Former state-owned telecoms incumbents with their reliable cash streams from millions of customers have an enviable position in these turbulent economic times. But don’t think that means they can kick back and catch up on their sunbathing, says France Telecom‘s finance chief Gervais Pellissier. Nor do they have time to explore unlikely mergers and acquisitions, like last year’s $40 billion hostile and ultimately failed bid for Nordic telco group TeliaSonera. This year at France Telecom, owner of the Orange brand, it’s all hands on deck for management to steer the great ship through the crisis. “Even on an aircraft carrier, when the sea is very big, I think everybody works,” Pellissier told the Reuters Global Technology Summit in Paris. ”When the sea is calm in the Mediterranean in the middle of summer, half of the team can tan on the sun deck,” he said. I don’t say this is what we did in 2008… but let’s say we could dedicate some time to such an operation last year that we cannot dedicate this year — it’s impossible.”
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.
Craig Mundie, Microsoft’s research chief, strolled the stands at TechFest on Tuesday, checking out the fruits of the software company’s 850 researchers working in six labs across the world.
The annual showcase, held at Microsoft’s Redmond, Washington headquarters, is an attempt to “manufacture serendipity,” said Mundie, as developers see how other far-seeing projects might mesh with their own.
One of the most popular demonstrations was the “omni-directional projector”, which lets you manipulate 360 degrees of data or images with voice and hand signals, like being in a little planetarium where you can reach out and pull the stars around.
This is turning out to be an earnings season when all bets are off on how technology giants will perform. With tech earnings taking the market on a roller-coaster ride, it wouldn’t be surprising if investors are a little sick in the stomach already.
The hits and misses so far among the biggest and brightest:
Intel: Missed expectations, profit fell 90 percent and they said they wouldn’t give a detailed quarterly forecast due to the economic uncertainty.
Several exhibitors took up the “green” theme at CES 2009 as the “Pre” party continued. Any chance Dell had to upstage Palm disappeared in a cloud of secrecy with the “Adamo” laptop it briefly presented, but gave no details about.
Fuji said its EnviroMAX alkaline batteries were made of more than 90 percent recycled materials, had no mercury, cadmium and were PVC free.
Singapore-based Horizon Fuel Cell Technologies said their “HydroPack” water-activated and portable power system HydroPak could provide 4 to 5 hours of 50 watt emergency power without pollution or noise.