What’s up with Hulu?

According to the New York Times, Hulu is approaching investment banks to underwrite an IPO this fall valuing the company at $2 billion. What is Hulu? Hulu is an online video service that offers a selection of hit shows, clips, movies, and more at Hulu.com and numerous destination sites online and across four screens — PCs, TVs, mobile phones and tablets.
Questions:

1. Based on Yarrow’s article, draft a simplified income statement for Hulu in 2009. Assume a year-end of December 31.

 
2. What is an IPO? Why does Atkinson see problems ahead with this?

 
3. How does Hulu generate revenue? What accounts do you think would be associated with this business model?

Source:
Yarrow, J. (2010). Hulu Wants To IPO At A $2 Billion Valuation, Business Insider SAI, August 16. (Retrievable at http://www.businessinsider.com/hulu-ipo-2010-8)

Atkinson, Claire. (2010). Hulu Faces Hurdles to Stock Offering. New York Post, August 17. (Retrievable online at http://www.nypost.com/p/news/business/hulu_faces_hurdles_to_stock_offering_2O1mh3F3PhtbXXbyrQ7QoO)

Saving Money through Social Media

The recession has bred a new type of coupon: the group coupon. In recent months, several Web sites have launched nationwide giving customers discounts on restaurant meals, sporting events, spa treatments, golf outings — pretty much any expenditure that many people give up during economic downturns. The catch is that the coupon only applies if a certain number of people use it.

Questions:

1.  After watching the video and accessing http://www.groupon.com, explain the company’s business model. 

2. Do you think that the group coupon trend will continue?  Why or why not?

3.  Go to the “recent deals” in your area at http://www.groupon.com.  Pick one of the deals. If you were a company offering this deal and using the services of Groupon, what accounts would be affected by the  deals you provide?

Sources:

Eklund, Kevin. (2010) Best Social Group Buying Sites For Killer Daily Deals And Deep Discounts. Tomuse.com (Retrievable online at 

http://tomuse.com/group-buying-sites-coupon-deals-discount-savings/#ixzz0wt6rxlKihttp://tomuse.com/group-buying-sites-coupon-deals-discount-savings/)

Trejos, Nancy (2009). The Humble Coupon Joins Social-Media Web, The Washington Post, September 1 (Retrievable online at http://www.washingtonpost.com/wp-dyn/content/article/2009/08/31/AR2009083103837.html)

CNN Video. (2010). Group Coupon Business Soars, August 13. (Retrievable online at  http://www.cnn.com/video/#/video/tech/2010/08/13/am.group.coupon.business.cnn?iref=videosearch)

Accounting Firms and Social Media

If accounting has the Big 4, then social media has the Big 3: LinkedIn, Facebook and Twitter. Still, many accounting firms and businesses consider LinkedIn as their sole source of social media because the site helps form relationships that often result in more business and turn into referral sources. But what are the benefits and drawbacks to using the other two main social media sources.  As this article and video show, taking time to investigate and manage social media outlets may help a firm’s marketing and ultimately its bottom line. 

 

Questions:

1.What were the 5 tips in the video for using social media to boost your firm’s income or presence?

2.Based on the video and article, what would you say are the biggest benefit(s) for accounting firms that use social media to promote their practices?

3.Are there any drawbacks for accounting firms who use social media?  How would you design a policy that would help in preventing these issues?

 Sources:

Cytron, Scott. (2009). Just a Tweet Away: Social Media in Accounting Firms. The CPA Technology Advisor, November.  (Retrievable online at http://www.cpatechnologyadvisor.com/publication/article.jsp?pubId=1&id=2609&pageNum=4)

CNN. (2010). How to Make Money with Social Media, CNN videos, July 24. (Retrievable online at http://www.cnn.com/video/)

What Do The World Cup and Public Accounting Have in Common?

OK. For all you accountants, here’s another acronym.  What does FIFA stand for? Well, it’s not an inventory method, but refers to the governing organization for the world’s biggest athletic event this summer ( the World Cup). Even if you’re not a fan, you can’t ignore World Cup fever that is sweeping the globe this summer. Tongue-in-cheek, author Daniel Braddock thinks that public accounting can learn a thing or two from these games.

Questions:

1. Check out Deloitte’s World Cup Fantasy Football League page.  Explain why you think the Big 4 firm started this initiative? (See http://deloitte.fantasyleague.com/Index.aspx)

2. Who is PricewaterhouseCoopers pick for the winner of the World Cup?  Do you agree? Why or why not?

3. Summarize what Braddock’s three points have to do with public accounting. What does this say to you about a career in the Big 4?

Source:

Braddock, Daniel. (2010).  Three Things Public Accounting Can Learn from the World Cup. Going Concern, June 17 (Retrievable online at http://goingconcern.com/2010/06/three-things-public-accounting-can-learn-from-the-world-cup/#more-12860)

Instant-Coffee Wars

Starbucks has been working on a closely guarded secret for 20 years – Via Ready Brew instant coffee. A month after its launch, Nestle, the maker of Taster’s Choice, has begun an aggressive campaign against the new interloper. This campaign includes free samples of Nescafe’s “sticks,” direct mailings, and Web commercials.

QUESTIONS:

1. How should Nestle account for the free samples of coffee?
2. Starbucks rolled out Via after 20 years of secretive internal research and development (R&D). Assuming that Starbucks spent a million dollars each year for the R&D, how would this be reflected in their financial statements?
3. Use some of the following facts laid out in the article:

Assume that Starbucks and Nestle are the only major companies in the instant coffee industry, which generates $21 billion worldwide in annual sales with 5% in the U.S.

Starbucks sells a 12-pack of single-serve pouches for $9.95.

Nestle sells seven 12-packs of single-serve pouches for $12.16.

If Nestle sells seven 12-packs for every one 12-pack sold by Starbucks, what amount of U.S. sales would each company share? How many pouches should be produced by each company to meet this demand?

SOURCE: Andrejczak, M. “Instant-Coffee War: Nestle Takes Aim at Starbucks,” Wall Street Journal – Market Watch (Retrievable online at http://www.marketwatch.com/story/instant-coffee-war-brewing-nestle-vs-starbucks-2009-11-18)

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