August 31, 2010

Wrapping up the summer

After a (too) long blogging vacation, I am back to business. The truth is that there have been quite a lot of things going on in the TMT space over the last few weeks.

At a time when Western economies are not picking up and the fears of a double dip are coming back, I have read a decent number of articles pointing to the TMT universe as the typical anti-cyclical industry where many are looking into.

I am going to make a quick reference to some of the events that I have found most interesting lately:


-  Telefonica closed the purchase of Portugal Telecom's stake in Brazilian cell operator Vivo (a great battle with many of the ingredients that are present in M&A cases that you see in b-school and characterize big corporate battles: references to maximizing shareholder value, increasing offers, political influence, strategic considerations, corporate threats...) for the astonishing amount of 7.5bn euros.

- Intel has entered the computing security business by paying $7.6bn euros for McAfee and has most recently purchased the mobile communications business of German manufacturer Infineon for around 1.1bn euros.

- Computing giants  HP and Dell are still fighting for acquiring 3PAR, the cloud storage solutions operator, in a race that has so far seen HP offering around $2bn (Dell's first offer was set at around $1.13bn)

- Telefonica bought Tuenti, the leading social network in Spain, for around 70m euros

- Nokia Siemens joint venture is "courting" private equity investors.


After changing hands several times over the past couple of years, Skype seems to be looking into an IPO to raise some money and to probably provide some liquidity to its investors. In the meantime, according to Techcrunch, Cisco Systems may be preparing a pre-IPO move on Skype, the leading VOIP provider with 500m+ users,  to take control of it.

This comes at a time when Google has launched Google Voice, its own applications to make phone calls over IP, which hopes to leverage Gmail's large user base.


The Financial Times has reported that Google's Youtube is negotiations with the main Hollywood studios to launch a mainstream pay-per-view movie rental service (beyond its current limited lineup of indie movies). Considering the huge Youtube user base, this could be a game changing move in this space. In fact it is a direct attack to a number of diverse models such as Apple's iTunes or Netflix.


Facebook has launched its new "Places", the latest intitiative when it comes geo-location services and apps. Considering Facebook's clout, will this be the beginning of the end for services such as Foursquare or Gowalla?


Julio Linares, Spanish leading telephony operator Telefonica's CEO, has "threatened" with a progressive switch to metered broadband use. In other words, it seems like the time of flat-rate pricing will be over soon and we will be switching to "the more you use, the  more you pay". Yoigo's (Telia Sonera's mobile subsidiary in Spain) CEO has pointed out in pretty much the same direction.

Arguments such as the growing use of smartphones, the increasing availability of video content or the need for infrastructure investments are at the core of the justification of such switch. I think that it kind of makes sense but, considering that the average internet rate is around a 140% higher than the European average, I find operators' claims a little harder to digest.

Well, not bad for a quick summary!

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