Top five web/internet companies acquired in 2007 - the year of the penguin.

mergeThanks to private equity firms, 2007 was an active year for M&A in general. But interestingly, in the web/internet space, most of the large acquisitions were done by Stretegics, the corporate acquirers, and not the private equity firms.

The sector that saw the highest activity was the Internet advertising sector; aQuantive, 24/7, DoubleClick, Right Media and a long list of others were acquired this year.

Here are the top 5 acquisitions in the Web/internet field.

gear(1) aQuantive - Microsoft : $6B. aQuantive is a digital marketing and technology company. It is now part of Micorosoft’s Advertiser and Publisher Solution group.

gear(2) WebEx - Cisco : $3.2B. Webex is a leader in the online video concerning. Cisco’s mantra? "Unified communication". Hmm, where have I heard that before?

gear(3) Double Click - Google : $3.1B. The deal is not complete yet but it was approved by FTC. DoubleClick develops and provides internet ad serving service. Google + DoubleClick will rule most of the clickable space on a webpage.

gear(4) Club Penguin - Disney : $700M. Club penguin is a virtual world for kids. Social Web - start them when they are young.

gear(5) Right Media - Yahoo : $680M. Yahoo already owned 20% of Right Media and purchased the remaining 80%. Some suggest that Yahoo purchased Right Media in response to Google’s DoubleClick purchase.

Some other notable acquisitions of 2007 are:

ImagePostini - google : $625M. Postini is an e-mail and communication security company.

Image24/7 real Media - WPP : $649M. 24/7 is a significant player in the online advertising marketplace.

ImageZimbra - Yahoo : $350M. Zimbra provides online office software.

ImageAdult Friendfinder - Penthouse : $500M. Adult FriendFinder is an an online adult dating site.

ImageHow Stuff Works - Discovery : $250M. How Stuff works has expanded in to online video instructions.

ImageAmerican Greetings - Webshot : $45M. This was notable because CNET purchased Webshot for $70M not too long ago. I still remember the time when Webshot was a wallpaper site.

ImageBusiness.com - Donnelly : $345M. From a directory serving Google text ads to the sale at $345M was remarkable.

Image Lexico - Answers.com : $100M. Lexico owns dictionary.com and thesaurus.com. This deal was notable because Answer.com paid almost $10/unique visitor - that is on the rich side for sure.

For a more detailed list, see PartnerUp and seeking Alpha and DealBook.

These are large numbers, but they dwarf compared to the attempted acquisition of Rio Tinto (international mining company) by BHP Billton (world’s largest mining company)for $140B.



To colorful, delicate bubbles of 2007, 2008 and beyond

bubbleThere have always been bubbles. There will always be bubbles…”

And thank god for the bubbles!

Judge Posner, one of the figures I admire the most, has written a very insightful piece on the Subprime Mortgage crisis, but the part that grabbed my attention was his eloquent description of how bubbles form.

A bubble begins when prices, in this case of housing, begin rising at a rate that seems inexplicable in relation to demand. No one knows how high they will rise. In conditions of uncertainty, there is a tendency to base expectations on simple extrapolation: if prices are rising, they are expected to continue to rise-for a time, but no one knows for how long a time. There is a reluctance to act as if they will not continue rising, for by doing so one is leaving money on the table. As a bubble expands, the rational response is to reduce risk, without forgoing profit, by getting in and out of the market as quickly as possible. The increased trading may keep the bubble expanding.

His observations and reasoning about how the housing, and subsequent investment bubble, got created are equally applicable to the web 2.0 properties and explains the valuation of many of the companies that we see around us. I have marveled over the valuation of Geni ($100M) and Tagged ($117M) and Facebook ($15B). In 2007 we saw the valuation of these companies rising at a rate that seems somewhat inexplicable.

Judge Posner also notes that the Bubbles are more likely to occur when downside risk is less than upside risk. In the Tech word, because the potential of “up side” is perceived to be very high, (e.g., Peter Thiel’s 500k investment in Facebook turning in to 1B+), the valuation of many Web 2.0 companies gets skewed.

But at the same time, as Judge Posner notes that even with the valuations that may seem skewed or inexplicable, it is not the time to walk away from the deals. The optimal thing to do might be to extract the up side from the expansion of the bubble. If the valuations of the start ups are rising, they are expected to continue to rise-for a time, but no one knows for how long a time. The bubble will continue to get fed and will continue to grow during this time. Hope you are participating in that growth.

There is a lot to be done over the next few years; open social, always on connection, moving office products to the web, more touch screen gadgets - and more specialized applications for the touch screen gadgets, HDTV, higher quality audio, DRM free music and each of these fields will spawn new startups, new Googles, and new Facebooks. There are opportunities abound and I hope the right one knocks at your door in 2008.

Happy New Year!

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Technology to watch - Ultrawide Band (UWB) for HDTV streaming and indoor GPS

uwb_TVEvery few years we get a new technology buzzword to watch; it was nano technology, then RFID and now it is UWB (Ultra Wide Band).

What is Ultra Wide Band and why should you care? Let me explain what it can do and then I’ll give you 30 seconds to come up with an application for it.

Ultra Wide Band is (i) short range and (ii) high bandwidth wireless technology. The current UWB wireless data speed exceeds 500Mbps.

As a comparison, a full HD video streaming at 1072p, requires about 150Mbps data speed (35Mbps for basic streaming and 150Mbps for stream manipulating applications like pause, replay, fast forward); UWB can easily accommodate this level of data speed requirements. Freescale semiconductor showcased their first prototype consumer TV with Ultra Wideband several years ago.

There are 2 billion peripheral USB devices connected to computers right now, they can all loose the wires and work with UWB. UWB is a natural extension of Bluetooth and WiFi.

Here is how the network scales looks like:

network scales

The standard setting body for UWB is WiMedia Alliance. It is an open industry association that promotes and enables the rapid adoption, regulation, standardization and interoperability of UWB. (IEEE attempted to define working standard called IEEE 802.15.3 for UWB but it got trapped in the quagmire of internal politics.)

According to the most recent report from market researcher In-Stat, in very near future UWB sales will overtake WiFi sales volume ($300M+ this year). The current predictions are that UWB-enabled notebook PCs hit the market soon and PC peripherals will follow shortly thereafter. CE and communications applications with UWB will hit the market in 2010 and in 2011, over 400 million UWB-enabled devices will ship. Of course, one expects several delays and I have heard of issues with the current state of UWB technology and its low power constraint, but I am hopeful.

Another really interesting use of UWB is for indoor GPS services. Last week, Thales, a French Aerospace company, said that it has developed indoor positioning system (IPS) that was aimed at helping fire services pinpoint people inside a smoke filled building. Traditional Global Positioning System (GPS) devices are of no use inside buildings because their signals are too weak and frequently bounce off surfaces, causing confusion.

The UWB IPS system will work seamlessly with GPS. All big box stores and all malls can use a system like this to help customers get to the right place, to the right store and to the right product. All major car park systems can use a system like this to help patrons find their cars.



Micro Nuclear Reactor - only real way to go green is to go nuclear

micro_nuclear_reactor

It has been more than 100 years since we learned of E=mc^2, and yet we insist on pathetic chemical reactions to power our gadgets and use one of the most unclean methods, digging out the stored carbon, to run those chemical reactions. Something is wrong with that picture.

Toshiba has developed a new class of micro size Nuclear Reactors that is designed to power individual apartment buildings or city blocks.

The new reactor, which is only 20 feet by 6 feet; about the size of a small truck. It is self sustaining, and can provide power for about 40 years for 200 families at 5 cents a kilowatt.

The 200 kilowatt Toshiba designed reactor is engineered to be fail-safe and totally automatic and will not overheat. Unlike traditional nuclear reactors the new micro reactor uses no control rods to initiate the reaction. The new revolutionary technology uses reservoirs of liquid lithium-6, an isotope that is effective at absorbing neutrons. The Lithium-6 reservoirs are connected to a vertical tube that fits into the reactor core. ( Next Energy News)

I don’t want micro reactors, I want nano or pico reactors. I want to buy a car that has a safe reactor built in. I want a car that comes with 200,000 miles warranty and fuel that will last 200,000 miles. I haven’t been very good this year, so I doubt Santa will bring me this present as yet, but very soon I hope.

The only real way to go green is to go nuclear.



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