Andy Boyer

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Category: Business (Page 12 of 24)

When Does Something Stop Being A Start-up

January 14, 2009 /

TechFlash details the latest version of Marcelo Calbucci’s Seattle Startup Index.  The index tracks the Web traffic of Seattle based startups.  TechFlash trumpets that once again, Zillow.com is at the top of the ist.

Now, I’m not trying to be ornery, but there’s something about being at the top of a list of “Start-ups” for multiple years, that feels akin to winning Rookie of the Year 3 times.  I see a lot of names on the Start-up list besides Zillow that have been around for quite awhile.  Names like Payscale, WetPaint, Jobster and Widgetbucks (formerly mpire.com).  

You might ask, “Who cares?”

Well if you are a start-up that launched in 2008, you certainly care that your traffic numbers are being compared to those of a companies that are reaching their 4th birthday.  Especially if some of them have geenrated serious rounds of funding already.  One would assume that a senior in his 4th year playing basketball would have more cumulative points than a freshman, no matter how exciting that freshman is.  

It all just makes me wonder how a “Start-up” is defined these days.

AOL Splits

January 13, 2009 /

We know that a number of companies are going to have to radically change their practices to survive this year.  In what could be the first “re-invention” of 2009, AOL appears to have split itself in two, blowing up the AOL brand in the process.

The new divisions are called MediaGlow and PeopleNetworks.  According to AdWeek, “MediaGlow encompasses a collection of 70 niche content sites launched in recent years, ranging from AOL Health to nonbranded properties like TMZ.com.”  it appears to be similar to Federated Media, a collection of web sites all served by a single ad network.

Meanwhile, “People Networks focuses on social media properties like Bebo and AOL Instant Messenger.”

The AOL portal is effectively gone, an acknowldgement that people are using search to land in their destination of choice, rather than having a single home page they visit every day.  

There are a number of other features that you can read about in the article.  Basically though, the old AOL is finally done.  It will be interesting to see if the new AOL properties become leaders in their new markets.

Will they or Won’t They? And Waht is the Effect of Widespread MSFT “Cutbacks”

January 5, 2009 /

So the blog world is all a-buzz with speculation about the rumored Microsoft cutbacks, layoffs, reductions, pruning, shearing or whatever other verb you want to use.  A lot of commenting is going on over at a blog called Mini-Microsoft, written by an insider.  

There are a ton of ways this could play out.  But at the end of the day, if Redmond makes either substantial cuts in one category, or small cuts across all full time heads, contractors, vendors and agencies, Seattle is going to feel a pretty big effect.

To the average Joe, it really doesn’t matter if Microsft makes formal layoffs, or just slows down the amount of contractors it brings on oard, or culls back some of its agencies.  In some shape or form, Steve Ballmer is writing checks to a bunch of people in this town.  Furthermore, if they do slash what they call the “10% ers,” those folks are going to come out with a tainted brand name on their resume.  If you are an employer, how do you justify hiring someone that was let go for being repeatedly on the “underperform” list?

Anyway, the point of this post is that it doesn’t matter what you call it.  Microsoft employing less people globally, means they will be hiring less people in Seattle.  And that causes not just full-time cutbacks, but also across agencies and temp firms.  And that’s bad for the city overall.  Let’s hope these rumors are disproven.  

1st Hand Account From Mumbai

December 1, 2008 /

Last week, you probably heard about the events in Mumbai, but glossed over them due to the hoilday weekend.  On Saturday, I discovered a friend of mine from Manchester Business School is now living in Mumbai.  I asked him to write a little about what happened out there.  Here is his email, unedited:

Re: Mumbai

well i am the worst when it comes to writing. i could relate some of the events to you to make up the script:

around 10.30pm we heard from the news that a place called Leobold cafe & bar had a gang war in which some people were shot. i actually had a friend just opposite that place curious about what had happened and could not figure out much. i heard stories of someone having their bachelor party there before the wedding.

it was only by 11pm  or so that we started getting news about 3 places and then 5 places that were hit by terrorist attacks. these included this bar, followed by a busy train station, and then these three locations that were under cross fire for 3 days, i.e. Taj Mahal Hotel, Trident Oberoi (two of the most upmarket hotels in the city which is a who’s who regular) and a predominiatly Jewish occupied building.

In the these three locations, the terrorists entered shooting at random. this followed with taking american, british and irish passport holders as hostage. many visitors from these nations also died in the attack. all these three locations were random killing grounds and under fire.

A hotel like to Taj could easily accomodate over a 1000 people. We hear from those inside that there were scores of dead bodies left in the hotel and many of them having bombs below them as booby traps. So we really do not know the actual death count but believe it is far above what the media portrays.

The following day we were hit by some rumours of terrorists in other parts of the city. We do fear though that there may be some of these terrorists that managed to escape and are busy planning something or finding an escape route. It is hard to say what is safe anymore here.

The government was quite unprepared considering the news shows a lot of the intelligence being made available to the state. the army did play a great role in stopping the series of sad events. it was quite late though. three days of anxiety has for the first time killed the spirit of a city that is known for rebounding back the next day from calamities and terrorism in the past. there is a great sense of unrest in the people now seeking strong action against the culprits and demanding a fair and committed government that really is concerned about its people and not to unkept promises to win their vote banks. most politicians that have tried to politicise this event have been come down hard upon by the media and public alike. 

Idea for Auto Bailout

November 20, 2008 /

This morning I listened to Dave Ross interview Ravi Batra, a professor of Economics and author of The New Golden Age: The Coming Revolution against Political Corruption and Economic Chaos.  Mr. Batra had what I think is a fabulous idea for the automaker bailout.

To summarize, the automakers want $50 Billion to save them.  Batra explains that for about $1 Billion, you could buy 60% of General Motors.  Then you could give all those shares to the UAW to distribute amongst their workers, making every union employee of GM a significant shareholder in the company.  Then, they could decide what woul dbe the best courses of action for the company to take.   

It’s brilliant.  It’s not socialism, because the people would get paid if they created value, and lose their jobs if they wouldn’t.  Plus, it would force the UAW to come to grips and decide whether their policies are good for the companies that employee their members.   I think it’s a great idea.  Too bad it will never be considered…

Mark Cuban vs the SEC

November 18, 2008 /

(Parts of post redacted due to learning new information)

A friend asked me my take on the Mark Cuban Insider Trading allegations yesterday.  I realized I didn’t have an opinion yet, and agreed it would make for interesting blog discussion.

If you don’t know the story, go read the report at the Silicon Valley Insider and come on back.

So assuming you have a little background on the situation, I’ll dive right into the initial thoughts that came to mind.

1) $750,000 sure seems like a small amount of money for Cuban to care about.

2) It sounds like the CEO of Momma.com convinced Cuban to buy 6% of the company in March 2004, and then about a month later the same CEO was bringing in a private equity firm which would dilute the shareholders, including Cuban.  If that timeline is accurate, it’s a pretty shady move to pull on your investors, including one who is a billionaire.

3) It also sounds like the CEO kept Cuban in the dark about the dilution until June 28.  So he had about 3 months of telling Cuban, “Oh yeah, everything is fine,” while working with the private equity firm on how to dilute everyone.  Then he calls Cuban on June 28 and said, “By the way, I’m diluting you in a week tomorrow.”

4) Cuban sounds like he was pretty annoyed by this.  And you would be too.  After all, had the CEO not brought Cuban on board as a 6% investor, the equity group may not have been interested in financing the company.  So Cuban may have gotten used by the CEO, and then since the CEO told him about the PIPE, now Cuban was stuck holding shares that he couldn’t get out of.  In his mind, they screwed him going in and now were screwing him from getting out.

5) So, Cuban’s decision at this point seems irrational and not well thought out.  He calls his financial guy and tells him to sell.  At this point, a good financial guy should look at his clock, see it’s late at night and ask why his boss suddenly wants him to stop doing what he was doing and try to unload 600,000 shares of stock in a company no one knows.  Some alarm bell should go off here.  There needed to be a, “Boss.  If the dilution isn’t for a week, lets take 12 hours and look at our options.” (Edit: The PIPE was announced the next day, June 29.)  But the financial guy should still advise him of the issues.

So my analysis:

  • I think anyone who tries to compare this to Wall St fat cats screwing the American consumer in sub-prime lending, is pretty off base.  Just from reading a few articles, I think Cuban was actually the guy screwed by the Wall St guys (the private equity group) and tried to get out of it.  
  • Unfortunately the rules are a little different for people who have conversations with CEO’s than folks like you and me, and he should have just waited for the announcement and sold everything then, taking the $750k hit.  Then he could have used his conections and power to make sure that CEO never got another dime of funding the rest of his life, and the private equity firm was on a giant blackball list.  I mean, he’s probably made 50x that amount on tips and insights from cocktail party conversations with people you and I don’t get to meet. 
  • It does seem like a pretty trivial matter for the SEC to make a big deal of 4 years after the fact.  Anytime a federal or regional judicial branch of government in a hardcore Republican state, sits on something for this long, and then launches it on a guy who helped fund an anti-George Bush movie, I agree that it kind of feels vindictive.
  • In the end, I think Cuban should pay a fine, we should all avoid ever investing in or using Momma.com and someone should ask why it takes the government 4 years to prosecute something like this.

However, this is only my first take, and if new evidence comes out, I’m willing to adjust.   Looking forward to some thoughts from you guys.

President-Elect Obama’s Online Ad Budget

November 7, 2008 /

ClickZ has a report that details President-Elect Obama’s online ad buy.  The article has more insights about the $8 million online media plan, but here is a condensed list of who received a little change:

  • Google: $3.5 million
  • Yahoo: $673,000
  • Centro, a local media buying firm for local TV and newspaper site buys: $630,000
  • Ad networks:  $600,000 (including AOL’s Advertising.com, Collective Media, Undertone Networks, Burst Media, Quigo, DrivePM, Pulse360, Specific Media, and online video networks Broadband Enterprises and Tremor Media)
  • Facebook: $467,000 ($370,000 in September) 
  • Time Warner (most likely CNN.com): $337,000
  • Microsoft (MSN Search): $250,000
  • Politico: $146,000 
  • BET.com: $138,000
  • The Weather Channel Interactive (geo-targeting): $108,000 
  • Cox, which offers digital local media: $100,000
  • WashingtonPost.com: $100,000.
  • Community Connect, publisher of BlackPlanet.com: $61,000
  • Microsoft-owned in-game ad network Massive: $44,465 
  • NBA.com: $21,000 (all in September)
  • MySpace: $11,500:

 

 

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