Mereja

Author: Serkadis

  • Motorola likely sold 100,000 Droid Handsets Over Opening Weekend

    Bloomberg are today reporting that in all likelihood, Motorola probably sold 100,000 Droid handsets over their opening weekend.

    According to Mark McKechnie, an analyst at Broadpoint AmTech Inc, Verizon Wireless had 200,000 Droid phones available, with most stores managing to sell at least half of their stock over the past weekend.

    Motorola Verizon Droid

    McKechnie also predicts that overall Motorola will sell some 1 million handsets powered by Android in Q4, with a further 10 million sold in 2010.

    I see the first few days as encouraging,” McKechnie said. “There seems to be pretty good demand — they’ve taken the right steps and picked a good partner with Google on the Android side.

    The Motorola Droid was officially launched on November 6 priced at $199.99 with a two-year service contract with Verizon.

    [via bloomberg.com]

    If you’re looking for more info on the new Verizon Android phones, then be sure to check out Droid Forums & Droid Eris Forums

    Motorola likely sold 100,000 Droid Handsets Over Opening Weekend

  • US Subpoenaed All Visitor Logs From Online News Publication; Falsely Said Site Couldn’t Tell Anyone

    We’ve seen it over and over again: when the government can hide behind the veil of secrecy, it can abuse its power. That’s why we’re supposed to have checks and balances on power, but all too often governments figure out ways to get around that. The latest example is that US attorneys issued a subpoena to the person hosting the news website Indymedia, demanding a logfile of all visitors from a particular day and ordered the woman not to reveal the existence of the subpoena itself. Indymedia doesn’t keep its logfiles, so it simply had nothing to turn over, and after realizing this, the government withdrew the request. However, the requirement to stay silent about it still was there, and the woman asked the EFF for help. With the EFF involved, the government finally backed down and admitted that there was absolutely no legal basis for demanding that the woman not talk about the subpoena, and “chose not to go to court” over the matter, despite threatening to at an earlier time.

    This is hardly the first time we’ve heard about the government using (and abusing) procedures like national security letters to not just demand all sorts of info, but also demand that the recipient not tell anyone about it. Every once in a while we’re able to hear about these situations because a group like the EFF or the ACLU pushed back and were able to get the US government to back down, but that’s likely only a fraction of the situations where this has happened. In many others, we likely don’t even know at all, because the recipient gave in, either because they didn’t realize their legal rights, or because it just wasn’t worth the fight. But when the government thinks that it can demand certain data and cloak the demand behind a related demand for secrecy, it makes it way too easy for the government to abuse the process. It basically guarantees no oversight, so why not ask for way more than the law requires, knowing that most people won’t push back and no one will ever find out about it?

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  • Vagrant Story coming to EU PS Store soon

    A solo dungeon crawl that puts you in control of a (quite literally) one man army, Vagrant Story’s weapons creation system, deeply intricate plot, an…

  • White House Firm On Health Reform Timeline, Sends Mixed Abortion Messages

    Roll Call: “Even as Senate Democrats continue to grope for a way forward on health care, the White House asserted Monday that its Dec. 31 deadline for final passage of the legislation is solid. ‘When we say the end of the year, we’ve got a pretty firm end-of-the-year deadline,’ White House Press Secretary Robert Gibbs said.” Last week, Senate Majority Leader Harry Reid implied that the legislation may lag beyond that time frame, but clarified his statement later to be in line with the president (Koffler, 11/9).

    “Gibbs said millions of uninsured and under-insured Americans are counting on Congress to pass meaningful health insurance reform,” KOLR TV 10, a CBS affiliate in Arkansas, reports. “However, the issue faces an uncertain fate in the Senate, which is more moderate than the House. Things also tend to move much more slowly in the Senate, where 60 votes are needed to move key issues forward” (11/9).

    Meanwhile, President Obama has offered a less solid position on one key controversy that threatens to delay the Senate vote, The Hill reports. Asked whether the administration supports a House amendment that would ban indirect public spending on abortions through insurance subsidies, Gibbs said, “Well, ask me that right before Christmas and the end of the New Year,” meaning, after the White House hopes the President will have signed a bill.

    Obama also spoke to ABC News about the issue, saying the abortion compromise would take some more ironing out. “[W]e’re not looking to change what is the principle that has been in place for a very long time, which is federal dollars are not used to subsidize abortions,” Obama said, adding: “what that tells me is that there needs to be some more work before we get to the point where we’re not changing the status quo.”  But, he said, “This is a health care bill, not an abortion bill” (Tapper, Travers, Miller and Dwyer, 11/9).

  • GigOptix Buying ChipX for $12.25 Million

    GigOptix Inc. (OTCBB: GGOX) has agreed to acquire ChipX, Santa Clara, Calif.-based provider of ASIC products. ChipX investors will receive 3.5 million common shares of GigOptix stock, currently valued at approximately $12.25 million and representing a 26% stake in GigOptix. ChipX has raised approximately $65 million in total VC funding, including a recap in 2004. Current backers include Elron Electronic Industries, Needham Asset Management, Newlight Associates, Parker Price Venture Capital, UMC Capital, VantagePoint Venture Partners and Wasserstein Ventures.

    PRESS RELEASE
    GigOptix, Inc. (OTCBB: GGOX), a leading high speed analog semiconductor manufacturer specializing in electronic engines for the optically connected digital world, today announced that the company has signed a definitive agreement, and completed the acquisition of ChipX, Incorporated, a privately-held fabless supplier of analog and mixed signal custom Application Specific Integrated Circuits (ASICs) on November 9, 2009.

    It is anticipated that on a consolidated pro-forma, non-GAAP basis, the company, with locations in the U.S., Switzerland and Israel, will have had combined revenues for the first nine months of 2009 of more than $25M. GigOptix and its subsidiaries will also have a work force of approximately 95 employees, down from 115 pre-merger, of which around 40% are in research and development, and approximately 15% are in sales and marketing. As demonstrated in its previous three acquisitions, the company believes it will achieve significant financial efficiencies after consolidation. Prior to the acquisition, GigOptix employees delivered approximately $230K annual revenue per employee, which the company plans to improve to over $300K annual revenue per employee in 2010.

    “I am delighted with the strategic match we have found in ChipX which continues our vision of bringing complementary technologies together to increase value for our customers so that we can accelerate our growth engine and continue to enrich the features we offer while reducing the cost to our customers,” stated Dr. Avi Katz, Chairman of the Board of Directors and Chief Executive Officer of GigOptix. “ChipX brings a loyal portfolio of tier one customers who use the first class design services and IP of ChipX to create their own truly differentiated custom products. Similarly, we will bring our own IP together with that of ChipX to bring new standard products to market faster, and at a lower investment by leveraging their excellent design capability. This acquisition fits into our continuous rollup and consolidation growth strategy and will support continuous improvement of all our financial and business metrics. I am excited to welcome the new team and look forward to working together to continue to deliver excellent results for our shareholders.”

    This acquisition is expected to bring a number of benefits to GigOptix’s current and future customers and investors, including:

    a. A solid revenue stream from more than 60 active customers, over 100
    custom mixed signal ASIC products in production and 5 products
    currently in development.
    b. Strong customer relationships due to the level of engagement
    required during the joint development of custom ASICs. These are
    particularly focused in the vertical markets of Defense & Aerospace,
    Industrial, Communications, Medical and Test & Measurement, where
    GigOptix can offer complimentary products for cross selling
    opportunities.
    c. A rich portfolio of intellectual property and complementary skills
    that will enable GigOptix to develop new products to expand its
    offering to the optically connected market. The alternative of
    GigOptix organically developing and building such a rich portfolio
    of approximately 70 silicon proven IP cores would take several years
    and millions of dollars to achieve.
    d. Increased presence in the Defense and Instrumentation market, which
    is supported by ChipX’s ITAR certification and the addition of
    ChipX’s subsidiary in Haifa, Israel, which is ideally located to
    facilitate support expansion of GigOptix’ product sales to the
    defense market there and around the world.
    e. As a fabless high volume silicon integrated circuit supplier, ChipX
    brings strong relationships with leading semiconductor foundries and
    sub-contractors and increased purchasing power which may be
    leveraged by GigOptix to further improve operating margins and
    enhance supply chain accessibility.
    f. Continuing the aggressive rollup of entities that have invested
    millions of dollars in developing sophisticated technology and
    products for a fraction of their investment, to support GigOptix’
    cost-effective technology and product arsenal build-up.

    “ChipX is a long time valued supplier to National Instruments and we look forward to continuing this collaboration with GigOptix,” stated Keith Odom, Research and Development Fellow at National Instruments (NASDAQ: NATI). “ChipX has a long track record of providing NI flexible, complex and cost-effective solutions such as mixed-signal ASICs for our USB 2.0 data acquisition products including NI CompactDAQ and advanced NI-STC3 PCI Express, timing and synchronization technology for our NI X Series DAQ devices. The joining of GigOptix and ChipX strengthens and broadens ChipX’s high-speed analog offering, another critical component for NI Multifunction DAQ and modular instruments. ChipX was honored with an NI 2009 Global Supplier Award after demonstrating commitment and results that set them apart from the rest of the industry and we look forward to continuing this high standard of innovation with GigOptix.”

    With the acquisition, GigOptix brings high volume silicon design expertise into the company to complement its design excellence in the more specialist semiconductor technologies of III-V, Silicon germanium and of course its unique expertise in Electro-Optic (EO) polymer technology. This will support its strategic move into higher levels of integration of analog and mixed signal system-on-chip products, such as Clock Data Recovery (CDR) and Serializer/De-Serializers (SERDES). Similar to the acquisition of Helix Semiconductors in January 2008, the acquisition supports GigOptix’s plan to efficiently expand its product portfolio into high volume optically connected markets such as consumer electronics, data centers, high performance computing as well as significantly reducing the time and cost of developing new products, customer relationships and vertical markets. The transaction also delivers increased scale with an existing revenue stream from complementary product sales.

    “This is a welcome and exciting move for the ChipX team,” commented Ophir Nadir, Vice President of Engineering at ChipX. “The combination of standard products and custom ASICs is an effective model in many successful semiconductor companies due to the ability to leverage the valuable customer channel and investment in IP across a larger number of products. It makes sense to add new intellectual properties to the custom ASIC tool kit from the GigOptix product base. ChipX has a healthy pipeline of new customer designs ongoing and expects to see growth in ASIC sales in 2010. The ChipX team is eager to work with everyone in the GigOptix corporate family to create additional new growth opportunities with this synergistic merger.”

    While GigOptix has installed an efficient financial operating model, GigOptix anticipates that the scaled up company will be even better positioned financially to mitigate the infrastructure cost of being a publicly traded small cap company. Both companies’ headquarters are located in Silicon Valley, and, to bring organization and financial benefits, will be quickly consolidated into one location at the current GigOptix headquarters in Palo Alto, as the current lease of ChipX in Santa Clara, California, expires in two months. It is expected that costs synergies will contribute to improving the bottom line as soon as the first quarter of 2010.

    The terms of the deal provide for the ChipX investors to receive approximately 3.5 million common shares, representing approximately 26% of the fully diluted share count of GigOptix. As well as the operational benefits, the acquisition is anticipated to have the significant effect of broadening the ownership of the GigOptix common stock with the addition of new strategic and institutional investors. In parallel with closing the acquisition, the company has entered into a new commercial banking relationship with Bridge Bank, N.A. (NASDAQ: BBNK), a full-service professional business bank based in San Jose, California, which will include a $4 million asset-based line of credit.

    Dr. Avi Katz will continue as Chief Executive Officer and Chairman of the Board. The current GigOptix Management Team will continue to lead the combined company, and the new ChipX (CX) Product Line will be jointly managed, ad-interim, by Ophir Nadir, Vice President Engineering of CX Product Line, and Elie Massabki, Vice President Sales & Marketing of CX Product Line. Both Mr. Nadir and Mr. Massabki were formerly executive members of ChipX. The transaction was approved by the board of directors of both companies and became effective on November 9, 2009.

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  • Taptu + OneRiot = realtime mobile search

    Taptu, the mobile search engine, is announcing today that they’re using the OneRiot search API to provide realtime search results to mobile devices at their touch-friendly mobile web page. The realtime search results will eventually make their way into the Taptu iPhone app. Full press release inside!


  • The Model for Veterans Employment

    Signing the Executive Order on Veterans Employment

    President Barack Obama signs an executive order on the Employment of Veterans in the Federal Government, in the Oval Office, Nov. 9, 2009. (Official White House Photo by Pete Souza)

    Last night the President signed an Executive Order creating an interagency Council on Veterans Employment to advise the President and Administration on how to set the bar for hiring and employing veterans. The Council will be chaired by Secretary of Labor Hilda Solis and Secretary of Veterans Affairs Eric Shinseki, with Office of Personnel Management Director John Berry serving as the Vice Chair and Chief Operating Officer of the Council.

    In statements prior to the signing, all involved gave their reasons for why the initiative is so important to them. The ‘also about continuing to fill the ranks of federal employees with men and women who possess the skills, dedication, and sense of duty that Americans deserve from their public servants. And few embody those qualities like our nation’s veterans."

    Secretary Shinseki also looked forward to integrating the unparalleled leadership and technical skills our veterans hold when they join the workforce, and noted that in terms of working in government in particular, "veterans have shown unmatched dedication to public service." Director Berry echoed that sentiment, noting that "the strong sense of patriotism and public service held by members of our armed forces doesn’t leave them when they exit from active duty." For her part, Secretary Solis saw the initiative as part of an enduring relationship between the federal government and vets: "Veterans are an important part of our nation’s past, present and future. They deserve our full support as they reintegrate into the civilian workforce."

  • Mill Road Capital Buying Cossette

    TORONTO (Reuters) – Cossette Inc (KOS.TO), Canada’s largest homegrown advertising agency, said on Tuesday it will sell itself to private eqyity firm Mill Road Capital, spurning a lower bid from Cosmos Capital.

    Mill Road will acquire all of Cossette’s issued and outstanding subordinate voting shares for C$7.87 a share in cash.

    Based on about 12.4 million shares outstanding, the deal is likely to be worth about C$97.6 million ($92.2 million). The Mill Road offer is not conditional on financing or due diligence.

    Last month, Cossette urged shareholders not to tender shares toward a sweetened bid from North American private equity group Cosmos Capital worth C$5.25 a share, or about C$88 million. [ID:nN29102296]

    The advertising agency’s clients include McDonald’s Restaurants of Canada, Bell Canada, General Motors of Canada and Coca-Cola.

    Cossette’s board unanimously approved the Mill Road offer and has agreed not to actively solicit competing acquisition proposals. However, the board retains the ability to consider any competing acquisition proposal. ($1= $1.058 Canadian) (Reporting by Euan Rocha; Editing by Derek Caney)

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  • Canadian VC Activity Hits 13-Year Low

    TORONTO (Reuters) – Activity in Canada’s venture capital market hit a 14-year low in the third quarter, tumbling 51 percent to $191 million from the same period a year ago as uneasy investors stayed out of the market.

    According to data put out by the Canadian Venture Capital and Private Equity Association (CVCA) and Thomson Reuters, the province of Ontario saw the steepest fall in investment, sagging to $24 million from $179 million a year earlier.

    For all of Canada, venture capitalists invested only $682 million in the first nine months of the year, compared with $1.1 billion in the January-September period last year.

    “There is increasing frustration in finding co-investment partners to fully capitalize companies to be successful and compete globally,” said Greg Smith, president of the CVCA.

    At the current rate, venture capital is seen coming in under $1 billion for the full year, something it has not done since 1995.

    Canadian venture capital activity is also down abroad, with funds investing only $38 million around the globe in the third quarter, compared with $151 million a year earlier.

    At the same time, U.S. venture capital funds and other foreign investors boosted their presence in the Canadian market, bringing $77 million to deals, accounting for a hefty 40 percent of total activity.

    ($1=$1.05 Canadian) (Reporting by Pav Jordan; editing by Rob Wilson)

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  • Abortion Clash Moves To Senate As Centrists Seek House-Like Provision In Health Bill

    Roll Call reports that the impending fight has also sparked the attention of the abortion-rights lobby. “Abortion-rights advocates, who were outmaneuvered in the House’s health care reform vote, are banking on tougher Senate rules and targeted lobbying to keep restrictive abortion language out of that chamber’s bill.” The House-passed bill includes “language that bars publicly subsidized health care plans from offering elective abortions, even if they only use private money to pay for the procedure” (Roth, 11/10).

    The Los Angeles Times: “The Senate legislation contains looser restrictions on abortion coverage than were approved by the House. But already at least one Democrat, Sen. Ben Nelson of Nebraska, has signaled that he may be willing to work with abortion rights opponents on developing language similar to the House’s.” Others targeted by activists to support such a move include Democratic Sen. Bob Casey of Pennsylvania. Since Senate Democrats will likely need all their party’s votes to pass a health bill, the two Senators have “significant leverage in demanding tough language” on abortion, the LA Times reports (Oliphant and Geiger, 11/10).

    The Wall Street Journal reports that Nelson said that if it’s not clear that federal money won’t be used for abortions then he won’t support a bill. Meanwhile, Senate Majority Leader Harry Reid “opposes abortion and faces re-election next year in a conservative state. He is often in a delicate position over the issue, since he leads a Democratic caucus that strongly supports abortion rights. … If Mr. Reid doesn’t include the (Rep. Bart) Stupak language in his bill, proponents are all but certain to offer it as an amendment” (Bendavid and Adamy, 11/10).

    Politico: “Other key moderates didn’t go quite that far, but at least two others — Sens. Kent Conrad of North Dakota and Mary Landrieu of Louisiana — said they, too, want to ensure that the Senate bill prevents federal dollars from paying for abortion” (Budoff Brown and Allen, 11/9).

    The Associated Press: Former President Bill Clinton is “expected to speak to Senate Democrats about health care legislation during their weekly caucus Tuesday, officials said.” The AP reports that “President Barack Obama wants to sign the legislation into law by the end of the year. But abortion opponents in the Senate are seeking tough restrictions in the health care overhaul bill, a move that could roil a shaky Democratic effort”  (Alonso-Zaldivar, 11/10). 

    CongressDaily: “Sen. Christopher Dodd, D-Conn., said he does not expect Reid to include the House language in the Senate bill since it was not included in either of the two committee versions.” Reid is waiting for Congressional Budget Office scores on his plans before debate in the Senate can begin (Edney, 11/10).

  • First Look: Nov. 10

    “Teach Workers about the Perils of Debt,” in the November issue of Harvard Business Review, argues persuasively for financial education. And not a moment too soon: In a recent U.S. survey covering knowledge of basic finance, for example, 30 percent answered a question about the concept of compound interest by overestimating the amount of time it takes for debt to double. As Dartmouth professor Annamaria Lusardi and HBS professor Peter Tufano write, “Overall, U.S. households have twice as much debt, by virtually any metric, as they did a generation ago.”

    Companies can help by adding a financial literacy component to employee assistance programs. They can also make it fun. A video game called Celebrity Calamity, created by the nonprofit Doorways to Dreams Fund, of which Tufano is the founder and president, puts users in the role of a celebrity’s financial manager and helps them learn about managing credit and debit cards.

    This week also sees an article by professor Anita Elberse on strategic and marketing issues around music sales (“Bye Bye Bundles: The Unbundling of Music in Digital Channels”) and cases on financier J.P. Morgan, shoe and clothing retailer Zappos.com, and speed-dating service HurryDate, among many other publications and cases.

    — Martha Lagace

    Working Papers

    Platform Envelopment (revised)

    Authors: Thomas Eisenmann, Geoffrey Parker, and Marshall Van Alstyne
    Abstract

    Due to network effects and switching costs, platform providers often become entrenched. To enter established markets, aspiring providers of new platforms generally must offer revolutionary functionality. We explore a second path to entry that does not rely on Schumpeterian innovation: platform envelopment. By leveraging shared user relationships and common components, one platform provider can move into another’s market, combining its own functionality with the target’s in a multi-platform bundle. Dominant firms otherwise sheltered from entry by standalone rivals can be vulnerable to an adjacent platform provider’s envelopment attack. We develop a taxonomy of envelopment attacks and analyze conditions under which they are likely to succeed.

    Download the paper: http://www.hbs.edu/research/pdf/07-104.pdf

    Stretching the Inelastic Rubber: Taxation, Welfare and Lobbies in Amazonia, 1870-1910

    Author: Felipe Tâmega Fernandes
    Abstract

    This paper examines the effect of government intervention via taxation on domestic welfare. A case study of Brazilian market power on rubber markets during the boom years of 1870-1910 shows that the government generated 1.3% of GDP through an export tax on rubber but that it could have generated 4.7% in total, had the government set the tariff at the optimal level. National, regional, and local constraints prevented the government from maximizing regional welfare. In a context of lobbies, government budget maximization may have differed from regional welfare maximization.

    Download the paper: http://www.hbs.edu/research/pdf/10-032.pdf

    Publications

    Managing the CEO’s Succession: The Challenge Facing Your Board

    Authors: Joseph L. Bower
    Publication: Chap. 9 in Boardroom Realities: Building Leaders Across Your Board, edited by Jay A. Conger, 253-275. Jossey-Bass, 2009

    Book link: http://www.wiley.com/WileyCDA/WileyTitle/productCd-0470391782.html

    Information Content of Insider Trades before and after the Sarbanes-Oxley Act

    Author: Francois Brochet
    Publication: The Accounting Review (forthcoming)
    Abstract

    This paper examines the information content of Form 4 filings under the more timely disclosure regime introduced by Section 403 of the Sarbanes-Oxley Act of 2002 (SOX). Abnormal returns and trading volumes around filings of insider stock purchases are significantly greater after SOX than before. Abnormal trading volumes around filings of insider sales are also greater post-SOX on average, but stock returns are not more negative. However, once controlling for pre-planned transactions, reporting lag, litigation risk, and news following insider trades, I also find a negative association between returns around filings of insider sales and SOX. Overall, the evidence suggests that the prompt public disclosures about insider transactions mandated by the new rule are relevant to the pricing of securities. The results are also consistent with SOX and regulatory actions reducing the incentives to sell ahead of privately known negative news.

    Bye Bye Bundles: The Unbundling of Music in Digital Channels

    Author: Anita Elberse
    Publication: Journal of Marketing (forthcoming)
    Abstract

    Fueled by digital distribution, unbundling is prevalent in many information industries. What is the effect of this unbundling on sales? And what bundle characteristics drive this effect? I empirically examine these questions in the context of the music industry, using data on weekly digital-track, digital-album, and physical-album sales for all titles released by a sample of over 200 artists. I analyze sales dynamics from January 2005 to April 2007—a period in which the share of unbundled units jumped from roughly one-third to two-thirds of total unit sales. My modeling framework, a system of an “album-sales” and a “song-sales” equation estimated using the seemingly unrelated regression method, explicitly accounts for the interaction between sales for the bundle and its components. I find that revenues decrease significantly as digital downloading becomes more prevalent because consumers switch from buying bundles (albums) to cherry-picking their favorite components (songs) on those bundles. The number of items included in a bundle (a measure of its “objective” value) does not emerge as a significant moderator of this effect. Instead, I find that bundles with items that are more equal in their appeal and bundles offered by producers with a strong reputation suffer less from the negative impact of the shift to mixed bundling in online channels.

    What Would Peter Say? The Continuing Relevance of the Drucker Perspective

    Author: Rosabeth Moss Kanter
    Publication: Harvard Business Review 87, no. 11 (November 2009)

    Article: http://hbr.harvardbusiness.org/2009/11/what-would-peter-say/ar/1

    Teach Workers About the Perils of Debt

    Authors: Annamaria Lusardi and Peter Tufano
    Publication: Harvard Business Review 87, no. 11 (November 2009)

    Article: http://hbr.harvardbusiness.org/2009/11/teach-workers-about-the-perils-of-debt/ar/1

    Is It Fair to Blame Fair Value Accounting for the Financial Crisis?

    Author: Robert C. Pozen
    Publication: Harvard Business Review 87, no. 11 (November 2009)

    Article preview: http://hbr.harvardbusiness.org/2009/11/is-it-fair-to-blame-fair-value-accounting-for-the-financial-crisis/ar/1

    Cases & Course Materials

    Digital Chocolate

    Linda A. Hill and Alison Berkley Wagonfeld
    Harvard Business School Case 410-049

    Trip Hawkins founded Digital Chocolate in Silicon Valley in 2003 to develop outstanding games for mobile devices. By 2008, the company had expanded its operations into four countries, and Digital Chocolate was one of the top developers of soloplayer games for standard mobile phones and iPhones. In 2009, Hawkins was eager for Digital Chocolate to start developing new types of mobile games that could be played by multiple players over a period of time. Hawkins wondered how to guide his company into this new area of social gaming without losing any of the tremendous creative momentum the team had built over the previous years.

    Purchase this case:

    http://cb.hbsp.harvard.edu/cb/product/410049-PDF-ENG

    HurryDate

    Sharon Katz, Edward J. Riedl, and Jessica Deckinger
    Harvard Business School Case 110-035

    This case illustrates a comprehensive valuation of a firm specializing in the “speed dating” niche of the dating/entertainment industry. The founders of HurryDate, a small, privately held firm, are considering options to fund future growth, including a full or partial sale of the firm. Students must assess the firm’s strategy including the key risks and success factors associated with this industry; evaluate basic financial reports; assess the firm’s past performance; estimate the firm’s future performance; and make recommendations regarding the valuation of the firm. This exercise also highlights the challenges of valuing a small firm, where information and viable comparables are often limited or non-existent.

    Purchase this case:

    http://cb.hbsp.harvard.edu/cb/product/110035-PDF-ENG

    Integrated Project Delivery at Autodesk, Inc. (A)

    Amy C. Edmondson and Faaiza Rashid
    Harvard Business School Case 610-016

    Describes Autodesk’s engagement in Integrated Project Delivery—a new model of risk management, inter-firm teamwork, and multi-objective (aesthetic, cost, and sustainability) optimization in building projects. In 2008, Autodesk, Inc., the world’s largest design software company, decided to engage in Integrated Project Delivery (IPD) for the design and construction of its new Architecture, Engineering, and Construction Solutions (AECS) Group headquarters near Boston. Under IPD, the project’s architect, builder, and client (Autodesk) entered a contractual agreement to share all project risks and profits. During the project, however, Autodesk was unsatisfied with the design progress and asked the project team to introduce a three-story atrium in the headquarters’ design. Logistically, it was not a good time to make changes as the team had already made significant design progress. The team was also working under a tight budget and delivery deadline. However, the aesthetics would appear to be greatly improved by changing the design. The project’s architect and builder had to decide whether accommodating the atrium into the current schedule and work sequencing was an acceptable risk.

    Purchase this case:

    http://cb.hbsp.harvard.edu/cb/product/610016-PDF-ENG

    Purchase this supplement (B):

    http://cb.hbsp.harvard.edu/cb/product/610017-PDF-ENG

    Purchase this supplement (C):

    http://cb.hbsp.harvard.edu/cb/product/610018-PDF-ENG

    J.P. Morgan

    Richard S. Tedlow and David Ruben
    Harvard Business School Case 810-052

    An account of J.P. Morgan’s remarkable career in government, railroad, and industrial finance.

    Purchase this case:

    http://cb.hbsp.harvard.edu/cb/product/810052-PDF-ENG

    One South: Investing in Emerging Markets (A)

    Nicolas P. Retsinas and Justin Ginsburgh
    Harvard Business School Case 210-024

    A United States private equity fund, The Saboput Group, must decide whether to invest in a new technology park development in Chennai, India. The case provides the reader with a detailed investment memorandum from the local Indian operating partner, and the reader must review the memo and financial model to make an investment recommendation to Saboput’s investment committee.

    Purchase this case:

    http://cb.hbsp.harvard.edu/cb/product/210024-PDF-ENG

    Purchase this supplement (B):

    http://cb.hbsp.harvard.edu/cb/product/210027-PDF-ENG

    VIZIO, Inc.

    Krishna G. Palepu and Liz Kind
    Harvard Business School Case 110-024

    William Wang, CEO of VIZIO, Inc., was proud of his company’s success in providing affordable flat screen TVs. Since its founding in 2002, VIZIO had grown to over $2 billion in revenue and was one of the top three flat panel TV brands, along with Samsung and Sony. Faced with intensifying price pressure from the industry leaders and an unprecedented economic recession, Wang wondered how VIZIO could best sustain its growth and finance its business.

    Purchase this case:

    http://cb.hbsp.harvard.edu/cb/product/110024-PDF-ENG

    Zappos.com 2009: Clothing, Customer Service and Company Culture

    Frances X. Frei, Robin J. Ely, and Laura Winig
    Harvard Business School Case 610-015

    On July 17, 2009, Zappos.com, a privately held online retailer of shoes, clothing, and other soft line retail categories, learned that Amazon.com, a $19 billion multinational online retailer, had won its board of directors’ approval to offer to merge the two companies. Amazon had been courting Zappos since 2005, hoping a merger would enable Amazon to expand and strengthen its market share in soft line retail categories. While Amazon’s interest intrigued Zappos’ senior executives, they had not felt the time was right, until now. Amazon’s offer—10 million shares of stock (valued at $807 million), $40 million in cash and restricted stock units for Zappos’ employees, and a promise that Zappos could operate as an independent subsidiary—was on the table. Zappos’ financial advisor, Morgan Stanley, estimated the future equity value of an IPO to be between $650 million and $905 million; this estimate skewed the Amazon offer—at least in financial terms—toward the high end of Zappos’ estimated market value. Hsieh and Lin, Zappos’ CEO and COO respectively, knew that much of Zappos’ growth, and hence its value, had been due to the company’s strong culture and obsessive emphasis on customer service. In 2009, they were focusing on the three C’s—clothing, customer service, and company culture—the keys to the company’s continued growth. Hsieh and Lin had only a few days to consider whether to recommend the merger to Zappos’ board at their July 21st meeting.

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    http://cb.hbsp.harvard.edu/cb/product/610015-PDF-ENG

  • Endowments, Fiscal Federalism, and the Cost of Capital for States: Evidence from Brazil, 1891-1930

    Published: November 10, 2009
    Paper Released: October 2009
    Authors: André C. Martínez Fritscher and Aldo Musacchio

    Executive Summary:

    Do endowments matter in determining the cost of capital for a country or state? Endowments, according to Banco de México’s André C. Martínez Fritscher and HBS professor Aldo Musacchio, are the conditions that determine what kind of commodities can be produced and exported in a determined geographical region. Studying the determinants of the risk premium of the bonds issued by Brazilian states between 1891 and 1930—a period of extreme decentralization of fiscal revenues and expenditures in Brazil—the researchers find that risk premia are highly correlated with state public revenue per capita. Because these revenues came, to a large extent, from the taxes states levied on commodity exports, the researchers argue that endowments mattered to determine the cost of capital for states. Key concepts include:

    • Between 1891 and 1930, the cost of capital for Brazilian states and the probability of issuing state debt in international capital markets were highly correlated with state revenues per capita.
    • The relationship among endowments and the cost of capital for states or the capacity to issue debt may have led to marked differences in access to capital and in the capacity that states had to spend on public goods.
    • Since differences in expenditures on public goods can lead to market differences in economic development among states, the setup of the 1891 Constitution promoted some of the regional inequality that is still observed today in Brazil.

    Abstract

    There is a large literature that aims to explain what determines country risk (defined as the difference between the yield of a sovereign’s bonds and the risk free rate). In this paper, we contribute to the discussion by arguing that an important explanatory factor is the impact that commodities have on the capacity to pay. We use a newly created data base with state-level fiscal and risk premium data for Brazil states between 1891 and 1930 to show that Brazilian states with natural endowments that allowed them to export commodities that were in high demand (e.g., rubber and coffee) ended up having higher revenues per capita and, thus, lower cost of capital. We also explain that the variation in revenues per capita was both a product of the variation in natural endowments (i.e., the fact that states cannot produce any commodity they want) and a commodity boom that had asymmetric effects among states. These two effects generated variation in revenues per capita at the state level thanks to the extreme form of fiscal decentralization that the Brazilian government adopted in the Constitution of 1891, which gave states the sole right to tax exports. We end by running instrumental variable estimates using indices of export prices for each state to instrument for revenues per capita. Our IV estimates confirm our results that states with commodities that had higher price increases had lower risk premia.
    47 pages.

    Paper Information

  • Study: Face Time At Doctor Visits Expanding, Not Dwindling

    Researchers have found that, contrary to conventional wisdom backed by “a more than 10 percent drop” in physician pay and consumer complaints, doctors are actually spending more time with their patients than they used to, the Los Angeles Times‘ Booster Shots blog reports. The study, published in the Annals of Internal Medicine, found that, between 1997 and 2005, doctors’ time spent with patients increased from 18 minutes to 21 minutes during an average visit (Mestel, 11/9).

    One reason for the increase could be doctors are seeing “more older, sicker patients, the researchers said,” according to HealthDay/U.S. News and World Report. But, “quality of care also improved according to nine medical, counseling and screening indicators used by the researchers.” One researcher told HealthDay, “Any efforts to increase efficiency in primary care should take into account the association between time spent with a physician and quality of care” (Reinberg, 11/9).

    “Another possible driver, they suggest, is an increased focus on having patients participate in making decisions about their care — it takes  longer to explain things to patients and seek their input than simply to tell them what to do,” the Wall Street Journal’s Health Blog reports (Goldstein, 11/9).

  • Medical Schools Change Curriculum To Adapt To Different Policies, Care Standards

    Medical schools are changing to adapt to the shifting medical landscape around America by increasingly preparing students for alternative methods of care, increased demand for their services and a world where health care reform will likely soon change the landscape again, The Washington Post reports.

    In Washington D.C., that means sending students to Capitol Hill to listen to the health reform debate and classes that acknowledge the shift landscape of communications and social and cultural issues. “Catering to these needs, medical experts say, could help future doctors offer preventive care first, reactionary second” (Lovenheim, 11/10).

  • Google to shine holiday cheer and free Wi-Fi in 47 airports for the holidays

    holiday07_5
    Google loves you and wants to make sure your holiday travel isn’t absolutely horrible by providing free Wi-Fi at 47 airports nationwide. Don’t be evil, indeed.

    The promo starts on November 16 and runs through January 15, 2010. The only catch is that once you log onto the free Wi-Fi, you will be prompted to try Google Chrome and set Google as your default search engine. Fine by me. In fact, it sounds less annoying that current airport Wi-Fi that generally has a gigantic banner somewhere on the screen reminding you that you’re in a wonderful airport waiting to board an H1N1-infested plane.


  • Google’s Christmas gift to America is free Wi-Fi at airports starting today

    google-xmas-wifi

    Those that hate Google but travel frequently might feel a bit conflicted over the next couple of months because of Google’s holiday gift to America. Starting today and ending on January 15th, Google will be offering up free, no strings attached Wi-Fi at 47 airports while Virgin American flyers will be getting free in-flight Wi-Fi as of the 18th. The In addition to this, Google has set up a way for travelers at each airport to donate to charities Engineers Without Borders, the One Economy Corporation and Climate Savers Computing Initiative. Google will match each airports donations up to $250,000 and will also give the most generous airport $15,000 for the charity of its choosing.

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  • UBS Adds To Financial Sponsors Group

    Allen Bouch and Scott Norby have joined UBS Investment Bank as managing directors within the firm’s financial sponsors group. Bouch will be based in San Francisco, and previously was with Citigroup. Norby will be based in New York, and previously was with Goldman Sachs.

    PRESS RELEASE

    UBS Investment Bank announced today that it has hired two senior investment bankers within the firm’s Financial Sponsors Group. Allen Bouch and Scott Norby will join the firm’s Investment Banking Department (IBD) as Managing Directors, reporting to Steven Smith, Global Head of Leveraged Finance and Americas Head of Financial Sponsors. Bouch and Norby will be based in San Francisco and New York, respectively.

    “Our financial sponsors deal pipeline continues to grow as financing markets have normalized and sponsors are becoming more active in both acquisitions and exits,” said Smith. “We are delighted Allen and Scott will be joining UBS. I am confident they will help strengthen and advance our Financial Sponsors practice through their deep knowledge of the sponsor community and proven credibility advising and delivering strategic solutions to top clients in this space.”

    Bouch joins UBS from Citigroup, where he was most recently in the Financial Entrepreneurs Group and Head of the San Francisco Investment Banking Group. Previously, he was with Merrill Lynch in its investment banking division. He brings 21 years of top-tier investment banking experience, the last 13 of which have been focused on covering the financial sponsor community. Bouch holds a BA from Claremont McKenna College and an MBA from Duke University’s Fuqua School of Business.

    Previously, Norby was a Managing Director at Goldman Sachs in its Financial Sponsor Group. Prior to joining Goldman Sachs, he was with Morgan Stanley in its Financial Sponsor practice. Most recently, Norby was a Managing Director at North Sea Partners where he led financial sponsor coverage. He holds a BA from the University of Wisconsin and an MBA from the University of Chicago.

    Kevin Cox, Americas Head of IBD, added, “The financial sponsor community represents a very important group of clients for UBS. We are committed to serving clients with bankers like Allen and Scott who can deliver innovative ideas, valuable insights and flawless execution.”

    Headquartered in Zurich and Basel, Switzerland, UBS is a global firm providing financial services to private, corporate and institutional clients. Its strategy is to focus on international wealth management and the Swiss banking business alongside its global expertise in investment banking and asset management. In Switzerland, UBS is the leading bank for individual and corporate clients.

    UBS is present in all major financial centers worldwide. It has offices in over 50 countries, with about 36% of its employees working in the Americas, 36% in Switzerland, 15% in the rest of Europe and 13% in Asia Pacific. UBS employs more than 65,000 people around the world. Its shares are listed on the SIX Swiss Exchange, the New York Stock Exchange (NYSE) and the Tokyo Stock Exchange (TSE).

    UBS Media Relations: Doug Morris, +1-212-882-5694 www.ubs.com

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  • Mark Wesseldine Joins Fried Frank

    Mark Wesseldine has joined the London office of law firm Fried Frank, as a partner focused on leveraged finance transactions. He previously was a partner with Allen & Overy.

    PRESS RELEASE

    Fried Frank announced today that Mark Wesseldine will join the Firm’s finance practice as a partner and will be based in London. Mark specializes in leveraged finance transactions with broad experience in all financing disciplines. He was previously a partner at Allen & Overy.

    Mark has extensive experience in leveraged acquisitions and other event driven financings. His practice includes advising lenders, investors and borrowers, including major financial institutions, financial sponsors and corporate entities, on a wide range of multi-jurisdictional leveraged buyouts and other complex financing and restructuring transactions.

    “We are delighted to have someone of Mark’s caliber join the Firm as we continue to extend the depth of our global finance practice. He has worked on some of the largest and most high profile leveraged transactions in the European market,” said Valerie Ford Jacob, Fried Frank’s Chairperson.

    “Mark brings his experience and expertise to a strong team who have been working on some of the most innovative and prominent transactions in the market, including advising on the largest European high yield transaction this year and the first “amend and extend” bank amendments in Europe,” added Managing Partner, Justin Spendlove.

    Fried Frank’s financing practice stands out because of its presence at all levels of the capital structure, working on some of the most sophisticated and complex deals on behalf of lead managers, arrangers and private equity sponsors. Clients include blue-chip corporations, financial institutions and private equity funds on a wide array of transactions, including merger and acquisition, mezzanine, and leveraged financing.

    “As a result of the recent disruption to the financial markets, it is increasingly important for law firms to understand the debt market on both sides of the Atlantic and are able to apply this knowledge to transactions. Mark’s appointment is a key part of our commitment to building our international practice,” said Fried Frank’s Head of Finance, F. William Reindel.

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  • Plex Systems Raises $6 Million

    Plex Systems Inc., an Auburn Hills, Mich.-based provider of ERP software for manufacturers, has raised $6 million in new funding led by return backer Apax Partners.

    PRESS RELEASE

    Plex Systems, Inc., provider of the No. 1 rated ERP software for manufacturers, today announced the company has received an investment totaling $6 million USD from multiple sources. Plex will use the growth capital to build on its strong customer base, expand its product development, and accelerate sales and marketing efforts.

    Funds advised by Apax Partners, a global private equity firm that has been an investor in the company since 2006, have invested $5 million. Additional investors include company management and the founding investors.

    “We have backed Plex Systems since 2006 and are pleased to be supporting the company’s management team as it oversees the next phase of growth,” said Jason Wright of Apax Partners.

    “Plex Systems has generated robust revenue growth and expanded into new markets over the past two years, winning new business in a very challenging economy,” said Plex SystemsCEO and President Mark Symonds. “With our competitors faltering, and the economy starting to show signs of life, we believe we have an immediate opportunity to accelerate our growth and become the global leader is SaaS ERP software for manufacturers.”

    For the first nine months of 2009, Plex Systems’ recurring revenue grew 34 percent over the same period last year, while total revenue grew 14 percent over the comparable period in 2008. Plex Systems credits this growth of revenue and market share to its expansion into new industries such food and beverage processing, aerospace and defense manufacturing, and medical device manufacturing, as well as growing its well established position within the automotive manufacturing space.

    About Plex Systems, Inc.

    Plex Systems, Inc. is the developer of Plex Online, a software as a service (SaaS) solution for the manufacturing enterprise and the only solution to achieve the prestigious Champion ranking in Aberdeen Group’s 2009 “ERP in Manufacturing” AXIS report. Plex Online offers industry-leading features for virtually every department within a manufacturer, including Manufacturing Operations Management (MOM) and Quality Management Systems (QMS) for the shop floor, Customer Relationship Management (CRM) for sales and marketing, Supply Chain Management (SCM) for procurement, and Enterprise Resource Planning (ERP) for finance and management. Plex Online’s fully-integrated model delivers a “shop floor to top floor” view of a manufacturer’s operations, enabling management to run their business at maximum efficiency. Founded in 1995, Plex Systems is headquartered in Auburn Hills, Michigan, with customers around the globe. More information is online at www.plex.com.

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  • Amazon finally releases the Kindle for PC app (but it’s still in beta)

    amazon
    Huzzah! PC users can finally include their computers within the each of Amazon’s syncing capabilities with the Kindle for PC app. The just released beta finally gives PC users a viable ebook reading option on a program that doesn’t look like it was designed for Windows 95. Although the majority of users will probably be those that already own a Kindle and just want to turn a few pages while at work, still relying on a Kindle for most of the reading. The app is pretty darn powerful in of itself, but there are some notable drawbacks and limitations.

    The Kindle for PC app has full access to the Kindle Book store, but it’s through the computers Internet browsers and not a touchscreen-friendly app. Ebooks look great in the app but only Kindle ebooks; you can’t import anything including PDFs or any other ebook. The app itself looks great but isn’t especially meant for a a touchscreen.

    Amazon is onto something here but it’s a good thing this app is still in a beta. If Amazon could make the app a little more touchscreen friendly with larger buttons and a dedicated book store, it very well could be a must-have app on all the touchscreen MID and UMPCs. The stradegy would be solid, get those proven gadget fans hooked with a free app and then possible sell them a Kindle. If they don’t buy a Kindle, at least they are still dropping $10 for each book. That’s money.

    The beta is free so why not jump over to Amazon and download it yourself. Mac users will need to sit quietly in the corner until Amazon outs an OS X edition.