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B&E This Fortnight
 
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B&E This Fortnight

Issue Date - 17/02/2011
 
INTERNATIONAL
ECONOMY & BUSINESS STRATEGY

GOOGLE 2.0

In what is considered to be a strategic shift in its boardroom, Larry Page, Co-founder & President of Google Inc., is set to assume charge of the Mountain View giant as CEO, starting April 1, 2011. Eric Schmidt, who had been playing the business-brain of the company since 1999, will continue as Executive Chairman and will focus primarily on strategic deals & partnerships, broader customer & business relationships and government outreach. This critical decision comes right after the announcement of its financial results for the quarter ending December 2010, in which the company reported GAAP net income of $2.54 billion, a rise of 28.93% when compared to the same period the previous year. Revenues stood at $8.44 billion, representing a y-o-y increase of 26%. This change in management seems to signal that even the management has now realised that in order to keep pace with the manner in which Google is venturing into newer arenas, it has to get newer and younger thoughts into its boardroom. Apart from the search engine business, the Silicon Valley based giant is betting big on the Android OS, YouTube and a secret project which will be a direct competitor to Facebook. A mutated DNA will pose some big challenges. Can Page work out an integrated plan to make the $195 billion giant bigger?

Third time ‘unlucky’!
How does it feel like losing a CEO whose very look confirms that he was responsible for a 264% rise in value of your stockholding in just the past two years? This story is of Steven P. Jobs, who has taken yet another break from Apple – his second since 2008. Though many experts claim that he will be back in few months, and that COO Tim Cook’s appointment as acting CEO is only a temporary affair, this time, the fears of Jobs’ end as CEO, have intensified. The last time when he took a break, Jobs was back in time for the iPad launch. However, this time around, shareholders and analysts alike are more apprehensive about his return. Apple has no blockbuster launches lined up for 2011, except a modified second version of the iPad (the iPad 2). In fact, the tech giant only plans to make minor modifications to its existing line of products. When news of Jobs’ leave became public, Apple’s stock crashed by 8% on NASDAQ, when trading opened the day following the announcement on January 17, 2011. Will Jobs be back? Will Apple’s market value fall in his absence? Will Apple a company that was once “too big to fail” become one “too big to save”? Questions that only Jobs can answer and time can prove.

 
stuttering economy The grand strategies of UK’s coalition government to put the economy back on track, seem to have taken a hit. The economy shrank by 0.5% during the last quarter of 2010. The office of National Statistics (ONS) blamed unfavourable weather conditions for the contraction, which caused major disruptions to businesses. Transportation and communication services (decline of 3.3%) and construction works (decline of 0.8%) in particular, were the worst affected. Analysts are now betting on a possible rise in trade & investments to play healer.

Kodak stumbles
Eastman Kodak is sailing in tough waters. On January 25, 2011, the company’s stock price fell by 13.4% to close at $4.52 on announcement by the US International Trade Commission that Kodak’s patent infringement claim against giants Apple and RIM was invalid. There was worse in store. The very next day, its stock further fell to $3.71 on the announcement of a dismal Q4, 2010 result. Kodak posted net income of $0.08 per share, down from $1.65 per share a year back. For a company whose transition to the digital age has cost them a lot of pride, this is not good news.


          

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