Google muscles in on voice. "One phone number, for all your phones, for life." That's the promise from Google Voice, the company's game-changing new service. Among other features, it enables calls to ring on multiple phones, live screening of calls, transcription of voicemail and online archiving of text messages. As TechCrunch notes, "Google is finally bringing us the voice service that was promised back in 2006." That was when Google bought GrandCentral, a startup that they used as the base for Google Voice. The new service threatens the telecomm ecosystem—including tech startups. The New York Times reports that the service will hurt big players like Skype, by undercutting their VOIP calling rates. Smaller startups like Spinvox and PhoneTag, which offer voice mail transcription for a fee are in dire peril. The big drawback for consumers, TechCrunch points out, is getting a new number—and telling everyone you know. After that, the world of telephony is Google's for the taking.
Want to run a business, but not start one? The New York Times has a piece today on search funds, a growing trend in financing. A couple of aspiring entrepreneurs, typically bright young b-school grads, want to start a company, but they have no practical experience. So they go to investors, who agree to fund their search for and possible acquisition of a promising, profitable business. Ideally, they grow the business and everyone makes money. It's sort of like venture capital, but investors fund start-up entrepreneurs, rather than businesses.
How much equity is enough? On his blog, VC Bijan Sabet has some brief advice for entrepreneurs looking to reward advisors or investors with equity. "Unlike employees, advisors may not be helpful as time goes on. They may become distracted with other things on their plate. With employees, options typically vest over multiple years. It's hard to use that type of vesting schedule with advisor but I would at least think about it in those terms. "
How to save money on travel costs. The Wall Street Journal has a curious front page story on how Goldman Sachs has been radically cutting expenses by forcing its employees to stay at in (gasp!) rooms at the Embassy Suites which cost $250 a night (compared to $495 a night at their customary sleeping quarters, the Ritz). The article goes through the horrors that Goldman bankers are subjected to: poly-cotton blend sheets (with scandalously low thread counts), undignified wake-up calls that sound like a rooster, and a river view of New Jersey. Assuming that you've already forced your employees to make these big sacrifices, you may want to check out Hannah Clark Steinman's blog, which has the latest deals on everything from travel to technology.
More trouble from the mortgage meltdown. Small builders are facing stiff competition from foreclosures, the Wall Street Journal reports. Houses they built are back on the market at fire-sale prices, undercutting their attempts to sell new homes, and many buyers are limiting their searches to just foreclosures. While larger companies are cutting expenses and restructuring debt to stay alive, a lot of smaller contractors are going under.
For virtual startups, VC funds aplenty? Om Malick says startups making virtual goods, online games, or virtual worlds aren't seeing a downturn. His evidence: in the last month alone, three companies have won the VC lottery megamillions, including Greystripe, a games-related advertising network, an online social gaming company called SuperSecret, and Offerpal, a startup that links virtual currency to real-world marketing deals. Together, they saw $30.5 million last month. Malick says investor interest mirrors the growing popularity of social games and virtual worlds, but he also starts the post with "if there is an economic crisis", so we remain skeptical.
Jobless rates in January rose sharply across the country. In the counterpart to yesterday's story about local economies planning their own stimulus, the WSJ looks at January unemployment numbers. The picture is grim. Nearly half of states saw unemployment rates rise a full percentage point, "a remarkable jump." The worst cases were in manufacturing heavy states in the Midwest, and in states that suffered the most from the housing bust. Export-heavy states, which were buoyed until recently be overseas demand, saw numbers jump as the recession spread around the globe. Unemployment in South Carolina, home to international companies and other exporters, skyrocketed 4.7 percentage points in the past year. Compare recent data by state and year in the Journal's unemployment chart.
Is the recession slowing? Probably not, but retailers saw a possible glimmer of hope in February, with sales declining only 0.1 percent, compared to the 0.5 percent drop that economists anticipated. Analysts cite the affect of declining gasoline prices on disposable income. But fluctuating numbers like the 1.8 percent gain back in January make experts wary of extrapolating from any of this data. "We're a little cautious that this won't last," said Rosalind Wells, chief economist for the National Retail Federation tells the New York Times.
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