Data Sheet—Tuesday, February 10, 2015

Welcome to a busy Tuesday morning, Data Sheet readers. Microsoft’s $10.75 billion bond sale created way more excitement than Apple’s. IBM patent lawyers are headed to court against online deals company Priceline. Plus, Google was behind high-tech’s most indulgent corporate venture capital fund last year.

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Near-record fine for Qualcomm, which will pay almost $1 billion to settle Chinese antitrust charges along with reducing patent royalty rates in the country. Given Apple’s compelling domestic share gains and Alibaba’s investment this week in smartphone maker Meizu, the deal can’t come soon enough.

Meanwhile, Microsoft, Samsung make up. The two settled an argument over royalties related to the acquisition of Nokia’s mobile handset business in September 2013. Mum’s the word on the terms, but Microsoft was chasing $6.9 million in delayed interest payments.

While we’re on the subject of Microsoft, the software giant just finished the biggest corporate bond sale this year. Yes, I know it’s only February, but it’s still bigger than what Merck & Co. and Apple just pulled off. The skinny is that Microsoft sold $10.75 billion in debt, maturing over anywhere from five to 40 years. Apple’s latest bond sale last week was “only” $6.5 billion. What's more, Microsoft originally planned a $7 billion sale. Interest was so frenzied it increased the size.

Court greenlights RadioShack’s red-tag sale. Up to 2,100 stores will be closed under its bankruptcy proceedings, so liquidators started slashing prices over the weekend. The first 1,000 locations could disappear by the end of this month.

Goodwill mission. After being spared the 2011 floods in Thailand that devastated other hard-drive manufacturers, Seagate is investing close to $500 million in additional plants there.

SCUTTLEBUTT

I wonder what this will do to William Shatner’s stock? IBM routinely files and wins more patents than any other U.S. company. Now it’s using some of them against online deals company Priceline—and its Kayak travel bookings and OpenTable restaurant reservation subsidiaries—seeking billions in royalties. IBM approached Priceline back in 2011 to negotiate a licensing agreement but has been routinely rebuffed, according to the civil lawsuit filed in Delaware.

Wearables tech company are ignoring dozens of useful applications for women. Intel vice president Ayse Ildeniz is on a mission to fix that.

Apple stock, on the way to $160? That’s the high-end of analysts’ published predictions for the next 12 months. The low: $60.

New sideline for Sidecar drivers. The ride-sharing service will use its fleet to deliver groceries and other packages for small businesses, like restaurants, that might not be able to offer this service.

LET'S MAKE A DEAL

Watson studies Japanese. IBM is teaming up with SoftBank to bring business analytics capabilities to education, banking, healthcare, insurance, and retail applications in Japan. It’s the first time that IBM’s cognitive computing technology is being “trained” to deal with a language that doesn’t use the Western alphabet. No word on when this actually will be available, though. Incidentally, SoftBank just blew its third-quarter profit estimates, mainly because of costs related to its $20 billion-plus takeover of Sprint.

Apple Pay takes flight with JetBlue. You’ll be able to pay for inflight snacks or movies with your iPhone instead of a credit card. Just as important for the flight attendants: all the procedure manuals they consult will now be published on an iPad Mini instead of a quickly outdated paper book. United Airlines and American Airlines are also iPad-friendly, but Delta Air Lines likes Microsoft’s Surface tablet.

GAZE INTO THE CRYSTAL BALL

Smartphone market share is one thing, profits are another matter entirely. Apple still handily earns way more than Samsung for its handsets—at least according to investment firm Canaccord Genuity. It estimates that the iPhone maker accounts for up to 93% of the profits related to this category.

Contain yourself. I’m used to market research firms being overoptimistic about technology adoption. So I read with interest that adoption of Docker—a next-generation approach to delivering software applications—seems ahead of schedule. About 70% of the businesses surveyed about the technology are using or evaluating it—motivated by pressure from internal developers and cost considerations. For perspective, 65% of the same respondents use VMware. There’s an agenda behind this data: this was a survey run by StackEngine, which sells Docker technology

UP-AND-COMERS

Israeli cybersecurity incubator draws $18 million. Alcatel-Lucent, Cisco Investments, Marker LLC, Bessemer Venture Partners, and Eric Schmidt’s Innovation Endeavors are among those helping launch Team8. The foundry’s first company (still in stealth, but focused on thwarting targeted attacks) is led by a former Check Point executive.

HP recharges security lineup. It will pay an undisclosed sum to buy Voltage Security, which makes encryption software. One of its specialties is securing retail transaction information; six of the top eight U.S. payment processors are customers.

KPMG’s new VC fund leads big data investment. It led a $13.4 Series B round for Bottlenose, which analyzes information streaming in real time. The startup likens itself to Palantir.

PEOPLE ON THE MOVE

The buzz about digital media company BuzzFeed is that it’s got a new chief revenue officer lined up: former Tumblr ad sales executive Lee Brown.

Former Motorola engineering vice president Steve Horowitz is the latest technical whiz to join SnapChat.

In stealth no more. Data center security startup Illumio is building up its sales organization, and it just hired a senior-level executive with previous IPO experience to lead strategy and recruitment. Denis Maynard was previously senior vice president of worldwide sales and operations for Ruckus Wireless; his resume also includes positions at QLogic and Cisco. So far, Illuio has raise $42.5 million from the likes of Andreessen Horowitz, General Catalyst Partners, and Formation8.

That was fast. Security software company Kaspersky Lab has appointed a new sales leader for small and midsize business accounts. Jim Sullivan, who previously led the company’s partner programs, takes over from John Salamone. No word on where the latter is heading.

GOOGLE, TOP HIGH-TECH FAIRY GODMOTHER

After years of strained relations, Microsoft CEO Satya Nadella has spent far more time than his predecessor Steve Ballmer courting contacts in Silicon Valley. There are many motivations—including Microsoft’s need to inspire next-generation developers to develop cool apps for Windows rather than just Android or Apple iOS. A new status report on corporate venture capital offers a more tangible, simpler reason—it’s probably jealous of Google.

Not only was 2014 the most active year on record for corporate VCs—who participated in close to 20% of all deals—Google Ventures is the most influential of the bunch. Intel Capital and Salesforce Ventures were on its heels, and the venture arms of Cisco and Samsung were also in the Top 10.

Sure, the two-year-old Microsoft Ventures makes the top 20 ranking in CB Insights’ latest annual report (registration required). It’s getting far more active in this space, as evidenced by its recent hire of BlackBerry's former head of developer relations. (Read: it's getting far more serious about mobile investments.) Microsoft now has seven startup accelerators around the world. Its distinctive approach: it doesn't take equity in the companies, instead it's looking for "long-term value," according to remarks made by its general manager last year.

Still, few of Microsoft's 200-plus startups are household or boardroom names, and even Motorola Solutions (the company left after Lenovo’s acquisition of its smartphone sister business) is managing bigger exits. Motorola had money in security startup Fixmo (acquired by Good Technology last June), wearables technology company Zephyr Technology (bought by Covidien), and biometrics innovator Lumidigm (snapped up by HID Global). None of those transaction values were disclosed.

I’ll bet Microsoft’s venture unit is more tweaked by the revelation that four out of the five biggest Internet tech deals last year involved either Google Capital or Google Ventures. That list includes additional financing for SurveyMonkey ($250 million total), Flatiron Health ($130 million), Slack Technologies ($120 million), and DataStax ($106 million). Incidentally, you’ll probably remember that Intel was in on the biggest funding event: the $900 million Series F round for Cloudera.

By the way, IBM may generate more patents than any other U.S. company (a record 7,534 last year) but it doesn’t warrant a mention in the CB Insights report. Neither do Apple, Oracle or SAP—at least not in the summary presentation.

MY FORTUNE.COM BOOKMARKS

Deloitte’s first female CEO: ‘Don’t stand still’ by Caroline Fairchild

Your high-tech car is putting your security at risk, a report finds by Ben Geier

Police are crunching data to stop murders before they happen by Shalene Gupta

Driverless cars could mean fewer cars on the road by Ben Geier

Data apps created by women: Are they really better for women? by Shalene Gupta

ONE MORE THING

See, SnapChat clearly isn’t fool-proof. A 16-year-old in Pennsylvania was linked to a murder after sending a selfie with the victim to another boy, who saved the image before it disappeared. You can’t make this stuff up.