New Adviser at Andreessen Horowitz

Posted on by Scott Hodges


Andreessen Horowitz, the venture-capital firm in Silicon Valley, has recently added a new software veteran to its advisers’ list. Kenneth Coleman, 70, will provide advice, mentorship and introductions for Andreesen Horowitz’ portfolio companies.

Coleman explained his plans, as he said, “I hope to be asked good questions, be a good listener, provide insight, open doors, make connections that might matter.” He has already been instrumental in helping Andreessen Horowitz by helping some of the portfolio companies to make presentations at a pharmaceutcal company that he advises.

Coleman founded ITM Software, which is a provider of information-technology management services. He has spent many years, as well, in management positions at Silicon Graphics Inc., Activision and Hewlett Packard.

ValueAct Capital Invests $2 Billion in Microsoft

Posted on by Scott Hodges

In recent hedge fund news, activist hedge fund ValueAct Capital just took a $2 billion investment in Microsoft. CEO Jeffrey Ubben announced the hedge fund industry investment news at a conference in New York on Monday.

He explained the investment as he said, “In three to five years, which is our time horizon, we’ll stop talking about PC cycles and instead talk about Microsoft as the largest cloud-computing company in the world.”

ValueAct describes itself as a fund that performs hedge fund due diligence as it “combines intensive due diligence, a concentrated number of investments, and active, constructive involvement in the value creation of those investments.”  It currently has $10 billion in assets under management and it works to have significant ownership in only a small number of companies and to perform hedge fund due diligence with these companies.

According to Reuters, ValueAct does not plan to change any of Microsoft’s current strategies. As Microsoft said, “Microsoft’s Board of Directors and management team welcome the perspectives of shareholders. We are committed to enhancing value for all shareholders, and will continue to take actions that we believe will enable us to achieve this objective.”

Crowdfunding Taking Off in 2013

Posted on by Scott Hodges

Interest in crowdfunding has taken off after President Barack Obama signed the Jumpstart our Business Startups Act (JOBS) a year ago. This act legalized equity crowdfunding, subject to certain new rules still in the works.

Crowdfunding started in the US as a way to raise money for creative projects and it has expanded quickly as an alternative source for financing. Many websites now have ways for small investors to earn interest from lending money to individuals or small businesses.

Worldwide crowdfunding volumes have reached $2.66 billion in 2012. This is up from $1.47 billion in 2011, according to a survey by Massolution. Massolution predicts that $5.1 billion will be raised through crowdfunding platforms in 2013.

One of the most highly watched crowdfunded deals last year happened through Kickstarter when smartwatch maker Pebble Technology raised more than $10 million with Kickstarter. This was 100 times their target!

Apple Apologizes to China

Posted on by Scott Hodges

Apple Inc has recently apologized to Chinese consumers – and for good reason. Their Chief Executive Tim Cookrecently apologized after getting blasted for two weeks for their after-sales service. The government-controlled media in China has been blasting Apple for “arrogance,” saying that they are only offering a one year service warranty in China and other issues.

While Apple initially ignored the criticisms, they did finally issue an apology and pledge to overhaul their consumer practices. Cook wrote, in a letter written in Chinese on Apple’s local website, “We are aware that owing to insufficient external communication, some consider Apple’s attitude to be arrogant, inattentive or indifferent to consumer feedback. We express our sincere apologies for causing consumers any misgivings or misunderstanding.”

Revenue from Greater China totaled $7.3 billion during the first fiscal quarter this year. This number was up 60% from only one year ago. Certainly, China is important to the Apple market and Apple is keeping its eye on the area to keep it happy.

Cook admitted in his lengthy letter that Apple has “much to learn about operating and communicating in China.”

Technology Investors Look to Change Gun Usage

Posted on by Scott Hodges

In response to the school shooting in Connecticut last December, a group of San Francisco Bay Area technology investors is taking action. They are backing a collection of startup companies that are developing “smart guns” and other methods to curb gun violence. At a news conference on Thursday, Ron Conway, an early-stage investor who has backed companies like Google and Twitter, said,  “A year from now, we will be able to point to the Googles, the Facebooks and Twitters, who are working in gun safety.”
The group is envisioning a number of safety measures that would include data-sifting software to improve gun purchaser background checks, “smart guns” that will only fire with a technology check and more. The San Francisco technology effort is coming from Sandy Hook Promise, a non-profit group that started after the Sandy Hook Massacre in Newton, Connecticut.
As the Sandy Hook Promise explains on its web page, “The Sandy Hook Promise Innovation Initiative is a “call for ideas” to reduce gun violence and a commitment by leading venture capitalists and angel investors to fund promising innovations in gun safety, mental health research and related new technologies. The Technical Committee to Reduce Gun Violence, which is a part of the Sandy Hook Promise organization, will be overseeing this initiative.”

Pinterest Hits the Mark

Posted on by Scott Hodges

Pinterest, the fastest standalone website to ever get to 10 million unique visitors a month, currently has 25 million members. Many of them are young, female, well-educated and ready to spend their money. Retailers are rushing to get to these potential customers, but Pinterest is an ad-free website.

Retailers are still trying to figure out how to get to the Pinterest market and how to reach out to shoppers in this way. Many retailers now have buttons on their main websites, hoping that potential customers will Pinterest their items. As Kyla Brennan, chief executive of HelloInsights, which provides analyses of Pinterest use, said

“It’s a huge window-shopping platform. It helps people find what they really like. Does it encourage people to be a little impulsive? Of course.”

Pinterest shoppers, on average, spend almost $170 per session, according to information from an e-commerce consultant, RichRelevance. They found that Facebook shoppers spend $95 per session and that Twitter shoppers only spend $70.

Companies with a major presence on Pinterest to date include L.L. Bean with over 5 million followers, Nordstrom Inc. with over 4 million followers and Lululemon Athletica Inc with almost 2 million followers. Pinterest recently closed a $200 million round of financing, where they raised their value to $2.5 billion.

Groupon Inc. Loses a Quarter of Its Market Value

Posted on by Scott Hodges

Groupon Inc has recently admitted to losing a quarter of its market value on Wednesday after just revealing that they began to take smaller cuts of their revenue on daily deals during the holidays.

They did so to sacrifice revenue and profits in order to attract and keep merchants.

The company has actually lost more than 75% of its value since it started at $20 in November of 2011. As Tom White, an analyst at Macquarie said, “This raises questions about how these guys are going to be able to scale the business. The forecast is underwhelming.”

Groupon has kept almost 40% of the money that they generated by daily deals. That then declined to 35% in the 4th quarter. The company is hoping that profitability will improve. As Child said, “We are focused on driving growth. We will make the investments we feel we need to optimize for growth and merchant profitability.”

Electric Car Recall: Bad for Mitsubishi Business

Posted on by Scott Hodges

Mitsubishi Motors is finding itself in hot water at the moment, recalling 14,700 electric cars globally due to brake issues that are unique to its electric-motor powered cars. This is one of the biggest callbacks that involves the new generation of eco-friendly cars they are trying to push.

Certainly, this recall is small compared to those that occur for conventional petrol-driven cars, but it accounts for almost half of their overall i-MiEV and MINICAB-MiEV production.

About the recall, Tatsuo Yoshida, a senior analyst at Mitsubishi UFJ Morgan Stanley Securities in Tokyosaid, “This is a matter of one part, and it’s too much to apply the issue to say there is something wrong with electric vehicles.”

He continued, “The cause of the problem is identified and there were no accidents. But the problematic part is the brake, an important part for safety, and that means Mitsubishi Motors’ quality check procedure is too weak.”

Office Depot Inc. and OfficeMax Inc. May Merge

Posted on by Scott Hodges

In an interesting piece of news, Office Depot Inc. is in advanced talks to merge with OfficeMax Inc. Both of the companies are under a great deal of pressure from investors to boost their profitability and their shareholder value. A merger could help them to cut costs, close stores and boost their placement with suppliers.

Office Depot’s market capitalization is at $1.1 billion and Office Max has a market value of $932 million.
Benjamin Nahum, a portfolio manager at the investment firm Neuberger Berman LLC, said, “In our view this would facilitate a fair deal.”

According to Thomson Reuters data, Neuberger Berman owns 4.76% of OfficeMax, which makes it the third-largest shareholder of the company.

In 1997, The Federal Trade Commission rejected a $4 billion merger of Office Depot with Staples, arguing that it would lead to less competition and higher prices for customers. Analysts are now less concerned about those issues.

Daimler Personnel Getting Extended Contracts

Posted on by Scott Hodges


For those following news about Daimler, they have just announced that they will extend the contract of CEO Dieter Zetsche by five years. This will take him until the end of 2018, as a source familiar with the situation reported to Reuters.

As the source said, “The board meeting on February 6 is just to approve the preliminary annual earnings results. The first full board meeting where personnel issues will be discussed is on February 21.”

Other top executives will also have their contracts renewed. These include Research & Development Chief Thomas Weber, who should have his contract extended by five years. It also includes Christine Hohmann-Dennhardt, who heads compliance, and should also receive an extension. It is not clear at this time how long her extension will be for.