Archive for the ‘war chest’ tag
Good news for Apple’s investors: the company revealed today in its third-quarter earnings that its previously-announced dividend will be paid out to investors on August 16, 2012.
This is the first time the company has paid a dividend to its shareholders. Apple announced the $2.65 per per share dividend offering back in March, which, along with a $10 billion stock buyback, was a way for the company to lighten the load of its $100 billion cash war chest. Apple needed to do something with its cash to appease investors, some of whom were worried the company wasn’t properly taking care of its shareholders. The company said it planned to spend $45 billion of its cash over the next three years on these plans.
Apple will be paying out the dividend to investors on record by the close of business on August 13, 2012.
While investors will certainly appreciate getting some sort of payout, the method has been criticized because investors also have to pay taxes on the dividends. It’s also worth noting that Apple will only be using its domestic cash stockpile for the dividend and stock buyback. If the company used cash from its overseas reserves, it would end up owing the U.S. government a healthy amount of taxes.
“We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure. You’ll see more of all of these in the future,” Tim Cook, Apple’s CEO, said in a statement back in March. “Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business. So we are going to initiate a dividend and share repurchase program.”
Apple stock was down almost 5 percent at $571.55 in after hours trading at the time of this post — likely because investors were disappointed the company missed analyst expectations.
SkySQL plans to be something of a thorn in Oracle’s side. As you’ll recall MySQL, which as a free database platform annoyed Oracle, was sold to Sun and then Oracle bought Sun. That was supposed to keep a lid on things. Now with MySQL under its wing, Oracle plans to move those MySQL users over to Oracle databases in due course. But it can’t push things too hard due to EU competition rules in place for the next five years. So guess what? That gives SkySQL – backed previously by the former founders of MySQL – a window to come back and start re-supporting all those dedicated die-hard Sun/MySQL fans. They’re baaack…..
And to do it they’ve raised an additional €2 million in Series A funding from California Technology Ventures, LLC (CTV). This takes SkySQL’s war chest to €6 million and will mean they can expand their business supporting existing MySQL users.
At the same time they’ve brought in Patrik Sallner as new CEO, who was previously VP of Professional Services at F-Secure Corporation which delivered cloud storage solutions to large telcos. Ulf Sandberg, current CEO at SkySQL, will now move to head up the U.S. operation as President of SkySQL Inc.
Admittedly SkySQL has mainly a service business right now, serving old MySQL customers in much the same way that RedHat services Linux customers.
But they plan to put in place a Cloud based product (yes, they will turn into a platform startup) which will gradually take on the heavy lifting and provide an alternative migration path to people who don’t want Oracle.
This is one to watch. And watch Oracle get redder in the face as the years tick by…
Leadership in management is the art and science of getting others to do what they don’t necessarily want – or don’t understand why they’re being asked – to do. Doing it at a startup is accomplishing all of that in the face of uncertainty and with little resources. Now imagine doing that without the war chest supplied to you by VCs as you bootstrap. Good times, but also a pain in the ass.
First: Yes, the Usual Clichés
Without a doubt, the mere minimum you need to do to recruit and retain talent is to show respect, empower, provide feedback and be a generally good person to want to work for. Treat employees not just like partners, but also how you want to be treated as an employee.
But, hiring during boom times is very different than during a downturn. Depending on your industry, your company might be grounded due to the inability to hire.
Your Business Isn’t a Fortune Cookie
“Hire slow, fire fast” is a great sound bite, but it’s usually wrong, especially if you lack the cash to hire anyone you want.
Either way, not everyone is a visionary or sees the lay of the land; a lot of people need direction and to be cast in a role. I am not recommending you to hire a putz and promote him, but if you saw something in a candidate and things aren’t working out at first, chances are they may be really good at something else.
Vegetable Lasagnas Need Not Apply
Hire a bunch of plain-vanilla yes-men and I promise you your company is DOA. But that doesn’t mean that you need to go out and try to hire a number of all-stars, because that’s not really how championship teams are built, either.
Life is all about team dynamics and balance.
The Ego Has Landed
Realistically, everyone has an ego, and in all honesty, that’s not a bad thing. As a boss you need to differentiate between self-centered people who place personal objectives ahead of the common good versus those who take pride in their work and will in turn set a good example for others. In fact, those two things are not even mutually exhaustive, so as long as the latter outweighs the former, you should check your own ego and live and let live.
Also, Don’t Lie to Yourself
Moreover, while you as the leader are driven to succeed and may have virtuous and altruistic objectives, ultimately you stand to gain financially when others help you achieve your goals, so you cannot be disingenuous in at least recognizing that others may have their own reasons for participating in your adventure.
But More Importantly, Don’t Lie to or Disrespect Others
The golden rule is candor, because people don’t like to be ridiculed or made fun of. If Maslow’s hierarchy were modified to reflect something other than needs, I’d argue that pride and self-esteem would place rather high. Respect everyone on your way up, even those who have what society perceives to be lower-ranking jobs and functions.
When you’re on a date, for example, a woman will pay particular attention to how you treat a waiter or doorman, because it will say a lot about you. Similarly, if you’re having lunch with a potential hire and you’re rude to the waiter, it sends a red flag to the person you’re trying to recruit.
You Are Neither Il Duce Nor George Washington
The key is to manage like it’s a democracy but to remember that it’s not. After a series of “bad” CEOs, P&G chose nice guy John Pepper as CEO. He had a tendency to agree with the last person he spoke to. That doesn’t work in startups, where everyone has their own ideas of what to do but, but enough resources to do the one thing you need to do properly.
You’re Only As Weak As Your Strongest Link
Saddam Hussein had a peculiar habit of balancing his sons’ powers. While you shouldn’t take management lessons from the Butcher of Baghdad, the reality is that you need to build a team that is balanced, so having one superstar is a recipe for disaster regardless of whether that employee leaves or stays.
The Psychological Value of Equity
Those that have equity tend to envy those with high salaries, and those who have high salaries crave ownership. Equity, as such, isn’t simply a financial motivational tool, but a golden pass that truly aligns and bonds employees to your company and mission statement. That being said, you never know how people’s roles will evolve over time, so despite what some may suggest, be conservative to leave you with more options down the road. Equity is the most important lever you have to offset your lack of money; it’s your lifeline as the bootstrapped CEO.
Creative People, Be It Artistic or Technical, Can’t Be Told To Be Creative In a Sandbox
Not only can’t you micro-manage the best people, but you also can’t kid yourself and think that you can hire the Crazies and expect them to remain successful within a tight, narrow sandbox you create for them.
The best employees are thinking and performing at a level that you can’t imagine even in your wildest dreams. That is why you hire them. If your ego can overcome that, you’re well on your way to greatness.
Perfectionists vs. Shippers
Of course, you can have the big thinkers, the smooth talkers, as well as the perfectionists; unless they actually deliver the goods and ship – or walk the walk – then you’re back to square one. Always go with results and achievers.
You don’t go to war with the army you want, you go with the army you have. But if you play your cards right, you’ll realize that they can be one and the same despite the lack of resources.
(image: Everett Collection, shutterstock)
For much of last year, Zynga was in a quiet period leading up to its IPO and Pincus had to wear a muzzle. During that time, Zynga haters came out of the woodwork in poorly disguised attempts to derail the IPO.
But the company managed to go public at an $8.9 billion valuation and raise $1 billion for its acquisition war chest. And now the muzzle is off. Pincus is now free to respond to allegations that his company is an untalented copycat — an issue that won’t go away — and that its business is overly dependent on Facebook.
Here’s an edited transcript of our interview with Pincus. And if you want more, check out our 25,000-word history of Zynga.
Gamesbeat: So I guess you were a millionaire last time I talked to you. Now you have a “B” in front of it.
Mark Pincus: Well … I think that the rest of the world has more fun and intrigue with all of it than I do, or any of us.
GB: Do you think you get too much attention for (being a billionaire)?
MP: I don’t think that this has been about that. I’ve been interviewed by someone on NBC who said, “Isn’t that what all you Silicon Valley people are about? Just trying to have more money or whatever?” And I said, “No, that’s really not what we’re about here. We’re way more ambitious than that. We want to change the world, make history.”
GB: How do you get them to come to understand that part?
MP: I just saw the movie “Moneyball” yesterday, and I realized, everyone doesn’t have to understand you, or believe in what you’re doing, while you’re doing it. Sometimes it’s later, when people see the outcomes of what you’re doing, that they maybe change their beliefs.
MP: If you go back to before the quiet period and look at what I was publicly talking about, that’s the thread we’ve still been on. We’re not just trying to build a company, we’re not just trying to build an industry, we’re trying to build a movement around play. We want people to put play in their day. We want to remind people to play with people and connect with people in their lives, and people are doing that. And I think we as an industry — and it’s now a broader industry — our industry goes all the way from fairly hardcore gaming developers to social developers.
If you go back to what I said when I keynoted the Social Gaming Summit industry conference at UCSF, I talked about how we need to work as an industry to build an awesome experience that convinces people that this can be the next great free medium since TV. I think we’re in the middle of this massive secular movement to free-to-play gaming. That’s been going on for a while, but I think it’s really accelerated. With mobile and social, it’s started to really penetrate the mass market.
What we’re excited about is seeing how huge numbers of people are changing their behaviors, like hearing last year that social games had replaced soap operas. We’re seeing it cut across the culture, seeing Words With Friends now become a cultural meme. And not just for the success of that one game, but for the success of our industry. Because on the back of Words With Friends rides an entire industry.
GB: This idea of changing play goes back pretty far in Zynga’s history. I don’t know if it was there at the very beginning, or how early you adopted it. It is interesting to me that none of the traditional game companies thought in such an ambitious way about getting everyone to play. Why do you think that was?
MP: When I first walked into EA — it was the meeting where I met Bing [Gordon, now a member of Zynga's board] — I said to the room full of EA people I thought social gaming was the best thing that had ever happened to them. I said that I thought it would create a whole new generation of online digital gamers, and I thought that whether or not companies like EA chose to play in that part of the market, these people would graduate to more hardcore, more sophisticated [games]. That TV might get you into video, and then you might want to go to movies. I don’t believe that TV cannibalized movies, and I don’t believe social gaming was going to cannibalize the video game industry. I think it was a renewed chance for growth.
MP: Yeah! I thought the Wii was a real shot across the bow. It was orthogonal. All of a sudden it, it wasn’t that it had the fastest processor and could do the coolest new graphics. It was an innovation in accessibility, which led to more social. So why didn’t the traditional industry go after this opportunity?
First of all, they did. I’ll remind you that the EAs of the world had games on Facebook almost when we did. If you remember, the whole Scrabulous thing was EA, (in a legal fight over) the Scrabble rights. They did focus on and pursue it. I think what was different was that we came from a place that was more organic to the medium, and we believed that this was the whole thing.
I think that initially, for the traditional industry, this was seen as a channel to take existing intelletcual property to market. Which it could be, and is, and will be. But our approach was that you couldn’t have play, you couldn’t have social gaming, without social. And that it had to exist in places that people wanted to hang out and congregate, and not be a destination that required that much intent and pre-planned interest. We thought it had to be free. Similar to, I think, when Amazon innovated to get us to do e-commerce, they had to take down the barriers to commerce. They had to compete with offline commerce, they had to show you that it was fewer minutes and hopefully fewer dollars to shop online. To create a whole movement, a behavioral change, where people saw online as a convenience and not a hassle.
Similarly, we thought that we had to remove tons and tons of barriers that were stopping the mass market from playing. So free was one, but even beyond free it was the download, the complexity. And the areas that we’ve innovated sometimes are too small; they don’t come in big, explosive graphics packages. The innovations that we focus on are things like the FTUE, which stands for First Time User Experience. We counted how many clicks it took, how many seconds before you could understand what the game was and why you’d want to play it. We had to simplify what a game was to make it more accessible.
GB: There was an interesting reaction, where you guys did do a great favor for the game industry, and the industry reacted so negatively.
MP: Yeah. That’s why it was so interesting watching “Moneyball” yesterday. You have to see it, and the book is even better. The whole story of this guy, Billy Beane, what he did with the Oakland A’s; he challenged the whole way that baseball had been managed. He said he was just going to focus on metrics and outcomes. He was scorned, laughed at, almost fired, and it didn’t work out at first. Everyone said he was an idiot, until it totally did work out, they had a 20-game winning streak that broke all records in baseball. It changed the industry forever.
With $3.5 billion in cash on hand, Facebook is swimming in success and may manage to reach $1 billion in profit by the end of this year, according to a report.
The social network giant had $714 million in net income on revenue of $2.5 billion between January and September of this year, a source with knowledge of Facebook’s financials told Gawker. Given that trajectory, it seems likely that Facebook will pass $1 billion in profits — or at least get agonizingly close — by year-end.
While exact details on Facebook’s financial history are fuzzy, the company is on track to earn double what it reportedly made last year, and quadruple what it made two years ago.
Facebook also has plenty of money in the bank: $3.5 billion, according to the report. That doesn’t compare with a massive war chest like Apple’s $81.6 billion, but it’s certainly enough to make big acquisitions when necessary. And as Gawker points out, it’s an amount that would make the likes of Yahoo and Adobe jealous.
Gawker’s source also reiterated previous reports about Facebook’s upcoming IPO, in which the company is said to be raising $10 billion at a $100 billion valuation. Basically, expect Facebook’s pocketbook to grow next year, and for some big spend acquisitions to follow.
Rick Perry’s people have gone to school on past elections. In fact, we can almost hear them repeating a Clintonism from 1992 here: “It’s the economy, stupid.”
This trailer-like commercial portends a feature presentation. But it’s a movie we’ve all seen before — a dark fantasy perpetuated by those who would do anything to gain office, in order to make obscene profits possible for the richest Americans.
This ad, and Rick Perry’s approach, pisses me off. Is empty rhetoric and flag-waving symbolism backed by a giant war chest all it takes to become President today? Of course it is, but the American people deserve answers, not more over-produced swill.