April 2007 – EUCAP Capital Partners

Panda Software Company Sold Cheap

Panda software, one of top antivirus software companies in the world, has been purchased by a Venture Capital Syndicate. Panda software founders have sold 75% of the company at a reported €133m valuation. Oddly, Panda has not issued an official press release. The valuation is a sales multiple of less than times one last reported revenues. An inexplicably low sale price for a world player in the antivirus market.

Local hero, Mikel Urizarbarrena, has always been a reference to EUCAP partners in northern Spain. Mr. Urizarbarrena has created a world leading software security company, while retaining 100% of founder equity. A staggering entrepreneurial feat.

As recently as 2005, Panda was ranked number four in market share, as shown in the table below.

Worldwide 2005 Total Antivirus Software Revenue for All Software Segment Types
(Millions of Dollars)

Company	2005	2005 Market Share (%)	2004	2004 Market Share (%)	2004-2005 Growth (%)
Symantec	2,150.4	53.6	1,915.3	54.2	12.3
McAfee	753.9	18.8	666.5	18.9	13.1
Trend Micro	555.7	13.8	509.3	14.4	9.1
Panda Software	128.6	3.2	103.9	2.9	23.8
CA	86.5	2.2	75.3	2.1	14.9
Other Vendors	340.2	8.5	263.0	7.5	29.4
Total	4,015.4	100.0	3,533.2	100.0	13.6

Source: Gartner Dataquest (June 2006)

Currently, Symantec has a market cap of €12b, and McAfee €4b. F-Secure, a recent European entrant to the top 5 antivirus products, has a €380m market cap on the Helsinki stock exchange.

On these 2005 sales multiples, Panda should have been valued in the €700m range.

The speculation is that recent Panda revenues have come under pressure from smaller entrants like Sophos, F-Secure and Bitdefender (SOFTWIN), in the race for new hardware platforms like mobile, and the lucrative corporate market.

As the market consolidates further, it is clear capital is the key to funding the marketing and sales drive required to maintain market share. One can speculate that Panda was under-capitalized during 2006, as the founders were reluctant to accept new shareholders.

Hopefully, the supposed €100m injected in the company will provide the impetus to consolidate its market share, and see Mr Urizarbarrena through to a successful public offering at a billion € valuation.

[Via Investindustrial y Gala Capital compran Panda Software – CincoDias.com]

A press release has been issued

Google Aiming for the Radio Advertising Marketplace

Google’s pursuit of the advertising marketplace continuous relentless. Though radio advertising is unrelated to organizing the world’s information, their Audio Adwords is looking to impact the advertising agency sector hugely.

More businesses are trying Google radio Ads in their Adwords account. The reviews from testers seem generally positive.

The air time available has now been extended to a supposed 675 radio stations. Though, like for Adwords, Google will not reveal its media list. Given what Adwords and Adsense have done for online media publishing, Google’s Audio Adwords could revolutionize radio station economics, be it traditional air-wave or podcast radios.

I am impressed by Google’s solution to the problem of creating the audio spot. Composing an audio spot is harder than making an Adwords text box. Writing, composing and recording requires experience, training and a technical setup. Google provides a crowdsourcing marketplace tool, where you can invite audio industry professionals to bid for the design and recording project. The electronic job board allows up to five professionals to bid on your audio project.

The tariff rate for airing the radio spot is the same as Adwords; CPM, cost per thousand listeners. Plus, testing is easy and cheap. You can try different stations, zip codes, demographics, airing times and find the slots that best work for you. Split testing becomes feasible for small merchants.

The possibilities for the new radio ads marketplace are dizzying. Just like Adwords catalyzed a whole online publisher industry, the potential for economic growth in complemeting sectors are great investment areas.

The only stakeholders loosing out are the creative advertising agencies who currently hold a near-monopoly on mediating between advertisers and radio stations. The creative added value provided will be crowdsourced out; brand design and innovation will be the only added value left to them.

[Via Nick Piggott]

Google’s New Personalized Maps a Threat to Map Mashup Startups

Startup companies where Google’s services are central live dangerously. Today Google launched customisable maps, with an aggregation and social filtering. Companies like

which offer maps of interesting places submitted and reviewed by their community observe with apprehension. Google has only introduced a simple sharing function for the maps; social aggregation and filtering or tagging are, so far, absent.

Google should offer assurances to companies collaborating and cooperating through Google’s web services and APIs. Google should signal it will refrain from entering their space, otherwise Google’s open commons community, and crowdsourcing ecosystem will vanish.