Google blows up another nascent business. So-called URL shorteners--which make it easy to link to websites on Twitter--have seemed like a promising little business, but the industry got its first big challenge yesterday when Google jumped into the fray with its own short-link service, Goo.gl. The market leader Bit.ly responded by launching a premium version of its service, according to TechCrunch. Dave Winer looks at what happened and says its a lesson in the importance of having a business plan. "[Bit.ly] was running a Build To Flip plan," he writes. "I think we found out yesterday that it didn't work. I think in general, even if your plan is to flip, you should run a company as if no one will buy it. That your liquidity will come in the form of profit from sales of services and products to users. It's good discipline. Keeps the team focused on who and what's important."
Obama to big banks: start lending. On a day in which two of the nation's largest banks announced they were going to repay the government for bailout money, President Obama urged the heads of a dozen financial institutions to increase lending to small businesses and consumers, The New York Times reports. In response, Bank of America said it would raise lending to small and mid-size businesses by $5 billion in 2010, which follows a similar announcement last month from JPMorgan Chase. But the meeting wasn't all rosey; the chief executives of Citigroup, Goldman Sachs, and Morgan Stanley didn't even make it to DC after their flights were canceled.
The DOE as the new VC? According to an article by the Wall Street Journal, the U.S. Department of Energy is shaping up to be a powerful capital force behind companies working on clean technology, with plans to lend or give out more than $40 billion to manufacturers of electric cars, wind turbines, and solar panels. In fact, in the first months of the Obama administration, the article reports, the DOE shelled out $13 billion in loans and grants to such firms -- dwarfing the $2.68 billion venture capital firms spent in the same sector. The article follows the journey of one such company, Fisker Automotive, which was seeking funds to build its gasoline-electric hybrid car, the Kx. Not only did the company receive $528 million in government loans, but also a new home for their operations -- a shut-down GM factory in Delaware (courtesy of one of the state's own, Vice President Joe Biden).
But are less flashy clean tech options being overlooked? The federal government is falling all over itself to funnel funding into clean tech from solar and wind power, among other sources. But are smaller scale options getting short shrift? One entrepreneur, Bill Davis CEO of Ze-gen, which converts biomass from construction into usable energy, has garnered $30 million in funding but no thanks to state and federal governments, says CNET (via peHUB). "The problem is nobody really cares. The Department of Energy is primarily concerned with technologies that can deliver a quadrillion units of energy and we're not one of them. We're not solar, not wind, not clean coal, and not ethanol," Davis says. "It's easy to have a technology category that basically falls through the cracks of the traditional funding mechanism."
The bizarre downfall of a fashion entrepreneur. Today's Los Angeles Times has the sad, strange tale of Georges Marciano, the French fashion designer who started Guess Jeans in 1981 with his three brothers. Guess brought Marciano a tremendous fortune, and after selling his stake in the company for $220 million, he turned his business focus to real estate. After a messy divorce, the Times reports that Marciano started acting erratically and became increasingly paranoid. After accusing his employees of stealing millions from him, the employees countersued for libel and intentional infliction of emotional distress. A judge ruled for the employees and awarded them $425 million in damages. That award was later reduced to $260 million. Marciano has vowed to appeal the ruling but has since exiled himself and his whereabouts are unknown.