Posts Tagged ‘telecoms’


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Scarred by the Dot-Com Bust, Reinvented for Social Media

Thomas WeiselNoah Berger/Bloomberg NewsBeen there: Thomas Weisel scouted technology start-ups in the 1990s and is doing so again.
SAN FRANCISCO — Thomas Weisel doesn’t have much personal experience with social media. He has never opened a Facebook or Twitter account, and he has resisted buying an iPhone.
But Mr. Weisel knows a lot about overheated markets. His firm, Thomas Weisel Partners Group, was a dominant force in taking technology companies public during the dot-com boom and was hobbled when that bubble burst in 2000.
Today, Mr. Weisel, 70, is assessing the industry landscape from his corner office at the Stifel Financial Corporation, the brokerage firm that bought his struggling company in April 2010. Although the current frenzy raises concerns, he says he thinks it is unfair to compare Internet stocks during the late 1990s to social media companies now.
“In a sentence, the big difference is these companies, in many cases, are enormously profitable out of the gate,” he said.
Mr. Weisel, who as co-chairman of Stifel’s board is still out hustling banking business, is among the many heavyweights from the dot-com days who are reinventing themselves in the era of social media.
Mary Meeker, the research analyst who was called the Queen of the Internet, recently joined theventure capital giant Kleiner Perkins Caufield & Byers. Frank Quattrone, the Wall Street investment banker who helped take Amazon.com public in 1997, now has his own boutique advisory group working with technology start-ups and stalwarts, including National Semiconductor on its recent deal with Texas Instruments. Sandy Robertson, previously a founder of Robertson Stephens, a technology banking firm, joined Francisco Partners, a private equity shop that focuses on technology.
Lise Buyer, a former Credit Suisse First Boston analyst who currently advises companies on potential public offerings at her firm, Class V Group, jokes that she is “running into everyone” she knew from the go-go period of the late 1990s.
“Social media is a new frontier,” Mr. Robertson said.These veterans offer a unique perspective, having survived the previous technology craze and now playing a role in the current one.
Mr. Weisel, a Rochester, Minn., native who was once a competitive speed skater, rose to fame during the technology boom. In the early 1990s, he ran Montgomery Securities, one of the boutique banks known as the Four Horsemen that dominated technology underwriting during the decade. During his tenure, Mr. Weisel took Yahoo public and helped orchestrate StrataCom’s sale to Cisco for $4.7 billion, at the time the largest technology acquisition that year.
But like many at the time, Mr. Weisel was swept up in the frenzy. In an interview in January 2000, he declared the tech boom was “the Super Bowl of all Super Bowls.” Just a couple months later, the bubble burst — a crushing blow to his firm.After NationsBank bought Montgomery in 1997, he struck out on his own, starting Thomas Weisel Partners. He quickly landed a number of big assignments, including advising Yahoo on its acquisition of GeoCities.
In the aftermath, Mr. Weisel tried to diversify his firm away from technology, which accounted for more than 80 percent of revenue. He expanded into health care and consumer products. To raise capital, he took Thomas Weisel public in 2006.
But the firm never really recovered from the dot-com bust, and in 2010, it was sold to Stifel Financial.
His experience over the last decade has influenced his view. While he remains bullish on technology broadly, he says social media stocks are far from a slam dunk.
“They have great potential, but they have to continue to produce,” Mr. Weisel said.
After years of managing, Mr. Weisel is happy to play the role of sage counsel. He regularly meets with technology entrepreneurs and executives, to help Stifel Financial land deals.
The notable difference this time is the underlying business models of many companies, he says. Technology costs are minimal, which allows social networking sites to be profitable almost immediately. During the dot-com boom, companies burned through cash and took years to turn a profit — if they did at all.
“For the most part, these are real companies with real revenue and are generating real cash flow,” he said.
Even so, Mr. Weisel says it is critical for companies like Groupon, which is said to be valued at roughly $25 billion, to maintain their leadership position.
“First-mover advantage is key,” Mr. Weisel said. “If they don’t continue to produce, someone next door will come in and build a better mouse trap.”
He points to MySpace as a cautionary tale. In 2006, it was the top social networking site, with users topping 50 million that year, according to the research firm comScore. But it has steadily ceded ground since then to Facebook, which claims 150.7 million users today versus 37.7 million for MySpace. Its current owner, the News Corporation, recently put MySpace on the auction block.
Mr. Weisel is also watching valuations. Companies like Facebook, which is worth an estimated $50 billion, may not be able to justify such numbers unless their strategies evolve and they find new sources of profit.
“Right now, these business models are typically brand new and not fully vetted,” Mr. Weisel said. “They have to figure how to continue to monetize the traffic they are getting or valuations will fall off.”

The Barons of Two Booms

Other major Wall Street players from the dot-com bubble have reinvented themselves.
Sandy Robertson
Sandy Robertson
THEN: A founder of the boutique bank Robertson Stephens, he proclaimed in 1999 that tech companies were the most expensive stocks ever.
NOW: While he wonders if sites like Facebook are the modern equivalent of the defunct citizens’ band radio, Mr. Robertson, an executive at the private equity firm Francisco Partners and a director at the software company Salesforce.com, sees great potential.
Mary Meeker
Mary Meeker
THEN: As an analyst for the investment bank Morgan Stanley, Ms. Meeker was referred to as the Queen of the Internet for her bullish investment calls on technology companies like Amazon.com and eBay.
NOW: Ms. Meeker left her perch at Morgan Stanley in late 2010 to join Kleiner Perkins Caufield & Byers, the venture capital firm based in San Francisco. An investor in the start-ups Groupon and Zynga, the firm recently introduced a $250 million social media fund.
Henry Blodget
Henry Blodget
THEN: Once a high-flying technology analyst at Merrill Lynch whose stock recommendations often moved the market, Mr. Blodget was accused by regulators of issuing positive ratings on stocks in public while deriding them in private e-mails. As part of a settlement, he was barred from the securities industry.
NOW: Mr. Blodget is currently the editor and chief executive of The Business Insider, a gossipy news site that covers Wall Street. He has more than 28,000 followers on Twitter.

Sent from a wireless device.


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HTC, founded only in 1997 and for the first 11 years of its existence was a little-known contract manufacturer for other brands, was valued at $33.8bn after the close of trading in Asia on Thursday,
HTC’s market value is also bigger company than either Sony or LG Electronics, according to Thomson Reuters data, but it remains smaller than Apple or Samsung Electronics, although unlike those two companies, the smartphone is the Taiwanese company’s sole business.
HTC shares are now a third higher than they were at the start of the year, while Nokia’s shares have fallen by a fifth over the same period

HTC overtakes Nokia in market value

FT.com / Telecoms – By Robin Kwong in Taipei
Published: April 7 2011 12:54 | Last updated: April 7 2011 12:54

Taiwan’s HTC has overtaken Nokia to become the third most valuable maker of mobile phones, highlighting the speed with which touchscreen-based smartphones have become a mass-market product in Europe and the US.
The growth of HTC, which was valued at $33.8bn after the close of trading in Asia on Thursday, also highlights the slide in value of Nokia which has failed to innovate in the new smartphone market.
The problems facing the Finnish mobile phone maker, which had a market capitalisation of $33.4bn based on Wednesday’s closing prices, were highlighted by Moody’s on Thursday.
The credit agency downgraded Nokia’s debt rating from A2 to A3, citing the company’s weakened market position and uncertainty over its transition to Microsoft’s Windows Phone software.
HTC’s market value is also bigger company than either Sony or LG Electronics, according to Thomson Reuters data, but it remains smaller than Apple or Samsung Electronics, although unlike those two companies, the smartphone is the Taiwanese company’s sole business.
HTC shares are now a third higher than they were at the start of the year, while Nokia’s shares have fallen by a fifth over the same period.
Nokia remains the world’s biggest producer of mobile devices by volume, with a 28.9 per cent global market share at the end of last year, according to Gartner.
But Nokia has fallen behind rivals in the smartphone market where Apple’s iPhone and Android-based phonemakers such as HTC have taken market share.
Nokia’s failure to compete culminated in a high-profile management reshuffle last year, with Steven Elop becoming the first non-Finnish chief executive of the company in its 145-year history.
Mr Elop, who joined Nokia from Microsoft, likened the company’s predicament to a man on a “burning platform” as he outlined a plan to transform the company and make it more competitive.
The American is now seeking to reinvent Nokia as a provider of premium smartphones based on Microsoft’s Windows Mobile platform.
HTC’s rapid rise reflects the speed with which touchscreen-based smartphones have become a mass-market product in Europe and the US.
Its sales last year was T$278.8bn ($9.6bn) and it shipped 24.7m units last year, according to Gartner, compared with 46.6m units of iPhones shipped last year.
While growth is expected to slow this year compared with 2010, the global smartphone market is still expected to grow by 50 per cent, according to IDC.
Unlike HTC, which was positioned from the start to take advantage of this trend, many other mobile phonemakers were caught off-guard by this rapid change.
HTC was founded only in 1997 and for the first 11 years of its existence was a little-known contract manufacturer for other brands. But since it made the world’s first Android-based phone for T-Mobile in 2008, the company has proved quick to adapt to the market’s changes.
HTC took advantage of the 18-month period in which it was the sole producer of Android-based phones to grow quickly in size. C.K. Cheng, analyst at CLSA, the equity brokerage, says that HTC’s scale means that “in times of tightness in the supply chain, such as now after the Japan earthquake, all the suppliers are going to ensure that Apple and HTC get their orders filled first rather than Motorola or Sony Ericsson”.
The rally in HTC’s shares also reflects the fact that it has been quick to fill the nascent market for phones running on much faster, fourth-generation networks. In the US, HTC’s Evo Shift, for Sprint’s network, and its Thunderbolt, for Verizon, are the only two 4G smartphones available on the market, although competing devices will soon be launched.
“Even if it is just a one or two-month lead, it is still a significant advantage,” Mr Cheng said.
However, some analysts, such as Morgan Stanley’s Jasmine Lu, worry that HTC will face increasing headwinds as competitors catch up, and may see its profit margins fall if low or mid-ranged smartphone models grow in popularity at the expense of premium models.

Copyright The Financial Times Limited 2011
FT.com / Telecoms – HTC overtakes Nokia in market valuevar addthis_config = { ui_cobrand: “MasterBlog en Español”}


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Vivendi to Buy Vodafone SFR Stake for $11.3 Billion

Vivendi, the French media conglomerate, announced on Sunday
that it had taken full control of SFR, a large cellphone
service provider, buying Vodafone’s 44 percent stake in
the company for $11.3 billion in cash.

The deal gives Vivendi full control of one of its biggest
business units, a longtime goal for the company. SFR is one
of the biggest cellphone carriers in France. It earned
nearly 4 billion euros in profit last year and had about 20
million mobile service customers as of Sept. 1.

DEALBOOK:
http://dealbook.nytimes.com/2011/04/03/vivendi-to-buy-vodafones-stake-in-sfr-for-11-billion/?nl=business&emc=dlbka9





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