Author Archives: Scalper1
PayPal Halts Business With Some Netflix Content Unblockers
Much like code-makers and code-breakers are locked in a seemingly endless battle, Netflix ( NFLX ) has a perennial struggle of its own: virtual private networks, proxies and unblockers. And now it has dragged PayPal ( PYPL ) into the fight. VPNs, proxies and unblockers have legitimate uses, but they can also be used to fake the geographic location of Internet traffic, which lets Netflix customers watch content they’re not supposed to. “People will always try to find ways to get the content they want, no matter the technological barriers,” an unidentified Netflix spokeswoman told Wired . “We recognize that, and that’s why we are trying to offer our content to members globally at the exact same time.” Until recently, Netflix hasn’t much cared that, say, Canadian customers use VPNs to watch shows restricted to the U.S. But as the company begins to roll out its plan for world domination (at least in video streaming), the situation appears to have changed . Cracking down on VPNs has some customers upset — especially ones in small markets like Portugal — and threatening to cancel their subscriptions. And now PayPal has either decided or been pushed into terminating its business relationships with unblockers that help customers circumvent geographic content restrictions. It looks as though Canadian VPNs are being targeted by PayPal for violating its terms of service, since video streaming Netflix America content from Canada violates copyright law. When asked for an interview with executives, a PayPal spokeswoman replied with the following statement: “As a global payments company, we have to comply with laws set by governments and regulatory agencies. PayPal does not permit the use of its service for transactions that infringe copyrights or other proprietary rights. This policy extends to services that unlawfully facilitate infringement by intentionally enabling access to copyrighted television shows or movies in places where distribution of the content is not authorized by the copyright owners. “In line with this policy, PayPal has recently discontinued service to certain businesses that actively promote their services as a means to circumvent copyright restrictions and violate intellectual property laws. We apologize for any disappointment this may cause our users.”
Apple Ad Block Doesn’t Stop Criteo From Crushing Q4 Earnings
Despite worries about the impact of Apple ‘s ( AAPL ) ad-blocking feature on its business, ad tech firm Criteo ( CRTO ) posted a solid Q4 earnings beat before the market open Wednesday, sending Criteo’s stock soaring. Criteo stock was up 21% in midday trading in the stock market today , near 31.50. Criteo stock, though, is still off 48% from its all-time high of 60.95, touched in March 2014. The Paris-based company posted Q4 revenue minus TAC — traffic acquisition costs, or what the company pays other sites to carry its ads — of 145.75 million euros ($164 million), up 51% year over year in euros. That beat analysts’ expectations for 138.2 million euros. The French ad company reported EPS ex items of 0.66 euro (74 cents), up 78% in euros. That blew past the EPS ex items of 0.40 euro analysts had forecast. For Q1, the company guided revenue ex-TAC of $153 million-$158 million (139 million-144 million euros, up 32%-36% year over year in euros). Analysts are expecting 140.8 million euros. The company guided adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in Q1 of $36 million-$41 million (33 million-37 million euros, up 28%-46%). Wall Street had been keen to see whether Apple’s decision last year to allow ad blocking on iPhones for the first time had impacted Criteo’s revenue, and whether the company’s China expansion was on track. Criteo reported revenue in its Asia-Pacific region rose 76% in Q4 and represented 20% of total revenue ex-TAC. “I am very pleased with our growing profitability and strong free cash flow generation in 2015,” Criteo CFO Benoit Fouilland said in the earnings release. “Our unique financial model continues to be a key differentiator in our space.” Criteo Says Facebook Mobile Ads Help The company said that more than 3,000 clients in the quarter “were live on Facebook mobile via our integration with dynamic product ads as of Dec. 31.” Criteo said it generated 25% of its ex-TAC revenue “from users that were matched on at least two devices, illustrating the continued deployment of our cross-device solution to our clients.” Criteo is “creating one of the largest cross-device advertising mousetraps, which will complement advertisers’ ability to measure performance outside of Facebook and Alphabet ( GOOGL )-owned Google,” said RBC Capital Markets analyst Rohit Kulkarni in a November research note. Paris-based Criteo will cease reporting in euros after Q4. The company will be adhering to GAAP reporting in U.S. dollars. Criteo embeds browser cookies — tiny text files that let websites recognize users and their preferences when they return to a site — for about half of the 100 largest retail and travel websites in the U.S. Criteo gets paid for serving ads only if a user clicks on the ads, and it collects a bigger cut if the user goes on to buy a product from or otherwise engages with that advertiser. Apple stock, meanwhile, was up a fraction in midday trading, near 95.