PC peripherals maker Logitech International has done its largest ever acquisition, by purchasing videoconferencing system maker LifeSize Communications for $405 million. This definitely represents an interesting new twist in the videoconferencing space. Given Cisco Systems' $3 billion acquisition of market leader Tandberg a few weeks back (now contested by investors who want a higher price), I would have thought that Polycom or Hewlett-Packard would have gone after LifeSize to fill out their product lines. The Austin-based company, which I've written about a few times, has been one of the faster growers thanks to its less expensive, easy to use gear.
What's most interesting is the potential for Logitech to accelerate the commoditization of videoconferencing. The company specializes in high-volume manufacturing of PC mice, keyboards and other gizmos; it's video business is essentially webcams, which bring in roughly $250 million of the company's $1.9 billion in annual sales, says Logitech president Gerald Quindlen. LifeSize, on the other hand, makes stand-alone gear that lets users launch a HD-quality videoconference with a few keystrokes. Quindlen says Logitech will be able to apply its economies of scale and other cost savings to "make video mainstream." Says LifeSize CEO Craig Malloy, "the opportunity is drive price points to the point that it's a no brainer for every office and conference room in the world."
Evidently, LifeSize wasn't going to pull that off on its own. While rapidly growing, the company is very vertically-integrated for a company its size--with in-house chip designers and other high-priced technology experts. And one source with knowledge of its performance says sales actually dipped slightly in its most recent quarter.
But together, LifeSize should get the resources to make a go of its strategy to bring videoconferencing down maket. Malloy admits he was puzzled when Logitech first came a courtin', as he had talked mostly with Cisco, Polycom and other traditional market players. But Quindlen shared his view that videoconferencing was nearing an inflection point when sales would take off--the way the netbook market did, when the chips, displays and software got cheap enough.
With LifeSize off the market, the pressure on Cisco to complete its Tandberg bid rises a notch. That's because there simply aren't many players of consequential size in the videoconferencing market.
Mark Pincus has become the poster boy for the booming business of social online games. His company, Zynga, brings in more than $100 million in annual revenues, and owns the most popular Facebook app of the year, FarmVille. Zynga is even considered by analysts and observers to be a candidate to go public next year.
So what does Pincus make of video game stalwart Electronic Arts recently scooping up Playfish, one of Zynga's top rivals, in a deal that's worth up to $400 million? He says EA paid a justifiably high price to enter the social gaming space. "The founders got a really good cashout, and EA got to catch up to a business that they had kind of missed the start of," Pincus says.
Zynga may benefit indirectly from the marriage, since EA marketing savvy could bring more attention to the social gaming space, he says.
Pincus isn't worried about Playfish's newfound access to more capital making it a stronger competitor. But he admits that EA's popular game brands including The Sims and Madden have a lot of potential in the social gaming space. "There’s a good chance for them to try to leverage EA’s major brands and take Sims and other [games] into the market," he says. This could be a "risk" for Zynga and others that don't have a stable of recognizable game franchises to draw on, Pincus says.
These days, it seems that everyone wants to be pals with Twitter, the microblogging phenom. On the morning of Oct. 21, Microsoft announced a deal for its Bing search engine to search for Twitter updates known as tweets. Just hours later, Google announced a similar deal.
Not to be left out, the professional online networking service LinkedIn on Nov. 10 is announcing its own integration with Twitter. Users of both services will be able to sync some or all of their tweets on Twitter and "network updates" on LinkedIn.
Specifically, users in LinkedIn will be able to check a "tweet this" box near their network update post to Twitter. And while on Twitter, they can add the hashtags "#in" or "#li" to their posts to appear on LinkedIn. Finally, a new app called Tweets will let users put their Twitter streams on their LinkedIn profiles.
Here's a video with LinkedIn Executive Chairman Reid Hoffman and Twitter cofounder Biz Stone:
And here are the details in a blog post from Allen Blue, a LinkedIn cofounder and vice-president of product strategy:
In its third-largest acquisition to date, Google announced it's buying AdMob, a provider of mobile ad technologies, for $750 million in stock. The purchase, announced this morning, could give the relatively small market for ads on mobile devices a big boost.
The move also gives Google, whose Android software is being used more widely in smartphones such as the Motorola's new Droid, a key set of technologies to expand its advertising footprint beyond its signature text search ads. "Google could have built this itself, but this gives them a head start," says mobile analyst Greg Sterling of Sterling Market Intelligence. "It will thrust Google into the forefront of mobile display ads."
In particular, AdMob provides Google with the ability to serve display ads, the pictorial banners that are the chief revenue source for most Web sites, to cell phones and other mobile devices. Google last June introduced AdSense for Mobile in a bid to provide Web sites with display ads akin to its multibillion-dollar AdSense program for conventional Web sites.
But Sterling said AdSense for Mobile was still "fairly undeveloped." By contrast, he says, AdMob has richer advertising formats, especially ads inside mobile apps. These mini-programs have become enormously popular on the iPhone, which has more than 100,000 apps. That has prompted Android, with 12,000 apps; Palm; Blackberry maker Research in Motion; and others to join the apps frenzy.
At least one analyst views the role of AdMob in mobile ads as similar to that of DoubleClick, which Google bought early last year for $3.2 billion, in Web display ads. "To us, AdMob looks in some ways to be a DoubleClick for the mobile web," Broadpoint.AmTech analyst Ben Schachter said in a note to clients. "It should help not only to provide more relationships with mobile ad publishers and buyers, but also to provide a tested technology platform for monetization of mobile inventory and the delivery, tracking, and reporting of mobile ad campaigns."
Google said acquiring the team at AdMob, which employs about 140 people, was as important as the technology in accelerating Google's mobile display ad efforts. "We got a chance to get an unbelievable engineering team," Vic Gundotra, a Google vice president of engineering, said in an interview. Susan Wojcicki, Google's vice president of product management, added that AdMob founder Omar Hamoui is "really a visionary in this space."
Google CEO Eric Schmidt said recently that the search giant planned to make about an acquisition a month, mostly small purchases, while making a large acquisition every year or two. AdMob is seen as one of the large acquisitions, though the money involved is small next to Google's $178 billion market capitalization. Besides DoubleClick, Google has paid more only for video sharing site YouTube, which it bought for $1.7 billion in 2006.
AdMob's growth has attracted attention, though the privately held company doesn't reveal revenues. BusinessWeek recently featured AdMob as one of 50 companies that could be the next Google. Even more recently, a BusinessWeek story mentioned AdMob as a possible acquisition for Google.
Founded in January 2006, AdMob has some blue-chip customers such as Ford, Procter & Gamble, and Coca-Cola. It has raised $47.2 million in funding from Sequoia Capital, Accel Partners, DFJ Growth Fund, and Northgate Capital. AdMob claims on its Web site to have served more than 125 billion ad impressions.
Analyst Schachter said he was surprised Google decided to buy the technology rather than build it itself, given the nascent nature of mobile ads. He also said he would prefer Google pay cash from its $22 billion war chest to avoid share dilution. Google's share were rising 1.7% in midday trading, outpacing the Nasdaq's 1.4% increase.
For its part, Google clearly is seeking to blunt anticipated objections to the company's ever-growing power in online advertising, dedicating another Web page to the issue of competition. Google said AdMob is "just one of more than a dozen mobile ad networks in the U.S. that have proliferated in recent years." Google said it expects a regulatory review in the U.S., but not in Europe, because the mobile ad market is so small there.
Google then goes further to note how small the entire mobile ad market is to date. It notes that eMarketer estimates mobile ads brought in $416 million in 2009, compared with almost $24 billion for online advertising overall, $51 billion on television ads, and $38 billion on newspaper ads. That's an interesting point to make when it just spent three-quarters of a billion dollars on it.
Still, Google's entry not only will be seen as the biggest force in mobile advertising, but will signal that ads on cell phones could be the next big opportunity in online advertising.
Blackberry maker Research In Motion is holding its Blackberry Developers Conference in San Francisco today, and is expected to announce some significant enhancements to its platform to give people building software for the device more features.
A few of the new features can be already be found in applications running on Apple's iPhone: In-application advertising, in-application purchasing, among others. But RIM has one key partnership that Apple doesn't: Adobe.
The companies will announce today that Adobe and RIM are expanding their existing collaboration, saying the software developers will be able to use Adobe's Flash -- the technology behind such sites as Google's YouTube and numerous other video sites on the Web -- in their applications.
Support for Flash is one of the most demanded features on the iPhone, but as Adobe's Adrian Ludwig explained in a recent post on a company blog, Apple has yet to allow support for Flash on the iPhone.
In a statement, Adobe said that developers will be able to use the forthcoming Adobe Creative Suite 5, which includes Photoshop, Illustrator and After Effects, to create graphic experiences for use on the Blackberry. Other Adobe tools, including Dreamweaver, Fireworks and Device Central, will support the creation of Blackberry widgets and content that's optimized for the Blackberry Web browser.
I spoke with RIM co-CEO Jim Balsillie on Friday, and he told me that other new features are coming to Blackberry App World, its application store. He said that the company will soon be adding device themes -- software and graphics that change the look and feel of its interface -- to the store, which will he said, "effectively double" the number of downloads available, right now numbering about 5,000. Additionally, he said that App World will allow developers to bill users for applications by way of the bill they get from their carrier.
Other features being announced today: New features for location based services. The Blackberry already has pretty good support for location by way of the GPS system of satellites. But GPS sometimes needs, help, especially indoors. To that end RIM is adding support in its applications that will allow developers to use other ways of getting location information into their apps. They can use a method called cell-site geolocation, which is a way to determine a position based on the nearest cell phone towers. Additionally, RIM is adding support for reverse geocoding, which takes GPS coordinates and then converts them into an address. So if the app knows your latitude and longitude, it can then tell you what the nearest address is. Another new feature: Travel time, effectively how long it will take you get where it is you want to go.
One developer taking advantage of the new features is Loopt, whose CEO Sam Altman was to be on stage to announce a new version of its application for the Blackberry that's designed to help you connect with friends and contacts who may be nearby. The app can update your location in real-time, even when its not directly running in the foreground. A screenshot is at the left.
Finally, I talked with Jeff Bonforte, CEO of Xobni, on Friday, a terrific plug-in for Microsoft Outlook that not only makes your mail highly searchable, but turns every bit of contact information that appears in your email into a super address book. Xobni will today demonstrate the first fruits of the investment it received from RIM's Blackberry Partners Fund. The Xobni team isn't making a formal announcement today but was expected to demonstrate its forthcoming Blackberry application. He was kind enough to provide me with a screen shot of what they're working on. It certainly looks interesting. Among other features Bonforte promises for the Blackberry app is integration of social media contact data from your contacts, meaning that when the app finds a contact information for someone, say in an email signature, it will also go out and find their LinkedIn, Facebook and Twitter information. He expects the app to see its official release early next year. Xobni on the desktop added Twitter support in September. Seeing as how I've struggled to clean up my address book, this just might be an application I would use.
This morning, Verizon Wireless announced Droid Eris, a new phone from HTC. The announcement comes on the heels of another, of Motorola Droid, another smartphone device based on Android software developed by Google and its partners. So Verizon Wireless has decided to develop a single brand for all Android-based phones it puts out: Droid, a company spokesperson confirms.
Early this morning, Google is launching a new feature that lets you view what data is being stored on a range of Google services. Google Dashboard also will let you...
It's been a year since the Conficker worm first started turning up on Windows PCs and the Conficker Working Group estimates that there are still millions of computers infected with...
Cisco just announced earnings for its first fiscal quarter that beat Wall Street's expectations by a wide margin, as well as its own expectations. The company posted revenue growth of...
Half of T-Mobile myTouch 3G users visit Android Market at least once a day, according to a Nov. 4 report from T-Mobile USA. That's a good sign for Android Market and its creator, Google.
BlackBerry devices enjoy at least one considerable advantage over rivals including the Apple iPhone: They use up much less wireless network capacity to complete the same tasks. That could prove to be an increasingly important advantage in the coming months.
BusinessWeek writers Peter Burrows, Cliff Edwards, Steve Hamm, Rob Hof, Olga Kharif, Steve Wildstrom, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.
Other features being announced today: New features for location based services. The Blackberry already has pretty good support for location by way of the GPS system of satellites. But GPS sometimes needs, help, especially indoors. To that end RIM is adding support in its applications that will allow developers to use other ways of getting location information into their apps. They can use a method called cell-site geolocation, which is a way to determine a position based on the nearest cell phone towers. Additionally, RIM is adding support for reverse geocoding, which takes GPS coordinates and then converts them into an address. So if the app knows your latitude and longitude, it can then tell you what the nearest address is. Another new feature: Travel time, effectively how long it will take you get where it is you want to go. 
