What does an Internet service provider have in common with a florist?
Seemingly not much. But United Online, which owns dial-up Internet service provider NetZero, said Wednesday that it's spending $456 million to buy FTD Group, the floral and specialty gift provider.
I don't think I'm alone in thinking this seems like an odd pairing. FTD is one of the largest floral companies in the world, providing products to consumers as well as retail florists throughout the U.S., Canada, U.K., and Ireland. But United Online, which owns Internet properties such as Classmates.com, Juno, NetZero, and MyPoints, said the FTD acquisition will provide it with additional revenue and help it expand into the growing floral Internet business.
"This transaction will meaningfully diversify our revenue base within a large global market experiencing significant migration to the Internet," the company's CEO Mark R. Goldston told The Wall Street Journal.
But as anyone familiar with M&As can tell you, most mergers, even the ones that seem to make sense, don't end up working out. Just look at Time Warner and AOL, which by most accounts is considered a huge failure. Or even eBay's $2.6 billion acquisition of Skype. The deal hasn't been a total bust, but last year eBay took a $900 million so-called impairment write-down against the value of Skype. In these examples, companies spent loads of money to "diversify" their businesses, but in the end the deals didn't work out as planned.
While I'm sure that United Media's execs believe there is a very good, strategic reason to get into the flower business, time will tell if the strategy delivers on its promise.
Symantec is acquiring AppStream, a maker of application streaming technology.
Symantec already uses AppStream's technology in its Software Virtualization Solution (SVS) Pro. Using application streaming enables end users to perform functions by accessing parts of a software program over the network as needed, without having the program fully installed on the client computer.
Terms of the deal were not disclosed. The transaction is expected to close by the end of June, Symantec says.
(Credit:
Symantec)
Yahoo announced Wednesday that it plans to acquire Tensa Kft., a Hungarian company known professionally as IndexTools, which makes marketing analytics tools for the Web.
Financial terms of the deal were not released, but Yahoo hopes that the acquisition will be finalized by the middle of 2008. Yahoo, currently battling with both a Microsoft takeover offensive and its status as second-string to Google in online advertising, plans to use IndexTools' technology to bolster its existing marketing analytics software. The initial target, a release from Yahoo explained, will be the 150,000 small and medium-sized businesses using Yahoo's marketing analytics tools.
There are also plans to build a third-party developer platform for the Yahoo-incorporated IndexTools.
In addition to its base in Budapest, Hungary, IndexTools also has offices in Frankfurt, Germany, and in New York.
When it comes to technology-related mergers and acquisitions in the first quarter, think "still waters run deep."
According to a first quarter M&A spending report released Friday by The 451 Group, proposed technology deals totaled $92 billion in the three-month period for 778 deals, down a notch from $100 billion in the same period a year ago for 1,059 transactions.
But keep in mind, and rightly so, Microsoft's initial blockbuster $44.6 billion buyout bid for Yahoo, accounts for nearly half of the technology M&A deals proposed in the quarter.
"Although Microsoft had few reservations in pushing forward the largest deal in its history, other big-ticket purchases were put on hold in the first few months of 2008," according to the report.
Chew on this stat: 11 proposed deals worth $1 billion or more logged in during the quarter--down by nearly half from a year ago.
"We would hang the decline in (billion-dollar) deals on the turmoil in the credit market, which has obviously knocked buyout shops from the market, as well as knocking the equity value of many companies into a tailspin," according to the report.
Leveraged buyout firms took the greatest hit, seeing the value of their transactions fall to $6 billion for 35 deals in the quarter--about half of the $11.5 billion for 28 deals a year ago, according to the report.
"As the subprime mortgage crisis began ripping through financial institutions, the days of cheap and easy debt came to an abrupt end," according to the report.
Companies looking to snap up other businesses, meanwhile, saw only a slight dip, of less than 3.4 percent, to $86 billion in the quarter, compared with a year ago.
And the Microsoft-Yahoo proposed deal falls into that camp.
Updated 1:55 p.m. PDT with no comment from Expedia.
Correction 12:45 p.m. PDT: This blog initially misstated the day the price of Expedia shares rose on rumors of a possible bid by Google. It was Tuesday.
Does Google want to buy travel site Expedia? A Wall Street analyst referred to rumors Tuesday morning that Google could make a bid and that drove up the stock of Expedia about 9 percent at one point, according to Reuters.
The rumors are just that though, at this point.
The move doesn't exactly make sense given that Google has shied away from being a company or buying companies that create content. It's likely one of the latest off-the-wall Google acquisition rumors that end up going nowhere (like the rumor a few months ago that Google was buying CNET).
But it does give a short-term boost to the company rumored to be acquired and Expedia, the largest online travel site, likely won't argue with that.
Representatives from both companies said they don't comment on rumors or speculation.
Electronic Arts has amended its takeover offer for smaller video-game publisher Take-Two Interactive.
According to an EA representative and an EA filing Friday with the Securities and Exchange Commission, the offer has been extended to Friday, April 18, instead of Friday, April 11. (EA's own press release incorrectly states that April 18 is a Wednesday. Oops.)
In addition, EA added a new condition to its offer: Take-Two must chuck its "poison pill" shareholder rights plan designed to deter the takeover.
Earlier this week, Take-Two officially rejected EA's bid, adopted the poison pill, and moved its annual shareholder meeting from April 10 to April 17. EA is apparently following suit with its date change.
"The actions of the Take-Two Board may increase the risk for their stockholders by delaying a potential transaction," Owen Mahoney, EA's senior vice president of corporate development, said in Friday's press release. "We continue to believe that our $26 per share offer price is full and fair, and that a transaction between Take-Two and EA is the most compelling combination financially, strategically and operationally for all parties."
EA's attempt to take over Take-Two has been an ugly one, with back-and-forth press releases doing much of the negotiation.
Google shouldn't buy Apple. Google should buy Venus.
The second planet from the sun remains an untapped market for search, and the overall opportunity for desktop applications has yet to be taken over by Microsoft, giving the search giant the chance to establish a working lab for its plans to move into online applications.
Plus, if science fiction films are to be believed, people from other planets often dress in flowing robes and have nightclub haircuts, which would fit in nicely with the hipster motif down in Mountain View, Calif.
It's either that, or they should develop a mini-sub to travel with Raquel Welch through the digestive tract of the president, a la Fantastic Voyage. Keeping billionaires occupied is no easy task.
Merger rumors--without them, I'd probably be out of a job. Not a week passes without some publication or analyst firm floating rumors that company X is about to invest in, or take over, company Y. Sometimes it isn't even a rumor: often, the reporter or analyst just sketches out why the two companies should get together.
Ironically, the fevered speculation rarely does any good. Reporters, and often those inside the companies, almost never accurately predict these things far in advance. Who saw the $850 million purchase of Bebo coming in the distance? Time Warner-AOL took everyone by surprise.
Hewlett-Packard buying Compaq also came as a surprise. "It is hard to find a successful example of one PC company buying another," said Webb McKinney, vice president of HP's personal computing group. He said that in April 2002, five months before the still-debated merger.
Meanwhile, the stadium is littered with predictions--IBM will buy Advanced Micro Devices; Microsoft will buy SAP; Dell will buy EMC--that come to naught.
You also might say it's pointless to listen to a beat reporter pulling in $71,500 a year on financial issues. But with the Bear Stearns meltdown, their opinion is just as good. Besides, since speculation won't stop, here's a guide to how to start successful rumors:
Go with big brand names
"Grand Auto to buy Kragen in hostile takeover." "Macrovision eyes Metabeam." "Is Cypress Semiconductor ready to make a play at Flatwire to get into WPAN market?" Those headlines don't really jump off the page, do they?
The public only cares about a few names--Microsoft, Apple, Google, Yahoo, Dell, Sony, Time Warner--so stick to those. It doesn't even matter if a company is well-known. You could start a rumor tomorrow that Acer, which is bigger and more successful than Apple in the PC market, planned to buy Trinidad, and it would barely raise a ripple.
Keep the reasons to a 3x5 card
Don't think too deep. Pitching a merger is like pitching a film. If you think about it, the plot of No Country for Old Men is like Witness without the Amish, and look where it got the Cohen brothers.
Microsoft will go after Ask.com because it gives it insurance against the Yahoo deal. Social networking is big, and other people have money, so Facebook will be bought.
Never underestimate the power of shallow thinking. Acquicor went public in 2006 on the strength of a simple-as-dirt idea. The company was going to succeed because it would be run by Gil Amelio, Ellen Hancock, and Steve Wozniak, three Apple alum. Ignore for a moment that Amelio and Hancock oversaw Apple during its major decline and Wozniak has spent a good part of the last 30 years teaching at a junior high. Forming a merger company based on Apple talent raised $160 million. Afterward, it narrowed down its focus to the chip industry. Since then, the $6 stock has gone down to 70 cents, it's changed its name to Jazz Semiconductor, and it's looking at strategic options.
Find the hidden connections
This is perhaps the most crucial element in starting a good rumor. One computer company buying another is boring--too obvious. A merger rumor should try to push the acquirer into a new market, or uncover some hidden trait of the acquiree, that will subsequently flower. To do it successfully, you need to sound like a strategist and think like a stoner.
Thus, MySpace.com isn't a social network. It's the future of TV. Wikipedia will morph from a nonprofit collaborative information site to a start-up incubator based around novel, open-source IP. Intel needs its own TVs to sell Canmore, so expect it to purchase, or invest in, Pioneer. Solar companies don't make products as much as they deliver services, so expect to see Salesforce.com try to replicate its software-as-a-service plan here.
And don't forget: Google consumes an inordinate amount of electricity per year. If they can't tap that on Venus, then they should buy some undersea thermal vents.
Walt Disney is eyeing acquisitions, but AOL is not one of them, according to the Associated Press.
Disney Chief Executive Robert Iger, speaking at a media conference on Wednesday, said the company is interested in purchasing other companies, but not Time Warner's AOL.
Time Warner Chief Executive Jeff Bewkes has said his company would consider selling off or spinning out AOL.
Regarding reports that Yahoo is looking to partner with another company to thwart a takeover bid from Microsoft, Iger said: "We watch these things from afar."
Online ad network Specific Media has acquired U.K.-based display ad network Adviva. Terms of the deal were not disclosed.
The purchase marks Specific Media's move into the European market. Specific media offers demographic, behavioral, contextual, and geographic ad targeting and has anonymous data on 365 million consumers globally.
Other companies are making acquisitions to push into the U.S. market, including U.K.-based Adconian, which announced last week it is acquiring Las Vegas-based Frontline Direct.
There is a huge amount of merger and acquisition activity in the hot online advertising space. These are tiny compared with Microsoft's $6 billion purchase of Aquantive and Google's $3.1 billion acquisition of DoubleClick, which finally cleared the final regulatory hurdle, in Europe, on Tuesday.
(Credit:
Adviva)
(Credit:
Specific Media)
(Credit:
Adconion)
One week after announcing that it raised $80 million, U.K.-based online ad network Adconion is spending one quarter of the money.
Adconion announced Thursday that it is acquiring direct marketing firm Frontline Direct for $20 million. Las Vegas-based Frontline Direct's customers include ConsumerInfo.com and Reunion.com.
Adconion said last week that it received the funding from investors led by Index Ventures.
