Friday, April 24, 2009

Light side or dark side?

Oracle Corp. signs a definitive agreement to acquire Sun Microsystems Inc. for $7.1 billion in cash or $9.50 per share. Sun’s core software offerings (including its Java programming language and MySQL database) are closely linked to the open source community. A key question is the extent to which Ellison would actively support these offerings. (Popular websites such as Facebook utilize MySQL.) Will Oracle build on Sun's software popularity with young programmers or will the software be undermined to protect Oracle’s current products/business model?

Will Oracle's purchase be on the light or dark side of M&A?

Friday, April 17, 2009

Cisco currency is back

Cisco announced last month that it will purchase Pure Digital Technologies, Inc. for approximately $590 million in stock. Pure Digital markets one-time-use digital cameras and video camcorders, as well as point and shoot camcorders. The group of investors/sellers includes Benchmark Capital, Crescendo Venture Management LLP, Focus Ventures, Sequoia Capital, Steamboat Ventures, LLC, and VantagePoint Venture Partners. The deal is expected to close in the fourth quarter of Cisco's 2009 FY.

Flip (Pure Digital's leading product) is designed for the YouTube uploads. Flip records videos and immediately uploads them to the Web via a USB stick. Cisco wants to stoke bandwidth use. The all-stock deal is a return to the good-old days of the 1990's when use of Cisco's stock fueled its M&A activity. Now sophisticated investors are no longer hesitant to receive Cisco stock as a currency.

Tuesday, April 14, 2009

Paper out, digital in

Google has purchased buildings and most of the Summa Mill site owned by Stora Enso Corp. for about $52 million. The site is struggling paper mill located in southeastern Finland. Google says it is planning to build a data center at the site. Google's move is symbolic of the decline of print media and the rise of digital.