Tag Archives: deal

Live Universe acquires yet another deadpooled start-up on the cheap

A couple of weeks ago we realized the shopping pattern of Live Universe is to buy failed, but over funded, start ups on the cheap and the deal we read about a few days ago makes no exception. Just over a few week ago the founders of and five engineers from VoIP services provider Jangl left for Jajah after the company failed to find a proper buyer. Following their departure, it was unclear what would happen to Jangl’s assets and remaining staff. Wonder no longer – Live Universe is here to help. As you may guess they bought the failed company, perhaps on the cheap too. We tried to find out what the acquisition price is, but since we found nothing neither reliable enough nor even rumors around the blogosphere about the exact price, we do assume the price tag is not much different from what the other failed start-up enjoyed in their deals with Live Universe. Call it $1M and you might be closer to the truth than you may expect.

Well not bad, except the fact that Jangl has raised $9M to date from a number of perhaps unhappy investors today. Among others Jangl’s investors include Storm Ventures, Labrador Ventures, Cardinal Venture Capital, Alex Mendez, Stuart Davidson and Chris Hadsell.

Based on a number of posts across the blogosphere we learn that problems of the company have likely started the late last fall. By that time Jangl’s board began telling the founders to pursue an acquisition strategy or raise more money despite the company had closed deals with several partners, including Plentyoffish and Tagged.

Despite the rumors that many companies have taken a look into the Jangl, it is clear that no deal has emerged from those interests.

Jangl allows consumers to exchange text messages, phone calls and voicemail without sharing their real numbers. Jangl customers can send/receive SMS messages from their mobile device or their Jangl account online, have voice messages sent directly to their email or profile inbox as MP3 files, and block contact from someone at any time, among other capabilities. Jangl provides its services to users of Facebook (JanglMe application), Bebo, Plentyoffish.com, Match.com, Friendster, Tagged, FriendFinder, Fubar, and more, and also offers its services at Jangl.com.

In late 2007, Jangl began testing a variety of ad placements in phone calls and SMS messages. One of its most recently partners – dating site Plentyoffish.com – will be a free service supported entirely by advertising. This advertising revenue stream will be Jangl’s second, as the company has already been generating partner revenue since January 2007.

Other companies bought on the cheap by Live Universe include Pageflakes (funding $4.1- sold out for what is known to be in the $1M range). Revver ‘s total funding is known to be in the $12.7M range coming from Comcast, Turner, Draper Fisher Jurvetson, Bessemer Venture Partners, Draper Richards and William Randolph Hearst III – sold also out for anything between $1M and $2M. MeeVee itself has also taken a whopping amount of money from the venture capitalists — $25M over the past years, we bet on it has also been sold out for anything in the $1M / $2M range. From the 3 companies above, MeeVee seemed by that time to have traffic, at least. Today’s deal is for yet another company that has taken $9M and has perhaps gone for nothing more than $1M.

A simple math that we started out a couple of weeks ago revealed that Live Universe has bought $42M worth in distressed assets for $3M in total and if we include the deal from today it turns out that the buyer has acquired web properties that have taken over $51M to develop for $4M in all.

The buying company LiveUniverse is probably most popular with the fact it has been founded by one of the founders of MySpace – Brad Greenspan. With over 55M monthly unique visitors, LiveUniverse is one of the world’s largest online entertainment networks. They operate several successful and popular websites across three core verticals: Video, Social Networking & Music. LiveVideo is one of their sites, which about a year ago instigated a scandal on YouTube when it reportedly paid top YouTube users to come to its platform. LiveUniverse founder Brad Greenspan, who was involved with MySpace early on, is perhaps best known for his lawsuits protesting the company’s sale to News Corp.

Competitors/similar companies include: SayNow, Jajah, Jaxtr, Dial Plus, GrandCentral and TringMe.

More

http://www.liveuniverse.com/
http://www.crunchbase.com/company/liveuniverse
http://jangl.com/
http://cerdafied.typepad.com/
http://www.techcrunch.com/2008/05/16/live-universe-picking-up-jangls-pieces/
http://www.crunchbase.com/company/jangl
http://www.techmeme.com/070524/p7#a070524p7
http://venturebeat.com/2008/05/07/internet-phone-company-jangl-to-sell-assets-core-team-goes-to-competitor-jajah/
http://web2innovations.com/money/2008/05/09/live-universe-acquires-yet-another-over-funded-start-up-on-the-cheap/
http://web2innovations.com/money/2008/02/15/revver-the-video-revenue-sharing-site-finally-sells-out-but-the-price-is-not-hefty/
http://web2innovations.com/money/2008/04/15/pageflakes-is-acquired-by-brad-greenspan%e2%80%99s-live-universe/
http://web2innovations.com/money/2008/02/15/revver-the-video-revenue-sharing-site-finally-sells-out-but-the-price-is-not-hefty/
http://web2innovations.com/money/2008/04/08/meevee-put-itself-up-for-sale/

Facebook raised $100M more, total is now at $493M

Facebook keeps on growing so does its expenditures. The latest news from the company is that they have raised yet another $100M round of funding. The company says this time all the money will go for buying servers, lots of servers. BusinessWeek has estimated they are going to scale things up with 50,000 new servers on top of their 10,000 they are currently running on. Total amount of money raised by Facebook is now $493M (we did the math and it seems $438M in total, but other more reliable sources claim it is $493M) according to several sources. This time, however, the founding is not against equity, but is a venture lending deal with TriplePoint Capital, a Menlo Park, Calif. based company that specializes in lending money to startups. Facebook already claims 109M monthly unique visitors and many people say the site is at times very slow.

Venture lending peaked during the dot-com bubble of the late 1990s and early part of this decade, but is making a comeback as startups use debt to pay for computer servers, telecom gear, and software. “The last thing the entrepreneur wants to do is see those precious equity dollars flowing into equipment purchases,” says TriplePoint CEO Jim Labe. “It’s a very unproductive use of equity to plow it into fixed assets.”

Forrester Research’s Gillett estimates that Google is buying half a million servers each year, while Microsoft’s annual consumption is as much as 200,000 servers.

Executives at Facebook declined to say which vendors will provide the servers. But the social network is already a big customer of Rackable Systems, which said in a recent financial statement that it derived $11.5 million, or 17% of $68 million in first-quarter revenue, from Facebook. This puts the total server expenditures of Facebook at $46M per year. With the new round this amount will significantly increase.

Facebook is hugely popular social networking site, second only to MySpace in terms of users. Other popular social networking sites are Bebo and Friendster, the second one tried to acquire Facebook in 2004 for just $10M.

The latest comScore metrics, we have seen, revealed that Facebook is actually havingo ver 100M unique visitors per month.

Peter Thiel, cofounder of PayPal and managing partner of the Founders Fund was the first angel investor in the company. He invested $500,000 into Facebook in early 2004. Later Accel Partners poured $12.7 million more in funding, at a valuation in the $100 million range.

The next year [2006], Facebook received $25 million in funding from Greylock Partners and Meritech Capital, as well as returning investors Accel Partners and Peter Thiel. The pre-money valuation for this deal was in the $525 million range.

Facebook is reported to have turned deals down from Friendster, Yahoo, Viacom  and the mighty Google a few months ago when Zuckerberg has chosen Microsoft to partner with. Microsoft de-facto has invested $240 million into Facebook for just 1.6 percent of the company in October 2007. This put the company’s valuation at over $15 billion on just $150 million in annual revenues.

More

http://www.facebook.com/
http://www.tpcp.com/
http://www.rackable.com/
http://www.techcrunch.com/2008/05/10/facebook-raises-another-100-million/
http://www.businessweek.com/technology/content/may2008/tc2008059_855064.htm
http://mashable.com/2008/05/09/facebook-triplepoint-funding/
http://venturebeat.com/2008/05/09/facebook-borrows-100m-to-build-out-its-infrastructure/
http://gigaom.com/2008/05/11/the-rising-cost-of-facebook-infrastructure/
http://www.marketwatch.com/news/story/hong-kong-tycoon-li-raises/story.aspx?guid=%7BE4097AA2-9EA3-4773-9100-456E68EE1C9A%7D
http://www.allfacebook.com/2008/03/facebook-gets-another-40-million/
http://www.techcrunch.com/2008/03/27/hong-kong-billionaire-puts-another-40-million-into-facebook/
http://mashable.com/2008/03/27/facebook-hutchinson-investment/
http://web2innovations.com/money/2007/11/30/hong-kong-billionaire-li-ka-shing-invests-60m-in-facebook-funding-totals-33820m-to-date/
http://gigaom.com/2008/03/27/facebook-soon-to-appear-in-3g/
http://www.facebook.com/apps/application.php?id=2915120374&b
http://gigaom.com/2008/03/13/lets-justify-facebooks-300-per-user-valuation/
http://www.crunchbase.com/company/facebook
http://www.techcrunch.com/2007/11/30/another-60-million-for-facebook/
http://kara.allthingsd.com/20071130/facebook-nabs-60-million-investment-from-li-ka-shing/
http://www.hutchison-whampoa.com/eng/about/chairman/chairman.htm

Live Universe acquires yet another over funded start-up on the cheap

It appears that the buyer’s profile of Live Universe is to buy web 2.0 companies in trouble on the cheap, yet preferably over funded, with some traffic and good technology, if possible. After they have bought video site Revver (also relatively cheap, price perhaps was in the $1M range) in February 2008, they have also fetched up Pageflakes just the last month for what is believed to be yet another 1M dollar deal. Yesterday we have read over Web that Live Universe has this time bought yet another start-up falling into the same profile (over funded, failed and looking for a fire sale) MeeVee. They have put themselves up for sale via press release the last month.

MeeVee is all about personalized TV guides and the company was said is having over 1.1 million organic unique users in March up from 480,000 in August 2007. The Company uses its editorial voice and proprietary technology to scour a curated list of thousands of sources to connect consumers with customized video, blog and TV programming content that matches their interests. The Company has significant issued IP, community, media relationships, a TV listings personalization engine, streaming TV directory and a compelling product roadmap. The Company has 7 full time employees, all in product and engineering.

Let’s look into the Live Universe’s shopping pattern.

Total funding for Pageflakes was $4.1M – sold out for what is known to be in the $1M range. Total funding for Revver is known to be in the $12.7M range coming from Comcast, Turner, Draper Fisher Jurvetson, Bessemer Venture Partners, Draper Richards and William Randolph Hearst III – sold also out for anything between $1M and $2M. MeeVee itself has also taken a whopping amount of money from the venture capitalists — $25M over the past years, we bet on it has also been sold out for anything in the $1M / $2M range. From the 3 companies above, MeeVee seems to have traffic, at least.

It is an interesting strategy to buy companies and spur growth, but we guess it is better you buy growing start-ups rather than falling stars that have spent enormous amount of capital yet did not work things out. It is yet to be seen if this strategy is going to be successful on the long term run for Live Universe. Let’s put it that way – a company that has raised $25M and did not manage to work things out is less likely to make it with less money. On the other hand buying distressed assets is something proven by the time. From Live Universe’s perspective it seems clever move that they have bought web assets that needed more than $42M to develop for $3M or something. As web 2.0 moves towards its peak and then its end (the same as what happened with the dot com boom) there would be lots of over funded and over hyped, but failed start-ups for sale on the table for Live Universe to choose from and buy cheaply.

So to conclude if your company has taken enormous amount of money, but has definitely failed to work things out and is looking for some liquidation of its assets Live Universe might be your choice to consider.

The buying company LiveUniverse is probably most popular with the fact it has been founded by one of the founders of MySpace – Brad Greenspan. With over 55M monthly unique visitors, LiveUniverse is one of the world’s largest online entertainment networks. They operate several successful and popular websites across three core verticals: Video, Social Networking & Music. LiveVideo is one of their sites, which about a year ago instigated a scandal on YouTube when it reportedly paid top YouTube users to come to its platform. LiveUniverse founder Brad Greenspan, who was involved with MySpace early on, is perhaps best known for his lawsuits protesting the company’s sale to News Corp.

Additionally in 2006, Greenspan also initiated a lawsuit and activism site against his former company, MySpace, calling attention to the fact they were censoring widget makers and software service providers using MySpace as a development platform.

More

http://www.liveuniverse.com/
http://www.crunchbase.com/company/liveuniverse
http://meevee.com/
http://biz.yahoo.com/bw/080407/20080407006076.html
http://www.techcrunch.com/2008/04/07/25-million-later-meevee-in-trouble/
http://www.crunchbase.com/company/meevee
http://www.techcrunch.com/2007/07/16/meevee-cuts-20-of-staff/
http://www.techcrunch.com/2007/09/20/meevee-takes-35-million-series-d/
http://www.econtentmag.com/Articles/ArticleReader.aspx?ArticleID=17395
http://findarticles.com/p/articles/mi_m0EIN/is_2006_Feb_27/ai_n16085490
http://www.techmeme.com/080407/p95#a080407p95
http://www.deftapartners.com/
http://www.labrador.com/
http://www.waldenvc.com/
http://www.jpmorgan.com/pages/jpmorgan/investbk/global/na/baef
http://web2innovations.com/money/2008/02/15/revver-the-video-revenue-sharing-site-finally-sells-out-but-the-price-is-not-hefty/
http://web2innovations.com/money/2008/04/15/pageflakes-is-acquired-by-brad-greenspan%e2%80%99s-live-universe/
http://web2innovations.com/money/2008/02/15/revver-the-video-revenue-sharing-site-finally-sells-out-but-the-price-is-not-hefty/
http://web2innovations.com/money/2008/04/08/meevee-put-itself-up-for-sale/
 

Pageflakes is acquired by Brad Greenspan’s Live Universe

Pageflakes, an Ajax home page that once was a real competition to Netvibes, is being rumored to have been acquired by Live Universe for an undisclosed amount. Both companies refrain themselves from publicly announcing the deal nor made any comments on the technology blogs that mentioned about it, which tells us the deal is most likely in the very low-range not worth mentioning. What makes us think so? Pageflakes has surely lost the battle with Netvibes and is having just a fraction of the traffic Netvibes reaches. The rumor has it the company was seriously running out of money while maintaining a burn rate of over $300,000. It also became publicly known fact that the company failed to raise additional money and they were sort of forced to undergo the fire sale road, which is never a good one and leads to little to no premium on the price. 

Based on both Quantcast and Compete the Pageflakes’ traffic is relatively low (below 100K) when compared to some of the company’s competitors, which is by far not enough to go for your Series B round of funding.

Of course, Pageflakes CEO Dan Cohen, formerly of Yahoo, denied that the company was running out of cash by replying to rumors that way: “All startups are up for sale! We frequently receive inbound M&A inquiries”. 

According to our own research across the web it seems the price is perhaps above $500K and may be not much over $1M. A couple of facts lead us to the thinking that the deal is not high-profile one 1) The Colorado-based NewsGator was also said to have been bidding for Pageflakes, but the rumored price was in the $500K range; 2) Brad Greenspan’s vehicle is known to be buying web companies on the cheap and 3) both companies did not announce the deal, yet.

The buyer Live Universe, which was founded by MySpace founder Brad Greenspan, has made a number of acquisitions to spur growth. Most recently, they acquired video site Revver (also relatively cheap, price perhaps was in the $1M range), in February 2008.

More about Pageflakes

The company was founded in Germany and is headquartered in San Francisco. The company was co-founded in October 2005 by Christoph Janz, Omar AL Zabir, Ole Braundenburg and Shahedul Huq Khandkar. Benchmark Capital Europe (now Balderton Capital) invested $1.3 million in Pageflakes in May 2006, and followed up with a $2.8 million bridge taking the company’s total funding to the $4.1M mark.

Pageflakes is the easiest way to read, see, discover and share your favorite things on the web. Start by easily creating a web start page that keeps you up to date on the many blogs and news sources that you read daily. Add photos, videos, a calendar, email, a to-do list and more to make your page even more personal. You can even make special pages that you can share with friends, family, or post on the web for everyone.

Pageflakes has thousands of Flakes (widgets or modules) including Facebook, a universal News Search, YouTube, Twitter, message board, blog, and hundreds of RSS feeds to choose from. Design and create a page that you can have for yourself or share with anyone you choose.

Pageflakes was founded in Germany in 2006 and headquartered in San Francisco, California. Pageflakes draws on the rich experience of its executive team, comprised of seasoned professionals who have helped shape the Web today. Backed by Balderton Capital, Pageflakes is led by Dan Cohen, an innovator who fashioned the way that both Google and Yahoo sought to personalize the Web.

From what we read below the company’s CEO is obviously a very experienced guy in the personalized content space so we have no idea what’s gone wrong, where and when.

Dan Cohen oversees all aspects of Pageflakes’ rapidly growing worldwide business and has an integral role in driving the company’s product vision. Dan is a seasoned entrepreneur and startup CEO, and is an expert in personalized homepages. Prior to Pageflakes he was the head of My Yahoo!, Yahoo’s personalized homepage, and before that led product management for personalized products at Google, including the Google Personalized Homepage. Previously, Dan was the founder and CEO of two technology companies, Personity and USConnect, and led their acquisitions by Openwave and IKON, respectively. He also held key senior management positions at IKON Technology Services, including Vice President of Strategic Partnerships and Director of Applications Development. Dan holds a dual Bachelor of Science degree in Electrical Engineering and Computer Engineering from Carnegie Mellon, and an MBA from the Wharton School of the University of Pennsylvania.

Dan is staying on his CEO position and is said will be reporting to Greenspan, and the company will remain at their current offices in Germany and San Francisco.

Competitors include Netvibes, My AOL, Microsoft, My Yahoo! and of course iGoogle.

More

http://pageflakes.com/
http://www.pageflakes.com/insider/
http://www.liveuniverse.com/
http://www.balderton.com/
http://www.pageflakes.com/company/exec_team
http://www.crunchbase.com/person/dan-cohen
http://www.crunchbase.com/financial-organization/balderton-capital
http://www.techcrunch.com/2008/04/13/pageflakes-acquired-by-live-universe/
http://www.crunchbase.com/company/pageflakes
http://gigaom.com/2008/04/13/pageflakes-out-of-cash/
http://www.pcmag.com/article2/0,1759,2265800,00.asp
http://webworkerdaily.com/2007/01/02/top-ajax-start-pages-reviewed/
http://www.benchmark.com/news/sv/2007/06_07_2007a.php
http://gigaom.com/2007/01/25/ex-yahoo-exec-now-pageflakes-ceo/
http://www.quantcast.com/pageflakes.com
http://siteanalytics.compete.com/pageflakes.com/?metric=uv
http://web2innovations.com/money/2008/02/15/revver-the-video-revenue-sharing-site-finally-sells-out-but-the-price-is-not-hefty/
http://mashable.com/2008/02/14/liveuniverse-buys-revver/

MeeVee put itself up for sale

An interesting approach is taken at MeeVee. They are trying to sell themselves through a press release. This morning we have seen a short press announcement put up on Yahoo through BusinessWire giving relatively short details about the company and soliciting interested parties to contact a person at his email as indicated in the pr.

MeeVee is all about personalized TV guides and the company was said is having over 1.1 million organic unique users in March up from 480,000 in August 2007. The Company uses its editorial voice and proprietary technology to scour a curated list of thousands of sources to connect consumers with customized video, blog and TV programming content that matches their interests. The Company has significant issued IP, community, media relationships, a TV listings personalization engine, streaming TV directory and a compelling product roadmap. The Company has 7 full time employees, all in product and engineering.

So, what’s so interesting in here one may ask. First off in the press release the company claims is engaged in multiple discussions with potential acquirers that provide the greatest long term upside and synergy, but are giving a public announcement where they solicit more such interested parties to discuss with them. It is either nobody is interested in the company to date and they are trying to attract such interest or the interested parties are setting their offers too low and MeeVee is trying to establish sort of bidding war in order to drive valuations up.  You don’t normally ask for interested parties to contact a company re a sale unless the current talks (if any) aren’t going well.

So far so good, but when you go into some more details about the company you realize there is something wrong with the whole situation around MeeVee.

The company is known to have taken $25M in total funding to date and having just 1.1M ungues per month off $25M in venture capital appears no longer that attractive as in it was in first reading. That sort of information is skipped in their original press release. Their last round of funding (Series D) was taken just late last year and was in the $3.5M range, which means they have spent most, if not all, of the money they have previously taken. As to what is only left in the company from their last round remains unclear. To top it off the company has gone through some significant layoffs.

Some of MeeVee’s unhappy investors include DEFTA Partners, Edmond de Rothschild Venture Capital, WaldenVC, Labrador Ventures, The Bay Area Equity Fund (Effective January 24, 2008 the private equity investment professionals of the Bay Area Equity Fund have left JPMorgan to form DBL Investors LLC) and FCPR Israel Discovery Fund.

Over the past years we have been witnessing not only one deal where a web site with over 1M unique visitor per month has commanded acquisition prices in the $20M range, but in the MeeVee’s case we do not think that is the case. Why? Well, MeeVeee has spent $25M so far, has laid off its employees and is on its way down. If you have spent $25M the expectations for your company are for much larger reach and audience than just 1.1M visitors per month, so in the case their 1M users per month can be considered quite a failure in the context of the resources being allocated to the company.  The picture is already quite different if you take for an example a web site that has reached the 1M uniques per month mark off say less than $1M of money invested in so far, did not lay off its employees and is not on its way down as a trend on the traffic graphs of sites like Quantcast and Compete.

Whatever the case is it is hard for us to believe that 1.1M uniques per month can command a price anything above the amount of money they have taken from an army of venture capitalists. So what is then the case here? It is perhaps that the VCs are looking for a way to effectively liquidate the company and recoup whatever is possible leaving the founders with literally empty hands.

More about MeeVee

Discovering what’s online and on TV.

MeeVee is the leader in helping people navigate the growing world of online and television entertainment. Each month, over a million tech savvy, affluent and educated online users visit MeeVee to help make their entertainment choices.  These people are passionate about entertainment, and visit MeeVee again and again to track their favorites and to discover and share new entertainment choices.

Why? Today’s consumers are overwhelmed by the millions of online videos and hundreds of digital TV channels now available. MeeVee is the first destination to bring together traditional TV listings and online video from hundreds of sources in one place. Using our patented technology, consumers can personalize MeeVee to search for new TV and online video based on their interests. At MeeVee, our mission is to help them discover more of what they want to see.

Located in Burlingame, CA, MeeVee initially launched in 2005 as a television listings provider.  Using innovative new technologies, MeeVee changed the way consumers find TV programming by enabling them to personalize their guides to surface new programming choices based on people, shows, hobbies and keywords of interest. Now MeeVee is applying that same technology to the growing world of online video, helping individuals to cut through the clutter and discover interesting videos.  Today, MeeVee employs more than thirty enthusiasts who are passionate about our mission of helping consumers discover and enjoy the media they want to see. 

Supported by leading advertisers, including CBS, Netflix, Radio Shack and more, MeeVee also syndicates and licenses our television search and personalization services to leading newspapers, major online content providers and cable operators around the country. Our partners include some of the largest integrated media companies, including Gannett, Hearst and Media News Group. Our list of syndication partners is growing daily and includes USA Today, The Chicago Sun Times, San Francisco Chronicle and the Seattle Times.  Our investors, who have supported some of Silicon Valley’s most successful ventures, include JP Morgan, Labrador Ventures, Walden Venture Capital, Defta Partners, and Rothschild Ventures.

TechCrunch has called MeeVee, “an easy-to-use application and…a nice model for building a personalized web experience.”  MeeVee is a 2007 “Always On” Media 100 winner.

Well, in some of the latest posts about MeeVee on Techcrunch are surely not as positive as the sentence above and MeeVee is as of today put in the dead pool watch list.
More

http://meevee.com/
http://biz.yahoo.com/bw/080407/20080407006076.html 
http://www.techcrunch.com/2008/04/07/25-million-later-meevee-in-trouble/
http://www.crunchbase.com/company/meevee
http://www.techcrunch.com/2007/07/16/meevee-cuts-20-of-staff/
http://www.techcrunch.com/2007/09/20/meevee-takes-35-million-series-d/
http://www.econtentmag.com/Articles/ArticleReader.aspx?ArticleID=17395
http://findarticles.com/p/articles/mi_m0EIN/is_2006_Feb_27/ai_n16085490
http://www.techmeme.com/080407/p95#a080407p95
http://www.deftapartners.com/
http://www.labrador.com/
http://www.waldenvc.com/
http://www.jpmorgan.com/pages/jpmorgan/investbk/global/na/baef

fix8 takes more money to fiddle around animated avatars

It was just a few months ago when fix8 took their first round of funding from Vickers Venture Group. The amount taken was then $3M. Vickers Venture Group is a Singapore-based private equity firm. This time the company says it has landed SK Telecom, which is a leading South Korean telecom, taking some $3M more to make it $5M in total funding. Fix8’s first part of the funding took place last year in October. 

SK Telecom has also awarded Fix8 a contract “to lead the development of SKT’s 3D avatar animation technology to enhance mobile and online communications.”

Fix8 is a web cam avatar community that lets you create animated avatars with your web cam by reading your expressions and gestures. When we took a look into their web site we have discovered tons of tools that you can play around with, including fix8’s wide selection of pre-made avatars and other accessories like voice manipulation, graphics and editing tools. Those clips can easily be embedded in your website or social networking profile, or use it for your instant messaging client like AOL, MSN, Skype or Yahoo Messenger.

Fix8 has recently teamed up with a couple of other companies like Pringo and Stickam. fix8 has also expanded its signature technology through a key partnership with Shanghai Media Group (SMG) offering Auditions(TV) to create a new world of Interactive TV where audiences can submit fix8 content for insertion into LIVE or taped programming. fix8 will further bridge the gap between communication devices with the launch of fix8 MOBILE.

Fix8 has also teamed up with Camfess, the premier site for online confessions. The ability to choose your own level of “incremental anonymity” and “confess” without anyone knowing who you are makes Camfess and Fix8 the “perfect fit.”

While we kept on researching around for more information we came across the following user review on the service. Gave it a try for fun. The idea is great but they have a way to go.

  1. It does not work if you have glasses on, and some people’s eyes do not work with them off.
  2. I did not play around long enough to have my body in the picture also, but from the image above it seems the avatar sits in front of the user. It needs to be placed around them so that when users turn their heads sideways, you can not see their head, but the side of the avatar’s head.
  3. It could not see my mouth moving unless I tilted my head backwards so as to get more light on my face (I have a fluorescent light above me so my room aint dark).

Fix8 is based in Sherman Oaks, CA and is a division of Mobinex, Inc.

More about fix8

Fix8 is a unique interactive communication application that allows people to customize their on-screen virtual appearance in real-time using avatar technology and creative accessories. Fix8 integrates human expression analysis and rendering capabilities, avatar/facial sculpting and animation technology, voice manipulation, and one click 3D face maker design capabilities in one package. Fix8 can create live streaming enhanced video to integrate into IM or other broadcast (such as TV) experiences, or record still images and fully-rendered videos.

While certain elements of the Fix8 product line can be found in the competitive landscape, the core technology to provide real-time animation in a consumer oriented application is unduplicated. Further, the specific feature set(s) offered in the Fix8 product line is unique and disruptive.

Fix8 differentiates itself from the competitive set by offering a unique easy to use application that incorporates avatar technology, 2D/3D facial accessories and flash animated accessories, voice masking and altering, and the ability to for a user to create their own individual set of avatars through use of photorealistic images all married with Fix8’s own IP that analyzes and renders human expressions so that the rich animated creations match the movements of the user in real-time for use in video and streaming.

Fix8 has coined the term user-generated reality to define the broad spectrum of creative self-expressive user-generated animation in real-time. Fix8 enhances the entertainment and enriches the communication experience of its clients’ customers by breathing new life into digital channels across multiple mediums.

The team

Linh Duy Tang, but you can call him “TANG”
President / CEO
 
Mr. Linh Tang is a senior executive (but he is really quite young at heart) with a demonstrated record of accomplishment in worldwide business operations. Tang’s vast experience in technology, operations and management make him the ideal fit to lead Fix8 on its mission to revolutionize virtual communication and expression. Tang is responsible for more than just Fix8’s vision and strategy; he is responsible for driving the “Innovation Bus” all the way to the user. A veteran of several startups with 15+ years in IT and consumer goods industries, Tang is – quite simply – THE MAN.
 
Chuning Ho, our very own voice of reason
Vice President of Operations
 
Ms. Chuning Ho brings over 17 years experience in application development, project deployment, executive management and business operations to the Fix8 team. As a founding member of the management team from initial start-up to present, Chuning knows where all the bodies are buried. Her main responsibilities include (but are not limited to) resources management, process standardization and communication strategy establishment and implementation. Chuning also manages to keep the entire team in check almost effortlessly. She is Fix8’s own secret weapon.
 
Scott Freeman, he sees dead people
Vice President of Finance
 
Mr. Scott Freeman brings extensive financial management experience to the Fix8 team. Scott did hard time with Deloitte & Touche, working in their entrepreneurial division, before he made his move to California Suncare, Inc. where he was instrumental in growing the company from $3M in revenue to $45M and assisted in its sale to a private equity firm for approximately $88M. Long story short, Scott knows how to make money and can see a deal well over a mile away. With a wife that is a successful interior designer, a daughter who is an artistic savant and a son who is a terror on the soccer field, Scott doesn’t have to work but he believes in Fix8 and, honestly, someone needs to keep Jake and Dinesh in check.
 
Dinesh Bhatia, proving that there are nice guys in sales
Vice President of Sales
 
Mr. Dinesh Bhatia brings direct experience in the wireless, television, Internet and software industries to the Fix8 team. Dinesh is a pretty smart guy; he graduated from Washington University with double degrees in Electrical Engineering and Computer Science and a Master’s Degree in Biomedical Engineering from Imperial College, London. Dinesh loves the disruptive creation and generation process of the software development community and is responsible for building strong partnerships to enhance the Fix8 user experience through added competitions and connectivity. In his spare time, he loves fiddling around with computers, gadgets, his saxophone and keyboards, photography, astronomy and spending time with his family. Dinesh also loves long walks on the beach – but this is not a personals ad – so let’s stop here.
 
Raphael Ko, it is rumored that he has brothers named Donatello, Leonardo and Michelangelo
Vice President of Engineering
 
Mr. Raphael Ko brings extensive experience in software development and information technologies management to the Fix8 team. Directly responsible for Fix8’s engineering activities, Raphael has drawn upon his 10+ years in software development as well as managing key projects in wireless applications, ERP, and IT services. Raphael’s love of photography and digital imagery fit right in with the Fix8 mission. Not much is known about Raphael’s past, in fact we can’t exactly put our finger on his start date either. One day he just suddenly appeared, fully formed and working (in all honesty) harder than the rest of us, so we let him stay. We still don’t know how he has the time to do what he does and still read all those issues of “Conan the Future Boy;” but some questions are best left unanswered.
 
Hao Zhou, Kevin Bacon stole the idea of six degrees from this guy
Vice President for Sales – China
 
Hao Zhou is a senior executive with an outstanding background in digital television and the new media industry. Shortly after learning how to crawl, Hao began his career as a system engineer, and quickly his work history grew to include sales and promotions of CATV, digital TV, broadband business, indoor and lift media and wireless value-add business. You know that guy who can do anything and has somehow managed to have successfully had every job available in the time it took you to pour your morning coffee? Yeah, well, Hao’s that guy. Hao’s ambition is what has brought him to the Fix8 team with one simple mission: Make Fix8 the next star shining over greater China. If anyone can do it, it’s certainly Hao. He’s our very own Hercules.

About Vickers Venture Partners.

The Vickers Financial Group is the venture capital arm of the Vickers Capital Group, an Asian investment house investing in alternative assets. Vickers Venture Partners is a leading venture capital firm focusing on early stage, high growth companies focused on Asian markets. The firm’s competency stems from the fact that its decision-makers have been part of and hence well-acquainted with the pulse of diverse domains.
 
The market

From what we were able to dig up it seems the space is extremely crowded. The competition include weblin.com, Meez.com, SecondLife, mypictr, gizmoz.com, miieditor, simpsonsmovie.com, gickr.com, Gravatar.com, imvu.com, Zwinky, digibody.com, Faketown, doppelme, SitePal, gaiaonline, imbee, myrl.com, Kaneva, blogoscoped.com, mojikan, frenzoo.com, clickbeurs.nl, Mr. Picassohead, whyrobbierocks.com, weeworld, and voki.com, among others.

More

http://www.sktelecom.com/
http://fix8.com/
http://www.vickersfinancial.com/
http://www.pehub.com/article/articledetail.php?articlepostid=11271
http://www.techcrunch.com/2008/04/03/fix8-takes-2-million-series-a/
http://web2innovations.com/money/2008/02/17/fix8-has-taken-3m-for-animated-avatars-for-your-cam/
http://mashable.com/2007/10/15/fix8-funded/
http://www.techcrunch.com/2007/10/15/fix8-raises-3-million/
http://mashable.com/2007/09/12/avatars/
http://mashable.com/2007/06/26/fix8-stickam/
http://webmaster.stickam.com/2007/06/fix8_partners_with_stickam_to.html
http://www.camfess.com/contents.php?cid=16
http://www.techcrunch.com/2007/05/31/fix8-brings-computer-generated-animation-to-the-webcam/

 

Li Ka-shing invests $40M more in Facebook; total funding is now $378M from $338M before

The Hong Kong billionaire Li Ka-shing has reveled in a recent conference call that he raised his stake in the social networking site Facebook with some $40M more. That amount comes on top of his previous commitment of $60M, which brings his total investment in the popular site to $100M. What is his actually equity position in the Facebook, however, remains mystery to date, but considering what Microsoft has bought for their $240M (1.6%) it might turn out that Li Ka-shing’s ownership is perhaps below 1%. For Microsoft it might be quite clear what is the driving force behind such pity deal (locking down some advertising inventory and keeping Facebook away from the rival Google), but what the benefits for the Honk Kong billionaire are is very unclear for us. May be everything comes down to a potential IPO, which as we understand is not going to happen any sooner than 2010, despite some recent rumors for a possible IPO in as early as 2009. We think there is no other viable exit for your investors than going public if you have already taken more than $300M funding money off little to no steady revenues. There was no word on today’s Facebook pre-money valuation.

Here is what Li, who is chairman of telecom company Hutchinson Whampoa, told reporters on his company’s conference call:

“Facebook is doing very well and we could have some synergy between the 3G services of Hutchison and Facebook, so the customers could use Facebook on mobile phones.”

The combination of the social network and 3G networks is seen by Stacey Higginbotham from GigaOm as the most logical reason why Li Ka-shing was so eager to increase his stake in Facebook. Facebook users can already access the site on their mobile phones through the Facebook mobile page

Well, this might be the answer of our question from above what are the benefits for the Li Ka-shing in the context of Microsoft’s deal with Facebook.
A little more Facebook history and facts.

Facebook is hugely popular social networking site, second only to MySpace in terms of users. Other popular social networking sites are Bebo and Friendster, the second one tried to acquire Facebook in 2004 for just $10M.

The latest comScore metrics, we have seen, revealed that Facebook is actually havingover 100M unique visitors per month.

Peter Thiel, cofounder of PayPal and managing partner of the Founders Fund was the first angel investor in the company. He invested $500,000 into Facebook in early 2004. Later Accel Partners poured $12.7 million more in funding, at a valuation in the $100 million range.

The next year [2006], Facebook received $25 million in funding from Greylock Partners and Meritech Capital, as well as returning investors Accel Partners and Peter Thiel. The pre-money valuation for this deal was in the $525 million range.

Facebook is reported to have turned deals down from Friendster, Yahoo, Viacom  and the mighty Google a few months ago when Zuckerberg has chosen Microsoft to partner with. Microsoft de-facto has invested $240 million into Facebook for just 1.6 percent of the company in October 2007. This put the company’s valuation at over $15 billion on just $150 million in annual revenues.

Mr. Li Ka-shing is the Chairman of Cheung Kong (Holdings) Limited and Hutchison Whampoa Limited. Cheung Kong (Holdings) Limited is the flagship of the Cheung Kong Group which has business operations in 55 countries around the world and employs about 250,000 staff. In Hong Kong alone, the Group includes eight listed companies with a combined market capitalization of approximately HKD981 billion (31 October 2007). Hutchison Whampoa Limited is a Fortune Global 500 company.

It would be interesting to find out what’s the equity position Mr. Li Ka-shing has secured for his $60M considering what Microsoft has bought for their $240M. 

More

http://www.marketwatch.com/news/story/hong-kong-tycoon-li-raises/story.aspx?guid=%7BE4097AA2-9EA3-4773-9100-456E68EE1C9A%7D
http://www.allfacebook.com/2008/03/facebook-gets-another-40-million/
http://www.techcrunch.com/2008/03/27/hong-kong-billionaire-puts-another-40-million-into-facebook/
http://mashable.com/2008/03/27/facebook-hutchinson-investment/
http://web2innovations.com/money/2007/11/30/hong-kong-billionaire-li-ka-shing-invests-60m-in-facebook-funding-totals-33820m-to-date/
http://gigaom.com/2008/03/27/facebook-soon-to-appear-in-3g/
http://www.facebook.com/apps/application.php?id=2915120374&b
http://gigaom.com/2008/03/13/lets-justify-facebooks-300-per-user-valuation/
http://www.crunchbase.com/company/facebook
http://www.techcrunch.com/2007/11/30/another-60-million-for-facebook/
http://kara.allthingsd.com/20071130/facebook-nabs-60-million-investment-from-li-ka-shing/
http://www.hutchison-whampoa.com/eng/about/chairman/chairman.htm

Wisdom of the crowds principle effectively applied to predict markets, events

While doing our daily research on the web 2.0 deals we came across a very interesting start up that deserves to make our web 2.0 innovations list – Predictify.

Essentially it is a very interesting and pretty innovative idea of using the wisdom of the crowds and the collective intelligence principles to predict in behalf of advertisers and market researchers. It is community-driven prediction market that pays and rewards users for their accuracy, which guarantees user engagement at higher level.

We’ve found out the site has launched just this last October and since then it launched its platform where other companies can create co-branded prediction centers. Freakanomics was Predictify’s launch partner for the platform, where readers can predict outcomes discussed on the Freakonomics blog.

The company has announced today it has closed $4.3 million round of funding, from Sierra Ventures and Sherpalo Ventures. Mark Fernandes, a managing director at Sierra Ventures, will be joining the Predictify board. Predictify has taken so far only an angel round of funding a year ago, but the amount is not publicly disclosed.

More about Predictify

Predictify is a prediction platform where users can predict the future and build a reputation based on their accuracy, and marketers can post questions to collect actionable, forward-looking data “from the crowd”.

Predictors
Predictify provides a simple, fun way to predict the future. You can research, discuss and predict what will happen, build a reputation based on your accuracy, and even get paid real money when you’re right (tell me more). Best of all, it’s free – no points or bets required.

Advertisers
Predictify is an effective way to create interactive advertisements by posting a question related to your product or service. Users’ incentive to be accurate leads to a high level of engagement in your marketing message. The resulting data set, which includes demographic information, provides insight into the preferences of existing and potential customer segments.

Market Researchers
Predictify uses advanced statistical methods to identify experts among their users based on past predictive accuracy, and combines this with demographic information to provide unique, crowd-based insight. You can tap into this user base to collect a large sample of predictions about future events, trends, and market data. Predictify’s unique system captures the full distribution of beliefs, not just the average, and provides easy-to-use graphical tools to analyze the results.

Here is quickly how it works

Predictify is a prediction platform where users can predict the future and build a reputation based on their accuracy, and marketers can post questions to collect actionable, forward-looking data “from the crowd”.

Submit a Prediction

  • Browse or search for questions that interest you
  • Predict the outcome – it’s free, no points or bets required
  • Build a reputation based on the accuracy of your predictions
  • Earn real money – payouts increase as you achieve higher levels of expertise

Click here to predict!

Ask a Question

  • Compose a question about the future that will have an objective, verifiable outcome
  • Submit your question for approval – it’s free (or select Premium to get demographics for $1 per response)
  • View the interactive, graphical results as users submit predictions (example)

Click here to post a question!

More

http://www.predictify.com/
http://blog.predictify.com/
http://mashable.com/2008/03/25/predictify-funding/
http://mashable.com/2008/03/02/predictify-freakanomics/
http://marketplace.publicradio.org/display/web/2008/02/05/predictify/
http://www.infoworld.com/article/07/12/10/50FE-crowdsourcing_1.html
http://freakonomics.blogs.nytimes.com/2007/10/25/a-new-prediction-market-for-the-masses/
http://dilbertblog.typepad.com/the_dilbert_blog/2007/10/hiring-republic.html
http://www.webware.com/8301-1_109-9794602-2.html
http://mashable.com/2007/10/08/predictify-live/

Taylor Nelson Sofres buys Compete.com

Compete, which started out in 2000 as an Idealab company, raised over $40M in funding to date, incurred $4.5M losses for the last year off $15M revenues and had hard time lately to compete with Quantcast has its exit day today. Compete has been acquired by the market research leader Taylor Nelson Sofres (TNS) for $75M plus another earn-out $75M through out 2008-2010 if certain conditions are met. Total acquisition price could possibly reach $150M. Compete.com calls that brilliant in their blog, which might be true taking into consideration that they have clearly lost the battle with Quantcast in the free traffic measurement space online. According to Compete’s own stats, it attracts about the same number of U.S. visitors a month as Alexa (727,000 for Compete versus 758,000 for Alexa), but Quantcast is the leader with more than double that (1.9M uniques). The deal and its price tag could also be called brilliant for Compete when compared to the comScore’s current market capitalization – $570M.

Since 2006 Compete tried almost everything on the PR front to gain popularity, create buzz, and increase its service awareness, but it had little to no success at all. In many aspects Compete’s traffic measurement, just like Alexa btw, is way inaccurate and incomplete when compared to quantified sites at Quantcast and perhaps TNS decided to buy the third or forth in the market due to a possible higher price Quantcast is currently looking for (or being not for sale) and the current market value comScore has. Both of them have been M&A targets for a while although no public facts are available as to whether TNS has been one of the suitors for either of the companies mentioned. By comparison, in 2007 Experian Group Ltd. paid $240 million to acquire another leading Web intelligence company, Hitwise Pty Ltd., which made money and had annual revenues of roughly $40 million. In other words, at a price tag of $75 million TNS is offering roughly 5 times Compete’s revenue, and it will pay 10 times sales if the target reaches the financial milestones stipulated under the earn-out clause. Experian paid a multiple of only 6 times sales for Hitwise.

One of the company’s latest developments was the partnership they made with Ask.com to provide compete data for sites on ask.com’s binoculars.

TNS is acquiring Compete primarily from a consortium of private venture capital companies. Compete is said it will continue to operate as a stand-alone company, but it has already identified stellar new product opportunities to develop with the TNS media intelligence and custom research teams.   

In additional to Idealab, Compete’s other investors include Charles River Ventures, Commonwealth Capital Partners, North Hill Ventures, Split Rock Partners, and William Blair Capital Partners. Total funding to date is $43M. Their investors were undoubtedly probably hoping for a much better outcome, but a solid double is better than nothing.

This acquisition brings together the global market information strength of TNS with Compete’s digital intelligence products and capabilities.  Digital intelligence combines data on user behavior and interactions on the internet with demographic and competitive information, to help businesses and marketers make critical, strategic and tactical business decisions. 

Through this acquisition, TNS will provide clients with new and valuable insights into how online consumer behavior affects purchasing decisions, enabling clients to improve their marketing effectiveness, both online and offline. Together, TNS and Compete will provide consumer, brand and media research and measurement services that will help businesses succeed in the digital marketing environment.

Compete conducts continuous analysis of internet clickstream data from close to 2 million people, weighted to match the US online population.  This information is used to measure how consumers consider, engage with and buy a client’s products or services online, relative to those of its competition.  This ability to analyze online behavior before a purchase is made enables Compete to advise clients on how to target online communications to individual consumers, to influence both their online and offline purchasing behavior.

As internet usage and e-retailing increases, clickstream data is expected to become a significant information source around which market research and analysis is based.  Recent estimates suggest that the US market in which Compete operates will grow from $325 million in 2007 to $500 million in 2009.  (Morgan Stanley research and Jupiter Research estimates of on-demand US web analytics market)

TNS will apply Compete’s ability to profile, measure and segment the online behavior of consumers to its own 6th dimension access panels.  This will start in the US, where TNS has a fully managed access panel of more than one million people and will then be extended across its network.  This will give TNS an unmatched ability to provide insight based on online and offline behavior and on consumer attitudes. 

David Lowden, Chief Executive of TNS, said: “This acquisition is an important move for TNS that builds on our ability to help clients understand consumer behavior in the new and highly complex digital world.  Compete has built a world-class digital intelligence capability that delivers multiple perspectives on how consumers engage with brands online. Its strength lies in its ability to provide competitive analysis of individuals’ online behavior, a rapidly growing section of the market that has enormous potential. 

“TNS will enhance this offering by putting it together with the understanding of consumer attitudes and behavior that we gain from our access panels.  We will use our network to offer this powerful combination to clients across the globe.  In the longer term, we will look at the opportunities to add further value by using our Worldpanel, Retail & Shopper and audience measurement capabilities to integrate data on purchasing and viewing behavior with internet search and shopping behavior.  We believe this will allow TNS to develop new syndicated and custom products, unique in our industry.”

Donald McLagan, Chairman and CEO of Compete, said: “We welcome this exciting opportunity to join one of the world’s most respected market information and insight groups.  Whether consumers buy online, or simply research online as they reach a purchasing decision, the marketing platforms they encounter bring major opportunities for brands.  Companies need to understand how the internet affects consumer preferences, attitudes, knowledge, understanding and motivation.  They also need help in maximizing the new online sales and marketing opportunities to target their prospective customers more effectively.  For the first time, we have given clients the opportunity to measure their effectiveness across all their marketing programmes.  This ability will be greatly enhanced when we are part of TNS.”

More about Compete

Compete, Inc. is a provider of analytics, research, and business intelligence. Compete gathers web behavior information from users who sign up at their site, then analyzes these data to create customized reports for client companies. Compete also offers a free web analytics tool for the general public at Compete.com.

Compete was founded in 2000 and is based in Boston, Massachusetts.  It analyses internet clickstream information received from its own panel and from internet service providers.  Compete uses proprietary data methodologies to normalize this data, making it representative of the entire US online market place. It specializes in the telecoms, media, automotive, financial services and travel industries, with a sector-based organization mirroring that of TNS.  It also has expertise in the field of online search evaluation.  Current management will remain with the company.  Clients, who include some of the world’s best-known brands, are engaged on a subscription basis, with analysis provided weekly or monthly.  The company has won a range of awards, including the Deloitte Technology Fast 50 two years in a row, the US Advertising Research Foundation David Ogilvy Award and the AdAge Power 150. Bill Gross is the company’s founder who had previously helped create the search engine that became Overture and later was acquired by Yahoo!.  

Compete has several competitors in enterprise-level web analytics and market research, including Nielsen/NetRatings, Hitwise, comScore, Amazon’s Alexa and Quantcast.

More about TNS

TNS is the third-largest market research firm across the globe (Honomichl)
TNS is the biggest provider of online market information in the world
TNS does more custom market research than any other firm worldwide
TNS Media Intelligence is the top-ranked ad spend measurement company
The TNS 6th Dimension access panels reach over two million consumers globally

The 1960s saw the creation of five of the market research companies that are at the heart of the Taylor Nelson Sofres (TNS) group today:

  • Intersearch in the USA in1960
  • AGB in UK in 1962
  • Sofres in France in 1963
  • Frank Small Associates in Australia in 1964
  • Taylor Nelson in UK in 1965
  • But the very first seeds had been sown in the USA in 1946, when NFO (National Family Opinion) opened for business.

In the 60s, 70s and 80s, all these companies grew significantly, introducing a wide and increasingly sophisticated range of research solutions and using the latest technological developments. And as they and their clients grew, they started to create their international networks:

Sofres opened offices in six European countries, the US and 12 countries in Asia Pacific
 
Taylor Nelson and AGB each developed a UK network of offices and began to acquire businesses in Europe

NFO grew to become the by-word for managed access panels in the USA
It soon became clear that brands were becoming global, and brand owners would need global market information partners.

In the 1990s, the market research industry started to consolidate, as major clients demanded an increasingly international service.

NFO made a series of acquisitions around the world and the companies that now form TNS responded to the changing market by joining forces, enabling them to deliver consistently high quality services to customers around the world.

  • Sofres acquired Secodip (1992)
  • Taylor Nelson joined with AGB  (1992)
  • Sofres combined with FSA (1995)
  • Sofres acquired Intersearch (1997)
  • Taylor Nelson AGB and Sofres merged (1997)
  • TNS acquired NFO (2003)

More
 
http://www.tnsglobal.com/
http://www.tnsglobal.com/investor-relations/news/news-E4DA1FFE67594CB6A72742C5A415BD1B.aspx
http://blog.compete.com/2008/03/03/tns-acquires-compete/
http://www.compete.com/
http://www.competeinc.com/
http://blog.compete.com/
http://www.techcrunch.com/2008/03/03/tns-buys-compete-for-75-million/
http://www.crunchbase.com/company/compete
http://www.quantcast.com/
http://www.alexa.com/
http://www.comscore.com/
http://www.thealarmclock.com/mt/archives/2007/08/compete_ups_ant.html
http://www.competeinc.com/news_events/pressReleases/114/
http://blog.compete.com/2008/02/11/press-release-compete-celebrates-fifth-straight-year-of-record-growth/
http://www.paidcontent.org/entry/419-compete-bought-by-tns-for-up-to-150-million/
http://www.centernetworks.com/tns-acquires-compete
http://www.thealarmclock.com/mt/archives/2007/08/compete_ups_ant.html
http://www.centernetworks.com/ask-partners-with-compete-binoculars
http://www.techconfidential.com/money-out/blog/money-out/british-market-research-firm-t.php
http://blog.arhg.net/2008/03/competecom-bought-for-75m.html
http://mashable.com/2008/03/03/compete-acquired/
http://searchengineland.com/080303-105153.php

Microsoft’s stock has fallen 13% since its offer for Yahoo

We have read tons of stories and points of views about the potential deal between Microsoft and Yahoo over the past weeks. We guess all people did. Everything seems already being said about the deal. Yet, something interesting popped up in the news today. It turns out that Microsoft is the big loser from the situation with Yahoo’s acquisition because it has lost 13% of its market capitalization since it has announced its bid to buy Yahoo almost a month ago.

After Microsoft’s stock has fallen 13% since its offer for Yahoo, the Microsoft’s offer price seems to have also been reduced to $29 – $41.7B as of today. Yahoo shares, by contrast, closed at $29.66 on the NASDAQ on Friday, indicating that investors’ expectations are for Microsoft to raise its bid.

While the software giant’s founder and chairman has taken a back seat to CEO Steve Ballmer in the Yahoo bid, Gates wasted no time in tempering expectations if Microsoft failed in its effort to buy Yahoo.

Chairman Bill Gates said yesterday that they are not planning to raise the bid for Yahoo and called the current offer “very fair.” Instead Bill Gates said they are having plans to invest heavily — and they said they can afford it — in anything but web search to compete against Google, with or without Yahoo. Just like what we have always been thinking — it is all about Microsoft vs. Google and Yahoo was only an instrument — Gates’s statement reconfirms it: “Google is the only company with “critical mass” in Web search.”

Yet, he admits that they’d get there faster if the great engineering work that Yahoo has done and the great engineers there were part of the common effort

“There is nothing new in terms of the process. We’ve sent our letter and we’ve reinforced that we consider that it’s a very fair offer,” said Gates, who remains the public face of Microsoft, even though he plans to switch to a part-time role at the company in June to focus on his philanthropic work.

What will happen with the stock prices of both companies if a deal does not go thru? We think both companies will get punished by the public market and have their stock prices reduced. Yahoo’s hit is expected to be stronger. 

More

http://finance.yahoo.com/q?s=MSFT
http://finance.yahoo.com/q?s=yhoo
http://uk.reuters.com/article/technology-media-telco-SP/idUKN1819990520080219
http://news.zdnet.com/2100-9588_22-6231021.html
http://mashable.com/2008/02/18/bill-gates-were-not-raising-the-yahoo-bid/
http://web2innovations.com/money/2008/02/01/yes-we-were-right-yahoo-was-seriously-undervalued-microsoft-offers-446b-for-the-company-a-62-premium-over-their-value-from-yesterday/
http://web2innovations.com/money/2008/02/02/is-google-going-to-be-the-winner-from-the-microsoft-yahoo-deal/
http://web2innovations.com/money/2008/02/04/google%e2%80%99s-chief-legal-officer-vs-microsoft%e2%80%99s-general-counsel/
http://web2innovations.com/money/2008/02/08/one-after-another-the-potential-competitive-bidders-for-yahoo-drop-off-is-yahoo-going-to-surrender-to-microsoft/
http://web2innovations.com/money/2008/02/09/end-of-speculations-yahoo-rejected-microsoft%e2%80%99s-offer/
http://web2innovations.com/money/2008/02/11/yahoo%e2%80%99s-official-response-to-microsoft%e2%80%99s-offer-no/
http://web2innovations.com/money/2008/02/12/and-here-is-what-microsoft-has-to-tell-yahoo/
http://biz.yahoo.com/prnews/080211/aqm241.html
http://finance.yahoo.com/q?d=t&s=msft
http://money.cnn.com/2008/02/09/magazines/fortune/yahoo_rejects_bid_report.fortune/?postversion=2008020914
http://www.ft.com/cms/s/0/fffc1006-d5e8-11dc-bbb2-0000779fd2ac.html?nclick_check=1
http://blogs.barrons.com/techtraderdaily/2008/02/05/yahoo-the-five-scenario-analysis/
http://www.techcrunch.com/2008/02/08/yahoo-board-to-determine-fate-of-company-today/
http://www.techmeme.com/080201/p78#a080201p78
http://www.mercurynews.com/ci_8149194
http://www.businessweek.com/technology/content/feb2008/tc2008021_885192.htm?chan=rss_topStories_ssi_5
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/02/AR2008020200568.html
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/02/MN8OUQGNB.DTL&type=tech
http://kara.allthingsd.com/20080201/microsoft-to-yahoo-two-days-to-respond-or-else/
http://www.alleyinsider.com/2008/02/hold-everything-we-may-get-another-yhoo-bidder.html
http://www.techcrunch.com/2008/02/01/what-would-a-combined-microsoft-yahoo-look-like/
http://www.techcrunch.com/2008/02/01/ballmers-internal-e-mail-to-the-troops-explaining-the-yahoo-acquisition/
http://www.techcrunch.com/2008/02/02/news-corp-scrambles-to-bid-for-yahoo/
http://www.alleyinsider.com/2008/02/microsoft-yahoo-combined-financials.html
http://www.informationweek.com/news/showArticle.jhtml?articleID=206107168
http://mashable.com/2008/02/10/yahoo-aol-merger/
http://www.techcrunch.com/2008/02/10/wait-yahoo-and-aol-i-was-looking-forward-to-something-moreintelligent/
http://www.techcrunch.com/2008/02/09/microsofts-80-billion-and-growing-yahoo-headache/
http://web2innovations.com/money/2008/02/09/end-of-speculations-yahoo-rejected-microsoft%e2%80%99s-offer

fix8 has taken $3M for animated avatars for your cam

A couple of months ago the tiny start up company fix8 has raised $3 million in a series A round of funding from Vickers Venture Group, which is a Singapore-based private equity firm. Fix8 is a web cam avatar community that lets you create animated avatars with your web cam by reading your expressions and gestures. When we took a look into their web site we have discovered tons of tools that you can play around with, including fix8’s wide selection of pre-made avatars and other accessories like voice manipulation, graphics and editing tools. Those clips can easily be embedded in your website or social networking profile, or use it for your instant messaging client like AOL, MSN, Skype or Yahoo Messenger.

Fix8 has recently teamed up with a couple of other companies like Pringo and Stickam. fix8 has also expanded its signature technology through a key partnership with Shanghai Media Group (SMG) offering Auditions(TV) to create a new world of Interactive TV where audiences can submit fix8 content for insertion into LIVE or taped programming. fix8 will further bridge the gap between communication devices with the launch of fix8 MOBILE.

Fix8 has also teamed up with Camfess, the premier site for online confessions. The ability to choose your own level of “incremental anonymity” and “confess” without anyone knowing who you are makes Camfess and Fix8 the “perfect fit.”

“Our investment in fix8 is in response to ever-increasing consumer demand for User Generated Content from instant messaging to video sharing and interactive TV,” said Managing Director, Jeffrey Chi, Vickers Venture Partners. “fix8 is well-positioned to lead virtual communications for UGC, and we look forward to supporting their expansion.”

In-Stat estimates global UGC revenues will grow from $80 million in 2006 to $1.6 billion by 2011. IDC estimates enterprise IM will grow from 40 million users in 2007 to more than 140 million by 2009, making it the fastest growing communications medium of all time.

“From camera-to-camera chats to webcasting, video blogging to interactive TV — fix8 allows consumers to unlock their creative desire for expression through a new world of unique, rich animated content,” said CEO, Linh Duy Tang. “We are pleased to be aligned with Vickers, which understands the significance and monetization of User-Generated Content, a phenomena that has broad international appeal.”

While we kept on researching around for more information we came across the following user review on the service. Gave it a try for fun. The idea is great but they have a way to go.

  1. It does not work if you have glasses on, and some people’s eyes do not work with them off.
  2. I did not play around long enough to have my body in the picture also, but from the image above it seems the avatar sits in front of the user. It needs to be placed around them so that when users turn their heads sideways, you can not see their head, but the side of the avatar’s head.
  3. It could not see my mouth moving unless I tilted my head backwards so as to get more light on my face (I have a fluorescent light above me so my room aint dark).

Fix8 is based in Sherman Oaks, CA and is a division of Mobinex, Inc.

More about fix8

Fix8 is a unique interactive communication application that allows people to customize their on-screen virtual appearance in real-time using avatar technology and creative accessories. Fix8 integrates human expression analysis and rendering capabilities, avatar/facial sculpting and animation technology, voice manipulation, and one click 3D face maker design capabilities in one package. Fix8 can create live streaming enhanced video to integrate into IM or other broadcast (such as TV) experiences, or record still images and fully-rendered videos.

While certain elements of the Fix8 product line can be found in the competitive landscape, the core technology to provide real-time animation in a consumer oriented application is unduplicated. Further, the specific feature set(s) offered in the Fix8 product line is unique and disruptive.

Fix8 differentiates itself from the competitive set by offering a unique easy to use application that incorporates avatar technology, 2D/3D facial accessories and flash animated accessories, voice masking and altering, and the ability to for a user to create their own individual set of avatars through use of photorealistic images all married with Fix8’s own IP that analyzes and renders human expressions so that the rich animated creations match the movements of the user in real-time for use in video and streaming.

Fix8 has coined the term user-generated reality to define the broad spectrum of creative self-expressive user-generated animation in real-time. Fix8 enhances the entertainment and enriches the communication experience of its clients’ customers by breathing new life into digital channels across multiple mediums.

The team

Linh Duy Tang, but you can call him “TANG”
President / CEO
 
Mr. Linh Tang is a senior executive (but he is really quite young at heart) with a demonstrated record of accomplishment in worldwide business operations. Tang’s vast experience in technology, operations and management make him the ideal fit to lead Fix8 on its mission to revolutionize virtual communication and expression. Tang is responsible for more than just Fix8’s vision and strategy; he is responsible for driving the “Innovation Bus” all the way to the user. A veteran of several startups with 15+ years in IT and consumer goods industries, Tang is – quite simply – THE MAN.
 
Chuning Ho, our very own voice of reason
Vice President of Operations
 
Ms. Chuning Ho brings over 17 years experience in application development, project deployment, executive management and business operations to the Fix8 team. As a founding member of the management team from initial start-up to present, Chuning knows where all the bodies are buried. Her main responsibilities include (but are not limited to) resources management, process standardization and communication strategy establishment and implementation. Chuning also manages to keep the entire team in check almost effortlessly. She is Fix8’s own secret weapon.
 
Scott Freeman, he sees dead people
Vice President of Finance
 
Mr. Scott Freeman brings extensive financial management experience to the Fix8 team. Scott did hard time with Deloitte & Touche, working in their entrepreneurial division, before he made his move to California Suncare, Inc. where he was instrumental in growing the company from $3M in revenue to $45M and assisted in its sale to a private equity firm for approximately $88M. Long story short, Scott knows how to make money and can see a deal well over a mile away. With a wife that is a successful interior designer, a daughter who is an artistic savant and a son who is a terror on the soccer field, Scott doesn’t have to work but he believes in Fix8 and, honestly, someone needs to keep Jake and Dinesh in check.
 
Dinesh Bhatia, proving that there are nice guys in sales
Vice President of Sales
 
Mr. Dinesh Bhatia brings direct experience in the wireless, television, Internet and software industries to the Fix8 team. Dinesh is a pretty smart guy; he graduated from Washington University with double degrees in Electrical Engineering and Computer Science and a Master’s Degree in Biomedical Engineering from Imperial College, London. Dinesh loves the disruptive creation and generation process of the software development community and is responsible for building strong partnerships to enhance the Fix8 user experience through added competitions and connectivity. In his spare time, he loves fiddling around with computers, gadgets, his saxophone and keyboards, photography, astronomy and spending time with his family. Dinesh also loves long walks on the beach – but this is not a personals ad – so let’s stop here.
 
Raphael Ko, it is rumored that he has brothers named Donatello, Leonardo and Michelangelo
Vice President of Engineering
 
Mr. Raphael Ko brings extensive experience in software development and information technologies management to the Fix8 team. Directly responsible for Fix8’s engineering activities, Raphael has drawn upon his 10+ years in software development as well as managing key projects in wireless applications, ERP, and IT services. Raphael’s love of photography and digital imagery fit right in with the Fix8 mission. Not much is known about Raphael’s past, in fact we can’t exactly put our finger on his start date either. One day he just suddenly appeared, fully formed and working (in all honesty) harder than the rest of us, so we let him stay. We still don’t know how he has the time to do what he does and still read all those issues of “Conan the Future Boy;” but some questions are best left unanswered.
 
Hao Zhou, Kevin Bacon stole the idea of six degrees from this guy
Vice President for Sales – China
 
Hao Zhou is a senior executive with an outstanding background in digital television and the new media industry. Shortly after learning how to crawl, Hao began his career as a system engineer, and quickly his work history grew to include sales and promotions of CATV, digital TV, broadband business, indoor and lift media and wireless value-add business. You know that guy who can do anything and has somehow managed to have successfully had every job available in the time it took you to pour your morning coffee? Yeah, well, Hao’s that guy. Hao’s ambition is what has brought him to the Fix8 team with one simple mission: Make Fix8 the next star shining over greater China. If anyone can do it, it’s certainly Hao. He’s our very own Hercules.

About Vickers Venture Partners.

The Vickers Financial Group is the venture capital arm of the Vickers Capital Group, an Asian investment house investing in alternative assets. Vickers Venture Partners is a leading venture capital firm focusing on early stage, high growth companies focused on Asian markets. The firm’s competency stems from the fact that its decision-makers have been part of and hence well-acquainted with the pulse of diverse domains.
 
The market

From what we were able to dig up it seems the space is extremely crowded. The competition include weblin.com, Meez.com, SecondLife, mypictr, gizmoz.com, miieditor, simpsonsmovie.com, gickr.com, Gravatar.com, imvu.com, Zwinky, digibody.com, Faketown, doppelme, SitePal, gaiaonline, imbee, myrl.com, Kaneva, blogoscoped.com, mojikan, frenzoo.com, clickbeurs.nl, Mr. Picassohead, whyrobbierocks.com, weeworld, and voki.com, among others.

More

http://fix8.com/
http://www.vickersfinancial.com/
http://mashable.com/2007/10/15/fix8-funded/
http://www.techcrunch.com/2007/10/15/fix8-raises-3-million/
http://mashable.com/2007/09/12/avatars/
http://mashable.com/2007/06/26/fix8-stickam/
http://webmaster.stickam.com/2007/06/fix8_partners_with_stickam_to.html
http://www.camfess.com/contents.php?cid=16
http://www.techcrunch.com/2007/05/31/fix8-brings-computer-generated-animation-to-the-webcam/

And here is what Microsoft has to tell Yahoo!

The saga continues. Following the firm “NO” of Yahoo as of yesterday, Microsoft has put up today an official press release responding to the Yahoo!’s NO with “Reiterates Full and Fair Proposal for Microsoft-Yahoo! Combination”

REDMOND, Wash., Feb. 11 — Microsoft Corp. (Nasdaq: MSFT) today issued the following statement in response to the announcement by Yahoo! Inc. (Nasdaq: YHOO) that its Board of Directors has rejected Microsoft’s previously announced proposal to acquire Yahoo!:

It is unfortunate that Yahoo! has not embraced our full and fair proposal to combine our companies. Based on conversations with stakeholders of both companies, we are confident that moving forward promptly to consummate a transaction is in the best interests of all parties. We are offering shareholders superior value and the opportunity to participate in the upside of the combined company. The combination also offers an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market. A Microsoft-Yahoo! combination will create a more effective company that would provide greater value and service to our customers. Furthermore, the combination will create a more competitive marketplace by establishing a    compelling number two competitor for Internet search and online advertising. The Yahoo! response does not change our belief in the strategic and financial merits of our proposal. As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal.

On February 1, 2008, Microsoft announced a proposal to acquire all the outstanding shares of Yahoo! common stock for per share consideration of $31 representing a total equity value of approximately $44.6 billion and a 62 percent premium above the closing price of Yahoo! common stock based on the closing prices of the stocks of both companies on Jan. 31, 2008, the last day of trading prior to Microsoft’s announcement. Microsoft’s proposal would allow the Yahoo! shareholders to elect to receive cash or a fixed number of shares of Microsoft common stock, with the total consideration payable to Yahoo! shareholders consisting of one-half cash and one-half Microsoft common stock.

About Microsoft

Founded in 1975, Microsoft (Nasdaq: MSFT) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This material is not a substitute for the prospectus/proxy statement Microsoft Corporation would file with the SEC if an agreement between Microsoft Corporation and Yahoo! Inc. is reached or any other documents which Microsoft Corporation may file with the SEC and send to Yahoo! shareholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF YAHOO! INC. ARE URGED TO READ ANY SUCH DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Investors and security holders will be able to obtain free copies of any documents filed with the SEC by Microsoft Corporation through the web site maintained by the SEC. Free copies of any such documents can also be obtained by directing a request to Investor Relations Department, Microsoft Corporation, One Microsoft Way, Redmond, Washington 98052-6399.

Microsoft Corporation and its directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Microsoft Corporation’s directors and executive officers is available in its Annual Report on Form 10-K for the year ended June 30, 2007, which was filed with the SEC on August 8, 2007, and its proxy statement for its 2007 annual meeting of shareholders, which was filed with the SEC on September 29, 2007. Other information regarding the participants in a proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in any proxy statement filed in connection with the proposed transaction.

Statements in this release that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as Microsoft Corporation’s ability to achieve the synergies and value creation contemplated by the proposed transaction, Microsoft Corporation’s ability to promptly and effectively integrate the businesses of Yahoo! Inc. and Microsoft Corporation, the timing to consummate the proposed transaction and any necessary actions to obtain required regulatory approvals, and the diversion of management time on transaction-related issues. For further information regarding risks and uncertainties associated with Microsoft Corporation’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft Corporation’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft Corporation’s Investor Relations department at (800) 285-7772 or at Microsoft Corporation’s website at http://www.microsoft.com/msft.

All information in this communication is as of the date hereof. Microsoft Corporation undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

While reading over different blogs and news stories we came across an interesting view.

Some experts do not accept the fact that people think Yahoo has little to no options left but to accept Microsoft’s offer. The first group says it is not true – Yahoo is having plenty of options to pursue.

It seems like the most obvious “option” would be for Yahoo to ship great products and radically improve the experience of its customers — this is essentially the process the executive team was busy with before this unsolicited bid came on the scene.

While it may be hard for some to imagine that Yahoo would suddenly get its groove back, Apple fought back from a much worse position (remember $6/share?). For all the posturing on both sides, the real underlying question is which ownership configuration would create the most value for customers and communities on a long term run. It would be tragic for a myopic push for short-term shareholder value (and/or acquisition price) to eclipse that more fundamental discussion.
If Yahoo is “massively undervalued,” it’s because its board believes that an independent company has much more long term potential than a combined company would. Microsoft clearly disagrees, and on a financial basis, their “premium” looks impressive, but imagine the world if Microsoft had swooped in and purchased Apple when they were hurting at $6/share… Would that be a better world?

That’s the question we should all be asking — not what sale price is fair.

On the other hand other people claim that Yahoo’s execs had enough time to prove themselves. That said the similarity with Apple ends at comparison of share price. Apple grew their customer base as a result of their actions and that ultimately led to their resurgence. Even though it wasn’t long ago, it was a different time, different place, different environment, and ultimately different people.

If there is a clear monetization plan for products that bring value over what MS is offering, then the Yahoo team should bring that front and center. It sounds as though the Yahoo exec team is saying “just give us more time, and we’ll get it figured out”.

Given how long they’ve been in play, I think the confidence from shareholders in this team to execute on a plan that brings more value than a MS merger is a tough sell right now.

If one takes a look from different perspective if Yahoo! thinks for itself of being “massively undervalued” then it turns out that Yahoo thinks the market was wrong. Some are even going further by asking is Yahoo! arrogant? ‘Massively undervalued’ – Compared to what? Are they that arrogant that they claim that the ‘actual value’ of the company is ANYTHING else than the value assigned by the stock market? It is pretty ballsy to claim that a bid 30% over market value is an under valuation and could basically mean ‘Our company is worth more but we are so bad at making the value visible that no one understands it’

Some of these thoughts were shared with the public on one of the popular tech blogs and credits were to be given if the commentators were not anonymous.

More

http://web2innovations.com/money/2008/02/11/yahoo%e2%80%99s-official-response-to-microsoft%e2%80%99s-offer-no/
http://biz.yahoo.com/prnews/080211/aqm241.html
http://finance.yahoo.com/q?s=yhoo
http://finance.yahoo.com/q?d=t&s=msft
http://money.cnn.com/2008/02/09/magazines/fortune/yahoo_rejects_bid_report.fortune/?postversion=2008020914
http://www.ft.com/cms/s/0/fffc1006-d5e8-11dc-bbb2-0000779fd2ac.html?nclick_check=1
http://blogs.barrons.com/techtraderdaily/2008/02/05/yahoo-the-five-scenario-analysis/
http://www.techcrunch.com/2008/02/08/yahoo-board-to-determine-fate-of-company-today/
http://web2innovations.com/money/2008/02/02/is-google-going-to-be-the-winner-from-the-microsoft-yahoo-deal/
http://web2innovations.com/money/2008/02/04/google%e2%80%99s-chief-legal-officer-vs-microsoft%e2%80%99s-general-counsel/
http://web2innovations.com/money/2008/02/01/yes-we-were-right-yahoo-was-seriously-undervalued-microsoft-offers-446b-for-the-company-a-62-premium-over-their-value-from-yesterday/
http://www.techmeme.com/080201/p78#a080201p78
http://www.mercurynews.com/ci_8149194
http://www.businessweek.com/technology/content/feb2008/tc2008021_885192.htm?chan=rss_topStories_ssi_5
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/02/AR2008020200568.html
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/02/MN8OUQGNB.DTL&type=tech
http://kara.allthingsd.com/20080201/microsoft-to-yahoo-two-days-to-respond-or-else/
http://www.alleyinsider.com/2008/02/hold-everything-we-may-get-another-yhoo-bidder.html
http://www.techcrunch.com/2008/02/01/what-would-a-combined-microsoft-yahoo-look-like/
http://www.techcrunch.com/2008/02/01/ballmers-internal-e-mail-to-the-troops-explaining-the-yahoo-acquisition/
http://www.techcrunch.com/2008/02/02/news-corp-scrambles-to-bid-for-yahoo/
http://www.alleyinsider.com/2008/02/microsoft-yahoo-combined-financials.html
http://web2innovations.com/money/2008/02/08/one-after-another-the-potential-competitive-bidders-for-yahoo-drop-off-is-yahoo-going-to-surrender-to-microsoft/
http://www.informationweek.com/news/showArticle.jhtml?articleID=206107168
http://mashable.com/2008/02/10/yahoo-aol-merger/
http://www.techcrunch.com/2008/02/10/wait-yahoo-and-aol-i-was-looking-forward-to-something-moreintelligent/
http://www.techcrunch.com/2008/02/09/microsofts-80-billion-and-growing-yahoo-headache/
http://web2innovations.com/money/2008/02/09/end-of-speculations-yahoo-rejected-microsoft%e2%80%99s-offer

Yahoo’s official response to Microsoft’s offer: NO!

After we reported the strong NO of Yahoo! to Microsoft over the weekend (Saturday) here is the official response of the Yahoo!’s board of directors.

Yahoo! Board of Directors Says Microsoft’s Proposal Substantially Undervalues Yahoo!

SUNNYVALE, Calif., Feb 11, 2008 — Yahoo! Inc. (Nasdaq:YHOO), a leading global Internet company, today said the Yahoo! Board of Directors has carefully reviewed Microsoft’s unsolicited proposal with Yahoo!’s management team and financial and legal advisors and has unanimously concluded that the proposal is not in the best interests of Yahoo! and our stockholders.

After careful evaluation, the Board believes that Microsoft’s proposal substantially undervalues Yahoo! including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as our substantial unconsolidated investments. The Board of Directors is continually evaluating all of its strategic options in the context of the rapidly evolving industry environment and we remain committed to pursuing initiatives that maximize value for all stockholders.

Goldman, Sachs & Co., Lehman Brothers and Moelis & Company are acting as financial advisors to Yahoo!. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to Yahoo!, and Munger Tolles & Olson LLP is acting as counsel to the outside directors of Yahoo!.

About Yahoo! Inc.

Yahoo! Inc. is a leading global Internet brand and one of the most trafficked Internet destinations worldwide. Yahoo! is focused on powering its communities of users, advertisers, publishers, and developers by creating indispensable experiences built on trust. Yahoo! is headquartered in Sunnyvale, California. For more information, visit pressroom.yahoo.com.

Yahoo! and the Yahoo! logos are trademarks and/or registered trademarks of Yahoo! Inc. All other names are trademarks and/or registered trademarks of their respective owners.

Meanwhile speculations and rumors about potential major merger between Yahoo! and AOL emerged today. This appears to us to be more as incentive for Microsoft to increase its offer for Yahoo! rather than anything real behind. We see little to no synergies between Yahoo! and AOL, aside a few such as instant messaging or the combined eyeballs and the potential deal does not address the major problem of Yahoo!, which is Google.

More

http://money.cnn.com/2008/02/09/magazines/fortune/yahoo_rejects_bid_report.fortune/?postversion=2008020914
http://www.ft.com/cms/s/0/fffc1006-d5e8-11dc-bbb2-0000779fd2ac.html?nclick_check=1
http://blogs.barrons.com/techtraderdaily/2008/02/05/yahoo-the-five-scenario-analysis/
http://www.techcrunch.com/2008/02/08/yahoo-board-to-determine-fate-of-company-today/
http://web2innovations.com/money/2008/02/02/is-google-going-to-be-the-winner-from-the-microsoft-yahoo-deal/
http://web2innovations.com/money/2008/02/04/google%e2%80%99s-chief-legal-officer-vs-microsoft%e2%80%99s-general-counsel/
http://web2innovations.com/money/2008/02/01/yes-we-were-right-yahoo-was-seriously-undervalued-microsoft-offers-446b-for-the-company-a-62-premium-over-their-value-from-yesterday/
http://www.techmeme.com/080201/p78#a080201p78
http://www.mercurynews.com/ci_8149194
http://www.businessweek.com/technology/content/feb2008/tc2008021_885192.htm?chan=rss_topStories_ssi_5
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/02/AR2008020200568.html
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/02/MN8OUQGNB.DTL&type=tech
http://kara.allthingsd.com/20080201/microsoft-to-yahoo-two-days-to-respond-or-else/
http://www.alleyinsider.com/2008/02/hold-everything-we-may-get-another-yhoo-bidder.html
http://www.techcrunch.com/2008/02/01/what-would-a-combined-microsoft-yahoo-look-like/
http://www.techcrunch.com/2008/02/01/ballmers-internal-e-mail-to-the-troops-explaining-the-yahoo-acquisition/
http://www.techcrunch.com/2008/02/02/news-corp-scrambles-to-bid-for-yahoo/
http://www.alleyinsider.com/2008/02/microsoft-yahoo-combined-financials.html
http://web2innovations.com/money/2008/02/08/one-after-another-the-potential-competitive-bidders-for-yahoo-drop-off-is-yahoo-going-to-surrender-to-microsoft/
http://www.informationweek.com/news/showArticle.jhtml?articleID=206107168
http://mashable.com/2008/02/10/yahoo-aol-merger/
http://www.techcrunch.com/2008/02/10/wait-yahoo-and-aol-i-was-looking-forward-to-something-moreintelligent/
http://www.techcrunch.com/2008/02/09/microsofts-80-billion-and-growing-yahoo-headache/
http://web2innovations.com/money/2008/02/09/end-of-speculations-yahoo-rejected-microsoft%e2%80%99s-offer

End of speculations: Yahoo rejected Microsoft’s offer

Internet giant Yahoo’s board has decided to reject Microsoft’s takeover bid, saying its 44.6 billion dollar offer “massively undervalues” Yahoo, the Wall Street Journal reported earlier today.

Yahoo’s board also believes the Microsoft offer, at 31 dollars per share, does not account for risks facing Yahoo if it pursues a deal that might be ultimately blocked by government regulators.

“Yahoo’s board believes that Microsoft’s is trying to take advantage of the recent weakness in the company’s share price to ‘steal’ the company,” the board further said.

“Yahoo’s board appears to be betting that Microsoft doesn’t want to ‘go hostile’ and try to acquire the company against the wishes of management and the board,” it also said.

Reports today lacked some facts, but they are not totally off mark. A couple of days ago we were researching online for information and commentaries on the scenarios most possible for the outcome of the Microsoft/Yahoo deal and Citigroup’s Mark Mahaney has speculated with several possible roads for Yahoo to take. Aside other speculative scenarios he played with 40% (the highest) weight was given for the chance Yahoo rejecting the Microsoft’s offer with the only mission to have the offer increased with a few dollars per share, which according to him is the most likely outcome. He was right but is he also right for the reason Yahoo is today rejecting the Microsoft’s bid.

Is there any chance for Microsoft to increase its offer?

On February 1 Microsoft unveiled its 44.6 billion dollar offer to take over Yahoo, in an effort to merge the world’s biggest software company with a major Internet player to take on search and advertising juggernaut Google.

Microsoft proposed 31 dollars per share to Yahoo’s board, a 62 percent premium above its closing price the previous day.

Microsoft said a combination of the companies would lead to cost savings of a billion dollars per year.

But Yahoo chief executive Jerry Yang sent a message to employees on Wednesday, assuring them the firm’s leaders were exploring ways to avoid a Microsoft takeover.

“Our board is thoughtfully evaluating a wide range of potential strategic alternatives in what is a complex and evolving landscape,” Yang wrote in the email.

“What’s become clear in the past few days is how much people care about this company. I’ve heard from many of you, and from other friends and colleagues from around Silicon Valley and across the globe, that we need to do what’s best for Yahoo and our shareholders.”

Google earlier condemned Microsoft’s effort as an attack on the very independence of the Internet.

“Microsoft’s hostile bid for Yahoo raises troubling questions,” said David Drummond, Google’s senior vice president for corporate development and chief legal officer, in a statement Sunday.

“This is about more than simply a financial transaction, one company taking over another. It’s about preserving the underlying principles of the Internet: openness and innovation.”

Update: A few people asked us why the logo of Microsoft/Google appears on the story and not a combined one of Microsoft/Yahoo? Because it is all about the battle between Microsoft and Google and Yahoo! appears to be an instrument. Congrats to Yahoo! though for firmly opposing the MS’s hostile bid!

 

More

http://money.cnn.com/2008/02/09/magazines/fortune/yahoo_rejects_bid_report.fortune/?postversion=2008020914
http://www.ft.com/cms/s/0/fffc1006-d5e8-11dc-bbb2-0000779fd2ac.html?nclick_check=1
http://blogs.barrons.com/techtraderdaily/2008/02/05/yahoo-the-five-scenario-analysis/
http://www.techcrunch.com/2008/02/08/yahoo-board-to-determine-fate-of-company-today/
http://web2innovations.com/money/2008/02/02/is-google-going-to-be-the-winner-from-the-microsoft-yahoo-deal/
http://web2innovations.com/money/2008/02/04/google%e2%80%99s-chief-legal-officer-vs-microsoft%e2%80%99s-general-counsel/
http://web2innovations.com/money/2008/02/01/yes-we-were-right-yahoo-was-seriously-undervalued-microsoft-offers-446b-for-the-company-a-62-premium-over-their-value-from-yesterday/
http://www.techmeme.com/080201/p78#a080201p78
http://www.mercurynews.com/ci_8149194
http://www.businessweek.com/technology/content/feb2008/tc2008021_885192.htm?chan=rss_topStories_ssi_5
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/02/AR2008020200568.html
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/02/MN8OUQGNB.DTL&type=tech
http://kara.allthingsd.com/20080201/microsoft-to-yahoo-two-days-to-respond-or-else/
http://www.alleyinsider.com/2008/02/hold-everything-we-may-get-another-yhoo-bidder.html
http://www.techcrunch.com/2008/02/01/what-would-a-combined-microsoft-yahoo-look-like/
http://www.techcrunch.com/2008/02/01/ballmers-internal-e-mail-to-the-troops-explaining-the-yahoo-acquisition/
http://www.techcrunch.com/2008/02/02/news-corp-scrambles-to-bid-for-yahoo/
http://www.alleyinsider.com/2008/02/microsoft-yahoo-combined-financials.html
http://web2innovations.com/money/2008/02/08/one-after-another-the-potential-competitive-bidders-for-yahoo-drop-off-is-yahoo-going-to-surrender-to-microsoft/
http://www.informationweek.com/news/showArticle.jhtml?articleID=206107168


 

One after another the potential competitive bidders for Yahoo drop off; is Yahoo going to surrender to Microsoft?

A few days ago we were trying to analyze who is going to eventually make a counter offer to match or outbid the Microsoft’s $46B offer for Yahoo!.

By that time multiple sources were reporting counter offers are in preparation by competitive bidders trying to snatch Yahoo! before Microsoft does it. We then exclude Google from the list of potential bidders for Yahoo! because some experts cited a 75 percent market share in the paid-search advertising market worldwide if Google/Yahoo deal happens and therefore Google is prevented by antitrust laws from buying Yahoo.

Another rumor was that a big private equity firm from New York is going to enter the bidding war for Yahoo!. No more news for that mystical white knight from New York has ever appeared publicly, so we put that aside. 

Another potential bidder being rumored on a few blogs was the New York-based Quadrangle Partners. Yahoo’s former president, Dan Rosensweig recently joined the firm to open the Silicon Valley office and Quadrangle also has deep media expertise. Yahoo! is after all more like a major media company with Internet nuance rather than pure technology company like, for example, Google.

Nothing happened here and we can clearly erase that bidder from the list too.

Other sources were reporting that News Corp is also frantically trying to put together a competing bid, with the help of private equity firms. This makes sense, given News Corp’s previous interest in trading MySpace for a big Yahoo equity stake. News Corp can’t afford to do the whole deal, but it could certainly provide some funding in exchange for some equity.

Nothing happened here too so we do assume News Corp has given up to fight for Yahoo! – Microsoft has simply put the price tag too high and is effectively preventing other players from offering anything even nearly close to their bid.

Today we learn that Softbank, the Japanese telecommunications and internet group, yesterday said it had no intention of selling its 41 per cent stake in Yahoo Japan after Microsoft’s bid for Yahoo. They also stated they have no intention of selling our Yahoo Japan stake. Mr. Masayoshi Son also said that Softbank, which owns 3.9 per cent of Yahoo, had no plans to take part in a counter-bid for the US company, which owns 33 per cent of Yahoo Japan.

Japan, by the way, is one of the few markets in which Yahoo remains the dominant search engine. Yahoo Japan also operates the country’s leading auction site Ebay.

Clearly Softbank is out of the game too. Anyone else? We hear and read nobody is proposing any counter bid for Yahoo!, so we have only Microsoft left in the game. A few days ago Citigroup’s Mark Mahaney has speculated with several possible roads for Yahoo to take. Aside other speculative scenarios he played with 40% (the highest) weight was given for the chance Yahoo rejecting the Microsoft’s offer with the only mission to have the offer increased with a few dollars per share, which according to him is the most likely outcome.

We have read over a few blogs that Yahoo has scheduled a special board of directors meeting on Friday, which we guess is to finally decide on what the company’s course is going to be. After a though week of dramatic events and speculations, it’s clear that no one is going to step in with a competing acquisition so we are getting nearer to witness a major deal between Microsoft and Yahoo!.  We guess we all learn more in the next few days.

Update: A few people asked us why the logo of Microsoft/Google appears on the story and not a combined one of Microsoft/Yahoo? Because it is all about the battle between Microsoft and Google and Yahoo! appears to be an instrument. Congrats to Yahoo! though for firmly opposing the MS’s hostile bid!

 

More

http://www.ft.com/cms/s/0/fffc1006-d5e8-11dc-bbb2-0000779fd2ac.html?nclick_check=1
http://blogs.barrons.com/techtraderdaily/2008/02/05/yahoo-the-five-scenario-analysis/
http://www.techcrunch.com/2008/02/08/yahoo-board-to-determine-fate-of-company-today/
http://web2innovations.com/money/2008/02/02/is-google-going-to-be-the-winner-from-the-microsoft-yahoo-deal/
http://web2innovations.com/money/2008/02/04/google%e2%80%99s-chief-legal-officer-vs-microsoft%e2%80%99s-general-counsel/
http://web2innovations.com/money/2008/02/01/yes-we-were-right-yahoo-was-seriously-undervalued-microsoft-offers-446b-for-the-company-a-62-premium-over-their-value-from-yesterday/
http://www.techmeme.com/080201/p78#a080201p78
http://www.mercurynews.com/ci_8149194
http://www.businessweek.com/technology/content/feb2008/tc2008021_885192.htm?chan=rss_topStories_ssi_5
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/02/AR2008020200568.html
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/02/MN8OUQGNB.DTL&type=tech
http://kara.allthingsd.com/20080201/microsoft-to-yahoo-two-days-to-respond-or-else/
http://www.alleyinsider.com/2008/02/hold-everything-we-may-get-another-yhoo-bidder.html
http://www.techcrunch.com/2008/02/01/what-would-a-combined-microsoft-yahoo-look-like/
http://www.techcrunch.com/2008/02/01/ballmers-internal-e-mail-to-the-troops-explaining-the-yahoo-acquisition/
http://www.techcrunch.com/2008/02/02/news-corp-scrambles-to-bid-for-yahoo/
http://www.alleyinsider.com/2008/02/microsoft-yahoo-combined-financials.html

An acquisition within the 3-D modeling space

While everybody is waiting to see what is going to happen between Microsoft and Yahoo, the first made yet another technology acquisition – bought the 3D modeling and animation software company called Caligari to further improve its Virtual Earth. Caligari appears to be not the typical web 2.0 company one might think of at first reading – they have been established back in 1986. Terms, typically for Microsoft’s small buys, were not disclosed.

Roman Ormandy, the CEO of Caligari (he has personally very interesting story which you can ready below), stated in a post yesterday in his company’s online forum that his staff as well as the people tasked with building Virtual Earth since the start are committed to a vision ensuring a “long-term commitment to the 3D Web.”

Caligari offers a range of products for 3D enthusiasts and illustrators, researchers and design engineers. All of Caligari’s products feature an immersive real-time interface that allows users to intuitively and directly manipulate objects in a fully-rendered 3D space, thus enhancing and accelerating the overall design process.

The motivation behind this deal seems quite clear – competing with Google and its popular Google Earth/Maps developments.

Interesting fact to note is that in a similar move Google has acquired a similar company back in 2006 called SketchUp, which is also 3-D modeling software that is now used to place 3-D objects inside Google Earth.

The company is based in Mountain View, CA.

The company was founded in 1986 by Roman Ormandy. A prototype 3D video animation package for the Amiga Computer, which led to the incorporation of Octree Software in 1986. From 1988 to 1992, Octree released several software packages including Caligari1, Caligari2, Caligari Broadcast, and Caligari 24. Caligari wanted to provide inexpensive yet professional industrial video and corporate presentation software. In 1993 Octree Software moved from New York to California and became known as Caligari Corporation. In 1994 trueSpace 1.0 was introduced on the Windows platform.

Interesting videos for trueSpace can be seen on YouTube.

More about Caligari Corporation

Founded in 1986, Caligari Corporation is one of the pioneers of 3D modeling and animation. Throughout our history, Caligari has focused on providing powerful, intuitive and affordable tools that enable users to communicate visually, whether the end product is a web page, a fully-rendered image, a 3D model or an interactive simulation. Today, we continue to drive innovation to the 3D authoring process in markets that range from design and engineering to biomedicine and entertainment. The release of trueSpace7 has opened new doors in 3D by providing our users with something that no other 3D company has ever offered: real-time collaborative authoring.

Caligari offers a range of products to satisfy everyone from 3D enthusiasts to illustrators, researchers and design engineers. All of Caligari’s products feature an immersive real-time interface that allows users to intuitively and directly manipulate objects in a fully-rendered 3D space, thus enhancing and accelerating the design process.

In January of 2006, after 20 years of uninterrupted development, Caligari released the 12th generation of its flagship product, trueSpace. Not only has Caligari enhanced the award-winning modeling, surfacing and rendering capabilities of trueSpace; we have revolutionized the way 3D content is created, communicated and shared with others. trueSpace7 is the only 3D authoring product on the market to offer all aspects of real-time design, modeling and animation within a virtual 3D space shared by remote participants over the broadband internet. trueSpace7’s easy-to-use authoring tools are seamlessly integrated into the underlying collaborative process. The trueSpace7 collaboration server enables multiple participants to connect to a shared 3D space to create and manipulate shared content in real-time.

Other products include gameSpace and iSpace. gameSpace offers game artists high-end 3D authoring capabilities at a low-end price. gameSpace provides all the tools game artists need for modeling, texturing, animating, UV mapping, and more; and comes with the built-in ability to export content to multiple game engine formats.

iSpace is an innovative 3D web graphics solution that allows web developers to easily create stunning 3D web pages in HTML and Macromedia Flash format. With iSpace, web designers can import existing 2D HTML pages, convert them into 3D and enhance their layout with easy-to-use styles and graphical elements such as buttons, lights, animations and 3D text. iSpace is also a complete assembly platform, allowing the user to combine .jpg, .gif, and Flash files in the same workspace to quickly and easily create integrated HTML outputs.

The Founder

Born in 1955 in Czechoslovakia, Roman Ormandy obtained an advanced degree in Computer science from Komensky University in Bratislava in 1980. He then undertook post-graduate studies in artificial intelligence, psychology and linguistics at Charles University in Prague. In 1981, he received a research fellowship in the University’s Laboratory for Computational Linguistics.

Later that same year, Ormandy defected to Italy while on “holiday” in Yugoslavia. He spent several months in an Italian refugee camps while his wife, Bibiana, was still in Czechoslovakia. A year later Ormandy was joined in America by Bibiana and their 18-month old son, whom he had never seen, after their dramatic flight across the Yugoslavian border.

Ormandy’s first job in the United States was in a suitcase factory making cases for Apple IIC computers. He then worked in the computer lab of Lexington School for the deaf while attending the graduate program in Computer Science at City University in New York. In 1983, he landed a job programming IBM graphics software for educational applications for Classroom Consortia Media. While here, he authored two educational applications and BrainChild, a software game design for the IBM PC Jr. In 1985, Ormandy became a computer graphics consultant for Edwin Schlossberg Inc., designing interactive laser disc applications and other components of the information system for Manhattans’ World Financial Center.

Ormandy began working on the prototype for a 3D video animation package for the Amiga computer in 1985. The prototype generated intense interest following a preview of Siggraph ’86 Conference. In the fall of 1986, Ormandy incorporated Octree Software, initially working part-time to get his new company off the ground. In 1988 he switched to full-time with the introduction of Caligari, aimed at the industrial video, design and corporate presentation markets. Ormandy grew very interested in creating a more realistic user interface to optimize human physiology and inspired by the belief that creativity would be radically increased if the designer was given direct contact with 3D objects in the workspace.

Two years later, Caligari Broadcast was introduced, offering professional quality 3D animation at a fraction of the cost of comparable systems. Because of its real-time, direct manipulation of objects in real-life perspective, Caligari allowed the computer user to transcend the 2D environment and explore new creative territory of its own.

In April, 1994, Caligari further revolutionized the 3D market by introducing trueSpace 1.0 for Windows, a powerful, usable 3D modeling, rendering and animation package that combined real-time direct manipulation of objects and professional-quality output with an easy-to-learn, icon-based interface. trueSpace’s affordable price, seamlessly integrated organic modeling, photorealistic ray-tracing, broadcast-quality animation and unprecedented ease-of-creation modeling tools created a phenomenon of response in the adolescent 3D market. Its highly usable VR-style immersive interface encouraged experimentation, stimulated creativity and gave users the ability to create stunning renderings and animation easily.

Today the award-winning trueSpace legacy continues unbroken, with the latest version, trueSpace7, still based on the same principles of making professional power available to users while keeping the software easy to use and affordable. Caligari has also expanded the product range to include gameSpace, which allows users to create 3D content for games, and truePlace, an on-line meeting place for social networking, distance learning, and collaboration.

Roman Ormandy and Caligari’s introduction of trueSpace helped redefine how people can create and communicate in media. He believes one of the most far-reaching possibilities is the creation of a new form of knowledge repository based not on symbols, but living, breathing 3D objects encapsulating knowledge into code and shared in collaborative on-line environments.

More

http://www.caligari.com/
http://forums1.caligari.com/truespace/showthread.php?p=59557#post59557
http://mashable.com/2008/02/07/microsoft-acquires-caligari-3d/
http://virtualearth.spaces.live.com/blog/cns!2BBC66E99FDCDB98!11432.entry
http://www.techcrunch.com/2008/02/07/microsoft-buys-caligari-to-pimp-up-virtual-earth/
http://www.caligari.com/Gallery/Animations/2007/jan/anim/2912.wmv
http://sketchup.google.com/
http://www.engadget.com/2007/03/07/playstation-home-revealed/
http://redmondspy.blogspot.com/2008/02/microsoft-kauft-3d-experten-caligari.html
http://en.wikipedia.org/wiki/TrueSpace
http://www.youtube.com/results?search_type=search_videos&search_query=truespace&search_sort=&search_category=0&page=4
http://lunadude.com/rsrc_trueSpace.htm

Google’s Chief Legal Officer vs. Microsoft’s General Counsel

An interesting virtual war is taking place on Web right now caused by the Microsoft’s bid for Yahoo!. It appears Google cannot (or they don’t want to) enter the bidding war for Yahoo! due to many reasons; one of them seems to be the antitrust law complications that might arise from potential market dominance in the search market. Another reason could be that Google does not need Yahoo but does not want to let Microsoft own it. Yet it did not stop David Drummond, Senior Vice President, Corporate Development and Chief Legal Officer to attack Microsoft about openness and the competition on Internet. David pointed out that the combined entity is going to have a dominant role on the IM and the email markets in US. By contrast, Microsoft has replied that deal between Microsoft and Yahoo is going to create competition since Google is the dominant player on both the search and web advertising markets. From the two statements below it becomes clear enough that it is all about Microsoft vs. Google and Yahoo is just a company to be used by Microsoft in their on going battle with Google for the leading position on Internet. Both companies seem right and not really the same time. Google barking at Microsoft about openness and compositeness is quite strange taking into consideration their unprecedented dominancy on the search and advertising market online. The same time Microsoft talking about openness, innovation, and the protection of privacy on the Internet sounds quite the same to me – unserious. Read below and decide for yourself who is right and who is wrong. 

Below is what Google said on their official blog.

The openness of the Internet is what made Google — and Yahoo! — possible. A good idea that users find useful spreads quickly. Businesses can be created around the idea. Users benefit from constant innovation. It’s what makes the Internet such an exciting place.

So Microsoft’s hostile bid for Yahoo! raises troubling questions. This is about more than simply a financial transaction, one company taking over another. It’s about preserving the underlying principles of the Internet: openness and innovation.

Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC? While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies — and then leverage its dominance into new, adjacent markets.

Could the acquisition of Yahoo! allow Microsoft — despite its legacy of serious legal and regulatory offenses — to extend unfair practices from browsers and operating systems to the Internet? In addition, Microsoft plus Yahoo! equals an overwhelming share of instant messaging and web email accounts. And between them, the two companies operate the two most heavily trafficked portals on the Internet. Could a combination of the two take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors’ email, IM, and web-based services? Policymakers around the world need to ask these questions — and consumers deserve satisfying answers.

This hostile bid was announced on Friday, so there is plenty of time for these questions to be thoroughly addressed. We take Internet openness, choice and innovation seriously. They are the core of our culture. We believe that the interests of Internet users come first — and should come first — as the merits of this proposed acquisition are examined and alternatives explored.

Statement from Brad Smith, General Counsel, Microsoft

The combination of Microsoft and Yahoo! will create a more competitive marketplace by establishing a compelling number two competitor for Internet search and online advertising. The alternative scenarios only lead to less competition on the Internet.

Today, Google is the dominant search engine and advertising company on the Web. Google has amassed about 75 percent of paid search revenues worldwide and its share continues to grow. According to published reports, Google currently has more than 65 percent search query share in the U.S. and more than 85 percent in Europe. Microsoft and Yahoo! on the other hand have roughly 30 percent combined in the U.S. and approximately 10 percent combined in Europe.

Microsoft is committed to openness, innovation, and the protection of privacy on the Internet. We believe that the combination of Microsoft and Yahoo! will advance these goals.

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed transaction, Microsoft Corp. plans to file with the SEC a registration statement on Form S-4 containing a proxy statement/prospectus and other documents regarding the proposed transaction. The definitive proxy statement/prospectus will be mailed to shareholders of Yahoo! Inc. INVESTORS AND SECURITY HOLDERS OF YAHOO! INC. ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Investors and security holders will be able to obtain free copies of the registration statement and the proxy statement/prospectus (when available) and other documents filed with the SEC by Microsoft Corp. through the Web site maintained by the SEC at sec.gov. Free copies of the registration statement and the proxy statement/prospectus (when available) and other documents filed with the SEC can also be obtained by directing a request to Investor Relations Department, Microsoft Corp., One Microsoft Way, Redmond, Wash. 98052-6399.

Microsoft Corp. and its directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Microsoft Corp.’s directors and executive officers is available in its Annual Report on Form 10-K for the year ended June 30, 2007, which was filed with the SEC on Aug. 8, 2007, and its proxy statement for its 2007 annual meeting of shareholders, which was filed with the SEC on Sept. 29, 2007. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.

Who is David C. Drummond?

David C. Drummond is Senior Vice President, Corporate Development and Chief Legal Officer

David Drummond joined Google in 2002, initially as vice president of corporate development. Today as senior vice president and chief legal officer, he leads Google’s global teams for legal, government relations, corporate development (M&A and investment projects) and new business development (strategic partnerships and licensing opportunities).

David was first introduced to Google in 1998 as a partner in the corporate transactions group at Wilson Sonsini Goodrich and Rosati, one of the nation’s leading law firms representing technology businesses. He served as Google’s first outside counsel and worked with Larry Page and Sergey Brin to incorporate the company and secure its initial rounds of financing. During his tenure at Wilson Sonsini, David worked with a wide variety of technology companies to help them manage complex transactions such as mergers, acquisitions and initial public offerings.

David earned his bachelor’s degree in history from Santa Clara University and his JD from Stanford Law School.

Who is Brad Smith?

Brad Smith is Microsoft’s Senior Vice President, General Counsel and Corporate Secretary. He leads the company’s Department of Legal and Corporate Affairs, which is responsible for all legal work and for government, industry and community affairs activities.

Smith has played a leading role at Microsoft on intellectual property, competition law, and other Internet legal and public policy issues. He is also the company’s chief compliance officer. Since becoming general counsel in 2002, he has overseen numerous negotiations with governments and other companies, including Microsoft’s 2002 antitrust settlement with state attorneys general, its 2002 data privacy negotiations with the Federal Trade Commission and European Commission, and agreements to address antitrust or IP issues with Time Warner, Sun Microsystems, RealNetworks, IBM and Novell.

Smith is responsible for Microsoft’s intellectual property work, including all of its IP portfolio, licensing and public policy activities. He has helped spearhead the growth in the company’s patent portfolio and the launch of global campaigns to bring enforcement actions against those engaged in software piracy and counterfeiting and against viruses, spyware and other threats to Internet safety. He is also responsible for the expansion of Microsoft’s citizenship and philanthropic activities, work to revise its contracts to make them more customer-friendly, and the strengthening of legal compliance programs, issuing Standards of Business Conduct for all Microsoft employees and creating an Office of Legal Compliance.

Smith previously worked for five years as Deputy General Counsel for Worldwide Sales, and before that, he spent three years managing the company’s European Law and Corporate Affairs group, based in Paris. Before joining Microsoft, he was a partner at Covington & Burling, having worked in the firm’s Washington, D.C. and London offices and represented a number of companies in the computing industry.

Smith graduated summa cum laude from Princeton University, where he received the Class of 1901 Medal, the Dewitt Clinton Poole Memorial Prize, and the Harold Willis Dodds Achievement Award, the highest award given to a graduating senior at commencement. He was a Harlan Fiske Stone Scholar at the Columbia University School of Law, where he received the David M. Berger Memorial Award. He also studied international law and economics at the Graduate Institute of International Studies in Geneva, Switzerland.

He has written numerous articles regarding international intellectual property and electronic commerce issues, and has served as a lecturer at the Hague Academy of International Law.

More

http://googleblog.blogspot.com/2008/02/yahoo-and-future-of-internet.html
http://www.microsoft.com/presspass/press/2008/feb08/02-03Statement.mspx?rss_fdn=Press%20Releases
http://www.google.com/corporate/execs.html
http://www.microsoft.com/presspass/exec/bradsmith/default.mspx
http://www.techcrunch.com/2008/02/03/google-cries-wolf-on-microsoft-yahoo-deal-irony-comes-up-blank-in-google-search/
http://www.techcrunch.com/2008/02/03/can-google-still-claim-to-be-david-to-microsofts-goliath-no/
 

Is Google going to be the winner from the Microsoft-Yahoo deal?

Over the past a couple of days all the major media outlets are full with news, analyses, reports, commentaries and researches on the potential deal between Microsoft and Yahoo! trying to figure out the benefits or the potential pitfalls the deal would eventually face.

We’ve read a lot and we’d like here to summarize the pluses and minuses of this potential deal.

Potential pitfalls, disadvantages and overall minuses

Different cultures of the two companies – there will be the challenge of integrating two very different companies, with clashing cultures and business philosophies. At Microsoft, the operating system has always been priority number one, while Yahoo’s vision is all things Internet.

Even combined the new entity is going to have less than the half of the searches Google enjoys.

  • Google Sites: 37.1 billion (5 billion at YouTube)
  • Yahoo Sites: 8.5 billion
  • Baidu.com: 3.3 billion
  • Microsoft Sites: 2.2 billion

So the deal would do little to nothing to address the fundamental problem faced by both companies: finding a way to effectively compete with Google and its growing dominance of the Web.

The combined number of employees would be in the 90,000 range and potential layoffs can be overseen.

The reach of Microsoft and Yahoo! combined is going to be bigger than Google’s but unless the new entity figures out how to more effectively monetize its traffic they are not going to make any impact on Google’s advertising business. Google’s AdSense is still paying most to web publishers compared to other advertising networks, which tells us that Google earns more off its traffic and reach than any other ad network out there.  

Despite Microsoft’s intention to offer significant retention packages to Yahoo’s engineers, key leaders and employees across all disciplines we think Yahoo’s most talented employees will take the money from their suddenly valuable stock options and run. It is clear they aren’t going to get rich working for Microsoft, whose stock has gone up an average of 6.6 percent a year over the last five years.

If this deal happen Yahoo’s shareholders can been seen in a better position compared to Microsoft’s. They would finally get a reasonably happy ending to their long nightmare of waiting for Yahoo management to come up with a viable strategy to repel the Google assault. Other than announcing a thousand job cuts this week, Yahoo co-founder and Chief Executive Jerry Yang has given no sign that he has any better ideas for turning around the struggling company than Terry Semel, who resigned in disgrace in June 2007.

There are many questions to be addressed; some of them are included below.

  • Live search or Yahoo search?
  • Live mail or Yahoo mail?
  • Live messenger or Yahoo messenger?
  • Live spaces, Yahoo 360 or Facebook (Microsoft owns less than 2% in Facebook)?
  • MSN Dating (Match) or Yahoo personal?
  • Microsoft’s AdCenter or Yahoo’s Panama advertising platform?
  • .Net or java?
  • Live ID or Open ID?

None of the above seems to be having any synergies. Most of them are already well established brands while others are taking quite different approaches by using and relying on different technological standards. There is clearly huge dilemma if Microsoft keeps the different brands alive, it will surely confuse customers and reduce synergies. If it kills one or another, it will throw away a lot of expensively built real Web properties.

Microsoft and Yahoo would eventually waste a couple of years jumping through antitrust hoops and figuring out how to integrate their companies. During all that time Google will continue to adding more business and consumer Web services and leverage its dominance of search advertising into yet more advertising niches.

Google is already aggressively entering into the mobile space, striking deals around the globe to get prominent positioning with certain carriers and promoting an open handset design. The company is even bidding billions of dollars to buy a chunk of U.S. wireless spectrum that it could use to launch its own mobile voice and data service.

Potential synergies, advantages and overall pluses

Under no doubt the biggest advantage oversee by the Microsoft’s people is the Internet traffic/reach the combined entity is going to have – it is clearly going to be much larger than Google’s. This is what Steve Ballmer called the eyeballs and is going to be used to strengthen their advertising strategy. According to HitWise the combined traffic reach of Yahoo! and MSN web properties is going to be 15.6% of the entire Internet traffic in the U.S., compared to only 7.7% for Google’s web properties yet Google still has double the market share in search of both Yahoo and Microsoft combined.

Microsoft says it can shave at least $1 billion from operating expenses in a merged company.

The combined revenues of the two companies would be about $65B while the net profit is expected to be in the $17.5B range compared to only $4.2B for Google.

The companied company would achieve around 32% market share from the US search market.

Another advantage is that Yahoo still sports the best consumer Web portal, My Yahoo, with tens of millions of loyal users while Microsoft’s Windows operating system runs nine out of 10 desktop computers on the planet and a considerable portion of the Internet is powered by servers of the company.

In theory, Microsoft might integrate the best services from each company, from Yahoo’s Flickr photo sharing to Microsoft’s Office applications, to provide an appealing PC-and-Internet platform for customers. The technical challenges would be enormous, but the payoff could be huge.

Today Microsoft has over $300B market capitalization while Yahoo!’s has climbed close to $30B so the combined entity would potentially have a market capitalization twice bigger than Google’s, which is a little more than $175B today.

Potential competitive bidders showing up on the horizon

Aside everything else being mentioned above the acquisition deal is not for sure yet. Multiple sources are reporting counter offers are in preparation by competitive bidders trying to snatch Yahoo! before Microsoft does it. One thing is for sure we can easily exclude Google from the list of potential bidders for Yahoo!. On the conference call explaining the deal, Microsoft general counsel Brad Smith pointed out that, while other companies may make competing bids for Yahoo, one company that clearly can’t is Google. Citing a 75 percent market share in the paid-search advertising market worldwide, Ballmer asserts, “Google is prevented by antitrust laws from buying Yahoo.”

One of the rumor is that a big private equity firm from New York is going to enter the bidding war for Yahoo!.

Another potential bidder being rumored on a few blogs is the New York-based Quadrangle Partners. Yahoo’s former president, Dan Rosensweig recently joined the firm to open the Silicon Valley office and Quadrangle also has deep media expertise. Yahoo! is after all more like a major media company with Internet nuance rather than pure technology company like, for example, Google.

Other sources are reporting that News Corp is also frantically trying to put together a competing bid, with the help of private equity firms. This makes sense, given News Corp’s previous interest in trading MySpace for a big Yahoo equity stake. News Corp can’t afford to do the whole deal, but it could certainly provide some funding in exchange for some equity.

So to conclude, the minuses, obstacles and the disadvantages seem to be more than what the pluses are expected to be. So if ever a deal goes through it is not very clear what the benefits for both Microsoft and Yahoo! would be and if ever there is going to be a winner from this deal Google, ironically, might be the one at the end of the day.

You can read more over here…

More

http://www.techmeme.com/080201/p78#a080201p78
http://www.mercurynews.com/ci_8149194
http://www.businessweek.com/technology/content/feb2008/tc2008021_885192.htm?chan=rss_topStories_ssi_5
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/02/AR2008020200568.html
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/02/MN8OUQGNB.DTL&type=tech
http://kara.allthingsd.com/20080201/microsoft-to-yahoo-two-days-to-respond-or-else/
http://www.alleyinsider.com/2008/02/hold-everything-we-may-get-another-yhoo-bidder.html
http://www.techcrunch.com/2008/02/01/what-would-a-combined-microsoft-yahoo-look-like/
http://www.techcrunch.com/2008/02/01/ballmers-internal-e-mail-to-the-troops-explaining-the-yahoo-acquisition/
http://www.techcrunch.com/2008/02/02/news-corp-scrambles-to-bid-for-yahoo/
http://www.alleyinsider.com/2008/02/microsoft-yahoo-combined-financials.html

After Samwer brothers Nokia is also going to invest in Facebook

It has been deal time for Facebook over the past months, or year? After Microsoft, the Honk Kong billionaire Li Ka-shing  and the Samwer brothers Nokia is now rumored to be in talk to invest in Facebook. Let’s however first take a look at what the Samwer brothers have gotten last week for their money.

The Samwer brothers, Marc, Oliver, and Alexander, have reportedly taken a stake in the social networking site, according to online sources including Reuters. The three German Internet entrepreneurs, the Samwer brothers, have taken a stake in the social networking site Facebook, Alexander Samwer said. Mr. Samwer, who declined to reveal the size of the stake, said the brothers would now become Facebook’s strategic partners in Europe. “We are going to support the expansion of Facebook in Europe,” It has also been disclosed that the Samwer brothers have offered up less than the $240 million that Microsoft paid for a 1.6% stake in Facebook, but the Samwer brothers’ investment amount, was rumored, is still sizable. Samwer have basically given the following comment: it was a “significant” amount, and less than the $240 million Microsoft paid for a 1.6 percent stake in Facebook in October, which valued the site at $15 billion. Analysts are left to speculate on the exact numbers.

“We think Facebook is, after Google, the most innovative company to have emerged in the last few years. We think it will be the phenomenon for the Internet that Windows was for the desktop,” Samwer said. Pretty serious claim, but it has to be taking into consideration the huge amount of money being poured in Facebook on reportedly less than $200M in revenues for 2007.

More about Samwer brothers

After selling the German Internet auction site Alando.de to eBay for $50 million in shares, the brothers have made names for themselves and have become even more involved with startups since. After a brief spell working for eBay, they then set up ringtone firm Jamba, which they sold to the U.S. company Verisign for $273 million in shares and cash in 2004. Little later they have also invested in the German Twitter clone, Frazr, and a handful of other startups. Interestign fact to note is that the Samwer brothers also invested in the Facebook clone StudiVZ, which was sold about a year ago for $112 million. Taking these facts and achievements into consideration we would not be that far in our conclusions if we say the guys are successful serial entrepreneurs and they have something to do with the social networking, at least in Europe. It already comes as no surprise they are interested to bring the most popular social site into Europe and lock down exclusivity for the market.

As the Samwer brothers are becoming the strategic partners for Facebook in Europe means that Facebook is getting even more serious about its European expansion. With the Samwer brothers having a large, vested interest in the success of Facebook’s growth across Europe, this seems like a pretty good fit considering the interests for all parties involved.

Just a week later and we are seeing today Nokia is also ready to jump the bandwagon of Facebook investors. However, this deal seems to be structured/offered in a little bit different way than pure investment where Nokia is rumored to be in talk for a deal with Facebook to bring the social site on to Nokia handsets in a major way. The Facebook placement could be as prominent as the YouTube button on the main screen of iPhone, online sources indicate. In addition, the deal is said to involve giving Facebook a major slot within Nokia retail products’ displays.

Nokia purchasing a stake in the company was said on several news sites and professional blogs is something yet to be confirmed. This now makes a little more sense in the light of Facebook’s recent strategic funding by Sawmer Brothers, in an effort to expand in Europe. The Nokia-Facebook deal would probably give the social network instant big-time mobile distribution: Nokia is the world’s largest maker of mobile phones after all.

A senior Nokia executive, speaking on background, declined to go into details about the pact with Facebook: “There is talk of a partnership in the works… it’s safe to say we’re testing the waters and things still have to be worked out.”

Nokia has of late been working on a number of services for the mobile, including its mobile web service Ovi, its mobile social network Mosh, and its most recent acquisitions in the larger media applications space. In October last year, it bought digital mapping provider Navteq for $8.1 billion to eventually offer customers location-based services. Also in October, it announced a deal to provide a year’s free access to Universal’s music catalog on certain Nokia phones. Also, it bought three other smaller companies last year: Avvenu (file sharing on mobiles and between mobile-PC); Twango (media sharing service for the hefty amount of $100 million); and Enpocket (mobile advertising and marketing services). 

On the content side, the potential deal with Nokia could be seen in very positive light for Facebook to drive the site’s usage on the mobile web.

The investment side, although nothing is for sure yet, isn’t that surprising given how many companies and high profile investors have already bought stakes into the Facebook over hyped site. “The remarkable part is how many companies are willing to invest in Facebook at a $15 billion valuation. At best Facebook may be worth even more than that, particularly when you consider sites like Baidu have a market cap in excess of $9 billion.”  Said Duncan Riley, who is an author at Techcrunch.

We don’t know when Facebook may move to an IPO; in his 60 Minutes interview a week ago Mark Zuckerberg said that it might be this year, or next year, or even 2010. What we do know is that an IPO in the current market will unlikely provide a strong valuation for Facebook.

Taking into serious considerations the current stock market conditions and all the US recession talk lately Facebook is highly unlikely to IPO this year. 2009/ 2010 are spoken out as the earliest dates for the Facebook’s IPO, presuming that the market eventually recovers.

Other less optimistic people are commenting that an investment at that $15B valuation is nothing less than idiotic and give the following details in support of their claims.

  1. When MSFT made investment in FB, YHOO was trading at $25/share. That is 20% higher than todays price. No way is FB worth 55% of Yahoo’s valuation of $27B today.
  2. Yahoo has revenue of over $6.5 Billion. FB generated $150M.
  3. Yes, FB is growing. But, YHOO has a real business and FB is trying to figure out how to make money.
  4.  Competition: FB has more competition than YHOO. YHOO has to deal with GOOG, MSFT and ASK. FB has to deal with the 15+ social networking sites plus GOOG and ASK (expected soon!?). 

In opposition to these claims and comparisons, other people find it quite shocking that this isn’t apparent to most people why FB is put at such high valuation and is being chased by major companies.

A stake in FB to certain companies is a priceless gamble. They are not trying to own a stake so that if/when FB becomes a revenue source they too can share in the benefits and see an incredible ROI. What they are doing is trying to solidify a relationship (as exclusive as possible) so that as FB carves out their experimental business model these companies will be able to couple themselves to it somehow. It’s more of a bribe than an investment, sources claim.

Companies like Microsoft and Nokia are essentially saying “We will pay you a few hundred million to establish the beginnings of what will be a mutually beneficial and exclusive relationship. A small portion of your company will be an added benefit and you can use that to broadcast a large valuation to the world to further legitimize your business despite an unproven and incomplete model”.

Facebook would like to continue to own and exploit their users’ private data without sharing in these profits and simply providing a useful service. Unfortunately, consumers are quickly learning that this may be something to be concerned about. There is a fast growing demand for openness that will hurt their walled garden philosophy. At some point an open and selfless alternative will arise and Facebook will shrink in order to remain a viable player for the long run. The catch 22 will lead to the inevitable deflation of Facebook.

Facebook is hugely popular social networking site, second only to MySpace in terms of users. Other popular social networking sites are Bebo and Friendster, the second one tried to acquire Facebook in 2004 for just $10M.

The latest comScore metrics, we have seen, revealed that Facebook is actually site #16 (others claim it is #6 today) in US with nearly 70M unique visitors per month and more than 50M registered and active users.
 
Peter Thiel, cofounder of PayPal and managing partner of the Founders Fund was the first angel investor in the company. He invested $500,000 into Facebook in early 2004. Later Accel Partners poured $12.7 million more in funding, at a valuation in the $100 million range.

The next year [2006], Facebook received $25 million in funding from Greylock Partners and Meritech Capital, as well as returning investors Accel Partners and Peter Thiel. The pre-money valuation for this deal was in the $525 million range.

Facebook is reported to have turned deals down from Friendster, Yahoo, Viacom  and the mighty Google a couple of months ago when Zuckerberg has chosen Microsoft to partner with. Microsoft de-facto has invested $240 million into Facebook for just 1.6 percent of the company in October 2007. This put the company’s valuation at over $15 billion on just $150 million in annual revenues.

Total funding for the company is now exceeding $400M as this number is highly speculative given the fact no public information is available for both the Samwer brothers’ investment and the Nokia’s eventual equity purchase.

It would really be interesting to find out what’s the equity position Mr. Li Ka-shing, Samwer brothers have secured and eventually Nokia will have for their money considering what Microsoft has bought for their $240M.

More

http://www.facebook.com
http://www.nokia.com/
http://mashable.com/2008/01/15/facebook-samwer-brothers/
http://www.techcrunch.com/2008/01/20/nokia-to-invest-in-facebook/
http://www.paidcontent.org/entry/419-nokia-and-facebook-working-on-mobile-deal-could-involve-investment/
http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSL1562367720080115
http://www.huffingtonpost.com/2008/01/16/facebook-hits-europe_n_81730.html
http://web2innovations.com/money/2007/11/30/hong-kong-billionaire-li-ka-shing-invests-60m-in-facebook-funding-totals-33820m-to-date/
http://www.crunchbase.com/company/facebook
http://www.techcrunch.com/2007/11/30/another-60-million-for-facebook
http://kara.allthingsd.com/20071130/facebook-nabs-60-million-investment-from-li-ka-shing
http://www.hutchison-whampoa.com/eng/about/chairman/chairman.htm
http://www.iht.com/articles/2006/12/03/business/brothers.php
http://venturebeat.com/2008/01/15/samwer-brothers-invest-in-facebook/
http://www.moconews.net/entry/419-nokia-to-buy-navteq-for-77-billion/
http://www.paidcontent.org/entry/419-facebook-gets-investment-from-german-online-entrepreneurs-samwer-brothe 
http://www.moconews.net/entry/419-nokia-buys-file-sharing-service-avvenu

Two major acquisition deals within the online storage space

IBM today announced it has acquired XIV, a privately-held storage technology company based in Tel Aviv, Israel. XIV, its technologies and employees, will become part of the IBM System Storage business unit of the IBM Systems and Technology Group. Financial terms of the acquisition were not disclosed but sources tell the price was $350M. 

XIV’s main product Nextra is a storage system based on a grid of standard hardware components. XIV will become part of the IBM System Storage business unit of the IBM Systems and Technology Group. XIV was established in 2002 by five graduates from the 14th class of the Israeli Army’s elite “Talpiot” program where the name XIV coming from. It’s the Roman numeral for 14. The company got only $3 million in backing thus far, making this deal a fairly huge exit for the founders.

“The acquisition of XIV will further strengthen the IBM infrastructure portfolio long term and put IBM in the best position to address emerging storage opportunities like Web 2.0 applications, digital archives and digital media,” said Andy Monshaw, general manager, IBM System Storage. “The ability for almost anyone to create digital content at any time has accelerated the need for a whole new way of applying infrastructure solutions to the new world of digital information.  IBM’s goal is to provide the leading technologies and solutions at every layer of the data center – storage, servers, software and services – to address these new realities IT customers face.” 

“We are pleased to become a significant part of the IBM family, allowing for our unique storage architecture, our engineers and our storage industry experience to be part of IBM’s overall storage business,” said Moshe Yanai, chairman, XIV.  “We believe the level of technological innovation achieved by our development team is unparalleled in the storage industry.  Combining our architectural advancements with IBM’s world-wide research, sales, service, manufacturing, and distribution capabilities will provide us with the ability to have these technologies tackle the emerging Web 2.0 technology needs and reach every corner of the world.”

The NEXTRA architecture has been in production for more than two years, with more than four petabytes of capacity being used by customers today. 

IBM’s acquisition of XIV supports the IBM growth strategy and capital allocation model, as part of the company’s overall objective for earnings-per-share growth through 2010.

XIV is led by Moshe Yanai, one of the key architects of data storage systems and instrumental in the development of EMC’s Symmetrix and DMX product lines throughout the 1990s.

Which brings us to the question why EMC did not buy XIV but that was done by IBM? EMC instead has acquired the online storage startup Mozy, headquartered in Utah. EMC Corporation itself is a public storage company. EMC has paid $76 million for the company, according to web sources.

“Mozy’s technology and online delivery model has proven itself to be one of the industry’s most admired offerings for customers looking to safely and cost-effectively backup and recover their digital information stored on desktops, laptops, and remote office servers,” said Tom Heiser, EMC SVP, Corporate Development and New Ventures. “The acquisition of Mozy is a natural extension of EMC’s leadership in the protection and security of personal and business information. We will continue to invest in Mozy’s full portfolio of online backup and recovery services and advance the Mozy brand in the marketplace.”

“I have been researching and developing internet-scale storage and information management solutions throughout my career,” said Josh Coates, founder and former CEO of Berkeley Data Systems. “EMC and Berkeley Data Systems are a natural fit, and I’m confident that EMC is the right organization to take Mozy to the next level. I look forward to working with EMC to continue innovating in the storage and information management industry.”

The company has basically a very simple way for users to back up their computer hard drives online. You need to download their software and the backups occur slowly over time. Mozy supports both Windows and Mac machines.

Mozy has raised just $1.9 million in venture capital, which is less than the $3M XIV has raised but the XIV’s exit sale is much larger by contrast. The round, closed in May 2005, was led by Wasatch Ventures, with participation from Tim Draper of Draper Associates and Draper, Fisher, Jurvetson and Novell co-founder Drew Major. Mozy was created by Berkeley Data Systems, which is a technology company based in Utah that specializes in large scale, parallel storage systems and software.

There were rumors circulating some time ago that Mozy was close to being acquired by Google for significantly less than this. The company eventually passed on the deal, which must have been a tough call. They clearly made the right choice in waiting.

About EMC Corporation

EMC Corporation is the world’s leading developer and provider of information infrastructure technology and solutions. We help organizations of every size around the world keep their most essential digital information protected, secure, and continuously available. We are among the 10 most valuable IT product companies in the world. We are driven to perform, to partner, to execute. We go about our jobs with a passion for delivering results that exceed our customers’ expectations for quality, service, innovation, and interaction. We pride ourselves on doing what’s right and on putting our customers’ best interests first. We lead change and change to lead. We are devoted to advancing our people, customers, industry, and community. We say what we mean and do what we say. We are EMC, where information lives. EMC Corporation has nearly $40 billion market cap. EMC is listed on the NYSE (NYSE: EMC).

About IBM System Storage business

IBM is a market leader in the storage industry. Innovative technology, open standards, excellent performance, a broad portfolio of storage proven software, hardware and solutions offerings – all backed by IBM with its recognized e-business on demand(r) leadership are just a few of the reasons why you should consider IBM storage offerings. Through its deep industry expertise, patent leadership, research and innovation, IBM has long been the leader in providing customers with technology solutions that help them deliver and utilize information effectively.  With industry recognized leadership in storage and server hardware and software, and through the recent strategic acquisitions of Softek, FileNet and NovusCG, IBM has grown its storage services offerings and presents customers with strategic solutions to deliver integrated software, hardware, services and research in standardized offerings that can be used by customers of all sizes to help them transform their businesses.  

Competition

Other online storage companies include: Amazon’s S3 (Simple Storage Service), Cnet’s All you can Upload, AllMyData, Box.neteSnips, Freepository, GoDaddy, iStorage, MofileOmnidrive, Openomy, Streamload, Strongspace, iBackup, Zingee, Xdrive and Carbonite, which is known to have raised $21 million in venture financing.

It is also rumored that Google is planning to launch gDrive. Microsoft is also jumping into the same bandwagon and more information can be found over here. Zmanda is an open source back up solution as well.

The online storage space is hugely overpopulated and crowded area. Who is next? A comparison chart over some of the companies above can be found over here: http://www.flickr.com/photo_zoom.gne?id=93730415&size=o

Our basic conclusion is that both XIV and Mozy have made very impressive exit deals taking into consideration the small amount of funding they both have taken so far.

More

http://www.mozy.com/
http://mozy.com/blog
http://mozy.com/news/releases
http://www.xivstorage.com/
http://www.xivstorage.com/company/company_news.asp 
http://www.emc.com/
http://www.emc.com/about/
http://www.ibm.com/storage
http://www-03.ibm.com/systems/storage/index.html
http://crunchbase.com/company/mozy
http://www.techcrunch.com/2006/01/31/the-online-storage-gang/
http://www.techcrunch.com/2008/01/03/ibm-acquires-storage-company-xiv-for-350-million/
http://www.techcrunch.com/2008/01/03/benchmark-europe-invests-in-uk-gambling-site/
http://www.crunchbase.com/company/carbonite
http://www.techcrunch.com/2006/01/31/the-online-storage-gang/
http://avc.blogs.com/a_vc/2005/12/online_backups_.html
http://jeremiahthewebprophet.blogspot.com/2006/05/online-data-storage-companies-ongoing.html
http://www.microsoft-watch.com/article2/0,1995,1951237,00.asp?kc=MWRSS02129TX1K0000535
http://www.eweek.com/article2/0,1895,1934589,00.asp
http://sftechsessions.com/2006/06/june-online-storage/
http://c2web.blogspot.com/2006/01/carbonite-online-photo-backup.html
http://www.flickr.com/photo_zoom.gne?id=93730415&size=o
http://www.storagesearch.com
http://ptech.wsj.com/archive/ptech-20061214.html
http://www.usatoday.com/tech/products/2007-10-30-tech-backup_N.htm
http://draperandassociates.com/
http://www.dfj.com/