Samsung Galaxy S3 gets head start on rival iPhone

SEOUL/LONDON (Reuters) - Samsung Electronics launched its top-of-the-range Galaxy S3 smartphone in Europe on Tuesday, aiming to outsell the previous model that helped the South Korean company topple Apple as the world's largest smartphone maker.

The Galaxy S3, which tracks the user's eye movements to keep the screen from dimming or turning off while in use, hits stores in 28 European and Middle East countries, including Germany and Britain, as Samsung aims to widen the gap with Apple months ahead of its rival's new iPhone, expected in the third quarter.

In the kind of anticipation that has become the norm for Apple gadget releases, about 50 customers queued outside the BASE mobile phone shop in Berlin on Monday night eager to be the first to lay their hands on the S3.

The smartphone, running on Google's Android operating system, boasts a 4.8-inch screen, one of the largest on smartphones ever, and much bigger than the 3.5-inch display on the iPhone 4S.

Top global carriers - from Britain's Vodafone to Singapore's SingTel - have started to aggressively promote the S3, fuelling speculation the smartphone could top its predecessor, the Galaxy S2's 20 million sales worldwide.

"In the two years that we've been offering pre-orders, it's the most pre-ordered Android device we've had in our line-up," said a spokesman for Vodafone UK, declining to disclose exact numbers. "It's on track to meet, if not exceed, the level of pre-orders we expected by the time it actually launches."

Samsung itself has said it expects the new flagship model to outsell its predecessor.

Samsung introduced its first Galaxy in 2010, three years after the iPhone's debut, to counter Apple's roaring success in smartphones at a time when the demise of bigger rivals Nokia and BlackBerry maker Research In Motion had started.

Samsung sold 44.5 million smartphones in January-March - equal to nearly 21,000 every hour - giving it 30.6 percent market share. Apple sold 35.1 million iPhones, taking 24.1 percent market share.

"The Galaxy S3 is a real challenger to the upcoming iPhone," said Francisco Jeronimo, an IDC analyst based in London. "This is likely be one of the most sold smartphones this year, though the real test will come when the next iPhone is launched."

The race for global smartphone supremacy comes as Apple has accused Samsung of copying some of its products. The South Korean company counter-claims that Apple has infringed its patents. Both have denied the allegations, and a long-running court saga continues.

Apple plans to use a larger screen on the next iPhone, according to people familiar with the situation. The current iPhone 4S model was introduced last October.

Samsung launched its own music service on the Galaxy S3, putting itself head-to-head with Apple. It has previously rebranded existing music and video services.

"Samsung is not known for our content services; we make good hardware products but we haven't done much in the content space but that's changing," T.J. Kang, senior vice president of Samsung Electronics' Media Solution Center, said.

"We are doing it to create a better experience for our users. There are things we could do better if we have complete control over all of the service."

MORE ROUNDED

In a departure from its predecessor, whose look and feel became the main subject of the legal dispute with Apple, the latest Galaxy has a more rounded outline. It also has voice recognition, dubbed S Voice, which will inevitably be compared with Apple's Siri, and image recognition software that can tag and share photographs.

Prices vary depending on the contract. A model with 16 gigabytes of memory costs up to 189 pounds ($300) under a 12-month contract with Vodafone. A similar package for the iPhone 4s costs 159 pounds, but comes with a more expensive monthly data plan.

Samsung said it will release the S3 via 296 carriers in 145 countries by July.

Profit from Samsung's mobile division nearly tripled in January-March to $3.6 billion, accounting for 73 percent of operating profit.

Samsung - whose shares have gained 82 percent since late-August, beating Apple's 58 percent rise - is now banking on an aggressive marketing campaign ahead of the summer London Olympics to further drive sales. It has said its mobile market share in China doubled after the 2008 Beijing Olympics.

"The S3 is supported by an unprecedented promotional campaign," said Geoff Blaber, an analyst at CCS Insight in London. "Samsung's timing with the Galaxy S3 is perfect."  Read More

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Facebook could pay over $1 billion for Opera: analysts

OSLO (Reuters) - Opera Software shares soared over 20 percent on Tuesday on talk Facebook Inc. was in discussion to buy the firm, while analysts said competition from Google and others could push the price tag of any deal over $1 billion.

Shares of Oslo-listed Opera, coveted for its advanced mobile phonesoftware technology, jumped as much as 26 percent, valuing the firm at over $800 million.

Opera's mobile technology, along with 170 million Opera Mini users, give the firm extensive commercial relationships with mobile phone manufacturers and operators.

Facebook has struggled to convert its rapidly increasing traffic from mobile platforms to revenue, and purchasing Opera would be a faster solution than building its own platform or browser, analysts added.

"Opera would be sensible for Facebook on several levels as it would enhance the now limited mobile experience of Facebook, improve Facebook's mobile monetization problem, help Facebook retain online game developers leaving the social network over a lacking mobile platform and further improve Facebook's ability to target ads," Arctic Securities said.

It would be such a perfect fit for Facebook, analysts said it would have to pay a hefty premium.

DNB, Norway's top bank, said the price would have to be double Friday's closing level, or 68.6 crowns, valuing the firm at $1.35 billion, while Danske Bank predicted a price between 50 and 60 crowns a share, or between $1 billion and $1.2 billion.

At 1021 GMT, the stock traded up 16.9 percent at 40.1 crowns a share, valuing the firm at around $800 million.

Opera officials have repeatedly declined to comment.

OBSTACLES

Still, several obstacles remain.

Opera founder and top shareholder Jon S. Von Tetzchner said the firm should focus on organic growth.

"I want Opera to focus on growth and delivering good results; there are big opportunities for Opera," Tetzchner, who holds 10.9 percent of Opera told Reuters. "We have been promised 500 million users by 2013 and I think that's a good goal and the firm should keep going for it."

"I personally think that an ARPU (average revenue per user) goal of $1 is even modest," he said. "I am not pushing for a takeover."

Tetzchner said he was not aware of a bid and had not decided how he would react to one but added it would be "undemocratic" for him to try to block it if others supported it.

Another obstacle could be Google, which has extensive relationships with Opera.

"A takeover by Facebook will likely send cold water down Google's spine," Arctic Securities said.

Google is Opera's default search partner for Opera Mini and Opera Mobile worldwide outside Russia/CIS, making the firm a key relationship for Google.

If the firm continued to grow organically, it would be able to maintain several parallel relationships with firms like Facebook and Google so if one of them wanted full control, the premium would have to be hefty, analysts added.  Read More

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U.S. to fine Ericsson in Panama $1.75 million over Cuba shipments

(Reuters) - World number one mobile network equipment maker Ericsson's subsidiary in Panama will pay a $1.75 million penalty to the U.S. Department of Commerce for violating U.S. export restrictions on Cuba, a settlement agreement obtained by Reuters showed.

The agreement, which was approved on Thursday but has not yet been made publicly available, showed that the firm's Panama branch operated a "scheme" under which it sent broken equipment from Cuba to the U.S. for repair after masking its origin.

After uncovering the shipments, Ericsson de Panama voluntarily disclosed the violations to the export control arm of the Commerce Department, the settlement showed.

Ericsson de Panama "knew that exports from the United States to Cuba were unlawful because it had been informed by its parent company of the embargo placed on Cuba by the United States," the agreement said. The settlement was signed last week and given final approval by a Commerce Department official on Thursday.

The export scheme was developed by three former Ericsson de Panama employees, spokesman Frederik Hallstan said, speaking from Ericsson's corporate headquarters in Sweden.

"This was not standard Ericsson procedure," Hallstan said. "We have changed our processes."

The three employees were dismissed after the scheme was uncovered by the company, he said.

The penalty covered 262 violations of federal regulations committed between 2004 and 2007, concerning about $320,000 worth of equipment, the settlement agreement said.

Under the scheme, the Panama branch received broken items from customers in Cuba, removed any recognizable markings and falsified papers before sending the items to a repair center in the United States.                    After repairs, they were shipped back to Cuba via Panama, the agreement said.

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Bharti adds 2 million Indian mobile users in April: industry

(Reuters) - Bharti Airtel, India's top mobile phone operator, added 2.01 million mobile users in April, taking its total subscribers in the country to 183.3 million, data from an industry body showed on Friday.

Vodafone's Indian unit, which is the country's No. 3 mobile operator by subscribers, signed up 0.82 million mobile users in April to have a total of 151.3 million, the Cellular Operators Association of India said on its website.

The industry body does not provide subscriber additions data for No. 2 carrier Reliance Communications.

Fourth-ranked Idea Cellular added 1.49 million mobile customers in April to have a total of 114.2 million, while Telenor's India unit boosted its subscriber base by 1.12 million to 43.6 million.

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As rivals falter, Lenovo has emerging market edge

HONG KONG (Reuters) - With home turf advantage in the world's biggest computer market and a foothold in major emerging economies, China's Lenovo Group is looking to turn market shareinto profit, heaping more pressure on U.S. rivals Hewlett-Packard Co and Dell Inc.

Concern that global tech spending, particularly in the developed world, is weakening faster than expected has battered Dell shares and prompted HP to axe some 27,000 jobs. To counter weakness in consumer spending in major cities in the world's second-largest economy, Lenovo is Casting its net wider.

"We are seeing strong growth in smaller Chinese cities," Chairman and CEO Yang Yuanqing said this week, unveiling a 59 percent jump in quarterly net profit. He noted that personal computer penetration in China is still just 20-30 percent versus 99 percent in the United States.

China has been Lenovo's traditional stronghold, contributing 42 percent of group revenue and boasting the business's highest operating margins. Lenovo has around a 30 percent share of the Chinese PC market, well ahead of Acer, Dell, Asustek and HP, all with single-digit market share, according to data from research firm IDC.

Lenovo sold 2.5 million PCs in China in January-March, according to IDC, and company data showed the average selling price across its products rose 1.5 percent from the previous quarter to $545. In the fast growing tablet segment, its Lepad trails some way behind Apple Inc's iPad, but outsells Samsung Electronics' Galaxy Tab.

Analysts note that while Dell has focused on high-margin products, Lenovo has aimed for volume sales to gain market share. The key for Lenovo, which has risen to the world's No.2 PC maker after its 2005 acquisition of IBM's PC business, is how to turn that market share into profit.

In the year to end-March, Lenovo's operating margin was below 2 percent - though it was 4.5 percent in China - compared to more than 7 percent at Dell and HP. Yang said Lenovo would look to turn a profit in emerging markets once it hits a certain volume - or 10 percent market share. This would allow it to hook in customers and profit later when they upgrade their products, particularly corporate clients, analysts said.

After quarterly profit fell sharply at both HP and Dell, investors are asking questions about their product strategies and management focus in a weak global economy.

Sunny Chung, Allianz Global Investors Taiwan Domestic Equity head, said a slowdown would cause some build-up in PC inventory as there would be more uncertainty over demand later this year. Allianz Global Investors owns Lenovo shares.

Lenovo lags HP by 4-5 percentage points as global PC market leader, but analysts expect the Chinese firm to take the top slot this year or next.

Lenovo has unveiled a series of consumer products in China as it moves aggressively into smartphones, tablet PCs and smart TVs, though some analysts question whether all its products will have the same level of success it has had in PCs.

"Lenovo's strategy in China is to continue building its own ecosystem, such as notebook, desktop, tablet, smartphone and TV. This could be kind of a dream as it's not easy to generate large profits from building hardware," said Angela Hsiang, an analyst with KGI Securities in Taipei.

BUYING MARKET SHARE

Lenovo has been winning market share in other emerging markets, such as Russia and India, where it is the top vendor, but that has been at the expense of operating losses due to aggressive pricing.

Yang said his company's focus over the coming quarters would be to improve profitability in these markets by increasing volume sales and controlling costs in areas such as hard disk drives. In mature markets, which generate more than 40 percent of Lenovo's revenue, the company has taken market share more by acquisition.

Last year it bought Medion in a deal that valued the German consumer electronics retailer at around $900 million, and signed a joint venture with NEC Corp to sell laptops in Japan.

   Chief Financial Officer Wong Wai Ming says Lenovo is open to more acquisitions.

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Google cleared in Oracle suit on patents

Google won a major victory as jurors sided with the Internet giant in a high-stakes court battle over patents with business software titan Oracle.

In a unanimous decision, 10 jurors agreed that Oracle had failed to prove its claims that Google infringed on Java software patents in Android operating software for smartphones and tablet computers.

The jury verdict thwarted Oracle's quest to get more than a billion dollars in damages from Google.

Oracle accused Google of infringing on Java computer programming language patents and copyrights Oracle obtained when it bought Java inventor Sun Microsystems in a $7.4 billion deal in 2009.

Google has denied the claims, and said it believes mobile phone makers and other users of its open-source Android operating system are entitled to use the Java technology in dispute.

Google unveiled the free Android operating system, which is widely used for mobile devices around the world, two years before Oracle bought Sun.

"We are grateful for the jury's verdict," said lead Google attorney Robert Van Nest as he left the San Francisco courtroom.

Oracle spokeswoman Deborah Hellinger said the company presented the case that Google "knew it would fragment and damage Java."

"We plan to continue to defend and uphold Java's core... and ensure it is protected for the nine million Java developers and the community that depend on Java compatibility," she said in a statement.

Oracle was expected to appeal the verdict.

Jurors deliberated for nearly seven days in what US District Court Judge William Alsup said was longer than the time taken by jurors in any other civil trial he has presided over.

All jurors but one quickly sided with Google in the patent portion of deliberations, said 52-year-old jury foreman Greg Thompson, who described himself as the lone holdout.

"I eventually had to conclude the preponderance (of evidence requirement) hadn't been met even though I could see strong value in Oracle's argument," he said.

"I think that a lot of us had an underlying feeling that something wasn't quite right about what Google."

A copyright phase of the trial ended earlier this month with the same jury ruling that Android operating system violated Java copyrights but deadlocked on whether it constituted "fair use" of the technology.

Thompson said he was one of three jurors who doubted whether Google's use of the copyrighted Java code was proper.

Jury selection was pivotal to the outcome, with technology-savvy members of the panel tough to convince to back a ruling that might "limit future expansion of what is seen as the common good of products," Thompson said.

If Google's use of copyrighted Java application programming interfaces (APIs) in Android was fair use, Oracle would deserve no damages from the Mountain View, California-based firm under the law.

The copyright verdict limited any damages Oracle could potentially win to a small amount allowed by law, at most. The verdict in the patent phase meant Google was liable for no damages in that regard.

"With such limited damages on the copyright side of the case and a determination of no infringement on the patent questions, Google should be putting confetti on their search site," said Washington, DC-based patent lawyer Robert Stoll.

Alsup canceled a planned damages phase of the trial and sent the jury home on Wednesday.

"I think it is fair to call the present result a near disaster for Oracle," said Stanford University law school teaching fellow Brian Love.

"In a case that started with potentially billions on the line, Oracle's maximum recovery right now might not be enough to cover two days worth of its attorneys' fees."

Adding to the complexity of the case, Alsup early on reserved the right to make the ultimate decision whether APIs at issue in the first phase of the trial can even be copyrighted.

The judge said that he might rule as early as next week.

Oracle's challenge of Google in court over copyrights was an unusual tactic being watched intently in Silicon Valley.

In the fast-paced land of Internet innovation, it has been common for software writers to put their own spins on APIs that mini-programs use to "talk" to one another.

The jury concluded that Google infringed on 37 copyrighted APIs, but it also agreed that Google demonstrated that it was led to believe it did not need a license for using Java.

Julie Samuels of the Electronic Frontier Foundation said the case was a huge waste of resources in trying to copyright these tools.

"After spending what certainly amounts to tens of millions of dollars... both parties will have wasted untold resources that could have been dedicated to innovation instead," she said.

"It's a sad commentary on the state of intellectual property litigation that we even had to go down this road."

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SAP to buy Ariba, boosts cloud bet

SAN FRANCISCO (Reuters) - Top European software company SAP AG plans to buy Ariba Inc in a deal valuing the business and commerce network company at $4.3 billion, its latest maneuver against Oracle in the fast-growing Internet-based computing market.

SAP is taking aim at Oracle, the world's No. 2 maker of business management software, as they vie with Salesforce.com Inc in the multibillion dollar cloud-computing services market, one of the industry's hottest area of growth.

Shares in Ariba, which were halted briefly, leapt 20 percent to SAP's offer price of about $45 per share.

"This deal puts them more on the radar screen and gives them another big customer base they can sell additional services into. These are not inexpensive moves but it signals they are really tilting more toward the cloud," said Evercore analyst Kirk Materne.

SAP's announcement comes just weeks before Oracle CEO Larry Ellison is due to announce the Silicon Valley company's latest cloud software strategy, on June 6.

The $45-per-share offer for Ariba, a darling of the first dotcom boom that has since reinvented itself as a major networking and online commerce software developer, values Ariba at 6.9 times expected 2013 revenue, according to Roth Capital Partners.

Salesforce.com trades around 5.5 times expected revenue.

The purchase of Sunnyvale, California-based Ariba would be the latest in a string of acquisitions by German technology company SAP to help fuel its revenue growth and expand its cloud computing business.

SAP said it expected the deal, already approved by Ariba's board, to close in the third quarter.

But Cross Research analyst Richard Williams said that since many of Ariba's customers use Oracle services, there is good reason -- and precedence -- to expect the U.S.-based Oracle to make a rival bid.

In 2005, Oracle snatched retail software maker Retek away from SAP after a bidding war that reached $630 million.

"Strategically it's a valuable asset and would disadvantage Oracle if SAP were to close the deal, so I can see a case for why Oracle would feel the need to enter into the bidding to protect its own potential growth opportunities," Williams said.

SHARES HALTED

Cloud computing refers to providing software, storage, computing power and other services to customers from remote data centers over the Web.

Oracle and SAP are locking horns as both transform themselves into major players in the cloud and reduce their reliance on traditional business software. SAP's purchase of Web-based software company SuccessFactors Inc, announced late last year, was seen as accelerating their running battle.

In February, Oracle increased its bet on cloud computing by agreeing to purchase Taleo Corp, a maker of Web-based software for recruiting employees, for about $1.9 billion.

SAP's deal puts Ariba's enterprise value at about $4.3 billion. Enterprise value is market capitalization plus debt and other considerations.

Demand for cloud-based software is rising rapidly because the approach allows companies to start using new programs faster and at lower cost than traditional products that are installed at a customer's own data center.

SAP intends to integrate Ariba into Hana, a business intelligence tool to help companies analyze large quantities of data quickly. Hana came to market last year and generated 160 million euros in sales through the end of 2011, surpassing SAP's own expectations of 100 million euros.

"We are looking forward to optimizing Ariba so it can be used in real-time. This is a new category of the cloud. We want to accelerate the platform for collaboration between companies," SAP co-chief executive Jim Hagemann Snabe said on a conference call.

SAP said its transaction would be funded from its free cash and a 2.4 billion euro ($3.06 billion) term loan facility.

The European company also said it would consolidate its cloud-based supplier assets under Ariba, which would continue to operate as an independent business.

Ariba shares closed up 19.2 percent to $44.87 on Nasdaq on Tuesday, suggesting investors expect the deal to be completed around that price. ($1 = 0.7838 euros)

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Morgan Stanley defends Facebook IPO procedures

(Reuters) - Morgan Stanley said its procedures for the Facebook Inc's initial public offering were "in compliance with all applicable regulations."

"Morgan Stanley followed the same procedures for the Facebook offering that it follows for all IPOs," spokesman Pen Pendleton said in a statement. "These procedures are in compliance with all applicable regulations."

Morgan Stanley issued the statement on Tuesday afternoon after Massachusetts Secretary of Commonwealth William Galvin issued a subpoena to the company related to an analyst's communications with investors about Facebook's revenue outlook.

The subpoena followed a Reuters report that the bank's consumer Internet analyst, Scott Devitt, reduced estimates for Facebook in the run-up to its IPO on Friday and informed certain investors.

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Toshiba plans to double operating profit by 2014-15

TOKYO (Reuters) - Japan's Toshiba Corp <6502.T> said on Thursday it aims to more than double its annual operating profit in three years to $5.6 billion, by expanding its social infrastructure business and boosting sales of electronics devices.

The electronics conglomerate, whose television sales have been sliding along with those of rivals Sony Corp <6758.T>, Panasonic Corp <6752.T> and Sharp Corp <6753.T>, has been buoyed bystrong sales of Apple Inc's iPhones, which use Toshiba's NAND flash chips.

The world's No.2 maker of NAND flash chips, behind Samsung Electronics <005930.KS>, Toshiba forecast NAND chip sales of 700 billion yen in the 2015/16 business year.

Shares of Toshiba Corp <6502.T> jumped 5.6 percent to 322 yen after the release of its mid-term business plan, outpacing a 0.9 percent rise in the Nikkei, and partly retracing a steep fall from levels above 380 yen in recent weeks.

Toshiba said its annual operating profit was likely to reach 450 billion yen ($5.6 billion) by the year ending March 2015, up from 206.7 billion yen for the year ended March 2012.

The company said earlier on Thursday that it has halted domestic production of LCD televisions in the face of price falls, following a similar decision by Hitachi Corp <6501.T>.

"We have shut down our domestic TV production. We are looking at all areas (of the TV business), number of models, numbers of panels, in order to re-strengthen this division," Toshiba president and CEO Norio Sasaki told reporters.

He added that the firm was shifting its focus to emerging economies and growing markets after domestic demand for TVs fell more than expected in the previous year.

Toshiba said sales for its digital products division, home to its loss-making LCD TVs, would reach 200 billion yen in business year 2015/16.

However, it pushed back its 1 trillion yen sales target for the nuclear power business for two years to 2017/18, following the Fukushima radiation disaster and stricter atomic regulations in the United States.

The firm also said it has been approached by several potential buyers interested in a stake in U.S. nuclear power company Westinghouse Electric, in which it has majority ownership. Sasaki was speaking about a 20 percent stake that U.S.-based Shaw Group plans to sell back to Toshiba by next January.

Toshiba said in its business plan that capital spending for the three years to March 2015 would be about 1.4 trillion yen, and it planned to spend around 1.1 trillion yen on research and development during the same period.

Sasaki also said that he wants to strengthen alliances with Toshiba's partners to expand its "smart community business", which helps energy users efficiently manage their power usage.

Last year, Toshiba bought Swiss-based Landis+Gyr in a deal valued at $2.3 billion in an effort to move into the promising overseas smart grid market, designed to accommodate a range of power generation options and give real-time information on energy use.

Toshiba last week forecast an annual operating profit of 300 billion yen ($3.75 billion) for the business year ending March 2013, buoyed by strong sales of its flash NAND memory chips. ($1 = 80.3550 Japanese yen)

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Facebook sets richest tech flotation in motion

Facebook on Friday makes the richest-ever share offering for a technology firm, raking in billions of dollars it could wield to dethrone Google as king of the Internet.

Facebook stock priced at $38 per share was to begin trading under the symbol "FB" on the Nasdaq, giving the world's leading social network a dizzying value of $104 billion at its initial public offering (IPO).

Investors were keen to own a piece of Facebook, which grew from a Harvard dormitory project in 2004 to an online community with more than 900 million denizens.

Facebook reportedly planned to go public hacker style with an all-night software bending bash to culminate with co-founder Mark Zuckerberg remotely ringing the Nasdaq opening bell.

Employees joined in a "hackathon" at Facebook's offices in the Silicon Valley city of Menlo Park and were to continue until the IPO at which 421 million shares of common stock were to be sold..

Facebook itself is selling 180 million and holders of previous shares are selling 241 million.

Facebook was on course to raise $16 billion, making it the richest IPO after financial giant Visa in 2008, according to Renaissance Capital. The addition of a possible stock "over-allotment" could boost the total to some $18.4 billion.

With a market worth of $104 billion, Facebook would be among the most valuable US companies, ahead of sector giants like Amazon ($98 billion) and Cisco ($89 billion), and more than twice the value of Ford Motor Co. ($38 billion). But it remains behind Google ($203 billion) and Apple ($495 billion).

Under the share plan, Zuckerberg will hold 55.8 percent of the voting power, and some 18.4 percent of the value of Facebook. The 28-year-old controls the firm through a dual class stock structure.

Wall Street and investors around the globe have been girding for a Facebook IPO frenzy.

In the past few days, Facebook boosted the estimated price for the shares, and added to the number of shares being offered from insiders.

London bookmakers anticipated a stampede. At the betting firm Spreadex, clients have been speculating that shares could rise above $56 after their first day.

Wedbush Securities analyst Michael Pachter said he believed that despite the large number of shares being offered, Facebook stock price will climb quickly in trading.

"I would guess it trades a lot higher, and settles in the mid-40s (dollars)," Pachter told AFP.

Spreadex noted that among other tech IPOs, LinkedIn rose 109 percent the first day while Groupon surged 31 percent. Social game maker Zynga lost ground on its first day.

But Spreadex spokesman Andy MacKenzie said that "we have had some customers holding back based on their belief that Facebook shares may well fall in value after the furor over the initial launch has died down."

Lou Kerner, founder of The Social Internet Fund, said he expects a strong response.

"US institutional demand has been good, the retail and global demand has been overwhelming," he said.

London-based Hargreaves Lansdown Stockbrokers said Facebook may have a hard time living up to lofty expectations but pointed out that it is "a relatively developed company which can display 'real' income and profit."

"There are extremely high expectations for the company's prospects and perhaps on that basis it deserves the punchy valuation it has been given," the brokerage said in a note to clients.

But the brokers said Facebook faces challenges including how to make money from the growing base of mobile users.

The IPO's net proceeds to the company were estimated at $6.4 billion. The rest of the cash goes to Facebook insiders and others who made early investments in the social network, and to cover the IPO costs.

The Wall Street Journal said 57 percent of shares will be from insiders, which is an unusually high percentage. Under Wall Street rules, investors have to wait six months to sell any shares not offered at the IPO.

Some analysts predicted Facebook's stock price will jump quickly to $44 a share but the long-term outlook is less clear.

At the heart of the debate about the wisdom of owning a piece of Facebook is how much revenue it takes in.

Revenue vaulted to $1.06 billion in the quarter which ended March 31 -- an improvement year-over-year, but down about six percent from the previous quarter.

According to Experian Hitwise, Facebook.com received nine percent of all US Internet visits in April 2012. It had 1.6 billion visits a week and averaged more than 229 million US visits a day for the year-to-date.

Facebook co-founder Eduardo Saverin, who this week revealed he had given up his dual US citizenship and that he intended to stay on in Singapore, denying the move was aimed at sparing himself a big tax bill when the site lists on the stock market, congratulated his former colleagues in a Facebook post on Friday.

He hailed Zuckerberg for "keeping tremendous steadfast focus, however hard that was, on making the world a more open and connected place."

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LG launches Cinema 3D Smart TVs for PHL market

Manila, Philippines - LG invited media attendees and its trade partners to witness the official unveiling of the 2012 Cinema 3D Smart TVs at the Makati Shangri-la Hotel. 

A day of dance and inspiring talks were capped off with a promise from LG's Managing Director, Mr. Sung Woo Nam, to provide premium 3D home entertainment to Filipino homes with LG's latest TV offerings.




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Facebook IPO has halo effect for venture capitalists

SAN FRANCISCO (Reuters) - For the handful of venture capitalists who backed Facebook in its early days, a huge financial payoff is not the only thing they may be celebrating when the company goes public later this week.

In a business in which the best investment opportunities flow to a small number of firms with big reputations, the prestige boost that Accel Partners, Greylock Partners and Meritech Capital have gained from their Facebook investments dating back to 2005 and 2006 could pay dividends for years to come.

"The person, often the firm too, gets that patina," said Lisa Edgar, who tracks a range of venture investors in her work evaluating venture-capital firms for fund-of-funds firm Top Tier Capital Partners. "It perpetuates. There's this deal-flow and network effect."

The dynamic is straightforward, but powerful. Entrepreneurs see a firm, or an individual partner, that not only made a great call but now has a special relationship with a company that could help their nascent business. That means that the venture capital firm gets first dibs on some of the most promising deals, which vastly increases their odds of success.

And their link to Facebook means in some cases an easy introduction, or even a deal down the road, for the venture capitalists' portfolio firms. Take Facebook's $1 billion acquisition last month of photo-sharing service Instagram - just after Greylock funded it.

Other venture capitalists also start paying more attention to what the successful firm is doing, and although they would be loath to admit it, they may become more inclined to back those same companies at richer valuations in later rounds of financing.

The limited partners who provide the funding for venture capitalists in turn see both the big financial return from the initial investment and the fringe benefits to other portfolio companies, and become more inclined to support the successful venture capital firm in the future.

'GIVES THEM CONFIDENCE'

Josh James, the former chief executive officer of the software company Omniture, is just the sort of entrepreneur that most any venture capital firm wants to back - he had sold Omniture to Adobe Systems for $1.8 billion in 2009.

He had his choice of funders when he was building his new software company, Domo, and went with Benchmark Capital last year in part because of Benchmark Capital partner Matt Cohler's close ties to Facebook.

James said he has sealed a deal to hire more than one employee by telling them that likely they eventually would get to present to Cohler, and he has closed several sales because the Facebook connection makes it clear to customers that Domo is up on the latest technology.

"It gives them confidence," he said.

Earlier this year, Domo raised $20 million more from Institutional Venture Partners.

At education network Edmodo, which took $15 million in funding from Greylock and Benchmark last year, the Facebook connection "brings credibility to us, too," CEO Nic Borg said.

Borg said he believes several education companies developed applications to run on Edmodo's platform that they might not otherwise have done so.

At business software company Couchbase, CEO Bob Wiederhold says the upside lies in large part on the introductions that Accel's Kevin Efrusy, an investor in his company since 2010, can make. That includes to Bobby Johnson, director of engineering at Facebook and now an advisory board member at Couchbase.

"He can help surround the company with good people," Wiederhold said, referring to Efrusy.

THE BIG COMEBACK

Facebook's earliest backers are sitting on a veritable fortune. Meritech's and Greylock's slices of Facebook will be worth more than $1 billion each.

But Accel Partners, which initially invested $12.7 million in Facebook at a $98 million valuation back in 2005, the year after it was founded, is clearly the big winner. Come the IPO, the current stake of Accel and its affiliates will be worth $6.3 billion, assuming a mid-point stock price of $31.50. It plans to sell a portion of that stake worth about $1.2 billion, according to the IPO prospectus.

Accel won in more than one way. It had been struggling in the wake of the dot-com bust that began in 2000, and the firm's fund that in 2005 first started investing in Facebook and other companies turned Accel's reputation around. Its latest funds, including last year's Accel XI, have been heavily oversubscribed by investors.

The deal was also a career-maker for Accel's Efrusy, who was not even a partner when he made the case for a big investment in Facebook at what was considered a very high valuation at the time. Efrusy went on to back social-discount company Groupon early on, in 2009, well before its IPO raised $700 million last year.

For Greylock Partners' David Sze and Meritech Capital's Paul Madera, both of whom jumped into Facebook as part of a $27.5 million round in 2006 that valued the company at $500 million, the deal was not their first big success.

Sze was an early investor in LinkedIn , which raised $352.8 million in an IPO last year, and Madera backed enterprise-software giant Salesforce.com before it went public in 2004.

Cohler invested sweat equity by leaving a job at LinkedIn in early 2005 to become Facebook's seventh employee before becoming a venture capitalist. At his new employer, Benchmark Capital, which does not invest in Facebook, he led a $7 million investment last year in Instagram.

Despite their extraordinary success, none of the early Facebook investors appears ready to rest on the laurels.

"You have to be humble about whether you can do it again, and that's what keeps you hungry," said Greylock's Sze.

"If you look at the cycle, every four to six years another company of (Facebook's) caliber gets created," said Chi-Hua Chien, currently a partner at Kleiner Perkins and a former associate at Accel who first brought Facebook to the Accel team's attention. He rattled off a list of names including: Amazon , in 1994; Google , in 1998; and Facebook, in 2004.

The outsized importance of the occasional monster deals means that venture capital firms sometimes find it worthwhile to get in - even late in the game.

Andreessen Horowitz, a high-profile new firm, drew some snickers when it bought Facebook shares in 2010 at a very high valuation. But that investment stands to show a tidy profit, and with partner Marc Andreessen sitting on the Facebook board, it is not hard to see the benefit for the firm..

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