adopts Birla report, to allow internet trades
The SEBI board has cleared a number of measures to enhance
transparency and deepen capital markets. They include introduction
of net trading, adoption of Kumar Mangalam Birla report on corporate
governance, clearing KB Chandrasekhar report to boost venture capital
funds and a new framework for accounting standards. It has also
decided to permit high networth foreign individuals and corporates
to invest in Indian bourses under the FII route and allow mutual
funds to manage foreign portfolios.
DR Mehta, Chairman, SEBI, said, “There would be an agreement between the broker and the client and a limit prescribed up to which the client can trade.”
SSI to raise $100 million, buys Inndsoft
Chennai-based software solutions company SSI will tap the international capital market to raise $100 million. It has appointed DSP Merrill Lynch to manage the issue. 75%-80% of the funds raised will be invested in software development centers.
SSI has also acquired InndSoft Systekh, a Chennai-based company with a workforce of 30 and turnover of around Rs1.5 crore. The acquisitions were made for a consideration of Rs3.14 crore. K Suresh, Chairman and CEO, SSI, said, “SSI had to decide whether to set up its own marketing network or acquire one as most of our products have a fixed shelf-life. We thus decided to go in for an acquisition.”
SSI Technologies, Nasdaq form JV
SSI Technologies (SSIT) and Nasdaq are forming a JV called IndigoMarkets. The new company will create internet-based trading and market systems for global markets. The initial focus will be on implementing solutions on Nasdaq-Europe and Nasdaq-Japan by the end of 2000.
IndigoMarkets’ product line will include TESA, SecuraTrade and SecuraWare–products developed by Indigo Technologies, a company that was recently taken over by SSIL. TESA or The Electronics Securities Architecture is a stock exchange automation system, SecuraTrade is an online internet trading system and SecuraWare is an ecommerce middleware product. “In future IndigoMarkets will be offering these solutions to other clientele,” says Kalpathi S Suresh, Chairman and CEO of SSIL. IndigoMarkets will offer its services with the help of technologies from partners like Compaq, Microsoft, Cisco Systems and MCIWorldCom. An offshore development center will be set up in Chennai as a strategic business unit to support IndigoMarkets’ requirements.
Synergy Log-In to acquire Singapore company
Banking software company Synergy Log-In Systems is acquiring a Singapore-based company. The buyout is being funded through a private placement of 24 lakh equity shares at about Rs83 per share. The placement of Rs20 crore amounts to 20% of Synergy’s paid-up equity. The private placement is being made at an around Rs75 per share–a discount to the current market price of Rs130 per share. UK-based business associate of Synergy, Celebrus Software has picked up 1.5 lakh shares.
Dot com deal to match IndiaWorld’s
Two venture funds, eVentures and RAFNet Ventures, have paid $25 million for a 20-24% stake in chaitime.com, a Philadelphia, USA-based community building portal aimed at South Asians. The purchase puts the value of the portal between $104 million and $125 million.
Bhana Grover, CEO, chaitime.com, says, “The eVentures group adds a lot of value and experience in India’s emerging internet economy. It will enable chaitime.com to build on its position as the leading gathering place for South Asians.”
IndAsia picks up 10% in Indbazaar.com
IndAsia Fund Advisors, a private equity firm has picked up a 10% stake in the education and personal finance portal Indbazaar.com. The portal aims to become a B2C ecommerce site.
Commenting on the investment, Pradip Shah, Chairman, IndAsia Fund Advisors, said, “Today there is no one particular site that provides quality information on India on the web. Indbazaar.com is aimed at the entire Indian family. The site provides a plethora of information that meets the requirements of a family and is a promising site to look out for this millennium.”
Indbazaar.com already has a tie-up with SBI Mutual Fund and Canfin Asset Management for providing mutual fund application forms.
iAsiaWorks acquires Indian hosting firm in Silicon Valley
iAsiaWorks, a pan-Asian internet solutions company, has acquired Web Professionals, a Silicon Valley web hosting firm founded by an Indian entrepreneur Sanjay Dani. The acquisition was made for an undisclosed combination of cash and equity. Web Professionals, based in Cupertino, California, provides leading-edge dedicated server hosting and co-location services.
Dani will join iAsiaWorks as VP, Hosting Strategy and Services. JoAnn Patrick-Ezzell, Chairman and CEO, iAsiaWorks, said, “Web Professionals has exceptional experience and skill in the hosting business, and we believe this acquisition accelerates iAsiaWorks’ expansion and execution in Asia in a significant way. Dani and his team will play a key role in developing hosting services to make iAsiaWorks the internet solutions provider of choice for companies doing business in Asia or expanding their Asian businesses into the US market.”
SingTel, Cable & Wireless HKT to merge
Singapore Telecommunications and the parent of Cable & Wireless HKT are considering a merger. The combined company would have some $6.6 billion in annual revenue and would be Asia’s fifth-biggest phone company in market capitalization and revenue. Cable & Wireless Plc of Britain, which owns 54% in HKT, would own 27% of the combined company but it would cut its stake for cash.
The Singaporean government had decided to throw open its telecom market to foreign competition on April 1 while Hong Kong granted 17 new licenses for telecom services. The combined company would command 60% of the market.
Kothari to launch internet opportunities fund
Kothari Pioneer, a mutual fund company, plans to launch its internet opportunities fund with an exclusive internet focus. Vivek Reddy, CEO, Kothari Pioneer, says, “The new fund will capitalize on the dramatic growth of the internet, its impact on personal lifestyles and the conduct of business and commerce the world over.”
There are six broad investment themes built on the internet, dot com and internet companies, ecommerce solutions providers, ISPs and portals, convergence plays on media, telecom and internet, internet infrastructure and hardware providers, and businesses such as in finance, retailing and health care which are leveraging the internet for strategic advantage.
The fund would invest in overseas-listed ADRs of Indian companies besides investing 5% to 10% of the corpus in unlisted companies in the pre-IPO stage. The corpus fund is estimated to be Rs100-150 crore. About 8 to 14 internet companies have been shortlisted by the company for funding. This number is expected to double in the next six months.
Mobile Telecom buys Mumbai-based unlisted company
Mobile Telecommunications has acquired a Mumbai-based unlisted company Access Information Systems. The cost of the acquisition is estimated at around Rs6 to 8 crore. According to the terms of the acquisition, Mobile is likely to issue about 80 lakh shares to the promoter of Access, B Rangarajan, who will take over as MD, Mobile post-merger. It subsequently plans to merge Access with itself and consolidate its operations in IT services.
UTI, Ketan Parekh buy stake in Shonkh
Three companies of broker Ketan Parekh–Panther Fincap and Management Services, Panther Investrade and Classic Credit–have taken an 18.02% share in Shonkh Technologies, a Bangalore-based IT products company. Besides, the Unit Trust of India (UTI) has also taken a 12.52% share. Both Parekh and UTI bought the equity at Rs130 per share, a premium of Rs120 per share. The promoters of Shonkh hold the rest of the equity. The company plans to offload 18% of equity through an IPO of about Rs65 crore during March-April this year. It is looking at a premium of Rs200 per share.
ICICI Venture’s investment zooms 4,000%
ICICI Venture and Trust Company of the West has hit a jackpot with one of its investments rising a phenomenal 4,000% in value, in less than a year. In February 1999, it had invested $2.4 million in Neoforma.com Inc, a Santa Clara, US-based seller of medical supplies on the internet. Following the company’s IPO, its stake is currently worth over $100 million–Neoforma.com listed at $13 on Nasdaq on January 24 and is presently quoting at $52.
ICICI Venture manages the $52 million TCW/ICICI fund which has investments in around nine companies overseas, including Neoforma.com. It plans six new funds with a corpus of Rs1,000 crore during the year.
AT&T makes new net hosting bid
AT&T has launched a new campaign aimed at becoming the network infrastructure of choice for the nascent ‘rent-an-application’ industry. AT&T is aiming to partner with smaller application service providers (ASPs) in hopes of capturing the lion’s share of their network traffic and boosting use of its own network services. The company said it would spend $250 million on infrastructure supporting the new companies.
The ASP model is aimed at allowing customers to download software on demand or to access it over a network, instead of keeping applications on individual computers’ hard drives. While the market is still in its infancy, analysts predict it will take off quickly as high-speed internet connections become more widely used. “This is a natural extension for AT&T,” says Harry Tse, an industry analyst with the Yankee Group. “They need to try to find a way to get this network traffic onto their own (layout).”
AOL seeks to block distribution of software prototype
America Online attorneys are trying to stop distribution of an unauthorized copy of the prototype for a new version of its subscriber software, AOL 6.0. The 15-year-old administrator of website Kenton.org received a three-page letter from the attorneys requesting he take down the materials, or face legal action. The leak comes barely three months after the online leader released AOL 5.0, the newest version of its software. AOL 6.0, code-named K2 for Karakorum, will be released for commercial testing in May, according to the documents posted on Kenton.org.
The letter warned that “prerelease of 6.0 materials that you have posted wholesale on your site are AOL’s internal confidential property. These materials are not available to the public. You can only have obtained them from someone who breached their employment agreement with AOL or from someone who illegally hacked into AOL’s system,” the letter went on. The youngster, who identified himself only as Kent, flatly denies using a third-party source or having hacked into AOL. He said he got the materials through AOL’s library, which has since been blocked to outside users. “I’m not sure what I’m going to do,” he said in an interview. AOL confirmed that it has beefed up security of its internal site.
Time Warner, EMI to create music powerhouse
In a deal that could change the face of music on the internet, Time Warner and Britain’s EMI Group have announced they will combine in a 50-50 JV to create a $20 billion net music powerhouse. EMI shareholders will receive a cash payment of $1.65 per share, totaling about $1.3 billion. The terms of the deal include a $90 million termination fee if the deal is rescinded by either party.
“When AOL and Time Warner launch their music initiative, they will have about 35% of American recorded music at their disposal,” says Aram Sinnreigh, an analyst with Jupiter Communications . “That will probably be enough to draw enough customers to really begin to change the way people consume music online, or consume music in general.”
The proposed company–to be called Warner EMI Music–will have some of the biggest names on its roster of artists. EMI’s catalog includes The Beatles, Spice Girls and The Rolling Stones, while Time Warner’s list of artists includes Madonna, Phil Collins and Jewel. With widespread delivery of digital downloadable music looming, the deal positions AOL, Time Warner and EMI to substantially profit from opportunities to bring music to target buyers over the internet. Warner Music and EMI said industry forecasts show that nearly 10% of worldwide music sales will happen over the internet by 2004.
Amazon announces layoffs
Amazon.com has laid off 150 workers, or 2% of its workforce–the largest employment cutbacks ever announced by the internet pioneer. The cutbacks will be across the board, but mainly at Amazon’s Seattle headquarters.
Amazon’s stock fell sharply, as much as 10%, in trading. “We regularly review the mission of the company and make sure we have the right skills to carry out the jobs,” spokesman Bill Curry said. Curry said the cutbacks stem from an “ongoing process” of reviewing the internet retailer’s organizational structure. He would not confirm or deny whether more layoffs are imminent.
Commerce One, Ariba in B2B ecom battle
Online procurement rivals Commerce One and Ariba are engaged in a marketing battle for a piece of the business-to-business ecommerce market, which Forrester Research estimates will reach $1.3 trillion by 2003. Commerce One and Ariba provide key tools within that market–complex procurement software that enables companies to automate the buying and selling of goods and services on the internet.
Analysts say Ariba and Commerce One are in an all-out battle for mindshare, jockeying to penetrate these huge markets first and to become the software platform of choice among a massive group of buyers and sellers. In addition to partnerships, both companies have pushed to expand their capabilities and technological depth, making key acquisitions.
“It’s a race,” said Laurie Orlove, an industry analyst at Forrester Research. “They’re trying to get the greatest penetration of their software platform into the hands of the various industry heavies.” Ariba had recently announced a deal with Chevron to build a trading exchange called Petrocosm that will connect buyers and sellers in the oil and gas industry. Meanwhile, rival Commerce One, based in Walnut Creek, California, is tapping the same vertical market with its latest partnership with Shell. Commerce One and Ariba have also been tackling other markets including auto manufacturing, chemical manufacturing and pharmaceuticals. Commerce One has teamed with auto giant General
Motors, while Ariba announced a recent deal with Dupont.
Diamond to use Transmeta chip
Diamond Multimedia has confirmed that it will sell portable internet devices powered by Transmeta’s new Crusoe chips. Diamond Multimedia, a division of S3, plans to incorporate Transmeta’s combination software-hardware technology in new webpad-like devices. S3 sells modems, portable MP3 players, video chips and other technology and is trying to expand into new markets.
S3 plans more partnerships and acquisitions as it moves into internet appliances and home networking, Andy Wolfe, Chief Technology Office, S3 said.
The move underlines Diamond’s ongoing efforts to reshape its business. Although historically known for its analog modems and graphics cards, Diamond has been revamping its consumer strategy with its Rio MP3 player as the centerpiece. The device’s popularity has encouraged Diamond to believe it can become the trusted name for digital gadgets.
DoubleClick accused of unlawful consumer data use
A California woman has filed a suit against DoubleClick, accusing the web advertising firm of unlawfully obtaining and selling consumers’ private information. The suit was filed in California Superior Court, Marin County, by attorneys representing Hariett Judnick and seeking to represent the public in the state of California. New York-based DoubleClick declined to comment.
The lawsuit alleges that DoubleClick employs cookies to identify internet users and collect personal information without their consent as they travel around the web. The suit comes after DoubleClick completed its $1.7 billion acquisition of Abacus Direct, a direct marketing company. The merger was unsuccessfully challenged by privacy advocates, who worried that the deal would chip away at the fragile privacy of consumers on the internet.
Disney barred from using Go.com logo
A federal appeals court has ordered the Walt Disney Company to immediately remove its Go.com logo from TV ads and websites until a trademark infringement trial brought by internet search service GoTo.com is resolved. “We feel vindicated,” said GoTo attorney Pierce O’Donnell in Los Angeles. “It’s a victory for us and particularly for our consumers, who are entitled not to be confused about which service they’re using.”
Disney executives could not immediately be reached for comment. But the familiar green stoplight logo it had been using since Go.com launched last year was replaced on its website. The stoplight logo, which had the word ‘Go’ in white lettering emblazoned in a green stoplight on a yellow square background, looked too similar to GoTo’s mark, which was established in 1997. GoTo first noticed the logo for Disney’s online directory during the company’s beta release early last year. GoTo sued Disney in February 1999 when talks between the companies broke down. The complaint seeks tens of millions of dollars in damages plus a permanent court order barring Disney from using the Go.com mark.
The court order came on the same day Disney announced it was changing its web strategy to play up its strength as an entertainment destination. Meanwhile, GoTo, based in Pasedena, California, has seen its search service blossom, according to analyst reports.