Anything to cheer about now that the first half of 2009 is in the bag?  Honestly, not really but at least we can say that some private equity m&a did occur.

Lookin’ at the number of buy-side transactions at some of the big firms yields the following . . .

It’s no secret the power and benefit of not only knowing how much internet traffic your website receives, but also how people got there, how long they stay, and what content they find most interesting.

While knowing traffic figures may not alter a private equity firm’s web strategy - (essentially just having a website), it is somewhat surprising that many firms don’t track at all.  Tracking site visitors doesn’t cost anything (Google Analytics seems to be the most popular), and is no more difficult than having your web admin insert a little chunk of code into the site footer.

So which firms don’t seem to care?  Checking for tracking code on a short list of websites yields a few notables . . .

Firm
Abry Partners	surprising given recent re-design and emphasis on media/communications opportunities
TPG	not too surprising given stagnant site
The Gores Group
TA Associates
Nautic Partners
First Reserve
HIG
The Blackstone Group	somewhat shocking

So which firms do care (or at least have an IT person who cared to set it up)?  Well many do.  KKR, Francisco Partners, CD&R, Carlyle, Candover, Cinven, Summit Partners, all track, but one surprise is Cerberus.

Cerberus doesn’t seem to care about keeping an up to date web presence - their last news update is still from ‘07, yet they do have Google Analytics set-up.  Now if Cerberus actually checks is another story.

Whether private equity firms as a whole track their web traffic more or less than then rest of the internet population would need a more detailed survey.  My guess is significantly less.  The quick survey above only checked mega sized firms.  Sampling several small firms yields even fewer . . .

Last month, Platinum Equity surprised everyone when news surfaced the LA-based group had entered the newspaper business.  Platinum’s no stranger to buying distressed businesses, but the acquisition of The San Diego Union-Tribune caught most folks off guard and despite the deal’s relatively small size, generated significant media buzz.  

Attention naturally spilled over to Platinum itself as people looked to learn a little more about the firm behind the deal. Google searches for Platinum Equity in March bumped up 50% as result.

Not exactly the search gains singing sensation Susan Boyle has experienced this month, but impressive for PE.

(source: Google - Keyword Tool)

Big press release today regarding strong interest in General Motors’ Saturn unit by “investor group” Telesto Ventures, a consortium of sorts which includes “private equity firm” Black Oak Partners. What’s not being mentioned however, are any specific details on the two private equity groups. The web generally provides a treasure trove of info, but this is the first time Black Oak or Telesto seems to be mentioned anywhere. It’ll be interesting to see if more details emerge on whose behind the names.

Mega non-core divestiture buyout firm Clayton, Dubilier, & Rice has taken the m&a lull to improve its stagnant website.  CD&R follows KKR and ABRY Partners as recent, larger private equity firms to complete a web overhaul.  See the difference below.  Content has largely stayed the same, but navigation and ease of use are vastly improved.

Legacy

New

In a bidding frenzy today, retail toy giant Toys R’Us helped to ensure its future in the online toy world by ponying up $5.1 million for domain name toys.com.  Toys R’Us, purchased for $6.6 billion in 2005 by a KKR led consortium (in another auction), outbid domain holding company National A-1 to come out on top.

While the retailer’s own domain of toysrus.com already ranks well for search query toys, (comes up #2 in google), passing up an opportunity to own the best domain for the industry could prove a costly mistake should toys.com emerge as a new online contender one day.  Who knows what the retailer’s strategy will be with the new asset, but even sales generated from redirecting type-in traffic ought to quickly pay off the purchase.

After stumbling across New York based mid-market private equity group Buckingham Capital’s website, one thing of note on their portfolio page is the use of pictures.  Most if not all firms break out and describe portfolio investments in some level of detail, but rarely do you see pics.

Not only does Buckingham show a pic of the business but showcases actual products as well.

Subtle, but one way to differentiate.

Stanford Financial, the latest investment firm with a founder grabbing headlines for all the wrong reasons, appears to have plowed $8 billion worth of high-yield bank CD proceeds into illiquid real estate and private equity investments.

The problem isn’t so much with the actual investments but rather that investors bought the high-yield certificates thinking their assets were a little more liquid and secure than what is typical for alternative assets.  As more details emerge, it’ll be interesting to see what private equity deals/funds CD holders actually own.  Hopefully, the $8 billion doesn’t turn out to be a complete wash.  Unlike Madoff and Co., at least Stanford invested in something.

Yesterday, the WSJ quietly featured a seemingly unusual new tactic for dealing with shaky private equity investments, that being giving the investment stake back.  In 2007, consumer/retail focused private equity firm NRDC Equity Partners invested in fashion house Peter Som Inc. The founders of the emerging brand took a $3 million cash infusion in exchange for a 65% stake in the business.

However, given the deteriorating state of all things luxury since, NRDC decided in January to go one step further then the standard write off, and relinquished its stake back to the Peter Som founders.  NRDC no doubt wants to spend its time following larger investments more closely, making the $3 million total loss somewhat insignificant.

While this sort of exit probably won’t become too popular, I’m sure there are other more notable private equity investments where firm owners would love to do the same.

VC backed Cash4Gold (real name Albar Metals), the upstart mail-order gold buyer shown quite often on late night commercials recently upped the ante with a SuperBowl Ad featuring financially troubled celebrities Ed McMahon and MC Hammer.

However, despite all the publicity, numerous complaints on the company’s business practices are beginning to surface.   VentureBeat recently outlined a post on Consumerist describing the company’s business practices from an ex-employee. Let’s just say the comments are pretty disturbing. This follows another account where a blogger whose unflattering internet post of a Cash4Gold exchange was offered several thousand dollars to alter his post so his story didn’t rank so high when Googling “Cash4Gold”, (comes up #2).

Dan Primack at Private Equity Hub noted a month ago that venture firms Highland Capital Partners (tagline Building Great Companies Together) and General Catalyst dumped $40 million into the company, although neither firm has publicly acknowledged the investment. At MIT’s December Venture Capital Conference Dan noted David Fialkow of General Catalyst stating;

“Me and [Highland’s Paul Maeder] here invested in a company we haven’t talked about yet, where these two entrepreneurs are making $1 million a week. They’re not doing anything technical, they’re just innovative… The reality is that great entrepreneurs figure out how to make money.”

I’m not sure why a company making $1 million a week with a simple business model would need a $40 million cash infusion, (other than the founders perhaps seeing the end and wanting to partially cashout, oh, and that Superbowl ad), but it does beg the question if both VC outfits were perfectly fine profiting from Cash4Gold’s innovative business model. I assume their due diligence process uncovered at least one complaint.

Who know’s what the future holds for Cash4Gold, but unless the company can turnaround its image by turning around its business practices, I don’t see a happy ending.

What’s interesting though is had Cash4Gold not appeared so seemingly greedy (allegedly offering 1/3 the value of your gold), this company probably had a long-term shot.

When it comes down to it, Cash4Gold’s business model is no different than hugely successful change converter Coinstar. The only difference is the fee. Coinstar’s fee is 8.9% and is easily found on the company’s website. Cash4Gold’s fee may be unavailable on its website, but is increasingly easy to find on other’s.