Mike Isaac

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Facebook Doled Out $67 Million in Stock for Parse

ParseHere’s a hint of how much regard Facebook has for its platform.

On May 10, Facebook handed out two and a half million shares of Class A stock to Parse, an outfit that provides tools and services to mobile developers. At the time, that amount of stock added up to about $67 million.

That’s more than a quarter of Facebook’s $221 million in M&A expenditures over the first half of 2013, according to a document filed with the SEC on Thursday. And the full deal could have been for even more, as that $67 million number doesn’t denote any cash or retention payouts.

So what’s Parse, and why did Facebook pay so much for the 21-employee startup? As I wrote when the acquisition was first announced, the benefit is fairly straightforward: Fold Parse’s tools and services into Facebook’s developer offerings so devs can better create apps that run smoothly across multiple platforms.

If small-time developer outfits don’t have to spend energy maintaining all the back-end stuff and can farm that out to Parse, the thinking goes, then those developers will spend their time making higher-quality apps.

And Facebook certainly wants to get on developers’ good sides, especially after a long and sketchy history of ticking off developers with an ever-changing stance on how third-party apps perform on the Facebook platform.

Facebook needs good content to flow through Facebook. And buying outfits like Parse for such a sizable sum shows just how badly Facebook wants developers to help provide that content.

Expect Facebook and Parse to reiterate that point over and over — especially at the first Parse developer conference in San Francisco this September.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik