DealBook: Twitter Sets I.P.O. Price at $17 to $20 a Share

DealBook: Icahn Urges Apple to Begin Share Buyback

Microsoft Raises Dividend and Announces New Share Buyback

The surprisingly big hike takes Microsoft's dividend yield to around 3.4 percent, ahead of major tech corporations such as International Business Machines Corp and Apple Inc.

But it may not satisfy activist investment firm ValueAct Capital and its supporters, mainly other big investment funds, analysts said. Some investors held out hope for a bigger slice of the company's $70 billion cash hoard, now that ValueAct has an option to take a seat on the software giant's board and exert greater influence over the company.

ValueAct has not publicized its goals. But people familiar with the fund's thinking say it questions Chief Executive Steve Ballmer's leadership and the wisdom of buying Nokia Corp's handset unit to delve deeper into the low-margin hardware business, and that it wants higher dividends and share buybacks.

Microsoft's shares finished 0.39 percent higher at $32.93 on the Nasdaq.

"I expected ValueAct to push for a big lump-sum payment like they have in the past," said Fort Pitt Capital analyst Kim Forrest, who has not spoken with the fund.

"And this is Microsoft saying no."

A hotly anticipated investor meeting on Thursday will give shareholders their first chance to quiz management on who may replace Ballmer, who announced plans to retire within a year after ValueAct pressed for his ouster.

It is unclear how hard ValueAct pushed Microsoft to share more of its $70 billion cash hoard. ValueAct CEO Jeffrey Ubben declined to comment about Microsoft during an industry event in New York on Tuesday.

For years, investors have called on Microsoft to return cash to shareholders rather than invest in peripheral projects, and limit its focus to serving enterprise customers with its vastly profitable Windows, Office and server products.

This month, it announced plans to buy Nokia's phone business and license its patents for 5.44 billion euros ($7.2 billion), a hefty investment that some criticized as a foray into a field already dominated by Apple and Google Inc hardware and software.

Microsoft has lost almost $3 billion on its Bing search engine and other Internet projects in the last two years alone, not counting a $6 billion write-off for its failed purchase of online advertising agency aQuantive.

Investors want a clearer picture of where Microsoft's investments in devices will take the company in coming years, especially as its cash cows, Windows and Office software, come under attack from Apple and Google in the mobile market, and the likes of Evernote and Box begin to develop productivity software.

"They really need to address what Microsoft will look like in a few years, and what the end goal is," Forrest said.

ONE COMPANY TO RULE THEM ALL

Ballmer announced his move just weeks after unveiling a 'One Microsoft' vision focused on hardware and cloud-based services. But poor sales of the Surface tablet, on top of its years-long failure to make money out of online search or smartphones, have cast doubt on the plan.

One of the biggest questions hanging over Microsoft is who will take the helm once Ballmer exits, and whether the successor will hew to his vision. Several sources have said top investors in the company are seeking a turnaround expert from within or without, and have proposed CEOs like Ford Motor Co's Alan Mulally or Computer Sciences Corp's Mike Lawrie.

The Nokia acquisition also brings former, well-regarded Microsoft executive Stephen Elop, who had headed the Finland-based company, back into the fold.

Tuesday's dividend and buyback declaration will help appease some investors for the time being, analysts said.

Microsoft said it will raise its regular dividend, payable on December 12 to shareholders of record on November 21, to 28 cents per share and authorized a new share buyback program.

The 5-cent increase, worth about $400 million a quarter, was about 3 cents more than analysts had expected. The new share repurchase program, with no expiration date, would replace another set to expire on September 30.

Microsoft ranks fourth on Wall Street in terms of actual cash payouts, behind Apple, Exxon Mobil and AT&T Inc. In terms of dividend yield, it ranks fourth among U.S. information technology companies, lagging only Intel Corp, Seagate Technology and Microchip Technology Inc, according to S&P Dow Jones Indices.

"We view this as a further indication that things are changing at Microsoft with respect to corporate governance that we believe could benefit shareholders over the next six to 12 months," Nomura Securities analyst Rick Sherlund said in a note.

But Barclays analyst Raimo Lenschow had expected an accelerated or expanded share buyback plan. The slightly bigger-than-expected dividend increase may signal a willingness to bow to investors' demands.

"A major open question is the timeframe over which the company plans to utilize the new $40 billion authorization, as that will dictate whether the level of the annual buyback is changing," Lenschow wrote on Tuesday.

"While the size of the new buyback program appears on the lower end of investor expectations, which we had pegged at close to $50-60 billion, the lingering question around the timeframe of the program makes the comparison to expectations flawed."

(Additional reporting by Nadia Damouni, Sam Forgione and Svea Herbst-Bayliss; Writing by Edwin Chan; Editing by Saumyadeb Chakrabarty, Robin Paxton, Noel Randewich and Richard Chang)

How to Share Data

A deluge of digital data from scientific research has spawned a controversy over who should have access to it, how it can be stored and who will pay to do so.

The matter was the subject of discussion after the journal Science published a paper on Thursday by Francine Berman, a computer scientist at Rensselaer Polytechnic Institute who is a leader of a group that focuses on research data, and Vinton Cerf, the vice president of Google.

The paper calls for a different culture around scientific data based on acknowledging that costs must be shared. It also explores economic models that would involve the support of various scientific communities: public, private and academic.

In an interview, Dr. Cerf said storing and sharing digital information was becoming a “crucial issue” for both public and private institutions.

The debate is likely to accelerate next week when federal agencies are expected to file proposals for how they would “support increased public access to the results of research funded by the federal government.” The plans were requested by John P. Holdren, director of the federal Office of Science and Technology Policy, in a memorandum in February.

But Mr. Holdren also directed that plans be carried out using “resources within the existing agency budget.”

That is likely to be a formidable challenge. While the cost of data storage is falling rapidly, the amount of information created by data-based science is immense. In addition, many agencies have complicated arrangements providing favorable access to corporations that then resell federal data. The agencies also must overcome the hurdle of developing systems that will make the data accessible.

Still, the federal guidelines underscore the importance of digital information in scientific research and the growing urgency to resolve the problems.

“Data is the new currency for research,” said Alan Blatecky, the director of advanced cyberinfrastructure at the National Science Foundation. “The question is how do you address the cost issues, because there is no new money.”

Dr. Berman and Dr. Cerf argued in their paper that private companies, as well as academic and corporate laboratories, must be willing to invest in new computer data centers and storage systems so that crucial research data is not irretrievably lost.

“There is no economic ‘magic bullet’ that does not require someone, somewhere, to pay,” they wrote.

Dr. Berman is the chairwoman of the United States branch of the Research Data Alliance, an organization of academic, government and corporate researchers attempting to build new systems to store the digital data sets being created, and to develop new software techniques for integrating different kinds of data and making it accessible. “Publicly accessible data requires a stable home and someone to pay the mortgage,” she said in an interview.

Google initially promised to host large data sets for scientists for free, and then killed the program in 2008 after just a year, for unspecified business reasons.

It may have been that the company was taken aback by the size of scientific research data sets. For example, the Obama administration’s proposal to eventually capture the activity of just one million neurons in the human brain (the human brain has about 85 to 100 billion neurons) for a year would require about 3 petabytes of data storage, or almost one third the amount generated by the Large Hadron Collider during the same period.

Dr. Berman said she was heartened to see a growing international recognition of the scope of the problem. The Research Data Alliance, begun last August with an international telephone conference of just eight researchers, now has more than 750 academic, corporate and government scientists and information technology specialists in 50 countries.

In their paper, she and Dr. Cerf argue that coping with the explosion of data would require a cultural shift on the part of not just the government and corporate institutions, but also individual scientists.

“The casual approach for many scientists has been to ‘stick it on my disk drive and make it available to anyone who wants to use it,’ ” Dr. Cerf said.

They argued that the costs need not be prohibitive. “If you want to download a song from iTunes, it’s not free, but it doesn’t break the bank,” Dr. Berman said.

Even those who feel that information should be free and open acknowledge that easy availability to data from government-subsidized projects gives an unfair and unnecessary advantage to private firms.

And some scientists argue that there would be advantages to charging for data. “Paying a small fee for downloads in the aggregate would also act as an incentive for providing the needed infrastructure,” said Bernardo A. Huberman, a physicist at Hewlett-Packard Laboratories.

In his memorandum, Dr. Holdren told the federal agencies to delay the release of research papers for a year; the reasons were not explained. That has angered activists who favor immediate and broad availability of publicly financed research.

“In scientific fields, a year is a very long time,” said Carl Malamud, the founder of Public. Resource.Org, a nonprofit group that attempts to make government information freely available online. Meanwhile, he said, corporations could sell the information. “It’s a sop to the special interests that publish this stuff.”

Dr. Berman said there were models that could provide ideas for the new infrastructures needed to store the data and make it accessible. One is the Protein Data Bank — a database of biological molecules — that is heavily used by the life sciences community and is publicly supported.

That data is freely available. However, she also pointed to the social science database Longitudinal Study of American Youth, which is maintained by the Inter-University Consortium for Political and Social Research at the University of Michigan. Users are charged a subscription fee.

As Revenue Exceeds Estimates, Groupon Plans $300 Million Share Buyback

The company, which also announced a $300 million share repurchase program on Wednesday, reported a better-than-expected 7 percent jump in second-quarter revenue to $608.7 million, as sales in the United States and Canada climbed 45 percent.

Lefkofsky, who was named interim CEO in February, has pushed on with his mobile-centric strategy since fellow founder Andrew Mason was replaced in February. The former CEO had presided over a precipitous share price decline to below $5 from its $20 debut in 2011.

The stock, which has gained 80 percent in 2013, rose to $10.35 in after-hours trade on Wednesday, its highest since July 2012.

"I think the news about installing Lefkofsky played a big part," said Tom White, an analyst at Macquarie Research. "Investors have been very impressed by the progress he's made since being made interim head and improving metrics particularly in the North America business."

With its core daily deals business model in steep decline, Groupon in recent months has re-invented itself as a more traditional e-commerce business that sells long-term deals, particularly through its smartphone app.

Lefkofsky and other executives told Wall Street analysts on Wednesday that emailed deals, once the linchpin of Groupon's sales strategy, now only accounted for 40 percent of its quarterly revenue. Instead, Groupon's customers were increasingly logging into the site to search for goods they were actively seeking, they said.

"It was only a few short years ago when email was all of the business," Chief Financial Officer Jason Child said. "The good news for us is we see our most active cohort of customers engaging with the marketplace most often. They're browsing, they're searching, they're going in and typing in keywords."

The difference, Lefkofsky added, was that Groupon was transforming from a "demand-generation business to a demand-fulfillment business."

But company management warned it would take several quarters for Groupon to complete its shift in direction and fully enter and compete in an intensely competitive and crowded e-commerce marketplace dominated by giants like Amazon Inc and eBay Inc.

For Groupon to succeed, Lefkofsky said it needed to focus on refining its algorithms to present goods relevant to a user's interests, while also improving its product suite for sellers, which includes rewards tracking programs and credit card processing tools.

BY THE NUMBERS

Groupon's gross billings, or the total value of purchased goods and services - of which the company takes a cut - rose 30 percent in North America, outpacing a 10 percent expansion rate overall.

About 50 percent of its North American transactions came through smartphones and tablets, versus 30 percent a year ago, the company said.

Groupon's success with mobile adoption has been viewed with particular favor on Wall Street. Groupon shares jumped 11 percent on June 14 when Deutsche Bank analysts upgraded the stock, attributing their optimism to the company's progress on the mobile front.

Groupon's revenue in the United States and Canada in the second quarter grew 45 percent, offsetting a 24 percent slide in Europe, the Middle East and Africa (EMEA) and a 26 percent fall everywhere else.

Child told Reuters on Wednesday that while Groupon's international performance has been weak, the company's investment in shoring up its European operations will pay off soon.

"North America continues to see strong growth and we made good progress in EMEA which flipped to positive gross billings growth," Child said. Gross billings in EMEA grew 4 percent in the second quarter. "We're now shifting our focus to the rest of the world."

The Chicago-based company reported quarterly revenue of$608.7 million compared with $568.3 million a year ago. Analysts on average expected $606.2 million in revenue, according to Thomson Reuters I/B/E/S.

It posted a second quarter net loss of $7.6 million, or 1 cent per share, compared with a year ago profit of $28.4 million, or 4 cents a share.

Excluding one-time items, it earned 2 cents a share, level with analysts' expectations.

(Reporting by Gerry Shih; Editing by Carol Bishopric)

Gadgetwise Blog: Listen Alone or Share With Friends

The Flips Audio headphones from Idea Village.

When it comes to a company like Idea Village, you expect to see some unusual concepts.

The company, which develops and markets “as seen on TV” products, like Stompeez children’s slippers and the Shoe Dini shoe horn, recently created a new technology division to market Flips Audio, a hybrid gadget that combines headphones and external speakers.

Placed on your head, Flips Audio delivers music directly to your ears as a pair of on-ear headphones. But when Flips is slipped around your neck, the ear cups can be turned outward for sharing with friends (or strangers on a subway train).

As headphones, Flips delivers decent sound, although a bit muddy, especially at higher volumes. The audio improves when the headphones are transformed into external speakers. Flips will not rock your next party, but the speakers are loud enough to let others nearby hear your music. When you’re done sharing, a quick flip turns them back into headphones.

The external speakers run on an internal lithium-polymer battery that Idea Village says will last two to three hours on a full charge. That’s not very long, but enough time to share your favorite songs. A USB cable is included for charging.

The biggest drawback is the lack of external controls. Flips Audio costs $120, and for that amount of money, you would expect at least an in-line remote control. As it stands, you have to keep your music player handy to change the volume or play or pause a track.

Flips Audio comes in black or white and is available on the company’s e-commerce Web site and at Walmart stores. It may not have the best sound system, but it is a fun novelty. You could easily find better headphones and a better speaker, but you’d be hard-pressed to find them both in the same gadget.

Bits: Netflix Allows Americans to Share Viewing Choices with Facebook Friends

Netflix

You no longer have to ask your friends what they are watching on Netflix. Instead, you can now simply peer over their digital shoulder.

Netflix announced Wednesday that it will begin offering United States customers the ability to connect their Netflix account to Facebook to see what their friends are watching on the video rental service. They will also be able to share their own favorite videos.

In a blog post on the company’s Web site, Cameron Johnson, director of product innovation at Netflix, said that the latest sharing feature would offer two main views: customers’ favorite videos and those that they have recently watched on the service.

“You’ll see what titles your friends have watched in a new “Watched by your friends” row and what they have rated four or five stars in a new “Friends’ Favorites” row,” Mr. Johnson wrote. “Your friends will also be able to see what you watch and rate highly.”

For people worried that a secret show will appear in their Facebook timeline for all to see, Netflix gives people explicit options to decide what they share to Facebook.

“You are in control of what gets shared. You can choose not to share a specific title by clicking the “Don’t Share This” button in the player,” Mr. Johnson wrote.

The sharing feature has been available in other countries for some time. But before Netflix could enable it in the United States, the company had to persuade Congress to amend a 1988 law, called the Video Privacy Protection Act, that prohibited video service providers from sharing customers’ viewing history without their consent.

It’s unclear whether American consumers really want to see what their inflated social networks are watching on television. Although the idea sounds great, if your Aunt Mildred is watching World War I documentaries, and your nephew Luca is watching SpongeBob SquarePants, your social feed might not be very useful.

But investors thought the news was great for Netflix, sending the company’s shares up 7 percent in midday trading on Wednesday.

Gadgetwise Blog: Q&A: How to Share an Apple TV

My son has an Apple TV with his iTunes account for TV shows, YouTube videos and music. We don’t share tastes. Can I also log onto the device to access the stuff from my own iTunes account?

Logging into the Settings screen on the Apple TV to pair the device with another iTunes library and Apple ID account is one way to share, but an update for the small black second- and third-generation Apple TV makes it easier. The Apple TV now allows the use of multiple iTunes accounts without having to sign in and out, but you need to have at least version 5.1 of the Apple TV software. The latest update does not work on the first-generation silver Apple TV model, which was discontinued in 2010.

To check for a software update (if you have not updated recently), turn on the Apple TV and use the remote to select Settings from the main screen. In the Settings menu, select General and then Update Software. If an update is available, select the option to download and install it.

Once you have updated the Apple TV, go back to the Settings menu and select iTunes Store. Click the Accounts link with the remote. If your son has been the only one using the Apple TV to play his iTunes Store content, his Apple ID account should be listed on the screen. To add your Apple ID account (and with it, access to your own iTunes library and purchases that live online up in Apple’s cloud), select Add New Account on the screen. Enter your Apple ID user name and password.

Once you have added your Apple ID information, both accounts should be listed on the screen. It’s a little kludgy, especially for apple, but to switch back and forth between your son’s account and yours, just revisit the Settings screen, choose iTunes Store, Accounts and select the account you want to use from the list. If you are purchasing iTunes content directly on the Apple TV, make sure you have your own account selected before you buy.

Rihanna & Karrueche To Share Chris Brown

Rihanna allegedly had a heart-to-heart with Karrueche Tran days after the model was dumped by Chris Brown and the two supposedly chatted for close to two hours.

The Sun reports that Chris and Karrueche ended on amicable terms, even adding that she and Rihanna talked for hours:

“Rihanna called Karrueche for a proper heart-to-heart. They needed to air a few problems,” a source told the paper. “The girls talked for close to two hours. Rih answered all of the questions and Karrueche had a few home truths to tell her.”

Chris who feels guilty about the split handed a lump sum to Karrueche so she can buy herself a house.

Now this is where the story gets crazy...MediaTakeOut claims that they have a source who told them that Chris had a meeting with both women to discuss when and where they could each have him:

“Chris wanted to make sure that no one would feel disrespected or upset if he was with the other. Rihanna seemed to be cool with everything because I’m not sure that she wants anything serious with [Chris]. Karrueche is the one I don’t understand…

I just can’t see either one of these chicks agreeing to this nonsense!

A rep for Chris reached out to E! News and shot down the rumors that Chris gave Karrueche money so she could buy herself a new home are categorically “not true.”

His camp also refuted a claim that Rihanna had called Tran last week for a “heart-to-heart” after the break up, as had been reported by Britan’s The Sun newspaper.