Yahoo!'s Third Quarter Impresses Wall Street. Progress?

The oft-critiqued and Silicon Valley's favorite punching bag is no longer that. At least, not as much as it was. Heck, unlike Jeff Bezos or Ginni Romitty who are nowhere to be found on earnings calls, CEO Marissa Mayer actually showed up, with CFO Ken Goldman sitting right beside her. From $15/share at the time Mayer the company took over to over $40/share, Yahoo! is moving fast and they're giving shareholders something to be excited about. That something was a third quarter that saw $1.9 billion in sales and $6.70 of profit per share. Mobile revenue reached just over $200 million for the quarter and search revenue is up 6% from the same time a year ago, now at $450 million. 1% quarterly profit growth is certainly nothing to roister over, but Wall Street seems engrossed. Maybe because tech has lacked sexiness or because further shrewd moves like the Alibaba and Snapchat investments await for Yahoo!

Jim Cramer made an interesting point this morning on CNBC in saying that per dollar spent on acquisitions, Yahoo! has done a better job this year than Google. Nest, for instance, how is Google looking to return that $3.2 billion it cost to buy them with their hand-waving temperature technology? Yahoo! has spent close to $1.6 billion on acquisitions with the largest deal coming at the hands of Tumblr at roughly $1 billion. Mayer estimates that Tumblr will produce in excess of $100 million in revenue in 2015 due in large part to the 40% user growth rate (420 million new users, 1 billion users total, and 206 million new registered blogs) Tumblr is currently experiencing. Apparently, Tumblr is now finally profitable. At least if you're looking at the EBITDA numbers which take out taxes, depreciation, and amortization. Finding more efficient ways to monetize Tumblr, possibly through an increase in targeted ads since users are staying on the site longer now, could be a nice cash generator for Yahoo!.

Another positive from the earnings call was the rising percentage of mobile ad revenue (17%) in relation to their total revenue. Mobile, unlike PC, is not only the wave of the present but the future. Mayer's plan to institute share buybacks to shareholders is also an interesting plan as Yahoo! made $6 billion from the Alibaba IPO that took place a couple weeks ago and will look to buyback close to $3 billion of that sum. During Mayer's tenure as CEO, Yahoo! has given $7 billion in buybacks. To further satisfy Wall Street pundits Mayer will need to increase that 1% quarterly revenue growth in a sector that manages somewhere between 13-15% revenue growth per quarter. Yahoo! has the content and then the search advertising business in play. Is she banking on content driving user growth which in turn stimulates ad dollars to their bottom line? Possibly. But more astute acquisitions like Tumblr need to be made, especially now that they have some Alibaba cash to play with.

The Spin-off Boom is Alive and Well...It is also Warranted

Just a few weeks ago Ebay spun-off it's PayPal business in a very smart and soon to be lucrative way, simply based on the cash generation PayPal has produced and will continue to produce in the near future as a leader, though competing with Apple and newcomer Square, in the online payments space. Hewlett-Packard (or HP), like Ebay and Symantec, is joining the spin-off party. Quietly, shrewdly, and yet mostly unmentioned has been HP's stock rise since Meg Whitman took the company over in 2011. In the 3 years since, HP has risen 50% and trading over $30 a pop. Despite the fact that Lenovo and Dell have badly overtaken HP's command of the PC sales market. The current spin-off would allow HP Inc., which includes the PC and printing business, to be separate from HP enterprise services, which includes servers, networking and storage.

The enterprise division will have ample competitors including Oracle, IBM, EMC and Cisco. From a strategic standpoint, this split has validation. HP Inc. has a consumer centered focus with tangible items being sold vs HP enterprise which is completely corporate and software focused. The two businesses are clearly different and target totally different sets of personnel. The strategic differences outline an important point in support of activist investors who, at least of late, have been strong advocates for spin-offs. One CEO overseeing two vastly different profit generating entities is a tall task. According to tech researcher Crawford Del Prete, HP Labs will be part of HP enterprise and will hopefully drive HP's innovation going forward.

What will drive HP Inc.'s profit will be a harder question to solve since three quarters of their operating profit comes from print, not PC. At this point, investing in R&D or developing new PC products seems desperate and illogical when looking at the likes of Dell, Microsoft, and Apple.
There's reason to be skeptical based on their earnings report from August, as well. Stagnant third quarter revenue growth of $27.1 billion was right in line with analysts predictions. And with 50,000 layoffs expected by the end of the year (nearly 18,000 have already been laid off), their is room for skepticism with regards to HP from both a corporate governance and financial ascendancy perspective. The biggest room for growth does come from the enterprise side where the market potential, at least for HP, in innovation for servers, networking, and software services is much greater than that of PC or print. If you want an Ebay analogy, it's that the HP enterprise company could become the profit generating machine that PayPal is now. Though not nearly to the extent of PayPal. The ultimate assessment of HP's spin-off will come a year to two years down the line after each business entity's management has invested enough time and money to the appropriate places. For shareholders in the meantime, there are surely more dividends to come. And for stingy investors infatuated with low P/E stocks, HP is right up your alley. Until then though, this is just a spin-off. But one that makes perfect sense.

Can Snapchat be Yahoo!'s next Alibaba?

Marissa Mayer has done wonders for Yahoo! Though let's not forget Jerry Yang, either. The former Yahoo! co-founder slyly invested $1 billion in the Chinese bombshell Alibaba in 2005 for a 40% stake in the company. In 2012, Alibaba agreed to buyback half their shares at a $7.1 billion price tag. I'm not done. As of 3 weeks ago, Yahoo! has made close to $10 billion from Alibaba's recent IPO. Yes, the same Alibaba that is now worth $225 billion 3 weeks into being a publicly traded company. It's as if Alibaba felt bad about not being included in the "bubble" speculation talk when it was happening and now it has arrived. As fashionable late as ever.

Now, continuing her string of acquisitions that include hip and tech-savvy start-ups like MessageMe and Summly, Marissa Mayer has helped Yahoo! invest $20 million into America's favorite start-up darling (it only lasts for 10 seconds!), Snapchat. The move comes at a curious time as pressure mounts from some head honcho activist investor firms (Starboard) for Yahoo! to merge with AOL, another stagnant internet behemoth from decades past. Starboard's stake in Yahoo! is undisclosed but assuming it wants any control in board maneuverability or acquisition talk, the stake would have to be over 5%. Mayer's acquisitions in 2014, as eclectic as they have been, are starting to gain consistency and cohesion. 3 out of the last 6 start-ups Yahoo! has bought have been mobile related. Both Yahoo! and AOL have been floating around due to the exterior services that each company provides. Fantasy sports, Huffington Post,  and TechCrunch are still generating revenue for companies like AOL at high clips. AOL's terrific earnings report from August though was due to third party platform advertising which jumped an ungodly 60% for a revenue total of $457.1 million for the second quarter. For Yahoo!, Snapchat would be wise a investment for a company flatlining (or closer to nosediving) in the search business and sustaining moderate YOY growth in advertising dollars. Yahoo! cannot beat Facebook in terms of social media, nor Google for email or search.

These are problems. But investing in Snapchat allows them to have a piece of the pie in a company whose valuation should now be in the $10 billion range. Snapchat surprisingly (or not) rejected $5 billion offers from both Google and Facebook earlier this year. A return on investment identical to Alibaba will be near impossible and furthermore unnecessary. The strategy here is simple: if you can't overtake or compete with Facebook, Google, and even Amazon, then why not invest in their competitors? Snapchat's greatest asset is that it has data to our phone numbers. How to monetize the site will become a tricky matter but there are banner ads possibilities on some of the apps features. At 40 million users and close to 700 million snaps sent per day, Snapchat is now a social media wrecking ball. Partly to thank was their first mover advantage in addition to their simple and easy to use interface. $20 million seems like a measly stake in a company with no revenue model or positive cash-flow aspirations in the near future. But the same things were said five years ago when the Alibaba investment was made. We all know how that turned out.

Where Them IPOs At?...And Why Market Volatility will Help Bubblemania 2.0

In the midst of an S&P downgrade on US debt and a neverending European debt crisis, 13 IPOs were pulled back last week. The largest amount in one week since 2000, hmmm. But luckily for tech boom 2.0 participants, the summer is a quiet, lazy kinda time anyways. Why? Well because most institutional investors, brokers, and bankers are on Vacay in the Hampton's or Martha's Vineyard. Ironically, one semi-big name that did IPO last week was Carbonite, a company that backs up software in data in the case of a computer emergency. But even Carbonite lowered its IPO raise from $100 million to $66, and went from a target price of $15-16/share to $10-11/share.

For Mark Pincus (above) and Andrew Mason's (of Groupon) sake, let's hope this price haircut was a result of the standard summer downtime and NOT the financial recession the US is headed into. And seeing how Merkel and Sarkozy had nothing productive to say in today's conference, the economic downward spiral will continue for at least another couple weeks. But, the fact that there's been an IPO price haircut with some companies already might be a good thing for start-up mammoths like Zynga, Groupon, and LivingSocial. LinkedIn's massively mispriced IPO went up over 100% on opening day in May, and it's still being traded at 1,000 x earnings. Remember, we can't blame the underwriters (Morgan Stanley and BofA) too much here because this was the first "social media" stock to go public, who knew the demand it would bring. Also keep in mind, that institutional investors such as MS or BofA will not misprice LinkedIn's IPO on purpose because that prevents them from being underwriters for future IPOs. Rather than the underwriter's fault (which it was partially) it was a result of pent-up demand by LinkedIn shareholders who only floated a measly 9% of their shares to the public. Low float = pent-up demand = higher share price.

The financial crisis we're currently in, may actually save the long-run livelihood of (unprofitable) companies like Groupon, LivingSocial, and Pandora. How so? Well it might lower their IPO prices to a reasonable number, say 20-25 x sales, instead of 50 plus. Zynga and Facebook are unique monsters. Zynga is a scaleable business model in that it sells virtual goods to people. But how does $90 million in profits for 2010 justify a valuation of $20 billion? It doesn't. And maybe just maybe, Pincus and his VC investors like Andreeson Horowitz just want to cash in big time with this IPO, just as Reid Hoffman did with LinkedIn. Then let the market take care of the rest. But how does a company that IPOs at $20 billion with $600 mil in revenue grow into a $30 or $40 billion dollar company? It likely won't, so when you're on top of the world with the spotlight on you, the only way to go is down. Just ask Tiger Woods.

Market volatility and financial instability in the US and in Europe could set IPO prices for these tech giants at a more realistic premium than we've seen early this summer and late spring. For Groupon's sake though, I think cashing in with the IPO might be exactly what they have in mind, after all, how long is this company going to last? Plenty of data has come out the past couple weeks showing how subscriber growth is decreasing dramatically in 2011 and the biggest hurdle for them will be how to translate Groupon users into paid subscribers. Also, how does a company with $800 mil/year in revenue and 300% revenue growth YOY suffer losses? In some ways Groupon isn't even a tech company, but a marketing one. After all, of its 9,000 employees, close to 5,000 are sales and marketing people. In a matter of months Andrew Mason went from giving the death stare to Kara Swisher at the D9 Conference to erasing the accounting metric Groupon made up in the S-1 filing, ACSOI (Adjusted Consilidated Segment Operating Income). Which excludes marketing expenses and stock compensation among other things. Competition and severe losses (or lack of profitability) will lead to Groupon's demise.

As the summer months wind down and the bankers return from their lovely summer estates, their trophy wives, and kids who'll get shipped up to Exeter Academy, the IPO market WILL get hot again, particularly for the big tech companies still waiting in the wings. Talk of a bubble has stymied and having this mini-crisis with the US debt and the European debt, may prevent any chance of their being a bubble, or at the least bit delay the bubble burst. An IPO price haircut for Zynga, Groupon, and Facebook will be the best thing for these companies in the long-run. Not so much for Zuckerburg, Accel Partners, and all the other big dog VC investors. But, if Facebook IPOs at a $100 billion valuation, how is it supposed to grow into $150 or $200? Let's recall it took Apple 20 years to go from a $10 bil market cap to a $50 bil one. Facebook is a tremendous company but it will need to diversify in a big way to get any bigger.

Pandora, We're Goin' Down Swingin'.....Hulu Receives Offer?

The aliens didn't put up much of a fight against Joaquin Phoenix in Signs, but does Pandora have what it takes to keep its stock price up? The short answer is no. But the more important question is, are investment banking underwriters getting better at pricing IPOs? That answer might be yes. I know this because Pandora, which went from a target IPO of $7-9, then $10-12, eventually IPOed at $16, only to reach $25 on opening day and then close at $13.50 just yesterday (four days after going public). BTIG analyst Richard Greenfield gave the stock a SELL rating on Friday at a price of $5.50, buying it for anything more would be ludicrous.

One thing that is leading to such a steep increase in stock prices on opening day is the limited number of shares these companies are offering in their IPOs. LinkedIn only offered 7-8% of the company's shares and Pandora offered 10%. The standard range is 20-25% for tech IPOs. But in the dot-com boom of the 90s there was a similar case of pent-up demand in tech stocks because the companies were offering a small chunk of their shares with the belief that this drive up demand, and drive up the stock price as a result. Several reports came out saying Morgan Stanley and Goldman Sachs did a horrendous job of pricing LinkedIn's IPO and deservedly so. But keep in mind, this was the first big internet company to go public in recent time. Particularly, the first social media company to go public. They weren't sure how the market would react to a relatively under-the-radar private company. It's no Facebook or Groupon or Zynga. LinkedIn opened at $45/share and went into the hundreds on opening day. Now it's at $69, a price that suggests the underwriters weren't so far off after all.

For more on floats, check out today's WSJ article:

http://online.wsj.com/article/SB10001424052702303936704576399821664370538.html

Accounting 101: free cash flow vs. cash flow from operations

Bill Reichert, an early investor in Pandora, was on Bloomberg West last week lobbying his case for Pandora as a company with lots of potential. Cory Johnson of Bloomberg said that the company is free cash flow negative, so positive cash flow from operations is irrelevant. First, let's define these two terms.

Free Cash Flow = cash - investment OR net dividends to shareholders + net payments to debtholders and issuers. In Pandora's case, operations is producing less cash than is needed for new investment, thus free cash flow is negative.

Cash flow from operations = change in cash - cash from financing - cash from investment

OR revenues less all operating expenses.

In Pandora's case, they made $2.7 million from operations the past couple quarters BUT free cash flow was negative with losses near $400 million. Reichert countered Johnson's point by saying that when Pandora is witnessing such tremendous user and revenue growth, a loss in cash is inevitable. But here's the catch, as Pandora keeps increasing users, the price to stream that music goes up because Pandora is being charged by the music label companies. That royalty agreement exists until 2015, at which point Pandora hopes to acquire such a large user base that they have the edge in any negotiations. Many analysts believe the price of royalties will go up even higher which is not good for Pandora. Greenfield's SELL rating for Pandora came as a result of a couple things. One is the royalty agreement, two is the number of competitors entering the online music space (Spotify, Apple, Amazon, Google, etc.), and three that fact the most of Pandora's users are mobile (over 53%), which means their ad-revenue goes down.

In other big tech news, Netflix competitor Hulu, the online video service, has received an unsolicited offer from an unknown company in an effort to buy Hulu. The rumors are out as to who this could be, one big name who could be in the mix is Yahoo! CEO Carol Bartz has had a wild last few months since the Alibaba Group dispute took place with Jack Ma. Microsoft, hot off their Skype purchase, is another suitor to consider. Why? Well because they have roughly $31 billion in cash sitting on their balance sheet, and CEO Steve Ballmer would love nothing more than to prove his haters (David Einhorn) wrong with a big-time acquisition. The video streaming space is clearly becoming the norm rather than just a trend. People can multi-task on Facebook, work, and TV at the same time on a computer. Hulu recently launched Hulu Plus to compete with Netflix. The premium service costs $7.99 a month and gives users the chance to watch current running TV shows and previous ones too.

Hulu, which was founded in 2008, is co-owned by a number of big companies including News Corp., Fox, Comcast, and Disney. One dark horse company who could be interested is Dish Network. Dish bought Blockbuster last year to get into the video business and this might be up their alley as well. Hulu's revenue is on pace to nearly double to $500 million from $263 million in 2010. Once again, we're seeing a "growth company" with ridiculous revenue growth in a short period of time, Groupon anyone? Hulu is approaching $1 million paid subscribers whereas Netflix already has $20 million. Just like Pandora has content costs to pay music label companies, Hulu has high content costs to pay movie and TV show studios. Hulu tried to raise $200-300 million for an IPO a couple months ago and that failed. So a takeover is the next best option. Microsoft with their ever-so-popular Xbox Live and Xbox Kinect could try and tie Hulu into those entertainment products. For now, these are all speculations but they make sense. Hulu would probably cost $2 or 3 billion to acquire.

Pandora's Stock Surges then Falls...Why Investors are Bullish on IPO Growth Prospects

"I got the magic stick

I know if I can hit once, I can hit twice."

-50 Cent ft. Lil Kim

Thankfully, we didn't have a LinkedIn type moment with Pandora today. But we did see a 63% increase in the stock price under the NYSE ticker P. After raising the offering price to $16 a share yesterday, Pandora started selling just above $20 this morning and at some point reaching as high as $26. It's currently at $18. LinkedIn's price more than doubled opening day as evidence that social media stocks are in high demand. Pandora only sold roughly 9% of its shares outstanding as a sign that it wants to hold the stock in the long-run. Bloomberg reported that the average float is 24% for US technology IPOs in the past year.

What VC moguls got paid off in yet another successful IPO? Namely it will be publicly traded Hearst Corp. who will sell 4.4 million shares in the IPO but the big dog investors of Pandora will not be selling their shares: Crosslink Capital, Walden Venture Capital, and Greylock Partners. As mentioned in my blog entry a couple days ago, Pandora is not profitable and will not be until at least 2012. The more music we listen to, the more money they have to pay record label companies. 87% of Pandora's revenues come from the advertising and the rest comes from subscription based services, but their advertising is showing nowhere near the success that Facebook is currently having. High octane startups are working together and trying to benefit off each other based on the LivingSocial and Groupon ads you may find when playing Mafia Wars (Zynga) or when streaming music on Pandora.

Pandora's current valuation at $3 billion means the company is selling at 20x sales, that's insane. Remember that Sirius XM is trading at 2.7x sales, with a market cap at $7.7 billion. Only Sirius XM is making lots of money off subscriptions, Pandora is not. They have to make money somehow to pay Howard Stern for his own radio show, right? Pandora isn't even a radio business, it's a customized music service who's competition is growing by the week. I personally like Grooveshark and now there's the I-Cloud, Amazon locker, and Spotify's US launch will be a big deal. On the subscription side they're facing steep competition from Sirius XM who's found a way to get into our cars, so Pandora they need to focus on generating some type of relevant ad content. Facebook's ad improvement (if you've been paying attention) has increased dramatically the past year. From random ads about salsa lessons and attractive singles nearby, to Sheryl Crow concerts (they know me too well). One thing to note is that Pandora was founded in 2000 and they just started using ads in their business model the past two years. I'm sure they can spend some of this IPO money to hire some good R&D people.

Another thing I wanted to mention today was why this tech bubble is different than the last. In '99, startups had the "get rich, or die tryin," mentality. Unlike 50 Cent, most startups did die off into the sunset, from a lack of a business model. To go public nowadays, Alan Patricof of Greycroft Partners, mentioned that you have to have a certain market cap and you have to raise a hefty load of money. A market cap between $25 million-$200 million is not acceptable if you want to IPO, yet it was in the late 90s. LinkedIn raised $352 million in last month's IPO, Pandora raised $240 million today. These companies have real revenues, real users, and a real business model. But Pandora is not profitable, and neither is highly anticipated Groupon. Pandora incurred $168 million in losses last year and Groupon looks to be in the $500 losses range. But investors are banking on a couple things here.

Jon Merriman, of Merriman Holding, was on Bloomberg West yesterday chatting about the Pandora IPO. He mentioned a couple of interesting things. Investors are bullish on these IPOs because of their rapid revenue increases, user base, and supporting cast. I mentioned last week that Howard Schultz being on the board of Groupon will help guide a young CEO in Andrew Mason. Moreover, Greycroft Partners are also an established VC firm and having them back Pandora is an important factor. Merriman did not recommend buying the stock today because of its market cap relative to sales figures and the increasing amount of competition from other companies. But investors are hoping that the sales and revenue growth numbers continue to increase as they have, which could eventually lead to a profit later down the road. Pandora's advertising model is at an early stage in the company's history and a big congrats to them because they've been through a lot. From lawsuit cases with music label companies to a failed IPO attempt in February, Pandora has been rewarded, for at least the short-term.

Based on LinkedIn's IPO surge and then dip(from $94 to $75), Pandora will dip as well. And remember, that LinkedIn just barely squeaked out a profit: $15 million last year. "Adult supervision" as Merriman stated yesterday, will be needed for the next set of IPOs and current IPOs to succeed. Although most of the recent IPOs don't have profits, they do have experienced silicon vets observing their movements and closely monitoring their financial prospectus for the near future. Reid Hoffman at LinkedIn, Rich Lefofsky at Groupon, and Steve Wozniak at Fusion-io have been around the block more than once. People's affinity and relation to Pandora's service is another reason there's high demand for this IPO.

LET'S GO BRUINS!!!

Capitals owner Leonsis Creates a Conflict of Interest....And Why I REALLY love JC Penney's style

"It just ain't the same, always unchanged

New days are strange, is the world insane?"

- Black Eyed Peas

Ted Leonsis (above), is a very very wealthy man and along with that wealth, often comes an even more impressive resume. Just to give you a glimpse, the man owns the Washington Wizards and Capitals (two sports teams), has written a best-selling book, produced movies, a former executive at AOL in its early days, and a former board member at American Express. Did I mention, he's also a partner at venture capital firm Revolution Ventures? This is where the problem lies: Leonsis is a board member at Groupon AND he works for Revolution who's an early investor in Groupon's biggest competitor, LivingSocial. The tech world is very small and information can pass through very quickly from a board meeting to another start-up without much monitoring. Remember just a couple months ago acclaimed VC titan John Doerr was rumored to be mole-ing around Silicon Valley during some employee bidding between Twitter and Google (he has a stake in both companies). Doerr also happens to be an early investor in Facebook and Google, two competitors. What am I getting at? The fact that there are so many tech startups VC investors want a piece of, that more often than not, they'll end up investing in companies who at some point become competitors, it's inevitable. Especially because of this Web 2.0/Social Media revolution we're in the middle of. Leonsis' situation is a tad different than that of Doerr's. Per Silicon Valley Insider, Revolution invested in LivingSocial before Leonsis joined the firm. Going forward this situation could get worrisome for Groupon who is trying to stay on top of the Coupon buying business and hopefully at some point become profitable.

J.C Penney's shares are up around 17% today, why? Some guy named Ron Johnson was named CEO and he simultaneously invested $50 million into the company. Johnson is a retail legend, first having worked at Target and establishing their soft clothing line and making Target a premier clothing and food destination. And in 2000, Steve Jobs asked him to join Apple to lead their retail business, he did just that. There are now Apple stores in 300 different locations and the international scale is just growing. Apple made $3.19 billion off the retail stores in the quarter ending in March alone. Wowzer. Johnson helped create a trendy, fun, and profitable retail business all across the world that makes people excited to visit a store, regardless if they're looking to buy something or not. Everything from the design to the actual hardware at Apple stores is a sight to see, as you all know.

Why do you think Johnson left a company who seems to be getting bigger and bigger each decade at a market cap of $307.3 billion? I have a couple reasons for you. One, I think the uncertainty of Steve Jobs's health doesn't sit well with Johnson. Jobs IS Apple and without him leading daily operations, it's hard to come up with the next Ipad or IMac computer. Tim Cook, who is currently running Apple, is capable of being a good CEO and he has stepped in during multiple occasions the past five years when Jobs could not, but he's no Steve Jobs, no one is. Another reason Johnson left is because Apple's stock or value has sort of been stagnant for the past 3-6 months. Since Johnson joined Apple's retail team, the stock went from $40/share to $332/share as it is today. This is a pricey stock and it will be hard for Apple to continue that type of growth without focusing on international markets. Apple has flooded the US, it needs that same success in Europe and Asia if the stock looks to increase significantly in the next coming year.

At J.C. Penney, Johnson gets to start from scratch again. He's now back in retail in a department store environment that is very similar to Target (or Dayton Hudson when he joined them) but he'll get a chance to add that sexiness to J.C. Penney that Apple has created the past decade. The magnet type effect that pulls you into their stores to see their new products and feel the aura of their stores. If J.C. Penney can do that, it will be huge. Nordstrom and Bloomingdales have brand names at their stores that are able to attract people. And some people can't afford to buy utilities at the Apple store, but everyone needs clothing, especially at a good price. J.C. Penney's stock price is at $35/share right now and with a market cap at $17 billion, the company has significant room for improvement in the next coming years.

USA Today mentions how J.C. Penney is facing increasing competition from places like Macy's and Neiman Marcus on the high end, and Target and H&M on the cheaper end. With mobile becoming more popular, Johnson will be looking to get those trophy wife afternoon shoppers to be more tech savvy and make it easy for them to find out about sales or store updates. Johnson was the one who introduced the Genius Bar at Apple stores where customers can get assistance with their Ipad, Iphone, etc. Myron Ullman III who took over as CEO in 2004 didn't damage the company, but Ron Johnson will be adding a whole lot of sexy to a J.C. Penney store near you.