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To: Lizzie Tudor who wrote (15986)	2/1/2003 12:07:45 AM
From: Bill Harmond	Read Replies (1) \| Respond to of 57684

news.com.com

To: Lizzie Tudor who wrote (15986)	2/1/2003 2:57:41 AM
From: stockman_scott	Respond to of 57684

Seattle VC firm opening California office By JOHN COOK SEATTLE POST-INTELLIGENCER REPORTER Saturday, February 1, 2003 At a time when the venture capital industry is mired in its worst slump, Frazier & Co. is expanding. The Seattle firm, which raised a $400 million venture fund two years ago, plans to open a branch office in Silicon Valley in the next four months. The announcement comes only a few weeks after Atlas Venture and Mohr, Davidow Ventures pulled the plug on their Seattle operations. The new California office will be led by Patrick Heron, who joined Frazier from McKinsey & Co in 1999. In addition to Heron, Frazier will add at least one new venture partner in Silicon Valley. The 18-member firm also plans to hire a venture partner in Seattle. The expansion is necessary to support the company's medical device and biotechnology companies in Silicon Valley, Heron said. About half of the firm's 60 companies are located in Northern California, a region that Heron calls the "most active life sciences market" in the country. The move does not mean fewer deals in Seattle, he said. "One of our committed goals as the largest venture capital group in Seattle is to make the Seattle life sciences market even more vibrant," he said. "I don't think there is going to be any degradation in our ability to service Seattle companies." In November, Frazier participated in the $13.6 million funding of Seattle-based GeneCraft. Its other Seattle area investments include Calypso Medical, Corixa Corp. and ZymoGenetics. Alan Frazier, the former Immunex executive who founded Frazier in 1991, said the firm has always maintained a national focus. Its portfolio includes companies in Colorado, New Jersey, North Carolina, Michigan and Texas. Establishing an office in Silicon Valley will cut down on travel time and make the firm more efficient, Frazier said. "For us, this is a convenience factor," he said. "We are down there all of the time. Having an office, a conference room and Patrick hanging out there, this is a situation where we will be able to operate a lot more conveniently." The physical presence also will help the firm find early-stage deals, he said. It is not the first Seattle-area venture firm to expand in California. Voyager Capital set up a branch office in Silicon Valley in early 2000 as a way to cross-pollinate technologies between the two regions. Voyager's three most recent investments have been made in Northern California companies. It's also not the only Pacific Northwest venture capital firm adding staff. Spokane-based Northwest Venture Associates hired a general partner this month and Bellevue-based Ignition added Martin Tobias as a venture partner last year. With many venture capital firms under pressure to cut costs, a new branch office could be seen as an unnecessary expense. But Frazier said the firm weighed the options and decided it was time to expand. Instead of choosing the marquee address of Sand Hill Road -- where dozens of high-profile venture firms are located -- Frazier will set up shop in downtown Palo Alto. "I think in this day and age, venture capitalists should be keeping their costs down just like we are suggesting our own companies keep costs down," said Frazier. "Palo Alto is a good bit cheaper than Sand Hill Road." seattlepi.nwsource.com

To: Lizzie Tudor who wrote (15986)	2/1/2003 3:39:02 AM
From: stockman_scott	Respond to of 57684

Dell Dips Toe in Retail Waters story.news.yahoo.com Fri Jan 31, 1:27 PM ET Keith Regan, www.EcommerceTimes.com Though it is widely praised for its cost-efficient online and phone sales model, Dell (Nasdaq: DELL - news) now plans to try its hand at selling computers in retail stores. The company said it will install sales kiosks inside Texas Sears (NYSE: S - news) locations and will make permanent a shopping-mall experiment. However, Dell noted, the moves do not indicate a change in its overall direct sales focus. Although the kiosks will be staffed by Dell representatives, customers will place orders through them either online or by phone. The information-booth-size kiosks will display desktop and portable computers, as well as software and accessories. "We see it as an extension of what we're already doing," Dell spokesperson Venancio Figueroa told the E-Commerce Times. "The mall program has turned out to be a good way for people to see our products in person, and that's proven worthwhile for some customers. This gives a different customer segment that same exposure." The first kiosks were launched in an Austin, Texas, Sears store this week and will appear in 10 Texas Sears outlets by the middle of February, according to Dell. Opposite Directions Ironically, the move comes on the heels of Dell competitor Gateway's (NYSE: GTW - news) announcement that it plans to reexamine its retail strategy in the face of sagging profit margins. Some observers have taken that as a signal that Gateway, despite saying it remains committed to a retail presence, may be gearing up to close a significant number of its 272 U.S. stores. Gateway CEO Ted Waitt said in a conference call Wednesday that the company already has shut four stores and will closely examine each of some 120 leases due for renewal this year. In contrast, Dell's direct sales model has helped it remain a profitable market leader even in a fiercely competitive environment that has seen Gateway, Apple (Nasdaq: AAPL - news) and other computer makers cut costs in recent weeks. "They've mastered the direct sales process in such a way that many others have tried to imitate it," IDC analyst Roger Kay told the E-Commerce Times. "Any wild variation from that model would be dangerous, but if they can use retail as an extension of what they're already doing, it might make sense. Certain customers, particularly those who may be new to PCs, want to see what they're buying before they put their money down." Dell will report fourth-quarter earnings next month and is expected to post a profit of about US$600 million, which would represent a 30 percent increase from the year-ago period. The company also has stated its intention to begin selling its own line of printers this year. Plans call for the kiosks to remain in the Texas Sears stores until summer, when the two companies will decide whether to make them permanent and expand the effort to other parts of the country. Financial details of the arrangement were not disclosed. Been There Dell is not new to the in-store retail arena. The company flirted with an indirect sales model in the early 1990s, putting its computers on shelves at Wal-Mart (NYSE: WMT - news), CompUSA and other chains around the country. But by 1994, Dell had pulled back to its core direct sales approach. Published reports indicate Sears may not have been Dell's first choice for the kiosks, with electronics retailers Best Buy (NYSE: BBY - news) and CompUSA reportedly declining to host the experiment.