Amazon invests in car retailer Greenlight
Amazon.com expanded its portfolio of investments, announcing that it has bought a 5 percent stake in online car retailer Greenlight.com.
The e-commerce leader did not disclose what it paid for the investment. Under a promotional agreement within the investment, recently launched Greenlight will pay Amazon $82.5 million over five years in exchange for marketing efforts and promotions. Amazon has the option to boost its stake in the company to 30 percent within that five-year period.
We are excited to be teaming up with the e-commerce leader," Greenlight chief executive Todd Collins said in a statement. "Now that Greenlight has teamed up with Amazon and its customer base of 16 million experienced online shoppers, no one else can deliver so many potential new-car buyers."
Amazon's move is only the latest in a string of investments by the e-commerce juggernaut. Last month, the Seattle-based company bought a 16.6 percent stake in luxury goods e-tailer Ashford.com. Amazon also has investments in Drugstore.com, Pets.com, Homegrocer.com, sporting goods e-tailer Gear.com and online gift registry Della.com.
Amazon backer and bluechip venture capital firm Kleiner Perkins Caulfield & Byers announced earlier this month that it launched Greenlight with Asbury Automotive Group, one of the nation's leading automobile networks. The site allows consumers to buy cars online through local dealerships.
Wall Street not worried about Microsoft swap
Can anything hurt Microsoft's share price?
Headlines yesterday and today were dominated by speculation that the Justice Department may seek to split Microsoft into two or three parts.
How did investors react?
Gates announced that he plans to step down as chief executive and that Microsoft's current president, Steve Ballmer, will take over the post.
In after-hours trading, shares in the software giant initially fell. However, they soon recovered and were trading at $108, according to Island, a finance firm that tracks late trading.
"Ballmer is a terrific manager and leader," said William Epifanio, a J.P. Morgan Securities analyst. "He's been president for a while, so we expect this will be a low-risk transition."
That's good news for investors, and not just for those holding Microsoft stock.
The company is considered a bellwether in the technology industry. With a market capitalization of more than $558 billion, Microsoft stock accounts for about 11 percent of the entire value of the Nasdaq market.
"I don't think there will be any fundamental change to the company," said Paul Dravis, an analyst with Banc of America Securities. "During the last few meetings in Redmond (Wash.), you got a sense that Ballmer was taking more of an active role in managing the company."
Ballmer is viewed as a strong, motivational leader who has the confidence of many investors on Wall Street. He was promoted to the position of president just 18 months ago.
Although the timing of the announcement may have been unexpected, Wall Street wasn't shocked by the decision, analysts said.
"I think it's a good move and not totally surprising," said Epifanio, adding that the change may have already been factored into Microsoft's share price.
He noted that it may be hard to distinguish the contributions of Gates and Ballmer as their vision for the company is very similar. Yet there are differences between the men on an operational level, Epifanio said.
"Gates is clearly a planning and product-type of executive. And Ballmer is (a) kick-the-doors-down and get-sales-results (executive)," he said.
Gates can clearly afford the break, analysts added. The world's richest man added a total of $38.2 billion to his paper wealth last year.
Linuxcare plans to go public
Linuxcare has become the latest unprofitable Linux company to file plans for an initial public offering, hoping to raise about $92 million.
The company sells various services based on Linux, an open source clone of the Unix operating system and a competitor to Microsoft Windows. Linuxcare's services include customization, installation, certification that hardware will run with Linux, training, and technical support.
"Our objective is to become the leading provider of Linux-related services," Linuxcare said in its filing with the Securities and Exchange Commission. The company competes vigorously with Linux software seller Red Hat, the first Linux company to go public, and to a lesser degree with VA Linux Systems, a hardware maker.
For the nine months ended Sept. 30, Linuxcare had revenues of $518,000 and a net loss of $10.4 million. A lack of profits is common among the Linux companies, which have spent a lot of money on research and development, acquisitions, and other expenses in hopes that they'll secure a key place in what they perceive to be a growing market. Linuxcare has less revenue than Red Hat or VA Linux Systems, however. Linuxcare plans to trade on the Nasdaq market under the symbol "LXCR." Underwriters of the IPO are Credit Suisse First Boston, FleetBoston Robertson Stephens and Hambrecht & Quist.
Linuxcare's announcement is the second in which a Linux company has revealed IPO plans on the heels of a major round of investment. Caldera Systems filed its IPO plans the same day it announced $30 million in corporate funding. Linuxcare received $32.5 million in mid-December.
The announcement may indicate a change of philosophy at Linuxcare, which earlier indicated that it didn't expect to go public any time soon. But its competitors have increasing amounts of money to spend on expansion, and some analysts have said the current Wall Street fondness for Linux may not last.
Investors are indeed throwing money at Linux companies. Not only do Red Hat, VA Linux Systems, Cobalt Networks and Andover.Net have high valuations, but companies expected to go public later this year, such as TurboLinux, have raised tens of millions of dollars from corporate investors.
Linuxcare revealed details of its plans in the filing. For one, it has worked to develop Linux so that it is compatible with chips from Hewlett-Packard, Intel and Motorola. For another, it's working on a project called ET-Linux, a variant of Linux designed for use in small, limited-purpose devices.
The filing also confirms that Linuxcare has aspirations to provide services with other open source projects besides Linux. Linuxcare's chief executive told News.com in an earlier interview that the company was considering changing its name to "Opencare."
In open source programming, the underlying blueprints of software are freely shared among a large pool of developers. Other open source projects Linuxcare is working on include the Emacs text editor, the Apache Web server, the Samba file and print server software that fits into Windows networks, and the Majordomo software for running Internet mailing lists.
Oracle, Sun Microsystems, Dell and Motorola are investors in Linuxcare.
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