What is in a name? Try these companies whose activities differ from their name

When I first began investing, I thought that a company's identity is revealed by its name. But years of poring through annual reports, websites, conference call transcripts and talking to seasoned investors, convinced me that this is not generally true. Companies may not reflect their name because

1. Profits come largely from a peripheral segment(Jindal Steel's profits majorly come from captive power plant output sold in open market
2. Legacy business no longer is the focus/revenue leader(Hence Tata Tea changed its name to Tata Global Beverages to reflect its product range and global reach
3. They have ventured into a new activity but have not bothered to change the name

I'am referring to the 3rd category in this post. Some companies in this are

1. Makson Pharma(http://www.makson-group.com/history.html):-Apparently a pharma company's, it is one of India's premier contract manufacturers in the confectionery segment
2. Karuturi Networks(http://www.karuturi.com)-It is not into networking equipment but is India's largest flower exporter(and recently agricultural produce also)

Moral: Study the company's segments and business description before assuming that it does a certain activity

Salesforce.com's stock ticker reflecting its main business-good or bad?

The meteoric rise of Salesforce.com has caught several tech analysts by surpise. I was looking at a contra view (http://seekingalpha.com/article/222106-salesforce-com-red-flags-and-hyperbole) when it hit home.t

Look at the ticker "CRM"-also the acronym customer relationship management which is the company's bread and butter, It struck me that if an investor has heard of CRM, this stock will take up mindspace and connect thereby building the brand.

But now that the company plans to focus on cloud computing, does this symbol still make sense? It reinforces the impression that the company is all about CRM-which is no longer true.

Takeaway:- We become prisoners of our own success. Rebranding the company is possible but changing a stock ticker is not that simple. The company faces an unenviable job changing lay investors's perception.

The 80:20 rule versus The Long Tail-in the video games industry

Starcraft, World of Warcraft, Call of Duty, Battle.net. These successful games(or franchises in industry jargon) are all published by one single company. Activision Blizzard(created by merger of Activision Inc and Vivendi's games division http://www.activisionblizzard.com/corp/index.html) is the world's most profitable video games company. While going through its Q2'10 investor relations transcript(http://seekingalpha.com/article/219068-activision-blizzard-q2-2010-earnings-call-transcript), I noticed some interesting things:-

1)Online push: Since Dec09, Amazon has sold more ebooks than hardcovers(present ratio is 1.43:1). Even considering the lower prices, this is more possible. For Activision also, this was the first time that their sales from online channels exceeded those from offline channels.

2)80:20 rule:- The CEO observed that the blockbuster/best selling games hog a disproportionate chunk of the market whereas Chris Anderson observed in his book "The Long Tail"(http://en.wikipedia.org/wiki/Long_Tail) that the back list music sales cumulatively equalled or surpassed recent music sales.

What does this imply? Is it that old music may still be in taste and that old games are not in vogue? Or does it mean that the trend will vanish once online distribution increases(since producers will find it easier to retail their old games online without incurring massive overheads).

Unlike the ebook industry however, server based('in the sky') games are more difficult to pirate. Thus, revenue leakage being lower, the business model of online games would still be more profitable