Google Gobles Up Cambridge-Based ITA for $700 Million

Establishing a company can be a long and trying process. Often, entrepreneurs must wait until they take their businesses public to realize substantial financial rewards for their efforts. Sometimes, though, if a company catches the eye of a larger business, another lucrative opportunity arises. This Thursday, popular search engine company Google, Inc announced the signing of a deal to purchase Cambridge’s ITA Software, a flight information provider, for $700 million in cash. (Image courtesy: http://bit.ly/bX69MD)

“ITA’s very talented team has created an impressive product to organize flight information,” Eric Schmidt, Chairman and CEO of Google said. “Their technology opens exciting possibilities for us to create new ways for users to more easily find flight information online, and we’re looking forward to welcoming them to Google.”

Fourteen years ago, a group of computer scientists from MIT developed the algorithms they used to launch ITA Software. Presently, ITA has partnerships with major airlines including Continental, American, United, US Airways, and Air Canada, as well as common travel services Orbitz.com and Hotwire.com. Google has pledged to maintain ITA’s current partnerships and to seek out additional partners.

“Today, almost half of all airline tickets are sold online. But for many people, finding the right flight at the best price is a frustrating experience,” Marissa Mayer, Google’s vice president of search products and user experience explained. “Pricing and availability change constantly, and even a simple two city itinerary involves literally thousands of different options. We’d like to make that search much easier.”

ITA also provides flight information to Bing.com, Microsoft’s search engine. Sources report that Microsoft made efforts to prevent the acquisition of ITA by its rival Google. While Microsoft did not want to purchase ITA itself, it hoped the company would remain an independent supplier of flight information.

“If Google... leverages the technology to deliver better-qualified customers to Priceline and other online travel agencies, then Google’s foray into vertical, travel search would represent an opportunity for Priceline,” Jeffrey Boyd, Priceline’s President and CEO, commented about ITA’s acquisition.

In three of the past five years (most recently in 2009), ITA was named one of Massachusetts’ best companies to work for by the Boston Business Journal. According to the company’s LinkedIn page, it presently employs 500 and is actively looking to fill positions in engineering, operations, quality assurance, customer relations, marketing, and business development. (Image courtesy: google.com)

“It is a privilege to work with a most skilled and dedicated team to build innovative technologies that people use every day,” said Jeremy Wertheimer, CEO & President of ITA Software. “We are all looking forward to continuing and expanding our efforts as part of Google.”

The employees of ITA must be excited about this acquisition. It will be interesting to see if Microsoft will continue to supply its Bing.com search engine with data from the Google-owned ITA, or will look for another provider. Either way, with the resources of Google at its disposal, ITA may be well on its way to again revolutionizing the way people search for flights online.

[Sources: http://bit.ly/abMs4d, http://bit.ly/9isdAk, http://bit.ly/d4hPSi, http://bit.ly/adqGBI]

NXP Semiconductors Comes to Billerica

Around the world, Boston is recognized as a great city to start a business or to open a branch of an existing business. The area’s supply of educated and talented workers, as well as its readily accessible resources, help make it an alluring location.

Netherlands’ NXP Semiconductors, recently opened a 12,500 square foot facility in the Boston suburbs of Billerica. The facility will focus on the advancement of radio frequency and microwave integrated circuits. Presently, the facility employs 15, but a NXP spokeswoman said that the location will soon grow “significantly.” (Image courtesy: http://bit.ly/d7IQiX)

“This new product creation center builds upon NXP's 50-year heritage in RF innovation, further refining, localizing, and extending that competence to meet customer demands and create innovative applications,” said John Croteau, senior vice president and general manager of the High Performance RF and Lighting business lines at NXP Semiconductors. “Process, packaging and circuit design innovation remain pillars of our strategy,” he added.

NXP is a main provider to such industries as defense and aerospace, industrial scientific and medical, and broadband communications. The company operates in 25 countries and had sales of $3.8 billion last year.

“The deep pool of experienced and talented RF designers, the active RF customer base, and the closeness to Europe make Boston the ideal location for the new NXP PCC,” said Ian Gresham, general manager Boston PCC, NXP Semiconductors. “The PCC team will endeavor to push the limits of our high performance RF and microwave products, overcoming market challenges through innovation.” (Image courtesy: http://bit.ly/clwhHX)

Although, NXP’s Billerica location is relatively small now, it is great to hear that they are planning for expansion. There will always be room for innovative and motivated companies in the Bay State.

[Sources: http://bit.ly/cv0rfS, http://bit.ly/clwhHX]

Business Roundtable Predicts Increasing Sales and Hiring

As the end of June quickly approaches, it seems that the economic outlook will remain optimistic. While everyone has probably heard anecdotal reports of how things are improving, it is often more comforting to hear from sources that are known to be authorities in their field. This week the Business Roundtable released the results of its second quarter CEO Economic Outlook Survey, which predicted increasing sales and employment over the next six months. (Image courtesy: http://bit.ly/YUrpN)

From May 24th to June 14th of this year, the Business Roundtable polled a collection of CEOs across the nation, which together represent “more than 12 million employees and nearly $6 trillion in annual revenues,” to gain insight into what they anticipate moving forward.

“Our member CEOs plan to continue hiring and expect improved sales,” Ivan Seidenberg, the Chairman of Business Roundtable and the Chairman and CEO of Verizon Communications, explained. “That said, our CEOs are demonstrating some caution in the area of capital expenditures, with fewer planning to increase and more keeping it level.” (Image courtesy: http://bit.ly/boeLpi)

Just under 80% of the CEOs surveyed said they expect their company’s sales to increase over the next six months, while only 4% said they predicted a decrease. In regards to anticipated capital spending, of the CEOs polled, 43% anticipated an increase, 50% no change, and 7% a decrease.
The CEOs surveyed also predicted that the real GDP of the nation will increase by 2.7% in 2010.

When questioned about anticipated employment changes, 39% of the CEOs surveyed predicted an increase, while 43% expected no change. The proportion of CEOs planning to increase hiring this year is the highest it has been since 2007.

In regards to the recently ratified financial reform legislation, the Business Roundtable reports that its sample CEOs are dissatisfied, and feel that the law “does not address the causes of the financial crisis” and was “rushed to conclusion without consideration of the consequences.”

“Far from effective reform, this legislation includes provisions entirely unrelated to the financial crisis which may disrupt America’s fragile economic recovered,” J. Castellani, president and CEO of Business Roundtable said. “As business leaders, we have been at the table and will continue to advocate for effective policies that encourage investment, innovation, and job growth in America.”

Business Roundtable Chairman Seidberg expressed, “The most important steps the government can take to stabilize financial markets, restore consumer confidence, and create an environment for growth is to commit to fiscal discipline and recognize that sustainable growth will only occur when the private sector--not the government--is expanding.”

Some of actions that the Business Roundtable’s sample CEOs feel the government should take include increasing exports via trade agreements and investing heavily in infrastructure. Moreover, the Business Roundtable’s sample CEOs feel that the government should be incredibly careful about increasing corporate income taxes, considering the United States already has the second highest corporate tax rate in the world and that most nations are presently decreasing taxes to inspire growth. (Image courtesy: http://bit.ly/cq37iE)

Hopefully, the recently passed financial reform legislation will prove not to be as negative as the sample CEOs fear and their anticipated hiring and sales predictions will become realities. The mix of negative and positive feelings coming from the Business Roundtable shows that, despite the progress the country is making, there is still considerable room for improvement.

[Sources: http://bit.ly/bF60SR, http://bit.ly/czJf5j, http://bit.ly/bmqdDW]

China and Massachusetts Have an Understanding

Each year, Massachusetts brings in $28 billion in revenue from international trade. Clearly, developing strong partnerships and trade networks is vital to maintaining the health of the state’s economy. While many of these partnerships are forged between local companies and those abroad, sometimes agreements are made at a higher level. Recently, the Massachusetts Office of International Trade and Investment (MOITI) and the Beijing Municipal People’s Government entered into a Memorandum of Understanding (MOU). (Image courtesy: http://bit.ly/9bSmcY)

The MOU outlines that both parties will make efforts to support free information exchange, direct investment, and referrals between each other. Specifically, some of the areas in which Massachusetts and China pledge to work together are renewable energy, financial services, communication technology, life sciences, and port development.

“China is a very important market for the innovative technologies and entrepreneurial spirit that is the lifeblood of the Massachusetts economy,” said Ted Carr, the MOITI’s Executive Director. “Governor Patrick has recognized this and my office has worked very hard to open new doors in China for Massachusetts business. We have satellite offices in Shanghai and Beijing and we see this agreement as a very positive step forward in building a relationship that benefits the citizens of Massachusetts.”

Delegates from the Beijing Municipal Government, Changping District Government, and the Zhongguancun Life Science Park will be visiting Massachusetts for a three-day tour during which they will take part in a roundtable discussion about business opportunities in the Bay State and meet with key figures in the state’s life sciences industry. (Image courtesy: http://bit.ly/89VqUE)

While it might be possible for Massachusetts to have a successful economy on its own, it is undeniable that via partnerships with companies abroad the state can progress beyond anywhere it would be able to reach alone. This new agreement between Massachusetts and China will bring fresh resources to both places and new opportunities for success.

[Sources: http://bit.ly/9Riuta, http://bit.ly/dAYzon]

IBM Selects Massachusetts for Largest Lab in North America

Every day local startups are creating new jobs in Massachusetts and driving innovation. In ways, these companies are like raindrops, which soon pool to make a substantial impact on the Bay State. In the midst of all these raindrops, though, sometimes there is a monsoon.

This week, IMB opened Mass Lab, the company’s “largest Software Development Lab in North America,” which employs 3,400 people in locations in Littleton and Westford. Altogether, the lab covers more square footage than Fenway Park or the TD Garden. (Image courtesy: http://bit.ly/dgtqig)

One of the primary goals of Mass Lab is to tackle substantial infrastructure modernization projects, such as the railroad, healthcare, and water management systems. Another objective of the lab is to further develop social networking and cloud computing technologies. Additionally, the lab is the location of IBM’s “Executive Briefing Center,” where the company will host clients from any of the 200 plus countries in which it operates, so they can meet with industry experts.

“Innovation is a centerpiece of the Massachusetts economy--we invent things here,” explained Massachusetts’ Governor Deval Patrick. “The IBM Mass Lab helps demonstrate to the world that Massachusetts is a global leader in the innovation economy.”

IBM reported selecting Littleton and Westford for its new lab because of the location’s easy reach by its “geographically dispersed employee population” and its position within the growing “high-tech belt along I-495.”

“IBM views Massachusetts as an innovation hotbed,” IBM senior vice president and group executive Steve Mills said. “IBM is committed to nurturing the human talent and economic strengths of the growing Massachusetts tech hub. The IBM Mass Lab is a critical component of our growth strategy for the state of Massachusetts.”

This new lab is only one of the many ways IBM has expanded in Massachusetts. Since 2003, IBM has purchased 14 Massachusetts’s companies including Rational Software, Cognos, Ascential Software Corp., Ounce Labs, and Guardium Corp.. Moreover, IBM has partnered with over 100 Bay State startups.

“In... the worst recession in living memory, the Philadelphia FED reports that our economy as of the end of last year is out performing 48 other states,” Governor Patrick reminded. “In April we had the largest single monthly job gain in 17 years… We have turned a corner. Massachusetts is on the mend and on the move and IBM is central to it.” (Image courtesy: http://bit.ly/cokqF1)

IBM selecting Massachusetts as the site of its new lab signals two very positive things: IBM views the state as optimal for supporting its cutting-edge activities, and IBM is confident that the economy is presently strong enough to support its expansion. Surely, IBM’s new lab will be a substantial asset for Massachusetts.

[Sources: http://bit.ly/booyQK, http://bit.ly/bHW8OM]

Fed's Beige Book Tells Uplifting Tale

When evaluating the condition of the economy, analysis of stock market performance, the jobless rate, and other key indicators is often important, but sometimes simply talking with people is enough. After all, if 400 out of 500 companies report that things are looking up, that probably means the economic outlook is promising. That is the general logic under which the “Beige Book,” a survey designed to collect “anecdotal information” from businesses before the Federal Reserve’s rate-setting meeting, operates. (Image courtesy: http://bit.ly/9I2RUV)

For the New England region, the survey revealed that most businesses experienced “stable to increasing activity in recent months,” as compared to 2009. “Some firms are hiring beyond replacement,” the report detailed, “and/or reinstituting merit-based pay increases.”

Technology companies in New England were one particularly bright spot in the report, reporting “significant increases in their business.” However, companies with international exposure reported some concerns about future business as the European dept crisis continues to unfold.

Retail stores in New England reported an increase in sales of 10%, as compared to this period last year. In accordance with this sales increase, manufactures in New England also reported increased demand, as compared to 2009.

In regards to real estate, Boston-area commercial building rents have failed to rise to even near pre-recession levels, but there has been a notable increase in leasing activity, according to the survey. As for residential real estate, the Fed predicts that home sales will remain strong in the region, despite the expiration of the federal home buyer tax credit, due to low interest rates and house prices.

At a national level, all of the Beige Book’s twelve districts reported at least “modest” growth, as compared to this time last year. (Map courtesy: http://bit.ly/bbgasn)

All things considered, this recent survey sounds very positive, particularly in regards to the Boston-area. Hopefully, for those companies in the region that the European debt crisis does adversely affect, improving domestic performance will be enough to at least maintain their current overall performance levels. As we quickly approach the mid-way point of 2010, the economy still only seems to be getting stronger.

[Sources: http://bit.ly/bzEwMm, http://bit.ly/9BKAnc]

Vistaprint to Make a $40K Impression on Microbusinesses

Once the hype from their grand openings subsides, businesses can sometimes run into trouble finding ways to remain in the minds of their target market. A great way for a company to renew interest in its brand and generate excitement, while giving back to its customers at the same time, is to host a contest. (Image courtesy: www.vistaprint.com)

This week, Vistaprint, a Waltham, Massachusetts-based leading provider of marketing materials, launched its “Make an Impression” contest, which offers the chance to win a “full marketing package” valued at $10,000. To enter, “microbusinesses,” or companies with fewer than 20 employees, can visit www.1-800-Vistaprint.com/contest, where they will answer questions about themselves and submit a story about “how they have made an impression on their customer base.”

“Over the past 10 years, Vistaprint has been a champion of micro businesses everywhere, giving them the tools and services to succeed in presenting a professional brand image to customers,” Bridget O'Brien, vice president of marketing communications at Vistaprint explained. “The company launched this contest as a way to give back to that community and allow them to showcase their businesses.”

Entrants of the competition are encouraged to spread the word about their candidacy using Twitter, Facebook, and any other means available, to motivate contacts to cast votes for their entry on the contest’s website. Ultimately, user votes will count for up to ten points, which will then be added to the scores provided by Vistaprint’s judges to determine the contest’s winners.

Early September, four microbusinesses will be selected to win the grand prize of a “full marketing campaign,” which includes a $600 HP gift card, a web commercial, 1,000 brochures, 1,000 business cards, 1,500 post cards, a direct mail campaign, 30 lawn signs, 1 banner, and 50 T-shirts. O’Brien ensures that the grand prize will “dramatically impact” the winners’ marketing efforts, “increase their customer base,” and “enhance their brand.” (Video courtesy: www.vistaprint.com)

To generate further interest in its contest, Vistaprint has provided a way for even non-businesses owners to win a prize. Simply by logging into the contest’s website, and then promoting the contest via Twitter, one is entered into a free sweepstakes. About mid-September, a winner will be selected at random from the pool applicants and awarded a 16 GB iPad valued at nearly $500.

Launching a contest is a crafty use of money. Rather than simply pumping $40,000 into a standard print or online marketing campaign, Vistaprint has chosen to offer four $10,000 prizes, which will generate positive PR, and ideally garner many happy customers in the long run. Tossing around this sum of money is a bit of a gamble, but also a great way to cut through the clutter to reach small businesses that can truly benefit from Vistaprint’s services.

[Sources: http://bit.ly/bPG8AT, http://bit.ly/dAFM7T]

Zipcar Gearing Up for $75M IPO

Taking a company public now, when the economy is still weak and investors are hesitant to part with their funds, is a daring move. Naturally, purchasing stock at an IPO is an opportunity to get in on the ground floor and realize substantial gains as a company grows. But how does a company garner investors when it has not profited in a decade?

This month, Cambridge, Massachusetts’ Zipcar Inc. filed for an IPO valued at $75 million. While the company’s revenues grew from $13.7 million in 2005 to $131.2 million in 2009, since its inception in 2000, ZipCar has failed to turn a profit. In fact, funds raised from its IPO will first go towards paying down the company’s $5.6 million in debt. (Image courtesy: www.zipcar.com)

“The IPO is not going to solve their net income problem," Andrew White, CFO at financial analysis company Sageworks Inc. said. “You should be able to make a company profitable in ten years."

Zipcar describes itself as a “car sharing” service. Customers sign up for an annual membership online, and then choose a car from a designated parking space in one of 13 cities, or on one of 150 college campuses, across the United States, Canada, England, and Scotland. Zipcar rents its vehicles by the hour or day, with fuel and insurance included in the cost of the service.

“I wouldn’t say it’s a scary place right now, but it’s definitely waning," IPO strategist Bill Buhr of Chicago research firm Morningstar Inc. said. Buhr went on to explain that a $75 million IPO is relatively conservative, and that Zipcar can succeed if it proves to investors that it will make a lucrative long-term investment. Consulting firm Frost & Sullivan reports that the car-sharing market is anticipated to surpass $3 billion by 2016. (Image courtesy: www.zipcar.com)

Goldman Sachs and JPMorgan will underwrite Zipcar’s IPO. The company plans to trade its shares on Nasdaq, with the ticker symbol “ZIP.”

With concerns about protecting the environment growing, the idea of car sharing seems perfect. One has to wonder, though, if a company that has been unable to profit for ten years will ever be able to overcome its costs. Perhaps, a cash infusion from an IPO will give Zipcar the boost it needs to set its company on the track towards profitability.

[Sources: http://bit.ly/bPhaSb, http://bit.ly/cfnYvB, http://bit.ly/95eLmC]

Survey Says: Massachusetts is Ahead of the Pack

When the economy is not at its best, memories of better times may help us get by, but optimistic reports about the future are far more motivating. Job opportunities are anticipated to increase going into the third quarter, especially for candidates looking for work in the Bay State. (Image courtesy: http://bit.ly/cZHyWv)

According to a survey conducted by Robert Half International, Inc., 16% of Massachusetts’ executives polled anticipate hiring additional professionals during the third quarter, while only 2% anticipate hiring fewer professionals. With this projected net gain of 14%, Massachusetts ranks highest in the country at 11% above the national average.

Nationally, Texas reported the second highest projected net gain in hiring at 8%. Of the New England States, Connecticut ranked after Massachusetts and seventh nationally, with a projected net gain of 3%.

“I see this as very good news,” Bill Driscoll, president of Robert Half International’s New England district expressed.

The survey also shows that law firms are particularly interested in hiring, with more than 30% of the firms polled reporting planning to increase hiring over the next three months. Transportation and business services companies also foresee higher than average increases in hiring during the third quarter. Finally, the survey predicts an increase in the demand for accountants, financial analysts, and business systems analysts moving forward.

On a national level, just under 50% of the survey’s respondents anticipate no change in hiring from this quarter to the next. Moreover, of the state executives polled, 79% anticipate no change in payroll from quarter two to quarter three. Despite the high percentage of hiring neutrality reported, 83% of the survey’s respondents still expect their organizations to grow during the third quarter, even if their headcounts do not.

One concern the survey revealed was that a large number of executives polled are worried they will be unable to find quality candidates once they do begin rehiring. Why those surveyed felt this way is not immediately clear.

In this particular study, Robert Half International polled a scientific sample of 4,000 organizations across the country, which employ no fewer than 20 employees each. Each quarter the company issues an updated “Professional Employment Report.” (Image courtesy www.rhi.com)

A 16% anticipated increase in hiring may not be shocking, but it is by no means disappointing, especially when considered in a regional, or even national, context. Moreover, neutral votes do not factor into this percentage, so a far greater number of workers across the state will at least be able to hold onto their current positions going into the next quarter. Overall, as new economic reports are released, it becomes more apparent that Massachusetts is doing something right, as it continues to rank strongest in the country time and time again.

[Sources: bit.ly/99FnKx, bit.ly/dtYUYT, bit.ly/csYvvU, www.rhi.com]