Finance Geek

Federal regulators want to know if AT&T and Apple worked to together to reject mobile apps for Google’s innovative Voice service, sending letters to the companies asking them to explain this incident and the policies behind the secretive and lucrative iPhone App store.

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Let’s call this what it is: A new bull market in stocks has emerged from the ashes of the financial meltdown and the deep recession that followed. And it’s signaling the onset of economic recovery. Free-market capitalism is more durable, resilient, and self-correcting than its detractors would have us believe.
This is not just a summer rally — although a 12 percent market rise since July 10 is absolutely splendid. There’s a lot more going on here. Over the last five months, since March 9, the broad-based S&P 500 is up 46 percent. If I’m not mistaken, a 20 percent…

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The “recession is over” chatter on Wall Street (and Newsweek’s cover) stands in stark contrast to falling consumer confidence, not to mention the often dire tone on our comments pages.This kind of Wall Street-Main Street disconnect “always

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The purveyor of gourmet foods has retained customers without slashing prices through an effective promotional campaign stressing the ’values’ to be found in its aisles. 

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The Cash for Clunkers program is a hit! It’s sparked so much interest the Obama administration is scrambling to keep the $1 billion program alive. On Friday afternoon, the House of Representatives approved $2 billion to keep the program going; the S

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From The Business Insider, July 31, 2009:Remember the fairy tale about AIG being an otherwise healthy
insurance company that just got a little crazy selling credit default
swaps? Well, it’s time to put that one to rest.

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WATERLOO — In restaurant parlance, Tom Porth has ordered a couple of remodeling jobs to go.

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As you probably saw Amazon acquired shoe e-tailer Zappos last week in a mostly stock deal worth around $900m.  It was a very interesting deal for a number of reasons – the big ticket price, the cash to founders and employees, Zappos’ unique culture, and Amazon’s stated intention to keep the business as a separate stand alone unit – on which there has been more than adequate commentary elsewhere.  I’m instead going to focus on the characteristics of the exit process as revealed in the S4 Zappos filed with the SEC a couple of days ago.

First some time periods:

• Time from company start to deal closed: 10 years
• Time from first Sequoia investment to deal closed: 4 years 9 months
• Time from first Amazon contact to deal closed: 3 years 11 months
• Time from when talks started to heat up to signing of termsheet: 4 months
• Time from signing of termsheet to announcement of the deal (and I assume signature of a sale and purchase agreement): 1 month

The main takeaway here is that Amazon and Zappos have known each other for a long time.  In the majority, and probably vast majority, of big deals this is the case.  When evaluating the exit possibilities for startups it is always tempting to dream about the possibility of a white knight coming in with a knock out offer, and those deals do happen, but the reality is that the acquirer is overwhelmingly likely to be someone you already know well.

There is a good reason for that too – making acquisitions is a risky business, and many, if not most, turn out to be failures, and acquiring a business that you have known for sometime reduces that risk.  Moreover for most startups it takes a while to really get to understand them and appreciate their charms.

Building relationships with potential acquirers over time therefore makes sense, even if it doesn’t drive revenue in the short term.  Typically there are two aspects to that – building the brand in the financial community and old fashioned business development.

Also of interest is that:

• Zappos formally appointed Morgan Stanley as advisors in April, two months after talks had started to heat up in February
• Terms were in discussion for around 10 days before a formal offer was made
• The exclusivity letter was signed eight days after the termsheet was delivered

There is (much) more detail on the timeline on PEHub.

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Antitrust Law: Congress and federal regulators are likely to put the Microsoft-Yahoo deal through the political meat grinder. Should the government have such power over private companies?
Microsoft and Yahoo, a couple of giants of the tech world, have hopes of pooling their brain power and resources to create a Web search engine that can compete with market leader Google. Yahoo will license its Internet search technologies to Microsoft, which will apply them to its new search engine called Bing. Revenue generated by the marriage will be split.
Clearly, it’s just a business deal….

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Investors, if you think US fortunes continue to drive the world economy, keep your money out of this market. But if you expect Asia and South America to lead the recovery, jump in now.

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