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Archive for October, 2010

Article from SF Gate.

“Zynga Game Network Inc.’s estimated worth surpassed Electronic Arts Inc.‘s stock-market value, a sign of the ascendance of social-networking entertainment at the expense of traditional video games.

Zynga, the maker of such games as FarmVille and FrontierVille, is valued at $5.51 billion, according to SharesPost Inc., an exchange for shares of privately held companies. Electronic Arts, the second-largest game publisher by sales, is worth $5.22 billion on the Nasdaq Stock Market.

Started by Mark Pincus almost four years ago, Zynga has become one of the fastest-growing technology companies by using Facebook Inc.’s social network to distribute games. It makes money by selling virtual goods, such as vehicles and weapons that help players advance in games. The company has grabbed about a third of that market, which is worth $1.6 billion this year, according to Inside Network in Palo Alto.

“The valuation is not that crazy, given what’s going on in the market,” said Atul Bagga, an analyst at ThinkEquity LLC in San Francisco, who estimates the virtual-goods market may reach $3.6 billion in three years. “It’s not that terribly expensive seeing the growth prospects.”

Electronic Arts, meanwhile, faces declining retail sales of gaming hardware and software. Before Tuesday, its shares had dropped 7.4 percent since March 1. Zynga’s estimated value has more than doubled in that period.

Electronic Arts was the world’s biggest video-game publisher until 2008, when Activision merged with Vivendi SA‘s gaming business to form Activision Blizzard Inc.

Dani Dudeck, a spokeswoman for San Francisco’s Zynga, said the company doesn’t comment on its valuation. SharesPost bases its number on data from trades of private shares, research estimates and venture-financing valuations. Jeff Brown, a spokesman for Redwood City’s Electronic Arts, didn’t immediately respond to a request for comment.

Zynga is the largest maker of games on Facebook, with more than 210 million monthly active users, according to AppData.com, part of Inside Network, a research firm.

Zynga’s value on SharesPost was $2.61 billion in March. That’s when SharesPost introduced a new index for venture-backed companies, including Facebook, Twitter Inc. and LinkedIn Corp.”

Read more here.

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By Tony Fish – member of Gerbsman Partners Board of Intellectual and principal at AMF Ventures. Visit his blog at: http://blog.mydigitalfootprint.com

If we sit back and reflect on current digital services, such as social media, we could conclude they are a game e.g If Twitter is about getting the best quip of the day or providing some useful info,  Linkedin is about proving “my network is bigger than yours”, and Facebook is about sharing that “I have a more interesting life than you”; then there must be some new rules for these new games, but what are they? Before we examine some suggested new rules, it is worth confirming and stating that all of the old/existing rules of social engagement are still valid, relevant and have not been washed away by this new digital age. A few examples of classic handed down rules that are timeless would include:-

  1. Don’t gossip, make things up, slander, steal, pinch or lie
  2. Have evidence and be professional, factual, accurate, honest, and transparent
  3. Engage and treat others how you want to be treated yourself
  4. Opinions are personal, be gracious, open, respectful and accepting of differences

Whilst all the old rules of social engagement exist, regulation does need some “modernising” as democracy, understanding and technology have advanced significantly since they were written.  Examples of regulation that would appreciate some new impetus would include: Privacy, Identity, Liberty, Harm, Consequences, Ownership, Access and Rights.

Realities for living and surviving in a digital age

Here are my rather eclectic suggestions of New Rules that I have heard, picked up or created.  I am hoping you will add and refine this list.  You can add your comments to this list here – My Digital Footprint Blog

mashup* are also organising an evening debate on “new social rules” on November 24th – you can register here.

  1. Change your password to Facebook, Twitter and bank accounts etc before you change your boy/girl friend/ partner.
  2. Don’t sack/release/ make redundant the person, and then be held hostage, by the person who has the login/password for your corporate fan page, group, twitter account until many people have control/access.
  3. Have several persona’s, this is not a sign of madness and you don’t need to justify then to anyone.
  4. Hide your friends identities by using personal nick-names on your mobile, just in case a friend borrows it to text that person with some inappropriate message that may haunt you forever.
  5. No adult supervision will not lead to anarchy. The youth want to be somewhere (in a digital world) where they are in control
  6. Provide someone (you trust) with the knowledge how to access your accounts/ data after you die and what you want done with your data/ digital footprint. Be aware – it will go against every term and condition you have signed if you do this.
  7. Your password is the weakest point in your armour,
  8. Reputation is all you have and your name is a good identity – so don’t abuse or loose either.
  9. Make sure you realise that your digital footprint is worth more than your salary.
  10. Everything you do can be recorded (stored) as sensors will be in all digital devices soon – ask yourself why and what use will the data be and to whom!
  11. Create a lot of rubbish data and cause confusion if you want to hide in plain sight. It is easy to find and hard to hide in a digital world if everyone is honest
  12. Determine what the terms “family” and “friends” mean to you before you accept others into your network(s)
  13. Un-friending is acceptable – being un-friended is a reality
  14. Learn the social (digital and physical) rules that apply to your group today but be aware they will be different tomorrow
  15. Privacy – It’s all in the settings
  16. Digital has one speed – fast, there are no breaks but plenty of fuel
  17. Internet writing is in Ink, once out there – it is out there, there is no rubber (yet)
  18. Loyalty (to a service) is dead – you are free to your own boundaries
  19. Open means you don’t want to hide and transparent means “it can be found” – but most people will not bother
  20. Branding is now personal and it is the new black
  21. Trust is the new king’s advisor – content still wears the trousers
  22. Free is not free – Engagement, Relationship and Conversation have a price
  23. FUD (Fear, Uncertainty and Doubt) are easier to sell
  24. Money in a digital world has less ‘personal’ value than real money and is closer to swopping chickens for potato’s. Unlike cash, others are more prepared to cheat, lie, swindle and steal your digital money as it appears “virtual” and less actual.
  25. Don’t set up any direct debits to anything
  26. Don’t let individuals buy web domains or set up accounts just to avoid the long corporate procedures and PO cycles.
  27. Interaction with the “screens of life” is the ultimate digital game being played. It is to get “content” from the dark bowels of a data warehouse onto your brightly lit screen
  28. Control is not in your hands
  29. Levels of damage and harm from digital engagement is currently lower that you may think

If you would like to chat about the opportunities that digital footprint data brings, especially from the perspective of mobile and real time feedback, please contact me at tony.fish@amfventures.com. The book is free on line at http://www.mydigitalfootprint.com/ or you can buy it direct from the publisher at the web site. There is also a summary and a eReader/ Kindle version.

We hope that our Viewpoint improves awareness, raises questions and promotes deliberation over coffee. We will respond to e-mail, text, twitter or blog comments. http://blog.mydigitalfootprint.com

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Extension to the Bidding Process – Procedures for the sale of certain assets of Applied Spine Technologies, Inc.

The Board of Directors of Applied Spine Technologies, Inc. did not accept any bid that were due on October 15, 2010.  As such, the Board of Directors has authorized an extension to the Bidding Process for the sale of certain assets of Applied Spine Technologies, Inc. to Friday, November 12, 2010.

Further to Gerbsman Partners previous emails regarding the sale of certain assets of Applied Spine Technologies, Inc., I attach the draft legal documents and wire transfer information that we will be requesting of bidders for certain assets of Applied Spine Technologies, 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 Applied Spine Technologies, Inc. will be sold on an “as is, where is” basis.  I would also encourage all interested parties to have their counsel speak with Merton Gollaher, Esq., counsel to Applied Spine Technologies, Inc.

For additional information regarding the legal documents please contact Merton Gollaher, Esq., of Wiggin and Dana LLP counsel to Applied Spine Technologies, Inc. He can be reached at 203 498 4362  and/or at mgollaher@wiggin.com For additional information regarding the Bidding Process and Due Diligence please contact Steven R. Gerbsman at 415 505 4991 and/or at steve@gerbsmanpartners.com.  Please do not contact the company directly.

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the Applied Spine Assets. Sealed bids must be submitted so that the bid is actually received by Gerbsman Partners no later than Friday, November 12, 2010 at 3:00 p.m. Eastern Standard Time (the “Bid Deadline”) by email to- steve@gerbsmanpartners.com and mgollaher@wiggin.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 nondisclosure agreement (attached hereto as Exhibit A) to have access to key members of the management and intellectual capital teams and the due diligence “war room” documentation (the “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 an opportunity to inspect and examine the Applied Spine Technologies 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 Applied Spine Technologies Assets. Sealed bids must be submitted so that it is actually received by Gerbsman Partners no later than Friday, November 12, 2010 at 3:00 p.m. Eastern Standard Time (the “Bid Deadline”) by email steve@gerbsmanpartners.com and mgollaher@wiggin.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 Applied Spine fixed asset list may not be complete and bidders interested in the Applied Spine 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 check in the amount of $100,000 (payable to Applied Spine Technologies, Inc.).  The deposit should be wired to Applied Spine’s attorneys Wiggin and Dana LLP.  The winning bidder will be notified within 3 business days of the Bid Deadline. Unsuccessful bidders will have their deposit returned to them within 3 business days of notification that they are the unsuccessful bidder.

Applied Spine Technologies reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all of the 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.

Applied Spine Technologies will require the successful bidder to close within a 7 day period. Any or all of the assets of Applied Spine Technologies 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 Applied Spine Technologies Assets shall be the sole responsibility of the successful bidder and shall be paid to Applied Spine Technologies at the closing of each transaction.

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

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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Article from SF Gate.

A partnership backed by Facebook, Amazon.com, Comcast and other major technology firms on Thursday established a $250 million fund to invest in startups that hope to capitalize on the growing reach of social networking.

The “S Fund” will be led by powerhouse Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers, an early investor in Internet companies such as Amazon, AOL and Google.

The fund’s backers are betting that the success of Facebook, which has more than 500 million members worldwide, is only the start of the next wave of “incredible and disruptive innovation,” Kleiner Perkins partner John Doerr said.

So the investors want “to find and fund and accelerate the success of these new kinds of social entrepreneurs,” Doerr said during a news conference hosted by Facebook.

The six initial investors are Facebook; e-commerce giant Amazon; cable TV and broadband service provider Comcast Corp.; social games leader Zynga Games Network Inc.; communications and entertainment giant Liberty Media Corp.; and investment bank Allen & Co. LLC.

Joining Doerr on stage at the event were Facebook chief executive Mark Zuckerberg, Amazon chief executive Jeff Bezos, Zynga chief executive Mark Pincus and Bing Gordon, former chief creative officer of video game publisher Electronic Arts. Gordon, now a partner at Kleiner Perkins, will lead the fund.

“Social is going to be a breeding ground for great CEOs,” Bezos said.

Bezos also said he wants to find startups that will use his company’s platform of cloud computing services, called Amazon Web Services.

“These social apps do tend to be very viral, and when they hit, they hit fast and they can grow violently,” Bezos said. “That really does play to the strengths of Amazon Web Services.”

Zuckerberg said the fund will help entrepreneurs who are trying to build social applications and services “from the ground up.”

“The opportunity is there in the next five years or so to pick any industry and reimagine it in the social Web,” he said.

The fund’s first $5 million investment went to CafeBots Inc., a Palo Alto startup that is working on a “friend relationship management” platform to help consumers make better use of their social network.

The startup, the brainchild of three Stanford University graduates, hasn’t released its product and is still in stealth mode.

CafeBots co-founder Michael Munie, 28, said that in addition to the money, inclusion in the fund gives his startup access to the entrepreneurial expertise of Kleiner Perkins, Facebook and the other investing companies.

As examples of the kind of “social Web” firms that could be funded, Kleiner Perkins trotted out representatives of several companies it previously invested in, including Flipboard Inc., which earlier this year launched a popular iPad app that creates a personalized magazine-style display of Facebook, Twitter and other news media feeds.

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Article from SF Gate.

“Intel Corp., the world’s biggest chipmaker, said it will spend between $6 billion and $8 billion on U.S. factory upgrades, spurring the creation of 800 to 1,000 manufacturing jobs.

Two plants in Chandler, Ariz., and two in Hillsboro, Ore., will be renovated, and a new research and development facility will be built, Intel said Tuesday in a statement. The plans will also create as many as 8,000 construction jobs, the company said. The initiative will be carried out over “several years,” Intel spokesman Tom Beermann said in an e-mail. The Oregon plant is to open in 2013.

Intel, based in Santa Clara, has manufacturing facilities at three sites in the United States, including New Mexico, as well as in Ireland and Israel. The company is also building its first production facility in China. Intel, which is vying with Samsung Electronics Co. to be the industry’s biggest spender on production, budgeted $5.2 billion for plants and equipment in 2010.

“Today’s announcement reflects the next tranche of the continued advancement of Moore’s Law and a further commitment to invest in the future of Intel and America,” Intel President and CEO Paul Otellini said.

Moore’s Law is Intel co-founder Gordon Moore‘s famous prediction in 1965 that computer chips’ performance will roughly double every two years as manufacturing technology improves and more transistors, or tiny on/off switches, can be crammed onto the chips. The other side of that prediction is that prices will also fall.

Semiconductor companies are locked in a race to shrink the line widths on the circuits that give computer chips their function. Intel’s budget will be spent on so-called 22-nanometer production. A nanometer is one billionth of a meter. Reducing line widths lowers costs and makes products more capable. Modern semiconductor plants cost hundreds of millions of dollars to construct and billions to equip with machinery. They run 24 hours a day, year-round.

Intel rose 2 cents to $19.21 in Nasdaq Stock Market trading. The shares have declined 5.8 percent this year.

The company’s microprocessors run more than 80 percent of the world’s personal computers. Rival Samsung is the biggest maker of memory chips. The two companies compete in the market for memory used in mobile products such as Apple’s iPad and iPhone.

Intel ended the third quarter with more than $20 billion in cash and short-term investments after generating $3.5 billion in cash flow from operations. That cash total doesn’t include the two pending acquisitions it announced in the period – the $7.68 billion purchase of McAfee Inc. and the $1.4 billion deal for Infineon Technologies AG‘s wireless-chip unit.”

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Article from GigaOm.

Fundamental changes in networking and computing are shaking things up in the enterprise IT world. These changes, combined with ubiquitous broadband and new devices like smart phones and tablets, are leading to new business models, new services and shifts in corporate behavior. It’s also leading to a lot of M&A activity as companies jockey for position before the ongoing technology shift settles into the new status quo.

A report out today from Deutsche Bank lays out some of the shifts and names what it believes are the 11 most likely acquirers, calling those companies the Big 11. The bank’s Big 11 are: Apple, Cisco, Dell, EMC, Google, HP, IBM, Intel, Microsoft, Oracle and Qualcomm. They were selected because of their size, their cash balance and their willingness to make strategic acquisitions. The report talks about which companies each might acquire, but it also gives a wealth of data on the companies which comprise the Big 11 that any startup looking for a buyer on the software and infrastructure side might find worthwhile.

In addition to the information on buyers, the report goes on to explain why many deals today are valued at multiples that are so much higher than the potential revenue of the company (HP’s buy of 3PAR is a prime example of this trend):

On the other hand, the multiples paid for these companies go counter to typical expectations for valuations. All of these deals were priced at considerable premiums to forward estimates. The implication is that the larger companies believed that there were strategic benefits far in excess of the smaller companies’ near-term prospects. A common criticism of acquisitions holds that management teams of large companies try to buy revenue and earnings to offset far lower growth rates in their core businesses. This does not appear to be the case with these deals. We see this as confirming our thesis that large companies are looking to buy technology and product synergies. In all of these deals, we see larger companies either significantly building up weak product lines or looking for the ability to bundle new features into existing equipment.

Some of the 50 targets mentioned are:

  • Salesforce.com (s crm )
  • VMware
  • Adobe
  • Citrix
  • Research In Motion
  • Riverbed Technology
  • SAP
  • Atheros
  • Skyworks
  • f5 (sffiv)
  • Juniper

Each are on the list of potential candidates for different reasons associated with improving the quality and speed of delivering web-based applications and services from a cloud-based infrastructure to a multitude of devices. However, there are plenty of startups and private companies that are pioneering new technologies in these areas which are also fair game. The report doesn’t go into the content side of the business where companies like Google, Facebook, Apple, Disney, etc. are fighting for features and services to expand their reach and platforms.

Since we’re living through an enormous period of potential disruption thanks to technology, the giants in the industry find themselves playing a game of musical chairs as they seek the best seat at the table for the future. Startups and larger public companies that will help those giants fill out their offerings before the music stops are under the microscope and perhaps at the top of their valuations.”

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Article from GigaOm.

“Oracle bought Sun Microsystems, hired former HP CEO Mark Hurd and declared that as “Oracle continues to grow, we need people experienced in operating a $100 billion business,” and ever since, the technology world has waited to see what other acquisitions Larry Ellison might have up his sleeve. This past week, we saw strong reactions to the rumor that Oracle might make a bid to buy EMC, due to the acquisition’s outlandish nature and monetary mismatch. Oracle will need to more than triple its revenue to reach that $100 billion target, so anything is possible.

That said, the rumor whips up a bunch of financial questions, because EMC owns 80 percent of VMware. EMC has a market capitalization of around $43 billion, and VMware around $32 billion. Match that up with EMC’s annual revenues of around $15 billion and VMware at $2.4 billion, and it isn’t hard to figure out where most of the value is, as well as where Oracle might be able to get a good deal on the multiple leading storage platforms.

So yes, the idea of Oracle buying EMC and VMware is a little crazy. But the idea of buying EMC and not VMware is within the realm of possibility, at least on paper, with The Register estimating that the non-VMware portion of EMC could be worth as little as $7.9 billion.

This is where things get interesting. The industry appears to be pushing towards server, network and storage consolidation following the moves of HP, IBM, Cisco, and Dell. Even Oracle has pushed a complete hardware and software package with Exalogic and Exadata using technology from Sun Microsystems to deliver an integrated solution. EMC and Network Appliance remain the large pure-play storage companies that could add significant heft to a server vendor that wants to dominate integrated stacks. HP and IBM have too much product overlap, and Dell can’t afford EMC, so that leaves an opening for Oracle and Cisco.

It seems likely that Oracle could be considering an EMC-only bid. I’ve heard some speculate that the reason Oracle became so tied to NetApp for certain solutions was the fear of EMC data center account control. Make no mistake; EMC knows how to close big deals, as their revenue number proves. If the goal for Oracle is to reach $100 billion, NetApp wouldn’t help them as effectively. NetApp currently has an $18 billion dollar market cap and just over $4 billion in revenue.

With Oracle, and potentially Cisco, interested in looking at a the EMC part of the equation, there could be impetus to move this deal forward. Even though Sun had plenty of great storage technology, they never had the commercial product success and storage revenues of EMC. If consolidation between servers and storage is the future, EMC better get cozy with someone soon.”

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