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Archive for the ‘Board Of Intellectual Capital’ Category

Connecting The Dots On eBay’s Local Shopping Strategy

Posted in Board Of Intellectual Capital, Business models, Economy, Gerbsman Partners, Investments, Market research, Strategy, tagged , , , , , , , , , on May 16, 2011| Leave a Comment »

Article from TechCrunch.

It’s no secret that eBay has been heavily investing in a local commerce strategy.

The central core of this is trying to capitalize on the $917 million online-to-offline buying market, which Forrester estimates will eventually reach $1.3 trillion (although this number seems low) and account for nearly 50% of total retail sales by 2013. Virtually every acquisition in the past year (besides the company’s $2.4 billionpurchase of GSI Commerce) has been of a company that is dabbling in local payments or linking to merchants (Milo, RedLaser, Where, FigCard). If you look closely, a clear strategy is emerging that positions eBay at the center of mobile shopping, local commerce, and payments (through PayPal). Let’s connect the dots.

Online-To-Offline and Comparison Shopping

eBay’s first foray into the local commerce arena was though the acquisition of barcode scanning mobile app RedLaser last June. RedLaser’s barcode scanning technology allows users to comparison shop on the go. Anyone can scan a barcode on an item at a store and then automatically access any eBay listings of the product on the marketplace. Sellers can also use the scanning technology to scan an item and list the product in very little time. RedLaser’s technology was quickly integrated into eBay’s dedicated iPhone and Android apps.

The company then bought Milo for $75 million, which aggregates and lists real-time in-store product inventory for over 50,000 stores across the country; featuring over 3 million products from Target, Macy’s, Best Buy, Crate & Barrel and more.

Most recently eBay integrated Milo into a few of its core products, including RedLaser. So with a single scan of a product in a store, users can see which nearby retailers have a product in store, and at what price. eBay also integrated Milo’s results into its own marketplace, allowing users to include local shopping tab in search results to check a product’s local, or in-store, availability directly from the eBay search results page.

But surfacing local product results and integrating barcode scanning only scratches the surface of local and mobile commerce and its potential. There’s no doubt that eBay is reaping the benefits of mobile commerce (the company expects to do $4 billion in mobile gross merchandise volume in 2011).

Local Payments

And eBay realizes that in order to really capitalize on local and mobile in the ecommerce experience, the company also has to be a part of the point of sale for local merchants. And eBay has a player in this race—payments giant PayPal. PayPal has been making its own small forays into local commerce and late last year launched a new version of its popular iPhone app that allows users to find businesses near their immediate location that accept PayPal as a form of payment. The feature rolled out in San Francisco initially, but we haven’t heard much about the initiative since last November.

Why? Well, scaling this feature broadly to other cities is a challenge for even a large company like PayPal. Not only do they have to find the local businesses, but PayPal has to teach them how to use their mobile apps as a payment mechanism. Wouldn’t it be much easier to acquire a company that could help PayPal and eBay do this?

Enter Where, a geo-location service and mobile advertising company that already has millions of active users across many mobile platforms. The apps show local listings for restaurants, bars, merchants, and events, and also suggests places and deals for you based on your location and past behavior. Where also offers a location-based ad network, which allows advertisers to show their mobile ads only to people near their store, or perhaps near a competitor’s store (after the user opts in to see these types of ads). Currently, more than 120,000 retailers, brands and small merchants use Where’s network daily to reach new audiences and deliver real-time foot traffic to their doorstep.

eBay of course acquired Where a few weeks ago, and housed the company within PayPal. Not only does this give PayPal much more of a reach with its payments service, but it gives eBay a platform to to enter into the the local deals market. As Where’s CEO Walt Doyle told us after the acquisition, “eBay is about connecting buyers and sellers and Where is about connecting people with places.” Ebay can now tap into connecting consumers with local businesses and can be a part of the transaction with PayPal.

PayPal also just bought mobile payments startup FigCard, a Boston-based startup that allows merchants to accept mobile payments in stores by using a simple USB device that plugs into the cash register or point-of-sale terminal. All the consumer needs is the Fig app on his or her smart phone. The connection with PayPal is that when consumers setup their payment information, they could add PayPal as a payments option and pay for goods via their mobile phone.

Eliminating the need for an actual wallet has always been a goal for PayPal, and if the company can scale FigCard’s technology (perhaps to many of those merchants using Where?); PayPal could have a stake in the mobile wallet race.

The ‘Pivot’

In the past year, it’s fair to say that eBay and PayPal have spent over $200 million on the acquisitions I mentioned above. That’s a fair chunk of change even for a company that is making billions each year.

There’s no doubt that eBay is invested heavily in this strategy and believes that the future of the company is based on both online to offline purchases, local and mobile commerce. eBay VP of engineering Dane Glasgow recently told us that one of the challenges for eBay in this strategy is being on the pulse of technology, which is constantly evolving.

But as retail evolves, eBay is shifting its business as well, and it will undoubtedly be interesting to see if the company can connect the dots with all these acquisitions and technologies to create a powerhouse in mobile and local commerce. The challenge is that some of these initiatives aren’t really that complimentary to eBay’s core marketplace and auction business.

While eBay won’t be quitting the auction business anytimesoon, the marketplace business itself isn’t growing as fast as PayPal. PayPal now represents 39 percent of eBay’s total revenue, and nearly made $1 billion in revenue for the company in the first quarter of 2011, up 23 percent from the same quarter in the previous year. Marketplaces brought in $1.5 billion, up 12 percent from the same quarter in 2010.

Pivot is a word that tends to be over-used in the tech world, but in eBay’s case that is exactly what we are witnessing—a major pivot in the company’s business model to local commerce. It’s certainly not easy for any company to “pivot,” especially one as massive as eBay. If it manages to pull this off so late in the game, it could herald a whole new era of growth for the company.

As Glasgow tells us, “it’s a new retail environment, where the convergence of online and offline are coming to life through mobile and local experiences.” Can eBay position itself fast enough to flourish in that environment?”

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Facebook’s not-so-stealth campaign against Google

Posted in Board Of Intellectual Capital, tagged , , , , , , , , on May 13, 2011| Leave a Comment »

Article from SF Gate.

“Facebook tapped a major public relations firm to plant negative stories about archrival Google’s competing services, the social-networking giant acknowledged after being effectively caught red-handed by an online news site.

The episode highlights the increasing friction between two of the most prominent companies in Silicon Valley as they battle over talent, acquisition targets and now public perception. It also underscores the growing importance of strategic communications in the competitive arsenal for information companies, whose success depends on winning the trust of users.

But largely, it’s an embarrassing backfire for Facebook, as the clumsy PR stunt has grabbed attention instead of the issue the company was hoping to spotlight.

“This allows Google to appear to be the good guys and Facebook the bad guys,” said Carl Howe, analyst with the Yankee Group.

In recent weeks, public relations firm Burson-Marsteller reportedly shopped around stories that raised privacy concerns about Google’s Social Circle service to influential voices, including USA Today reporters and privacy blogger Christopher Soghoian.

The plan began to unravel after Soghoian posted the pitch online, revealing that Burson had offered to help write and place an opinion piece in the Washington Post, Politico and elsewhere. USA Today followed up with a story suggesting the firm was engaged in a “whisper campaign” to spread negative news about Google and concluded that the claims were “largely untrue.”

The mystery remained about which client was behind the PR effort until the Daily Beast reported that Facebook, when confronted with evidence, had fessed up.

Facebook mostly defended its actions Thursday, saying no “smear” campaign was “authorized or intended.”

“Instead, we wanted third parties to verify that people did not approve of the collection and use of information from their accounts on Facebook and other services for inclusion in Google Social Circles,” the statement read. “We engaged Burson-Marsteller to focus attention on this issue, using publicly available information that could be independently verified by any media organization or analyst. The issues are serious and we should have presented them in a serious and transparent way.”

Social features

Google has increasingly been weaving social features into its services, notably adding “social search results” that include things like the public Twitter updates from a person’s connections that might be relevant to a given query. Google pays Twitter for that information feed.

The initial pitch from Burson claimed that Google is also scraping data from sites like Facebook, MySpace and Yahoo, and revealing secondary connections – say, the friends of your friends – without the permission of users. Google didn’t respond to inquiries from The Chronicle.

Facebook has been on the receiving end of plenty of privacy criticism itself for, among other things, increasing the amount of information that is accessible without asking permission from members.

Burson both defended and apologized for its role in the incident. The company said it was raising fair questions, but acknowledged that the approach “was not at all standard operating procedure and is against our policies, and the assignment on those terms should have been declined.”

The fact that one tech company was pitching negative stories about another comes as little surprise to many journalists, but for the general public, it sheds a glaring and unflattering light on how parts of the industry operate. Big-league public relations is often a bare-knuckle affair, focused as much on bashing rivals as lauding oneself or clients.

Not uncommon

Different companies operate according to different standards, but it’s not uncommon for major businesses to attempt to draw the eyes of journalists to the questionable practices of rivals, by highlighting issues they might not have noticed or sharing damning documents.

“It is a staple of the political and public relations world to not only tell the attributes of your own client, but to voice the demerits of one’s opposition,” said Sam Singer, president of Singer Associates Inc., a crisis PR firm in San Francisco.

The major reason this incident became big news is that Burson didn’t disclose the client it was working for, a violation of standard industry practice, he said. The ethics policies of the Public Relations Society of America state that members shall: “Reveal the sponsors for causes and interests represented.”

Journalists readily take the off-the-record bait, often without disclosing the source of the information, because the information helps them produce scoops or uncover new angles.

Reporters shouldn’t dismiss such information out of hand, because sometimes it’s the only way it can be obtained, but they shouldn’t simply run with it either, said Joe Skeel, executive director of the Society of Professional Journalists.

“It’s like any tip you get anywhere,” he said. “It’s incumbent on every journalist to check out the facts and make sure it’s credible before going forward.”

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Microsoft Makes $8.5 Billion Skype Buy Official

Posted in Board Of Intellectual Capital, tagged , , , , , , , , , , , on May 10, 2011| Leave a Comment »

Article from GigaOm.

“Microsoft confirmed that it has agreed to buy Skype for $8.5 billion and plans to integrate it into a wide array of products, from Kinect and Windows Phone 7 to Lync, Outlook and Xbox Live. The deal caps a sudden turn of events for Skype, which had previously been the target of interest from Google and Facebook, but then attracted attention from Microsoft. Om first broke the news about Microsoft’s interest in Skype, and last night nailed the purchase price. With the deal, Microsoft is taking a product that eBay couldn’t integrate well and will try and use it to compete against Google, Apple, Cisco and others in the collaboration and communications space.

Microsoft said Skype will become a new business division with Skype CEO Tony Bates assuming the title of president of the Microsoft Skype Division. The company said the acquisition will enhance its work in real-time communications, which includes Lync, Outlook, Messenger, Hotmail and Xbox LIVE. And it expects it to bring in new revenue and provide more benefits to both consumers and enterprise customers.

“Skype is a phenomenal service that is loved by millions of people around the world,” said Microsoft CEO Steve Ballmer in a statement. “Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world.”

For Skype, the deal allows it to extend its reach and introduce new ways to communicate, said Bates. Microsoft said Skype currently has 170 million connected users and logged more than 207 billion minutes of voice and video conversations in 2010. For all its popularity, however, Skype has had trouble making money and posted a $7 million net loss in 2010.

Microsoft will have a big job on its hands in trying to make Skype work — in part because at $8.5 billion, it is Redmond’s biggest acquisition ever. As Om points out, Skype could give Microsoft a boost in the collaboration market and improve its Windows Phone 7 offering. It could also be an intriguing video-calling combination for Kinect, the gesture-based system for the Xbox. But big acquisitions also have a history of failure, so it remains to be seen whether Microsoft has the ability to turn Skype into a money maker — especially considering its other online efforts haven’t seen much success.”

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Steven R. Gerbsman will be a guest speaker at the Center for UC Berkeley Executive Education Venture Capital Executive Program May 16-20, 2011.

Posted in Board Of Intellectual Capital, Gerbsman Partners, Marketing, tagged , , , , , , on May 5, 2011| Leave a Comment »

Steven R. Gerbsman, Principal of Gerbsman Partners, will be a guest speaker at the Center for UC Berkeley Executive Education Venture Capital Executive Program taking place May 16-20, 2011.

He will speak on the topic Maximizing Enterprise Value of Under Performing Deals on Thursday, May 19 over lunch, 12:00-1:15 PM.

The program is designed for investment professionals, economic policy advisors, and entrepreneurs striving to gain advanced, results-oriented training in the venture capital process.

For more information, please visit: http://executive.berkeley.edu/programs/vcep/ and http://executive.berkeley.edu/programs/venture-capital-training/speakers.html.

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 and has restructured/terminated over $795 million of real estate executory contracts and equipment lease/sub-debt obligations. Since inception in 1980, Gerbsman Partners has been involved in over $2.3 billion of financings, restructurings and M&A Transactions.

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Delicious: Yahoo sells bookmarking service

Posted in Board Of Intellectual Capital, tagged , , , , , , , , on April 30, 2011| Leave a Comment »

Article from SFGate.

“Yahoo sold its bookmarking service Delicious to YouTube founders Chad Hurley and Steve Chen, part of a plan to offload underperforming sites.

The service will become part of Avos, a new Internet company, Hurley and Chen said Wednesday in a statement. Hurley is the chief executive officer of the new business.

“We’re excited to work with this fantastic community and take Delicious to the next level,” Hurley said. “We see a tremendous opportunity to simplify the way users save and share content they discover anywhere on the Web.”

Sunnyvale’s Yahoo, more than two years into a turnaround by CEO Carol Bartz, is selling off businesses and trimming staff to generate more profit. Earlier this year, it announced plans to cut about 1 percent of its staff, after a decision to eliminate about 4 percent, or about 600 jobs, in December. The strategy helped first-quarter earnings top analysts’ estimates this month.

“As we have said, part of our product strategy involves shifting our investment with off-strategy products to put better focus on our core strengths and fund new innovation,” Yahoo said in an e-mailed statement. “We believe this is the right move for the service, our users and our shareholders and look forward to watching the Delicious technology develop.”

The YouTube founders plan to “aggressively hire” to improve the service, making it easier to use. Hurley and Chen are relocating Delicious to San Mateo, near where they started YouTube.”
Read more here.

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