Activity in the IPO pipeline reached a two-year record in the fourth quarter of 2009, meeting pre-recession levels with 53 companies entering into registration, 30 IPOs launched and the overall pipeline increasing to 54 registrants seeking to raise $10.3 billion, according to the Ernst & Young LLP US IPO Pipeline study. This activity jumped from the previous quarter, which showed some momentum with 30 new registrants, 14 companies that went public and a resulting pipeline of 34 registrants.

The number of companies in the IPO Pipeline increased by 59 percent compared to the third quarter of 2009. Fourth quarter registrants, however, sought less than the $10.9 billion represented at the end of the third quarter.

Many of the 53 new registrants entering the pipeline in Q4 were smaller companies; 24 companies sought deal sizes of $100 million or less. Ten of the new registrants went public within the same quarter, contributing to the high turnover in the pipeline.

“The resurgence of entrepreneurial companies in the pipeline is reminiscent of the pre-recession IPO market,” says Maria Pinelli, Ernst & Young LLP, Americas Director, Strategic Growth Markets. “Emerging companies should take advantage of the current market to fund their growth strategies.”

  Year over year IPO Pipeline comparison:

     Time Period       # of Deals    Dollar Amount    Average Deal Size
     End of Q4 2007    90            $16.8 billion    $186.7 million
     End of Q4 2008    57            $15.5 billion    $272.7 million
     End of Q4 2009    54            $10.3 billion    $191.0 million

“Finally, the markets are opening up to represent their historic diversity – a range of deal sizes, pre-recession averaging at about $190 million, and a variety of industries led by technology,” says Jackie Kelley, Ernst & Young LLP, Americas IPO Leader. “Although strong companies can access the public markets most of the time, this quarter represents a return to normalcy for the average players. The next few months are shaping up to be a key period of activity.”

The technology sector carried the most deals in the pipeline – 11 registrants, including 10 new issuers – representing $1.7 billion and almost double the number of deals from the previous quarter. Diversified industrial products accounted for six deals representing $1.5 billion, while pharmaceuticals had nine deals representing $596.6 million. Retail and wholesale continued to raise the most capital over other industries with two deals representing $2.2 billion. Most industry categories showed at least one new registrant, while pharmaceuticals gained eight and diversified industrial products gained five.

Regionally, the West was most active with 21 companies in registration to raise $3.6 billion. The Southwest sought $2.4 billion, while the Midwest sought $1.2 billion, each with five companies in registration. California had the highest level of activity among the states with 18 companies in registration, followed by Texas and Georgia with three each.

Our Take: This is great news and speaks to the fact that over half of the Fortune 500 companies today started in a recession.  Great time to get in the game.

Source: PR Newswire / RP

Google Adsense

Right around a year ago now, I made my first cent online. It was literally a cent — $0.01 — and it showed up in my Google AdSense account after a certain number of people had viewed an ad for dog food or a shiatsu massager or whatever on my old humor blog.

That first cent was exciting, because it proved that you really could make money online in the way it seemed that everyone said you could — by creating sites populated with ads, and then sitting back and letting the earnings pile up. Then, if the gurus were to be believed, it was only a matter of time before I would be living in Hawaii, while bikini girls used the Mona Lisa to wax my Lamborghini.

So I read a ton about how to use AdSense, took a few courses, and built a bunch of little search-engine-optimized niche websites. I worked and worked and built and built, and eventually I amassed a couple dozen of these little moneymakers.

Slowly, visitors began to come to my sites, click on the expensive Google ads for lawyers and insurance, and make me some money. Then, reasonably content with my Google army, I put those sites on “set it and forget it” mode (like a Ronco Rotisserie) and started something new.

A different way to do it

Specifically, in April of last year, I started the Johnny B. Truant biz. The business model basically consisted of trying to write funny blog posts and generally just hanging out online, and then parlaying that good will into its logical succession, which is, of course, technology services.

I worked very hard, but it didn’t feel like work — especially compared to what I had been doing on the niche sites. It felt like being an amiable jackass in the right places, and meeting people, and kind of screwing around. Eventually it also started to feel like building a business, but that happened slowly and by degrees.

Nine months passed, with both venues making me money in their own unique way.

At the end of 2009, I recorded my second five-figure month in the JBT technology biz, after building between eighty and a hundred blogs for clients in December.

And at around the same time, I got my first ever AdSense check from Google. It was for $111.

The best way to “make money online” is probably not what you think.

Spend a few minutes Googling around for ways to make money online. Go ahead; I’ll wait.

If you didn’t do that search just now, it’s probably because you’ve tried it before and already knew what you would find. Almost every site, course, and guru out there will tell you that to make money online, you should sign up for AdSense (or maybe for a large advertiser’s affiliate program), rustle up some long-tail keywords, and start gaming Google traffic.

I’m not going to tell you that doesn’t work . . . but I am going to tell you that it didn’t work for me, and that it’s unlikely to work for you if you’re even one iota like me.

Here’s why I don’t like the AdSense strategy as a business model:

1. It’s not a business model. Any time you can talk about “monetization,” you’re probably not talking about a real business because “monetizing” a business is redundant. “Monetizing” is slapping a moneymaker on top of something that doesn’t naturally produce income. The way that 99.99% of people dive into AdSense, they’re simply putting something out there and waiting for the dollars to roll in. There is no real planning, no accounting forecasts, no intention down the road to improve workflow or expand offerings or enlarge the sales funnel, no exploiting the best abilities of yourself and partners to create benefit for others.
2. It doesn’t add value. Technicalities aside, there is no real product or service in the way most AdSense “make money online” campaigns are run. There is simply arbitrage. You’re not increasing widget sales; you’re trying to make sure more of theexisting sales will occur through your ads. I learned my lesson trying to play the stock market (and failing) and then investing in real estate (and failing at an epic level): Sustainable incomes come from using your talents to create value for others, not from gambling and playing the numbers.
3. It contradicts the way the Net is supposed to work. Yes, yes, I know . . . some people blog in a heartfelt manner about cabinetry and run cabinetry ads, and visitors click them to buy cabinets and the site owner makes money. But most AdSense strategies are all about gaming the system. When I was creating insurance niche sites, I couldn’t have cared less about insurance. I was simply trying to draw traffic away from the legit insurance sites so that people would click on my ads instead of finding an insurance company a different way. That’s not the way that the Web is supposed to work . . . which is to efficiently connect the searcher and what she’s searching for.
4. It’s anonymous. Few “make money online” strategies will tell you to blog under your own name, include your own picture, and make a big deal about being the guy or gal who created this site. In fact, I spent a lot of my time trying to obscure who I was. Many courses even tell you to use hosting that will generate random, non-sequential IP addresses for each site, so that even Google won’t know that one person owns them all. Anonymity conflicts directly with what I consider to be the most important reasons for my success, which are honesty, authenticity, trust-building, and transparency.

You can do better, no matter who you are

I worked really, really, really hard on those AdSense sites. I worked 15-hour days; I wrote keyword-laced post after keyword-laced post; I entered them in article directories and put them through social media bulk submitters; I launched site after site, tweaked, customized, and researched.

And by doing that, I made $111 in a year.

Maybe I didn’t work hard enough. Maybe I used the wrong system. Maybe, if someone else had done it, they might have done it twice as well. And maybe that same person would have done it for three times as long as I did, building sites for the whole year instead of only doing it for four months.

So yeah, maybe that super-ambitious person might have made $888.

Now, stop and think about that for a second.

Anyone who doesn’t believe that they could start a business today, being themselves, playing to their own strengths, and creating value for others, and not make more than $888 in a year should . . . well, those people should really just stop reading about business right now.

Am I saying that you can’t use AdSense to make money online? No. Am I saying that every “system” for striking it rich on the Net — like creating anonymous niche sites that use AdWords ads to draw traffic to affiliate products — is an impossible scam? No.

I’m just saying that the average person is probably going to have better luck building a real business. Meaning:

• One that you can stand behind publicly.
• One that’s based on helping others in exchange for pay.
• One that benefits from being a real, authentic person.
• One that matches your best abilities to the needs of others.

This Third Tribe thing? This new internet era of being real and honest and open in business and marketing rather than relying on tricks, games, yellow-highlighted text, and the hard sell? It’s real, folks. And at least for me, using that approach turned my Google earnings into an afterthought. [copyblogger]

Source: Johnny B. Truant

CFO

According to findings from the fourth quarter “CFO Outlook Survey” conducted by Financial Executives International (FEI) and Baruch College’s Zicklin School of Business, CFOs are looking up, but remain committed to utilizing some of the important lessons learned during the downturn and keeping companies streamlined. Their views on staffing are mixed. In exploring what steps companies are currently taking toward environmental responsibility, the survey uncovered varying drivers behind those actions.

“The findings of our Q4 survey demonstrate that CFOs overall closed 2009 with a much improved sense of optimism that when it began, but they are realistic about the challenges that still lay ahead,” said John Elliott, Dean of the Zicklin School of Business at Baruch College. “CFOs are indicating that they have learned lessons from the downturn and can face the coming year looking forward to the opportunities at hand.”

Fewer Layoffs Planned, but Hesitancy to Re-hire

In the shadow of 2009′s dismal unemployment rates, hiring prospects at respondents’ companies show modest signs of buoyancy in 2010, with 44 percent reporting an anticipated increase in hiring at their companies. This joins the finding that the majority of CFOs (62%) indicated they do not plan any layoffs for the coming year. However, 27 percent admitted it is “too soon to determine” if they will conduct layoffs.

Retrospectively, three out of four CFOs (77%) indicated they were forced to cut back on staff during the course of the downturn. When those companies that had reduced staff were asked what they will do prior to rehiring new full-time employees, nearly half (49%) say they do not plan to replace the positions. In addition, at least one-fifth plan to reinstate overtime for existing employees (31%), hire part-time employees (23%), and/or make current part-time employees full time (21%) before rehiring new full-time employees. These facts put the positive hiring plans of 44 percent of CFO respondents in perspective.

CFOs to Increase Spending, Retain Efficiencies

While recent quarters’ surveys painted a picture of unrelenting cutbacks, CFOs looking toward 2010 anticipate positive increases in a number of areas. Key areas of expected increases include:

  --  Net earnings expected to rise by 22 percent (more than double
      anticipated Q3 mean increase of 11%)
  --  Revenue anticipated to grow by 10 percent
  --  Capital spending expected to grow by 8.9% (compared with an increase
      of 1.1% in Q3)
  --  Technology spending anticipated to increase by 6.1 percent
  --  Inventory anticipated to increase by 2.5 percent (compared with Q3,
      where CFOs predicted reductions of -1.9%)
  --  Hiring expected to grow by 2.9 percent (up from 1.7% in Q3)
  --  Price of products expected to grow by 1.13 percent (up from the Q3
      projected increase of 0.7%)

When CFOs were asked this quarter to identify areas for increases in 2010, marketing and advertising and business acquisitions were also top of mind, with 39 percent of CFOs planning to increase marketing and advertising and 33 percent of CFOs planning increases in business acquisitions. In addition, while 37 percent of CFOs reported they will cutback on executive perks, a small number of respondents remain (4%) who plan to increase executive perks in the coming year.

“The return to a place where CFOs are anticipating increased earnings and revenue provides encouragement that those companies that have endured the downturn are ready to come back strong,” said Marie Hollein, CEO and President, Financial Executives International. “As far as the new normal is concerned, efficiency is the name of the game.”

When asked what their organizations would continue to do as they begin to emerge from the recession, nearly nine out of ten CFOs reported that they would continue process efficiencies put into place during the downturn. Two-thirds (66%) said they will continue technological efficiencies, and one-third (34%) plan to continue the restructuring of their business.

CFOs Taking Steps to Be “Greener” but Debate Continues Over Regulation

As the global conversation on sustainability heats up, this quarter’s survey examined what steps companies are taking to become more environmentally responsible, and why they may be taking them. The most frequent “green” action among respondents’ companies is reducing energy consumption in company facilities (48%). This was followed by reducing waste in production and packaging (30%) and promoting incentives and initiatives encouraging customers to be “greener” (21%). Least popular initiatives were reduction of greenhouse gas emissions from factories and plants (6%), and supporting legislation on environmental issues (7%).

While few are actively supporting legislation on environmental issues, sentiment toward governmental regulation of environmental responsibility is split among CFOs. Though nearly half (49%) believe regulation a bad response, more than one-third (37%) support government incentives to spur innovation, 14 percent support limits on emissions, and 9 percent support cap and trade and other financial incentives.

Perhaps disappointingly, 28 percent of CFOs indicated that their companies are not taking any actions to make their companies more sustainable. With regard to those companies who are taking actions, the survey revealed a number of motivators. More than one-third cited cost efficiencies as the main driver, 31 percent refer to personal priorities of their leadership as the cause, 29 percent say enhancement of public perception is the reason, and 24 percent point to a desire to emerge as a committed leader in the industry.

Source: FEI

Netflix Online

Netflix has just reported its Q4 2009 results, and has performed pretty well as expected, although revenue was slightly below most forecasts.

What caught our eye is just how many Netflix customers are now streaming movies and TV shows online. The percentage of subscribers who watched instantly more than 15 minutes of a TV episode or movie in Q4 2009 was 48 percent, compared to 28 percent for the same period of 2008.

As for the numbers (PDF):

Netflix ended the fourth quarter with approximately 12,268,000 total subscribers, a 10 percent jump compared to end of the third quarter of 2009. Net subscriber change in the quarter was an increase of 510,000 for the third quarter of 2009.

The company earned $30.9 million, or 56 cents per share, in the fourth quarter of 2009. That compared to $22.7 million, 38 cents per share, in the same period of 2008.

Netflix’ Q4 2009 revenue rose 24% to $444.5 million, a 5 percent sequential increase from $423.1 million for the third quarter of 2009. The DVD-rental company was estimated to report revenues of up to $446 million.

Netflix expects revenue to climb to $490 million to $496 million this quarter. [techcrunch]

Our Take: Incredible business that is killing the Blockbusters of the world, not to mention saving a few million carbon cycles.  Clearly, as they convert us from a manual world to a digital one, Netflix stands to dominate.

As we look at what we do, we too need to be thinking hard about how we can change the game in our respective spaces.

Source: Techcrunch / RP

Yuri Milner

What is DST style investing and where did it come from?  Turns out that when Facebook was seeking a private placement to the tune of a few hundred million dollars for future growth, in stepped Yuri Milner.  Mr. Milner is the CEO of a Russian based private venture and operating firm called Digital Sky Technologies (DST).

Basically, he proposed a financing in which he split the funding between the common shareholders, read employees, and the company.  Thus, employees could sell part of their holdings in advance of a public sale, while the remaining funds would be used by the company to fuel future growth.  A star was born;  the “DST” style of investing.

Look for more companies who are showing dramatic growth and yet not ready for a public financing to follow suit.  Already Digital Sky Technologies has investments in Facebook and Zynga, two of the hottest pre-IPO companies out there.

Personally, I like the idea.  First and foremost, employees dedicate and enormous amount of work at often equity laden, but cash poor jobs.  This gives them liquidity to actually “have a life,” through the process.  And second, it keeps the company charging hard without the pain incurred by the massive regulatory burden of being public, and showing perfect quarter on quarter growth.

Source: RP

James Dolan of Newsday

In late October, Newsday, the Long Island daily that the Dolans bought for $650 million, put its web site, newsday.com, behind a pay wall. The paper was one of the first non-business newspapers to take the plunge by putting up a pay wall, so in media circles it has been followed with interest. Could its fate be a sign of what others, including The New York Times, might expect?

So, three months later, how many people have signed up to pay $5 a week, or $260 a year, to get unfettered access to newsday.com?

The answer: 35 people. As in fewer than three dozen. As in a decent-sized elementary-school class.

That astoundingly low figure was revealed in a newsroom-wide meeting last week by publisher Terry Jimenez when a reporter asked how many people had signed up for the site. Mr. Jimenez didn’t know the number off the top of his head, so he asked a deputy sitting near him. He replied 35.

Michael Amon, a social services reporter, asked for clarification.

“I heard you say 35 people,” he said, fromNewsday‘s auditorium in Melville. “Is that number correct?”

Mr. Jimenez nodded.

Hellville, indeed.

The web site redesign and relaunch cost the Dolans $4 million, according to Mr. Jimenez. With those 35 people, they’ve grossed about $9,000.

In that time, without question, web traffic has begun to plummet, and, certainly, advertising will follow as well.

Of course, there are a few caveats. Anyone who has a newspaper subscription is allowed free access; anyone who has Optimum Cable, which is owned by the Dolans and Cablevision, also gets it free. Newsday representatives claim that 75 percent of Long Island either has a subscription or Optimum Cable.

“We’re the freebie newsletter that comes with your HBO,” sniffed one Newsday reporter.

Mr. Jimenez was in no mood to apologize. “That’s 35 more than I would have thought it would have been,” said Mr. Jimenez to the assembled staff, according to five interviews with Newsday staffers.

“Given the number of households in our market that have access to Newsday’s Web site as a result of other subscriptions, it is no surprise that a relatively modest number have chosen the pay option,” said a Cablevision spokeswoman.

Nevertheless, traffic has fallen. In December, the web site had 1.5 million unique visits, a drop from 2.2 million in October, according to Nielsen Media Online.

In the short time that the Dolans have owned Newsday, it’s been a circus. When they were closing the deal to buy the paper in May 2008, they had their personal spokesman scream at an editor who assigned a reporter to visit the Dolans, seeking comment; there was a moment back in January of last year, when Newsday editor John Mancini walked out of the newsroom because of a dispute over how the paper was handling the Knicks; in the summer, the paper refused to run ads by Verizon, a rival; Tim Knight, the paper’s publisher, and John Mancini, the editor, eventually both left.

The paper, which traditionally has been a powerful money maker, lost $7 million in the first three quarters of last year, according to Mr. Jimenez at last week’s meeting.

In October, the web site relaunched and was redesigned. One of the principals behind the redesign is Mr. Mancini’s replacement, editor Debby Krenek.

To say the least, the project has not been a newsroom favorite. “The view of the newsroom is the web site sucks,” said one staffer.

“It’s an abomination,” said another.

And now the paper is in the middle of a labor dispute in which it wants to extract a 10 percent pay cut from all employees. The cut was turned down by a lopsided vote of 473 to 10, this past Sunday.

Things are bleak in old Hellville, the pet nickname some reporters have established for life on Long Island.

“In the meeting with Terry, half the questions weren’t about labor issues, but about why isn’t this feature in the paper anymore?” said one reporter. “People are still mad about losing our national correspondents, our foreign bureaus and the prestige of working for a great newspaper. The last thing we had was a living wage, being one of the few papers where you’re paid well. And to have that last thing yanked from you? It’s made people so mad.”

Source: John Koblin

Mckinsey & Company

Two years after the recession started, why is the credit bubble still intact and/or growing?

A new report by McKinsey Global Institute says that globally we have avoided the necessary deleverage process.

Governments like the U.S. have increased total leverage through deficit spending. Meanwhile, they boosted leverage in areas like housing through programs that promote spending.

In other words, we have delayed the deleverage process until some time right around now.

If we’re lucky. Otherwise we’re looking at this nasty option:

McKinsey: We therefore see a risk that the mature economies may remain highly leveraged for a prolonged period, which would create a fragile and potentially unstable economic outlook over the next five to ten years. They may then go through many years in which, all else being equal, GDP growth is slower than it would have been otherwise as debt is paid down.

Roach Post thinks: If you remain leveraged, you had better think hard and fast about shedding debt now.

Source: McKinsey / RP