The value of venture-backed exits (which is almost entirely M&A these days) might be down about 50 percent in the third quarter, but total M&A activity (including public companies) is seeing a noticeable uptick.

We ran some numbers on Crunchbase, which keeps track of all announced acquisitions, and in the third quarter $31.8 billion worth of acquisitions were announced, double the amount from the second quarter and up fourfold from the $7.6 billion low in the fourth quarter. That number was even up 23 percent from the year before. Update: Those original numbers were based on a preliminary run. We’ve since done a final run, and the the value of deals in the quarter were even higher: $45.1 billion (versus $15.4 billion in the second quarter).

Many of the bigger deals involved publicly traded companies, such as Xerox buying Affiliated Computer services for $5.75 billion, Dell purchasing Perot Systems for $3.9 billion, and Adobe picking up Omniture for $1.8 billion.  There were also a lot of biotech and pharmaceuticals deals such as Abbott Labs swallowing Solvay Pharmaceuticals ($6.6 billion) and Dainippon Sumitomo eating Sepracor ($2.6 billion).

The actual number of M&A deals is pretty flat at 213 231, which is about where it’s been for the past four quarters. But the average value of each deal in the quarter was $349 million, up 85 percent from last year. So buyers might be more picky, but when they do pull the trigger they are willing to spend more money. And they are more willing to spend money for companies with established businesses, which often means they are publicly traded or have been around a while.

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Can you spell “patent troll”?

Software developer SpeedTrack has filed suit against nearly two dozen major online retailers, including Amazon.com, Best Buy, Overstock.com, Nike, Costco and Dell, accusing the major online retailers of infringing some patent that supposedly covers a search mechanism customers can use to locate products on their websites.

The complaint, filed yesterday in the U.S. District Court for the Northern District of California, accuses the defendants of infringing U.S. Patent Number 5,544,360, titled “Method for accessing computer files and data, using linked categories assigned to each data file record on entry of the data file record”.

Dubbed GIA (Guided Information Access), originally developed and patented by SpeedTrack co-founder and CTO Jerzy Lewak, the system is designed to guide users to contextually relevant information when searching specific keywords, ensuring a result rather than a page that says “no result can be found” or whatever. According to its website, law enforcement agencies like police departments use SpeedTrack’s GIA software to sort through massive criminal records data, which supposedly helps them solve crimes faster.

Evidently, this type of software is important for Internet retailers’ conversion rates, because such technology enables users to discover related or similar products on their websites when specific items cannot be found. But I can hardly imagine that SpeedTrack’s technology is so unique that the e-commerce giants should have to pay as much as a penny to the software company. Of course, a jury may very well be persuaded otherwise.

Message to Lewak and the rest of the SpeedTrack team: how about you focus on sales to mark up your balance sheets rather than turning to courts in the hopes that Amazon and Co. will come fill your pockets for you.

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Searching for growth and better margins, Dell is expanding its enterprise IT consulting business by acquiring Perot Systems for $3.9 billion in an all-cash deal. Perot Systems is the IT consulting and integration services company founded by Ross Perot in 1988 four years after selling Electronic Data Systems to General Motors. (EDS is now part of HP, which bought it last year for $13.9 billion).

The shift to consulting services will make Dell look more like IBM (and HP). Dell has an existing services division, which will be rolled into Perot Systems. Peter Altabef, the current CEO of Perot Systems, will run the combined IT Services business. Both Dell and Perot Systems are based in Texas, which should make the combination go smoother.

Perot Systems will bring about $2.5 billion in annual revenues to Dell at its current run-rate, which is not a lot considering that Dell did $61 billion in revenues last year. And Perot Systems isn’t exactly a profit machine. In the last quarter, it’s net income was only $31 million, on revenues of $628 million (a 5 percent net margin). Maybe Dell can pump up those revenues by plugging Perot Systems into its existing enterprise customers, which account for about a quarter of Dell’s total revenue.

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Of course Gmail being down is not good news for Google’s business (directly nor indirectly), but if you’re a giant computer manufacturer directly retailing products online across the globe, I’d wager you’re a bit worse off when your website is completely unavailable.

At least for the past half hour (since 5 PM EST), Dell.com has been suffering from a serious outage. Just for your reference, the company saw sales of $12.76 billion last quarter, and that was down 22% from $16.43 billion a year ago. Rest assured every minute of downtime is costing the computer manufacturer serious money.

Update: site is back up as from 5:40 PM EST

Are the two events related and are we experiencing yet another massive DDoS attack, or is this merely coincidental?

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Our sources on new hardware coming out of Asia tend to be spot on (we broke the news of the second and third generation Amazon Kindles, the launch of the Palm Pre and the existence of the second Palm WebOS phone and generally have good information on sales figures for iPhones, Kindles and other devices). But in this case the information we’ve received is extremely thin.

There have been reports of Dell launching a phone in the Chinese market in recent months, with rumors of the carrier partner being China Mobile in one case and China Unicom in another.

There is also wide speculation on the operating system, but we’re guessing it’s Android. Dell has also been working with Google on an Android-powered tablet computer in recent months. But in April Reuters had a report that Dell may be creating a proprietary operating system with China-based software maker Red Office.

What we’ve heard on the hardware: iPhone-like, touchscreen, no physical keyboard. that’s it for now. Keep an eye on the Dell China site.

Update:
We now get reports from China that China Mobile is about to release a Dell-branded Android phone called “Ophone mini3i” in the next days. More info over at MobileCrunch.

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On a daily basis Breyer sees a flow of non public information (retail sales at Walmart, Facebook’s monetization plans, Marvel’s thoughts on the promise and peril of digital distribution, Dell’s plans to stay relevant) that would be the envy of anyone.

I’ve long had a warm place in my heart for Breyer, who managed to defuse the absurd legal situation that arose last year when we put on an Iron Man screening. Marvel tried to shut it down for a variety of reasons. Breyer, realizing the ridiculousness of the situation, called back the attack dogs and the screening went forward. I’ve had a man crush on him ever since.

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It’s not like they tried: the former owner of the domain name, Tucows subsidiary YummyNames, has no record of ever even being approached for a sale or lease of the internet address. Dell claims they had a broker contact the firm anonymously, who was quickly convinced the price would be too high (yet YummyNames leases domains from $750 per month).

The computer manufacterer instead went with AdamoByDell.com but belatedly realized it wouldn’t be such a terrible idea to own or at least use Adamo.com too. Now they’ve finally made a move and acquired it outright for an undisclosed sum which was probably much higher than what they’d have paid a couple of weeks ago, according to Domain Name Wire. Both domain names now redirect to the product website.

As DNW points out, Apple also purchased the iPhone.com domain name after launching the product, and there are many more historic examples of this. No doubt, companies will keep making mistakes like this in the future as well.

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In fact, the whole Netbook market may be making them nervous. Despite the fact that they power most of these devices with their new Atom chip that handles some PC chores well and uses a lot less power (so batteries are smaller and last longer). Intel sees Netbooks as devices for people who can’t afford normal laptops, or as second devices. But it’s clear that a lot of people are buying them instead of normal dual core machines, despite their very serious limitations.

That means that for the most part, every Netbook sold is one less Dual Core that Intel can sell at a higher price and higher margin. Which explains exactly why the company has been publicly criticizing the performance of the machines. “If you’ve ever used a Netbook and used a 10-inch screen size–it’s fine for an hour. It’s not something you’re going to use day in and day out,” said Intel VP Stu Pann at an event last year.

Intel also wants to keep Netbooks at 10 inches or less. Some PC companies we’ve spoken with say that Intel doesn’t want Atom chips in devices bigger than 10 inches, and puts incredible pressure on them to keep Netbooks at 10 inches or less. Dell’s Inspiron uses an Atom chip anyway, but Samsung is using Via’s competitive (and less expensive) chip, the Nano.

We asked Intel if they forbid manufacturers to build Netbooks with larger than 10 inch screens, which is what those manufacturers are telling us (Dell notwithstanding). Their answer: “Intel defines a netbook as a 10″ or smaller screen size. We recommend that OEMs and netbook manufacturers use that guideline as well in order to get the best user experience.”

That’s a nice statement but it’s complete rubbish. There is no performance loss with a 12 inch screen v. a smaller screen (other than power usage). A 12 inch Netbook is just as fast or as slow as a 10 inch one. The only difference is that the user is even less likely to buy a low end laptop with a dual core.

Netbooks are clearly here to stay, and the new models with larger screens and larger keyboards solve two of the three problems I have with them (the last issue is Vista and XP, which runs poorly on these devices, but people are fixing that problem, too).

We’ll soon see 13 inch and larger Netbooks, despite the pressure Intel is putting on manufacturers to keep them at 10 inches. Intel may not agree to have their chips in these devices, but Via, with their excellent Nano competitor, seems more than willing to fill the void.

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Online holiday sales deflated 3 percent this year. ComScore estimates that holiday sales in the U.S. totaled $25.5 billion between November 1 and December 23, the last day orders could be delivered in time for Christmas. The comparable total in 2007 was $26.3 billion.

Sales were struggling to keep up with last year’s totals all holiday season. In the end, they fell short. (Hitwise comes to the same conclusion).

A simple look at U.S. traffic to retail sites in December through Christmas Eve (see table below) shows that eBay had the most unique visitors (85.4 million), followed by Amazon (76.2 million), and Wal-Mart (51.5 million). Even though eBay attracted the most people, its traffic was down 4 percent from last year. Amazon saw 7 percent more visitors, which might have contributed to its claiming to have a great Christmas.

But the retail sites that saw the biggest increases in visitors was Apple (up 19 percent) and Hewlett-Packard (up 28 percent). Dell, in contrast, saw a 17 percent decline in visitors.

(Photo by Randy Son of Robert)

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This has been a brutal month or so for tech layoffs. According to our Layoff Tracker, there have been 19,683 job eliminations at tech companies announced since mid-September, and we’re not even counting the 24,600 people at Hewlett-Packard who are being eliminated as a result of its merger with EDS.

But only five big companies make up more than 90 percent of the layoffs: Xerox (3,000), Dell (8,900), Yahoo (1,500), eBay (1,500), and German chipmaker Qimonda (3,000). The other 33 companies are mostly startups, and collectively account for 1,683 layoffs. Although three more companies (Sony Ericsson, Nvidia, and TicketMaster) account for an additional 1,110 job losses.

After stripping those out, you get closer to a pure number of layoffs at tech startups: 573

That is the equivalent of about 57 startups with ten people each. And those are just the ones that we or other news outlets have been able to confirm. Our list of tips is much longer than that and we are working through it to confirm as many as we can. For instance, Cake Financial has laid off 30 percent of its staff, or 6 people.

Another company with unreported layoffs earlier this week was Meraki, which I’ve confirmed let go 20 percent of its staff (10 people). That makes Meraki the third Sequoia-backed company to announce layoffs this week. (The other two were Mahalo and imeem). Sequoia urged all of its portfolio companies to make cut-backs earlier this month.

At least most of these startups are already done with their layoffs, unlike Yahoo which announced a 10 percent cut is coming but won’t say who exactly is losing their jobs for another few weeks. Layoffs are bad enough, but don’t prolong the misery.

This past week alone, tech companies have laid off 13,809 people:

Company–––––––––Layoffs

Xerox————3,000
Daptiv————–21
Haute Secure———3
Cake Financial——–6
Mercent————-6
Dell————-8,900
imeem————-20
Mahalo————-6
TicketMaster——300
Eons—————8
Veoh————–15
Yahoo———-1,500
Wikia—————3
Meraki————-10
Break.com———-11

Total———-13,809

If you know of any layoffs at a tech company, please submit a tip with the name of the company and number of layoffs. If it’s been covered, also send a link to the blog post or news article.

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In a move that could start a new wave in PC sales, Dell and Paramount Pictures today announced that they have signed a joint venture that will see “Iron Man” come pre-loaded on Dell computers for anyone who wishes to order the unit.

So far, the details of the deal are a bit disappointing. Paramount is the only studio that has signed on and “Iron Man” is the only film being offered. Dell claims that more titles will eventually be offered during the purchase process, but for now, it looks like Dell and the studios have a “wait and see” attitude to decide if they want to move forward with a broader strategy.

“Iron Man” will be offered on Dell’s Inspiron, Studio, and XPS models and can be added as an option during the purchasing process. Much like the DVD, the film pre-installed on Dell computers will run you $20 and feature the bonus footage contained on the DVD. More importantly, you can burn the movie onto a DVD, but there’s one catch: you can only do that once.

The option to add “Iron Man” to Dell computers is available now.

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Online file storage and sharing service Box.net is helping to put the “cloud” in Dell’s first netbook, the Inspiron Mini 9.

With only 4GB of built-in hard drive space, Dell needed some way to boost capacity. So it placed a default Box icon on the desktop that leads to 2GB of free internet storage (twice the normal 1GB that Box provides for free).

Right now, that icon is just a shortcut to Box’s website where users can sign up for the service. The Palo Alto-based startup has suggested, however, that a deeper level of desktop integration is in the works.

Don’t want to cough up $350 for one of these little guys? Box has offered to give away five of them for free to our readers. Each will come with 25GB of Box storage.

To win one, tell us in the comments why you need an ultraportable laptop. We’ll pick the five best reasons and email to follow up, so make sure to submit your real email address.

Update: The contest has ended – thanks everyone for your submissions!

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Who do you trust more, Google or Toyota? The answer might depend on where you live. In its annual corporate reputation survey of 60,000 people worldwide, the Reputation Institute finds that Google scores highest in the U.S., but is No. 2 worldwide after Toyota. On the global list, Ikea is No. 3, Johnson & Johnson is No. 5, and Walt Disney is No. 12. Apple doesn’t even make it into the top 25 (see below).

Using the same data, Forbes breaks out the top 75 companies in the U.S. In the U.S. alone, Apple is No. 17, HP is No. 18, Intel is No. 19, Dell is No. 25, IBM is No. 35 and Microsoft comes in at No. 43. Bringing up the rear is Motorola at No. 50, Cisco at No. 55, CBS at No. 62, and American Express at No. 75. (See partial list below).

These rankings are based on an opinion poll, but they just don’t seem right to me. How can Dell be No. 25, with all of its customer service issues last year? And why is American Express, which regularly ranks as one of the most admired companies in the world and one of the top brands, dead last?

It is instructive to compare some of these rankings to the top 100 brands, as measured by an estimate of brand value. (See below). Google, again is No.1. Microsoft is No. 3, IBM is No. 6, Apple is No. 7, Toyota is No. 12, HP is No. 16, American Express is No. 20, Intel is No. 27, and Dell is No. 41. About the only company the two rankings agree on is HP. These brand rankings feel like a better measure of reputation to me than the Reputation Institute’s survey.

What do you think? Take our own poll. Vote for the companies you trust or admire the most. Multiple answers are allowed.

Editor’s note: I put in BMW twice by mistake in our poll, so please only vote once for BMW if you vote for it at all. I’m keeping the existing poll up rather than put up a new one and throwing away the votes that have already been cast.

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MessageOne offers on-demand services for business continuity, archiving and disaster recovery, with a particular focus on email. MessageOne’s Email Management Services (EMS) promises to “eliminate all of the risks of managing email by solving archiving, continuity, and security needs” with a “fully integrated suite of on-demand services” that eliminates email downtime and prevents data loss.

As Alarm Clock points out, the interesting thing about the acquisition is the possible nepotism; MessageOne is owned by Michael Dell’s brother Adam Dell. Although it does seem like a somewhat strange acquisition for Dell, the company has been slowly moving into Internet/ online fields, having acquired EqaulLogic in November 2007.

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New Hampshire based EqualLogic makes internet focused data-storage network systems that use proprietary software “designed to simplify how businesses store and manage data.” EqualLogic offers virtualization solutions and is a minor partner in VMWare.

Dell said that they would use the acquisition to increase their market share in the rapidly growing internet storage market.

Privately held EqualLogic took seed funding from Charles River Ventures before going on to take approx $50 million in funding over several rounds. Prior to today’s acquisition the company had been preparing for an IPO.

Dell expects to complete the acquisition no later than early 2008.

(in part via Reuters)

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The company also unveiled StudioDell, a video sharing site focused on Dell issues that contains both company video and submissions from users.  Comments are allowed on IdeaStorm but not on StudioDell.

The company fully acknowledges its intellectual debt to Digg, calling IdeaStorm “a combination of message board and Digg.com.”

Jeremiah Owyang calls this a nod to the idea that “intranets are anachronisms,” though the second most popular submission as I write this is a call for a separate, internal IdeaStorm site for Dell employees.   That makes me question how enthusiastic Dell’s employees will be about IdeaStorm.  The leading suggestion is the make Dell more ecologically responsible.

I think it’s more a testimony to the usefulness of paradigms made popular by Digg and YouTube.  Like the Yahoo! Suggestion site that was launched just yesterday – Dell’s IdeaStorm looks a lot like Digg.  Many people were very critical of Yahoo’s move but both Michael Arrington in yesterday’s coverage and yours truly in this post support what these companies are doing.  

These types of sites are just plain smart.  If web lovers are critical of big companies trying to patent processes that are logical and widespread (like social networking or mash ups), isn’t it unfair to turn around and criticise them later for humbly following the lead of trailblazing startups?

You don’t see outrage about Meneame or Hugg trouncing on the ways of Digg.  Countless companies now allow user upload of videos and only the most unimaginative people say they are all trying to rip-off YouTube.  I think Dell’s new sites are a brave move that many more companies will follow.  Hopefully they’ll push this trend of online two-way communication to the limit and listen to what their users have to say.

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