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Archive for the ‘Economy’ Category

Social networking overtakes email

Posted in Board Of Intellectual Capital, boic, Economy, FaceBook, Gerbsman Partners, Market research, mobile 2.0, Technology, Web 2.0, Wireless 2.0, tagged , , , , , , , , , , , , , , on March 10, 2009| Leave a Comment »

Here is a good piece from FierceMobileContent

Social networking is now the most popular web activity, surpassing even email, according to a new study issued by information and media firm Nielsen. Active reach in what Nielsen defines as “member communities” now exceeds email participation by 67 percent to 65 percent, the firm reports–among all Internet users worldwide, two thirds visited a social networking site in 2008. Facebook now leads the pack: Three out of every 10 web users visit the site at least once a month, and in all, Facebook experienced a 168 percent increase in users in 2008, galvanized by growth among the 35-to-49 demographic.

Mobile social networking is most popular in the U.K., where 23 percent of mobile web users (about 2 million subscribers) now visit social networks via handsets–the U.S. follows at 19 percent, or 10.6 million subscribers. Mobile social networking usage increased 249 percent in the U.K. in 2008, and grew 156 percent in the U.S. Nielsen notes that the most popular social networks via PCs and laptops mirror the most popular services on the mobile web–Facebook is the most popular in five of the six countries where Nielsen measures mobile activity, with Xing proving most popular in Germany. In addition to the mobile web and dedicated mobile social networking applications, users are also interacting with their social networks via SMS–according to Nielsen, at the end of 2008 almost 3 million U.S. users were texting Facebook on a regular basis. For more on social networking’s growth: – read this Nielsen report

Related articles: Social networking tops mobile search queries, Facebook in mobile social networking talks with Nokia

Other blog  comments: techblips, USA Today

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Recession Job Losses Top Four Million

Posted in Board Of Intellectual Capital, Economy, Gerbsman Partners, Market research, tagged , , , , , , , , , , , , , , , , , , , on March 6, 2009| Leave a Comment »

WASHINGTON — The U.S. economy continues to hemorrhage jobs at monthly rates not seen in six decades, a government report showed, signaling that there’s still no end in sight to the severe recession that has already cost the U.S. over four million jobs.

The report suggests that households, already seeing the value of their homes and investments plunge, face added headwinds from the labor market, which could put more pressure on consumer spending in coming months.

Nonfarm payrolls, which are calculated by a survey of companies, fell 651,000 in February, the U.S. Labor Department said Friday, in line with economist expectations. However, December and January were revised to show much steeper declines. In the case of December, the revision was to a drop of 681,000, the most since 1949 when a huge strike affected half a million workers. However, the labor force was smaller then than it is now.

The economy has shed 4.4 million jobs since the recession began in December 2007, with almost half of those losses occurring in the last three months alone. And unemployment is lasting much longer. As of last month, 2.9 million people were unemployed more than six months, up from just 1.3 million at the start of the recession.

“The sharp and widespread contraction in the labor market continued in February,” said Keith Hall, Commissioner of the Bureau of Labor Statistics. Layoffs announcements continued last month across industries including Macy’s Inc., Time Warner Cable Inc., Estee Lauder Cos., Goodyear Tire & Rubber Co. and General Motors Corp.

The unemployment rate, which is calculated using a survey of households, jumped 0.5 percentage point to 8.1%, the highest since December 1983 and slightly above expectations for an 8% rate. Some economists think it could hit 10% by the end of next year. For many industries including manufacturing, construction, business services and leisure, the jobless rate is already in double digits.

Read the full article by Brian Blackstone here.

Other comments can be found here: Flowing data, AFL-CIO, 8Pac

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Zero Stage Capital Dissolves Amid Losses

Posted in Board Of Intellectual Capital, Distressed Intellectual Property, Economy, Gerbsman Partners, Intellectual capital, Investments, Venture Capital, tagged , , , , , , , , , , , , on March 5, 2009| Leave a Comment »

This current economic crisis has started to hit VC´s as well, Zero Stage Capital dissolves.

“Zero Stage Capital, a life science and IT venture firm, dissolved last year after several poorly performing funds, according to limited partners. The firm’s few remaining portfolio companies have been transferred to a newly created firm, Vox Equity Partners, managed by the son of Zero Stage’s managing director.

Originally based in Cambridge, Mass., small business investment company Zero Stage raised a $150 million sixth fund in 1999 and a roughly $160 million seventh fund in 2001. In April 2005, the firm told VentureWire it had scrapped plans for a larger, $250 million eighth fund after several personnel changes, scaling back plans to raise a $150 million vehicle for buying struggling venture-backed businesses.

Yet by 2008, according to one limited partner who wished to remain anonymous for this story, the firm was run out of Managing Director Paul Kelley’s Sommerville, Mass., home as he worked to wind down its operations.”

Read the full VentureWire article by Jonathan Matsey here.

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Onerous Post-Bubble Deal Term Reappears

Posted in Board Of Intellectual Capital, Economy, Gerbsman Partners, Intellectual capital, Investments, Market research, Venture Capital, tagged , , , , , , , , , , , , on March 3, 2009| Leave a Comment »

Here is a good article by Scott Austin at WSJ Online on a subject we brought up last week.

“Start-up companies appear to be giving into investor demands of a harsher funding deal term that gained notoriety after the tech bubble burst in the early part of the decade.

According to two separate quarterly reports issued last week from law firms Fenwick & West and Cooley Godward Kronish, venture capital firms are more frequently receiving multiple liquidation preferences that protect them from losing out on investments.

Venture capital firms almost always receive preferred stock when they invest in companies, giving them certain rights over common stock holders, usually the founders and executives. One of these standard rights is a liquidation preference, which gives preferred stock holders the right to get their money back from a company before other common stock holders in an unfavorable sale or liquidation.

But with more companies in trouble, investors are inserting multiple liquidation preferences into term sheets, meaning they could get two times or more the amount of capital they invested. That can create nightmarish capital structures for companies but give them more incentive for them to become successful.”

Read the full article here.

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Bad Money Still Drives Out Good

Posted in Board Of Intellectual Capital, Economy, Gerbsman Partners, Investments, Venture Capital, tagged , , , , , , , , , , on February 25, 2009| Leave a Comment »

Here is a good analysis of a former collegue of mine, Tim Oren. To read the full article, please click here.

“Gresham’s Law hasn’t been repealed, but it’s taking on new forms in Washington these days.

Having put ‘bad’ money – printed by fiat or ‘secured’ by loans against taxpayers yet unborn – into the banking system in the first round of bailouts, the Feds now presume to rewrite not only future but existing loans. The consequences were on exhibit in Washington last week as financial genius Barney Frank and other politicians “…managed to demand more loans for consumers while simultaneously giving lenders new cause to wonder if they’ll ever be repaid.” They and other congress critters want to make it legal for bankruptcy judges to forcibly abrogate the terms of existing mortgages.

As pointed out in this WSJ article, most of the lending side of the credit market does not come from banks: “Most investors who lend in these markets are not recipients of financial bailout money, so Congress can’t simply browbeat them into making another big bet on the American consumer. ” These lenders have ‘good’ money that is still subject to the reality check of the market, rather than political exigency. But a move to retroactively rewrite credit contracts by government fiat will affect them as well. The result?

First, to make the world of collateralized mortgage debt tremble once again. While the consequences of foreclosures fall on the junior tranches of packaged debt – now mostly written off – in many case the results of forcible, retroactive modification of a contract’s conditions would fall pro rata across all tranches, causing the value of those that are still standing to slide as well. Yet more fear to hang over new as well as existing mortgage backed securities.”

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