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Tom Taulli
California - http://taulli.com

Tom Taulli is the author of various books on finance, including The Complete M&A Handbook (Random House) and Investing in IPO's (Bloomberg Press). In addition to his writing, Mr. Taulli has appeared on high-profile television venues such as CNN, CNBC and Bloomberg TV, and has been quoted in the various print media sources such as the Wall Street Journal, USA Today and LA Times.

According to a report from the 451 Group, the third quarter was horrible for tech M&A. With the financial crisis, it's tough to get buyers interested in deals.

But, today we got some relief; that is, eBay (NASDAQ: EBAY) agreed to shell out $820 million in cash for Bill Me Later. In fact, the company also paid $390 million for bilbasen.dk, which is a leading classifieds operator in Denmark.

At the same time, eBay plans to slash 10% of the workforce (amounting to about 1,000 employees). With an impending global recession, the environment is likely to be pretty bad for consumer platforms.

Thus, with the Bill Me Later transaction, there may be some traction -- especially with the PayPal business. But again, eBay will need to demonstrate skill with integration (which can be particularly tough in the tech world). Besides, eBay's M&A track record has been spotty, specially since its Skype deal.

Bill Me Later will certainly be costly. While the company is growing quickly, its revenue is only $150 million. Besides, the deal will dilute eBay's 2009 earnings by 6 cents to 13 cents per share. Also, might the credit crunch result in some problems for Bill Me Later?

More importantly, eBay announced that revenue will be at the low end of its forecast for Q3. In other words, the company realizes it needs to make some big moves to keep up the momentum.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

While the credit crunch is making it difficult for businesses to get credit, there may be other reasons you've had trouble getting the line of credit you need. For one thing, you may not be taking steps to build a credit history for your business.

By establishing business credit, you may be able to get larger loan amounts and better rates. What's more, it could be easier to find good suppliers and vendors – as well as to snag customers.

So how do you establish business credit:? Well, here are some steps:

Create a credit profile: Perhaps the top credit agency for small businesses is Dun & Bradstreet (NYSE: DNB). Basically, you complete a credit profile with them through service called the CreditBuilder; you then get a DUNS number, which is what third-parties will request when they do a credit check. All in all, the process is pretty easy.

Keep in mind that it's important to periodically update the file. An incomplete file is often a red flag.

The third quarter was an absolute nightmare for many hedge fund managers. In fact, they have the tough job of writing letters to shareholders explaining the chaos in the financial markets.

Perhaps one of the most interesting missives comes from the chief of TPG-Axon Capital Management LP, Dinakar Singh. He was a former big-shot trader at Goldman Sachs (NYSE: GS).

Since starting his fund in 2005, he has racked up market-beating returns. However, September was downright horrible. In fact, for 2008, TPG-Axon is down 20%, which Singh calls "unacceptable."

According to him, the global financial system is undergoing an inflection point as the U.S.'s dominance wanes. But, many investors have had the misconception that the U.S. and world economies had been decoupled.

Instead, the global financial system is highly interconnected. Moreover, there is the disproportionate impact from high-velocity investors (basically, hedge funds). As the market turned quickly, there was a massive unwinding of positions, which has exacerbated the situation and damaged the U.S. financial system. Unfortunately, it's going to take awhile to heal things.

Yet, Singh is optimistic and thinks there are some compelling investment opportunities. While he did not name any companies, he did provide some key themes. For example, he likes valuations in China and Japan. Furthermore, he likes quality financials as well as U.S. manufacturing and heavy goods companies.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website.

Over the past few years, some of the big players in tech – such as Oracle Corporation (Nasdaq: ORCL), SAP (AG) (NYSE: SAP) and Microsoft Corporation (Nasdaq: MSFT) – have been been aggressive with M&A. Even after the dot-com bust, there is still a lot of excess capacity in the tech world.

However, according to a report from the 451 Group, it looks like the recent instability in the financial markets is taking a toll on things. After all, Lehman Brothers no longer exists and other major investment banks have radically changed their business models, such as Morgan Stanley (NYSE: MS) and Goldman Sachs Group, Inc. (NYSE: GS).

Looking at Q3, the dollar-value of tech deals plunged by a third to $37 billion. In fact, there were only six deals in excess of $1 billion.

Then again, with the tight credit squeeze, it's exceedingly difficult to get deals done. For instance, there were only 12 leveraged buyouts in Q3, which compares to 36 in the same period a year ago.

Of course, the financial shakeout has made many tech targets attractive. But, the problem is that the mega corporate buyers have also seen sharp reductions in market caps. And if the US economy continues to deteriorate, it's likely to cut into tech spending, making things even worse for dealmaking.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

Venture capitalists (VCs) are supposed to take the long view of things. Even fast-growing companies like Cisco (NASDAQ: CSCO) and Google (NASDAQ: GOOG) can take awhile to get traction. Of course, it's worth the wait as the returns can be staggering.

But there's now a big problem for VCs: even if their portfolio companies are doing well, there are few opportunities to cash out. Simply put, the key exit markets – IPOs and mergers & acquisitions – are in deep freeze.

Just take a look at the latest statistics from Dow Jones VentureSource. For Q3, VCs got only $4.75 billion in exits from IPOs and M&A deals. This represents a 66% plunge from the same period a year ago.

Interestingly enough, the only VC-backed company to go public in Q3 was Rackspace Hosting (NASDAQ: RAX), and this deal was fairly lackluster.

In fact, at the current pace, it appears that this year will be the worst for IPOs and M&A deals – that is, since the dot-com bust.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

In 1997, Greg Gianforte started a new-fangled software company called Right Now (NASDAQ: RNOW) to help companies improve customer relationships. It proved to be great timing, since the internet was just beginning its surge.

Over the years, I've had a chance to talk to Greg, who always has great insights for entrepreneurs. Now he has a new book: Eight to Great: Eight Steps to Delivering an Exceptional Customer Experience.

It's a quick read, easy to understand and has lots of case studies focusing on companies like eHarmony, TomTom, Nikon, and so on.

The theme of the book is straightforward: "providing an excellent customer experience -- the sum total of a customer's interactions with an organization -- can be the single best way to set your company apart from the competitors."

OK, so what are some of the things you can do to help improve customer service?

In short order, the shareholders of Washington Mutual (NYSE: WM) have lost billions. A tier-1 private equity investor, TPG, has lost $1.3 billion on the company. And, unfortunately, thousands of WaMu employees have lost their jobs.

However, there are some winners. For example, there are the short sellers. JP Morgan (NYSE: JPM) is also likely to do well since the firm bought WaMu's assets for a mere $1.9 billion.

But there appears to be yet another interesting beneficiary: Alan Fishman. He is WaMu's CEO, who took the top job 18 days ago.

As should be no surprise, he signed a juicy contract: a $7.5 million signing bonus and a lump-sum payment for severance that comes to $6.15 million. In other words, if he leaves the company, he'll walk away with $13.65 million.

That's a pretty good deal in light of the fact that WaMu is the biggest bank collapse ever.

Moreover, I suppose it is yet further evidence of why Americans have low regard for the financial system. And despite huge bailouts, it's probably a good bet that little will change.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

With the credit crunch, it seems inevitable that upstart companies will face challenges getting fresh capital. Yet, as seen with recent deals – such as the $28.7 million financing of Digg – there is still interest from investors.

To get some insight on all this, I had a chance to interview Thomas O'Keefe. He runs a cool site called Bizak, which helps value Net startup companies.

No doubt, O'Keefe knows the space fairly well, having founded a variety of companies (like WiredAlumni.com and Research Connect) He was also a financial equity analyst at Thomson Reuters.

Now, to the interview.....

Q: Some background on Bizak?

A: Bizak gives equivalence to startups so investors and entrepreneurs can make equal comparisons on their earnings potential and business valuation. I founded Bizak so entrepreneurs could compute the financial performance of their startup, compare their performance to industry averages and research profitable industries for future ventures. The premise for Bizak came from the earnings per visitor metric (EPV) which allows startups to equally compare their financial performance to other startups on a per visitor level - in essence the EPV creates an equal comparison irrespective of traffic volume.

Several years ago, I talked to Jay Adelson, the CEO of Digg (a popular news rating service). We discussed the keys to successful ventures and the importance of building an enduring platform. I liked when he said that it is critical to have an "unfair advantage."

Well, so far, things seem to be working nicely. In fact, Digg has raised $28.7 million from a group of investors including Greylock Partners, Silicon Valley Bank, Highland Capital Partners and the Omidyar Network. In all, the firm has raised about $40 million.

The capital is meant to reinforce the Digg platform. This means doubling the staff, which now stands at 75 people, adding new features like publishing analytics, and moving into foreign markets.

Of course, there have been many rumors that Digg has been exploring sellout talks with biggies like Google (NASDAQ: GOOG). But with the current uncertainty in the financial markets, it probably makes sense to wait things out. Besides, Digg has a highly loyal user base who may not want to see a deal get done.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

In the current market, it's certainly nice to be Warren Buffett. Many companies are looking for cash infusions, and of course, are making calls to the dealmaking guru.

So, recently Buffett reached a deal to purchase Constellation Energy Group (NYSE: CEG), which operates a variety of energy assets such as nuclear power plants, for $4.7 billion. To do this deal, Buffett used his MidAmerican Energy Holdings Co. vehicle, of which Berkshire Hathaway (NYSE: BRK.A) owns 80.5% of the common stock.

As should be no surprise, Buffett wasn't the only player interested in the deal. In fact, KKR, TPG and Electricité de France (EdF) made a bid for Constellation as well and were actually willing to offer 32% more.

But Constellation rejected the bid.

Not long ago this would have been an attractive bid, but in light of the credit crunch and botched deals, private equity firms have gotten a black eye.

Regulatory approval is also problematic, especially with the involvement of French based EdF. Although, Buffett has a track record as a long-term investor, which should allay fears.

Besides, Buffett quickly invested $1 billion into Constellation so as to stabilize things as the recent financial turmoil wreaked havoc on the company. In other words, he has a lot of leverage in this deal – even if rivals put together much higher bids.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website