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HP today (August 26, 2008) announced that it has completed its acquisition of Electronic Data Systems Corporation (EDS) at enterprise value of approximately US$13.9 billion, creating a leading force in technology services.

It also revealed that EDS’ top-level management structure would remain largely unchanged.HP had already made it clear that EDS president and CEO Ron Rittenmeyer, would continue in a leadership role. On Tuesday, it confirmed that Rittenmeyer’s direct reports would include key executives from EDS continuing in their roles as vice presidents overseeing various regions of the world as well as functions such as global sales, transformation, outsourcing and marketing.

The lack of a top-level management shuffle or purge did not surprise one industry observer.

The acquisition is, by value, the largest in the IT services sector and the second largest in the technology industry, following HP’s acquisition of Compaq, which closed in 2002. The companies’ collective services businesses, as of the end of each company’s 2007 fiscal year, had annual revenues of more than $38 billion and 210,000 employees, operating in more than 80 countries.

“No real surprises here so far,” said Forrester Research analyst Paul Roehrig, via e-mail. “It’s very much in line with the original strategy to fold much of the legacy HP services capability into the EDS management framework.”

EDS will handle outsourcing services previously provided by HP’s Technology Solutions Group, which will focus instead on designing, installing and maintaining systems for customers, HP said.

HP plans to reveal more about its plans for EDS on Sept. 15, when CEO Mark Hurd appears at a meeting Webcast for securities analysts.

The massive deal which sets up a pitched battle between HP and IBM for dominance in the services arena created a combined services business with nearly $40 billion in annual revenue and more than 200,000 employees as of the end of fiscal 2007, according to HP.

New EDS leadership team
Rittenmeyer announced his leadership team for the new business group, representing a mixture of existing EDS direct reports, as well as new appointments from within EDS and HP. His direct reports are:

• Michael Coomer, 55, senior vice president, Asia Pacific & Japan, who held a similar role at EDS.
• Joe Eazor, 46, senior vice president, Transformation. He was previously responsible at EDS for corporate strategy and business development.
• Bobby Grisham, 54, senior vice president, Global Sales, who held a similar role at EDS.
• Jeff Kelly, 52, senior vice president, Americas, who held a similar role at EDS.
• Mike Koehler, 41, senior vice president, Infrastructure Technology Outsourcing (ITO) & Business Process Outsourcing (BPO), who held a similar role at EDS.
• Andy Mattes, 47, senior vice president, Applications Services. He was previously senior vice president, HP Outsourcing Services.
• Maureen McCaffrey, 45, vice president, Worldwide Marketing, who held a similar role at EDS.
• Dennis Stolkey, 60, senior vice president, U.S. Public Sector, who held a similar role at EDS.
• Bill Thomas, 48, senior vice president, Europe, Middle East & Africa, who held a similar role at EDS.

In addition, functional support will be provided by the following individuals, who will report into global functions at HP, consistent with the company’s organizational model. They are:

• Craig Flower, 46, senior vice president of IT, reporting to Randy Mott, executive vice president and chief information officer at HP. Flower was previously HP’s senior vice president for eBusiness, customer and sales operations.
• Tom Haubenstricker, 46, vice president, Finance, reporting to Cathie Lesjak, executive vice president and chief financial officer at HP. Haubenstricker was previously vice president and chief financial officer for EDS’ EMEA region.
• Deborah Kerr, 36, vice president and chief technology officer, reporting to Shane Robison, executive vice president and chief strategy and technology officer at HP. Kerr was previously HP’s vice president and chief technology officer for services.
• Mike Paolucci, 48, vice president, Human Resources, reporting to Marcela Perez de Alonso, executive vice president of Human Resources at HP. Paolucci was previously EDS’ vice president of Global Compensation and Benefits/HR Business Development.
• Sylvia Steinheiser, 43, vice president, Legal, reporting to Mike Holston, executive vice president, general counsel and secretary at HP. Steinheiser was previously HP’s vice president, Legal, for the Americas.

Source: HP News Release | The New York Times

- Sakin

On March 11, 2008 Google Inc. (NASDAQ: GOOG) officially announced the completion of their formal acquisition of major advertising firm DoubleClink Inc., for US$ 3.1 Billion in cash from equity firm Hellman & Friedman. The purchase, originally announced nearly a year ago, has had it’s fair share of detractors and legal hurdles to clear before going ahead, with the Federal Trade Commission (FTC) grinding negotiations to a halt shortly after the original announcement. However, the FTC finally gave the green light on the deal in DecemberDoubleClick Inc, is a premier provider of digital marketing technology and services. The world’s top marketers, publishers and agencies utilize DoubleClick’s expertise in ad serving, rich media, video, mobile, search and affiliate marketing to help them make the most of the digital medium. From its position at the nerve center of digital marketing, DoubleClick provides superior insights and insider knowledge to its customers.

With the acquisition of DoubleClick Inc, Google Inc. (NASDAQ: GOOG) now has the leading display ad platform, which will enable them to rapidly bring to market advances in technology and infrastructure that will dramatically improve the effectiveness, measurability and performance of digital media for publishers, advertisers and agencies, while improving the relevance of advertising for users.

According to Startup Earth, Google CEO Eric Schmidt has warned existing employees of Doubleclick that the search giant has not yet decided who they will fire from the online advertising firm, and has ordered doubleclickers to submit their resumes to a Google committee for immediate review. Here’s a snippet from the post:

One of the more obvious areas where Google may downsize is within the DoubleClick owned search marketing company Performics. It’s been noted that when Google acquired DoubleClick, they also acquired Performics, making them the owners of a search engine optimization and link building company.

- Sakin

- Edited By Sakin Shrestha, 6-March 2008

Warren Buffett estimated net worth $62 Billion, the famed U.S. investor who heads Berkshire Hathaway Inc (BRKa.N), replaced his friend and Microsoft Corp (MSFT.O) founder Bill Gates as the richest man in the world, Forbes magazine said on Wednesday (5-March-08).

Mexican telecoms tycoon Carlos Slim came in second with an estimated worth of $60 billion, pushing Gates to third place after 13 years of holding the No. 1 spot.

The list of billionaires has almost doubled in the past four years, Forbes said. There were 469 U.S. billionaires, worth a combined $1.6 trillion, while the 656 billionaires who live outside the United States are worth $2.8 trillion.

Russia came in second place as home to 87 billionaires and Moscow is now the world’s billionaire center, the magazine said. The Russian capital is now home to more billionaires than New York City.

India, China and Turkey also saw large gains in numbers of billionaires.

The world’s youngest billionaire is 23-year-old Mark Zuckerberg, founder of social networking Web site Facebook. The magazine estimated his worth at $1.5 billion and said he is the youngest self-made billionaire to ever appear in the Forbes billionaire rankings.

List of Top 20 Billionaires in the World by Forbes Magazine
1. Warren Buffett; US Citizen, est. net worth $62 Billion.
2. Carlos Slim Helu; Mexico citizen, est. net worth $60 Billion.
3. Bill Gates (William Gates III); US Citizen, est. net worth $58 Billion.
4. Lakshmi Mittal; Indian Citizen, est. net worth $45 Billion.
5. Mukesh Ambani; Indian Citizen, est. net worth $43 Billion.
6. Anil Ambani; Indian Citizen, est. net worth $42 Billion.
7. Ingvar Kamprad; Sweden Citizen, est. net worth $31 Billion.
8. KP Singh; Indian Citizen, est. net worth $30 Billion.
9. Oleg Deripaska; Russian Citizen, est. net worth $28 Billion.
10. Karl Albrecht; Germany Citizen, est. net worth $27 Billion.
11. Li Ka-shing; Hong Kong Citizen, est. net worth $26.5 Billion.
12. Sheldon Adelson; US Citizen, est. net worth $26 Billion.
13. Bernard Arnault; French Citizen, est. net worth $25.5 Billion.
14. Lawrence Ellison; US Citizen, est. net worth $25 Billion.
15. Roman Abramovich; Russian Citizen, est. net worth $23.5 Billion.
16. Theo Albrecht; Germany Citizen, est. net worth $23 Billion.
17. Liliane Bettencourt; French Citizen, est. net worth $22.9Billion.
18. Alexei Mordashov; Russian Citizen, est. net worth $21.2 Billion.
19. Prince Alwaleed; Saudi Arabia Citizen, est. net worth $21 Billion.
20.Mikhail Fridman, Russian Citizen, est. net worth $20.8 Billion.

Source: Forbes Magazine Annual World’s Billionaires List 2008

The depth of Microsoft’s online problem became clear 18 months ago, when Google trumped its bid to handle search advertising for MySpace, the popular social networking site.

MySpace owner News Corp. (NWS) liked Microsoft (MSFT) well enough. But it had to go with the money. Because Google (GOOG), the top search engine, could guarantee a larger audience and thus more revenue in a search deal, it won the MySpace account. “They said to Microsoft, ‘Look, if you can get there in revenue we’d prefer to go with you,’ ” said a source familiar with Microsoft’s side of the negotiations. “It came down to a pure economic decision.”

Technology battles often unfold like sumo matches, where the biggest companies win by pushing opponents around – and Microsoft, the world’s largest technology company by market value, has dominated the wrestling ring for years. But in the online world, Microsoft finds itself in the unusual position of small fry, getting shoved aside by Google.

Microsoft CEO Steve Ballmer has cited Microsoft’s online size disadvantage as the reason he is pushing ahead with a hostile bid of more than $40 billion for Yahoo (YHOO). To get the deal done, he is prepared to break two unspoken rules that have guided Microsoft purchases in the past: Microsoft never buys mega-companies, and it never forces itself on folks who don’t want to be bought.

The reason why Ballmer is willing to take drastic measures? Google is doing to the online advertising market what Wal-Mart (WMT) did to small-town retailers. Much as Wal-Mart turned its huge selection and crowds of customers to out-sell competitors, Google has used its search engine’s popularity to pull in advertisers and get them more bang for their marketing buck. Just as many manufacturers feel they must sell their products through Wal-Mart to reach consumers, advertisers feel they must deal with Google to get results. As Microsoft has lost ad deals time and again, it has become clear to executives that they need to take a bold step.

“Microsoft has been slow to gain critical mass in an area where this is the key to success,” Goldman Sachs analysts wrote in a note earlier this year. “The online advertising industry has the growth and market potential to move the needle, even for a company of Microsoft’s size.” A combination with Yahoo would arguably give Microsoft a greater share of the online audience, which should drive more searches, attract more advertisers, and bring in more money.

Back to the wrestling metaphor, there is more at stake for Microsoft than just the embarrassment of losing. The software giant, which rakes in billions of dollars in cash every quarter from sales of its Windows operating system and Office productivity software, is used to getting occasionally manhandled by opponents when it enters new markets. But in the past, Microsoft has always been able to use its juggernaut size and financial resources to gradually wear down opponents. But with Google, that old wrestling technique just isn’t working in online advertising.

By itself, Google’s advertising dominance might not be such a big problem – except that the online company is using its advertising bulk to wrestle its way into markets that Microsoft has long dominated. Google’s online-based software for documents and spreadsheets offers an alternative to Microsoft Office, and its relationship with the organization behind the Firefox web browser threatens Internet Explorer. Perhaps most alarming to Microsoft, Google has aggressively supported non-Microsoft cell phone software through its promotion of its own Android phone software and its services for Apple’s (AAPL) iPhone.

Microsoft has pooh-poohed Google’s software efforts, pointing out that Google’s software lacks the features and polish of more mature offerings, and that Google’s software efforts aren’t profitable. But even as it downplays Google’s efforts, there’s clear cause for worry: These are the same put downs Microsoft competitors like Apple, Netscape and Palm (PALM) once aimed at Microsoft when it challenged their products with Windows, Internet Explorer and Pocket PC. Tech historians know how those battles turned out; because Microsoft’s core businesses allowed it to keep improving its new products, it eventually surpassed its rivals.

To keep Google from accomplishing the same trick, Microsoft needs to mount a convincing challenge in online advertising. And to do that, Microsoft has to get big, fast. That’s why, even though Yahoo is resisting a deal, Microsoft will likely move quickly to get a deal done as soon as the end of 2008. A source with knowledge of Microsoft’s legal strategy says that once Microsoft makes shareholders an official offer to buy out their shares, federal regulators can begin reviewing the deal – a process that Microsoft believes could be wrapped up in six to nine months.

Why the need for speed? Google gets stronger by the day. And once Google gets international approval for its purchase of ad powerhouse DoubleClick — a development that could happen soon — its Internet empire will begin to gather so much momentum, and size, that it might shove Microsoft out of the online advertising ring for good.

(Source: Fortune Magazine)

- Sakin

Microsoft announced a sweeping shake-up of its executive ranks Thursday, placing new executives over operations facing fierce new competition from Google, Apple and cellphone makers.

The announcements were part of a broad management reorganization involving seven new senior vice presidents and seven new corporate vice presidents.

One of the more significant leadership changes was in the cellphone operations. Andy Lees was named senior vice president for mobile communications operations. Mr. Lees, who had overseen the server business, succeeds Pieter Knook, who, the company said, “made the decision to leave Microsoft to pursue other opportunities.”

Microsoft has been paying more attention to its cellphone business following the introduction of Apple’s iPhone and Google’s Android software operating system. In only a few months of the iPhone’s release, according to Canalys, a market research firm, Apple gained 28 percent of the smartphone market in the United States, a greater share of the market than the cellphones using Microsoft’s Windows Mobile software. Research In Motion, maker of the BlackBerry, leads the category that has been dominated by phones made for business users.

Microsoft is showing more interest in the consumer market. This week it announced it was buying Danger, the maker of the popular Sidekick cellphone.

Analysts said that Microsoft was moving to confront a growing competitive threat from a range of companies that have positioned themselves to offer Web-based alternatives to Microsoft’s core office-productivity applications. The other major change was the replacement of Steve Berkowitz, the current senior vice president of Microsoft’s Online Services group. Mr. Berkowitz, the former chief executive of the online site Ask Jeeves, was hired with great fanfare in April 2006 to help revive Microsoft’s search and portal operations. Microsoft has been unable to make a dent in Google’s growing dominance in search and search advertising. Mr. Berkowitz will leave the company this August, the company said.

Responsibility for online operation was split among three executives who will work in the combined organization that handles both Internet activities and the Windows operating system, which is run by Kevin Johnson.

Satya Nadella, will be the senior vice president for the search, portals and advertising group. Mr. Nadella is on the engineering side of Microsoft, and will look after the technical side of Web search, advertising systems and related systems. He will also have responsibility for the programming of the MSN portal.

Bill Veghte, will be the senior vice president for online services and Windows, handling sales, marketing and product management both for Windows and online operations.

Brian McAndrews, the senior vice president of the advertiser and publisher solutions group, will look after the strategy and marketing of Microsoft’s online activities jointly with Mr. Veghte and Mr. Nadella.

(Source: The New York Times)

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