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Article from SFGate.

Two weeks ago, solar power plant company BrightSource Energy abruptly canceled plans for an initial public stock offering, convinced that investors currently have little appetite for new solar shares.

Now SolarCity Corp. will test that theory.

SolarCity on Monday reported plans for its own IPO. The San Mateo company, best known for leasing rooftop solar systems to homeowners and businesses, filed a confidential draft registration statement with the U.S. Securities and Exchange Commission last week.

SolarCity’s brief statement announcing its IPO did not specify a price range for the stock or say when trading might commence.

The company was founded in 2006 by brothers Lyndon and Peter Rive. Their cousin – Tesla Motors CEO Elon Musk – chairs the company’s board.

SolarCity had been widely expected to go public this year. The popularity of residential solar leases, which allow homeowners to install solar panels without paying the up-front cost, has grown quickly. SolarCity and San Francisco’s SunRun Inc. have emerged as the field’s dominant players.

Ugly year for stocks

But SolarCity could face headwinds on Wall Street.

Solar stocks have endured an ugly year, falling even before the highly public bankruptcy of Fremont’s Solyndra. All have been hammered by a worldwide plunge in solar cell prices, the result of new factories in China flooding the market. A Bloomberg index of major solar stocks – including First Solar Inc. and SunPower Corp. – lost 67 percent of its value in the last 12 months.

So burned have investors been that they may look askance at solar companies that have nothing to do with making cells.

BrightSource, based in Oakland, called off its IPO on April 11, just hours before trading was scheduled to start. The company’s large solar power plants don’t use photovoltaic cells. Instead, they use fields of mirrors to concentrate sunlight and generate heat.

And yet, as BrightSource executives spoke with potential investors in the weeks before the planned IPO, the investors were skittish. It didn’t help that solar stocks, which had shown some improvement in January and February, tanked during the road show, said BrightSource CEO John Woolard.

“The feedback we were getting from investors was, ‘In the solar space in particular, it’s been a bad place for us to be, recently,’ ” Woolard said last week.

He felt fortunate that BrightSource didn’t absolutely need to move forward with its stock sale. The company’s board unanimously voted to cancel the IPO rather than postpone it.

“You can always get a deal done,” Woolard said. “The questions are: at what price? Is there after-market support? Is it going to be a good outcome or not? Is it a deal you want?”

The fall in solar cell prices that has gutted so many solar stocks has, in fact, helped SolarCity.

Although they receive less public attention than struggling solar manufacturers, the companies that develop or install photovoltaic solar systems have benefited from tumbling prices, which make their systems more affordable. That could work in SolarCity’s favor when the company’s shares start trading.

Deal with military

“It’s not a good time for solar manufacturing, but it’s a great time for other parts of the solar industry,” said Ron Pernick, managing director of the Clean Edge Inc. market research firm. “This is one of the areas where we’re seeing a lot of deployment and growth, and it’s quite robust.”

Some large, institutional investors are already quite familiar with SolarCity.

Both Bank of America Merrill Lynch and U.S. Bankcorp. are financing a $1 billion SolarCity project to place solar panels on military housing across the country. The U.S. Department of Energy had initially agreed to back the effort with a loan guarantee of $275 million, under the same federal program that gave Solyndra $528 million to build a factory in Fremont. But the loan program expired before the department and SolarCity could agree on terms.

Those banks understand SolarCity’s business and know that the company doesn’t share the problems plaguing manufacturers, Pernick said.

“I think savvy investors will understand the difference,” he said. “Whether the general public does, we’ll have to see.”

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Article from SFGate.

“Three years from now, the data equivalent of every movie ever made will cross Internet networks every five minutes, according to Cisco Systems predictions. How to manage all that information is what will be driving technology mergers and acquisitions in 2012.

In a bid to transform that torrent into profits, a cash-rich industry is poised to surpass 2011’s almost $200 billion volume of announced mergers and acquisitions. Companies such as Cisco and IBM are searching for deals that will boost their capacity to provide new storage, analytics and security services to enterprise customers.

Big data, mobile and cloud technologies will lead to “bold investments and fateful decisions,” market research firm IDC said in a recent report. The volume of digital information may balloon from 2.7 zettabytes this year – the equivalent of filling 2.7 billion of Apple’s priciest iMacs to capacity – to 8 zettabytes by 2015, according to IDC.

“The speed at which technology innovation moves is such that you can’t miss a step,” said Jon Woodruff, the San Francisco co-head of technology investment banking at Goldman Sachs, the industry’s top adviser on deals last year. “Every tool has to be used for speed and nimbleness sake, and M&A is one of those significant tools.”

Abundant cash and investor pressure to jump-start sales growth will also propel deal-making. Cash levels have expanded 21 percent in the past year to $513 billion, based on holdings of the 35 companies that comprise the Morgan Stanley Technology Index.

Large companies will be leading the charge. Hewlett-Packard, Google and Microsoft led a 36 percent gain in technology deals last year, outpacing a 4.1 percent advance for all M&A worldwide.

In one of the biggest deals last year, HP agreed to buy Autonomy Corp. for $10.3 billion in a bid to build its software business and scale back on its PC manufacturing. Though viewed negatively by some investors, the move will enable Hewlett-Packard to offer database search services and other cloud-related services for business. CEO Meg Whitman said in November that the company doesn’t plan “large M&A” this year, though it may seek small software deals.

Cisco, which has made about 150 acquisitions in its history and has $44.4 billion in cash on the balance sheet, said in November that it will “continue to be aggressive in acquiring technologies.”

Bigger volume

“This year’s technology deal volume could be bigger than last year’s and 2007’s,” said Chet Bozdog, global head of technology investment banking at Bank of America.

Industry takeovers in 2007 reached $264.4 billion, the biggest year since 2000’s record high of $585.2 billion.

“Convergence between hardware, software and services will continue to add products to the same sales chains,” said Bozdog, who is based in Palo Alto.

Cloud computing, which allows companies to access information over the Internet from external data centers, and the shift from desktops to mobile devices, will continue to be “huge multiyear trends,” said Drago Rajkovic, head of technology mergers and acquisitions at JPMorgan Chase.

As part of this trend, SAP, the largest maker of business-management software, agreed to buy SuccessFactors for $3.4 billion in December to create a “cloud powerhouse,” co-CEO Bill McDermott said at the time.

Gaining patents

Google announced in August it would buy Motorola Mobility Holdings for $12.5 billion in its largest acquisition, gaining mobile patents and expanding in hardware. Microsoft purchased Skype Technologies for $8.5 billion in October, the biggest Internet takeover in more than a decade, in an effort to catch Google in online advertising and Apple in mobile software.

While Google and Microsoft paid in cash for their deals, the purchases didn’t put a dent in their funds. Microsoft’s cash and equivalents jumped 41 percent from a year earlier to $51.7 billion, based on its latest filing, while Google increased cash by 28 percent to $45.4 billion.

Apple, which has no debt and the most cash among technology companies at $97.6 billion, said Jan. 24 that it is discussing ways to spend its funds and would consider acquisitions.

“There’s more cash in technology than in any other sector and the low level of debt makes it very easy for companies in the industry to buy growth,” said JPMorgan’s Rajkovic, who is based in San Francisco.

Affordable targets

“As cash piles have increased, some potential targets have become more affordable. Shares of F5 Networks, whose software helps companies manage Internet traffic, lost 18 percent of their value in 2011 even as sales grew 31 percent. Riverbed Technology, a provider of equipment to boost networks’ speed, lost 33 percent while its revenue increased 32 percent. Shares of Acme Packet, a maker of devices that help networks transmit phone calls and video, dropped 42 percent last year while sales jumped 33 percent.

“You will see more M&A than last year, with some very strategic technology companies involved as valuations have become more reasonable,” said Larry Sonsini, who co-founded Wilson, Sonsini, Goodrich & Rosati, the law firm that brought Apple public in 1980.”

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Article from NYTimes.

“For Reid Hoffman, the chairman of LinkedIn, it took less than 30 minutes to earn himself an extra $200 million.

With the hours ticking down to his company’s stock market debut, Mr. Hoffman dialed into a conference call from San Francisco’s Ritz-Carlton hotel as his chief executive, Jeff Weiner, and a team of bankers raced up from Silicon Valley in a black S.U.V. to meet with potential investors.

Demand for shares was intense, and they decided to raise the offering price by $10, to around $45.

When trading began on May 19, LinkedIn did not open at $45. Or $55. Or $65. Instead, the first shares were snapped up for $83 each and soon soared past $100, showering a string of players with riches and signaling a gold rush that has not been seen since the giddy days of the tech frenzy a decade ago.

Now there are signs that a new technology bubble is inflating, this time centered on the narrow niche of social networking. Other tech offerings, like that of the Internet radio service Pandora last week, have struggled, and analysts have warned that overly optimistic investors could once again suffer huge losses.

That enthusiasm was on full display in the blockbuster debut of LinkedIn, which provides a window into how a small group — bankers and lawyers, employees who get in on the ground floor, early investors — is taking a hefty cut at each twist in the road from Silicon Valley start-up to Wall Street success story.

“The LinkedIn I.P.O. will be used very powerfully over the next year as these companies go public and bankers deal with Silicon Valley,” said Peter Thiel, the president of Clarium Capital in San Francisco and an early investor in PayPal, LinkedIn and Facebook. “It sets things up for the other big deals.”

The sharp run-up after the initial public offering set off a fierce debate among observers about whether the bankers had mispriced it and left billions on the table for their clients to pocket. But the pent-up demand for what was perceived as a hot technology stock set the stage for easy money to be made almost regardless of the offering price.

Naturally, Wall Street is enjoying a windfall. Technology I.P.O.’s have generated nearly $330 million this year in fees for the biggest banks and brokerages, nearly 10 times the haul for the same period last year, and the most since 2000.

Besides the $28.4 million in fees for LinkedIn’s underwriting team, which was led by Morgan Stanley, Bank of America and JPMorgan Chase, there were also a few slices reserved for specialists like lawyers and accountants. Wilson Sonsini, the most powerful law firm in Silicon Valley, collected $1.5 million, while the accounting firm Deloitte & Touche earned $1.35 million.

Mr. Hoffman founded LinkedIn in March 2003 after making a fortune as an executive at PayPal, the online payments service, but even as LinkedIn grew and other employees and private backers got stakes, Mr. Hoffman retained 21.2 percent, giving him more than 19 million shares when it went public. He has kept nearly of all them, so for now his $858 million fortune — it was $667 million before the last-minute price hike — remains mostly on paper.

Mr. Weiner arrived more recently, in late 2008, after working at Yahoo and as an adviser to venture capital firms, but his welcome package included the right to buy 3.5 million shares at just $2.32. And they are not the only big winners who secured shares at levels far below the I.P.O. price.

For example, when LinkedIn raised cash in mid-2008, venture capital firms including Bessemer Venture Partners and Sequoia Capital, scooped up 6.6 million shares at $11.47 each in return for early financing. They have held on to the stock, but Goldman Sachs, which got 871,840 shares at $11.47, sold all of it for a one-day gain of nearly $30 million.

Scores of fortunate individuals also managed to profit.

Stephen Beitzel, a software engineer, worked at LinkedIn from its founding until March 2004, but kept his stock when he left. His shares are now worth $17 million, and he sold $1.3 million worth in the offering.”

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Here is an article from SF Gate.

“Google Inc. executive Mike Steib is courting customers such as Progressive Corp. and touting tools that let marketers create the snazzy, interactive ads that rival Apple Inc. has been using to snatch mobile-ad business.

“We have a significant investment in mobile, and competition is going to push us to be really, really good,” Steib said in an interview the day Google closed its $750 million acquisition of AdMob, which places ads on mobile programs and Web pages.

As Google’s head of mobile advertising, Steib leads the effort to build his company’s next $1 billion business from sales of ads on wireless devices – and lessen its dependence on Web-search ads. With a team based in a former cookie factory in Manhattan’s Chelsea neighborhood, Steib is striving to persuade advertisers they will win over more consumers by working with Mountain View-based Google than with Apple.

“It’s safe to say Google will respond to iAd and respond very strongly,” said Michael Collins, chief executive officer at Joule, a mobile-ad agency that’s part of WPP Plc. “They have too many assets to pull from, too many arrows in their quiver.”

Staying ahead may not be easy, now that Apple is luring advertisers to iAd, a service that places ads inside applications that run on its iPhones and other mobile devices. Apple has sold more than $60 million in advertising on iAd since it was announced in April, CEO Steve Jobs said at a conference Monday. That represents about half of the mobile display-ad market for 2010, according to JPMorgan Chase & Co.

Tension between the companies escalated Wednesday when AdMob accused Apple of barring developers from using Google ad services to create ads for the iPhone – a move that may threaten AdMob’s ability to get revenue from the device.

This year, AdMob and Google together may generate more than $100 million in U.S. mobile-ad sales, according to IDC in Framingham, Mass.

Apple won business as Google awaited a green light from the Federal Trade Commission for its $750 million AdMob acquisition, announced in November, Joule’s Collins said.

Introducing iAd “gave Apple the opportunity to suck all the oxygen out of the room,” he said. “Apple is on a tear these days with the iPhone, iAd, the iPad.”

As sales of smart phones rise, more users are viewing ads on handheld devices in addition to – and sometimes instead of – computers or televisions. Spending on mobile ads in the United States is expected to reach almost $500 million this year, from $220 million in 2009, according to IDC.

In the next three years, as much as one-third of global digital ad spending will be devoted to mobile, according to Alexandre Mars, who oversees mobile ads for Publicis Groupe SA.

“You’re seeing advertisers who see mobile marketing as a significant business driver,” said Steib, who joined Google in 2007 from NBC Universal. “This is a big part of the conversation.”

Google’s strategy includes creating tools that help developers embed videos and make ads more interactive, similar to what Apple’s iAd can do. Google also wants to sell more ads tied to a user’s location and deliver coupons for nearby deals, said Steib, Google’s director of emerging platforms.

The company is keen to make money from delivering coupons for nearby businesses and selling ads alongside a tool that lets customers take photos of an item and search for it on the Web, said Steib.

That way, a bistro could offer free appetizers to a nearby customer who’s searching for a place to eat, and the user could later see where to buy a bottle of the wine paired with dinner. The restaurant and wine seller would pay Google for the ads.

Google and AdMob together had 21 percent of the U.S. mobile ad market in 2009, said IDC analyst Karsten Weide. Quattro Wireless, which Apple acquired in January after losing out on AdMob to Google, had 7 percent.

‘Short-term disruption’

Steib says iAd may create “short-term disruption.” Still, Google can contain the fallout in part because it has experience letting customers manage campaigns on multiple Web sites and it can change ads on the fly based on performance, said Steib, who himself is an avid user of Apple products. He owns about a dozen iPods, iPhones and the new iPad.

Bank of America Corp. went from buying an occasional mobile campaign to paying Phonevalley, the agency run by Publicis’ Mars, a $1 million annual retainer. Google’s AdMob is among the ad-placement companies used by the financial institution, the largest U.S. bank by assets.

“We did take a hard look at iAd and we passed on it,” said Kathryn Condon, a vice president of digital marketing at Bank of America. She said she’s not convinced it will provide more value than AdMob and the other companies the bank uses.”

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