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Archive for the ‘Board Of Intellectual Capital’ Category

Venture fund to help social-networking startups

Posted in Board Of Intellectual Capital, Community, Economy, FaceBook, Gerbsman Partners, Intellectual capital, internet, Investments, Market research, Mobile, Social Networks, Strategy, Uncategorized, Venture Capital, Web 2.0 on October 22, 2010| Leave a Comment »

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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Intel to invest billions in renovating factories

Posted in Board Of Intellectual Capital, tagged , , , , , , , , on October 20, 2010| Leave a Comment »

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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The Big 11 Tech Acquirers

Posted in Board Of Intellectual Capital, Distressed IP, Economy, Gerbsman Partners, Intellectual capital, Investments, Market research, Strategy, Technology, Venture Capital, tagged , , , , , , , , , , , , , , , , , , , , , , , , , , on October 19, 2010| Leave a Comment »

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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Is EMC the Next Step in Oracle’s Journey to $100B?

Posted in Board Of Intellectual Capital, tagged , , , , , , , , , , , , , , , on October 18, 2010| Leave a Comment »

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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IVP Woos Hot Web Companies Before They Grow Old

Posted in Board Of Intellectual Capital, tagged , , , , , , , on October 17, 2010| Leave a Comment »

Article from WSJ Venture Dispatch.

“If you think early-stage investing is the only place to be in venture capital, you haven’t been paying attention to Institutional Venture Partners.

Although it’s a senior citizen in VC with 13 funds to its name, the late-stage investor is behind two of the Web’s hottest companies, Twitter Inc. and Zynga Game Network Inc.

And while many firms struggle to hit fund-raising goals, IVP recently closed a new fund at $750 million, its largest ever, blowing by a $600 million target.

Its partners think that’s because this is exactly the right time for its strategy as the road to exiting has grown longer and early investors and founders look for liquidity.

Although the firm is not lacking competition, “the supply-demand relationship in the late stage is quite attractive,” said General Partner J. Sanford “Sandy” Miller. Fund-raising data support this view: Early-stage and multi-stage venture firms raised $3 billion and $3.98 billion, respectively, in the first half of this year, according to Dow Jones LP Source; late-stage specialists raised a mere $500 million (this amount does not include IVP’s latest fund, which closed in the second half of this year).

Miller, who joined IVP in 2006 from London-based 3i Group PLC, and before that co-founded investment bank Thomas Weisel Partners, said that although public offerings are again “a feasible alternative,” they will remain a small percentage of venture capital exits compared with M&A. Strategic acquisitions will provide the best exits for VCs as technology companies deploy their “unprecedented war chests,” Miller said.

Meanwhile, many technology companies, especially those employing the software-as-a-service model or in digital media, are investing aggressively to drive growth. IVP initially invested in both Twitter and Zynga in 2008 when they raised second rounds. Late-stage investors traditionally invest in third or later rounds.

IVP General Partner Dennis Phelps said Internet companies, because they can be launched cheaply, often can tap the late-stage market after raising little previous capital. For example, IVP in March led a $10 million Series B round for New York-based DoubleVerify Inc., which runs a brand-protection service for online advertisers and had raised $3.5 million from investors previously.

The DoubleVerify investment also illustrates another trend in the late-stage market as IVP, besides injecting fresh capital, bought Series A shares from an angel investor who was looking for liquidity. Miller said such transactions are more common now, although it is usually founders or management selling shares. Not only is it a way for IVP to boost its ownership stake in the company but it also can relieve financial pressure on company executives who otherwise might have to wait a decade to get money out of the business.

Recent IVP funds have performed well. Its 10th vehicle, raised in 2001, had an internal rate of return of 7.4% as of March, according to data from investor California Public Employees’ Retirement System. Its 12th fund, closed in 2007, had a 28.4% IRR as of March, according to California State Teachers’ Retirement System.

“We’re looking for the emerging winners,” Miller said of IVP’s investment strategy. “If you wait too long, they’re no longer emerging and they’re just very expensive situations.””

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