Explaining Southern California's economy

Yammer sells to Microsoft for $1.2 billion. Good call on skipping that IPO!

Yammer

The enterprise social network would do anything to avoid an IPO. And then along came Microsoft...

Yammer, based in San Francisco, is basically Twitter for business — although in the two roughly years since I regularly used it, it's evidently added some Facebook-esque features. It's been at the vanguard of "enterprise social networking," or bringing microblogging and social networking into the business environment. With the consumer space tapped out, this is where a lot of companies are looking to expand. 

Or, in Microsoft's case, acquire. Just for perspective, $1.2 billion is FAT valuation for Yammer. Remember Instagram, the year-and-half old photo sharing site with 13 employees that Facebook bought on the eve of its IPO for $1 billion? Yeah, that seems so long ago now...

Yammer sold for a little more than one "Instagram," in the new parlance of Silicon Valley. But more importantly, Microsoft bought the company for all cash. Instagram, by contrast, was a cash-and-stock deal, mostly stock. So Yammer's investors, who had put about $150 million into the startup, are going to see a very large payday, composed of actual money that they can use to either buy a second yacht or turn around and pour into other startup investments.

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Venture capital isn't over — it's trifurcating!

TechCrunch Disrupt SF 2011 - Day 3

Araya Diaz/Getty Images for TechCrunch

Venture capitalists and founders at a recent TechCrunch Disrupt conference. Are the those who disrupt about to get disrupted?

Scott Anthony, who runs venture investing for Innosight — a consulting firm founded by the founder of "disruptive innovation," Clayton Christensen — has applied the master's lessons to the venture capital space at Harvard Business Review's blog. Like a lot of folks, myself included, he takes a recent Kauffman Foundation report as his starting point. 

And then he effectively deploys Christensen's best-known concept to explain why venture capital — and particularly big VC funds — isn't performing as well as an investment class as it has in the past. The way disruptive innovation works is that in an established industry, a new player will enter at the low end and wind up disrupting the major players.

A good example might be Japanese carmakers attacking first small motorcycles and later small cars, then moving up the food chain to make plenty of trouble for Ford and General Motors. More recently, you could argue that Instagram did this to Facebook by creating a lightweight mobile photo-sharing app that was so easy to use that it acquired 50 million users practically overnight. 

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Facebook v. SpaceX, Part III: Meltdown and splashdown

NASA-SpaceX

NASA TV

SpaceX CEO Elon Musk is having a much better few weeks than Facebook CEO Mark Zuckerberg.

Facebook CEO Mark Zuckerberg is honeymooning in Italy while Facebook's stock heads ever-southward, a week and half after its disappointing IPO — possibly the most disappointing big IPO in U.S. business history.

Meanwhile, SpaceX CEO Elon Musk is sitting in a control room in Hawthorne, Calif., tweeting away as his space exploration startup caps the best two weeks for the U.S. and space since Mercury astronaut Alan Shepard became the first American to visit space in 1961.

Facebook meltdowns while SpaceX splashes down! You can't beat the symmetry for these two California companies. (For what it's worth, Facebook should be OK. A $60 billion market-cap company is nothing to sneeze at.)

So SpaceX's Dragon capsule did indeed successfully detach from the International Space Station, survive atmospheric re-entry, deploy chutes, and splash down in the Pacific Ocean off the coast of Baja earlier today. As of 11:34 a.m. Pacific Time, it "looks good," according to Musk. So it hasn't sunk. It isn't on the barge yet, to head back to port.

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DeBord Report on 'America Now with Andy Dean,' May 25 edition

Andy Dean Banner

It's the Tuesday after a holiday Monday, so it must be time for me to post my weekly business and economy segment from "America Now with Andy Dean." A day later than usual. We will be back on the non-holiday schedule next week!

Andy and I covered the complete disaster that the Facebook IPO has become, especially the potential trouble CFO David Ebersman may face.

But we also discussed the bloodletting at HP under new CEO Meg Whitman, as well as just replacing the entire IPO process with massive Japanese all-girl bands and — this is a very good one — Barry Diller's kindasorta completely aggressive attempt to resell the broadcast T.V. signal to digital users by, get this, renting special antennas! That last one is fascinating.

As usual, Andy and I have a pretty good time running down the week's big news in business. Check us out live this Friday at 4 p.m. Pacific Time!

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DeBord Report on 'America Now with Andy Dean,' May 18 edition

Andy Dean Banner

Apologies for not posting this earlier in the week. My regular weekly economy report on "America Now with Andy Dean" might make for some amusing listening now, given all the problems that Facebook has encountered, post-IPO. We talk extensively about how the IPO went down and what to expect. AND I got to lead off the show, which was a real thrill.

Additionally, I can use this opportunity tell you all to tune in today at 4 p.m. Pacific Time to listen to this week's report LIVE! It should be pretty exciting.

Follow Matthew DeBord and the DeBord Report on Twitter. And ask Matt questions at Quora.

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