Over the past week or so, there has been a lot of speculation and rumors about the acquisition of Palm, Inc. (NASDAQ:PALM). Potential buyers included Motorola, Inc. (NYSE:MOT) and Nokia Corp. (NYSE:NOK). Nokia being a potential buyer of Palm didn’t seem right to me simply because of the vested interest that Nokia has in the Symbian (which is the largest smart phone operating system right now).
This Canalys press release shows that Nokia shipped out 55% of all smart phones in 2006, and Palm lagged behind three positions, being only able to secure 5.5% of the market. Now lets not forget that Palm devices operate on both the Palm and Windows Mobile operating systems. Nokia’s smart phones on the other hand run on the Symbian operating system and Nokia additionally has 47.9% ownership in Symbian.
Is it just me, or does it seem as though it would be a conflict of interest for Nokia to acquire Palm? The only logical explanation is that Nokia plans on integrating the Symbian OS into Palm devices in order to help grow Symbian’s market share in the United States, which is lagging right now.
Last week’s Red Herring issue (subscription required) had an article discussing a little buying spree that 10 companies went on from 2002 to 2006 where a total of 330 companies were acquired for over $98.8 billion. The acquiring companies that were looked at were Broadcom (NASDAQ:BRCM), Sisco Systems (NASDAQ:CSCO), EMC (NYSE:EMC), Google (NASDAQ:GOOG), Hewlett-Packard (NYSE:HPQ), IBM (NYSE:IBM), Microsoft (NASDAQ:MSFT), Oracle (NASDAQ:ORCL), Sun Microsystems (NASDAQ:SUNW), Symantec (NASDAQ:SYMC), and Verisign (NASDAQ:VRSN).
Of those 330 companies that were acquired 133 we backed by venture capitalists. Of the 10 companies that were analyzed IBM acquired more companies than anyone else spending a total of $16 billion on 65 companies, 20 of which were VC backed. Broadcom on the the other hand acquired the smallest amount of companies spending a total of $835 million on 13 companies, 9 of which were VC backed. IBM might have picked up the largest amount of companies to add under its belt, but Hewlett-Packard was able to outspend everyone else by acquiring 38 companies for a total of $26.6 billion.
The total number of acquisitions that were web 2.0 companies was not disclosed but one can imagine that they made up a large portion of 330 companies that were involved. This goes on further to prove that acquisitions are exceeding IPOs as an exit strategy for many companies as a result of stricter regulations on requirements to go public. Oh yeah, its also been proven that an acquisition for more than a billion dollars doesn’t require a company to have a proper model for generating revenues.
I just stumbled upon TheFunded.com a few days ago due to the amount of publicity it was receiving. Its an interesting idea without a doubt, and probably a very helpful to those who are seeking venture capital funding. With the number of reviews growing on a daily basis and the number of reviews currently at 326 (only a few weeks after getting started), one can expect the process of raising funds from venture capitalists to become a more transparent process as time goes by.
Additional features of The Funded include the ability to download the vCards of partners at over 3,500 funds as well as being able to edit and review different funds. The upside is that membership is free, the downside is that to become a member one must be invited by another member or submit a membership application, where one must provide a “quality reason” for becoming a member. Talk about exclusivity! Oh yeah, one last catch, if one works at or is an agent for a funding source, they can forget about getting a membership to The Funded.
