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Archive for August, 2010

Here is some big news from SF Gate.

“Intel Corp., signaling its ambitions to expand beyond computers and into the booming market for mobile and Internet-connected devices, announced a deal Thursday to buy security software maker McAfee Inc. for $7.68 billion, the chipmaker’s biggest acquisition ever.

The surprise deal represents Intel’s bold move to position its chips, primarily its lower-powered mobile processors, as an attractive choice for the billions of coming Internet-connected devices, what some have termed the Internet of Things.

By integrating McAfee’s anti-virus software, the world’s biggest chipmaker hopes to create a product that addresses the potential security vulnerabilities created by countless wireless devices, appliances, cars, printers and ATM machines.

Paul Otellini, Intel’s president and CEO, said in a conference call that the Santa Clara company is looking to provide added security, which he called a third pillar of computing, after energy efficiency and connectivity. In the process, Intel is transforming from just a PC company to a broader computing company, he said.

“Our view is that everywhere we sell a microprocessor, there is an opportunity to sell security software with it,” he said.

The acquisition values McAfee, a leading security software firm also based in Santa Clara, at $48 a share. That is a 60 percent premium over its Wednesday closing price.

The deal also continues a streak of cash-rich Silicon Valley titans buying neighbors, following Oracle’s purchase of Sun and Hewlett-Packard‘s acquisition of Palm.

Intel said it would run McAfee as a subsidiary with its executive structure in place. David DeWalt, McAfee’s CEO, said he was excited about the prospect of teaming with Intel to tackle larger security challenges ahead.

“By becoming part of Intel Corp., we believe we can continue to create new and innovative security solutions,” said DeWalt.

Analysts’ reactions

Analysts greeted the news with mixed reactions. Some saw the wisdom of securing Internet-connected devices, which could hit an estimated 50 billion units in the next decade.

“If you look at the PC world, we have a stable stack and set of technologies like the operating system, middleware and antivirus software,” said Crawford Del Prete, an analyst with research firm IDC. “But when you think of connected devices, the stack doesn’t exist in the same way, and security will be a big problem for the billions of devices out there.”

The move will also help Intel compete against processors based on designs from ARM Holdings, which are found in virtually all cell phones and many electronic devices. ARM chips are preferred because they offer better power efficiency, but Intel’s move may help differentiate its chips by highlighting their built-in security protection.

Doubts about synergy

Other analysts, however, have questioned the strategy of buying McAfee, saying it is an expensive purchase and one whose synergies may be hard to realize.

Brian Marshall, an analyst with investment bank Gleacher & Co., said its unclear how much help McAfee can provide, with its strengths in selling packaged software for PCs. He said the business model for selling security for smaller and embedded devices is not established and may be challenging to monetize.

Symantec Corp., McAfee’s biggest rival, said in a statement that Intel might be too focused on securing individual devices when it should create a broader solution that addresses the multiple devices consumers will use.”

Read more here.

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Here is an article from SF Gate.

“Susan Choe, head of the San Francisco-based online video-game startup Outspark Inc., figured she’d found the right strategy when a family of four spent $35,000 for virtual goods on her site.

“We actually called their bank to make sure they could afford it,” said Choe, 40, who serves as chief executive officer. “Apparently they can.”

Outspark offers free Internet games and then makes money by selling extras, such as $2 magic potions, $200 rings with special powers, and even $5 licenses that let players get married virtually (divorces are free). Several hundred families have now spent tens of thousands on the site.

The company is tapping into the so-called freemium model, where people play for free but shell out for premium features – an approach that is spreading to the United States after taking off in Asia. Outspark is relying on a different tack than Zynga Game Network Inc., the maker of freemium titles like FarmVille and Mafia Wars, by offering more involved games that coax individual users into paying bigger amounts.

The average paying Outspark customer spends about $55 a month, or as much as $400 during the life of a game. That compares with the $10 to $20 that paying customers typically spend monthly for a game like FarmVille, the most popular title on Facebook, said Atul Bagga, an analyst for ThinkEquity LLC in San Francisco.

Though most freemium players don’t spend a dime, the less than 5 percent of gamers who do buy items will generate revenue of $1.6 billion in the United States this year, said Justin Smith, founder of Inside Network, which tracks social games and virtual payments. That’s up 55 percent from last year.

“The virtual goods market will be a multibillion-dollar industry,” Smith said.

Outspark’s titles, such as Fiesta and Fists of Fu, rely on elaborate fantasy quests to keep players engaged. Customers also tend to be more hard-core gamers than those who play most Facebook games, meaning they’re more likely to spend money enhancing their characters or improving the chance of advancing.
Stiff competition

Outspark is competing for online gamers against larger companies, including makers of traditional video games. Electronic Arts Inc., the world’s second-largest game publisher, expanded into the market last year by buying Playfish Inc. for about $400 million. Last month, Walt Disney Co. agreed to buy Playdom Inc., another maker of online games, for $563.2 million.

Zynga, which is also based in San Francisco, leads the market for social-networking games. It may record more than $450 million in revenue this year selling virtual objects, ranging from tractors for FarmVille to machine guns for Mafia Wars, according to people familiar with the company.”

Read more here.

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Bidding Process – Procedures for the sale of certain assets of NovaLign Orthopaedics,, Inc.

Further to Gerbsman Partners e-mail of August 6, 2010 regarding the sale of certain assets of NovaLign Orthopaedics, Inc
., I attach the legal documents and wire transfer information  that we will be requesting of bidders for certain assets of NovaLign Orthopaedics, Inc. All parties bidding on the assets are encouraged, to the greatest extent possible, to conform the terms of their bids to the terms and form of the attached agreements.  Any and all of the assets of NovaLign Orthopaedics, Inc. will be sold on an “as is, where is” basis.  I would also encourage all interested parties to have their counsel speak with Stephen O’Neill, Esq., counsel to NovaLign Orthopaedics, Inc.

For additional information please contact Stephen O’Neill, Esq., of Murray & Murray counsel to NovaLign Orthopaedics, Inc
. He can be reached at 408 907 9200  and/or at soneill@murraylaw.com

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the NovaLign Assets. Sealed bids must be submitted so that the bid is actually received by Gerbsman Partners no later than Friday, September 17, 2010 at 5:00 p.m. Central Standard Time (the “Bid Deadline”) at NovaLigns’ office, located at 5885 Ridgeway Center Parkway, # 210, Memphis, TN 38120.  Please also email steve@gerbsmanpartners.com with any bid.

For your convenience, I have restated the description of the Updated Bidding Process.

The key dates and terms include:

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a Confidential Disclosure Agreement (attached hereto as Appendix B) to have access to key members of management and intellectual capital teams and the due diligence “war room” documentation (“Due Diligence Access”). Each interested party, as a consequence of the Due Diligence Access granted to it, shall be deemed to acknowledge and represent (i) that it is bound by the bidding procedures described herein; (ii) that it has had an opportunity to inspect and examine the NovaLign Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and Gerbsman Partners (and their respective staff, agents, or attorneys) do not make any representations as to the accuracy or completeness of the same.

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the NovaLign Assets. Each sealed bid must be submitted so that it is received by Gerbsman Partners no later than Friday, September 17, 2010 at 5:00pm Central Daylight Time (the “Bid Deadline”) at NovaLign’s office, located at 5885 Ridgeway Center Parkway, Suite 210, Memphis, TN 38120.  Please also email steve@gerbsmanpartners.com with any bid.

Bids should identify those assets being tendered for in a specific and identifiable way. In particular, please identify separately certain equipment or other fixed assets. The attached NovaLign fixed asset list may not be complete and bidders interested in the NovaLign equipment must submit a separate bid for such assets.

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase.  All bids must be accompanied by a refundable deposit in the amount of $200,000 (payable to NovaLign Orthopaedics, Inc.).  The deposit should be wired to NovaLign’s attorneys Murray & Murray, A Professional Corporation.  The winning bidder will be notified within 3 business days of the Bid Deadline. The deposit will be held in trust by NovaLign’s counsel.  Unsuccessful bidders will have their deposit returned to them within 3 business days of notification that they are an unsuccessful bidder.

NovaLign reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale.  Interested parties should understand that it is expected that the highest and best bid submitted will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.

NovaLign will require the successful bidder to close within a 7 day period. Any or all of the assets of NovaLign will be sold on an “as is, where is” basis, with no representation or warranties whatsoever.

All sales, transfer, and recording taxes, stamp taxes, or similar taxes, if any, relating to the sale of the NovaLign Assets shall be the sole responsibility of the successful bidder and shall be paid to NovaLign at the closing of each transaction.

For additional information, please see below and/or contact:

Stephen O’Neill, Esq.
(408) 907-9200
soneill@murraylaw.com

Steven R. Gerbsman
(415) 456-0628
steve@gerbsmanpartners.com

Dennis Sholl
(415) 457-9596
dennis@gerbsmanpartners.com

Kenneth Hardesty
(408) 591-7528
ken@gerbsmanpartners.com

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Here is an article from WSJ´s Venture Dispatch.

“The technology start-up scene is rebounding strongly from the recession. That’s evident at 410 Townsend St. in San Francisco’s South of Market neighborhood.

The 75,000-square-foot office building was about 60% vacant in late 2008 when the financial crisis hit and one of the property’s major tenants moved out. Now the landlord, PMI Properties, says the building is 100% full with Internet start-ups such as microblogging service Yammer Inc., online ticket seller Eventbrite Inc., online gaming company Playdom Inc. (recently purchased by Walt Disney Co.) and help-desk software company Zendesk Inc.

All of the start-ups moved in within the last year. And many are now bursting at the seams as they grow more quickly than expected. “We’ve got a competition with Yammer to see who will outlast the other in this building and get the other’s space,” says Kevin Hartz, chief executive of Eventbrite, which has seen its staff grow from 25 last year to around 70 people now. “It’s a death match.”

The activity at 410 Townsend reflects Silicon Valley’s broader tech recovery. As demand for tech goods picks up, venture capital financing is ramping up and start-ups are recruiting new hires.

That has fueled the ferment in SoMA, a hip start-up neighborhood that is home to Twitter Inc. and others. The area’s office vacancy rate peaked in last year’s fourth quarter at 30.5% and has since eased to 28.2%, while average asking rents per square foot have risen to $28.57 from $27.69 late last year, according to real-estate firm Cornish & Carey Commercial.

Jeffrey Palmer, a partner at PMI Properties, says the firm deliberately sought tech tenants for 410 Townsend to cluster them together. Each of the 10,000-square-feet office suites in the four-story building have exposed brick walls, kitchens and state-of-the-art Internet connections.”

Read the full article here.

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Here is an article from SF Gate.

“Ning Inc., the social-networking site co-founded by venture capitalist Marc Andreessen, did what many young Web companies only dream of: It got customers weaned on free services to start paying.

Since telling users in April that it would stop offering the means to build and operate social networks for free, Ning’s paid user base tripled to 45,000, with memberships starting at $2.95 a month. The privately held Palo Alto company is adding paying subscribers at the rate of 5,000 a month, three times what it was before.

“A very large percentage of economic activity is shifting online, and it makes sense that there are more services that are going to charge,” said Andreessen, the co-founder of Netscape Communications Corp., who serves as Ning’s chairman. “It also means there are going to be more people willing to pay.”

Few are charging

Ning is one of the few social-media sites charging users, following a path cut by media and entertainment providers, which have experimented with fee-based services. Founded in 2004, the same year as Facebook Inc., Ning failed to turn a profit with its original strategy: offering most services for free and charging a monthly fee for extra features. Co-founder and Chief Executive Officer Gina Bianchini resigned in March, and 42 percent of the staff was laid off in April.

Social-networking tools on the Web are widely available for free. Facebook, which has more than 500 million users, is expected to generate at least $1.4 billion this year, mostly from the sale of ads, two people familiar with the matter said last month. Twitter, with more than 100 million users, began running ads on its site this year.

With a large population of Web users relying on Facebook for basic social services, like keeping track of close friends, there’s an opportunity for other sites to charge for more unique services, said Lou Kerner, a social-media analyst at Wedbush Securities Inc. in New York.

“Facebook has won the free social media race,” said Kerner. “What you’re seeing in the marketplace is folks who are trying to find out business models that are more niche-oriented.”

For Jive Software Inc., that niche is business. The startup, also based in Palo Alto, sells social-networking and online collaboration tools to corporations, including Nike Inc., Intel Corp. and Charles Schwab Corp. Jive’s services start at $100 per user per year, and many customers pay for at least 10,000 users to start.

“The use of social software in the consumer world has no doubt fueled the interest level” among business users, said Tony Zingale, Jive’s CEO. The company, which received a $30 million investment last month led by Kleiner Perkins Caufield & Byers, expects bookings of as much as $25 million in the last three months of the year, he said.

Paying subscribers are an attractive asset to venture capitalists, who are often asked for money from Internet startups planning to cash in on advertising.

“Ad-driven is a lazy model,” said Dave McClure, a startup adviser and venture capitalist in Silicon Valley. “If there is value, then there probably is a paid relationship that works there at some point,” he said.

Business networking site LinkedIn Corp. generates some revenue by selling professional services, like tools for finding and recruiting job candidates. Meetup Inc., a service for coordinating social events, charges organizers a fee.

The “freemium” model of charging a portion of users is nothing new. One of the earliest examples is PayPal Inc., founded in 1998, which made its payment service free to buyers of products and services so that many people would use it.

“You need free users to enhance the overall value for the product,” said David Sacks, one of the founders of PayPal, who now runs enterprise social-media startup Yammer.”

Read more here.

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Please reserve the date as registration for Mobile 2 (Silicon Valley) in now is open.

Event : Mobile 2 Event

Style : Business/ strategy day & developer day

Date :  Monday 20th and Tuesday 21st September 2010

Venue :  San   Francisco

Timing :  Full day events

RegistrationClick here.

Discount :  Enter “Friends” code for 20% discount.

In its 5th year, MOBILE 2.0 Silicon Valley brings together experts and thought leaders from all aspects of the mobile ecosystem, including startups, investors, mobile carriers, device manufacturers, and mobile application developers and web technologists. The event is focused on new Mobile Applications and Services, Mobile Ecosystems, and Disruptive Mobile Innovation.

I will in SFO from Wednesday 15th to Wednesday 22nd and would be good to meet up.  I will be hosting again the fireside chat, this year with Russ McGuire, David Katz, James Parton and Fabio Sisini.

As usual Mobile 2.0 Silicon Valley is all about giving our audience the opportunity to learn, network and voice views. The Event does not talk at you — you are the Mobile Community and we strive to create an atmosphere that challenges your business assumptions and provides you with hands on understanding of mobile platforms.

Looking forward to seeing you at the event!

/ Tony Fish

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My Old Man

By Ron Harris, Conway, SC

There was great relief and much celebration in America on August 14, 1945, as America noted “Victory over Japan,” or “V-J Day.”  Some three weeks later, World War II was formally over with the signing of Japan’s surrender on Sept. 2, 1945 on the USS Missouri in Tokyo Bay.

Those events’ upcoming 65th anniversaries likely won’t draw much attention, at least not as much as they should.  When I think of what occurred the four years previous (1941-45) to those historic dates, I remember My Old Man.

As I grow older, I think about him a lot — my long-deceased father whom I rarely had time for as a teenager, young man, 30-something, etc.  He died in 1986 at the age of 65.  I passed the 67-year mark this past March and reflect periodically on that uneventful birthday: “Well, I’ve outlived my old man, for whatever that means from an anatomical and heredity analysis,” I muse.  Of course, my mother died in 1964 at age 40, so my mortality genes are likely quite confused.

With my family’s health history, I’m probably not likely to probe the treasure troves of life many more years, but that’s okay.  I live life on life’s terms now. For all the potholes and problems therein, my tenure on this planet has been good.  I have a comfortable retirement income, a wonderful spouse, two loving adult children, an outstanding daughter-in-law and the three cutest, smartest grandkids east of the Mississippi.

I believe I owe my good life, in some or large part, to the efforts of My Old Man, and his American brethren who have come to be regarded as the nation’s “Greatest Generation.”   The years are taking their toll, and those Greats are dwindling rapidly.

And now you’re muttering, “Oh, geez – here we go with another sentimental journey under the apple tree with those geezers that whipped the Axis powers and saved the world.  Put on Glenn Miller and Andrews Sisters’ music, old dude.”

Well, okay, let’s take that journey (sans Glenn and the Sisters), and I promise not to get overly sentimental.  If at any time you want to hop off this cruise, feel free…

…he was the youngest of five children raised in the Texas panhandle, kids of cotton farmers who squeezed out a living during the Great Depression.  College, of course, was out of the question for them.  His two sisters married in their teens and moved nearby, he and his two brothers helped on the farm, the oldest becoming a farmer himself, the other a tractor mechanic.

They did what they had to do and rarely complained about their situation(s), or lack of material things.  They were decent, hard-working men and women who loved their families and country, asking nothing from anyone.

My Old Man was the only one in his family to serve in the military and WWII.  He sought to enlist immediately after Pearl Harbor, but his eyesight nixed his admittance into the Navy or Air Corps.  He tried the Army, but was rejected for his “flat feet.”  He resigned himself to the notion that the military didn’t have a place for him.

But those feet must have miraculously improved in two years, because in the fall of 1943 (a few months after I was born), he got the “Greetings” letter from Uncle Sam – and he was off for basic training in the Army.  A few months later he was on a troopship to the South Pacific, along with hundreds of other troopships and thousands of GIs as the war in the Pacific raged.

Growing up, I learned in bits and pieces from family conversations that My Old Man – a muscular farm-kid who made PFC merely by toting a Browning Automatic Rifle (BAR) and its belted ammo — had been at New Guinea, Saipan, and then the retaking of the Philippines in late 1944, the battles for Leyte and Leyte Gulf, particularly.

I asked him only once over the years if he had gotten any medals in WWII.  He commented, dismissively, “Yeah, I got a Purple Heart and a Good Conduct medal – both of which I could have done without.”

He fibbed a bit there, but I didn’t know it until after his death in 1986, because, as with most Americans in that war, he talked little about his experiences in combat.  The horrors of war are often unspeakable and something few people, particularly those in WWII, want to revisit.

In the summer of 1986, my wife, stepmother and I were going through My Old Man’s belongings and papers, as families do after a loved one’s passing. Therein we found the paperwork, and old hometown newspaper accounts, of some incidents on Leyte — his actions in combat that won him a Bronze Star with oak leaf cluster for bravery in combat.

I won’t go into too much detail here about those actions; he wouldn’t like that. The military report, I’m sure, was minimal, and the hometown newspaper article possibly hyperbolic.  Suffice to say that he provided cover that assisted most of his squad to slip away from a strategically-positioned Japanese machine-gun nest, before he was wounded twice in each leg in that firefight.  But he remained conscious and helped take out the nest before passing out.

When he awoke, he was on the ground in the jungle, not in the clearing where he had previously been.  His wounds had been partially tended, but one Army medic lay dead near him, another was severely wounded some yards away.  Other GIs around him were in a firefight with Japanese soldiers.  My Old Man, according to reports, dragged himself to the wounded medic, then dragged and pulled himself and his comrade to a ditch, away from the heaviest fighting, and used his body to cover his wounded comrade.

For those actions in that clearing and in that jungle, My Old Man received Bronze Stars.  That’s not a big deal to some folks, a lot of those medals have been awarded.  A veteran in Stephen Ambrose’s excellent work, “Citizen Soldiers,” a GI at the Battle of the Bulge, said about medals, “…almost everybody got a Bronze Star there [Bulge], or should have.”

But those Stars and that knowledge was a big deal to me, for I saw My Old Man in a different light than I ever had.  It was an epiphany that I cherish now.

He never mentioned the Bronze Star(s), nor the actions for which he received them, perhaps because he never considered his actions valorous, only necessary. And neither did any of the family talk about it when I was growing up.  My Old Man just didn’t care to speak of any of it, I’m sure preferring to forget rather than remember.

Valor like his, and much more from thousands of others, should never be forgotten.  We Americans should remember the price of freedom every day of our lives, and be forever grateful that My Old Man and thousands of other fathers, husbands, brothers, sisters, sons, and daughters were and are ready to pay that price if necessary.

There are some in our nation who abhor and protest war so vehemently and absolutely that they disdain the people who must pay the price for their right to that protest, and some unequivocally hate the uniform and the symbols the uniform conjures.

My Old Man wouldn’t like that.  But, he wouldn’t say anything about it, except maybe, “They’re entitled to their opinions.  That’s what freedom’s all about.”

For all his human failings and the differences we had, he was a good man and a class act.  One doesn’t have to be a military veteran to be either good or classy, but I give all Vets the benefit of the doubt.  And I say “thank you” to every military person I see in uniform when it’s possible to do so.

I also wore the uniform, Navy whites and blues from 1964 – 68, but the closest I came to combat was a bar-room brawl in San Diego.  Not exactly something I like to talk about, either, but for totally different reasons than that of the Greatest Generation.

As for My Old Man, I salute you, Pop, and also say “Thanks.”  Thanks for doing what had to be done, and never carping about it.  You spent the rest of your life in a painful struggle on so many fronts, physical and emotional, but you never complained.  As you noted from time to time, “Keep your problems and troubles to yourself or within the family, son, and work ‘em out.  Ninety percent of people don’t care about ‘em, and the other 10 percent are glad you got ‘em.”

As horrible as wars were and are, they are a fact of life.  They always have been and always will be, unless or until a human-triggered Armageddon ceases all of mankind’s trials and tribulations.

I pray your great-grandkids will not have to face the horrors you did, Dad.  But if they do, I want them to remember the role models from the “Greatest Generation,” particularly you.

———————–

“There are no extraordinary men – just extraordinary circumstances that ordinary men are forced to deal with.”  — Vice Adm. William “Bull” Halsey, following the Battle of Midway, June, 1942.

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