BY SOPAN DEB FOR THE MILFORD DAILY NEWS

BOSTON – Steve Pagliuca is just a regular guy, or so he says.

He loves basketball. He played college ball at Duke and has coached all four of his children in his hometown of Weston. And he just happens to be part owner of the Boston Celtics, one of the most storied franchises of the National Basketball Association.

As a candidate for the late Ted Kennedy’s U.S. Senate seat, the 54-year-old Pagliuca has spent $1.4 million of his personal fortune, mostly on television ads to emphasize his regular guy persona while introducing himself to the state’s voters.

A political newcomer, Pagliuca’s message is simple: His business experience makes him the obvious choice to help fix the nation’s economic problems.

“I think we’re in a unique moment in time, we have a crisis,” Pagliuca said during a campaign stop. “I offer something very different than the classic politicians. I offer 25 years of on-the-ground business experience on how to build businesses (and) how to get people back to work.”

That experience comes from years at Bain Capital, a private equity firm where he worked closely with former Gov. Mitt Romney. Romney recruited Pagliuca to work there in the early ’90s. In return, Pagliuca contributed to Romney’s campaign to unseat Kennedy in 1994. He also made campaign contributions to other Republicans: former Gov. Bill Weld and former President George W. Bush.

Pagliuca sees no contradictions in this as he seeks the Democratic nomination for Kennedy’s seat.

“My first donation was to Bill Clinton in 1992,” Pagliuca said. “He captivated me. I thought he could do the right things for the country and he did. I’ve always had progressive values. I’ve given hundreds of thousands dollars to Democratic causes and raised money. What I did for the Republican Party was tiny. It was out of friendship. It was not out of ideology.”

In public appearances and media interviews, Pagliuca calls his family “the product of the American dream.”

His grandfather emigrated from Italy in 1922, working at a shoe factory for 30 years. His father fought in World War II and the Korean War, becoming the first in his family to attend college thanks to the G.I. Bill.

Pagliuca attended Harvard Business School, driving moving vans to pay off $70,000 in college debt.

He interviewed for a job selling television ads in North Carolina, where he was told to change his name to Steven Page because, “Steven Pagliuca isn’t going to sell any ads here in North Carolina.”

Supporters say Pagliuca has remained grounded. Marylou Sudders, president and CEO of the Massachusetts Society for the Prevention of Cruelty to Children, tells a story about how Pagliuca, who is chairman of the charity, showed up late to a monthly board meeting because he was trying to find a parking spot to avoid paying $35 for a spot in a parking garage.

“There probably isn’t any typical conversation with Steve Pagliuca,” Sudders said. “Every conversation is unique. He is always very curious about the MSPCC and what we’re doing. He is always available to me if I need to reach him, which is sort of extraordinary given how busy he has been.”

Pagliuca sees his work at the society as part of a life’s work in public service that he now hopes will include elected office.

“I’ve always had a strong element of giving back and a community element to my life and so it’s in the back of my mind that at some point when I’m ready, when my family would allow it, I’d like to kind of give back and help,” he said.

In his Senate campaign, Pagliuca paints himself as a progressive Democrat and a businessman who understands the needs of regular citizens. His issues include health care and financial regulatory reform.

“I actually think training and building businesses is vital to the government function,” Pagliuca said. “It’s about getting results, having a sense of urgency and reaching across both sides of the aisle and making things happen so the government can make our country great again.”

As a hands-on entrepreneur, Pagliuca said there needs to be less talk and more action in Washington.

“You don’t create jobs from talking about it,” Pagliuca said. “You create (them with) very detailed plans on how to bring sustainable jobs here that would create jobs in research (and) cure illnesses.”

(link to original story)

In case anyone had forgotten about former Repug presidential hopeful and former Governor “Penumbra Of Angst” (here), a certain Willard Mitt Romney decided to let us know he’s still around (here)…

WASHINGTON (CNN) – Mitt Romney has a message for the Obama administration: Stop talking to Iran. Period.

“The Iranian leadership is the greatest immediate threat to the world since the fall of the Soviet Union, and before that, Nazi Germany,” Romney said in a speech Monday to the pro-Israel group AIPAC at their national summit in San Diego, according to excerpts provided to CNN.

Funny, but I would consider al Qaeda to be “the greatest immediate threat to the world,” but considering that the above analysis came from a guy who said “it’s not worth heaven and earth” to try and capture bin Laden (here), I can’t say that I’m surprised.

And I would say that Romney has no room to criticize anyone on Iran, considering that, as noted here, Romney’s one-time employer and the company he founded has links to recent Iranian business deals…

Romney joined Boston-based Bain & Co., a management consulting firm, in 1978 and worked there until 1984. He was CEO of Bain Capital, a venture capital firm, from 1984 to 1999, despite a two-year return as Bain & Co.’s chief executive officer from 1991 to 1992.

Bain & Co. Italy, described in company literature as “the Italian branch of Bain & Co.,” received a $2.3 million contract from the National Iranian Oil Co., in September 2004. Its task was to develop a master plan so NIOC — the state oil company of Iran — could become one of the world’s top oil companies, according to Iranian and U.S. news accounts of the deal.

Bain Capital, the venture capital firm that Romney started and made him a multimillionaire, teamed up with the Haier Group, a Chinese appliance maker that has a factory in Iran, in an unsuccessful 2005 buyout effort.

Also, this September 2006 story tells us that, when Romney was governor of that liberal Gomorrah Massachusetts (wink), he denied any security from his state to Mohammed Khatami, former Iranian president and a legitimate moderate who was visiting to speak at Harvard.

Now, while I do not cut Iran any slack because it is a run by a regime of criminals, I would say that it still is incumbent upon us to look for ways to initiate some kind of a dialogue with them, however slight the excuse may be; this news story tells us of a terrorist attack on Iran, quite likely originating from Pakistan, something you could definitely consider “chickens coming home to roost” given Iran’s support of Hamas. However, I still think this is an opportunity for us to remind Iran that, even though they sponsor terrorism, they have something to gain from “cleaning up their act,” especially when they face the threat from violence that other countries face.

But of course, Romney has other thoughts, being the good little Repug that he is…

“The notion that Hamas and violent jihadists are motivated by ’shared interests’ and ‘common goals’ is naïve in the extreme and dangerous to the entire free world,”

If The Mittster really believes that, though, then doesn’t that invalidate his Now And Forever You Godless Commie Lu-bu-ruul And Just Because That Kenyan American-Pretend Pre-zee-dint O’Yours Is In Charge Don’t Think We Ain’t Comin’ Back in 2010 Global War On Terra! Terra! Terra!?

Of course, compared to whatever latest scribblings happen to appear on Just Plain Folks Sarah Palin’s Facebook page on this subject, such sentiments from Romney are positively statesman-like for his party, however wrong they may be (and if that isn’t a pathetic commentary, I don’t know what is).

Business social network LinkedIn has hit 50m members worldwide after adding one million in 12 days. The network is seeing its fastest growth in India, where it now has almost 3m users. The milestone was revealed on the US-headquartered company’s blog by chief executive Jeff Weiner, who said: “LinkedIn has been global since inception — about half of our total membership is international.”

However, information on how many of its users are paying to use the site is guarded by the privately-held company, which was valued at $1bn last year when it raised $53m in a fundraising led by Bain Capital. Rival network Xing, which is publicly quoted on the German stockmarket, had 635,000 paying members out of 7.91m total members as of the end of June this year.

Subscriptions accounted for almost 90% of its €10.8m first half revenues, with advertising contributing just €360,000.

Xing is focused on Europe, where LinkedIn claims it now has 11m users. LinkedIn also brings in money from advertising and in September it launched the LinkedIn Audience Network, which makes non-personally identifiable data, such as industry, job function, seniority, company size, gender and geography, available to advertisers.

Welcome to the www.NegMeg.com NEG Meg Whitman news archive.

“a monkey could drive this train”
Margaret “Meg” Whitman comment on eBay,
while she was eBay CEO and President.

Margaret Cushing “Meg” Whitman
Born August 4 1956

• “President and Chief Executive Officer of eBay from March 1998 to March 2008.”

NEG Meg The Series Episodes

NEG Meg The Series 1998

CEO Employment Letter between eBay and Meg Whitman
January 16 1998

• “eBay, Inc. (the “Company” or “eBay”) is pleased to offer you a position as Chief Executive Officer, at a salary, payable twice per month, which is equivalent to a yearly salary of $175,000.00. In addition, you will be eligible for an annual bonus up to $100,000.00 solely at the discretion of the Board of Directors.”
• “You will also be entitled to the benefits that ebay customarily makes available to employees in positions comparable to yours and it will be recommended to the Board of Directors that you be granted an option for the purchase of 800,000 shares of the Company’s Common Stock.”

Women on the Move
Deeanne McClain, August 24 1998

• “Meg Whitman has been named the new CEO of eBay, the rapidly growing online personal trading company. Whitman comes to eBay from Hasbro Inc.’s Preschool Division and is expected to lead eBay to the next level of success, building upon the company’s leadership position in the one-to-one online trading market.”

EBay Suspends Fraud Suspect
December 14 1998

• “suspended a user who is under investigation for cheating customers out of as much as US$100,000, according to a report in the latest issue of Newsweek.” “But the high-flying San Jose, California, company has refused to give refunds to the duped customers, Newsweek reported, suggesting that eBay (EBAY) may be unable to protect its customers from fraud. ”
• “”We feel badly for [the victims] but [they] really do need to take it up with local law enforcement,” eBay chief Meg Whitman”
• “The stock closed Friday at $192″

NEG Meg The Series 1999-2000

NEG Meg The Series 2001

NEG Meg The Series 2002

NEG Meg The Series 2003

NEG Meg The Series 2004

NEG Meg The Series 2005

NEG Meg The Series 2006

NEG Meg The Series 2007

NEG Meg The Series 2008

NEG Meg The Series 2009

Meg Whitman Steps Down from eBay’s Board
Randy Smythe, January 5 2009

• Comments

Meg Whitman to run for Governor of California
Power Sellers Unite, January 6 2009

Meg Whitman resigns from all board positions
Ed, January 6 2009

• “her recent history has shown that whilst she is a capable and dynamic leader during growth of a business, she flounders during stagnation or decline.”

The Shenzhenian Candidate: Meg Whitman Wants to be Governor of California
Chris Kelly, January 6 2009

• “She’s a real person. With a genuine record. Of callous indifference not just to the dignity of labor, but to suffering in general.”

Bain Connection – Corp Raiders & Salvador
wphamilton, January 8 2009

• “In 1984, Bain Capital was financed by Ricardo Poma, Salvadoran billionaire. The founding partners were Mitt Romney, T. Coleman Andrews III, and Eric Kriss. Bain Capital was a spinoff of Bain & Company, whose executives included Mitt Romney (CEO), Meg Whitman (8yrs, VP) and John Donahoe (17 yrs, Managing Director).”
• “The Bain Way, unavoidable in the business of corporate raiding, typically meant slashing jobs, closing plants, moving production overseas. The objective is bottom line return for investors regardless of jobs, local impact, environmental or other considerations, or in some cases even the long term health of the business.”
• “Bain & Company – the consulting firm parent company – saw its revenues plummet in the 80’s, the senior partners accused of looting the company for retirement featherbedding.”

Greed At A Glance
January 12 2009

• “Whitman does seem to have a problem relating to the world outside her rather privileged personal bubble. Even her philanthrophy reeks of regal.”

Don’t Bid on Meg Whitman
Mark Gimein, January 16 2009

• “The reality, however, is that the perception among CEOs that they shine in the public eye is one that comes mainly from the fact that many of them spend their time around subordinates who are eager to reflect their faint glow and pretend it’s a blinding light.”  ”Whitman is typical in this. The adoring press that Whitman got for years as head of eBay (adoring in part because eBay very efficiently shut down reporters who weren’t—for most of the time that I’d worked at Fortune, the company refused to take the magazine’s calls because of an insufficiently flattering story) contrasts starkly with the stiffness you see when you watch her at the Republican Convention—or even at eBay’s own annual eBay Live gathering.”
• “points up the biggest problem with Whitman as a candidate: After years of facing flattery and imagining that it is scrutiny, and reciting catchphrases that will seem appealing only to those who are getting paid to applaud, the average chief executive has developed the misconception that the best way to reach an audience is to say nothing.”
• “chief executives like Whitman are used to saying nothing, sounding like they’re saying nothing, and getting congratulated for it. That, more than any stiffness of style or inexperience in real public scrutiny is what keeps CEOs like Whitman out of elective office.”

eBay’s Meg Whitman to Announce Governor Run Today
Ina Steiner, February 9 2009

• Comments

It’s Official – Meg Runs for California Governor in 2010
Randy Smythe, February 9 2009

• Comments

Meg Whitman to run for Governor of California
Sue Bailey, February 9 2009

• Comments

Whitman settles cybersquatter case — out of court
Shane Goldmacher, February 9 2009

• Comments

Former eBay CEO Wants to be Next California Governor
Chris Crum, February 9 2009

• Comments

Meg Whitman: Small Business Governor?
Stacy Perman, February 9 2009

• Comments
• More Comments

Heavily Vaselined Ex-eBay CEO Running for California Governor
Owen Thomas, February 9 2009

• Comments

Look Out Arnold ~ Meg’s Coming!
Yahoo! Message Boards – eBay Inc. (EBAY), February 9 2009

If Meg Whitman runs California like eBay…
Dan Wilson, February 10 2009

• Comments

CA-Gov: Meg Whitman Is In
Arjun Jaikumar, February 10 2009

• “Ms. Whitman’s most recent claim to fame was presiding over a company which was part and parcel of those job losses, having laid off 10% of its workforce.”
• “Whitman may take some hits among conservatives for not even having been a Republican until 2007″
• Comments

Will Whitman’s eBay Legacy Help or Hurt Bid for Office
Kenneth Corbin, February 11 2009

• “14 percent of likely Republican voters said they backed Whitman”
• “”an argument that her opponents will make that she led the company when the expression inside the company was, ‘Even a monkey could drive this train,’”
• “The auction giant has also come under fire from some who had once been among its most loyal supporters – its sellers.”
• “A lot of the sellers would argue that eBay ultimately failed them”
• Comments

GOP gubernatorial candidate Whitman outlines stands
Michael Finnegen, February 11 2009

Meg Whitman’s Campaign – What’s Old is Not so New…
Robin Swanson, February 11 2009

• “Perhaps they’d like to sneak her into our subconscious since she’s only got a 17 percent favorability rating”

Meg Whitman Can’t Use the Buy it Now Option to Run For Governor
Tawny, February 11 2009

• “Those in the Tech World know Meg Whitman as the grim reaper behind EBay’s downfall”

Can Meg Whitman save California
Patricia Sellers, March 16 2009

• “What dirt are they going to dig up?” That’s one of many questions that Whitman’s friends are firing at her. The best “dirt” on Meg Whitman seems to be that in the past decade, she voted in elections less than half the time. There is “absolutely no excuse for it,” she has been saying in her campaign speeches, but when I ask her about her voting record, she lobs an excuse my way: “I was head down, building eBay, with two teenage sons and a neurosurgeon husband, and traveling half the time,” she says.”
• “there’s no denying that her performance as CEO sputtered in her last three years there. The company’s growth hit a wall. Profits fell. The stock, as high as $59 in late 2004, now trades around $12 a share.”
• “She did acknowledge that she left a bit of a mess at eBay”
• (Steve Poizner) ”Poizner, a Stanford-educated engineer, says, “If voters are looking to rebrand the state, she’s a very attractive candidate. But if voters are looking to rebuild the state, they’ll turn to me.”"
• “Jerry Brown, an energetic campaigner who was governor from 1975 to 1983. Brown displays a mix of ridicule and respect when he describes candidate Meg’s positioning this way: “‘I ran a business. I can buy my campaign. I have zero experience in government. I want to take on the most difficult state government job in America. Therefore, make me governor.’ That’s her campaign.”"
• “When Whitman tried to be a visionary, she sometimes scored (buying PayPal) and other times didn’t: She took a $1.4 billion write-down on Skype, acquired for $3.1 billion. “Did we pay too much? Yes,” she says, while insisting that eBay is better off owning Skype.”

Ada Lovelace Day: Meg Whitman
Dan Wilson, March 24 2009

• “Ada Lovelace Day encourages bloggers to write about women involved in technology and whilst Meg is clearly closely associated with technology, it would be hard to characterise her as a technologist. This has been both a strength and a weakness.”
• Sue [Bailey] said: ”It makes me very sad to think that someone would seek to stop someone else celebrating a person they thought worthy of celebration. That’s what ALD was all about, after all.”

Undoing Meg Whitman’s eBay
Saul Hansell, April 23 2009

• “Before voting for Meg Whitman for governor, California residents would do well to consider what has been happening at eBay since she stepped down as chief executive. John Donahoe, her successor, has pretty much disassembled all of her major strategic moves.”
• “He is undoing her acquisitions of Skype and StumbleUpon. It turns out that neither voice communications nor Web surfing have anything to do with what eBay does.”
• “Ms. Whitman’s plan to build sales of mainstream merchandise easily available elsewhere by using eBay’s structure — seven-day auctions, high merchant fees”

Meg Whitman: a female Checchi or Simon?
Garry South, May 7 2009

• “One of the major problems with wealthy business types attempting to cross over into politics is their own – how shall we say? – inflated self-impression.  Many really do envision themselves as smarter and more accomplished than officeholders who have succeeded in the political system for years or decades.  After all, they’ve run a business, created jobs, “met a payroll.””
• “Whitman’s tenure at eBay was not without controversy or failure.  For the last couple years under Whitman, the company experienced a marked slowdown in growth, and its stock lost half its value.  In 2005, she also engineered the $2.6 billion purchase of Skype, the Internet-based video calling service, believing that eBay buyers and sellers would find talking to each other directly to be peachy keen.  Instead, it turned out to be a lemon, and eBay wrote off Skype and is trying to dump it.”
• “While Whitman was CEO, the company also came under heavy fire for forgeries and stolen items, dishonest sellers and inaccurately described merchandise.  In addition, criticism was leveled at the Whitman-era eBay for generating revenue growth by ever-increasing fees on sellers, which was an unsustainable, self-defeating strategy.”

Meg Whitman to Draw Intense Media Scrutiny to eBay
Ina Steiner, May 7 2009

• “It will be interesting to see if California media will scrutinize what industry insiders call “eBay math” as Whitman continues to tout her record of job creation.”
• Comments

Steve Poizner for California Governor 2010 – Meg No Waay – web video
campaigntvads, May 12 2009

Mad Money Calls Out Whitman
Jim Cramer, June 10 2009

Former eBay honcho Meg Whitman brought her trophy husband
TG Daily Live, Gawker, July 10 2009

• “Former eBay honcho Meg Whitman brought her trophy husband, all the better to ask for gubernatorial campaign donations with.”

How eBay lost the China market
Sherman So, J. Christopher Westland, August 10 2009

• “Many believe Taobao beat global online auction king eBay in China by being free,  but not EachNet founder Bo Shao who sold the company to eBay in July 2003. A key catalyst was “migration”, the decision to terminate EachNet’s homegrown technology platform and move all EachNet users to the eBay US platform, said Shao.”
• “On the day of the migration, traffic to eBay China dropped by half. Despite the serious customer losses, Meg Whitman, then CEO of eBay, only learned about it a month after it occurred, on a visit to Shanghai.”
• “The company thought everything would be fine. After all, EachNet, now eBay China had an overwhelmingly dominant position and it planned to spend an extra $100 million to improve its technology platform and promote eBay’s brand in China. Any new competitors would be easy to crush.”
• “However, nothing went according to plan. A new rival came out of nowhere and eBay retreated from China four years later.“
• “What really caused eBay to lose its dominance in China was its decision to move its technology platform from China to the US”
• “The slow and unstable services frustrated users and caused them to leave eBay China in droves.”
• “After investing nearly $300 million ($180 million for acquiring Eachnet and $100 million as extra budget for its China push), eBay all but threw in the towel. It folded its China operation into a joint venture with Tom Online, a leading mobile value-added services provider in China at the end of 2006.”
• “eBay’s market share had shrunk to 7 percent by the second quarter of 2007″

Ebay still playing with the feedback
Cohibastore.com, September 19 2009

• “Meg&Co let it go for so long that they must have realized they need to monitor the entire site better and see just whats going on. Under Whitman nothing happened but fee increases and an overall degradation of the site. Like it not, JD and his cohorts are trying to fix things, rather than letting it wither on the vine like Meg was. This kind of research and testing is critical.”

Former CEO Whitman likely to take stand in eBay-Craigslist civil trial
Andrew Macintosh, September 26 2009

• “Meg Whitman may have to take time off from her Republican gubernatorial campaign next month to appear as a key witness at a Delaware civil trial featuring Web behemoths eBay and Craigslist.”
• “”The witness list has not been finalized yet, but it’s highly likely she will be testifying,” eBay spokeswoman Maggie Fitzpatrick”
• “As eBay’s former chief executive officer, Whitman allegedly oversaw its aggressive 2004 purchase of a minority 28 percent stake in Craigslist.”
• “Whitman’s involvement in eBay’s dispute with Craigslist stems from the 2004 investment. After she led the efforts to buy a minority stake, eBay launched its own overseas classified advertisement service, called Kijiji.com, in 2005.”
• “In its rival lawsuit in California and in its Delaware court documents, Craigslist alleges that eBay executives misled them from the start about their intentions.”

Steve Poizner – Meg Whitman Did Not Vote For 28 Years
campaigntvads, September 26 2009

While eBay Burned, Whitman Fiddled
Eric Jackson, October 01 2009

• “Whitman’s final years at eBay leave her open to criticism. She promoted a drunken-sailor approach to acquisitions, always overpaying and making little effort to stitch them together. A culmination was the $4.1 billion purchase of Skype in 2005″
• “more damaging in the long-run for eBay than overpaying was that Whitman didn’t get the intellectual property associated with Skype. This has allowed Skype’s founders to now come back and sue eBay for trying to unload the property recently at a valuation of $2.75 billion.”
• “Jan. 1, 2005. Since then, however, eBay has been in a tailspin with the stock down 59% vs. a Nasdaq decline of 3%”
• “Whitman’s last four years on the job in which her pay became dramatically disconnected with eBay’s stock price and her perks started to go through the roof.”
• “between 2005 and 2008, Whitman’s interest had drifted away from increasing the stock price of eBay to increasing her cash compensation and perks. Had anyone seen these clues — and, interestingly, perhaps Skoll did as he liquidated his entire eBay stake in 2006 — they might have pulled the ripcord on owning the stock in 2006 or 2007 when it was trading at $35, before the bottom fell out in the stock and it hit its nadir below $10 this past March.”
• “two years of lavish perks coincided with a time when eBay’s stock dropped 22%, even though Nasdaq was up 17%”
• “Whitman spent more than $1 million on personal air travel in 2006.”
• “They say that while Rome burned, Nero fiddled. At eBay in 2006, while the stock dropped and the Skype merger was a mess, Whitman flew to Hawaii and other locales on a private jet paid for from the shareholders’”
• “this “CEO entitlement mentality” that Whitman adopted in her final years on the job is that she’s passed the habit on to her successor. Donahoe racked up almost $280,000 worth of personal aircraft expenses in his first nine months on the job in 2008.”
• “Donahoe made $13.1 million last year for his nine months as CEO, while eBay’s stock dropped 55%, far wider than Nasdaq’s 30% loss”
• Comments

Call of Shame!
Jane Wells, October 2 2009

• “GM’s joint venture with Ebay [EBAY 22.91 0.21 (+0.93%) ]ended because it didn’t lead to sales.”
• “E-BAIL   Former Ebay CEO Meg Whitman bailed out of voting most of her life. The Sacramento Bee reports that the Republican gubernatorial candidate didn’t even register to vote until 2002, and still missed some major elections after that. Making matters worse, the Bee says Whitman earlier claimed she registered in 1998, which Whitman now says was “a mistake.” Her stumbling responses to reporters’ repeated questions only made matters worse.  Now she says, “I like many Americans was not as engaged as I should have been over the last 20 or 30 years. I was focused on raising a family, on my husband’s career, we moved many, many times, and it is no excuse. My voting record, my registration record is unacceptable. There is no excuse for it.” Let me just say that I raised a family, I supported my husband’s career, and I’ve moved a few times, and I have never missed a major election (and I’ve only missed one minor election). Does that make me material for governor? No, but Whitman’s right, she has no excuse.”

Can Meg Whitman’s eBay success translate in Sacramento?
Ken McLaughlin and Pete Carey, October 4 2009

• “Whitman certainly has her detractors, including many sellers who, ironically, complain that eBay during her reign erected a thicket of rules that were every bit as burdensome as the government regulations she now assails. Sellers also complain that, under pressure to meet Wall Street expectations, eBay under Whitman repeatedly jacked up fees, driving off many sellers and making the site far less profitable for others.”
• “The annual eBay Live! conferences — once an almost-evangelical gathering of buyers and sellers — became “bitch fests,” said Andrew Bergman, operations manager of Alpha & Omega Antiques, which does about $120,000 worth of business on eBay each year. “eBay just got too big for its britches,” he said.”
• “Other Whitman critics say she was simply lucky, having hopped on a bandwagon that was rolling down a road paved in gold.”
• “eBay could have been run by a Labrador retriever,” said Rosalinda Baldwin of the Auction Guild, a 10-year-old watchdog group that monitors complaints at online auction businesses.”
• “After being singled out in a congressional report that called the IPO system rigged and corrupt, Whitman issued an internal memo to eBay employees saying she got the shares because she was a personal client of Goldman Sachs.”
• “two professors who focus on business ethics — David Shapiro at the City University of New York and William Black at the University of Missouri-Kansas City — predict the issue might prove troublesome for her on the campaign trail.”  ”The fact that she could say she could learn no ethical lesson is illustrative of moral blindness,” Black said.”
• “What’s not in dispute is that as the traditional online business began slipping in 2005, Whitman began acquiring companies to boost growth. While PayPal — which currently contributes almost a third of eBay’s revenue — was a grand slam, other acquisitions didn’t work out so well. Clearly the worst decision was buying Skype for $3.1 billion, on the questionable theory that eBay buyers and sellers would flock to the service to talk to each other to close their deals. Whitman eventually admitted she paid too much for Skype, and the company took a $1.4 billion write-down.”

I Stand By My Prediction
ebay_flyer, October 5 2009

• “I didn’t realize that was the deal when I shook Megs hand at Ebay Live 1.
• I’m a legend in the halls of Ebay!
• Ebay Pays My Bills ~ LOL“

The arrogance may be Whitman’s
George Skelton, October 5 2009

• “The political novice who would be governor calls state workers ’selfish and arrogant.’ That isn’t a sound management practice.”
• “a bit grating recently to read that billionaire political novice Meg Whitman had called state civil servants “selfish and arrogant” in officially announcing her candidacy for the Republican gubernatorial nomination.”
• “Whitman felt she had more important things to do than participate in democracy’s most basic civic duty. She couldn’t be bothered. Had little interest in public policy.”  ”Now she wants to be governor. Is that arrogant?”

Who junked eBay’s lawn chairs?
VenturaCountyStar.com, October 5 2009

• “one of Whitman’s first acts after being hired in February 1998 was that she “replaced the lawn chairs with corporate cubicles.”"
• “Steve Westly, also an early eBay executive, I had paraphrased what Westly told me about one of his first acts when he was hired in 1997 as vice president of business development: “to order the office lawn chairs replaced with traditional furniture.”"
• “Adam Cohen’s book “The Perfect Store.” Cohen puts the year of the lawn chairs’ demise at 1997, but credits neither Westly nor Whitman.”

eMeg Stumbles
Jerry Roberts, October 8 2009

• “Steve Poizner, the state’s insurance commissioner, who posted a detailed narrative (tinyurl.com/y85tawr) of her shifting statements, along with a batch of YouTube videos using her own words to question her integrity.”  “Meg Whitman’s different stories on her non-voting record have raised serious concerns as to what is true and what is deception,” said Poizner spokesperson Jarrod Agen.”
• “eBay billionaire’s laissez faire attitude about the most basic duty of citizenship could feed the perception that eMeg has a sense of entitlement, not to mention disdain for the democratic process.”
• [Meg Whitman] ““Go find it””

NEG Meg The Series 2010

:::

The “NEG MEG” phrase was popularized by ‘Ming the Merciless’, an AuctionBytes poster.

NEG Meg The Series is not affiliated with Ming the Merciless or anyone else.  Yet.

Got links?

We’re not finished. We want links. Post a comment with links.

:::

Are you Ahead of the Curve???

 
As a first aside, President George W. Bush (’75) and Treasury Secretary Henry Paulson graduated from Harvard Business. President-elect Barack Obama received his Juris Doctorate from Harvard. Michael Bloomberg, New York City mayor, amongst other things, is a MBA from Harvard. The always quick-to-be-proud of his business acumen, ex-presidential candidate, Mitt Romney, did his work at the Crimson. And today, on the 45th anniversary of his assassination, it should be noted Kennedy graduated from Harvard (cum laude) in 1940, majoring in government. (Thus the Kennedy School of Government.)

I just finished up Ahead of the Curve: Two Years at Harvard Business School by Philip Delves Broughton, a memoir about his recent experience as a graduate student at Harvard Business School, class of 2006. Considered by most as the pinnacle school to receive that prestigious MBA at, Broughton’s story (and the title aptly reflects) on what we should be considering during these difficult times, and on the people who make these decisions.

So indeed, being a Harvard grad has its potential perks, and peaks of power.

Englishman Broughton wrote for a living before stepping into the hallowed foray that is Harvard. As a neophyte to the world of banking, finance, hedge funds and leverage buyouts, he got a crash course in what is the terminology, psychology and manipulations of business numbers, and where it would lead him even before he got started on his two-year trek. As he soon learned, there are no clear answers; just measurements of risk and reward, possibilities defined better, and the balance of what is important to know in business, and in life.

Relating to current financial malaise, a passage from the Ahead of the Curve:

“…I once asked a hedge fund manager in New York about the reckless way credit
was sold to people who could ill afford it. I said they would be ruined. They
would lose their homes and their possessions. Where were the checks on all of
this? What would happen to all these firms lending like crazy when people
stopped paying back their loans? The hedge fund manager looked at me like I was
a madman and said, ‘It’s just economic.’ He meant that over time these borrowers
would learn their lesson. The bankrupted lenders would be bought cheaply by
other investors and turned around. The economic wheel would keep turning, no
matter how many lives had been crushed against it…” (pgs. 232-233)

As we have seen with the demise of Lehman Brothers, Bear Stearnes, WaMu, IndyMac and others likely in the queue (GM, Chrysler, Lear), the economic wheel is spinning quite well as it has indeed crushed retirement funds, and stocks and put people out of work in droves. (Citigroup announcing 50,000+ in job cuts in one week.)

Our current leader, George W. Bush, seems to have adopted a technique not-as-yet-perfected when he attended Harvard, but discussed in Ahead of the Curve, the levering up through debt. This preferred technique, of financing a buyout mainly through debt, thus recording interest paid as an expense (on that debt), produces more return on equity, to equity stakeholders, thus making them extremely happy. It works if you produce a profit, can generate the cash to pay the interest payments, and can keep other expenses down, preferably through frugality to all other concerns. At some point, you take the enterprise public again with all the miscellaneous expenses cut, but likely only a real benefit to the LBO starters of the once-fat company. The actual company, the workers, are unlikely to have received any benefits.

(2nd aside) How this relates to our current government: During the Bush administration, we have ‘levered up’ the balance sheet of the United States. Taking on more debt, trying (but not succeeding) to trim other programs (those nasty entitlements) while keeping taxes on those multi-millionaires low, even giving a tax holiday to them for a decade. The low-interest rates that spurred out-of-control lending to the non-financially savvy, and the opportunists, that both got caught in the wheels of sub-prime and housing market free falls, has loaded up more debt on the U.S. Treasury balance sheet. We continue to make our interest payments on a $10,000,000,000,000 national debt, of at least $500,000,000,000. But when do we run out of fiat money? (At least if you don’t print and print, devaluing our currency to the point of worthlessness.)

But as we’ve also seen, the entities under the auspices of too much leverage have indeed failed when the cash flows stopped to these many, many banks, insurance companies, manufacturers, retailers, and now, oil entities. The deflation of the value of things is reminiscent of the Great Depression.

We are now Behind the Eight Ball: What Harvard Business School Did Not Teach President Bush.

With a new President, Obama will have to get well ahead of the curve in order to stave off the impending doomsday scenario discuss on more than one occasion here, and now, at many other media outlets.

 

As Broughton also learned, business is not solely the most important entity – as ex-CEO of GE Jack Welch had surmised, quite smugly – as the government too, has its place. For one, without a government in operation, a business cannot protect its interest via laws or the enforcement of contracts. (A business would have to act as a thug to accomplish contract enforcement. Essentially, become a government entity with enforcers and judges of people’s misdeeds.)

The argument made by Welch, that government generates no revenues, and business generates all the money, so we can ignore governance, leaves aside that a symbiotic relationship has always existed. Businesses can exist without government, but only for so long as people ascribe to obeying business edicts. Otherwise, chaos and revolt and failure soon comes. Governments can exist only if people are willing, and led to accept its rules, and abide under its control. And provides some benefit, else why have it. Neither operates in a vacuum.

The book presents Broughton engrossed in the whys of how he decided on Harvard B-School, only to not go immediately from there to a big corporate job, either as an marketing/product manager at Google, a hedge fund operator at Bain, an overworked, type-A financier on The Street, or a start-up city controller as he envisioned in one entrepreneurial leap-of-faith posited. Mr. Broughton’s book maybe a business school companion volume of One L by Scott Turow, the exploration of what it is to become a legal mind and those ramifications, but it truly reflects, that writers, are what they are: able to mirror, emote, characterize, judge and divine truth when at their best.

That somewhere on the curve, there is a path to another road, with another curve to come out ahead on.

Je suis abonné à la lettre de nouvelles hebdomadaires de Hoovers, pas les balayeuses mais une compagnie d’informations financières, division de Dun & Bradstreet.

Cette lettre informe entre autre du calendrier des IPO à voir le jour aux États-Unis.

Depuis plusieurs semaines, aucune IPO n’est planifiée.

Qui serait assez téméraire pour coter son entreprise à la bourse en des temps si maussades?

Il faut savoir que les Offres Initiales Publiques par les compagnies se cotant en bourse sont très lucratives pour les banques d’affaires.

On peut donc facilement en déduire que plusieurs banques d’affaires américaines vont voir leurs revenus sabrer pour le trimestre courant.

Dans les IPO qui sont actuellement retardées, il y a celle des populaires magasins Dollorama. Bain Capital avait acquis la chaîne de magasins il y a quelques années. 

Il serait surprenant qu’on voit de nouvelles IPO sur les marchés américains avant la mi-décembre.

Over the last week there has been a handful of sizable rounds of VC funding in the tech space. Are startups trying to raise capital before the well goes dry? Or is this evidence that the market might not have a big impact on funding deals for companies with solid business models? 

Recent deals:

• Like.com raises $32 million
• AdMob raises $15.7 million from Sequoia
• Akamai buys Acerno for $95 million
• Blip.tv receives a second round from Bain
• Movidia raises $14 million
• Brightstorm raises $6 million

Online web show distributor blip.tv has raised an undisclosed amount of funding from Bain Capital in its second institutional round; Blip raised its first round in June 2007 from Ambient Sound Investments. It did not disclose how much was raised in either one.

When asked for more specifics on the investment, blip CEO Mike Hudack was pretty tight-lipped, saying only that it was “the right amount” and that the money will be used to add functionality for show creators and add distribution destinations.

Blip, which only counts one view per IP address per video per session, said it served more than 51 million video views in September, representing a 250 percent year-over-year bump. And the company says it currently distributes more than 37,000 actively updated web shows.

Based in New York, blip currently has 17 employees. Hudack said they will also use the new money to add another three or four people.

Today’s Wall Street Journal is reporting an attempt by the Carlyle Group to thwart the Neuberger Berman deal reached with Bain and Hellman & Friedman. 

The vultures swooping in sounds more like a coup against the Lehman pedigreed management in Joe Amato and Allison Deans, but it could be a sign that the price is just too darn low.  Is this another case of money being siphened out to managers by way of the $400 earmarks to retain partners?  Although instead of at the expense of shareholders this may be viewed as at the expense of debtholders.  This will probably get more juicy before all is said and done, as debtholders are a lot more protective of their cash than equity holders are.

At the very least, Judge James Peck, is going to have to hear the proposal tomorrow, and if there is a better offer for LBHI’s estate, he will need to consider it.  Either way, it’s not going to bring comfort to Neuberger clients.  And in time, with  enought client attrition, the final purchase price may prove to have been too high. 

Private-equity firm Carlyle Group has teamed up with former Neuberger Berman chief executive officer Jeffrey Lane to make a rival bid for Neuberger, the crown jewel of Lehman Brothers Holdings Inc.’s asset-management unit.

Late last month, Bain Capital LLC and Hellman & Friedman LLC’s announced an acquisition of Neuberger and other Lehman money-management assets for $2.15 billion. The price paid by Bain and Hellman — about half the firms’ initial bids — was a steep discount to the amount Neuberger would have sold for prior to Lehman’s collapse.

Carlyle and Mr. Lane filed an objection in bankruptcy court Tuesday that the price paid for Neuberger is too low and violates Lehman’s obligation to maximize the value of its asset sales to pay off its creditors.

Source:
Carlyle, Lane to Launch Bid for Neuberger
Peter Lattman, Jeffrey McCracken, Wall Street Journal, October 15, 2008

http://online.wsj.com/article/SB122403403197135037.html?mod=googlenews_wsj

Comunicado Banif

Según anunciamos en la nota de ayer, a continuación os exponemos los detalles del acuerdo para la venta por parte de Lehman Brothers Holdings Inc (LBHI) de su unidad de gestión de activos de renta fija y gestión alternativa junto con la venta según los datos proporcionados por la propia compañía en su nota de prensa de ayer.

Dos de las mayores firmas de private equity, Bain Capital Partners, LLC y Hellman & Friedman LLC, han acordado con Lehman la adquisición de Neuberger Berman, sociedad de gestión de activos, así como los negocios de renta fija y parte del negocio de gestión alternativa de la división de gestión de inversiones de LBHI.

Los activos que van a adquirirse se valoran en 2,15 billones de dólares estadounidenses.

Como parte de la transacción, y tal y como os adelantábamos en nuestra nota de ayer, el acuerdo de adquisición prevé la constitución de una sociedad gestora independiente bajo la que se incluirían negocios que actualmente gestionan activos con un valor a 31 de Agosto de 2008 de más de 230 billones de dólares estadounidenses.

Neuberger Berman sería su unidad operativa más grande y, junto con los negocios de renta fija y gestión alternativa, el corazón de esta nueva sociedad de gestión. George Walker, responsable de gestión de activos en Lehman Brothers será el Consejero Delegado de la gestora Neuberber Investment Management.

Bain Capital Partners, LLC y Hellman & Friedman LLC se han comprometido a entrar en la transacción sobre la base de una asociación equitativa en la que ambos serán socios igualitarios de la nueva sociedad gestora.

Se espera que la transacción este completada para principios del año 2009 y esta sometida a una serie de condicionantes, que el comunicado de prensa no especifica, inclusive el visto bueno del Tribunal de Nueva York competente para la suspensión de pagos de LBHI.

La transacción incluye, según el comunicado de prensa de LBHI, productos de renta variable, fondos de pensiones, Lehman Brothers Asset Management (gestión de activos), que incluye a su vez, renta fija, materias primas y gestión cuantitativa de activos, el grupo de gestión de fondos, incluyendo el negocio de fondos de fondos, tanto hedge funds,

En El Economista

Las firmas de capital riesgo Bain Capital Partners y Hellman & Friedman han alcanzado un acuerdo para comprar a Lehman Brothers la firma de gestión de activos Neuberger Berman y otros activos de esta división, que se englobarán bajo la denominación Neuberger Investment Management, por 2.150 millones de dólares en efectivo (1.493 millones de euros).

Como parte del acuerdo alcanzado, se creará una nueva firma independiente de gestión de inversiones que gestionará activos por valor de más de 230.000 millones de dólares (159.793 millones de euros) y de la que Neuberger Berman será la mayor unidad operativa.

George Walker, responsable global de gestión de inversiones de Lehman Brothers será el consejero delegado de Neuberger Investment Management, mientras que Joe Amato continuará desempeñando el cargo de máximo responsable de Neuberger Berman.

COMENTARIO: Siguen vendiendo a precio de saldo las joyas de la corona, no me imagino el precio que pondrán a los activos tóxicos de Lehman…

In the United Kingdom shadow governments are standard operating procedure, but in the United States those out of power avoid identifying prospective cabinet officers.  Mostly this is custom.  The kind of custom a maverick like John McCain should have no hesitation to break. 

Whatever results from this week’s negotiations in Washington, it’s evident that Congress will be constructing an economic remedy that will find its greatest measure of implementation in the next administration, not this one.  That’s why voters ought to be given some idea who will be managing this mess.

McCain should do this not simply because the economy is the most important issue to voters, and not simply because dissatisfaction with the economy is providing Barack Obama what might be a winning margin, but because whether its packaged as “change” or “reform” voters are demanding to know specifically how candidates will achieve their policy objectives. 

Few things define your policy objectives or telegraph how you will work to achieve them like the staff to whom this important work is entrusted.  McCain should tell us who will be his Secretary of the Treasury and Secretary of Commerce.  He should tell us who will chair his Council of Economic Advisors and run his Office of Management and Budget. 

Sen. John McCain (L), Gov. Mitt Romney (R)

One name above all others should be included in this shadow government.  Mitt Romney’s experience at Bain Capital, which financed the creation and growth of many businesses, at the 2002 Winter Olympics, which were failing financially before he was brought in to make it successful, and in Massachusetts, where he stabilized state finances, all recommends him.

Indicating that Romney would play a central role in the McCain Administration’s management of the nation’s unsteady economy would benefit the maverick in three ways: It would give moderate and independent voters in economically struggling but politically important states reassurance that meaningful expertise would be applied to this important need; it would give fiscal conservatives the reassurance they need that McCain will not be pushed into adopting government solutions to business failures; and finally, it would reaffirm the central Country First theme on which his campaign is based.

Romney was the preferred candidate for president, and once McCain prevailed, for vice president.  In an election where the economy is the supreme issue, there is an amazing dearth of economic expertise on either major ticket, which makes the selection of cabinet and other staff critically important.  McCain could remedy this deficiency by telling voters that he will rely on Romney to oversee the economy in his prospective administration.  The sooner the better.

It was the summer of 2002 and I was working as an investment banker in midtown Manhattan at Gordian Group, LLC, best known for representing Ben & Jerry’s in their sale to Unilever PLC, when I came up with my fool proof can’t miss get rich quick scheme. Despite the fact that I was very much enjoying being a freshly minted MBA and working in a prestigious boutique bank, I was young enough to dream big and stupid enough to believe that anything was possible. Late one night with my green banker light reflecting off the pane glass window, I penned a historic, to me, letter to Mr. Jack M. Greenberg, CEO of McDonalds. A letter that could have altered life as I knew it. The fact that I am telling you about it here, should make you cognizant of the fact that things did not turn out as planned.

At the time of my letter, all was not well in the land of the golden arches. Eric Schlosser had just penned Fast Food Nation and the stock was trading at $30/share on it’s way to $15/share. I, however, was prepared to extend Mr. Greenberg an olive branch, a way to monetize value for shareholders — sell Chipotle Mexican Grill to me, or, if that was not palatable, sell me the rights to open and operate Chipotle in New York City. In the summer of 1999 while interning at a private equity shop in Denver I had discovered Baja Fresh, a Wendy’s property, and due to a previous stint in New York City, I knew the city was ripe for a burrito revolution and that there was not a local property that could service the demand when the wave crested. My real goal was to get the franchise rights for the local territory, but I figured taking the audacious approach would enable me to offer the franchise rights as a compromise assuming we would come to an impasse on valuation.

I had tried this stunt before, in 1998, involving Fresh Samantha, a producer and marketer of fresh juice beverages, out of Saco, Maine. Unfortunately, I lost out on the property to Bain Capital, LLC, but I would like to believe my letter catalyzed the process that allowed Bain to buy Fresh Samantha. Neither party ever sent me a thank you note. At the time I was woefully under prepared having no access to capital and no sense on valuation, so it was no surprise that my previous effort failed based on execution, as opposed to ambition.

This time around, for my dance with Mr. Greenberg, I was much more prepared. I still had no money but I was armed with numbers. On the capital front, I had left a few messages for folks so I could say, “it’s in process, but I don’t expect a financing contingency in my proposal”. Truth be told my plan was to team up with the founder who still owned a big slug of equity, despite the fact that McDonalds now owned a controlling stake, and he was shurly backable and would not want to see his baby sit in idle while McDonalds focused on fine tuning its strategy oversees (note: I did manage to have a conversation with Steve Ells, the founder, as part of the process and at the time said he had no interest in buying Chipotle back, funny how things would come full circle). What I brought to the table was blind ambition and capital markets relationships.

In my effort to prepare for going mono e mono with Mr. Greenberg. I tried to learn how to value franchises. The logical place to start, I assumed, was to look at McDonald’s valuation and understand where the deal would become accretive to them. The problem was, at the time, that Chipotle was accounting for a large percentage of McDonalds’ quarterly earnings. I knew the deal would not be easy on that basis alone. However, McDonalds was trading at 20.0x LTM EPS vs. a historical average of 25.0x. I dug into the numbers and growth rates that we available, looked at public company comp list, circled up a number and fired off my letter to Mr. Greenberg and began to wait. Summer became fall and McDonalds’ stock went in the tank (I was an owner, and still am). I was hopeful for a letter from Mr. Greenberg. I went back to waiting.

My magical letter arrived in December 2002, “Mr. Jaffe – If we wanted to sell Chipotle Mexican Grill or partner on an expansion, we would know who to call. You would not be on that list. Sincerely, Mr. JackGreenberg.” Mr. Greenberg lost his job two weeks later. I’m not sure the events are correlated. Chipotle entered the New York City market in 2003, lines were around the block. While I loved the food, I was melancholy about my lost opportunity. On the plus side, I learned a little something about valuing franchise businesses. Below is a summary of points you should consider if faced with the same task.

1) All revenue is not created equal. Spilt the revenue stream into restaurant sales and franchise royalty fees. If you are valuing a large operating business you will focus on profitability, but in a growth equity context looking at revenues is useful. Value the revenues based on their prevailing multiple. Consider that McDonalds is valued at 3.0x, prevailing market comps are trading at a median multiple of 10.7x, with hot properties like Panera bread trading at nearly 24.0x.

2) You need to dig into the franchise contracts to understand the value of the non-controlled entities. Length for contract, contracted value flowing to the parent, supply relationship, and buyback and control provisions all impact where on a valuation range an operation should fall. Longer contracts with more recurring revenue streams is better than less. Discounted buyback provisions are favorable. You should also assess where a franchise is in its useful life if the contract has a rebuild or upgrade provision. This value inures the franchisor, since the franchisee bears the cost but only captures a majority of the benefit, but not all.

3) Analyze location and location density. See Boston Market as what not to do. Did Sydney need 9 locations and Toronto 3? A company that is expanding more rapidly and into markets outside it’s core competency (Krispy Kreme anyone?) should be viewed as riskier investments and the risk should be reflected in the discount rate applied to any cash flow analysis. More highly valued real estate also brings lease pricing risk. If they franchisor owns the land and leases it to the franchisee that has intrinsic value, which translates to a higher multiple.

4) Look at comps. Same store sales. Sequentially. Year over year. Profitability as well. Average sales per store open 12+ months. Are there more winners than losers? Are there outstanding stores and laggards? Are margins compressing, if so why? What are the cap-ex costs relative to its closest peers. Comp restaurant sales growth of 10% is a base line in a favorable economy, high single digits in a more turbulent environment. Higher growth should translate into a better multiple. Average sales per store should be continually improving to command a higher multiple. Restaurant level margins of at least 20% is favorable. Expanding operating income margin, in double digits is good.

5) Estimate ROI as average sales per store * restaurant level operating margin (total revenue less operating cost divided by total revenue) = restaurant level cash flow. Investment cost per store divided by restaurant level cash flow = ROI. As a baseline 30%+ in favorable economic climates.

Net net, Mr. Greenberg put me back in my place. However, unlike my pursuit of Fresh Samantha, I had the valuation nailed. Applying my analysis to Chipotle’s go public numbers got me within $0.25 of the offering price. Now that I have learned a little something, third time is a charm?

/bryan

Bain Capital must be psychic. Apparently they’ve looked into the future and seen that TokBox, a San Francisco-based startup, will either grow into a large company or find a buyer for what is essentially a Flash-based, in-browser video chat service that’s gotten marginal traction. Sure, the company has a new desktop client that allows you to video chat with anyone, but then so does my iChat.

Bain Capital has led a $10 million investment in TokBox. The move comes less than a month after the company named a new CEO, Nick Triantos, who has worked for many tech firms, but has never before held that title.

The company launched in October 2007 and has thus far raised a total of $14 million from Bain and early investors Sequoia Capital. Scott Friend, Venture Partner at Bain Capital Ventures, in a press release announcing the Series B round, said:

“The company is executing well…We are excited to be investing with our partners at Seqouia in a company we believe has the potential to be the next ‘big thing’ in web communication.”

Just to put his words into context, TokBox recently fired its founder and CEO, Serge Faguet. And according to Compete.com, they had about 179,000 visitors in the month of July, though they did sign a deal with Meebo that stands to get them some traction. (For a list of their competitors, check out NewTeeVee’s round-up of video chat applications.)

From the way I understand it, TokBox is using the built-in video capture capabilities in Flash player combined with the Flash media server to offer in-browser video conferencing. When the company launched, I pointed out that it was an “interesting idea, but more of a feature than a platform for a standalone company or model for a viable, long-term business. If (and that’s a big if) TokBox is going to work, it will need to be rapidly adopted by the marketplace.” Rapid adoption hasn’t quite happened, however, and I wonder if it ever will.

But again, the guys at Bain must be able to look into the future better than us skeptics.

According to Broadcast Engineering, NBC Universal, Bain Capital and The Blackstone Group have signed a definitive agreement to acquire The Weather Channel properties from Landmark Communications.

The Weather Channel will be operated as a separate entity, based in Atlanta, with management services to be provided by NBC Universal. Financial terms of the transaction were not disclosed.

The transaction includes The Weather Channel Networks, the third-most-distributed cable network, seen in more than 97 percent of U.S. cable television homes; The Weather Channel Interactive, which includes weather.com; and weather forecaster Weather Services International.

The transaction is expected to be completed by year’s end and is subject to receipt of customary regulatory approvals. NBC Universal, Bain Capital and The Blackstone Group announced June 13 that they had entered into exclusive negotiations to purchase The Weather Channel properties.

BROADCAST/CABLE

HBO on Sunday will premiere “Generation Kill,” a seven-part miniseries about the Iraq war. At $55 million, the miniseries is being described as the most expensive production to date on the conflict, and it comes from David Simon, the man behind HBO’s “The Wire.” (The Sun (Baltimore) 7/6)

Click the image below for the site and a trailer of the new series.  Love David Simon.  The Wire still stands as my most favorite TV series of all time.  Marauder love on this one even though the Iraq war conflict plot seems a bit over-aired at this point in time.

NBC Universal — along with partners Bain Capital and the Blackstone Group — have announced a deal to acquire The Weather Channel, which is said to reach 96 million basic cable households, from Landmark Communications. NBCU intends to keep The Weather Channel running as a separate operation, having no plans to merge it with its NBC Weather Plus. (The New York Times 7/7, The Wall Street Journal 7/7)

NBC Universal is developing a new audience measurement system that can chart viewership of an event over several different media vehicles. The company, for instance, will issue its new Total Audience Measurement Index on a daily basis during this summer’s Olympics, for channels including NBC, Oxygen and CNBC and their corresponding Web sites. (Mediaweek 7/7, The Wall Street Journal 7/7)

Michael Phelps competes in the 100-meter butterfly final at Saturday’s U.S. Olympic trials in Omaha, Neb.

BROADCAST/CABLE

ABC Family’s debut of The Secret Life of the American Teenager Tuesday night (8p) delivered the best-ever original series telecast in the network’s history with W18-34 (620,000); W18-49 (891,000) and F12-34 (1.4 million). (Cynopsis 7/3)

Shannen Doherty may join her former castmates of Beverly Hills, 90210 and reprise her role as Brenda Walsh on The CW’s new spinoff series 90210, reports Variety. Shannen would be reuniting with Tori Spelling and Jennie Garth who are in place reprising their former characters. (Cynopsis 7/3)

The Weather Channel could be sold in the next day or so, according to this report, which speculates that is how long it will be before Landmark Communications announces that it will sell the cable net to a group composed of NBC Universal, Blackstone Group and Bain Capital for between $3 billion and $3.5 billion. NBC Universal declined to discuss the report. (The Boston Globe/Reuters 7/2)

Time Warner Cable, which is in the process of being spun off from Time Warner, will pursue its core businesses after going independent and will look to bring the company within a debt target by the end of 2009, according to Robert Marcus, chief financial officer of the country’s second-largest cable provider. But, Marcus added, Time Warner Cable isn’t likely to act on continued speculation that it wants to own Cablevision anytime soon: “I think it’s a long-shot deal,” he said. “When and if it ever comes on the market, will we look at it? Absolutely.” (Bloomberg 7/2, Broadcasting & Cable 7/2)

Cablevision Systems said it would add 15 free high-definition channels to its offerings, a move that will bring the Bethpage, N.Y., company’s HD roster to 60. The new channels include Discovery, Nickelodeon, The Weather Channel, FX, AMC and Fox News. (Yahoo!/Reuters 7/2)

Mark Mays, Clear Channel Communications CEO, issued a statement to the company’s employees late on the night of June 29 to the effect that that Clear Channel Radio CEO John Hogan will continue on as Clear Channel’s top dog for another five-year term.

From the Mays Memo:

“As we move toward the closing of our merger, I want to share with you an important additional piece of news. It’s my pleasure to let you know that John Hogan has signed a five-year contract with the company.”

[...] “Clear Channel Radio has the top-performing management team in the industry — evidenced by our consistent outperformance of our peers in the radio industry through both good and difficult times.”

“Now, as we move to put our unparalleled national platform into service for even more national advertisers, this management team will be on point to compete successfully against newspapers, cable, television, and all of our other competitors. This is the same team, of course, that has turned potential competitors like the Internet and iPods into strong and successful collaborators. Our aggressive rollout of iTunes Tagging gives Clear Channel Radio a unique competitive advantage and, of course, our company’s embrace — and ultimate leadership position –- in online music and radio has been well-documented.”

“Please join me in congratulating John. We are excited about his continued leadership.”

This is especially significant in light of the current pending buyout of Clear Channel by private equity firms Bain Capital and Thomas H. Lee Partners. Truly this is a vote of confidence in his ability on the part of the new regime.

Bidders have emerged for the Boston Globe, EditorsWeblog reports.

Boston Celtics/Bain Capital’s Stephen G. Pagliuca and Jack Connors (Partners HealthCare) is one; the other is led by Stephen E. Taylor, a former Globe executive and member of the family that sold the paper to the New York Times Company in 1993. Full story here.

[qi:090] Tokbox, a San Francisco-based start-up that offers browser-based video chat, has lost its CEO, Nick Triantos. He has been replaced by Ian Small. We had heard about this change, and Tokbox confirmed it to me. Small’s bio hasn’t been added to Tokbox’s web site just yet. Triantos had replaced co-founder Serge Fauget in somewhat mysterious circumstances in March 2008. Tokbox has raised $14 million in two rounds of venture financing from Sequoia Capital and Bain Capital.

The company launched in October 2007 by spamming me and others who were invited to test out Tokbox. The company’s video chat service has struggled to find the super-growth that a consumer-oriented company such as Tokbox needs. Tokbox says it has a “user base of over 1 million people who are making over 1.5 million video calls everyday.” According to web-traffic measurement service Quantcast, Tokbox is  getting about 62,000 visitors a month, roughly in line with the user metrics reported by Compete.com. I have always been a little skeptical of Tokbox, and frankly, I haven’t seen anything that has made me change my mind.

With leverage markets still in limbo, firms are looking at Equity Buyouts (EBOs) in ever growing numbers. These all-equity deals have greatly increased in the small and lower mid-cap markets over the past year, and they’re starting to creep into the landscape of the big deals. Although it didn’t go through an example would be Bain Capital and Hellman & Friedman’s planned acquisition of Lehman Brothers’ much sought after subsidiary Neuberger Berman with an all equity offering of $1.85 billion. A sucessful case would be Advent International’s all cash deal last October for the card-processing business of Experian France (which Advent renamed Monext) for €203 million. A simplified explanation for the trend is that you don’t need to use leverage to buy companies when they’re trading at a 50% discount to their historic average multiples.  The discount itself gives you a similiar effect to leverage. Plus without a debt market (junk bond prices, for instance, have gone from roughly 8% above 10-year Treasurys to about 19% above in the last six months), many firms don’t have any other choice.

There’s a lot of downside to all-equity deals though. They carry greater risk because firms have to contribute far more of their fund to a single deal than in a leveraged buyout. They also don’t provide the tax-shelter benefits of interest payments on the debt, which further increases the overall cost of capital. While these factors can be mitigated by paying a lower purchase price for the asset, in today’s climate it’s still a guess if valuations are as low as they should be. Meaning, after years of companies being overvalued in a bull market, firms now need to know that they’re buying at a discount to the true value of a company’s worth. Which is easier said than done.

The following graph is from a good article in the Wall Street Journal on the subject of EBOs:

Here’s Bain Capital Managing Director Stephen Pagliuca on regulation and discussng the time it will take to implement change in the leverage buyout debts.

Welcome to the www.NegMeg.com NEG Meg The Series episode archive.

“a monkey could drive this train”

Margaret “Meg” Whitman comment on eBay,
while she was eBay CEO and President.

Margaret Cushing “Meg” Whitman
Born August 4 1956

• “President and Chief Executive Officer of eBay from March 1998 to March 2008.”

eBay Hacked, Cracked  & Hijacked, But Denies All
February 19 2007

• “came just weeks after North American CEO Bill Cobb announced new fraud fighting measures and policy changes to the site”
• Comments

Stirring Up the Cubicles at eBay
Brad Stone, February 21 2007

• “Mr. Donahoe, 46, is a deputy to eBay’s chief executive, Meg Whitman, 50, and, many people in the industry say, her likely successor when she ultimately steps down.”
• ““All our businesses need to do well, but John’s success and the success of Marketplaces is absolutely essential to the company,” said Ms. Whitman, who met Mr. Donahoe when they were consultants working in the San Francisco office of Bain & Company in the early 1980s.”
• “eBay stock has dropped by half from an early 2005 high”

Is Vladuz the Good Guy?
February 26 2007

• “Now two weeks into the latest bombardment of Vladuz related listings, management is looking like an impotent cowboy with a black hat”
• Comments

The Vladuz Style of eBay Auction Hacking Continues!
March 18 2007

eBay Getting into Micro-Finance through Purchase of MicroPlace
Ina Steiner, March 30 2007

• “eBay has purchased an organization called MicroPlace”
• “eBay’s Chief Marketing Officer Gary Briggs” “A third point to bring up is MicroPlace, which a group that we purchased that is making microfinance loans available to the developing world in particular, and we think – particularly as it relates to PayPal”

Antitrust Lawsuit Filed against eBay over PayPal, Payments Policies
Ina Steiner, April 6 2007

• “Michael Malone filed an antitrust class-action lawsuit against eBay this week under the Sherman Act, alleging eBay “utilizes its nationwide monopoly of the on-line auction market to monopolize the available forms of payment that sellers can use on eBay.” eBay controls which payment methods sellers may advertise in their listings”

eBay’s Payment Policies Spark Two Antitrust Lawsuits
Ina Steiner, May 4 2007

• “Two antitrust lawsuits were filed against eBay in April 2007 and have been assigned to the same judge because they are related, according to court filings. The plaintiffs in both parties have complained of eBay’s practices with regard to its online payment service PayPal. The same judge had presided over a PayPal-related class-action lawsuit that was filed in 2002.”
• “The Justice Department gave the green light to eBay’s acquisition of PayPal in 2002, despite the fact that PayPal itself had complained to the government about eBay’s practices after the auction marketplace had acquired the BillPoint payment service. ”
• “Both antitrust lawsuits are assigned to Judge Fogel in the US District Court, Northern District of California.”
• “The Court finds that Malone v. eBay Inc., Case No. 07-01882-JF and Farmer, et al. v. Ebay, Inc., Case No. C-07-02209 are related actions and such cases are hereby consolidated into Malone v. eBay Inc., Case No. 07-01882-JF, and are referred to herein as the Consolidated Action.”

Meg Whitman at TiEcon
TiEcon, May 17 2007

• [Meg Whitman] “We also think about very disruptive ideas that could disrupt our core business, or we could disrupt other major segments of the economy. And many times those very disruptive innovations will come from outside eBay”
• [Meg Whitman] “We have no sales force.”
• [Meg Whitman] “Failure is okay.”

EBay reshapes itself as an easier, cooler place
June 15 2007

• ““Our user experience has always been fantastic, but it didn’t keep up, in my view, as well as it should have,” CEO Meg Whitman said in an interview Friday on the sidelines of the “eBay Live”user celebration in Boston. You will see more changes to eBay’s buyer experience in the next 12 months than you probably have seen in the past three or four years.”"
• “Other moves make eBay more like typical e-commerce sites, such as last year’s birth of eBay Express”
• “eBay’s 2005 purchase of Skype, an Internet calling service, for $4.1 billion”
• “”reignite the core,” in the words of Bill Cobb”

EBay Moves to Recharge Its Auctions
Bob Tedeschi, June 18 2007

• “In 1998, eBay’s chief executive, Meg Whitman, changed the background color of the site’s home page from gray to white. Rather than simply switching colors overnight, though, Ms. Whitman directed eBay’s engineers to bleach the gray over the course of 30 days. At the end of the month, the company asked users if they noticed anything different. No one did.”
• “700,000 sellers who rely on eBay for their livelihoods”
• ““We have to make sure our old users stay with us, but we’re going to be more bold around product changes than we’ve been in the past,” Ms. Whitman said in an interview last week in Boston at eBay Live, an annual conference for the site’s sellers. “I think people expect more from eBay.””
• “Analysts said sellers were moving to other places on the Web in search of buyers who had grown weary of an overwhelming array of product choices on eBay.”
• [Meg Whitman] “We’re optimistic that the changes will translate to accelerated growth and help us change the trajectory of our two largest markets, U.S. and Germany”

Reaping profit in study, sweat
Robert Gavin and Sacha Pfeiffer, June 26 2007

• “Maximizing the financial return to investors can mean slashing jobs, closing plants, and moving production overseas. While Bain Capital helped expand companies that created jobs, the firm also engaged in some of the business’s harsher practices.”
• “Companies like Bain Capital typically cash out of their investments in three to five years, and ”usually have less of a stake in the community, in terms of employment, service on nonprofit boards, your physical and environmental impact,” {Ross} Gittell says. ”The objective is: make money for investors. It’s not to maximize jobs.””
• “Through Ampad, Bain bought several other office supply makers, borrowing heavily each time. By 1999, Ampad’s debt reached nearly $400 million, up from $11 million in 1993, according to government filings.”
• “Bain Capital didn’t escape Ampad’s eventual bankruptcy unscathed. It held about one-third of Ampad’s shares, which became worthless. But while as many as 185 workers near Buffalo lost jobs in a 1999 plant closing, Bain Capital and its investors ultimately made more than $100 million on the deal.”

EBay Chief Spurs Growth on PayPal, Beats Google Unit (Update2)
Danny King, July 6 2007

• “PayPal, bought by EBay for $1.5 billion in 2002″
• “”PayPal is a huge home run,” Whitman, EBay’s chief executive officer”
• “Shares of EBay rose $1.12, or 3.5 percent, to $33.39″

EBay Profit is Up 50%; Listings Off
Brad Stone, July 19 2007

• “Ms. Whitman said that her efforts to improve the user’s experience should address these problems.  “In the next six months,”she said, “you will see more changes to eBay than you have in the last two or three years, whether that is an improved search experience or fun things that make the site better, like Bid Assistant, which allows you to bid on more than one item without worrying that you will end up buying five iPods by mistake.”"
• “EBay started Kijiji overseas in 2005.  “We’ve had a great relationship with Craigslist, and we have learned a lot from them,” Ms. Whitman said. “We felt this market was large and diverse enough to support many players. We don’t think of new offerings as competitive, we think of them as better and more choices for consumers. We think there is an opportunity to stake out a slightly different buyer.”"

Blasphemy at eBay
Adam Lashinsky, July 23 2007

• “Last month, eBay temporarily stopped buying keyword advertising on Google, the Web’s largest search engine. EBay said the suspension did not have had significant effect on its bottom line. “We learned a great deal from that test, “Ms. Whitman said. “It actually had no impact on the financials of the quarter, and we learned a lot about where we want to spend money and where we think we can save money on Internet marketing.”"
• Comments

Mitt’s equity army
David S. Bernstein, August 10 2007

• “One such example is Meg Whitman, CEO of eBay — and one of the Romney campaign’s national finance chairs. Whitman worked with Romney at Bain & Company before going to work for Disney and then Keds. In 1995, when Bain Capital bought florist chain FTD, Romney installed Whitman as CEO. She left after just 18 months, with stocks, salary, and bonuses worth well more than a million dollars —even though, as she has conceded in interviews, she did not come close to successfully putting the company on the right track.”
• “Bain Capital’s record shows the same treatment for many companies: slashing jobs, benefits, research-and-development budgets, and other items to show quick profitability before selling or taking the company’s stock public.”

Romney’s Old Ties To Firm Pay Off
John Solomon and Matthew Mosk, August 14 2007

• “Another fundraiser is eBay chief executive Meg Whitman, who worked as a vice president at Bain before getting top jobs at Stride Rite shoes and the FTD florist service, which Bain targeted for investment.”

The Ruination of eBay
crazeenydriver, September 22 2007

ebaY Major Hack Attack! User’s Data Posted On Ebay T&S
Cappynonymous, September 25 2007

• Comments

Intimidating eBay Lawyer snoyce@ebay.com ME Page Hacked By Vladuz
Doc, September 28 2007 (?)

• “Now In An Apparent Show Of Power That He Can Pick And Hack Anyone’s eBay Account He Chooses, Vladuz Posts Mr Noyce’s Personal Details On His ME Page!”
• “This Really Makes Rob Chestnut’s Trust And Safety Department Look Like A Bunch Of Keystone Cops! But It Has Been Rumored Rob Is On Sabbatical, And Will Not Be Returning To eBay!”

Web 2.0 Summit: Meg Whitman, eBay
Bobbie Johnson, October 18 2007

• [Meg Whitman] “”If we were a retailer – which we’re not – we’d be the fifth or sixth largest in the world. But as your core business begins to slow down, you go right back to where you started, which is customers. how do you reinvent your core business to meet the needs of customers. We’re actually in a reinvention of some of the core flows, . We have made more changes to the site in the last three or six months than we have in the last three years.”"
• [Meg Whitman] “”We have about 1.6m people worldwide who make their living selling on eBay. There are always people who made their business. The casual sellers represent about 50% of the gross merchandise volume and about 95% of the sellers. We look at the number of users we have, which has slowed but it’s still going up.”"
• [Meg Whitman] “”We began to see PayPal becoming the effective way to pay on eBay. It’s now 85-90% of payments.”"
• [Meg Whitman] “”We know that we were only here because of a disruptive innovation.”"
• [Meg Whitman] “”The vast majority of people – less than 1/100th of one percent cause problems.”"
• [Meg Whitman] “”Etsy.com? “It’s a cute little company, I like what they’ve done. We need to do everything we can to invite those sellers onto eBay – we just launched eBay Neighbourhoods”"

EBAY Launches MicroPlace.com
ONLY EBAY, October 24 2007

• “After acquiring the company in June 2006, EBAY have launched MicroPlace”
• “Meg Whitman was talking about entering the social lending business as far back as this speach in June 2006.”

Whois Vladuz eBay’s Hacker
liamssoft, October 25 2007

• “Sources in the hacking community say that he claims to be listening in on some meetings held by eBay chief executive Meg Whitman.”
• “2004, someone calling themselves Vladuz was selling a set of PHP files designed to create phishing sites that would collect eBay data”
• “observers think the hacks Vladuz has pulled off reveal a much deeper problem at the auction giant”

eBay jumps into microfinancing
Yi-Wyn Yet, October 26 2007

• “The site, which had been in development when eBay (EBAY) acquired MicroPlace in June 2006″
• “EBay’s interest in microfinance was established by company founder Pierre Omidyar.”
• “eBay executive Matt Bannick, who spearheaded the purchase of MicroPlace, left the company in March to run Omidyar Network”

eBay Launches Microfinance Loan Site
October 29 2007

• “EBay’s newly launched MicroPlace lets users make loans through PayPal”

The Dangerous Wealth of the Ivy League
Business Week, November 29 2007

• “It’s only fitting that Whitman College, Princeton’s new student residence, is named for eBay (EBAY) CEO Meg Whitman, because it’s a billionaire’s mansion in the form of a dorm. After Whitman (Class of ‘77) pledged $30 million, administrators tore up their budget and gave architect Demetri Porphyrios virtual carte blanche. Each student room has triple-glazed mahogany casement windows made of leaded glass. The dining hall boasts a 35-foot ceiling gabled in oak and a “state of the art servery.” By the time the 10-building complex in the Collegiate Gothic style opened in August, it had cost Princeton $136 million, or $272,000 for each of the 500 undergraduates who will live there. ”

EBAY: Time For CEO Meg Whitman to Go?
Henry Blodget, December 6 2007

• “We will not be the first to suggest that Meg may have gotten a bit more credit than she deserved for that”
• “I go out there and meet with Meg and it’s all I can do to avoid shorting it as I walk out the door.”

Should eBay CEO Meg Whitman Step Down?
Ina Steiner, December 6 2007

• “Whitman did some things badly. Giving users inadequate customer service was one. And denial of fraud was another.”
• Comments

Yes, Amazon SHOULD Buy eBay
Henry Blodget, December 17 2007

• “eBay’s mismanagement and lack of attention to its user interface have finally caught up to it, punishing its market value.”
• “until eBay’s CEO situation is resolved, the concept is probably moot. (There is no way the companies will merge with Meg still at the helm, as her immediate departure thereafter would leave no interpretation possible other than that she had been unceremoniously dumped).”

The Depth of eBay’s Problems 1: Disappointed Buyers
Saul Hansell, December 17 2007

• “The outpouring of rage at eBay was of the sort we don’t see here for anything other than cellphone companies. The company is clearly getting hit by both buyers and sellers.”
• “As a former middle manager at eBay, I can attest to the company’s ghastly approach to customer support…. If it’s a matter of managing expectations, then eBay should rename their customer support something more appropriate like, “Endless obstacle course of red tape and runaround where you rarely if ever get to talk to a human.” — Ann Cummins”

The Depth of eBay’s Problems 2: Angry Sellers
Saul Hansell, December 17 2007

• ““EBay’s relations with sellers over the last few years have deteriorated and are, at best, poor right now,” Mr.  Wingo said. ”
• “Given the depth of the anger against the company”

eBay Users Vent Rage To NYT
Henry Blodget, December 17 2007

• “eBay, meanwhile, now seems to have alienated not only Wall Street but the folks who create all of its business value.”
• “Meanwhile, as frustrated eBay shareholders, we reiterate our suggestion that it’s time for Meg Whitman to go.”

Face Time With Meg Whitman
Charles Fishman, December 19 2007

• “Husband, Griffith Harsh, a neurosurgeon at Stanford; two sons, ages 13 and 16″
• [Meg Whitman] “(laughing) I took calculus, chemistry, and physics my first year. I survived. But I didn’t enjoy it. Of course, chemistry, calculus, and physics have nothing to do with being a doctor, but if you’re 17 years old, you think, This is what being a doctor is going to be about. After that, I had to find something else to do. I began selling advertising for a magazine that was published by Princeton undergrads. It was more fun than physics.”
• [Meg Whitman] “I bought Beanie Babies when one of my sons was very much into Beanie Babies. And I sold children’s books that we didn’t need anymore. It was great. Here was a book that you didn’t need, and you might get $6 or $8 for it. Next, we bought Pokémon cards. Then we sold Pokémon cards. Sort of the round-trip on Pokémon cards. And the latest thing I’ve been buying on the site has been a lot of fly-fishing equipment.”
• “How does the slowdown in the U.S. economy affect eBay?”  [Meg Whitman] “Our hypothesis is that in a slowdown, eBay actually benefits. And that’s because buyers still want the things that they want. Consumer electronics, computers, whatever. Yet people will become more value-oriented. At the same time, I think that we will actually see an increase in sellers. You may get gifts that you don’t necessarily want, things you don’t use anymore — things that you can sell on eBay and raise some cash.”

:::

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