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Excitement Ahead: Google and Oracle Get Another Jolt of Java

May 27, 2015

Let’s assume that Fortune is spot on. Let’s assume that Department of Justice lawyers have figured out the issues related to application programming interfaces. Let’s assume that copyright is the operative claim. Let’s assume that no one writes, “Assume. Ass-u-me.”

Navigate to “Let Oracle Own APIs, Justice Dept Tells Top Court in Surprise Filing.” Surprises are a good thing, right?

The all-time-champ of business is Fortune. I circled this passage:

The issue before the court is when, if at all, API’s can be protected by copyright. The outcome has serious repercussions not just for Google, but the entire software industry, since API’s act as a sort of lingua franca that allow different computer programs to deliver instructions to each other. In the case of Oracle and Google, the dispute turns on the search giant’s use of certain Java API’s for its Android software. Java is a programming language that was developed by Oracle’s predecessor, Sun Microsystems, and is widely used by software developers.

Quick question? When Java was in the Google mix, how many former Sun engineers were employed at Google? How many were working on the caffeinated project?

I then noted:

U.S. District Judge William Alsup, a respected Silicon Valley judge, initially sided with Google in 2012 after teaching himself Java for the trial. He found that the API’s were functional, and fell on the wrong side of copyright law’s “idea/expression dichotomy” and merger doctrine – these are rules that prevents copyright law from becoming too broad, and covering everyday things like menus and simple instructions.

Even the dinosaur bones on the Google campus smiled.

But then the legal worm did its thing:

Last year, however, the U.S. Federal Circuit appeals court overturned that finding, and likened the Java API’s to Charles Dickens and other literary works.

And now another twitch:

In its filing on Tuesday, the Obama Administration’s top lawyer sided with the Federal Circuit. It also repeated that court’s argument that the case should be decided by determining if Google had a “fair use” right to use the API’s

What’s next?

You know the answer: More lawyering.

Google now has an opportunity to spend more quality time with various officials in Washington, DC. The stakes are high because a couple of big companies are about to help explain copyright. Publishers, like Fortune, should be really excited.

Stephen E Arnold, May 27, 2015

HP Autonomy: MicroTechnologies Joins the Legal Fray

May 19, 2015

I read “MicroTech Sues HP, Claims to Be Caught in Middle of Autonomy Legal Battle.” I am going to have create a wall of index cards to keep track of who is suing whom in the dust up about Hewlett Packard’s purchase of Autonomy.

According to the write up:

MicroTechnologies LLC is suing Hewett-Packard for $16.6 million in unpaid invoices that the technology giant claims were for deals that never actually existed.

The article explains:

For two transactions totaling $16.5 million, Autonomy took the payments from MicroTech but never delivered the license keys, according to the complaint. Neither deal ever closed, the lawsuit states, but Autonomy kept the payments from MicroTech. One of the two customers was the Vatican Library in Italy, and the other was HP itself — prior to its 2011 acquisition of Autonomy for $11 billion.

I will make a note card run to Dollar General at noon. Lots of litigants to track.

Stephen E Arnold, May 19, 2015

HP Autonomy Dust Up: Details, Details

May 11, 2015

I read belatedly yet another analysis of the HP lawsuit against Autonomy. “Details of HP Lawsuit against Autonomy Executives” The write up reports that HP is taking “direct legal action against Lynch.” There is nothing like a personal legal action to keep the legal eagles circling in search of money.

The HP position is that Lynch (the founder of Autonomy) and Sushovan Hussain (former Autonomy CFO) overstated Autonomy’s growth and profits. My reaction is “Yeah, but didn’t you guys review the numbers before you wrote a check for $7 or $8 billion?”

Details, details.

The article states:

The acquisition has been seen as a disaster for HP since the tech giant was forced to write down $8.8 billion from the deal in 2012. The $5.1 billion legal claim is one of the largest ever brought against an individual in Britain. HP bases the claim on a $4.6 billion charge linked to the alleged financial misconduct, roughly $400 million connected to shares given to Lynch and Hussain and a further $100 million loss associated with Autonomy that was suspected of being caused by the former executives’ activities, according to the British court documents.

HP may not be a tech leader or even a C student in acquisition analyses, but it is the leader in the magnitude of the claim it is making against Dr. Lynch. If he is found guilty of selling something to HP who analyzed the deal and then decided to buy the company, he will have to pay $5.1 billion.

I don’t have a dog in this fight. But it seems to me that HP reviewed Qatalyst Partners’ financial presentation about Autonomy. Then HP analyzed the numbers. Then HP involved third parties in the review of the numbers. Then HP decided to buy Autonomy. Then HP bought the company. Then HP found that Autonomy is not exactly a product like a tube of Colgate Total toothpaste. Then HP fired, forced, or tasered Lynch and others out of the HP carpet land. Then HP tried to convert the technology into some sort of cloud based toolkit. And finally HP decided to go after Dr. Lynch. You don’t have to like him, but he is a bit of a celebrity in the Silicon Fen, holds an Order of the British Empire, and he is quite intelligent, maybe brilliant, and in my experience, not into dorks, fools, goof balls, losers, or dopey managers. Your mileage may vary, of course.

I am sufficiently experienced to know that when a buyer wants a product, service, or company, craving—nay, lust and craziness—kick in. “Yo, we’re 17 years old again. Let’s do it” scream the adrenaline charged experts. This is a slam dunk. We can take Autonomy waaaay beyond the place it is today. Rah, rah, rah. Get ‘em, team.”

Autonomy’s management and its advisors knows that PowerPoint dust can close deals. The blend of blood frenzy and the feeling of power one gets when taking ownership of a new La Ferrari is what business is about, dog. Smiles and PowerPointing from Autonomy played a part, but HP made the decision and wrote the check. Caveat emptor is good advice.

Frankly I see HP as the ideal candidate for a marvelous business school case. The HP Autonomy story is better than the Yahoo track record of blunders and blind luck. The management of HP believed something that has never ever ever been done: Generate billions of dollars in new revenue quickly. Google generates billions from advertising. Autonomy generated hundreds of millions in revenues from the licensing of dozens of products. HP got its wires crossed in reasoning which does not line up with the history of  the search and content processing industry.

Billions do not flow from content processing and search technology. Investors can pump big money into a content processing company like Palantir. Will these investors get their money back? Don’t know. But to spend billions for a search and content processing company and then project that a $600 million or $800 million per year outfit would produce a gusher of billions is a big, but quite incorrect, thought.

Never has happened. Never will. It took Autonomy 15 years, good management, intelligent acquisitions, and lots of adaptation to hit the $600-$700  million plus in annual revenue it generated. Only energy drinking MBAs with Excel fever can convert 15 years and multiple revenue streams from dozens of quite different products into one giant multi billion dollar business in a couple of years. The scale is out of whack. When I visited the store in Manhattan with the big crazy pencil and the other giant products I could see the difference between my pencil and the big pencil. HP, I assume, would see the two pencils as identical. HP, if it purchased a big pencil, would sue the shop in Manhattan because the big pencil would not fit into a Panasonic desktop pencil sharpener. Scale of thinking, accuracy of perception—They matter to me. HP? Hmm.

This is not bad business on HP’s part. This is not flawed acquisition analysis on HP’s part. This is not HP’s inability to ask the right questions. This is medieval lunacy with managers dancing on the grass under a full moon. Isn’t HP that company which has floundered, investigated its own Board of Directors, chased good managers from one office in Silicon Valley into the arms of a competitor based on the old Sea World property? Maybe. Maybe HP is a fully stocked fishing pond, not a water deficient stream in Palo Alto?

My personal view is that HP has itself, its Board of Directors, and its advisors to blame. I find it very difficult to believe that as talented as Dr. Lynch is that he could spoof HP’s Board, HP’s financial professionals, HP’s advisors, HP’s lawyer, and HP’s Meg Whitman. Hey, the guy is talented, but he is not Houdini.

Well, we have a show, gentle reader. We have a really big show. Where is Ed Sullivan when we need an announcer?

Stephen E Arnold, May 11, 2015

Annual Ranking of Legal Sector Puts Omnivere at the Top

May 6, 2015

The article titled Omnivere Voted Best National End-To-End Ediscovery, Managed Ediscovery & Litigation Support, and Data & Technology Provider in 2015 Best of the National Law Journal on Blackbird discusses the ranking and what it means. This is an annual ranking that is conducted with readers of The National Law Journal & Legal Times casting ballots based on their experiences with their own legal services. Omnivere won this year’s legal sector “best in show.” The article states,

“In less than a year, OmniVere has established itself as a trailblazer in the next wave of data and technology consulting, eDiscovery services and litigation support. In creating an in-house team of expert, veteran data consultants, including former senior leadership from FTI, Navigant Consulting, Integreon, Recommind, Xerox and Berkeley Research Group, OmniVere is well positioned to deliver a range of products and services on a global playing field.”
Omnivere was launched in May 2014 and rapidly grew into one of the biggest and most sought-after companies for its work in litigation support and discovery management. Erik Post, Omnivere President, is quoted in the article celebrating the win and the overall success of the company. He suggests that in spite of their new brand, the work and abilities of the staff is “resonating across the country.”

Chelsea Kerwin, May 6, 2014

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Google and Europe: Google and Some No So Best Buds

April 28, 2015

I read “Google Antitrust Case: 19 Complainants Named Including Microsoft.” The write up identifies companies complaining about Google:

  • 1plusV (
  • Eurocities
  • Expedia
  • Foundem
  • Hot Map
  • Microsoft
  • Streetmap
  • Trip Advisor
  • Yelp

Yep, 19 but only 10 are listed in the write up. Well, close enough for legal reporting style.

I spotted some of the other 19, but I am not a real journalist, of course. Real journalists work in a different way. Here are some other grousers:

  • BDZV
  • Elfvoetbal
  • Nextage and Guenstiger
  • Odigeo
  • Twenga
  • VDZ
  • Vft
  • Visual Meta (Axel Springer which owns a chunk of the woiuld be Google killer Qwant (Pertimm).

Well, imagine that. Nineteen outfits unhappy with the GOOG.

Stephen E Arnold, April 28, 2015

Google Has a Problem: A Monopoly on Data, Not Traffic, Data

April 20, 2015

Leave it to the complainers in the UK to accuse Google of having a monopoly on data. Navigate to “Google Dominates Search. But the Real Problem Is Its Monopoly on Data.” Note that there are some outfits in the UK which have quite a bit of data too. The difference is that Google appears to be free, and the UK outfit is sort out of the spotlight.

The write up jumps from the allegations under consideration by the European Commission about Google’s search results. The write up states:

Were Google a manufacturer, say, a monopoly such as it has over internet search would never be allowed. But three factors conspire to Google’s advantage. Firstly, digital services, however ubiquitous, seem less tangible and therefore do not appear so obvious a threat to commercial pluralism, innovation and to consumer interests.

Okay, no monopolies allowed. No kilt wool combines. No champagne controls in quirky France. No centralization of Mercedes Benz parts. I understand.

To its credit, the Guardian points out that an alternative to Google is just a click away. The reality is different. Ask a shrink about habits. I highlighted this paragraph:

The wider problem is that Google has become the ultimate monopolist of the information age. Information is a source of power, and nothing in the EU’s case does anything significant to touch that power.

Good point. So isn’t the war over? Research that question in Qwant.

Stephen E Arnold, April 20, 2015

Short Honk: Google: Perhaps Google Is Sorry

April 15, 2015

I don’t want to rehash familiar ground. Google perceives itself as a great outfit. “Antitrust: Commission Sends Statement of Objections to Google on Comparison Shopping Service; Opens Separate Formal Investigation on Android” makes it clear that the European Commission has some doubts. The headline also demonstrates that the EC wants to create a Google friendly document. That first page of results is important.

As a Googler once told me, “It is easier to ask for forgiveness than ask for permission.” I have emended this to mean, “We’re sorry. We’re really, really sorry.” It worked in a “Fish Called Wanda.” Oh, wait. That was a motion picture. Well, close enough.

Stephen E Arnold, April 15, 2015

Attivio Board Member Under Scrutiny

April 3, 2015

I read “The SEC Charges Venture Capitalist with Insider Trading.”

Here’s the passage I noted:

An Oak spokesman was just learning about the SEC charges when contacted by Fortune, and did not yet have any comment. Among the open questions not only are if Ahmed will be a partner on the future fund, but also if he’ll remain a board member with existing Oak portfolio companies like Attivio Inc., Circle Financial Kenet LLC and

I have mentioned that firms requiring repeated injections of venture funding are under considerable pressure to produce returns. I find it interesting that Attivio, founded by former executives at Fast Search & Transfer, had a board member who allegedly requires investigation. I wish to note that Fast Search was investigated by Norwegian authorities, and John Lervik, the founder, was saddled with formal punishment.

Attivio is a variant of Fast Search’s aspirations to deliver an enterprise wide unified information access platform. Dr. Lervik and his team had the ability to see what enterprise customers wanted. The technology fell short of the mark and some fancy financial dancing ensured. Attivio’s founders left Fast Search before the investigation spooled to high RPMs.

Search remains a difficult sector  in which to produce the types of returns venture firms and angels expect the investments to generate. Is the SEC investigation an indication that extra ordinary measures are required to make some of the these investments pay off?

My view is that it is desirable to offer a product that customers want to buy, grow by making sales, and avoiding the lure of geysers of venture capitalist money. Others have a different view. That makes horse races. Who would try to fiddle with a horse race? Good question in Kentucky.

I wonder if any of the Fast Search team are on the Attivio Board of Directors.

Stephen E Arnold, April 3, 2015

Google: Three Elephants Preparing to Fight Among Themselves

April 2, 2015

I love the Google. I found two unrelated articles interesting for one simple reason: Google is getting ready for its own version of Wrestlemania.

The first write up is “China Blasts Google Security Move as ‘Unacceptable’.” Most outfits doing business in China seek to avoid getting into an awkward position with the Chinese authorities. Anyone remember the mobile death vans? Well, check up on your allegedly accurate current history. According to the write up, Google is not recognizing certain Chinese certificates:

The Google posting was updated Wednesday to note that CNNIC’s certificates “will no longer be recognized in Google products” adding that the Chinese organization was “welcome… to reapply once suitable technical and procedural controls are in place”.  An anti-censorship group, – which has accused Beijing of attacking its services—said the original revelation was evidence that CNNIC had been “complicit” in so-called man-in-the-middle operations. Such attacks involve an unauthorized intermediary inserting themselves between computer users and their online destinations, usually undetected, allowing them to harvest data including passwords.

For me, the point is that Google is lighting up the radar of the CNNIC just as the fly bys by Mr. Putin’s armed forces catch the attention of Russia’s neighbors.

The second write up is even more fascinating, if it is accurate. The article is “EU Lays Groundwork for Antitrust Charges Against Google.” You will either have to buy a newspaper and kill a small bush or tree or pay. Or you will have to pony up money for online access. If the link works, wow, you are lucky.

The passage I noted was:

The European Commission, the European Union’s top antitrust authority, has been asking companies that filed complaints against Google for permission to publish some information they previously submitted confidentially, according to several people familiar with the requests. Shopping, local and travel companies are among those that have been contacted, one of those people said.

Assume the “one of those people said” is delivering on the money information. The idea that there will be legal documents available for analysis is darned interesting. I have reviewed one or two court documents in my work career and some of them are chock full of useful information. Too bad that some documents, like those in the i2 vs Palantir matter disappear after the proceedings, but that’s life in the aeries of legal eagles.

The net net of this is that Google is not just jousting with the Xooglers at Facebook and the world’s smartest man at Amazon. The Google appears to be entering a two front war. One hopes those online advertising revenues continue to pump cash into the Google’s coffers. Two front wars can be costly for human, companies, and the victims of the proverb which asserts:

When elephants fight, only the grass gets trampled.

I am delighted I live in Harrod’s Creek. The mine drainage run off makes grass a scare item. So who will be the grass when Google tussles with China and the EC? I am interested in how a company battling nation states will move forward.

Stephen E Arnold, April 2, 2015

HP: Caveat Venditor Becomes the Company Slogan

March 31, 2015

[I was going to post this on April Fool’s Day. But I thought that some of my very small audience would think I was posting a joke. This is no joke, I fear.]

I am not sure my high school Latin is working, but I think I am close. You know the phrase, Caveat emptor. My view is that Hewlett Packard’s new slogan is, “Seller beware” or caveat venditor in my version of the dead language.

Navigate to “HP Sues Autonomy Co-Founder Lynch in U.K. for $5.1 Billion.” The write up reports:

Hewlett-Packard Co. escalated its more than two-year-old battle with Michael Lynch, suing the Autonomy Corp. co-founder, as well as a former chief financial officer, for $5.1 billion. Hewlett-Packard has maintained that before it agreed to buy the Cambridge, England-based software company for $10 billion in 2011, Lynch and other managers gave an overly optimistic representation of its financial health.

There you go. Let me get this straight. HP decided to buy something. That something triggered much work by HP executives and its consultants. The something became Autonomy. More analyses and conversations ensued.

HP believes that the sellers (Dr. Mike Lynch and his senior managers) did the Norman Vincent Peale thing to sway the $100 billion corporation. You remember. The Power of Positive Thinking. I assume Dr. Lynch and his team did the normal sales pitch complete with diagrams, buzzwords, and lots of upbeat comments about the market opportunity, the IDOL and DRE technology, and the future for smart software. Most of the pitches I have heard in my 50 year business career are more marketing than verifiable facts. Buyers want to buy. Sellers want to sell. Sellers usually have a tough time forcing a buyer to buy unless the situation takes place in a Netflix entertainment experience.

false advertising

A happy quack to

The article points out:

The U.K.’s Serious Fraud Office in January dropped its probe into the takeover after finding “insufficient evidence for a realistic prospect of conviction,” the agency said at the time. The U.S. Department of Justice is still investigating, and the SFO said it gave its files to the U.S. authorities. The U.K. accounting regulator, the Financial Reporting Council, is still looking into the matter. The fight has been played out in the open on both sides of the Atlantic, with Lynch posting comments and documents on his blog and Hewlett-Packard aligning with shareholders to pursue Lynch and Hussain in court.

Okay. The SFO seems to okay with the deal. FRC is still analyzing.

The winner is going to be the law firms working on this matter. From my point of view, HP bought Autonomy. Dr. Lynch sold Autonomy. As far as I know, Dr. Lynch did not use direct or implied threats to cause the deal to occur. HP, managed by adults, made a decision.

Now, years and billions later, HP is going to “prove” that a known technology wizard with a strong marketing sense fooled a multi-billion dollar company, its handpicked team of managers and analysts, and legions of brains for hire folks.

I know Dr. Lynch is good. I did not know he was a magician and hypnotist.

Fascinating but HP has to do something in addition to splitting its company in two, ignoring the threat posed by Amazon and its ilk, the absence of management wisdom, and the uncertain market into which HP knowingly jumped.

I wonder if HP will take a look in the mirror and wonder what business message the company is sending. Auto dealers in Palo Alto are probably wondering if they are next to be sued. Every auto salesperson with whom I interacted stresses the positive. I, when the buyer, have to do my homework and understand the facts about a purchase BEFORE signing the deal and forking over hard cash.

Stephen E Arnold, March 31, 2015

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