- Yahoo on $1.1bn Tumblr acquisition deal: we won't screw it up
Web pioneer reveals details of acquisition of blogging platform, as site's 26-year-old founder tells staff: 'Fuck yeah'
Yahoo promised "not to screw it up" as it formally announced its acquisition of the Tumblr blogging platform for $1.1bn ahead of the US stock market opening on Monday.
The relaxed wording of the memo for one of the internet giant's biggest acquisitions was echoed in the memo sent by David Karp, Tumblr's 26-year-old founder, to his staff, in which he said "We're not turning purple" – Yahoo's corporate colour – and rounded it off "Fuck yeah."
The deal, which is expected to complete in the second half of the year, is almost all cash, is equal in value to Yahoo's money in hand at the end of its first quarter in March – but it has substantial extra assets in short-term securities, shares in the Chinese site Alibaba, and other equities which it can liquidate.
It is understood that Karp, who will remain Tumblr's chief executive, will be tied into the company for at least four years for his payment of about $220m to vest.
Explaining the deal, Yahoo said that Tumblr has more than 300 million monthly unique visitors and 120,000 signups every day, 900 posts a second and 24bn minutes spent on the site every month. On mobile, more than half of its visitors are using the Tumblr mobile app, for an average of seven sessions a day.
"The combination of Tumblr+Yahoo! is expected to grow Yahoo!'s audience by 50% to more than a billion monthly visitors, and to grow traffic by approximately 20%," the company said.
Yahoo plans to use its personalisation and search technologies to tie Tumblr users more tightly into its network – thus dragging their attention away from rival social networks such as Facebook, Twitter, Pinterest and Google+. "The two companies will also work together to create advertising opportunities that are seamless and enhance the user experience," it said.
"Tumblr is redefining creative expression online," the Yahoo chief executive, Marissa Mayer, said in a statement. "On many levels, Tumblr and Yahoo couldn't be more different, but, at the same time, they couldn't be more complementary. Yahoo is the internet's original media network. Tumblr is the internet's fastest-growing media frenzy. Both companies are homes for brands – established and emerging. And, fundamentally, Tumblr and Yahoo are both all about users, design, and finding surprise and inspiration amidst the everyday."
In a conference call with Wall Street investors, Mayer said the acquisition would grow Yahoo's audience by 50% to more than 1bn people and increase its total traffic by 20%.
She said the company would not place ads on Tumblr bloggers' sites without their permission, or plaster the hip blogging site with Yahoo corporate branding – a cautious move designed to appease its most sceptical users.
"On Tumblr, there's a number of different places we think we can monetise that are meaningful and add to the user experience," said Mayer, confirming that ads will be introduced to the dashboard page where users can follow other Tumblr posts.
"Our hopes here are that this significantly contributes to our growth story in terms of traffic and users. It is an exceptional company and an exceptional team," she added.
Meyer brushed aside one question about concerns over the amount of pornography on the Tumblr site, saying Yahoo needed "good tools for targeting" and removing less "brand-safe" material. "We really think the richness and breadth of the content – even though it may not be as brand safe as on our site – is really exciting and that will help us reach more users."
The chasm between the two companies is best expressed by the fact that Karp, 26, is only eight years older than Yahoo itself, which was founded in 1995.
"David Karp is one of the nicest, most empathetic people I've ever met," Mayer said. "He's also one of the most perceptive, capable entrepreneurs I've ever worked with. David's respect for Tumblr's community of creators is awesome. I'm absolutely delighted to have him join our team."
Announcing the deal on Tumblr's staff blog, Karp said: "Before touching on how awesome this is, let me try to allay any concerns: We're not turning purple. Our headquarters isn't moving. Our team isn't changing. Our roadmap isn't changing.
"And our mission – to empower creators to make their best work and get it in front of the audience they deserve – certainly isn't changing."
Karp told staff at its New York headquarters that the deal means Tumblr gets "better faster" and signed off: "Fuck yeah, David".
The deal will see Karp become the latest high-school dropout turned multimillionaire, following in the footsteps of web wunderkinds including Mark Zuckerberg, the Facebook founder, and Sean Parker, the Napster creator. Karp reportedly owned about 20% of Tumblr stock, valuing his stake at $220m after Monday's deal.
The native New Yorker, whose parents separated when he was 17, taught himself computer code before founding Tumblr in 2007, when Zuckerberg's Facebook was three years into its global expansion.
- Church of Scotland votes to allow gay ministers
General assembly votes to allow congregations to admit gay ministers but only if they specifically elect to do so
The Church of Scotland, the country's largest Protestant church, has narrowly voted to admit gay and lesbian ministers after traditionalists agreed to compromise after four years of division.
The church's ruling general assembly voted to allow congregations to admit gay ministers but only if they specifically elect to do so, in a radical departure from more than 450 years of orthodoxy set in train by the protestant reformer John Knox.
The vote is likely to lead to an end to a four-year controversy which has split the church after an openly gay minister, Scott Rennie, was selected to lead Queen's Cross parish in Aberdeen in 2009.
The general assembly, equivalent to the Church of England's synod, rejected a motion which would have made gay ordination – solely for ministers in civil partnerships or who are celibate - the default position of the Church of Scotland, by 340 votes to 282.
The new deal – which now has to be written into a new church law and authorised by next year's general assembly - affirms the traditional teaching of the church as favouring heterosexual ministers, but will allow congregations to opt in to select gay ministers if they wish.
The church's complicated law-making procedures could still mean the compromise measure – which was proposed in a late motion tabled on Monday by the previous moderator, Albert Bogle, may not be law until 2015.
John Chalmers, the Church of Scotland's principal clerk, said the vote was historic: "This has been one way or another, a massive vote for the peace and unity of the church." He said both sides of the debate had moved to agree a compromise.
The general assembly had voted for the "mixed economy", he said, where congregations could decide to uphold traditional teachings to only employ heterosexual ministers but whether others could take on gay and lesbian ministers.
Critics of gay ordination had warned that scores of Church of Scotland ministers and congregations could leave in protest at proposals to make it church policy that all congregations had to accept gay ministers unless they opted out of doing so.
Six ministers and two congregations have already resigned, while senior figures in the far more orthodox Free Church of Scotland said that around 50 ministers have been in touch about defecting.
The Church of Scotland has been edging towards gay ordination ever since Rennie's appointment: in 2011, the general assembly voted to allow gay ministers already in post to remain in place, so long as they were in openly-declared civil partnerships or celibate, and had been ordained before 2009.
The vote came after the general assembly heard from the Rev Elizabeth Spence, a lesbian minister from Ibrox in Glasgow.
"For me, there is nothing bigger than whether I'm accepted in this church or not, because I am a gay woman," she said, adding: "It's now time; it's time to decide, so those of who are in this limbo can get under the wire."
A minister based in England, the Rev Jim Sharp, also urged the assembly to support gay ordination, in the spirit of accepting the total equality of all people, regardless of gender, ethnicity or sexuality.
"Let us be brave, let us bold," he said. "Let us not put ourselves in the position where ten, 20 years from now, people say of us 'how on earth can anyone think that lesbians and gays were second class citizens and not worthy to be treated as equals?'"
The Rt Rev Roy Patton, the moderator of the Presbyterian Church of Ireland, warned the delegates there would be serious tensions within the global presbyterian church if the general assembly voted to admit gay ministers. That would be "hard to comprehend", he said.
"It would lead a church away from the tradition of the church," he said. "We do believe this is contrary to the message of god and will make it difficult for the church as a whole to reach out to the wider world."
The Rev David Randall, another traditionalist, said the controversy had already divided the church: it had lost ministers, congregations and money as a result. There were other people in the church "hanging on by the fingernails", hoping the move towards gay ordination would be blocked.
The proposals in the church's theological commission report on ordaining gay ministers for a gay marriage liturgy was one of his "worst nightmares", Randall said. "The basic issue is whether or not this church stands by the teaching of scripture or whether we think that we know better than god's will," he said. "This is no time for compromise."
- Iraqi sectarian attacks kill at least 86
In Iraq's deadliest day for eight months, 10 car bombs explode in Baghdad and other attacks hit Shia Basra and Sunni Samarra
A wave of attacks killed at least 86 people in Shia and Sunni areas of Iraq on Monday, pushing the death toll over the past week to more than 230 and extending one of the most sustained bouts of sectarian violence the country has seen in years.
The worst of the violence took place in Baghdad, where 10 car bombs ripped through open-air markets and other areas of Shia neighbourhoods, killing at least 48 people and wounding more than 150, police officials said.
In the bloodiest single attack, a parked car bomb blew up in a busy market in the northern Shia neighbourhood of Shaab, killing 14 and wounding 24.
The predominantly Shia city of Basra was hit by two car bombs, one outside a restaurant and another at the main bus station, killing at least 13 and wounded 40, according to officials.
In the town of Balad, a car bomb exploded next to a bus carrying Iranian pilgrims, killing 13 Iranians and one Iraqi, a police officer said.
The bloodshed is still far shy of the pace, scale and brutality of 2006-07, when Sunni and Shia militias carried out retaliatory attacks against each other. But Monday's attacks have heightened fears that the country could be turning back down the path towards civil war.
Sectarian tensions have been worsening since Iraq's minority Sunnis began protesting against what they say is mistreatment at the hands of the Shia-led government. The mass demonstrations, which began in December, have largely been peaceful, but the number of attacks rose sharply after a deadly security crackdown on a Sunni protest camp in northern Iraq on 23 April.
Monday was the deadliest day in Iraq in more than eight months. There was no immediate claim of responsibility for the attacks, but the fact that they occurred in Shia areas raised suspicions that Sunni militants were involved.
The prime minister, Nouri al-Maliki, accused militant groups of trying to exploit Iraq's political instability to exacerbate sectarian tensions, and also blamed the spike in violence on the wider unrest in the region, particularly in Syria. He said insurgents "will not be able to bring back the atmosphere of the sectarian war".
Many Sunnis contend that much of the turmoil is rooted in decisions made by Maliki's government, saying his administration planted the seeds for more sectarian tension by becoming more aggressive towards Sunnis after the US military withdrawal in December 2011.
Monday's violence also struck Sunni areas, hitting the city of Samarra north of Baghdad and the western province of Anbar, a Sunni stronghold and the birthplace of the protest movement.
A parked car bomb in Samarra went off near a gathering of pro-government Sunni militia who were waiting outside a military base to receive salaries, killing three and wounding 13. In Anbar, gunmen ambushed two police patrols near the town of Haditha, killing eight policemen, police and army officials said.
Also in Anbar, authorities found 13 bodies dumped in a remote desert area, officials said. The victims, who included eight policemen kidnapped by gunmen on Friday, had been killed with gunshots to the head.
- Royal Bank of Scotland leads the way as FTSE 100 hits highest level since September 2000
Central bank action and growing signs of economic revival lift UK shares closer to all time high
As leading shares hit heights not seen for almost 13 years, Royal Bank of Scotland was the day's biggest riser.
The bank ended 15.1p higher at 351.9p after analysts at Numis raised their recommendation from hold to buy and their target price from 308p to 410p. The broker said RBS's US business Citizens was undervalued while the profitability of its UK retail operations would be underpinned by its efficiency measures.
Overall the FTSE 100 finished 32.57 points higher at 6755.63, pushing through the peak of 6732 seen in 2007 and reaching its highest level since September 2000, just as the dotcom bubble was about to burst.
Investors continued to take heart from central bank actions to stimulate the global economy. Worries about what happens when the taps are turned off are being put to one side at the moment, although analysts warned they cannot be ignored for ever. The mood was helped by Friday's better than expected US consumer confidence figures and news that Japan raised its outlook for the economy for the first time in two months.
Equities are also providing reasonable returns given the current low interest rate environment, as well as falling government bond yields and declines in the price of commodities, notably precious metals. Indeed, gold is on its longest losing streak for four years while silver is at its lowest since September 2010.
So Fresnillo led the fallers, down 35p at £10.34. Randgold Resources was 61p lower at £46.96 while precious metals specialist Polymetal dropped 16.5p to 617p.
There were also concerns about further industrial unrest in South Africa after unions reportedly sought pay rises of up to 60% from some of the main mining groups.
Elsewhere controversial Kazakh miner Eurasian Natural Resources Corporation lost 7.5p to 264.1p after the board revealed details of the proposed offer from its founding oligarchs. It said the terms were a total of 260p a share, in a mixture of 175p cash and 0.231 of a share in associate Kazakhmys. The independent directors said the bid undervalued the business. On Friday the Takeover Panel gave an extension for the bidders until 3 June.
Kazakhmys, up 13.3p at 351.7p, made clear the shares involved were those owned by the Kazakh government, and said it was not itself part of the consortium bidding for ENRC. Its own stake in ENRC was not a strategic investment and it would consider any proposal from the consortium at the appropriate time.
Back among the risers, budget airline EasyJet climbed 47p to £12.35, buoyed by good results from rival Ryanair, up nearly 7% at €6.765. Ryanair reported a 13% rise in full year profits to €569m, helped by strong growth in fares and a rise in charges for extras such as baggage and in-flight refreshments.
EasyJet was also helped by a Citigroup buy note, with the bank raising its target price from £12.10 to £13.30 and pointing to the prospect of a payout to shareholders. Analyst Andrew Light said:
[Our] earnings forecasts raised by around 10% on better revenue outlook and lower fuel costs. Our dividend per share estimates have also been increased by around 10% with around 10% growth per annum based on a 33% payout ratio. We expect balance sheet net cash to rise to over £1.2bn by 2015. We therefore continue to think there could be a further special dividend.
Ocado added 11p to 285.1p as Exane BNP Paribas raised its target price on the online grocer from 225p to 300p in the wake of its long awaited tie-up with Morrisons, up 2.8p at 289.3p, unveiled on Friday.
Arm shook off worries the chipmaker had lost out to Intel in Samsung's new tablet, closing 8p better at £10.96. But analyst Janardan Menon at Liberum Capital said:
It is being widely speculated in industry news sites that Samsung's forthcoming Galaxy Tab 3 with a 10.1" screen will be running on an Intel processor. If true, this would be a major setback for Arm as it would be a first Android-based device from Samsung to use an Intel processor rather than an Arm-based processor. Our sell recommendation on Arm is based primarily on a view that it will continue to lose market share in the smartphone and tablet markets to Intel, as the latter is now on par with Arm on power consumption and performance. With its more advanced manufacturing roadmap, we expect Intel to potentially go ahead of Arm in coming years. We believe Arm's lofty valuation does not factor in this rapidly growing competitive threat from Intel.
News of falling profits and a £615m cash call sent FirstGroup down more than 30% to 155.6p.
The bus and rail company unveiled a 3 for 2 rights issue at 85p a share to raise funds for investment and to cut its £2bn of borrowings. Much of the debt was run up by buying US bus business Laidlaw in 2007.
Meanwhile it reported a 36.5% drop in full year profits to £172.4m, hit by falling earnings at its bus business, which is currently being restructured, rising fuel costs, and the ending of some of its rail subsidies. It is cutting its dividend payment to shareholders.
Chairman Martin Gilbert is also stepping down after 27 years at the company, once a successor is found.
Healthcare group BTG fell 18p to 338.6p. The company saw full year underlying profits rise from £19.9m to £25.7m, but there is caution ahead of a US decision on whether to approve its Varisolve treatment for varicose veins, due early next year. Keith Redpath at finnCap said:
The next key event which will move the share price will be FDA approval of Varisolve or otherwise in the first half of 2014. We see no reason to buy before this point.
Food producer Cranswick climbed 28p to £11.15 after the pork specialist reported an 8% full year profit rise to £49.3m. It was helped by increased consumption of pig meat in the UK, with strong sales of bacon and sausages. Investment in improving production helped offset some of the effects of higher pork prices, while it also benefited from growing demand for UK producers in the wake of recent worries about meat supplies. After the year end, Cranswick made the strategic acquisition of East Anglian Pigs. Charles Hall at Peel Hunt said:
Cranswick successfully mitigated the sharp rise in pig prices last year, with retailers keen to ensure access to UK product. Over the year pig prices increased from 140p per kilo to 158p. Prices are continuing to move forwards and are now 163p. A smaller increase in prices is generally harder to recover, and this may put pressure on margins this year. This will be partially mitigated by the acquisition of East Anglian Pigs, which brings some vertical integration.
Cranswick continues to perform well despite the increase in input prices. However, the shares seem fairly rated, given the relatively pedestrian profit growth. We have increased our target price to 1,050p to reflect the increase in peer group valuations. Hold.
Finally Aim-listed agrochemical company Eden Research jumped 56% to 13.625p on news that the three active substances in its lead product 3AEY had been approved by the European Commission for use in plant protection. The EU approval process has taken seven years to complete, but should now trigger similar decisions elsewhere, notably in Africa.
- John Kerry to visit Middle East this week to revive peace talks
British foreign secretary William Hague to join the US secretary of state's fourth visit to region in two months
US secretary of state John Kerry arrives in the Holy Land this week on his fourth visit in two months amid deepening scepticism on all sides about his chances of breathing life back into the moribund peace process, and an acknowledgement by European diplomats that there is no "Plan B" in place in the event of its failure.
The British foreign secretary William Hague will also join the Middle East diplomatic merry-go-round this week, with a visit to Israel and the Palestinian territories beginning on Thursday. The focus of Hague's trip, in which he is expected to meet politicians from both sides, is to support Kerry's mission to bring the two sides back to negotiations after an impasse of almost four years.
Kerry's efforts have produced no tangible results so far, apart from both parties consenting to refrain from actions which could set back his efforts. But while the Palestinians have stuck to their agreement to postpone pressing their case for statehood at international bodies, Israel has infringed its unannounced de facto moratorium on settlement expansion with recent moves on the retroactive legalisation of four unauthorised outposts and the construction of 300 houses at Beit El.
Following his last visit, Kerry said he was working on a package to boost the Palestinian economy as part of a framework of measures. No details were given.
Israeli and Palestinian political and diplomatic sources are privately sceptical about the chances of negotiations resuming but are unwilling to publicly dismiss such a high-profile effort. "It's not going to happen. We know that, they know that, but Kerry doesn't know it yet," said one.
European diplomats are also reluctant to express confidence in the likely success of the mission, speaking instead about giving Kerry "space" and "encouragement" to pursue his efforts.
"The EU wanted American engagement in this issue, and now we should support and encourage him, and give him space to develop something," said a senior European diplomat. "We know exactly what the situation is but we are not speaking of a Plan B because we want Plan A to succeed."
Another European diplomat was blunter. "There is no Plan B, or at least not one that all 27 [EU] states can agree to. If Kerry fails, it will be up to individual countries to try to change the dynamic."
International hopes were raised when the Arab League last month spoke for the first time about a Palestinian state on 1967 borders with "comparable and mutually agreed minor swaps of the land". The statement, from the Qatari foreign minister, was the first time the League had acknowledged the possibility of some Jewish settlements in the West Bank being on Israel's side of any agreed border.
Kerry has pushed the 2002 Arab Peace Initiative – which offered normalised relations between all Arab states and Israel in return for a Palestinian state – as a basis for renewed talks. He welcomed the new statement, as did former Israeli prime minister Ehud Olmert, who said: "We are speaking of an opportunity that must be seized to renew the diplomatic process."
However, Binyamin Netanyahu, the current prime minister, has not even acknowledged the move, let alone seized it as an opportunity. Referring to a Haaretz front page headline which read "John Kerry's upcoming visit to Israel is fourth attempt to push stone up the hill", one western diplomat quipped: "It's more like pushing water up hill. At least with a stone you have a chance."
Much of the secretary of state's attention will be focussed on Syria during his four-day trip to the Middle East, which includes visits to Oman and Jordan. He is expected to discuss with Netanyahu Israel's recent airstrikes on weapons stores near Damascus and the risks of such action internationalising the civil war, now into its third year.
Netanyahu has refused to rule out further action aimed at preventing advanced or chemical weapons being transferred to Islamic militants, despite the Syrian regime's threats to retaliate on the next occasion.
- Ex-Goldman Sachs boss quits HSBC role
John Thornton cites expanded responsibilities at other businesses as reason for resignation from bank
John Thornton, the former boss of Goldman Sachs, is resigning as a non-executive director of HSBC before the bank's annual general meeting on Friday, citing his "expanded responsibilities" at other businesses where he has senior roles.
His departure leaves a vacancy at HSBC for a chairman of the remuneration committee, and comes weeks after shareholders in Barrick Gold voted against the $12m (£7.8m) signing-on fee he received from the Canadian miner after he became co-chairman.
HSBC said Thornton's resignation was entirely due to the time pressures of his other roles. The bank's chairman, Douglas Flint, said he was saddened that a "substantial increase" in Thornton's workload had led to his departure.
Thornton, who received more than £1m in fees from HSBC in 2012, joined Barrick's board in February 2012 and was hit by the shareholder protest in April despite the firm's 85-year-old founder, Peter Munk, defending the signing-on fee and $17m total pay.
Thornton joined the HSBC board in December 2008 and has chaired the remuneration committee since May 2010, during which time he overhauled the bank's policies, requiring directors to hold their bonuses in shares until they retire. He had once been regarded as a potential future chairman of HSBC.
Head of Goldman Sachs until 1998, he will not now stand for election to the board of HSBC on Friday when shareholders assemble for the AGM at London's Barbican and vote on issues including the bank's pay policies.