VentureBeat » profit

Samsung expects to post a massive $7.7B profit this quarter

Sean Ludwig — Fri, 05 Apr 2013 14:15:58 +0000

July 9-10, 2013
San Francisco, CA

South Korean electronics titan Samsung expects to take in an enormous $7.7 billion (8.7 trillion won) operating profit for the first quarter of 2013, the company said in its latest earnings guidance.

Samsung is one of the most formidable and popular electronics companies on the planet, and we’ve seen it post stunning quarterly earnings before. Just last quarter, the company posted a net profit of $6.6 billion. The company has a tremendous hold in the mobile market and also sells popular TVs, laptops, and appliances.

Not surprisingly, Samsung’s mobile unit is the biggest driver of its revenue. More than 60 percent of its revenue last quarter was generated from sales of smartphones including the Galaxy S III and Galaxy Note II. This next quarter will likely be no different.

The company has another huge release on its plate for this quarter as well — the Galaxy S IV, which should hit stores at the very end of the earnings period. That phone is sure to be a massive seller, just like the Galaxy S III has been.

Samsung will post its full quarterly results on April 26. We’ll be sure to let you know if the company was able to meet — or maybe even beat — its guidance.

Photo via Devindra Hardawar/VentureBeat

Filed under: Mobile

When did it become sexy to not make money?

Colin Day — Tue, 04 Dec 2012 18:00:33 +0000

Some people think we’re returning to the Bad Old Days of the late 1990’s dotcom bust. One after another, recent hot tech IPOs have been disappointing investors. Many these companies are underperforming financially, and some have yet to turn a profit.

Three of the more high-profile tech stock debuts of the past 24 months — Pandora, Trulia, and Zynga — continue to lose money over the long haul. The questions investors need to ask themselves are, what true assurances to they have that any “hot” company will become profitable? Beyond pure speculation on stock returns, what makes money-losing companies worthy of investor interest?

We’ve been here before. From 2000 to 2002, $5 trillion in market value was lost in the stock market; much of this evaporation was due to the loss of confidence in dot-coms that looked like sure-thing juggernauts despite their lack of making a dime. Anyone remember Boo.com, Pets.com, or GovWorks.com? All looked like they were a lock at the time they went public. Today, all are gone.

Profit is fundamental. It’s the air companies breathe, it’s the reason they exist. Moreover, it’s the function they fulfill in a thriving economy. Profit allows a company to grow, to meet customer needs, to support employees and their families. And yes, to reward investors.

It seems, however, that every ten years or so we find new reasons to delude ourselves about whether it’s important for growing companies to actually turn a profit. Much of the time the excuses involve new paradigms and uncharted territory. Fifteen years ago it was the rise of the Internet. Today it’s cloud infrastructure and Software-as-a-Service. Different names, same result: a gauze that falls over our eyes, blurring and obscuring the realities of business.

In the HR recruiting industry, of which my company is a part, we had over 200 direct competitors in the late 1990s. Today we’re one of the few still standing. Much of the reason, if I can boast, is that from the very beginning we sought to turn a profit. We knew it wouldn’t do our customers any good to form a close relationship with a business partner who would be gone or gobbled up five years hence. That strategy has paid off over time.

Many entrepreneurs looking to make a killing on their firms will say, “We may not be making money right now, but we can be profitable any time we want. Whenever our customers say so, we can flip that switch.” Trouble is, many of those companies never do. By the time someone insists on profitability, the exit strategy is fulfilled and customers (or public shareholders) are left holding the bag with whatever survives.

Now obviously, a reasonable amount of operating losses are expected from startups. And I’m not saying that no big tech IPO will ever make money. But anyone who invests themselves in an unprofitable company with minimal track record — whether for portfolio growth or as a customer — should insist that the period of losses be short and well-defined, with a clear path established toward running in the black.

As the recent U.S. presidential election season made clear, political parties are loathe to offer visions that are long-term in nature. Companies have even less of an excuse. Strategies that support short-term speculation over long-term profitability are in the interest of the few, not the many. Just ask any customer, employee, community, or shareholder who’s benefitted for 20 or 30 years from a strong company, one that assures its future through profitability. They’ll tell you who’s really sexy.

Colin Day is CEO of iCIMS, Inc. a provider of SaaS talent acquisition solutions. iCIMS has been profitable for the last ten years, achieving a CAGR of 24% from 2007-2011.

Woman lying on a bed of money: Jason Stitt/Shutterstock

Filed under: Cloud, Entrepreneur

Neil Patel’s 10 tips on using metrics to make money

John Koetsier — Thu, 23 Aug 2012 16:16:55 +0000

VANCOUVER, British Columbia — Neil Patel didn’t start web analytics company KISSmetrics because he loved the product, or the idea, or the customers. Very simply, he wanted to make money, as he told the crowd here at GROW 2012 yesterday.

After revealing his motivation, Patel proceeded to reveal the methods behind his madness — the metrics he measures that have driven KISSmetrics to 100 percent year-over-year growth. Patel says every entrepreneur needs to track 10 specific areas of metrics:

People, not unique visitors
UVs are not a valid measurement of activity. Customers might visit your site from multiple browsers on their laptop, plus a tablet or a mobile phone. In Google Analytics, they all look unique … so you need to start tracking people: log-ins, credentials, and usernames.
Time to buy
Some people need time before they buy, says Patel. Give them that time, but be looking at marketing attribution — the first entry source, all the referrers in-between, and especially the last one before they buy. KISSmetrics tire-kickers need seven touches — blog, website, Twitter, Facebook, ads, and so on — before they convert to customers. You will find some interesting things, Patel said. Originally, the KISSmetrics team thought that Twitter didn’t convert. On a closer look, they say that there was no conversion if they viewed the data episodically, but customers did convert over time. Better tracking also enables better assessment of marketing ROI … now you really know the process that people take before buying.And one more tip: retargeting is important. Patel related an example of a mattress he was interested in buying that was $1,000, then $800, then $700 as he continued to occasionally click on the ad and became more and more likely to buy.
Targeted feedback from ideal customers
Getting feedback from all the people who visit your website is useless, says Patel. Instead, ask the people who are your ideal customers … the insights will be much more valuable. Exit surveys are one of the tools KISSmetrics uses for this purpose.
Engagement level
When Patel analyzed site engagement by traffic source, he saw that people from Twitter were spending almost two minutes on site, and that people who arrived at the website from a search engine using the keyword “heat map” were engaging much more than others. That enabled KISSmetrics to focus on those visitors who were already engaging the most.
Site and app events
Tracking events is critical to knowing what part of your application users are actually using. For example, by adding event tracking to basically everything on the site, Patel determined that the addition of live chat on the site — talk to a sales rep — killed conversion. If something in your app or site is not being used, strip it away, Patel says. It’s extra, clutter, and distraction.
Real conversion rate
Conversion doesn’t end when someone signs up. Free users can convert into paid users, so you need to track where free users originally came from, says Patel, and maintain that tracking over time. For one of KISSmetrics’ client, Bing and Google converted the same in terms of free trial users. But people who came in from Bing were almost five times more likely to enter their credit cards and buy the product. Knowing that helped the client focus their marketing efforts. Patel likes to track not just where customers came from but also what they did before converting — and then look for patterns.
Cancellations
It’s easier to keep existing customers than get new ones, Patel says. That’s not rocket science, but knowing in detail what’s happening with cancellations and why is critical to growth. “You may have this big leaky bucket that everything is draining out of,” says Patel. “So stop filling it and start fixing the bucket.” For KISSmetrics, the number one reason people canceled was price, so Patel made cancelers an offer right during the cancellation process. The one-time offer, which gave exiting users the next 12 months at 40 percent off, achieved a 10 percent conversion rate.If users still don’t take that offer, KISSmetrics automatically allows them to ”name your own price.” If that number fit within predetermined levels, the company instantly accepted it.

“If you can reduce churn, you’re going to be making a lot more money,” says Patel.
Lifetime value of the customer
It’s OK to lose money in the short run, according to Patel, as long as you make it up in the long run. Which is why weight-loss companies offer all those money-back guarantees.
Cohort analysis
Numbers on a user graph that are going up and to the right are fine, but they can often mask problems as new users join a growing service, says Patel. Entrepreneurs have to check user cohorts, or segments, to see how they are doing. For example: all the users who joined in August 2011 … where are they six months later? A year later?
User segments
Don’t treat all your customers the same. Some are free, some paid, some are long-term, and some short-term. Then use marketing automation with Hubspot or Marketo to communicate appropriately to those different user groups.

When you track, Patel says, odd things jump out of the data that can make you much more profitable. One final example: Cutting the KISSmetrics demo time in half doubled conversions … probably due to more perceived urgency in customer’s minds.

Which is precisely how metrics can make you money.

Image credit: John Koetsier

Filed under: Big Data, Business, Entrepreneur

The opposite of Apple, Nokia posts huge loss to end 2011

Ben Popper — Thu, 26 Jan 2012 12:53:06 +0000

Mr. Elop poses with the Lumia

Nokia is flailing while other companies, despite a later start, zoom past it it. One day after Apple reported an eye-popping $13 billion profit for the fourth quarter of 2011, Nokia reported a $1.4 billion loss.

That’s a big difference from a year ago, when Nokia managed to turn a profit of a little under a billion. Perhaps more troubling, the company’s operating margin shrank by a factor of four, falling from 12.1 percent to 3.4. Strangely, these reduced margins come after the company began to shave 17,000 jobs in November of 2011 in an effort to cut costs.

Nokia has hitched its wagon in the smartphone wars to Microsoft, and the company reported recently that it has sold “well over a million” of the new Nokia Lumia handsets running Windows mobile OS. That seems like a bright spot, until you compare it to the staggering 37 million iPhones Apple sold in just the last three months of 2011.

The share price of Nokia has tumbled 53 percent, reports the Wall Street Journal, since new the chief executive Stephen Elop joined and announced, in February of 2011, that the company would be leaving behind its own software platform, Symbian, and switching to Microsoft’s mobile effort.

VentureBeat is holding its second annual Mobile Summit this April 2-3 in Sausalito, Calif. The invitation-only event will debate the five key business and technology challenges facing the mobile industry today, and participants — 180 mobile executives, investors, and policymakers — will develop concrete, actionable solutions that will shape the future of the mobile industry. You can find out more at our Mobile Summit site.

Filed under: Business