Archive for the 'Internet' Category

$98.8 Billion to Acquire 330 Companies

Published on March 26, 2007 in Business, Internet and Investing. 0 Comments

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.

TheFunded.com - The Inside Scoop on Venture Capitalists

Published on March 23, 2007 in Business, Entrepreneurship and Internet. 0 Comments

TheFunded

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.

Brickfish - Aiming to Create a new Model for Online Marketing

Published on February 21, 2007 in Business, Entrepreneurship, Internet and Marketing. 0 Comments

brickfish

I really can’t remember how I came across Brickfish, but what I know is that it caught my attention from the moment I stumbled upon it. Claiming to be a new model for online marketing, Brickfish simply offers anyone the chance to upload campaigns and allow their community to evaluate that campaign whether it be a blog, video, or photo. Brickfish breaks down users into two segments, Brands and Consumers, allowing anyone to partake on any side depending on what one has to offer.  Brands range from self-branded content to branding campaigns from the likes of Reebok and Varsity Books, and Consumers ranging from your everyday average internet user to extremely marketing savvy users.  Brickfish states:

“Our company was founded on the belief that consumers define brands-in fact, consumers are brands. We have created the world’s first integrated environment where consumers and companies engage with each other in ways that empower users to make a real impact. Everyone who is involved in the site and with our campaigns has the power to bring about positive change and we would like to invite you to join us in embracing that belief.”

I’ve browsed around the Brickfish website for quite a bit now and believe that there is a lot of potential for it to become a huge sensation within the next few months.  With Brickfish raising $11.2 million during its Series A financing round, according to today’s press release on their website, one can only expect more great things to come from such a venture.  This is where social networking meets product development, marketing, branding, and advertising, which is great in a world today where most products are driven by the needs and wants of the consumer.

A Great Day for Apple Inc.

Published on January 9, 2007 in Business, Internet, Investing and Technology. 0 Comments

AAPL-MOT-RIMM-PALM-NOK 1day
At today’s MacWorld Steve Jobs introduced the Apple (NASDAQ:AAPL) iPhone. During the iPhone introduction, Jobs stated that the iPhone is going to be another revolutionary device released by Apple. The iPhone is going to redefine the way smartphones operate and according to Jobs is five years ahead of its time, while acting as the most advanced iPod, a revolutionary phone, and a breakthrough internet device.

A look at the way the market reacted in terms of this “futuristic” device is pretty interesting. Motorola (NYSE:MOT) who produces the Motorola Q smartphone, Nokia (NYSE:NOK) who produces enterprise phones and multimedia phones, based off of the Symbian OS, Palm (NASDAQ:PALM) who produces the Treo line of smartphones, and Research in Motion (NASDAQ:RIMM) who produces the Blackberry line of professional communications devices, all acted negatively to the news of the Apple iPhone.

Additionally Apple, will be dropping the word “computer” form Apple Computer, Inc. and will become known as Apple, Inc. as they move deeper into the consumer electronics market.

Where the Apple & Google “Partnership” is Heading?

Published on December 20, 2006 in Business, General Business and Internet. 0 Comments

It has been a while since Google (NASDAQ:GOOG) CEO Dr. Eric Schmidt has been elected to Apple’s (NASDAQ:AAPL) board of directors.  So far, no one has seen any direct consequences of what I call the “strategic partnership”, other than Google showing more support for the Mac OS with the release of compatible applications.

Other than that, nothing has really been disclosed as to how the two innovative companies may collaborate.  On the other hand though, a whole bunch of rumors have been circulating about the Apple iTV, Apple’s potential mobile phone, Google’s plans for YouTube (especially getting a proper business and revenue model in place), and a potential Google mobile phone.  The rumors have been flying all over the place in terms of what Apple and Google might be planning for these products.

A few months back Apple announced what has become known as the “iTV”.  The only other piece of information related to that iTV is that it would be available in the first quarter of 2007.  Nothing on what the iTV was supposed to do, the specifications, or how it would operate was released.  But supposedly the iTV is supposed to stream one’s digital multimedia content from a computer to the television.

I don’t know if I’m the only one thinking this way, or if anyone else has been thinking the same way as I am but hasn’t been vocal about their thoughts, but wouldn’t it be logical for Apple to integrate Google’s YouTube with the iTV?  This would essentially mean free on-demand video content for the consumer served right to one’s television, while Google, Apple, and the content providers reap the benefits of the revenue from the advertisements displayed while the on-demand video is being served.  And if the iTV really does catch on just like the iPods have, Google and Apple will have set foot into a market which will only prove to be beneficial.

The Right Way to Acquire: Google Acquires YouTube for $1.65bn

Published on October 9, 2006 in Business, Internet, Investing and Marketing. 1 Comment

Google (GOOG) today announced that has struck a deal to acquire YouTube, the leading online video distributor, for $1.65 billion. For those that are unaware, YouTube serves approximately 120 million videos on a daily basis. Even though the reach of YouTube is quite higher than the reach of some broadcast media, YouTube has yet to define a revenue model. This is where Google’s acquisition of YouTube will play a crucial role in defining a revenue model that is bound to make a whole lot of money. A few months ago, Google announced that AdSense would, in addition to their contextual advertisements and banner advertisements, also provide video advertisements. With Google Video only having close to 6.5% market share, surely Google’s video advertisements wouldn’t be a huge moneymaker through Google Video. This is where YouTube has a whole lot of potential to rake in a big chunk of change for Google, as YouTube owns close to 43% of the online video market share.

I would say that this is a different type of acquisition for Google. First of all, YouTube was bought out not with cash, but in exchange for Google stock. Additionally, Google will not be rebranding YouTube; YouTube will remain as a separate entity and resume operations as it always did with its full staff. Sounds pretty good to me, knowing that it is the YouTube brand name that is attracting 43% of viewers of online video.

Many people were skeptical about the acquisition of YouTube by Google. Especially since the first big leak of a potential acquisition surfaced on Friday, October 6th. As it turns out, YouTube and Google were in talks for about two weeks, and one can conclude that both entities were pretty serious about the talks. This draws my attention to the potential acquisition of Facebook, the second largest social networking website. It seems that it has been over a year since Facebook has been taking turns having talks with potential acquirers, such as Yahoo! (YHOO) and Microsoft (MSFT). But every time a rumor of a potential acquisition of Facebook is ever mentioned, the rumors turn out to be rumors after all. What might be the cause behind it? I would have to say that Facebook has put too big of a price tag on itself. Rumors and leaks state that Facebook is asking in excess of $1 billion, which is obviously turning away the buyers. Yes, the largest networking website, MySpace, was bought out for $750 million. But that three-quarters of a billion dollars was paid to acquire a huge chunk of the social networking market share (currently a few percentage points over 75%), while Facebook commands less than 10% of the social networking real estate. Trying to catch up to first place, Facebook was willing and is willing to try anything, first diversifying away from its niche market of college students to high school students, then diversifying away from students and opening up to the general public (something that angered hundreds of thousands of college students).

Just to tie things back all together, I would like to say that I doubt Facebook will ever be bought out for a price that they are asking for, especially when they are trying to do anything to gain market share. Yahoo! is falling behind Google by being unable to diversify its portfolio of products and services and take the lead in the many online ventures that Google has a hold on. Google on the other hand is able to acquire small ventures that have a lot of growth potential, and at the same time, small companies like YouTube on the receiving end are able to take advantage of their “huge potential for growth” situations.

Zecco Defines a New Way of Online Trading

Published on October 9, 2006 in Business, Internet, Investing and Marketing. 0 Comments

If you haven’t checked out Zecco by now, I really recommend that you do, especially if you’re an online trader or investor. Online trading has reached a new milestone with Zecco, by allowing online investors to trade for free. Some research into the Zecco through the Zecco Community Forums has provided me with answers as to how Zecco plans on generating income to sustain the business.

First off, not all trades are free through Zecco, only market orders and limit orders are for free. But other services cost a minimal amount. For instance options trading is priced at $3.50 plus $0.60 per contract. Browsing the Zecco Forums led me to learn the following:

  1. Looking at E*Trade’s 10-K filings, one notices that 49% of the revenues that E*Trade generates is from interest.
  2. Companies like E*Trade spend on average $5 on advertising for every trade that is conducted.

This all makes sense when one realizes that Zecco requires a minimum account balance of $2,500 and that they do not plan on advertising their service. Zecco seems to be hoping that the minimum $2,500 account balance will help them generate enough revenues through interest. Furthermore, rather than spending big money on advertising, Zecco plans on having their community forums and blogs, generate enough viral marketing to attract new customers. With the average Zecco page having three Google AdSense advertisements on it, it is quite evident as to how Zecco plans on generating a big chunk of their revenues in order to help cover clearing fees that result from the free trades.

Many people talk about Zecco being the Google of online trading. Whether or not Zecco is the Google of online trading, it wouldn’t come as a shock to me if sometime in the future we learn of Google and Zecco signing off on a deal where Google will guarantee a certain amount of advertising dollars to be generated through the Zecco website. Something similar to the Google and MySpace deal that we saw two months back.

For those who are interested here are some more Zecco links: a comparison of Zecco and other online brokers, the Zecco team, and the Zecco backers.

Online Search can Make or Break a Business

Published on September 26, 2006 in Business, General Business, Internet and Marketing. 0 Comments

Who would have ever thought that online search would have a huge impact on a company’s ability to sell or attract customers? A recent article on CNN Money titled Get right with Google describes how small companies can lose up to 20% of their revenues due to losing their rankings on Google for specific search keywords or keyphrases. This problem probably does not only exist for companies that depend on Google (the article probably focused on Google due Google being the leader in market share in terms of online searches), but probably also exists for companies that rely on any of the top search engines to generate traffic to their websites.

Online search engines have become a great marketing tool for many companies, especially for small companies that couldn’t afford expensive advertisements in publications and other types of media. But at the same time such companies that just rely on search engine marketing are at a huge risk of losing a lot of their business due to the fact that search engines are constantly refining the algorithms that are used to rank websites based on certain keywords and keyphrases. That makes one wonder how a company can stay on top of all the advances that take place on the internet?

There are probably hundreds and hundreds of ways to do so, but a very simple, cheap, and cost-effective way would be for companies to use a free online analytics tool, such as (and by far the greatest free one out there) Google Analytics to monitor website traffic and keyphrases that lead to the traffic. Any anomalies that are noticed should be immediately looked into and tested against various variables and benchmarks (such as looking up certain keywords or keyphrases that were generating the most traffic for the website from a search engine) and test the page rank of the company’s current website against the past page rank. Since almost all search engines claim that their search algorithms are proprietary, the only way to go about improving page ranking is by visiting websites that have “stolen” the website’s spot on the search engine and analyze the way keywords are used on the website, what websites link to the website, the way the link structure of the websites work, etc. From this point, the company’s website must be modified to match the new trends that are allowing for other websites to perform better with that search engine.

MySpace and Google Ink $900m Deal

Published on August 8, 2006 in Business and Internet. 0 Comments

MySpace, the infamous, social networking website and Google have reportedly inked a $900m deal according to this article at the Financial Times website (after Google outbid Microsoft earlier on). The deal, which is valid through 2010, states that MySpace will receive $900 million from advertising revenue generated by Google. Additionally Google will be in charge of all search related functions on MySpace and on websites that are owned by News Corp. For those unaware, News Corp. outbid Viacom to acquire MySpace last year for $580 million. MySpace is expected to hit 100 million subscribers this week, with more than 250,000 people joining daily.

$900 million, 100 million subscribers, 4 years. Google will have to generate a few dollars per MySpace subscriber over the course of the next four years. Something which seems to be extremely attainable considering the amount of traffic that MySpace receives on a daily basis. Once again Google has been able to strike another huge and beneficial deal, this time with long-term business opportunities as both MySpace and Google said that a broader alliance in 2010 is quite possible after the current deal is over.

The eBay & Yahoo! Partnership

Published on May 28, 2006 in Business, Internet and Marketing. 0 Comments

This piece of news might be a few days old, but for those of you that haven’t heard, a few days ago eBay and Yahoo! announced an alliance, or what I would like to call a partnership, that will give Yahoo! control over all advertising on the eBay website and also ensure that Yahoo uses eBay’s PayPal for all online payments.

As a result of this partnership, Google and Microsoft have been shut out of what could have been extreme potential for growth. In the past all of eBay’s advertisement sales were in-house efforts. Bringing in a company like Yahoo!, that has great experience with online advertising due to their acquisition of Overture, will surely benefit both eBay and Yahoo!. eBay will take a certain percentage amount off of the revenues that Yahoo! generates through the advertisements displayed on the eBay website.

As a result of this alliance, Yahoo! will work with eBay on better and more effective website design in order to help the Yahoo! crawlers crawl the eBay website better. Yahoo! also stated that it will not manually manipulate eBay’s page-ranks within the Yahoo! search engine, but would rather crawl the eBay website more frequently which will result in better page ranks when the eBay website is optimized for the Yahoo! crawlers.

Not all is perfect with this alliance though. First of all, Yahoo! will take care of all advertisements on the U.S. version of the eBay website. Additionally, Yahoo! has to prove to eBay that it will be able to design advertisements that won’t drive away any of the eBay business, and finally both eBay and Yahoo are still competitors with Yahoo! having its own auction and classifieds system.

This article at TMCnet and this blog post at Blogging Stocks both raise some good points, such as the fact that eBay and Yahoo! should have teamed up years ago before Google was a major player, as their partnership right now is not as effective with Google in the marketplace. Or as the blog post on Blogging Stocks talks about this alliance being a “web-based partnership to thwart Google’s advances.”

This surely is an excellent alliance for both eBay and Yahoo in terms of creating opportunities for each other in terms of generating more revenues. But will this alliance be able to slow down Google? I do not think so. With Google dominating the online search-engine business, there is no way that anything will stop Google that easy. What are your opinions on this subject?