Global cyber security spending is expected to reach$60 billion in 2011 and is forecast to grow at 10 percent every year during the next three to five years.
The U.S. accounts for more than half of all deals globally, triggered by growing cyber threats and increasing awareness among both organizations and consumers of accelerating breaches and attacks, according to a new report from PwC titled, Cyber Security M&A: Decoding deals in the global Cyber Security industry.
Total deal activity since 2008 has exceeded $22 billion globally. In the first half of 2011, there were 37 deals accounting for over$10 billion in deal value, representing a 70 percent increase compared to full year 2010.
Since 2008, the total investment in global cyber security deals has exceeded $22 billion, an average of over $6 billion in each year.
Deal activity in cyber security expected to grow
“Deal activity in cyber security is expected to continue to grow given the fragmentation of the market and the attractive growth outlook,” said Barry Jaber, PwC’s security industry leader. “Technology and IT companies are making acquisitions to differentiate their offerings while defense firms continue to do deals to diversify away from shrinking defense budgets.”
“Against the backdrop of heightened awareness of hacks and deliberate attacks on institutions by semi-organized groups, the cyber security market is undergoing significant change and attracting investment from sectors that span technology, telecommunications, defense, professional services and financial investors,” said Rob Fisher, PwC’s U.S. technology leader for transaction services.
In most regions, the private sector accounts for the majority of cyber security spending, while the U.S. is the notable exception where government spending is almost equal to the private sector.
The strong U.S. technology industry combined with the fact that the U.S. defense and intelligence budgets are significantly larger than in any other country are key market drivers.
“The U.S. is a unique market with significant cyber security spending in the public sector, particularly by intelligence and defense agencies,” said PwC’s Jaber.
The U.S. market leads in value with the majority of deals (over 50 percent) involving acquirers or targets based in North America. By comparison, Europe accounted for approximately a quarter of deal value and a third of deal volume over the same period.
“Growing threats and awareness, and changes in technology such as mobile devices and cloud computing are key drivers of spending growth in the cyber security market,” added PwC’s Jaber.
Personally, we think it is past time for major corporations to spend serious money, time and thought on protecting digital assets, including customer information. If nothing else, the rash of high level cyber-security breaches this year seem to have heightened awareness that current security measures not sufficient to meet increasing threats.
Other key drivers underpinning growth in cyber security spending include:
Increasing cyber threats, both from new actors and new threat vectors (the paths that attacks can take).
Greater vulnerabilities due to the more pervasive use of technology, particularly mobile devices and cloud computing.
Increasing awareness by organizations and consumers of the threats and potential threats.
Changes in technology driving product and service innovation of security solutions.
Increasing regulation, particularly those enforcing the requirement to secure personal data.
Changes in outsourcing; some organizations are increasingly relying on partners for security, while others are growing internal security spending to maintain greater levels of control.
The way we shop is rapidly being influenced by scores of innovative young companies who are helping retailers, brands and consumers fundamentally reshape how goods and services are bought and sold. A new report says mobile, online and in-store shopping are quickly converging and startups are disrupting the traditional retail ecosystem.
Architect Partners, the M&A advisory firm exclusively focused on Internet, mobile and digital media clients, today published “The Evolution of Shopping“. ”Shopping is at the early stages of profound change,” according to Eric Risley, managing partner of Architect Partners.
“Our newest report, The Evolution of Shopping, highlights why this evolution is happening, offers a framework to describe a very complicated ecosystem and features some of the most innovative companies making things happen.”
Consumer centric strategies emerging
“Retailers and brands are leveraging these changes to devise and implement strategies that are more consumer-centric. An entire infrastructure is emerging to support their efforts,” according to Dr. Phil Hendrix, Director of IMMR, a research consultancy and contributor to The Evolution of Shopping.
“We stepped back to the fundamentals to help us understand the innovation we’re seeing,” explained Steve Payne, Partner with Architect Partners. “We crafted a seven step framework describing how products are bought and sold. We then mapped over 300 companies against this framework.”
According to the U.S. Census Bureau, U.S. retail sales exceeds $4 trillion annually. Much of this spending is likely to be influenced by this evolution.
Incumbent suppliers to retailers and brands such as SAP, Oracle, IBM, Microsoft, NCR, Epicor, Visa, Mastercard, American Express and many others have major stakes in the outcome.
Disruption is emerging from a new set of competitors such as eBay, Amazon, Salesforce.com, Google and Apple. Many emerging companies will also be important disrupters.
“Marquee M&A transactions have already occurred within this area, according to Tom Brehme, principal with Architect Partners. “I’d highlight eBay’s M&A appetite which has included the acquisitions of Hunch, Zong, Magento, WHERE and GSI Commerce for a total of over $3 billion just in the past year.
“We’re aware of over 75 significant M&A transactions under the theme, evolution of shopping, announced since the beginning of 2010.”
Entering the holiday shopping season tangible signs of this evolution are clear. IBM’s Cyber Monday Report 2011, demonstrated online shopping continues to register strong growth, up 33% from 2010. Also, mobile device initiated purchases are beginning to become meaningful, representing 6.6% of Cyber Monday 2011 sales.
Amazon has purchased Charlotte-based speech-recognition firm Yap, according to a report in The Atlantic. Citing an SEC filing, the magazine notes that neither company announced the merger of Yap with Dion Acquisition Sub, which lists a Seattle Amazon building address.
The magazine says that “The acquisition is particularly interesting given the prominence of Apple’s voice efforts and the depth of Google’s.’” It speculates the acquisition may be Amazon’s step into the voice control field. Amazon has steadily moved from being primarily a retailer to being a tech company selling ereaders, tablets and cloud services.
Yap’s technology, which goes beyond the voicemail-to-text service it shutdown recently, may be Amazon’s first move in developing a rival to Apple’s Siri on the new iPhones.
Yap, which presented at TechMedia’s Southeast Venture Conference and was profiled here, raised a $6.5 million A financing round from SunBridge Partners in 2008. The sixth annual SEVC is just around the corner, February 29 – March 1, 2012 at the Ritz Carlton in Tysons Corner, VA.
“Yap is truly a leader in freeform speech recognition and driving innovation in the mobile user experience,” said Paul Grim, general partner at SunBridge Partners in a statement following the funding. “It is increasingly clear that the fastest, easiest, and safest way to interact with services on a mobile device is using your voice, and Yap makes this both possible and intuitive.”
Founded in 2006 by brothers Igor and Victor Jablokov, the company raised $1.5 million from individual investors in May 2007.
Hulu, the online video service that was seeking a buyer, has terminated its sale process.
In a joint statement from all of its owners, News Corp., Providence Equity Partners, and the Walt Disney Co., Hulu said:
“Since Hulu holds a unique and compelling strategic value to each of its owners, we have terminated the sale process and look forward to working together to continue mapping out its path to even greater success. Our focus now rests solely on ensuring that our efforts as owners contribute in a meaningful way to the exciting future that lies ahead for Hulu.”
Angie’s List consumer reviews service passes 1M paid households
Angie’s List, a subscription consumer reviewservice that helps customers find the best local service providers, has surpassed the 1-million, paid households milestone.
Angie’s List collects consumer reviews on everything from home improvement to health care. Reviews come from members who have first-hand experience with local service professionals. Because Angie’s List has two active and individual members per household, it estimates it has more than 2 million paid members.
Unlike most consumer review sites, Angie’s List charges a subscription fee and prohibits anonymous reports. It places a high premium on accountability, requiring all members to affirm the validity of their reviews and encourages companies, free-of-charge, to monitor and respond to reviews.
Companies are prohibited from submitting reports on themselves and their competitors. Angie’s List uses proprietary technology, human review and outside auditing to ensure report reliability and fairness.
Skype CEO Tony Bates will head Microsoft’s Skype Division at Microsoft as president. Here’s a video from Bates discussing where he thinks the merger will take the video chat business. Beware, it includes a fair amount of Skype Hype.
Bloomberg reports say AOL”s head honcho Tim Armstrong is again talking with the banks and private equity firms that work with Yahoo on the heels of Carol Bartz’s outster as Yahoo CEO in a flurry of sniping.
Armstrong first expressed interest in acquiring Yahoo in 2010, but Bartz rebuffed the idea.
Neither AOL or Yahoo have responded to reporter requests for comment thus far.
CNBC, however, reported that a Yahoo source said the company, which is worth $18.2 billion vs. AOL’s $1.6 billion market valuation, is not interested in a merger.
We suspect that Yahoo is too smart to hook-up with AOL, which is making only incremental progress in attracting more visitors and ad dollars despite it’s $315 million buy of the Huffington Post and is spending about $160 million a year on its hyper local gamble, Patch.
Not only that, the recent brush-up between AOL and TechCrunch creator Michael Arrington may damage the continuing value of the TechCrunch property, which already seems milder and more homogenized under AOL.
More than half of Twitter’s 100M users access it via mobile
Twitter is almost an ideal mobile service. It’s 140 character limit may not please budding novelists or the wordy memo-writers of yore, but it’s easy to post to or read on the go whether via a smartphone or a Tablet PC or a netbook.
Online Media Daily says that with 55 million of Twitter’s 100 million active users accessing the service through mobile devices, “It may be safe to say at this point that Twitter is a mobile service.” Mobile use soared 40 percent since Q1 and with mobile devices proliferating, that rise is not likely to slow.
Twitter has become popular platform for public figures, from NBA players to politicians. Twitter says that 84 percernt of state governors post to their Twitter accounts, two-thirds of NBA players, all major league sports teams, all 50 top TV shows, and 87 percent of Billboard’s top musicians are tweeters.
Wattpad, an e-book community of readers and writers, funded
Wattpad, a Tornoto-based Internet and mobile site that connects e-readers and writers, has raised $3.5 million in an A round led by Union Square Ventures and W Media Ventures. The site is rapidly growing in populatriy, the site lets users post and share e-book fiction they create.
Wattpad by the Numbers
1 Million registered users
3 Million comments/votes a month
2 Million stories, 250,000 new ones added every month
Wattpad is available as a mobile app, mobi site and at wattpad.com
Users spend an average of 30 minutes on Wattpad twice a day
The most popular device to use Wattpad is the iPhone Here’s a video on how Wattpad works:
WASHINGTON, DC – The U.S. Department of Justice has sued to block AT&T’s merger with T-Mobile, the $39 billion deal that would create the largest U.S. wireless carrier. The move comes after AT&T stated today it would bring 5,000 call center jobs back to the U.S. if the merger closed.
“The department filed its lawsuit because we believe the combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for their mobile wireless services,” said James M. Cole, the deputy attorney general.
AT&T says it will “vigorously contest this matter in court.”
The DOJ complaint, filed in U.S. District Court in Washington, maintains that the merger “places important competitive pressure on its three larger rivals, particularly in terms of pricing, a critically important aspect of competition.”
Here’s AT&T’s statement on the suit:
Wayne Watts, AT&T Senior Executive Vice President and General Counsel:
We are surprised and disappointed by today’s action, particularly since we have met repeatedly with the Department of Justice and there was no indication from the DOJ that this action was being contemplated.
We plan to ask for an expedited hearing so the enormous benefits of this merger can be fully reviewed. The DOJ has the burden of proving alleged anti-competitive effects and we intend to vigorously contest this matter in court.
At the end of the day, we believe facts will guide any final decision and the facts are clear. This merger will:
Help solve our nation’s spectrum exhaust situation and improve wireless service for millions.
Allow AT&T to expand 4G LTE mobile broadband to another 55 million Americans, or 97% of the population;
Result in billions of additional investment and tens of thousands of jobs, at a time when our nation needs them most.
We remain confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court.
The Communications Workers of America had this to say:
The decision by the U.S. Department of Justice to seek to block the merger of AT&T and T-Mobile USA is simply wrong.
In today’s sinking economy, where millions of Americans are looking for work, the DOJ has filed suit to block a merger that will create as many as 96,000 quality jobs. In the U.S., where too many Americans, especially in rural areas, don’t have access to the tools of Internet technology, the DOJ is looking to block a plan to build out high speed wireless access to 97 percent of the country should be opposed.
In a nation where workers’ rights are routinely violated, as occurs everyday at T-Mobile, the DOJ apparently believes that workers should be on their own instead of having a fair choice about union representation.
The DOJ’s action would put good jobs and workers’ rights at the bottom of the government’s priorities. Just yesterday, AT&T announced that it would return a net 5,000 jobs to the U.S. on completion of the merger. That is the kind of corporate responsibility that more employers in the U.S. should demonstrate if we are ever to have an economic recovery.
Instead of acting to block this merger, our government should be looking to support companies that create, keep and return good jobs to the United States.
AT&T said today that it will bring 5,000 wireless call center jobs back to the United States if its merger with T-Mobile closes.
The 5,000 new wireless call center jobs at AT&T will offer among the nation’s most highly competitive wages and benefits. AT&T, which has not yet determined where in the U.S. the new jobs will be located, is the nation’s largest employer of full-time union employees and the only unionized major U.S. wireless carrier.
“At a time when many Americans are struggling and our economy faces significant challenges, we’re pleased that the T-Mobile merger allows us to bring 5,000 jobs back to the United States and significantly increase our investment here,” said Randall Stephenson, AT&T Chairman and CEO. “This merger and today’s commitment are good for our employees, our customers and our country.”
Today’s announcement represents the largest commitment by an individual American company to bring jobs back to the U.S. since the economic crisis began in 2008.
Also, AT&T has committed as part of the T-Mobile merger to increase its U.S. infrastructure investment by more than $8 billion. According to an analysis by the Economic Policy Institute that was commissioned by the Communications Workers of America, AT&T’s increased investment is estimated to produce up to approximately 96,000 new U.S. jobs.
AT&T said today’s jobs commitment does not change its previous guidance on the expected overall merger synergies.
The company is pushing hard to have the merger approved despite some Congressional opposition. Some fear the merger would reduce competition and lead to higher prices for mobile services.
Touting merger benefits
It says that beyond the jobs created, AT&T’s acquisition of T-Mobile USA provides a fast, efficient and certain solution to the impending exhaustion of wireless spectrum in many markets, which limits both companies’ ability to meet the ongoing explosive customer demand for mobile broadband. The uniquely complementary nature of AT&T and T-Mobile’s network assets will allow the combined company to add wireless network capacity – the functional equivalent of new spectrum – sooner than any other alternative.
AT&T promotes a number of benefits it says the merger will bring. The additional wireless network capacity will enable AT&T to offer better service — fewer dropped and blocked calls, and faster data speeds. Plus, the economic scale, additional spectrum and other benefits resulting from the merger will enable AT&T to deliver high-speed 4G LTE mobile broadband service to 97 percent of the U.S. population, or 55 million more Americans than it would without the merger. Reaching 97 percent of the population with LTE will create a much more extensive and robust mobile broadband platform that will fuel growth and investment throughout the country, the company says.
It adds that the benefits of the AT&T and T-Mobile merger have been recognized by numerous elected officials throughout the country, including 27 governors, more than 100 mayors, 11 state attorneys general, 79 Democratic Members of the U.S. House of Representatives and more than 150 chambers of commerce from 40 states, as well as a dozen labor unions and dozens of high-tech companies, such as Facebook, Microsoft, Yahoo! and Oracle.
Vitrue an Atlanta-based social marketing platform, has acquired San Francisco-based GamesThatGive, the social gaming platform designed to engage brands’ customers in charitable activities through branded-gaming experiences.
As part of the acquisition, GamesThatGive co-founder Adam Archer and the team will now operate out of Vitrue’s newly opened San Francisco office and oversee all gaming-related functionalities on the Vitrue SRM platform. Vitrue will also be adding as many as five new staff members to the team as part of the acquisition. Financial terms were not disclosed.
“A key goal for Vitrue this year is to provide our customers with the most robust and innovative platform for social marketing, whether through partnerships, integrations, or new acquisitions,” said Reggie Bradford, founder and CEO of Vitrue.
“We’ve seen great results from incorporating elements of charity and gaming into brands’ social campaigns. With this acquisition of GamesThatGive, a company that has developed a successful, smart platform, we are now offering both the gaming and charitable elements through our platform to continue to help brands reach and engage with their target audiences in new and effective ways.”
The acquisition allows Vitrue to add gaming functionality to their leading social marketing platform, the Vitrue SRM, allowing brands to seamlessly create custom games on Facebook and maintain consistent brand visibility during the entire experience, all the while supporting a brand’s charitable programs. The platform will now allow clients to create custom, fully skinned, branded casual games to increase brand loyalty, integrate charitable giving features, and add new customer touch points.
“Charitable game mechanics are a new way to motivate Facebook fans to play while giving brands a truly unique and charitable manner to engage with their fan base,” said Adam Archer, co-founder and CEO of GamesThatGive. “Our gaming solutions allow brands to drive fans to their Facebook pages and increase user retention and brand affinity. We give brands a platform to showcase and raise funds for their charities through engaging gaming experiences for Facebook fans.”
GamesThatGive has been successful in boosting fan engagement and spreading brand awareness for many brands across Facebook. Many of their apps have players averaging more than 40 minutes of game play per visit. The company also notes that many apps have more than 80 percent of visits coming from returning players and some games have achieved more than 100 percent virality, bringing in more than 1,100 additional fans for every 1,000 fans driven to the game. GamesThatGive has also raised more than $100,000 for charities including the Ronald McDonald House, American Heart Association, U.S. Fund for UNICEF, St. Jude’s Hospital and The Breast Cancer Fund.
Vitrue, whose clients include many of the world’s most recognizable brands and agencies, has cross-over clients with GamesThatGive including Pepsi and Domino’s. GamesThatGive has also worked with MasterCard, Dial Soap, Quaker, Dockers, UNICEF and Propel, to name a few.
“Domino’s puts a priority on reaching and building real social relationships with the millions of people that are on Facebook and other emerging social networks,” said Russell Weiner, Chief Marketing Officer, Domino’s Pizza, a Vitrue and GamesThatGive client. “But there are also millions of people playing games for free online every day and we’ll certainly jump at the chance to put our product in front of them and demonstrate our commitment to the community at the same time. As a partner of both Vitrue and GamesThatGive, we can easily manage our entire social presence in one place, and not only acquire and engage with fans in ongoing, innovative ways but also tie-in our charitable foundations in a seamless manner.”
Wisconsin Senator Herb Kohl has submitted a letter to US Attorney General Eric Holder and FCC Chairman Julius Genachowski expressing his opposition to the proposed AT&T – T-Mobile USA merger now under review by the Department of Justice and Federal Communications Commission. Kohl says the merger would result in higher prices for service and a reduction in consumer choice.
His move prompted some in-state opposition, however.
Thad Nation, executive director of Wired Wisconsin, issued this statement in response to the news:
“I am disappointed by Senator Herb Kohl’s decision to withhold his support for a merger that can provide real benefits to Wisconsin residents. As proposed, this merger would enhance and improve access to wireless broadband for Wisconsin residents through private sector investment in critical infrastructure, especially in rural areas.
“Individuals in many parts of Wisconsin often lack access to high-speed Internet, quality cell service and other amenities. This merger would help to change that by providing improved services and access to people throughout Wisconsin. Because of this identified, statewide need, I do not agree with Senator Kohl on this matter and I believe this is the wrong decision for Wisconsin consumers.”
Wired Wisconsin is the Wisconsin-based project of Midwest Consumers for Choice and Competition (MCCC), a non-profit organization of individual consumers interested in technology, broadband, and telecommunication issues with state projects throughout the Midwest region. The project will work to support an environment for innovative technology, high-tech job creation, and economic growth.
So what do you think? Will the T-Mobile, AT&T merger be good for consumers or will it, as Sen. Kohl maintains, result in higher service charges and less choice?
Go Daddy Group Inc., parent of domain registrar GoDaddy.com, has sold to private equity firms for $2.25 billion, the company said. The company sold to KKR, Silver Lake and Technology Crossover Ventures.
GoDaddy is looking to exceed $1.1 billion in revenue this year. The company is known for its excellent company service. If you ever bought a domain name from GoDaddy, you likely got a call not long after from one of its service people. The company, based in Scottsdale, AZ, was founded by CEO Bob Parsons in 1997.
Some folks in the tech community have expressed concerns that the private equity buyers of the company will milk it for all its worth without regard to its tradition of selling domain names inexpensively with great service. We’ll see.
Zynga, Farmville-maker files for $1 billion IPO
San Francisco-based Zynga, the game maker that created Farmville and Mafia Wars, two of the most popular Facebook games, has filed with the U.S. Securities and Exchange Commission for an initial public offering of stock to raise at least $1 billion.
For a detailed infographic on Zynga’s path from founding to IPO see: Zynga infographic at Namesake.com.
Zynga, founded four years ago, has users in 166 countries. About 230 million people play its games every month. The company has revenue of $597 million in 2010, up from $121 million in 2009. The profitable company earned $90.6 million in 2010.
It is the latest of the much ballyhooed Internet companies to seek public status following LinkedIn (Linkd) Corp. Analysts expect even greater interest in Zynga’s IPO and the amount of money it decides to raise may change as the level of that interest is better evaluated.
The company was founded by CEO Mark Pincus and has about 2,300 employees. The company’s shares recently sold for $15 each on secondary markets, which would value the firm at $12.6 billion.
The filing with the SEC reveals the company is investing in its own data centers to supplement its use of the Amazon cloud service, which allowed the company to grow fast without building infrastructure. Most Facebook game companies rely on Amazon’s cloud. VentureBeat says Zynga’s ability to design apps that take advantage of Amazon’s cloud is one reason for its success.
Despite the inevitable suggestions that the moonbeam valuations of Internet companies may signal another Internet bubble, many analysts point out that the difference is in the fact the today the Internet is more fully integrated into our public, personal and professional lives. These companies have substantial revenues, enormous numbers of users, and some, such as Zynga are even profitable.
Some analysts note, though, that their market values may still be quite overvalued.
BLiNQ names John Tawadros president, COO
BLiNQ Media, a global technology innovator in Facebook advertising and the only pure-play media and technology company worldwide with official access to the Facebook Ads API, has hired former COO for top search-marketing firm iProspect John Tawadros as president and COO.
Prior to joining BLiNQ Media, Tawadros was the COO of iProspect. Over the course of ten years he helped build the company from a basement startup to the #1 search marketing firm in the world, acquired for $50MM in 2004.
While at iProspect, he built and ran a world-class client services team with a 90%+ client retention rate, a companywide training program and scalable business processes to drive efficiencies, communications, ROI and overall performance.
The client-facing, algorithmic and paid search, technology, training and innovation teams all reported to Tawadros. He also played a significant role in the integration of iProspect with Aegis and in the acquisition and integration of a Texas-based retail industry search firm.
“Social media is the new search,” said Tawadros. “Facebook, the biggest player in digital media, is now the home of innovation, and BLiNQ Media helps advertisers make the most of it. It’s an honor to join this creative, intelligent and hard-working team.”
Global cyber security spending is expected to reach$60 billion in 2011 and is forecast to grow at 10 percent every year during the next three to five years.
The way we shop is rapidly being influenced by scores of innovative young companies who are helping retailers, brands and consumers fundamentally reshape how goods and services are bought and sold. A new report says mobile, online and in-store shopping are quickly converging and startups are disrupting the traditional retail ecosystem.
Amazon has purchased Charlotte-based speech-recognition firm Yap, according to a report in 
Hulu
Twitter is almost an ideal mobile service. It’s 140 character limit may not please budding novelists or the wordy memo-writers of yore, but it’s easy to post to or read on the go whether via a smartphone or a Tablet PC or a netbook.
WASHINGTON, DC – The U.S. Department of Justice has sued to block AT&T’s merger with T-Mobile, the $39 billion deal that would create the largest U.S. wireless carrier. The move comes after A
AT&T said today that it will bring 5,000 wireless call center jobs back to the United States if its merger with T-Mobile closes.
Vitrue an Atlanta-based social marketing platform, has acquired San Francisco-based 
Go Daddy Group Inc., parent of domain registrar GoDaddy.com, has sold to private equity firms for $2.25 billion, the company said. The company sold to KKR, Silver Lake and Technology Crossover Ventures.
