It’s quite amazing what the buyout from ebay has done to Skype. Now it suddenly is technology darling out there. Apparently Cisco is making an aggressive run for Skype.
Cisco has made an offer to acquire Skype before they complete their IPO process, says one of our more reliable sources. We have not been able to confirm this rumor one way or another via other sources, which isn’t surprising. A company in lock down during the IPO process is usually even more tight lipped than normal.
But if true this would be one very big acquisition. Skype insiders are hoping for an out of the gate valuation of $5 billion or so, we’ve heard. Presumably Cisco would have to bidding in that range to make it interesting.
Google was also rumored to be sniffing around Skype, but antitrust concerns may have persuaded them not to make an actual offer.
Cisco has done a great job with WebEx. This would be a similar but much bigger play. It makes sense for Cisco and would provide nice returns for Andereesen and his freinds.
Ali Partovi has a very interesting guest post on Techcrunch on how an 18 year old Scott Banister invented search keyword advertising.
The story begins in 1996 with an 18-year-old college dropout named Scott Banister
, who came up with a simple but elegant concept that turned out to be one of the best business ideas in history.
This is the true story of the search business model — a concept that John Battelle and other search historians have erroneously attributed to Bill Gross for Goto.com. Although Gross deserves the lion’s share of credit for recognizing a good idea and more importantly for implementing it, the credit for developing the idea itself belongs elsewhere.
An interesting read.
Social gaming has overtaken email in the amount of time Americans spend online and Google has a huge hole in this activity. So it is buying up companies to fill its gaps. It recently bought Slide and now is buying Jambool that makes a popular social payment system called Social Gold.
Google continues to gobble up companies that will form the backbone of it’s new social strategy and the upcoming war with Facebook. Last week it was Slide. And they are now buying Jambool
and their Social Gold payment product, we’ve heard from multiple sources. The purchase price is $55 million plus another $15 million -$20 million in an earnout, say our sources.
Social Gold gives app developers the ability to build payments directly into their games and other applications. It was founded by Amazon veterans Vikas Gupta and Reza Hussein, and has raised $6 million in funding.
Like other payments companies they’ve been hit very hard by Facebook Credits
A recent report by UBS research suggests AWS will be making $500M in 2010.
Today, UBS Investment Research analysts Brian Pitz and Brian Fitzgerald released a report which projects revenue numbers against Amazon’s web services. The duo estimate that in 2010, AWS will generate about $500 million in revenues and will grow this number to $750 million by 2011. By 2014, it would bring in close to $2.54 billion in revenues.
UBS analysts believe that the total market for AWS-type services will be between $5-to-$6 billion in 2010 and will eventually grow to $15-to-$20 billion in 2014.
We are in the midst of the second E-commerce wave. Amazon is buying daily deal site woot for $110M in cash.
Amazon.com is moving into a quirky corner of e-commerce by agreeing to buy Woot, a deal-of-the-day site.
The terms of the acquisition, which the companies announced Wednesday, were not disclosed, and Amazon said it expected the deal to close in the third quarter.
Woot is one of a cluster of shopping sites that have sprung up over the last few years in the biggest flurry of e-commerce innovation since Amazon and eBay were started.
Start-ups like Woot, Groupon and Gilt have been experimenting with new models of shopping centered around limited-time sales. Shoppers get lured in to shopping as a game, and retailers get a quick way to unload excess inventory.
Woot, which began in 2004, was one of the first sites to offer a single item a day, available at a discount until it sold out. On Wednesday, for example, Woot sold iPod Nanos for $99.99. The same iPods sold on Amazon for $122.54. In addition to consumer electronics, Woot now sells wine, toys and T-shirts.
E-commerce is again going through a growth phase because of growth markets such as China and India. It is also seeing a lot of new innovation after relative stagnation since the dot com time/ You will see a lot of M&A activity over the next few years as this space will see a lot innovation and growth in emerging markets. Here is an example. China E-commerce giant Alibaba buys Vendio.
The fast-growing Web operator founded by outspoken entrepreneur and former schoolteacher Jack Ma, has been trying to make further inroads into the United States and India.
Vendio offers the same Internet business services in the United States as Alibaba, which connects millions of buyers and sellers around the world. Alibaba.com is the listed unit of the Alibaba Group, of which Yahoo owns nearly 40 percent.
The start-up already hosts services for 80,000 small U.S. businesses, which can now link into Alibaba’s network of buyers and suppliers.
“From the Vendio Platform, merchants can source products from Alibaba.com’s trusted supplier network and sell through channels such as eBay, Amazon, and their own Vendio-supported store,” the company said in a statement. Terms of the deal were not disclosed.
Web commerce in China has surged as buyers tap the Internet for better deals from more suppliers in the nation’s highly fragmented distribution networks.
Ebay is rejuvenated by mobile shopping says BW.
After losing ground to Amazon.com (AMZN) for years in online retailing, eBay has emerged as a leader in a new market: mobile commerce. As consumers increasingly shop with their BlackBerrys, iPhones, and handsets powered by Google’s (GOOG) Android software, such as the Motorola (MOT) Droid, eBay has become the top mobile retailer in the U.S., say analysts. Consumers are even buying cars with their eBay apps: The most expensive example this year is a used Lamborghini Gallardo Spyder that went for $139,000. In 2010, the San Jose company expects to move $1.5 billion worth of goods through its mobile apps—more than double last year’s $600 million. Tablet computers, too, are moving the merchandise: Users of eBay’s app on Apple’s (AAPL) iPad spend three or four times as much money in a typical session than they would on an iPhone, says Steve Yankovich, eBay’s vice-president for mobile.
Facebook now makes around $1B per year in revenues. So does Zynga which develops social games on platforms such as Facebook. I would say Facebook has become a solid platform worth devloping for without too much of a platform risk.
It is extremely risky for companies to build on platforms that are still searching for business model (read twitter). I am not saying that companies can not be successful building twitter based products and services. At this moment it comes with a lot of risk. Facebook platform has significantly reduced its platform risk.
Sarah Lacy has a nice profile on the Chinese internet giant Tencent (third largest internet company in the world).
Quick quiz: Who are the three largest Internet companies in the world by market capitalization?
If you guessed Google and Amazon you got two right, but I’m betting few of our American readers guessed the third. I certainly wouldn’t have a year ago. It’s not eBay or Yahoo; it’s Tencent. If you are in the Web space and haven’t heard of them, read this post, because Tencent’s cutesy penguin mascot is only going to cast a larger shadow in the global Web world in coming years.
Low-key Tencent is the largest, most profitable Internet company in China and it has just under 400 million active users–comfortably bigger than the population of the United States. Tencent recently bought 10% of Digital Sky Technology, which in turn owns huge chunks of Zynga and Facebook.
In the past, Tencent has held joint venture talks with Google and Facebook and made acquisition offers to a few smaller Valley companies that haven’t resulted in deals. But if investor pressure on the Hong Kong Stock Exchange is anything like investor pressure on Wall Street, some deal will happen soon.
Tencent’s stock has more than doubled in the last year, and it has a P/E ratio more than six times Google’s, according to Yahoo Finance. You think Apple’s stock has appreciated in recent years? Check this out
. Tencent has had more than double the stock appreciation of Apple over the last five years, according to Yahoo Finance. Investors itch for a company like that to go do something with that rich of a stock currency.
Even if you don’t know the name Tencent, you’ve probably heard of its core IM product QQ. Tencent started in instant messaging in 1999 and unlike nearly everyone else, figured out a way to make money from it by selling virtual goods and services to enhance your avatar. Today, the bulk of its revenue comes from online games, with meaningful amounts also coming from virtual goods sold over its social network QZone and ads over its QQ.com portal and search property.
Sramana Mitra writes about the e-commerce gold rush.
According to some analyst estimates, nearly 20,000 entrepreneurs now open online storefronts every week, and growth in e-commerce sales continues to outstrip that of sales in physical stores. Early online players such as Dell and Starbucks are now joined by luxury watchmaker Longines and clothing designer Roberto Cavalli.
In 1998, online retail sales accounted for about 0.5% of all retail sales in the United States. Dell was one of the only companies truly succeeding with online retailing in the mid-nineties. By the end of 1997, Dell was the first company to record $1 million in online sales.
Forrester predicts that the U.S. e-commerce market will increase from $176.9 billion in 2010 to $229.1 billion in 2013.
During the gold rush, the entrepreneurs who steadily built fortunes were not only those who sought gold, but also those who made the shovels.
Forrester Research also released a five-year forecast for the e-commerce industry in March 2010. According to this report, apparel, computers, and consumer electronics represented more than 44% of online sales ($67.6 billion) in 2009.
Today, the U.S. economy still gasps after the great recession, with only census jobs being added to the country’s payroll. People tired of looking for jobs that do not come are taking destiny in their own hands. In their bedrooms and basements, e-commerce companies are cropping up everywhere.
