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Archive for the ‘Board Of Intellectual Capital’ Category

HP tops Dell’s offer in bid to buy 3Par

Posted in Board Of Intellectual Capital, Economy, internet, Investments, Market research, Strategy, Technology, Venture Capital, tagged , , , , , , on August 25, 2010| Leave a Comment »

Article from SF Gate.

“Hewlett-Packard, the world’s largest PC-maker, has offered to buy Fremont’s 3Par Inc. for about $1.6 billion, topping Dell‘s bid for the maker of data-center equipment and software.

The bid of $24 a share in cash is 33 percent higher than Dell’s offer, HP said Monday in a statement. Dell offered $18 a share in cash, or about $1.15 billion, for 3Par on Aug. 16.

HP and Dell are using acquisitions to challenge Cisco Systems and IBM in the market for data-center products and services, which generate higher profits than desktop and laptop computers. 3Par sells hardware and software that make it easier and cheaper for companies to store information. Its stock rose past HP’s offer, signaling that some investors expect a bidding contest.

“One of the growth areas in technology is in the enterprise storage space,” said Joel Levington, managing director of corporate credit at Brookfield Investment Management Inc. in New York. “3Par’s products fit well in there. It’s an easy way to gain product breadth.”

HP said on a conference call that it has been working on the proposed acquisition since before the departure of Mark Hurd, who stepped down as HP’s chief executive officer on Aug. 6 after an investigation found he filed inaccurate expense reports to conceal a personal relationship with a marketing contractor.

The offer is HP’s second bid for 3Par, Dave Donatelli, who heads HP’s storage and server division, said Monday. The PC-maker has been in talks with 3Par for “some period of time,” he said, declining to comment further.

David Frink, a Dell spokesman, declined to comment. John D’Avolio, a spokesman for 3Par, didn’t immediately comment.

HP’s offer values the unprofitable 3Par at almost 2 1/2 times its worth before Dell’s bid, and at more than eight times its sales of $194.3 million in the year ended March 31. 3Par’s revenue rose 5.2 percent from 2009, and it has about 670 employees.

“It’s a very exorbitant price,” Levington said. It probably doesn’t make economic sense for Dell to counter, he said.”

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Patience May Pay Off For 3Par’s Venture Investors

Posted in Board Of Intellectual Capital, Economy, Investments, Market research, Venture Capital, tagged , , , , , , , , on August 24, 2010| Leave a Comment »

Here is an article from WSJ Venture Dispatch.

“3Par’s IPO in November 2007 was held up as yet another strong offering during a year that saw 74 venture-backed companies go public. The IPO, which priced above market estimates at $14 a share and saw a 13% gain on opening day, also was billed as a big exit for venture capitalists.

But the market soon tanked, bringing down 3Par’s stock with it – by spring-time it was fluctuating between $6 and $9, and its venture investors were nowhere near exiting this company. Typically, VCs begin unloading some shares once the 180-day lock-up period ends, but with the stock-market in flux, three of 3Par’s main venture backers mostly stayed put.

Nearly three years later, Mayfield Fund, Menlo Ventures and Worldview Technology Partners still own significant chunks of 3Par stock, and that patience may pay off mightily – thanks to the bidding war between Dell and Hewlett-Packard.

Last week, Dell agreed to acquire 3Par for $1.13 billion, or $18 a share, but Hewlett-Packard has swooped in with a $24-a-share offer that values 3Par at $1.6 billion. The bidding has caused 3Par’s stock to rocket upward to more than $25 today, finally bringing the stock above its IPO price.

This is especially good news for limited partners in Mayfield Fund and Worldview Technology Partners, which first invested in 3Par in 1999. Together, these three firms and a number of others invested a total of $183 million into 3Par over the years.

Prior to these buyout offers, 3Par’s venture investors were left with a difficult choice between selling out for liquidity now or waiting for better returns down the road. Menlo Ventures, which led the company’s 2004 recapitalization, and Worldview Technology Partners, which first invested alongside Mayfield Fund in the 1999 Series A round, have both held onto their entire stakes and today own 13.4% and 12.2%, respectively. These investors declined to comment or did not respond to requests for comment.

Mayfield Fund, which was at the time of the IPO, the company’s largest shareholder, has been slowly selling its stake in the business over the last two years at prices ranging between $9.22 and $12.30, which was near the price prior to the announcement from Dell. That firm currently owns about 9.9% of 3Par.”

Read the full article here.

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Facebook’s Places raises more privacy debate

Posted in Board Of Intellectual Capital, FaceBook, Market research, Social Networks, Technology, Web 2.0, tagged , , , , , , , , , on August 23, 2010| Leave a Comment »

From SF Gate.

“Facebook‘s latest move to add “where” to the list of personal information members share with the world gives the social networking firm yet another tool in its march to become the Internet’s most dominant destination.

And yet predictably, the new Facebook Places check-in feature has ignited a new round of debate over whether the Palo Alto firm is doing enough to safeguard its members’ privacy.

Facebook Places began rolling out Wednesday night to the company’s members in the United States with an upgraded application for the iPhone and iPod Touch that includes an icon that resembles a Google Maps location pin.

Launching the app lets members share their current location, which is automatically plotted by their phone’s GPS technology. They can tag Facebook friends who might also be there and use a “Here Now” function to see who else might be in the area. On Facebook.com, the Here Now map is powered by Google-rival Microsoft’s Bing Maps.

Tapping into trend

Places taps into the same social sharing game of “check-in” that has caused technology pundits to declare startups like Foursquare and Gowalla as part of the latest hot tech trend. This year, microblogging service Twitter also launched a location-tagging feature to its tweets and online recommendation service Yelp enabled check-ins on its mobile application.

But Facebook vice president Chris Cox said Places represents more than just a game, because it uses virtual technology to connect people in the real world. Over time, locations can accumulate stories and memories that later generations can access, Cox said.

San Francisco’s Ocean Beach, for example, could be tagged as the place “where your parents had their first kiss,” Cox said. “What starts to happen is the physical reality we’re in comes alive with the human stories that we’ve told there.”

Facebook worked with other location-based services to integrate their apps with Places.

“This basically validates that we’re on to something, that this will be something much, much bigger going forward,” Holger Luedorf, vice president of mobile and partnerships for Foursquare, said during a Facebook news conference.

But analysts say Facebook’s entry into the location-based services could blow the others out of the water because the social network has such a broad reach with mainstream audiences. Worldwide, Facebook has more than 500 million active members who span all age and marketing demographics. Foursquare, by comparison, has at least 3 million members and is growing quickly.

Working with Facebook may give companies like Foursquare “a little advantage, but the advantage is minimal and it’s not going to last very long,” said Susan Etlinger, a consultant with the Altimeter Group of San Mateo. “My Aunt Sue might not be on Yelp, but I know she’s on Facebook.”

Places also completes the public picture of members, who are already encouraged to share who they are, what they are doing and when. Facebook has become one of the Internet’s top destinations for finding news, viewing photos and watching video. And according to Internet researcher eMarketer, Facebook is on track to bring in $1.28 billion in online advertising in 2010, up from $835 million this year. The company is also developing its own virtual payment system, Facebook Credits.

Facebook officials sidestepped questions about how the firm plans to generate revenue from Facebook Places.

But analyst Augie Ray of Forrester Research Inc. said Places enters Facebook into the emerging mobile advertising space.

“There is no question that knowing where people are and what places they visit will be valuable data for Facebook and its advertisers,” Ray said. “It will permit Facebook to better understand individual’s likes and dislikes, not simply based on what buttons they click, but on their actual real-world behavior. And knowing where an individual is at a given moment will permit Facebook to serve better and more relevant ads based on user location.”

ACLU raises questions

But the San Francisco office of the American Civil Liberties Union immediately questioned whether Places has again left Facebook members open to privacy problems.

“Facebook made some changes to its regular privacy practices to protect sensitive location-based information, such as limiting the default visibility of check-ins on your feed to ‘Friends Only,’ ” the ACLU’s Nicole Ozer wrote in a blog post. “But it has failed to build in some other important privacy safeguards.”

In a sharply worded rebuttal, Facebook spokesman Barry Schnitt said Places “sets a new standard for user control and privacy protection for location information. We’re disappointed that ACLU’s Northern California office ignores this and seems to generally misunderstand how the service works.””

Read more here. 

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Intel to acquire McAfee in $7.68 billion deal

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

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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Online game firm grows as more players buy in

Posted in Board Of Intellectual Capital, tagged , , , , , , , on August 19, 2010| Leave a Comment »

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.”

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