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Apple  (NASDAQ: AAPL), reported earnings making Q2 the most profitable second quarter in Apple’s history.

The Company had revenue of  $5.26 billion and net profit of $770 million, or $.87 per diluted share. That’s up from revenue of $4.36 billion and net quarterly profit of $410 million, or $.47 per diluted share, for the same period last year. Gross margins were 35.1 percent, up from 29.8 percent. International sales accounted for 43 percent of the quarter’s revenue.

During the period, Apple shipped 1,517,000 Macs and 10,549,000 iPods during the quarter. Those numbers represent 36% growth in Macs and 24% growth in iPods over same period last year. Steve Jobs noted that "the Mac is clearly gaining market share, with sales growing 36 percent — more than three times the industry growth rate."

More detailed press coverage of Apple’s finances can be found at:

Yahoo Finance
Google Finance
Marketwatch

In a ticket industry cluttered with primary and secondary sales, pre-sales and resales, market heavyweights are increasingly worried about protecting their territory.  In effort to reassert its dominance, IAC’s Ticketmaster filed several lawsuits during the past week.

Most notable  of the suits was a complaint filed against eBay’s Stubhub. It was filed in Los Angeles Superior Court last Wednesday. That complaint alleges that Stubhub, an auction reseller of tickets, has repeatedly interfered with contracts that typically grant Ticketmaster exclusive rights to sell tickets for events to the general public. 

The complaints specific focuse is on actions relating to the Rowdy Frynds Tour for which Stubhub has advertised that it would offer front-row seats via auction for  up to 100 seats in the first 10 rows for all 20 show dates.   

According to Ticketmaster, these seats should not have been available to Stubhub.  Stubhub used improper tactics to gain access to the seats which contractually should have been part of Ticketmaster’s inventory. Click to Read More

On April 13th Google announced a definitive agreement to buy Double Click from private equity firm Hellman & Friedman for $3.1b in cash, a price equal to approximately 20x EBITDA.  Rumors of the sale had been floating for a few weeks (Business Week ran a story on April 3rd) but the deal and the price have raised more than a few eyebrows.

Here’s a brief look at the deal and some thoughts:

DoubleClick is known largely for its Display Ad network which large advertisers rely on for brand building and general online presence.  The network which was founded in in 1995 provides ad-management for pay-for-impression (Cost Per Impression: CPM Based) internet advertisers.  Double Click has more than 1,500 clients, most of which participate in its impression-based business and many of which are major online publishers including AOL and News Corp (MySpace).

Google’s ad business, while varied, is best known for its success with search advertising and pay for performance (P4P) model that generates revenue based on viewers click-thru behavior (sometimes called Cost Per Action or CPA).  Through this system Google has a huge pool of partner sites sharing revenue and displaying the ads.

In Display Advertising, Google has generally lagged and not had tremendous comparative success.  In acquiring Double Click, Google is buying a complimentary service that enhances an area where it is weak.  It is also buying a significant client list, and some valuable, but lesser known technology.  The marriage of services and client lists should give Google a nice opportunity to bundle and sell a larger range of services to its clients.  Buying DoubleClick will help Google compete Strength to Strength with Yahoo in the Display Ad Market.

While there is a clear value proposition for the transaction, one motivation for  the deal, and the price, is likely defensive.  There’s two parts to the defensive front:

First, thought not widely known outside the industry, DoubleClick’s portfolio includes a strong affiliate P4P /Affiliate advertising platform that it acquired through a company called Performics (which retains its name inside Doubleclick.) The search and affiliate marketing tools Performics offers are considered by many in the industry to be among the best products available from a technology standpoint..  In acquiring DoubleClick, Google will successfully keep this little jewel away from competitors who would have been able to use it to potentially eat in to Google’s stronger markets.

Click to Read More

Ebay (NASDAY: EBAY), reported a rise in profits in Q1 earnings.

Net income ws up $377.2m (.27c/share) over $248.3m (17c) for the same period last year on income of $1.77m (above analysts’ expectations of $1.72m).

The Paypal payments division showed growth with revenue up 31% to revenues of $439m.  The communications division, home of Skype, showed revenue of  $ 79m  (up from $66m in Q4).  Skype saw an 11% increase in calls and a 135% increase of fees, numbers I suspect, much lower, than eBay has been hoping for.

While profit margins were up, along with revenue and that was spun as a very positive piece of news, auction volume in the increasingly efficient auction marketplace was flat.  Non-store listings were up 4% over last year, but down 4% from Q4.  It was the third time in the last four quarters eBay failed to see quarter-to-quarter growth in auction listings.  Its European focus was also less than expected.

Initial market reaction to the news was mixed.

More detailed press coverage on Ebay’s finances can be found at:

Yahoo Finance
Google Finance
Marketwatch

Netflix  (NASDAQ: NFLX), battling with an aggressive marketing campaign from competitor Blockbuster, reported Q1 earnings slightly below expectations and reduced its outlook for the year.

Revenue was up 36% to $305.3m but earnings fell in 2cents below estimates.  The company earned 14cents a share ($9.9m) for the quarter, up substantially from 7 cents a share ($4.4m) for the same period last year.

There were 6.8m total subscribers but churn (customer cancellations) increased to 4.4% from 3.9%in the 4th Quarter

Guidance was adjusted downward to fiscal year revenue of $1.21b to $1.26b, off initial estimates of $1.25-$1.30b and analysts consensus (Thompson) of 41.29b

More detailed press coverage on Netflix’ finances can be found at:

Yahoo Finance
Google Finance
Marketwatch

Earlier in the week Accenture released the results of its annual survey of executives in the media and entertainment industries. The survey questioned 110 Senior Executives at advertising, film, music, publishing, radio, Internet, gaming and Television companies. 60 percent of the executives were from North America and 40 percent from Europe.

Among the findings published:

• 32% thought content would drive their revenues, up from 21% in the prior year.
• 53% cited short-form video as having the highest growth potential for their industry over the next 5 years. (13% picked video games, 11% feature-length/long-form film, 11% music, 9% consumer publishing and 4% chose business publishing.)
• 68% of respondents thought they would make money from user-generated content within the next 3 years.

Click to Read More

On Thursday, Apple announced it would delay the release of its latest Mac operating system (“Leopard”)  until October (versus a planned spring birth announcement) in order to divert greater corporate resources to insure the on-time, June, delivery of the hotly anticipated iPhone.

Bloggers and professional journalists are speculating that the delay is really for other reasons. Apple Insider, a popular blog on Apple and its issues, is reporting Wall Street analysts suspect “Secret” features of the operating system are really to blame. 

While there is nothing to substantiate those claims, it is clear that in recent years delayed release of keenly anticipated Apple products has been common.  Whether this delay, or others, have been the result of unforeseen development issues, parts shortages, overstretched assembly lines at contract manufacturers (like Taiwanese company Inventec which makes 5th Generation video iPod’s and is rumored to be assembling the iPhone), the result of overly ambitious timelines inside Apple or even part of a marketing effort to inflate demand, is unclear.    

Looking back over the past few years, here are just a few of Apple’s delayed launches:

Click to Read More