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A market collapse, a cash crunch, and an IPO. I experienced it all in 2001. Now that another (even broader) recession is upon us, I offer my hard-earned lessons for “weathering through” uncertain economic times. (I write often about such topics my blog,Market Mine.)

Back in 2000 I was running a company that made software for microprocessor designers, called Simplex Solutions. We had $40M in revenue, and we were profitable, but when the bubble burst in spring 2000 – we ran into a cash crunch. We were growing the sales channel but also investing in infrastructure, so we knew we would need access to more capital soon.

But Simplex was an old style company, growing with a real product. In early 2000 I couldn’t talk eyeballs or click-throughs, so I had been unable to get attention from investment bankers. We just weren’t a sexy dotcom story.

Our line of credit was coming to its end and TransAmerica Finance was not going to renew it. They were scared, just like everyone else. So, we were forced to concentrate on conserving our cash to weather through — not knowing how long it would be until things got better. We survived, and eventually did go public. Here are the lessons we learned from the trials of 2001, I think they will be as useful in today’s downturn… Continue »

UBS’s John Hodulik, one of the best telecom analysts, has pegged AT&T as his top pick for this earnings seasons and is expecting some good tidings from Ma Bell. What caught my eye in his note this morning was the progress made by AT&T’s IPTV effort, U-Verse. Hodulik says AT&T has added about 135,000 subscribers in the first quarter of 2008, up from 105,000 new subs in the fourth quarter of 2007. (It could have had one more subscriber in Stacey, who is waiting for U-Verse to show up in Austin.)

This means the company could add as many as 975,000 more U-Verse subscribers by the end of 2008. If that is the case, then U-Verse will have done much better than company expected for 2008. At present, U-Verse is available to about 5.5 million homes, but by end of 2008 that number will increase, helping U-Verse penetration.AT&T has forecasted 1 million new U-Verse subscribers for 2008. AT&T had 231,000 U-Verse subscribers at the end of 2007.

Just a day after we first reported that Cupertino, Calif.-based Packeteer (Nasdaq: PKTR) was in talks with two equipment makers, the company announced it is being acquired by Blue Coat Systems (Nasdaq: BCSI) of Sunnyvale, Calif. The deal is pegged at $7.10 a share — about $268 million in cash. The deal is clearly better than the $5.50 a share offered by Elliott Associates, which wanted to execute a hostile takeover of Packeteer.

BCS CEO Brian NeSmith gives a laundry list of reasons why he is buying Packeteer in this press release. In short, this is about WAN market consolidation, as I had outlined in my previous post. The two companies together have about 35 percent of the WAN optimization market, putting them ahead of Riverbed and Cisco Systems. According to some industry insiders, Riverbed is a likely buyout candidate.

Word around the Valley is that Xobni, a San Francisco-based startup that has made a software add-on for Microsoft Outlook, is getting a thorough look-over by Microsoft. This isn’t the first time the company has been the object of Microsoft’s affection. Apparently, the company had previously been offered about $20 million but chose to raise VC money and do it alone.

Who knows, this time the price may be right. Bill Gates is one high-profile Xobni beta tester, making it easy for M&A drones to pay up for this company. Xobni’s software uses features of social networking to better analyze your inbox and formulates relationships and other relevant points that help you conquer the chaos called email. I have written about Xobni in the context of email as a social environment.

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Packeteer (PKTR), a Cupertino, Calif.-based maker of wide area network optimization products, is getting amorous glances from two of its competitors, Blue Coat Systems and Nortel Networks, according to my sources. Indeed, in a recent 14D9 filing, the company suggested that it had three different suitors. But both Blue Coat (BCSI) and Nortel (NT) declined to comment, citing company policies regarding rumors.

The interest in Packeteer comes on the heels of a hostile takeover bid from investment firm Elliott Associates, which already has a 9.8 percent stake in the company. Elliott offered $5.50 a share for Packeteer, valuing it at $200.8 million, but the WAN company thinks it’s worth more, apparently more like $7-$8 a share. As it noted in a press release in which it rejected Elliott’s offer: Continue »

Earlier this morning I met with Sarik Weber, co-founder of Hamburg, Germany-based mobile callback service, Cellity. He brought me up to speed on his company, but he also mentioned that they had launched a Facebook application that allows you to send free SMS messages to anyone worldwide.

I signed up for the app but also looked at the competitive landscape and found that there are around three dozen (free) SMS-related apps, but they have little or no usage. Even the best ones get about 500 users a day, though most have fewer than 50 daily users. (Related story: 5 Ways to SMS for free.)

The state of these SMS apps is no different from many social voice applications (voice widgets). The only difference being that the VoIP widgets have high incidence of installs but comparatively low daily usage. Continue »