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Making Deals, Raising Cash

There was a lot of money sloshing around the IT industry last week, with several companies making acquisitions and several others lining up new financing. The buyers were plugging holes in their product portfolios or buying technology. News Corp. bought more than 30 Web sites. Business Objects went for financial-planning and performance-management software. Microsoft grabbed an E-mail-services hosting company. And Broadcom focused on 10 Gigabit Ethernet technology. Meanwhile, venture capital flo

Never Enough Web Sites
News Corp. moved to expand its Web presence last week, saying it will spend $580 million in cash to buy Intermix Media Inc., which owns more than 30 E-commerce and media Web sites. The deal will triple News Corp.'s reach among U.S. Internet users and make it a player in the online social-networking market. In a separate deal, Intermix bought the 47% of social networking site MySpace.com that it didn't already own.

MySpace and Intermix's other sites will become part of the acquiring company's newly formed Fox Interactive Media unit, led by Ross Levinsohn. Intermix CEO Richard Rosenblatt and MySpace CEO Chris DeWolfe will continue in their roles under Levinsohn.

"Intermix's brands, such as MySpace.com, are some of the Web's hottest properties and resonate with the same audiences that are most attracted to Fox's news, sports, and entertainment offerings," Rupert Murdoch, chairman and chief executive of News Corp., said in a statement.

Rupert Murdoch

Rupert Murdoch
The deal will boost News Corp.'s U.S. Web traffic to more than 45 million unique monthly users, the company said. Intermix's network of sites, which includes entertainment, humor, gaming, and social networking, attract more than 27 million unique monthly users.

"News Corp. is more than tripling its reach among U.S. Internet users," said Erin Hunter, senior VP of Internet-consulting firm ComScore Networks, in an E-mail. "By adding MySpace to their portfolio, News Corp. has now positioned itself as a market leader in the social-networking arena, as well as increasing its exposure to the teenage market."

The number of unique visitors to MySpace soared 1,375% from June 2004 to June 2005, to 17.7 million from 1.2 million, according to ComScore. The number of visitors to News Corp. Online, on the other hand, fell 7% during the same period to 11.9 million from 12.8 million.

Intermix recently paid $7.5 million to settle a lawsuit brought by New York Attorney General Eliot Spitzer that charged Intermix illegally distributed adware.

-- Antone Gonsalves, InternetWeek


Holes Filled In BI Toolset
Business-intelligence software vendor Business Objects SA plans to acquire SRC Software Inc., a privately held developer of financial-planning and performance-management software, for about $100 million in cash. Business Objects CEO Bernard Liautaud expects to complete the acquisition in September.

The deal will let Business Objects add financial planning, budgeting, and consolidation applications to its core business-intelligence product line. That will help the company offer a more complete line of tools for performance management, the process of developing strategic plans, and monitoring operational performance toward meeting plan goals.

The acquisition is similar to the 2003 acquisition of financial-planning software vendor Adaytum Inc. for $157.1 million by Cognos Inc., Business Objects' chief rival in the business-intelligence market.

-- Rick Whiting


Managing E-Mail Systems
Microsoft will acquire FrontBridge Technologies Inc., which manages companies' E-mail systems for compliance with government regulations and filters spam and viruses. Microsoft didn't disclose terms of the deal when it was revealed last week.

FrontBridge is a privately held company that had estimated sales of $10.1 million in 2003, according to Hoover's Inc. Microsoft said it plans to sell businesses a service that will make sure their E-mail complies with regulations such as the Sarbanes-Oxley Act, the Health Insurance Portability and Accountability Act, and Securities and Exchange Commission regulations.


Steve Ballmer

Steve Ballmer
The service will archive companies' E-mail and instant messages for retrieval; apply filters to block E-mail spam, viruses, and phishing attacks; and provide availability of E-mail during disasters or emergencies.

FrontBridge operates eight data centers around the world for high availability of E-mail. Its products work with Microsoft's Exchange Server E-mail software and IBM's Lotus Notes. Companies including AT&T, IBM, and Siemens distribute FrontBridge's service.

Fighting E-mail-borne attacks and getting computer systems to comply with government regulations are high on U.S. executives' IT to-do lists. Microsoft CEO Steve Ballmer said in an interview last month that his company plans to build features to support compliance into its software to induce upgrades to products that include those features.

-- Aaron Ricadela


10G--The Next Frontier
Broadcom Corp. revealed plans revealed plans last week to buy Ethernet processor company Siliquent Technologies Inc. for $76 million in cash. Siliquent, which develops 10 Gigabit Ethernet network-interface controllers, has its R&D facilities in Tel Aviv, Israel. Broadcom is a communications chip company

In a statement, Greg Young, VP and general manager of Broadcom's high-speed controller line of business, said, "With 10GbE being the next frontier for enterprise networks, our acquisition of Siliquent provides technology that enables Broadcom to deliver TCP/IP offload, iSCSI, and RDMA capabilities on a single-chip 10GbE controller."

-- Peter Clarke, EETimes


Security Startup Gets Cash
Network-security startup ConSentry Networks has secured an additional $17 million in venture funding, in advance of an expected product introduction later this year. Formerly known as Tidal Networks, the company has been creeping out of stealth mode recently by talking publicly in general terms about its expected network-security appliance, which apparently will lean heavily on proprietary silicon to overcome the performance hit often associated with security-measure processing. According to ConSentry, its goal is to allow for wire-speed security at any port on the LAN, at a cost of around $30 per port.

While the company still hasn't set a product launch date, that didn't keep prominent venture-capitalist outfits such as Accel Partners and Sequoia Capital from participating in the latest round of financing, which is ConSentry's Series C round. Both Accel and Sequoia have a long history of backing successful networking startups, with Cisco Systems, NetScreen, and 3Com among Sequoia's winners and Avici Systems, Foundry Networks, and Redback Networks on Accel's short list. With the new round, ConSentry says its funding total is at $31.1 million.

-- Paul Kapustka, Advanced IP Pipeline


Open Source Wins VC Backing
JasperSoft Corp., a provider of support and services around the open-source JasperReports business-intelligence project, has raised $8 million in a third round of funding.

The funding highlights a growing trend that has Silicon Valley venture capital flowing to companies that promise to transform open-source projects into business-ready apps. JasperSoft will do this by selling support services to users and by contributing code and features that advance the basic open-source offerings. JasperSoft has raised a total of $23.5 million in financing.

IDC projects the market for business-intelligence software will exceed $4 billion in sales this year. Using open-source JasperReports as its foundation, JasperSoft is looking to push reporting capabilities out to users, allowing them to easily present their data in charts, dashboards, and tables.

-- Larry Greenemeier


Money For Grids
ActiveGrid Inc. last week pulled down $10 million in Series B venture-capital funding. ActiveGrid's Grid Application Server software is an application server built atop the open-source ActiveGrid project, which is tuned to run applications in grid environments populated by servers running the Linux open-source operating system.

ActiveGrid specializes in grid data-center environments, where companies add x86-based servers to their existing systems to enhance computing performance. It will start this fall to sell a proprietary version of its software in addition to support services for the open-source version of ActiveGrid. The proprietary software will package additional features such as identity-server integration and dynamic data caching around the base ActiveGrid application.

-- Larry Greenemeier

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