Tag Archives: acquisitions

SourceCast: Episode 57: Start Up, Sell Out

It took a few weeks, but 2017 is officially in business thanks to several IT acquisition announcements. Are these purchases part of a trend and giving hints at a larger picture? Or is it just more of the same?

Photo: Rubén Bagüés

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SourceCast: Episode 33: Showing the Value

sn_money_Andrew Pons

This week we discuss Verizon’s acquisition of Yahoo for $4.8B… and we wonder where is the value?

Update: I totally called it in this podcast, Tumblr is now adding ads to their pages to generate revenue.  I am curious if the user population will revolt.
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Photo: Andrew Pons

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Supplier Alert: Verizon will purchase Yahoo for $4.8B

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News on the street is that Verizon may purchase Yahoo’s core internet this Tuesday.

Update: Verizon has officially announced they will purchase Yahoo for $4.83B.

Verizon already bought a company that your grandparents probably use for email… AOL. So what is appealing about Yahoo at this point for Verizon?

Reportedly, the offers that have come in have been between $3 billion and $5 billion for a range of assets that include not only the search and media businesses, but real estate and IP. Yahoo’s “Excalibur” patent portfolio contains 2,600 technical patents and Yahoo optimistically values it at upwards of $1 billion.

But after months of small movements in this saga, and years of steady decline at Yahoo, in a way, it’s not at all a surprise to hear that Verizon may end up getting Yahoo at the end of it.

Speaking of AOL, Verizon didn’t buy them for their still profitable dial-up business. So what was the appeal of AOL last year?

If Verizon intends to keep expanding, new growth won’t come from adding more customers each quarter or through acquiring a competitor. The company will have to make more money off its existing customers through alternative means, because its traditional avenues for increasing revenue—voice, messaging and data—won’t cut it. Verizon already offers unlimited voice and text plans to most of its customers, and while data usage is increasing, competition is gradually driving down the per-gigabyte prices.

Why is owning AOL and Yahoo a viable direction for Verizon?  Verizon can’t buy another telecom company and fighting the other wireless providers down to the lowest prices isn’t appealing (and they aren’t winning that game anyway).  And how does their cash flow look?

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The company made almost $18B last year and they have enough cash to swing a $3-5B purchase. But is it really a wise investment? Is there anything in those Yahoo patents that is such a game changer from what they already own thanks to AOL?

Verizon is following Comcast’s lead with NBC and buying companies that creates content, so they can make money off of ads however:

Of course, even with AOL and Yahoo assets, Verizon has a long way to go (paywall) to catch up with the online advertising leaders. Verizon with AOL currently holds a mere 1.8% of the $69 billion digital ad market in the US. Yahoo has about 3.4%. Google and Facebook together claim about half of it. Looked at another way, though, there’s plenty of market share to steal, which can’t be said of its traditional business.

What becomes of the rest of Yahoo? The Yahoo we know would be over and there will be a chunk left over that manages the valuable Alibaba asset moving forward. Update on what assets are not being sold:

Yahoo’s stakes in Alibaba and Yahoo Japan aren’t part of the acquisition. These stakes are worth tens of billions of dollars alone. As of Friday July 22nd, Yahoo’s 15 percent stake of Alibaba represented $31.2 billion, and its 34 percent of Yahoo Japan was worth $8.3 billion. Yahoo’s patent portfolio, which is worth around $1 billion, isn’t part of the sale either. Yahoo’s Sunnyvale headquarters are part of the acquisition, a source told TechCrunch.

Photo: Adrianna Calvo

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News You Can Use: 6/22/2016

sn_horses_Isabella Jusková

  • Cable and telecom companies just lost a huge court battle on net neutrality

    The court verdict puts to rest — for now — a key question: Whether the Internet represents a vital communications platform that deserves to be regulated with the same scrutiny as the common networks of the past, such as the telephone system. Writing for the court, Judges David Tatel and Sri Srinivasan held that despite advances in technology, the underlying importance of the Internet to everyday communications and commerce makes it more similar to the phone system than not. Today, for example, consumers are accustomed to using not just the email accounts that their broadband provider gave them, but also using third-party services such as Gmail as well as Netflix, Amazon and Uber.

    https://www.washingtonpost.com/news/the-switch/wp/2016/06/14/the-fcc-just-won-a-sweeping-victory-on-net-neutrality-in-federal-court/

  • What’s going on with IT hiring?

    CompTIA, an industry group, said about 96,000 IT jobs were lost last month across all industries, not just the technology sector. That figure includes the impact of the approximately 37,000 telecommunications jobs sidelined by the Verizon strike, which was settled this month. But it was a rough month, by some estimates.

    Analysts have been generally cautious this year about IT hiring trends. Although the unemployment rate for IT professionals is about half the national average of 4.7%, said CompTIA, some analysts use terms ranging from “modest” to “pre-recession” to describe IT hiring.

    http://www.computerworld.com/article/3080825/it-careers/what-s-going-on-with-it-hiring.html?nsdr=true

  • The Psychology of Solitude: Being Alone Can Maximize Productivity, with Scott Barry Kaufman
  • 4 Steps to Avoid ‘Death by Meeting’

    Whether your meetings are derailed by the shiny object syndrome, or you get stuck in the weeds, the only person who can save you is you! That’s why, when I’m facilitating team events, I make sure that our agendas include business items as well as elements relevant to the team. That way, we weave in learning with business needs, giving team members an opportunity to practice and apply the skills they are learning.

    What often happens, when a team gets stuck in the weeds or off track, is that team members start making eye contact with me: raising an eyebrow, in effect begging me to, “Get us out of here — we are stuck!” It always strikes me that it’s me, the guest facilitator, who is asked to save the day.

    https://www.entrepreneur.com/article/275194

  • Doth thou protest too much?

    Many will applaud this effort to reign in what is seen as an out of control protest process. After all, the protest rate has grown some 45 percent during a period of time that total federal spending has dropped 25 percent. In 2001 there were about 700 individual protests filed with the GAO; in 2015 that number was over 2,500. Interestingly, of those protests on which GAO ultimately ruled, its “sustain rate” had dropped to 12 percent—from 18 percent just a few years earlier and 22 percent in 2001.

    https://washingtontechnology.com/articles/2016/06/03/insights-soloway-bid-protests.aspx

  • How Google killed Nest and why acquisitions fail

    I think the real problem is that when most companies do an acquisition they treat it almost like you and I would buy a car. They focus on the price and closing the deal after becoming interested in the firm’s products and/or services. But you don’t buy people, and a firm without the employees who made it a success is a failure in the making and worth a fraction of its assessed value. Part of the real cost of the acquisition is critical employee retention, and retention packages do a poor job of making people want to stay.

    http://www.cio.com/article/3082033/mergers-acquisitions/how-google-killed-nest-and-why-acquisitions-fail.html

  • Verizon to bid $3B for Yahoo’s core Internet business
    First Verizon buys AOL, and now they are looking into buying Yahoo. Verizon is where all of your old embarrasing email addresses like (mustang_guy_1972_xx@yahoo.com) go to die. 
    http://www.cio.com/article/3080025/verizon-to-bid-3b-for-yahoo-s-core-internet-business.html

Photo: Isabella Jusková

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News You Can Use: 10/28/2015

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  • Millennials: Entitled or Just Ambitious?
    As they come into their own professionally, millennials are shifting corporate culture and the way companies are organized. In this video, Jamie Notter, co-author of “When Millennials Take Over” digs deeply into common millennial values and how they’re changing the ways top companies compete for premium talent. Unlike previous generations, millennials aren’t satisfied with years of “paying their dues” in positions of low responsibility. They want autonomy, transparency, and a sense of mission. Expect to see the tides continue to shift in this direction as the emerging generation takes the reins in the coming decade.
  • Your Best Ally For A Big Data Budget

    Under pressure to provide better information on their businesses, CFOs are beginning to latch onto the possibilities that big data and analytics offer for their own financial reporting. A survey by Ernst & Young found that 90% of the 500 responding CFOs and others with financial titles expect to be reporting on forecasting, sustainability, and corporate social responsibility within three years. That effort will take some investment, and CPOs can perhaps make a case that with their management of the supply chain they can help, if they have the resources.

    http://www.procurementleaders.com/blog/my-blog–paul-teague/your-best-ally-for-a-big-data-budget-575274

  • Why Dell acquisitions strategy beats the industry’s Frankenstein approach

    Dell’s method was developed initially at IBM to preserve the value of the acquisition. It does that by shifting the focus from conformance to focusing on the value of the company acquired. The first step is to identify and protect the assets that were acquired and then not doing anything to damage what was purchased. In general the firms culture, process, compensation plan, span of control, executive team, hiring process, and even location remain intact.

    What gets changed are things that can be done behind the scenes to cut costs and increase execution. For instance, it is common to use Dell’s advanced supply chain to increase the speed of the acquired firm’s execution and reduce its costs. If the change makes financial sense and doesn’t put the identified assets at risk then it is put into the plan, if it doesn’t it isn’t.

    http://www.cio.com/article/2997155/mergers-acquisitions/why-dell-acquisitions-strategy-beats-the-industry-s-frankenstein-approach.html#tk.rss_all

  • How to cure the Sunday night blues
    I am definitely someone who suffers from Sunday night blues and of all their suggestions, this is the one that I deploy to keep it in check…

    While it’s tempting to dash out the door on Friday evening, you might be doing yourself a big favor if you take a bit of time to organize the following week first, O’Brien says. Or, take a few minutes on Saturday morning to plan what will need to be done on Monday, ensure you have the information and resources you need to complete those tasks, and identify any obstacles or challenges so they don’t catch you by surprise.

    http://www.fastcompany.com/3052390/how-to-be-a-success-at-everything/how-to-cure-the-sunday-night-blues

  • CIOs turn to cloud-based analytics to manage IT asset costs
    I want to know more about this Apptio services to see if it is legit…

    LaPlaine says he started off with rudimentary calculations, using Apptio to figure out total IT costs divided by total IT assets. This revealed data duplications in the general ledger, missing lease costs and other bad data. “We spent a ton of time cleaning up data … now we have a very rich model,” LaPlaine says. He counts 25 IT services in AOL’s service catalog, which produce 70 invoices every month to run and support IT services, including public cloud software from Amazon Web Services and Salesforce.com, as well as kilowatt power costs its IT systems generate. LaPlaine, who sends the corporate finance department a file with the costs every month, says he’s also using a new planning tool from Apptio to build his IT budget for 2016

    http://www.cio.com/article/2996559/cloud-computing/cios-turn-to-cloud-based-analytics-to-manage-it-asset-costs.html#tk.rss_all

  • More on Apptio… (from 2009 and not directly published from the company)
    Here is something from the company…
  • Make Your Company More Like a Family to Attract Talent
    This is easier said than done with HR policy and in companies with a downsize requirement.  That being said… I lean more towards this style than not (and did so when I had my store)

    Beyond earning insight into a company’s operating information, employees need to feel like they’re given ample opportunity for personal development and that the company is invested in making that development happen. Sixty-one percent of highly talented managers work to leverage and develop employee strengths and attributes,according to Gallup. I’ve prioritized investments into a leadership development program that teaches basic management skills to current and future managers. Better leaders help motivate and inspire employees. In turn, those new leaders will live up to a company’s values and reinforce its culture.

    http://www.entrepreneur.com/article/249793

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