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February 13, 2008 Wednesday Late Edition - Final Dell to Buy E-Mail Service to Better Compete With Rivals BYLINE
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February 13, 2008 Wednesday Late Edition - Final Dell to Buy E-Mail Service to Better Compete With Rivals BYLINE: By REUTERS SECTION: Section C; Column 0; Business/Financial Desk; Pg. 2 LENGTH: 330 words Dell, the computer maker, said on Tuesday that it would buy the business e-mail services provider MessageOne, which was co-founded by Michael S. Dell's brother, in an effort to compete with similar services provided by Microsoft and Google. The $155 million cash deal is Dell's latest in a wave of acquisitions ranging from small shops like the software company Everdream to the $1.4 billion purchase in November of the network storage provider EqualLogic. MessageOne's software, which is delivered to customers over the Internet, helps companies manage and archive e-mail messages, minimize failure and prevent data losses, Dell said in a statement. Dell's chief information officer, Stephen F. Schuckenbrock, said the acquisition would help the company compete against offerings ''that are emerging in the market from companies like Google, like Microsoft and others.'' Last year, Google paid $625 million to acquire the e-mail security company Postini to bolster its online Apps service to make it more useful inside businesses. Dell said MessageOne was partly owned by two investment funds: Impact Venture Partners and the Impact Entrepreneurs Fund. The founder and chief executive of Dell, Michael, and his family are investors in the funds, which are managed by his brother, Adam. Dell said it expected Michael; his wife, Susan; and their children's trust to receive about $12 million from the deal. Adam Dell will get about $970,000, and his parents will receive about $450,000. Michael Dell intends to donate the proceeds to charity, the company said, adding that he was excluded from negotiating the acquisition. Dell has stepped up the pace of acquisitions since Mr. Dell resumed the helm a year ago. Last month, the company completed the purchase of EqualLogic, its largest acquisition since the company was founded in 1984. EqualLogic specializes in data storage technology, Dell's fastest-growing business. Shares of Dell fell 22 cents, to $19.71. URL: http://www.nytimes.com SUBJECT: ELECTRONIC MAIL (90%); MERGERS & ACQUISITIONS (90%); COMPUTER MAKERS (79%); ENTREPRENEURSHIP (78%); INTERNET & WWW (78%); SOFTWARE MAKERS (78%); COMPANY LISTS & RANKINGS (78%); NETWORK STORAGE TECHNOLOGY (76%); VENTURE CAPITAL (71%); DATA STORAGE DEVICES (71%); COMPUTER SOFTWARE (90%) COMPANY: DELL INC (84%); GOOGLE INC (84%); EQUALLOGIC INC (57%); MICROSOFT CORP (56%) TICKER: DELL (NASDAQ) (84%); DEC (LSE) (92%); GOOG (NASDAQ) (84%); GGEA (LSE) (84%); MSFT (NASDAQ) (56%) INDUSTRY: NAICS334111 ELECTRONIC COMPUTER MANUFACTURING (98%); SIC3571 ELECTRONIC COMPUTERS (98%); NAICS518112 WEB SEARCH PORTALS (84%); SIC8999 SERVICES, NEC (84%); SIC7375 INFORMATION RETRIEVAL SERVICES (84%); NAICS511210 SOFTWARE PUBLISHERS (56%); SIC7372 PREPACKAGED SOFTWARE (56%); NAICS519130 INTERNET PUBLISHING & BROADCASTING & WEB SEARCH PORTALS (84%) PERSON: MICHAEL DELL (94%) LOAD-DATE: February 13, 2008 LANGUAGE: ENGLISH PUBLICATION-TYPE: Newspaper Copyright 2008 The New York Times Company 1078 of 1231 DOCUMENTS The New York Times
Late Edition - Final $300 Million To Burn, With a Catch BYLINE: By ANDREW ROSS SORKIN. The latest news on mergers and acquisitions can be found at nytimes.com/dealbook. SECTION: Section C; Column 0; Business/Financial Desk; DEALBOOK; Pg. 1 LENGTH: 1205 words Here's an odd predicament: You have to spend $300 million in the next 14 days or it all goes poof. That's what's facing Michael S. Gross, a co-founder of the big private equity firm Apollo Management and a director of Saks. And a similar conundrum could be in store for a string of other big-name gamblers on Wall Street: Ronald O. Perelman, Bruce Wasserstein and Nelson Peltz, among them. Mr. Gross, a 46-year-old entrepreneur with a penchant for shoot-for-the-moon risk, is one of dozens of deal makers who have recently piled into an obscure corner of Wall Street -- one of the few places amid the market decline where money is still gushing in. If you haven't heard about this little netherworld, you will: it is called -- and please don't let your eyes glaze over this alphabet soup of an acronym -- SPACs, short for Special Purpose Acquisition Companies. In the 1990's, a variation on the same idea was called a ''blank check company.'' Think of it is as a publicly traded buyout fund -- or perhaps, more accurately, poor man's private equity. Average Joes finally get access to Masters of the Universe, at least that's the sales pitch. Mr. Perelman, Mr. Wasserstein and Mr. Peltz have all started their own SPACs or are in the process of doing so. Here's how it works: Average Joe buys shares in an initial public offering for an investment company with no assets to speak of other than the pot of money from the I.P.O. The company's sole mandate is to make one big acquisition. Average Joe has no idea what it will buy. And frankly, neither do the folks running the investment company. It's a blind bet that the Masters of the Universe will live up to their name. Of course, there's a catch (there is always a catch), and here's where Mr. Gross enters the picture: These investment companies have only 18 months to 24 months to find something to buy with all the money they raised and get shareholders to sign off on the acquisition. If the investment company can't find an acquisition, it must dissolve itself and give back the money to shareholders, less the costs it incurred on its failed hunting expedition for a takeover target. (Not a bad insurance policy.) Mr. Gross started a SPAC called Marathon Acquisitions and raised $300 million in the summer of 2006. Take a look at the calendar: his 18 months are almost up. Starting today, he's got exactly 14 days left; that's only 10 business days (but who's counting). Maybe he was diddling for too long, but whatever the case, he hasn't found anything to buy -- at least he hasn't said so publicly. (He's been hinting to friends that he might pull a rabbit out of his hat at the 11th hour.) Mr. Gross, who declined to comment, was at one point so desperate to buy something -- anything -- he told bankers on Wall Street and his friends that he was prepared to offer a $15 million reward to find a successful acquisition target. For him, not only will his chance of a big deal fall apart, he'll be out about $5.5 million of his own cash he put into the deal (unlike regular shareholders, principals don't get their money back). And therein may lie the ultimate problem with this new tool of capitalism: the incentives to do a deal are pretty perverse. As a result, companies that have no business being public may soon be getting ticker symbols. The way people like Mr. Gross get paid is by making sure they can get a deal across the finish line -- not necessarily how great an investment it turns out to be five years later. If Mr. Gross can persuade shareholders to give the deal the thumbs up, he gets -- are you sitting down? -- 20 percent of the entire company. That's a lot more than the 20 percent of the profits that private equity players take for at least ostensibly improving a company. And all he has to do is hold onto his shares for six months to a year after the deal is complete before he's free to dump his shares. Actually, it used to be a lot worse. In the 1990's, blank check companies were involved in a series of frauds where shareholders were taken to the cleaners while entrepreneurs ran off with their money. The Securities and Exchange Commission got involved. Other blank check companies worked initially, but then went bankrupt. Jon Ledecky, who is behind one of the most successful recent SPACs -- the acquisition of American Apparel -- and has two more coming, presided over several deal-oriented companies he put together in the mid-1990s; all ended up in bankruptcy after he had left the companies and mostly cashed out. Now, he has reinvented himself as the SPAC King. Today at least, shareholders, especially those that get in at the beginning, have a fighting chance. Hedge funds have been plowing into SPACs because they see it as a free option at a potentially great deal. If the investment company buys something that shareholders think is a dud, they can vote against it and get their money -- which is put in an escrow account -- back with interest. Heads you win, tails -- well, at least you don't lose. Most of the risk is borne by the principals in the deal like Mr. Perelman or Mr. Peltz. They have to put their money, name and time into the investment company and can't get it out if they can't complete a deal. Last year, there were 66 initial public offerings for SPACs, raising a total of $12 billion, according to Dealogic. The biggest one ever was just completed, a company called Liberty Acquisition Holdings, which raised $1.03 billion. Its Master of the Universe is Nicolas Berggruen, a billionaire investor. He just finished another successful SPAC, Freedom Acquisition Holdings, which bought GLG Partners, a hedge fund manager. Its stock is up. Others haven't been as lucky. If you got in early to Services Acquisition Corporation, which bought Jamba Juice, you did well. If you stuck around, you're not a fan of SPACs. It's stock price is down 60.5 percent since the I.P.O., to $2.76 a share; its shares traded as high as $12.25. While early shareholders may be protected, it is the long-term investor, and a company that maybe shouldn't be public, that may end up being the sucker. Most hedge funds jump into SPACs in the very beginning and sell immediately once the deal is completed, pocketing the difference. Whom do they sell their shares to? Average Joe. Once again, the big money makes out no matter what. The timing of all these SPACs may be telling: with the market in turmoil, promoters say they should have a good chance of picking up distressed assets that would have gone to private equity firms -- and maybe buy some businesses from private equity themselves. Some call them the next version of private equity. It's even possible some SPACs could end up buying entire private equity firms, allowing firms that wanted to follow in Blackstone Group's footsteps to become public through the back door even though the I.P.O. window closed on them. They might even buy other public companies. Of course, virtually every bank is trying to get in on the action: Citigroup, Credit Suisse, UBS, Deutsche Bank, Lehman Brothers and Merrill Lynch to name a few. But take note, one bank, so far, has refused to play the SPAC game: Goldman Sachs. Hmmm. Maybe that should tell you something.
Copyright 2008 The New York Times Company 1079 of 1231 DOCUMENTS The New York Times
The New York Times on the Web Start-Up Brings Free Calls to Mobile Phones BYLINE: By VICTORIA SHANNON SECTION: Section ; Column 0; Business/Financial Desk; Pg. LENGTH: 489 words DATELINE: PARIS ''In a few years' time, we'll look back and say how strange it was that we didn't always use Facebook on our mobile phones,'' predicts Avi Shechter, an Israeli technology entrepreneur. Mr. Shechter, who was a general manager of the pioneering ICQ chat service that AOL bought in 1998, now runs Fring, which is essentially a mobile-phone version of Skype. He believes that just about everything that people like to do on the Internet at their desks today -- like network on Facebook -- they will soon want to do on their cellphone. ''We have turned the corner -- people now expect to take their Internet experience mobile,'' he said. Like Skype on personal computers, Fring uses peer-to-peer Internet technology to send calls from mobile phones over the Internet at no charge. Like Skype, both sender and receiver have to have the Fring application on their phones for the calls to be free. And as with Skype, people can also use Fring to have instant-message text chats on their cellphones. Fring and its various start-up rivals -- Truphone, Yeigo, Rebtel, Jajah and Skype's own mobile version -- are services that grate on mobile phone operators, since they exploit the data subscriptions that the carriers offer. With Fring, callers are not paying for using air time or sending SMS text messages, Mr. Shechter said. ''In the short term, not all of them like it that much,'' he said, ''but at the end of the day, they need to serve their customers.'' Last week, Fring upgraded its service by adding support for users of Yahoo and AIM to the other online communities it supports, like Skype, MSN Messenger, Google Talk, ICQ and Twitter. Fring users can also now transfer files -- including MP3s, digital photos and video clips -- to one another. While Fring is a free download and free to use, callers still pay their normal monthly data charges. The service requires a smartphone using the Symbian 8 or 9, Windows Mobile 5 or 6, or UIQ operating systems, which means about 450 cellphone models. That would apply to about 250 million of the three billion or so active mobile subscribers today. In its newest version, Fring is available in six languages besides English. Mr. Shechter said people in 160 countries are ''Fringsters,'' but noted that not a single country contributes more than 8 percent of the traffic. After a second round of venture capital funding last year, Mr. Shechter is concentrating on creating a market and not yet on generating revenue. Shechter said Fring was attracting 100,000 registered users a month, though he would not specify the number of active users. ''I think it reflects users' need to be connected not just when they are in front of their PCs,'' he said. ''At the end of the day, the mobile device is a voice-centric device, but with the addition of chat and file transfer, convergence is finally here. ''We see ourselves as an Internet company that is focused on the mobile area,'' he said.
Copyright 2008 The New York Times Company 1080 of 1231 DOCUMENTS The New York Times
Late Edition - Final ON THE WEB BYLINE: By REUTERS SECTION: Section C; Column 0; Business/Financial Desk; ARTICLES ON THESE DEVELOPMENTS ARE AT NYTIMES.COM/BUSINESS.; Pg. 2 LENGTH: 318 words TRIAN PARTNERS, the hedge fund run by the investor Nelson Peltz, said on Monday that it was trying to gain control of the board at the hamburger chain Wendy's International, which it is trying to buy. (REUTERS) HASBRO, THE TOY COMPANY, posted a better-than-expected quarterly profit, in part because of strong demand for its Transformers, Nerf and Furreal Friends product lines. (REUTERS) THE LOEWS CORPORATION, the conglomerate run by the Tisch family, said that fourth-quarter profit fell 31 percent, hurt by subprime investment losses and weaker-than-expected results in its insurance, tobacco and drilling businesses. (REUTERS) ECONOMY EXPORTING EDUCATION The United States is exporting one of its great strengths -- its deep infrastructure for higher education and basic research. In doing so, does it risk losing its competitive edge? DANIEL ALTMAN blogs.iht.com MEDIA
DON'T HOLD YOUR BREATH With the writers' strike appearing close to a conclusion, viewers want to know when they will see new episodes of their favorite shows. The answer is, a while. BRIAN STELTER nytimes.com/tvdecoder ABC'S FALL LINEUP Granting renewals to four new series and five returning hits, ABC has ordered new episodes of nine prime-time television shows for fall 2008. BRIAN STELTER nytimes.com/tvdecoder TECHNOLOGY THE RENTAL STORE NEXT DOOR Another idea from the first dot-com boom -- renting items from your neighbors -- is making a comeback. BRAD STONE nytimes.com/bits NET CALLING FALLS SHORT Internet telephony remains an underdeveloped niche technology, industry experts say, citing the market clout of large phone companies, a labyrinth of new technical standards and consumer indifference. KEVIN J. O'BRIEN nytimes.com/technology SMALL BUSINESS THE SECOND WORK LIFE It's not a retirement job. It's an ''encore career,'' says Marc Freedman, a social entrepreneur. MARCI ALBOHER nytimes.com/smallbusiness URL: http://www.nytimes.com SUBJECT: FAST FOOD (90%); NETWORK TELEVISION (90%); RESTAURANTS (78%); ENTREPRENEURSHIP (77%); TOYS & GAMES MFG (77%); INTERIM FINANCIAL RESULTS (77%); TOYS & GAMES (77%); SMALL BUSINESS (77%); BLOGS & MESSAGE BOARDS (77%); TELECOMMUNICATIONS SECTOR PERFORMANCE (76%); INTERNET & WWW (74%); HEDGE FUNDS (73%); COMPANY PROFITS (72%); RESEARCH (70%); SUBPRIME LENDING (70%); INDUSTRY ANALYSTS (70%); TELEVISION PROGRAMMING (67%); COMPUTER TELEPHONY (64%); INTERNET TELEPHONY (64%); COLLEGES & UNIVERSITIES (54%); PRIMETIME TELEVISION (67%) COMPANY: LOEWS CORP (72%); WENDY'S INTERNATIONAL INC (58%); HASBRO INC (72%) TICKER: LTR (NYSE) (72%); WEN (NYSE) (58%); HAS (NYSE) (72%); L (NYSE) (72%) INDUSTRY: NAICS524126 DIRECT PROPERTY & CASUALTY INSURANCE CARRIERS (72%); NAICS334518 WATCH, CLOCK & PART MANUFACTURING (72%); NAICS312221 CIGARETTE MANUFACTURING (72%); NAICS213111 DRILLING OIL & GAS WELLS (72%); SIC6331 FIRE, MARINE, & CASUALTY INSURANCE (72%); SIC6311 LIFE INSURANCE (72%); NAICS722211 LIMITED-SERVICE RESTAURANTS (58%); SIC5812 EATING PLACES (58%); NAICS339932 GAME, TOY & CHILDREN'S VEHICLE MANUFACTURING (72%); NAICS339931 DOLL & STUFFED TOY MANUFACTURING (72%); SIC3944 GAMES, TOYS, & CHILDREN'S VEHICLES, EXCEPT DOLLS & BICYCLES (72%); SIC3942 DOLLS & STUFFED TOYS (72%) GEOGRAPHIC: UNITED STATES (79%) LOAD-DATE: February 12, 2008 LANGUAGE: ENGLISH PUBLICATION-TYPE: Newspaper Copyright 2008 The New York Times Company 1081 of 1231 DOCUMENTS The New York Times
The New York Times on the Web Discovering Second Acts in Sustained Working Lives BYLINE: By MARCI ALBOHER SECTION: Section ; Column 0; Business/Financial Desk; Pg. LENGTH: 1220 words Marc Freedman has become the voice of aging baby boomers who are eschewing retirement for what he calls ''encore careers,'' long periods of meaningful and sustaining work later in life. Mr. Freedman, who was one of the founders of Experience Corps, now runs Civic Ventures, an incubator of programs and ideas to redefine the second half of life. One of those programs, the Purpose Prize, gives monetary awards to entrepreneurial innovators over the age of 60 who have contributed to the social good. After reading his book, ''Encore'' (PublicAffairs, 2007), I decided to chat with Mr. Freedman about the growing phenomenon of encore careers, the obstacles facing older workers, and why it is so hard to come up with language to describe this new period of work and life. Following are excerpts from our conversation: Q.You have coined the term ''encore career'' to describe work in the second half of life that combines continued income, new meaning and a significant contribution to the greater good. When did you notice this was happening? A. During the time of the first Clinton administration there was a great deal of enthusiasm around programs like AmeriCorps and Teach for America. A lot of the focus was on young people, and I felt there was an undiscovered continent of idealism and experience in the older population. So, along with the late John Gardner and others, I helped to create Experience Corps, a national service program for people over 55. It was designed to be like the Peace Corps -- something you do for a year or two and then move on. What we discovered is that no one ever leaves. Instead of being something you do for a year or two, it became as significant to people as the work they did before. Q.How big do you think this movement is? A. It's hard to say. The research we've done shows that there are millions of people launching second careers in areas like education, health care, the nonprofit sector and government. And they don't want to wait until they are 62 or 65 to get started. They want to do it early enough so that they have enough time to go through the inevitable ups and downs, explore different options and do something significant for a significant period of time. Q.You've talked to hundreds of people forging these encore careers. How hard is it to create something that provides the kind of meaning and purpose you talk about? A. Society is set up to make retirement happen seamlessly. But if you want to launch a significant second career in an area of social importance, you are often on your own, even though we desperately need people to move into this direction. And the media often does a disservice by making it look easy. Take those personal finance stories with photos of a couple next to their B&B or vineyard, their dream instantly realized. It gives people who have the usual ups and downs, confusions, setbacks, a sense that they are failing because in reality it takes years. Q.You talk in your book about the difficulty in naming this stage of life, which happens roughly when people hit the age of 60. You mention some phrases that didn't stick: ''second act,'' ''zoomers,'' ''seasoned citizens,'' and have come up with some of your own, like ''the experience movement'' and ''practical idealists. Why is the language around this issue so thorny? A. There is this proliferation of oxymorons to describe this stage of life. The young old. Sixty is the new 50. Whenever opposing words like these get jammed together, it's a sure sign that something new is being born. But, in fact, it is an entirely new stage of life and of work. And it is much more difficult to come up with something new than to tinker with something that already exists. Even for Mark Penn, who wrote Microtrends and coined the phrase ''soccer moms,'' the best he could do was ''working retired.'' Q.Is there really no one left who aspires to the old-fashioned one you depict in the early chapters your book -- a life of 24/7 leisure in a Sun Belt golf or tennis community? A. The fact is that there are very few people who can afford to be retired for 30 years. What happens is that people are having false retirements. They are retiring from what they were doing in their midlife careers because they are tired, need a break, or have deferred many priorities. Then, after a year or five, they are rested and restless and looking ahead to a period that might be 20 years in duration. So what seemed like retirement was a sabbatical or hiatus as opposed to a final destination. The original purpose of retirement still exists. It is just getting pushed back further and further to a point where people are at the same point physically as the kinds of people that went off to Sun City in the 1960s. Q.Are retirement communities changing to embrace this? A. You are starting to see retirement communities open up in areas that aren't particularly warm and sunny because even those people want to remain close to work and family. Developers are also designing plans with home offices so people can continue working. Q.You have expressed concern that many older people end up in what you call ''bridge jobs,'' at places like Starbucks, Hope Depot and Wal-Mart. What's so bad about a bridge job? A. It's important that the retail sector is pursuing older people, and the reason they are doing that is that they recognize them as a source of talent and experience. What troubles me is that the bridge job is becoming the new default position for people moving into their 60s and 70s. I know from our research that there are millions of people looking for something different who don't want to phase out but instead want to focus in on work that is significant beyond themselves and they are having a much more difficult time following that path. I worry that the restful golden years are going to be supplanted by the Wal-Mart decades. Q.You acknowledge that employers aren't helping. What would you like to see employers doing? A. Employers need to recognize, particularly those facing talent shortages, that there is more than one place to look when filling these gaps. While many young people have an enormous amount to offer, there is another vast and growing pool of talent and commitment. And employers need to correct some misconceptions. They often assume that people in their 50s and 60s have one foot out the door. But an accumulation of evidence supports the fact that turnover is less with this population than with young people. So it is worth investing in these individuals. Q.You make a lot of policy suggestions including revamping higher education, creating programs to train older workers, allowing people to buy into Medicare, giving workers earlier access to tax-advantaged savings and pensions, and my favorite -- the national sabbatical. Do you think we can hope to see some of these policy changes in a next administration? A. The answer is dispiriting. It's hard enough to get the candidates to talk about the hot-button issues of Social Security and Medicare. But no one is talking about these issues even though many of them are themselves nearing this juncture. There is no creative policy debate around these issues. No recent candidate has embraced them. And with 10,000 boomers turning 60 every day, it's about time. Directory: ~hesterj -> Entrepreneur Entrepreneur -> Byline: By richard siklos section: Section C; Column 5; Business/Financial Desk; Pg. 1 Length Download 3.51 Mb. Share with your friends:
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