Unemployment among recent graduates has risen significantly, with men worse affected than women, a think tank says.

The Higher Education Policy Institute said unemployment among graduates aged under 24 rose by 25% from 11.1% in December 2008 to 14% in December 2009.

In my earlier post on Motorola, I had mentioned their need for a better product mix and a better position in the SmartPhone / Convergence Device segment. There were not many changes in Motorola’s product mix in the second quarter with just upgradings to the RAZR model. This over-dependence on its RAZR model has proved detrimental to the company and it has slipped to the third position in the mobile phone market behind Nokia and Samsung.

Motorola, Inc. (NYSE: MOT) has three business segments: Mobile Devices, Home and Networks Mobility, and Enterprise Mobility Solutions. For the second quarter of 2007, the company reported net sales of $8.7 billion, a 19% decline from $10.8 billion in the year ago period. Net sales were down 40% in the Mobile Devices segment, up 9% in the Home and Networks Mobility segment, and up 42% in the Enterprise Mobility Solutions segment primarily due to the acquisition of Symbol for $3.5 billion in January this year (smart acquisition).

In the second quarter of 2007, Motorola shipped 35.5 million mobile handsets, a 21.8% decline from 45.4 million in the first quarter of 2007 and a 31.5% decline from the year-ago period. As per IDC, Motorola now has just 13% of the market. It was the only vendor among the top five to post a year-on-year decrease. Apart from a lackluster product mix, the company also lost out due to shipment challenges in Asia, the Middle East, Africa, and to lesser extent, Europe.

The company does not expect its Mobile Devices segment to be profitable for the full year 2007. It is undertaking aggressive steps by enhancing its product portfolio to include products based on improved software platforms and technologies that go beyond 3G, reducing workforce, going for multiple silicon providers, and rationalizing the business’s product pricing structure and distribution strategy.

Motorola?s performance and its outlook for the year have affected its stock, which is on a downward trend. It is currently trading around $16.9.

Motorola has a great brand and lots of experience to be a key player in the convergence device market which the iPhone has breathed new energy into. It will, most likely, have a CEO change with Ed Zander being replaced by someone more effective. At the moment, the company seems to be waiting for new leadership, and investor should too.

Paul Cook is a legend. I had the great honor to spend some time with Paul over the last few weeks, understanding the story of how he built Raychem from scratch.

Today, Silicon Valley has embarked on yet another evolution in its history, and has been consistently committing huge chunks of capital on a genre of technology companies and entrepreneurs that have popularly come to be known as Cleantech, and encompasses clean energy, water, and other such segments.

My core thesis is that Raychem was a company that succeeded in building an Industrial powerhouse based on innovative technology, and can be a great example for these Cleantech companies and their investors to learn from.

I did an earlier story on ERI, a water desalination company, which took 21 years to build, and the company made numerous mistakes, almost went out of business several times, and was essentially built by people who had no experience building an Industrial business. I spoke with VCs who acknowledge that the traditional model of a venture fund doesn?t allow investing in businesses that take 21 years to build. Or even 15 years for that matter!

With this backdrop, let us travel down the memory lane with Paul Cook, the cofounder and CEO of Raychem, who can tell us a few things about how to build an innovation-driven Industrial company.

(to be continued)

The stock price of Concur dropped before the dot com bust, but while the rest of the industry was faltering, Concur began to climb.

SM: You changed course in 2001. Was that due to the market? SS: The change actually happened in 2000, and it was due to our business strategy transition. The market did not like the idea of us changing our business model. We hit a low point of 28 cents a share after the announcement, and the stock before was $30.

Over a period of a couple of months we saw the stock descend rapidly. We were a very thinly traded stock, so when we saw one of our larger shareholders get out, the stock took a very significant hit. It also recovered shortly thereafter.

The point is, we told our investors, the right way to capture this market and build long-term value was to align the economics and the delivery model in a way that was beneficial to the customer. This concept, of on-demand computing, was new at that point.

One of the things I will tell you that I am happy about is that every quarter since that change, literally every single quarter now for seven years, our business has improved.

Much of the hard decisions we made in March of 2000, other companies had to make in March of 2001. Our view is that you must confront the issues that exist in your business as soon as humanly possible, and solve them.

SM: Looking at the stock price chart you hit bottom from 2000 to 2001, and started rising when other companies dropped in 2001 and kept going down. SS: That is right. It took a long time. Some investors are more risk oriented than others, but it took a long time to re-earn the trust of our investors at that point.

SM: It is difficult to make those types of changes as a public company. SS: It is. Honestly when it comes down to it you really have a very simple decision. Either deal with the challenges or hide from them.

SM: Were you already the CEO? SS: I became the CEO in 1996.

SM: So you were the CEO through this timeframe? SS: Yes, all of those mistakes were mine.

[to be continued]

[Part 4] [Part 3] [Part 2] [Part 1]

M&A and VC activity

Match.com, a business unit of IAC, acquired edodo in China and Netclub in France in February this year. Match operates 35 country sites in 15 languages. The deal will add 4 million subscribers to Match.com?s already existing 15 million.

In January 2007, Meetic acquired DatingDirect, a UK online dating site, for 27.3 million pounds (40.67 million euros/$52.8 million). Online dating service Matchmaker was acquired by Date in 2006.

MeetMoi, the mobile dating site has raised $1.5 million in funding in its first round of financing from Acadia Woods Partners.

Engage has closed a $5 million venture funding led by The Founders Fund and Revolution Ventures.

OkCupid, America?s largest free online dating site recently completed a $6 million in Series A funding from a group of angel investors. OkCupid is the fastest growing free, online dating site in the United States with more than 2 million monthly unique users and 500,000 active users.

eHarmony raised $110 million in VC funding from Sequoia Capital, Technology Crossover Ventures and other VC firms and individuals in 2004. eHarmony was founded in 2000 with $3 million of Series A funding from Fayez Sarofim & Co. and individual investors. This is a likely IPO coming up.

Conclusion
With more and more daters going online, dating sites are experiencing increasing traffic. People are getting more comfortable dating online and it is catching up across the world. While sites are experiencing increasing membership very few sites are making profits, which is a major concern.

With the market for online dating saturating in the US and strong growth expected in the EU and Asia, I expect to see consolidation in the industry.

Though some new age sites with interesting Web 3.0 applications have evolved they are also yet to make profits. Many entrepreneurs are focusing on niche sites and radically different business models like JDate.com, TrekPassion, Green Friends, Golfmates, Plentyof Fish, and OkCupid and I see these as interesting experiments.

The big next movement in Online Dating ought to come from the social networking plays, who can create subscription based matchmaking services. It would tackle their looming monetization questions. For more on this topic, please read my Facebook’s Monetization Strategy series.

[Part 1] [Part 2] [Part 3] [Part 4]

In my previous posts, I have talked extensively about Palm?s future in the face of competition from iPhone. In a nutshell, I?ve maintained that Palm either needs to come up with something impressive in the enterprise space, or go for a lower-priced emerging market killer app strategy.

Post iPhone launch, Foleo still remains Palm?s only response so far.

Palm, Inc. (Nasdaq:PALM) is a leading mobile computing solutions provider with revenue of $1.56 billion and 1,247 employees in fiscal 2007. Palm?s revenues for fiscal year 2007 declined 1% from fiscal year 2006. Revenue for smartphones was $1.3 billion, a 15% increase from $1.1 billion in fiscal year 2006. Revenue for handheld devices was $310.5 million, a year-on-year decrease of 37%. A major investment in fiscal 2006 was the purchase of the Palm OS Garnet license from ACCESS Systems Americas, Inc. (formerly PalmSource, Inc.) for $44.0 million. For Q4 fiscal 2007, net income was $15.4 million, or $0.15 per diluted share compared to net income of $27.2 million, or $0.25 per diluted share in Q4 fiscal 2006.

Year on year, Palm was able to raise its average selling price per unit from $316 to $354. The shift in the product mix favoring smartphones was one of the reasons for this trend. The average selling price might go even higher if Foleo (priced at $499) sales kick in, but there is a giant question mark about this device’s success prospects.

For Q1 fiscal 2008, the company expects its revenue to be between $355 million and $365 million but handheld business is expected to continue its decline.

The hype around iPhones has put the spotlight on smartphones and Palm seems to have benefited from it as shown by the record high sales in the Q4 2007 of 750,000 units, a 43% increase compared to the previous year. But since the launch of the iPhone, its stock is on a downward trend and it is currently trading around $14.

To be fair, however, Palm has recently introduced Elevation Partners and John Rubenstein, with the hopes of a turnaround, and it would take at least 3-4 quarters for any impact from these changes to be felt. Overall, I am bullish on the convergence device market, and if Palm can get a couple of Linux based hit products out with Rubenstein’s strong execution orientation, (something Palm has consistently lacked so far), it still has a great brand to market them under.

Remember, Private Equity firms generally don’t buy into assets unless they think that they can leverage them. Elevation’s purchase of the 25% stake in Palm is definitely not without an investment thesis, and I suspect it if not very different from what I see in the laptop replacement device space overall.