McAfee: Mobile Malware ...

Security and anti-spam firm McAfee today reported that it saw a massive uptick in mobile malware last quarter. Mobile malware has “exploded,” the company said ( PDF ), “with a significant increase on Android devices. In addition, McAfee also found a slight increase in malware targeting the Mac, but the report notes that this trend was not “extreme.” Despite the increase in mobile and Mac malware, as well as password-stealing Trojans, the good news in today’s report is that global spam level dropped quite a bit during the last quarter, though we are still talking about a trillion messages per month. This quarter’s increase in mobile malware is partly due to the fact that McAfee improved its ability to find these threats, but it still represents a massive increase. The company collected about 8,000 mobile malware samples last month. These threats, as usual, mostly target Android. While Google and other major store have made great strides in keeping malware out of their stores, third-party stores and forums remain a problem. Among the areas of mobile malware that saw major increases in threats was mobile backdoor malware and the always popular premium-rate SMS-sending malware. The report also noted that the company found one of the first destructive Android Trojans this quarter. This piece of malware doesn’t damage apps or executables, but instead targets a user’s photos and then adds an image of the Ayatollah Khomeini to each picture. Here are a few additional interesting data points from the report: Q1 2012 had the largest number of PC malware detected per quarter (83 million) McAfee found about 250 new Mac malware samples last quarter and about 150 fake Mac anti-virus samples spam levels dropped to 1 trillion per month the United States represents the primary source of cyber attacks You can find the full report here (PDF).

Salesforce.com: Q1 Net ...

The ongoing interest and use of cloud-based services has brought a generally good set of results to one of the leaders in the enterprise software-as-a-service business.  Salesforce.com released Q1 earnings just now and in a quarter that is traditionally slower for the company, it swung to a net loss of $19.5 million, compared to a net profit of $530 million a year ago. Nevertheless, total revenues for the quarter were $695 million and earnings per share of $0.37 — beating estimates from analysts as polled by First Call, who expected adjusted EPS of $0.34 and $678.21 million for revenue. The figures were also better than Saleforce’s own guidance of $0.33-$0.34 for the EPS and revenue of $673 million – $678 million. The sales were an increase of 38 percent on revenues for the same period a year ago, and Marc Benioff, chairman and CEO, salesforce.com, says that the company is on track for its first $3 billion year; last year the company broke new ground with $2 billion in sales. Within salesforce’s revenues of $695 million, the company is making the vast majority of its money on its core, cloud-based CRM software, for which subscription and support revenues were $655 million. Professional services accounted for a much smaller portion of sales at just $40 million. Subscriptions are growing more: they were up by 38 percent compared to 30% for professional services. Deferred revenues — that is, revenues that Salesforce has yet to collect from its customers — is up by quite a lot. Salesforce notes that overall deferred revenue on the balance sheet was $1.33 billion, a rise of 46 percent on last year. Meanwhile unbilled deferred revenue — business that is contracted but unbilled and off the balance sheet — was up to $2.7 billion from $2.2 billion a year ago. Rises in both might be a reflection of Salesforce’s own growth, but could also be a sign of customers delaying their payments, which Salesforce cites as a risk factor in its business. Salesforce says that it generated cash of $213 million in Q1, up 53 percent over last year. Total cash, cash equivalents and marketable securities are at $1.7 billion. In addition to the bullish projections on $3 billion in revenues for the full year, Salesforce.com says that it expects revenues for the next quarter to be up on this quarter and in the range of $724 million and $728 million, up 33 percent on last year’s Q2. Looks like tomorrow might be a good trading day for Salesforce.com.  In a research note, Canaccord Genuity analyst Richard Davis noted that the thinks that shares of Salesforce.com  might rise by as much as three-eight percent on Friday, due to “at least temporary exhaustion of risk-off selling of high valuation growth stocks,” and “a positive halo effect from a successful Facebook IPO.”

Gartner: Q1 2012 Phone ...

Sign of a maturing marketing flattening out, a lack of compelling devices, or a contraction in the economy? Gartner today released figures that note that worldwide sales of mobile phones were actually down by two percent this quarter, to reach a total of 419.1 million units — the first time the market has declined since the second quarter of 2009, the analysts say. Gartner’s explanation is a slowdown in demand from Asia-Pacific, because of a lack of compelling new devices getting launched in the period: users are simply holding out until something better comes along. Nevertheless, of the vendors that are doing well, Samsung is riding at the top of the list, with 20.7 percent of all mobile sales globally, and among smartphones, it is the only Android vendor to have more than 10 percent market share — with Android now accounting for 56 percent of all smartphone sales in the quarter. This will be the quarter that people remember as the one when Samsung swapped places with Nokia, with others like Strategy Analytics also showing a similar shift. In Gartner’s calculations of mobile sales, Nokia has now slipped down to second position with 19.8 percent of all mobile sales to Samsung’s 20.7 percent, equivalent to 86.6 million units. Nokia, Gartner notes, had been in the number-one position since 1998 — but from the looks of its earnings for the last few quarters, it doesn’t appear that Nokia will be regaining the lead any time soon. (Don’t rule it out yet, though. Nokia just yesterday launched two more low-cost, souped up feature phones that play to the developing markets where it has continued to do alright, despite its market share losses in more advanced countries.) Among the other trends that Gartner noted, it pointed out that white-box vendors — the long tail of device makers that fill in the “others” category seemed to have been hit the hardest. It notes that while companies like Nokia may have been selling in less at the retail level, white-box vendors have a supply issue in that they overproduced and now have a build-up of inventory. That will mean very cheap devices will be hitting stores in the next couple of quarters as they try to shift their stock for the next generation of devices. (This by the way was a similar problem Nokia had in Q2 2011 , when Gartner suspected this might have made Nokia appear to have a bigger share of sales than it actually had.) Overall, Samsung and Apple were the only two vendors in the top 1o mobile rankings to have gained market share: the rest all declined, as you can see from the list below. Together, Samsung and Apple now represent 49.3 percent of all smartphones sold — a sure sign of the consolidation being that a year ago the pair only accounted for 29.3 percent. Nokia’s smartphone share is down to 9.2 percent, Gartner says. Gartner says that Samsung also managed to wrest the leading smartphone maker crown from Apple this quarter: it sold 38 million units to Apple’s 33 million. Among android makers, Samsung is also proving once again that it is the brand to beat: it accounted for 40 percent of all Android smartphone sales. (In that respect, Google’s Motorola buy seems less and less like a device play, or that it can realistically be one.) Smartphone sales accounted for just over one-quarter of all mobile sales: they stood at 144.4 million units, out of total mobile sales of 428 million units. That represented growth in smartphone sales of 44.7 percent, Gartner says. Samsung’s Galaxy S III, the follow up to its best-selling Galaxy S II, was launched only last month and is now gradually getting rolled out worldwide — although it has seen mixed reviews and so it remains to be seen whether it will prove to be a similar blockbuster for the Korean company. In the meantime, we all continue to guess when Apple might release its next iPhone — with many suspecting it will not be until the later half of this year.

Enterprise, Video Led T...

Instagram, Schminstagram. While flashy consumer deals keep getting all the headlines, it was actually cloud computing, enterprise and video that fueled the biggest deals of last quarter’s $25.1 billion in mergers and acquisitions, according to top-tier accounting firm Ernst & Young. The total value of all deals fell by 12 percent from the year before while the number of deals was about the same, according to a report the firm published today. While that’s not too huge a drop, the firm attributes it to “ongoing economic uncertainty.” (Thanks Greece.) Quarterly deal volume has apparently reached a plateau after two years of growth and is being restrained by concerns about the macroeconomic climate. If you’re curious what the biggest deals of last quarter were, here are they below. The leaderboard is topped by enterprise deals like  Cisco’s $5 billion agreement to buy NDS Group and Oracle’s $2 billion deal to buy Taleo , which helps companies manage recruiting.  There is also a consumer-facing deal in there with Youku , China’s version of YouTube, merging with its rival Tudou Holdings Ltd. for $1.1 billion in a pending acquisition. Instagram’s $1 billion deal doesn’t count because it happened after the quarter ended. If it was here, it would show up in seventh place. Ernst & Young says there are five megatrends driving deal-making. Basically, they include smart mobility, cloud computing, social networking and “big data” analytics. Shocker. Then there is one extra one, which Ernst calls “blur” or ”convergence, as technology sectors come together and the technology industry enters other industries as enabling innovation.” (Yes, “blur” is a big trend these days. Haven’t you heard?) Cloud computing and software-as-a-service deals had both the biggest number of deals and the biggest transaction sizes. The biggest deal of the quarter looped in both trends. Cisco’s $5 billion deal to get NDS will give the Silicon Valley networking giant a video software and content security solutions provider that’s a backbone of pay TV industry . The Tudou-Youku deal also skews the size of video and online gaming transactions. The Americas led most of the acquisitions, with 75 percent of global deal volume and 87 percent of global deal value. Buyers in Asia also tended to buy targets in other parts of the world. M&A activity dropped off dramatically in Europe thanks to continuing economic malaise there. Joe Steger, who leads global technology industry transaction advisory services, says the overall economic climate will keep M&A activity flat or slow this year. So here are a few more charts from the report: Again, here’s another way to look at how software-as-a-service is leading deals, representing $11.5 billion of all the target companies. Overall, there were were a few really large deals in the $1 billion-plus range that drove overall transactions up. There were also many more deals that didn’t have disclosed prices this quarter. Something that should keep things exciting for the rest of the year is the huge pile of cash the world’s biggest technology companies are accumulating. Ernst & Young estimates that the top 25 tech companies in the world have $668 billion in cash between them, up from $571 billion the year before. (Thanks Apple.) That should give bigger companies room to write checks for interesting targets. Europe actually was a net seller as many U.S. buyers picked up companies from across the pond. NDS, for example, originally was founded in Israel.

AOL Beats Street, But R...

AOL reported first quarter earnings this morning, which saw it posting higher revenues than expected by analysts, with $529.4 million in revenue during the quarter, beating the $527 million consensus. However, this represented a 4% drop from a year earlier. Meanwhile, net income rose fourfold from the same quarter last year, with net income at $21.1 million (22 cents per share), up from $4.7 million (4 cents per share) in this quarter last year. Although total ad revenue increased by 5% to $330.1 million, AOL reported that U.S. display ads fell 1% to $118.9 million – representing the first decline in the last five quarters. AOL owns several online properties, including TechCrunch, as well as Engadget, local news source Patch, and the Huffington Post, among others. Globally, the display revenue was driven by growth in international display advertising, particularly growth in both the U.K. and Canada. The domestic display advertising revenue declined primarily reflecting a decline in reserved impressions sold, but this was partially offset by growth in reserved inventory pricing and Patch revenue. (Yes, Patch!) According to AOL’re report, “Patch grew traffic and advertisers over 40% year-over-year and revenue over 100% year-over-year.” Other areas doing well in the product/consumer space included video (videos, video views, video ad impressions, and video revenue grew at double-digit rates), and traffic was up over Q4 2011 to 108 million uniques. In April, AOL agreed to sell more than 800 patents to Microsoft for $1.06 billion , and that transaction is expected to close by year-end. In today’s statement, AOL said Microsoft might have to pay $211.2 billion if the deal is terminated. In a statement, Tim Armstrong, Chairman and CEO, said: “AOL is a much stronger company today than a year ago and began 2012 by growing advertising revenue, lowering expenses and improving Adjusted OIBDA trends. In 2012 and beyond we are simultaneously focused on the continued successful execution of our strategy and on creating and unlocking value for our shareholders.”