M&A

Quick Thoughts on Microsoft-Skype

By Mark Evans in M&A 5 Comments Tags: , , ,

There’s been a flurry of coverage on Microsoft’s $8.5-billion purchase of Skype so here are some quick thoughts:

1. Microsoft, whatever you do, don’t screw up Skype. Big companies have a reputation for turning chicken into chicken salad so please don’t try to Redmond-ize Skype, which is a different beast.

2. I wonder how much Canadian taxpayers made from deal given Canada Pension Plan Investment Board was one of the investors when Silver Lake led a group that purchased 70% of Skype in 2009. At the time, Skype was valued at $2.75-billion.

3. How does eBay feel after finally cutting ties with Skype? It’s been six years since eBay made its curious decision to acquire Skype for $2.6-billion. At the time, it was a strange, out-of-left field move. At the end of the day, eBay made $4.3-billion – a nice return on investment but it was strategically and tactically distracting.

4. How quickly and deeply will Microsoft integrate Skype into Windows and its other products? I would suggest that after a short honeymoon, Microsoft Telecom (powered by Skype) will appear on the scene.

5. Does this open the door for a competitor? Now that Skype is owned by Microsoft, it’s no longer cool or rebellious, which was a big part of Skype’s appeal. Will Facebook and Google buy or build something to compete against Skype?

Nortel: Messy ‘Til the Bitter End

By Mark Evans in M&A 2 Comments Tags: , , , ,

If Nortel was a movie, it might be called “The Company That Couldn’t Shoot Straight”.

Two years after filing for bankruptcy protection, Nortel is still on life support but refuses to go away quietly even as it divests its last assets – a patent portfolio chock-a-block with all kinds of wireless goodies.

Yesterday, Nortel unveiled plans to sell 6,000 patents to Google for $900-million. The deal, however, is structured so competitive bids can surface. Among the parties rumoured to be interested are Research in Motion, which covets Nortel’s LTE assets.

If it was as simple as an auction happening, that would be one thing. But in the whacky world of Nortel, nothing is that simple. According to GeekWire, Microsoft says it has a “worldwide, perpetual, royalty-free license to all of Nortel’s patents that covers all Microsoft products and services, resulting from the patent cross-license signed with Nortel in 2006.”

What it means is the sale of Nortel’s patent portfolio could become a complicated and messy situation, which could not only see competitive bids but a legal battle over who owns or controls the patents.

Seemingly lost within the shuffle is that the patents are the last chapter in Nortel’s disappointing demise from tier-one telecom equipment supplier to non-entity. What was once the star of Canada’s high-tech industry is going to disappear into the history books.

Hammered by hubris, a series of strategic and tactical mistakes, weak senior management and, finally, an unwillingness to fight until the bitter end, Nortel will soon disappear, although the battle over the patents could see the “patient” hang on for a few more months.

Why the Radian6 Sale is Good for Canada

By Mark Evans in M&A, Social Media 4 Comments Tags: , , ,

In many ways, the sale of Radian6 was just a matter of time. As a leading player in the fast-growing social media monitoring business, Radian6 was a big target for anyone looking to quickly establish a strong foothold. So when Salesforce.com rolled in with a $326-million offer, it wasn’t much of a surprise.

For Canada, the sale of Radian6 is a double-edged sword. On one hand, it’s disappointing to see another Canadian company snapped up by a foreign buyer. On the other hand, it shows that successful and world-class technology companies can be nurtured and financed in Canada. Radian6 had enough time and money from investors such as BrightSpark to embrace an aggressive growth strategy to become a $40-million company.

Far too high-tech startups in Canada never get the opportunity to even attempt to get this big because they can’t find the financial support to help make it happen. Even if a startup has strong prospects and sales traction, they often have to pursue money outside Canada.

The sale of Radian6 and last summer’s sale of Sysomos to MarketWire (Note: I’m director of communications with Sysomos) should be seen huge confidence boosters for the Canadian startup scene.

Both companies are home-grown success stories that should embolden entrepreneurs, investors and government that world-class technology companies can be built in Canada.

Last month, Sarah Prevette wrote a column in the Toronto Star wondering why there weren’t more startup success stories in Canada. In many ways, she’s right that Canada’s active and enthusiastic startup community should be doing better.

But the success of Radian6 and Sysomos demonstrate with some financing, it is possible for Canadian startups to not only take on the world but dominate a new and fast-growing market such as social media monitoring and analytics.

Is There Anything Google Won’t Buy or Offer?

By Mark Evans in Google 4 Comments Tags: , , ,

According to TechCrunch, Google is looking to buy Yelp for $500-million, a move that would boost Google’s presence in the local search and directory business.

Maybe it’s just me but over the past few months, Google’s strategy to take over the world is becoming more evident. If it’s not acquisitions (60 and counting), it’s new (and free!) services such as Google DNS or the recently-unveiled Goo.gl URL shortening service.

This may sound naive given that capitalism is capitalism but does Google need to own everything and offer every online service? Doesn’t it make sense to leave some scraps for competitors so that there’s still some competition?

Don’t get me wrong, Google offers some terrific (and free!) service but the bigger it gets, the more nervous it makes me because it doesn’t seem healthy to have one super-dominant player – even one that professes to not be evil.

Rather than just talking the talk, I’m going to walk the walk by giving up Google for a week to see what life would be like if Google suddenly disappeared.

More: Boomtown suggests Google could also be interested in moving into the real-estate search market by buying Trulia.

Anyone out there not use any Google services?

Rejected by Twitter, Facebook Buys Friendfeed

By Mark Evans in Uncategorized No Comments Tags: , , ,

So, the big news within the high-tech world is that Facebook is buying Friendfeed.

I’m happy for Bret Taylor and Friendfeed’s investors but the deal doesn’t excite me that much.

Maybe it has to do with the fact I’ve really, really tried to like Friendfeed but it has never resonated. And as much as I recognize Facebook’s size and utility, I’m not an avid user.

To me, the Facebook-Friendfeed deal is sort of like striking out with the beautiful girl (aka Twitter) so you make the best of the situation by dating her not-as-beautiful friend (aka Friendfeed).

Who knows, maybe Facebook can revive Friendfeed, which has not only seen its growth plateau but start to decline. (See the Compete.com chart below. That said, I think anyone – such as Mashable’s Adam Ostrow – who thinks this new combination is a Twitter-killer is off the mark.

The integration of Friendfeed into Facebook will enhance Facebook’s features but it’s a niche deal as opposed to a game changer.

More: Mashable has a post on three reasons why Facebook bought Friendfeed. As well, J.D. Lasica posted a video of an interview he did with Friendfeed co-founder Paul Buchheit in 2007 about how Friendfeed was started.


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