Oracle has responded to yesterday's statement from BEA Systems that it was worth $21 per share. Larry Ellison's software empire had previously offered $17 per share in an unsolicited takeover bid. Oracle says $21 is an "impossibly high price" and "nobody would seriously consider paying that." Well, we saw that coming. So predictable, that Ellison. We look forward to more passive-aggressive statements issuing forth in the future. [Mercury News]
BEA Systems wants at least $21 a share from Oracle — or anyone else who wants to buy them. That's a mere $4 per share more than Larry Ellison offered. Don't expect Ellison to just say "OK" to this. That would make him look weak and easily manipulated. And it was probably a bad move, since it essentially set a ceiling for what Ellison might offer — any more, and he'd look like he gave in to BEA's demands. We suspect, though, that the deal will get done at some point soon, once the two companies are done playing grabass. Oh, and Oracle rival SAP? Says they don't want BEA. Bitches just jealous. [Mercury News]
Larry Ellison is not used to getting rejected. After being spurned twice by BEA's board, Oracle is now threatening to withdraw its $17-a-share offer for the software maker on Sunday. The stock, however, is still trading above $17. Translation? Wall Street thinks Ellison is bluffing. [Tech trader Daily]
Network-equipment giant Cisco Systems is buying WiMax equipment maker Navini for $330 million in Cisco's 124th acquisition. Navini owns a number of patents related to their SmartBeaming technology that may give Cisco an edge in WiMax, a wireless-Internet technology with much longer range than Wi-Fi. Hopefully everyone has their tax documents in order — we hear that can be a problem at Cisco. Navini had been backed by Sequoia, among numerous others, but VentureBeat points out Sequoia declined to participate in its sixth funding round last May. Sequoia Partner Mike Goguen is a Navini board member and we presume Sequoia is glad to cash out if they didn't think the company was worth continued investment. (Photo by AP/Paul Sakuma)
Ever catch a Microsoft CEO Steve Ballmer speech in person? He's the kind of speaker to make you wish you sat at home watching the webcast. It's not just the spittle. It's the feeling he might just reach out and consume you. Turns out, he might. Yesterday, he told the Web 2.0 crowd Microsoft plans to acquire 20 companies a year for the next 5 years. He said Microsoft is willing to spend $50 million to $1 billion on each company to do it. Take note, startup entrepreneurs, unless you're ready to move to Redmond and get assimilated, avoid the front row. You'll stay drier that way, too. (Photo by Aaron Wagner)
THE GALLERY LOUNGE, SOMA — Joel Sacks of AdBrite wants to have a word with me. No, nothing to do with his company's adventures in serving up porn ads; he's still pissed off about the time we caught him on video soaking himself with a pint of beer. This time, he's dry. But he's just lucky — this San Francisco bar is packed wall to wall, thanks to social-news site Reddit's open invitation for anyone to come and spill a free beer on their neighbor. The largesse comes from Reddit's owner, Conde Nast, the publisher of Wired, which bought the site a year ago. I got to meet Reddit's founders, most of whom are still, contrary to rumor, at the company. But one was, notably, missing in action: Aaron Swartz, the obstreperous Reddit cofounder who quit shortly after Conde Nast bought the site. More on the founders' status after the jump.
A cautionary tale for BEA, the software company Larry Ellison is trying to add to his Oracle-housed collection: When Oracle's integration teams sweep through, they obliterate all traces of the prior company. Take, for example, Siebel, the sales-management software company Oracle gobbled up in 2005. Writes a tipster:
Discovery Communications, owners of popular cable networks like the Discovery Channel, Animal Planet, TLC, and the Travel Channel, hopes purchasing popular web property HowStuffWorks for $250 million will help it transition to the Web. On the surface, the topical match between the cable net and the website looks like a marriage made in heaven. But while it's true that established media companies have mostly failed at building their own Web sites, there's no guarantee that buying will work out any better. The plan will begin by integrating Discovery video segments into the HowStuffWorks site, followed by producing television content using HowStuffWorks's library of articles. Right, sure, sounds good — but really, how do you mesh "Shark Week" and "Mythbuster" video into HowStuffWorks' wonkery?
I'm beginning to think that tech mogul Larry Ellison collects software companies the way he buys car, yachts, and tracts of land: Not because he needs another one, but just because he wants to have more. His devilish $6.66 billion offer for BEA Systems is right in character. For years, BEA has been mentioned as an Oracle takeover target. Its core product line, WebLogic, acts as middleware connecting Web servers and databases. Databases, of course, are Oracle's bread and butter. But Oracle already has its own middleware. The attraction here, I suspect, is more BEA's customer base. As he's done with other software purchases like Hyperion and PeopleSoft, Ellison can slash BEA's costs, rein in new development, and collect the cash flow from software-licensing fees. Which may make BEA a more practical bauble than the rest — but a bauble nonetheless.
Private-equity firm Elevation Partners — which counts U2 frontman Bono among its partners — sold gaming companies BioWare and Pandemic Studios to Electronic Arts for $860 million. Elevation Partners, which is named after the U2 song, was a natural for EA to do a deal with. One of the founding partners, John Riccitiello, is the CEO of Electronic Arts. Elevation purchased the two game companies in late 2005 for $300 million. Not bad for less than two years' work. [WSJ]
Why was a roomful of venture capitalists and lawyers clinking champagne glasses at Zibibbo in Palo Alto last week? The target of their fulsome praise was entrepreneur Anthony Soohoo, a former Yahoo executive. And the reason? He had managed to flip his website Dotspotter, yet another celebrity gossip site with thoroughly derivative social-networking features, to CBS for a quick $10 million. Dotspotter's short one-year lifepspan didn't scare off serial charmer Quincy Smith, the startup-mad head of CBS Interactive. Having bought financial videoblog Wallstrip and Web-based social music site Last.fm, we can only conclude that Smith's strategy is to buy a lot of startups, throw them against the wall, and see what sticks. Nice work, especially when CBS shareholders are footing the bill. And who's receiving the checks? One of Dotspotter's beneficiaries, we hear, is Facebook CFO Gideon Yu. Nice to have a backup plan in case all those social networks turn out to be a fad.
And we thought that Congress was going to be the main stumbling block for 3Com's buyout by Bain Capital and Huawei. Shareholders are suing 3Com, its directors, a former director, Bain Capital, Huawei Technologies, and the Easter Bunny over the "insufficient" purchase price. Just shut up and take the money. No one else is going to buy your little has-been networking-equipment company. [AP]
Motorola CEO Ed Zander claimed that his company considered buying Navteq, the mapping-services company rival Nokia snapped up last week, but decided to pass. "We are not in the applications business," said Zander. Right. That explains, of course, why Motorola bought Good Technology, an email software company, last year. We have another theory: Bitches just jealous.
These days, when I hear that Google has bought a company, I feel sorry for its founders, however rich they're becoming. Google just bought Jaiku for a rumored $12 million. Not bad for a service that's mostly a copycatan identical twin of Twitter, allowing users to broadcast short messages to friends by text message and IM. Sure, they got a nice payout. But my gut tells me that the price was dooming Jaiku to irrelevance. Google's track record of botched acquisitions — remember dMarc Broadcasting or Dodgeball, anyone? Didn't think so — just grows longer and longer. At YouTube, most of the pre-Google employees are resting and vesting, I hear — waiting for their stock-option packages to reach full value, and then plotting their escapes. If Jaiku's employees are students of history, one hopes they inked an agreement that allowed them an early exit in case things go sour. Evan Williams, who sold his previous company to Google, must be softly chuckling to himself.
Newsvine, the Seattle-based headline aggregator — think Digg, but without the heartthrob cofounder — has sold to MSNBC.com for an undisclosed amount. The company had raised a small amount of venture capital, $1.5 million, which has led some industry insiders to peg the price at more than $15 million, less than $35 million. Newsvine, like Digg and the rest, encourages users to discuss news headlines, but it adds a twist: So-called "citizen journalism," where users also write their own articles. To a cynic, allowing that just spells more loser-generated content. But for MSNBC, which has, since its birth over a decade ago, been struggling to embrace the Web, the prospect of viewers contributing reporting has double appeal. First, it potentially cuts costs, and secondly, it adds a much-needed appearance of hipness, as upstarts like Current.tv threaten to garner a more youthful audience.
Mark Zuckerberg's strategy of holding out for a Facebook valuation as high as $15 billion is contagious. Developers of the most popular Facebook applications have become mini-Zucks, unwilling to part with their astronomically self-valued creations. If Lance Tokuda, the chief executive of RockYou, sees any difference, it's only one of scale. Speaking about his companies popular Super Wall application, Tokuda, says "If you told me you were going to write me a check for $10 million, I'd say, 'Forget it.'" Why?
3Com's buyout by Bain Capital could get hung up in Congress because of Chinese telecom-equipment maker Huawei's involvement. The Committee on Foreign Investment in the United States could review the deal, examing the national-security implications of Huawei getting "shareholder voting rights, seats on the board or access to technology." [AP]
Microsoft has bolstered its Internet commerce capabilities by purchasing Jellyfish, an innovative comparative shopping site, for an undisclosed sum. Jellyfish will remain a standalone entity, but Microsoft's Web team has signaled they will be borrowing Jellyfish's technology for use across the software giant's websites. Why? Jellyfish introduces a compelling new twist to comparison shopping. Listed retailers only pay Jellyfish when purchases are made — the more they pay, the higher they rank. In turn, Jellyfish kicks back half of its commission to the buyer, effectively lowering the price. It's an intriguing business model, taking a page from Google's ad-ranking technology and applying it to e-commerce. Just one problem: Microsoft's unfortunate track record of crushing the life out of small, innovative companies it acquires.
