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 Above the Fold
   News from Eiler Communications
March 2010
Newsletter Contents

IPOs in Disfavor,

Try an IPE

Video Display Ads for Google: Next Big

EA Takes a Hit

EiR:  Familiar?


About Eiler

Eiler Communications is a public relations and marketing communications firm in Ann Arbor, MI.  We specialize in new and traditional media marketing, serving established and emerging companies in the communications
technology, financial services, biotechnology and healthcare industries.


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AnewtermisemergingA new term is emerging in investments.  It's IPE, initial private equity, which is coming into favor among hot tech companies who need capital and want to reward their employees rather than make them await an IPO, initial public offering.  Read on.
IPOsindisfaavor.tryandIPEIPOs in Disfavor.  Try an IPE

Employees of hot tech companies have found a new way to cash in - way earlier than waiting for their firms to do IPOs, initial public offerings.  It's initial private equity (IPE), reports Bloomberg BusinessWeek (Feb 22).

Going public has been the hallmark of emerging tech companies - on and off according to the current financial picture - for many years.

Now, it's IPE.  Facebook led the pack last year with its $200 million from a Russian investment firm. Followed by Twitter which got $100 million in private funding.

There were only three IPOs in 2009 and hotshot new companies are now focused on getting private-equity investments that give them operating cash AND reward some employees by tendering for some part of their private stock.

Yelp, the very hot six-year-old web site that provides reviews of local stores, restaurants across the nation, recently took a $100 million investment by Elevation Partners, a private equity firm, to help it finance growth.  $75 million will go toward a tender for employees' shares and $25 million toward growth.

- Larry Eiler

videodisplayadsVideo Display Ads for Google: Next Big Thing?

Google and Search are synonymous.  The innovative company has 100 or more products (Analytics, Maps, AdSense, Calendars, Images).  But the bulk of its revenue, something over 90 percent, comes from searches.  In December, 87.8 billion searches were conducted on Google: 2.8 billion (2,800,000,000) a day!

Now, the firm may have new growth come from display advertising (videos, banner ads) on YouTube (Google bought it five years ago), which Bloomberg BusinessWeek claims may by its first billion-dollar revenue generator apart from search ads.

Yahoo is the leader in the segment but analysts forecast that Google can grow as much as 40 percent, to $1 billion revenue, with the new tools it is developing new products to help users customize colors, languages and measure the ads effectiveness - something all advertisers love.

EA Takes a Hit

Electronics Arts, paragon of the electronic games market for many years, is taking a big hit as people find new, less costly or free games across the Internet

In a trend identified three years ago, people began turning away from the well known sh
rink-wrapped games, sending EA into a tailspin in which it lost money several quarters in a row - and had its stock drop by two-thirds.

It's a traditional high-tech problem - a newer, cheaper, better alternative comes into play and the older, traditional method of selling - as with the $60 shrink-wrapped video games - is shunted aside.

Stay tuned to see how EA can grow its digital business to supplant the loss of traditional games, still 80 percent of total revenue.(BusinessWeek)

EIR:FamliarEiR:  Familiar?

With venture capital firms struggling to find the "next new thing," Executive in Residence (EiR) programs are a new form of delivery that Silicon Valley venture firms have initiated.

The New York Times reported that some VC firms are providing comfortable surroundings for proven entrepreneurs to work in for a period while they are well paid and free to develop their ideas.

The concept is to get investors connected to entrepreneurs who develop their ideas while being paid - a far cry from the in-home creative ideas that many firms have modeled in the past.

Lots of business schools and technology infrastructure groups have such EIR programs for different reasons.  The difference here: people who have succeeded in other ventures are encouraged to build their ideas at some else's risk.  

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