Posts Tagged ‘Omniture’

Risk-Taking Makes a Come-Back in Technology

September 28, 2009

Tech: The Return of Risk-Taking
Suddenly, there are mergers and acquisitions, IPOs, and investors galore. Will the reenergized industry lead the U.S. out of the Great Recession?

By Spencer E. Ante

In the past few weeks, Jon A. Woodruff, who heads up technology mergers and acquisitions in Goldman Sachs (GS)’ San Francisco office, has seen the mood shift in Silicon Valley. Tech companies are stepping up their dealmaking after a quiet year. In a span of 21 days, Goldman has worked on three major deals—eBay (EBAY)’s sale of Skype, Adobe (ADBE)’s purchase of Omniture (OMTR), and Dell (DELL)’s acquisition of Perot Systems (PER). “People seem more willing to take out their checkbooks again for the right assets,” says Woodruff.

The surge in deal activity is a sign of broader change: Risk-taking is making a comeback in the tech industry. The first three weeks of September saw $19.3 billion in technology mergers and acquisitions, up from $2.5 billion in August and $11 billion last September, according to Thomson Financial. Meanwhile, more companies are filing for initial public offerings, including such closely watched startups as Watertown (Mass.) battery maker A123 Systems. Venture capital investments are perking up, too. The micro-blogging service Twitter has raised a round of funding that gives the nearly revenue-free startup a valuation of $1 billion, according to several reports.

All this activity is being driven by a central idea: The worst of the recession is over, and it’s time to prepare for better times. Economists and other experts say many corporations put off technology investments during the downturn and are likely to step up spending to generate the productivity gains vital to the bottom line. Mark M. Zandi, chief economist of Mark M. Zandi (MCO), predicts that tech spending in the U.S. will increase 4% in 2010 and 10% in 2011, after dropping 10% this year. “I think we are at a turning point for tech,” he says.

Read the rest of the BusinessWeek story here.

2008: A Good Year for Tech IPOs?

January 7, 2008

Will 2008 be a good year for tech IPOs? Last year, I correctly predicted that 2007 would be the best year for tech IPOs since the tech bust. We ended the year with 60 tech IPOs, up from 41 in 2006, according to data from America’s Growth Capital. This year, I am predicting it will be another year of growth for tech offerings, but the growth won’t be on the order of last year’s 46% surge. We’ll be fortunate to see 10% to 20% more tech IPOs in 2008.

There is one caveat to my prediction: If the economy veers into recession all bets are off.

In my story published in January 2007, I argued that “a steadying of interest rates and inflation, a recent rally in the tech-heavy NASDAQ, and exceptional performance of tech offerings since the summer of 2006″ all pointed to a record year for tech IPOs.

None of those factors have changed that much. Inflation remains low, interest rates are falling again. Tech shares have experienced the best after-market performance of any IPO category, around 28% through the end of October. And some of the year’s biggest stock market winners were new tech names, such as VMWare, Omniture, and more recently, NetSuite.

Moreover, the Silicon Valley dream of changing the world and striking it rich is more alive than ever. I ended my 2007 story by quoting NetSuite CEO Zach Nelson, who affirmed this point. “Entrepreneurs don’t found a company to make Google better,” says Nelson, CEO of software provider NetSuite Inc., which recently chose an investment bank for an expected 2007 IPO. “They found a company to make a mark on the industry.” Now that NetSuite went public in late December, Nelson is worth around $40 million on paper.

Not everyone agrees with me, of course. The founding ceo of America’s Growth Capital, Ben Howe, thinks 2008 won’t be a growth year for tech IPOs. Howe, a key source in my 2007 forecast, argues we will see a decline from 2007, which he believes is already evident from the significant drop in new filings in Q4 2007. “Weak economy, choppy capital markets, political uncertainty will all work to slow down the IPO market,” writes Howe.

What do you think? This could make for an interesting thread.

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