2011 Healthcare Preview — It’s Uhhh-gly

If you’re excited about healthcare reform, you might want to slow down a little. Because in the short term, there’s going to be a lot of confusion as to how to implement it — or how to keep your small health plan from being subject to healthcare reform’s rules. For starters, a new study from PriceWaterhouseCoopers found premiums will likely go up 9 percent next year, on top of last year’s 15 percent hike .

Elon Musk: “Why Owen Thomas Is Silicon Valley’s Jayson Blair”

Tesla Motors Founder and CEO Elon Musk isn’t a man that backs down when facing the press. When the New York TImes wrote an error-filled article, Musk lashed out at the author, saying “What is he doing picking on an electric car company? Why would he pick on the little guy who is trying to do good when you’ve got egregious waste of money in the tens of billions occurring in Detroit?” He added “He’s a huge douchebag…and an idiot.” And that was just when a journalist was poking at Tesla. Get into Musk’s personal life and he’ll take off the kid gloves. Valleywag’s Owen Thomas, now writing for VentureBeat, has for some reason become fascinated with Musk’s personal life and continues to write about the man’s marital woes. He’s called Musk a liar on multiple occasions and seems delighted to get into the sordid details of Musk’s divorce. Musk wrote his side of things on the Huffington Post. Thomas hit him again . Musk is now responding yet again, below. What bothers me about this exchange is that Silicon Valley press, VentureBeat in particular, is so focused on an entrepreneur’s personal life. A divorce isn’t anything that our readers want to know about. This isn’t Hollywood and these individuals aren’t out there trying to get lots of press about their personal lives. If they were, they’d hire agents and publicists and make the best of it. Instead they are focused on imagining and building the future. There’s no place in our community for these kinds of attacks. VentureBeat should apologize and move on, and let Tesla continue to disrupt the car industry. Below is Musk’s response: Why Owen Thomas is Silicon Valley’s Jayson Blair The latest article by Owen Thomas, “Tesla CEO can’t handle the truth”, continues his damaging and fraudulent crusade against Tesla and me personally. Tesla has received a great deal of press, both positive and negative, but it is amazing how much of the truly negative press can be traced directly back to one man. Despite numerous successes at both Tesla and SpaceX, Thomas has never once written a positive article about either company. Every one of the dozens of stories he has written – without a single exception – has been a nasty hit piece. Even if all those stories were factually correct, and they certainly were not, he has still fundamentally misled the public about my companies by failing to provide even a token number of positive articles. Lying by omission is still lying. Responding below under similar headings Thomas uses in his article, I address the inaccuracies in his latest article, where he again lies with great conviction. It is impossible to stop Owen from continuing to write such erroneous garbage, but, as I do not have the time or inclination to refute all bad reporting on his part, I would like it known that nothing he writes is remotely objective. Any future articles written by Owen Thomas should be viewed with this in mind. Tesla IPO Filings Thomas says “Tesla updated its IPO filings to acknowledge substantially all of the concerns we [ie Owen Thomas] raised as potential risk factors investors should consider”. We updated our IPO filings simply to state that what Thomas had written had no basis in fact. Since Tesla was in the IPO quiet period, we could not respond directly with a press release. Instead, we had to update the IPO documents to assure investors that what Thomas had stated about Tesla being reliant on me for funding or there being a DOE loan default risk related to my divorce were both false. Even without the IPO proceeds, Tesla has enough funding from its many venture investors, Daimler and the DOE to complete the Model S with no financial help from me. The reason for the IPO was to provide cash for additional new developments and a small percentage of liquidity for long time shareholders, including me (I sold 5% of my holdings). If this had been a real issue, it would have been placed in the IPO prospectus by the bankers and lawyers long before Owen Thomas raised it. This is one of many situations where he created a real problem for Tesla out of thin air by writing a misleading article. My Personal Spending In his section entitled “Musk’s personal spending”, Thomas does some creative math to claim that one of my “whoppers” is that I suggest I’m spending $30k per month, excluding legal fees. This is completely made up. I never state that anywhere in my piece, nor can it be computed from a collection of my other statements. Thomas intentionally conflates a statement I make about the average of what I’ve been forced to spend on divorce lawyers over the past two years and my household expenses last year, ignoring the fact that a huge portion of the legal expenses occurred this year in the run up to trial. Founding of Tesla Motors Here Thomas relates an anecdote about a serious issue Tesla had with Martin Eberhard, one of the cofounders of the company. Eberhard filed a lawsuit against Tesla (and me) that was filled with inaccuracies. Tesla was going to file a counter suit, but before we filed, Eberhard and I settled our differences with a few hours of mediation. I’m glad that we made peace. The result obviously satisfied both Eberhard and me or it wouldn’t have been settled. However, Thomas quotes Eberhard’s lawyer as though this was a one sided victory. He could just as easily have quoted my lawyer who would have made the same statement. What Thomas forgets to mention is that Eberhard was forced to withdraw his lawsuit weeks before the mediation even began. If Eberhard’s position had been strong, he would not have had to withdraw his claims unilaterally well before mediation started. The Safety of Customer Deposits Thomas states that I both told customers that I would personally back their vehicle deposits and that I said their deposits were at risk. He is again intentionally conflating facts to make it sound as though I had contradicted myself. Here is how Owen Thomas once again misleads the reader: the statements are actually referring to different vehicles at very different stages of maturity, but he pulls each quote out of context and pretends they refer to the same thing. When I said that I would back customer deposits personally, which I did directly to customers on several occasions as well as in a Car & Driver article, that was clearly and explicitly regarding the Roadster. I knew that my resources, combined with Tesla’s, would be enough to pay them back personally if need be. Moreover, Tesla had not been sufficiently clear with customers in the early days that the Roadster deposits were at risk. It would not be right for customers to have those funds at risk without their explicit consent. On the other hand, the statement I made to Claire Cain Miller of the New York Times at the Model S launch specifically and clearly referred to the Model S reservations. I knew that my and Tesla’s resources could not also cover the Model S deposits in a worst case situation. However, unlike with Roadster, we were very explicit that Model S reservation dollars were at risk and that the funds would be put to use doing advance development of the vehicle. In this section, Thomas also says that I announced that a Tesla financing round had closed in November 2008, when it actually closed in March 2009. Whether intentionally or not, he is getting the dates confused between when the financing round documents were signed (representing firm commitments), which was actually December 2008, and when the last of the cash was wired in, which was March 2009. This is common in complex financial rounds with a large number of participants. My History as an Entrepreneur In this section, Thomas casts aspersions on both Zip2 and PayPal, my first two companies, talking about management changes that occurred at both and not acknowledging one positive thing about either company. The reality is that Zip2 (which I started at age 23) sold for over $300M to Compaq and PayPal sold to eBay for over $1.5B after going public. Anyone reading Thomas’s twisted account of their history without knowing better would think that both were failures. It is worth noting that of the five companies that I’ve been a key part of creating (Zip2, PayPal, SpaceX, Tesla and SolarCity) over the past fifteen years, every round at every company has been an up round, even in the worst of all market conditions. In other words, no matter whether you were a series A, B, C, D, etc investor, you always made money. With a public company, there are of course significant short term fluctuations in share price, but those investors that believe in a long term hold strategy should be comforted by this track record. Thomas also falsely states that I’m alienated from the rest of the management team at PayPal and have a completely different version of history to them. In reality, Peter Thiel, who replaced me as CEO of PayPal, later became one of the biggest investors in SpaceX. Max Levchin (PayPal CTO), Peter Thiel, David Sacks (PayPal COO) and I produced a movie together soon after we worked together at PayPal. There are half a dozen other ventures involving me and several other members of the PayPal management team. Tesla’s Investors Thomas references another NY Times Miller article about an email I wrote to customers and claims I said Tesla would start getting DOE funds in four to five months. What I actually said was that the DOE had told me to expect funds disbursement in four to five months. This was absolutely true. In the end, it took the DOE six months longer than they themselves expected, since the ATVM loan program was brand new. In any event, Thomas bizarrely manages to create a fake negative story out of what was actually a huge victory for Tesla. We were selected as the first winners of the Advanced Technology Vehicle Manufacturing program, along with Ford and Nissan. One of the requirements of this program was that you had to demonstrate that you were a viable ongoing business and that you had a compelling technology and business model for the funds sought. This is completely different from the auto bailout program for GM and Chrysler, although many in the media confused the programs. In fact, the reason that GM and Chrysler were excluded from the ATVM program, is that they were going through bankruptcy and therefore obviously failed the requirement to have a viable ongoing business. Thomas falsely states that Tesla wasn’t profitable last year, even though I said it would be. In fact, Tesla was profitable in 2009, albeit only for the month of July. That’s the best we could do, given the ramp up in Model S expenses, but nonetheless it was an important symbolic victory. If all Tesla did was focus on being a small sports car company and sell powertrain technology, it would still be profitable today, as both businesses generate a good margin. However, my goal from the beginning has been to make electric cars that anyone can afford (Model S is step two in that process, not the end game), which requires a huge expansion in production. We are trying to go from about 500 Roadsters per year to 20,000 Model S vehicles. In other words, production is intended to be 4,000% of what it is today in only a few years time. There is just no way to remain profitable with that level of growth and capital expenditure. Regarding Car & Driver quoting me as saying that GE would be an investor, that was an error on my part that was corrected as soon as C&D published. The C&D interview occurred a few months earlier when GE had confirmed via email that they would be investing. Then GE had some sort of internal crisis and pulled out at the thirteenth hour (they had asked us to extend the closing deadline to allow them to participate), which was unfortunate for them. Their investment would have done incredibly well. Thomas pointedly ignores actual Tesla investors. In addition to the excellent venture investors of Valor Equity, DFJ, Technology Partners and others, there is Daimler and Toyota. Daimler invested $50M in Tesla after working with us for a year on the electric Smart car and doing extremely detailed technical and financial due diligence. When we did another investment round late last year with ADWEA and Fjord Capital, they invested again. When we did the IPO, they didn’t sell a single share, despite having a roughly threefold return on investment. The Toyota Deal Thomas states that although Toyota and Tesla announced that they would be developing a vehicle together, the SEC filings done right after the press conference say that we have no written agreement and there is no guarantee that we will get one done. Therefore, he concludes that I (and presumably Akio Toyoda), were misleading the public at the press conference! Thomas actually knows better, but, for those who aren’t familiar with the requirements of an IPO prospectus (aka S-1), you always have to state the worst case scenario. This is done for liability protection, but is definitely not what is actually expected to occur. Anyone who thinks that Akio Toyoda, the president of Toyota, would give a major public speech in front of the governor of California about doing a joint electric vehicle project with Tesla and not follow through is a complete fool. As was announced last week in Japan by Toyota, we have now signed the agreement and will be delivering the first prototypes this month. The vehicle and details of the program will be unveiled at another event later this year. Despite Toyota’s recent troubles, they are still the largest car company in the world and by far the leader in hybrid electric vehicles. For them to have invested in Tesla, (moreover at the IPO price) and want to partner with us to produce a vehicle is a great honor and a powerful endorsement. Purchasing the NUMMI plant for $42M, which has the ability to manufacture half a million vehicles per year or almost 1% of global automotive production, and making that our Tesla factory is another valuable element of the relationship. I should mention that NUMMI was owned half by Toyota and half by the General Motors spinoff (Motors Liquidation Corp), so we owe them a debt of appreciation too. The main reason I love this factory is that it accelerates our ability to produce an affordable mass market car. The Model S platform will at most consume 50k to 100k of the NUMMI capacity. The remainder of the plant will be sectioned off until we can bring our high volume affordable electric car to market, which has always been my dream for Tesla. CrunchBase Information Tesla Motors Elon Musk Information provided by CrunchBase

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Elon Musk: “Why Owen Thomas Is Silicon Valley’s Jayson Blair”

Google Secretly Invested $100+ Million In Zynga, Preparing To Launch Google Games

Google has quietly (secretly, one might say) invested somewhere between $100 million and $200 million in social gaming behemoth Zynga , we’ve confirmed from multiple sources. The company has raised somewhere around half a billion dollars in venture capital in the last year alone, including $150 million from Softbank Capital last month and $180 million late last year from Digital Sky Technologies, Tiger Global, Institutional Venture Partners and Andreessen Horowitz. The Softbank announcement was never officially confirmed by the company, however, and the Google investment was likely part of that deal as well. The investment part of the deal closed a month ago or so. A larger strategic partnership is still in process. The investment was made by Google itself, not Google Ventures, say our sources, and it’s a highly strategic deal. Zynga will be the cornerstone of a new Google Games to launch later this year, say multiple sources. Not only will Zynga’s games give Google Games a solid base of social games to build on, but it will also give Google the beginning of a true social graph as users log into Google to play the games. And I wouldn’t be surprised to see PayPal being replaced with Google Checkout as the primary payment option. Zynga is supposedly PayPal’s biggest single customer, and Google is always looking for ways to make Google Checkout relevant. And there’s more. These same sources are saying that Zynga’s revenues for the first half of 2010 will be a stunning $350 million, half of which is operating profit. Zynga is projecting at least $1.0 billion in revenue in 2011, say our sources. This blows previous estimates out of the water. Zynga continues to work on high level strategic business development deals. The reason these deals are so attractive to companies like Yahoo and now Google is this – Zynga allows them to rebuild the massive social graph, currently controlled by Facebook. For whatever reason people love to play these games and get passionately addicted to them, coming back day after day. That’s helped Facebook become what it is today. Google, Yahoo and others want some of that magic to rub off on them, too. We’ve reached out to both Google and Zynga for comment. Neither have responded. There will be lots more news on Google Games in the near future, we’re guessing. Here’s a job opening for a Product Lead for Google Games, for example: Product Management Leader, Games – Mountain View This position is based in Mountain View, CA. The area: Product Management One of the many reasons Google consistently brings innovative, world-changing products to market is because of the collaborative work we do in Product Management. With eyes focused squarely on the future, our team works closely with creative and prolific engineers to help design and develop technologies that improve access to the world’s information. We’re responsible for guiding products throughout the execution cycle, focusing specifically on analyzing, positioning, packaging, promoting and tailoring our solutions to all the markets where Google does business. The role: Product Management Leader, Games The Product Management Leader, Games will be a flexible, results-oriented, and experienced senior leader who will be responsible for developing Google’s games commerce product strategy and partnering to build and manage the business with a cross-functional team. You will have visionary product insight, combined with experience in the online content business, significant technical expertise and extensive leadership and business skills. The Product Management Leader, Games combines a great instinct for developing compelling products with a strong focus on users and technical aptitude to work with a world class engineering team and the business sense to drive product goals and strategies. Responsibilities: Identify market opportunities and define product vision and strategy. Develop and launch new products and enhance existing products. Lead and mentor a team of Product Managers. Engage closely with the engineering team to help determine the best technical implementation methods as well as a reasonable execution schedule. Establish partnerships as necessary to drive the growth of Google’s products. Requirements: Technical degree or equivalent experience. Masters or PhD preferred. Experience building an online gaming business both on the web and on mobile devices. Deep understanding of the game business and how to create hits. Proven success in driving product strategy and product design for a successful game. Solid product management experience with a track record of creating innovative and winning Internet or software solutions. Significant people and organizational management skills. A natural leader and mentor. Demonstrated ability to gather user requirements and convert them into a winning product vision. Strong quantitative and analytical abilities. Strong communication skills with the ability to evangelize the merits of Google’s products internally and externally. CrunchBase Information Zynga Google Information provided by CrunchBase

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Google Secretly Invested $100+ Million In Zynga, Preparing To Launch Google Games

AP Not Amused By The Woot Story, Tries To Play The Oil Spill Card

Oh those jokesters over at the AP — the fun never ends! Last night, we wrote a post noting that Woot was (humorously) calling out the AP for not following their own ridiculous rules when quoting from content. By Woot’s calculation, using the AP tool , the AP owes them $17.50 (but Woot was nice enough to offer them the chance to buy some headphones off of Woot instead). The AP didn’t like that story — neither our’s or Woot’s. This morning, Paul Colford, the Director of Media Relations for the AP sent emails to both me and Woot CEO Matt Rutledge. Here’s what we got: MG Siegler: Surely you’ll also want your readers to know that The Associated Press INTERVIEWED Mr. Rutledge, as this version of the “newsy little thing” you cite makes clear: http://bit.ly/cl8JlX Meanwhile, AP staffers across the Gulf region and in Washington continue to provide comprehensive coverage of the oil spill. You’ll find highlights of that coverage here: http://www.ap.org/oil_spill/ Cheers, Paul Colford Did he really just pull out the oil spill card? Yes, he did. A few minutes later, Rutledge got the same basic email, minus the oil spill coverage reference. The emphasis of both is that the AP actually interviewed Rutledge about the story. Sure enough, they did. Here’s the quote the AP used from that interview: “I’m really excited,” he said. Yep, that’s it. So that’s 24 words lifted from Rutledge’s post (which wasn’t linked to, by the way) and 3 words from the AP’s reporting. So, if I’m interpreting this correctly, the AP’s stance is that it’s fine to lift excerpts from others’ work as long as you interview them — even if that interview only results in a three word quote and the quotes you’re lifting are much longer. Just to make sure, I emailed the AP about it: so I’m confused, you’re allowed to quote all you want for free from a blog post if you do a phone interview with the person and quote three words from that interview? so if I do a phone interview with the AP, can I then copy and paste an entire AP story free of charge? serious question. I didn’t get a response. But I did send it to Rutledge (remember, the interviewee here). Here’s what he wrote back, “ I was just mulling over how to respond to similar confusing email here, but I think I like your response better .” A couple hours later I wrote a quick follow-up to the AP: Hi Paul — Just following up. No statement here about this? Happy to hop on the phone. About 20 seconds later Colford writes back: Root of this non-”story” ($17.50 for quotes) is 2 yrs old, as AP noted again in 2009:  http://bit.ly/9ehJGZ Thanks. Ouch. Someone is a little cranky. A few things here. 1) Interesting that Colford didn’t note that position at all in his original email. Instead, his position was that they were free to lift passages from Rutledge’s post because they “interviewed” him. 2) That AP release from 2009 completely disregards the fact that in 2008, the AP did in fact try to bully Drudge Retort into taking down excerpts from their stories that ranged in length from 39 to 79 words. After some big backlash, they quickly tried to back away from that, and their 2009 statement basically rewrites their position stating that they’re not going after bloggers for using excerpts from their stories (even though they clearly went after Drudge Retort). 3) Wouldn’t a “non-’story’” be a story? The quotes around story already indicate Colford’s belief that the Woot issue isn’t a story. So a non-non-story is a story. Anyway, whatever. I’m a little confused by this whole thing. So is Rutledge. I think the AP is too. But I’m going to go with what I can only assume is their policy now. Since I technically “interviewed” Colford for this post, I’m going to copy an AP story below. I’ll go with an oil spill one since he was so quick to point those out. And sure, I only got a few words out of Colford, but since that doesn’t seem to matter, I’m just going to paste an entire AP story below. I like this new policy. Jun. 24, 2010 5:47 AM ET AP check: Shoddy disposal work mars oil cleanup JAY REEVES, Associated Press Writer ORANGE BEACH, Ala. (AP) — A leaky truck filled with oil-stained sand and absorbent boom soaked in crude pulls away from the beach, leaving tar balls in a public parking lot and a messy trail of sand and water on the main beach road. A few miles away, brown liquid drips out of a disposal bin filled with polluted sand. BP PLC’s work to clean up the mess from the worst offshore oil spill in U.S. history already has generated more than 1,300 tons of solid waste, and companies it hired to dispose of the material say debris is being handled professionally and carefully. A spot check of several container sites by The Associated Press, however, found that’s not always the case. Along the northern Gulf coast, where miles of beaches have been coated with oil intermittently for two weeks, the check showed the handling and disposal of oily materials was haphazard at best. A mound of oily sand sits in an uncovered waste container in a parking lot at the crown jewel of Alabama’s park system, Gulf State Park. Water from the previous night’s storm drips out of the bin into a brown pool on the asphalt. In Pensacola, Fla., along the road through Gulf Islands National Seashore, trash bags from the debris removal hang over the side of big storage bins. A waste collection area dotted with numerous bins full of spill debris stands in what seems like an odd spot: Smack in the middle of the tourist section in Gulf Shores, Ala., directly across the street from a seafood restaurant hungry for customers because of a lack of tourists. Cleaning up a spill is an undeniably messy job, particularly when crude oil or tar balls are washing ashore in varying amounts in four states. The debris isn’t classified as hazardous waste, so it can be placed in landfills that accept ordinary household garbage, including table scraps. Yet Jerry Kidd, doing maintenance work at a condominium, couldn’t believe it when he saw a Waste Management Inc. truck pull away from a collection site in Orange Beach piled with loose sand, oil-smeared protective gear and oily boom pulled out of the water. It was trailing pollution of its own. The company says it is using 535 containers lined with what amount to huge black trash bags to collect debris from Mississippi, Alabama and part of the Florida Panhandle under a contract with BP. But not all of the bins really are lined, and liners have failed in others. “They’re going down the road leading to the landfill; they take the same route every day. They’re leaking onto the roads, into the storm sewers,” said Kidd. “There’s no telling where it’s going.” The Alabama Department of Public Health, which regulates the transportation of such wastes in the state, said it wasn’t aware of the problem until contacted by AP. “This needs to be taken care of, and get these things sealed tight,” said Pres Allinder, director of environmental services for the department. “There’s no point in collecting this stuff if they’re just going to spread it around.” Waste Management is taking solid wastes from the three states to landfills in Vernon, Ala.; Pass Christian, Miss.; and Campbellton, Fla. Spokesman Ken Haldin said the company would be more careful, having drivers check bins for problems and possibly using a new type of liner, because of the AP findings. “It is something we are going to be addressing,” he said. “They’re probably isolated situations, but we are still early in the process with all this work.” Despite problems, Haldin said Waste Management is trying to make sure oil spill contamination isn’t spread inland. “There are a whole set of steps we are taking to make sure this operation is safe,” he said. Liquid waste, such as oily water left from the cleaning of oil-blocking booms or the mix of oil and water picked up by skimmer boats in the Gulf, is handled separately. The oily residue is processed for sale where possible and the water is reused or injected underground. The amount of waste being generated sounds staggering, but it’s not unusual in the disposal business. “This whole spill is going to be a drop in the bucket for its impact on landfills,” said Vic Cullpepper, technical director at River Birch Landfill, near New Orleans. “A lot of people are trying to blow this up and say it’s going to be a problem for landfills, but it’s not.” BP says 761 tons of crude-contaminated waste already has been buried at the two landfills in Alabama and Florida. Some 13,100 cubic yards of oily waste have been buried in Louisiana, where the amount is being tallied by volume instead of weight. Marlin Ladner, a supervisor with Harrison County, Miss., is angry about spill waste being buried in his coastal county, which still is trying to recover from Hurricane Katrina in 2005. The county could use the dumping fees from the disposal operations, he said, but there are too many uncertainties. “I just don’t think it’s worth it,” he said. “I just have a problem with BP, in effect, polluting our beaches, bays and estuaries and then turning around and hauling that stuff and dropping it just four or five miles from the coast here.” BP says no oily material will be sent to the Mississippi landfill. ___ Associated Press writer Melissa Nelson contributed to this report from Pensacola, Fla. Associated Press Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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AP Not Amused By The Woot Story, Tries To Play The Oil Spill Card

IBM Acquires Enterprise Data Security Software Company BigFix

IBM is making another acquisition today, buying up computer security software company BigFix. Terms of the deal were not disclosed. BigFix security software identifies all of a company’s PCs, laptops, server and then monitors and flags IT administrators when devices are not in compliance with corporate IT security standards. BigFix’s software promises to make security fixes across at least 500,000 machines in a matter of minutes.

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IBM Acquires Enterprise Data Security Software Company BigFix

Local.com Buys Domain Advertising Company OCTANE360 For Up To $11M

Local business directory and search engine Local.com this morning announced the acquisition of the assets of OCTANE360 , a technology startup based out of Los Angeles that provides domain-based local advertising solutions to small businesses, domain portfolio owners, agencies and channel partners. Under the terms of the agreement, Local.com is paying $5 million in cash and stock with an earnout of up to $5.9 million if certain performance criteria are met in the two-year period following the closing. OCTANE360 will become a wholly-owned division of Local.com Corporation . Founded in 2008, OCTANE360 offers a number of services to its client base, which consists mostly of small businesses and agencies, on a direct, wholesale or private label basis. The services it offers include targeting and registration of geo-category based local website domains ( examples ), website creation, hosting and management, an ad exchange system to manage the selection and deployment of ad inventory and a content marketplace for the management of geo-category content. Following the acquisition, OCTANE360 will be managed within Local.com’s Sales & Ad Services business unit, and its products and services will be utilized by the company’s Owned & Operated and Network business units. OCTANE360 CEO Adam Rioux will become Local.com’s vice president, leading the newly added division. Finally, Local.com also announced the closing of a $30 million revolving credit facility with Silicon Valley Bank . The facility, secured by all of the company’s assets, is expected to be used primarily for general working capital and to fund more ‘strategic growth initiatives’. CrunchBase Information Local.com Information provided by CrunchBase

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Local.com Buys Domain Advertising Company OCTANE360 For Up To $11M

Boston-Power Recharges With $60 Million Funding For Lithium-Ion Batteries

Better batteries may be on the way as lithium-ion battery producer Boston-Power ramps up its manufacturing and R&D with a $60M Series E round from Foundation Asset Management and Oak Investment Partners.  Boston-Power produces Sonata , better known as Hewlett-Packard’s Long Life Battery , as well as Swing , which is used to power electric vehicles including the upcoming ZE Saab 9-3 . The company plans to double its workforce , adding sales and marketing staff in Massachusetts and growing its manufacturing centers in Taiwan. Founder and CEO Dr. Christina Lampe-Önnerud said the funding will help Boston-Power meet global market demands. Currently, the company can’t produce batteries fast enough to compete with more established players like Sony and Panasonic. Venrock and Gabriel Venture Partners, who previously invested in the company, also contributed to this round, bringing Boston-Power’s fundraising to $185 million since 2005. Most recently, the company raised $55 million in January. CrunchBase Information Boston Power Dr. Christina Lampe-Onnerud Foundation Asset Management (FAM) Oak Investment Partners Information provided by CrunchBase

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Boston-Power Recharges With $60 Million Funding For Lithium-Ion Batteries

Apptera Raises Another $10 Million For Its Voice & Visual Mobile Advertising Network

Mobile advertising company Apptera has raised another $10 million in VC funding, we’ve learned via an SEC filing . The startup’s previous financing round dates back to November 2008, also totaled about $10 million and came from investors such as Alloy Ventures , Lightspeed Venture Partners and Walden International . The company has yet to publicly disclose the new capital injection, but these types of follow-on rounds typically come from existing backers, with maybe one or two additional investors. Founded in 2001 in Silicon Valley, Apptera operates what it refers to as a ‘Voice & Visual Mobile Advertising Network’, enabling the company to dynamically serve voice ads to callers and enhancing those calls with interactive visual engagements. Callers can opt in to voice ads and have special offers such as coupons and promotional codes, videos, even maps and directions sent direct to their phones, straight away or at a time scheduled in the future. Publishers in its mobile advertising marketplace include movie ticketing services (such as Movietickets.com, Moviefone and Fandango), free-411 services (e.g. Jingle and AT&T), social voice services and blogs, and widgets on social networks like Facebook and MySpace. At the help of Apptera we find Henry Vogel, the former eBay exec that was previously chief revenue officer of Quigo Technologies, the ad network company that was acquired by AOL in December of 2007. The rest of the members of the management team have a ton of experience from a variety of positions at companies like Yahoo, Overture, eBay, Meraki, Spot Runner, ESPN, Sony Pictures and iPass under their belts. CrunchBase Information Apptera Information provided by CrunchBase

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Apptera Raises Another $10 Million For Its Voice & Visual Mobile Advertising Network

As Holiday-Order Time Nears, Retailers Are Nervous

It’s getting to be that time of year again — the time when ordinary mortals think “vacation,” and retailers think, “holiday orders.” Especially big retailers, who need to order mass quantities far ahead of time to make sure they can get enough stock. You would think this would be a season of cheer after several months of gently rising retail sales . But it turns out the situation is a little more complicated than that. Many retail chains are still nervous that consumer confidence may evaporate before holiday trees go up, The Economist reports. And that should make small retailers nervous, too. The back half outlook for 2010 is really tough to call. Consumer studies have shown growing confidence for several months. But it’s like retailers are still suffering post-traumatic stress from the deep recession of the past two years.

Getting the Numbers to Add Up

As a consultant to start-ups and early-stage companies, I see a lot of business plans. Often, these plans are written by entrepreneurs with great ideas and promising products but only a vague idea of the size of the market or how many middlemen they’re going to have to cut in along the way. As a result, the sales projections that they come up with are often wildly optimistic — $50 million the first year, $100 million the second year and $250 million the third — and the profits are so enormous that an investor might wonder why the company needs to raise any capital at all. And yet these entrepreneurs wonder why their business plans aren’t getting funded. The reality is that no matter how passionately you believe in your business, you’ve got to make the numbers work before you can turn your entrepreneurial dream into the reality of a profitable and scalable business. While nobody has a crystal ball that can predict the future, a good financial model will help you understand the key drivers that make your business tick and help you avoid the kind of problems that can sink your venture before it even launches. Here are three common business mistakes that a good financial model can catch: 1. Your business must hit critical mass before it can reach profitability. Any business that relies on the power of database marketing — a time-share group, house-swapping club or online dating service, for example — requires its database to grow to a certain size before other members will be interested in joining. And that’s the catch: Until the database is large enough to attract a significant number of members, few people will want to join. Therefore, database marketers must spend big dollars to acquire customers without knowing whether their investment will ever pay off. The solution: Give channel partners (trade associations, clubs, affiliate web sites, etc.) a piece of the action in return for helping lower the cost of customer acquisition. 2. The cost of customer acquisition is too high for your company to ever become profitable. As many dot coms discovered 10 years ago, you can’t always spend your way to profitability. While laying out millions of dollars for advertising may be the quickest way to pump up revenue, it’s a money-losing strategy if your company can’t turn those dollars into life-time customer value. Magazine publishers, e-commerce merchants and other direct marketers may break even or lose money when they first acquire a customer but ultimately recoup their investment when the customer comes back to renew his subscription or place another order. By contrast, a company that spends $300 to acquire a subscriber who spends $20 a month and cancels his subscription at the end of the year is pouring its money down the drain. The solution: Test, measure and test again. Only when you’ve done enough testing to figure out how to create a positive arbitrage between how much you pay to acquire the customer and how much revenue the customer is likely to generate should you throw big money at a roll-out campaign. 3. Your company has no reseller channel. Because it’s difficult and time-consuming to acquire customers, most new companies find it easier to break into a market by tapping into a network of manufacturers’ reps, agents, brokers and other third-party resellers. At my former company, NetCreations , our email marketing business skyrocketed once we were able to tap into the network of list brokers and ad agencies that recommended direct mail lists to leading magazine publishers, catalog marketers and other corporate clients. By contrast, companies like public relations firms, yoga studios and pet grooming businesses that enter a market without an existing reseller channel often struggle to survive, alternating between feast and famine. The solution: Make a list of potential channel partners before you start your business and ask them if they’d be willing to send some business your way.

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Getting the Numbers to Add Up