Want to find shelter from the chilly economic slowdown? Follow Candles lead. Get on the road and identify good companies that would make great strategic allies—fast. Candle, a systems-management veteran, is branching out into e-biz analysis tools and other Web-related offerings to drive growth. Vice chairman Robert J. LaBants No. 1 priority is to develop strategic alliances. The company currently has 152 partners. Other targets include EDS and CGE&Y, according to LaBant. “Eighty percent of consulting services for our products should be billed by our partners—not by us,” says LaBant. Will you pick up a piece of Candles pie?
> Kim Schmitz has gone from hacker to financial backer. Schmitzs VC firm, Kimvestor A.G., is set to pump $46 million into the struggling Letsbuyit.com. Schmitz says hes a reformed hacker who previously broke into private networks owned by Citibank and NASA, among others. Question: Why give Letsbuyit.com money when you can make the companys debt vanish electronically?
> Finally, a smoking gun. Back in November, we reported that Novells $95 million investment in MarchFirst fell to a meager worth of $5 million. Novell hasnt directly confirmed our estimate, but the companys 10-K form, filed on Jan. 26 with the SEC, reveals some anecdotal evidence. The filing says Novells “combined short- and long-term investment portfolio includes securities with net unrealized losses of $80 million.” The bulk of those unrealized losses are due to Novells “investment in MarchFirst,” the filing says.
Novell isnt alone in its bad bets. Microsoft pumped money into USWeb/CKS (before the merger that formed MarchFirst) and Divine InterVentures, a struggling Internet incubator. Microsoft and Novell had identical goals: They wanted to drive their respective technologies into the market through investments. Unfortunately, they chose the wrong allies.
> Sources say MarchFirst is filling positions in its Detroit office, which targets the automotive sector. Maybe MarchFirst should stop and ask for directions, now that GM and Ford have issued earnings warnings, and Chrysler is firing 26,000 employees.
> Despite the economic slowdown, were bullish on data-center specialists like Digex, Exodus and Qwest. Just last week, Qwests consulting and Web hosting teams won $50 million in new contracts from Citibank, Procter & Gamble and Fleet Securities.