MediaFile

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.

googleBlogTechCrunch, 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.

from Commentaries:

Revolution?

Video compression technology can be interesting, really.

On2 CEO on Beet TVMost 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.

On2 stock chart before and after Google offerThere'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.

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.

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.

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.

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.

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…