Catching the last five minutes of  Eric Schmidt’s Boston University commencement speech on WBUR I was struck by the veiled swipes (pokes?) he took at Facebook. You know, the company that last week launched the most anticipated IPO in years, and that despite NASDAQ glitches and a disappointing finish, wiped Google out of the record books? Yes, that Facebook.

Apparently, a captain of industry like Google’s executive chairman, never lets the chance to sell his company or tweak his rival go untaken. So even though he never uttered the “F word,” everyone got the message.

One example (paraphrased since I was behind the wheel): “Don’t hit the ‘like’ button. Talk to the people you like and love. Look them in the eye.”

Another:  ”Life is not about your friend count, it’s about the friends you can count on.”

"Life is not about your friend count, it's about the friends you can count on" Eric Schmidt Boston University Commencement 2012 #ericschmidt—
Scott Cohen (@Dimestore) May 20, 2012

Schmidt also told the new graduates to be sure to turn off their computers for at least an hour a day —  a line that got the biggest roar out of the crowd.

Eric Schmidt at BU: take one hour a day and turn off all devices. Really connect.—
janefountain (@janeefountain) May 20, 2012

For the last few years, Google and Facebook have been locked in heated competition for the best talent in Silicon Valley and beyond. The noise around Facebook’s IPO contributed to the impression that Google, which went public in a then-record breaking 2004  IPO, is a has-been.

Apparently Eric Schmidt is the #BU commencement speaker. Can I put "don't be evil" on my graduation cap? #Google—
Alex Wolinetz (@alexwolinetz) May 03, 2012

That perception hurts. No wonder Schmidt got his digs in.

Photo courtesy of Flickr user Guillaume Paumier

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NEW YORK (Reuters) – Newly issued shares in Facebook Inc <FB.O> may have a hard time in the coming week if lead underwriter Morgan Stanley stops supporting the stock and managers lower down in the IPO book who were hoping for an early surge decide to get out before going underwater.

Facebook on Friday sold 421 million shares of stock in a deal that valued the company at more than $100 billion. But investors, expecting a first-day pop in price, instead saw it close just 0.6 percent above the IPO price at $38.23.

As the underwriter, Morgan Stanley <MS.N> stepped in to support Facebook’s stock when it fell toward its $38 IPO price shortly after it opened, a source familiar with the matter told Reuters. The shares spent much of the last hour of Friday trading near that price, with onlookers watching to see if it would post a $37.99 price – which it did not.

But the bank will not support the stock indefinitely, analysts said, and once that firepower is gone, funds that received IPO stock looking for a bounce may decide to bail as well.

Lead underwriters in a stock essentially “short” the stock through what is known as an “over-allotment” of shares – they sell shares to the market that they do not own. If the stock has trouble, which Facebook did, the underwriter supports it by then buying more stock at the IPO price.

Had Morgan Stanley bought all of the shares traded around $38 in the final 20 minutes of the day, it would have spent nearly $2 billion. The “green shoe” overallotment, which can be used to support Facebook’s stock, is 63 million shares. At $38 per share, that amounts to $2.4 billion in firepower.

In an IPO where the stock rises significantly, the green shoe is typically exercised in the days after the debut and the company raises that additional amount. If Morgan Stanley shorted the full amount and bought shares on the open market to support the price, Facebook will not raise the extra $2.4 billion from the IPO.

“Right now you have one big buyer, Morgan Stanley,” said a former chief operating officer for Bear Stearns, who dealt with IPOs on the investment bank’s syndicate allocation committee, but asked not to be named as he did not want to talk publicly about the issue.

“That’s what people are trying to figure out, how much of the shoe is left,” he said. “In most deals, on the Friday that would be it; come Monday, it would be all bets are off, by Tuesday for sure.”

That opens the door for short-sellers and institutions looking to get out. Short-selling is expected to be limited for a few more days. A prime broker on one of the lead underwriters said Friday that they would not be lending shares at least until settlement, which comes three business days after pricing.

In addition, with the stock market in correction mode as investors fret about Europe’s ongoing debt crisis and the outlook for global growth, the environment for a new stock is not ideal.

That could mean the stock’s fate will depend on the strength of the IPO anchor orders – the big clients at the top of the IPO book, who see Facebook as a core holding – as well as a host of retail clients who are less likely to sell their shares quickly and may even be enticed to buy more.

“It is very likely to dip under $38, particularly if overall market conditions deteriorate,” said Mohannad Aama, managing director at Beam Capital Management in New York. “Morgan Stanley will continue to defend the $38 price, but that support is not endless.”

PERFECTLY PRICED?

In the end, Friday’s action suggests the IPO was truly priced to perfection. The company increased the amount of shares being offered last week and boosted the original selling price. Brokers at a number of broker-dealers told Reuters their clients were getting as much, if not more, than they expected.

That is what disappointed those expecting a 10 percent to 30 percent pop in the shares – rather than seeing the stock fall back to its IPO price shortly after opening.

“A Herculean effort by the underwriters, I would call it,” said Jeff Matthews of hedge fund firm Ram Partners. “How could it be a hot deal if all the usual mutual fund suspects already own some going into the IPO?” he added.

The classic move by an underwriter to stop an IPO from “breaking issue” worked, if only barely.

Given the technical issues that plagued Nasdaq, with the stock opening about 30 minutes late and delays in receiving order confirmations continuing throughout the session, it is also hard to know how much Friday’s action reflected reality.

“You really don’t know how that left people, whether there were sellers who put in limits that weren’t executed,” said Rick Meckler, president of investment firm LibertyView Capital Management, a hedge fund with $1.3 billion in assets.

“I don’t know if people stepped away at some point because they just couldn’t execute in a clear manner, and that Monday we will have some follow through of people that weren’t executed and still need to sell.”

It’s retail investors who stand to get hit the most if trades aren’t executed properly, said Tim Pollock, professor of management and organization at the Pennsylvania State University.

“This is a situation where small investors are more likely to be affected because of the sizes of the orders they’re putting in,” he said.

“If Fidelity is saying they want to buy two million shares that’s going to take priority over the smaller trades. As a regular retail investor placing orders through TD Ameritrade or Schwab you’re at the back of the bus relative to institutional investors so you’re hostage to the system.”

One RBC broker said that with hindsight he was grateful that he was allocated just 500 of the 20,000 shares he requested.

Others had similar relief. Said John Lane, founder of Lane Capital Markets, a small broker-dealer in Fairfield, Conn., that has managed about 40 initial public offerings: “Many retail and institutional buyers were floored at how much stock they got.”

Lane said he spoke with a hedge fund manager and a mutual fund manager who sent buy indications to more than a dozen brokerages on the theory that they would get a fraction of what they desired. “One got filled everywhere, and the other more than he wanted. They’re both sweating right now,” said Lane, who admits he bought shares near the end of the trading day at a little over $38.04.

If shares fail to recover in coming days, retail investors who were lured back into the market by the Facebook frenzy may revert back to the caution that has slowed trading since the 2008 market crash, some brokers fear.

Those who want to take bets against the company will not be able to do so through the options market until May 29. Activity in options of companies like Zynga <ZNGA.O> suggests investors are using those to hedge against their position in Facebook.

Facebook’s lackluster debut also had a knock-on effect on other social media stocks, which dropped sharply on Friday. LinkedIn <LNKD.N>, Groupon <GRPN.O>, Pandora Media <P.N> and Yelp <YELP.N> all fell at least 5 percent on Friday with Yelp losing 12 percent.

SEE ALSO: Sorry, But This Whining And Umbrage About Facebook’s IPO Is Ridiculous

(Reporting by Edward Krudy, Jed Horowitz and Olivia Oran; Editing by G Crosse, Alwyn Scott and Muralikumar Anantharaman)

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Motorola announced in a brief blog post that some of its smartphones won’t be eligible for upgrades to the newest version of Android, Ice Cream Sandwich.

That’s because Motorola says the update won’t “improve” the devices. It doesn’t give much more detail than that.

We first came across Motorola’s announcement on Engadget.

To say Ice Cream Sandwich won’t improve devices sounds pretty insane to us. It’s full of a ton of awesome features that you won’t find in the older versions of Android. In many ways, Ice Cream Sandwich outshines Apple’s iOS. 

It gets worse though.

Take a look at Motorola’s upgrade roadmap for Ice Cream Sandwich. Some phones aren’t slated to get the upgrade until Q4 this year. That’ll be almost a full year since Google released Ice Cream Sandwich.

By the time Motorola gets around to upgrading some of its Android phones, Google will have already moved on to the next version of Android.

It’s pretty embarassing that Google’s own hardware company is a year behind with Android updates.

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At long last, Yahoo has announced a plan to monetize its stake in Chinese internet company Alibaba.

It’s complicated, and it will be in stages, but the process has begun, and Yahoo says it will get about $7.1 billion in short order, via Alibaba’s repurchase of half of Yahoo’s stake in the company.

The plan is exactly what was reported last week by Kara Swisher at AllThingsD.

Here’s the key paragraph from the announcement:

The first step is the repurchase by Alibaba of up to one-half of Yahoo!’s stake, or approximately 20% of Alibaba’s fully-diluted shares. The purchase price will be based on a valuation of Alibaba to be established through equity financings that Alibaba intends to undertake to finance the transaction, subject to a floor valuation of approximately US$35 billion. The agreement includes substantial financial incentives for Alibaba to raise the additional equity at a valuation higher than US$35 billion. At the minimum price and assuming the initial repurchase of the full 20% stake, Yahoo! would receive from Alibaba consideration of approximately US$7.1 billion, composed of at least US$6.3 billion in cash proceeds and up to US$800 million in newly-issued Alibaba preferred stock.

Yahoo’s remaining stake in Alibaba will be disposed of over time.

As for cash plans:

Yahoo! intends to return substantially all of the after-tax cash proceeds to shareholders following the closing of the transaction. While the form of the return of capital to shareholders has not yet been finalized, Yahoo!’s board has increased Yahoo!’s share buyback authorization by US $5 billion concurrently with this transaction.

Here’s the release.

——

Yahoo! and Alibaba Reach Agreement on Comprehensive Plan for Alibaba Stake

Agreement Realizes Significant Value, Immediate Liquidity and Path to Future Monetization

Yahoo! Board Increases Share Repurchase Plan by US$5 Billion

SUNNYVALE, Calif. & HANGZHOU, China–(BUSINESS WIRE)– Yahoo! Inc. (NASDAQ:YHOO) and Alibaba Group Holding Limited today announced they have entered into a definitive agreement for a staged and comprehensive value realization plan for Yahoo!’s stake in Alibaba.

The first step is the repurchase by Alibaba of up to one-half of Yahoo!’s stake, or approximately 20% of Alibaba’s fully-diluted shares. The purchase price will be based on a valuation of Alibaba to be established through equity financings that Alibaba intends to undertake to finance the transaction, subject to a floor valuation of approximately US$35 billion. The agreement includes substantial financial incentives for Alibaba to raise the additional equity at a valuation higher than US$35 billion. At the minimum price and assuming the initial repurchase of the full 20% stake, Yahoo! would receive from Alibaba consideration of approximately US$7.1 billion, composed of at least US$6.3 billion in cash proceeds and up to US$800 million in newly-issued Alibaba preferred stock.

The agreement also establishes a framework for Yahoo! to monetize its remaining interest in Alibaba in stages. First, at the time of an initial public offering (IPO) of Alibaba in the future, Alibaba will be required either to repurchase one-quarter of Yahoo!’s current stake at the IPO price or allow Yahoo! to sell those shares in the IPO. Second, following such an IPO, Yahoo! has registration rights and rights to marketing support from Alibaba to enable Yahoo! to dispose of its remaining shares, at times of Yahoo!’s choosing following a customary lock-up period.

This agreement is a result of extensive discussions between the two parties and a comprehensive review of both taxable and tax-efficient alternatives. Yahoo! and Alibaba believe this agreement to be the best path to align incentives and maximize value for shareholders of both companies and it paves the way for Alibaba to achieve future public market liquidity for all of Alibaba’s shareholders. For Yahoo!, the agreement provides for a staged exit over time, balancing near-term liquidity and return of cash to shareholders with the opportunity to participate in future value appreciation of Alibaba.

“Today’s agreement provides clarity for our shareholders on a substantial component of Yahoo!’s value and reaffirms the significance of our relationship with Alibaba,” said Ross Levinsohn, Interim CEO of Yahoo!. “We look forward to continued collaboration with the Alibaba team on business initiatives as we explore joint opportunities for growth and benefit from Alibaba’s future. I want to thank Jack Ma, Joe Tsai and the Alibaba team, as well as Tim Morse, Michael Callahan and our Yahoo! team for their dedication in achieving this successful outcome.”

“This transaction opens a new chapter in our relationship with Yahoo!,” said Jack Ma, Chairman and Chief Executive Officer of Alibaba Group. “I look forward to working with Ross Levinsohn and the Yahoo! team as Alibaba builds China’s leading e-commerce company. Yahoo!’s global audience reach will provide attractive partnership opportunities for Alibaba to explore markets outside of China. The transaction will establish a balanced ownership structure that enables Alibaba to take our business to the next level as a public company in the future.”

“We look forward to delivering the proceeds of the near-term transaction to our shareholders, and to the further enhancement of value and the additional monetization in the future that this agreement enables,” said Timothy R. Morse, Executive Vice President and Chief Financial Officer of Yahoo!.

In addition to the share repurchase, the companies have also agreed to amend their existing technology and intellectual property licensing agreement. Among other things, this amendment will result in Yahoo! granting Alibaba a transitional license to continue to operate Yahoo! China under the Yahoo! brand for up to four years, while restrictions on Yahoo!’s ability to make other investments in China will be terminated. Alibaba will make an upfront lump sum royalty payment of US$550 million to Yahoo! and continuing royalty payments for up to four years. In addition, Alibaba will license certain patents to Yahoo!. Upon closing of the repurchase transaction, the Alibaba shareholders’ agreement will be amended so that the parties’ respective rights will be commensurate with the parties’ post-closing level of ownership in Alibaba. Yahoo! will continue to be represented on Alibaba’s board of directors with the right to appoint one of four existing directors.

Yahoo! intends to return substantially all of the after-tax cash proceeds to shareholders following the closing of the transaction. While the form of the return of capital to shareholders has not yet been finalized, Yahoo!’s board has increased Yahoo!’s share buyback authorization by US $5 billion concurrently with this transaction.

The transaction is subject to customary closing conditions. Alibaba will be required to close the repurchase with respect to at least one-quarter of Yahoo!’s current stake in Alibaba regardless of the amount of financing raised, and up to one-half of Yahoo!’s current stake if it obtains the requisite financing. Alibaba intends to finance the repurchase through a combination of its own cash resources, debt, equity and equity-linked financing. The transaction is expected to close within approximately six months.

UBS Investment Bank acted as lead financial advisor to Yahoo! and Allen & Company LLC and Goldman Sachs & Co. also served as financial advisors. Skadden, Arps, Slate, Meagher & Flom LLP acted as lead legal counsel to Yahoo! and Weil, Gotshal & Manges LLP also acted as legal counsel. Munger, Tolles, & Olson LLP acted as legal counsel to the Yahoo! Board of Directors. Credit Suisse acted as lead financial advisor to Alibaba and Wachtell, Lipton, Rosen & Katz acted as lead legal counsel to Alibaba. Freshfields Bruckhaus Deringer LLP acted as counsel to Alibaba on certain financing and Hong Kong legal matters and Fenwick & West LLP acted as counsel to Alibaba on intellectual property matters.

Conference Call and Webcast Information

Yahoo! will host a conference call to discuss today’s announcement at 5:45 a.m. Pacific Time / 8:45 a.m. Eastern Time Monday, May 21, 2012. A live webcast of the conference call, together with a supplemental presentation concerning the transaction, can be accessed through the Company’s Investor Relations website at http://investor.yahoo.net/. The dial-in number for the live conference call is (866) 659-9165. Participants calling from outside the United States may dial (617) 399-5178. The passcode 73540611# is required to access the call. In addition, an archive of the webcast can be accessed through the same link. An audio replay of the call will be available for one week following the conference call by calling (888) 286-8010 or (617) 801-6888, passcode: 35326266.

About Yahoo!

Yahoo! is the premier digital media company, creating deeply personal digital experiences that keep more than half a billion people connected to what matters most to them, across devices and around the globe. And Yahoo!’s unique combination of Science + Art + Scale connects advertisers to the consumers who build their businesses. Yahoo! is headquartered in Sunnyvale, California. For more information, visit the pressroom (pressroom.yahoo.net) or the company’s blog, Yodel Anecdotal (yodel.yahoo.com).

About Alibaba Group

Alibaba Group is a leading e-commerce company based in China. Since it was founded in 1999, Alibaba Group has grown to include the following core businesses: Alibaba.com (HKSE: 1688; 1688.HK), Alibaba Group’s flagship company and a global e-commerce platform for small businesses; Taobao Marketplace, China’s leading C2C online shopping destination; Tmall.com, a popular B2C online marketplace in China for quality, brand name goods; eTao, a comprehensive shopping search engine; Alibaba Cloud Computing, a developer of advanced distributed cloud computing services; and China Yahoo!, one of China’s leading Internet portals. Alipay, a leading third-party online payment service in China, is an affiliate of Alibaba Group.

Forward-Looking Statements

This press release contains forward-looking statements (including in the quotations in this press release) concerning the agreement entered into by Yahoo! with Alibaba Group Holding Limited, including, without limitation, statements about the expected timing of closing of the transactions contemplated by the agreement, the ability of Yahoo! to monetize its holdings in Alibaba in both the near-term and in the future, potential future actions by Yahoo! and Alibaba concerning future business initiatives between Yahoo! and Alibaba and the potential for an initial public offering of Alibaba shares, and other expected benefits of the agreement and related agreements. Risks and uncertainties may cause actual results and benefits of the transactions contemplated by the agreement and related agreements to differ materially from management expectations. The potential risks and uncertainties include, among others, the failure to consummate or delays in consummating the transactions contemplated by the agreement; uncertainty regarding the future valuation of Alibaba; uncertainty regarding the financing of the transactions; uncertainty regarding if and when there will be an initial public offering of Alibaba shares; uncertainty regarding any future business initiatives with Alibaba; general economic and market conditions; and the possibility that some or all of the expected benefits of the agreement and related agreements may not be realized. All information set forth in this press release is as of May 20, 2012. Yahoo! does not intend, and undertakes no duty, to update this information to reflect subsequent events or circumstances. More information about potential factors that could affect Yahoo!’s business and financial results is included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Yahoo!’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, as amended, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, which are on file with the Securities and Exchange Commission (“SEC”) and available at the SEC’s website at www.sec.gov.

Yahoo! is the trademark and/or registered trademark of Yahoo! Inc. All other names are trademarks and/or registered trademarks of their respective owner.

Yahoo! Media Relations:
Yahoo! Inc.
Dana Lengkeek, 408-349-1130
danal@yahoo-inc.com
or
Sard Verbinnen & Co
Charles Sipkins, 310-201-2040
csipkins@sardverb.com
or
Yahoo! Investor Relations:
Yahoo! Inc.
Joon Huh, 408-349-3382
jhuh@yahoo-inc.com
or
Alibaba Group Contact:
International
Alibaba Group
John Spelich, +852 9017-7444
johnspelich@hk.alibaba-inc.com
or
U.S.
Sard Verbinnen & Co
Paul Kranhold/Jenny Gore, 415-618-8750
pkranhold@sardverb.com
jgore@sardverb.com

Source: Yahoo! Inc.

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The Samsung Focus 2 4G LTE pleasantly surprised me. I’ve had it for about a week now and I don’t want to give it back. That’s how much I like it.

And that says a lot about Windows Phone. This was my first time using one for an extended period of time.

The 4-inch Super AMOLED screen makes it easy to read on and I loved how clear and bright it was. Surfing the web was fast thanks to AT&T’s 4G LTE. I didn’t experience any hang ups.

I only found a few drawbacks. The Focus 2 only comes with 8 GB of storage, which probably won’t be enough if you like to store a bunch of music and movies on your device. Luckily, you can add more storage with a micro SD card.

As with all Windows Phones, the app store needs a lot of work. There isn’t nearly as large of an app selection as you’ll find on Android and iPhone. I missed using SoundCloud, one of my favorite apps.

Still, those drawbacks are relatively minor, considering the Focus 2′s incredible price.

I can’t believe this phone costs $50. (With a two-year contract, of course.) If the iPhone wasn’t so ubiquitous, then I would be OK with the Focus 2. It’s a steal. 

The phone is a nice size and fits into a pocket easily.

Although the glossy finish did make the phone a little slippery to hold.

Compared to the iPhone, the phones look pretty similar. The obvious difference is the 4-inch screen on the Focus 2.

See the rest of the story at Business Insider

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During the weekend, even Ars takes an occasional break from turning Vitas into phones or worrying about Best Buy’s PC setup procedures. Weekend Ar(t)s is a chance to share what we’re watching/listening/reading or otherwise consuming this week.

This is our damn video about making “Here’s your damn chocolate ice cream.”

If you’re the kind of ice cream eater who only opts for the classic swirl, the genius of Humphry Slocombe is lost on you. On any given day inside the San Francisco flavor factory, sure, you can find some form of chocolate and vanilla. But it’s likely Chocolate Smoked Salt and Tahitian Vanilla. And those can usually be found next to tastes that really make all other parlors jealous: Peanut Butter Curry or Jesus Juice (a red wine and cola sorbet) for instance.

Last month Humphry Slocombe did foodies everywhere a favor. They took 40 of their favorite recipes and compiled them into the inaugural Humphry Slocombe Ice Cream Book. Finally, the world could learn the secret behind mind-melting experiences like your first scoop of Secret Breakfast (bourbon and cornflakes).

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Yahoo and Alibaba have finally hashed out terms that will see Yahoo sell back half of its stake in the Chinese e-commerce site in a $7 billion deal, according to an AllThingsD report.

Yahoo will sell half of its 40 percent stake, and with Alibaba valued at $35 billion, the value of Yahoo’s holdings are worth around $7 billion. The taxable Yahoo-Alibaba deal has reportedly been cleared by Yahoo’s board. After taxes and fees, Yahoo should end up clearing about $4 billion.

Both Yahoo and Alibaba have been bickering over the terms of their relationship for years, so it only makes sense for Yahoo to finally give up a portion of its stake in the company. And Yahoo seriously needs cash to help it come up with new direction and new products, especially in light of the company losing CEO Scott Thompson recently in an embarrassing resume-padding scandal.

Photo credit: Flickr/Yahoo

Filed under: VentureBeat

Tens of thousands of ultra-Orthodox Jewish men, many bearing smartphones, converged on Citi Field in New York to discuss the temptations that lie in uncensored use of the Web.

So many victims.

Interscope Records

You’re not the kind of person who would ever fall for a “relationship scammer” on the Internet, of course, so you might wonder whether anyone actually sends tens of thousands of dollars in gifts to a romantic partner they have met only online. The answer is: yes, yes they would. And it happens far more often—and involves far more money—than you might suspect.

Case in point: back in 2005, in the great state of California, a woman named Paula met a “man” named Jesse while participating in an online discussion forum around the show Deadwood. Paula fell in love. Hard. But “Jesse” wasn’t a man; she was apparently a woman named Janna, who lived in Batavia, Illinois—just up the road from me and right next to the Fermilab research complex.

This led, eventually, to a lawsuit. Here’s how an Illinois appeals court summed up the complex claims that Paula made in the case. (Pardon the length, but it’s needed to convey the full-on bizarreness of what happened.)

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