larry-ellison

Dal LaMagna: "Hail Mary" or "Hail Arianna"?

by on February 8, 2011

Ken Auletta at the New Yorker is saying that the AOL acquisition of the Huffington Post is Tim Armstrong’s “Hail Mary” pass for AOL. Since yesterday’s announcement AOL’s stock has been failing towards its yearly lows of $19.52 now at $20.50 as I write this. I say this is a “Hail Arianna” pass that will be caught. How can one person make the difference in the fortunes of a company? Think Steve Jobs of Apple, Larry Ellison of Oracle, Bill Gates of Microsoft, Larry Page of Google, and Mark Zuckerberg of Facebook. Arianna is now the president of the Huffington Post Media Group an AOL Company with a domestic audience of 117 million people. I was an original investor in Arianna Huffington’s Huffington Post back in March of 2005. Why? I wanted to see an effective progressive voice operating online. Back then Arianna was a consummate blogger who relentlessly and effectively articulated many of our frustrations with the Bush administration particularly its march into Iraq. Back then Arianna met Ken Lerer a genius strategist and teamed up with him to create the Post. Ken helped built the infrastructure around Arianna turning the blogger she once was into an institution. Last year Arianna met Tim Armstrong the new CEO of AOL and now he teams up with her supplying the infrastructure that multiplies the reach of the Post fivefold. Yes, I made a very nice return on my investment. I am using part of it to aggressively buy up AOL stock and while saying my Hail Ariannas.

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Mark Hurd’s Salary At Oracle Said To Be $950,000

by AP on September 8, 2010

NEW YORK — Oracle plans to pay newly appointed President Mark Hurd a base salary of $950,000 a year. The company also says the former Hewlett-Packard Co. CEO, who was ousted by that company last month, is eligible for a fiscal 2011 bonus of as much as $10 million. Oracle released the details of Hurd’s pay package in a filing with the Securities and Exchange Commission on Wednesday. The biggest part of Hurd’s pay package will be the 10 million stock options Oracle plans to give him. The company said Hurd’s options will carry an exercise price equal to the market value of the shares on the date they are granted. While the filing did not offer a specific date, Oracle shares closed Tuesday at $24.26, which would value 10 million shares at $242.6 million. If he stays with the company, Hurd will be given options to buy another 5 million shares each year for the next five years. Oracle is not shy about handing out big salaries and bonuses. Founder and CEO Larry Ellison, among the world’s richest people, drew a pay package worth roughly $70 million for the company’s most recent fiscal year, according to an Associated Press analysis of Oracle’s securities filings. It included a base salary of $250,000, a performance-based bonus of $6.5 million, stock options valued at $61.9 million and other perks totaling $1.5 million. During HP’s most recent fiscal year, Hurd received a pay package as CEO valued at $24.2 million, according to an AP analysis. His base pay came to $1.3 million, with bonuses totaling $15.8 million and $6.6 million worth of restricted stock. Hurd’s future at Oracle was complicated Tuesday when Hewlett-Packard sued Hurd to keep him out of his new job. HP is worried Hurd will use his knowledge of the company to give Oracle an unfair advantage. Lawsuits of that kind often end with a court ordering an executive to avoid certain parts of their employers’ businesses. Hurd resigned from HP last month after five years as the company’s CEO. An investigation uncovered inaccurate expense reports related to Hurd’s outings with an actress and HP contractor named Jodie Fisher, who claimed that her work at HP dried up after she rebuffed Hurd’s advances. Hurd’s move to Oracle has injected new friction into Oracle’s relationship with HP. The two companies have cooperated for years, with HP selling corporate servers and Oracle providing the software that helps organize the information stored on them. But Oracle, which is based in Redwood City, Calif., moved into direct competition with HP in the hardware business when it bought Sun Microsystems for $7.4 billion last year.

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Larry Ellison Pay Package Worth $70 Million

September 7, 2010

NEW YORK — Oracle Corp. founder Larry Ellison, one of the world’s richest people, drew a pay package worth about $70 million during the company’s most recent fiscal year. That’s down 17 percent from $84.5 million the year before, according to an Associated Press analysis of Oracle’s securities filings. The drop in overall compensation, including a smaller base salary and fewer stock options, came despite a better financial performance by the business software company. In fiscal 2010, Oracle made a profit of $6.1 billion, up 10 percent from the year before. Revenue climbed 15 percent to $26.8 billion. Ellison’s base salary came to $250,000, down from $1 million the year before. But the company did boost his performance-based bonus to $6.5 million, up nearly 80 percent from $3.6 billion. The bonus last year was cut because the Oracle didn’t meet internal earnings targets. Ellison made less in stock options in the most recent year; about $61.9 million worth, down 21 percent from $78.4 million. Other perks added up to $1.5 billion, most of it for security at Ellison’s home, roughly in line with the prior year. The Associated Press formula is designed to isolate the value the company’s board placed on the executive’s total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don’t include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive’s compensation in the previous fiscal year.

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Eve Tahmincioglu: CEOs, horny or otherwise, get too many breaks

September 6, 2010

Job applicants with a bad history are typically screwed . If there’s information out there about your negative financial background, your crummy criminal background, or your salacious sexual background, you’re going to find it hard to find a job. Unless you’re a CEO. The president of Oracle, Charles Phillips, who had a mistress take out a billboard about his philandering is being replaced by the disgraced HP CEO Mark Hurd who was accused of sexual harassment and was kicked out of HP a month ago because of misconduct regarding his expenses. Some reports say Oracle CEO Larry Ellison is tennis buddies with Hurd. Probably all you need today to get a sweet job in Corporate American. The question is, will it help the company? If there’s a doubt, will shareholders, or workers question the choice? But more importantly, will Oracle women rise up and say, “this is screwed up!” I asked women who were in the know at Oracle, and the answer was, probably not. “Oracle is a very competitive and driven culture and people who thrive there long-term have a tendency to ‘suck it up’ and perform,” said one source familiar with the women’s culture at Oracle who did not want her name used. “Their women’s network operates in a narrow bandwidth of trying to stay politically correct and not rock the boat in a highly political company culture.” Translation: No one is standing up against Hurd’s appointment, women or otherwise. Oracle’s CEO Ellison, who has been married four times, has been defending Hurd since he got the boot from HP. So it’s not totally surprising that he’d hook up his buddy with a gig. He sent an email to the New York Times after Hurd was fired saying: “The H.P. board just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago.” Clearly Ellison believes in his buddy. But should the rest of us? Hurd did do a good job of laying off lots of workers at HP, and he was paid handsomely for it , even upon his tainted departure. This seems to be the norm for so many CEOs — cut lots of jobs and you’ll be laughing all the way to the bank. Alas, if these guys don’t keep control of their penises it could cost the company some loose change. Just last week, one of the biggest janitorial companies in the nation, ABM Industries Inc., settled a suit for nearly $6 million for the sexual transgressions of some of its supervisors. The next sexual harassment and ethics training sessions at Oracle should be interesting.

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Bill George: A Perspective on the HP Tragedy: An Authentic Leader Loses His True North

August 11, 2010

The Mark Hurd situation can only be considered a tragedy for everyone involved. Hurd is one of the most outstanding leaders in the U.S. In 2005 he took over an ailing technology giant and restored it to greatness in just five years. He refocused HP on its original mission and values and built the company around its strengths – technology, customer service, and managerial discipline. He built a much better organization with excellent leadership at all levels, and unified a dysfunctional board of directors. During a short span, he turned HP into the world’s largest technology company and expanded its revenues to $125 billion with nearly $9 billion in profits. The markets rewarded his leadership, as HP’s market capitalization has doubled during a period in which the S&P declined in absolute terms. He leaves behind a company that is demonstrably stronger than it was when he took over. So what happened here? Did the HP board act “in a cowardly manner,” as Oracle CEO Larry Ellison charged in his letter to the New York Times? No, the HP board acted in a unified manner to address an extremely difficult situation. Most likely, the board was blindsided when it received the letter from Jodie Fisher charging Hurd with sexual harassment. The board did the responsible thing in conducting a thorough investigation. It concluded there was no basis for the sexual harassment charges, but that Hurd had violated basic HP employee policies regarding expense reporting as well as other issues. Should the board treat Hurd differently from other HP employees that had committed similar indiscretions? Its answer was “no.” The values and principles of the company had to take precedence over any individual, no matter how well he had performed or how valuable he was to the company. The board’s unanimous decision was that Hurd had to resign. Reports out of the company indicate that HP’s global employee base was overwhelmingly in support of the board’s decision. As much as the HP board doesn’t want to go through another CEO search, this time around it has excellent candidates both within and outside the company. Hurd has built a strong executive team with several excellent successor candidates. If the board chooses to go outside, it will have outstanding applicants lining up to be considered for the top job in Silicon Valley. The question remains, how did an exceptional leader like Hurd let this happen? We’ll never know how Hurd got into this position, nor is it ours to judge. His greater error was to dig the hole deeper. This is a classic case of Murphy’s Law of Compound Loss; i.e., when something goes wrong, individuals often compound their problems by trying to cover up the initial problem. For example, President Richard Nixon’s cover-up of the Watergate break-in is what compounded his problems and led to his resignation. Hurd could have acknowledged his liaison in the first place and likely wound up with only a reprimand. Instead, he compounded his problem by submitting inappropriate expense accounts. When the HP board initiated its investigation – which it was compelled to do by Fisher’s letter – Hurd made an agreement with her that kept her from cooperating with the board’s investigation. In business, we call this “hush money.” After his resignation was announced, Hurd allowed his close friend, Larry Ellison, to defend him by attacking the HP board. In spite of his recent actions, I continue to believe Mark Hurd is an authentic leader who lost sight of his True North. No matter how authentic they are, all leaders make mistakes. When this happens, the key is to recognize that you alone are responsible. By having the self-awareness to see how you strayed off course, or by accepting honest feedback from people who know you well, you can acknowledge your problems and return to the course of your True North. Hurd has his weaknesses, as all of us do and is facing the music for a personal failure. I believe this is not his last chapter. Hurd is only 53 years old and has nearly half his life ahead of him. If he acknowledges where he went wrong, he can come back to other leadership roles and continue to make a positive difference in the world.

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Fiorina Declines To Weigh In On Mark Hurd HP Scandal

August 10, 2010

SACRAMENTO, Calif. — California Republican Senate candidate Carly Fiorina on Tuesday declined to weigh in on the ouster of Hewlett-Packard Co. CEO Mark Hurd, her successor at the Silicon Valley company, saying she is focused on her campaign. Hurd resigned last week after an investigation into a sexual harassment claim found that he falsified expense reports on dinners and meetings with Jodie Fisher, who helped organize HP events from 2007 to 2009 and greeted executives at the gatherings. Hurd has settled with Fisher for an undisclosed sum, and both parties have said the relationship was not sexual. Hurd said an assistant prepared all of his expenses and has offered to reimburse HP. Fiorina was asked about Hurd’s departure Tuesday during a campaign stop at an almond plant in Sacramento. She said she was focused on trying to defeat Democratic Sen. Barbara Boxer by highlighting what she describes as Boxer’s antibusiness policies. “I’ve been solely focused on my own race,” Fiorina said during the stop at the Blue Diamond Growers almond processing plant in Sacramento. “I can only say that I wish HP well. It is a great company with great employees.” Analysts say Hurd’s severance package, estimated to be worth more than $40 million, reflects his steady leadership following Fiorina’s sometimes rocky tenure. Fiorina left with a $21.1 million package after she was ousted as CEO in 2005. Boxer’s campaign noted that under Fiorina’s stewardship, HP laid off 30,000 workers and shipped jobs overseas. At least one executive has come out in defense of Hurd. Oracle’s CEO Larry Ellison on Monday blasted HP’s decision as an act of “cowardly corporate political correctness.” Ellison, who is a friend of Hurd, said the technology giant made the worst personnel decision since Apple forced out Steve Jobs 25 years ago. Federal campaign fundraising reports show Ellison has donated $4,800 to Boxer’s re-election campaign.

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Forty Billionaires Follow Buffett’s Pledge To Donate Bulk Of Their Wealth To Charity

August 4, 2010

Famed investor Warren Buffett today announced the names of 40 of America’s wealthiest families and individuals who have signed on to the Giving Pledge, a charitable project that targets billionaires to pledge to donate the bulk of their wealth. From New York Mayor Michael Bloomberg to Oracle (ORCL) CEO Larry Ellison, each of the individuals and families announced today have made a pledge to give the majority of their wealth to the philanthropic causes and charitable organizations of their choice, either during their lifetime or after their death.

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Oracle’s Ellison Highest-Paid CEO as Paychecks Shrink, New York Times Says

April 4, 2010

By Dan Hart April 4 (Bloomberg) — Larry Ellison , chief executive officer of Oracle Corp. , was the highest-paid U.S. CEO last year as compensation fell for the second straight year amid the recession, the New York Times reported. Ellison received $84.5 million, all but $6.1 million of it in stock options, the newspaper said, citing a study by Equilar . The median total compensation for U.S. executives declined 13 percent to $7.7 million, while average total pay fell 15 percent to $9.5 million for chief executives at their companies at least two years, the newspaper said, citing the survey by executive compensation tracker Equilar. The median compensation for executives of companies receiving funds from the U.S. government’s Troubled Asset Relief Program, or TARP, was $6 million, down 34 percent from a year earlier. The median cash payout for the group rose 20 percent, while the stock and options component fell 94 percent and 92 percent, respectively, the newspaper said. Equilar’s study for the Times covered 199 public companies with 2009 revenue of at least $5.78 billion that filed annual proxy statements by March 26, the newspaper said. Boston Scientific Corp. ’s Raymond Elliott was second in the ranking with $33.4 million, including a bonus of $2.1 million, the newspaper said. Ray Irani , chief executive of Occidental Petroleum Corp. , was third with $31.4 million, up 39 percent from a year earlier, the newspaper said. Hewlett-Packard Co. ’s Mark Hurd saw his compensation decline 29 percent to $24.2 million, which included a $15.8 million bonus, in placing fourth in the survey, the newspaper said. James Hackett , chief executive of Anadarko Petroleum Corp. , was fifth with $23.5 million, most of that in restricted stock and stock options, the newspaper said. Rounding out the top 10 in sixth through 10th place, respectively, were: Alan Lafley , Procter & Gamble Co., $23.5 million; William Weldon , Johnson & Johnson, $22.8 million; Miles White , Abbott Laboratories, $21.9 million; Robert Iger , Walt Disney Co., $21.6 million; and Sam Palmisano , International Business Machines Corp., $21.2 million, the Times said. To contact the reporter on this story: Dan Hart in Washington at dahart@bloomberg.net .

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Oracle’s Ellison Highest-Paid CEO as Paychecks Shrink, New York Times Says

April 4, 2010

By Dan Hart April 4 (Bloomberg) — Larry Ellison , chief executive officer of Oracle Corp. , was the highest-paid U.S. CEO last year as compensation fell for the second straight year amid the recession, the New York Times reported. Ellison received $84.5 million, all but $6.1 million of it in stock options, the newspaper said, citing a study by Equilar . The median total compensation for U.S. executives declined 13 percent to $7.7 million, while average total pay fell 15 percent to $9.5 million for chief executives at their companies at least two years, the newspaper said, citing the survey by executive compensation tracker Equilar. The median compensation for executives of companies receiving funds from the U.S. government’s Troubled Asset Relief Program, or TARP, was $6 million, down 34 percent from a year earlier. The median cash payout for the group rose 20 percent, while the stock and options component fell 94 percent and 92 percent, respectively, the newspaper said. Equilar’s study for the Times covered 199 public companies with 2009 revenue of at least $5.78 billion that filed annual proxy statements by March 26, the newspaper said. Boston Scientific Corp. ’s Raymond Elliott was second in the ranking with $33.4 million, including a bonus of $2.1 million, the newspaper said. Ray Irani , chief executive of Occidental Petroleum Corp. , was third with $31.4 million, up 39 percent from a year earlier, the newspaper said. Hewlett-Packard Co. ’s Mark Hurd saw his compensation decline 29 percent to $24.2 million, which included a $15.8 million bonus, in placing fourth in the survey, the newspaper said. James Hackett , chief executive of Anadarko Petroleum Corp. , was fifth with $23.5 million, most of that in restricted stock and stock options, the newspaper said. Rounding out the top 10 in sixth through 10th place, respectively, were: Alan Lafley , Procter & Gamble Co., $23.5 million; William Weldon , Johnson & Johnson, $22.8 million; Miles White , Abbott Laboratories, $21.9 million; Robert Iger , Walt Disney Co., $21.6 million; and Sam Palmisano , International Business Machines Corp., $21.2 million, the Times said. To contact the reporter on this story: Dan Hart in Washington at dahart@bloomberg.net .

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Oracle’s Ellison Highest-Paid CEO as Paychecks Shrink, New York Times Says

April 4, 2010

By Dan Hart April 4 (Bloomberg) — Larry Ellison , chief executive officer of Oracle Corp. , was the highest-paid U.S. CEO last year as compensation fell for the second straight year amid the recession, the New York Times reported. Ellison received $84.5 million, all but $6.1 million of it in stock options, the newspaper said, citing a study by Equilar . The median total compensation for U.S. executives declined 13 percent to $7.7 million, while average total pay fell 15 percent to $9.5 million for chief executives at their companies at least two years, the newspaper said, citing the survey by executive compensation tracker Equilar. The median compensation for executives of companies receiving funds from the U.S. government’s Troubled Asset Relief Program, or TARP, was $6 million, down 34 percent from a year earlier. The median cash payout for the group rose 20 percent, while the stock and options component fell 94 percent and 92 percent, respectively, the newspaper said. Equilar’s study for the Times covered 199 public companies with 2009 revenue of at least $5.78 billion that filed annual proxy statements by March 26, the newspaper said. Boston Scientific Corp. ’s Raymond Elliott was second in the ranking with $33.4 million, including a bonus of $2.1 million, the newspaper said. Ray Irani , chief executive of Occidental Petroleum Corp. , was third with $31.4 million, up 39 percent from a year earlier, the newspaper said. Hewlett-Packard Co. ’s Mark Hurd saw his compensation decline 29 percent to $24.2 million, which included a $15.8 million bonus, in placing fourth in the survey, the newspaper said. James Hackett , chief executive of Anadarko Petroleum Corp. , was fifth with $23.5 million, most of that in restricted stock and stock options, the newspaper said. Rounding out the top 10 in sixth through 10th place, respectively, were: Alan Lafley , Procter & Gamble Co., $23.5 million; William Weldon , Johnson & Johnson, $22.8 million; Miles White , Abbott Laboratories, $21.9 million; Robert Iger , Walt Disney Co., $21.6 million; and Sam Palmisano , International Business Machines Corp., $21.2 million, the Times said. To contact the reporter on this story: Dan Hart in Washington at dahart@bloomberg.net .

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Oracle’s Profit Meets Estimates as Customers Begin Buying Software Again

March 25, 2010

By Rochelle Garner March 25 (Bloomberg) — Oracle Corp. , the world’s second- largest software maker, reported third-quarter profit that met analysts’ estimates after customers bought programs they had delayed purchasing during the recession. Profit before acquisition and some other costs was 38 cents a share in the period ended Feb. 28, the company said today in a statement. That matched the average of analyst estimates in a Bloomberg survey . Including deferred revenue from Sun Microsystems Inc., which Oracle acquired in January, sales were $6.47 billion. Analysts estimated $6.32 billion. Chief Executive Officer Larry Ellison , 65, has spent $41.8 billion buying 62 companies since January 2005 to add customers and products, including business applications and tools that make disparate pieces of software work together. License sales rose 13 percent to $1.72 billion as companies renewed spending. “Those license numbers tell you things are looking up in the enterprise space,” said David Rudow , a Minneapolis-based analyst with Thrivent Asset Management, which owns more than 3.7 million Oracle shares. “The acquisitions they’ve done in middleware are paying off. These are programs for the data center that you have to spend money on to run your business better.” Fourth-Quarter Forecast On a conference call to discuss the results, Oracle forecast adjusted earnings of 52 cents to 56 cents a share for the current quarter, while adjusted revenue will jump to $9.36 billion to $9.7 billion. Analysts on average estimated 52 cents a share on $9.53 billion in sales. Sales of new software licenses will rise to $2.83 billion to $3.1 billion, Oracle said. Hardware product revenue will be $1.2 billion to $1.3 billion. Oracle, based in Redwood City, California, fell 37 cents to $25.67 in late trading at 6:07 p.m. New York time. Earlier the shares rose 28 cents to $26.04 in Nasdaq Stock Market trading. They have advanced 6.2 percent this year through the Nasdaq close. Net income fell to $1.19 billion, or 23 cents a share, from $1.33 billion, or 26 cents, a year earlier. Revenue before adjustments increased to $6.4 billion. Goldman Sachs Group Inc. expects global technology spending to rebound this year, increasing 5 percent. Large companies in the U.S. will provide a “modest” contribution to total revenue growth, the firm estimates. To maintain growth, Ellison set Oracle on an acquisition spree that moved the company beyond its database software. Today the company competes against SAP AG , the world’s biggest maker of business-management software, handling tasks such as accounting, inventory and human resources. BEA Purchase In 2008, Oracle acquired BEA Systems Inc., stepping up its challenge against International Business Machines Corp. in the market for so-called middleware, or software that helps different kinds of programs share information. “Their vast portfolio is helping them compete better,” said Jeff Gaggin , a New York-based analyst with Avian Securities Inc. “The rebound in the economy is definitely helping their growth.” He has a “positive” rating on the shares, and doesn’t own them. With the $7.4 billion acquisition of Sun, Oracle gained the fourth-biggest maker of server computers, marking Oracle’s entrance into the hardware market. Oracle has said it will get out of Sun’s low-margin, high-volume server business — focusing instead on more profitable, high-performance servers. “A lot of companies have their moment where everything comes together but aren’t able to move forward as some new platform takes hold,” Tony Ursillo , an analyst with Loomis Sayles & Co., said in an interview from Boston. “Oracle, led by Larry Ellison, continues to have good visibility into how technology is evolving and then maintains its relevance in that evolving world.” Loomis Sayles owned 6.1 million Oracle shares as of Dec. 31, according to Bloomberg data. Oracle trails Microsoft Corp. in software revenue. To contact the reporter on this story: Rochelle Garner in San Francisco at rgarner4@bloomberg.net

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Sun Chairman McNealy Has `Few Regrets’ as Oracle Takeover Nears Completion

January 27, 2010

By Connie Guglielmo and Rochelle Garner Jan. 27 (Bloomberg) — Sun Microsystems Inc. Chairman Scott McNealy , in a final memo to employees yesterday as the company prepares to be acquired, said he has “few regrets” about how the fourth-largest maker of computer servers conducted business. “ Sun did not cheat, lie, or break the rule of law or decency,” McNealy wrote. “While we enjoyed breaking the rules of conventional wisdom and archaic business practice and for sure loved to win in the market, we did so with a solid reputation for integrity.” McNealy, 55, sent his memo to employees of the Santa Clara, California-based company as he readies a handover to Oracle Corp. After Oracle agreed in April to buy Sun for $7.4 billion, the purchase was delayed as European regulators investigated the transaction. Oracle received approval from the European Commission last week, removing one of the deal’s last hurdles. “While it was never the primary vision to be acquired by Oracle, it was always an interesting option,” McNealy said in the note, which thanked employees for “a great 28 years.” Oracle has acquired about 60 companies since January 2005. The $9.50-a-share purchase of Sun is Oracle’s first outside the software market. “To be honest, this is not a note this founder wants to write,” McNealy said in the memo. “Sun in my mind should have been the great and surviving consolidator. But I love the market economy and capitalism more than I love my company.” Severance Pay Sun’s top executives, including McNealy, Chief Executive Officer Jonathan Schwartz and Chief Financial Officer Mike Lehman , won’t be offered positions at Oracle, people familiar with the matter said. The executives won’t resign because they would forfeit severance packages that are triggered by the sale, said one person, who declined to be identified because the plans aren’t public. Schwartz is set to receive $12 million as part of his severance package, McNealy will get $9.53 million and Lehman is due $4.03 million, Sun said in a June 8 regulatory filing. Those sums didn’t include performance-based restricted stock, which Sun said it wasn’t able to value at the time. McNealy co-founded the company in 1982 and was CEO from December 1984 to April 2006. He then handed the job to Schwartz, 44, at a time when Sun was trying to recover from five years of losses. Oracle CEO Larry Ellison is scheduled to host an event today at the company’s headquarters in Redwood City, California, to lay out plans to integrate Sun’s products. Sun rose 1 cent to $9.49 yesterday in Nasdaq Stock Market trading. Oracle declined 15 cents to $23.88. To contact the reporters on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net ; Rochelle Garner in San Francisco at rgarner4@bloomberg.net .

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Alison van Diggelen: The Larry Ellison of Green

December 23, 2009

Silicon Valley — Newly minted rock star of green business, Kevin Surace shares his motivations and future vision for Serious Materials in an exclusive Fresh Dialogues interview. The CEO of Serious Materials was just picked as Entrepreneur of the Year by Inc. Magazine and joined Time Magazine’s list of Tech Pioneers Who Will Change Your Life. It’s an incongruous status for someone from the mundane world of building materials, but Kevin is being described as ‘savior of the world’, ‘ the Larry Ellison of green ‘ and has even turned down an invitation to the White House. He knows he’ll be invited back. In an exclusive Fresh Dialogues interview recorded before the accolades descended, Kevin reveals his motivations for waging war on climate change and the lessons learned in building a green company. We discussed the influence of Al Gore’s An Inconvenient Truth in helping create a market for green products; how Serious Materials got with the green program; and whether consumers are willing to pay a premium for green products. Kevin outlined how his company uses new media to get its message out and what his future plans are for the company. On Kevin’s motivations for wanting to save the planet “When you have children, you start to think what world are you leaving them? I think that affects everybody.” On how An Inconvenient Truth helped create a market for green “When that movie came out, it allowed the American public to get the story in a way they never got it before and that’s when I could step back and say: there’s an opportunity here to actually make a difference…LEED took off, green buildings took off…that had a profound impact on the entire industry.” Are consumers willing to pay a premium for green? “I don’t think they’ll ever be willing to pay a premium. That’s been our thinking from Day One.” How does Serious Materials use New Media? “We blog, we Twitter, we Facebook, we do an awful lot with the web, that’s unusual in the building materials space …. Our constituents are educated, they get it. They want to see video, hear audio, you’re on the web: that is new media today. Many of the eyeballs -and ears- have moved to the web, and we have to go with that.” What does the future hold for Serious Materials? “This is a venture backed company… they need to ultimately see an exit…you build these companies towards a potential IPO… you are ready for whatever life brings you: if that’s M&A, if that’s independence, an IPO…whatever. Over the next five years, one of those things will surely happen… We’ve increased our capacity ten X over a year ago and are ready for the onslaught here. Our business keeps growing…our products save people money.” This Fresh Dialogues interview was recorded on June 30, 2009 at Serious Materials in Sunnyvale, California. To hear an exclusive interview with Bloom Energy CEO KR Sridhar, Time Magazine’s “Tech Pioneers Who Will Change Your Life 2009″ click here .

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America’s Cup Spending Spree on Design May Buy Speedier Boats for Everyone

December 15, 2009

By Aaron Kuriloff Dec. 15 (Bloomberg) — The America’s Cup boats that will race in February — products of a technological showdown between billionaire sailors — may bring wings, multiple hulls and computers to the next generation of sailboats. The two-year legal battle between billionaires Larry Ellison and Ernesto Bertarelli has produced two racing yachts that are a decade ahead of any boat built previously, even as it has dogged and delayed the 158-year-old regatta, to be held off the coast of Spain. The innovations made as longstanding Cup rules were abandoned in the search for a settlement may one day benefit sailors on weekend jaunts. Designers for both Ellison’s BMW-Oracle Racing and Bertarelli’s Alinghi syndicate said building and learning to sail these boats, each at least 90 feet long and among the fastest yachts ever built, has meant gains in everything from data collection to sail technology. “We’re like kids in the candy shop,” said Dirk Kramers, chief engineer for the Cup-defending Alinghi catamaran. “During the last Cup , it was all about trying to squeeze another 1/100th of a knot out of the boat. Now we’re really in discovery mode, learning huge lessons every day. We get to work on boats that are just so much more exciting than anything that’s ever been done.” Sailors, recreational boaters or other users of ultralight, aerodynamic technologies may benefit in coming years from equipment and data being assembled by both the Alinghi and BMW- Oracle racing syndicates, said Pete Melvin, a U.S. Olympic sailor and world champion . Development Jump “It’s been a hugely concentrated development, with all the best people in the industry, plus outside experts in every field, all focused on pushing the edge of the envelope,” said Melvin, co-founder of Morrelli & Melvin Design & Engineering Inc. . “It normally would have taken eight or 10 years to do what’s been done in just two short years.” Morelli & Melvin has designed multihulls, including Steve Fossett’s record-setting Playstation , and has consulted for BMW- Oracle. Multihulls are much faster than monohull boats, because they are lighter and have less drag. The America’s Cup has long featured yachting’s cutting edge. The 1983 victor, Australia II , used wings on its keel to reduce drag and increase performance. Such wings, so secret at the time that it took two undercover frogmen to spot them, are now common on sailboats worldwide. Recent editions of the Cup required boats that were restrictive and boring, says Donnie Brennan, boatwright for the U.S. Olympic sailing team in Beijing and owner of Mobile, Alabama-based Diversified Marine Services Inc. Two years of lawsuits over the rules of the event have led to an anything- goes faceoff that “certainly opens the door to innovation and technology,” he said. ‘Kazilllions of Dollars’ “They’re charting new areas,” said Brennan. “It’s great that we’ve got someone like Larry Ellison out there dumping kazillions of dollars into this technology.” Bertarelli spent about $90 million to capture the Cup from New Zealand in 2003. Grant Simmer, Alinghi’s design team coordinator, told Seahorse magazine that the team’s catamaran cost about five times as much as a typical Cup boat. Representatives of both teams declined to discuss the details of their biggest advances, saying they wanted to hide them from each other. Alinghi said in a New York court filing that Ellison had hired spies to sneak looks at its catamaran. Mike Drummond, design chief for the BMW-Oracle trimaran, said he can’t conceal the 190-foot wing that this month replaced a sail on his boat. The carbon-fiber foil is bigger than the wing of an Airbus A380 , the world’s largest passenger jet. The 60-foot Stars & Stripes catamaran that defended the America’s Cup in 1988 used a wing that was about half the size. A wing is more efficient than a conventional sail, holding its shape better while generating increased lift and diminished drag. High Risks It’s also harder to control, Drummond said. “It is an unknown risk for us,” he said. “We decided that the potential gains were enough that we would take that risk.” Drummond called some recent small breakage “teething problems” and said that the team was working to solve them while processing “more e-mails than the moon landing” full of questions from excited sailors. Alinghi also has considered wing technology, Kramers said in an interview. Designers also have worked on new kinds of line to handle the excess loads and, for the first time in the America’s Cup, onboard engines to power winches and other systems. On-Board Cameras Other likely spots for technological advancement include some of the most concentrated data collection in sailing history. Both teams use fiberoptic systems and on-board cameras to measure things like sail shape and stress. Kramers said sailors would find uses for both the data and the collection systems. In the meantime, he cautioned against celebrating either design until the two boats meet off Valencia. “It’s not a game about who comes up with the fanciest toys — you’ve still got to win a boat race,” Kramers said. “You can shoot yourself in the foot quite easily. You can make it too light and have something break on you, or you come up with something so complex you don’t know how to sail it. So there’s a certain amount of restraint involved, too.” To contact the reporter on this story: Aaron Kuriloff in New York at akuriloff@bloomberg.net .

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