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Archive for the ‘Economy’ Category

Article from SFGate.

“Hewlett-Packard Chief Executive Officer Meg Whitman announced Thursday that the company has decided not to spin or sell off its PC division, another repudiation of a controversial plan proposed in August by her ousted predecessor, Léo Apotheker.

Whitman said an internal review showed it would be more costly to sell or spin off the unit, called the Personal Services Group, than to keep it within the Palo Alto company.

“HP objectively evaluated the strategic, financial and operational impact of spinning off PSG,” Whitman said in a statement. “It’s clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees. HP is committed to PSG, and together we are stronger.”

The plan to spin off or sell the division was one of the major factors that led HP’s board of directors to dump Apotheker in September and hire Whitman. The PC unit is HP’s least profitable, but accounts for about one-third of the company’s revenue.

In a news release issued minutes after the close of trading on Wall Street Thursday, HP noted the unit generated $40.7 billion in revenue for fiscal year 2010.

HP said the internal review “revealed the depth of the integration that has occurred across key operations such as supply chain, IT and procurement. It also detailed the significant extent to which PSG contributes to HP’s solutions portfolio and overall brand value. Finally, it also showed that the cost to recreate these in a stand alone company outweighed any benefits of separation.”

When she took the helm, Whitman said her appointment wasn’t a signal that HP was shifting its strategy away from the course set by Apotheker.

But at an economic conference earlier this month in San Francisco, Whitman was asked whether HP would continue Apotheker’s software expansion strategy following the company’s $10.3 billion purchase of British software maker Autonomy Corp.

“It’s certainly the end of big acquisitions,” Whitman said.

Stock in HP closed at $26.99 per share, up $1.24, on the New York Stock Exchange.”

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Article from GigaOm.

“2011 has been a year of milestone birthdays in tech. September saw Google become a teenager, email hit the big 40 in June, and even Twitter turned five back in March. Perhaps the most significant tech birthday this year, though, was the World Wide Web itself turning 20.

In 1991 British scientist Tim Berners-Lee posted a brief summary of the World Wide Web (or W3) project on the alt.hypertext newsgroup, writing:

“The WWW project was started to allow high energy physicists to share data, news, and documentation. We are very interested in spreading the Web to other areas, and having gateway servers for other data. Collaborators welcome.

It’s safe to say that Berners-Lee’s invitation to potential collaborators went fairly well. That initial web page has expanded to more than 19 billion pages (at the last count) and there are millions and millions of workers across the globe who rely on the World Wide Web to go about their daily lives. In those 20 years, the changes to the workplace that have taken place thanks to the Internet are nothing short of remarkable. Email is as good a place as any to start.

You’ve got mail

Try to explain the workplace B.E. (before email) to someone under 30, and you could be describing life in the 19th century for all the relevance it has to their working day. Back then, we lived in a world in which quaint technologies such as the fax machine prevailed. With the fax machine, it was not unusual to wait days for a reply.

Later, when Web-based email began to grow in popularity, it transformed communication in the workplace. You could now receive a response to a question within minutes, especially once broadband connections became more commonplace. You could send information and documents to colleagues around the world at the click of a button.

Email overload

But technology was now developing at a pace that seemed astonishing even to those who worked in the industry, and email, after a honeymoon period, hit problems. “Too intrusive,” said some. “Too much of it,” said others. “Not quick enough,” moaned the rest.

When consumer-based instant-messaging technologies infiltrated the workplace – AIM launched in 1997 and Yahoo! Messenger (then Pager) in 1998 – users were suddenly able to communicate with co-workers in real-time. Years later, these tools would often be integrated into a platform that also included voice over Internet protocol (VoIP), shared whiteboards, video conferencing and file transfer features.

It was around this time that social networks also began to establish a presence. Some of these are undoubtedly more consumer-focused, but there can also be no denying that Facebook, LinkedIn and Twitter have had a massive impact on working life, too. The ability to communicate and share content with your extended network (and beyond) has transformed many of our traditional working practices. As well as enabling businesses to engage in two-way conversations with their customers, these social networks are now a central part of the recruitment process. Last year, I wrote a piece on how Facebook, LinkedIn and Twitter can enable you to find a team of peers without breaking the bank of recruitment agencies. You can tap into your workforce’s network and find like-minded, talented people to become part of your company.

Getting ready to collaborate

The net result of all the technological developments outlined above has been to change the very fabric of how we work. We now live in a collaboration economy. To share and communicate information, ideas and innovation has never been easier, or come more naturally to the workforce. The emergence of the Web has given rise to a global working village, with location and time zone utterly irrelevant. You can work as closely with someone in another country as you would with someone sitting opposite; work from home or on the move, and even send files from your mobile handset to someone on the other side of the world.

This has all been made possible by the World Wide Web. From Skype to smartphones and social networking to SaaS, it’s all underpinned by the internet and the changes to the workplace of 20 years ago are just extraordinary. With a global mobile worker population set to hit 1.19 billion by 2013, one can only wonder what the Internet will bring us next. Bring on the next 20 years!”

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Article from GigaOm.

It’s no secret that the larger economy has hit a rough patch in recent months. Although Silicon Valley has — in general – fared better than many other parts of the world, the venture capital industry is not immune to the negative effects of the macro-economic slowdown.

In the third quarter of 2011, venture capital investment activity fell 12 percent in terms of dollars and 14 percent in terms of deals compared to the previous quarter, according to the latest edition of the MoneyTree Report assembled by accounting giant Pricewaterhouse Coopers (PwC) and the National Venture Capital Association (NVCA).VCs invested $6.9 billion in 876 deals during the July through September timeframe in 2011, the MoneyTree report says, a notable decline from the $7.9 billion invested in 1,015 deals during the second quarter of 2011.


To be fair, the industry is still up compared to last year. For the first three quarters of 2011, VCs invested $21.2 billion, which is 20 percent more than VCs invested in the first three quarters of 2010. And 2010 saw an even bigger drop between the second and third quarters of the year. But VC funding is not exactly predictable according to the time of year — in 2009, for instance, the third quarter of the year was stronger than the second.

The VC industry is not as predictably cyclical as others because it generally takes its cues from a fluctuating variety of places: the worldwide economy, the entrepreneurial environment, the stock market’s appetite for IPOs, and larger companies’ appetite for acquisitions. It’s a complicated mix, but at the moment, it seems venture capitalists may be nervous about the larger environment of financial unrest, and the IPO window that opened earlier this year seems to be closing.

Seed funding takes a hit

Seed funding — which has recently been the hotshot of the industry as more angel and individual investors have become active in funding the startup scene — took a major hit in the third quarter of 2011. Seed stage investments fell a whopping 56 percent in terms of dollars quarter-over-quarter, and 41 percent year-over-year, to $179 million. It’s not just the total amount of seed investment that’s fallen, it’s also the amount of money per deal: The average seed deal in the third quarter was worth $2 million, a 43 percent drop from the average seed deal in the second quarter of 2011, which was $3.3 million.

And late stage deals have started to see major declines as well. Later stage startup investments decreased 20 percent in dollars and 30 percent in deals in the third quarter compared to the second, MoneyTree reported. Middle, or expansion, stage deals were relatively robust: Expansion stage dollars increased two percent quarter-over-quarter and 43 percent year-over-year, with $2.5 billion going into 260 deals.

Software is still strong

It’s not all doom and gloom, though. The software space has held up fairly well, receiving the highest level of funding for all industries during the third quarter with $2 billion invested from venture capitalists. That’s a 23-percent increase in dollars from the second quarter, and according to MoneyTree, the highest quarterly investment in the sector in nearly a decade, since the fourth quarter of 2001.

The web industry had a relatively soft quarter, as investments in Internet-specific companies fell 33 percent quarter-over-quarter during the third quarter to $1.6 billion. But it’s not exactly time to cry for Internet startups; the third quarter had a very tough act to follow, because Internet-specific VC deals hit a 10-year high in the second quarter of 2011.

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Article from SFGate.

“Google reported sales that beat estimates Thursday as businesses spent more on advertising to online consumers.

Third-quarter sales, excluding revenue passed on to partner sites, rose to $7.51 billion, Google said on its website. That topped the $7.23 billion average of analysts’ estimates compiled by Bloomberg. Net income climbed 26 percent to $2.73 billion ($8.33 per share) from $2.17 billion ($6.72) a year earlier.

Google, despite concerns about the economy, is benefiting from growing demand for online advertising, including search-based marketing that makes up most of its sales. Search-based advertising should reach $37.7 billion this year globally, up 23 percent, while total Internet ad spending should climb 20 percent, according to media researcher MagnaGlobal.

“Search is good,” said Kerry Rice, an analyst at Needham & Co. in San Francisco who rates the stock a buy and doesn’t own shares. “Paid search is still the biggest component of online advertising, and Google’s obviously going to win the vast majority of that dollar.”

Google rose 1.9 percent to close at $558.99 on the Nasdaq Stock Market. The shares have dropped 5.9 percent this year.

Third-quarter profit, excluding some items, was $9.72 a share, exceeding the $8.76 average of analysts’ estimates.

Even with more competition from Microsoft, Google picked up market share in the United States, according to Efficient Frontier Inc., which helps companies promote products online. Google had 82 percent of spending on search advertising in the third quarter, up from 81 percent in the two previous quarters.

Microsoft, which provides search and ad services for Yahoo’s U.S. websites under a new agreement, had 18 percent, down from 19 percent in the previous two quarters, according to Efficient Frontier.”

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Article from GigaOM.

“Reports of the death of Groupon’s IPOplans have apparently been greatly exaggerated. The online daily deals pioneer filed an updated version of its S-1 document with the Securities and Exchange Commission on Friday, as part of its preparation for a planned initial public offering of its stock.

Since the company first filed its S-1 in June, Groupon has been roundly criticized for its seemingly shady accounting practices and that its early founders and investors have already cashed out billions of dollars worth of the company’s stock. CEO Andrew Mason was so irked by the negative press that he sent a long email to Groupon’s employees filled with talking points they could use to defend the company. Ironically, when that email was inevitably leaked to the press, it only attracted more criticism; the missive was seen as a violation of the SEC’s quiet period rules.

These issues coupled with the larger environment of economic unrest have fueled rumors that Groupon had put its stock market plans on ice. But Friday’s S-1 update — the third revision since June — shows that the company is still keen to go public. Despite Groupon’s swaggering reputation and Mason’s grumbling about haters, the company’s management is showing that underneath it all, it’s actually willing to make changes and respond to criticism. Specifically, the latest filing has a few notable tweaks: Groupon said it plans to scale back its marketing budget, reported that its revenue bookings were slightly higher in the second quarter of the year, and reprinted the full text of Mason’s leaked email.

More than anything, though, updating the S-1 shows that Groupon is still serious about making its stock market debut at some point soon. But ultimately, that will only happen if investors show that they have an appetite for the company’s shares.”

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