Talarian

~ the obit ~

On 10 December 1999, Vivek Ranadive, who ran TIBCO, telephoned Paul Larson, who ran Talarian, to ask whether the two companies should combine. They met once, the talks stopped over valuation, and Talarian went ahead and listed on its own seven months later. The two companies came back to that same question twice more over the next twenty-eight months, and the number got smaller each time.

The product was SmartSockets, and the thing it did is the thing a great deal of modern software still does. One program publishes a piece of information, other programs subscribe to the kind of information they care about, and a server in the middle makes sure the right messages reach the right places without the publisher needing to know who is listening. Add a queue for the subscribers who were not connected at the time. Add multicast when the same payload is going to many recipients at once. If you have worked with a message broker in the last fifteen years you already know this shape, which is exactly why the vendors who sold it as a product in 1999 are mostly gone: the pattern became infrastructure and stopped being a purchase.

Talarian was incorporated in November 1988 and sat at 333 Distel Circle in Los Altos, California. Through 1996 most of its money came from command and control software for aerospace, which is to say from systems where a dropped message is a serious event. In 1997 it took that machinery and repointed it at ordinary enterprise computing, which by then had developed the same appetite for messages that could not be lost. The customers it ended up with, about three hundred of them, were concentrated in financial services, telecommunications and aerospace. The logo carried the sentence "Because everything is mission-critical now," which is both a sales line and an accurate description of what had happened to the market.

~ the rap sheet ~

~ the lockheed license ~

In 1989 Talarian licensed technology from Lockheed that its filings describe as the basis for many of its products. The license was fully paid and irrevocable, which is worth a pause: the core of a company that spent the dot-com years selling internet infrastructure came out of a defense contractor's lab in the 1980s, bought once, owned outright. It made two acquisitions of its own later and both were small. GlobalCast came in 1999 for multicast work, and WhiteBarn, an Illinois company, cost $713,000 in cash in 2000 and left Talarian with an office in Warrenville.

~ two refusals ~

Talarian's registration went effective on 20 July 2000 and the offering opened the next day, through a syndicate managed by Lehman Brothers. It covered 4,200,000 shares at an aggregate $67.2 million, which works out to sixteen dollars each, and the company netted around $70 million counting a preferred sale alongside it. Revenue for that fiscal year was $15.9 million against $9.0 million the year before, and the loss was $15.0 million. TIBCO came back in late October 2000 and was turned down on price a second time.

Then the market closed. Fiscal 2001 revenue came in at $14.9 million, below the year before it, while research and development spending went from $5.7 million to $9.8 million and the net loss widened to $23.4 million. By August 2001 the board had appointed a strategic opportunities committee, by 14 September it had formally engaged Lehman to find a buyer, and over that autumn Lehman approached eight companies that the board thought might be interested. Two stayed at the table. There were 117 people left at the end of November, 27 of them writing code.

~ what five thirty bought ~

The merger agreement is dated 4 January 2002 and was announced the following day. TIBCO would pay $5.30 a share, half in stock and half in cash, valuing the company at roughly $115 million including the options it assumed, through a subsidiary called Panther Acquisition Corp. A shareholder suit was filed in Santa Clara County on 8 January, four days after the agreement, and settled by memorandum of understanding in April.

The part that nearly derailed it was antitrust. On 18 March 2002 the two companies announced that the Justice Department had issued a second request for information, which the government does when it notices two direct competitors in a narrow market combining. It cleared. Talarian's stockholders met at 333 Distel Circle at ten in the morning on Tuesday 23 April 2002 and approved the merger, and the Form 15 deregistering the stock was signed the same day. Under the line asking how many holders of record the company had, it says one, and the signature belongs to Vivek Ranadive, as president of Talarian Corporation.

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