Global Currents: Remember Charles Kuralt and his On the Road television tours of America? They gave you a sense of what this country is really like, away from the big media capitals of New York City and Los Angeles.
Remember Charles Kuralt and his On the Road television tours of America? They gave you a sense of what this countryяis really like, away from the big media capitals of New York City and Los Angeles. My career doesn't exactly live up to Mr. Kuralt's, but I can say that nothing beats getting away from the office to hear and see what's really going on. So recently, when I was in Tokyo to network with some venture capitalists at a VC conference, I had a chance to hear about some pioneers who are helping to shape mainland China's economic destiny. These entrepreneurs are working tirelessly in some pretty god-awful places that are not nearly as pleasant as Palo Alto, California, on a sunny day.
One is Richard Chan, the cofounder of Taiwan's huge chip maker TSMC (NYSE: TSM). Today he's focused on bringing the semiconductor business to mainland China -- and in the process may trigger even more friction between the mainland and Taiwan, with its semiconductor empire. His newest venture, Siticomex, is building a huge chip-making facility in Pudong, the packed new industrial area right across the river from Shanghai's Bund. Mr. Chan started Siticomex with $900 million in funding from several leading VCs in Asia in addition to Goldman Sachs. Siticomex got all kinds of incentives from the Shanghai government to build this fab in Pudong and is set to start churning out chips by the fourth quarter of this year. Its competitive advantage? Lower tariffs and cheaper engineering costs in comparison to Taiwan.
You gotta wonder why two big names in the Silicon Valley VC business have picked up and moved to London. Are investment opportunities really better in Europe than in the U.S. now? Not from what I have heard. Softbank (TSE: 9984) and News Corporation (NYSE: NWS) shut down their eVentures incubator in November, and Softbank's @Viso partnership with Vivendi froze all new investments around the same time. Or could it be that the American VCs simply need some high-powered help to pull off the best deals away from home? Best to ask Bruce Dunlevie of Benchmark Capital, and John Fisher of Draper Fisher Jurvetson, who will soon call the UK home.
KNOW THE FLIGHT ATTENDANTS Mr. Dunlevie will probably know all the flight attendants by name because he plans to fly back to the United States every five or six weeks to meet with the nine U.S. companies for which he's a board member. He's got plenty to do in London besides networking. Since Benchmark opened its London office in June 2000 with a $500 million fund, it has made eight European investments. Will more venture firms join the parade to the UK?
YOU GO, DAN Finally, the first inklings of anything wrong at Yahoo (Nasdaq: YHOO) came from its international ranks. In February, Fabiola Arrendondo, head of European operations, and Savio Chow, head of Asian operations, left within days of each other. That was followed by the departure last week of Mark Rubinstein, head of Canadian operations. The Korean boss also bolted. This all happened during a critical international expansion that Yahoo was counting on to boost revenues.
Of all the stories written about Yahoo's retrenchment last week, one of the best had to be Red Herring's own story. Writer Dan Briody, musing what the news might be when trading on Yahoo shares was halted last Wednesday morning, speculated that it might be 'an acquisition by Elvis or a relocation to Mars.' Of course, the news wasn't really all that surprising. After six years at the helm, Tim Koogle will be stepping down as Yahoo's chief executive officer once a replacement CEO is found, and the company lowered its first-quarter earnings and revenue guidance for the second time this year. As Dan says, it looks like Yahoo investors are going to stay down at the end of lonely street, at Heartbreak Hotel.