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Content Tagged Craig
U.S. WiMAX Saved by $3.2 Billion Infusion
You can all Xohm now — and call it Clearwire. The much talked about WiMAX joint venture between Clearwire and Sprint Nextel is going to happen and the news is going to come as soon as tomorrow. The combined company is going to be worth $12 billion, The Wall Street Journal reports. Here are some facts:
- Comcast is pumping in $1.05 billion.
- Intel Corp. is putting in $1 billion.
- $550 million will come from Time Warner Cable.
- $500 million will come from Google.
- $100 million will come from Bright House Networks.
- The new company is also going to be called Clearwire.
- Current Clearwire CEO Ben Wolff will also be the CEO of the new company, Craig McCaw will be chairman.
- The service will offer voice service and broadband.
- Cable providers will sell it under their own brand, with a re-seller agreement with the new Clearwire.
- There is a good chance this service comes out before the wireless guys roll out their LTE networks.
Other details are sketchy, but here are my thoughts:
- Sprint Xohm is dead.
- Craig McCaw can chalk this up another win — he saved his near-disaster investment(s) in Clearwire with this deal.
- Intel will throw mad money to save some of its investments, however foolish they might be.
- McCaw & Wolff bluffed their way to a sweetheart deal. The cable companies, Google and Sprint are all playing from a position of fear. McCaw made AT&T buy his wireless operation, spend billions on it and then walked away, smelling very green. Same is true this time.
- Many might see this as a win for Dan Hesse; I think of it as the start of one giant hack job in Overland Park, Kan. He will sell Nextel and be left with a puny Sprint that will eventually be sold to T-Mobile or someone willing to pay up just to shut up Wall Street.
- You might want to recall the AT&T implosion and the end of Michael Armstrong, who had the right ideas at the wrong time. Of course, he listened to Wall Street too much.
- The big winners will be the equipment providers: Motorola, Nortel, etc.
The elephant in the room:
This is a spaghetti-like mess of conflicts and self-interests. I wonder how open this network is going to be? Clearwire has a history of blocking other services such as VoIP carriers. Comcast is a known P2P offender. Will Google be our only search option?
The final word:
I told you so comes to mind :-)
Wireless Auctions Aren’t for Wimps
Frontline Wireless’ decision to bow out of the 700 MHz auction proves that in the Wild West of spectrum speculation, only the bold need apply. Frontline dropped out of the auction after finding it difficult to raise enough money to cover a $128 million up-front payment on the spectrum.
Backers of Frontline included former FCC chairman Reed Hundt; some of Silicon Valley’s most elite investors, such as John Doerr of Kleiner Perkins; and angel investor K. Ram Shriram. These are smart guys who presumably knew what they were getting into, but the reasoned approach to high-risk investing, as practiced by VCs, is nothing like the wildcatter mentality needed by spectrum investors.
The proceeds from this auction are expected to range between $10 billion and $30 billion, and the cost of building out a network using that spectrum might reach $10 billion. If Frontline couldn’t meet a $128 million payment, it’s best they got out early.
The 700MHz spectrum licensed at auction may go to the telecommunications carriers with large pockets and an established business, but just in case Google still has plans to make a play, it’s worth reviewing some recent spectrum speculation history to show the Googlers what might be in store for them.
Aloha Partners is one of the freshest success stories of spectrum speculation. AT&T offered $2.5 billion for its 700MHz spectrum in October. Aloha bid for its licenses in 2002 and paid $29 million for them.
Aloha got its spectrum on the cheap, but Craig McCaw, the head of Clearwire Communications, has raised more than $1.6 billion (including a $600 million public offering) to build out a wireless network on the WiMax standard using 2.5 GHz spectrum. Clearwire hasn’t talked about its total spectrum costs, and its stock is off 44 percent from its IPO, but when McCaw sells a company, he tends to make the big bucks.
There’s also the rather repetitive history of the satellite industry, which is littered with investment, bankruptcy and buyouts. When it comes to spectrum, you have to pay to play, and even that won’t guarantee success.
The GigaOM Show: Special Guest Craig Newmark
In the latest episode of The GigaOM Show, we chat with Craig Newmark, founder of Craigslist, and ask him if he has an exit plan or other new ventures in development? Craig began his online enterprise with a simple arts and technology event email list that went on to spawn Craigslist, in 1995. With its online classified success, most of the acknowledgment now resides on Jim Buckmaster, CEO & programmer of Craigslist. His next big idea? You have to watch the show to find out.
You can download the show in HD, QuickTime, Windows Media or Xvid formats.
Applying UML and Patterns : An Introduction to Object-Oriented Analysis and Design
Goodbye, Tello
Forget Web 2.0, and think VoIP when it comes to start-ups that are kicking the bucket. Tello, a San Mateo, Calif.-based start-up that launched with much fanfare back in January 2006, is no more, becoming one of the first high profile causalities in the voice over the Internet space.
An early player in the “presence” market, the company had all the buzz it needed to get started. Like most others, we were guilty of getting too impressed by the long list of luminary backers, and wrote about the company when it launched about 14-months ago.
Tello was the brainchild of Jeff Pulver, a VoIP visionary and founder of the VON conference. The company was launched in 2004 and raised about $5.5 million in series A funding from the likes of Eagle River (Craig McCaw’s investment arm), Evercore Partners (Michael Price’s investment vehicle), Rho Ventures (former Apple CEO John Sculley), and Intel Capital. That was followed by a $10 million series B round last July, led by BCE Capital and including all the previous investors.
Acting on a reader tip, we made a few calls and were able to confirm that the company had indeed pulled down its shutters. We decided to check out their offices in San Mateo and there was no “presence” of Tello, so to speak. (See accompanying photo!) The real estate company managing Tello’s space said the company had vacated the offices about a couple weeks ago.
We were not that sanguine about the company’s chances, given that it was in an increasingly crowded space where leviathans like Cisco, Avaya and lately Microsoft roam with abandon. Here are few lines from our original post:
Buzzwords, and pedigree of the investors might help ensure headlines, but it is hardly a slam dunk. Tello would need a lot of things to go right before it can be declared a success … My initial reaction to the service is that it might suffer from feature creep, and will be tough for actual users to adopt. And who really knows how well it will scale.
Anyway the company did not run out of money, but instead had a mutiny of sorts. Apparently the feature creep was enough for the engineering staff to up and quit, instead of grappling with ‘visions.’ A hallucination is more like it! So who’s next?