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Autonomy Buys Zantaz By Phineas LambertThe DealJuly 19, 2007 Enterprise infrastructure software maker Autonomy Corp. PLC on Tuesday, July 3, agreed to buy U.S.-based archiving company Zantaz Inc. for $375 million to exploit the growing electronic discovery market. Pleasanton, Calif.-based Zantaz provides content archiving, electronic discovery products and software to enable organizations to retain and retrieve unstructured digital information, while Autonomy sells the platform for accessing such information. Zantaz generated earnings before interest, taxes, depreciation and amortization of $5.2 million on revenue of $100 million for the year ended Dec. 31. In the 11 years since it was founded, its VC backers have included General Atlantic Partners LLC, Athena Technology Ventures, Red Rock Ventures, ComVentures, Pyramid Technology Ventures, Geneva Venture Partners and Novus Ventures. The purchase will be Autonomy's largest since it bought data retrieval software maker Verity Inc. for $507 million in cash at the end of 2005. "We have been greatly impressed by Zantaz's products and will be continuing to develop and support the whole range," said Autonomy CEO Michael Lynch in a statement. "Our combined solution will be unique in offering our existing 17,000 customers end-to-end information rich risk-management solutions." Cambridge, U.K.-based Autonomy said the acquisition will be partly funded through the placing of 12.7 million shares and a term loan. On completion, Autonomy said it expects to have about $75 million in cash on its balance sheet. Shares in Autonomy were up almost 9 percent, or 64.5 pence, to 792.5 pence in London, giving the company a market cap of £1.67 billion ($3.36 billion). The announcement coincided with news that Autonomy expects record second-quarter 2007 results, with pretax profit and revenue ahead of the top end of analysts' forecasts. Derek Brown, an analyst at London-based Seymour Pierce Ltd., noted that the market for electronic discovery has been fast-growing since the revised Federal Rules of Civil Procedure require businesses to make readily accessible all relevant information from unstructured data like e-mails. "The deal provides a unique offering in the market: a hosted service for archiving combined with the applications for customers to choose which route to go by," Brown said. "There's a good cross-selling opportunity here." Autonomy expects the acquisition to be earnings accretive in the first six months and generate costs synergies of about $25 million per annum. Tax loss carry-forwards will be assumed with a net present value of about $45 million, it added. Steve King, the target's CEO, will keep his position as chief executive of the Zantaz division of Autonomy. Deutsche Bank AG acted as financial adviser to Autonomy. The deal, subject to regulatory approvals, is expected to be completed by August. Zantaz has agreed to pay a $10 million breakup fee to Autonomy, should it terminate the agreement.

Forget iPhone, Think Google Phone Written by Om Malik Sunday, December 17, 2006 at 12:33 AM PT | 74 comments The Observer of London is reporting that Google might be working with HTC and mobile/telecom giant Orange to build a Google Mobile Phone, which could possibly have Google software inside the device, and would be able to do many of the web tasks smartly. The device, article speculates, could go on sale in 2008. (Of course, we would all have forgotten by then… if it doesn’t happen.) Orange and Google, both declined to comment. Their plans centre on a branded Google phone, which would probably also carry Orange’s logo. The device would not be revolutionary: manufactured by HTC, a Taiwanese firm specialising in smart phones and Personal Data Assistants (PDAs), it might have a screen similar to a video iPod. But it would have built-in Google software which would dramatically improve on the slow and cumbersome experience of surfing the web from a mobile handset. It would be interesting to see if this comes to fruition. Google, in recent months has become increasingly aggressive about its mobile ambitions, and is pushing into the carrier space, though there have been some snags. Google Phone, if you think about it is a reasonable speculation. Google has been aggressive in developing location based services, has amp-ed up its local search and mapping services. In addition, it has also been mobilizing its applications such as GTalk and GMail. YouTube, the video arm of Google, is beginning to embrace the mobile ecosystem. Normally, one would not spend too much energy on this bit of news. However, presence of Andy Rubin on Google campus gives us a reason to pause. Who is Rubin? He was one of the co-founders of Danger, the company that makes the Sidekick devices. He sold his last company, Android to Google for an undisclosed amount of money, and he has been holed up in Mountain View, California campus of Google, doing something. No one knows what, but since Android was focusing on mobile, it is safe to assume that he just might be involved in Android. Danger, as you might know has become a multimillion dollar business based off the “compress web and take it mobile” technology developed by Rubin and others. Businessweek had reported that Android was working on a cell phone operating system. One source familiar with the company says Android had at one point been working on a software operating system for cell phones. … In a 2003 interview with BusinessWeek, just two months before incorporating Android, Rubin said there was tremendous potential in developing smarter mobile devices that are more aware of its owner’s location and preferences. “If people are smart, that information starts getting aggregated into consumer products,” said Rubin. For Orange, this could be a valuable asset in its triple play ambitions. The company owns broadband businesses across Europe, and has access to 3G networks, and is owned by France Telecom. It could use Google’s web expertise to take on its rivals, by offering web-mobile hybrid phones, and at the same time get a slice of mobile advertising revenues. I know, sounds far fetched, but not out of the real of possiblity. Your thoughts?