The iPhone 5 launch on Wednesday, Sept. 12 is sure to be the most important event for tech investors this year. The Motley Fool will be hosting a live chat where our top tech analysts will answer your questions and break down what the announcement means for Apple and tech investors everywhere. Be sure to swing by Fool.com at 12:45 p.m. EDT next Wednesday for all your coverage of Apple's next big announcement.
Seeing the handwriting on the digital wall
Despite having telecom investments in parts of the world that haven't been hit as hard by economic misfortune, Telefonica has decided to gaze a bit further into the future, looking at how it could compete in the mobile advertising and online payments markets against the likes of Facebook
To that end, the company is putting together a network of venture capital firms, called Amerigo, which will invest in digital start-up companies. The first investments will be made in Spain, Chile, Brazil, and Columbia, where those start-ups would receive some governmental funding.
Tasked with managing the Amerigo investment funding network, and given near-autonomy, is Telefonica's year-old Digital division. Telefonica Digital has already generated $3 billion in revenue in 2011 and plans on more than doubling that by 2015.
The Digital division has already made "direct to bill" agreements with Facebook, Google, Microsoft
Telefonica Digital chairman and CEO, Matthew Key, said in a statement, "We have long understood that to succeed we need to understand ... the digital innovation ecosystem, recognizing that great ideas can come from anywhere." Even "outside of the main centres of venture capital activity, such as Silicon Valley and London."
Does Telefonica rate a thumbs-up in CAPS? I think it does. The company is profitable, and its P/E is under 4. And regarding that suspended dividend, Telefonica said it would reinstate it for 2013, though it will be paid in shares, not cash. Furthermore, the company has global investments and does not have to rely on a quick turnaround in Spain for its survival.
If Telefonica can make inroads into Facebook's advertising revenue stream, what would that mean for Facebook? For a thorough discussion of the pros and cons of investing in Facebook, this premium Fool report is a must-read. Get it here .
Fool contributor Dan Radovsky has no financial interest in the above-mentioned companies. The Motley Fool owns shares of Facebook and Microsoft. Motley Fool newsletter services have recommended buying shares of Google, Microsoft, Apple, and Facebook. Motley Fool newsletter services have also recommended creating a synthetic covered call position in Microsoft and a bull call spread position in Apple. The Motley Fool has a disclosure policy.
We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
More from The Motley Fool
3 Top Telecommunications Stocks to Buy in 2017, and 1 to Avoid
Three of these telecom stocks could make you rich. With the fourth one, you'll probably lose your shirt.
The 3 Best International Telecom Stocks to Buy in 2017
American investors have easy access to many telecom stocks from foreign markets. Let's take a look at the three best names you can buy today.
Why Shares of Telefonica S.A. Slumped Today
The telecommunications giant is reportedly delaying the IPO of two units because of market volatility following the Brexit referendum.