Wow. Crazy stat of the day. How many staffers do you think Current has?
30?
50?
100? Sit down, grab some crazy pills.
How about 410… after they lay off 60! 410? Via Valleywag:
Hi Paul,
The company statement is below. For what it’s worth, I’d be very appreciative if you used the entire statement:
“Current Media today announced changes to its structure and staffing. Approximately 60 positions have been eliminated in the company’s three U.S. offices and approximately 30 new positions created. Many of those whose positions were eliminated have been placed in the new positions. Current will have approximately 410 employees (after these staffing adjustments). These changes result from the development of a new, innovative programming strategy built around eight cross-platform channels, including news, comedy, music and technology, slated to premiere in the first quarter of 2009. Current’s new programming strategy expands upon its pioneering use of viewer created content to include additional opportunities for participation, creating a far more viewer-influenced network, and further unifies the Company’s online and TV platforms by having each web channel paired with a companion TV show. In addition, these changes enable Current Media to reduce its cost structure, thereby assuring that it will be comfortably profitable in 2009 regardless the depth and length of the recession.”
What for? To carry around Al Gore’s ego? Sheesh. If a company can lay off 60 and still operate as if nothing happened, my question: what were they doing on staff in the first place?
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WatchMojo NewsletterGoogle has a whole lotta staffers whose options are underwater - something I covered “ages” ago here. Ok, maybe not “ages ago”, but February 2008. It sure does feel like ages, because in February 2008 Google was off its all-time high of nearly $750/share at $550. I thought morale would be down then. Today, Google closed at $311. I mean, I am not sure if $750 was ever realistic (oh-oh, I think we’ve heard this line of thinking before), but the point is: a lot of employees’ options are priced with that underlying stock price.
Faecbook, meanwhile, can’t be a garden of euphoria either.
Facebook sold preferred shares at $15B, while its employees own common shares at a $4B valuation. As SAI points out:
As we all know, Microsoft, Li Ka-shing, and some German investors paid a $15 billion valuation for some preferred stock last fall. Importantly, this preferred stock takes precedence over the common: Microsoft will get its $250 million back before common shareholders get a cent (common shareholders will get to split up what’s left). So it is inaccurate to say that Facebook’s valuation has fallen from $15 billion to $4 billion.
Admittedly, to really discern what this all means, you’d need to get your hands on the company minutes and most importantly, the unanimous shareholders’ agreement, however, one thing is certain:
It cannot be fun times at either headquarters. But what is the best remedy to cheer up employees saddened by paper loss? The potential of a pink slip… so I am hoping that everyone cheers up real soon.
Finding out that XM Sirius lost nearly $5B in the third quarter (not spent, or in the year, we’re talking losses in three months) is akin to finding out that the pizza parlor next to our office spent $13M in green peppers. It’s shocking, criminal, numbing.
Is this what the US “leaders of industry” have come to? Mel Karmazin, a media guru, orchestrates this joke of a merger and proceeds to lose $4.88B in three months? Sure, satellite radio is reliant on the car industry, but don’t even get me started on those guys. Where does it say in the Bible that “thou shall be Three Big Carmakers, and the US taxpayer shall compensate for their mismanagement…”
And if that’s not enough, we find out that AIG needs a bailout… from its bailout.
A joke, this is what the US economy is right now. My favorite part about this crime is the fact that the Republicans were calling Barack Obama a socialist and we’re now seeing Socialism across the Board, from Manhattan, down to Washington DC, via Detroit and on to SF.
What on earth is happening in board rooms?
Where is the leadership?
We need Jack Welch, Warren Buffett et al. to barge into some of these board rooms with a few baseball bats and toss these criminals out of these companies and onto their arses. Why on earth should your average, hard-working American pay taxes these days? Tell me, why?
All right, I feel better… let me go read about the next round of layoffs.
Phillips has designed an intelligent pill, which they call the “iPill,” that can release drugs to certain areas of the body. Equipped with a microprocessor, battery, wireless radio, pump and a drug reservoir, the pill can measure acidity in the gut. These measurements, as well as targeting specific locations in the body, can lead to lower dosages and therefore fewer side effects. Read more…
“Great companies, great ideas, and exceptional people almost always get funded.”
From a successful VC…
These days… I pinch myself. How, on earth, did I manage to bring the company to where it is? I’m not alone, don’t get me wrong. We have assembled a great team.
But when it comes to financing the company, I have been alone. When I launched Mojo Supreme in 2005 and then WatchMojo.com in 2006, I thought I could fund the company for a few months, maybe a couple of quarters. A frivolous lawsuit made raising funding impossible… and even once that was settled, an out-of-vogue business (video content) could not close the deal. Even when I would get close to sealing the deal, a term sheet’s draconian clauses would turn me off. Ironically though, by the end of year last year, I thought I had run out of runway, with no options left. Somehow, some way, I managed to extend the inevitable and here we are… probably on better footing than at any other time in our history.
In an ironic twist, if (don’t want to jinx anything now) we survive let alone thrive, it will be because we never raised VC, and not because of it. For some context, from Forbes:
The entire portfolio of the California Public Employees Retirement Fund, for example, a major investor in venture funds, is down 20% and needs to raise capital. Cash will be scarce in 2009, no matter if you’re a pension fund, a VC or a start-up. Wall Street is broken.
It’s really ironic, but had we raised money last year… we would have been forced to grow very quickly initially, add a bunch of useless people and positions; our costs would have mushroomed; our revenues? Not sure.
But the financial meltdown would have forced us to a) reduce costs, b) lay people off, and c) maybe even shut down.
When you raise money from VCs, they basically control the purse strings, so if they decide “not to approve the budget”, you have to basically shut down and return whatever money you raised to the investors. Crazy… but the key to surviving and thriving will probably be staying independent and small.
One of the biggest cliches and lies VC tell is “raise as much money as you can”. That’s BS. When it comes to dealing with VCs, equity isn’t the most important thing, it’s the only thing (to quote Felix Dennis). But more on that in a separate post.
Apocalypse now, analyst style, from Trip Chowdhry of Global Equities Research, via Eric Savitz. Not all that crazy, frankly. I am not software or hardware expert, but on the VC-backed consumer media web stuff, I agree with most of the boldfaced (emphasis mine):
- Almost every Silicon Valley company is facing deteriorating business conditions and will cut their workforce by 3%-10% by year end.
- Project cancellations are accelerating in almost every vertical, including financial services, retail, transportation and public sector.
- “Many startups are starting to fold.” He contends that “almost every” VC funded open-source company is struggling and will run out of funds within the next 6 months. He also says that “many VC funded Web 2.0 companies are shutting down…the Web 2.0 fad is now coming to an end.” He has a similarly dark view on the prospects for software as a service start-ups.
- He thinks the death of many start-ups will be trouble for Google (GOOG), which he says gets 7% of AdWords related revenue from start-up companies.
- He also sees a coming glut of used hardware arriving on the market early next year, selling at 20%-25% of original prices, and depressing the market for computing and networking gear. He thinks that IBM, Hewlett-Packard, Cisco and Juniper in particular are vulnerable to this phenomenon, and could soon find themselves competing with their own used hardware.
- “Every enterprise software company,” including Microsoft, Oracle, SAP, CA, BMC and Sybase are negotiating lower prices on maintenance contracts.
- Indian outsourcing companies, including Infosys, Satyam, Cognizant and Wipro are seeing project pipelines “drying up.” He contends “there is not enough work to keep employees busy.”
- He says Sohu, Baidu, Netease and Sina are struggling to maintain top-line growth, as multinationals cut back their online marketing campaigns in China.
- Web browsers are growing in importance; he thinks Oracle and IBM will offer their own browsers within 12 months.
- Motorola could get a life line in the form of equity investments from Microsoft and possibly Google, in return for supporting the Windows Mobile and Android mobile phone platforms.
- First-generation SAAS companies - NetSuite, Kenexa, RightNow, Salesforce.com, Rackspace, SuccessFactors, DemandTec - “continue to struggle and probably will not see any recovery in their business, irrespective of the economy.”
- Salesforce.com’s business “continues to deteriorate, the best is over, the worse is still to come.” He writes that one of his contacts describes the company as “a modern day Visi-Calc.”
- Cisco is feeling pressure from Microsoft and Arista Networks; he expects layoffs at Cisco of 5%-10% by year end.
- VMware, he says, is seeing business deteriorate. He expects 10% layoffs by year end.
- Apple, he says, is going to start selling iPhones via Costco at $149 starting in January.
Quick: close the window before your colleague jumps out!
Paid Content quotes Economist publisher Paul Rossi, who suggested at the Future Of Business Media conference last month:
Just 12 percent of European web users paid for online content last year, but that’s due to rise to 19 percent by 2013, a new Jupiterresearch report says: “While free content will continue to dominate, as overall online audiences for all content categories continue to grow, so the number of European users willing to pay for content online will grow at an even greater rate.”
That sounds like salvation for formerly premium publishers who had come out from behind their pay walls just in time for an advertising recession. But what’s driving it? A seismic shift in the number of people who will begin paying for music, Jupiter says. Though freeloaders outnumbered paying listeners by 53 million to 6.9 million last year, by 2013, it’s reckoned European efforts to drive consumers to legal downloads will see payers become the majority - 63.7 million against just 55 million. That’s one factor will drive paid content income to €5 billion in 2013, from €1.4 billion last year.
I ask: will consumers really shell for content? I think some will. But ultimately, I see the following being more likely:
I see aggregators licensing content from content owners as being far more likely than individual users paying content. Individual users will look for free options primarily… and be drawn to free models. I am not saying that distribution sites who aggregate content will be able to recoup the licensing fees initially, but they will create enough value to make it worth their while. We’ve seen many companies outright license content from us at WatchMojo.com, how many users would pay for the content? I am not sure.
SAI observes that MySpace is kicking Facebook’s tush in ad sales. There are three reasons, one of which they point to:
1 - Google’s 45-month, $900M guarantee gives Fox Interactive Media a nice base to grow revenues off of. With that kind of foundation, a VP of sales and CEO can make decisions to make marketers more comfortable on MySpace, which is key to FIM’s numbers. Their other sites are far more ad friendly (IGN, for example, or FOX News).
2 - Facebook has always positioned itself as a technology company, a platform; MySpace has been a media and entertainment company that offers some of the tech bells and whistles that the Valley wants them to, but they know that Madison Avenue drives the free, consumer web media space. As I always say, there has only been one really successful ad-supported technology: Google. I know Google, I use Google, and Facebook, you are no Google.
3 - Facebook has to develop ad strategies from scratch (Beacon anyone?) as well as a sales organization, MySpace can leverage News Corp. and FOX’s, arguably the most diverse media organization in the world.
Of course, it’s worth noting that re: #1, the Google/FIM deal will expire sometime in late 2009/early 2010, I wonder what the terms of that deal will look like.
Disclaimer: MySpace is a WatchMojo.com distribution partner. I used to work for FIM after they bought the company that bought my [old] company.
