Welcome back to Baby Breakerdom! This week's quest to uncover budding Rule Breakers finds Mr. Softy moonlighting and a bumper crop for health-care investors.
First up is Microsoft (Nasdaq: MSFT ) , which launched a social networking spinoff called Wallop this week. It's new territory for Mr. Softy, even though the company took the first steps toward the launch as early as 2003. Back then, reports VentureWire, Microsoft decided to make more of its intellectual property and patents available for license.
Then last year, the program took the further step of working with start-ups to bring Microsoft-developed technology to market. And it was christened with a name: IP Ventures. It's that venture group that has birthed Wallop, along with funding help from Silicon Valley's Bay Ventures.
No doubt, Microsoft is hoping that Wallop will receive a halo effect from the enthusiasm for Friendster, News Corp's (NYSE: NWS ) MySpace, and Facebook, which is seeking a Skype-sized payout from potential suitors. If it pays off, look for Mr. Softy to do many more of these deals.
Next up are health care and life sciences funds. According to VentureWire, 2005 was a record-setting year for such investments, which took in $5.6 billion in new capital. Now, it turns out that 2006 could be just as bountiful. For example, VentureWire reports that two different life sciences funds -- OrbiMed Advisors and Alta Partners -- have oversubscribed their newest offerings. Interestingly, both funds and a number of peers plan investments in public and private firms.
Here's why this matters to you: Many public biotechs are still very much in the seed stage, including Rule Breakers portfolio member and cancer specialist Exelixis (Nasdaq: EXEL ) . Creative venture funds, such as those being built by OrbiMed and Alta, could provide needed cash for Exelixis and others, providing additional runway as they strive to produce breakthrough treatments and, thereby, multibagger returns. In other words, it's a pretty good time to be in biotech.
That's all for now. See you back here next Friday when we continue the quest to find the next ultimate growth stock.
For more Rule-Breaking Foolishness:
- Check in with last week's infants.
- Take a lesson from John; he's smashing atoms and the market.
- Learn six reasons why fellow Fool Rick Munarriz loves Rule Breakers pick CNET (Nasdaq: CNET ) .
Netflix. Marvel. AOL. Starbucks. Find out how David Gardner landed these and other multibaggers by taking atest-driveof Motley Fool Rule Breakers today. You'll also learn why our analysts are smashing the market by more than 17% as of this writing. All you have to lose is the prospect ofbetter returns.
Microsoft is a Motley Fool Inside Value pick.
Fool contributorTim Beyersis slowly coming around to the biotech bandwagon. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what's in his portfolio by checking Tim's Foolprofile. The Motley Fool has an ironcladdisclosure policy.