Can You Say EchoBox?

By Mark Evans in M&A No Comments

Sling-1
The Slingbox is downright cool. It’s one of those devices that you never realize how much you like until you actually use it to remotely watch your home television over the Web.

As much I love the Slingbox, I always had two questions about the company. Is it possible to build a big enough business by selling a $100 to $250 product that may not have mainstream appeal? And who would eventually buy Sling Media at a high enough price to justify the more than $50-milllion of venture capital it has received?

Not sure if the first question will be answered soon but the second answer is: EchoStar Communications, which has scooped up Sling for $380-million. Along with Goldman Sachs, Liberty Media, Allen & Co., Doll Capital, Mobius Venture Capital and The Hearst Corp., EchoStar participated in Sling’s $46.6-million financing round in January 2006.

EchoStar must figure it can use the Sling platform to meet the needs of mobile couch potatoes, especially those who use its DISH pay-TV service. And it’s a nice marketing tool to compete against rivals such as DirecTV, Comcast and Time-Warner.

Sling is one of those cool companies that you’re happy to see succeed but kind of sad to see snapped up. As much as the product will continue to be part of the landscape, I’m not sure it will have the same cache now that it’s owned by a large, established company.

More: PaidContent has an interview with Sling co-founder Blake Krikorian, who said Sling was about to do a “pretty healthy” financing round before it was approached by several buyers. Jeremy Toeman, who was VP of marketing with Sling, calls the deal a “pretty solid win-win relationship” that will help both parties.

$100M = 1% = Wow!

By Mark Evans in Microsoft No Comments

According to the Wall St. Journal, Microsoft has held preliminary discussions to invest $100-million in Facebook based on a valuation of $10-billion…or more. It’s astounding that $100-million would give Microsoft a 1% stake. Of course, a $100-million investment in Google right now would give you a 0.06% stake.

So what’s next? Has Facebook started an investment auction that will see Google commit to a $1-billion investment for 5%? How much cash does Rupert Murdoch still have left after buying MySpace and the Wall St. Journal?

One more thought: Does anyone in the tech world keep secret any more? Judging from leaks about deals being made (e.g. EMC-Mozy), new strategic initiative (Google’s Facebook-killer) and investments (Microsoft-Facebook), mnay people can’t help but spill the beans. Maybe this info-spillage is just a fact of life in this instant information/instant gratification age in which we live.

Update: Jeremy Toeman brings some sane thoughts to the blog-o-frenzy by pointing out that the WSJ is chock-o-block with speculation, coulds, woulds and may. Meanwhile, Mathew Ingram cranks up the speculation by suggesting Microsoft’s interest in Facebook could prompt Yahoo to acquire Facebook. Man, it’s great when bloggers get so hot and bothered! So many words, so many thoughts! Kara Swisher, meanwhile, takes a very healthy swipe at the financial fascination with Facebook, suggesting Silicon Valley is becoming more delusional by the minute.

Google: Is There Life Beyond Search and AdSense?

By Mark Evans in Google 2 Comments

Google Muscle
Hey, I’m just as Google-obsessed as the next guy. After all, it’s impossible not to be fascinated by a company with the world’s dominant search engine, an ad business that tosses off billions of dollars in profits, and a willingness to give its R&D people the freedom to launch pretty much anything what they want.

But for all the Google strategic initiatives and news – most recently, a potential Second Life-like service, presentations, a Facebook-killer strategy, plans to build an undersea cable across the Pacific Ocean – what is Google other than a company with two killer apps: search and AdSense?

Don’t get me wrong, it’s awesome one-two punch that has pumped its market cap to $174-billion and made Sergey Brin and Larry Page among the top-five richest people in the world. But beyond search and AdSense, has Google really – and I mean really – succeeded at anything else?

GMail’s been successful as a rival to Yahoo and Hotmail; Blogger has become one of the leading blogging platforms, Google Reader has stormed on to the RSS stage, YouTube could become a killer app if consumers are willing to pay for online video, while Google Earth is downright cool. Google Docs, meanwhile, has a solid following but it’s far more interesting as a potential rival to Microsoft Office, while Picasa, Froogle, Google Blog Search and GTalk are nothing to write home about.

Aside from perhaps YouTube, all of the services above play modest supporting roles to search and AdSense. For all the stuff coming out of the GooglePlex, Google is really no different from a business perspective than it was two or three years ago. As long as the online advertising market sees strong growth and Google can leverage its ability to sell relevant advertising, the golden goose (search and AdSense) will continue to lay very profitable eggs.

But when you think about it, Google is not unlike Microsoft. Huh? Well, Google has search and AdSense while Microsoft has Windows and Office. Not that there’s anything wrong with having two dominant products that generate billions in sales and profits.

Microsoft has spent years trying to expand beyond Windows and Office, pursuing areas such as cable, Internet access, game consoles, portals and search. Yet, Microsoft is still a two-trick pony. Google has been strategically aggressive as well with the launch of new online services, acquisitions, a push into the advertising market (radio, newspapers) and lots of activity in the wireless market (wither the GPhone?)

All of this activity is good and necessary for large companies such as Microsoft and Google to stay vibrant and maintain their growth. That said, it’s a huge challenge finding another killer, high-growth business. Truth be told, it could be that Google’s ongoing success will consist of many, many sources driving AdSense as opposed to one killer idea.

More: Hugh MacLeod has some thoughts Microsoft, capped off by his belief Microsoft has to stop letting other people tell its story. MakeUseof offers up a nice list of “10 Google Services That Get No Love”.

EMC Snaps Up Mozy

By Mark Evans in Aside No Comments

According to TechCrunch, EMC has acquired Mozy, a popular online storage start-up. Mozy has become an important part of my small portfolio “go to” Web-based services along with Paypal, StumbleUpon, eBay and Google Reader. Mozy works because it’s a snap to set up and configure, user-friendly and, most important, it does the job. I’ve been using the free version, which gives you 2GB of storage. As much as it sucks when a cool start-up is snapped up by a corporate behemoth, it’s encouraging to see that Mozy attracted a $76-million takeover offer – a huge win for its investors who provided $1.9-million in financing. Here’s hoping EMC doesn’t screw up a very good thing.

Me Too Usually Mean Peugh

By Mark Evans in Venture Capital 3 Comments

Blogtv-1
BlogTV.ca led a short and completely unspectacular life.

But it’s not like anyone should be surprised. As the 642th video-filing sharing service to be launched, BlogTV.ca hinged its prospects on a very thin threat: it was going to Canada’s YouTube – not withstanding the fact few people on the Web consider a company’s nationality to matter.

BlogTV.ca failed because it was just another video-sharing service in a market awash in YouTube wannabes. BlogTV.ca learned the hard way that jumping on the bandwagon as a “me too” service was a recipe for disaster. Unless you come out with something different or unique than what’s currently popular, it’s really not even worth trying.

Yet everyone thinks they can invent a better mousetrap. If you look at the video-sharing market, for example, there are still plenty of companies attracting venture capital. In the last couple of months, Dailymotion has raised $34-million, kewego (who?) $6.9-million, Metacafe $30-million and Veoh $26-million. I’m sure the VCs backing these companies believe they have great prospects given the video market’s growth but some of these bets aren’t going to pay off.

Even more troubling is there continues to be too many ill-conceived “me too” investments in many markets such as photo-sharing, storage, social media and social bookmarking where the market is already crowded and growth is now far from spectacular. Sure, entrepreneurs and investors are eternal optimists but just because it’s now easy to launch an online start-up in a hot or warm market doesn’t mean it has to be funded. Unfortunately, this hasn’t stopped the bandwagon investment philosophy that seems to be alive and well.

Maybe that’s the where the bubble that concerns everyone is happening. Rather than seeing high-profile companies blow up like the dot-com book, most of the failures will likely happen to late-to-the-game start-ups that managed to raise some venture capital at the slim hope they could win the lottery and become the next YouTube. So rather than blaring headlines about the shocking demise of a much-hyped start-up, the bubble will quietly burst in the hinterlands where it will receive, at best, modest, attention.

Before ending this mini-rant, I would remiss if I didn’t add that there will always be exceptions to the rule. Sometimes, the right company with just the right strategy and good timing will be successful. Canada’s video.ca, for example, is apparently alive and well.

I’d Like to Hire a Co-Blogger Too!

By Mark Evans in Uncategorized 2 Comments

This blogging gig must be getting good given the flurry of high-profile hirings recently – actually, they’ve been only two but you get my point.

First, Marshall Kirkpatrick leaves a good job with SplashCast to work for Richard MacManus’ popular Read/WriteWeb. Now, Erick Schonfeld has become a co-writer at TechCrunch – good timing since his last employer, Business 2.0, just bit the dust.

These are clearly good times if you’re a high-traffic blog with the ability to attract enough advertisers to actually create a business – as opposed to the dollar-a-day habit/addiction that the majority of us have happily created.

Given the blog hiring bonanza, it got me thinking how nice it work be to have the financial means to bring on a co-writer. On those days when you’re uninspired, you could just bark at your co-writer to come up with something brilliant. You could take a vacation and not have to feel guilty about sneaking away for 30 minutes because you need to blog. And you could hire someone a lot smarter than you, and bask in the brilliance of their blogging insights.

Of course, you’d have to pay these people, probably offer them benefits, maybe have an office where they would work, and still do your fair share of the writing. So, maybe it’s completely unrealistic for the vast majority of us to even dream about hiring a co-writer but when you think about the benefits, it’s hard not to see why it’s become all the rage.

More: Tony Hung wonders if TechCrunch is still a blog, while Mathew Ingram suggests some of the larger blogs are replacing magazines, particularly in the tech sector.

Update: If someone’s looking to hire a high-profile vlogger, Amanda Congdon is looking for a new gig after she and ABC decided to part ways. Amanda, you should stuck with Rocketboom.

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