Deloitte & Touche Notes CaseStack, YouBet for Growth

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Several L.A. County firms have made Deloitte & Touche USA’s list of fastest-growing Southern California tech firms.


The list was based on percentage revenue growth over the last five years. The No. 2 firm on the list was Santa Monica-based CaseStack Inc., a company that provides outsourcing to mid-sized consumer goods packaging companies. CaseStack saw growth of 2,443 percent in that period.


Other Los Angeles-based companies that made the list included No. 3 online horse race betting firm Youbet.com Inc., which saw 1,305 percent revenue growth; No. 5 dial-up Internet service provider United Online Inc. (818 percent); No. 7 online advertising network ValueClick Inc. (577 percent); No. 9 messaging service j2 Global Communications Inc. (333 percent); No. 20 semiconductor producer Diodes Inc. (130 percent) and No. 21 and No. 28, videogame producers Activision Inc. (127 percent) and THQ Inc. (100 percent).


Who was No. 1? Occam Networks Inc., the Santa Barbara-based tech firm that supplies innovative Ethernet and Internet-based loop carrier equipment to telecommunications service providers.


Occam registered an eye-popping increase of 48,958 percent from 2001 to 2005. The firm is riding the crest of the explosion in the field of video and broadband data, and has benefited greatly from its development of a system that efficiently delivers “triple play” service video, Internet access and telephone service so popular with cable, telephone and satellite companies these days.


Along with the growth ranking, Occam is celebrating its recent approval from the Nasdaq stock market to list its shares. The stock, available as of Oct. 9 under the symbol OCNW, is hovering around $18.50 per share.



Digital Expansion


Accounting firm Ernst & Young is expanding from its current sector in which it provides auditing, tax reporting, tax advisory and business risk services to technology and security risk services.


The Los Angeles-based division, run by Ernst & Young principal Kevin Moncrief, has identified the top five tech security threats for businesses: uncontrolled wireless networks; the increased use of collaboration technologies; increased database security requirements, which can result in the loss of private or confidential data; the increased need for digital identities; and the expanded use of service-oriented architectures and/or grid computing.


The 46-year-old Moncrief comes from the Midwest with an unusual security background. He was a military policeman for the U.S. Army’s 69th Infantry Brigade in Topeka, Kan.



The Rights Stuff


Google Inc. snapped up YouTube Inc. for a tidy $1.65 billion last week, but a gazillion-dollar question still hangs over the acquisition: Will they pay copyright owners to use material or not?


Santa Monica-based intellectual property attorney Lawrence Iser, of Kinsella Weitzman Iser Kump and Aldisert LLP, sums up the issue neatly.


“Are you going to derive revenue from licensing or are you going to derive revenue from litigation?” Iser asks.


Iser points out that You Tube was extremely adroit in announcing newly crafted rights deals with Los Angeles-based Universal Music Group, Sony BMG Music Entertainment and CBS moments before it announced its Google deal.


Iser believes the timing was no accident.


“Google is pretty smart,” he said. “Basically, it means that You Tube is following the copyright laws.”


He was referring specifically to the Digital Millennium Copyright Act, which Congress enacted to protect new Internet service providers. It provides the right for a provider like You Tube to legally post a video or a song that it doesn’t have rights to. If the material’s creator or rights holder wants them to take the site down, they need only ask.


Iser’s former partner, Aaron Moss, who remains a copyright attorney for Los Angeles-based Greenberg and Glusker, points out that the copyright act, otherwise known as the Safe Harbor Act, will not protect YouTube or Google if it profits from the material, and make no mistake, the plan is to make money.


There’s some irony in YouTube, which made its name in part because of its ad-free presentation, merging with the most aggressive of the Internet giants when it comes to advertising.


“I expect it will be a great channel for advertising,” said Sergey Brin, Google’s co-founder at the conference call announcing the deal. Google said it could insert ads inside the videos as well as serve up text-based ads based on YouTube’s search function.


YouTube’s Chief Executive Eric Schmidt said that the Google deal “is an exciting next step in terms of our thinking of the evolution of Internet and video.” And copyrights, he might have added.



The Ripe Stuff


Ripe Digital Entertainment has received $32 million in Series B financing from Hearst-Argyle Inc., Time Warner Investments, Columbia Capital LLC and Rho Ventures.


The Los Angeles-based company plans to use the money to build its broadband and mobile strategy, and accelerate the development of its measurable advertising platform.


“This infusion of cash enables Ripe to produce the best content, and work with elite distribution and talent partners for our current and future networks,” said Ripe Digital’s Chief Executive Ryan Magnussen.


Ripe Digital provides video-on-demand for cable TV, broadband and mobile to Time Warner and Comcast subscribers.



Staff reporter Dan Cox can be reached at

[email protected]

or at (323) 549-5225, ext. 223.

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