE reasons to invest in the RenRen IPO

by Fred Mason

I’ve been excited about this for months. Back in February, I wrote a post titled Five reasons to invest in the RenRen.com IPO, and now it looks like we’re getting really close to launch. Here are three more reasons to consider investing in RenRen’s IPO:

1) The writing on the wall. Sometimes, all it takes is investor excitement to push up the value of a stock – even in the absence of underlying fundamentals. Let’s take Youku.com, for example. Shares in the so-called “YouTube of China” IPO’d around $33 in December. Despite revenue of just $23 million and a loss of $5.6 million in the three months ending Dec. 31, shares have risen nearly 100 percent since debuting on NYSE. That puts Youku’s stock at more than 110 times annual revenue! Those are mind-boggling numbers for a company with scanty revenue and a hell of a lot of competition.

It’s hard to deny that Yoku’s trading on much of anything beyond investor exuberance, and I expect the exuberance for the “Facebook of China” to far outpace that of the “YouTube of China” – especially since even a company as large as Google (NASDAQ:GOOG) has had trouble making money with YouTube.

2) Several companies in one. Not only does RenRen operate the most popular “real name” social network in China, it’s also ventured into the professional social networking space with the launch of a LinkedIn-style network dubbed Jingwei (Read more in my post: RenRen readies for IPO by launching second social networking site, cloning LinkedIn). They didn’t stop there, though. The company also operates a Groupon-style deal of the day clone at Nuomi.com. Granted Nuomi’s one of a reported 2,612 group buying websites in China (per the Xinhua News), but RenRen’s parent company is serious about seeing Nuomi succeed. They announced plans in February to pour $30.42 million into advertising the new venture.

3) The fat part of the curve. China’s Internet growth feels a lot like the U.S. tech bubble, except for the fact that there are already lots of Chinese tech companies making real money. The online advertising market in the PRC is expected to triple through 2014 to nearly $13 billion, according to Susquehanna International Group LLP. By contrast, online advertising grew just 15 percent in the U.S. last year, per PCWorld. As advertising rates surge, the biggest beneficiaries will be social networking sites with their warchests full of invaluable data on their users. From ages to location to tastes in music and relationship status, RenRen knows more about their users than Baidu, and – if the company continues to expanding its user base – that could make RenRen even more valuable to advertisers.

Fred’s Best Guess: RenRen easily makes my list of the Top 3 IPOs of 2011. It ranks up there with LinkedIn and Russian search engine Yandex. I expect choppy (dangerous) trading for the first few days, and a steady skyward march after that. I say dollar-cost-average your way into the stock, and hold it for a year to latch onto what could very well be triple-digit gains.

Note: Fred’s Best Guess is just that: a complete guess. It does NOT constitute investment advice and should NEVER be construed as such.

RenRen IPO Vitals

RenRen expected IPO date: May 4, 2011.
RenRen ticker symbol: NYSE:RENN

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Tags: China, chinese tech stocks, Facebook, Facebook IPO, Groupon, Jingwei, Nuomi, RENN, RenRen
Posted in Chinese stocks, Internet stocks, IPOs, private companies, tech stocks | No Comments »

Feb

2011

Groupon CEO is a weird guy with good advice

by Fred Mason

Deal-of-the-day web site Groupon.com vaulted from obscurity to multi-billion dollar company in two years. Indeed, it’s predicted to “make $1 billion in sales faster than any other business, ever,” according to Forbes. Now, we’ve gotten a peek behind the curtain with the so-called “Frodo Memo” that ended up in the hands of the Wall Street Journal.

The memo, which was sent late last month, shows just how unusual Groupon’s CEO Andrew Mason is. In it, the CEO holds back little of his enthusiasm, pride and ambition, and he offers a few nuggets of wisdom that entrepreneurs everywhere should heed:

1) You’re your own worst enemy. Mason argues sites like MySpace, Friendster, AOL and Yahoo! didn’t lose to competitors, but rather lost the battle on their own. “MySpace essentially handed Facebook the keys to the castle by devolving into a service that wasn’t delighting its customers,” he writes. How did they do that? By digging a rut and being unable or unwilling to innovate.

2) Enjoy the ride you’re on. When you’re overwhelmed with the day-to-day operations of your business or job, you can lose sight of what you’ve accomplished so far. It’s OK to revel in your success. Use it to feed your desire to make your business even better. “The earth is super old – thousands of years, some say – and no one has ever done anything like this,” Mason writes. “You should all exude a borderline-annoying sense of pride in what you’ve achieved. You should be wearing a big, toothy grin – the kind that makes people want to punch you in the face.” If you take pride in your business, you’ll make the decisions that will lead your customers back to your trough.

3) Give your customers a reason to pick you. Mason’s well aware that just about every programmer and multi-national tech company in the world is working on a way to poach clients from Groupon. “They are coming HARD,” he writes. “If you feel a little like Frodo climbing Mount Doom, you can’t be blamed.” But Mason argues that Groupon can stay ahead of its competitors by surprising the company’s clients. “Life is too short to be part of another cookie cutter company,” he writes. “Surprise reminds people that they are alive, that they haven’t seen it all.”

Take heed. Mason graduated from Northwestern University in 2003 with a degree in music. That makes him, what, 31? A thirty-something with a music degree has built a rapidly-growing Internet marketing juggernaut the likes of which the world has never seen. He’s proof that we can all accomplish great things by ignoring the naysayers and forging ahead … just like little Frodo on Mount Doom.

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Tags: entrepreneurs, Groupon, small businesses
Posted in business ideas, Internet stocks, IPOs, NASDAQ, private companies, retail stocks, tech stocks | No Comments »

Jan

2011

The unofficial tech IPO calendar for 2011

by Fred Mason

After a few terrible years for IPOs, some exciting technology companies look like they’re ready to step up to the IPO plate in 2011 or 2012. Here’s an unofficial list of 23 tech companies that – according to rumors from the Wall Street Journal and TechRice among other sources – might go to market this year or next:

58.com IPO? China’s for-profit version of Craigslist.org, 58.com’s got a robust user base. A recent browse through the site’s classified ads in Beijing showed more than 1.2 million listings for people looking for roommates – and that’s just in one city! The site ranks 34th in online traffic in China, according to Alexa.com.

***

360buy.com IPO? The third-largest online retailer in China, 360buy.com just secured a nice chunk of change from Wal-Mart. They got more than $500 million in all. As I wrote previously, 360buy.com controls 2.5 percent of the e-commerce market in China. That may not sound like much, but that’s more than 3.5 times the e-commerce marketshare enjoyed by competitor China Dangdang, Inc. (NYSE:DANG).

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Demand Media IPO? A content factory that uses an army of freelancers to churn out “How To” articles, Demand Media has turned the written word into a commodity on eHow.com. All told, eHow produces enough text to fill more than four English language Wikipedia’s every single year. And their so-called “evergreen” articles aren’t pegged to specific dates, so they’ve got a very long shelf-life of search-engine friendly content that’s perfectly suited for advertisements.

Update: Demand Media IPO’d on Jan. 26, 2011 under ticker symbol DMD. Check out my latest post on the company: Will Demand Media’s (DMD) stock recover from Google shock? Absolutely.

***

Facebook IPO? I can’t say much that hasn’t already been said about Facebook, except this: they’re the only Web-based company in U.S. that’s positioned to truly challenge Google in the coming years. As they expand into search, virtual goods, e-commerce and mobile, Facebook seems to be taking over the internet. Indeed, the site currently accounts for 25 percent of ALL pageviews in the U.S. Even with a $75 billion+ valuation, Facebook still looks cheap to me.

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Groupon IPO? Groupon’s found the holy grail of online marketing: a simply way to marry coupons and local businesses. To use it, just give Groupon your email address and they send you a daily offer from a local business. If you like the offer (which is often a coupon or gift card that’ll save you 50 percent or more at a local restaurant, hobby shop, etc.), you can buy the coupon, print it out and redeem it anytime before the expiry date. The company’s already rejected a $6 billion buyout offer from Google, and they’re in the early stages of expanding into China. The only problem? Google’s got Groupon on their hit list now, and an all-out war is probably in the making.

***

Hulu.com? A streaming video site with backing from media heavyweights like News Corp. (NASDAQ:NWSA), Walt Disney (NYSE:DIS), and NBC Universal, Hulu claims to be operating at a profit with 2010 revenues around $260 million. The company’s biggest competitor is streaming giant Netflix, Inc. (NASDAQ:NFLX), which now has a market cap of $9.6 billion.

***

Jiayuan IPO? The leading online dating site in China, Jiayuan’s the 55th most-visited site in China, and it boasts at least 25 million members. The company makes money by charging for memberships (about $6 a month for a “Diamond Membership”), selling virtual currency and other romantic add-ons. Jiayuan has attracted capital from New Oriental Education & Technology Group (NYSE: EDU) among other investors.

Update: Jiayuan shares started trading on May 12, 2011 under ticker “DATE” on the NASDAQ. Check out my latest post on the company: Jiayuan.com IPO: 3 reasons to invest in Chinese dating site.

***

LinkedIn IPO? A social networking site for professionals, LinkedIn boasts more than 90 million members from around the world. The company lacks the sex appeal of some of the other tech IPOs on the docket, but it does seem like its network might be easier to monetize than, say, Twitter, since it can capitalize on hiring solutions, advertising aimed at professionals and premium landing pages.

Update: LinkedIn IPO’d on May 19, 2011 under ticker symbol “LNKD.” Check out my latest post on the company: 3 reasons NOT to invest in LinkedIn IPO.

***

LivingSocial IPO? The biggest and most well-known Groupon competitor, LivingSocial offers daily deals from local and national retailers. LivingSocial got a big boost when it announced that Amazon.com, Inc. (NASDAQ:AMZN) was investing $175 million in the company. Soon after, LivingSocial offered its members a $20 Amazon gift card for just $10, and they netted both companies more than $13 million up front in the deal.

***

Nuomi IPO? An ultra-deep discount coupon site, Nuomi’s fighting for attention in what will soon be a very crowded market. Still, they’ve got decent ownership in Oak Pacific – the parent company of “China’s Facebook”: RenRen. And they’ve got a decent idea: do as Groupon does. The company sells coupons online for a limited time. At least one theater owner who partnered with Nuomi was thrilled with the results: “I’d say this is a miracle,” producer Lei Zile told the Global Times last July. “I’ve talked to older producers about this and they all said it was a miracle in the history of stage plays. 100,000 tickets were sold in one day. You could call it encouraging.”

***

Pandora IPO? An online music streaming site, Pandora grew out of the Music Genome Project, which attempts to categorize music based on more than 400 variables. Using that information, Pandora can build “custom” radio stations after you’ve entered a song or band that you like. The site’s enjoyed a big surge in popularity with wider-spread adoption of smartphones that allow streaming music anywhere, anytime. Despite the fact that Pandora shelled out more than $30 million in royalties in 2009, the company still managed to make its first profit that year, netting some $50 million. In 2010, profits were estimated to be around $100 million largely on the strength of premium ad-free streaming accounts and partnerships with car manufacturers that are installing Pandora direct from the factory.

***

Qunar IPO? An online travel booking site in China, Qunar’s Web traffic is pacing Ctrip.com’s (NASDAQ:CTRP). Both companies operate in the same niche, but Ctrip’s more well known in the West since its IPO came in 2003. Since 2003, shares in Ctrip have risen more than 750 percent. Competition in the sector seems to be heating up as Tencent Holdings, Ltd. (HKG:0700) recently invested in 17u.com, another Chinese travel site that’s currently a distant third behind Ctrip and Qunar.

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Renren IPO? A glaring example of the copyright issues that plague China, when RenRen.com launched in 2005 as XiaoNei.com, the site looked like it was an official Facebook product. It even identified itself as “A Mark Zuckerberg Production” at the bottom of its pages. After getting bought out by Oak Pacific Interactive in 2006, the company’s since tried to carve its own niche – and its done well. RenRen.com currently has more than 160 million registered users in China, and it’s the country’s 16th most-visited site.

Update: RenRen went public on May 5, 2011. Shares have collapsed more than 30 percent since then. Check out my latest post on RENN: RenRen IPO: 5 things you don’t know about ‘China’s Facebook.’

***

Sunity IPO? A Chinese version of Zynga, Sunity Online Entertainment Ltd. makes Web-based games and will soon start launching mobile apps, according to the AP. The company racked up $9.54 million in revenue in 2010, up from $8.25 million in 2009. Sunity generates 52 percent of its revenue from Qihang (QHG) – a subscription-based cards and chess game, according to Gaming-Hub.com. Another 8 percent of the company’s revenue comes from Han Dynasty Game (HDG) – a free Chinese mythology role-playing game that makes money off the sale of virtual goods.

***

~~Skype IPO?~~ Skype’s VoIP services offer businesses and individuals a free or low-cost way to make international calls, host video conferences and shares files online. With the company’s recent $100 million acquisition of mobile video streaming service Qik, it’s clear Skype’s getting aggressive about making a push into the smartphone market.

Update: Microsoft acquired Skype on May 10, 2011 for $8.5 billion.

***

Taobao IPO? It’s unclear whether or not Taobao will IPO in 2011 or 2012, but it is, hands down, my favorite stock on this list. Taobao controls 75 percent of the e-commerce market in China with it’s psuedo-eBay-style site. There, consumers can buy products from other consumers or businesses at auction or at set prices, although auction-style buying seems to have fallen out of favor on the site. Credit Suisse analysts expect the e-commerce market to more than quadruple in China by 2015, and Taobao will easily be the biggest beneficiary of those gains. They seem to have seen the writing on the wall, too, as the company’s investing $3 billion to $4.5 billion into a warehouse network that will make shipping throughout China more efficient.

***

Taomee’s 61.com IPO? A Chinese social networking site aimed at children and parents, 61.com has some 20 million users ages 6 to 14, and Forbes reported revenue projections of more than $30 million in 2010. The subscription-based site lets kids hang out in virtual worlds (the Seers for the boys and the Moles for mixed-gender users), and parents are invited, too.

***

Tudou IPO? While they may be playing second fiddle to Youku.com, Inc. (NYSE:YOKU), video streaming site Tudou.com gets nearly as much traffic. The site’s ranked by Alexa.com as the 11th most-visited Web site in China. Youku.com’s ranked as the 10th most-visited site. Youku’s spectacular November IPO could foreshadow another buying frenzy in Tudou even though its unclear when or how either company will get profitable.

Update: Despite an ongoing legal battle between Tudou’s CEO and his ex-wife, the company appears to be moving closer and closer to an IPO. Check out my latest post on the company: Tudou IPO: Is Tudou stock a buy?

***

Twitter IPO? Microblogging site Twitter still isn’t profitable, but it looks like it’s getting serious about making money after staggering valuations put the company’s market cap around $3.7 billion. Twitter appointed its former COO Dick Costolo as CEO late last year, and Costolo’s tasked with ramping up revenues. A report out yesterday by online research firm e-Marketer Inc. estimates the company will generate $150 million in ad revenues in 2011 and $250 million by 2012. I’ve also blogged in the past about what I see as Twitter’s secret key to making money.

***

VANCL IPO? An up-and-coming online clothing retailer in China, Vancl.com’s got excellent pedigree in site founder Chen Nian who sold his last project, Joyo.cn, to Amazon. Vancl.com’s focus on clothing has helped it capture nearly 30 percent of all online clothing sales in China, and the company expects its warehouse space to triple by the end of the year. Last year’s sales at Vancl were expected to be up more than 300 percent, according Businessweek.com.

***

Yandex IPO? My second-favorite stock on this list, Yandex.ru is likely among the least well-known of the stocks, too. Expect to hear a lot more about Yandex if the company IPOs on the NASDAQ. The leading search engine site in Russia, Yandex claims revenue spiked by 43 percent to $410 million last year. Google holds the No. 2 slot in Russian search engine usage and the American search company posted revenue of some $69 million in Russia in 2009. Yandex.ru is the most-visited site in Russia and the 25th most-visited site in the world, per Alexa.

Update: Yandex IPO’d on May 24, 2011. Check out my latest: Yandex IPO: 5 reasons to invest in Yandex stock.

***

Zhenai IPO? A Chinese dating site, Zhenai.com claims more than 26 million registrations as of August 2010. While the site gets far less traffic than its biggest competitor Jiayuan, Zhenai adds a human touch to the matchmaking process by having trained matchmakers help users find the best possible matches.

***

Zynga IPO? An online game maker, Zynga’s most famous for its iPhone and Facebook apps Farmville and Cityville. The company boasts a market cap of $5.8 billion on SharesPost. Sound like a lot? At least Zynga’s not having much trouble making money. Zynga likely generated revenue of more than $500 million last year, Lou Kerner, an analyst at Wedbush Securities, tells Dealbook. That’s up from about $300 million in 2009. That’s not bad, especially since Kerner estimates the company has profit margins of some 20 percent.

EAT YOUR HEART OUT, ZYNGA PopCap IPO: 4 reasons to invest in the social gaming giant	A START-UP AMONG GIANTS Millennial Media IPO: The future of mobile advertising?
LOOKING FOR LOVE IN CHINA Jiayuan.com IPO: 3 reasons to invest in Chinese dating site	THE GOOGLE OF RUSSIA Yandex IPO: 5 reasons to invest in Yandex stock
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Tags: 360buy.com, 58.com, 61.com, AMZN, CS, CTRP, DANG, Demand Media, DMD, EDU, Facebook, GOOG, Groupon, Hulu.com, Jiayuan.com, Joyo.cn, LinkedIn, LivingSocial, Nuomi, Pandora, Qunar, RenRen, SharesPost, Skype, Sunity, Taomee, Tudou.com, Twitter, Vancl.com, Yandex.ru, YOKU, Zhenai.com
Posted in Chinese stocks, Demand Media, Internet stocks, IPOs, NASDAQ, private companies, Russian stocks, tech stocks | 5 Comments »

Jan

2011

3 reasons NOT to invest in Groupon’s IPO

by Fred Mason

Groupon’s spectacular rise from concept to $6 billion company in two years is hard to believe. Even harder to believe: the company shot down a $6 billion buyout deal from Google Inc. (NASDAQ:GOOG), preferring instead to try to find their own way in a crowded marketplace.

Groupon offers customers a daily coupon. Register for an account, give Groupon your ZIP Code, and they’ll send you an offer for a discount at a local or national retailer every day. If you like the offer of the day (which is typically 50 percent or more off standard rates at local restaurants, spas, etc.), you pony up the cash and print out a coupon with a fresh bar code on it.

Web companies have long been trying to tap the local advertiser market, and Groupon’s approach seems to have clicked. In the wake of Google’s buyout offer, Groupon’s in a mad rush to IPO in an attempt to establish market dominance before the company’s copycats start gaining ground.

An IPO date hasn’t been set, but here are three big warning signs you might want to consider before investing in Groupon’s stock:

1) Competition. Groupon’s 30-year-old CEO Andrew Mason estimates some 500 copycat sites have sprung up since Groupon first started offering discounts in 2008. The barrier to entry is so low, a lone programmer could probably replicate the site’s functionality in a day. After that, it’s all up to clever marketing, knocking on businesses’ doors and convincing retailers that, yes, it is in their best interest to sell their products at 75 percent or more off the going rate (including Groupon’s cut).

Already, a second company, LivingSocial, has started generating major press after first scoring a $175 million investment from Amazon.com, Inc. (NASDAQ:AMZN), then engineering what’s been dubbed the “most successful online coupon campaign in history.”

Shortly after securing the investment from Amazon, LivingSocial offered its email subscribers 50 percent off a $20 gift card at Amazon.com. The company sold 1.3 million of the vouchers netting Amazon and LivingSocial $13 million in cash up front, according to Mainstreet.com.

2) Is Groupon just an internet fad? One big flaw in Groupon’s model is the fact that it’s hard to offering compelling discounts via email 365 days a year. If the company sends out a few stinker coupons, I expect that’ll lead Groupon’s 50 million or so subscribers to stop opening the company’s emails. After a few weeks of clicking “delete” every time you see a Groupon email, you’ll probably decide to unsubscribe from the service altogether – and that will make you a lot less inclined to sign up for similar services in the future.

3) Groupon may have spurned the wrong company. Just because Google got shot down by Groupon, that doesn’t mean they’re going to hang up their hats and slink away from the growing local advertising market. By rejecting Google’s overtures, Groupon may have created a very powerful competitor for itself. Google’s scale makes it a logical choice for offering daily deals from national retailers. As the smart phone market continues to grow, too, Google will be able to leverage GPS to target ads at users who are near local businesses.

While doing it’s due diligence before making an offer for Groupon, Google got a nice hard look at the company’s numbers, operations and marketing tactics. Now, they can use that information as recon while dumping billions of dollars into their own efforts to tap local advertisers (a little network they’ve dubbed Google Offers). If I had to bet on one of the two companies to succeed in long-term, I’d lay my money down on Google.

Tags: GOOG, Groupon, marketing
Posted in business ideas, Internet stocks, IPOs, private companies, tech stocks | 3 Comments »

Jan

2011

How to invest in Digitial Sky Technologies and Mail.ru

by Fred Mason

I’ve long been intrigued by the chance to invest in the Russian tech sector’s heavyweights: Digital Sky Technologies and Mail.ru. Digital Sky Technologies seems to have a knack for investing in major U.S. tech companies long before American investment banks have the guts to do so.

They were in early on Facebook (when Facebook had a $10 billion valuation), and they’re currently holding stakes in Facebook game and app-maker Zynga, Inc. as well as deal-of-the-day coupon company Groupon, Inc. All told, they’ve got a 10 percent stake in Facebook, and their partnership with Mail.ru entitles Mail.ru to a 2.4 percent stake in Facebook.

On top of its great investment portfolio, Mail.ru runs the largest free email service in Russia, two of the three largest social networking sites in the country, and it claims to be the largest social gaming company in Russia as well. The simplest way to invest in Mail.ru (and get a piece of the privately-held Digital Sky Technologies in the process) is to directly buy shares in Mail.ru.

In November of 2010, shares in Mail.ru started trading on the London Stock Exchange under the ticker MAIL. The stock’s up 30 percent since trading started two months ago.

Don’t have access to London-based shares? You could also consider an investment in the South African media giant Naspers Limited (ADR) (PINK:NPSNY). Naspers announced last summer that it had taken a “substantial stake” in Digital Sky Technologies according to Maija Palmer at FT.com.

Shares in Naspers have risen 44 percent over the past year. As an added bonus, Naspers also has a 35 percent stake in Tencent Holdings Limited (SEHK:700) – a company that’s often cited as China’s most profitable Internet company.

Tags: Digital Sky Technologies, Facebook, Groupon, MAIL, Mail.ru, Naspers Limited, NPSNY, Tencent Holdings, Zynga
Posted in Chinese stocks, Internet stocks, IPOs, NASDAQ, Russian stocks, tech stocks | No Comments »

Dec

2010

Five reasons to invest in a Groupon IPO

by Ed Roven

I’m torn on Groupon’s reported IPO late in 2011 or early 2012 – especially now that it’s looking like Facebook could IPO in 2011, too. Of the two, my money would be on Facebook, but I’d seriously consider laying down some cash on a Groupon IPO. Here are five reasons why:

1) Groupon shot down buyout bids of $2 billion (from Yahoo!) and $6 billion (from Google) this year alone. That haughtiness shows that Groupon’s leadership knows they’ve tapped into a very special market with lots of room for growth.

2) Groupon’s expects sales of more than $500 million this year, according to Bloomberg. Not bad for a company that’s barely two years old!

3) Groupon has more than 35 million registered users, and they’re users who are in the habit of spending money at local restaurants and businesses. As that database of users grows, so too will Groupon’s ability to target ads to specific users and types of users based on their past buying habits.

4) Groupon’s valuation estimates have shot up more than 400 percent since April. That type of growth just doesn’t come around often. As the business expands into new domestic markets and around the globe, Groupon should be able to keep generating fresh sales even as companies like Twitter struggle to find viable revenue options.

5) Groupon produces results for local business owners – at least according to Groupon. Groupon claims that 90 percent of their “featured” local businesses ask to be featured a second time on the site. The best part of the model is that small business owners don’t have to shell out a penny up front. They make money when Groupon sells coupons. It’s a hard model to resist, even if Groupon keeps the bulk of the cash from the coupon sale.

Tags: Facebook, GOOG, Groupon, Twitter, YHOO
Posted in business ideas, IPOs, NASDAQ, tech stocks | No Comments »

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