Posts Tagged ‘TechCrunch’

No Silver Bullets @ MySpace: Sacking Chris & Tom Was Easy; Now What?

April 23, 2009

So the new surprising news is out that MySpace founders Chris DeWolfe and Tom Anderson are leaving the helm of the pioneering social network.

The two big questions here are: Why did DeWolfe and Anderson get pushed out of their executive roles? And what does this mean for the future of MySpace?

I don’t know for sure what prompted their departures but I suspect it had much to do with the April 1 appointment of Jonathan Miller as Chairman and Chief Executive Officer, Digital Media Group and Chief Digital Officer for News Corporation, reporting directly to Rupert Murdoch. Until Miller’s appointment, the buzz in tech and media circles was that News Corp probably wanted to retain DeWolfe and Anderson. After all, the two founders built up the site from nothing, creating the world’s largest social network in terms of revenue. Then Miller took charge and gave the two founders the boot.

Miller is clearly under pressure to pull some big and bold moves to help get MySpace back on a sustainable growth path. Sacking DeWolfe and Anderson is an easy first move, though I am not sure it is the wisest. In his new job, Miller was given control of Fox Interactive Media, including its primary asset MySpace, and News Corp’s interest in the Hulu online video site. He will also collaborate with operational heads and digital executives through all lines of business around the globe to develop and refine digital efforts.

Reports have said that Miller hadn’t been planning on getting rid of DeWolfe in the near future until TechCrunch reported this week that the company had hired a headhunting firm to look for possible replacements. But clearly Miller was not gung-ho on keeping the founding team in charge or he would have locked up that deal as soon as he took charge.

And now the bigger question: What is the future of MySpace? Getting rid of DeWolfe and Anderson is not going to solve its problems–and it may make them worse in the near term by sapping morale and spurring an exodus of managers who remained loyal to Chris & Tom.

The key issue for MySpace is strategic. Until now, MySpace had positioned itself as the anti-Facebook. While Facebook’s strategy is all based on maximizing user growth and rolling out translations of the site in every imaginable language, MySpace, as part of a publicly traded company, has been pursuing a more conservative tack of dialing back on growth to maximize profits.
Last November, MySpace head of international operations Travis Katz told me that the horse race wasn’t that important. Since about 85% of the world’s online ad spending is concentrated in five markets—the U.S., Britain, Japan, Germany, and France—Katz said we are “not worried about rolling out in every single country.”

If Miller does bring in former Facebook Owen Van Natta to head up MySpace, it suggests that the company may be shifting course and turning up the dial on growth. The risk, of course, is that by pursuing growth, the units profits and margins get crushed.

If Miller & Co. do not go for growth, then they will surely need to overhaul the company’s business model. The company’s hyper-targeting program for advertisers has helped but MySpace needs to find ways to generate sources of revenue other than advertising. Making matters more challenging, is the impending end of MySpace’s $900 million advertising deal with Google in the second quarter of 2010. If that deal is renewed, which is not a guarantee given Google’s disparaging comments about monetizing social networks, it is sure to be at a much lower rate.

So any way you look at it, it seems like it’s going to be another tough year for MySpace. The company is facing some hard decisions during a deep recession, and it just lost its two visionary anchors.

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Notes on Apple’s New iPhone and Application Store

July 11, 2008

The first reports about Apple’s new iPhone and Application store are coming in. TechCrunch focused on the top applications that consumers are snapping up. Super Monkey Ball is the top seller, with MLB At Bat in the second slot. So games and sports apps continue to drive the mobile Web.

And Bank of America stock analyst David Barden this morning published his field notes about Apple stores in New York. It appears that demand for the new iPhone is solid but not as exuberant as it was for the initial launch. Kind of what I expected. Check out the field notes:

7:45am NYC apple store location. 60 people in line. First person lined up last night. Doorman says compared to last year this is ‘very relaxed’

8:00am First 20 allowed into the store. Applause from staff. 3-4x normal staff are present

8:05am Store manager appears. He’s optimistic about ATT subscription process. AT&T has not trained their folks, Apple folks practiced on the iTunes website.

8:10am Handfull of print journalists appear and some photographers

8:16am First successful customer emerges. Upgrader from a 2G phone. Said process was smooth but definitely lengthy. About 60 in the store now

8:30am Customers being let in at 5 and 10 increments. Things seem to be moving slowly

8:40am Line has grown now to 250+ covering about 2 sides of the city block, but things moving slowly

AT&T store

8:05am 20 people in the store. About 80 in line. Store staff says bigger than last year.

8:15am Staff having systems problems signing up new AT&T customers. System is crashing. Staff says this is a repeat of last year and ‘was expected’.

8:20am This location has 100 units in inventory, so clearly going to sell out soon. Expecting re-stock delivery later today. Seems strange the stock wouldn’t be on hand if it was available. Expect long lines today.

Yahoo-Google Ink Search Deal; But Does it Fly?

June 13, 2008

As Techcrunch reported, Google and Yahoo! inked a search deal. While early reports said such a deal would be limited, the actual agreement sounds somewhat expansive–and is far from a slam dunk when it comes to approval of government regulators. See the full release below.

* The deal enables Yahoo! to run ads supplied by Google alongside Yahoo!’s search results and on some of its web properties in the United States and Canada
* It also allows Yahoo to run ads on other third parties, and Yahoo!’s own Panama marketplace.
* The agreement also applies to current partners in Yahoo’s publisher network.

This could be a landmark case for the application of anti-trust law to the Internet search market. With Google dominating the market, it’s hard to see how regulators are going to let this fly without altering the deal, or putting the kibosh on it entirely.

What do you think?

Yahoo! to Strengthen Competitive Position in Online Advertising Through Non-Exclusive Agreement With Google

Agreement Advances Yahoo!’s Open Strategy; Enhances Ability to
Compete in Converging Search and Display Marketplace

SUNNYVALE, Calif., Jun 12, 2008 (BUSINESS WIRE) — Yahoo! Inc. (Nasdaq:YHOO), a leading global Internet company, announced today that it has reached an agreement with Google Inc. that will enhance its ability to compete in the converging search and display marketplace, advancing the company’s open strategy. The agreement enables Yahoo! to run ads supplied by Google alongside Yahoo!’s search results and on some of its web properties in the United States and Canada. The agreement is non-exclusive, giving Yahoo! the ability to display paid search results from Google, other third parties, and Yahoo!’s own Panama marketplace.

Under the terms of the agreement, Yahoo! will select the search term queries for which – and the pages on which – Yahoo! may offer Google paid search results. Yahoo! will define its users’ experience and will determine the number and placement of the results provided by Google and the mix of paid results provided by Panama, Google or other providers. The agreement applies to paid search and content match and does not apply to algorithmic search. The agreement also applies to current partners in Yahoo’s publisher network.

Yahoo! CEO and co-founder Jerry Yang said, “We believe that the convergence of search and display is the next major development in the evolution of the rapidly changing online advertising industry. Our strategies are specifically designed to capitalize on this convergence — and this agreement helps us move them forward in a significant way. It also represents an important next step in our open strategy, building on the progress we have already made in advancing a more open marketplace.”

“This agreement provides a source of funds to both deliver financial value to stockholders from search monetization and to invest in our broader strategy to transform display advertising and advance our starting point objectives with users,” said Yahoo! President Sue Decker. “It enhances competition by promoting our ability to compete in the marketplace where we are especially well positioned: in the convergence of search and display.”

Agreement Provides Attractive Economics and Enhances Search Monetization

Yahoo! believes that this agreement will enable the Company to better monetize Yahoo!’s search inventory in the United States and Canada. At current monetization rates, this is an approximately $800 million annual revenue opportunity. In the first 12 months following implementation, Yahoo! expects the agreement to generate an estimated $250 million to $450 million in incremental operating cash flow.

The agreement will enhance Yahoo!’s ability to achieve its goal to grow operating cash flow significantly, while at the same time providing flexibility to continue to invest in ongoing initiatives such as algorithmic search innovation and search and display advertising platforms. It gives Yahoo! complete flexibility to continue to use its Panama paid search results.

Significant Benefits Will Flow to Users, Advertisers, Publishers and Employees

Users will also benefit from Yahoo!’s ability to invest incremental operating cash flow in ongoing improvements to its search services, building upon recent major innovations such as Search Assist and SearchMonkey. Advertisers will continue to benefit from multiple marketplace alternatives including Panama, Google and others. Publishers will benefit from a winning combination of distribution, monetization and services to help them grow their businesses. The financial benefits will enable Yahoo! to broaden the scope of its investments and initiatives, enhancing Yahoo!’s ability to offer attractive career opportunities to its employees.

Terms of the Agreement

The agreement will enable Yahoo! to run ads supplied by Google’s AdSense(TM) for Search and AdSense(TM) for Content services next to Yahoo!’s internally generated paid search and algorithmic search results. Yahoo may also run Google-supplied ads on non-search Yahoo web properties, as well as on current members of its partner network. The agreement has a term of up to ten years: a four-year initial term and two, three-year renewals at Yahoo!’s option. It applies to Yahoo!’s operations in the U.S. and Canada only. Advertisers will continue to pay Yahoo! directly for clicks served by Yahoo! from Yahoo!’s Panama and Content Match marketplaces. Advertisers will pay Google directly for each click on Google paid search results appearing on Yahoo! owned and operated network or certain affiliate sites. Google will share a percentage of such revenue with Yahoo!.

In addition, Yahoo! and Google agreed to enable interoperability between their respective instant messaging services, bringing easier and broader communication to users.

The agreement allows either party to terminate the agreement in the event of a change in control of either party. The agreement also requires Yahoo! to pay a termination fee if the agreement is terminated as a result of a change in control that occurs within 24 months. The termination fee is $250 million, subject to reduction by 50 percent of revenues earned by Google under the agreement.

Although Google and Yahoo! are not required to receive regulatory approval of the deal before implementing it, the companies have voluntarily agreed to delay implementation for up to three and a half months while the U.S. Department of Justice reviews the arrangement.

Goldman, Sachs & Co., Lehman Brothers and Moelis & Company are acting as financial advisors to Yahoo!. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to Yahoo!, and Munger Tolles & Olson LLP is acting as counsel to the outside directors of Yahoo!.

How Much Money Has Facebook Raised?

May 10, 2008

There’s been a number of differing estimates about how much money Facebook has raised. TechCrunch pegs it at $493 million.

But here’s what Facebook CFO Gideon Yu told me: Facebook has had 4 rounds of equity capital financing and two rounds of debt financing. Here are its investors:

Microsoft: $240 million
Li Ka-shing: $120 million
Group of individual investors: $15 million

Before that Yu says Facebook raised another $37.5 million from a “B” round venture investment from Accel Partners and a “C” round investment from Greylock Partners and Meritech Capital Partners.

$12.5 million came from Accel Partners in May 2005. And in April 2006 $25 million came from Greylock Partners, Meritech Capital Partners and Facebook’s existing investors Accel Partners and Peter Thiel also participated. Lastly, published reports have said that in late 2004 Peter Thiel invested $500,000 in angel money in Facebook.

That comes out to a grand total of $413 million. Add in the $100 million it got from TriplePoint at that brings you to $513 million. But that still does not include the first round of debt financing. I don’t know how much that was for.

Shattered Links: Why Web Journalism Will Only Get More Powerful

March 30, 2008

When I look around and connect the online dots, it seems to me that the last month has been a sort of tipping point for Web journalism. Web sites have broken two major stories and have received big-time awards that they have never received before. Consider the facts:

1. Blogs Dominated the Microsoft-Yahoo! merger news: Somehow news of the Micro-hoo merger did not leak out to the Wall Street Journal or New York Times. But after Microsoft announced its hostile offer for the beleaugered Silicon Valley darling, blogs dominated news coverage of the year’s biggest merger story.

In particular, TechCrunch and Silicon Alley Insider broke a lot of the post-announcement scooplets. As a tech journalist, I found myself being forced to check both of these sites every day, no, every few hours, to track the fluid flow of events. On the day the deal was announced, SAI published eight posts alone, including Steve Ballmer’s letter to Jerry Yang and the Yahoo! board.

2. On February 19, blogger Joshua Micah Marshall, editor and publisher of the widely read political blog, Talking Points Memo, won the Polk Award for Legal Reporting. This is the first time that a blogger has won a major journalism award to my knowledge.

Here’s what the citation said: Marshall “led the news media in coverage of the politically motivated dismissals of United States attorneys across the country. Noting a similarity between firings in Arkansas and California, Marshall and his staff (with his staff reporter-bloggers Paul Kiel and Justin Rood) connected the dots and found a pattern of federal prosecutors being forced from office for failing to do the Bush Administration’s bidding. Marshall’s tenacious investigative reporting sparked interest by the traditional news media and led to the resignation of Attorney General Alberto Gonzales.”

3. On March 26, The Smoking Gun blew the lid off the Los Angeles Times online report that a 1994 assault on Tupac Shakur was carried out by associates of Sean “Diddy” Combs, and that P. Diddy knew about it in advance. The Smoking Gun has debunked other false reports before. Most notably, it showed that James Frey made up most of this best-selling memoir A Million Little Pieces. But this is the first time that a Web site has took down a high-profile story of a major newspaper operation.

The Smoking Gun reported that the Times story, which was published on the Web, was “based largely on fabricated FBI reports” and that the paper “appears to have been hoaxed by an imprisoned con man and accomplished document forger [and] … an audacious swindler.” After launching an investigation, the LA Times retracted the story and issued an apology.

“We published this story with the sincere belief that the documents were genuine, but our good intentions are beside the point,” said LAT editor Russ Stanton in a statement. “The bottom line is that the documents we relied on should not have been used. We apologize both to our readers and to those referenced in the documents and, as a result, in the story. We are continuing to investigate this matter and will fulfill our journalistic responsibility for critical self-examination.”

Chuck Philips, the Pulitzer-Prize winning reporter who wrote the story, said that he was convinced that the documents were fake after an extensive examination by The Smoking Gun. “I failed to do my job,” he said, according to the paper. “I’m sorry.”

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So what are the lessons here:

1. The Web is excelling at multiple forms of new journalism: From breaking news and analysis to hardcore investigative reporting, the Web is proving to be a powerful and diverse source of news and information.

2. The impact of Web journalism is growing: As more and more people get information from the Web, and as more journalistic talent flows to the Web (and it is, just look around), it’s ability to set the agenda or change the conversation will only grow.

3. Web journalists can move faster: When news of the Microsoft-Yahoo! deal was announced, tech blogs shifted into overdrive, pouring a lot of their resources into the story. By contrast, mainstream media journalists still had to balance their desire to get scoops with other deadlines and responsibilities. Truth is, for most print journalists, the Web is still a side project–not the main focus of their jobs or the way that people get ahead. TechCrunch’s Erick Schonfeld wrote about this issue in a post today.

But the point of this post is that THIS MINDSET HAS TO CHANGE in order for old media to survive. Print journalists who are being asked to devote more and more of their time online need to be supported and rewarded for making that shift. Otherwise, the online mantra being chanted at most print publications will never be taken seriously–and old media will never succeed in the Digital Age.

On that note, I am happy to report that on the TechMeme leaderboard, a list measuring the sources most frequently posted to tech news aggregator Techmeme, BusinessWeek (#51) ranks higher than its two main rivals, Fortune (#68) and Forbes (#84). However, we are way behind the Wall Street Journal (#15).

Who is number one? TechCrunch, of course.

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