AllThingsD » JPMorgan Chase

Workday Is Looking for Bankers to Help It Go IPO in 2012

Arik Hesseldahl — Fri, 23 Dec 2011 12:22:36 +0000

Aneel Bhusri

The pre-IPO buzz around the cloud-based human resources software company Workday has officially begun. Bloomberg News reported yesterday that Workday has started looking for banks to guide it through the process toward an offering that would raise as much as a half-billion dollars. Among those under consideration are Allen & Co., Morgan Stanley, Goldman Sachs and J.P. Morgan Chase.

Allen is said to have advised Workday on its recent funding round, which closed in October. As exclusively reported by AllThingsD at the time, Workday raised $85 million at an implied valuation of $2 billion. The Series F was led by T. Rowe Price, Morgan Stanley Investment Management, Janus and Bezos Expeditions, the personal investment entity of Amazon CEO and founder Jeff Bezos. Bloomberg also says that Michael Dell’s personal investment vehicle, MSD ventures, was in on that funding round, which grew to $100 million since the closing.

Previous investors include Dave Duffield and Greylock Partners, who are in for $90 million across four rounds; and New Enterprise Associates, which joined a $75 million Series E round in 2009.

Apparently encouraged by the successful IPO of Jive Software earlier this month, and the performance of its shares, which are up nicely since the debut, Workday now appears poised go through with the IPO that CEO Aneel Bhusri (pictured) hinted in October would take place during the second half of 2012.

And there’s no question that Workday is in a hot space. SAP’s $3.4 billion acquisition of SuccessFactors last month, plus Salesforce.com’s deal for Rypple last week, attest to the urgency with which larger companies want to be in the HR software business.

Think about it: Every company — of any size — needs to keep track of its people, their salaries, performance-review information and so on. And why bother with software that runs on the local machines, when the cloud is so much more efficient?

Bhusri was a senior executive and co-chairman of PeopleSoft’s board, and was on hand for that company’s hostile takeover by Oracle. After losing that battle, he and co-founder Dave Duffield concluded that the next battlefield for enterprise software would be in the cloud.

Workday’s average customer has between 10,000 and 15,000 employees. Among its 250-odd customers, the biggest is Flextronics, the huge electronics manufacturing company, which has 200,000 employees. Others include Time Warner, Thomson Reuters, Chiquita Brands and, perhaps unsurprisingly, Salesforce.com. Workday has some two million employees in its system.

And while there’s no S-1 filing with the US Securities and Exchange Commission to peruse yet, the IPO watch on Workday officially begins now.

Bring in the Suits: Yahoo Hiring Strategic Advisers to Plot Next Moves

Kara Swisher — Wed, 07 Sep 2011 03:54:46 +0000

Yahoo is preparing to hire investment bankers and other strategic advisory firms, said sources close to the Silicon Valley Internet giant, as it seeks to figure out what to do next at the company.

The board of Yahoo, which ousted its CEO Carol Bartz today in a unanimous decision, is exploring a range of possible strategies to turn around its moribund growth, including possible acquisitions, shedding units, bringing in new investment partners and even taking the company private or selling it.

A sale is the least likely of options, said sources close to the situation, but — given today’s news — Yahoo might attract a lot of attention from investors seeking to take advantage of the company’s powerful but troubled assets.

“It is all on the table,” said one source close to the company.

Independent board member David Kenny, president of Akamai, is heading the strategic options committee in charge of managing the process, sources said.

No adviser has been selected yet, but sources said Yahoo is likely to hire Allen & Co., which advises many tech and media firms. It is currently advising AOL, for example.

Other candidates would likely be the typical panoply of choices, including big investment banks like JPMorgan Chase, Goldman Sachs and Morgan Stanley, and smaller boutique firms such as Qatalyst Group and Code Advisors.

Sources said whoever is hired will be charged first with doing an extensive review of the company that is more intensive than has been done before.

“There is a potential for enormous growth that the company has not been capitalizing on and should,” said another source. “The board needs to get this company on a trajectory for growth.”

Indeed, it does, as it has not under the leadership of Bartz. Revenue growth has stalled and product innovation has lagged.

The company will also be conducting a search for a CEO, which will be difficult because any new top exec will want to be part of such a companywide review.

Yahoo’s choice of an executive search firm has also not been determined, but is likely to be one of the big companies that specialize in the arena.

One thing is certain, said multiple sources: Yahoo will continue to focus itself as what it has previously called a “premier digital media company.”

What that means now, of course, will be determined in the months ahead.

Meet Andreessen Horowitz’s Newest Partner: Mark Cranney

Arik Hesseldahl — Sat, 15 Jan 2011 00:01:41 +0000

Venture capital firm Andreessen Horowitz has named Mark Cranney–a veteran tech executive with more than 20 years of experience in senior positions at Hewlett-Packard, Opsware and Parametric Technology–as its newest partner today. He’s been entrepreneur-in-residence at the firm for about seven months.

His role will be a little different from that of most other VC partners. As AH’s partner for “market development,” rather than evaluate new deals he’ll spend his time on developing the sales and go-to-market strategies of companies that the firm has already invested in.

AH co-founder Ben Horowitz said it’s all part of the firm’s preference for founders becoming CEOs. “The thing that’s most difficult, especially for a technical founder, the most difficult thing to learn is sales. It’s the most difficult thing to learn operationally,” Horowitz told me. “If you don’t have experience with sales, it can cause you to fail as a founding CEO.”

It turns out that Cranney knows a thing or two about sales, and his history with Horowitz and AH’s other co-founder Marc Andreessen runs deep. Cranney spent four years as vice president of worldwide field operations at Opsware, which Andreessen and Horowitz sold to HP in 2007 for $1.65 billion. During that time Cranney’s team grew from 10 to 350 and sales grew from $18 million to $150 million. Horowitz wrote last year about how he came to hire Cranney at Opsware and how he possesses what Horowitz calls “the right kind of ambition.”

Cranney said that sometimes new companies get so focused on selling their new product or service that they forget to consider the larger backdrop of what’s going on inside a potential customer’s operations. “You want to help them avoid looking like a hammer in search of a nail,” Cranney told me. “There’s a systematic way of helping companies identify what’s going on in particular industries and companies and how they can tie what they do to projects already underway.” He’s also building out a network of contacts at large companies–including the Walt Disney Company, FedEx and JPMorgan Chase–that could become potential customers of the companies in the AH portfolio.

He’ll be focused on helping companies in the AH portfolio build their sales talent, and help them grapple with tricky issues like moving from “freemium” to premium business models, working with partners, identifying customers and responding to competitors.

One company he’s already worked with is Apptio, which helps companies manage their IT costs. It’s also notable for being the first investment that AH made. “They’ve had explosive growth in the last year and have been staffing up their sales teams,” Cranney said. “They had been a little concerned that these teams weren’t ramping up fast enough,” he said. Cranney helped Apptio develop a sales training program.

Besides Opsware, Cranney’s prior jobs include time at Aster Data, where he was executive VP of worldwide field operations, and a position as vice president for the Americas at Hewlett-Packard’s software and solutions business. He was also a vice president at Parametric Technology.

It’s another sign of growth at Andreessen Horowitz, which debuted in 2009 with a $300 million fund, then raised a bigger one of $650 million in November. It has recently taken positions at Groupon and Facebook on the consumer side. Its enterprise investments besides Apptio have included stakes in Okta and Fusion-io.

Yahoo Earnings Preview: Cheat Sheets

Kara Swisher — Tue, 20 Apr 2010 08:22:17 +0000

Yahoo will announce its first-quarter earnings after the markets close today and have a call with Wall Street analysts at 2 pm PT.

BoomTown will be liveblogging the proceedings, of course.

Until then, here are preview reports about Yahoo (YHOO) from a pair of sharp analysts: Imran Khan of J.P. Morgan (JPM) and Mark Mahaney of Citigroup (C).

Overall take: Recovery mode for the Internet giant, due to an upswing in display advertising online, which has been a good thing for the stock. It has risen smartly to prices above $18 in recent weeks, closing yesterday at $18.39.

Khan:

Yahoo Inc: 1Q’10 Earnings Preview: Expect Display Ad Recovery to Continue

Overweight

We are modeling Yahoo! 1Q revenue to be flat on a Y/Y basis (down 8% Q/Q) to $1.16B, slightly below consensus of $1.17B. We expect Yahoo! to achieve 1Q pro forma EPS of $0.14 vs. consensus of $0.13. Given macro-economic improvements as well as company specific changes, we feel that there may be upside to guidance of gross revenue of $1.58B to $1.68B and our estimate of $1.63B.

Display advertising should recover. We are modeling 7% Y/Y growth (down 21% Q/Q) on O&O display revenue. This would be an acceleration from last quarter’s down 1% Y/Y performance. We feel confident in our estimate and think there could potentially be upside as the ad environment improved throughout the quarter and we see guaranteed inventory showing the largest improvement. We note that page views on the homepage, Yahoo! sports, and Yahoo! finance were up 5% Y/Y, 24% Y/Y, and 2% Y/Y during the quarter, according to comScore data.

Search market share shows signs of stabilization. However, despite this positive data point in March, we continue to expect 1Q search revenue growth to underperform Google due to modest market share loss earlier in the quarter, and as advertisers are moving ad dollars from the Yahoo! Platform in anticipation of the migration to the Microsoft Platform. We are modeling 1Q O&O search revenue to decline 10% Y/Y (3% sequentially), as comScore data suggests US queries declined 10% Y/Y.

Margins should continue to improve. We feel good about our EBITDA estimate of $370M, roughly in-line with consensus of $372M. Our EBITDA margin est. of 32.1% implies a 370 bp Y/Y decline as we expect increased marketing spend. However, we think there may be upside to this number.

Key things to look for on the call. We are hoping to attain more insight into Microsoft synergies, the ramp-down of search related expenditures and the outlook on search RPS.

Reiterating our OW rating. Yahoo! trades at 6x our F’10 EV/EBITDA vs. the large cap peer group ave. of 12x. We think this discount is unjustified and reiterate our OW rating and $21 price target.

Mahaney:

From: “Mahaney, Mark “
Date: Mon, 19 Apr 2010 11:18:10 -0400
To: Undisclosed recipients
Subject: Flash: YHOO: YHOO Q1:10 “Cheat Sheet”

Yahoo! is expected to report Q1 earnings on April 20th, after the close. For the March quarter, we are looking for Gross Revenue of $1.63B, Net Revenue of $1.16B, EBIT of $100MM and GAAP EPS of $0.09 vs. consensus estimates of Gross Revenue of approximately $1.63B, Net Revenue of $1.17B, EBIT of $108MM, and GAAP EPS of $0.09. Based on intra-quarter channel checks and our model sensitivity work, we believe Street Q1 estimates are reasonable, with no material signs of upwards or downwards variance. We do note that YHOO will give additional detail on one-time payments and cost savings from the YHOO-MSFT Search deal, which received regulatory approval in Q1.

Read-Thru From Google’s Q1 Results–We believe GOOG’s Q1 results provided a modestly positive read-thru for YHOO’s Q1 EPS results. Google’s U.S. revenue growth showed Y/Y acceleration (even after we adjusted for its Nexus One sales), and Google noted that it saw strength in every vertical, including Retail, Travel, Entertainment, Finance and CPG. Google also noted that Q1 showed a resurgence among large advertisers. We note that Yahoo!’s business is heavily weighted towards the U.S., and that its key verticals include Finance, CPG, Autos, and Entertainment. Finally, YHOO has a strong focus on large, branded advertisers, so we believe Google’s Q1 results should provide a positive outlook for YHOO Q1.

Our YHOO Q1 “Cheat Sheet” [see embedded below]–On page 2, we provide a one-page grid of what we would view as Positive, Neutral & Negative results for YHOO on Key Q1 P&L Items, Key Q1 Underlying Metrics, and Q2 Guidance. This Cheat Sheet will hopefully provide a guide to interpreting YHOO’s results.

We reiterate our Buy & $22 PT–Our Long Thesis: 1) YHOO will participate in an Ad recovery that is already showing real traction on the ‘Net; 2) New management focus significantly increases odds of sustained operating margin expansion; 3) YHOO has highly attractive Asian Internet portfolio & 4) @ 6X ’10 EV/EBITDA, YHOO shares don’t fully reflect 1, 2, 3… We view YHOO as the Large Cap Internet Turnaround/Value Play.

Link to our full note: https://www.citigroupgeo.com/pdf/SNA54039.pdf

SNA54039

Microsoft Gets Brainy New Board Member: Maria Klawe (and Announces 13-Cent Dividend)

Kara Swisher — Mon, 09 Mar 2009 22:54:01 +0000

Maria Klawe, the president of Harvey Mudd College, has just been named as the 10th member of the Microsoft board.

The company also announced “that the board of directors declared a quarterly dividend of $0.13 per share. The dividend is payable June 18, 2009, to shareholders of record on May 21, 2009.”

Klawe’s appointment is interesting. She is rather sharp–what a shock–according to her bio, which lists impressive credits as a computer scientist.

Said a Microsoft (MSFT) spokesperson:

“Klawe has made significant research contributions in several areas of mathematics and computer science including functional analysis, discrete mathematics, theoretical computer science, and the design and use of interactive multimedia for mathematics education.”

Klawe is the second woman on the board, after Dina Dublon, former chief financial officer of JPMorgan Chase (JPM).

In a statement, Klawe said she would make sure Microsoft would pay more attention to gender issues.

Said Klawe:

“The underrepresentation of women in the fields of science and engineering is one of the critical issues facing the computing industry….I’m looking forward to helping the company continue to make progress on this important issue.”

BoomTown is with you on that, Maria.

Here’s the full press release, after the jump:

Microsoft Adds New Board Member and Declares Quarterly Dividend
Maria Klawe, Ph.D., leading computer scientist and educator, to join board; dividend of $0.13 per share payable in June.

REDMOND, Wash.–March 9, 2009–Microsoft Corp. today announced that Maria Klawe, Ph.D., president of Harvey Mudd College, was appointed to the company’s board of directors, returning the board’s size to 10 members. The company also announced that the board of directors declared a quarterly dividend of $0.13 per share. The dividend is payable June 18, 2009, to shareholders of record on May 21, 2009. The ex-dividend date will be May 19, 2009.

“Maria has made significant research contributions to computer science and mathematics, and we are very fortunate to have her join Microsoft’s board of directors,” said Bill Gates, Microsoft chairman. “In particular, I think her close connection to university students and the way they shape computing trends will bring an important perspective to the board.”

Klawe has been president of Harvey Mudd College–a highly regarded private liberal arts college in Claremont, Calif., that focuses on engineering, science, and mathematics–since 2006. Before joining Harvey Mudd College, she served as dean of engineering and a professor of computer science at Princeton University from 2003 to 2006, and held several positions at the University of British Columbia from 1988 to 2002 including dean of science, vice president of student and academic services, and head of the Department of Computer Science. She also worked at IBM Research in California for eight years, and held academic positions at the University of Toronto and Oakland University.

“Through her strategic planning work at Harvey Mudd College, Princeton and elsewhere, Maria has demonstrated the kind of long-term vision and focus that we were looking to add to the board,” said Steve Ballmer, Microsoft CEO. “In addition, there’s no doubt that she brings a solid grasp of the technologies that will be important to Microsoft’s future growth opportunities.”

“Computing, and the role it plays in people’s lives, is on the verge of an incredible transformation,” Klawe said. “Microsoft plays a unique role in shaping the impact that technology has on society, and I’m excited to join Microsoft’s board at this point in computing history.”

Klawe was the first woman to serve on the board of the Computing Research Association and she co-founded CRA-W, the highly successful Committee on the Status of Women. She has served on the board of the Anita Borg Institute for Women and Technology since its inception and as chair from 2003–2008. From 1997–2002 she held the IBM-NSERC Chair for Women in Science and Engineering for British Columbia and the Yukon, and led several research studies and projects related to increasing the participation of women in computing.

“The underrepresentation of women in the fields of science and engineering is one of the critical issues facing the computing industry,” Klawe said. “Microsoft has been active and focused in helping to address this challenge, and I’m looking forward to helping the company continue to make progress on this important issue.”

Klawe is also a past president of the Association of Computing Machinery (ACM), a trustee of the Mathematical Sciences Research Institute in Berkeley, Calif., and a member of the board of Math for America. She is a fellow of ACM and the Canadian Information Processing Society and the recipient of numerous awards including the Computing Research Association’s Nico Habermann Award. Klawe holds several honorary doctorate degrees in the areas of science and mathematics. She received her Ph.D. and bachelor of science in mathematics from the University of Alberta.

Klawe has made significant research contributions in several areas of mathematics and computer science including functional analysis, discrete mathematics, theoretical computer science, and the design and use of interactive multimedia for mathematics education. Her current research interests include discrete mathematics, serious games and assistive technologies.

In addition to Klawe, Microsoft’s board of directors consists of Bill Gates, Microsoft chairman; Steve Ballmer, Microsoft CEO; James I. Cash Jr., Ph.D., James E. Robison professor and senior associate dean emeritus of Harvard Business School; Dina Dublon, former chief financial officer of JPMorgan Chase; Raymond V. Gilmartin, former chairman, president and CEO of Merck & Co. Inc.; Reed Hastings, founder, chairman and CEO of Netflix Inc.; David F. Marquardt, general partner at August Capital; Charles H. Noski, former vice chairman of AT&T Corp.; and Dr. Helmut Panke, former chairman of the board of management at BMW AG.

WaMu: Epic Bail

John Paczkowski — Fri, 26 Sep 2008 07:37:51 +0000

Add Washington Mutual (WM) to the list of troubled financial institutions felled by the current economic crisis. Thursday night, the lender was seized by federal regulators and sold to JPMorgan Chase (JPM) for $1.9 billion in hopes of preventing further damage to the country’s hard-hit economy. Under the deal, JPMorgan will acquire all of WaMu’s banking operations, including $307 billion in assets and $188 billion in deposits. “This institution was a big question mark about the health of the deposit fund,” said Sheila Bair, chairwoman of the Federal Deposit Insurance Corporation, on a conference call yesterday. “It was unique in its size and exposure to higher risk mortgages and the distressed housing market. This is the big one that everybody was worried about.”

WaMu’s failure is historic–the largest bank bust on record. The company’s assets are equivalent to about two-thirds of those held by the 747 insolvent thrift institutions and sold off by the Resolution Trust during the S&L crisis.

With more than 20 percent of global technology spending coming from the financial industry, WaMu’s failure and the collapse of other institutions are certain to have repercussions in tech. “This is game-changing,” Gartner (IT) analyst Joanne Correia said of the economic crisis recently. “People are going to stop new software deployments. They’ll cut in the applications space. In PCs and servers, everyone will stop putting in new hardware.”

PREVIOUSLY:

[Image Credit: Ape Lad/Flickr]