AllThingsD » Boston

Content Gains Allow Demand Media to Beat Wall Street Expectations on Q1 Earnings and Revenue

Kara Swisher — Tue, 07 May 2013 20:25:02 +0000

Demand Media, the online content company, said it had earned nine cents on an adjusted basis in the first quarter, on revenues of $100.6 million, topping Wall Street estimates of eight cents on $99.6 million in sales. On a fully diluted basis, earnings were one cent a share, or $700,000, compared to a loss of two cents, or $1.8 million, in the three months compared to a year ago.

“Strong growth from our owned & operated content and media properties drove our Q1 results, highlighting the unique capabilities of our content discovery, creation and distribution platform. Further, we accelerated our paid content strategy with the acquisition of Creativebug, a premier online destination for arts and crafts instruction, which will provide our large eHow crafts audience with an expanded learning experience. In addition, we signed up over 400 resellers to our new gTLD tools and received more than two million expressions of interest for domains to be registered with new gTLDs,” said Richard Rosenblatt, chairman and CEO of Demand Media in a statement. “We are excited about the distinct long-term growth opportunities for both of our businesses.”

Demand’s eHow site seems to have driven a lot of the gains in the content area.

Demand shares rose in trading yesterday by close to two percent, to close at $8.58, also its stock is down 7.6 percent for the year.

The company did not mention the planned split of its registar and content business that it announced in the last quarter in the current results, which might be covered on the conference call the Santa Monica, Calif. company will have with analysts at 2 pm PT.

In its last earnings release for the fourth quarter, Demand said it was spinning off its domain registrar business from its media one in a bid to better clarify the company to investors.

Since it went public several years ago, there has been some level of difficulty for each part of Demand to easily explain itself to Wall Street, given the very different natures of its key — but very different — revenue units. In a statement at the time, Demand said that it was “our intent to spin off our registrar business and separate into two independent, publicly traded companies.”

The company noted that the two units “divergent strategic priorities and opportunities” would be better in the new configuration with a pure-play media company and domain services company. At the time, the company said the transaction was expected to take place in the next nine to 12 months, although it required a number of company and regulatory approvals to do the tax-free spin-off to create two different stocks.

In a different kind of transaction, Demand had talked a little more than a year ago to a private equity company about taking the company private. The effort was abandoned, in which Boston-based Thomas H. Lee Partners would have purchased Demand for a price of up to $1.2 billion, due to a number of challenges. Its current market valuation is now about $744 million.

Until we hear more about the spin-off plans from Demand execs, here’s the full release from Q1 to peruse:

1Q 13 FINAL RELEASE

Twitter Testing New Local Discovery Features -- And It's About Time

Mike Isaac — Thu, 25 Apr 2013 20:15:43 +0000

Twitter may be the best way to figure out what’s happening around the world right now. But it sure ain’t great at telling me what’s going on in my world — that is, what’s happening down the block from me.

That may change. According to multiple sources, Twitter is in the process of testing a new feature that lets you discover tweets from people within a certain distance of your location. The idea is to surface relevant activity based on where you are in the world, serving up tweets from others around you — whether you follow them or not.

The feature, as I understand it, came out of the company’s recent hack week at the beginning of this month, where a few engineers worked on projects related to local discovery. A number of employees have been testing the feature in the Twitter app ever since.

The type of tweets you’d see, ideally, are the most relevant ones nearby, especially when they follow a trend or a flurry of closely connected activity. So a football game or a concert, for instance, may be a great use case here.

Or perhaps even more importantly, it could be used in completely unplanned, spontaneous instances.

Here’s an example, and a real kicker: I’ve been told that a few employees were testing the new feature in Boston last week, around the time that the brothers Tsarnaev allegedly carried out a series of horrific bombings during the city’s annual marathon.

When reached for comment, Twitter spokeswoman Carolyn Penner said the company had nothing to share on the matter.

It’s fascinating to me that Twitter is toeing the waters of discovery through a local lens more explicitly than ever before. Currently and historically, the company already factors in location when suggesting content inside the Discover tab and also when serving you ads. It also goes without saying that to try this stuff out during the recent Boston tragedy — which was arguably watched by much of the world through Twitter just as intensely as it was over broadcast networks — is incredibly interesting, if only to imagine what possibilities it could hold for other mass events in the future.

The big question for me: Twitter, what took you so freaking long?

For a company that prides itself on its interest graph — the pulse of what everyone in the world is talking and thinking about — something like a localized version of discovery seems like a natural extension of what it means to use Twitter in a meaningful way.

Yes, Twitter makes much of the foo foo special moments its users have when connecting with people on the other side of the planet (or in some cases, connecting to others off our planet entirely). I won’t begrudge them that; it is pretty fantastic.

I’d argue, however, that Twitter could be infinitely more useful to me were I to open up the app and see something happening down the block: A yard sale, a car accident, half-off a tasty fried chicken sandwich. That’s Foursquare’s entire value proposition with its newly revamped, search-focused app. If done right, Twitter could potentially be even more powerful in this respect, feeding off the hundreds of millions of potential intent signals flowing through its pipes on a daily basis.

So this may have come out of a recent hack week project, but ideas like this have been in the works for a long time. People I’ve spoken to said that for years Twitter has kicked around just exactly what discovery is supposed to mean for the company. Does Twitter relegate it to the Discover Tab alone and “experiment” with how people use it, as product VP Michael Sippey said at our D: Dive into Mobile conference recently?

Or perhaps an even bigger coup: Does Twitter insert these local tweet suggestions into your main Twitter timeline directly? I hear Twitter has considered both options — again, for years people inside the company have agonized about the right way to handle this — but there’s no decision quite yet.

To insert suggested location-based tweets into your main timeline, however, is a really big deal for Twitter. Touching the holy grail that is the timeline — the list of people that users have selected to follow — isn’t something the company takes lightly. For one, it could tick off Twitter’s early user base, or alienate all the folks who have carefully curated their follow lists over time.

But here’s something to think about: Right now, Twitter isn’t worried about the longtime, early user base. The company is launching products on “Good Morning America.” It’s cooperating with the Grammys and the Oscars. It’s pushing products like Vine at Cannes. It’s making the head of comms into a consumer marketing director as well.

The service’s 200 million active users pales in comparison to Facebook’s billion. Twitter needs to go truly mainstream.

Ultimately, if that means changing some of the core elements of the product and peeving the hardcore Twitter users, I’d guess Twitter may soon be approaching the point that it is willing to make that choice. It has already chopped off the legs of its client developer base and shifted everyone’s attention to the official Twitter apps.

My impression here, though, is that even Twitter isn’t sure yet what it wants to do. It could again test how this feature works within the Discover tab and maybe move it into the timeline later. Or perhaps just keep it inside Discover. Or, in all possibility, scrap the feature as it stands entirely and try it a different way. Twitter doesn’t move that fast on major changes like these.

I will say, however, that I’m glad to see the company is at least looking at tweaking its formula, even if there’s potential to upset part of the user base.

Frankly, it’s about time.

Viral Video: Imagine if We All Got Along

Kara Swisher — Thu, 25 Apr 2013 07:15:44 +0000

After just finding out that an old friend of mine was among those hurt in the Boston bombing last week, this video made me pause a little longer and wish a lot of things could be different when it comes to all the fissures in society today.

It’s from the Anti-Defamation League, and it imagines a world in which some of the most prominent victims of violence had survived instead.

Really worth a watch:

Videos Show Tense Minutes Before Boston Bombing Suspect Capture

Arik Hesseldahl — Sun, 21 Apr 2013 17:24:06 +0000

It’s been about 36 hours since Boston Marathon bombing suspect Dzhokhar Tsarnaev was taken into custody after being found in a boat parked outside a home in Watertown, Mass. And as with the 2011 raid that killed Osama bin Laden, there’s a public fascination with the details and procedures of what went down.

The latest is the video footage taken by a Massachusetts State Police helicopter of the careful way in which police approached the boat. Obviously, they were cautious, no doubt because they had engaged in a pretty intense firefight with the suspect.

What you see in the video below, which was released today, is thermal imagery showing Tsarnaev’s warm body plainly visible beneath the boat cover. In the minutes leading up to the capture you could plainly hear, on police scanner traffic, someone saying whether or not he was moving, and see his position in the front or the middle or rear of the boat as he moved around a little. Later, you see a police vehicle moving in and using a robotic arm of some kind to tear away the cover.

And if you haven’t seen this yet, it bears mentioning: It’s some amateur video, taken from a neighboring home, of the gunfight that had occurred outside the boat just as Tsarnaev was discovered. (Be advised: There’s some NSFW language as it goes down.)

Finally, here are five still photos, released earlier by the Massachusetts State Police, taken from the video footage above. You can click them to make them bigger:

Call for More Video Cameras Spotlights Debate on Use

Jennifer Valentino-Devries and Geoffrey A. Fowler — Sat, 20 Apr 2013 22:00:02 +0000

Video cameras played a critical role in helping authorities track suspects in this week’s Boston bombings. Now calls for increased camera surveillance in the U.S. are putting a spotlight on the technology and the debate about its use.

Read the rest of this post on the original site »

How a Webcam Pointed at a Police Radio Won the Internet Friday

Arik Hesseldahl — Sat, 20 Apr 2013 15:02:24 +0000

The events in Boston — starting Monday with a pair of explosions that killed three and injured 176 near the finish line of the Boston Marathon — came to a dramatic close Friday night with the capture of 19-year-old Dzhokhar Tsarnaev, one of two brothers suspected of carrying out the attacks. He had been hiding out in a boat parked in the backyard of a house in Watertown, Mass.

A furious citywide manhunt brought Boston and surrounding towns to a standstill, and there was little else to do all day but watch the live TV coverage. All day, reporters repeated what they knew, which was precious little beyond the bare facts. One suspect was dead, the other on the run after an intense gunfight with police. The “Breaking News” banners became meaningless, because throughout the day there was not much actual news breaking other than that the search continued.

Not 30 minutes after a news conference during which local officials told Boston residents they could probably go outside again, police engaged in a firefight with the suspect hiding in the boat.

It was at this point that a quarter of a million people, including me, tuned in to the streaming video image of Uniden Bearcat scanner radio picking up publicly available police communications traffic in Boston.

As anyone who’s ever worked at a local newspaper can tell you, the real “breaking news” is often heard on police scanners. And, with right kind of radio, it is perfectly legal to listen in on how cops on the beat and firefighters conduct their business. Listening to the scanner is often how reporters and camera crews know where to go when there’s a story breaking.

The scanner in question was set up in an anonymous home in Framingham, Mass. The owner had inexplicably placed his radio in the bathroom at the base of the toilet, trained a live Webcam on it, and streamed it to Ustream.

Police scanners are so common that enthusiasts have been streaming live audio from the airwaves to the Internet for years. And apps that tap these livesstreams are common on iOS and Android devices.

During a week in which professional media organizations like CNN and the Associated Press had so often failed to meet the standards to which they hold themselves, reporting arrests where none had occurred, the desire for a raw feed and clear information was understandable.

Those listening to the scanner audio naturally turned to Twitter and Facebook, relaying news of the capture to the world, and allowing the city of Boston and the rest of the world to breathe once again. Some thought the scanner stream was not a very good idea. The suspect might have been monitoring social media, the thinking went, and might be tipped off to the movements of police. Unlikely, as police were bearing down on him while he was bleeding in the back of a boat after two exchanges of gunfire during the day.

Space Rogue on Twitter was one of those listening and, at 8:42 pm ET, had the first tweet I saw containing the news:

“Suspect in custody but nobody inside the perimeter, still a hot scene”

April 19, 2013 5:42 pm via YoruFukurou ReplyRetweetFavorite

@spacerog

Space Rogue

Here’s what the live audio of the capture sounded like. The audio below lasts three and a half minutes, and begins with some routine-sounding traffic. At about the 50-second mark, you’ll hear someone say, “no other elements on the boat, HRT only,” referring to a hostage rescue team that had been called in, presumably to talk to the suspect and negotiate his surrender, if necessary. Then there’s a long, agonizing silence, broken up by indistinct radio noise. At about the 2:45 mark, you’ll hear the first reference to “still a hot scene,” followed by the confirmation “suspect in custody,” and a call for a medic. The cheering of local residents started soon thereafter.

Update: UStream has just published a corporate blog post on this video feed, saying that at its peak, 265,000 people were watching, and that throughout the day more than 2.5 million people tuned in. Half of them were on mobile devices.

Boston Suspect in Custody After Historic Manhunt

Joshua Dawsey, Evan Perez, Devlin Barrett and Jennifer Levitz — Sat, 20 Apr 2013 01:03:04 +0000

WATERTOWN, Mass. — Authorities captured a 19-year-old college student suspected in the deadly Boston Marathon bombings after one of the biggest manhunts in U.S. history paralyzed an entire metropolis.

Police and Federal Bureau of Investigation agents converged on a house in the Boston suburb of Watertown late Friday, and apprehended Dzhokhar Tsarnaev, one of two brothers alleged to have exploded two homemade bombs in downtown Boston, killing three people and injuring more than 175. Images of the suspect were shown all day on national TV and online and online.

Read the rest of this post on the original site »

A Look at Brothers Suspected in the Boston Bombing

Alan Cullison and Devlin Barrett — Fri, 19 Apr 2013 15:04:18 +0000

With an auto mechanic as its patriarch, the family of the suspected Boston Marathon bombers arrived in Cambridge, Mass., around 2002, assisted by a leader of the local Chechen community who helped finance their relocation, said a friend of the family that rented a flat to them.

The suspects — brothers Tamerlan Tsarnayev, 26 years old, and Dzhokhar Tsarnayev, 19 — were identified Friday as suspects in Monday’s bombings. Authorities said Tamerlan Tsarnayev was killed in a confrontation with police in Watertown, Mass. An intense manhunt was under way for Dzhokhar Tsarnayev. Both were believed to be involved in the fatal shooting of a Massachusetts Institute of Technology campus police officer during a chaotic series of events Thursday night.

Read the rest of this post on the original site »

Twitter's View of the Boston Marathon Bombings (Video)

John Paczkowski — Tue, 16 Apr 2013 22:00:49 +0000

These days, when events occur in the world, they also occur on Twitter. That was certainly the case Monday, as news of the devastating Boston Marathon bombing broke, and the microblogging service was flooded with information about it. Onstage at D: Dive Into Mobile Tuesday afternoon, Twitter’s VP of product Michael Sippey talked about the spike in Boston-related tweets following the tragedy, and how Twitter’s community parses good information from bad.

[ See post to watch video ]

Computer Security Legend Mudge Leaves DARPA for Google Job

Arik Hesseldahl — Sat, 13 Apr 2013 14:57:32 +0000

Peter Zatko, the computer hacking expert better known by the handle Mudge, says he’s leaving his job as a program manager at DARPA to join Google. He announced the change overnight on Twitter.

Zatko joined DARPA, the research arm of the U.S. Department of Defense in 2010 and was a program manager in its Strategic Technologies Office, where he oversaw research intended to help government agencies fend off cyber attacks.

Here’s the original tweet:

Given what we all pulled off within the USG, let’s see if it can be done even better from outside.Goodbye DARPA, hello Google!

April 12, 2013 8:28 pm via Twitter for iPad ReplyRetweetFavorite

@dotMudge

.mudge

Zatko first came to fame as a member of the Cambridge, Mass.-based hacking group The L0pht, a sort of unofficial think tank for hackers whose members at the time included people who went on to distinguished careers in computer security, like Chris Wysopal, Joe Grand, and Christien Rioux. He was also a member of The Cult of the Dead Cow, another hacker collective known for mixing hacking prowess with an ability to get media attention.

In the mid-1990s he did some of the early fundamental research on a type of computer security vulnerability known as a buffer overflow, and published some of the first papers on the topic. He later was the principal creator of some important security tools, including L0phtcrack . In 1998 he and other members of L0pht testified before the U.S. Senate, a session in which the group famously proclaimed that with its combined expertise, it could “bring down the Internet in about 30 minutes.”

After that, he and other L0pht members were occasionally summoned to Washington whenever senior officials, including President Clinton (he’s the long-haired guy in the picture), wanted to be seen discussing computer security issues.

In 1999, L0pht went legit and joined with the Cambridge-based computer security firm @Stake, which in 2004 became part of Symantec. In 2005 Zatko joined BBN Technologies as a research scientist.

Inside DARPA, an agency known more for its secrecy and occasionally for the cool things it does, Zatko created a Cyber Fast Track Program, through which hackers working outside government with good security ideas could get funding to work on projects that could help secure Defense Department systems.

Zatko didn’t specify what he’ll be doing at Google, and he didn’t immediately answer an email from me asking for a little more detail, though its a pretty sure bet it will involve doing some kind of research on security. I’ll add more if I hear back from him.

He’ll be the second high-profile DARPA manager to join Google in recent memory. Last year the agency’s former director, and D9 speaker Regina Dugan, joined the search giant.

Despite Controversy in Austin and Philly, Ride-Sharing Service SideCar Expands to Boston, Brooklyn and Chicago

Liz Gannes — Fri, 15 Mar 2013 12:00:00 +0000

SideCar, the peer-to-peer ride-sharing service that has courted controversy in its recent launches, is adding three more cities today. Its last two launches earned a car-impounding sting, a lawsuit and 20,000 free rides requested, so this should be exciting.

The company connects riders and drivers through its smartphone apps, with payment in “gifts” rather than fares.

It is launching weekend service in Boston, Brooklyn and Chicago. Previously, the company started operations in San Francisco, then expanded to Seattle, Los Angeles, Philadelphia and Austin.

But those last two cities didn’t go too smoothly. In Philadelphia, local authorities conducted a sting and impounded the cars of SideCar drivers.

In Austin, the transportation authority declared ride-sharing was illegal, so SideCar filed a lawsuit against the city a week ago, and made all rides free for now.

Free rides were an easy non-sell during SXSW, with more than 20,000 requested during the Interactive (a.k.a. technology) portion of the festival. (Obviously, not all of those were fulfilled. But such is the nature of the system.)

SideCar spokeswoman Margaret Ryan said of the Austin situation via email, “We’ve since had productive meetings with city officials, many of which are pro-rideshare. We’re hoping to have resolution so we can go back to operating as usual soon.”

Meanwhile, San Francisco-based SideCar is still in discussions with regulators in its home market, where competitors Uber and Lyft have already settled with the California Public Utilities Commission, but SideCar had resisted terms that limited an open interpretation of ride-sharing.

In Boston, Brooklyn and Chicago, SideCar will be available from 5 pm to 3 am on weekend nights until it reaches critical mass.

The company had also said last month that it was recruiting drivers in Washington, D.C., for launch this year.

SideCar raised $10 million in Series A funding last year from investors including Lightspeed Venture Partners and Google Ventures.

Spogo App Lets You Bet on Live Sports (Sort Of)

Eric Johnson — Wed, 19 Dec 2012 22:31:27 +0000

Sometimes, it seems like sports are impervious to the Internet.

Long before anyone had heard of social media, sports — both in the stadium and on TV — has been a social experience. That holds true today, even when “live” events can be anything but.

Still, “second-screen” apps, which aim to supplement live television for smartphone and tablet users, could yet have value for sports.

Case in point: Spogo.

The Boston start-up is awkwardly named, but clever in execution. Users download an app to their iPhones (Spogo plans to release an Android app after it finishes a round of seed funding) and use it to wager on what’s going to happen throughout the live game. But instead of betting money — a tricky affair in the U.S. — they bet points that can be exchanged for prizes.

Co-founder Andrew Vassallo said Spogo has a total of 50 prize-awarding partners in its two launch cities, New York and Boston. Most of those partners are sports bars, paying for both exposure through the app’s prizes (e.g. free beer or half-off a hamburger) and for data on the users who redeem those rewards.

It’s a simple gamification-lite twist that seems likely to get new people in the doors … if Spogo can attract an audience, of course.

To that end, Vassallo said he and his partner, David Shack, want to expand into other cities with the “big four” sports of football, basketball, baseball and hockey, starting on the East Coast and eventually moving west.

Right now, the app only covers football and offers rewards in those two Northeastern cities, so here in San Francisco, my betting on the 49ers-Pats game over the weekend didn’t do me much good.

On a broader scale, Vassallo and Shack also plan to branch out into betting on the outcomes of non-sports entertainment like the Oscars. And, of course, the prizes would be tailored for that decidedly different audience.

“Something like movie tickets through a partnership with AMC or a subscription to Netflix,” Vassallo said.

Wayfair Raises $36 Million in Search of Home Decor Dominance

Matthew Lynley — Mon, 10 Dec 2012 16:43:05 +0000

Wayfair, a Boston-based network of retail sites that focuses on home decor, has raised $36 million in its second round of funding amid rapid expansion of its third retail branch: a flash-sales site called Joss & Main.

Joss & Main, which offers a curated shopping experience similar to sites like Fab and One Kings Lane, has grown over the course of a year to have about a $100 million annual revenue run rate, said Wayfair CEO and co-founder Niraj Shah.

Read the rest of this post on the original site »

Associated Content Founder Beatty to Helm TechStars Boulder Program

Kara Swisher — Tue, 20 Nov 2012 16:00:18 +0000

Luke Beatty, the founder of Associated Content, has been named managing director of TechStars’ Boulder, Colo., program.

Beatty, who had been an entrepreneur in residence at the start-up accelerator, had previously been a top-level content exec at Yahoo before leaving in April. The Associated Content unit had been bought by the Silicon Valley Internet giant in 2008 for $90 million.

As described on its Web site, the organization takes only 10 companies per city: “TechStars is a mentorship-driven seed stage investment program. We run a three month long program in Boston (MA), Boulder (CO), Cloud (San Antonio, TX), New York City (NY), and Seattle (WA) once each year … These companies get $18,000 in seed funding. In addition, companies accepted into the program are offered a $100,000 convertible debt note by a group of prominent VCs immediately upon acceptance into TechStars.”

“I really believe in the TechStars community-driven model and the viability of the start-up scene in Colorado,” said Beatty. “It is my good fortune to be able to work with the diverse group of successful entrepreneurs that TechStars supports — both existing and prospective.”

Added TechStars CEO David Cohen: “Luke has been a mentor here at TechStars for some time. Not only is he an amazing entrepreneur, but he’s the kind of person that digs in and goes deep. It’s obvious that he genuinely loves working with start-ups, and that makes him a natural fit here at TechStars.”

Zynga Confirms 5 Percent Staff Reduction, 13 Game Closures

Tricia Duryee — Tue, 23 Oct 2012 22:04:12 +0000

Zynga’s founder and CEO Mark Pincus has just sent out a letter to the troops detailing the magnitude of the cutbacks today, which include a 5 percent reduction in staff.

“We don’t take these decisions lightly as we recognize the impact to our colleagues and friends who have been on this journey with us. We appreciate their amazing contributions and will miss them,” he told employees in a letter.

More details will be provided on the earnings call tomorrow, but the high-level takeaway is that the troubled social games maker will be “sunsetting” 13 games, which seems like a lot, and closing the Boston office. It is also proposing closures of the Zynga Japan and U.K. studios.

As previously reported, it confirmed it was reducing staffing levels at its Austin studio, where The Ville was developed.

With as many as 3,400 on its payroll, a 5 percent layoff works out to about 170 employees being let go.

And on what was already a rough day, it didn’t help that Facebook CEO Mark Zuckerberg pointed to Zynga’s struggles as one of the drags on his payments business.

Here’s the note that was provided by a Zynga spokesperson:

Security Firm Rapid7 Acquires Seattle's Mobilisafe

Arik Hesseldahl — Tue, 09 Oct 2012 19:29:09 +0000

Rapid7, the Boston-based cloud-based security concern that runs the widely used vulnerability warning service Metasploit, said today that it has acquired Seattle-based Mobilisafe, a firm focused on mobile security, specifically the management of risks associated with the “bring your own device” trend in which workers use their own smartphones and tablets for company business. Financial terms have not been disclosed.

Also Gone From Yahoo: Top Sales Exec Grabowski (and Expect More TK)

Kara Swisher — Mon, 30 Jul 2012 22:13:45 +0000

Ross Levinsohn is not the only media and advertising departure from Yahoo today — top sales exec Marc Grabowski also is departing, said sources. A nearly 10-year veteran, he had most recently headed Yahoo’s sales office in Boston and headed the combined Interclick and mid-market sales teams at the company. Expect a lot more media-side shoes to drop at Yahoo in the coming days under the new CEO regime of former Google exec Marissa Mayer.

Accel, Breyer Capital and Polaris Join Harvard-Area's Experiment Fund

Kara Swisher — Tue, 26 Jun 2012 14:56:29 +0000

Accel Partners, Breyer Capital and Polaris Venture Partners became the newest partners in the seed-stage venture fund aimed at entrepreneurs in the Boston area.

The Experiment Fund, which already includes New Enterprise Associates, is “anchored” and was launched at Harvard University, although the famed school is not one of its funders.

New advisers were also added to the Experiment Fund, including former Harvard Law School professor and former director of the Berkman Center John Palfrey, Facebook co-founder Andrew McCollum, Massachusetts Institute of Technology researcher Hugo Liu, as well as an ex-officio post created for the current president of Harvard Student Agencies.

The fund, which AllThingsD wrote about previously, was created earlier this year by the dean of the Harvard School of Engineering.

The early-stage incubator planned then to award funding to four to six start-ups, in amounts from $250,000 to $500,000, focused on the Cambridge, Mass., area around Harvard, which includes many other schools such as MIT.

The point has been to foster innovation around the Boston area, rather than watch those start-ups head west to seek funding. In other words, to keep the next Facebook — which was born there — from moving away to Silicon Valley.

In other words: Stay east, next young Mark Zuckerberg!

The new partners are contributing more funds, although they declined to specify the amount. Breyer Capital is the personal investment company of Accel’s Jim Breyer.

As part of adding the new partners, Breyer and Polaris’ Alan Crane will become “experts-in-residence” at the Harvard School of Engineering and Applied Sciences. Breyer and Crane, by the way, both got their MBAs from Harvard.

Former CEO Thompson Might Be Gone, But Internal Investigation Into ResuMess Still a Hot Potato at Yahoo

Kara Swisher — Tue, 22 May 2012 16:03:16 +0000

While former Yahoo CEO Scott Thompson fades from the tech scene — besides getting jacked from the top job at the Silicon Valley Internet giant, he’s also just come off two tech boards he had served on — the investigation over his hiring and how a fake computer science degree got into the company’s regulatory filings continues.

While the quick-fire controversy burned Thompson, as well as now former Yahoo director Patti Hart, the special committee of independent board members is still at work trying to figure out how such a mess was made in the first place.

And, more importantly, who knew what when and told whom.

At the time the committee was announced, Yahoo said it would “conduct a thorough review of CEO Scott Thompson’s academic credentials, as well as the facts and circumstances related to the review and disclosure of those credentials in connection with Thompson’s appointment as CEO.”

The special committee is chaired by Yahoo’s new Chairman Fred Amoroso and includes John Hayes and Thomas McInerney, two independent directors who joined the board in April.

Yahoo also hired independent counsel Terry Bird of the law firm Bird, Marella, Boxer, Wolpert, Nessim, Drooks and Licenberg in Los Angeles to handle the inquiry.

The company also noted at the time that “the special committee and the entire Board appreciate the urgency of the situation and the special committee will therefore conduct the review in an independent, thorough and expeditious manner. The Board intends to make the appropriate disclosures to shareholders promptly upon completion of the review.”

Gripped by urgency myself, I have grown weary waiting by the phone for some official answers, which sources said will not be forthcoming for some time.

But since I am the most curious of cats — uh-oh! — I started dialing around on my own to find out what’s what.

And, according to sources — especially since Thompson has settled with Yahoo and will not get severance due to the academic falsehood — the big focus is now centering on if the company’s staff screwed up the background check of his academic credentials, thus allowing it to get into its official filings with the Securities and Exchange Commission and also on Yahoo’s corporate Web site.

When Thompson was hired from eBay, where he was president of its PayPal payments division, the online commerce company had the correct bio information in its SEC filings, although not on its Web site or in its PR materials.

The question is: Did someone from Yahoo simply rely on Web bios and not check eBay filings and did anyone ever re-check Thompson’s college records? (Note: It took me 15 minutes flat to find out he did not have such a degree at Stonehill College in the Boston area.)

If lazy checking was the case, it spells rank incompetence on the part of staffers, as well as Hart, who headed the search after Yahoo fired its previous CEO Carol Bartz last fall.

A much more troubling line of inquiry taking place is aimed at the possibility that someone at Yahoo did discover the discrepancy in Thompson’s resume and either did not report it up the chain of command or did and it was either lost or ignored or, well, worse.

While this certainly ain’t Watergate, such a situation would be very hard for Yahoo to explain away as easily to shareholders, especially potentially litigious ones. As it is always said, the coverup can often be more damaging than the crime itself.

And, if it is determined by the special committee that certain employees knew of Thompson’s resume inaccuracy, it will most certainly result in dismissals of Yahoo employees.

The focus on the committee — which truly cannot sweep this under the rug, if it occurred in this much more serious scenario — is most obviously the legal department of Yahoo, which is responsible for making certain filings are accurate.

Also under scrutiny is the quickness of the hiring of Thompson.

Among the questions is how much vetting was done and whether adequate questions about him were asked among a variety of possible sources.

When he was picked in January, Thompson was a dark-horse candidate for many, including some Yahoo board members.

In fact, he was not on the initial headhunting lists prepared by outside talent search firm Heidrick & Struggles.

That’s because Heidrick had placed Thompson at eBay in mid-2000 and could not then recommend him to Yahoo. As it turned out, Thompson took it upon himself to cold email Yahoo board member and Intuit CEO Brad Smith about the job, who then passed Thompson’s interest to Hart.

Heidrick had no involvement in the checking of Thompson, although he later blamed the firm in a public meeting with Yahoo employees for putting the error in his bio in the first place from when he was hired at eBay. Heidrick quickly called the accusation “verifiably not true” in a memo to its own employees.

Sources said that meant that the firm had a resume that Thompson had submitted to it that also contained the error.

But the central mystery of how that mistake appeared on his bio will likely remain just that without further explanation from Thompson.

In a radio interview in 2009, he did not correct a specific question about the twin degrees he appeared to have held and seemed to even agree with the show’s host, Moira Gunn, about them.

Later, she told me in a video interview that Thompson had clearly indicated to her in the prep for that interview that he indeed had a computer science degree.

Still, it is still not clear — and may never be — who put the faux computer science credential on his resume in the first place.

So, with all apologies to Winston Churchill: It might remain a riddle wrapped in a mystery inside an enigma.

Exclusive: Yahoo Director in Charge of Botched CEO Vetting to Step Down From Board

Kara Swisher — Tue, 08 May 2012 15:50:13 +0000

CSLie has claimed its first victim, although the mystery is still unsolved.

Patti Hart — the Yahoo director in charge of the search that resulted in the hiring of Scott Thompson as its CEO, making her directly responsible for a clearly botched vetting of his academic record — will not stand for re-election to the board at the next annual meeting, according to sources close to the situation.

Hart — who is CEO of International Game Technology, which makes electronic gaming equipment and systems products — is resigning. Apparently, said sources, her own board asked her to remove herself from the Yahoo mess to better focus on the company she actually runs.

But she is perhaps just a few steps ahead of being pushed, given her key role in the hiring of Thompson, who was president of eBay’s PayPal payments unit when he cold-emailed Yahoo director and Intuit CEO Brad Smith seeking the job.

A Yahoo spokesman declined to comment.

[UPDATE: Yahoo confirmed the inevitable departure later in the day and said the Yahoo board would have nine members going forward. Hart also released a statement, confirming the move.]
Hart, who came to the Yahoo board in 2010, has been head of its corporate governance and nominating committee.

The departure makes her the first casualty — but definitely not the last — of the controversy over how a fake college degree managed to get in Yahoo’s regulatory filings via Thompson’s inaccurate bio.

The issues around how Thompson was hired — including how background checks on him failed to discover that he never got a CS degree from the Boston area’s Stonehill College, as his longtime bio on eBay had claimed — are part of a new investigation by the board.

That will be officially announced later today, along with the hiring of an outside law firm to conduct the probe, which will be headed by independent director Fred Amoroso.

[UPDATE: Yahoo officially said it was forming a special committee to look at Thompson's bio snafu and the circumstances around his hiring. Along with Amoroso, the other members are John Hayes and Thomas McInerney, independent directors who joined the board in April.

"The special committee and the entire Board appreciate the urgency of the situation and the special committee will therefore conduct the review in an independent, thorough and expeditious manner," a statement from Yahoo said.

Interestingly, the statement did not include a show of support for Thompson, which often happens in such circumstances.]

They will have a lot to investigate. Such as this mystery: Thompson’s correct bio appeared in filings eBay made with the Securities and Exchange Commission, while Yahoo’s similar documents were inaccurate about his educational credentials.

Also under scrutiny: How the falsehood was added to Thompson’s public resume, and who put it there; why Thompson never noticed the error, there since at least 2004; why he declined to correct it when asked directly about it; and who at Yahoo might have known about the problem before the hiring.

It’s a basic case of who, what, where, when and how. And, most of all, why anyone would make such a dumb mistake.

Hart would seem to have all the answers to that, along with a forensic firm that worked on the vetting. Key Yahoo staffers were also involved, said sources, although its headhunting firm on the CEO search, Heidrick & Struggles, was not used in relation to Thompson.

Presumably, there is a paper trail of some sort, which was the subject of a legal demand by activist shareholder Daniel Loeb of Third Point yesterday. He uncovered the bio error last week, in the middle of pressing a proxy fight to garner board seats.

Loeb’s allegations also nailed Hart in much-less-egregious padding of her own college record, making it appear as if she had economics and marketing degrees. She has one in business administration, with “specialties” (Yahoo’s ridonkulous word, not mine) in economics and marketing.

While Hart’s leaving might assuage some, providing a convenient scapegoat to the bizarre situation, this is by no means over for Yahoo or Thompson.

Another increasingly potent issue is the ever-declining morale at the Silicon Valley Internet giant over the company’s odd response — it initially called the bio problem an “inadvertent error,” without further explanation — and also Thompson’s lack of transparency on the issue.

He released an email to employees last night, apologizing for the “distraction” of the resume issue, but not for the error itself.

That, and other of Thompson’s actions — he has been described to me, by many close to the situation, as defiant over the issue, and as blaming Loeb for conducting a personal vendetta — did not sit well with many, both inside and outside Yahoo.

A Yahoo spokeswoman told me earlier this week that there is much support for Thompson internally and externally, but declined to provide specifics.

But message boards I read were mostly negative about him, as are a plethora of direct emails to me on the situation. One clever commenter on this site bemoaned that Thompson might get off “Scott-free.”

Ouch! Nonetheless, the atmosphere at Yahoo is indeed unsettled.

“Sentiment from employees is unanimous that he must go,” said a Yahoo employee, who has no personal agenda that I can grok, in a common refrain. “He clearly knew and lied for years; and his handling since exposed has been unacceptable.”

Unacceptable or not, though, Hart is the only one going for now. But stay tuned.

Until then, here’s an appearance I made today on WSJ.com to talk about Hart’s departure:

[ See post to watch video ]

In 2009 Interview, Yahoo CEO Does Not Deny He Has a CS Degree, and Calls Himself an "Engineer" (Audio)

Kara Swisher — Fri, 04 May 2012 06:22:41 +0000

On March 25, 2009, Yahoo CEO Scott Thompson — when he was then president of PayPal — appeared on the TechNation radio show to talk about the revival of the eBay payments unit.

At the end of the largely charming interview, Moira Gunn asked him a direct question about his college degrees, specifically noting they were in accounting and computer science.

“Your bachelor’s degree is in accounting and computer science. Now, from both of those, I mean that’s, that’s pretty obvious that’s PayPal,” said Gunn. “What are the most important things you learned?”

“Yeah,” begins Thompson, failing to correct her at all on the fact that he does not actually have a computer science degree — only one in accounting.

He then went even further, touting his early tech training at Stonehill College, near Boston, which did not offer a computer science degree at the time he went there, from 1975 to 1979.

“And that’s really the background that I have, and it started back in my college days, and I think that’s really the wonderful part of being an engineer is you think that way,” said Thompson.

In the most generous interpretation, it’s not quite clear whether Thompson was saying “Yeah” to her statement of his academic credentials, or if he was not actually listening.

But it’s a careless oversight on his part not to have corrected her about the degrees, which could also be said about a computer science degree being present on his bio for more than a half-dozen years at eBay and later at Yahoo without some notice by him.

Because while Thompson has had a long career as a tech exec, as well as a stint as a CIO, academically speaking, a computer science degree did not happen in his college days nor did he graduate as an engineer.

That became apparent earlier today, when Yahoo confirmed that it included inaccurate information about Thompson’s academic background on its Web site and in its regulatory filings.

The admission came after activist shareholder Dan Loeb of Third Point correctly asserted that Thompson’s resume was overstated related to his education.

Yahoo called the inclusion of the computer science degree on his bio an “inadvertent error,” but gave no other explanation as yet. Tonight, the Yahoo board said it was reviewing the matter and would then make appropriate disclosures afterward.

While it is entirely possible that Thompson did not correctly grok what Gunn was saying, it seems pretty clear that he implied his college background was in tech and he was an engineer.

It is true that Thompson did take some computer science classes at Stonehill. And it is entirely possible that he thinks of himself as an engineer by work training and not by college degree.

I am awaiting comment from Yahoo PR, which has its hands full today (welcome to the circus, Amanda!).

Until then, here is the actual audio of that part of the interview and the pertinent part of the transcript, which began at the 26:33 time on the audio, to judge for yourself:

Yahoo's Board Will "Review" Resume Discrepancy of CEO

Kara Swisher — Fri, 04 May 2012 02:28:55 +0000

Yahoo just released a statement that its board will “review” today’s revelation that the bio of its CEO Scott Thompson contained an error related to his educational achievements and will make “appropriate disclosure” about what happened.

On both the Web site and in the regulatory filings of the Silicon Valley Internet giant, Thompson is described as having a degree in both computer science and accounting from Stonehill College.

He does not have a degree in computer science from the Boston-based school, but does have a Bachelor’s of Science in Business Administration (Accounting).

Yahoo said in full in its statement:

“In connection with the statement the company made earlier today about Scott Thompson, the Yahoo! board will be reviewing this matter, and upon completion of its review, will make an appropriate disclosure to shareholders.”

Earlier today, Yahoo first blamed the issue on an “inadvertent error” — but provided no further details — which sources said did not sit well with the board.

“Many members of the board are deeply concerned,” said one person with knowledge of its thinking. “This is a problem on a lot of levels, especially related to the trust of shareholders.”

Indeed, especially since the news came to light via activist shareholder Dan Loeb of Third Point, who is agitating for board seats via a proxy fight.

Loeb’s efforts to impugn Thompson appear to have caused some level of damage, at least in terms of perception about the level of vetting that was done when the former president of eBay’s PayPal unit was hired earlier this year.

In fact, the error has been around for a half-dozen years, which begs the question of why Thompson never noticed it.

While his bio on filings made by eBay to the Securities and Exchange Commission were accurate, the one on the online commerce site’s Web site incorrectly said he had a computer science degree.

It is not known who introduced the error there.

But the inaccuracy moved inexplicably to both Yahoo’s corporate Web site and also its SEC filings, and the company declined to provide any details earlier today as to how that happened.

It’s not clear what happens next, or if there are any legal implications, beyond a needed correction by Yahoo with the SEC — which already took the entire line about Thompson’s education off his Web bio today.

As I wrote earlier today:

The controversy could not have come at a worse time — Thompson was actually in meetings all day yesterday and today with senior staff, following recent layoffs of 2,000 and a massive restructuring, to discuss plans for moving the long-troubled company forward.

And besides the proxy fight, he is also dealing with selling off Yahoo’s Asian assets, renegotiating a new search deal with Microsoft, and also trying to figure out what parts of Yahoo to keep and what parts to jettison to improve its prospects.

How Did a Phantom CS Degree Get on CEO's Bio in SEC Filings? Yahoo's Not Saying.

Kara Swisher — Thu, 03 May 2012 23:08:24 +0000

Back in early 2008 when Scott Thompson got the job as president of eBay’s PayPal, the regulatory filing accurately listed his educational pedigree:

“Mr. Thompson holds a B.S. degree in Accounting from Stonehill College.”

The eBay filings over the next several years — until he left the online commerce giant for a much bigger job as CEO of Yahoo in January of this year — remained consistent.

But, curiously, Thompson’s bio on eBay’s Web site added an additional degree to his curriculum vitae for more than a half-dozen years, different from its Securities and Exchange Commission documents:

“Scott received a bachelor’s in accounting and computer science from Stonehill College.”

As it turned out, according to the Boston-area school, he had not gotten a computer science degree at all and graduated with the Bachelor’s of Science in Business Administration (Accounting).

An eBay spokesman I called today had no explanation for the discrepancy, except to note that its legal filings were correct and that it was an error due to the lack of cross-checking the Web bio, which was apparently posted by Thompson’s staff at the time.

Also without explanation — and perhaps more seriously — is that the false computer science degree claim somehow then made it into Yahoo’s SEC filings, as well as his Web site bio, when Thompson took the helm. (The inaccurate line about his schooling is in its latest filing and all others.)

Without providing further explanation of how it got there, Yahoo today called the mistake an “inadvertent error” and said it had no bearing on his ability to lead the Silicon Valley Internet giant.

But the long troubled company might be speaking too soon, given that the revelation was uncovered this morning by activist shareholder Dan Loeb of Third Point. Loeb has called into question the vetting process that Yahoo’s directors did to hire Thompson, as part of a proxy fight he is waging to gain several board seats.

And, while such an allegation is normal for an increasingly nasty battle, Loeb has hit his mark with deadly accuracy this time, putting into question both Thompson’s credibility and Yahoo’s obvious botching in its vetting of him.

“If there is a good explanation for the apparent discrepancies regarding the academic records of Mr. Thompson and Ms. Hart, we are confident that it will be provided promptly,” wrote Loeb in a letter to Yahoo’s board today. “However, in the event that there is no good explanation, we expect the Board to take immediate action.”

The Ms. Hart that Loeb was referring to is Patti Hart, the board member who ran Yahoo’s process for hiring a new CEO after it fired Carol Bartz — who does have a CS degree — last year. (In his letter today, Loeb also correctly called into question how she portrayed her own college degree in a more impressive fashion than was accurate.)

The search for a new Yahoo CEO was conducted by headhunter Heidrick & Struggles, which did not have Thompson on its list of candidates, since it had placed him at eBay many years before.

In fact, according to numerous sources, without involvement by Heidrick, it was Thompson who cold-emailed key Yahoo board members, nominating himself for the CEO job. He was quickly brought in for interviews and, presumably, a thorough vetting.

Despite that and despite the fact that eBay’s SEC filings did not list a computer science degree, Hart or others seem to have totally missed the discrepancies and it was added to Thompson’s official Yahoo bio and legal filings.

It’s not clear what happens next or if there are any legal implications, beyond a needed correction by Yahoo with the SEC — which already took the entire line about Thompson’s education off his Web bio today.

Yahoo’s not talking either, with its spokesperson declining to provide any explanation for its lapse or who had maintained that Thompson had that degree when he did not.

It’s essentially a mistakes-were-made-let’s-move-on defense.

I think not, for my part, and a number of prominent Silicon Valley people I spoke to today agreed that these issues tend to spin out of control.

“This is going to get very messy, very quickly,” said one person in a common sentiment I heard.

Maybe, and it’s not clear if the company has to release any details of how this occurred or if its board needs to investigate the situation.

In addition, Thompson himself is probably not at risk unless it can be definitely proved he was the one who misrepresented having the degree in the first place. He can simply say he had no idea who added it to the eBay Web site and that he did not notice it there on on the Yahoo Web site and SEC filings.

While that makes him look careless, how big a deal it becomes with shareholders, as well as Yahoo employees, is also an unknown. While a computer science degree is not a requirement for a CEO of a tech company — both Facebook’s Mark Zuckerberg and Microsoft’s Bill Gates dropped out of college and did pretty well in computer science anyway — tech resume padding, even inadvertent, is not a characteristic that is going endear Thompson to anyone.

Plus, it just handed Loeb a very potent weapon in his fight against Yahoo, the very day after the company said the hedge fund manager’s expertise was not “relevant” to gaining a board seat.

One thing’s for sure: Loeb is most certainly very good at vetting.

Yahoo's Response on CEO's Computer Science ResumeGate: "Inadvertent Error"

Kara Swisher — Thu, 03 May 2012 19:27:37 +0000

A Yahoo spokesperson just confirmed as accurate allegations from an activist shareholder Dan Loeb of Third Point that its CEO Scott Thompson did not have a computer science degree from Stonehill College as claimed on his bio and also in regulatory filings.

He does not, a mistake that the Silicon Valley Internet giant is calling an “inadvertent error.”

Except this is a mistake that goes back more than a half-dozen years, as it is also on the Web site bio at eBay, where he served as president of its PayPal payments unit and its CTO before that.

(Update: Yahoo just removed the line about Thompson’s college degrees from his Web site bio entirely.)

While Yahoo sought to underplay the controversy, it could become a serious issue for Yahoo, both from a credibility and regulatory compliance issue.

It would also call into question — as Loeb does in the letter — the amount of vetting done by Yahoo on the CEO choice, which was conducted by board member Patti Hart.

It gets worse: Loeb also alleged that Hart changed her degree from Illinois State College from business administration to a loftier economics and marketing. And Yahoo admitted it was so, noting the director had a business administration degree, with a specialty in economics and marketing — whatever that means.

But, incompetent vetting by Hart aside, it is how and why Thompson changed his resume that will be at issue.

Here’s one fact that is true: Thompson only has an accounting degree from Stonehill College, near Boston, which he attended from 1975 to 1979.

(Second Update: Stonehill also confirmed that Thompson’s degree was only a Bachelor’s of Science in Business Administration (Accounting).)

Here is, in fact, a screenshot of an alumni newsletter when Thompson got the job at Yahoo earlier this year:

Despite the mistake, however it was made and which presumably serves to burnish Thompson’s tech cred, Yahoo said in a statement that it does not diminish his qualifications to lead the tech company.

Said the statement in full:

“Scott Thompson’s degree at Stonehill College was in bachelor science in accounting. There was an inadvertent error that stated Mr. Thompson also holds a degree in computer science. This, in no way, alters that fact that Mr. Thompson is a highly qualified executive with a successful track record leading large consumer technology companies. Under Mr. Thompson’s leadership, Yahoo! is moving forward to grow the company and drive shareholder value.”

Here’s the definition of inadvertent, for those who don’t know:

1. failing to act carefully or considerately; inattentive
2. resulting from heedless action; unintentional inadvertently

I’d say it’s going to turn out to be a lot more than that, but we’ll see what the board of Yahoo and, ultimately, shareholders, have to say.

(And, ironically, just yesterday Yahoo wrote a letter to shareholders claiming that Loeb did not have “relevant” expertise to be on its board. Turns out, he’s definitely pretty good at vetting.)

Dan Loeb Alleges "Discrepancies" on Yahoo CEO Scott Thompson's Resume Related to Computer Science Degree

Kara Swisher — Thu, 03 May 2012 18:53:08 +0000

The gloves are now really off in the proxy battle for Yahoo.

In a letter to Yahoo’s board, activist shareholder Dan Loeb of Third Point is alleging that the company’s new CEO Scott Thompson has inaccurately added a computer science degree to his resume.

(Update: Yahoo confirmed that Loeb is correct about Thompson not having such a degree and called it an “inadvertent error.”)

Thompson went to Stonehill College, near Boston, from 1975 to 1979, according to his LinkedIn profile, but it does not specify his degree.

(Second Update: Stonehill College also confirms that Thompson only graduated with a Bachelor’s of Science in Business Administration (Accounting).)

And older bios, such as one from his director bio for F5 and one from Forbes, as well as a Stone Hill College alumni newsletter, note that he graduated only with a Bachelor’s of Science in accounting.

But in official bios from his job at eBay as head of its PayPal payments division, as well as on the current Yahoo one, a degree in computer science also appears, along with the accounting degree.

“Scott received a bachelor’s in accounting and computer science from Stonehill College,” read the Yahoo and eBay bios. It is also in Yahoo’s regulatory filings.

According to Loeb’s letter:

I am awaiting a call back from Stonehill about Thompson’s degree, which the college is checking now. And I called Yahoo for comment and also am waiting for that, too.

If Loeb’s allegations are true and Thompson burnished his resume to add educational expertise to lend him more tech credibility, it could become a serious issue for Yahoo.

It would also call into question — as Loeb does in the letter — the amount of vetting done by Yahoo on the CEO choice, which was conducted by board member Patti Hart.

It gets worse: Loeb is also alleging that Hart changed her degree from Illinois State College from business administration to a loftier economics and marketing.

(Update: Loeb is correct. Yahoo said Hart has a degree in business administration, with a specialty in economics and marketing — although I am not sure what that means exactly.)

But Thompson’s educational pedigree is the main issue here, of course, and Loeb is calling for his head if explanations are not provided.

“If Mr. Thompson embellished his academic credentials we think that it 1) undermines his credibility as a technology expert and 2) reflects poorly on the character of the CEO who has been tasked with leading Yahoo! at this critical juncture. Now more than ever Yahoo! investors need a trustworthy CEO,” said Loeb in the letter.

But read it for yourself — here is the full letter from Loeb:

Third Point Letter to Board May 3 Release