Archive for October, 2006

More analyst firm consolidation

On Friday, it was announced that Datamonitor is to buy Ovum in a deal that values the company at $80m – an almost 50% premium over Ovum’s pre-announcement market cap, according to Citywire. The justification for the premium, says Datamonitor’s CEO Mike Danson, is that 70% of its revenues comes from subscription-based products (ie research and reports) and are therefore recurring. Danson dismissed Ovum’s marketing of itself as a people-based consultancy (a lower margin model) as “flannel.”

Europe’s largest technology analyst firm, Ovum is probably best known in the US for its acquisition of telecom-focused house RHK and, in July this year, of Summit Strategies. Datamonitor doesn’t just focus on the tech industry and is Europe’s largest analyst firm across the board. It, too, has had its fair share of acquisitions in recent years, including news service Computerwire and analyst firm Butler Group. As with these acquisitions, its seems that Datamonitor plans to maintain Ovum as a separate brand and entity.

Of course, as Dean Bubley of Disruptive Analysis points out, Datamonitor is still nowhere near the $800m size of industry big dog Gartner. Should it decide to go for global domination, however, there is no shortage of mid-size firms it could target – Yankee, Strategy Analytics, Pyramid, IDATE and Current Analysis are his suggestions.

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October 22, 2006 at 10:04 pm Leave a comment

Quote of the week

I’m a firm believer that you can make virtually any subject interesting and accessible if you put your mind to it. Here’s the opening line of Om Malik’s blog about gigabit DSL:

“Copper is the cockroach of the telecom world – it just doesn’t go away.”

Quality.

October 22, 2006 at 2:00 pm Leave a comment

What’s a SPAC?

Apparently, it stands for special purpose acquisition company (who knew?). And it’s how oldtimer tech trio Gil Amelio, Steve Wozniak and Ellen Hancock raised $172m to fund the acquisition of Jazz Semiconductor.

Kevin Maney’s USA Today column features a great and amusing interview with Gil Amelio that explains all the details. So what is a SPAC exactly? Explains Maney: “The idea is that you do an initial public offering before you have a business, then use the IPO proceeds to buy an existing company. Investors are basically betting on the management team and assuming the team will find and run a good business.”

The common link between the three is Apple. We all know Wozniak’s role; Gil Amelio had a dubious stint as CEO in the mid-late 90s, and brought in Ellen Hancock from a long tenure at IBM. Nevertheless, it seems an unlikely trio and, one that has not been in the public eye for a while – apart from Wozniak’s recent book promoting, including a slightly bizarre appearance on the Colbert Report.

Would you bet on this management team? Gil Amelio was ousted by Apple in 1997, and admits that he’s not the “rockstar” the company needed. Ellen Hancock was CEO of Exodus until it crashed and burned in 2001. And here’s how Maney describes Wozniak: “Since the 1980s, he’s basically been a member of the Lost Co-founders Club, along with Microsoft’s Paul Allen, onetime Beatle drummer Pete Best, and whoever Anheuser was.”

Maney characterizes the new venture as a “quest for redemption,” and doesn’t seem entirely sure they’ll pull it off. But if they do, “somebody write the script. Get Joe Pesci to play Amelio. He needs a comeback, too.”

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October 18, 2006 at 10:00 pm Leave a comment

Will Techdirt bloggers clean up?

Last week, at the Office 2.0 conference, Techdirt launched its Techdirt Insight Community – basically a way of putting companies looking for advice and feedback on specific topics in touch with relevant bloggers. It works like this: companies pose a specific question and Techdirt fields it to a group of qualified bloggers. The bloggers reply in the form of blog-style pieces, and follow-up discussions ensue. The whole thing is double-blind – ie the bloggers don’t know who the company is, and vice versa. Individual bloggers set their own price, likely to be $50-100 per post, according to BusinessWeek.

Techdirt reckons that companies will use the service “to raise issues, get feedback, test ideas, review products, make strategy suggestions, help with purchasing decisions.” It’s certainly a lot cheaper than conducting focus groups or engaging a traditional analyst firm, although, of course, there’s no guarantee that you’re talking to a ‘representative’ sample of people.

It sounds like a great way of gauging the opinions of the blogosphere and of harnessing the value of the industry bloggers – people who are not analysts by profession, but who are incredibly knowledgeable in their chosen areas by virtue of their day jobs. I imagine that, for the bloggers, the compensation will be more pocket money than retirement fund, but I also suspect that their motivation will lie more in the opportunity to shape debates than in the money.

For more reactions to the announcement, check out Techdirt’s updated post here.

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October 16, 2006 at 11:51 am Leave a comment

Hands-on CEO become hands-off

Manjunath Kiran/European Pressphoto Agency

I just had to note this fabulous photo of McAfee’s outgoing CEO in the NYT today, taken by Manjunath Kiran and distributed by the European Pressphoto Agency. All caption suggestions welcome!

 

October 12, 2006 at 4:27 pm Leave a comment

Is it Doomsday – or will marketers save the world?

Mark Cuban has long maintained that one day soon YouTube will be sued to kingdom come by the big content owners. Despite its recent deals with Warner, CBS, Universal and Sony and its acquisition by those ‘morons’ at Google, he is still standing by his opinion. Three days after the annoucement, he is still dreaming up new doomsday scenarios of how exactly YouTube’s demise will come about. Today, he posits the interesting theory that content owners will have to shut YouTube down because otherwise it will open the floodgates for a myriad of other YT wannabes (with whom they don’t have agreements) to flout copyright with abandon. And what they will do, says Cuban, is go after the small guys first in order to establish a legal precedent and then come a-calling for YouTube – either by lawsuit or draconian licensing agreements.

Tom Foremski of Silicon Valley Watcher, on the other hand, takes a far more kindly view of human nature – and copyright owners. In a blog entitled “Why copyright violations don’t matter,” Foremski suggests that copyright owners have more to gain from allowing users to perform mashups with their content: “users who upload copyright content from TV are engaging in the large-scale, free viral marketing for this content.”

He goes on to assert that “If you can get marketers running the show instead of lawyers and accountants, the world looks incredibly different.” Bravo!

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October 12, 2006 at 4:02 pm 1 comment

LonelyGirl15 makes public service announcement 2.0

Unfortunately, I can’t take credit for that line – it comes courtesy of Caroline McCarthy at Cnet. Cnet and the Wall Street Journal reported that the United Nations Millennium Campaign is using LonelyGirl15 (and other viral video creators) to raise awareness of the need to eradicate poverty. Jessica Rose, aka Bree, recorded a typical LonelyGir15 video blog, but this time with a different subject matter.

According to the WSJ, the videos are part of a campaign designed by ad agency Y&R. It’s a great idea and hats off to the UN for supporting it – although I understand that it pulled another video in the campaign because it was considered tasteless.

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October 10, 2006 at 10:08 pm Leave a comment

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