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Who is Ross Levinsohn?: Yahoo’s new salesman-in-chief

Posted in Board Of Intellectual Capital, Business models, Distressed IP, Economy, Entrepreneurship, Gerbsman Partners, Intellectual capital, internet, Investments, Market research, Strategy, tagged , , , , , , , , , on May 14, 2012| Leave a Comment »

Article from GigaOm.

Ross Levinsohn, appointed Sundayas interim CEO, doesn’t have to learn Yahoo — he’s spent the last 18 months immersed in it.

And he doesn’t have to learn digital media — from helping to create online sports powerhouses at CBS Sportsline and Fox, to building a $1 billion-plus digital portfolio for Rupert Murdoch, to launching and investing companies through his own private equity fund, he’s covered the digital media waterfront and then some.

He’s Hollywood and Santa Monica but he speaks fluent Silicon Valley.

Most important, he knows Yahoo is a media company — and he knows how to sell it that way. Of all the things he found when he joined Yahoo in late 2010, the most disconcerting was how much the company was doing right and how very bad it was at making that count. Here’s how he put it during an interview with paidContent last year as he emerged from a quiet period:

“I spent six months digging into the company making sure I’m not crazy — and I’m not crazy.

“Yahoo is the premier digital company in the world and embracing that isn’t a hard thing to do. That’s just fact-based. Tell me what other type of media can sit with you and say ‘I’ve got the top 19 #1 or #2 newspapers, I’ve got the top 20 shows, I’ve got the 19 of the top 20 radio stations, 19 of the top 20 magazines’?

“Duh. But you have to fully embrace that. You can’t half-ass that.”

Last fall, he took the stage at paidContent Advertising to pitch the company. The interview came just days after Carol Bartz, who hired him to head media and ad sales for The Americas, was fired. At the time, he was considered a leading internal candidate for CEO. He talked about Yahoo’s need for “a little bravado, a little swagger”:

“Yahoo is a huge, mature, gigantic business. Some of that is overlooked right now. Businesses grow at different rates. We’re 16 years old and we’ve been on top for 15 years. It’s hard to maintain that. When you think of entertainment and gossip, you think of TMZ, but OMG is twice as big with 30 million users a month and still growing. But no-one knows that.”

Levinsohn’s biggest coup at News Corp. was acquiring MySpace from under Viacom’s nose for $580 million in 2005. In hindsight, given how MySpace panned out, perhaps it was anything but a coup — but, at the time, it was transformative, and as big a statement as News Corp. could make about being in the digital game.

Here’s how Levinsohn described it when we talked about why MySpace wasn’t a fit for Yahoo in 2011:

“We bought a social networking site in 2005, before anyone knew what social networking was and now look at where social networking is — so if you look at the trendline we were way head of the game.

“When we bought it, it was doing about $1 million a month; 24 months later we were on a run rate to do $500 million a year. You’d have to say that was a pretty good trajectory.

“Users went from, when we bought it, to 70,000 signups a day (which I thought was astounding), to the month I left about 450,000 signups a day. So again, trajectory, unbelievable.”

Levinsohn was replaced at Fox Interactive when it switched from M&A to operating mode. He’s been battling against perceptions ever since that that he’s not an ops guy.

In addition to rebuilding the internal sales organization and partnering with AOL and Microsoft in a digital sales alliance, and with his top media exec Mickie Rosen setting up a series of high-profile original content deals, Levinsohn has been out telling that story. Not the one of the company that can’t shoot straight – the one about the media company at its core.

Since then, he’s interviewed Tom Hanks to promote a new Yahoo original, been on stage with Katie Couric at the Yahoo digital upfront last month and a few days later being photographed with Sophia Vergara during the White House Correspondents Dinner festivities. He upgraded and expanded an existing relationship with ABC News.

Levinsohn hasn’t left M&A behind but he insists Yahoo doesn’t need a big acquisition to fix its problems, although, if he could have found a way, Hulu would be a Yahoo property. Look at him to focus on making the pieces Yahoo already has fit better, pick up tuck-in acquisitions — and finally decide whether Yahoo should be in the ad tech business or sell it.

Until now, everything he’s done at Yahoo has been in the shadow of CEOs making the final decisions on resources and setting the overall tone. Now — at least for the interim — Yahoo is Levinsohn’s Pottery Barn. He told Yahoos in a lengthy internal e-mail Sunday:

“I know there is one thing we should definitely all be doing in light of this news, and that is to focus on the momentum we’ve created over the last few months.

“Many of you have heard me talk about the possibilities we have, and about the opportunities in front of us. In spite of the very bumpy road we’ve traveled, we are achieving genuine and meaningful successes in the marketplace every day and heading in the right direction.”

What he’ll have to decide now is whether to spend the next months acting as CEO or auditioning for it. Here’s Demand CEO Richard Rosenblatt’s advice, following a Forbes piece by outspoken Yahoo shareholder and tech writer Eric Jackson:

I agree Ross run it like you are the permanent CEO not interim. Own it forbes.com/sites/ericjack…

And, yes, that is the same Richard Rosenblatt who was the CEO that sold MySpace to News Corp., then bought back some of the pieces that helped build Demand Media.

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Accel, Goldman Sachs big Facebook sellers in IPO

Posted in Board Of Intellectual Capital, Business models, Economy, Entrepreneurship, FaceBook, Investments, IPO news, LinkedIn, Market research, Social Networks, Strategy, tagged , , , , , , , , , , , , on May 5, 2012| Leave a Comment »

Article from SFGate.

Facebook investors Accel Partners and Goldman Sachs plan to sell as much as $1.8 billion in shares of the top social network, becoming two of the biggest sellers in the planned initial public offering.

Goldman Sachs is selling 13.2 million shares, worth as much as $461.6 million at the high end of the range outlined Thursday by Menlo Park’s Facebook. Accel Partners, an early investor in Facebook, intends to sell as much as $1.3 billion of shares.

Facebook unveiled plans Thursday to raise as much as $11.8 billion in the largest-ever Internet IPO. Executives including Chief Executive Officer Mark Zuckerberg and backers such as Digital Sky Technologies will sell a total of 157.4 million shares for as much as $35 apiece, according to a regulatory filing. None will unload their entire holding.

On Friday, Facebook received a buy recommendation from Wedbush Securities and a target price of $44, its first rating since announcing plans to sell shares in an initial public offering.

Facebook should benefit from its large, growing user base that will help it attract more spending by advertisers and boost revenue and earnings, Michael Pachter, an analyst at Wedbush in Los Angeles, said Friday in a note to investors. Mobile advertising could play an especially important part of the growth in advertising, Pachter said.

“More users should drive more usage, which in turn should drive increased advertising revenue share,” wrote Pachter. “Facebook will capture an increasing percentage of spending on offline advertising, while growing share of online advertising as well, as usage continues to increase and advertisers become more comfortable with the cost-effectiveness of online advertising.”

Facebook would be valued at more than $90 billion, and executive and investor sales would yield $5.5 billion. Existing shareholders paid an average of $1.11 a share for Facebook, the filing shows.

Facebook is offering 180 million shares to raise funds for general corporate purposes.

While Goldman Sachs is one of the IPO underwriters, it failed to win the lead role after scuttling a private sale of Facebook’s stock to U.S. investors last year. Facebook said in January 2011 that it raised $1.5 billion from Goldman Sachs and Digital Sky Technologies, valuing the company at $50 billion. Goldman Sachs, affiliated funds and Digital Sky invested $500 million, while non-U.S. investors in a Goldman Sachs fund bought $1 billion of shares.

Michael DuVally, a spokesman for Goldman Sachs, declined to comment on the plans to sell Facebook shares. Richard Wong, a partner at Accel Partners, declined to comment.

Zuckerberg will offer 30.2 million of his 533.8 million shares in the sale, bringing him as much as $1.1 billion. The majority of his net proceeds will be used to pay taxes associated with exercising a stock option.

Accel, the biggest outside holder, invested $12.2 million in Facebook in 2005 and owns 11.3 percent of Facebook’s Class B shares. At the high end of the proposed IPO price range, Accel’s remaining stake would be valued at about $5.7 billion.

Digital Sky is selling 26.3 million shares to yield as much as $919 million.

Selling may be smart for holders with large stakes who haven’t had a chance to diversify their assets, said Erik Gordon, a professor at the Ross School of Business at the University of Michigan in Ann Arbor.

Other selling stockholders include Elevation Partners, Greylock Partners, Microsoft, Zynga CEO Mark Pincus and LinkedIn Chairman Reid Hoffman. The investors are selling only parts of their Facebook stakes.

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Data torrent may spur biggest M&A frenzy since ’07

Posted in Board Of Intellectual Capital, tagged , , , , , , , , , , , , , , , , , , , , , on February 6, 2012| Leave a Comment »

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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7 stories to read this weekend

Posted in Board Of Intellectual Capital, Economy, Market research, tagged , , , , , on October 30, 2011| Leave a Comment »

By Om Mailk at GigaOM.

Wow! Was that week chock-full of news or what? Frankly, sometimes it was hard to remember what was happening. Nevertheless, here are some good and mind-nourishing pieces for the weekend that you can actually enjoy and learn from.

  • The noise during the past week is the reason why I enjoyed reading this piece by George Dyson – Information is cheap, meaning is expensive. This will blow your mind.
  • How Instagram might be changing photography. I love the service and almost prefer photos on Instagram more than anything else. But should we be worried as Naomi Zeichner argues in The Fader?
  • Plagues of the new millennium are not about diseases of the body alone. They are about the rot of the human brain and body. This is an ironic but excellent list from McSweeney’s.
  • How to measure a company’s most elusive element: culture. Somewhat of a large corporate perspective but full of lessons nonetheless.
  • Voice wars: Apple vs. Google vs. Microsoft. This is in light of the Siri explosion.
  • Rise of the machines. Charles Schwab’s chief investment strategist Liz Ann Sonders is an excellent writer. Too bad her views are buried on the company’s terrible website. In this piece she writes about the domination of high-frequency trading and its impact on the markets.
  • Spacewar. My ex-boss David Churbuck reminded me of this piece about the early days of computer hackers. And it is by Steward Brand and that alone makes it worth reading, not to mention the historical context it gives to our modern tech industry. The passing of our industry’s seniors over the last few days makes this an appropriate piece to share.

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Google sales beat estimates amid online ad growth

Posted in Board Of Intellectual Capital, Business models, Economy, Gerbsman Partners, google, Intellectual capital, Market research, Microsoft, Strategy, Technology, Venture Capital, tagged , , , , , , on October 14, 2011| Leave a Comment »

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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