Archive for July, 2011

Gerbsman Partners has been involved with numerous national and international equity sponsors, senior/junior lenders, investment banks and equipment lessors in the restructuring or termination of various Balance Sheet issues for their technology, life science, medical device and cleantech portfolio companies. These companies were not necessarily in Crisis, had CASH (in some cases significant CASH) and/or investor groups that were about to provide additional funding. In order stabilize their go forward plan and maximize CASH resources for future growth, there was a specific need to address the Balance Sheet and Contingent Liability issues as soon as possible.

Some of the areas in which Gerbsman Partners has assisted these companies have been in the termination, restructuring and/or reduction of:

  • Prohibitive executory real estate leases, computer and hardware related leases and senior/sub-debt obligations – Gerbsman Partners was the “Innovator” in creating strategies to terminate or restructure prohibitive real estate leases, computer and hardware related leases and senior and sub-debt obligations. To date, Gerbsman Partners has terminated or restructured over $795 million of such obligations. These were a mixture of both public and private companies, and allowed the restructured company to return to a path of financial viability.
  • Accounts/Trade payable obligations – Companies in a crisis, turnaround or restructuring situation typically have accounts and trade payable obligations that become prohibitive for the viability of the company on a go forward basis. Gerbsman Partners has successfully negotiated mutually beneficial restructurings that allowed all parties to maximize enterprise value based on the reality and practicality of the situation.
  • Software and technology related licenses – As per the above, software and technology related licenses need to be restructured/terminated in order for additional capital to be invested in restructured companies. Gerbsman Partners has a significant track record in this area.

Maximizing Enterprise Value – Gerbsman Partners proprietary “Date Certain M&A Process”

Gerbsman Partners developed its proprietary “Date Certain M&A Process” in 2002. Since that time, the process has evolved into a 6-8 week time frame vehicle for maximizing enterprise and asset value for under-performing venture capital and senior lender backed medical device, life science and technology Intellectual Property based companies. To date, Gerbsman Partners has maximized enterprise and asset value for over 68 of these companies. A description of this proven process can be reviewed on the Gerbsman Partners website.

About Gerbsman Partners

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in under-performing, under-capitalized and under-valued companies and their Intellectual Property. Since 2001, Gerbsman Partners has been involved in maximizing value for 68 Technology, Life Science and Medical Device companies and their Intellectual Property,, through its proprietary “Date Certain M&A Process” and has restructured/terminated over $795 million of real estate executory contracts and equipment lease/sub-debt obligations. Since inception, Gerbsman Partners has been involved in over $2.3 billion of financings, restructurings and M&A transactions.

Gerbsman Partners has offices and strategic alliances in Boston, New York, Washington, DC, Alexandria, VA, San Francisco, Orange County, Europe and Israel. For additional information please visit www.gerbsmanpartners.com or Gerbsman Partners blog.

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A Yankee fan is a Yankee fan for life.

I saw DiMaggio, Berra, Martin, Maris, Jackson & The Mick – Micky Mantle.

Now Derek Jeter joins this select group for me.

The “Captain” is a leader, a man of class and great athlete.

Thank you for all the hits, the World Series championships and for being the “role model” of what it means to be a New York Yankee.

From a life long Yankee fan – with respect

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Article from SF Gate.

“Facebook began bringing video calling to the masses Wednesday, partnering with Skype to provide the free chat service to its 750 million members.

Video calling comes to the world’s largest social network as part of a larger overhaul of Facebook’s chat features. The updated service will allow users to create group text chats by adding multiple friends into the same window. The chat window also becomes more prominent, taking up the right side of the screen by default.

Speaking at the company’s Palo Alto headquarters, Facebook CEO Mark Zuckerberg said the updates marked a shift for the company away from simply adding users at an ever-faster clip.

“The driving narrative for the next five years or so is not going to be about wiring up the world, because a lot of the interesting stuff has actually been done,” he said. “It’s about what kind of cool stuff you’re going to be able to build, and what kind of new social apps you’re going to be able to build, now that you have this wiring in place.”

Zuckerberg said the shift was prompted in part by a surging demand for sharing information. Facebook users share twice as much today as they did a year ago, as measured by photos posted, comments written and other items.

Facebook’s announcements come on the heels of Google rolling out a new social offering, Google+, that duplicates many of the sharing functions found in Facebook. Google+ also includes a feature called Hangouts that enables group video chatting.

For starters, the Facebook-Skype partnership will only allow one-on-one chatting. Group video chat could be forthcoming, executives said, although on Skype’s stand-alone product, that feature costs money to use.

Zuckerberg said Google’s new product validated Facebook’s own works, and that in the future social features would become an expected part of every application.

The question is which Internet company will prove better at retaining users. Google has more unique users, but they spend less time on the site than Facebook users do. The more time users spend on a site, the more valuable it is to advertisers.

Susan Etlinger, an analyst at Altimeter Group, said Facebook’s large user base would make its video-calling feature instantly competitive with Google’s and other video chat services.

She said the company’s plans to build new services on top of their platform signaled a newfound maturity for the 7-year-old company.

“What I heard Mark say today is that Facebook is starting to focus more on the social aspect of social networking, whereas in the past they focused more on the networking and engineering,” she said. “It’s a really healthy shift.”

Executives at Skype, which was acquired by Microsoft in May for $8.5 billion, said the acquisition would introduce them to an enormous new audience and sell add-on services to them.

“We think this makes a lot of business sense as well,” Skype CEO Tony Bates said. “We get huge reach. In the future we’re talking about potentially also having Skype paid products available within the Web format that we saw here today, so we’re very excited about it.”

Every month, Skype’s users spend 300 million minutes making video calls, Bates said. At peak times, video represents more than half the company’s traffic. (Skype has 170 million regular users.)

Video chat should be available to everyone within a week, Skype product manager Mike Barnes said. Making calls requires users to download a small Java application through the browser.

At first, users will not be able to link their Facebook and Skype accounts. But that integration is in the works, Barnes said. Users who have microphones but not webcams will be able to make voice-only calls on Facebook, he said.”

Read more.

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Article from GigaOm.

I have some news for Kevin Systrom and Mike Krieger, co-founders of Instagram, a San Francisco-based, photo-oriented, social network: They are the fastest growing photo sharing service on Twitter. I’m not surprised. As you know, many folks take photos and share them via Twitter, thanks to services like Twitpic, Yfrog and even Twitter itself. However, Instagram is slightly different; if you’re an iPhone user, you take a photo, upload to Instagram, then share it on Twitter.

Skylines, a Dutch startup focused on real-time photo search, has been analyzing the Twitter feed and has some unique insights into the market. From May 23 to June 26, 2011, Skylines found Instagram usage has gone up 38 percent: from 538,000 photos shared weekly to 740,000 photos shared each week.

Instagram CEO Systrom had recently observed that only 11 percent of Instagram members were using Twitter and by that metric, Instagram members might be adding about a million photos a day to Instagram. Add those two data points together, and one can extrapolate that Instagram is gathering steam. The service recently passed the five million subscriber mark. This level of engagement is one of the reasons why I believe Instagram has a chance of becoming the mobile social hub.

Skylines also shared some other data for the five-week period analysis.

  • From May 23rd to June 26, 2011, there were 33 million photos shared on Twitter via Twitpic, Yfrog, Instagram and Mobypicture (the four services indexed by Skylines).
  • Twitpic is no slouch. It was responsible for sharing of 3.295 million photos during the week of June 20, making it the largest photo-sharing service.
  • Yfrog was used to share 2.98 million photos during the same week.
  • The growth in the total number of photos shared in the five-week period measured was 17 percent.
  • Only 4 percent of the pictures are geo-tagged, while 15 percent have a hashtag.
  • Not surprisingly, weekends are the most popular days to share photos.

As the data shows, while Twitter might have launched its own photo sharing service via Photobucket, the independent photo-sharing services have not seen any kind of slowdown, though there are some dark clouds looming ahead for the likes of Twitpic and Yfrog.”

Read more here.

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Article from GigaOm.

“In some cases, cloud computing is merely a means to avoid investing in “undifferentiated heavy lifting,” but when done right, it actually can be a source of significant competitive advantage. So says Zynga, at least, which highlighted its unique cloud infrastructure, as well as its advanced analytics efforts, as part of its core strengths in the S-1 statementit filed this morning.

According to the form, Zynga views its “scalable technology infrastructure” as a core strength, stating, “We have created a scalable cloud-based server and network infrastructure that enables us to deliver games to millions of players simultaneously with high levels of performance and reliability.” In describing its cloud infrastructure as an important aspect of its business, Zynga’s S-1 says:

Our physical network infrastructure utilizes a mixture of our own datacenters and public cloud datacenters linked with high-speed networking. We utilize commodity hardware, and our architecture is designed for high availability and fault tolerance while accommodating the demands of social game play.

We have developed our architecture to work effectively in a flexible cloud environment that has a high degree of elasticity. For example, our automatic provisioning tools have enabled us to add up to 1,000 servers in a 24-hour period in response to game demand. We operate at a scale that routinely delivers more than one petabyte of content per day. We intend to invest in and use more of our own infrastructure going forward, which we believe will provide us with an even better cost profile and position us to further drive operating leverage.

Zynga has been touting its Z Cloud infrastructure for more than a year, which reverses the conventional approach to hybrid cloud computing. Whereas many analysts initially assumed companies would use private clouds as a gateway to public clouds, Zynga uses Amazon EC2 as a staging ground before ultimately moving games onto private cloud resources. Essentially, Amazon’s cloud lets Zynga scale elastically and determine average traffic load and other metrics, so that it can optimize its internal infrastructure for each game’s specific needs.

The goal of this strategy is efficiency: Zynga doesn’t have to invest in more resources than necessary upfront, nor does it have to worry about underprovisioning resources or otherwise inadequately configuring them when it brings games onto its private cloud. In many cases, private clouds can cost less than public clouds for applications with fairly stable usage patterns, and they help companies meet various requirements around security and compliance. Zynga uses Cloud.com for its private cloud infrastructure, as well as RightScale as a management layer that makes for a uniform experience in terms of managing both public and private resources.

As is the case with every leading web company, Zynga also highlights its big data strategy as a key differentiator. Describing its “sophisticated data analytics,” the S-1 notes, “The extensive engagement of our players provides over 15 terabytes of game data per day that we use to enhance our games by designing, testing and releasing new features on an ongoing basis. We believe that combining data analytics with creative game design enables us to create a superior player experience.”

Cloud computing and advanced analytics are double-edged swords, though. As Zynga’s S-1 acknowledges, relying on publicly hosted cloud computing resources makes it vulnerable to service outages like Amazon Web Services’ infamous April 2011 outage, which temporarily downed both FarmVille and CityVille. “If a particular game is unavailable when players attempt to access it or navigation through a game is slower than they expect, players may stop playing the game and may be less likely to return to the game as often, if at all,” the form states.

Relying on advanced infrastructures and analytics also means competing with companies such as Facebook, Google and others for employees skilled enough to keep Zynga’s operations on the cutting edge. Specifically, the company acknowledges, “game designers, product managers and engineers” are in high demand, making attracting and retaining them a resource-intensive process. In some cases, this has meant offering particularly attractive employees lucrative stock options, which could come back to bite the company. As it notes in the S-1, “[W]e expect that this [IPO] will create disparities in wealth among our employees, which may harm our culture and relations among employees.”

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