Finance Geek

WASHINGTON-As Americans take to the roads on Memorial Day weekend, almost all are blissfully ignorant that Congress must pass a highway bill by September 30, when authorization for the Highway Trust Fund expires.
The Senate Finance Committee is well aware of the deadline, though, and held hearings earlier this month to explore different options for infrastructure finance. The focus of the hearing was a proposal for a federally-funded $10 billion infrastructure bank, which would provide funding for the nation’s highways and bridges.
Although the Highway Trust Fund, funded by motor fuel…

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After oil companies released their first-quarter earnings figures last month - showing exceptionally high profits - Democratic leaders predictably called for an end to “subsidies.”
Lawmakers promptly hauled some top energy CEOs to Washington, accused them of greed, and introduced legislation to impose new taxes on oil and natural gas companies.
That bill was defeated, but some lawmakers continue to gin up public support for huge new taxes. Don’t be fooled. Much of the rhetoric surrounding oil taxes and profits is misleading.
Despite public perception, the industry has a…

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Mobile payments are booming — and the space is set to get bigger. A leading technology in the space is Near Field Communications. Here’s what the NFC buzz is all about.

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Facebook and Spotify, according to Forbes, are planning to formalize their already-mutually-beneficial relationship with a neat group-listening feature for Facebook users in countries where Spotify is already available.

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It’s been a big week in Bailout Nation: On Tuesday, AIG and the U.S. Treasury sold $8.7 billion of stock, reducing the government’s stake, while Chrysler repaid $7.6 billion of loans to the U.S. and Canadian governments — six years ahead of its deadline. The events are going to fuel the idea that the government [...]

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Amazon is apparently sick of getting clobbered by Apple’s iTunes in digital music sales. The e-commerce giant, which used to be the go-to place for music online, just offered a startling one-day special, selling Lady Gaga’s new album at 99 cents a copy. The album wholesales for around $9, so this meant that Amazon was [...]

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Nicholas Lovell just put up a great post answering the question What does a VC care about?  It is the latest in our series of 50 Questions you should ask before raising venture capital.

He covers the topics of obsession with downside risk, exit and other matters, but I particularly liked his comment on the increasing absurdity of thinking too much about exit strategy:

Some investors, particularly those with a mergers and acquisitions background, obsess about who might buy your company.

At one level, this is farcical. The technology industry is growing so fast that if an investor has a 5-7 year investment horizon, the likely acquirors may not have been born yet. In my world of games, Zynga is only four years old, but has made 14 acquisitions in the last 12 months.

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You have probably seen the news today that Twitter has acquired Tweetdeck for $40m, ending a month or two of wrangling between Twitter and Ubermedia over the business.  As well as being an interesting saga in its own right and a good result for Tweetdeck the whole affair is a good illustration of the perils of being too dependent on a company like Twitter.

Dependency on another company is never desirable, but it isn’t necessarily something to worry about too much if the partner is stable and profitable, and the relationship is mutually beneficial – e.g. Zynga is ok on Facebook.  However, if the partner has yet to find a stable business model or there is any hint of exploitation then then their policies are subject to change in ways that can undermine their erstwhile partners.  Look at the way Twitter’s acquisition of iPhone client Tweetie last year undermined other Twitter iPhone clients and the way Google’s changes to its search algorithm has hurt content farms and other aggregators.

Tweetdeck’s exit was pretty decent.  At some stage I am sure they were hoping for a bigger outcome, but given they only raised $3.8m I’m sure Ian Dodsworth and his investors have all made good money.  I think they were able to achieve this result despite their dependence on Twitter because of the scale they had achieved and because Ubermedia was/is becoming a pain to Twitter and was keen on acquiring Tweetdeck.  The latter condition is pretty hard to plan for and needed to be present for Tweetdeck to get the result it did.

Ubermedia is run and backed by some very smart people, but from what I know it is now hard to predict great things for the company.  They are as dependent on Twitter as Tweetdeck was, but unlike Tweetdeck they obviously felt they needed to fight Twitter to maximise growth, and Twitter has put them in their place both by the Tweetdeck acquisition and by suspending their apps for violating the terms of service.  It is hard to see Twitter acquiring them now.  This Business Insider article does a good job of detailing Ubermedia’s chequered history.

So in summary, of the two Twitter dependent businesses discussed here one achieved a decent result and the other still has an unclear future.  That doesn’t sound too bad, but Tweetdeck did very well to build competitive tension around its exit and I’m left thinking the same as I did before I wrote this post, that dependence on companies like Twitter brings risk to a company and is best avoided/mitigated.  It is for this reason that Tweetdeck’s strategy was to become a social media dashboard.

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Congress is considering bills that would help resolve a vexing problem of internet commerce: Who has taxing authority — or rather, who doesn’t when multiple states can make a claim on a single transaction? One such bill, the Digital Goods and Services Tax Fairness Act of 2011, has the support of a bevy of companies in the crossfire including one which has been particularly affected: Amazon.

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Less than a month after President Obama set up a task force to “root out” fraud in the oil market, the Commodity Futures Trading Commission has accused two individuals of manipulating the market — back in 2008. The WSJ reports: “The CFTC accuses the traders, Nicholas J. Wildgoose and James T. Dyer, who worked for [...]

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Google will announce a new mobile payments system on Thursday, according to Bloomberg, adding greater urgency to the all-out arms-race taking place in the point-of-sale digital money space. The announcement will include news of a partnership with Sprint to roll out a mobile-payments system based on Near Field Communication, or NFC, technology.

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There was a nearly audible sigh of relief heard from the White House and motorists alike three weeks ago when oil prices, along with several other leading commodity prices, suddenly collapsed by almost 10 percent in one day. It appeared to signal the early end of a commodity bubble, and potentially reflected a new equilibrium for oil around $100 a barrel. While high, this level could be considered manageable given the exogenous factors, as economists call them, in play at the moment. Of the current $100 price of oil, as much as $15 can be attributed to weakness of the dollar, and another…

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With New York City’s rent laws set to expire June 15, “tenant” activists are decrying the catastrophic consequences should Albany’s Republican-controlled Senate fail to renew them. But these laws actually harm most tenants: By protecting long-term residents at the expense of newer (not wealthier) ones, they’ve caused huge increases in the City’s overall rents.
Given over 8 million people call the Big Apple home - only a million of whom are fortunate enough to live in rent-regulated apartments - the wild popularity of the rent stabilization laws among New York…

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First there was Renren, the “Facebook of China.” Then came the LinkedIn offering last week. Today, Yandex, “the Google of Russia” went public in a deal that was wildly oversubscribed and saw the stock surge on its first day of trading. These and other echoes of the 1990s tech boom are causing investors and pundits [...]

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So soon after the rapture failed to materialize, I’m aware that the market for spectacularly good news might not be a particularly robust one. But listen, people! A new housing boom may be upon us! Really. No, my keyboard hasn’t been occupied by David Lereah, the former chief economist of the National Association of Realtors, [...]

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