The tech business week: Netflix struggles despite record subscribers; Etsy valued at US$3.5bn

20 Apr 2015

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A digest of the top business technology news stories from the past week.

Netflix struggles financially overseas but has a record 62m subscribers in Q1 2015

Beating its original forecast last January, Netflix has stated that its subscriber numbers rose by as much as 2.28m in Q1 in the US alone, while its international subscriber numbers rose by 2.6m during the same period, but its strong sales growth of 24pc to US$1.57bn was on a par with what the market analysts had predicted.

According to Yahoo!, its exponential growth has seen its stock rise with it, by 12pc to US$534.07, an all-time high, following the announcement of the streaming company’s results. However, Netflix posted revenues of US$23.7m, which is almost half of what it earned at the same time last year, when it posted revenues of US$53.1m.

Etsy stock nearly doubles, company valued at more than US$3.5bn

Etsy, the online marketplace for buying and selling crafty items, was valued at more than US$3.5bn when it floated on the stock exchange last Thursday (16 April).

The company’s shares rocketed up from their original set price of US$16, peaking at US$35, before settling on US$30.

Etsy, which was originally set up as a way for founder Rob Kalin to sell his handmade, wooden computers back in 2005, raised a good chunk of cash before fully floating, raising US$287 from more than 16m shares, to value the company at US$1.8bn, half of its subsequent closing value.

However, the company doesn’t make a profit – its losses grew from US$796,000 in 2013 to more than US$15m last year, despite revenues climbing by more than half.

EU comes down on Google, claiming abuse of dominance for search results

After much build-up, the European Union (EU) has finally revealed its intentions regarding its claims that Google’s search results are anti-competitive and has now filed a statement of objection (SO).

For the last five years, the EU has been looking extensively into Google’s search engine service, the most dominant worldwide by a considerable margin, and whether its results were heavily skewed towards its own range of services and products, something which the EU now says is the case.

Google+, Google Maps and YouTube were all cited as being examples where these services would get preferential treatment over similar services that, based off understandings of Google search trends, effectively leaves them marginalised.

San Francisco mayor proposes law changes that will hit Airbnb rentals

Just months after Airbnb’s business model was finally made legal in its home city of San Francisco, Mayor Edwin M. Lee is proposing new legislation that would bring changes to the law.

Following months of dialogue with homesharers, housing associations, the private sector and city agencies, Mayor Lee wants to introduce a series of amendments to make San Francisco’s current short-term rental law more enforceable.These changes include a limit on the number of days a resident can rent out their home to 120 days. Currently, there are unlimited rentals when a host is present.

Lee would also like to see all short-term rental hosts treated equally by eliminating the current difference in the law between ‘hosted’ and ‘un-hosted’ rentals. He’s also proposing the creation of the Office of Short-Term Rental Administration and Enforcement to ensure the laws are implemented.

Apple’s acquisition of Israeli company LinX paints quite a picture

Apple’s camera technology just got a major leg up with the purchase of Israeli company LinX, which will probably lead to vastly improved iPhone and iPad photo-taking capabilities.

The deal cost a reported US$20m, however neither Apple nor LinX have revealed many details.

Apple’s interest in Israel is significant; it already employs 700 people in the Middle Eastern country as part of the company’s largest R&D hub outside the US.

Nokia to buy Alcatel-Lucent for €15.6bn

Nokia has announced it is to buy telecoms equipment company Alcatel-Lucent for €15.6bn.

The deal is subject to approval by Nokia’s shareholders and other paperwork, but if it goes through it will lay the foundation for what the company calls “the next wave of technological change, including the internet of things (IoT) and transition to the cloud”.

Together, Nokia and Alcatel-Lucent boast more than 40,000 R&D employees. Both firms spent a combined €4.7bn on R&D in 2014

Brigid O Gorman is the sub-editor of Siliconrepublic.com

editorial@siliconrepublic.com