Thursday, February 27, 2014

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NAME - SHYAM KISHOR SINGH
PGDM - 2sem

Tata Power to sell 30% stake in Indonesian subsidiary for $120 million

Mumbai: Tata Power Co. Ltd has agreed to sell a 30% stake in its Indonesian subsidiary, PT Mitratama Perkasa, to Indonesian conglomerate Bakrie Group for $120 million.

The stake in Mitratama Perkasa is held by another Tata Power subsidiary in Indonesia, PT Sumber Energi Andalan Tbk, which signed the deal with Bakrie Group, the company said in a filing to BSE on Thursday.

“Prior to the sale, PT Mitratama Perkasa would be restructured to hold infrastructure assets in relation to PT Arutmin Indonesia and Tata Power, through its subsidiaries, would continue to hold 30% stake in PT Kaltim Prima Coal related infrastructure assets,” Tata Power said in the filing.

This is a part of the $500 million agreement Tata Power announced on 31 January regarding the sale of 30% stake it held in mining company PT Arutmin Indonesia, and its associated infrastructure assets, to the Bakrie Group.

PT Kaltim Prima Coal, a subsidiary of Tata Power, owns one of the largest thermal coal-producing mines in the world.

Tata Power expects to complete the stake sale in Mitratama Perkasa in two months, subject to approvals.

The continuing losses at Mundra Ultra Mega Power Project (UMPP) have created stress on Tata Power’s balance sheet. The waiver on financial covenants relating to this project had expired on 30 June 2013 and the management was negotiating with lenders, according to the notes to accounts of September quarter earnings.

“Keeping the under-recovery challenges in Mundra UMPP operations and cash flow concerns in mind, we have also signed an agreement to exit from PT Arutmin Indonesia to get additional cash flow and to reduce our consolidated debt,” Anil Sardana, managing director, at Tata Power had said early this month while announcing December quarter financial results.

Last week, the Central Electricity Regulatory Commission (CERC) allowed a compensatory tariff of Rs.0.524 for every unit of electricity generated from Mundra plant. This tariff is for the period beyond 1 April 2013.

On Thursday, Press Trust of India reported that the CERC ruling will help in reducing Mundra project’s annual losses by Rs.1,100 crore, citing Tata Power’s Sardana.

The 4,000 megawatt Mundra UMPP, located in Gujarat, is estimated to be incurring a loss of Rs.1,500 crore annually mainly due to rise in price of Indonesian coal that is used to fire the plant, the news agency reported.

On Wednesday, the shares of Tata Power fell 1.85% to Rs.79.45 on BSE, while the exchange’s benchmark Sensex rose 0.65% to 20,986.99 points. The S&P BSE Power index gained 0.57% to 1,527.62 points.

Markets were closed on Thursday for a local holiday.

Rahul kumar Gupta

PGDM,1st Year

source:-Mint

Food prices must decline sharply to avoid interest rate hikes

Ever since the Urjit Patel panel report was made public, the fear in the market has been that the central bank will target inflation to the exclusion of everything else. In a speech last Wednesday, governor Raghuram Rajan allayed that fear by saying that the Reserve Bank of India (RBI) won’t “administer shock therapy” to a weak economy. He has also turned on those who say that the RBI is not doing enough by pointing to the recession in the US when Federal Reserve chairman Paul Volcker rapidly raised rates. In sum, Rajan has tried to give the impression that he is steering a middle path, by choosing to target a slow and steady fall in inflation, rather than go for the jugular.

This middle path is also the cornerstone of the Urjit Patel panel suggestions—8% Consumer Price Index (CPI)-based inflation by January 2015, 6% by January 2016 and 4% (with a two percentage point band) thereafter. The question is: by how much will RBI have to raise the repo rate to reach those targets?

The answer depends a lot on the level of food and fuel inflation, which are far from a pure monetary phenomenon in India, points out an analysis by Credit Suisse. Food and fuel prices have a 57% weight in the CPI. Therefore, for overall CPI to reach the targeted levels, this component has to come down, else it will require a dramatic fall in core (or non-food and fuel) inflation, which in turn means that growth will have to be severely curbed.

For the CPI to hit 6%, when food and fuel inflation hovers around 10%, core inflation has to go down to 0.7%. That, as Credit Suisse estimates show, will require a massive nine percentage point increase in the policy rate, almost unimaginable. It will, of course, wreck the economy.

Putting things in context, in January, retail inflation for food was 9.9%, for fuel 6.5%, while headline consumer price inflation was 8.8%. Core CPI (excluding food and fuel) was 8.1%. True, food inflation had come down in January, but this is mainly a seasonal phenomenon. This component has averaged 9% since 2005. And inflationary expectations still remain high with 80% of respondents in the RBI survey expecting double-digit inflation a year ahead. If growth starts to pick up, it will mean additional pressure on core inflation unless the supply side improves.

In any case, even if food and fuel inflation were to come down sharply to 5%, Credit Suisse computes that a 90 basis point rise in the repo rate will be needed for the CPI to come down to 6%. One basis point is one-hundredth of a percentage point. That indicates the odds are skewed in favour of rising policy rates in the next couple of years, unless food and fuel inflation comes down drastically.

Ranjay Kumar

PGDM 1 year

source-: mint

Monday, February 24, 2014

Why Raghuram Rajan matters

The Reserve Bank of India (RBI) governor attracted a lot of global attention recently after a series of public comments he made on how the US Federal Reserve (Fed) should take into account the impact of its actions on emerging markets as it winds down the programme to buy bonds through the creation of new money, a.k.a. quantitative easing (QE). US policymakers such as new Fed chairperson Janet Yellen have brushed aside his concerns with the argument that any country should be free to pursue policy according to its national interest. Others have said that countries such as India should focus on domestic imbalances that reduce their vulnerability rather than bet on US empathy.

Rajan has good reason to be concerned. There has been a renewed bout of global volatility ever since Ben Bernanke first indicated in May 2013 that the QE would be rolled back, though the actual taper began in January. It must be remembered that the unconventional monetary policy that the US has pursued since 2009 is part of a broad global stimulus programme put in place by the heads of important governments after the world economy was nearly brought to its knees after the global financial crisis. This is what the joint statement of leaders of 20 nations after their April 2009 meeting in London said: “We will conduct all our economic policies cooperatively and responsibly with regard to the impact on other countries and will refrain from competitive devaluation of our currencies and promote a stable and well-functioning international monetary system.”

The emerging markets are essentially complaining that the spirit of cooperation that was central to the stimulus should also be part of the exit strategy. The US is behaving in an asymmetric manner. There is also enough empirical evidence that unconventional monetary policy pursued by the Western central banks has indeed had an impact on emerging market economies through pro-cyclical capital flows, currency appreciations and asset price bubbles. The opposite effect—currency depreciations and falling asset prices—are thus inevitable risks during the ongoing QE taper

The emerging markets did not try to stop such effects through the imposition of capital controls, though some such as Brazilian finance minister Guido Mantega did complain about the prospect of currency wars. Most emerging markets—India included—in fact went out of their way to attract more short-term debt at low interest rates to fund their current account deficits rather than deal with the underlying structural causes of such deficits. The focus was thus on funding the external gap rather than reducing it. It is no wonder countries with the worst current account deficits were hit the hardest during the risk aversion that gripped the global markets in August. The rupee was almost in freefall.

Tanay Tapas

PGDM,1st Year.

Source:-Mint

Nokia goes full Android, launches first ever Android range of phones

AP Stephen Elop, chief executive officer of Nokia, speaks during a conference at the Mobile World Congress, Barcelona, Spain. File photo

Three years after announcing that Nokia would jump ship to Microsoft’s Windows Phone software instead of Google’s Android software, Executive Vice President Stephen Elop got on stage at the Mobile World Congress trade fair on Monday to announce a new line of mobile phones that run a modified version of Android.

The decision to come out with a new line of phones-- the Nokia X, X+ and XL—based on Android comes days ahead of Microsoft’s acquisition of Nokia.

According to Mr. Elop, the market has “shifted dramatically” and the company needs to quickly address the sub-$100 category of mobile phones in "growth markets.".

According to analysts, this is Nokia's submission of the fact that buyers of low-end mobile phones in countries like India prefer an Android-based operating system over anything else.

“The X family serves a specific purpose - it is a feeder system into our Lumia line of smartphones. It also addresses the gap between Asha and Lumia," Mr. Elop said, while addressing reporters here on Monday.

The three new models rely on an open version of the Android operating system and come bundled with Nokia' and Microsoft's services-- avoiding dependence on Google's services. For instance, by using an open version of Android, Nokia doesn't depend on the Google Play app store-- it uses its own app store along with a host of other app store. It will also bundle the X range with its own music and map offerings along with Microsoft's e-mail, cloud, messaging and search services.

The Nokia X and X+, which will be released soon in Eastern Asia and Southeast Asia, are priced at 89 and 99 euros respectively. The Nokia XL, which has a bigger five inch screen, is priced at 109 euros. The specific launch dates were not disclosed.

When asked if he had "jumped ship" the wrong way with Windows Phone software three years ago, Mr. Elop replied in the negative.

"There were quite a lot of vendors... who went with Android but couldn't differentiate. What we are doing here is simple... we're building a third ecosystem along with Microsoft. We don't mind if there's overlap with our other devices," Mr. Elop said.

SARVESH KUMAR SINGH
PGDM 2 nd SEM

SBI chief Arundhati Bhattacharya declares war on bad loans

Mumbai: When she was a village branch manager in eastern India, she was quick to grab a screwdriver to fix power outages. Now, as the most-powerful woman in Indian finance, Arundhati Bhattacharya must tackle the highest bad-loan ratio among India’s 10-largest banks.

Appointed in October as the first female chairman and most-senior executive officer of the country’s largest lender, State Bank of India

Bhattacharya has been combing through balance sheets riddled with Rs.67,800 crore of bad debt. Some 5.7% of total loans at the 207-year-old behemoth are non-performing, the highest level in at least eight years, the earliest date for which data are available, exchange filings show.

The war on bad loans continues, Bhattacharya, 57, said in a 14 February interview in Mumbai after SBI reported a bigger decline in third-quarter profit than estimated. “I have no magic wand to make the non-performing assets go away. We have to work through the pain to fight the issue.”

India’s slowing economy and the highest borrowing costs among Asia’s largest nations are eroding debtors’ capacity to repay loans. The ability of companies to generate cash and service debt is at the lowest level in five years, said Deep Narayan Mukherjee, a Mumbai-based director at India Ratings and Research, a unit of Fitch Ratings Ltd.

A failure to curb sour debt would drag further on the lender’s earnings and share price, which has slumped by almost one-third in the past year. SBI’s return on equity, which measures profit generated with investors’ funds, is poised to end the bank’s business year on 31 March at the lowest level since 1999.

Stock sales

SBI raised Rs.10,000 crore in January from selling shares to the government and institutional investors, and needs another Rs.70,000 crore by March 2018 to comply with Basel III rules, according to Bhattacharya.

The fundraising lifted SBI’s capital adequacy ratio, a gauge of financial strength, to 12.8%, the bank said in a 30 January statement, exceeding the 12% level the government wants state-controlled banks to maintain. The national average was 12.7% as of September, according to RBI data.

Banks failing to curtail soured loans will have to strengthen their capital buffers against defaults, the central bank said in a January statement. Lenders that are able to quickly restructure bad debts owed to multiple lenders will receive better regulatory treatment such as being allowed to spread losses from distressed assets over two years, it said.

Banks’ challenge

“The erosion in capital buffers and profitability due to rising bad loans is a challenge for most state-run banks in India,” said Vibha Batra, New Delhi-based co-head of financial-industry ratings at Icra Ltd, the local unit of Moody’s Investors Service. “SBI is not different.”

SBI shares have dropped 31% over the past year, to Rs.1,510.50, dragging the bank’s valuation to 0.8 times book value, an estimate of the worth of its assets. That compares with 0.6 times for the CNX PSU Bank Index, which tracks 12 government lenders including SBI, and the BSE Sensex’s multiple of 2.5, data compiled by Bloomberg show.

Net income at the lender fell 34% in the three months ended 31 December to Rs.2,230 crore, the lowest in nine quarters, as provisions for defaults rose 24%, SBI reported on 14 February. Return on equity slumped to 11% in the nine months to 31 December from 17.7% a year earlier. Reporting the same ROE for the business year that ends next month would be the lowest level since March 1999.

Part of what’s needed to improve SBI’s performance may remain outside Bhattacharya’s control. India’s economy is set to grow at 4.9% in the year to 31 March, compared with a decade-low 4.5% the previous year, the statistics ministry said in a report this month.

“It will help if India’s economy revives,” Bhattacharya said. “If the growth doesn’t pick up, the situation will become more difficult. But we will keep doing what we can to minimize the pain.”

AKANKSHA SHANU

PGDM 1st year.

Nokia targets emerging markets with ‘X’ Android phone

Nokia is targeting emerging markets with a low-cost smartphone that uses Google’s Android operating system rather than the Windows Phone software from Microsoft, the company about to buy Nokia’s phone business.

Nokia will ditch many of the Google services that come with Android, which Google lets phone makers customize at will.

Instead, the new Nokia X phone announced Monday will emphasize Microsoft services such as Bing search, Skype communications and OneDrive file storage.

Its home screen sports larger, resizable tiles resembling those on Windows phone.

“The Lumia continues to be our primary smartphone strategy,” Nevanlinna said. “We take that pinnacle experience and make it more affordable.”

Once the No.1 maker of cellphones, Nokia has been struggling to keep up with the iPhone and devices running Android.

Nokia said smartphone revenue fell 29% in the recent holiday quarter compared with the same period in 2012.

And even as competition intensifies for high-end smartphones such as the Xperia Z series, Nokia has been hit by competition from cheaper
mobile phones made by Chinese and other companies in Asia.

The Nokia X phone will sell for €89 ($122) and won’t be available in the US, Canada, Korea and Japan in part to avoid competing with Lumia phones, which cost hundreds of dollars in the US without subsidies from phone carriers.

Nokia officials said that although much of the development on the new phone came after Microsoft announced the deal in September, there was already talk before then as part of a long-standing partnership between the two.

At the Mobile World Congress wireless show in Barcelona, Spain, Nokia announced two even cheaper phones on Monday. The Nokia 220 is meant as a starter phone for €29 ($40). It will have Facebook, Twitter and some games already installed, but users won’t be able to add apps. The Asha 230 will offer more options for apps. The €45($62) phone is meant for people who are not yet ready for the Nokia X. It comes with a touch screen, but lacks the power and versatility found in smartphones.

For a first-time smartphone experience, Nokia Corp. is pushing the Nokia X. Because it uses Android, it will be able to run most Android apps. However, app developers may have to tweak some of their software because the phone doesn’t have key Google services.

For instance, location services will have to be designed for Nokia’s Here mapping software rather than Google Maps. In-app payments will have to be tweaked to allow billing through mobile carriers rather than credit cards, which many people in emerging markets lack.

RANJAY KUMAR

PGDM 1ST YEAR

SOURCE -: MINT

NEWS: Facebook appoints Deborah Hale as business marketing director, EMEA

Facebook has announced Deborah Hale, former producer of the 2012 London Olympic Torch Relay, will join the social network as business marketing director, EMEA.

Hale has extensive experience working in the advertising industry, with international expertise and a track record of developing strong partnerships with top brands across the globe.

In her most recent role at LOCOG, Deborah worked closely with a number of key sponsors, including Coca-Cola, Lloyds TSB and Samsung to deliver the London 2012 Torch Relay. This included the creation of a national marketing campaign for the UK which engaged over a quarter of the population.

Previously, Hale was managing director of London Unlimited, the international marketing agency for London. Here she was responsible for overseeing the development of 'Brand London' and promoting the city to the emerging markets of China, India and Russia.
Hale’s agency experience includes several years as a member of the global executive management team for WPP-owned Red Cell Network where she was communications director and managed the brand strategy as the network expanded into new international markets.

rahul singh 1

pgdm 1st year

Sensex trades over 90 points higher on positive global cues

Mumbai: The 30-share bellwether BSE Sensex on Tuesday was trading over 90 points higher tracking gains in global markets.

At 9.29am, the Sensex was trading up 0.44%, or 92.16 points, at 20,903.6 points, while the National Stock Exchange’s (NSE’s) broader 50-share Nifty was trading higher 0.48%, or 29.7 points, at 6,215.8 points.

The gainers included Bharti Airtel Ltd that rose 1.18% to Rs.286.25 and ICICI Bank Ltd that jumped 1.14% to Rs.1,048.

Among the losers, Dr Reddy’s Laboratories Ltd shares lost 0.45% to Rs.2,782.5 and Maruti Suzuki India Ltd fell 0.09% to Rs.1,681.90.

All sectoral indices are in green. The BSE Bankex index rose 0.72% to be the biggest gainer, while the S&P BSE consumer durable index rose 0.6%.

Financial Technologies (India) Ltd (FTIL) was trading at Rs.329.4 on BSE, up 2.08% from its previous close, while Multi Commodity Exchange of India Ltd (MCX) was trading at Rs.506.6 on BSE, up 0.91% after sources said that corporate affairs ministry has found that the management of National Spot Exchange Ltd (NSEL) violated companies law and that the board of its parent FTIL may be liable for the breaches.

Ranbaxy Laboratories Ltd was trading at Rs.359.30 on BSE, down 1.11% after Daiichi Sankyo Co. Ltd said on Tuesday its Indian unit Ranbaxy has suspended shipment of pharmaceutical ingredients produced at its Toansa and Dewas plants.

US markets closed lower on optimism about merger activity and gains in shares of health insurance companies. The Dow closed up 0.64%, while the S&P 500 gained 0.62% and the Nasdaq 0.69%.

Asian markets were trading higher. Japan’s Nikkei Stock Average gained 1.35%, Hong Kong’s Hang Seng was up 0.51%, while China’s Shanghai Composite was marginally down 0.01%.

ONIKA JAISWAL

PGDM 1ST YEAR

2013-15

SOURCE - LIVE MINT

SpiceJet slashes ticket prices; IndiGo, GoAir follow

Mumbai: India’s second largest low-fare airline SpiceJet Ltd on Monday cut fares by 75% for bookings made during 24-26 February to fill seats during the lean season.

This offer is valid for travel between 1 April and 30 June, the airline said on its website.

According to the SpiceJet website, a typical Mumbai-Delhi fare would be as low Rs.3,186 after the discount compared with the last-minute booking price of Rs.10,098, while Delhi-Goa fare would be Rs.3,737 against Rs.11,148.

“Super Summer Sale is valid on all domestic direct flights on the SpiceJet network. SpiceJet will offer discount on base fare and fuel surcharge only. All applicable fees and taxes to be paid by the customer,” the airline’s website said.

IndiGo, India’s largest airline by passengers carried, joined the fare war with flights starting at Rs.1,867. The airline, which is operated by InterGlobe Aviation Ltd, announced rates for select sectors including Mumbai-Delhi (Rs.3410), Mumbai-Goa (Rs.2,078), Bangalore-Hyderabad (Rs.1,943) and Ahmedabad-Mumbai (Rs.1,867).

The airline, in a late night circular, said the travel is valid between 1 April to 30 June and for bookings from 24-26 February.

GoAir, the low-fare airline run by Go Airlines (India) Ltd, also joined the fare war by offering 70% discounts for the booking up to 26 February.

“Summer vacation travel offer. Fares starting as low as Rs.1,726,” GoAir wrote in its microblogging site. The discounted fares are excluding taxes.

Neelu Singh, chief operating officer at Ezeego One Travels and Tours Ltd, which runs online travel agency firm www.ezeego1.com, said these discounts will bring down the travel costs by at least 30% and this is a great saving for the upcoming summer season.

“However, the inventory on metro routes are very limited and it is aimed at tourist and non-metro destinations which will see a surge in bookings from people eager to book their summer vacations. The earlier the booking better is the discount as these fares are for a limited inventory,’’ she added.

Sharat Dhall, president at Yatra Online Pvt. Ltd, that runs Yatra.com, said SpiceJet has launched a three-day sale of up to 75% for flights between 1 April and 30 June and the discount ranges from 35% to 75% on current fares across sectors and is an attempt to stimulate the market and garner early bookings for the summer holiday season.

“IndiGo has also launched special summer fares for the same period, and I expect other carriers to follow suit as well. This is a bonanza for holiday makers and a great opportunity to get super discounted fates for the family holiday this summer,” Dhall said.

“We are already seeing bookings triple from normal levels within hours of the sale being announced,” Dhall added.

The promotional fare plan comes at a time when SpiceJet is looking for investment to fund its expansion plan. Last week, consultancy firm Centre for Asia-Pacific Aviation, or Capa, said in a report that SpiceJet is estimated to need close to $200 million to remain operationally viable, while a realistic and meaningful turnaround may require $300 million or more.

Chennai-headquartered SpiceJet recently appointed consulting firm Bain and Co. to restructure its network and return it to profitability after losses mounted over the past few quarters.

As of 31 March 2013, the total accumulated losses of the airline industry over the previous seven years had risen to $8.6 billion (based on current exchange rates), consultancy firm Capa said in its last week report adding the industry debt had climbed to $12.6 billion, with the full-service carriers—Air India Ltd, Jet Airways (India) Ltd and Kingfisher Airlines Ltd—accounting for 94% of the amount.

SpiceJet, controlled by media baron Kalanithi Maran, posted a net loss of Rs.173 crore in the three months to December, against a net profit of Rs.103 crore in the year-ago quarter.

In January, SpiceJet had cut fares by more than half for bookings for three days, a move promptly followed by other airlines including Jet Airways and Air India.

“SpiceJet is committed to leading the way in offering the most attractive fares to the most customers. We received overwhelming positive feedback from customers who booked the earlier ‘Super Sales’ for taking the lead in making air travel more affordable, where travelers can now book more spontaneously and more often by air, and also for attracting many first time air travelers who would otherwise endure long train journeys or not travel at all,” said Sanjiv Kapoor, chief operating officer, SpiceJet.

Kapoor said these advance purchase offers are a win-win for customers, for airlines, and for the travel industry and the economy overall, as it leads to significant demand stimulation, even as customers get to enjoy deeply discounted fares, airlines get to reduce wastage of seats that would otherwise fly empty, and others in the travel ecosystem get more business.

“These are not fare wars as is commonly reported, as there are no losers. This is just basic customer segmentation and inventory and revenue management,” he added.

Rahul kumar Gupta

PGDM,1st Year

source:-Mint

MWC 2014: Facebook CEO Mark Zuckerberg, the new mobile king

The keynote speaker on the opening day of MWC, Facebook CEO Mark Zuckerberg has come a long way in the mobile world in a short time.

BARCELONA: Billionaire 29-year-old Facebook founder Mark Zuckerberg stars in Mobile World Congress (MWC), the mobile industry's biggest fair on Monday, fresh from his $19 billion (14-billion-euro) takeover of smartphone messenger WhatsApp.

The keynote speaker on the opening day of the February 24-27 MWC in Barcelona, Zuckerberg has come a long way in the mobile world in a short time.

When Facebook sold its shares to the public in an initial public offering in May 2012, "it literally had no mobile advertising revenues," said Eden Zoller, analyst at the research house Ovum.

"It did actually have a pretty strong mobile user base at IPO but what it had failed to do at that time was actually monetise those mobile users," she said.

At the time of the float, worries over the lack of money coming in from the mobile business sent Facebook's shares sliding.

But the social network - boasting more than 1.2 billion members - quickly repaired its strategy.

By the end of 2013, mobile devices accounted for 53% of Facebook's advertising revenue, bringing in $1.2 billion in the last quarter and more than $3 billion over the whole year.

However mobile advertising can be "highly intrusive," Zoller cautioned, especially if it interrupts a user's engagement with an application.

"You have to be very careful." Nevertheless, the social network needs to keep up the momentum, the analyst said.

"It can't be complacent. On the mobile front it is particularly important. Consumers have an increasing number of social media and social messaging alternatives to Facebook."

The company still has a weak point, however, she added: its failure to carve out a strong position in mobile payment systems, which are expected to show strong growth in the next few years.

Nonetheless, Facebook is clearly building a base for further revenue growth.

On Wednesday, the social network announced its takeover of WhatsApp, which followed last year's smaller purchase of online photograph-sharing site Instagram.

"Facebook is paying for one of the fastest growing audiences in history - WhatsApp is now nearing half a billion users globally - and the monetisation potential that that brings," said Guillermo Escofet of research house Informa.

Facebook has captured 18.4% of the mobile publicity market, making it the number two force after Google, according to digital media analyst eMarketer.

"They performed a remarkable turnaround from about two years ago," said Escofet, recalling the social network's early reluctance to push advertising to mobile devices.

"The reason for that is because they did not want to compromise the user experience on mobile and they did not want to cram the small mobile screen with ads," he said.

Facebook's solution was to integrate advertising into its users' news stream, where members read the latest events in their "friends"' lives.

It has proven an efficient strategy. Of Facebook's 1.23 billion users who are active at least once a month, three-quarters access the site from their smartphones.

Today, it is a "mobile company," declared Sephi Shapira, chief executive of advertising platform MassiveImpact, a Facebook partner.

"We are very happy with them," he said. MassiveImpact's clients publicize on Facebook, but only pay when users click on the advertisement and then actually buy the product.

For products such as insurance, the percentage of users who make a purchase after clicking on a web advertisement is often in single digits, but for mobile apps that figure can rise to 20% or 30%.

"For app promotion, I think they're definitely the best," Shapira said. Many advertisers now devote all their publicity to mobile devices, not even spending on internet advertising, he said.

But "I think we should not get too excited," Shapira cautioned. "You have to run just to stay alive. So in this market, you have to constantly be innovating and developing new technologies just to survive, if you don't, you disappear."

shailendar kumar

pgdm 1st year

The times of india