When Less Is More for Italy’s Economy (CNBC)
The Italian economy shrank for the eighth straight quarter yesterday, according to statistics agency ISTAT. However, the country’s gross domestic product (GDP) fell .2 percent on a month-to-month basis and 2 percent on an annual basis. These figures are better than analysts’ estimates for the same period which had suggested drops of .4 percent on a month-to-month basis and 2.2 percent on an annual basis. The ongoing contraction was not isolated in a single sector. Rather, the contraction was spread across the Italian economy. So, is a smaller loss the “new victory” for investors in Europe? It is for now.
Facebook Not Alone Showing Profit in Social Media (FinancialTimes)
Well, 15 months after its initial public offering (IPO), Facebook investors finally were rewarded for their loyalty when the social media giant’s share price cracked the $38 mark. Unfortunately for shareholders, Facebook seems to be the laggard in the industry when it comes to profitability. LinkedIn has 240 million members and Yelp around 100 million — both a far cry from Facebook’s 1.1 billion users. And each company’s enterprise value reflects that difference, with Facebook sitting at $75 billion, LinkedIn at $25 billion and Yelp at $4 billion. So, which will turn out to be the better investment in the long run? Right now, Yelp seems to be taking over market share from Groupon, but Facebook’s mobile revenue grew 75 percent in the last quarter. Either makes sense, at this point.
Newspapers: Darkest Before the Dawn? (Bloomberg)
Just when it appeared that the nation’s hardcopy newspapers were going the way of the dinosaur, Jeff Bezos of Amazon fame, delivers a Jurassic Park-sized lifeline. At least, that’s what it looks like on the surface now that Amazon’s CEO has plunked down $250 million for the Washington Post. However, the reality is something a bit different as Bezos becomes the third billionaire to buy an existing newspaper in recent weeks. Last week, Boston Red Sox owner John Henry purchased the Boston Globe — despite rumblings of conflict of interest with his baseball ownership. And Warren Buffett looks to be assembling a Hearst-like consortium of community newspapers. Despite the recent rush to paper ownership, it’s not clear how any of the three will turn around newspapers in a flagging industry amid decreased readership. Investors would be wise to sit and watch these developments for a while before following the lead of the billionaires.
