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Baker Capital puts the bad in VC
Showing why you should be very careful in selecting your investors, online retailer Wine.com just got screwed over big time by Baker Capital.
As the name suggests, San Franscico Bay Area based Wine.com sells wine over the internet. Business had been decent, claimed the San Jose Mercury News. But in need of an additional investment, the company started talking to potential suitors that could buy the company. In the end Liberty Media offered $67.5m.
Baker Capital however, which was on the company's board of directors after an investment round last year, blocked the deal and pulled a stunt that is suitable for a summer movie twist.
With cash running out quickly, the VC undertook a much needed financing round. But this time the company was valued at only $35m. By investing $10m, Baker obtained a 65 per cent stake in the e-tailer. Management had no other option but to go along – it was either Baker's investment or bankruptcy.
Corporate raiders will probably applaud the move for its cunningness. Anyone with a conscious should curse Baker.
Baker is growing sour grapes
photo credit: Katia Grimmer
tags: wine.com, baker capital, corporate raider
August 31, 2005 at 09:03 PM | Permalink | Comments (2) | TrackBack
The patent threat in the web's closet
Putting all the wrong things in the words "corporate turnaround", EpicRealm has gone from a company selling internet acceleration technology to a company that hold the internet hostage, hoping to enforce a dynamic web content patent.
EpicRealm over the course of the past months has filed lawsuits against 13 companies that are allegedly infringing on its patents, demanding damages and a licence fee.
The accused are (spread out over 3 lawsuits):
Speedera (has since been acquired by Akamai)
Autoflex
eHarmony
Friendfinder
Grande Communication Networks
Its Just Lunch (has since started settlement talks)
Transplace
Franklin Covey
Clark Consulting
Macerich
Safelite
Herbalife
Pink Sheets
As it goes with patent cases, it's hard to say how broadly the patent can be applied. It could apply to "most modern e-commerce sites involved in dynamic web page generation and caching", according to Ira Rothken, founder of the Rothken Law Firm that is representing FriendFinder.
EpirRealm's counsel Kevin Meek with Texas law firm Baker Botts downplayed how broadly the patents could be applied.
At the end it depends on the judge to rule on the validity of the patent (EpicRealm didn't exactly invent dynamic webpages) and how broadly they can be applied.
For Friendfinder Rothken is convinced that this all will have a happy end. The company only uses load balancing technology but none of the dynamic web page generation technology that is part of the patent.
But back to EpicRealm. It once used to compete with Akamai but somewhere around 2003 the plug was pulled. Technically the company didn't go bankrupt, but let's just say that there is little going on at its office on Crescent Court in Dallas, that doesn't even list a telephone number.
Click here to download court documents:
Photo credit: Ken Duncan
tags: epicrealm, litigation, patents, patent litigation
August 31, 2005 at 05:46 PM | Permalink | Comments (0) | TrackBack
No bloody pictures for Germans
Backbone provider Level 3 Communications has cut off German websurfers from the Ogrish.com website.
The site allegedly violates local legislation by failing to do a proper age check. Level 3 didn't wait for a court order, but instead simply cut off access to the service after a German watchdog group called "Jugendschutz" (translated: Youth Protection) contacted the firm.
Ogrish offers rather unpleasant pictures and movies of people dying in accidents, war situations and natural disasters. The site admits that the images are distasteful, but at the same time claims that they are part of everyday life.
Level 3 is a backbone provider, selling access to the internet to internet providers, hosting providers and large enterprises.
The telco feels responsible for the website because it is hosted by a customer of a customer of a customer. As a result it now blocks users of certain German internet providers that buy bandwidth of Level 3's network.
Although I didn't enjoy looking at the pictures and certainly wouldn't want any children to be confronted with them, there is something smelly about the path that Level 3 took. The company is fine hosting the website, but will also block access to it for its network customers.
Level 3 could easily block access to the website from all German IP addresses. Instead it chose to add an IP block for the website's IP on its routers in Germany. This only prevents German customers of its network services from accessing the content, leaving the site open to customers of providers that rely on other backbone providers.
Why take such a lacklustre approach if you want to protect innocent children from viewing disturbing materials? There is only one answer: PR move. Level 3 can now say that it has acted against the site without hurting its business.
Speek no evil
tags: ogrish, level3, censorship
August 31, 2005 at 02:32 AM | Permalink | Comments (1) | TrackBack
Zotob author: "look at me!"
The 18-year old Farid Essebar who was arrested last Thursday for writing the Zotob, Rbot and Mytob worms, was quite a productive virus writer as it turns out.
The Russia born man had authored around 20 worms, Sophos thinks. His creations currently hold 6 of the top 10 virus positions.
It all goes to support the theory that Farid isn't a very smart virus writer. His creations might have been a success in terms of infections, but failed as a business venture.
Any person that takes the virus charts by storm is going to attract attention. If you want to avoid the flak, you should stay under the radar.
photo credit: Andrew Brigmond
August 30, 2005 at 09:43 PM | Permalink | Comments (0) | TrackBack
Larry Ellison goes to the races - and shows his team spirit
Larry Ellison was racing in the America's Cup trials at the weekend and managed to win an unexpected victory.
Ellison has been one of the key players in transforming the America's Cup from a four yearly competition to a continuous regatta of competing teams. On Monday the BMW/Oracle racing boat, on which the software company has lavished €100 million, managed to beat the widely favoured New Zealand team thanks to some aggressive tactics and a broken jib sheet which crippled the Kiwis on the final lap.
Larry turned up to the regatta, held in the Baltic off Malmo in Sweden, in his 400+ft yacht. The vessel is the product of a long running feud between him and Jim Clark, formerly of Netscape over who has the biggest toys.
Sadly your correspondent didn't get to see much of the man in person, since the second the race was over he abandoned ship, jumped into a speed boat and was off to his floating gin palace as it's less than affectionately known around the America's Cup paddock.
(brought to you from SV Sleuth's European correspondent)
Oracle (left) jockeys for position
After the race Ellison made a quick escape back to his yacht, leaving his team to clean up the mess he left down under.
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tags: oralce, larry ellison
August 30, 2005 at 05:25 PM | Permalink | Comments (0) | TrackBack
Newspapers are now officially a niche product
Having been beaten to death by Ebay and Craigslist, the San Diego Tribune has decided to waive advertising fees for classified ads for goods under $5,000.
The drop in advertising coincides with a similar drop in readership of print newspapers.
In a story about its move, the newpaper quotes Gordon Borrell, president of Borrell Associates, a media consulting firm in Virginia:
"Seldom has a new medium come along and completely killed another. But . . . the Internet is squeezing newspapers into a niche product. Classified is being walloped."
In an attempt to save face, the newspaper's director of advertising Scott Whitley however maintained that this wasn't a move out of desperation, but rather "about growing readership with content – and advertising is content."
Classifieds are content, he argues, and will help him regain readers that found out that internet not only gives you access to more ads, it also allows you to search them much better and receive better product information.
Whitley is fighting a rising tide, and showing typical behaviour (AKA: denial) for a company in despair.
outdated
photo credit: Carin Araujo
tags: craigslist, advertising, ebay, classified ads
August 29, 2005 at 11:31 PM | Permalink | Comments (0) | TrackBack
Judge issues restraining order against AOL
New York's attorney general Eliot Spitzer and America Online have settled a lawsuit, with AOL agreeing to pay a $1.25m fine for making it too hard for customers to cancel their service with the internet provider.
AOL has been living in its private bubble ever since the world discovered broadband internet. The company tried to hold on to its subscribers by making it very hard and in some cases impossible to cancel their accounts.
In one case, the company refused to cancel a account of a deceased person because their relatives couldn't provide their "screen name", reported the New York Times.
The company itself still is wearing its reality distortion glasses, and pretends to be actually grateful for the settlement.
The company told the New York Times that it was "pleased to have reached agreement" and that is would "assist with the verification of certain member intentions online."
Back in the days when I tried to cancel my AOL account, they just kept offering me additional months of free subscriptions. After six months of not paying for dial up, I finally decided to switch to broadband after all.
AOL is your typical example of a company that just doesn't understand how to compete in today's economy. The websites and blog posts about its horrible customer care record will remain online for years to come. Even if they ever succeed at creating a product that people actually want (no the internet on training wheels that they sell now), they'll have a really hard time convincing consumers to pay them for it.
AOL keeps thinking its customers are at this stage, but little girls grow older
photo credit: Charly Empey
Tags: america online, AOL
August 29, 2005 at 10:39 PM | Permalink | Comments (1) | TrackBack
Apple gets ready for another iPod moment
Rumour mills and websites have gone into overdrive after Apple said that it would make a major new announcement around its iPod music player next week on Wednesday in San Francisco.
The invitation was brief:
"1000 songs in your pocket changed everything. Here we go again.
Please join us at Moscone West in San Francisco on September 7 at 10:00 a.m.
Registration begins at 9:00 a.m. Arrive early for this invitation-only event."
Theoretically Apple could just open a chain of Apple pie stores, but the phrasing of suggests that the announcement is centred around this iPod music player or iTunes music store.
The Motorola iTunes phone would be a good guess. After numerous delays, the device was recently cleared by the FCC. But don't be surprised if Apple goes the extra mile and launches a mobile operator at the same time. The phone so far has failed to charm existing phone companies because it forces them to loosen the grip on their customers (read: fewer ring tones and less data traffic = less revenue).
A video iPod would be another good guess, although analysts have suggested that such a device won't be ready until 2006.
Number three would be the obligatory update of the iPod Shuffle, adding a display and possibly radio tuner to the device.
I'm putting my money on the Motorola phone plus Apple Mobile phone company, but we'll all have to wait until next week until we know for sure.
Steve Jobs earlier this year at MacWorld in San Francisco
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August 29, 2005 at 08:47 PM | Permalink | Comments (1) | TrackBack
The Windows hole that isn't
For every story that makes it into the media, a dozen is killed before a single word is written about them.
Russian security expert Igor Franchuk discovered a weakness in Windows that could be used to hide certain information.
Without going into too much detail: it could allow an application to go into the Windows registry, add a string and make it invisible. This could for instance be used to make Windows load certain applications when it boots up. A spyware maker would like to be undetectable.
I'm no security expert and nor do I pretend to be one, so the fact-checking began.
Microsoft confirmed the vulnerability, but also pointed out that it occurs in the "Registry Editor", not in Windows itself. For the rest followed the standard statements that the company is looking into the issue.
Microsoft has to be cautious, and I don't blame them for it. They have to take every flaw extremely seriously or risk getting flamed later on.
On to Symantec to see what they made out of this. They actually invested the time and effort to see if they could replicate the flaw, and more importantly, cause any harm.
Symantec's answer was extremely clear:
"While you can create an extra long reg key, it does not look like the information can actually be saved/stored/exported from the key itself. We tried exploiting it and came up with nothing. So while the vulnerability is valid, the ability to exploit it to accomplish any misdeeds is unproven at this point (and presumably unlikely)," director of product management David Cole wrote in an email.
What might have been a story, several hours later turned out to be just a blog posting about a security hole that isn't.
---
update:
litterarly 2 minutes after this post was published, Cnet News.com published a report claiming that this "allows hackers to hide the presence of their applications," according to security vendor StillSecure.
The error in StillSecure's reasoning however is that they mistake an flaw in a Windows tool for a system vulnerability. There are plenty of tools that WILL display the "hidden" registry entries.
tags: symantec, microsoft, windows, security
August 27, 2005 at 01:09 AM | Permalink | Comments (0) | TrackBack
Evil virus writers busted
Police in Morocco and Turkey have arrested two individuals for their role in the design and releasing of the Rbot, Zotob and Mytob viruses.
The good news is that two delinquents are off the streets, the bad news is that they were stupid enough to get caught.
Let's hope for 21 year old Atilla Ekici that the prisons in Turkey still operate in a similar way to what was shown in the movie Midnight Express, and that 18-year old Farid Essebar is treated in a similar way. They are responsible for knocking down computer systems for many corporations including the New York Times, ABC, American Express and Kraft Foods.
But the duo also represents a bygone era in virus writing: the time of the mega worms. Clever virus writers create worms that infect only a few computers, in an effort to stay under the radar of authorities and anti-virus software.
Creating large scale worms like Zotob makes you an easy target. Microsoft, playing an instrumental role in the capture of Ekici and Essebar, can use the case to show the world its dedication to fighting viruses.
This isn't that much different from the judicial strategies in many countries. They will crack down on highly visible petty crimes that hit civilians, but are less focused on tackling organised crime – as long as it doesn't come out into the open.
It's impossible to stop all crime, so you create the illusion that you do. It also is impossible to stop all virus writers, but at least you want to create the illusion that you have the situation under control.
photo credit: Alvaro Prieto
August 27, 2005 at 12:43 AM | Permalink | Comments (0) | TrackBack
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