Monthly Archives: April 2007

Richard Waters

Chris_moore You could forgive Chris Moore of Redpoint Ventures for feeling a little pleased with himself today. Moore was the man who backed Right Media with a sizeable $12m solo investment back in 2005. He isn’t saying what kind of stake that money bought. Typically, though, investors in a first round of venture funding would look for around 20 per cent. If that is what Redpoint bought, that stake has just turned into $170m with Yahoo’s agreement to acquire the company. Read more

IyogiSome people tiptoe around controversy. Others embrace it wholeheartedly. That certainly seems to be the case with iYogi, an Indian startup specialising in providing remote tech support for US computer users. Rather than downplay the fact that its computer brainiacs are sitting in New Delhi rather than New York iYogi has based its business model on it.

On Wednesday, iYogi closed a $3m investment round with partners including Canaan Partners and Silcon Valley Bank. The round was the second Indian investment for Canaan, which opened an office an India last year. Their other Indian investment is BharatMatrimony, a ‘dating site’ for Indian couples looking for arranged marriages. It seems Canaan may be onto something here. Read more

Richard Waters

Msn Buried in Microsoft’s latest quarterly earnings is some surprisingly positive news about efforts to turn around the struggling online services division. Sure, this is long overdue (see Site under construction, please return next year.) The gap with Google is still getting bigger. But at least it shows that not all hope is lost.

Apparently, Microsoft’s online advertising revenue rose 23 per cent in the latest three months. The display business grew in line with the market as a whole. Read more

Mure Dickie

Rupert Murdoch’s wife Wendi may be on the board of MySpace China, but the way the new venture’s CEO tells it, the famously interventionist News Corp mogul will play next to no role in how it is run.

Local executives will be in full control of MySpace China’s operations, technology development and marketing, insisted CEO Luo Chuan on Thursday, ahead of the launch of a beta test version of the www.myspace.cn site.  Read more

Richard Waters

Eyeballs You thought time had moved on and the inanities of the dotcom days were all in the past? You thought wrong. Not only are consumer internet companies once again being valued on the number of eyeballs they can attract: there still isn’t any agreement on how to count those eyeballs in first place.

In the age of Google and pay-per-click advertising, this might come as a surprise. After all, the Web is meant to be the ultimate performance-driven medium, a place where you can find small niche audiences and track the effectiveness of ads in real time. Read more

Chris Nuttall

Barbarians_at_gate_ea_game Those in search of the latest trends in technology and what it will mean for their businesses have converged on the Gartner Symposium/ITxpo: Emerging Trends in San Francisco this week.
The conference has been built around eight mega-trends identified by Gartner analysts, including the globalisation of supply and demand, the commoditisation of the tech sector, the virtualisation of IT and the socialising of technology.
Martin Reynolds, Gartner vice president, gave me his thoughts on the consumerisation of IT.
He showed how his non-work cellphone could access his office emails with the help of the latest version of Microsoft Exchange Server. It allowed a port to be safely opened to the company’s network that would satisfy the security concerns of the IT department.
He sees consumer-focused companies such as Apple, Google and Sony having a big effect on enterprise IT. The Apple iPhone when it comes out is not expected to be able to connect to business email systems in the way that a Blackberry can. Mr Reynolds said he did not think it would have virtual private network (VPN) software. This would challenge IT when influential executives turned up at work and demanded connectivity to the company network.
Google was doing its best to disintermediate IT, said Mr Reynolds, with its browser-based applications and its provision of a vast infrastructure for users.
He feels Google and others, such as Yahoo, Microsoft, Sony and Amazon, could challenge IT departments and traditional infrastructure providers by offering spare capacity on their own online networks to enterprises.
IT departments need to adjust to some new realities, he said.
"IT is no longer about how we run the computers, it’s about how we make the business better, how do I increase revenues rather than how do I decrease costs."

Chris Nuttall

Taking_off The list of British websites successful in the US cannot be a long one, but cheapflights.com says it figures right at the top.

David Soskin, chief executive, who is in San Francisco for the ad:tech conference, told us unique visitors had now reached around 3m a month, meaning the US site, less than five years old, was now as popular as cheapflights.co.uk, founded in 1996. Read more

Chris Nuttall

Edwards_twitter_2 The Web 2.0 version of presidential elections is gaining momentum.

Yahoo!, The Huffington Post and Slate have announced plans for two online-only presidential debates for the 2008 campaign. They will take place after Labor Day, with one featuring Democratic candidates and the other Republican ones. Read more

Chris Nuttall

God_of_war_2 Despite Sony trumpeting PlayStation 3 sales in Europe this week, the next-generation console has still to catch fire in the US.

Official March sales figures just out from the NPD Group show 130,000 PS3s were sold here, compared to 199,000 units of Microsoft’s Xbox 360 and 259,000 Nintendo Wiis. Read more

Maija Palmer

Software vendors beware. The UK’s small to medium-sized businesses appear to have the most lax attitudes in Europe to using illegal software. According to a new study by the Business Software Alliance, 41 per cent of UK SMEs believe there is no risk from using pirated software. “No risk” in this case, means they fear no risk of either prosecution or computer problems that pirate programs might cause.

The rest of Europe appears to be more law-abiding. Only 7 per cent of French SMEs believe illegal software is risk-free. This rises to 10 per cent in the Netherlands, 18 per cent in Germany, 21 per cent in Italy and 26 per cent in Spain. Read more

Richard Waters

Ebay_logo eBay and Yahoo! face remarkably similar problems – which should make eBay’s positive earnings news today mildly encouraging for Yahoo shareholders, who just got hammered (only "mildly encouraging", because Yahoo has shown a dependable ability in the past to shoot itself in the foot.)

You could think of it under these three headings: Read more

Maija Palmer

Life is tough for the medium-sized UK IT consultancy. Last week another one of them – Impact Plus – sought shelter in the arms of a bigger Japanese suitor, Hitachi of Japan.

 Read more

Vtlogo Of all the social networking sites, Facebook emerged as the place where Virginia Tech students and family members turned to reconnect and console each other over Monday’s campus shootings.

Our man inside Facebook says an eight-fold surge in traffic following Monday’s shooting spree "pretty much fried" the server dedicated to the site’s Virginia Tech network. Facebook engineers have been working long days all week to manage the influx.

In the days following the tragedy, the focus has turned to remembrance. More than 500 Virginia Tech-related groups have popped up to honor the victims. One group, "A tribute to those who passed at the Virginia Tech shooting," has attracted more than 200,000 members. A number of hate groups have also made an appearance, and Facebook has been working to take them down.

The gunman, Cho Seung-hui, has been described as a loner by those who knew him, and that would seem to apply to his online life as well. Facebook employees have spent hours scouring the site in search of any profiles Mr Cho might have created. So far, their search has turned up nothing.

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Mure Dickie

The Japanese search service established by Baidu.com earlier this year has been hailed as a pioneering effort by a Chinese internet company to establish a global presence. So why do Beijing’s shadowy internet censors appear to be blocking access to the new website?

Baidu is declining to comment on why baidu.jp cannot be accessed from within China in recent days, but industry observers are sure  the Japanese service’s tolerant approach to porn is the reason behind the block. As noted by bloggers writing in Chinese and English, baidu.jp’s main appeal so far appears to be Chinese internet users who find its image search function a better way to get hold of pornographic pictures than the main baidu.com service. (Take a look at the rather revealing user data on alexa.com hereRead more

Chris Nuttall

Flickr_origami_turkey Microsoft’s Origami Project was all about folding the computer into a smaller Ultra Mobile PC (UMPC) shape. Now Intel is folding it once more into the even smaller Mobile Internet Device (Mid) format.
Intel has been talking about its products for this new Mids market segment for the first time at its Developer Forum in Beijing.
Unhappily for Microsoft, it sees a Lintel as well as a Wintel solution in this size of device. Anand Chandrasekher, head of Intel’s Ultra Mobility Group, said he saw Linux as an operating system alternative for Mids and announced the support of Red Flag and Canonical, a provider of the Ubuntu version of Linux, as the first OS vendors.
Microsoft and Intel have never been in lockstep over development of the UMPC category and Samsung, the other member of the triumvirate, diverged with a VIA processor rather than an Intel one six months after the launch of its Q1 in May last year created the initial UMPC fanfare.
Sales have also been far from stellar for the devices and Intel, with 1,000 engineers and a whole division now dedicated to Ultra Mobile, seems keen to exploit a further sub-category.
The Mids are one step above the mobile phone, where Intel made little headway and eventually abandoned its efforts to penetrate the market with its processors.
That does not inspire confidence that it can succeed in this unproven segment, which also bumps up against Palm-style personal digital assistants. But Mr Chandrasekher introduced a new Ultra Mobile platform of processors and chipsets and announced he was bringing forward its next-generation platform (codenamed Menlow) for UMPCs and Mids from late 2008 to the first half of next year.
He also announced the formation of the Mid Innovation Alliance, a collection of second-tier manufacturers including Asus and BenQ who would bring out Menlow-based devices next year.
Mids will be about the size of a paperback novel and will feature Intel wireless chipsets, including regular wi-fi standards and the wider area Wimax. Their smaller size will mean better battery life than the UMPCs, but that is about the only longevity for these devices we can safely predict.

Chris Nuttall

Crossbow The exclusive Web 2.0 conference, where the term first gained currency in October 2004, has spawned a larger Web 2.0 Expo making its debut this week in San Francisco.

The standard conference format and IBM, Nokia, Microsoft and Intel booths at the Moscone West exhibition centre seem a world away from the image of Web 2.0 one-man businesses being run out of San Francisco coffee shops.  Read more

Richard Waters

Bill_gross When Bill Gross talks about internet search, people tend to listen. You can put that down to his invention of the keyword-driven advertising business that is the foundation of Google’s fortunes (GoTo.com, the company founded by Gross’s Idealab to develop the idea, was later renamed Overture and sold to Yahoo.)

Gross’s latest Big Idea? Getting rid of what he calls "the crapshoot" of clicking on hyperlinks in web pages. Take the link in that sentence: you don’t know till you click on it where it will lead and how useful you will find it (it links to a description of the idea on Snap.com, Gross’s search engine.) Read more

Richard Waters

Doubleclick_logo Talk about a clash of cultures. Google (buyer) and Hellman & Friedman (seller) each had a very different take on today’s $3.1bn DoubleClick deal.

Eric Schmidt of Google was in Argentina this afternoon, but I got the chance to ask him over the phone how he could justify paying so much for a company which, according to one person knowledgeable about it, had revenues last year of only $300-400m. He acknowledged that "the criticism will be, how do we get the money back?", but added that Google had run its sliderule over the business. His assurance:

This is a math problem. We’re good at math problems.

When I spoke to Philip Hammarskjold at Hellman & Friedman, on the other hand, he was marvelling over the very unscientific nature of valuations in the financial markest. The 2005 leveraged buy-out that took DoubleClick private looks like a steal. Hammarskjold:

It’s amazing to look at it now, but there really was little interest in this company.

Fair enough. Hellman & Friedman is a buyer and seller of companies: it’s all about the timing. Google is a strategic buyer: it’s all about the synergies. But there’s a lot more to making a deal of this size work than crunching the numbers. The jury’s still out on last year’s purchase of dMarc for up to $1.1bn and the $1.65bn acquistion of YouTube. Google is surely right to use the gusher of cash from its core business to place some big bets in adjacent markets, but it has yet to prove it can make them work.

 Read more

Richard Waters

Doubleclick_logo Talk about a clash of cultures. Google (buyer) and Hellman & Friedman (seller) each had a very different take on today’s $3.1bn DoubleClick deal.

Eric Schmidt of Google was in Argentina this afternoon, but I got the chance to ask him over the phone how he could justify paying so much for a company which, according to one person knowledgeable about it, had revenues last year of only $300-400m. He acknowledged that "the criticism will be, how do we get the money back?", but added that Google had run its sliderule over the business. His assurance:

This is a math problem. We’re good at math problems.

When I spoke to Philip Hammarskjold at Hellman & Friedman, on the other hand, he was marvelling over the very unscientific nature of valuations in the financial markest. The 2005 leveraged buy-out that took DoubleClick private looks like a steal. Hammarskjold:

It’s amazing to look at it now, but there really was little interest in this company.

Fair enough. Hellman & Friedman is a buyer and seller of companies: it’s all about the timing. Google is a strategic buyer: it’s all about the synergies. But there’s a lot more to making a deal of this size work than crunching the numbers. The jury’s still out on last year’s purchase of dMarc for up to $1.1bn and the $1.65bn acquistion of YouTube. Google is surely right to use the gusher of cash from its core business to place some big bets in adjacent markets, but it has yet to prove it can make them work.

 Read more

Richard Waters

The veiled threat against Google last week by newspaper newbie Sam Zell has had the blogosphere buzzing all week.

Following the NBC/Fox joint agreement to place their video on a range of big internet portals, maybe this was a sign that newspaper owners would also start to extract favourable deals from internet companies, suggested ValleyWag. Yahoo, which has positioned itself as Old Media’s friend, might be a good place to start. Venture capitalist Fred Wilson’s response: you must be kidding. Read more