Monday, March 25, 2013

B&E This Fortnight

INTERNATIONAL
ECONOMY & BUSINESS STRATEGY

Who’ll buy Twitter?

The social media landscape has suddenly been set ablaze with a tug of war between technology titans Google and Facebook. And this time the reason is Twitter. Strategically, Twitter will give a leading edge to the technology barons. The run up to the acquisition is much obvious as the site has lately picked up on the social media circuit and is adding nearly 30 million users every month. Even its revenues are expected to double by 2011. Therefore, Facebook and Google are eyeing this opportunity to boost their market share and leverage the huge subscriber base following twitter. Orkut, Google’s initiative which majorly lost its subscriber base with the launch of Facebook is also looking forward to this buyout. Google was even in talks with Groupon but the developments ended with the latter raising money from venture capitalist. Google & Facebook want total access to Twitter’s data to make use of the real time information, which is an integrated part of their portfolio offerings and have been indexing the tweets by the users. However, it will certainly be interesting to watch the valuation of Twitter which is estimated to be around $10 billion, way ahead of what the analyst speculate. Twitter was valued at $3.5 billion last year when it raised money. It will be an interesting buy for both companies to back them with a big fan following.

Pepsi’s skinny woes!
US food and beverage giant Pepsi Co. posted a disappointing Q4 results with income falling by 5% as compared to Q4 2009 figure. The company’s net income declined to $1.37 billion in Q4 2010 from $1.43 billion in Q4 2009. Though the company is extremely optimistic about the synergies emerging from the acquisition of its main bottlers apart from the $3.8 billion takeover of Europe’s biggest dairy products company, Wimm-Bill-Dann Foods, it has baffled analysts with unsatisfactory guidance for 2011 amidst rising input costs. Meanwhile, rival Coca-Cola has reported a three-fold surge in its profits in Q4 2010. Considering that the recent launch of ‘a new skinny can’ by PepsiCo has invited criticism from NEDA, its CEO Indra Nooyi has all the reasons to rework her strategy.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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