Sep 15, 2008: Lehman Brothers was the 4th largest investment bank in the world. Why was Hank Paulson smiling the day Lehman Brothers was declared bankrupt? Did he play a role in the denial of US Govt support for Lehman Brothers at a critical juncture? Nobody knows that. But what one surely knows is that Hank Paulson is ex-Goldman Sachs and Goldman Sachs is a long term beneficiary of Lehman Brothers fall. Agreed that Lehman had much higher leverage (about 40x) than its peers (20x), so their balance sheet was much higher in risk. But if US Govt could support other large financial organizations like AIG, Fannie Mae and Freddie Max, maybe they should have offered some “short term support” to Lehman Brothers too. In credit crunch situation, time is all that one needs, and with a bit of time, Lehman could have got a chance to get sell some of its assets to raise capital or raise fresh capital from its long term investors globally. The US Govt’s/ Fed’s attitude of “not a single dollar to support you” towards Lehman Brothers was not logical and it harmed the global financial markets, including US economy.

Some people in Wall Street with influence over the US Govt and US Fed were thinking long term, and they saw a clear opportunity to eliminate one key player. Nobody puts such business strategy on power point slides. The timing was perfect, and when the economy picks up again, there will be one less competitor for the big deals. Think about it.

Barclays and Nomura bought valuable pieces of Lehman Brothers in the distress bankruptcy sale, and have made themselves stronger for the next upturn. Good show by them. They will be Goldman Sachs competition in future.

For information regarding the Chapter 11 Filing of Lehman Brothers Holdings, please visit www.lehman-docket.com

Since many companies and professionals have used MyOrbit services for their online business, I wanted to share this with you. http://www.guardian.co.uk/technology/blog/2010/sep/09/google-instant-effect-on-seo

What is clear is that Google wants to offer long-tail keywords to users as early as possible in the search process.

For example, along with the keyword: “Hair Transplant Surgery Cost”, people will also see options like: “how much does hair transplant surgery cost”, and the latter phrase will now receive many clicks too, even though its hardly a keyword in today’s internet marketing book.

Earlier such a longer sentence or question would have received very few direct clicks because people won’t type long text, but people can surely select longer text if its offered as a drop-down like it is being done now, thereby generating more exposure/visits to web content built on long tail keywords than today.

In addition, Google has been working hard to improve “personalization”, which means they want to show you things relevant to your search profile based on past searches, geography, etc.

What does it mean for website owners and SEO? I believe websites that cover their topic thoroughly using all possible keywords and their natural expressions will ultimately come out winners.

We will study this further to see how Google Instant can be used for our work, and will share the learning with you. Meanwhile all basic SEO work should continue because that is essential to get started in the search engine indexing game.

Best Wishes,
Shankar

For those are who have been following it, the Indian Cement Industry is rocking. It has been one of the best performers in fundamentals and also in the stock markets.

Vallabh Bhansali of Enam Securities comments on the proposed demerger of Grasim’s cement business and formation of a wholly owned subsidiary called Samruddhi Cements, which will ultimately get merged with Ultratech Cement, which is also part of AV Birla Group like Grasim.

Ultratech has shareholding in it by rival Larsen & Toubro, so that could be a reason why a direct transfer into Ultratech is not being done.

Kiran Karnik, the interim chairman of the Indian government appointed board of Satyam, said that it is up to Tech Mahindra to decide the way forward for Satyam. And of course, it shouldn’t be any other way. Tech Mahindra now has a wide array of restructuring projects as it tries to merge/rationalize Satyam’s services into its overall IT services portfolio.

Here are the details.
eBay Inc. today announced that it plans to separate Skype from the company, beginning with an initial public offering that is intended to be completed in the first half of 2010. Specific timing of the IPO will be based on market conditions.

“Skype is a great stand-alone business with strong fundamentals and accelerating momentum,” said eBay Inc.’s President and CEO John Donahoe. “But it’s clear that Skype has limited synergies with eBay and PayPal. We believe operating Skype as a stand-alone publicly traded company is the best path for maximizing its potential. This will give Skype the focus and resources required to continue its growth and effectively compete in online voice and video communications. In addition, separating Skype will allow eBay to focus entirely on our two core growth engines — e-commerce and online payments — and deliver long-term value to our stockholders.”

The decision to separate Skype is based on a timeline outlined by Donahoe when he became eBay’s CEO in April 2008. At the time, the company said it would spend a year evaluating Skype and its potential synergies within the eBay Inc. portfolio before making any decisions about Skype’s future.

Donahoe also installed a new management team at Skype led by Josh Silverman, which has driven stronger momentum and improved performance. In 2008, Skype generated revenues of $551 million, up 44 percent from 2007, and segment margins of approximately 21 percent. Registered users reached 405 million by the end of 2008, up 47 percent from 2007, and user metrics improved significantly throughout the year. The company recently announced that it expects Skype to top $1 billion in revenue in 2011, nearly doubling 2008 revenues.

“Under the leadership of Josh Silverman and his management team, Skype has become a stronger business in the past year, and I expect it will be even stronger a year from now,” Donahoe said. “Skype has accelerating global user growth and strong fundamentals, diversified revenue streams and is competitively positioned in a large market. We expect Josh and his team to continue delivering results as we prepare Skype for an IPO.”

Most recently, the release of the Skype for iPhone application has generated a great response. More than one million people downloaded Skype for iPhone in the first 36 hours after it became available—and Skype immediately became the No. 1 downloaded free iPhone application in more than 40 markets, including the U.S., UK and Japan. In just over a week, downloads passed the two million mark, putting Skype on more than 6 percent of all iPhones and iTouches – and adding almost half a million new Skype users.

It reported a loss of $303 million compared to a profit of $205 million last year.

The results come as Carol Bartz takes over from Jerry Yang as the firm’s new chief executive.

Some analysts feel Yahoo has weathered the downturn better than expected, with the loss mainly due to one-off costs.

We don’t think so. The downturn is far from over, and Yahoo will see a very aggressive Google in the coming months, because Google is also facing pressure on their revenues.

Yahoo has a similar global people reach as Google, of about 450 million people, or 30% of global Internet user base, but the lack of revenue producing assets makes the difference. Yahoo has no strong answer to Google Adwords even today after 3 years.

Yahoo does have a few strong assets:

1. Yahoo Answers has been growing in popularity at an amazing rate, and how they monetize that traffic and user loyalty is to be seen. This is a big winner from Yahoo, where they have beaten Google.
2. Yahoo Personals also has potential because online dating is a high growth business. Their pricing model needs tweaking because there are free sites like Plenty of Fish, that are equally good in quality of members.
3. Yahoo Egroups and Flickr are also very popular destinations, and even if they can increase revenue by 1 dollar per user, it could a 100-200 million in new revenues.

But on the advertising side, Yahoo has difficult times ahead as Google continues to eat into its user base worldwide — both English and non-English. Their ad network doesn’t work anywhere near Google’s quality, and that explains the lower revenues.

Yahoo has to make some hard decisions on revenue generation and partnerships.

Related Articles:

http://news.bbc.co.uk/2/hi/business/7854887.stm

There is much to learn for any business, whether it is privately held or a public-listed.

Read the specific analysis here: Lessons From Satyam Investor Issues 

GSIBM: Graham School of Investing & Business Management

http://GSIBM.com

It could be considered as an online b-school that’s very practical in its approach, and aims to build business leaders. The program is based on successful business teachings by Ben Graham (and followed by Warren Buffet to produce financial results we all know).

The program has been carefully designed after extensive market research on the business knowledge needs of working professionals at various levels, and it will address a large unmet need.

The program will help working professionals in their career growth with the wide coverage planned: from Finance & Investing, to Sales & Marketing, and Legal Contracts, etc.

You are the among first to get this news, and it will be great if you can share it with others who may be interested, and also bookmark the website: http://GSIBM.com
Best Wishes,
Shankar AVSB for MyOrbit Team

It is estimated that ba.com takes about £30 million per year to run, and that BA is looking to save a big chunk here. BA Travel Booking and Servicing functions of ba.com – a major part of the ecommerce programme for BA’s online platform – will be outsourced to a third party under proposals being evaluated currently.

BA already uses third party vendors to for online FAQ service and payment system. Now even more will be outsourced, or maybe even sold, depending on how the proposals come. This blog post has more info.

In this post, we will answer 5 Questions on Venture Capital Investment, that we have seen from early stage companies seeking Venture Capital funding. The above video also expresses similar views.

Q1: How does Venture capital work?

Answer: Venture capital is the term used for unsecured equity funding by specialist investment firms (often focusing on a few sectors) in return for a part of the equity in the company being funded. Venture capital investments carry considerable risk because they are unsecured and it is estimates that only 1 in 10 early stage companies generates good profits.

Q2: How much equity stake do VCs usually take?

Answer: The most common equity stakes taken seem to be in the range of 20-50%, which ensure that if the company succeeds, then the VC makes a good return. Over 50% equity investment by any one VC is rare because the risk increases significantly.

Q3. What do a VC expect in return for the equity funding.

Answer: Because only a few ventures actually become profitable, a venture capital company looks for a high return (a compound return of 25% or more) on each plan, largely generated by growth in the share value of the invested company through increasing brand name and also increasing sales. Most VCs also seek a representation on the company’s board, though it is not a guarantee of producing success from the venture. A good VC would be a partner with the entrepreneur. So personal dynamics are very important. VCs help with raising additional money and financial strategy and also executive team strengthening.

Q4: How much time does it take to raise venture capital?

Answer: It takes about 6 months. Raising capital will take longer than you imagine. Plan for 6 months, and think beyond initial funding. Set realistic milestones, and keep planning for future capital. Learn from others, including other business owners and investors. If you are looking for funding, you have to be patient. For every VC who invests in your venture, there will be 10 VCs who would say no to you.

Q5: How should we approach the business plan writing?

Answer: When it comes business plans, you need a crisp 1-2 page executive summary and it must show a good story of what you want to achieve and what resources you have and what you are looking for. The more you precisely know your Haves and Have Nots, the better your business plan. So don’t get trapped in a 50 business plan that’s full of all kinds of data and it never completes itself.

A long business plan is not a good idea if the same message can be expressed in a couple of pages. Don’t confuse number of pages with clarity of thoughts. Go ahead with a business plan that’s brief and present a coherent logic that interests to the VC. Be honest on things you don’t know. Investors appreciate people who are transparent.

If you are looking to write a business plan, then use this website: BusinessPlan247.com