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.
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.
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.
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:
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.
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.
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.
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.”
Yuri Milner, the Russian internet investor, has become one of the most intriguing figures in the industry by acquiring a near-10 per cent stake in Facebook, and by floating Mail.ru, his Russian internet company in London.
Mr Milner, whom I saw in action at the Monaco Media Forum, also has the element of mystery. Few people outside Russia paid attention to him until his Digital Sky Technologies acquired its Facebook stake in May 2009.
The world of enterprise applications software is short on entertainment, so we can thank Larry Ellison for providing some. This week, Oracle’s co-founder and chief executive hired private detectives to serve a court subpoena on Léo Apotheker, Hewlett-Packard’s new chief executive.
Amazon’s move to offer newspaper and magazine publishers 70 per cent of the revenues from selling their periodicals on Kindles is a testimony to the power of competition.
Amazon’s original terms were that it would take up to 70 per cent of the price itself, leaving publishers only 30 per cent. Since then, the launch of the iPad has given publishers an alternative – and one they are more excited about.
Lucy Kellaway’s column on the fact that many entrepreneurs face personal challenges – and it can be helpful not to be too happy – reminded me of my recent visit to China.
I think Lucy, quoting Rosabeth Moss Kanter on “misery as motivation” is correct about the need for individuals to be motivated to succeed. But this point applies to societies as well.
Facebook keeps powering its way toward an initial public offering as the winner of the battle for dominance among social networks. I wonder how worried Mark Zuckerberg, its founder, is when he considers the ranks of his fallen rivals.
The most recent is MySpace, the music-dominated social network that was also growing rapidly when it was bought by News Corp for $580m in 2005. Things have changed – News Corp is now warning that MySpace faces a harsh fate if it does not do better soon.
I dropped into the best free entertainment in New York on Wednesday afternoon – the last day of the trial to decide whether a Citigroup banker deceived Guy Hands, head of the Terra Firm private equity group, into making his disastrous bid for EMI in 2007.
The trial in the Southern District Court in Lower Manhattan had a surreal air, since it involved UK executives and bankers debating what occurred in London to a British company in front of US lawyers and a jury of New Yorkers.
This involves some incongruous moments, such as the explanation by Ted Wells, Citigroup’s lead attorney, to the jury that Gatwick “is a very large airport, it’s like La Guardia” (in reference to another deal in which Terra Firma was involved).
As the Republicans take control of the House of Representatives, their first temptation as upholders of the free market and limited government will be to roll back swaths of the Dodd-Frank financial reform act. They should resist it.