Technology Stock Roundup: Cisco, Microsoft Steal the Show

Last week, Cisco (CSCO) launched its answer to SDN and Microsoft (MSFT) got a little closer to its next CEO.

Cisco Is Absorbing Insieme
Cisco is buying out the remaining 15% of Insieme, which it had originally funded with $100 million, subsequently contributing another $35 million. Cisco, which already owns 85% of the company, expects to spend up to $863 million for the balance.

The reason for setting up and funding Insieme was to counter the emergence of software defined networking (SDN), which combines software with lower-end hardware to mimic the capabilities of higher-end hardware. Since Cisco dominates the higher end, this is a direct attack on its bread and butter.

Cisco has come up with “application-centric infrastructure," which seeks to automate the functioning of software applications in data centers and clouds. For this purpose it is partnering with Microsoft, EMC, VMware, SAP and IBM (IBM), serving mutual interests. The idea is to lock in Cisco’s very considerable client list to ensure that they remain on Cisco networks.

Microsoft: Mirror, Mirror on the Wall…
Microsoft’s CEO hunt could be coming to an end. If the recent Reuters report is to be believed, the list of candidates has now been narrowed down to five. These include Alan Mulally, Ford (F) CEO; Stephen Elop, former Nokia CEO; Satya Nadella, currently heading Microsoft’s cloud business; Tony Bates, former president of Skype and Mike Lawrie, the CEO of CSC (CSC).

The list doesn’t look too exciting, but investors reacted positively to an analyst report from Nomura, which stated that an agreement with Mulally was not far off. Mulally has a history of fixing things: he did wonders at Boeing (BA) and Ford and could do the same at Microsoft. The obvious drawback is his lack of experience in software, which requires vision and a certain amount of agility in understanding and anticipating rapid technological change.

The other outsider is Mike Lawrie, who has the correct background to move the company forward. But he may be more of a risk-taker given his history.

That leaves the insiders, one of whom (Elop) is a known failure, while the other two lack experience in running a company of Microsoft’s size. Investors clearly favor Mulally.

Yahoo Gains Some, but Loses Some Too
Yahoo (YHOO) under Marissa Mayer has completed a huge number of acquisitions, most of which were designed to bring in engineering and other talent. While Mayer’s work remains on track, it appears that others have started tapping its swelling resources.

The last week saw the departure of two key personnel. The first was Eran Shir, an Israeli entrepreneur that joined Yahoo through its Dapper acquisition. Eran’s importance was related to his role in building a global engineering team called the Creative Innovation Center (CIC). The idea of having the CIC was to encourage creative thinking related to mobile, video, dynamic and rich media ads. The second was Tim Converse who joined Yahoo through its Jybe acquisition. Converse has been an important data scientist at Yahoo, spearheading its efforts in personalization.

Apple’s (AAPL) plans next iPhones: The next iPhones are likely to have curved screens, new pressure sensors and larger sizes (4.7-inch and 5.5-inch). Archrival Samsung launched its curved-screen model last month.

India’s Reliance Communications to distribute iPhone 5c: One of the largest carriers in India will be distributing iPhones in the hopes of increasing data usage. The company has seen its profits plunge in recent times and has partnered with financing banks, to bring the pricey phone to India’s millions. The Indian smartphone market is growing 5x annually compared to China’s 52% according to IDC and is set to overtake the U.S. as the second largest market by 2017. Lower-end models (sub-$200) comprise the fastest growing segment.

Yahoo Finance Gets Personal: Yahoo stepped up its personalization efforts with interactive toold in the new versions of Yahoo Finance for iPhones and iPads on the one hand and the web version on the other. The iOS version delivers portfolio-based news and data and also allows swiping and pinching actions common to mobile usage. The web version seeks to improve the organization, accessibility and personalization of portfolio-related data. The new look makes Yahoo Finance look more consistent across desktop and mobile platforms.

Facebook Removes Thumbs Up Sign: Facebook (FB) is removing the ambiguity of the “like” symbol by removing the Thumbs Up sign. This appears to be a first step toward better defining a user’s sentiment toward the matter “liked”. It is also rolling out a “star” feature whereby a user can rank a page from 1 star up to 5. Better defining user sentiments could help the company’s ad conversions.

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