Monthly Archives: November 2010

John Gapper

I am struggling to believe in Groupon, which Google is reported to be considering buying for $5.3bn, making it the company’s largest acquisition. Despite Groupon having some social media trappings, and being profitable, it feels oddly old-fashioned.

Groupon amasses groups of users to take part in mass one-off discounting programmes by retailers – hence the name. In the US, where coupon-clipping is still popular, despite the power of Wal-Mart’s “every day low prices”, it grown very rapidly. Read more

John Gapper

Mary Meeker, the “queen of the net” and the best-known investment bank analyst in the technology and media world, has picked an interesting moment to become a venture capitalist.

Ms Meeker, who survived the bursting of the 1990s dotcom bubble without getting caught up in the research scandal of the time, has become a venerable figure in the tech world. She is capitalising on that by leaving Morgan Stanley to join Kleiner Perkins Caufield & Byers as a partner.

Chris Dixon, an angel investor, tweeted in response that “Wall Street sell-side research is dead”, and it never regained its influence after the dotcom meltdown. A few analysts have made their name since – in particular Meredith Whitney – but most of the action has been on the buy-side. Read more

The news of Federal Bureau of Investigation raids on US hedge funds in a sweeping investigation into alleged insider trading is welcome. The authorities are clearly alert to a financial blight, although the funds deny wrongdoing and no charges have been brought.

John Gapper

Mickey Drexler, the ebullient chairman and chief executive of J. Crew, has done well out of private equity and will probably do so again. Mr Drexler, who would be integral to the $3bn buyout offer for J. Crew, was first recruited to the clothing company by Texas Pacific in 2003.

As New York Magazine recorded five years ago: Read more

Yuri Milner is very popular among internet entrepreneurs. Mark Zuckerberg, founder of Facebook, encourages him to drop by and Mark Pincus, chief executive of Zynga, an online games company, regards him as a trusted adviser. Among Silicon Valley’s venture capitalists, feelings are decidedly cooler.

John Gapper

The General Motors initial public offering looks as if it will be successful – and will be priced well in excess of the range first set by the underwriters. That will let the US government sell down its 61 per cent stake substantially and perhaps exit entirely next year.

So who deserves the praise for this achievement? GM’s new management (even with the revolving door at the top), the government for its act of tough love in financing GM’s purge in Chapter 11 bankruptcy, or former GM executives led by Rick Wagoner?

My money is on the government and its auto industry taskforce led by Steve Rattner for not listening to Mr Wagoner’s dire warnings about Chapter 11 and for realising that GM could only be properly restructured in bankruptcy. Read more

John Gapper

Green energy is often seen as the next gold mine for US innovation and entrepreneurship – following Silicon Valley’s successes in software and the internet – but it is a costly and complex business.

At a General Electric event in New York this morning, I was struck by a figure quoted by Jeff Immelt, GE’s chief executive – that a single solar panel plant costs as much to build as the entire venture capital investment in Google. Read more

John Gapper

James Murdoch attended the same event as Mr Milner and tweaked the tails of technology figures for their belief in distributing news and other “content” free online.

“If you are going to monetise something, the first rule is you should probably not give it away for free . . . Our view is that we are happy to invest more in a product, and price it fairly, and accept the fact that not everyone will consume it.” Read more