June 11, 2013
Looks like the social networking company Bebo is caught in a tangled web. The TechCrunch article “Social Network Bebo Has Filed A Voluntary Chapter 11 Bankruptcy Petition” talks about the messy battle between the majority shareholder Criterion Capital Partners and the minority shareholders which include co-founder Michael Birch, Hecker Consultancy and SV Angel. In lieu of this Bebo.com Inc filed a voluntary petition for Chapter 11 Bankruptcy. An initial judgment was filed in February of this year by some of the smaller shareholders for the court to appoint a receiver to control the company because they felt it was being mismanaged by Criterion. Bebo was once a flourishing and profitable company but lately has been headed in a downward spiral.
“Once a fast-growing social network that was particularly popular in the UK and Ireland — in the UK in 2008 (when Facebook was much smaller) it claimed to have 40 million users who spent an average of 40 minutes each on the site. Bebo was bought by (TechCrunch owner) AOL for $850 million in 2008 but then sold to Criterion for $10 million only two years later.”
Adam Levin was the CEO in February but his future as the chief executive office at Bebo hangs in the balance as accusations of mismanagement swirl around. As stronger players such as Facebook entered the scene Bebo seems to not have been able to keep up with the competition and its popularity and overall business name faltered. With such initial success one must wonder if popular sites such as Facebook and MySpace could follow down the same path and one day be replaced by the next big thing.
April Holmes, June 11, 2013
June 6, 2013
Interesting thoughts occurred regarding identity recently. Specifically, how is search used for negative purposes? We were wondering because of the frightening news about Bloomberg recently, according to a CNBC story, “Bloomberg Users’ Messages Leaked Online.”
According to the story:
More than 10,000 private messages sent between users of Bloomberg’s financial terminals have leaked online, undermining the company’s attempts to restore faith in its ability to keep client data confidential as it scrambles to allay clients’ privacy concerns.
Two long lists showing confidential Bloomberg messages between traders at dozens of the world’s largest banks and their clients have been online for several years, the Financial Times has learned.
Undoubtedly a scary prospect for customers and a boon for criminals. It looks like maybe we will see some financial fraud defined the way we have seen health care fraud defined in the past. Thankfully, there are already regulators on the job spotting market fraud. The question remains, though, how can you avoid fraud when companies like Bloomberg can’t keep their own info under wraps? This is a tough situation that is going to require heightened security and, we suspect, government intervention to assure no more flubs like this happen.
Patrick Roland, June 06, 2013
June 4, 2013
Third quarter earnings information is coming in and many companies are sharing their results. Open Text, a leader in the Forrester Wave Smart Process Applications, has announced theirs through a press release on their site: “Open Text Reports Third Quarter Fiscal Year 2013 Financial Results and Announces Quarterly Dividend Program.” The information is broken up into three categories: financial highlights, business highlights and dividend program highlights.
The financial highlights caught our eyes. Some of the numbers reported were that cloud services revenue was $44.4 million and license revenue was $69 million, up 16% Y/Y.
According to the article, OpenText CEO Mark J. Barrenechea states:
“We are committed to delivering value to our stockholders through technology innovation, strategic acquisitions and now through a dividend. We generated $333.1 million in operating cash flow over the last twelve months and we are running our business at record operating margins. We have always been committed to rewarding our stockholders’ investments in OpenText and the Board has decided that it is the right time to declare a dividend for our stockholders.”
The financial side of things for Open Text looks to be a mix of good news and bad news. Margins are narrowing and Q3 2013 revenue was down from Q2 2013.
Megan Feil, June 04, 2013
May 26, 2013
Tableau Software has its IPO scheduled for May 16 and has been spotted in the news quite a bit as of late. The Greencrest Capital Management’s most recent email campaign was on “Tableau Software (DATA).” A brief but informative summary accompanies a chart available for download as a free preview.
The actual document is nine pages and covers Tableau’s IPO, their innovation in data visualization, information on how they handle big data and it shows their model aiming for profitability. The preview tells us that Tableau Software has set an aggressive IPO price range.
We also learned:
“The company updated its S-1 on Monday, ahead of its IPO on May 16. Tableau plans to offer 7.2MM shares at a range between $23-26 per share, suggesting an implied market capitalization of $1.4B at the midpoint, or 3.6x our 2014 revenue estimate of $390MM. We have updated our valuation analysis to reflect market capitalization of Tableau and price/share – following the release of the exact offering size and shares outstanding.”
Want some insight into Tableau’s big play IPO? Well, it’s brief but there’s an interesting chart. Check it out here.
Megan Feil, May 26, 2013
May 23, 2013
LucidWorks continues to raise revenue, helping the company build and support open source software that empowers organizations to manage their multi-structured data. Venture Beat covers this latest round of venture capital in their story, “LucidWorks Pulls in $10M to Turn Open Source Data Into ‘Business Gold.’”
The articles states:
“‘Big data’ startup LucidWorks has raised $10 million to help enterprise companies ‘turn multistructured data into business gold’ . . . According to a form filed with the SEC, existing investors Shasta Ventures, Granite Ventures, and Walden International contributed to this third round of funding. It brings LucidWorks’ total capital raised to $26 million.”
The company employs one-fourth of the committers on the Apache Lucene/Solr project, upon which their LucidWorks Search and LucidWorks Big Data offerings are built. Big customers include AT&T, Elsevier, Cisco, Nike, Sears, and Ford, among others. The company is truly doing well, and this additional capital will help improve their scope and reach. Their support offerings set them apart from the pack, and their investment in open source is sincere, sponsoring multiple training and development events across the country. If they stay on this path, good things will continue to happen to LucidWorks.
Emily Rae Aldridge, May 23, 2013
May 20, 2013
Why What You Do Not Can Bite Your Pocketbook. Marketers Have Their Interests Front and Center, Not the Customers’ Interests
A few days ago, I sat through several presentations about enterprise search. The systems struck me as quite similar. The emphasis was placed on providing basic information access to users. For the purpose of this short essay, I will not make distinctions among search vendors which position themselves as providers of analytics, business intelligence, discovery, and Big Data access, among other synonyms for search and information retrieval.
The missing pieces of the cost puzzle can make budget deficits a reality. A happy quack to Vermont’s Department of Information and Innovation. See the discussion to drive down the cost of doing business. States are paragons of fiscal probity.
However, the talks caused me to reflect on what the vendors left out of their presentations.
Here’s a checklist of the omissions in commercial systems which are now being marketed as an alternative to the high profile and expensive solutions available from Dassault, Hewlett Packard, Lexmark, Microsoft, and Oracle, Each of these large enterprise software vendors acquired one or more search systems. Each has taken steps to integrate search with other enterprise software solutions.
The gap the acquisition of such companies as Autonomy, Exalead, and others is now left to smaller and less well know vendors of search. I don’t want to mention these companies by name, but a quick search of Bing or Google will surface many of the firms vying to become the next $100 million vendor of enterprise search systems.
The first omission is a component which can acquire, normalize, and present textual content in a form the search system can process. For newcomers to enterprise search, the content acquisition process can add significantly to the cost of deploying an enterprise search system. Connectors are available from a number of specialist vendors. Most of the search vendors provide some basic tools for acquiring content. Depending on the organization, the vendor provided tools may be adequate for acquiring documents in text or Web pages in HTML. Other document types may be more problematic. A vendor offering a system which requires documents to be in a supported XML format often emphasizes the system’s ability to slice, dice, parse, and perform certain operations with alacrity. What’s omitted is the time, cost, technical expertise, and work flows required to get content into the search system. Cloud based enterprise search solutions and certain lower cost enterprise search systems leave content to the licensee or offer for fee consulting services to assist with these often complex activities.
May 17, 2013
What is going on with search? According to Search Engine Watch in “Kenshoo Global Search Spending Grows 15%, CPCs Drop In Q1” the trends point to global search spending going up, but the costs-per-click are in the doldrums. Kensoo’s Global Search Advertising Trends tracked the search trends and found many positive factors: click-through-rates are up 62%, search spending is 15% up year-over-year, and the total spending is up 32% from 2011. It all looks great, but then the global average CPC dropped $0.39.
It seems the search market is an inevitable seesaw, but what is making it rise and descend so much? Possibly the lack of marketers who have not caught onto mobile. The immediate culprit would be social media, but the just might be a red herring:
“Social media is certainly sucking up all the buzz, but is this what’s depressing CPCs? Not according to Aaron Goldman, CMO of Kenshoo. ‘Social is certainly hot, but we’re not seeing it cannibalize search budgets,’ Goldman said. ‘Rather social is being funded from other channels, such as display and offline.’ He adds that social ad platforms including Facebook Exchange are taking budget from other ad exchanges and networks.”
We’ll just pin it on a bunch of economic factors that mesh together and form near indecipherable tracings. Bet your dollar that Google will be affected; the Google Glasses won’t be able to protect them from this burn if it continues.
Whitney Grace, May 17, 2013
May 12, 2013
I read “Daily Voice Bankruptcy Is a Setback for Hyperlocal News.” The key is “hyperlocal.” The idea is that people in a locale want news and information about that particular area. Sounds good and makes sense. I live in Harrod’s Creek, Kentucky, and I don’t know what’s going on at the local college. After the fact, I might learn about a lecture or a musical event.
Monetizing good ideas is tough unless a person or an institution just gathers the information and posts it on a Web page which few may see. Hyperlocal doesn’t work where folks don’t read all that much (rural Kentucky) or where there isn’t much news because there is no local college (again Harrod’s Creek). But New York and Connecticut? Slam dunk. Smart people like those who work at Bloomberg and Goldman Sachs and similar outfits. Lots of real universities.
According to either Fortune or CNN Money:
Tucker blames the bankruptcy filing on a lawsuit filed last year by some former reporters who claim they were incorrectly classified as “exempt” from being paid overtime. The company, formerly known as Main Street Connect LLC, “does not have the financial wherewithal” to continue fighting the lawsuit,” and that it is scaring off potential investors, Tucker said in court papers. The company says its legal costs are already at $500,000, and that it is relying on debt to finance operations. Tucker says he has lent the company $250,000 of its $550,000 of secured debt. Its total debt is $867,000, and its assets are worth less than $400,000. Its remaining local sites drew about 437,000 unique visitors in March, for an average of less than 11,000 each.
Yep, staff and readers – definitely a potential problem. A setback for sure.
My view? There’s Twitter.
Stephen E Arnold, May 12, 2013
Sponsored by Augmentext which is not a two way service like some real information systems headquartered in the same region as the Daily Voice
May 7, 2013
Some of the UK newspapers pop up boxes wanting me to subscribe. Nice try, but I don’t follow too much of the England, Ireland, Scotland action. As fascinating as the Cotswolds may be, most of the business news from England is a bit depressing and irrelevant to life here in Harrod’s Creek. My subscribing to the major UK dailies online is simply not yet compelling. But once in a while an information truffle comes to my attention.
Economy Watch presented this somewhat troubling picture of England’s economy. For a discussion of the data, please, navigate to http://www.economywatch.com/world_economy/england/.
I did notice in one of my Overflights this story, however: “Barclays Capital Accused in Autonomy Lawsuit.” (If the link goes bad, you will have to hunt around for the story or look at a hard copy of the paper in a library.)
The main idea is that HP spent $11 billion for Autonomy. A short time later, HP wrote off about $9 billion, making the deal for Autonomy apparently worth $2 billion. Here’s was the Telegraph said about a shareholder lawsuit which named the top brass of HP among others as allegedly responsible for the misstep:
“HP’s financial advisor, Barclays, was conflicted in advising the board while simultaneously underwriting the financing of the deal,” the lawsuit states. “Compounding the problem, after the acquisition closed, HP’s fiduciaries misrepresented the facts to conceal their own failings,” it [the shareholder lawsuit] added.
What I find interesting is that the difference between what HP paid and at what the write down pegs the “value” is still a hefty number for a search and content processing company. Autonomy was the pre-eminent search vendor, and it did a good job of surviving and growing as other vendors failed. Consider that Autonomy survived and reach nearly $1 billion in revenues as Convera, Entopia, Delphes, Siderean and others disappeared.
My view is that Autonomy’s success continues to give venture firms and entrepreneurs hope that an enterprise search, business intelligence, or content analytics firm can deliver hundreds of millions in revenue. Since the roll up wave of the high profile search vendors has come and gone, the companies which want to fill the void look at the Autonomy deal as a benchmark.
What I find interesting is that like the Microsoft purchase of Fast Search & Transfer, the big European deals have been dogged by by questions about the financial underpinnings of the company. The smaller deals—Dassault”s purchase of Exalead, IBM’s deal for Vivisimo, Lexmark’s one-two deals for Brainware and ISYS Search Software, and Oracle’s acquisition of Endeca—have been largely without excitement. The search “technology” has morphed into functions which enhance the owners’ enterprise systems. I would note that most of these acquired search technologies were aging at the time of the buyouts in my opinion. ISYS, I believe, dates from the late 1980s.
Are some companies unable to manage, value, and leverage their search acquisitions? I was reminded yesterday that 20 somethings and slick MBAs have figured out how to make money from search. I listened, of courser. But in the back of my mind, it seems that most of the still standing search vendors are in the business of raising money. Making sales and growing a business, for some, is a secondary activity.
Which enterprise search vendors are demonstrating organic growth and generating sufficient cash to support and enhance their products? When I think about the mad rush to convert search technology into something to tackle big data or mine nuggets in real time data, I wonder if a “willing suspension of disbelief” is the defining characteristic of those who pump millions upon millions into search and content processing.
Technology is enhanced by marketing. Smart money seems to believe the public relations. The actual financial performance drifts to a secondary role.
Who’s affected? According to the shareholders, executives and bankers. Here’s the phrase in the estimable Telegraph’s lingo: “disastrous purchase of Autonomy.”
Disastrous is a colorful notion when applied to enterprise search and its related disciplines, isn’t it?
Stephen E Arnold, May 7, 2013
Sponsored by Augmentext
May 2, 2013
I participated in three telephone conference calls earlier this week. As I was thinking about each, I realized that the “metacontent” of the calls had little to do with the actual subjects discussed. On the surface, the participants were opining about search, smart software and money.
After I read “Buyouts – New Venture Aims at $100 Bln Zombie Fund Market” I wondered how much pressure these folks will put on the managers responsible for breathing life into the nearly dead? Here’s the passage I noted:
The new firm plans to act as a fiduciary to replace or complement general partners of funds; provide advisory services for limited partners; create successor funds by consolidating direct private equity investments into a fund structure; and shop for investment opportunities such as follow-on capital at the portfolio level. In a prepared statement, Kirchner said the partnership “provides tremendous validation” of his firm’s business model. “Now is the right time for us to scale up to meet rapidly increasing market demand,” he said, adding that the deal with Crestline Investors will provide “institutional infrastructure and access to capital.”
I don’t see many butterflies, fairies, or unicorns in this play. I then thought about the conference calls. Each of these focused on raising money from a willing source. My latest take on some key phrases which I jotted down during these calls appear below:
1 — “We have a breakthrough search technology.”
What I now think this phrase means is something along the line of:
I have an MBA, know nothing about search, but I think this new search system can become the next Google.
In my opinion, this is self delusion fueled either by ignorance or the prospect of getting paid when a person or persons puts money into the search technology. Is Google a search company? Is it likely that Google will be unseated any time soon? These questions are ignored by the participants in this call.
2 — “I have more than $500,000 in sweat equity in this breakthrough cloud system.”
What I now think this phrase means something like this:
I want to get funding so I can pay myself $500,000.
I, like many others, want to get paid. Is there another bankrupt mom in this $500,000? A new Corvette? Is it realistic to think that a person or persons investing in a start up will happily watch $500,000 disappear into the pocket of a sweat equity worker? I think not in most cases. Investors want revenue growth, profits, and a big payday for themselves. Others stand behind in the line at the pay window.
3 — “I am working 80 hours a week and juggling essential tasks.”
Here’s my translation:
I have replaced judicious action with doing lots of stuff in the hopes that something, anything, works.
What message does working really hard while juggling send. One misstep and the balls come down and bounce away. One or two could strike the juggler and knock him or her unconscious. Could that be a way to achieve entropy?
Has search, content processing, big data, and analytics been cracked? For me, no. Are these chestnuts roasting by an open fire? You bet. Get too close to the flames and there is pain. Companies which accept funding have to produce with or without the odd phrases which keep cropping up in conference calls.
Stephen E Arnold, May 2, 2013
Sponsored by Augmentext