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Archive for the ‘Business models’ Category

Here is an interresting article from SF Chronicle.

“Regulators have cleared the way for the landmark search partnership between Microsoft Corp. and Yahoo Inc., creating a unified front in the battle to crack the dominance of Google Inc.

Seven months after announcing the agreement and following several years of merger flirtations, the U.S. Department of Justice and European Commission approved a deal that tightly allies the No. 2 and No. 3 players in the search space. It also marks a pivotal moment in the history of Yahoo, as it cedes territory where it was once a pioneer.

Under the terms of the pact, Microsoft’s Bing search tool will become the exclusive platform on Yahoo’s sites, funneling queries through the Redmond, Wash., software titan’s increasingly popular algorithm. The Sunnyvale Web portal will sell advertising tied to online search for both companies, and Microsoft will pay Yahoo for the traffic it generates.

The deal promises to give the companies control over nearly 30 percent of U.S. online searches, based on the current market share reported by comScore Inc. The combination will deliver improved results for consumers and better returns for advertisers and publishers, the companies said.

“Together, Microsoft and Yahoo will promote more choice, better value and greater innovation,” Microsoft chief executive Steve Ballmer said in a statement.

But analysts are skeptical about how much the deal will really reshape the search industry. Google holds a commanding lead of more than 65 percent of searches, and Yahoo has been bleeding market share for years.

“I don’t think there’s a big shift in power here,” said Carl Howe, analyst with Yankee Group Research Inc.

Rather, he said the agreement provides incremental benefits, opening up a bigger channel of advertisers for Microsoft and lowering research and development costs for Yahoo.

Yahoo previously estimated the agreement would add $500 million to its annual operating income and save $200 million in capital expenditures, though not until two years after the deal was approved.

Implementation will begin in the coming days and could be complete in the United States by the end of the year. The goal is to transition U.S. advertisers and publishers to the new platform before the holiday season, but the companies acknowledged it may take until 2011.

“This breakthrough search alliance means Yahoo can focus even more on our own innovative search experience,” Yahoo CEO Carol Bartz said in a statement. “Yahoo gets to do what we do best: combine our science and technology with compelling content to build personally relevant online experiences for our users and customers.”

Read the whole article here.

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Here is a good weekend article around youth online behaviours well worth a reading. The SF Chronichle article points out that Twitter has failed to catch up among the young, Myspace invites for blogging in contrary to Facebook that is more of a staus/ short message socializing forum.

Questions that I get from this is how to reach the youth with businessmodels, enabling profits, advertising etc. Also, if the lifecycles of products are as shorts as a few years, what happens with existing, but declining businesses?

Gerbsman Partners are able to provide leadership in this questions, please contact us for more information.

“Teenagers and young adults spent less time blogging during the past three years as social networks like Facebook became more popular, according to a Pew Research Center study released Wednesday.

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Here is an interresting article from Seeking Alpha.

“By Rob Day

Haven’t had much time to go through the various recent cleantech IPO filings, and so haven’t talked about them much. Also just generally hoping they do well, for the sake of the overall industry.

But in a meeting today someone put up some stats that were pretty sobering.

Taking a basket of 4 high profile recent IPOs and filings, the total across the four companies was:

– Trailing twelve month revenues = $319M

– Trailing twelve month EBITDA = -($343M)

– Total venture dollars put into all four companies to date = approximately $1.5B

Like I said, I hope all of these companies do well and grow into great companies. But this type of profile for IPO isn’t the norm. So you have to wonder about it.

Someone today mentioned that they think these companies have to IPO now because they need yet more capital and the private equity world is tapped out. I disagree, I think companies with prospects like these would be able to raise more capital, if not from traditional VCs, then from non-traditional private equity players. Cleantech private equity is down, but far from tapped out.”

Read the full blogpost here.

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Here is an interesting article from The Economist.

“BEIJING recently suffered its lowest temperature in 59 years, but the economy is sweltering. Figures published on Thursday January 21st showed that real GDP grew by 10.7% year on year in the fourth quarter. Industrial production jumped by 18.5% in the year to December, while retail sales increased by 17.5%, boosted by government subsidies and tax cuts on purchases of cars and appliances. In real terms, the rise in retail sales last year was the biggest for over two decades.

A year ago many economists were fretting about unemployment and deflation. Now, with indecent haste, they have shifted to worrying that the Chinese economy is overheating and inflation is taking off. The 12-month rate of consumer-price inflation rose to 1.9% in December, an abrupt change from July when prices were 1.8% lower than a year before.

The recent rise in inflation was caused mainly by higher food prices as a result of severe winter weather in northern China. In many cities, fresh-vegetable prices have more than doubled in the past two months. But Helen Qiao and Yu Song at Goldman Sachs argue that it is not just food prices that risk pushing up inflation: the economy is starting to exceed its speed limit. If, as China bears contend, the economy had massive overcapacity, there would be little to worry about: excess supply would hold down prices. But bottlenecks are already appearing. Some provinces report electricity shortages and stocks of coal are low. The labour market is also tightening, forcing firms to pay higher wages.”

Read the full article here.

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Here is a good VentureBeat article.

“Now that 2009 is over, we can add up the numbers on how much venture firms invested in startups during all of 2009 — and, well, it was a lot less than in the past. Over the course of the year, VCs invested a total of $17.7 billion in 2,795 deals, the lowest total since 1997, according to the MoneyTree Report from the National Venture Capital Association and PricewaterhouseCoopers.

On the bright side, the worst hit came from numbers that we’ve already reported on, since investments really plummeted during the first half of this year. Funding went up in the third quarter, and more-or-less held steady in the fourth. The amount invested went down from $5.1 billion in the third quarter to $5.0 billion in the fourth quarter, but the numbers of deals went up from 689 to 794. So VCs were making smaller bets, but they placed more fo them. Another reason for optimism: There were more seed and early-stage deals in Q4 than in any other quarter this year, so new ideas are still getting money.

Two of the industries we spend a lot of time covering at VentureBeat took a big funding hit in 2009. Internet-specific companies received $2.9 billion dollars, down 39 percent from 2008. Cleantech fell even further to $1.9 billion, a decline of 52 percent. Meanwhile, VCs put more money into biotech ($3.5 billion) than any other sector, and even then, biotech saw a 19 percent drop from 2008.

NVCA President Mark Heesen acknowledged the drop in a statement released with the report, saying, “The venture industry had no choice but to slow the investment pace in 2009.” But he also offered an optimistic view of the year to come.

“Now that the economy has begun to show signs of improvement, we expect to see dollars flow more freely back into those sectors that offered the most promise before the recession began — clean technology, life sciences and IT,” Heesen said. “The seed and early stage pipeline needs replenishing across all industries and the health of the startup community in the next decade will be dependent upon more robust first-time financings. 2010 should be the year to begin that process in earnest.”

Read the complete article here.

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