Any day now the founders and investors of Salt Lake City-based SBI Group will have a few more coins in their collective pockets, as will the company itself. How much, you ask? About $160 million worth.

That's the price SBI agreed to accept for selling off its SBI.Razorfish interactive advertising agency to Seattle-based aQuantive (Nasdaq: AQNT) late last month.

Slated to close before the end of July, aQuantive will pay SBI $75 million in convertible notes in AQNT and approximately $85 million in cash upon closing of the transaction.

SBI Group was formed initially as SolutionBank back in 1997 with financial backing from Park City-based venture capital firm Hunter Capital, with later investors including GE Capital and Cerberus Capital Management.

Over the years, the company has migrated from being a systems integrator/value-added reseller (VAR) with a focus on developing custom software applications to a company providing interactive advertising solutions and strategic consulting services.

It also changed its name three times to keep pace with its evolving offerings: First to SBI, then to SBI and Company, and last October to SBI Group, an entity comprised of two divisions — SBI.Enteris and SBI.Razorfish. SBI has also been extremely opportunistic over the years. For example, it used the recent DotCom recession to snatch up four struggling interactive ad agencies in 2002 for pennies on the dollar — Lante, Razorfish, Scient and WebFlow — effectively buying top-name clients along the way. As a result, by the time SBI/AQNT deal was announced, SBI.Razorfish had become the largest independent interactive advertising agency in the world, with more than 500 employees in cities like New York City, Chicago and San Francisco, as well as in aQuantive's hometown. Excluding billings to clients for reimbursable costs, SBI.Razorfish had net revenues of $93 million in 2003 and was profitable for the year.

The upshot is that SBI Group is probably the largest tech company in Utah that the fewest people in the state actually know anything about.

The other takeaway from this portion of the column is that SBI's probably not going to be on the fund-raising trail anytime soon. This was another Utah tech company I thought had a good shot at going public in 2005, but I'd say that's extremely unlikely now.

Then again, given its ability to morph and adapt to opportunities, I would never say never when it comes to SBI. On a different front (and at a different scale), Draper-based Cerberian has entered into an agreement to be acquired for $17.5 million in stock by Sunnyvale, California-based Blue Coat Systems (Nasdaq: BCSI).

Cerberian creates Internet filtration software that has primarily been integrated into software and devices from companies such as Check Point and Microsoft.

Blue Coat plans to incorporate Cerberian's Web Manager into Blue Coat's ProxySG network appliances. Known as "edge devices" as they are attached to the edge of computer networks, such network appliances provide IT professionals with a buffer between the Internet and the corporate network, delivering greater security and management capabilities.

According to its Web site, Cerberian had raised approximately $7.85 million in outside funding since its founding in August 2000. The acquisition is expected to close before Sept. 30, 2004.

Finally, kudos to the Utah Information Technology Association for a great gig earlier in the month with Clayton Christensen as the keynote speaker.

A native Utahn and a product of both Salt Lake City's West High and Brigham Young University, Christensen is a professor at Harvard Business School and author of two best-selling business books: "The Innovator's Dilemma" and "The Innovator's Solution."

Christensen's easy manner delighted the dinner audience of 400-plus at the Marriott City Center in Salt Lake City as he interweaved personal anecdotes with observations from scholarly research to drive home his points.

Central to his comments was the concept that companies that win are those that disrupt the marketplace either by attacking the low-end by introducing products that are worse than the leading products or by creating a new market by targeting non-consumers.

For example, Sony used this non-consumption model when it successfully introduced the transistor radio and targeted teenagers. The sound produced by these early devices was vastly inferior to those purchased by audiophiles, and yet Sony still created a huge market where there had been none before.

On the low end, the former White House Fellow walked audience members through the 40-year-plus saga of the battle between vertically integrated steel mills versus mini-mills, a battle that today finds only one vertically integrated mill left in the United States.

How was it done? Turns out it started with the lowest of low steel products: rebar.

The mini mills won, Christensen explained, because of an "asymmetry of motivation."

According to Christensen, the managers of the integrated steel mills didn't feel bad losing the rebar business because it had very thin profit margins and only amounted to a small fraction of their overall business. So they withdrew from the rebar business, and when they did, prices in the rebar business soon stabilized to a low-end commodity price structure, which in fact forced the mini mills to look "up the food chain" for the next market to enter.

That's why, Christensen said, "The low-cost strategy only works as long as there's a high-end competitor."

Christensen was great. Thanks to UITA and all of the other sponsoring companies for a fabulous event.

Now if we could only have a lot more similar events in the state on a regular basis that would be really cool.


David Politis leads Politis Communications, a strategic communications agency that helps maximize corporate value for high-tech and life science companies. E-MAIL: dpolitis@politis.com.