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Archive for the ‘Business models’ Category

DoJ, FTC Will Review Merger Guidelines, Seek Public Input

Posted in Board Of Intellectual Capital, boic, Business models, Investments, Venture Capital, tagged , , , , , , , , on October 21, 2009| Leave a Comment »

Here is an interesting piece on mergerlaw from IT Business Edge.

“More frequently than not these days, when two companies operating in the same market space agree to merge or to engage in a strategic partnership, the U.S. Department of Justice or the Federal Trade Commission, or even both agencies, are going to want a closer look. Take Oracle’s acquisition of Sun Microsystems, and the Microsoft-Yahoo agreement in the search arena, for instance. The agencies want to make sure the merger, acquisition or partnership is not going to have an anti-competitive effect on the market such that consumers will be adversely affected.

The number of these inquiries has risen, and will continue to rise in the next few years, I’d imagine, because the Obama Administration has pledged to get serious about antitrust violations. That pledge has garnered mixed reviews, especially in the tech industry, as you can see in this post by our Rob Enderle. I don’t have Rob’s years of experience watching these things unfold, but I don’t know that I would go to such extremes. Yes, the new administration appears to be taking a more hands-on approach in enforcing the law, but at least the agencies responsible are also evaluating whether the guidelines they use to do so are still up to par.

Last week, Compliance Week’s Melissa Klein Aguilar reported that the DoJ and the FTC are considering whether the guidance they use in evaluating the anti-competitive effects of proposed horizontal mergers and acquisitions need updating. To that end, they are asking the public to respond to a 20-question survey on the matter.”

Read the full article here.

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Venture Funding Up 17.5%, M&A Rebounds Even More

Posted in Board Of Intellectual Capital, Business models, Gerbsman Partners, Intellectual capital, Investments, Market research, Technology, Venture Capital, tagged , , , , , , , , on October 15, 2009| Leave a Comment »

Here is some good news from TechCrunch.

“Last quarter, based on funding and M&A data we collect in CrunchBase, we signaled that we were cautiously optimistic about the rebound of the tech sector. Q2 trends were no worse than Q1 09: venture financings were up 20% and mergers & acquisitions held steady (excluding Oracle’s acquisition of Sun Microsystems) in comparison to Q1.

With another quarter of data under our belts, we’re feeling even better about the health of technology startups. The number of new startups, venture fundings and M&A are all on the rise. In addition to decent stats, there are lots of new tech products launching across diverse categories, coming from companies both great and small. The Layoff Tracker and Deadpool have quieted down in our sector. In short, we’re feeling like there’s a more rational and focused market for startups and tech.

Strategic M&A Is Back: 3x Q2 Levels

One of the strongest signals of the quarter was the resumption of activity in mergers and acquisitions. The acquisition market really rebounded in Q3 09 to over $45 billion from 231 deals, 3x greater than Q2’s $15 billion. We haven’t seen M&A activity at this level since Q2 08, which recorded 275 deals totaling $59 billion.

…

Most encouraging, acquirers are adding strategically to their businesses (Amazon-Zappos, Facebook-Friendfeed, Google-On2, Yahoo!-Xoopit, VMWare-Springsource, RIM-Torch Mobile, Intuit-Mint, etc.) Some acquirers are returning to the market with multiple strategic deals (Adobe, EMC, IBM, Thomson Reuters, Yahoo!, Google, etc.) Deal making was well distributed across business segments (consumer web, retail, mobile, advertising, enterprise, biotech, cleantech)”

Read the full article here.

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Venture liquidity still a trickle

Posted in Board Of Intellectual Capital, boic, Business models, tagged , , , , , , , , , , on October 1, 2009| Leave a Comment »

Here is a story from VentureBeat.

“It has been a rough three months for startups hoping to get acquired. Well, it’s been more like a rough year, but there’s new data from Dow Jones VentureSource focusing on the third quarter of 2009.

Overall, venture-backed liquidity (the combination of mergers, acquisitions, and initial public offerings) added up to $2.7 billion, down 49 percent from the same period last year, VentureSource says. It’s even a drop from the $3 billion of venture liquidity earned in Q2.

Things were even worse for M&As, which fell 56 percent to $2.25 billion paid in 71 deals — though the number would have been higher if VentureSource had counted Amazon’s $807 million purchase of Zappos, which hasn’t closed yet. Instead, that should add a big boost to next quarter’s numbers.

Acquired companies also made less money (median acquisition price fell 52 percent to $22 million) and had been waiting for longer to sell (median age increased 23 percent to 6.13 years).

On the other hand, IPOs were actually up from last year, with a combined total $451.25 million, the highest since 2007. That’s less exciting than it sounds, since the vast majority of that money came from battery company’s A123’s spectacular IPO, and there were only two IPOs in all. So it’s hard to see the increase as indicative of any big trend, except the fact that big IPOs are still possible. But hey, after the yearlong period (which ended in Q2) of no IPOs , that’s something.”

Read the full story here.

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Tech leads market optimism

Posted in Board Of Intellectual Capital, boic, Business models, tagged , , , , , , , , , , on September 18, 2009| Leave a Comment »

Here is some good market analysis in regards to topics we covered earlier in the week by way of ITWorld.

“September 17, 2009, 07:33 PM —  IDG News Service —

Optimism about IT helped boost stock exchanges to 2009 highs this week as tech-sector mergers and acquisitions and news about improving demand for hardware buoyed investor confidence.

The tech-heavy Nasdaq Composite index hit 2133 on Wednesday, its highest level for 2009, well above the 1630 mark at the start of the year and its low of 1268.64 on March 9. Nasdaq computer stocks were up 50 percent for the year, while Nasdaq telecom stocks were up 48 percent for the year. The broader Dow Jones Composite Index was up 10 percent for 2009.

M&A activity has fueled investor excitement about the tech sector. While the recession has killed the market for leveraged buyouts and private equity deals this year, there has been a steady stream of acquisitions among tech companies, many of which have large coffers of cash.

In one of the larger tech deals announced recently, Adobe said late Tuesday it will acquire Web analytics company Omniture for US$1.8 billion in cash. Adobe said it will incorporate Omniture technology into its own Web-development and document-creation products. Adobe is paying a 45 percent premium over Omniture’s share price, which may account for the immediate reaction to the deal: Adobe shares slipped by $2.27 to close at $33.35 Wednesday.

However, M&A often stokes investor excitement because it is seen as a sign of industry confidence in certain technologies. Vendors will buy companies in order to quickly ramp up in areas of technology that they believe are taking off.

For example, Intuit — the leading personal finance software developer — on Monday announced it would pay $170 million for startup Mint.com. Though Intuit has successfully battled Microsoft Money for years, the company has not had a response to various Web-based financial tools that have sprung up lately. Mint offers free tools to help consumers gather and analyze personal financial information. While Intuit shares dipped by $0.07 to close at $27.78 Tuesday, they bounced back up to $27.89 Wednesday.”

Read the complete article here.

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More IPO gossip, new prospects include: Greenplum, LinkedIn, Pacific Biosciences and Zynga

Posted in Board Of Intellectual Capital, boic, Business models, Market research, Strategy, tagged , , , , , , , , , , , , , , , , , , , , , , on August 27, 2009| Leave a Comment »

Here is a recent article from CNN.

“If you have been an investor in technology IPOs in recent months you’ve done well.

Starting in April, and really gathering momentum this summer, there has been a slew of tech companies that leapt through the public market window including Changyou (CYOU), Rosetta Stone (RST), OpenTable (OPEN), and most recently Emdeon (EM).”

The article continues,

“Right now in Silicon Valley, investment bankers are busy making the rounds of promising portfolio companies trying to convince them of the wisdom of an IPO. There is always the question of what kind of company can – or should – go public. During the last wave of tech IPOs, after the dotcom bust, the rule of thumb was that firms with $100 million in revenue and profitability were IPO candidates.

Investment bankers on the prowl in Silicon Valley

Now, according to one prominent venture capitalist who asked to remain anonymous, investment bankers are telling him, “If a company can show revenue of $15 million per quarter, a good business model – and if not profitability, a path to profits – they can deliver an oversubscribed offering.” (One wonders wonder whether these simply are investment bankers who have had nothing to do for the last 12 months, trying to make their bonus figures.)

Venture capitalists have not had much to be happy about, either. It wasn’t just IPOs, but acquisitions that came to a screeching halt during the recession. Both of these groups desperately want the IPO window to stay open, and so far it is.”

And concludes,

“In Google’s day it was bulge-bracket investment banks – Morgan Stanley (MS), CSFB (CS), Goldman (GS), Lehman Bros or no one. The economics of the banks (characterized as going “down-market” to even do $500 million IPOs) required bigger deals. Today’s deals, with their much more modest size, are better tailored for the boutique banks – Thomas Weisel Partners, Jeffries, JMP Securities, Piper Jaffray, and the like. These are the banks pounding the streets in Silicon Valley the hardest.

Could it all end badly? Of course, and usually it does when the rush toward IPOs at some point sends half-baked companies into the public markets and they tank. But between now and then we are likely to see a group of very high quality tech companies look to go public – think Greenplum, LinkedIn, Pacific Biosciences and Zynga among many others.

For those investors with the stomach, it might not get much better.”

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