Wal-Mart Coming to India

After many months of speculation Wal-Mart has signed an agreement with the Bharti Group to pave the way for Wal-Mart in India. It was rumored that Wal-Mart might work with Mukesh Ambani’s Reliance Group, but the Bharti Group got the nod. Of all the press releases and front page headlines about Indian business, this could drastically change the consumer landscape. I’ve seen stats that estimate 95-98% of all goods are currently purchased from mom and pop shops (known as kirana stores). That leaves the Reliance Group and the Future Group (led by Kishore Biyani) to round out the big 3 players in the retail segment. Although, the news was big in India, a quick check of some American financial websites (cnnfn.com, marketwatch.com, usatoday.com) barely gave it press. Instead, Wal-Mart suffered a 0.1% drop in same-store sales which triggered a sell-off on the NYSE and Nasdaq.

iPod vs Zune

It’s been several weeks since the much anticipated launch of Microsoft’s Zune MP3 player and the consensus is the launch was a dud. I have not had a chance to checkout the Zune personally but a couple friends did buy it and say it was very well designed and the interface was great. The wireless 802.11 support was a plus but that fact you can only talk to other Zune’s is lame and the file-sharing has DRM (digital rights media) protection. Yes, the iPod’s have their own DRM protection called FairPlay, but there are ways around it, in fact that has been my biggest complaint from all the press people that have been comparing the two devices is around DRM, such as this quote from cnnfn.com: “And like Apple’s often-criticized format, which locks music downloaded from the iTunes music store so it will not play on non-iPod devices, music from the Zune Marketplace will play only on Zunes, not on iPods or other players.” Let’s get something straight the iPod and iTunes Store are not a closed or proprietary system. A closed system would be Betamax where a Betamax tape will not play in a VHS system and vice versa. Or a CDMA phone which will not work on a GSM network and vice versa. You can easily download MP4 (the FairPlay protected format) from the iTunes Store, burn it to a CD and then rip it to an MP3 format which is unprotected. However, it’s technically impossible for CDMA phone to some how work on a GSM network no matter how hard you try to hack the damn thing. So I have digressed from the original point of the post, but it seems the 1.0 version of the Zune player has a ways to go. The iPod wins hands down.

The Great Land Rush of India

The Indian equity markets are hitting historic highs and what appears to be the biggest land rush in recent memory is also occurring. A year ago, most of the billboards in Bombay were plastered with NFO’s (new fund offerings) from the mutual fund companies. This time around it’s every developer or real estate company advertising their upcoming IPO.

The real estate frenzy reminds me of the tech boom in 1999-2000 in the US where “analysts” on TV talked about how “clicks and eyeballs” were the new business models. The talking heads on CNBC-18 and the other Indian business channels are all touting how land is scarce and with the upcoming launch of real estate mutual funds and foreign real estate funds the prices can only go higher. The land scarcity in Bombay is more of a myth, grab a copy of a book called Above Bombay. You’ll be amazed at how much land is vacant and how few tall buildings there are for a city of 18 million people.

Recent regulations have been lifted to allow for taller builders but only time will tell if it actually gets implemented, so yet again the land scarcity continues. So where does Sobha Developers fit in, they are one of several companies that have recently filed their red herring document with SEBI and planning to IPO in the next couple weeks. Take a look at their filing, it weighs in at 428 pages (grab a cup of coffee as well).

After going through the document you realize one thing, most of their property deals come via Infosys. That is not necessarily a bad thing, as Infosys is massive, but the major build out of Infosys has already occurred in Bangalore. And, from their filing it seems they are only focused on the Bangalore region at the moment. I’m sure once their roadshow starts they will talk about expanding and how they are looking to be an all-india player.

Anyways, there are some quality real estate companies out there and the above is an example of one that appears to be just cashing in on the real estate bandwagon. My view is if you are gonna trade in the stock/scrip be careful and remember it could be like Vegas – go big or go home.

Forbes 40 Richest Indians

Forbes has come out with its list of the 40 richest Indians. It has the usual suspects: Laxmi Mittal, Ambani’s, Azim Premji, etc… However, the list just seems to be thrown together with no clear methodology. It appears they picked the names most thrown around in the media, checked to see if they were part of a publicly traded company and reported their share holding pattern, jeez anyone can do that. By including Laxmi Mittal on the list they must mean Indians anywhere in the world, b/c Laxmi does not reside in India. If that’s the case, then I’m not sure how they could have friggin’ missed people like Vinod Khosla of Kleiner Perkins, Desh Deshpande of Sycamore Networks, or Rajvir Singh of Cerent (which was sold to Cisco for USD 6.9 billion in 1999). This article would have been more interesting had they included the myriad of Indian politicians that could have made the list. Yes, it’s tough to nail down those figures but then again that’s the job of a Forbes Magazine – hard hitting facts, not fluff. Full list

Cisco Q1 Fiscal Year 07 earnings

Two things are certain in the technology sector: Steve Jobs will always wear a black turtleneck and jeans during press conferences and Cisco will impress Wall Street with their quarterly numbers. The recent numbers continue the trend. Revenues were USD 8.2 billion, up 25% year over year (includes revenue from their recent acquisition of Scientific-Atlanta). Cash flow was USD 2.3b, margins were 64.8%, cash and investments is USD 19.5b and headcount was 51,840. Being on the ground in India, the picture for Cisco seems even rosier. They just recently announced a hugh expansion to their Bangalore campus. Granted almost every tech company has talked about expanding under the much touted SEZ program, the Cisco expansion is real as they have the land and are just looking to expand and not deal with the government red tape and so called economic incentives. During the recent flurry of press releases in India talking about the Indian expansion, the head of Cisco India was never quoted about it. He was from the sales group but I figured he would have played some role in the expansion but it seems after 3 years, Rangu Salgame has left Cisco. David Caspari, VP from Asia Pacific, will be the interim head of Cisco India.

Britney and K-Fed splitting

A. I can’t believe it B. It was so sudden and shocking C. They seemed like a perfect match D. None of the above If your response to the news that Britney and K-Fed are splitting was letter D, then you are inline with about 96.7% of the population. Britney Spears filed for divorce citing “irreconcilable differences” and asking for both legal and physical custody of their two children with K-Fed getting reasonable visitation rights. Britney is also asking the judge to make each party pay their own attorney’s fees, which means Britney will have the dream team of attorney’s and K-Fed is gonna have half a hot dog because he couldn’t afford the rest. He’ll probably get to keep the silver Ferrari 360 Spyder but won’t have a nickel for gas or insurance, so he’s back to square one – no money and no talent.