Category Archives: Public Companies

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

Yes, we were right Yahoo was seriously undervalued; Microsoft offers $44.6B for the company, a 62% premium over their value from yesterday

When a few days ago we conducted an in-depth research on Web and ran an analysis based on the information collected we came up to the logical conclusion that Yahoo! was seriously undervalued company. Today Microsoft proved us right by offering $44.6B for Yahoo!, which represents a 62% premium on Thursday’s closing price. All major media are reporting on the deal.

In our post a few days ago we were speculating that Alibaba lost $13B from its market cap in just one month, yet the company’s market value was close to 50% from what Yahoo!’s value then was (~$26B).

Yahoo! is known to own 39% in Alibaba Group. Alibaba Group holds a 75% stake in Alibaba.com, which was worth $17.4 billion. Yahoo owns 39% of Alibaba Group, which puts the value of their share at $6.8 billion. Yahoo! has also bought around 1.2% stake in Alibaba.com by paying $100M so the direct-owned 1.2% stake was worth about $278 million. That puts the total value of Yahoo’s interest in Alibaba.com at north of $7 billion. That was then about 16.7% of Yahoo’s then $42 billion valuation.

The big question then was whether Alibaba.com is overvalued or Yahoo! is undervalued? One should take into serious consideration the fact that Yahoo! is making more than $6B in revenues per year while Alibaba.com is having, as far as we know, no more than $150M in annual revenues. A quick online research revelead that Alibaba had GAAP Revenue of around $46.3M for 2004 while the company’s revenue in the first half of 2006 was about $100 million (presumingly $200M for the entire 2006). For the first 6 months of 2007 Alibaba had revenue of RMB957.7M (~$132MM) (presuming $260M for the entire 2007). The numbers showed big difference, no? Anyway, today we are already pretty sure we were right the other day and it is obvious today that Yahoo! was seriously undervalued and was a good buy.

Microsoft Corp. made an unsolicited $44.6 billion cash and stock bid for Yahoo on Friday, a deal which could shake up the competitive and lucrative market for Internet search. The deal would pay Yahoo shareholders $31 a share, which represents a 62% premium from where Yahoo stock closed on Thursday.  Steve Ballmer, Microsoft’s chief executive, called the move the “next major milestone” for the software giant. “We are very, very confident this is the right path for Microsoft and for Yahoo,” he said. Ballmer, saying that Microsoft has been in “off and on” talks with Yahoo for 18 months, said he called Yahoo CEO Jerry Yang Thursday night to tell him about the bid.

Microsoft made the bid early Friday. In a statement, the company said the offer allows Yahoo shareholders to elect to receive cash or a fixed number of shares of Microsoft common stock, with the software giant’s offer consisting of one-half cash and one-half Microsoft common stock.

Shares of Yahoo (YHOO, Fortune 500) shot up nearly 60% in pre-market trading on the news, while shares of Dow component Microsoft (MSFT, Fortune 500) went down 5%. In a statement, Yahoo acknowledged receipt of the offer and said its board would evaluate the proposal “carefully and promptly.”

Michael Arrington from Techcrunch has also predicted a couple of days ago in his appearance on Fox Business that Yahoo could face a takeover by Microsoft as part of an ad play, and he was right too.

Two other events hit Yahoo over the past week on Thursday, former Yahoo Chief Terry Semel, who opposed an earlier approach made by Microsoft last year, resigned from the Yahoo’s board. In another announcement Yahoo said it would lay off 1,000 employees by mid-February. Yahoo also reported lower fourth-quarter earnings that still beat Wall Street’s now modest expectations for the firm, but it gave a 2008 revenue forecast that disappointed analysts.

Microsoft also said it projects the online advertising market to grow from over $40 billion in 2007 to nearly $80 billion by 2010 and in other news we have read advertising is the key element from the deal as proposed. Regardless Google’s recent problems and the fact they have lost 24% of its market capitalization since November 2007, the company is still leader on the online advertising market and a potential deal between Microsoft and Yahoo! would for sure strengthen their position in the battle for the online leadership with Google. The investors will no doubt be pressing the line that the combined bulk of the Yahoo! flagship website and MSN, Microsoft’s web division, will create – in terms of advertising inventory at least – a counter to Google’s dominance.  Google already controls nearly 60 percent of the U.S. search market, and has been widening its lead, despite concerted efforts by both second-place Yahoo and third-place Microsoft. By combining, Microsoft and Yahoo would have a 33 percent share of the U.S. search market, according to the latest data from comScore Media Metrix. But the idea is it eventually surge ahead of Google in terms of the eyeballs attracted to the combined web sites. The combined internet properties will have reach of at least 700M/800M people online per month but possible overlap of the real uniques can be expected.

According to comScore the current search numbers are as follows:

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

The thing is, Microsoft and Yahoo! have both known this for years and have been falling over themselves to create – or buy – their own advertising technologies that can compete with Google’s. That’s why Microsoft bought aQuantive and Yahoo! has spent furiously on the development of Panama, a rival new advertising platform aside buying a number of other advertising companies like RightMedia and BlueLithium. It’s also part of the reason it’s hard to see any synergies between Microsoft and Yahoo! with their rival proprietary technologies and bolt-on acquisitions. Doubts also abound on whether the two companies would do well together in terms of culture.

Other experts have expressed concerns that Microsoft’s audacious bid for Yahoo reveals the extent to which the Seattle giant has failed to adapt to the Internet age.

On the other side when Yahoo! was created by Jerry Yang and David Filo in 1994, Microsoft was already 21 years old and the largest software developer in the world and indeed Yang by that time was known to go against Microsoft’s technologies and clearly disliking them.

Other questions that have popped up publicly are as follows, including but not limited to.

  • Live search or Yahoo search?
  • Live mail or Yahoo mail?
  • Live messenger or Yahoo messenger?
  • Live spaces, Yahoo 360 or Facebook?
  • MSN Dating (Match) or Yahoo personal?
  • Microsoft’s AdCenter or Yahoo’s Panama advertising platform?
  • .Net or java?
  • Live ID or Open ID?
  • Anyone else?

Microsoft publicly disclosed its cash-and-stock offer in hopes of rallying support from Yahoo’s shareholders, making it more difficult for Yahoo’s board to turn down the bid.

Below is enclosed the entire email as it was sent from Microsoft’s Steven Ballmer to Yahoo’s board of directors and to Jerry Yang. It somehow made the public and appeared on multiple news sources and blogs.  

January 31, 2008

Board of Directors
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Attention: Roy Bostock, Chairman
Attention: Jerry Yang, Chief Executive Officer

Dear Members of the Board:

I am writing on behalf of the Board of Directors of Microsoft to make a proposal for a business combination of Microsoft and Yahoo!. Under our proposal, Microsoft would acquire all of the outstanding shares of Yahoo! common stock for per share consideration of $31 based on Microsoft’s closing share price on January 31, 2008, payable in the form of $31 in cash or 0.9509 of a share of Microsoft common stock. Microsoft would provide each Yahoo! shareholder with the ability to choose whether to receive the consideration in cash or Microsoft common stock, subject to pro-ration so that in the aggregate one-half of the Yahoo! common shares will be exchanged for shares of Microsoft common stock and one-half of the Yahoo! common shares will be converted into the right to receive cash. Our proposal is not subject to any financing condition.

Our proposal represents a 62% premium above the closing price of Yahoo! common stock of $19.18 on January 31, 2008. The implied premium for the operating assets of the company clearly is considerably greater when adjusted for the minority, non-controlled assets and cash. By whatever financial measure you use – EBITDA, free cash flow, operating cash flow, net income, or analyst target prices – this proposal represents a compelling value realization event for your shareholders.

We believe that Microsoft common stock represents a very attractive investment opportunity for Yahoo!’s shareholders. Microsoft has generated revenue growth of 15%, earnings growth of 26%, and a return on equity of 35% on average for the last three years. Microsoft’s share price has generated shareholder returns of 8% during the last one year period and 28% during the last three year period, significantly outperforming the S&P 500. It is our view that Microsoft has significant potential upside given the continued solid growth in our core businesses, the recent launch of Windows Vista, and other strategic initiatives.

Microsoft’s consistent belief has been that the combination of Microsoft and Yahoo! clearly represents the best way to deliver maximum value to our respective shareholders, as well as create a more efficient and competitive company that would provide greater value and service to our customers. In late 2006 and early 2007, we jointly explored a broad range of ways in which our two companies might work together. These discussions were based on a vision that the online businesses of Microsoft and Yahoo! should be aligned in some way to create a more effective competitor in the online marketplace. We discussed a number of alternatives ranging from commercial partnerships to a merger proposal, which you rejected. While a commercial partnership may have made sense at one time, Microsoft believes that the only alternative now is the combination of Microsoft and Yahoo! that we are proposing.

In February 2007, I received a letter from your Chairman indicating the view of the Yahoo! Board that “now is not the right time from the perspective of our shareholders to enter into discussions regarding an acquisition transaction.” According to that letter, the principal reason for this view was the Yahoo! Board’s confidence in the “potential upside” if management successfully executed on a reformulated strategy based on certain operational initiatives, such as Project Panama, and a significant organizational realignment. A year has gone by, and the competitive situation has not improved.

While online advertising growth continues, there are significant benefits of scale in advertising platform economics, in capital costs for search index build-out, and in research and development, making this a time of industry consolidation and convergence. Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition. Together, Microsoft and Yahoo! can offer a credible alternative for consumers, advertisers, and publishers. Synergies of this combination fall into four areas:

Scale economics: This combination enables synergies related to scale economics of the advertising platform where today there is only one competitor at scale. This includes synergies across both search and non-search related advertising that will strengthen the value proposition to both advertisers and publishers. Additionally, the combination allows us to consolidate capital spending.

Expanded R&D capacity: The combined talent of our engineering resources can be focused on R&D priorities such as a single search index and single advertising platform. Together we can unleash new levels of innovation, delivering enhanced user experiences, breakthroughs in search, and new advertising platform capabilities. Many of these breakthroughs are a function of an engineering scale that today neither of our companies has on its own.

Operational efficiencies: Eliminating redundant infrastructure and duplicative operating costs will improve the financial performance of the combined entity.

Emerging user experiences: Our combined ability to focus engineering resources that drive innovation in emerging scenarios such as video, mobile services, online commerce, social media, and social platforms is greatly enhanced.

We would value the opportunity to further discuss with you how to optimize the integration of our respective businesses to create a leading global technology company with exceptional display and search advertising capabilities. You should also be aware that we intend to offer significant retention packages to your engineers, key leaders and employees across all disciplines.

We have dedicated considerable time and resources to an analysis of a potential transaction and are confident that the combination will receive all necessary regulatory approvals. We look forward to discussing this with you, and both our internal legal team and outside counsel are available to meet with your counsel at their earliest convenience.

Our proposal is subject to the negotiation of a definitive merger agreement and our having the opportunity to conduct certain limited and confirmatory due diligence. In addition, because a portion of the aggregate merger consideration would consist of Microsoft common stock, we would provide Yahoo! the opportunity to conduct appropriate limited due diligence with respect to Microsoft. We are prepared to deliver a draft merger agreement to you and begin discussions immediately.

In light of the significance of this proposal to your shareholders and ours, as well as the potential for selective disclosures, our intention is to publicly release the text of this letter tomorrow morning.

Due to the importance of these discussions and the value represented by our proposal, we expect the Yahoo! Board to engage in a full review of our proposal. My leadership team and I would be happy to make ourselves available to meet with you and your Board at your earliest convenience. Depending on the nature of your response, 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.

We believe this proposal represents a unique opportunity to create significant value for Yahoo!’s shareholders and employees, and the combined company will be better positioned to provide an enhanced value proposition to users and advertisers. We hope that you and your Board share our enthusiasm, and we look forward to a prompt and favorable reply.

Sincerely yours,

/s/ Steven A. Ballmer

Steven A. Ballmer

Chief Executive Officer

Microsoft Corporation

Big question here is will the anti trust authorities in US and the EU’s ones allow this to happen. Microsoft has previously shown, not only once, an interest in Yahoo, with reports in May 2007 saying that Microsoft had approached Yahoo about a friendly takeover, rumored to have offered $50B by that time. Some other sources go even further down to offers dated from 2006, according to the CNet article. Mediapost.com has some perspective on the deal from the point of view of ads and eyeballs. Such an acquisition, which would be Microsoft’s largest by far — it bought aQuantive last year for $6 billion — would, as we mention above, need approval by US and EU authorities. A European Commission spokesman declined to comment to Reuters. There’s also a conference call at 8:30am EST where more details will be publicly reveled.
Really more

http://www.yahoo.com/
http://finance.yahoo.com/q?s=YHOO
http://finance.yahoo.com/q?s=msft
http://www.microsoft.com/en/us/default.aspx
http://money.cnn.com/2008/02/01/technology/microsoft_yahoo/?postversion=2008020108
http://biz.yahoo.com/ap/080201/microsoft_yahoo.html?.v=22
http://www.bloomberg.com/apps/news?pid=20601103&sid=asbqLJQTL8eI&refer=us
http://www.bbc.co.uk/blogs/technology/2008/02/microsoft_and_yahoo_perfect_pa.html
http://www.techcrunch.com/2008/02/01/wow-microsoft-offers-446-billion-to-acquire-yahoo/
http://www.techcrunch.com/2008/01/30/lets-trash-yahoo-during-happy-hour/
http://afp.google.com/article/ALeqM5htQYlMQMYqZmuCMJwt514rqKceVw
http://www.techcrunch.com/2007/05/04/microsoft-pursues-yahoo-takeover/
http://uk.techcrunch.com/2008/02/01/if-microsoft-buys-yahoo-what-does-it-mean-for-europe/
http://www.mercurynews.com/localnewsheadlines/ci_8137285
http://www.foxbusiness.com/markets/article/futures-jump-microsoft2fyahoo-bid_461090_2.html
http://in.reuters.com/article/businessNews/idINIndia-31718720080201
http://www.forbes.com/markets/feeds/afx/2008/02/01/afx4602885.html
http://www.marketwatch.com/news/story/microsoft-offers-446-bln-yahoo/story.aspx?guid=035B5DA4-6DDD-44A9-95D6-2EFF58F6EB04&dist=SecMostRead
http://technology.timesonline.co.uk/tol/business/industry_sectors/technology/article3289188.ece
http://slashdot.org/article.pl?no_d2=1&sid=08/02/01/1353211
http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticleHomePage&art_aid=75612
http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSBRU00628720080201
http://online.wsj.com/article/SB120186587368234937.html?mod=yahoo_hs&ru=yahoo
http://www.bigmouthmedia.com/live/articles/semel-steps-down-from-yahoo-board-of-directors.asp/4401/
http://www.nytimes.com/2008/02/01/technology/01cnd-subyahoo.html?em&ex=1202014800&en=ce4ce395e1c80eb4&ei=5087%0A
http://www.guardian.co.uk/media/2008/jan/31/yahoo.digitalmedia
http://www.ft.com/cms/s/7b2043ba-cf68-11dc-854a-0000779fd2ac.html
http://news.zdnet.co.uk/internet/0,1000000097,39292572,00.htm
http://en.wikipedia.org/wiki/Steve_Ballmer
http://news.tigerdirect.com/2008/02/01/microsoft-proposes-acquisition-of-yahoo-for-31-per-share/
http://www.fierceiptv.com/story/microsoft-bids-45-billion-yahoo/2008-02-01?utm_medium=rss&utm_source=rss
http://blog.edge.be/uncategorized/microsoft-koopt-yahoo
http://jimstroud.com/2008/02/01/microsoft-bids-4500000000000-for-yahoo/
http://www.pixelapes.com/2008/02/01/breaking-news-microsoft-offer-to-buy-yahoo/
http://gigaom.com/2008/02/01/dear-yahoo-i-pwn-you-xo-microsoft/
http://www.burlingtonfreepress.com/apps/pbcs.dll/article?AID=/20080201/NEWS/80201015/-1/rss
http://dondodge.typepad.com/the_next_big_thing/2008/02/microsoft-propo.html
http://blogs.reuters.com/mediafile/2008/02/01/microsoft-hands-off-my-yahoo/
http://thenextweb.org/2008/02/01/microsoft-offers-446-billion-for-yahoo-why-yahoo-will-accept/
http://sandeepvenu.wordpress.com/2008/02/01/microsoft-offers-to-buy-yahoo-for-446-bln/
http://www.buzzmachine.com/2008/02/01/microsoft-yahoo-the-deal-of-the-dinos/
http://domainnamewire.com/2008/02/01/what-would-microsoft-yahoo-mean-for-domainers/
http://www.istartedsomething.com/20080202/microsoft-yahoo-big-mess-comparison/
http://blog.searchenginewatch.com/blog/080201-100256
http://www.gadgetell.com/tech/comment/microsoft-offers-to-acquire-yahoo-for-446-billion-dollars/
http://www.seobook.com/what-microsoft-acquisition-yahoo-means-webmasters-web-publishers
http://www.paidcontent.co.uk/entry/419-microsoft-makes-446-billion-cash-and-stock-bid-for-yahoo-62-percent-pre/
http://webworkerdaily.com/2008/02/01/microsoft-offers-to-buy-ailing-yahoo-for-446-billion/

The Washington Post Company acquired CourseAdvisor.com

The Washington Post Company (NYSE: WPO) has acquired the education site CourseAdvisor.com, which is an online lead generator serving the education industry. However, the financial details and terms of the acquisition were not disclosed.

The Wakefield, MA.-based company matches up students with suitable degree or certificate-granting programs across 800 institutions. CourseAdvisor founder and CEO Greg Titus was formerly the head of online education firm Acadient. The Washington Post Company is also the owner of education services firm Kaplan, which is an educational prep service and hence the synergy to justify the acquisition. Kaplan is already among those institutions listed as a potential for match using CourseAdvisor’s search wizard.

The company is known to have raised $12 million investment, which was the company’s first institutional round of financing. The investment was led by ABS Capital Partners, a leading private equity firm focused on investing in established and profitable growth companies, and The Washington Post Company. The money was then said to be used to fund the Company’s continued rapid growth by increasing investment in its sales force and strengthening its balance sheet. As a result of the financing, Deric Emry, a General Partner at ABS Capital, joined CourseAdvisor’s Board of Directors. Ralph Terkowitz, also a General Partner at ABS Capital and Caroline Little, chief executive officer and publisher of Washingtonpost.Newsweek Interactive (WPNI), will serve as observers on the Company’s Board of Directors.

The company was founded in 2004 and is basically an online research directory for postsecondary education, career training, and professional development. We offer more than 7,000 programs through nearly 500 accredited colleges, career schools, training centers, and universities.

With over 1.5 million unique visitors per month, CourseAdvisor has become a leading online education directory (OED). The Company has significant technological advantages which enable it to manage complex search campaigns to source high quality leads. Since all site visits are generated from paid and organic search, each visitor is actively seeking information about colleges, universities and career and professional training. In addition, the Company’s advanced technology platform with superior filtering capabilities offers student profiling, geo-targeting and multi-stage data verification to maximize lead quality for CourseAdvisor’s customers.

Search CourseAdvisor for:

  • Online and Campus Degrees
  • Professional Diploma and Certificate Programs
  • Nursing and Allied Health Schools
  • IT Training
  • Business Degrees
  • Online Master’s in Education
  • Criminal Justice and Homeland Security

The CourseAdvisor Approach
CourseAdvisor’s objective is to be a useful, effective resource for furthering your education and enriching your life. We work hard to make researching higher education easy. Our guided search Wizard finds only those programs that meet your interests, requirements, and qualifications. The basic information you provide helps us connect you with the schools that can best serve you.

Our unique advantage is our team of education, technology, social sciences, and Internet experts. We continually research career fields and employment trends and actively seek out schools that offer exciting new programs in the fastest-growing fields.

We also develop our own custom search technologies to help you find the best opportunities in your chosen career. More than 2 million students visit CourseAdvisor every month! Think of CourseAdvisor as a search engine that runs in both directions… we make it easier for students and schools to find each other.

CourseAdvisor is located in Wakefield, Massachusetts and is now an independent subsidiary of The Washington Post Company since October 11, 2007.

CourseAdvisor.com claims it attracts over 1.5 million unique visitors per month, but a quick look into Quantcast reveals much better numbers – Courseadvisor.com is a top 1,000 site that reaches over 2.8 million U.S. monthly uniques.

The market

Competitors include GlobalScholar, SmartThinking, Tutor.com, and TutorVista.

GlobalScholar, by the way, has today announced a $27 million B Round from existing investors Ignition Partners and Knowledge Universe Education. This is on top of a previously undisclosed $15.5 million A Round the company raised early last year. Board members include Ignition’s Brad Silverberg and former Drugstore.com CEO Peter Neupert.

In conjunction with the investment round, GlobalScholar is also announcing that it has acquired Excelsior Software for an undisclosed amount (although it was less than half the total money raised). Excelsior makes student assessment software used by teachers in 1,000 school districts nationwide. GlobalScholar said it will be adding the Excelsior’s business to its existing Web-based tutoring platform, which it launched quietly last fall.

About ABS Capital Partners

ABS Capital Partners is a private equity firm that was founded in 1990 to invest in mid- to later-stage growth companies in order to create significant, market-leading companies. The firm’s investment strategy focuses on companies in the business services, health care, technology and media & communications sectors. ABS partners with strong management teams to help build businesses with substantial revenues, near-term profitability and solid customer bases. The firm has created long-term value for management and investors. ABS leverages over 100 years of combined investing and operating experience among its partners and provides a range of investment structures, including expansion financing, management buyouts and recapitalizations. With an extensive history and knowledge of equity and mergers & acquisitions markets, ABS Capital provides strategic guidance and helps companies to capitalize on their business opportunities. ABS has $1.5 billion under management and nine investing partners within offices in Baltimore, San Francisco and Boston. Over the past fifteen years, ABS has invested in over 70 portfolio companies, including American Public Education, Inc., DoubleClick, Inc., NeuStar, Inc., Rosetta Stone, Inc. and Vibrant Media, Inc..

About the Washington Post Company

The Washington Post Company (NYSE:WPO) is a diversified education and media company whose principal operations include educational and career services, newspaper and magazine publishing, television broadcasting, cable television systems and electronic information services. The Company owns The Washington Post; Washingtonpost.Newsweek Interactive (WPNI), the online publishing subsidiary whose flagship products include washingtonpost.com, Newsweek.com, Slate, BudgetTravel.com and Sprig.com; Express; El Tiempo Latino; The Gazette and Southern Maryland newspapers; The Herald (Everett, WA); Newsweek magazine; Post-Newsweek Stations (Detroit, Houston, Miami, Orlando, San Antonio and Jacksonville); Cable ONE, serving subscribers in midwestern, western and southern states; and CourseAdvisor, an online lead generation provider. The Company also owns Kaplan, Inc., a leading international provider of educational and career services for individuals, schools and businesses. The Company has an ownership interests in the Los Angeles Times-Washington Post News Service and Bowater Mersey Paper Company.

More

http://courseadvisor.com/
http://www.washingtonpost.com/
http://www.paidcontent.org/entry/419-washington-post-acquires-lead-generator-courseadvisorcom/
http://corporate.courseadvisor.com/archive/press_11_06.php
http://mashable.com/2007/10/11/washington-post-courseadvisor/
http://www.abscapital.com
http://www.techcrunch.com/2008/01/30/globalscholar-raises-27-million-b-round-to-tackle-online-education/
http://www.nytimes.com/2008/01/31/fashion/31CYBER.html?ex=1359522000&en=7e55fe77d4377379&ei=5124&partner=permalink&exprod=permalink
http://www.washpostco.com/company-profile.htm
http://finance.google.com/finance?q=NYSE:WPO

After Internet Brands, LogMeIn, now Al Gore’s Current TV files for an IPO and plans to go public

It seems it is time for small-sized Internet and technology IPOs. After Internet Brands, Inc. went public on NASDAQ, LogMeIn, Inc. filed to do so now Al Gore’s Current is looking forward to do the same. Unlike Internet Brands Inc and LogMeIn, Inc, Current TV is purely from the web 2.0 age, so it would be of particular interest for all companies from the web 2.0 sector to see how the company goes public and what is going to happen after their IPO. The company is planning to raise $100M on $63.8M revenues for the last year with operating losses in the $6M range.

Current TV is, under no doubt, mostly popular due to its co-founder the ex Vice President Al Gore. The registrant is Current Media, Inc., which is the parent company for current.com and Current TV. It has filed to trade on the NASDAQ Global Market under the symbol CRTM.

Current is a global participatory media company with the goal of democratizing media by engaging, informing and enriching our young adult audience and encouraging their participation across platforms. The company operates a television network, Current TV, and a website, Current.com, where they all distribute viewer-created content as well as internally developed and acquired content that is relevant to the lives of young adults. The company believes the combination of their television and Internet platforms creates an immersive and interactive viewer experience for our growing global audience, where the audience participates in both the creation and selection of the content it engages with on both Current TV and Current.com.

The company’s primary sources of revenue are affiliate fees and advertising. Affiliate fees are derived from long-term distribution agreements with cable, satellite and telecommunications operators who pay Current Media, Inc. a monthly fee for each subscriber household that receives Current TV. In the United States, the company’s affiliate customers include DirecTV, Comcast, EchoStar, Time Warner and AT&T. In the United Kingdom and Ireland, affiliate customers include British Sky Broadcasting, or BSkyB, and Virgin Media. In the Spring of 2008, the company has plans to launch in Italy on Sky Italia. Advertising revenue is derived from advertisers who pay for sponsorships and spot advertisements. Selected advertising customers include Toyota, T-Mobile, Johnson & Johnson, General Electric, Geico and L’Oreal. Affiliate revenues accounted for 84% of the company’s total revenues for 2007.

Current TV was launched in August 2005 in approximately 19 million subscriber households in the United States and is now available in approximately 51 million subscriber households in the United States, the United Kingdom and Ireland. In 2006 and 2007, the company recorded revenue of $37.9 million and $63.8 million, respectively where the operating losses were $4.8 million in 2006 and $6.1 million in 2007.

The company intends to use a portion of the net proceeds from this offering to repay in full the principal and accrued interest on an outstanding loan from Dylan Holdings, Inc., which amounted to $30.4 million as of December 31, 2007. The loan is in the form of a senior purchase money note, has an interest rate of 9.25% and matures in May 2008. The company issued this note in May 2004 as part of the purchase price for our acquisition of the NWI television network. NWI television network was purchase in 2004 for $70.9 million, including intangible assets consisting of affiliate distribution arrangements valued at $13.7 million.

The company also intends to use a portion of the net proceeds from this offering to repay in full the principal and accrued interest on their outstanding promissory notes, which amounted to $6.1 million at December 31, 2007. The entered into a note purchase agreement in September 2006 with a consortium of lenders pursuant to which they issued the revolving promissory notes. All of these lenders are currently equity investors in the company. Under the terms of these notes, they borrowed $5M and have made no payments. These notes bear interest at a rate of 15% for the first year and 18% thereafter, which compounds quarterly. In accordance with the terms of these notes, interest is added to the principal through May 4, 2008, at which time the unpaid principal and interest become payable in full.

The company intends to use a portion of the net proceeds from this offering to repay in full the principal and accrued interest on an outstanding note payable to Oracle Credit Corporation, which amounted to $64,000 at December 31, 2007. The company entered into this note payable in May 2006 in connection with the purchase of software and support. The note bears interest at the rate of 9.83%. Under the terms of the note, interest is added to the principal balance. The note requires annual payments of $36,000 on the first day of September of each year until 2009, at which time the final payment of $36,000 is due.

The remaining net proceeds from this offering is planned to be used for working capital and other general corporate purposes. Additionally, the company might also expand their existing business through acquisitions of other complementary businesses, products, services or technologies, although no agreements are currently in place for such acquisitions at this time.

Basically Current relies on its innovative approach, although it is called in their prospectus “innovative but unproven”.

Current was founded with the goal of cost-effectively engaging young adults with news, entertainment and lifestyle programming centered on what is going on in their world. We recognized that to reach young adults it was necessary to reach them via television, where they spend a lot of time and where there is a proven business model, as well as on the Internet, a medium where they are also very active. To do this, we launched a television channel, Current TV, and more recently a website, Current.com. The two serve as distinct consumer destinations, but they are also symbiotic and form a combined platform with which Current engages its audience. Key aspects of our solution include:

Current’s new network model.
Our focus on user-generated content provides a unique connection with our young adult audience. We engage young adults by telling stories in their voices and from their perspectives. We have redefined the scope of “news” for young adults, and broadened our programming to include an array of subjects that are important to our audience.

Current’s programming.
Current has developed a programming model built on several unique content offerings, all designed to reflect the tastes and lifestyles of our target 18-34 year-old audience. Our programming is presented in short segments that we call “pods,” which are typically 2-10 minutes in length, rather than traditional half-hour or hour-long programming blocks.

Current’s innovative advertising solution. 
Our advertising model is designed to appeal to the lifestyles, tastes and needs of young adults. A key solution that we provide advertisers is the ability to let our young adult viewers create commercials that we then air on Current TV. In addition to these viewer created ad messages, or VCAMs, we offer other attractive sponsorship solutions, in which advertisements are integrated with and embedded into our content, providing advertisers a marketing forum that is free from ad-skipping.

Current’s all digital broadcast facility. 
Our TV broadcast facilities are built on an open IP architecture as opposed to traditional broadcast television legacy systems. Unlike high-cost production facilities at traditional cable networks, we have deployed a new, all-digital infrastructure that allows us to produce, acquire and distribute high quality content at a low cost.

Current.com.   
Current.com serves several purposes: it is a news, information and entertainment source for young adults online; it is a real-time connection to programming on Current TV; and it is a platform for collaborative media production. At its core, Current.com is a social news feed.

More about Current TV

Since its inception in 2005, Emmy award-winning Current TV has been the world’s leading peer-to-peer news and information network. Current is the only 24/7 cable and satellite television network and Internet site produced and programmed in collaboration with its audience. Current connects young adults with what is going on in their world, from their perspective, in their own voices.

With the launch of Current.com, the first fully integrated web and TV platform users can participate in shaping an ongoing stream of news and information that is compelling, authentic and relevant to them.

Current pioneered the television industry’s leading model of interactive viewer created content (VC2). Comprising roughly one-third of Current’s on-air broadcast, this content is submitted via short-form, non-fiction video “pods”. Viewer Created Ad Messages (VCAMs) are also open to viewer’s participation.

Current’s programming ranges from daily pop culture coverage to political satire in “SuperNews,” unprecedented music journalism in “The Current Fix,” and unique insights into global stories through Vanguard and Citizen Journalism.

Current is now viewed in the U.S. and U.K. in more than 51 million households through distribution partners Comcast (Channel 107 nationwide), Time Warner (nationwide), DirecTV (channel 366 nationwide), Dish Network (channel 196 nationwide), Sky (channel 193) and Virgin Media Cable (channel 155).

The company is headquartered in San Francisco, California and as of December 31, 2007 employed 391 full-time employees. They also have an office in London, production studios in Los Angeles and an advertising sales office in New York City. The company was initially formed as a limited liability company in Delaware in September 2002 named INdTV, LLC. On May 4, 2004, they have purchased Newsworld International, or NWI, a traditional cable and satellite network. This acquisition enabled the company to gain access to cable and satellite distribution as an independent network. In connection with that acquisition of NWI, they’ve changed their name to INdTV Holdings, LLC and concurrently formed a wholly owned subsidiary INdTV, LLC, a Delaware limited liability company, and transferred all of their operations to INdTV, LLC. Since that time, they have had no operations because all operations are conducted by their subsidiaries. On April 4, 2005, they changed the name of INdTV Holdings, LLC to Current Media, LLC and INdTV, LLC to Current TV, LLC. On August 1, 2005, they terminated NWI’s existing programming and launched Current TV in the United States.

The company faces significant competition in both the cable television and online markets in which they operate. Current TV competes with other television networks that target young adults. These networks include Comedy Central, Fuse, G4, MTV, Spike TV and other major cable networks that are owned by large media conglomerates, such as Comcast, Disney, Time Warner and Viacom. Current.com faces competition from companies that are consumer destination websites, such as AOL, Google, MSN and Yahoo!, online video aggregators, such as Hulu and YouTube, and news and social network platforms, such as del.icio.us, digg.com, Facebook and MySpace.

Executive officers

Albert Gore, Jr. co-founded Current in 2002. He has served as our Executive Chairman and as a member of our board of directors since September 2002, and was elected as Chairman of our board of directors in May 2004. Mr. Gore has served as a Senior Advisor to Google, a global Internet company, since February 2001, and a member of the board of directors of Apple, a consumer electronics company, since March 2003. He has also served as Chairman of Generation Investment Management, an investment management firm, since 2004 and joined Kleiner Perkins Caufield & Byers, a venture capital firm, as a partner in November 2007. He has served as a visiting professor at Middle Tennessee State University. Mr. Gore served as the 45th Vice President of the United States from 1993 to 2001, during which time he also served as President of the United States Senate and as a member of the Cabinet and the National Security Council. Prior to 1993, he served eight years in the United States Senate and eight years in the United States House of Representatives. Mr. Gore was co-winner of the 2007 Nobel Peace Prize. Mr. Gore holds an A.B. from Harvard University.

Joel Hyatt co-founded Current in 2002. He has served as a member of our board of directors and as our Chief Executive Officer since September 2002. Mr. Hyatt has served as a member of the board of directors of Hewlett-Packard Company, a computer electronics company, since May 2007 and as a member of the Board of Trustees of the Brookings Institution since May 2001. From September 1998 to June 2003, Mr. Hyatt was a Lecturer in Entrepreneurship at the Stanford University Graduate School of Business. Previously, Mr. Hyatt was the founder and Chief Executive Officer of Hyatt Legal Plans, Inc., a provider of employer-sponsored group legal plans, and of Hyatt Legal Services, a multi-state legal services firm. Mr. Hyatt holds an A.B. from Dartmouth College and a J.D. from Yale Law School.

Mark Goldman has served as our Chief Operating Officer since December 2003. From July 1999 to December 2003, Mr. Goldman served as a consultant in the media and communications industries. Prior to that time, Mr. Goldman served as Chief Operating Officer for Sky Latin America, a division of News Corp., which provides satellite television service to Latin America, and as an executive at MCA/Universal Television, where he was responsible for business development and the launch of several international cable networks. Mr. Goldman has a B.S. in Economics from The Wharton School at the University of Pennsylvania.

Paul Hollerbach has served as our Chief Financial Officer since October 2007. From August 1997 to January 2007, Mr. Hollerbach worked at Yahoo!, a leading global internet company, where he held a broad range of senior financial roles. At Yahoo!, Mr. Hollerbach most recently served as Vice President, Finance and Investor Relations, and previously served as Vice President, Corporate Controller. Prior to Yahoo!, Mr. Hollerbach held various finance positions at Silicon Graphics, a computer electronics company, and served at KPMG LLP and Ernst & Young LLP, managing technology clients in their assurance practices. Mr. Hollerbach holds a B.S. in Business Administration from California State University, San Luis Obispo and is a licensed CPA in California.

David Neuman has served as our President of Programming since October 2004. From October 2003 to October 2004, Mr. Neuman researched the development of several television and feature film projects and incorporated his own production company, Blackrock Productions, working on primetime television and feature film projects. From January 2001 to October 2003, Mr. Neuman was Chief Programming Officer of CNN Networks, an international television news organization. Prior to that time, Mr. Neuman served as President of Walt Disney Television and Touchstone Television, a television studio. Mr. Neuman graduated from the University of California, Los Angeles in 1983 with an A.B. in Communication Studies.

Joanna Drake Earl joined us in September 2002 and has served as our President of New Media since October 2004. From September 2002 to October 2004, Ms. Drake Earl served as our Senior Vice President of Strategic Partnerships. From February 2001 to July 2002, Ms. Drake Earl was Vice President, Content Strategy, at Digeo, Inc. (formerly Moxi Digital, Inc.), which develops multi-media devices and consumer media applications. Previously, Ms. Drake Earl served as a senior media industry consultant at Booz Allen & Hamilton, an international consulting firm. Ms. Drake Earl holds a B.A. from the University of California, Berkeley and an M.A. from Stanford University.

Joshua Katz has served as our President of Marketing since December 2006. From February 2006 to December 2006, Mr. Katz served as Chief Marketing Officer at TiVO, a provider of digital video equipment and services. From July 2005 to January 2006, Mr. Katz was Vice President of Marketing for Lucasfilm, a film studio. From March 1999 to June 2005, Mr. Katz was President of The Halo Effect, a marketing and brand consulting firm. Previously, Mr. Katz served as Senior Vice President of Marketing at both the Cartoon Network and VH1 cable networks. Mr. Katz has a B.A. from Tulane University.

Directors

Richard C. Blum has served as a member of our board of directors since May 2004. He is the Chairman and President of Richard C. Blum & Associates Inc., the general partner of Blum Capital Partners, L.P., a long-term strategic equity investment management firm that acts as general partner for various investment partnerships and provides investment advisory services, which he founded in 1975. He has also served as the Chairperson and a member of the board of directors of CB Richard Ellis Group, Inc. since 2001. Mr. Blum holds a B.A. and an M.B.A. from the University of California, Berkeley.

Ronald Burkle has served as a member of our board of directors since May 2004. Mr. Burkle is managing partner and majority owner of The Yucaipa Companies, a private investment firm that he co-founded in 1986. Mr. Burkle has also served as a director of Occidental Petroleum Corp. since 2005, KB Home Corporation since 1995, and Yahoo! since 2001.

Edward Renwick has served as a member of our board of directors since May 2004. Mr. Renwick is a partner of The Yucaipa Companies, a private investment firm where he has worked since 1999. Prior to that, Mr. Renwick served as a consultant at The Boston Consulting Group, a strategic consulting firm. Mr. Renwick holds a B.A. from Stanford University and a J.D. and M.P.P. from Harvard University.

Mark Rosenthal has served as a member of our board of directors since May 2004. From June 2005 to December 2006, Mr. Rosenthal served as Chairman and CEO of Interpublic Media, the media operations organization of the the Interpublic Group of Companies. From July 1996 to July 2004, Mr. Rosenthal served as President and Chief Operating Officer of MTV Networks, a cable network. Prior to becoming President and COO of MTV Networks, Mr. Rosenthal rose through positions of increasing responsibility in the affiliate sales and marketing organization at MTV Networks and its predecessor company, Warner Amex Satellite Entertainment Company, ultimately supervising the sales, distribution and marketing for all of MTV Networks’ domestic television networks. Mr. Rosenthal joined Warner Amex Satellite Entertainment Company in 1982. He has also served as a member of the board of directors of CNET Networks since April 2007. Mr. Rosenthal has a B.A. from Kenyon College and an M.F.A. from Yale University.

Orville Schell has served as a member of our board of directors since May 2004. Since January 2007, Mr. Schell has been the Director of the Center on U.S.-China relations at the Asia Society. From January 1997 to January 2007, Mr. Schell served as the Dean of the Graduate School of Journalism at the University of California, Berkeley. Mr. Schell holds a B.A. from Harvard University and an M.A. from the University of California, Berkeley.

Major stockholders include Al Gore, entities affiliated with Blum Capital Partners, L.P., Yucaipa Corporate Initiatives Fund I, L.P., DirectTV, Inc. and Comcast CTV Holdings, LLC. Underwriters include J.P. Morgan Securities Inc., Lehman Brothers Inc. and Pacific Crest Securities Inc.

More

http://current.com
http://current.com/tv
http://www.sec.gov/Archives/edgar/data/1424470/000104746908000572/a2182152zs-1.htm
http://current.com/items/88827879_current_files_for_100m_ipo
http://www.paidcontent.org/entry/419-current-media-files-for-100-million-ipo/
http://www.readwriteweb.com/archives/current_files_for_ipo.php
http://www.readwriteweb.com/archives/current_tv.php
http://www.readwriteweb.com/archives/al_gore_current_re-defining_television.php
http://today.reuters.com/news/articlenews.aspx?type=technologyNews&storyid=2007-10-16T030718Z_01_N15319230_RTRUKOC_0_US-INTERNET-TELEVISION-CURRENT.xml [the story is down]
https://web2innovations.com/money/2008/01/15/logmein-files-for-an-ipo-hoping-to-raise-86m/
https://web2innovations.com/money/2008/01/14/internet-brands-inc-went-public-on-nasdaq/
http://en.wikipedia.org/wiki/Al_Gore
http://www.hoovers.com/yucaipa/–ID__40153–/free-co-factsheet.xhtml

A big question: is Alibaba.com overvalued or Yahoo is seriously undervalued?

Let’s put it that way Alibaba lost $13B from its market cap in just one month, yet the company’s market value is close to 50% from what Yahoo!’s current value is!

When Alibaba went public on the Honk Hong Stock Exchange a couple of months ago everything was more than perfect and the company has raised from the public sector the whopping amount of $1.49 Billion. Alibaba’s market capitalization then skyrocketed to the $25.7B range, just not too far from what Yahoo!’s market capitalization looked like by the time of the IPO of the Chinese Internet company. All those numbers made it the largest Internet IPO in Asia and the second largest globally. Yahoo! was then happy too.

Shares of Alibaba.com, the Chinese B2B marketplace, nearly tripled in their Hong Kong debut, closing at HK$39.50 (US$5.09), after its IPO priced at HK $13.50 (US$1.74). The steep rise was easy to see coming, considering the groundswell of enthusiasm for the company preceding the IPO. The company quickly reached a $25.7 billion market cap, which brings it close with Yahoo (NSDQ: YHOO) Japan as the largest internet company in Asia, according to online sources. 

Alibaba.com and its parent company Alibaba Group initially offered a total of 858,901,000 shares under the Global Offering, of which 227,356,500 shares were offered by the Company and 631,544,500 shares were offered by Alibaba Group. An additional 113,678,000 shares were sold by Alibaba Group upon exercise by the International Underwriters of their Over-Allotment Option.

The eight Cornerstone Investors which participated in the Global Offering included Yahoo! Inc., AIG Global Investment Corporation (Asia) Limited, Foxconn (Far East) Limited, Industrial and Commercial Bank of China (Asia) Limited, Cisco Systems International B.V., and entities affiliated with Mr. Peter Kwong Ching Woo (Chairman of The Wharf (Holdings) Limited), the Kwok family (controlling shareholders of Sun Hung Kai Properties Limited) and Mr. Kuok Hock Nien.

The total cornerstone investment was HK$2.1 billion (US$274 million) and all Cornerstone Investors agreed to a lock-up period of 24 months from the date of listing.

Goldman Sachs (Asia) L.L.C. and Morgan Stanley Asia Limited were the Joint Global Coordinators and Joint Sponsors, and with Deutsche Bank AG, Hong Kong Branch, Joint Bookrunners and Joint Lead Managers of the Global Offering while N M Rothschild & Sons (Hong Kong) Limited was the Financial Advisor to the Company.

Let’s take a look at how the things looked like for the US Internet giant by that time.

Yahoo! is known to own 39% in Alibaba Group. Alibaba Group holds a 75% stake in Alibaba.com, which was worth $17.4 billion. Yahoo owns 39% of Alibaba Group, which puts the value of their share at $6.8 billion. Yahoo! has also bought around 1.2% stake in Alibaba.com by paying $100M so the direct-owned 1.2% stake was worth about $278 million. That puts the total value of Yahoo’s interest in Alibaba.com at north of $7 billion. That’s about 16.7% of Yahoo’s then $42 billion valuation.

What happened next? A few days after the IPO things appeared to be worsening. Many investors took the money and ran, driving shares of Alibaba.com Ltd. down 17% a day after their debut, when they nearly tripled from their initial-public-offering price. Analysts said the flagship business-to-business unit of Alibaba Group is likely to fall further on continued profit-taking for a while, as the stock is still overvalued. The shares of Alibaba.com then fell to 32.60 Hong Kong dollars (US$4.20) from almost 41.50HKD. Aside the fears of the investors that the stock price was unsustainable the company’s stock was also hit by Yahoo!’s CEO Jerry Yang’s appearance on Capitol Hill, defending the company’s handling of Chinese censorship probe. The major support, however, for the company’s falling stock price came earlier this month when Yahoo! announced to lay off hundreds of employees. The final number of people to be laid off from Yahoo’s work force of about 14,000 is yet to be determined and is likely to be announced around the end of the month, perhaps during Yahoo’s January 29 conference call with analysts after it reports fourth-quarter financial results, but it for sure had influenced the stock performance of its smaller Chinese brother Alibaba. Over the weekend, some blogs reported that Yahoo was considering layoffs of 10 percent to 20 percent of its work force. But the people close to the company, who discussed Yahoo’s layoff plans on condition that they are yet to be identified, said the cuts would likely be in the “hundreds.” Yahoo’s stock itself declined 20 percent in the last quarter.

Alibaba’s today stock price is 20.20HKD fallen down from 40.50HKD as what the price was in its best days. The company’s market capitalization is close to $13B (US Dollars), which is a major decline from what the company’s highest value was – close to $26B. 

So, let’s now take a look at how the things look like for the US Internet giant today. Logically Yahoo!’s interest total market value in Alibaba.com is now close to $3,5B falling down from the previous $7B mark. A couple of months ago Alibaba’s value was about 16.7% of Yahoo’s then $42 billion valuation. Today Yahoo!’s market capitalization is $27.77B, which makes Alibaba’s today value close to 50% of Yahoo!’s market value.

The big question here is whether Alibaba.com is overvalued or Yahoo! is undervalued? One should take into serious consideration the fact that Yahoo! is making more than $6B in revenues per year while Alibaba.com is having, as far as we know, no more than $150M in annual revenues. A quick online research revelead that Alibaba had GAAP Revenue of around $46.3M for 2004 while the company’s revenue in the first half of 2006 was about $100 million (presumingly $200M for the entire 2006). For the first 6 months of 2007 Alibaba had revenue of RMB957.7M (~$132MM) (presuming $260M for the entire 2007). The numbers show big difference, no?

All calculations are made on the 1 HKD = 0.128087 USD and 1 CNY (RMB) = 0.138941 USD basis respectively.

More about Alibaba.com

Alibaba.com (HKSE:1688), a member of the Alibaba Group of companies, is one of the world’s premier e-commerce brands and the number one online marketplace for global and domestic China trade. We provide an efficient, trusted platform connecting small and medium-sized buyers and suppliers from around the world. Our international marketplace (www.alibaba.com) focuses on global importers and exporters and our China marketplace (www.alibaba.com.cn) focuses on suppliers and buyers trading domestically in China. Together our marketplaces form a community of more than 24 million registered users from over 200 countries and regions.

Our operational headquarters is based in Hangzhou in eastern China. We have field sales and marketing offices in more than 30 cities in China, Hong Kong, Switzerland and the United States. The company had more than 4,400 full-time employees as of June 30, 2007.

History & Milestones
Jack Ma, our lead founder and chairman, and 18 other founders launched Alibaba.com in his Hangzhou apartment in 1999. Originally, Alibaba.com operated as a bulletin board service for businesses to post buy and sell trade leads, and later became a vibrant marketplace for small and medium enterprises around the world to identify potential trading partners and interact with each other to conduct business online. Alibaba.com listed on the Hong Kong Stock Exchange on November 6, 2007 and is the flagship business of the Alibaba Group.

  • October 2000 Gold Supplier membership launched to serve China exporters.
  • August 2001 International TrustPass membership launched to serve exporters outside of China.
  • March 2002 China TrustPass membership launched to serve SMEs engaging in domestic China trade.
  • July 2002 Keyword services launched on our international marketplace.
  • November 2003 TradeManager instant messaging software launched to enable users to communicate in real time on our marketplaces.
  • March 2005 Keyword bidding launched on our China marketplace.
  • April 2007 Gold Supplier membership launched to serve Hong Kong exporters.
  • November 2007 Alibaba.com listed on the Main Board of the Stock Exchange of Hong Kong Limited, under stock code 1688.

Below is what the Alibaba’s CEO David Wei stated at the time of their IPO.

We have just celebrated our successful listing on the Main Board of The Stock Exchange of Hong Kong Limited and I’d like to welcome all our new investors and many thanks for your visionary investing commitment.

Alibaba.com’s mission is to make it easy to do business anywhere. Over the years, we focused on Small and Medium-sized Enterprises (“SMEs”) sector, which have been the key driving forces for China’s economic growth and playing an increasingly important role in China’s economy. Through our world’s leading B2B e-Commerce marketplaces, we have made it possible for SMEs to grow their business and reach out to the world. We will maintain such long term focus by providing the best user and customer experience.

We take our responsibility to our shareholders very seriously. We adhere to the highest levels of ethical practices and create optimal corporate governance. Our Board of Directors include a number of experienced and high caliber independent directors who chair and run our board committees.

Going public is another a milestone in Alibaba.com’s history. Our belief of being a public company is to create growing sustainable value for customers and shareholders. I look forward to the ongoing support of our shareholders as we continue to build the world’s number one online marketplace for international and China trade.

More

http://blogs.barrons.com/techtraderdaily/2007/11/06/huge-surge-in-alibabacom-stock-price-following-ipo-could-spur-tuesday-rally-in-yahoo-shares/
http://sanjose.bizjournals.com/sanjose/stories/2007/01/29/daily22.html?from_msn_money=1
http://www.bloomberg.com/apps/news?pid=20601080&sid=aLtQSTnRGzdw&refer=asia
http://www.alibaba.com/
http://www.yahoo.com/
http://ir.alibaba.com/ir/stock_information.html
http://finance.yahoo.com/q?s=1688.hk
http://online.wsj.com/article/SB119446125893585466.html?mod=yahoo_hs&ru=yahoo
http://www.paidcontent.org/entry/419-alibabacom-prices-at-top-of-the-range
http://www.news.com/Hundreds-of-layoffs-expected-at-Yahoo/2100-1038_3-6227041.html?tag=nefd.top
http://yhoo.client.shareholder.com/
http://finance.yahoo.com/q?s=YHOO
http://www.tjacobi.com/50226711/alibabacom_revenue.php
http://money.cnn.com/2006/12/31/news/international/alibaba/index.htm
http://startuplay.com/tag/alibaba
http://www.chron.com/disp/story.mpl/ap/fn/5491544.html
http://www.forbes.com/business/2008/01/09/china-internet-media-biz-media-cx_pm_0109notes.html
http://online.barrons.com/article/SB119931045594863115.html?mod=googlenews_barrons
http://www.hkex.com.hk/
http://www.247wallst.com/2008/01/the-coming-inte.html
http://www.hkex.com.hk/Alibaba.htm
http://www.alibaba.com/aboutalibaba/releases_071106.html

Wall Street plunged but does it affect the Web 2.0

Wall Street plunged at the opening of trading Tuesday, propelling the Dow Jones industrials down about 300 points after an interest rate cut by the Federal Reserve failed to assuage investors fearing a recession in the United States.

U.S. markets joined stock exchanges around the world that have fallen precipitously in recent days amid concerns that a downturn might spread around the world. U.S. bonds were mixed, with investors seeking safer investments as stocks plummeted. The oil price, by contrast, fell amid expectations that a downturn would depress demand for energy.

The Fed’s decision to cut its federal funds rate to 3.50% and the discount rate, the interest it charges to lend directly to banks, came a week before the central bank’s regularly scheduled meeting, a sign that the Fed recognized the seriousness of the world financial situation. But there were already fears in the markets before the Fed move that an interest rate wouldn’t be enough to prevent a recession. The cut was the biggest one-day rate move by the Fed since it lowered rates by a full percentage point in December 1991, when the country was trying to emerge from recession.

In the first hour of trading, the Dow was down 293.70, or 2.43 percent, at 11,805.60. The Dow was last below 12,000 in March 2007. The broader Standard & Poor’s 500 index was off 32.49, or 2.45 percent, at 1,292.70, while the Nasdaq composite index fell 66.82, or 2.86 percent, to 2,273.20.

It was the first time the Fed altered the target federal funds rate between scheduled meetings since the markets reopened after the Sept. 11, 2001 terrorist attacks.

It’s been a black year so far for stocks. The SP 500 index, the broadest measure of the stock market, has suffered its worst annual start ever, giving up about 13 percent in just three weeks. The Dow is down about 12 percent since the beginning of the year, and the Nasdaq is down approximately 15 percent.

On the other side the government bond prices surged as stocks fell and investors fled to safer securities. The yield on the benchmark 10-year Treasury note, which moves opposite its price, sank to 3.53 percent from 3.63 percent late Friday.

Both Asian and European markets have also fallen seriously where the Asian market was hit harder. Japan’s Nikkei stock average closed down 5.65 percent — its biggest percentage drop in nearly a decade. The German’s DAX for instance fell to the level of mid 2007, yet higher than the levels of January 2007.

Did the crisis affect the major Internet players anyway?

Below is a quick outlook of some of the more important Internet players and how their stocks performed for today. Clearly everything was colored in red.

Company / Stock Symbol / Last Trade / Change / Mkt Cap

  • Microsoft Corporation  MSFT  32.05   -0.96 ( -2.91% )  299.84B
  • Google Inc.  GOOG  590.14   -10.11 ( -1.68% )   184.62B
  • News Corporation  NWS.A  18.59   -0.10 ( -0.54% )  58.05B
  • Time Warner Inc.  TWX  15.07   -0.47 ( -3.02% )  54.62B
  • eBay Inc.  EBAY  27.13   -1.20 ( -4.24% )  36.68B
  • Amazon.com, Inc.  AMZN  77.62   -2.14 ( -2.68% )  32.31B
  • Yahoo! Inc.  YHOO  20.02   -0.76 ( -3.66% )  26.78B
  • Baidu.com, Inc. (ADR)  BIDU  270.40   -2.64 ( -0.97% )  9.12B
  • IAC/InterActiveCorp  IACI  24.14   +0.02 ( 0.08% )  6.85B
  • SINA Corporation (USA)  SINA  38.95   -0.26 ( -0.66% )  2.13B
  • Sohu.com Inc.  SOHU  39.99   -2.06 ( -4.90% )  1.49B
  • CNET Networks, Inc.  CNET  7.78   -0.38 ( -4.66% )  1.18B 

Alibaba.com Corp., yet another major Internet player, which is traded on the Honk Kong stock market, has today lost 8.91% from its market capitalization.

From all the companies we took a look at only IAC seems to be the winner for today (at the moment we checked them out) – having its stock price colored green.

The big loser could be Answers Corporation which got its stock smashed on Friday, dropping more than 23%. Answers’ plunge jeopardizes Lexico acquisition, which they were hoping to buy for $100M, a deal we have reported a few weeks ago. It is hard to believe that answers.com is attracting more than 34M unique visitors per month and the entire company is today worth less than $30M. The company once was over $140M worth when its stock was close to $18.

The venture capital market

Reporters went public today on the venture capital market released from PricewaterhouseCoopers and the National Venture Capital Association. Total venture funding for the year were up 10.8 percent to $29.4 billion, and up 11.5 percent for the fourth quarter of 2007 to $7 billion. That makes it the fourth straight quarter where VC deals were above the $7 billion mark, and the highest yearly total since 2001. 2007 was a year of steady gains for VC investing, the highest since the $40.6 billion invested in 2001 (and still well-below the $105 billion in 2000).

What about the new entrants from the web 2.0 age?

Facebook the most buzzed web 2.0 company seems to be rethinking the perfect time for their IPO and rumors are they are going to postpone it to at least 2009 or even 2010 if markets recover. Digg, yet another popular web site from the web 2.0 age, is trying to shop itself for months now at the $300M range but we hear no any news for potential acquisition of the social news site.

Despite all talks for possible recession in US and despite all huge losses the major banks in US have incurred, the web 2.0 deals appear to be more than ever before. For example only today [January 22, 2008] we have read about 10 deals at least where the average funding figures where close to $15M. Over the past 30 days, no matter we were in holiday season we have written down to report later more than 100 VC deals for web 2.0 companies, most of them start-up, and at least 20 acquisition and buy out deals with in the sector. Almost half of the deals reported on that particular day were acquisitions. Also today a major VC player has raised $577M late stage growth fund for. The web 2.0 market is going crazier from day to day and the peak seems not reached yet. Based on what we are witnessing the major credit and financial crisis in the states is not affecting the relatively small web 2.0 sector. All the VC activity within the sector gives no signals about crisis or any major slow down in the web 2.0 market, at least for now.
More

http://biz.yahoo.com/ap/080122/wall_street.html
http://www.nyse.com 
http://www.nasdaq.com
http://www.techcrunch.com/2008/01/21/venture-fundings-hit-294-billion-in-2007-the-year-in-charts/
http://finance.google.com/finance?q=GOOG
http://stocks.us.reuters.com/stocks/overview.asp?symbol=1688.HK
http://finance.google.com/finance?q=ANSW
http://www.bloggingstocks.com/2008/01/20/dilution-is-not-the-answers-com/
http://www.globes.co.il/serveen/globes/docview.asp?did=1000299719&fid=942

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
https://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

Proximic lands deals with Yahoo! and Shopping.com, said to be taking on AdSense, which is bad PR approach!

Content-delivery network Proximic, which has a unique contextual matching system, now has ads to sell that can help bloggers and others monetize their sites. The Munich Germany based start-up has signed deals to syndicate product listings from both eBay’s Shopping.com and Yahoo’s Shopping Network as contextual ads on other Websites. What other web sources claim the company is going to have more than 50 million product ad units in its data base coming in from both Yahoo! Shopping and eBay’s Shopping.com. Proximic estimates that Google, in contrast, has an inventory of about one million unique ads. Proximic’s ad network based on this massive inventory will launch at the end of January or early February 2008.

Web publishers are going to be offered with a way to place a widget on their sites, which Proximic is later going to use to serve ads on. Web site participating in the network are going to be later indexed and served up with contextually matching products as text ads along with contextually relevant content links. The ads and contextual links can also appear in a sidebar for anyone who has downloaded the Proximic Firefox add-on.

Proximic is neither matching context based on the keywords nor on the context itself. The company also says it doesn’t use semantic or statistical methodologies to understand the page’s meaning. “Semantic systems are not able to scale,” claims Proximic co-founder and CTO Thomas Nitsche. He also adds “If you hold more than one million documents, you run into a problem,”. Semantic search, he thinks, is too slow at this point for ad serving. Instead of keyword, semantic, or statistical approaches, Proximic uses proximity analysis to determine the page’s context. There is no much information publicly available as to how exactly it works, but from what we know and have read Proximic’s algorithm is translating each body of text into a pattern of characters that then becomes represented by a mathematical vector. Matches are done through traditional vector analysis. The company gives the following explanation:

We look at patterns of letters. We get a profile. The profile is a vector. We compare two vectors, and compute proximity by pattern distance. We can generate proximity between texts. The text can be one word, two words, 15 words, or a complete page.

We have read on other blogs claims of the sort Proximic is taking on Google AdSense, which has provoked us to give our 2 cents too and we think that such claims are, if anything, too boostful and not serious in any way and could be more harmful to the image of Proximic rather than brining anything like positive PR at the end of the day…

Ok, here we go with several potential problems, as we see them, Proximic is going to face and needs to deal with.

First
First off no site running Google AdSense is going to give up on its Google ads and earnings and replace them with an unknown start up that has little to no advertisers on its network. Why? Simply because Google does not allow your site or blog to run third party contextual ads (no matter what technology is used to match the context) on a page where their AdSense ad units run, which leaves little to no chance for Proximic’s contextual ads to stand off the ground any soon or at least not on sites that are currently Google AdSense publishers. There is clearly going to be a conflict of the two contextual ad units and Google is not going to be the one who will be dropped off by the web publishers.

Second
If Proximic is indexing each page, as we read above, that becomes part of its network then they would also need 600,000 servers to get any closer to what Google is today (check the link for more info about the Google’s computation expenditures).

Third
Revenue sharing with web publishers is not going to be very favorable for the web publishers who are going to participate in Proximic’s ad network after eBay, Yahoo! and Proximic itself all get their cut. We have read on Web that Proximic plans on giving participating websites 70 percent of any revenues after eBay and Yahoo! take their cut, which clearly leaves the publishers with a very small piece of the pie. On the other side, if they want to spread around Web, the way Google did, they have to pay web publishers serious money, lots of money, before even starting to think on competing with Google AdSense. Let’s put it that way: we see no way for Proximic to reach the payout Google achieved – $3.5B paid to web publishers in the first 3 quarters of 2007…

Forth
Proximic is not the first third party company to serve ad units from Yahoo! Shopping and eBay’s shopping.com. Even today you can sign up for Shopping.com or Yahoo! Shopping’s developer program and get listings up by next week. There are a number of other shopping engine syndication programs and most of them allow you to target to some extent. One of which is Shopzilla, among others, and Proximic is going to face fierce competition for the love of eBay and Yahoo!.

Fifth
In tests, Nitsche says Proximic is seeing click-through rates as high as 1.5 percent, which is much greater than the 0.25 percent or less that is typical for an AdSense campaign. That’s simply not true. We have been Google AdSense publisher since 2004 and our average click-through ratio has always been way above 1.5%, so speaking for precise targeting we’ll have to wait and see what Proximic is capable of.

Sixth
Proximic claims to be showing relevant results based on the content one is reading by gathering results from multiple sources, including Wikipedia but a weak point here is that they are not maintaining their own index massive, unlike Google. Just like with their third party sources of the information they deliver the same is with their product ads too, they are not theirs, which simply turns Proximic into an affiliate (middleman) company. Either way the company is vulnerable in case any of the third party information/ads providers leaves the game. 

Proximic is a privately funded company based in Munich, Germany and Palo Alto, California. Investors include Wellington Partners and the Holtzbrinck Group, the publisher of numerous publications including Scientific American. The company is said to have 14 employees.

Other players on the contextual arena include Amazon, LinkedWords, Turn, Tumri, Shopzilla, Vibrant Media and Kontera and BlogRovr, among others.

Amazon is also employing the same in-text contextual approach with their in-text linked words where once you mouse over them a JavaScript pop up message appears containing contextual web information and product ads from the huge data base of the shopping company.  

LinkedWords is yet another, already fairly popular, company known to deal with the contextual aspect of Web and is known to be the pioneer of the in-text linked words approach, been around even before Amazon adopted this interesting approach for spreading its products among third party web sites’ context. It runs a massive contextual platform built upon tens of millions of English words and phrases, which web publishers are using to get contextually linked to each other through their platform by using in-text linked words, as the company’s name implies itself. (Disclosure: we are using LinkedWords)

Other ad companies that are known to have tried the same are Turn and Tumri, among others.

More

http://www.proximic.com/
http://www.news.com/8301-10784_3-9850877-7.html?tag=nefd.blgs
http://www.news.com/8301-10784_3-9788569-7.html
https://web2innovations.com/money/2008/01/10/can-google-lead-amid-its-ever-growing-infrastructure-and-computation-expenditures/
http://www.techcrunch.com/2008/01/15/proximic-signs-deals-with-yahoo-and-ebay-to-turn-product-listings-into-contextual-ads-taking-on-adsense/
http://venturebeat.com/2008/01/16/proximic-signs-contextual-ad-deals-with-yahoo-shoppingcom-aims-for-adsense/
http://blog.express-press-release.com/2007/10/02/proximic-takes-on-google-but-overlooks-sphere-linkedwords-kontera-vibranmedia-and-others/
http://www.calacanis.com/2007/12/21/ads-as-content-or-testing-google-and-shopzilla/
 

LogMeIn files for an IPO hoping to raise $86M

It seems it is time for small-sized Internet and technology IPOs. After Internet Brands, Inc. went public on NASDAQ it is now turn of yet another second-tier technology company LogMeIn, Inc. to do the same looking for pretty much the same amount to raise. It has filed to trade on the NASDAQ under the symbol LOGM.

In times when the IPO market isn’t what it was even a few months ago the remote computer access service provider LogMeIn has filed to raise up to $86.3 million through an initial public offering, according to a filing late last week with the SEC. This happens despite the fact a growing crowd of other technology companies are being forced to pull or postpone their IPOs. Some popular and web 1.0 Internet companies that have recently pulled off their IPOs include GoDaddy, Classmates and Accoona (Planned on $80.5) among others. By contrast, looking to capitalize on the Apple halo effect, three former company executives, including co-founder Steve Wozniak, took their new company, Acquicor Technology, public 2006 in an IPO raising $150 million. The money they raised is purely based on their reputation, as Acquicor Technology, is officially designated as a “blank-check” company, meaning they don’t have any principal activity or business model yet and can do whatever they want with investor money, when raised.

LogMeIn intends to use the net proceeds from this offering for working capital and other general corporate purposes, including the development of new services, sales and marketing activities and capital expenditures. They may also use a portion of the net proceeds for the acquisition of, or investment in, companies, technologies, services or assets that complement their business. They also intend to invest the net proceeds from this offering in short-term investment grade and U.S. government securities.

LogMeIn is a leading provider of on-demand, remote-connectivity solutions to small and medium-sized businesses, or SMBs, IT service providers and consumers. Businesses and IT service providers use our solutions to deliver remote, end-user support and to access and manage computers and other Internet-enabled devices more effectively and efficiently. Consumers and mobile workers use their solutions to access computer resources remotely, thereby facilitating their mobility and increasing their productivity. Their solutions, which are deployed on-demand and accessible through a Web browser, are secure, scalable and easy for the customers to try, purchase and use. The company’s customer base has grown from approximately 48,000 premium accounts in November 2006 to approximately 92,000 premium accounts in November 2007.

They believe LogMeIn Free and LogMeIn Hamachi, their popular free services, provide on-demand connectivity to more users than any other on-demand connectivity service, giving them access to a diverse group of users and increasing awareness of our premium services. Our users, they claim, have connected over 30 million computers and other Internet-enabled devices to a LogMeIn service, and during November 2007 the total number of devices connected to their services increased at an average of over 60,000 per day. They complement their free services with nine premium services, including LogMeIn Rescue and LogMeIn IT Reach, the company’s flagship remote support and management services, and LogMeIn Pro, their premium remote access service. Sales of the premium services, the company claims, are generated through word-of-mouth referrals, Web-based advertising, expiring free trials that they convert to paid subscriptions and direct marketing to new and existing customers.
 
LogMeIn delivers each of their on-demand solutions as a hosted service that runs on their proprietary platform called Gravity. Gravity establishes secure connections over the Internet between remote computers and other Internet-enabled devices and mediates the direct transmission of data. This robust and scalable platform connects over 4.2 million computers to the company’s services each day.

The company sells its services on a subscription basis at prices ranging from approximately $40 to $1,900 per year. During the nine months ended September 30, 2007, the company has completed over 159,000 transactions at an average transaction price of approximately $160. During the nine months ended September 30, 2007, LogMeIn generated revenues of $18.4 million, as compared to $7.3 million over the same period in 2006, an increase of 151%.  

Principal stockholders in the company as of December 31, 2007 are as follows:

  • Prism Venture Partners IV, L.P.- 23.98% 
  • Polaris Venture Partners – 21.16% 
  • Technologieholding Central and Eastern European Funds – 15.96%
  • Integral Capital Partners VI, L.P. – 8.98% 
  • Intel Capital – 5.47%
  • Michael K. Simon – 7.92%  
  • Marton B. Anka – 6.94%
  • Kevin K. Harrison – 1.35%

As it uses a peer-to-peer data transfer model after it makes the connection between the home computer and the remote user, LogMeIn faces less of an infrastructure burden as it grows. The company has a patent-pending service delivery platform called Gravity, which reduces their bandwidth and other infrastructure requirements, which, they believe, makes their services faster and less expensive to deliver as compared to competing services.

The company sells primarily to enterprises, so the IPO may also be an effort to gain some credibility with corporate buyers. Some of that credibility may also come from a deal LogMeIn signed with Intel in December 2007. The previously undisclosed deal involves Intel investing $10 million in LogMeIn and an agreement to tightly integrate LogMeIn’s services with Intel hardware. Based on the prospecutus filed with SEC, it turns out that Intel took only 5.47% for its $10M investment. The chipmaker will also market and sell LogMeIn’s service to its customers and share that revenue with LogMeIn. Polaris Venture Partners, Prism Venture Partners, Integral Capital Partners and Intel Capital are backing the five-year-old company.

Over the past weeks I have seen lots of online ads of LogMeIn all over the Web. I guess this is meant to fuel the company’s growth as it is approaching its IPO.

LogMeIn Hamachi, the company’s popular free services is actually a result of an acquisition done back in 2006. By that time LogMeIn has acquired the based VPN provider, Hamachi as the terms of the deal were not disclosed publicly. Hamachi has by that time about three million beta users, and the company claimed it is adding 400,000 computers a month.

A disturbing fact popped up on Web while we were researching for the company. Experts by that time gave the following explanation: “the technical side of this service establishes a VPN tunnel via a gateway server on Cocos Island. If this service were to ever embrace port hopping technology like Skype-uses, you’d have a peer to peer link established from your corporate network to foreign soil. This is problematic for many businesses.”

More about LogMeIn

LogMeIn, Inc. was established in 2003 by the creators of RemotelyAnywhere, the award-winning remote control and administration software. The company develops and markets innovative remote access, productivity, management and security products that serve mobile professionals and system administrators with a suite of SSL, TLS and SSH-encrypted products.

Based outside of Boston, Massachusetts, LogMeIn also maintains a development center in Budapest, Hungary. In February 2003, the company incorporated under the laws of Bermuda. In August 2004, they have completed a domestication in the State of Delaware under the name 3am Labs, Inc. and later changed their name to LogMeIn, Inc. in March 2006.

LogMeIn, Inc. has the following trademarks or registered trademarks: Gravity™, LogMeIn® Backup™, LogMeIn® Free®, LogMeIn® Hamachi™, LogMeIn® Ignition™, LogMeIn® Rescue®, LogMeIn® Rescue+Mobile™, LogMeIn® Pro®, LogMeIn® IT Reach® and RemotelyAnywhere®.

Some of the company’s major clients include 3M, BestBuy, AMD, DHL, HSBC, IBM, Konika Minolta, Rolls-Royce and SAP.

Management Team

Michael Simon, CEO
Simon was the founder, chairman and CEO of Uproar Inc., a Nasdaq – and Easdaq – listed company that was acquired by Vivendi Universal in March 2001. He has a BS in Electrical Engineering from the University of Notre Dame and an MBA from Washington University St. Louis.

Marton Anka, CTO
Anka was the original creator and principal architect of RemotelyAnywhere. Anka has been at the forefront of Internet technology since 1995. He created the first high-volume, real-time, secure-transaction platform in Java that was commercially launched in August 1996. Anka earned his diploma in Information Technology from the Szamalk Institute (Hungary).

Jim Kelliher, CFO
Kelliher has more than 20 years experience in key financial roles in the high tech industry. Most recently, he was Chief Financial Officer of IMlogic, Inc. , a venture backed start-up in the enterprise instant messaging market. Prior to Imlogic, Jim was Sr. VP of Finance and Operations at Parametric Technology and was European Finance Director of Cullinet Software. He began his career with PricewaterhouseCoopers after receiving a Bachelor of Science degree in Accountancy from Bentley College.

Kevin Bardos, VP Product Development
Bardos, a 15-year high-tech veteran, manages the development team for LogMeIn’s suite of IT support tools. He led business development efforts for ERP company Scala Business Solutions (now Epicor) and was co-founder and managing director of the Central European online media agency Red Dot. Bardos received a B.A. in Economics from Queen’s University, Ontario, Canada.

Andrew Burton, VP Product Marketing
With more than a decade of industry experience, Burton has driven product strategy, product marketing and product management for a number of market-leading technology companies. He was previously with Symantec Corporation, where he held a senior product management position. Prior to Symantec, Burton delivered new products and innovative solutions at IMlogic, Groove Networks (a Microsoft company), USinternetworking (an AT&T company), and Accenture. He earned his MBA from Boston College, a Masters in Information Systems from University College, Dublin, and a BS from Oregon State University.

Michael J. Donahue, VP and General Counsel
Donahue is responsible for all the company’s legal affairs. Previously, he was vice president and general counsel for C.P. Baker & Company, a Boston-based venture capital and management services company. Prior to that, he spent six years with Wilmer, Cutler, Pickering, Hale and Dorr LLP – leaving as a junior partner in 2005. Donahue has a BA from Boston College and received his JD from Northeastern University School of Law.

Kevin Farrell, VP and GM, Digital Living
Farrell has driven strategy and product management for several successful start ups and is responsible for extending LogMeIn’s award-winning remote connectivity service and future initiatives. He was formerly Sr. VP at Ensim Inc., a software startup in the hosted Web, VoIP, messaging and collaboration space after serving as VP, Product Management and Marketing for TeleGea—which was acquired by Ensim. He has a BS in Mechanical Engineering and a MS in Computer Science from Villanova University, and a MBA from Seton Hall University. Farrell also holds several patents.

Kevin Harrison, VP Sales
Harrison drove the worldwide sales strategy and organization, including enterprise, partner, and direct sales channels, for Ximian, a leading Linux application company. Before Ximian, Harrison had sales leadership roles with MapInfo, Netegrity, and NetCentric. Harrison received a BS in Accounting from Boston College.

Richard Redding, VP and GM, Mobile
Redding worked in strategy and business development at AT&T, and previously was at Excite@Home in international business development and operations. Excite@Home was the leading broadband Internet company offering high-speed Internet access and producing a network of web properties including the Excite portal. Redding graduated with honors from the University of California at Santa Cruz and has his MBA from the University of Santa Clara.

Conan Reidy, VP Business Development
Reidy is responsible for identifying key technology partnership opportunities for LogMeIn. He was previously with Symantec Corporation, where he held a senior business development position. Prior to Symantec, Reidy ran business development for IMlogic, Inc., an instant messaging management vendor, and was instrumental in the sale of IMlogic to Symantec in early 2006.

Board of Directors

Dave Barrett, Polaris Venture Partners
Dave joined Polaris Venture Partners after a 22-year operating career. Prior, Dave served as chief operating officer of Calico Commerce, where during his tenure, the company evolved from venture-backed startup to a $45M, publicly-held corporation, helped to pioneer the e-business market, and with market value in excess of $3 billion, was both one of the top-performing IPOs of 1999 and 6th most successful offering in the history of NASDAQ. Before that, he served as senior vice president of worldwide operations for Pure Atria Software Corporation, continuing in that role after the company was acquired by Rational Software Corporation for $1 billion in 1997. Prior to Rational, Dave spent twelve years with Lotus Development Corporation, where among many roles, he served as vice president of field sales and services, leading the build-out of the company’s global sales & services effort. He also served as general manager of worldwide federal systems, the company’s then-fastest growing division. Lotus was acquired by IBM in 1995 for $3.5 billion, the largest merger in software industry history up to that time.

Woody Benson, Prism VentureWorks
Benson is a general partner at Prism VentureWorks. He joined the firm in 2004 and primarily invests in digital living companies. He also focuses on mobile and on-demand business models. He came to Prism from Lazard Technology Partners, where he managed the firm’s Boston office. Career highlights include serving as Chairman, President and CEO of MCK Communications, which went public in 1999 and completed a secondary offering in 2000.

Kenneth Cron, Midway Games
Cron is chairman of Midway Games, a Chicago-based developer and manufacturer of home video game entertainment products. He has held key leadership roles in businesses that have been instrumental in transforming the contemporary technology, media and entertainment markets. His involvement steering both public and private companies to success includes overseeing and growing stable organizations into global enterprises, revitalizing large companies, and launching start-ups with eventual public offerings. As interim Chief Executive Officer of Computer Associates International Inc., Cron was instrumental in stabilizing the company following a challenging period. Prior to Computer Associates, Cron was Chairman and CEO of Vivendi Universal Games, Inc., a global leader in the publishing of online, PC and console-based interactive entertainment.

Irfan Salim, MarkMonitor
Salim is president and chief executive officer, of MarkMonitor, the global leader in enterprise brand protection. He brings more than 20 years of experience growing and leading world-class Internet security, fraud prevention, and domain registrar companies. Prior to MarkMonitor, he was president and chief operating officer of Internet security company Zone Labs, which was acquired by Check Point Technologies. Earlier, Salim was president and CEO of NameSecure.com, an Internet domain name registrar and services company as well as serving as president of US and European operations at security leader TrendMicro.

More

https://secure.logmein.com
http://www.sec.gov/Archives/edgar/data/1420302/000095013508000171/b67378lmsv1.htm#116
http://gigaom.com/2008/01/14/logmein-files-for-86m-ipo-gets-money-from-intel/
http://gigaom.com/2006/08/08/logmein-buys-hamachi/
http://ipadventures.com/?p=1124
http://gigaom.com/2006/08/08/logmein-buys-hamachi/
https://secure.logmein.com/go.asp?page=pressrelease&id=49
http://redmondmag.com/features/article.asp?editorialsid=2400#neverwas
http://www.tmcnet.com/planetpdamag/articles/16929-logme-enables-remote-tech-support-smartphones.htm
http://www.canada.com/montrealgazette/columnists/story.html?id=6e9a2720-cdac-4366-bb94-3c71a728bcc8
http://www.pcmag.com/article2/0,2704,2219740,00.asp
https://secure.logmein.com/corp/pressrelease.asp?id=99
 

Internet Brands, Inc. went public on NASDAQ

Internet Brands, Inc., the smaller brother of IAC in terms of Internet strategy, and an Internet holding company with a number of second tier e-brands went public in the last weeks of 2007. They filed for their IPO back in July 2007 and were then planning to raise $100M/$115M million.

Internet Brands, Inc. was by that time planning to sell 3,750,000 shares of Class A common stock and the selling stockholders named in this prospectus are selling 5,816,454 shares of Class A common stock. We will not receive any of the proceeds from the shares of Class A common stock sold by the selling stockholders. The company and some of the selling stockholders have granted the underwriters a 30-day option to purchase up to an aggregate of 1,434,968 additional shares of Class A common stock, to cover over-allotments, if any. This was an initial public offering of our Class A common stock. They have an expectation the initial public offering price of our Class A common stock to be between $10.00 and $12.00 per share and they have applied for approval to list our Class A common stock on the NASDAQ Global Market under the symbol “INET.” 

The company revealed no specific plans for the use of the net proceeds of this offering. The principal reasons for the offering are to provide their stockholders liquidity in the public equity market, raise cash for general corporate purposes, which may include working capital and capital expenditures, and support the company’s general growth plan, which includes possible future acquisitions of complementary products, technologies and businesses. The timing and amount of their actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of the business. Pending these uses, Internet Brands Inc. intends to invest the net proceeds of this offering primarily in investment-grade, interest-bearing instruments.

The company was founded in 1998 as CarsDirect.com and, reflecting its growth and diversification, changed its name in 2005 to Internet Brands, Inc. and is a subsidiary of Idealab. Credit Suisse and Thomas Weisel Partners were underwriting the IPO. Investors include Idealab, the company’s largest shareholder, Foundation Capital, Clearstone Venture Partners, among others. It is interesting to note the fact that Idealab Holdings, L.L.C., through its ownership of our Class A common stock and exclusive ownership of our Class B common stock, will have control of approximately 67% of the votes represented by our Class A common stock, on an as-converted basis, and Class B common stock outstanding as of September 30, 2007. Thus, Idealab Holdings, L.L.C. will be able to influence or control matters requiring approval of our stockholders, including the election of directors and the approval of mergers, acquisitions and other significant corporate transactions.

What happened since then?

In times when the IPO market isn’t what it was even a few months ago the El Segundo, Calif.,-based operator of small, consumer-focused Web sites managed to go public, unlike a growing crowd of other technology companies being forced to pull or postpone their IPOs. Some popular and web 1.0 Internet companies that have recently pulled off their IPOs include GoDaddy, Classmates and Accoona (Planned on $80.5) among others. By contrast, looking to capitalize on the Apple halo effect, three former company executives, including co-founder Steve Wozniak, took their new company, Acquicor Technology, public 2006 in an IPO raising $150 million. The money they raised is purely based on their reputation, as Acquicor Technology, is officially designated as a “blank-check” company, meaning they don’t have any principal activity or business model yet and can do whatever they want with investor money, when raised.

Interestingly, instead of going further with its initial plans to sell 9.57 million shares between $10 and $12 a share, Internet Brands, Inc. settled for selling 6 million shares at $8 each. This put together with the fact their three quarters of 2007 resulted in a $2.5 million loss, which is not a good way to kickoff an IPO.

Second, instead of raising as much as $115 million, the company took in $48M or about 42 cents for every dollar it had hoped to raise. Internet Brands closed its first day of trading at $8, unchanged from the offer price — despite trading volume of 1 million shares, which was more than 10 times the average daily volume since then.

The company’s today (January 14, 2008) market capitalization is $260.63M where the 52Wk High was $8.87 while the 52Wk Low is $5.84. Today’s stock quote is at $6.20, way below its IPO stock price.

The company had revenues of $85 million in 2006 while the 2007’s revenues have actually declined from $65.2 million to $64.9 million. Its Q107 revenues declined to $19.1 million, compared to $21.9 million in Q106. This has been attributed to the slowing interest in the consumer Internet segment, especially for the auto industry. With 35 acquisitions during 2007, including Jelsoft Enterprises’ vBulletin, ApartmentRatings.com, DVD Talk and ePodunk, it has been looking to improve the communications technology across its growing network of commerce sites.

The acquisitions made by Internet Brands, Inc. total $84.8M as of today.

The guys behind vBulletin (JelSoft Enterprises)  have said by that time “We are pleased to announce that Jelsoft Enterprises Limited has been acquired by Internet Brands, Inc., a leading provider of automotive, travel and home-related sites and communities. As part of a larger organisation, with more than 500 employees, Jelsoft has access to additional resources, support and business expertise which will ensure that we can continue to grow and flourish. Products will continue to be actively developed and fully supported, and as time goes on you will begin to see noticeable changes and improvements that are made possible by being part of a larger organization.” The vBulletin’s co-founder, John Percival, left the company.

The company is leveraging over 27M unique visitors per month and is having agreements and relationships with the various vendors that benefit through their sites. CarsDirect does, for example, collect money from the dealers that are signed to their network. These dealers provide the vehicles to the shoppers on the site. The larger dealers clearly source more vehicles and are therefore likely to be paying more to CarsDirect. Some public sources claim the dealers pay anywhere from $35-$75/CPM, which is fairly high price and is perhaps brining in solid ad revenues to the company. More than 3,000 local car dealers have joined its nationwide network and it has alliances with Penske Automotive Group (formerly United Auto Group).

In general, Internet Brands Inc. seems to have some clear strategy problems. Their intent is to be a leading provider in community based research and transactions in the areas of automotive, real estate and travel, and they certainly own enough web properties in the respective categories to be the leader.  However, what Internet Brands Inc. has not done well is to leverage the 40+ brands they own to create an ultimate experience in any of those sectors. Online sources claim that the teams, part of the many acquired companies, were forced to integrate to their corporate structure way too quickly resulting in the opposite situation where Internet Brands Inc.’s companies seem disjoint, disintegrated with little to no ability to create game changing synergy. 

Maybe even more concerning is that Internet Brands Inc. owns many so called web 1.0 or web 1.5 brands, websites that are community driven, but are doing so with a look and feel of the past Internet decade. What makes this concerning is that Internet Brands Inc. is in a dangerous position of gradually losing its various communities to new-comers that take full advantage of web 2.0 technologies and functionality. Internet Brands Inc. should use the money they’ve raised from the IPO to either develop or acquire better positioned web properties towards the web 2.0-age if they want to retain and expand their online offerings and reach.

By contrast, Jefferies & Co initiates INET with a Buy and a $10 target saying as an owner-operator of a broad portfolio of vertically-oriented sites, INET is benefiting from the fragmentation of online audiences, and advertisers’ quest for highly targeted consumers. The investment firm says traffic growth, in part through acquisitions, and improvement in monetization should continue to drive INET’s prospects long-term.

Below are some of the recent sales of unregistered securities, including acquisitions and stock option plans. Since January 1, 2004, the company has issued the following securities that were not registered under the Securities Act of 1933:

1.  On December 31, 2004, we acquired certain assets and liabilities of LoanApp, Inc., and all of the stock of LoanApp, Inc., an affiliate of Myers Internet, Inc., for $2.4 million, including 212,563 shares of our Class A common stock. The 212,563 shares were issued to Warren H. Meyer, the controlling stockholder of Myers Internet, Inc. and the then sole stockholder of LoanApp, Inc., as follows: On December 30, 2007, January 31, 2005, February 2, 2005, and June 10, 2005, we issued 152,284, 15,863, 22,208, and 22,208 shares, respectively.

2.  On April 26, 2005, we exchanged 2,200,000 shares of Series D preferred stock for 2,000,000 shares of Class B common stock, pursuant to a Share Exchange Agreement with Idealab Holdings, L.L.C.

3.  On June 1, 2005, we acquired the assets and certain liabilities of 1-800 Communications, Inc. and Advanced Lead Generation, Inc. for $8.5 million, which consideration included 89,392 shares of our Class A common stock issued on June 1 to Jonathan Kratter and 89,392 shares of our Class A common stock issued on June 1 to Stuart Heller, the sole shareholders of the selling corporations.

4.  On July 15, 2005, in connection with the acquisition of VacationHomes.com, we issued 15,000 shares of Class A common stock to Kurt Leinbach.

5.  On February 22, 2006, we acquired certain assets and liabilities of Client Shop, Inc. In connection with this transaction, we issued 14,113 shares of Class A common stock to Client Shop, Inc.

6.  On September 13, 2006, we issued 5,000 shares of Class A common stock to Heidrick and Struggles, Inc. pursuant to a warrant exercise at $0.70 per share.

7.  On February 27, 2007, we extended the expiration date for four warrants to purchase 1,554,314 shares of Series F preferred stock, issued to Penske Motor Group, Inc. (formerly Penske Automotive Group, Inc.), Penske Automotive Group, Inc. (formerly United Automotive Group, Inc.) and Penske Corporation, to (i) as to three of the warrants, the earlier of December 31, 2008 or the termination of Roger Penske’s service as a director and (ii) as to one of the warrants, December 31, 2008.

8.  Between January 1, 2004 and the date hereof, we granted stock options to purchase 3,519,755 shares of Class A common stock at exercise prices ranging from $0.50 to $9.50 per share, with an average price per share of $3.31, to employees and consultants pursuant to our 1998 Stock Plan.

9.  Between January 1, 2004 and the date hereof, we granted stock options to purchase 95,500 shares of Class C common stock at exercise prices ranging from $0.50 to $4.70 per share, with an average price per share of $1.12, to employees and consultants pursuant to our 2000 Stock Plan.

10.  Between January 1, 2004 and the date hereof, we awarded stock options to purchase 16,750 shares of Class A common stock at an exercise price of $9.70 per share, and 386,702 shares of our restricted stock, valued at $9.70 per share, to directors, officers and employees pursuant to our 2007 Equity Plan.

11.  Between January 1, 2004 and the date hereof, we granted stock options to purchase 181,806 shares of Class A common stock at exercise prices of $1.50 per share to employees and directors outside of our 1998 and 2000 Stock Plans and 2007 Equity Plan.

12.  Between January 1, 2004 and the date hereof, we issued an aggregate of 2,293,378 shares of Class A common stock upon exercise of options under our 1998 Stock Plan, of which 532,569 shares were reacquired through repurchase of restricted (unvested) shares, promissory note repayment and exercise of right of first refusal.

13.  Between January 1, 2004 and the date hereof, we issued an aggregate of 20,641 shares of Class C common stock upon exercise of options under our 2000 Stock Plan.

14. Between January 1, 2004 and the date hereof, we issued an aggregate of 106,806 shares of Class A common stock upon exercise of options granted outside of our 1998 and 2000 Stock Plans and 2007 Equity Plan, of which 29,748 shares were reacquired through repurchase of restricted (unvested) shares.
 
15. Between January 1, 2004 and the date hereof, we issued an aggregate of 1,042,985 shares of Class A common stock upon the exercise of a warrant held by JPMorgan Chase & Co.

More about Internet Brands, Inc.

Internet Brands is a leading Internet media company that builds, acquires and enhances a rapidly growing network of branded websites in the automotive, travel and leisure, and home and home improvement categories. Utilizing a cost-efficient, proprietary operating platform, the Company operates and enhances websites that attract consumers through rich content, opportunities for participation in strong online communities, and user-friendly functionality, which enables the company to sell targeted advertising through various formats, such as cost per lead, cost per thousand impressions, cost per click, cost per action, and flat fees. Internet Brands operated 45 principal websites as of September 30, 2007, and attracted 27 million unique visitors during the month of September.

The company is based in El Segundo, CA and as of 2006 it had 559 employees. Major competitors include Autobytel, AutoNation, IAC, among others.

Some of the more popular brands of the company are:

Other web properties include:

  • Autodata
  • NewCarTestDrive.com
  • BBOnline.com
  • CruiseMates.com
  • VacationHomes.com
  • Loan.com
  • Mortgage101.com
  • RealEstateABC.com
  • AudiWorld.com
  • CorvetteForum.com
  • Ford-Trucks.com
  • FlyerTalk.com
  • TrekEarth.com
  • Wikitravel.org
  • BrokerOutpost.com
  • DoItYourself.com

And more…

Management team

Robert N. Brisco / Chief Executive Officer

Bob Brisco has been CEO, President, and Director of Internet Brands since 1999. He has led the growth of the company from an early stage to a position today of significant and rapidly growing profitability. Brisco has extensive experience in building high performing organizations and consumer brands, has led business turnarounds, and has been instrumental in the success of several Internet businesses.

Brisco joined Internet Brands from Universal Studios Hollywood and CityWalk, where he was President of one of the largest entertainment destinations in the world, hosting 10 million visitors per year. He oversaw all aspects of the business, including operations, marketing, sales, technology, finance, and entertainment. Prior to Universal, Brisco was senior vice president of advertising, marketing, and new business development for The Los Angeles Times. At The Times, he was responsible for over $1 billion of revenue. He oversaw all of The Times’ new media operations, directing the launch of LATimes.com, and leading acquisitions such as Hollywood.com. As a corporate officer of Times Mirror, Brisco was central in the company’s new media investments. He was a founding board member of Classified Ventures, which has launched Internet services in the real estate, rentals, and automotive categories. He also served as a Director of La Opinion, the largest Spanish language newspaper in the U.S. Previously, Brisco was a consultant with McKinsey & Co. and the Boston Consulting Group. As a consultant, he specialized in media and consumer products and developed winning business strategies for many clients. Brisco received an MBA from UCLA and a BA from USC (summa cum laude) in economics and journalism.

Lisa Morita / Chief Operating Officer

Lisa Morita oversees the company’s day-to-day operations including sales, customer service, pricing, and product and business strategy for the Automotive and Home Divisions. Prior to joining Internet Brands in March 2007, Morita was Senior Vice President of Customer and Content Solutions at Yahoo! Search Marketing. She was responsible for leading the customer and editorial operations that supported online advertisers who spent billions of dollars in search marketing. She led the customer operations team through the successful migration of its hundreds of thousands of online advertisers onto an entirely new platform, “Project Panama.” Morita joined GoTo.com in 2001 and scaled the operation during its rapid growth as Overture Services. Morita has extensive marketing and general management experience in companies ranging from early stage to Fortune 500 companies. She was SVP of Marketing at eMind, LLC, where she was part of the team that grew the start-up company into a leading provider of eLearning solutions. Previously, Morita was Vice President of Advertising and Marketing at The Los Angeles Times, responsible for retail ad sales and marketing. She began her career at Carnation Company/Nestle USA in brand management running brands including the most profitable in the division. Morita received an M.B.A. from Stanford University and earned a B.A. from Occidental College.

Debra Domeyer / Chief Technology Officer

As Chief Technology Officer, Debra Domeyer oversees information technology, creative services, development and architecture for Internet Brands. Prior to joining Internet Brands in 1999, she served as Vice President and Chief Information Officer at PG&E Energy Services. There, she created Web-based information products in support of a $220 billion nationwide industry initiative promoting commodity products. Prior to PG&E, she was Vice President of Information Systems for Times Mirror Company. Domeyer also has extensive experience in the mortgage industry. From 1989 to 1993, she directed information systems operations for the Federal Home Loan Mortgage Corporation during a year of record growth, then led re-engineering improvements at Countrywide Home Loans, one of the country’s leading mortgage loan companies. From 1983 to 1988, Domeyer served in the White House, supervising development of distributed applications and secure communications for the President’s trips worldwide, including the Japan Economic Summit and the US/Russia Summit in Iceland. Domeyer has a B.A. in Business from Loras College and a master’s degree in Information Systems Technology from George Washington University.

Alexander E. Hansen / Chief Financial Officer

Alex Hansen is responsible for the controllership, operational accounting, finance, planning and treasury functions for Internet Brands. He has been a Chief Financial Officer for over 15 years, serving as the finance executive for both public and private companies ranging in size from start-ups to middle-market companies with revenues over $800 million. Companies he has served, spanning the consumer products, software development, advertising and entertainment industries, include CreativePlanet, Quisic, J. Walter Thompson and GROUPE DANONE. Hansen is a partner and board committee member of Tatum LLC, a CPA (former manager with PriceWaterhouse), a member of the AICPA and the CSCPA, and a graduate of Williams College and Princeton Theological Seminary.

B. Lynn Walsh / Executive Vice President, Corporate Development and General Counsel

Lynn Walsh is responsible for structuring and negotiating acquisitions and strategic partnerships and oversees all human resource, legal, and regulatory aspects of the company’s business. Prior to joining Internet Brands in 2000, Walsh was a partner in the Technology group at Alston & Bird LLP in Atlanta, Georgia, where she specialized in public and private offerings of securities, mergers and acquisitions and corporate finance. Previously, Walsh was a partner at Hunton & Williams in Atlanta. She received her B.A. from the University of Michigan and her J.D. from Wayne State University Law School.

Chuck Hoover / Senior Vice President, Marketing and Business Development

Chuck Hoover oversees Internet Brands’ marketing including online and offline advertising, consumer and product research, acquisition and retention strategies, and PR. He is also responsible for Internet Brands’ business development initiatives to create relationships with strategic partners and oversees advertising sales. Hoover joined Internet Brands in December 1999 from Homestore.com, operator of the nation’s largest real estate Web sites. At Homestore he was responsible for consumer marketing including management of distribution partnerships with top portals and product development. Prior to Homestore, Hoover was Vice President of Marketing for PeopleLink, the first company incubated by Idealab and the leader in providing business to business community services. Previously, Hoover worked at the Los Angeles Times in the Marketing and New Business Development group developing new advertising products for major retailers and entertainment companies, including the acquisition of Hollywood.com. Hoover received an MBA from Stanford University and a BA in economics Phi Beta Kappa from Occidental College.

Gregory T. Perrier / CEO & President, Autodata Solutions Company

As President and CEO since 1993, Greg Perrier has built Autodata Solutions into one of North America’s largest software and services boutiques focused on the automotive industry. The company, which Internet Brands acquired in mid-1999, serves every manufacturer in North America from Acura to Volvo through its diverse suite of products and services. Autodata’s products and services help auto manufacturers throughout all stages of the selling-chain from market analytics, product planning, vehicle configuration management, order placement, in-dealership retail systems, and dealership personnel training, to consumer-facing web sites. Perrier earned an honors degree in business from the Ivey School of Business in 1984 and immediately following served as a consultant with Price Waterhouse.

Board of Directors

Dr. Howard Morgan

Dr. Morgan has served as a Director of Internet Brands since February 1999 and as Chairman of our board of directors since September 1999. He is also a Director of Idealab, a creator and operator of technology companies. Since 1989, Dr. Morgan has also been President of Arca Group, Inc., a consulting and investment management firm specializing in the areas of computers and communications technologies. He serves as a director for a number of private and public companies, including Franklin Electronic Publishers, Inc., Segue Software, Inc. and Unitronix Corp. Dr. Morgan holds a B.S. in Physics from City University of New York and a Ph.D. in operations research from Cornell University.

Robert N. Brisco

Bob Brisco has been CEO, President, and Director of Internet Brands since 1999. Mr. Brisco joined Internet Brands from Universal Studios Hollywood and CityWalk, where he was President of one of the largest entertainment destinations in the world. Prior to Universal, Mr. Brisco was Senior Vice President of advertising, marketing, and new business development for The Los Angeles Times. He oversaw all of The Times’ new media operations, directing the launch of LATimes.com, and leading acquisitions such as Hollywood.com. Previously, Mr. Brisco was a consultant with McKinsey & Co. and the Boston Consulting Group, specializing in media and consumer products.

Roger S. Penske, Sr.

Mr. Penske has served as a Director of Internet Brands since May 2000. He has also been Chairman of the Board and CEO of Penske Corporation since 1969. Penske Corporation is a privately-owned diversified transportation services company that holds, through its subsidiaries, interests in a number of businesses. Mr. Penske has also been Chairman of the Board of Penske Truck Leasing Corporation since 1982 and of UnitedAuto Group since 1999. He serves as a member of the Boards of Directors of General Electric Company and Universal Technical Institute, Inc.; and is a director of Detroit Renaissance and a member of The Business Council.

Marcia Goodstein

Marcia Goodstein has been a member of the board of Internet Brands since August 2004. Ms. Goodstein founded Idealab with Bill Gross in March 1996 and serves as the company’s Chief Operating Officer and President. Prior to joining Idealab, Ms. Goodstein worked in business development and marketing for Enfish Corporation, a software development company. Ms. Goodstein was also an early employee of Gemstar Development Corporation and was responsible for media licensing for North America, as well as marketing and distribution in South America.

Gerald Greenwald

Mr. Greenwald has served as a Director of Internet Brands since September 1999. Mr. Greenwald is Chairman Emeritus of United Air Lines and served as the Chairman and CEO of United Air Lines from 1994 to 1999. From 1979 to 1990, Mr. Greenwald was employed by the Chrysler Corporation, where he worked in various positions including Corporate Controller and CFO before being promoted to Vice Chairman, a position in which he shared responsibility with the CEO for the operations of the company. From 1957 to 1979, he was employed by the Ford Motor Company, where he worked in several positions including Controller, Director of Ford’s operations in Europe and as President of Ford of Venezuela. Mr. Greenwald is one of the founders of Greenbriar Equity Group.

Bill Gross

Bill Gross has served as a Director of Internet Brands since its inception. He is the Founder, Chairman and CEO of Idealab, a creator and operator of technology companies. A lifelong entrepreneur, Mr. Gross has launched a number of successful companies, including GNP Development (acquired by Lotus), Knowledge Adventure (acquired by Havas Vivendi) and Overture Services, to name a few. A well-known visionary and entrepreneur, Mr. Gross sits on the Board of Directors of Overture Services (NNM: OVER) and the Board of Trustees of the California Institute of Technology. Mr. Gross received his B.S. in Mechanical Engineering from the California Institute of Technology.

Kenneth Gilman

Kenneth Gilman has been a member of the board of Internet Brands since January 2002. Mr. Gilman joined Asbury Automotive Group following a 25-year career with the Limited Inc. where his most recent assignment was CEO of Lane Bryant. From 1993 to 2001, Mr. Gilman served as Vice Chairman and Chief Administrative Officer of The Limited, Inc. with responsibility for finance, information technology, supply chain management, production, real estate, legal and internal audit. From 1987 to 1993, he was Executive Vice President and CFO. He joined the company’s executive committee in 1987 and was elected to the board of directors in 1990.

Martin Melone

Mr. Melone has served as a Director of Internet Brands since August 2005. Mr. Melone was a partner of Ernst & Young, LLP from 1975 to 2001, where he was responsible for global clients in a wide range of industries. He now serves on the Board of Directors of Countrywide Financial Corporation, where he is Chairman of the Audit and Ethics Committee. Mr. Melone also serves on the Boards of Directors of the California Science Center Foundation and Public Counsel Law Center. He is a member of the American Institute of Certified Public Accountants and the California Society of Certified Public Accountants.

James Ukropina

Mr. Ukropina has served as a Director of Internet Brands since February 2006. He is also a director of Lockheed Martin Corporation, Pacific Life Corp, Trust Company of the West, Central Natural Resources and the Keck Foundation, and is the CEO of Directions, LLC, a management and strategic consulting firm. Mr. Ukropina formerly served as Vice-Chairman of the Board of Trustees of Stanford University and as an advisor and board member of numerous other public, private and non-profit entities, including IndyMac Bancorp, Santa Fe International, Security Pacific Corp., Occidental College, and the California Chamber of Commerce. He has chaired various board committees, including the audit, compensation, nominating and special committees, and has authored a number of articles on corporate governance and executive compensation. He was a partner with the international law firm, O’Melveny & Myers LLP until 2000 and has served as Of Counsel since that time. Mr. Ukropina holds a B.A. and a M.B.A. from Stanford University and a LL.B from the University of Southern California.

More

http://www.internetbrands.com
http://finance.google.com/finance?q=INET
http://www.paidcontent.org/entry/419-idealab-backed-holding-firm-internet-brands-files-for-100-million-ipo
http://www.sec.gov/Archives/edgar/data/1080131/000104746907008138/a2179214zs-1a.htm
http://mashable.com/2007/10/31/internet-brands-ipo/
http://www.paidcontent.org/entry/419-internet-brands-to-raise-up-to-45-million-in-ipo/
http://mashable.com/2007/07/10/vbulletin-acquired-by-internet-brands/
http://www.paidcontent.org/entry/419-internet-brands-acquires-real-estate-community-site-apartmentratings
http://www.paidcontent.org/entry/419-message-board-software-vbulletin-bought-by-internet-brands
http://www.techcoastreview.com/2007/11/internet-brands-goes-public.html
http://stocks.us.reuters.com/stocks/fullDescription.asp?rpc=66&symbol=INET.O
http://www.hoovers.com/internet-brands/–ID__59923–/free-co-factsheet.xhtml
http://www.pehub.com/article/articledetail.php?articlepostid=8919
http://www.thestreet.com/s/internet-brands-ipo-suggests-return-to-normalcy/newsanalysis/techstockupdate/10391500.html
http://www.sec.gov/Archives/edgar/data/1080131/000104746907008138/a2179214zs-1a.htm#toc_dk79101_1
http://www.techdirt.com/articles/20060808/1526256.shtml
http://www.techdirt.com/articles/20060727/0843233.shtml
http://www.vbulletin.com/forum/showthread.php?p=1383883#post1383883
http://en.wikipedia.org/wiki/Internet_Brands
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=BCOM&date=20080111&id=8025636

Can Google lead amid its ever growing infrastructure and computation expenditures?

While reading our daily dose of news, stories and events from the web sector we came across an interesting fact worth reading and mentioning further. Google seems to be processing huge amounts of data per day in their daily routines – 20 Petabytes per day (20,000 Terabytes, 20M GBs).

The average MapReduce job is said to run across a $1 million hardware cluster, not including bandwidth fees, datacenter costs, or staffing. The January 2008 MapReduce paper provides new insights into Google’s hardware and software crunching processing tens of petabytes of data per day.

In September 2007, for example, the white paper document shows Googlers have made 2217 MapReduce jobs crunching approximately 11,000 machine years in a single month. Breaking these numbers further down shows that 11,081 machine years / (2217 job.s x 395 sec = .0278 years) implies 399,000 machines. Since this is believed to double about every 6 months one may guess Google are up to about 600,000 machines by now.

Google converted its search indexing systems to the MapReduce system in 2003, and currently processes over 20 terabytes of raw web data.

Google is known to run on hundreds of thousands of servers – by one estimate, in excess of 450,000 (data as of 2006, today more likely 600,000) – racked up in thousands of clusters in dozens of data centers around the world. It has data centers in Dublin, Ireland; in Virginia; and in California, where it just acquired the million-square-foot headquarters it had been leasing. It recently opened a new center in Atlanta, and is currently building two football-field-sized centers in The Dalles, Ore.

Microsoft, by contrast, made about a $1.5 billion capital investment in server and data structure infrastructure in 2006. Google is known to have spent at least as much to maintain its lead, following a $838 million investment in 2005. We estimate 2008’s Google IT expenditures to be in the $2B range. 

Google buys, rather than leases, computer equipment for maximum control over its infrastructure. Google chief executive officer Eric Schmidt defended that strategy once in a call conference with financial analysts. “We believe we get tremendous competitive advantage by essentially building our own infrastructures,” he said.

In general, Google has a split personality when it comes to questions about its back-end systems. To the media, its answer is, “Sorry, we don’t talk about our infrastructure.” Yet, Google engineers crack the door open wider when addressing computer science audiences, such as rooms full of graduate students whom it is interested in recruiting.

Among other things, Google has developed the capability to rapidly deploy prefabricated data centers anywhere in the world by packing them into standard 20- or 40-foot shipping containers.

Interesting fact from the Google’s history can be found back in 2003 when, in a paper, Google noted that power requirements of a densely packed server rack could range from 400 to 700 watts per square foot, yet most commercial data centers could support no more than 150 watts per square foot. In response, Google was investigating more power-efficient hardware, and reportedly switched from Intel to AMD processors for this reason. Google has not confirmed the choice of AMD, which was reported two years later by Morgan Stanley analyst Mark Edelstone.

Basically Google is mainly relying on its own internally developed software for data and network management and has a reputation for being skeptical of “not invented here” technologies, so relatively few vendors can claim it as a customer.

Google is being rumored that they would eventually start to build their own servers, storage systems, Internet switches and perhaps, sometime in the future, even optical transport systems.

Other rumors claim Google to be a big buyer of dark fiber to connect its data centers, which helps explain why the company spent nearly $3.8 billion over the past seven quarters on capital expenditures.

That’s tremendous amount of information and IT operations and based on our basic calculations, as far as we are correct in our human computation, it turns out that Google is facing IT expenditures in the $2B range per year, including for their data centers and the people.

Even though Google’s completive advantage is not only because of its infrastructure but also employees (Google has what is arguable the brightest group of people ever assembled for a publicly held company), proprietary software, global brand awareness, huge market capitalization and revenues of more than $10B per year, we think $2B burn rate per year on computing needs alone is “walking on thin ice” strategy at breakneck pace. Companies like Guill, who are claiming to have invented a technology 10 times cheaper than Google’s in terms of indexing and storing the information, Powerset working in hadoop/hbase environment, IBM, Microsoft and Yahoo! could potentially take an advantage over Google as Web grows further, so the Google’s computing expenses too.

Btw, we have also found on Web that Google processes its data on a standard machine cluster node consisting two 2 GHz Intel Xeon processors with Hyper-Threading enabled, 4 GB of memory, two 160 GB IDE hard drives and a gigabit Ethernet link.

Yahoo! and Powerset are known to use Hadoop while Microsoft’s equivalent is called Dryad. Dryad and Hadoop are the competing equivalent to Google’s GFS, MapReduce and the BigTable.

More about MapReduce

MapReduce is a programming model and an associated implementation for processing and generating large data sets. Users specify a map function that processes a key/value pair to generate a set of intermediate key/value pairs, and a reduce function that merges all intermediate values associated with the same intermediate key.

Programs written in this functional style are automatically parallelized and executed on a large cluster of commodity machines. The run-time system takes care of the details of partitioning the input data, scheduling the program’s execution across a set of machines, handling machine failures, and managing the required inter-machine communication. This allows programmers without any experience with parallel and distributed systems to easily utilize the resources of a large distributed system.

Google’s implementation of MapReduce runs on a large cluster of commodity machines and is highly scalable: a typical MapReduce computation processes many terabytes of data on thousands of machines. Programmers find the system easy to use: hundreds of MapReduce programs have been implemented and upwards of one thousand MapReduce jobs are executed on Google’s clusters every day.

More about Hadoop

Hadoop is an interesting software platform that lets one easily write and run applications that process vast amounts of data. Here’s what makes Hadoop especially useful:

Scalable: Hadoop can reliably store and process petabytes.

Economical: It distributes the data and processing across clusters of commonly available computers. These clusters can number into the thousands of nodes.

Efficient: By distributing the data, Hadoop can process it in parallel on the nodes where the data is located. This makes it extremely rapid.

Reliable: Hadoop automatically maintains multiple copies of data and automatically redeploys computing tasks based on failures.

Hadoop implements MapReduce, using the Hadoop Distributed File System (HDFS). MapReduce divides applications into many small blocks of work. HDFS creates multiple replicas of data blocks for reliability, placing them on compute nodes around the cluster. MapReduce can then process the data where it is located. Hadoop has been demonstrated on clusters with 2000 nodes. The current design target is 10,000 node clusters. Hadoop is a Lucene sub-project that contains the distributed computing platform that was formerly a part of Nutch.

More about Dryad

Dryad is an infrastructure which allows a programmer to use the resources of a computer cluster or a data center for running data parallel programs. A Dryad programmer can use thousands of machines, each of them with multiple processors or cores, without knowing anything about concurrent programming.

The Structure of Dryad Jobs
 
A Dryad programmer writes several sequential programs and connects them using one-way channels. The computation is structured as a directed graph: programs are graph vertices, while the channels are graph edges. A Dryad job is a graph generator which can synthesize any directed acyclic graph. These graphs can even change during execution, in response to important events in the computation.

Dryad is quite expressive. It completely subsumes other computation frameworks, such as Google’s map-reduce, or the relational algebra. Moreover, Dryad handles job creation and management, resource management, job monitoring and visualization, fault tolerance, re-execution, scheduling, and accounting.

More

http://doi.acm.org/10.1145/1327452.1327492
http://www.niallkennedy.com/blog/2008/01/google-mapreduce-stats.html
http://labs.google.com/papers/mapreduce.html
http://research.google.com/people/jeff/
http://research.google.com/people/sanjay/
http://research.microsoft.com/research/sv/dryad/
http://lucene.apache.org/hadoop/
http://labs.google.com/papers/gfs.html
http://labs.google.com/papers/bigtable.html
http://research.microsoft.com/research/sv/dryad/
http://www.techcrunch.com/2008/01/09/google-processing-20000-terabytes-a-day-and-growing/
http://feedblog.org/2008/01/06/mapreduce-simplified-data-processing-on-large-clusters/
http://en.wikipedia.org/wiki/MapReduce#Uses
http://open.blogs.nytimes.com/tag/hadoop/
http://www.baselinemag.com/print_article2/0,1217,a=182560,00.asp
http://www.stanford.edu/services/websearch/Google/
http://gigaom.com/2007/12/04/google-infrastructure/
http://gigaom.com/2005/09/19/google-asks-for-googlenet-bids/

Microsoft bets on enterprise search, offers to buy Fast.no for $1.2B

In what’s Microsoft’s second largest deal for the past 12 months the company offered to buy Fast Search & Transfer ASA, a leading provider of enterprise search solutions based in Norway. Details are as follows: Microsoft Corp. today announced that it will make an offer to acquire Fast Search & Transfer ASA (OSE: “FAST”), a leading provider of enterprise search solutions, through a cash tender offer for 19.00 Norwegian kroner (NOK) per share. This offer represents a 42 percent premium to the closing share price on Jan. 4, 2008 (the last trading day prior to this announcement), and values the fully diluted equity of FAST at 6.6 billion NOK (or approximately $1.2 billion U.S.).

FAST’s board of directors has unanimously recommended that its shareholders accept the offer. In addition, shareholders representing in aggregate 35 percent of the outstanding shares, including FAST’s two largest institutional shareholders, Orkla ASA and Hermes Focus Asset Management Europe, have irrevocably undertaken to accept the offer. The transaction is expected to be completed in the second quarter of calendar year 2008.

FAST has over 3500 enterprise clients, including heavyweights like Disney, The Washington Post, AutoTrader.com, and LexisNexis. According to Mary-Jo Foley from ZDNet, we should pay attention to how Microsoft will integrate FAST into their SharePoint Server. “Remember what Microsoft CEO Steve Ballmer said about SharePoint last year: He characterized SharePoint as the next big operating system from Microsoft,” she writes. “More and more, it’s looking like enterprise search functionality is one of the biggest reasons why.”

“Enterprise search is becoming an indispensable tool to businesses of all sizes, helping people find, use and share critical business information quickly,” said Jeff Raikes, president of the Microsoft Business Division. “Until now organizations have been forced to choose between powerful, high-end search technologies or more mainstream, infrastructure solutions. The combination of Microsoft and FAST gives customers a new choice: a single vendor with solutions that span the full range of customer needs.”

The companies possess a number of complementary strengths that advance a shared vision for helping businesses deliver information worker productivity and improved business results. FAST has a deep talent pool and is respected throughout the technology industry for its expertise in best-in-class, high-end search solutions. Microsoft offers worldwide customer reach and an extensive partner network, and is the recognized leader in business productivity with the popular Microsoft Office SharePoint Server, which combines search with best-in-class collaboration, business intelligence, portal and content management capabilities.

“This acquisition gives FAST an exciting way to spread our cutting-edge search technologies and innovations to more and more organizations across the world,” said John Lervik, CEO of FAST. “By joining Microsoft, we can benefit from the momentum behind the SharePoint business productivity platform to really empower a broader set of users through Microsoft’s strong sales and marketing network. It validates FAST’s momentum and leadership in enterprise search.”

In addition to bolstering Microsoft’s enterprise search efforts, this acquisition increases Microsoft’s research and development presence in Europe, complementing existing research teams in Cambridge, England, and Copenhagen, Denmark, with new and significant capabilities in Norway.

The offer will be subject to customary terms and conditions, including receipt of acceptances representing more than 90 percent of FAST shares and voting power on a fully diluted basis, and receipt of all necessary regulatory approvals on terms acceptable to Microsoft. The complete details of the offer, including all terms and conditions, will be contained in the offer document, which is expected to be sent to FAST shareholders during the week of Jan. 14, 2008. The offer will not be made in any jurisdiction in which the making of the offer would not be in compliance with the laws of such jurisdiction.

Larry Dignan, also from ZDNet, thinks this will lead the rest of the industry to consolidate the same way the advertising industry has been. “Until now organizations have been forced to choose between powerful, high-end search technologies or more mainstream, infrastructure solutions. The combination of Microsoft and FAST gives customers a new choice: a single vendor with solutions that span the full range of customer needs,” said Jeff Raikes, president of Microsoft’s Business Division.

More about FAST

FAST, which was founded in 1997, creates the real-time search and business intelligence solutions that are behind the scenes at the world’s best-known companies with the most demanding information challenges. FAST’s flexible and scalable integrated technology platform and personalized portal connects users, regardless of medium, to the relevant information they need.

FAST is headquartered in Norway and is publicly traded under the ticker symbol ‘FAST’ on the Oslo Stock Exchange. The FAST Group operates globally with presence in Europe, the United States, Asia, Australia, the Americas, and the Middle East. For further information about FAST, please visit http://www.fast.no/.

FAST’s Business is Enterprise Search. Since they have set up their company in Norway back in 1997, they have grown rapidly to become a global organization with offices across six continents. FAST is said to be the forefront of search technology and it knows how to do the heavy lifting, as they claim. 
 
Execution excellence
With over 3500 installations, many at Fortune 500 and Global 2000 companies, we have an illustrious pedigree. These blue-chip companies rely on us to help them achieve their business goals and they are loyal. If you ask our customers why they remain loyal, they will probably tell you how we exceed their expectations, provide an unparalleled level of service and show a demonstrable return on their investment. In many cases we have fundamentally contributed to their success.

In 2005 independent evaluations of our support organization gave us a 98% satisfaction rating. We get tested quarterly. In 2005 we delivered more than 300 successful customer projects on schedule and within budget. We also ran over 100 Search Best Practices workshops across the world with extremely positive feedback. It helps that more than 60% of our work force are engineers and that close to 50 of our engineers have PhDs in relevant fields. They enable us to meet complex needs by delivering simplicity.

Financial strength
We are the market leader in Enterprise Search and number one in revenue growth. We have no debt. We have been profitable, exceeding our projections, for every quarter during the last 4 years. And we have made these profits while investing a quarter of our income back into R&D. Performance like this gives us the freedom to invest in innovation and win on value and financial return.

Partner power
Partners give us the ability to deliver total solutions and our FAST X 10 partner program plays a major role in our success. We have over 90 Systems Integrators and VARs on board, and over 30 OEMs embedding our search technology. We have also certified close to 1000 developers in FAST University, drawing on our best-of-breed approach to partnering. Quantity is less important than quality, of course. We only pursue a partnership if there is a mutually beneficial, lasting opportunity.

Global presence
We have been a globally minded company, with a global outlook, since our inception. Maybe it is because of our Norwegian roots. In fact, soon after we opened our doors we established an office in the United States. We now have offices in 6 continents and development centers in 4 of them. Our products support close to 80 different languages.

John M. Lervik, Ph.D., serves as the Chief Executive Officer (CEO) and is a co-founder of FAST. Dr. Lervik served as the Company’s Chief Technology Officer from 1997 to September 2001 overlooking all of the company research and product development activities. Dr. Lervik holds a Ph.D. from the Norwegian University of Science and Technology, and was awarded the best overall PhD at NTNU in 1996/97.

Other co-founders of FAST are Mr. Thomas Joseph Fussell, who was a co-founder of Fast Search & Transfer ASA and has served as Executive Chairman of the Board of Directors since June 1997 and was Managing Director in 2000 and Mr. Robert Napier Keith, co-founded Fast Search & Transfer ASA and has served as Executive Director since June 1997.

Some people think this is a brilliant acquisition for Microsoft. Gartner says that Microsoft is struggling in this (already crowded) market. FAST is recognized as an industry-leader, along with Autonomy, Endeca, ZyLab, among others. 

The other thing to keep in mind is Microsoft’s biggest bet, which is its DYNAMICS (ERP/CRM) division. Because Business Objects was acquired by SAP, Microsoft possibly became more compelled to make an acquisition. Enterprise Search is going to be an absolutely massive component of ERP in the coming years, and this is a market that is strategic for Microsoft.

Fast.no seems to have some issues with its Board of Directors. More information enclosed below.

The conduct of Fast’s directors has been the subject of much comment in Norway. In Jan 2006 a article ran in the Norwegian IT paper that claimed that one of FAST’s directors Tomas Fussel had made a 2000% markup for himself by buying a loss making company Hercules communications and selling it to the public company Fast 3 weeks later for a massive mark up.

More recently there has been controversy at the board level with one director resigning and another making public statements about other directors and major shareholders. Fast’s board member Robert Keith said in a newspaper interview, “I ought to have seen the problems in Fast earlier. And I ought to have understood that Hans Gude Gudesen is a crazy liar. Also, I ought to have shot Oystein Stray Spetalen the first time I met him. That would have helped a lot of people, says the controversial Brit to the paper [Finansavisen].” Spetalen and Hans Gude Gudesen are both major shareholders in Fast. Furthermore directors Keith and Fussel are allegedly being pursued by the Norwegian tax authorities for $50M in unpaid taxes the government says it is owed by them. In the event of non payment liability may fall on the company. I should have shot Spetalen.

The ongoing turmoil has seen 3 directors resign from the board in the last month, the latest being Johan Fredrik Odfjell who is quoted in the company’s release as saying `FAST faces many challenges and opportunities going forward’

On December the 22nd Orka FAST’s largest shareholder demanded an EGM to force Fussel and Keith off the board

Need to Restate Accounts for 2006 and 2007

On the 12th of December 2007 Oslo Bors suspended trading of FAST shares. The next morning the company announced it was reviewing the accounting utilized for the 2006 and 2007 reports with a likely outcome that this would be changed. In an article titled “Fast restates its accounts” http://www.dagensit.no stated that Fasts results for 2006 and 2007 may be restated in what it called ”another clean up round.” It also stated “The Search technology vendor Fast Search & Transfer have had several rounds with restating of accounts. Also after CFO Joseph Lacson some months ago declared that “everything is cleaned up” one has found skeletons in the closet. Wednesday afternoon trading was suspended, after what the stock exchange called “certain conditions”.

Earlier last year FAST has acquired AgentArts, a San Francisco-based technology company with a personalization and recommendation engine for music, video, games and mobile entertainment. AgentArts clients include Infospace Mobile, Telstra Big Pond, Telstra Mobile, and Unipier. FAST said will add the technology to its enterprise search products, which will allow users to see the relationships between content and get recommendations for similar content based on their search patterns. It also includes a social recommendation feature, which helps users discover similar content based on patterns of other users with similar interests.

Although Fast Search & Transfer’s core business is widely known to be enterprise search, in 2007 the company seems to have sharply turned towards online advertising and search monetization, which seems the Web’s 2007 trend anyways, everybody is trying to become an ad company, platform or network. 

Also late last year (2007) FAST, which may be a company best known for specializing in site search, has launched a product platform that is looking to socialize the ecommerce storefront search function. It’s called FAST Recommendations and it is based on offering product recommendations similar to those of Amazon.com, but with a social twist.

If some of the information above proves to be true then this is a major, and in time, exit for the FAST’s shareholders.

More

http://www.fastsearch.com/
http://www.fast.no 
http://www.microsoft.com/presspass/press/2008/jan08/01-08FastSearchPR.mspx
http://www.forbes.com/prnewswire/feeds/prnewswire/2008/01/08/prnewswire200801080443PR_NEWS_USPR_____AQTU104.html
http://www.techcrunch.com/2008/01/08/microsoft-has-announced-a-takeover-bid-for-fast-search-transfer-priced-at-12-billion/
http://mashable.com/2008/01/08/microsoft-to-acquire-fast-search-transfer/
http://www.readwriteweb.com/archives/microsoft_fast_takeover.php
http://blogs.zdnet.com/microsoft/?p=1085
http://blogs.zdnet.com/BTL/?p=7518
http://www.microsoft.com/enterprisesearch/serverproducts/searchserverexpress/default.aspx
 

After Last.fm, Wallstrip CBS has now acquired Dotspotter

Online gossip site Dotspotter has been acquired by CBS for $10 million. In Digg style Dotspotter lets users offer up celebrity news, video clips, images, articles and sightings for your leisurely enjoyment. You can vote up the ones you like and vote down the ones you hate.

After acquiring Last.fm for $280M CBS president Leslie Moonves laid out an online marketing strategy, which most likely includes the current acquisition. As Valleywag pointed out Dotspotter’s short one-year lifespan didn’t scare off serial charmer Quincy Smith, the startup-mad head of CBS Interactive. Earlier CBS has also bought the financial video blog Wallstrip. Sources also claim that one of Dotspotter’s beneficiaries is Facebook CFO Gideon Yu.

According to Quantcast the site is getting less than 600,000 American unique visitors per month. Compete is reporting for pretty much the same number of visitors. At the time the deal was announced (Oct 2006) the site had only 280,000 users a month according to Compete. This compared to the 3.6 million for TMZ and 1.5 million for PerezHilton, perhaps the most popular entertainment blog.

The company is founded by Anthony Soohoo, who is a former Yahoo exec.  It would appear that Anthony Soohoo made the right choice by leaving Yahoo back in March 2006.

The price seems pretty high for a sector which is crowded with more high profile celebrity blogs/sites like TMZ.com, PerezHilton, and others as well as the fact that the site has only been launched mid-January last year. Online sources close to the situation tell the price is not for the site itself, but the team that has built it. Structured this way the deal may also include a heavy earn-out component.

CBS has launched celebrity news before like the site Showbuzz in June 2006, but things did not go any further. CBS also produces two celebrity tabloid shows The Insider and ET.

At the end of the day it appears as a nice exit for the investors since the site is said to have only raised seed money from angels and the amount is rumored to be less than $1M. Gideon Yu is one of the investors, along with couple of other angels.

More about Dotspotter

Dotspotter is a new way to explore and enjoy pop culture. We’re the community that lets users discover, share and talk about the people, places and ideas that are defining what’s hot and happening. People use Dotspotter to find the latest scoops, gab with their friends, share celebrity sightings and cast their votes on the pop culture topics that they care about.

People join for many different reasons. Whether you want to try your skills at breaking celebrity gossip (you know, bring out your inner paparazzi!) or you just want to have fun socializing with others, Dotspotter members can do it all. And the best part is that joining Dotspotter is absolutely FREE. All that’s needed to join Dotspotter is a valid email address. Once you register, join the topics that interest you and connect with people like you who have a passion for all things pop culture!

Dotspotter is made up of many different and interesting people with a common interest centered on pop culture entertainment. Join in the discussions, participate in the community and make new friends.

About CBS Interactive

As the online extension of America’s most-watched network, CBS Interactive enhances the viewer experience with best-of-breed content from some of the biggest brands in television across multiple platforms.

CBS has partnered with a collection of leading next-generation companies to create the CBS Audience Network, the web’s first and largest professional video content network, delivering reach and targeting capabilities to our advertisers. The result… the best lineup of full-length and short-form clips from CBS, CSTV and Showtime are now available to over 140 million uniques per month reaching 89% of the Web. Some of the online brands include: CBSSports.com, NCAASports.com, CBSNews.com, TheShowbuzz.com, Wallstrip, CBS.com, STARTREK.COM, Last.fm, CBS Audience Network, CBS Games and CBS Mobile.

Oddly but Dotspotter does not appear as a stand alone online destination/brand.

More

http://www.dotspotter.com
http://www.cbs.com/
http://valleywag.com/tech/acquisitions/cbs-eyes-gossip-site-for-10-million-309047.php
http://mashable.com/2007/10/10/cbs-dotspotter/
http://www.quantcast.com/dotspotter.com
http://siteanalytics.compete.com/dotspotter.com/?metric=uv
http://www.thealarmclock.com/mt/archives/2007/10/pink_pop_cultur.html
http://blogs.business2.com/startups/2007/06/thousands-of-ma.html
http://www.paidcontent.org/entry/419-cbs-buys-a-year-old-celebrity-gossip-blog-dotspotter-price-around-10-mi/
http://www.alleyinsider.com/2007/10/cbs-buys-celeb-.html
http://www.cbscorporation.com/
http://www.cbsdigitalmedia.com/

Google bought Jaiku, instead of Twitter

Finnish short messaging and microblogging service Jaiku has been acquired by Google. 
Notable fact here is the fact that Google bought Jaiku instead of its competitor Twitter, a service founded by Blogger founder Evan Williams.

We think a possible reason of that situation could be the current overvaluation of Titter.  Jaiku may also be better on the mobile platform than Twitter.

Technology has made staying in touch with your friends and family both easier and harder: living a fast-paced, on-the-go lifestyle is easier (and a lot of fun), but it’s more difficult to keep track of everyone when they’re running around at warp speed.

That’s why, Google said, we’re excited to announce that we’ve acquired Jaiku, a company that’s been hard at work developing useful and innovative applications for staying in touch with the people you care about most — regardless of whether you’re at a computer or on a mobile phone.

Google has lately been rolling out a number of very young mobile services. Interesting fact from the past of Google is yet another acquisition of very similar company called Dodgeball that went literally no where. 

RedMonk analyst James Governor, who has blogged extensively about the business value of Jaiku competitor Twitter has some interesting thoughts on the news. Governor says he’d like to see RIM buy Twitter but thinks Yahoo! is much more likely. He says the Jaiku mobile download could be a key addition to the Google Phone kernel but fears that all the leading microblogging services will be quickly overrun with commercial messages. Perhaps that is the commercial future of the microblogging services.

At the time of the deal took place Twitter was full with conversation on the acquisition, according the tracking service Twitterverse, the hottest word across Twitter in the last hour is Jaiku.

With easy group creation, RSS import and threaded conversation, amongst other features, Jaiku is probably a superior service to Twitter. Creation of new accounts have been stopped at Jaiku with news of the announcement.

More about Jaiku

Jaiku’s main goal is to bring people closer together by enabling them to share their activity streams. An activity stream is a log of everyday things as they happen: your status messages, recommendations, events you’re attending, photos you’ve taken – anything you post directly to Jaiku or add using Web feeds. We offer a way to connect with the people you care about by sharing your activities with them on the Web, IM, and SMS – as well as through a slew of cool third-party applications built by other developers using our API.

The most powerful instrument of social peripheral vision is your mobile phone. We’ve put in a special effort to create Jaiku Mobile, a live phonebook that displays the activity streams, availability, and location of your Jaiku contacts right in your phone contact list. We modestly believe it is the best solution out there for seeing what your friends are up to. Currently Jaiku Mobile is available for phones based on the Nokia S60 software platform.

To learn more about Jaiku, this video interview may be found insightful and interesting. It is done by the new European outfit Intruders.tv with company founder Jyri Engestrom, trained as a sociologist and formerly from Nokia.

Jaiku’s founders have commented on the home page of their site on the acquisition.

While it’s too soon to comment on specific plans, we look forward to working with our new friends at Google over the coming months to expand in ways we hope you’ll find interesting and useful. Our engineers are excited to be working together and enthusiastic developers lead to great innovation. We look forward to accomplishing great things together. In order to focus on innovation instead of scaling, we have decided to close new user sign-ups for now.

But fear not, all our Jaiku services will stay running the way you are used to and you will be able to invite your friends to Jaiku.

More

http://jaiku.com/
http://jaiku.com/blog
http://google.com/
http://www.jaiku.com/blog/2007/10/09/were-joining-google/
http://www.readwriteweb.com/archives/google_acquires_jaiku.php
http://googleblog.blogspot.com/2007/10/reach-out-and-message-someone.html
http://jaiku.com/help/google
http://us.intruders.tv/Essential-Web-07-Interview-with-Jaiku-co-founder-Jyri-Engestrom_a93.html
http://twitterverse.com/
 

Google files patent for recognizing text in images

Google has filed a patent application in July 2007, which has just recently become public claiming methods where robots can read and understand text in images and video. The basic idea here is Google to be able to index videos and images and made them available and searchable by text or keywords located inside the image or the video. Aside Google Inc. the application was filed by Luc Vincent from Palo Alto, Calif. and Adrian Ulges from Delaware, US. The inventors are Luc Vincent and Adrian Ulges.

Digital images can include a wide variety of content. For example, digital images can illustrate landscapes, people, urban scenes, and other objects. Digital images often include text. Digital images can be captured, for example, using cameras or digital video recorders. Image text (i.e., text in an image) typically includes text of varying size, orientation, and typeface. Text in a digital image derived, for example, from an urban scene (e.g., a city street scene) often provides information about the displayed scene or location. A typical street scene includes, for example, text as part of street signs, building names, address numbers, and window signs.”

If Google manages to implement that technology the consumer search will be taken to the next level and Google would have an access to much wider array of information far beyond the text only search it already plays a leading role in.

This, of course, raises some additional privacy issues as being properly noted by InformationWeek. Gogole had already privacy issues with Google Maps Street View and if that technology starts to index and recognize textual information from millions of videos and billions of pictures around Web things might go more complicated.
 
Nonetheless if that technology bears the fruits it promises it will represent a gigantic leap forward in the progression of the general search technology.

There are open sources solutions to the problem. Perhaps not scalable and effective as it would be if Google develops it, yet they do exist.

Andrey Kucherenko from Ukraine is known to have made a very interesting project in that aspect. His classes can recognize text in monochrome graphical images after a training phase. The training phase is necessary to let the class build recognition data structures from images that have known characters. The training data structures are used during the recognition process to attempt to identify text in real images using the corner algorithm. His project is called PHPOCR and more information can be found over here.

PHPOCR have won the PHPClasses innovation awards of March 2006, and it shows the power of what could be implemented with PHP5. Certain types of applications require reading text from documents that are stored as graphical images. That is the case of scanned documents.

An OCR (Optical Character Recognition) tool can be used to recover the original text that is written in scanned documents. These are sophisticated tools that are trained to recognize text in graphical images.

This class provides a base implementation for an OCR tool. It can be trained to learn how to recognize each letter drawn in an image. Then it can be used to recognize longer texts in real documents.

Another very interesting start-up believed to be heavily deploying text recognition inside videos is CastTV. The company is based in San Francisco and over its just $3M in funding is trying to build one of the Web’s best video search engines. CastTV lets users find all their favorite online videos, from TV shows to movies to the latest celebrity, sports, news, and viral Internet videos. The company’s proprietary technology addresses two main video search challenges: finding and cataloging videos from the web and delivering relevant video results to users.

CastTV was one of the presenters at Techcrunch40 and was there noticed by Marissa Mayer from Google. She asked CastTV the following question: “Would like to know more about your matching algo for the video search engines?”. CastTV then replied: “We have been scaling as the video market grows – relevancy is a very tough problem – we are matching 3rd party sites and supplementing the meta data.”

Today we see Marissa’s question in the light of the patent application above and the context seems quite different and the answer from CastTV did not address Google’s concerns. Does CastTV work on something similar to what the patent is trying to cover for Google? We do not know but the time will tell. CastTV’s investors are Draper Fisher Jurvetson and Ron Conway. Hope they make a nice exit from CastTV.
 
Adobe has also some advances in that particular area. You can use Acrobat to recognize text in previously scanned documents that have already been converted to PDF. OCR (Optical Character Recognition) runs with header/footer/Bates number on image PDF files.

It is also interesting that Microsoft had, in fact, applied for a very similar patent (called “Visual and Multi-Dimensional Search“). Even more interesting here is the fact that MS had beaten Google to the punch by filing three days earlier – Microsoft filed on June 26, 2007, while Google filed on June 29.

Full abstract, description and claims can be read below:

More

http://google.com
http://www.wipo.int/pctdb/en/ia.jsp?IA=US2007072578&DISPLAY=STATUS
http://www.techmeme.com/080104/p23
http://www.techcrunch.com/2008/01/04/google-lodges-patent-for-reading-text-in-images-and-video/
http://www.webmasterworld.com/goog/3540344.htm
http://enterprise.phpmagazine.net/2006/04/recognize_text_objects_in_grap.html
http://www.phpclasses.org/browse/package/2874.html
http://www.crunchbase.com/company/casttv
http://www.casttv.com/
http://www.google.com/corporate/execs.html
http://www.centernetworks.com/techcrunch40-search-and-discovery
http://www.setthings.com/2008/01/04/recognizing-text-in-images-patent-by-google/
http://help.adobe.com/en_US/Acrobat/8.0/Professional/help.html?content=WS2A3DD1FA-CFA5-4cf6-B993-159299574AB8.html
http://www.techcrunch40.com/
http://www.therottenword.com/2008/01/microsoft-beats-google-to-image-text.html

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/

AOL‘s Platform-A gets the fourth ad company under its umbrella

AOL has finally completed the acquisition of online advertising company Quigo. Quigo is a provider of contextual advertising on third-party publisher Websites, much like AdSense and Yahoo Publisher Network. The company offers a variety of different advertising formats including text, banners, and video, and sells them on a CPC, CPM, or “cost per time” basis. AOL had originally announced its intention to acquire Quigo on November 7, 2007.

Financial terms of the deal were not publicly disclosed, though we’ve found information on Web from different sources claiming the sale is said to be around $340 Million.

According AOL officials, Quigo will operate as a wholly owned subsidiary of AOL within its Platform-A organization, which is focused on unifying the company’s many online advertising divisions, which include Advertising.com, Tacoda, Adtech, among others. The acquisition of Quigo lets AOL expand the use of contextual advertising — which matches ads to the contents of a Web page — across AOL’s own Web pages, as well as its third-party networks, sites and publishers. Quigo is expected to bring in $100 million a year as it stands.

Now that the acquisition is final, and AOL is showing intentions to actually do something with a company it purchased, the unification strategy could actually work to make them a significant player in the online ad world in the face of the present dominant role of Google.
What Quigo basically offers is transparency and control in what can often be an opaque business: advertisers pay Yahoo and Google for contextual ad placement on a wide variety of Web pages, but get little say over where those ads run or even a list of sites where they do appear.

Quigo, by contrast, gives advertisers not only the list of specific sites where their ads have appeared but also the opportunity to buy only on specific Web sites or particular pages on those sites. It also allows media company sites like ESPN.com and FoxNews.com a chance to manage their own relationships with advertisers.

Although Quigo remains a small competitor, with less than 10 percent of the contextual ad business, its growing success has apparently persuaded Google, which is accustomed to calling the shots in all aspects of its business, that it has to change the way it sells the sponsored link ads in the future.

More about Quigo

Quigo – www.quigo.com – recently named Company of the Year by AlwaysOn Media – provides innovative performance marketing solutions for advertisers and premium publishers. Quigo’s AdSonar is a leading network of top-tier websites offering a broad range of advertising solutions. AdSonar’s content-targeted sponsored links are distributed to many of the web’s most recognized sites including CNNMoney.com, TIME.com, People.com, ESPN.com, Forbes.com, TheStreet.com, FoxNews.com, CareerBuilder.com, LonelyPlanet.com and on over 200 local, regional and national newspaper and television sites including those of ABC, Tribune Interactive, Fox, The Hearst Company, The McClatchy Company, Morris Communications, Media News Group, New York Daily News, New York Post, Scripps, Stephens Media, USA Today, and others. AdSonar offers advertisers multiple targeting options for their campaigns; including national and local targeting by vertical category, site, individual page, section, topic, and/or keyword. Quigo’s suite of search marketing solutions, including its flagship FeedPoint product, offers scalable, technology-driven services to help leading e-commerce and directory sites drive traffic, acquire new customers, and maximize revenue and profits.

Founded in 2000, Quigo’s primary venture backers include Highland Capital, Steamboat Ventures (the venture capital arm of The Walt Disney Company), and Institutional Venture Partners.

Management team

Michael Fisher: President. 

As President, Mike is responsible for all aspects of the company’s business. Prior to joining Quigo in 2005, he served as Vice President, Engineering & Architecture for PayPal, Inc. an eBay company. Prior to joining PayPal, Mike spent seven years at General Electric helping to develop the company’s technology strategy and processes. He attended the United States Military Academy in West Point, New York where he received a Bachelor of Science degree in Computer Science. Mike also holds a Master of Science and PhD in Information Systems and a Master of Business Administration.

Kevin Fortuna: Chief Strategy Officer. 

As CSO, Kevin leads AdSonar and PageCast, Quigo’s advertising and video content targeting platforms, as well as the Finance and Marketing teams. Prior to joining Quigo in 2005, he was the founder and Managing Partner of Dedalus Capital, a boutique M&A consultancy and venture firm. Before Dedalus, Kevin was the VP, Business Development at two IPO-track internet companies: Juno Online Services and CNET/Snap.com. He graduated summa cum laude from Georgetown University and is a member of Phi Beta Kappa.

David Sasson: Chief Operating Officer. 

As COO, David leads the FeedPoint division and Quigo’s Product Management team. Prior to joining Quigo in 2004, David was Vice President of Advertising Systems at Juno Online Services, where he developed new advertising technologies and managed client services. David was also co-founder & COO of Advocacy Inc., a leading interactive agency for political campaigns, congressional offices and issue advocacy. David is a Phi Beta Kappa, magna cum laude graduate of Haverford College, where he earned a Bachelor of Arts degree.

Geoffrey Weber: Chief Technology Officer. 

As CTO, Geoffrey oversees the Engineering, Tech Operations, Information Technology and Quality Assurance teams. He has over 25 years of Technology experience, and previously served in several management positions at eBay including: Director of eBay Site Operations and Director of Financial Systems, PayPal. Prior to joining eBay, Geoffrey spent 10 years in an independent consulting practice building highly scalable solutions for clients such as: NEC, Sprint, Sun Microsystems, Sybase, Franklin-Templeton, and Providian Financial. He studied Mathematics and French Literature at the University of California, Berkeley.

About AOL

AOL is a global Web services company that operates some of the most popular Web destinations, offers a comprehensive suite of free software and services, runs one of the largest Internet access businesses in the U.S., and provides a full set of advertising solutions. A majority-owned subsidiary of Time Warner Inc. (NYSE:TWX – News), AOL LLC and its subsidiaries have operations in the U.S., Europe, Canada and Asia. Learn more at AOL.com.

Time Warner’s AOL unit purchased four advertising companies in 2007, including Quigo Technologies Inc. Quigo is the fourth advertising company AOL has acquired during 2007. Earlier in the year, AOL acquired Third Screen Media, a leader in mobile advertising, ADTECH, a leading ad serving platform based in Frankfurt, Germany, and TACODA, a leading behavioral targeting company.

Platform-A is said to be reaching over 90% of the online audience.

In related news Quigo’s CEO Mike Yavonditte will depart the company. He’ll spend the next six months as an adviser to Curt Viebranz, president of AOL’s Platform A advertising division. Instead the Quigo CTO Michael Fisher will become president of the subsidiary.

Michael Yavonditte is a veteran of new media and technology. Prior to being named CEO of Quigo, he served as VP of Sales for USA Networks Electronic Commerce Solutions Group. He managed the e-commerce operations for CBS Sportsline, Nascar.com and the National Hockey League. In 2000, he joined AltaVista, where he negotiated and closed several large, multi-year, multi-million dollar agreements for the company. Mr. Yavonditte started his career at Ziff-Davis Publishing in NY where he held various sales and management roles. In 6 years he took Quigo from a start up to the predominant performance-driven, ad auction-based, pay-per-click advertising company in the industry.

The deal is yet another part of the major shakeout and consolidation that took place within the online ad industry through out the entire 2007 and is one of the web’s biggest deals for the 2007 we have listed and ranked yesterday. 

AOL chairman and CEO Randy Falco stated, “Quigo is an important part of our new Platform-A organization that we announced in September.”  Platform-A is, by all accounts, the future of AOL.

More

http://www.quigo.com/
http://www.quigoblog.com/
http://www.timewarner.com/corp/newsroom/pr/0,20812,1697295,00.html
http://mashable.com/2007/12/30/aols-quigo-acquisition-complete/
http://directmag.com/news/aol-122107/
http://valleywag.com/336627/quigo-ceo-departs-as-aol-completes-takeover
https://web2innovations.com/money/2007/12/31/some-of-the-web%e2%80%99s-biggest-acquisition-deals-during-2007/
http://biz.yahoo.com/bw/071220/20071220005128.html?.v=1 http://www.nytimes.com/2007/02/26/business/media/26adco.html?_r=1&oref=slogin
http://www.tmcnet.com/viewette.aspx?u=http%3a%2f%2fwww.tmcnet.com%2fnews%2f2007%2f12%2f21%2f3181294.htm
http://www.webpronews.com/topnews/2007/12/21/aol-finishes-quigo-acquisition
http://www.businesswire.com/cgi-bin/mmg.cgi?eid=5572035
http://www.bloomberg.com/apps/news?pid=20601103&sid=asbgoM.LLJg0&refer=us
http://www.foxbusiness.com/markets/industries/media/article/aol-completes-acquisition-quigo_414972_15.html
http://www.pehub.com/article/articledetail.php?articlepostid=9529

Some of the web’s biggest acquisition deals during 2007

As the end of the year approaches us we would like to briefly sum up some of the web’s biggest acquisition deals for the 2007, as we know them. 

All deals will logically be ranked by their sizes and less weight will be put on the time the deal happened through out the year. Deals from all IT industry sectors are considered and put in the list, from Web and Internet to the Mobile industry as well. The size’s criterion for a deal to make the list is to be arguably no less than $100M unless the deal is symbolic in one way or another or either of the companies involved was popular enough at the time the deal took place. Otherwise we think all deals are important, at least for its founders and investors.

Under no doubt the year we will remember with the number of high-profile advertising company acquisitions for large-scale companies like DoubleClick, aQuantive, RightMedia, 24/7 Real Media, among others. Putting all acquisition deals aside, one particular funding deal deserves to be mentioned too Facebook raised $240 million from Microsoft in return of just 1.6% of its equity. The Honk Kong Billionaire Li Ka-shing later joined the club of high-caliber investors in Facebook by putting down $60M for unknown equity position.  

Other remarkable funding deals include: Alibaba.com raised $1.3 Billion from its IPO; Kayak raised $196 Million; Demand Media took $100 Million in Series C; Zillow totaled $87 Million in venture capital funding; Joost announced $45 million funding from Sequoia, Index, CBS & Viacom, among others. 

Yet another noteworthy deal is the Automattic (wordpress.org) turning down a $200 Million Acquisition Offer. 

And the 2007 Web 2.0 Money winner is… Navteq for its deal with Nokia for $8B. Apparently Microsoft has this year lost the crown of being named the deepest pocket buyer.

Nokia Buys Navteq For $8 Billion, Bets Big On Location-Based Services

Nokia (NOK), the Finnish mobile phone giant with nearly a third of the global handset market, has decided to bet big on location based services (LBS), and is buying Chicago-based digital map company NAVTEQ (NVT) for $8.1 billion. That works out to about $78 a share. This is one of Nokia’s largest purchases to date — the Finnish mobile giant has a mixed track record when it comes to acquisitions. This is also the second megabillion dollar buyout in the maps (LBS) space.

SAP Germany makes its biggest deal ever – acquires Business Objects for 4.8B EURO (around ~$6.8 billion)

SAP, the world’s largest maker of business software, has agreed to acquire Business Objects SA for €4.8 billion euros, which was around ~$6.8 billion at the time the acquisition deal was announced. The deal is amongst the largest for 2007 alongside with Oracle’s Hyperion deal for over $3.3B and the Nokia’s Navteq for over $8B. [more]

Microsoft to buy Web ad firm aQuantive for $6 Billion

Microsoft Corp. acquired aQuantive Inc. for about $6 billion, or $66.50 a share, an 85 percent premium to the online advertising company’s closing price at the time the deal was publicly announced. Shares of aQuantive shot to $63.95 in pre-opening trade, following news of the deal. The all-cash deal tops a dramatic consolidation spree across the online advertising market sparked when Google Inc. agreed to buy DoubleClick for $3.1 billion.

Oracle to buy Hyperion in $3.3 Billion cash deal

Oracle Corp. has acquired business intelligence software vendor Hyperion Solutions Corp. for $3.3 billion in cash. Oracle has agreed to pay $52 per share for Hyperion, or about $3.3 billion, a premium of 21% over Hyperion’s closing share price at the time of the deal. Oracle said it will combine Hyperion’s software with its own business intelligence (BI) and analytics tools to offer customers a broad range of performance management capabilities, including planning, budgeting and operational analytics.

Cisco Buys WebEx for $3.2 Billion

Cisco has agreed to acquire WebEx for $3.2 billion in cash. In 2006, WebEx generated nearly $50 million in profit on $380 million in revenue. They have $300 million or so in cash on hand, so the net deal value is $2.9 billion.

DoubleClick Acquired by Google For $3.1 Billion In Cash

Google reached an agreement to acquire DoubleClick, the online advertising company, from two private equity firms for $3.1 billion in cash, the companies announced, an amount that was almost double the $1.65 billion in stock that Google paid for YouTube late last year. In the last month for this year the US Federal Trade Commission has granted its approval for Google to purchase DoubleClick.

TomTom Bought Tele Atlas for $2.5 Billion

It took $2.5 Billion dollars for TomTom to buy mapping software company TeleAtlas, this will set the stage for TomTom to be big rival of Garmin across Atlantic. Tele Atlas went public in 2000 on the Frankfurt Stock Exchange, and last year, it bought another mapping firm, New Hampshire-based GDT.

Naspers acquires yet another European company – Tradus for roughly $1.8 Billion

Simply put a fallen dot com star with eBay ambitious, once worth more than 2B British pound (around $4B) and collapsed down to £62M at the end of 2000 is now being basically said rescued by the South African media company Naspers that is spending money at breakneck pace. The offered price is £946M (more than $1.8B) based on just £60M annual revenues. [more]

HP acquired Opsware For $1.6 Billion

HP has acquired IT Automation company Opsware for $1.6 billion. Whilst any acquisition of this size is interesting in itself, the back story to Opsware is even more so; Opsware was originally LoudCloud, a Web 1.0 company that took $350 million in funding during the Web 1.0 boom.

AOL acquired TradeDoubler for $900 Million

AOL has acquired Sweden-based TradeDoubler, a performance marketing company, for €695 million in cash, which was about US$900 million at the time the deal took place.

Microsoft acquired Tellme Networks for reportedly $800 Million

Microsoft Corp. has announced it will acquire Tellme Networks, Inc., a leading provider of voice services for everyday life, including nationwide directory assistance, enterprise customer service and voice-enabled mobile search. Although the price remains undisclosed, it is estimated to be upwards of $800 million.

Disney acquires Club Penguin for up to $700 Million

Club Penguin, a social network/virtual world that has been on the market for some time, was acquired by The Walt Disney Company. An earlier deal with Sony fell apart over the Club Penguin’s policy of donating a substantial portion of profits to charity. The company, which launched in October 2005, has 700,000 current paid subscribers and 12 million activated users, primarily in the U.S. and Canada.The WSJ says the purchase price is $350 million in cash. Disney could pay up to another $350 million if certain performance targets are reached over the next couple of years, until 2009.

Yahoo acquired RightMedia for $680 Million in cash and stock

Yahoo has acquired the 80% of advertising network RightMedia that it doesn’t already own for $680 million in cash and Yahoo stock. Yahoo previously bought 20% of the company in a $45 million Series B round of funding announced in October 2006. The company has raised over $50 million to date.

WPP Acquires 24/7 Real Media for $649 Million

Online advertising services firm 24/7 Real Media was acquired by the WPP group for $649 million. The old time internet advertising firm had its origins serving ads for Yahoo! and Netscape in 1994 and was formerly founded the following year as Real Media. After numerous acquisitions it took its current name and grew to have 20 offices in 12 countries, serving over 200 billion advertising impressions every month.

Google bought the web security company Postini for $625M

Google has acquired e-mail security company Postini for $625 million, a move intended to attract more large businesses to Google Apps. More than 1,000 small businesses and universities currently use Google Apps, but ‘there has been a significant amount of interest from large businesses,’ Dave Girouard, vice president and general manager of Google Enterprise, said in a Monday teleconference.

EchoStar Acquires Sling Media for $380 Million

EchoStar Communications Corporation, the parent company for DISH Network, has announced its agreement to acquire Sling Media, creator of the Sling suite, which lets you do things like control your television shows at any time, from their computers or mobile phones, or record and watch TV on your PC or Windows-based mobile phone. The acquisition is for $380 million.

ValueClick acquired comparison shopping operator MeziMedia for up to $352 Million

ValueClick has acquired MeziMedia for up to $352 million, in a deal consisting of $100 million in upfront in cash, with an additional sum of up to $252 million to be paid depending on MeziMedia’s revenue and earnings performance through to 2009.

Yahoo Acquires Zimbra For $350 Million in Cash

Yahoo has acquired the open source online/offline office suite Zimbra. The price: $350 million, in cash, confirmed. Zimbra gained wide exposure at the 2005 Web 2.0 Conference. Recently they has also launched an offline functionality.

Business.com Sells for $350 Million

Business.com has closed another chapter in its long journey from a $7.5 million domain name bought on a hope and a prayer, selling to RH Donnelley for $350 million (WSJ reporting up to $360 million). RH Donnelley beat out Dow Jones and the New York Times during the bidding.

AOL acquired online advertising company Quigo for $350 Million

AOL announced plans to buy Quigo and its services for matching ads to the content of Web pages. The acquisition follows AOL’s September purchase of Tacoda, a leader in behavioral-targeting technology, and comes as AOL tries to boost its online advertising revenue to offset declines in Internet access subscriptions.

eBay bought StubHub For $310 Million

eBay has acquired the San Francisco-based StubHub for $285 million plus the cash on StubHub’s books, which is about $25 million.

Yahoo! Agreed to acquire BlueLithium for approximately $300 Million in cash

Yahoo! Inc. has entered into a definitive agreement to acquire BlueLithium, one of the largest and fastest growing online global ad networks that offers an array of direct response products and capabilities for advertisers and publishers. Under the terms of the agreement, Yahoo! will acquire BlueLithium for approximately $300 million in cash.

CBS to buy social network Last.fm for $280 Million

CBS is known to have paid $280 million for the Last.fm site, which caters to music fans. CBS Corp bought the popular social networking website organized around musical tastes for $280 million, combining a traditional broadcast giant with an early leader in online radio. Last.fm, claims more than 15 million monthly users, including more than 4 million in the U.S.

AOL Acquired Tacoda, a behavior targeting advertising company for reportedly $275 Million

AOL has announced the acquisition of New York-based Tacoda earlier this year, a behavior targeting advertising company that was founded in 2001. The deal size, which we haven’t had confirmed, is likely far smaller than Microsoft’s $6 billion for aQuantive , Yahoo’s $680 million for RightMedia , or Google’s $3.1 billion for DoubleClick. The price might be low enough that it isn’t being disclosed at all.Jack Myers Media Business Report has confirmed the $275 million price tag

MySpace to acquire Photobucket For $250 Million

MySpace has acquired Photobucket for $250 million in cash. There is also an earn-out for up to an additional $50 million. Oddly enough MySapce has dropped Photobucket off its social networking platform. The dispute that led to the Photobucket videos being blocked on MySpace letter also led to acquisition discussions, and the block was removed. They have hired Lehman Brothers to help sell the company. They were looking for $300 million or more, but may have had few bidders other than MySpace.

Hitwise Acquired by Experian for $240M

Hitwise, the company that performs analysis of log files from 25 million worldwide ISP accounts to provide relative market share graphs for web properties, has been acquired by Experian for $240 million.

$200+ Million for Fandango

Comcast paid $200 million or perhaps a bit more. Fandango revenue is said to be in the $50m/year range, split roughly evenly between ticket sales and advertising. Wachovia Securities analyst Jeff Wlodarczak estimated the multiple-system operator paid $200 million for Fandango, whose backers include seven of the 10 largest U.S. movie exhibitors.

Intuit Acquires Homestead for $170 Million

Small business website creation service Homestead, started out in the web 1.0 era, announced tonight that it has been acquired by Intuit for $170m. In addition to Intuit’s personal and small business accounting software, and the company’s partnership with Google to integrate services like Maps listing and AdSense buys, Intuit customers will now presumably be able to put up websites quickly and easily with Homestead. [more]

Naspers Acquired Polish based IM Company Gadu Gadu (chit-chat) for reportedly $155 Million

South Africa’s biggest media group Naspers Ltd offered to buy all outstanding shares in Polish Internet firm Gadu Gadu S.A. ( GADU.WA ), a Polish IM service, for 23.50 zlotys ($8.77) per share. The current majority shareholder of Gadu Gadu has agreed to tender its 55% shareholding in the public tender offer. The price is $155M. [more

Studivz, a Germany Facebook clone, went for $132 Million

German Facebook clone Studivz has been sold to one of its investors, Georg von Holtzbrinck GmbH, a German publishing group, for €100 million (about $132 million). Other investors of Studivz include the Samwer brothers, founders of ringtone company Jamba (sold for €270M) and Alando (sold to eBay for €43M in 1999).

Feedburner goes to Google for $100 Million

Feedburner was acquired by Google for around $100 million. The deal is all cash and mostly upfront, according to sources, although the founders will be locked in for a couple of years.

Answers.com has purchased Dictionary.com for reportedly $100 Million

Question and answer reference site Answers.com has acquired Dictionary.com’s parent company, Lexico Publishing, for $100 million in cash. Lexico can really serve all your lexical needs because it also owns Thesaurus.com and Reference.com.

Yahoo Acquires Rivals for $100 Million

Yahoo has acquired college sports site Rivals.com, reported the Associated Press in a story earlier this year. The price is not being disclosed, although the rumor is that the deal was closed for around $100 million. Rumors of talks first surfaced in April 2007.

UGO Acquired By Hearst for reportedly $100 Million

Hearst has acquired New-York based UGO. Forbes reported the price should be around $100 million. UGO is a popular new media site that was founded in 1997 and, according to Forbes, is generating around $30 million/year in revenue. UGO media is yet another web 1.0 veteran and survivor.

Fotolog Acquired by Hi Media, French Ad Network for $90 Million
 
New York-based Fotolog been acquired by Hi Media, a Paris-based interactive media company for roughly $90 million – a combination of cash and stock, according to well-placed sources. 

Online Backup Startup Mozy Acquired By EMC For $76 Million

Online storage startup Mozy, headquartered in Utah, has been acquired by EMC Corporation, a public storage company with a nearly $40 billion market cap. EMC paid $76 million for the company, according to two sources close to the deal.

eBay Acquiring StumbleUpon for $75 Million

The startup StumbleUpon has been rumored to be in acquisition discussions since at least last November (2006). The small company had reportedly talks with Google, AOL and eBay as potential suitors. At the end of the day the start-up got acquired by eBay. The price was $75 million, which is symbolic with the fact the site had only 1.5m unique visitors per month at the time the deal took place. The company was rumored to be cash-positive.

General Atlantic Has Acquired Domain Name Pioneer Network Solutions

General Atlantic has acquired Network Solutions from Najafi Companies. Network Solutions was founded decades ago in 1973 and had a monopoly on domain name registration for years which led Verisign to pay billions to buy it. Najafi Companies purchased NS from VeriSign in November 2003 for just $100M. No financial terms were disclosed for the deal and no price tag is publicly available, although we believe it is way over $100M, but NS made our list due to its mythical role for the Internet’s development. That deal is symbolic for the Internet. 

MSNBC made its first acquisition in its 11-year history, acquired Newsvine

In a recent deal the citizen journalism startup Newsvine has been acquired by MSNBC, the Microsoft/NBC joint venture, for an undisclosed sum. Newsvine will continue operating independently, just as it has been since launching in March of 2006. The acquired company also indicated there would be little change in the features of the site.  We think the price tag for the Newsvine is anywhere in the $50/$75M range, but this is not confirmed. [more]

Google to buy Adscape for $23 Million

After some rumors of a deal earlier this year, Google has expanded its advertising reach by moving into video game advertising with their $23 million acquisition of Adscape.

Disney buys Chinese mobile content provider Enorbus for around $20 Million

Disney has bought Chinese mobile gaming company Enorbus , for around $20 million, MocoNews.net has learned. Financial backers in the company included Carlyle and Qualcomm Ventures.

BBC Worldwide Acquires Lonely Planet

BBC Worldwide, the international arm of BBC, has acquired Lonely Planet, the Australia-based travel information group. The amount of the deal was not disclosed, but Lonely Planet founders Tony and Maureen Wheeler get to keep a 25% share in the company. We truly believe this deal is in the $100M range, but since no confirmation was found on Web and therefore we cannot put a price tag for the sake of the list. Even though a global brand their site is getting just 4M unique visitors per month.

AOL Acquires ADTECH AG

AOL has acquired a controlling interest in ADTECH AG, a leading international online ad-serving company based in Frankfurt, Germany. The acquisition provides AOL with an advanced ad-serving platform that includes an array of ad management and delivery applications enabling website publishers to manage traffic and report on their online advertising campaigns. No details about the acquisition price were found on Web but we would suspect a large-scale deal and rank it very high. 

Amazon Acquires dpreview.com

Amazon have announced the acquisition of the digital camera information and review site dpreview.com. UK based dpreview.com was founded in 1998 by Phil Askey as a site that publishes “unbiased reviews and original content regarding the latest in digital cameras. Dpreview.com has in excess of 7 million unique viewers monthly. The value of the deal was not disclosed but we believe the purchase price should be in the $100M range (not confirmed).

HP Acquired Tabblo

HP announced the acquisition of Cambridge, Massachusetts based Photo printing site Tabblo this morning. The price was not disclosed.

eBay Gets Stake in Turkish Auction Market

eBay announced yesterday that it has acquired a minority stake in Turkish-based GittiGidiyor.com, an online marketplace structured in a similar manner to eBay. GittiGidiyor reportedly has more than 400,000 listings and 17 million users, which is a considerable percentage of the Turkish population. With the stake in GittiGidiyor, eBay now has the opportunity to enter the Turkish market via a system that’s already similar to theirs in functionality and purpose. Istanbul-based GittiGidiyor.com was founded in 2000. GittiGidiyor is Turkish for Going, Going, Gone. Terms of the deals were not found publicly available. Looking at the size of the Turkish site and the buying habits and history of eBay, the price should be considerably high, at least for the region.

Microsoft Acquiring ScreenTonic for Mobile Ad Platform

Microsoft is acquiring ScreenTonic, a local-based ads delivery platform for mobile devices, for an undisclosed amount. Paris-based ScreenTonic was founded in 2001, and has created the Stamp platform to deliver text or banner links on portals, text message ads and mobile web page ads, that vary depending on the recipients’ geographical location in a so called geo-targeting approach. 

~~~

Naspers acquires yet another European company – Tradus

Simply put a fallen dot com star with eBay ambitious, once worth more than 2B British pound (around $4B) and collapsed down to £62M at the end of 2000 is now being basically said rescued by a South African media company that is spending money at breakneck pace. The offered price is £946M (more than $1.8B) based on just £60M annual revenues.

A month after Naspers acquired the Polish chat site Gadu Gadu for roughly $155M the media company from RSA is now making a major acquisition step in Europe. Naspers bid to buy the European online auction site Tradus for £946M. Naspers valued Tradus at nearly $2 Billion, which is 26.7% higher than the average share price during Naspers’ most recent half-year.

Some analysts compared the Naspers deal with the deal of eBay for Skype in 2005 – in other words overpaying for the purpose of its own expansion. With this deal Naspers said it is going to switch focus from operations on only ad-supported Web businesses to transaction-based e-commerce services.

In focusing on Internet expansion, Naspers has established a new company called MIH Internet, which operates under its Myriad International Holdings division. This makes sense for MIH to handle the acquisition of Tradus, as MIH already dabbles in emerging markets on a global scale, including M-Web and Tencent, among others.

Tradus, previously known as QXL Ricardo, has backed an £18-a-share offer from Africa’s largest media company, the owner of the Daily Sun newspaper and the pay-TV firm Multichoice, as part of its strategy for Internet expansion. The deal represents a 19 per cent premium on Tradus’s price of 1,510p a share, when the company first announced it was in takeover discussions on 6 November, and comes amid a renewed interest in online companies.

Tradus conducts online auctions across 12 European countries, mostly Eastern Europe. It was founded by a former Financial Times journalist, Tim Jackson, in 1997 and, after listing on the stock market in 1999, its value soared to £2 Billion in early 2000 on hopes it would become the European eBay. But just eight months later, it was worth only £62M as Internet stocks crashed.

Cobus Stofberg, Naspers’ chief executive, said: “The operations of the Naspers Group and Tradus complement each other perfectly, and significant advantages can be obtained by aligning Tradus’s businesses with Naspers’ other internet investments in Central and Eastern Europe.”

The deal, due to be completed by March, requires approval from Tradus shareholders, but the board has recommended investors accept the offer. Shares in the FTSE 250-listed group rose 12 per cent to £18.15.

Tradus was the subject of a failed takeover battle in 2005 between members of its management team and the consortium Florissant, backed by the UK private equity firm Novator.

Tradus’s pre-tax profits rose 28 per cent to £7.7M on revenues of £30.6M in the six months to the end of September.

An extremely positive deal for Tradus’ shareholders, the purchase is less obviously so for Naspers’. It earns three-quarters of its revenues in South Africa but is expanding at breakneck pace in China, Russia and other emerging markets. Tradus will complement its geographic reach, with a market-leading business in Poland. The lack, though, of operational overlap means no synergies are expected. And there must be suspicion that Naspers is overly keen to spend its $1.5Billion cash pile, two-thirds of which is offshore and must be spent before the year end or repatriated.

Admittedly, others share its optimism over Tradus’ prospects. Citi, even in these difficult days, is providing £700M of bridging finance. But Naspers’ shareholders seem warier this time around. The shares fell slightly after the deal was announced, suggesting a fear that the days of overpaying for internet companies with uncertain future revenues are not necessarily over.

In September 2007 QXL Ricardo (Tradus) has bought a 30 percent stake in Molotok.ru, an online auction site in Russia, for a relatively small sum of $1.5 million. The remaining 70 percent of the site is be owned by Russian portal Mail.ru

The company was known to be in deal talks, and there had been speculation that eBay and Alibaba.com were both interested in acquiring the Eastern Europe-focused site.

More about Tradus

Tradus provides online consumer trading platforms and related internet services in eleven European countries. These platforms connect buyers and sellers 24 hours a day, seven days a week in a safe, efficient, and entertaining environment. A wide selection of merchandise and services is available on our sites, ranging from consumer electronics and collectibles to clothing, lifestyle products, cars, car parts and real estate.

Tradus plc, formerly QXL Ricardo PLC, was established in September 1997 and its shares have been quoted on the London Stock Exchange since October 1999. Although the corporate headquarters are in London, most of the operations are located in our key countries across Europe, with the majority of staff being based in Poznan, Poland where our largest business is based. At the end of March 2007 there were over 400 employees in the Group, most of whom are dedicated customer service staff ensuring that the needs of our growing member base are met.

About Naspers

Naspers is a multinational media company with principal operations in electronic media (including pay-television, internet and instant-messaging subscriber platforms and the provision of related technologies) and print media (including the publishing, distribution and printing of magazines, newspapers and books, and the provision of private education services). Naspers’ most significant operations are located in South Africa, where it generates approximately 76.4% of its revenues, with other operations located elsewhere in Sub-Saharan Africa, Greece, Cyprus, the Netherlands, the United States, Thailand and China. Naspers creates media content, builds brand names around it, and manages the platforms distributing the content. Naspers delivers its content in a variety of forms and through a variety of channels, including television platforms, internet services, newspapers, magazines and books. Many of Naspers’ businesses hold leading market positions, and Naspers capitalises on these strong positions when expanding into new markets.

As a side note early this year Naspers announced voluntary delisting from NASDAQ and instead Naspers Limited Received Listing Approval for London Stock Exchange. Naspers is listed on the stock exchange in Johannesburg and up to date stock quote can be found over here: http://stocks.us.reuters.com/stocks/overview.asp?symbol=NPNJn.J

With the current acquisition Naspers is hoping to expand its instant messaging services beyond what it already owns in the sector. Naspers operates local IM/online services in Russia (Mail.ru), China (Tencent) and Thailand (M-Web/Sanook).

The company is headquartered in Cape Town, RSA. 

More

http://www.qxl.com/
http://www.qxl.com/investor_centre
http://www.naspers.com/English/home.asp
http://news.independent.co.uk/business/news/article3263632.ece
http://www.ft.com/cms/s/1/da97695c-ad4b-11dc-9386-0000779fd2ac.html
http://www.paidcontent.org/entry/419-tradus-auction-site-agrees-2-billion-takeover-by-south-africas-naspers/
http://mashable.com/2007/12/18/naspers-acquires-tradus/
http://www.paidcontent.co.uk/entry/419-online-auctioneer-qxl-ricardo-to-sell-to-naspers-for-up-to-800-report/
http://www.paidcontent.co.uk/entry/eurpean-company-qxl-ricardo-takes-30-percent-stake-in-russian-auction-site
https://web2innovations.com/money/2007/12/23/naspers-acquired-polish-based-im-company-gadu-gadu-chit-chat/
http://www.telecom.paper.nl/site/news_ta.asp?type=abstract&id=196998&nr=
http://www.tradus.com/news-item?item=56416543336883
 http://biz.yahoo.com/ic/56/56312.html