Google and Yelp: A holiday drama… or farce
Only a few days ago, Yelp insiders seemed on the verge of taking home a $500 million holiday gift basket courtesy of Google, which was in talks to acquire the online publisher of local business reviews.
Now all that good cheer appears to have turned to acrimony, with the deal talks in tatters and the two sides pointing fingers.
TechCrunch, the blog that initially reported news of discussions between Google and Yelp, said on Monday that the talks ended abruptly after Yelp CEO Jeremy Stoppleman walked away.
That seemed a strange change in tone from TechCrunch’s initial report which said the deal was “very likely to close.” But it was less surprising given the comments of a source close to the situation who told Reuters last week that Yelp’s investors were divided over whether Google’s offer was sufficient and were feeling pressured by Google to take the deal.
The blog Silicon Alley Insider reported on Monday that Stoppleman turned Google down because he decided he’d rather try his luck in the IPO market.
But the tale of Stoppelman’s brave stand had a decidedly Yelp-tinted perspective to it. And so on Tuesday, a report in The New York Times appeared that seemed designed to recast the story from Google’s point of view.
According to the Times report, which cites “a person briefed on the negotiations,” it was Google, not Yelp, that walked away.
from Commentaries:
Revolution?
Video compression technology can be interesting, really.
Most people forget how online video worked before YouTube popularized the embedded Flash video player. Remember the frustration of making sure you had the right video player to play this or that web video? It was YouTube that popularized giving people one-click access to videos.
On Wednesday, Google said it had agreed to acquire On2 Technologies, a maker of video compression technology, in a deal that could have sweeping effects for how video works on the web. The Internet search leader has a bland blog post about how it intends to use On2 to innovate in how video working on the Web, but it isn't at all clear how far it Google is ready to go.
There's lots of speculation that Google may choose to open source, or give away, On2's video compression technology, undercutting royalty-bearing video compression technologies in use across the Web. That could undermine Adobe and its widely used Flash player, Microsoft, with its Silverlight alternative, not to mention Apple Inc and RealNetworks. Dan Frommer at Silicon Alley Insider spells out how far-reaching the Google gambit could be. As a counterpoint, Dan Rayburn of StreamingMedia.com argues the Google move is no big deal.
Google is only paying $106.5 million in stock for the American Stock Exchange listed-firm based in Clifton Park, New York. Because the deal involves two public companies, there's an outside chance that a competitor may want to mount a rival bid. The On2 board would have to consider a richer bid for fiduciary reasons. Google might have more on its hands that it bargained for.
(Images: Beet.tv, Google Finance)
http://wayonda.com/index.php?page=videos §ion=view&vid_id=100106 Interesting historical perspective on the company and it’s investor relations leading up to the deal.
Microsoft-Yahoo: whither the boatloads?
It takes a deft touch to vanish a boatload of cash, but Yahoo seems to have done it.
Disappointed investors voted with their feet initially when the Microsoft-Yahoo deal, announced in the early hours of Wednesday, came with reams of detail on search, revenue-sharing, technology and advertising tie-ups — but no anticipated upfront payment, which some had put at around $1 billion. Yahoo prompty lost about a 10th of its market value.
“This agreement comes with boatloads of value for Yahoo, our users, and the industry, and I believe it establishes the foundation for a new era of Internet innovation and development,” Yahoo Chief Executive Carol Bartz said in a press statement released jointly with Microsoft on Wednesday.
Back in May, Bartz said her company would be open to any deal with “boatloads of money” and the right technology. Microsoft is indeed cash-rich, but the market might be wondering why shareholders won’t immediately see much from its coffers.
Asked what had happened to the boatloads of money on a conference call for investors and media, Bartz appeared to go on the defensive.
“What was really important to Yahoo is that we had a deal that flowed successfully through our P&L. Having a big cash payment upfront doesn’t really help us from an operating standpoint,” Bartz responded, before launching into an explanation of traffic acquisition costs, expense lines and investing in the business.
“So listen, it’s easier to talk about boatloads of cash and value because you guys understand that. But as far as we’re concerned the boatload of cash is us preserving our revenue line.”
Oh, one more thing. Google is betting the store on cloud computing. My prediction? Cloud computing is NOT the future of computers.
methoo.com
Verizon cagey on phones, open about global ambitions
In a wide-ranging interview with Charlie Rose earlier this week, Verizon CEO Ivan Seidenberg danced around questions about cellphones but was more forthcoming about the U.S. telecom giant’s long-term expansion ambitions.
Asked to confirm a report that Verizon will sell an Android-based phone from Motorola this year Seidenberg said, “It might be true what you said. I can’t quite disclose…”
And as for any plans to sell iPhone, the executive said that would be Apple’s decision.
Seidenberg was more comfortable talking about his dreams of global expansion and seemed to hint that the company would aim for an overseas acquisition in wireless.
“We want at some point a global retail play in wireless,” said the executive, whose wireless unit is 45 percent owned by U.K. based international service provider Vodafone. Verizon has long said that it would like to buy out Vodafone’s stake in Verizon Wireless, a move that Soleil analyst Michael Nelson said would likely be its first acquisition priority.
Instead of asking how Verizon might expand overseas, Rose questioned the executive about whether he would consider buying Sprint. But Seidenberg said Verizon is already big enough in the United States.
“Sprint is U.S based and we’re thinking global. I don’t know that that would make a lot of sense. We’re thinking differently, and bigger,” he said, suggesting that the “home run” would be to have global communications companies with the same kind of scale as companies like Fedex.
Big enough in the USA translates to we are being clobbered by the iphone.
This could be the beginning of a talking point. Iphone immaterial since we are going international.
Tech M&A: Going down, down, down
Investment bank Jefferies recently released a report on technology M&A in the first quarter of 2009. As one can imagine, there are few surprises. We may as well give you the highlights here, which point to some signs of recovery compared to the end of last year, but clearly there’s still a long way to go:
- The number of tech deals in North America fell 4 percent to 373 in the first quarter from the fourth quarter of 2008. It’s the lowest level of activity in five years, but at least the drop is a manageable 4 percent — in the December quarter, the number of deals dropped 23 percent from the third quarter of 2008.
- The aggregate value of North American M&A transactions was $4.3 billion in the first quarter, also a 4 percent drop from the prior quarter and an 85 percent plunge from the first quarter of 2008.
- Not a single tech IPO priced in the U.S. market during the quarter.
- The biggest tech deal announced in the quarter was Autonomy’s purchase of Interwoven for $764 million.
- The first quarter of 2009 has only three transactions greater than $500 million, compared to 10 such deals in the year-ago quarter.
The Jefferies survey also looks at tech M&A in Western Europe, which presents a similarly gloomy picture. Nine of the top 10 Western European deals in the first quarter were cross-border, and four of them involved U.S. buyers. The aggregate deal value fell 80 percent to $1.8 billion compared to the fourth quarter of 2008.
But it’s interesting to note that the mix of deals in the software, services and media sub-sector hasn’t changed much quarter to quarter. For example, IT services deals have hovered at about 30 percent of total transactions for the past five quarters, while digital media M&A has ranged from 32 percent to 35 percent of total deals in the same period.
Based on the grim experience of the first quarter of this year, Jefferies predicts there will be fewer than 1,500 deals this year in North America, a decline of 22 percent from 2008, which saw 1,919 deals. In terms of aggregate value, the bank expects only $17.2 billion, a 79 percent drop from last year, and nowhere near 2007, when the total deals announced were collectively worth $191 billion.
(Chart: Jefferies)
Google coins new mantra amid Twitter Talk
Google famously made “don’t be evil” its official mantra a few years ago.
But a new, 7-word phrase may well end up Google’s most-used, unofficial slogan, as company officials take turns repeating “we don’t comment on rumor or speculation” in response to reports that Google is in talks to buy microblogging startup Twitter.
The topic inevitably came up at the Web 2.0 conference in San Francisco on Friday morning, where Google Engineering VP Vic Gundotra was on stage for a keynote presentation.
Gundotra, who oversees Google’s mobile applications, said he was a big fan of Twitter, which lets people broadcast 140-character text messages to a network of friends. He also confessed that he was enjoying the online debate/blog-battle about whether his company was preparing to acquire Twitter.
Michael Arrington, of the blog TechCrunch, initially reported that Google was in late-stage discussions to buy Twitter, but rival blogger Kara Swisher later said on AllThingsD that no such deal was in the works.
“I’m friends with both Michael and Kara and I’m enjoying their conversation,” Gundotra said.
When it came to helping resolve the matter though, Gundotra proved of little help, offering but a slight variation on the mantra.
There will not be any smoke without fire goes the old saying.
Sun CEO takes stage, ignores IBM deal talk
What do you do if your company is reported to be involved in an $8 billion acquisition and you’re already scheduled to give a big speech?******If you’re Sun CEO Jonathan Schwartz, you honor the commitment and then make a swift exit.******The pony-tailed CEO took the lectern on Wednesday at the Open Source Business Conference at San Francisco’s Palace Hotel, his first public appearance since reports surfaced last week that IBM and Sun were in acquisition talks (reports that neither company has so far commented on).******While the putative deal has produced endless column inches of analysis and speculation in the business media, it had no place in Schwartz’s remarks. Instead, Schwartz spoke about Sun’s recently-released cloud computing service, largely rehashing talking points he made in an earlier series of blog posts.******The most intriguing nugget, for those running Schwartz’s comments through the filter of an IBM deal, was his characterization of Sun’s open source operating system as the “single most valuable” part of the company, as it represents the key building block for Sun to play in high-margin, adjacent markets like networking.******When his 30 minutes were up, Schwartz slipped behind a curtain and retreated backstage, conveniently avoiding any reporters in the audience eager for ask him about the IBM deal.******And when a couple of reporters greeted him at the hotel’s exit, Schwartz proved equally aloof – the surprised CEO was good-mannered enough to shake hands, but didn’t break his stride, or his silence, to answer a question about the progress of the IBM deal. Maybe next time…
All my family are fans of the fox network. Leave it alone and stop trying to interfere with a good thing.