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VentureBeat reports on the demise of Pleasanton, Calif. Internet phone company Jangl and notes that Seattle-based WhitePages.com was sniffing around the assets.
Citing an anonymous source, VentureBeat reports that WhitePages offered $20 million for Jangl, but then "whittled down" the offer once it found out that Jangl was facing financial problems.
WhitePages.com Chief Executive Alex Algard tells me in an e-mail exchange that they never bid $20 million "or anything even close to that for Jangl."
"We are a growth-oriented company constantly seeking good acquisition opportunities, but we don't announce which business opportunities we pass on, for a variety of reasons as you can understand," said Algard.
The fact that WhitePages.com was considering a purchase of Jangl indicates that the company is looking for new and creative ways to expand the business.
That's not a big surprise. In an interview earlier this year, Algard discussed several new initiatives to build on the idea of helping Internet users find and connect with one another. One is allowing people to input cell phone numbers on their personal profiles on the site, a feature that WhitePages started testing late last month.
Given the company's goal of reaching $200 million in revenue in three years and its plans to upgrade its legacy online directory businesses, I wouldn't be surprised to see WhitePages expand with acquisitions.
Profitable with $62 million in revenue last year, WhitePages should have both cash and stock as currency. It also has laid off workers in the past 18 months, further indication that it is trying to reposition.
In March, WhitePages Vice President of Marketing John Lusk told me that the 11-year-old company had to become more innovative in how it brought products to market.
Maybe they are looking for startups to help in that mission. Stay tuned.
TechCrunch offers seven reasons why the $14.5 billion Clearwire-Sprint Nextel deal announced this week is a potential "disaster," noting the huge losses at Clearwire, unproven WiMax technology and lack of global standards on which companies can make WiMax equipment.
Investors appear to agree, sending the stock of Clearwire down four percent Friday to close at $14.10. It fell another five cents in after hours trading, with the stock nearing its 52-week low of $10.10.
It must be the week for top executives at venture-backed companies to set sail. I just reported on the departure of Avvo co-founder Paul Bloom.
Now, I've learned that Talyst Chief Executive Jim Torina is leaving the company that he co-founded. He's being replaced on an interim basis by Carla Corkern, who most recently held the title of chief operating officer.
Torina told employees of his departure today.
Talyst, whose technology is used to automate hospital pharmacies, hit a rough patch earlier this year when it announced the lay off of 17 employees.
In 2006, the company raised $20 million in a deal led by OVP Venture Partners and Ignition Partners.
At the time of the financing, Torina expressed ambitious plans for the Bellevue company.
"The market is very large and the timing is right for this," Torina told the P-I. "We believe that every person that takes medication could eventually be taking a drug out of our system."
Paul Bloom, who co-founded the online attorney rating service Avvo, plans to step down from the 22-person company to pursue other opportunities.
Bloom, who served as vice president of products and marketing, notified employees of the decision Thursday. Avvo Chief Executive Mark Britton said that Bloom wanted to be more involved with product management rather than people management, adding that the departure does not signal internal problems.
"That perception could not be further from the truth," said Britton, adding that the company has been expanding into new markets and adding new employees. It also recently inked a deal to provide the results for Washington CEO magazine's upcoming "Top Lawyers" issue.
Bloom, who previously worked at Classmates.com, Apex Learning and Microsoft, played a key role in the early product vision. Britton said he was a huge help in getting the service launched, adding that he will be missed.
"It is tough because I started the company with Paul and he is an amazing person," said Britton, who was unsure whether he would refill the position.
Bloom plans to stay with the company -- backed with $13 million from Benchmark Capital, Ignition Partners and others -- through a transition period. It has not been determined if he will step down from the board as well.
Internet pioneer Vint Cerf today told about 800 people at the Technology Alliance's annual luncheon about the early days of the Internet, the promise of government-funded broadband networks and how to brew the perfect cup of coffee.
Oh yeah, he also answered that burning question: Does the term "surf the Net" originate from his name?
It does not. First, since this is Seattle, how does "the father of the Internet" like his coffee. The key, he said, is to grind the coffee and then let it sit in a cold pitcher of water overnight. Doing so removes many of the acids, Cerf said.
After discussing his coffee habits, Cerf jumped into the topic that most of the audience came to hear.
"OK. Go for it, Internet," he said to laughs as moderator Ed Lazowska fired up his questions.
Cerf said that the Seattle technology industry is among the leaders in the world, but many people outside the region don't realize the impact it is having.
"I am really damned impressed," he said.
Cerf, who from 1976 to 1982 played a key role in the Defense Department's development of what became the Internet, said it has been a "roller coaster ride" in terms of where the technology has gone.
And just like society in general, Cerf said that people use the Internet for "good and ill."
The chairman and chief executive of one of Seattle's largest software companies has been charged with killing 32 bison on a neighbor's ranch in Colorado.
Jeff Hawn, the chairman and chief executive of Attachmate, has been charged with 34 counts of theft, criminal mischief and aggravated cruelty to animals, according to an arrest warrant obtained by Colorado's 9News.com.
The warrant says that Hawn killed two of the bison, while he hired hunters to kill the rest on March 19. Here's more from the 9News.com report:
The hunters with the Atzlan Native Community killed 32 bison belonging to rancher Monte Downare on March 19, including six bulls and some cows that were carrying calves. The arrest warrant said some of the bison were skinned while most of the rest were left to rot.
The dead animals were found over hundreds of acres near Eleven Mile Reservoir in Park County. Authorities say only eight of the bison were killed on Watersedge Properties, which is owned by Hawn. The remaining 24 bison were killed on other property.
The Los Angeles Times reports that Hawn, who lives in Austin, Texas, bought his 362-acre ranch in 1995 and shortly after constructed a fence to keep out livestock. But the fence did not keep out the bison, which under open range laws are able to wander.
Attachmate, which is privately held and makes software to access information from mainframe computers, merged with rival WRQ in one of the largest private equity transactions in the state in 2005. At the time, the combined company employed about 950 people and posted annual revenue of more than $200 million.
Hawn, a former senior vice president at BMC Software and partner at McKinsey, joined WRQ in 2005.
I have a call into Attachmate to see what this means for the company.
The story is big news in Colorado, with the Rocky Mountain News' Bill Johnson calling it "a contract massacre."
Meanwhile, The Denver Post has some gruesome photos of the dead bison and links to the arrest warrant of Hawn. An undersheriff for Park County, where the killings took place, tells the Denver Post that arrangements are being made for Hawn to turn himself in to authorities.
UPDATE: I just heard back from Attachmate spokeswoman Susanne Smith, who would only confirm that Hawn remains the CEO of the company at this time. She declined to answer questions about the potential impact on the company or whether Hawn planned to turn himself in.
UPDATE: Here's my full story, which includes another comment thread.
And the winner of the Technology Alliance's annual startup of the year award is ... a coffee company.
Seattle's Coffee Equipment Co., which was recently sold to Starbucks, was announced as the Alliance of Angels' startup of the year.
In accepting the award this afternoon, Chief Executive Zander Nosler joked that they have been telling people all along that they are a technology company. No one ever believed them, he said.
In fact, investor Geoff Entress tells me that "there is a ton of technology in the device," including software that would allow Starbucks to monitor how much coffee is flowing through the machine remotely.
The company beat out BuddyTV and CleverSet.
The last time I bumped into Phillip Lee he was a University of Washington business student running an online apartment search service called Spottage.com.
Lee has now graduated, launched the service on five college campuses in the Northwest and changed the name of the company to Spottago (more on that unusual story later).
A presenter at today's Early Stage Investment Forum, Lee detailed how the recently-launched company plans to make money by helping students find a place to live.
Backed with about $100,000 in startup capital, Spottago shows apartment listings near college campuses on an online map. It then shows how close those apartments are to bars, restaurants and grocery stores.
The company, which launched last month, also offers a business directory and a roommate finder service.
In his presentation, Lee noted that 13 million students live off campus, representing a $23 billion market that turns over every year. Furthermore, he said the market is highly fragmented with the big three apartment owners representing about five percent of the market.
I've written a lot about local search around targeted communities, a trend that Spottago is definitely hitting on. Lee told me that the service is especially attractive to advertisers since the vast majority of users live within a few miles of local businesses. That means a pizza shop could offer a coupon on the site and get higher click through rates, he said.
It is often said that a democracy only works if the citizens are well informed.
Ameritocracy.com is hoping that it can do its part to keep the wheels of democracy moving. The Seattle startup is developing a new online service that allows readers to rate the credibility and relevance of political news stories and politicians' comments.
Though still a month or so away from launch, the site has already been mentioned in the gossip pages of The New York Post. That's because of the Kennedy connection.
Robert Kennedy III -- the grandson of Bobby Kennedy -- is among the five employees working to promote and develop the new service.
Kennedy is a good friend of founder of Porter Bayne, a 28-year-old Seattle software developer who came up with the concept for Ameritocracy during the last presidential election.
"I was getting really concerned of the impact of misinformation," said Bayne. "I was shocked to see that perfectly intelligent people that I would hop into a debate with were basically repeating back to me hook, line and sinker quotes and factoids straight from the Bush campaign and the Kerry campaign."
Bayne started tinkering with ways by which readers could rate or promote political news content, a concept that also drives services such as Digg, Reddit and Newsvine.
While other services aggregate news content from readers, allowing them to vote on whether a story is compelling or not, Bayne said his company has a slightly different approach. For political coverage, Bayne said a binary rating system like the one at Digg creates problems because it encourages a "homogeneous community."
"Two thousand people might vote up and 2,000 people might vote down, and it looks like that content is flat-lining or that is not interesting to the community, when in actuality it is controversial and it is very interesting," he said.
The Ameritocracy site allows readers to vote on whether an issue or a political candidate's statement is relevant or not. For example, the community could vote on whether Jeremiah Wright's comments are relevant to Barack Obama's campaign.
It's been a little busy around here the past couple of days with Clearwire's merger and RealNetworks' decision to spin off its games business into a separate company.
Because of those two breaking stories, I've missed some of the smaller tidbits. Here's a quick look:
RealNetworks is spinning off its games business into a separate company, with the possibility of an initial public offering.
The games business was the second-biggest revenue generator for RealNetworks during the first quarter, with $31.8 million in sales. Last year, the games business grew 26 percent and accounted for $108.5 million in sales.
"RealNetworks was a pioneer and has been a leader in the casual games industry since we introduced RealArcade in 2001," said RealNetworks Chief Executive Rob Glaser in a news release. "We believe that spinning off our casual games business will give it the best opportunity to continue to flourish and lead."
The release does not say what the new company will be called, but a frequently asked questions sheet indicates that it most likely will be located in Seattle.
RealNetworks plans to make a decision about the spinoff and potential IPO by the end of the year, with the company writing that a separate company could more easily attract talent.
The company anticipates that spinning off its casual games business will result in two more flexible and focused companies. In addition, the separation will provide the games business an industry-specific currency for future acquisitions and enhance its ability to attract and retain the best talent in the industry.
Real also announced its first-quarter results, reporting revenue of $147.6 million and net income of $2.4 million.
RealNetworks has used some of its cash from the Microsoft antitrust settlement to invest heavily in games.
Here's a look at the acquisitions with links to the press releases:
2008:
2007
2006
2005
2004
UPDATE: I just chatted with FlowPlay's Derrick Morton, a former executive in RealNetworks' games business. He told me that a games spin off was a common topic of conversation among employees when he worked there.
At times, he said employees in the games business felt like they "were fighting a losing battle" because their fortunes were tied to less profitable and slower growing products.
"Certainly, among the staff there was always this what if scenario. What if we got spun off or there was a tracking stock or something so that the results of our activity and the success we are having was actually rewarded in some way," said Morton, the former general manager of mobile games at RealNetworks. "I definitely think it is a great move, for the games guys and for RealNetworks too."
In many ways, Morton said that RealNetworks may be more valuable broken up. And he noted that RealNetworks may want to spin off its Rhapsody online music business as well.
"If you valued the individual pieces, you probably would come up with a greater valuation than the whole company itself put together," he said.
RealNetworks senior vice president Harold Zeitz tells P-I reporter Dan Richman that the company would do what was in the best interest of shareholders, but there's no plan at this time to shed additional business units.
Cory Bergman is leaving KING-TV and KING5.com after seven years to join MSNBC.com as director of business development.
At KING, Bergman was instrumental in starting the Citizen Rain aggregator of Seattle blogs. He also is the gatekeeper of the popular Lost Remote blog, which he says will continue.
"In recent months, I've come to believe that the media industry needs business innovation as much or more than it needs content innovation. As a geek journalist with an MBA, that's why I've decided to make the shift to the business side of the online media world," writes Bergman in a blog post.
Clearwire Chief Executive Ben Wolff will have his hands full as he attempts to build out the country's first nationwide WiMax network by 2010, an undertaking he admits is "ambitious." But the 39-year-old executive got a big boost -- some may call it a reprieve -- when Google, Comcast, Intel and others yesterday announced plans to pump $3.2 billion into a new Clearwire that also includes the assets of Sprint Nextel's WiMax assets. (The stock is taking a beating today).
Clearwire's Ben Wolff
I interviewed Wolff yesterday afternoon about the complexities of the deal, the involvement of Clearwire founder Craig McCaw and the role that Seattle will play in the new Clearwire.
Some of his comments appeared in my story today, but I wanted to share a few more details.
"It actually started before Dan Hesse came on board. You may recall when we announced the termination of the letter-of-intent last fall, what I said and Sprint said at the time was that we were terminating the letter-of-intent but the discussions were ongoing. I don't think anybody believed us, but that was the truth. We knew we were no longer going to pursue the joint build transaction, so we had an obligation to our public shareholders to disclose that. But really what was going on at that time was we were morphing the discussions into a transaction that related to combining the assets of the companies, but of course that was premature to disclose at the time."
"We had concluded late last year that it made sense to bring the Sprint and Clearwire assets together. There was all kind of industrial logic associated with that. Then we set out to say that the business would benefit from having additional strategic partners as well as investors, whether that was going to be one additional party or five really was not lined out in terms of hard decisions. It was just kind of the way the discussions evolved and where we ended up. I would say there were a whole variety of players that were potential partners for us and we are obviously very pleased with the partners we ended up with."
"Craig was very involved. Craig and I spoke on a daily basis and Craig had some dialogue with other key partners that have come to the table. This is a deal that Craig and I worked arm-in-arm on.... But I would clarify one thing. I don't think that either Craig or I aspire to have complex deals. (Laughs) Certainly, complexity is the enemy of getting deals done, but sometimes it is necessary."
"Certainly, Clearwire could have continued to move its business on its own, which has been the path we have been on all along. But there are some tremendous benefits from getting this transaction done that in my view add real upside to our business opportunities. You know, not the least of which is the ability to combine Sprint's Clearwire's spectrum in one company. The spectrum that we use and Sprint uses looks a little bit like jigsaw puzzle pieces. And neither of us had a complete nationwide network. The opportunity to pursue a nationwide plan where people can roam from one market to the next on a single unified network has a tremendous amount of appeal and business opportunity upside for us."
"There is no doubt it is ambitious. No doubt about it. And what we stated today is what our aspirations are. But having said that, realize that we have rolled out 50 markets using a technology that is very similar to WiMax. We have more than 400,000 customers and we have more than three years of experience building wireless broadband networks. This is not like we just kind of fell off the truck and said: 'Oh boy, let's go do something new.' There is a lot of history here, coupled with the fact that a lot of our team at Clearwire have built wireless networks for more than a decade."
Shares of Kirkland-based Clearwire fell more than 12 percent in heavy trading today and are now off about nine percent, a sign that investors don't like everything they see in the merger with Sprint Nextel's WiMax assets.
The stock, now trading at $14.70 and hitting a low of $13.81, took a hit after research analysts questioned the $14.5 billion valuation of the new company.
"Being a start-up using evolving technology with an unproven model, we believe a $14.5 billion valuation for the company is too high," UBS analyst John Hodulik said in a research note reported by Reuters.
Meanwhile, Bloomberg News reports that Citigroup analyst Michael Rollins put a sell rating on Clearwire's stock.
"The business model still faces operating and financial hurdles at an early stage of its buildout. The same challenges remain for the combined businesses with respect to a coverage plan that reaches less than half of the U.S. population by 2010.''
Isilon Systems, the Seattle digital storage company, posted a 35 percent increase in revenue during the first quarter as sales increased to $24.1 million.
But the net loss also grew, with the company losing $10.1 million during the quarter. That compares to a net loss of $6.9 million for the same period last year.
"I am encouraged by these results as we emerge from the challenges of the past few quarters," said Chief Executive Sujal Patel in a statement. "Despite recent business headwinds and a seasonally slower first quarter, we witnessed record levels of repeat purchases from existing customers, reflecting Isilon's strong value proposition and the modular, 'pay as you grow,' architecture of our clustered storage systems."
Clearwire and Sprint Nextel are joining forces to create a nationwide broadband wireless network, a highly anticipated combination backed with $3.2 billion from Intel Corporation, Google, Comcast, Time Warner Cable and Bright House Networks. John's Stanton's Trilogy Equity Partners also is expected to invest $10 million.
Sprint Nextel's Dan Hesse
The $14.5 billion deal, first reported by The Wall Street Journal, comes less than seven months after Sprint Nextel and Clearwire called off a planned partnership. But much has changed in that period, including the appointment of former AT&T Wireless Chief Executive Dan Hesse as the CEO of Sprint Nextel.
The company, which will retain the Clearwire name and Kirkland headquarters, is expected to trade on the Nasdaq under the ticker "CLWR." Target price for the new company is $20 per share.
Craig McCaw will serve as nonexecutive chairman, with current Clearwire Chief Executive Benjamin Wolff retaining the CEO slot. Sprint Chief Technology Officer Barry West will hold the title of president.
The board eventually will include 13 members, with Sprint's Dan Hesse, Comcast Chief Executive Brian Roberts; Time Warner Cable's Glenn Britt and Trilogy's Stanton expected to serve. Meanwhile, Sprint will have the ability to appoint seven directors, while the strategic investors may appoint four. McCaw's Eagle River investment arm may appoint one board member under the current structure.
Here's what some of the players are saying in the press release:
McCaw:
"We believe that the new Clearwire will operate one of the fastest and most capable broadband wireless networks ever conceived, giving us the opportunity to return the U.S. to a leadership position in the global wireless industry."
Intel Chief Executive Paul Otellini:
"This agreement is a historic step forward for WiMAX as it represents the first nationwide deployment of a next-generation mobile broadband Internet in the U.S."
Google Chief Executive Eric Schmidt:
"Google is a firm believer in supporting new ways for people to access the Internet."
Comcast's Roberts:
"This transaction is attractive to us strategically and financially and puts in place very attractive wholesale relationships for access to Sprint's existing 3G and Clearwire's 4G networks, giving us complete flexibility to introduce wireless mobility in terms of product innovation and deployment."
The companies plan to have the new wireless network covering between 120 million and 140 million people in the U.S. by 2010, with Sprint transferring equipment and intellectual property to Clearwire. But even with the heavy hitters lining up behind the new entity, Clearwire will need to raise approximately $2.3 billion more in order to reach coverage goals, according to Bloomberg.
Research analyst Michael Nelson tells Bloomberg News that the deal is "positive for Sprint, but potentially transformational for Clearwire.''
Shares of Clearwire, which opened at $17.77, are trading at about $16.35. About 8.5 million shares have changed hands about eight times the average volume.
More to come.
Here are a few headlines from around the Web:
UPDATE 11:15 a.m.: McAdams Wright Ragen analyst Sid Parakh notes in a report that the joint venture is a "boost for Clearwire's long-term prospects" because it eliminates financing and spectrum hurdles in the race to build a national wireless network. More from Parakh, who has a buy rating on Clearwire stock and a revised price target of $20 per share
Overall, we believe that Clearwire has the potential to become a significant competitor to large established telecom companies given an apparent time-to-market advantage for its 4G services. However, we note that this advantage will diminish rapidly if the deal does not close on time.
Meanwhile, the stock has bounced back a bit from earlier this morning, now trading at $16.95. Share volume has surpassed 10 million.
UPDATE 12:30 p.m.: The new Clearwire will be based in Kirkland, which means the Seattle area will maintain a rich history of wireless innovation. That's good news, said Madrona Venture Group's Tom Alberg, a former executive vice president at McCaw.
"Clearwire is going to be a very significant wireless company on the cutting edge of wireless technologies and it will be a real plus for the local economy and the technology community. It continues our tradition as a leading center of wireless companies that began with McCaw Cellular and continued with Western Wireless, VoiceStream and Nextel. The Seattle area tech community has benefited enormously with lots of talented employees who have launched, financed and worked with numerous local wireless technology startups. "
UPDATE 1:30 p.m.: I just finished listening to the replay of the conference call, which featured Ben Wolff of Clearwire and Dan Hesse of Sprint Nextel.
The executives spent a good portion of their time touting the strength of the high-speed WiMax network that they plan to build. While critics have noted that the technology is unproven, Wolff said that "WiMax is real and it is here now."
"The new Clearwire will have a substantial time to market advantage over others in the industry who only recently acquired the basic building blocks, spectrum, for a 4G network," said Hesse. He added that the new company will have "an enviable depth of spectrum" -- the largest in the country -- which it will use to roll out new services faster and at a lower cost than competitors.
Wolff reiterated that point, saying the goal of the company is to deliver four times the performance at one tenth the cost of other legacy wireless networks. He says that the new network will be one of "the fastest and most capable wireless networks ever conceived."
That means people will have the ability to download songs or participate in live video conferences on the go, he said.
As part of the deal, Clearwire will be able to utilize the cell towers from Sprint at below market rates. Sprint, which will own between 49 to 53 percent of the company, also is contributing assets related to spectrum and the Xohm technology. Those are valued at $7.4 billion.
Meanwhile, Wolff said that the supervoting shares that Intel and McCaw currently hold in Clearwire will be converted into class A shares in the new company. The deal will be put to the Clearwire shareholders in the next few months.
Wolff noted that the company may have to raise between $2 billion to $2.3 billion in new capital in order to reach cash flow positive, though he added that capital requirements could be less if the company slowed the network roll out.
"Because of the significant additional assets that we will have following closing, including three times as much spectrum as Clearwire currently holds, we believe we should be able to opportunistically access debt financing to meet some or all of the future funding requirements," he said.
And he didn't rule out the possibility of Clearwire raising more money prior to the closing of the transaction.
UPDATE 1:45 p.m.: The Associated Press notes that the new joint venture could radically change the way wireless carriers sell phones and service plans. From the AP's Peter Svensson:
Right now, when you buy a Sprint phone, you use it on the Sprint network, and Sprint picks the applications, like TV services, that come with the phone.
Sprint has indicated the new network will be run on an "open access" basis, where anyone with a compatible device can connect it.
If everything works well, this could lead to a proliferation of cell phones, Web tablets, computers, TV set-top boxes, GPS devices and gadgets we haven't even dreamt of. Manufacturers will be free to make gadgets that can ride on the network, without striking a deal with the carrier first.
Rather than buying a cell phone with a monthly minute plan, you could be buying a device that gives you unlimited use of voice-over-Internet services like eBay Inc.'s Skype.
UPDATE 6:15 p.m.: Here's my full story, which includes portions of an interview with Clearwire Chief Executive Ben Wolff in which he described the complex nature of the deal.
"I've done transactions for most of my career, and normally people swear off doing three-way deals because they can get so complicated. A seven-way deal is exponentially more complicated."
I also interviewed O. Casey Corr, author of "Money From Thin Air," which details McCaw's role in helping to create the wireless industry. Corr said the latest Clearwire deal is vintage Craig McCaw.
"It has all the earmarks of a Craig McCaw deal. It is first, stunning. It is gaining the attention of the entire industry. It is very big, complex and -- most of all -- creative."
If Clearwire and Sprint Nextel ink a $12 billion joint venture -- as was reported earlier today by The Wall Street Journal -- there will be some interesting plot lines that run deep in the Seattle wireless industry.
Craig McCaw
It is well known that Clearwire is based in Kirkland, started by wireless pioneer Craig McCaw.
But Sprint Nextel has some interesting Seattle connections as well. Its recently-appointed CEO is Dan Hesse, who before being tapped for the top job at the Overland Park, Kansas-based telecommunications giant spent time in Redmond as CEO of Terabeam and AT&T Wireless.
Of course, there should be some level of familiarity between the two executives. After all, McCaw sold his cellular company to AT&T in 1993 for about $12 billion. (Interestingly, that's rougly the same value that the Journal is placing on the new Clearwire joint venture.)
Hesse then joined the company, rebranded as AT&T Wireless, as chief executive in 1997.
It will be interesting to see if these two titans of the wireless industry can deliver on the promise of a broadband wireless network, something they both have been kicking around for more than a decade.
Meanwhile, Tricia Duryee of MocoNews asks if there may be too many cooks in the kitchen with this joint venture. After all, the power players involved not only include McCaw and Hesse, but Google's Eric Schmidt and Comcast's Brian Roberts.
UPDATE: The New York Times also points out that the consortium of companies -- while powerful -- could make the joint venture difficult to manage since each has different needs.
But it was the last line in the story that caught my eye. In addition to the big name investors already reported by the The Wall Street Journal, Seattle area venture capital firm Trilogy Equity Partners plans to invest $10 million, according to The Times.
Trilogy is the venture capital firm of former VoiceStream Wireless and Western Wireless Chief Executive John Stanton, which adds yet another titan of the Seattle wireless scene to the syndicate.
It will be interesting to see who sits on the board of the joint venture.
Maybe we will find that out tomorrow since it looks like an announcement is coming. I have a call into Clearwire, but haven't heard anything at this point.
Jack Faris plans to resign as president of the Washington Biotechnology and Biomedical Association after a little more than three years on the job.
P-I reporter Joe Tartakoff has the news and the resignation letter in which Faris says he wants to spend more time with his family.
The WBBA is the largest trade group representing biotechnology and life science companies in the state.
The Bellevue online retailer of health and beauty products also announced that Chief Financial Officer There du Pont plans to resign to run a private foundation.
The company also named Marc Stolzman as chief financial officer. He previously held that role at Imperium Renewables, which postponed plans for an initial public offering earlier this year. Before Imperium, Stolzman held executive finance positions at Starbucks.
The on again, off again talks between Sprint Nextel and Clearwire appear to be heating up with The Wall Street Journal reporting that a deal could be announced as soon as tomorrow.
According to the story, Comcast, Intel, Time Warner Cable, Google and others have agreed to invest $3.2 billion in a new joint venture between the two companies that will operate under the Clearwire name. The value of the company will be more than $12 billion.
As part of the deal, the Journal reports that Sprint will merge its high-speed wireless unit with Clearwire in a deal that has already been approved by investors.
More from the story, which notes that the newly-merged company will continue to be run by Clearwire Chariman Craig McCaw and CEO Ben Wolff, while Sprint will hold a majority stake.
Negotiating the transaction was hugely complex. Titans of media and technology – Comcast Chief Executive Brian Roberts, Google CEO Eric Schmitt, and Mr. McCaw – had to agree on everything from pricing and marketing strategy to the fair valuation of the huge swath of radio spectrum licenses controlled by Sprint and Clearwire.
Clearwire's stock is up about seven percent in after hours trading.
There's been a lot of specualtion about a deal between Sprint and Clearwire merging their high-speed wireless networks over the past few months. If anyone has more details, please e-mail me at johncook@seattlepi.com.
Facing a tough real estate climate, Kirkland-based HouseValues continues to lose money.
The company's net loss for the first quarter was $1.2 million, down from the $9.8 million it lost in the fourth quarter due in part to one time charges. Revenue dropped eight percent to $11.2 million.
"Despite a severe deterioration of the housing market in the first quarter, HouseValues made important progress towards the company's strategic objectives, while at the same time reducing shares outstanding and strengthening our cash position," said chief executive Ian Morris in a statement.
It finished the quarter with $63 million in cash, which is just above the $58 million market value.
I am jumping on the conference call right now to get more details.
(Note: Post has been corrected to reflect accurate cash position and market value)
There were a few changes in the top 10 of Marcelo Calbucci's monthly startup index, partly because Alexa changed they way it calculates rankings.
Most notable is that PayScale and Faves moved up while, SEOMoz and Picnik tumbled. Zillow maintained its top ranking, though iLike was displaced for second by Robot Co-op's 43 Things. (As Calbucci and I've noted in the past, these results need to be taken with a grain of salt since the measurement tools -- Alexa and Compete -- have flaws.)
Here's a look at the full list for April and a look back at the March index for comparison sake.
Looking to help startup companies add talented developers, sales professionals and other staffers at a low cash cost is the goal of a new entity being announced today by Atlas Accelerator.
The Bellevue consulting firm, which provides outsourced development, sales and financial support to startup companies, now will offer recruiting services to companies as part of an alliance with Athena Chiefs founder Tom Ryan.
The new entity, which will be led by Ryan and operate as a sister company to Atlas, will be called Atlas Recruiting.
The goal, according to Atlas managing partner Brant Williams, is to help cash-strapped companies find the talent they need in a way that doesn't "kill the currency they have."
Atlas typically fills temporary staffing roles at startup companies. But after time, it needs to hand off those positions to permanent workers. In the past, those transitions have consumed time and money -- two precious elements of a startup.
I've written before about the differences between women and men when it comes to entrepreneurial ventures. And I've noted how few venture-backed companies are run by women.
Looking to help women bridge the entrepreneurial gap, Microsoft this Friday will host "Vision to Venture" at its campus in Redmond. It is part of a five-city tour that the company's Office Live Small Business unit has been touting in an effort to provide women with the tips needed to start new businesses.
More than 300 people have signed up for the event, which costs $59. A free webcast also will be offered of the event on the "Vision to Venture" Web site.
The winners of the 12th annual Webby Awards were announced today, with comedian Stephen Colbert named the "Webby Person of the Year." A few Seattle companies were picked, not a surprise since there are nearly 70 categories.
Odd ball Web site I Can Has Cheezburger? won the People's Voice Award in the humor category. It also was tapped as a fan favorite in my favorite category: "weird."
Meanwhile, Zillow won the Webby in the real estate category, with San Francisco competitor Trulia receiving the People's Voice Award. It was the same type of split in travel, with Seattle's Farecast -- now a part of Microsoft -- winning the Webby and competitor Kayak.com getting tapped by the community.
An awards ceremony will be held June 10 in New York City, with winners limited to five-word acceptance speeches.
I hope that applies to the People's Voice winners since it will be an absolute kick to see what the I Can Has Cheezburger? folks come up with.
UPDATE: Looks like I missed one other Seattle startup that will be taking the trip to New York. Wetpaint, the Seattle wiki creator, won the Webby in the telecommunications category for the Sidekick Wiki it created for T-Mobile.
For years, companies have been trying to come up with ways to make it easier for older Americans to use computers and access the Internet. (Anyone remember Bellevue's Sageport?)
Now, a Seattle company led by former Amazon.com executive Cayce Roy is jumping into the mix.
BigScreenLive today is introducing a new Internet service tailored to those over the age of 60, including larger fonts, easy-to-use photo sharing and spam filters. It plans to charge $9.95 per month for those who sign up for 12 months, with a six month package available for $49.95 through the company and Amazon.com.
In an interview last fall, Roy said he was attracted to the product because it offers "a dramatic impact" in improving the quality of life of seniors.
"It was clear that the team here was thinking about it in the right way," said Roy, who joined the company last year after seven years at Amazon.com. The startup now employs fewer than 10 people.
Boston-based Eons, an online network for Baby Boomers, appears to be going after a slightly younger demographic than BigScreenLive, which is targeting community centers, retirement facilities and other places where senior citizens gather. (The New York Times covers some of the other players in the market in a story last fall.) BigScreenLive has already tested the service at a Seattle-area independent-living center.
Venture capital investments in the cleantech sector have increased by nearly 10 times in the past five years, with the biggest areas of growth coming in solar and wind power technologies.
Just over $2.1 billion was invested last year, which compares to $1.4 billion in 2006 and $224 million in 2003, according to a report from PricewaterhouseCoopers. And 80 percent of venture capitalists surveyed by the National Venture Capital Association say the industry will likely grow further in 2008, though another 61 percent think the sector is overvalued. The report notes:
Despite signs of a weakening economy, the credit squeeze, and volatile public markets, investment in the sector is expected to persist, priming significant exit activity by 2009 and throughout 2010, then accelerating as more companies graduate through a well-fed pipeline. Investment in 2008 will likely continue to flow into wind and solar and channel out to an increasingly diverse range of sub-sectors, including next-generation biofuels and energy storage technologies.
UPDATE: I just received a copy of the cleantech venture investments in Washington state. There's been more than a seven fold increase in the past five years, with 12 deals received $129 million in 2007. More in this chart from PricewaterhouseCoopers and the National Venture Capital Association.
Phillip Sabin, the former vice president of finance at Revenue Science and a co-founder of Internet startup Sweat365, has joined vcfo as a senior associate/CFO.
Since Jerry McGuire opened the Seattle office last year, vcfo has been growing fast. The firm, which now employs eight people, provides financial and accounting services to startup companies.
It also recently named Lora Gates, formerly of Aventail, Western Wireless and Enfisys, and John Edwards, formerly the controller at Demand Media, to the positions of associates/controllers.
One big tech acquisition has already fallen apart in the Seattle tech industry. But another may be on the horizon.
Reports in the German magazine Der Spiegel indicate that Deutsche Telekom's T-Mobile -- whose U.S. unit is located in Bellevue -- is considering a buyout of Sprint Nextel.
TheStreet.com notes that a newly merged company would have three wireless network technologies -- iDen, CDMA and GSM.
A merger also could have an impact on Kirkland wireless broadband company Clearwire, which has been in talks with Sprint Nextel.
John L. Scott Real Estate continues to invest in its technology offerings, with the 77-real-estate brokerage firm announcing today that it has acquired Real Tech.
For the past five years, Real Tech has provided some of the new services for John L. Scott's Web site. Those include integration with Microsoft Virtual Earth and the Neighborhood Wizard technology that allows home buyers to set geographic boundaries on a map to see listings.
Real Tech's nine employees will operate within the company's marketing and eStrategies unit.
"John L Scott has a serious commitment to delivering cutting-edge technology solutions to their agents and the real estate consumer. Combined with Real Tech's expertise, this enhanced partnership will fuel the next generation of products and services, continuing our role as technology leaders in the real estate industry," said Real Tech General Manager Adam Jundt in a statement.
P-I reporter Todd Bishop has been covering the Microsoft-Yahoo saga on his blog, with a time line of events, Steve Ballmer's letter to employees and other interesting tidbits.
But his story for tomorrow's paper asks the all important question of what's next now that the deal is off the table.
One thought: Microsoft will gobble up smaller Internet players. That's gotta to be music to the ears of entrepreneurs and venture capitalists, many of whom who would be more than willing to have the $44 billion that Microsoft had planned to spend on Yahoo spread around to 20, 30 or 40 companies.
In his e-mail to employees, Ballmer even alluded to the possibility of new partnerships and investments.
And Microsoft has shown its willingness to make these smaller purchases, most recently the $115 million deal for Seattle online travel startup Farecast.
Just for some perspective. Microsoft could buy the equivalent of nearly 400 Farecasts with the money it saved on the Yahoo deal.
So who might Microsoft pursue?
Bishop's story notes AOL, MySpace and Facebook, while VentureBeat tosses out names such as Twitter, Digg and Meebo.
Of course, it will all depend on where Microsoft plans to put its energy -- trying to dethrone Google in online search or holding onto its lead in business applications.
Microsoft could try to do both, though focus is absolutely key in any business.
Having spent three days at the local search and advertising conference last week, I could see Microsoft spending some time to crack that nut. (Seattle companies such as Marchex and AdReady play in that arena)
Delivering business applications over the Web is a natural place for Microsoft to expand, so collaboration tools (Smartsheet.com's Brent Frei is quoted in Bishop's story) or email services. (The Xobni rumors may finally come true.)
What about LinkedIn? Or Salesforce.com? Or a smaller Salesforce competitor such as Seattle's Entellium?
Really, there are all sorts of possible combinations out there. One good place to look for clues is Microsoft's Startup Accelerator program, where it lists about 40 startups that it is working with.
Who do you think Microsoft will try to buy?
P-I environmental reporter Lisa Stiffler has an in-depth story on the food versus fuel debate, asking entrepreneurs, researchers, farmers and policy makers the question: How green are biofuels?
The story also discusses some of the advances in using algae to produce biofuels, with Kelly Ogilvie of Seattle's Blue Marble Energy describing their system for converting sewage into energy.
Imperium Renewables Chief Executive John Plaza and Targeted Growth's Tom Todaro addressed the food versus fuel issue at a conference last month in Bellevue. Said Todaro, whose company is attempting to increase crop yields for biofuel production:
"The food versus fuel debate will go on, but the simplest solution is to relieve the pressure by growing more food or more fuel on a given acre. If you can increase soybeans from 50 bushels an acre to 60 bushels an acre on 200 million acres, that's a lot more soybeans."
Chris Shipley, the face behind the startup launchpad DEMO, sat down with me at The Triple Door last night to talk about the Seattle tech market, trends in technology and the recent dust up with TechCrunch. (For those who missed the drama, TechCrunch50 and DEMO will hold their conferences on overlapping dates this fall.)
"It makes a lot of sense. There is this great genealogy if you think about it, coming out of Microsoft and other firms and if you dial the wayback machine way back to Microrim and some of these types of companies. People who are entrepreneurs have to go create things. And if you are inside a big company like Microsoft you may be able to do something like that on some product basis, but large companies have to serve entrenched customer bases. And to really break away and do something new often means leaving and starting it."
"(Google) is kind of this new monster. In a lot of ways, in this economy ... Google has far more influence and power over who will or won't be successful, then I think Microsoft ever did.... Google is the new Microsoft in that regard, the new bogey man. I don't think the change is just because there is a new bad guy in town. Microsoft has put a tremendous amount of effort in Silicon Valley."
"I have no feud with TechCrunch. It was a big kerfuffle. As I said at the outset, I don't think it is good for entreprenuers to have a split audience. But I think they are really different events. I think TechCrunch is about saying, 'here are a handful of companies that may or may not have been well screened by our committee, but take a look at them and here is a small army of others that have come to show their wares....' If you are shopping for a company to flip or an early investment, particularly in the Web 2.0 space, it probably makes a lot of sense.
DEMO is about launching products that by our estimation have the opportunity to be really significant, really game changing in the marketplace... Our ambition with DEMO is to get those products and those companies closer to customers, not necessarily to get them closer to the buzz of Silicon Valley.
I think they are different, they are for different stages of companies.... They should be able to peacefully co-exist in my way of thinking, but apparently not by everyone's way of thinking."
"That charge is leveled as if we held these young companies at gunpoint and we are taking food from their children's mouths.In fact, we work really hard with companies that we think ought to be at DEMO to help them find sources of funding in advance of the event so that they actually are ready --not just to pay our fee -- but to put the investment into going to market. You can build a very capital efficient company today on a Visa card credit limit.
It's a much harder thing to build a sustainable company that way. In some ways, that fee and the ability to pay it says you are in a position now to actually do right by your customers. You've got the resources to do that. Over the years I have done the event, I can think of one person in 12 years who said 'I don't think I got my full measure.'"
Traditional media companies that refuse to invest in the Internet and withdraw into old business models are destined to fade away, opening the door for entrepreneurs to take advantage of the lack of innovation.
That was the message from Merrill Brown, a media consultant and former editor in chief of MSNBC.com who was speaking this morning at the Drilling Down on Local conference in Seattle.
Brown said that there are some examples of media companies -- citing Seattle's Fisher Communications' recent purchase of Pegasus News -- that are thinking creatively about the Internet. But he said the "macro trend" does not point to much innovation coming from traditional media.
Brown is especially skeptical about television, saying the business models for the big networks and their affiliates will make it difficult to make the transition. "For my money, they are treading water," he said.
Brown also addressed the failure of the hyperlocal news site Backfence.com, saying the stock options he holds as a former board member are worth less than a glass of water.
One of the big reasons why the startup failed is that it did not offer "self service" advertising tools that made it super easy for local companies to create and deploy ads. Instead, he said Backfence had to rely on a pre-1999 business model of sending a sales force door-to-door in the local communities that it served.
But that concept is fading away, partly because a number of companies are working on the problem. (That's right in the sweet spot of Seattle companies such as AdReady and Mixpo.)
Brown also said that media will continue to be sliced and diced in different ways, noting that there are still plenty of opportunities to create new media niches. "We've only seen the tip of the iceberg," he said.
What does that mean for old media?
Brown said he has been involved in some recent discussions where media companies are asking large endowments for support, with the idea that the old media brands should be propped up as part of the public trust.
Brown doesn't think that will work, saying that failing businesses should be allowed to fail.
DEMO organizer Chris Shipley was in town today searching for the next great Seattle startup. Shipley -- whose DEMO conferences are among the premier launchpads for new technologies -- met with eight Seattle startups throughout the day. (More on her thoughts, including the TechCrunch rivalry in a later post.)
The day ended with a cocktail hour at The Triple Door, where the wine and beer were flowing as Seattle's technology crowd blew off some steam. Here's who I encountered:
Napera co-founder Todd Hooper, just back from the Interop conference in Las Vegas, spoke in his Australian accent about the lack of venture capital in his homeland. There was also some chatter between Hooper and Blist founder Kevin Merritt about a new Web site, i-booze.com, that made some waves on the Seattle Tech Startups forum. (Is it for real?)
LiquidPlanner's Charles Seybold and Bruce Henry -- fresh off the last DEMO (which I chronicled in this series) -- made an appearance. Henry -- holding an over-sized Martini glass -- touted the marketing benefits of the DEMO conference, saying it was well worth the $18,000 entry fee. (He later gave some advice to a possible future presenter, noting that the event was valuable in that it forced the company to impose a strict deadline on the product release).
Venture capitalist Jon Staenberg -- wearing a DEMO ball cap -- was there touting some of the Malbec wines that he is producing in Argentina.
Yannis Dosios, director of marketing at Smilebox, carved out some time to mingle after celebrating the recent birth of his first son. Isn't that the the type of special occasion that warrants an e-greeting through Smilebox? I am sure he's already thought of that.
RescueTime's Brian Fioca and Tony Wright were chatting about their three month adventure at Y Combinator's startup boot camp in San Francisco. The RescueTime team decided to return to Seattle even though Fioca said the Y Combinator folks "put the screws to us" to do the startup in the Bay Area, Fioca said. Just one problem with that. Fioca and other team members have spouses in Seattle.
I got a kick out of chatting with Lilipip founder Ksenia Oustiougova, a Russian born entrepreneur who discussed some of the cultural issues of living in the U.S. and trying to start a new company. Her beef? Why are people so quiet about raising capital? I agree. Feel free to share all of your tips here (johncook@seattlepi.com)
Braincandy co-founder Sam Reich-Dagnen discussed some of the ways that she is thinking about expanding her early education offerings for pre-schoolers to the Internet. I asked if we could see the first social network for 2-year-olds?
A scary thought, according to new father and Smilebox exec Dosios. But I noted that it could generate a lot of press, to which Reich-Dagnen wisely noted, "bad press."
Sampa's Marcelo Calbucci, Redfin's Glenn Kelman, the UW's Oren Etzioni, ActiveRain's Jonathan Washburn and Madrona Venture Group's Tom Alberg are among the Seattle tech leaders featured in a story in Seattle magazine dubbed "Web 2.0 or Bust."
Author Douglas Gantenbein provides a good overview of the opportunities and challenges facing the new breed of Internet companies, with UW professor Suresh Kotha predicting that another dot com bust is on the horizon.
"I just don't see how some of these companies are going to make any money," Kotha tells the magazine.
The story ends with Sampa's Calbucci saying that he can always go back to Microsoft if things don't work out.