With SAP deal, Ariba’s 13-year headstart pays off

May 23, 2012 2:14 pm by Andrew Hill

Investors with long-ish memories will recall that Ariba, the business-to-business ecommerce network that SAP has just agreed to buy, was a dotcom IPO star of 1999: its stock surged 291 per cent on its debut, giving it a market capitalisation of $3.7bn – only just short of the $4.3bn that the German enterprise software company has agreed to pay for it 13 years later. Those were the days, Facebook investors may ruefully reflect.

Ariba had much further to go in the short period before the dotcom bubble deflated in 2000 – at one point it was worth a heady $30bn. But its longevity, before finally being snapped up by one of the companies it successfully challenged, demonstrates the durability of its underlying offering. Ariba’s early potential was obviously hugely overrated at the peak of the internet boom, but it grew into that original valuation.

Cloud-based software-as-a-service (SaaS) is quite the thing, with companies like Salesforce.com and Netsuite angling to provide solutions that simplify customer and supplier relations and allow enterprises, large and small, to concentrate on their core business. At a Netsuite customer conference I attended in San Francisco last week, SAP was one of the competitors that Netsuite claimed was lagging behind. By buying its way into the cloud, the German company has made a bid to close the gap that Ariba and other web-based B2B companies started to open up 13 years ago.

Tags: Ariba, ecommerce, Facebook, IPOs, Netsuite, Salesforce.com, SAP
Posted in Business, Technology | Permalink

From FT.com May 21, 2012

FT column: Recipe for the secret sauce of Facebook

Dustin Moskovitz, an early employee of Facebook, is worth $5bn, give or take the odd million, after last week’s initial public offering. He could now apply his technological knowhow and abundant new wealth to solving the world’s loftiest organisational problems. Instead, he and his partners are hunkered down in a dark ground-floor office in San Francisco’s Mission district working out how to liberate office workers and middle managers from the tyranny of lengthening to-do lists, overflowing email and meetings about meetings. Dilbert, meet Dustin.

Posted in Business, Management, Media, Technology | Permalink

Why Waterstones is undaunted by Amazon

May 21, 2012 5:25 pm by Andrew Hill

There were some interesting foretastes of Monday’s deal between Amazon and the big UK bookstore chain Waterstones in comments made by the latter’s managing director, James Daunt, at the FT a few weeks ago.

Mr Daunt – who had previously called the etailer a “ruthless, moneymaking devil” – spoke at a roundtable in early May to launch the Financial Times and Goldman Sachs Business Book of the Year Award. You can listen to a podcast of his initial interview in which he pointed out that all bookshops had to find ways to make the environment for book-buying attractive again. He added:

The largest of us face the additional challenge of how do we become a relevant part of this new digital world, in which, clearly, a substantial part of the reading that our customers engage in is going to take place.

The Amazon deal - under which Waterstones’ stores will sell Kindle reading devices as well as ebooks, alongside the physical product – clearly answers that rhetorical question (even if it doesn’t entirely explain the speed of Mr Daunt’s conversion from devil-hater to devil-worshipper).

The more interesting comment came at the end of the ensuing discussion with publishers and agents, who pointed out that in some respects (for example, in its publishing venture), Amazon was still rather dependent on traditional publishing models.

Mr Daunt added that on the rare occasions when Waterstones fails to get the physical book onto its shelves, the title “sits unmoving on Amazon, until it arrives in our shops and then up it goes”. Most booksellers, while trying to use technology to complement their traditional business, have railed against becoming Amazon’s showroom. Mr Daunt appears to want to embrace that fate. The big question is whether Waterstones can profit from it.

FT video – Book end?

Tags: Amazon, ebooks, James Daunt, Waterstones
Posted in Business, Media, Retail, Technology | Permalink

Private views on Facebook’s public offering

May 16, 2012 6:32 am by Andrew Hill

Facebook investors: you have been warned. The last time I was in Silicon Valley was 12 years ago, in the very week that the Nasdaq crashed, marking the end of the dotcom boom. That I should fly back into San Francisco on the eve of the social network’s initial public offering cannot be a good omen.

I’m not here to write about Facebook – for expert insights, read the analysis of my San Francisco-based colleagues or the FT Lex team – but the IPO overshadows most discussions. What strikes me is how entrepreneurs, technology executives and analysts I’ve met are reluctant to talk publicly about Facebook and its founder Mark Zuckerberg. Ask them what they think about him and they tend to preface their remarks with a polite request that this part of the interview should be off the record.

Continue reading: “Private views on Facebook’s public offering”

Tags: Facebook, IPOs, Mark Zuckerberg, Silicon Valley
Posted in Business, Media, Technology | Permalink

FT column: A set-to as old as the Old Testament

May 15, 2012 2:26 am by Andrew Hill

Last Thursday I was, briefly, head of communications for a large Canadian widget maker, coping with a wave of Twitter-borne rumours about the arrest of its chief executive.

Posted in Advertising, Media, Technology | Permalink

Performance not pay doomed Aviva’s Moss

May 8, 2012 12:38 pm by Andrew Hill

Spare me the “shareholder spring” allusions. Not only does the parallel devalue the genuine sacrifice of those who took part in the popular revolts of the “Arab spring”, it misrepresents the nature of the shareholder rebellions that have now defenestrated three UK chief executives, including, today, Andrew Moss of Aviva.

Andrew Moss - no longer lord of all he surveys

The natural assumption is that high pay is the root cause of investors’ disgruntlement, whereas tone-deafness on remuneration was merely a symptom of a wider concern about Trinity Mirror, AstraZeneca and now Aviva. What really did for Mr Moss (apart from his habit of letting himself be photographed looking out over the City, like a jut-jawed lord of all he surveyed) was his performance not his pay.

Continue reading: “Performance not pay doomed Aviva’s Moss”

Tags: Andrew Moss, AstraZeneca, Aviva, executive pay, Occupy, Trinity Mirror
Posted in Business | Permalink

From FT.com May 7, 2012

FT column: Look into the future before it is too late

I admire the chief executive who once described his attitude to the quarterly earnings report to me like this: “We spend three days before and one day after getting busy – and then we go back to running the business as usual.”

Posted in Business, Management | Permalink

Trichet still flies the ECB flag

May 3, 2012 5:45 pm by Andrew Hill

Shortly before Mario Draghi started his press conference at the European Central Bank’s meeting in Barcelona on Thursday, his predecessor Jean-Claude Trichet was addressing a more sympathetic audience at the St Gallen Symposium in Switzerland. If anything, Mr Trichet was probably the cagier of the two.

In spite of some robust questioning from the BBC’s Stephen Sackur, the former ECB president came across as unrepentant about the ECB’s role during the eurozone crisis. He argued, for example, that 14 years ago, 99 per cent of observers would have dismissed as impossible that the euro would keep its value amid low inflation – a performance that he said bettered that achieved by the national central banks in the 15 years before the single currency’s birth. “Had I added that this [performance] would be observed after five years of the worst crisis ever, [the sceptics] would have been 100 per cent,” Mr Trichet said. The nearest he came to admitting to flaws in the eurozone project was when he said the financial crisis had been “like an X-ray or scanner that reveals the problem you might have”.

Continue reading: “Trichet still flies the ECB flag”

Tags: European Central Bank, Jean-Claude Trichet, St Gallen Symposium
Posted in Business, Europe, Finance | Permalink

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