AllThingsD » Boston http://allthingsd.com Wed, 23 May 2012 04:16:57 +0000 en hourly 1 http://wordpress.org/?v=3.3.2 http://allthingsd.com/theme/images/logo-rss.jpg All Things Digital http://allthingsd.com/ 144 22 Exclusive: Yahoo Director in Charge of Botched CEO Vetting to Step Down From Board http://allthingsd.com/20120508/exclusive-yahoo-director-in-charge-of-botched-ceo-vetting-to-step-down-from-board/ http://allthingsd.com/20120508/exclusive-yahoo-director-in-charge-of-botched-ceo-vetting-to-step-down-from-board/#comments Tue, 08 May 2012 15:50:13 +0000 Kara Swisher http://allthingsd.com/?p=205076

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 ]

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]]> http://allthingsd.com/20120508/exclusive-yahoo-director-in-charge-of-botched-ceo-vetting-to-step-down-from-board/feed/ 0 In 2009 Interview, Yahoo CEO Does Not Deny He Has a CS Degree, and Calls Himself an "Engineer" (Audio) http://allthingsd.com/20120503/in-2009-interview-yahoo-ceo-does-not-deny-he-has-a-cs-degree-and-calls-himself-an-engineer/ http://allthingsd.com/20120503/in-2009-interview-yahoo-ceo-does-not-deny-he-has-a-cs-degree-and-calls-himself-an-engineer/#comments Fri, 04 May 2012 06:22:41 +0000 Kara Swisher http://allthingsd.com/?p=203636

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:

Gunn: 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. What are the most important things you learned?

Thompson: Yeah. You know, I think and I, I mention this to young kids when I’m on campus, and my son who I was just talking about at Santa Clara, what I’m happiest about in my background is if you work in technology you’re trained to solve problems.

And that’s really it, you’re trained to pull apart very complex things and think about okay, how can I do this or how can I do that or how can I make it better?

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.

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]]> http://allthingsd.com/20120503/in-2009-interview-yahoo-ceo-does-not-deny-he-has-a-cs-degree-and-calls-himself-an-engineer/feed/ 0 Yahoo's Board Will "Review" Resume Discrepancy of CEO http://allthingsd.com/20120503/yahoos-board-will-review-resume-discrepancy-of-ceo/ http://allthingsd.com/20120503/yahoos-board-will-review-resume-discrepancy-of-ceo/#comments Fri, 04 May 2012 02:28:55 +0000 Kara Swisher http://allthingsd.com/?p=203599

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:

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 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.

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.

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]]> http://allthingsd.com/20120503/yahoos-board-will-review-resume-discrepancy-of-ceo/feed/ 0 How Did a Phantom CS Degree Get on CEO's Bio in SEC Filings? Yahoo's Not Saying. http://allthingsd.com/20120503/how-did-phantom-cs-degree-get-on-ceos-bio-in-sec-filings-yahoos-not-saying/ http://allthingsd.com/20120503/how-did-phantom-cs-degree-get-on-ceos-bio-in-sec-filings-yahoos-not-saying/#comments Thu, 03 May 2012 23:08:24 +0000 Kara Swisher http://allthingsd.com/?p=203523

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.

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]]> http://allthingsd.com/20120503/how-did-phantom-cs-degree-get-on-ceos-bio-in-sec-filings-yahoos-not-saying/feed/ 0 Yahoo's Response on CEO's Computer Science ResumeGate: "Inadvertent Error" http://allthingsd.com/20120503/yahoos-response-on-computer-science-resumegate-inadvertent-error/ http://allthingsd.com/20120503/yahoos-response-on-computer-science-resumegate-inadvertent-error/#comments Thu, 03 May 2012 19:27:37 +0000 Kara Swisher http://allthingsd.com/?p=203351

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.)

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]]> http://allthingsd.com/20120503/yahoos-response-on-computer-science-resumegate-inadvertent-error/feed/ 0 Dan Loeb Alleges "Discrepancies" on Yahoo CEO Scott Thompson's Resume Related to Computer Science Degree http://allthingsd.com/20120503/dan-loeb-alleges-discrepancies-on-yahoo-ceo-scott-thompsons-resume-related-to-computer-science-degree/ http://allthingsd.com/20120503/dan-loeb-alleges-discrepancies-on-yahoo-ceo-scott-thompsons-resume-related-to-computer-science-degree/#comments Thu, 03 May 2012 18:53:08 +0000 Kara Swisher http://allthingsd.com/?p=203301

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:

Upon recognizing this discrepancy, Third Point initially assumed that the documents we had reviewed were incorrect and the representations in Yahoo!’s public filings were accurate. However, we were then informed by Stonehill College that Mr. Thompson did indeed graduate with a degree in accounting only. Furthermore, Stonehill College informed us that it did not begin awarding computer science degrees until 1983 — four years after Mr. Thompson graduated. We inquired whether Mr. Thompson had taken a large number of computer science courses, perhaps allowing him to justify to himself that he had “earned” such a degree. Instead, we learned that during Mr. Thompson’s tenure at Stonehill only one such course was even offered — Intro to Computer Science. Presumably, Mr. Thompson took that course.

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

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]]> http://allthingsd.com/20120503/dan-loeb-alleges-discrepancies-on-yahoo-ceo-scott-thompsons-resume-related-to-computer-science-degree/feed/ 0 Exclusive: The Billion-Dollar Inside Story of How Demand Media Almost Went Private Last Week (And Then Didn't) http://allthingsd.com/20120428/the-1-2-billion-inside-story-of-how-demand-almost-went-private-this-week-and-then-didnt/ http://allthingsd.com/20120428/the-1-2-billion-inside-story-of-how-demand-almost-went-private-this-week-and-then-didnt/#comments Sat, 28 Apr 2012 18:02:46 +0000 Kara Swisher http://allthingsd.com/?p=200988

According to sources close to the situation, Demand Media was deep into discussions with a private equity firm to complete a deal that would have taken the online content company private, nearing a price that was double its current value.

But Demand abandoned the effort this past week — which was born from an aggressive attempt by Boston-based Thomas H. Lee Partners to purchase the company for a price of up to $1.2 billion. That was due to a number of challenges, including complications related to its financing and the ability to retain executives in its aftermath.

The move on Demand by private investors is perhaps no surprise, and is part of a wider trend related to some Internet companies whose stocks have a depressed value relative to the worth of their assets.

Among companies having been and also being evaluated by private equity firms, whose business it is to turned the undervalued into a goldmine: Yahoo and AOL.

And also Demand, which is now worth only $605 million, a market cap that is off 65 percent since it went public in February 2011. Shares now trade at $7.25 each.

That depressed share price has been due to a number of issues, most especially changes to Google’s search algorithm to improve results. Called Panda, the changes at the search giant — a critical partner of Demand’s — has cut traffic to its major content sites and also called into question its ability to monetize its scaled editorial efforts.

Such a situation is nearly irresistible to PE firms — in this case, Lee, which approached Demand.

Several sources said that the board threw out a hefty number that it assumed would shut down any interest and the pair began talking with an initial offer to take the company private at $11.28 a share.

That equals close to $1 billion for Demand, which also has more than $100 million in cash. But sources said Lee and Demand also discussed the addition of a large loan as part of the ongoing discussions, for possible acquisitions related to a content roll-up strategy it had, which would bring the total up to $1.2 billion.

One source underscored that the board of the Santa Monica, Calif., company had no interest or intention to sell the business, but that the premium was large enough that it engaged.

The deal from Lee, which also included a strategy of splitting up the content arm from Demand’s lucrative domain-registar business.

There were also large cash-out provisions for major shareholders, as well as for CEO and co-founder Richard Rosenblatt.

Thus, the two sides engaged intensely in the last several weeks in crafting an agreement, although the devil would prove to be in the details.

One big issue is that taking Demand private was still a big financial commitment for Lee — which tried to engage some of its limited partners in the transaction — as well as other investors, including Silicon Valley’s Marc Andreessen.

That proved harder than Lee thought, said sources, with some balking at the firm’s ability to make a big enough score on the possible turnaround.

“It was hoped it would be a Skype situation, but there were worries,” said one source, referring to the blockbuster sale of the Internet telephony company by private investors to Microsoft for $8.5 billion last year. That deal was widely considered a PE home run, given the excessive premium paid for it.

Demand’s challenges increasingly worried the firm as it moved forward, sources said, causing it to reevaluate its earlier bid several times.

Also a worry: Retaining major talent, including Rosenblatt and others, after they sold large chunks of their equity.

After Lee asked for more time to complete the financing, Demand ended the talks last week.

Another source, as is typical in these endings, said it was the Lee that walked away (who knows and, really, who cares — both sides were engaged seriously).

One thing was true: “Demand was definitely at the altar, but it did not get to the vows,” said one source.

Another source noted that the board also determined that Demand’s situation was improving, and that new trends are showing that the bottom might be been reached. The company reports its first-quarter earnings on May 8, which is expected to show some traction related to its many challenges.

“There is nothing Lee could do that Demand could not do for itself,” said one person. “So throwing in the towel seemed premature for now.”

Lee declined to comment, as did Demand.

]]> http://allthingsd.com/20120428/the-1-2-billion-inside-story-of-how-demand-almost-went-private-this-week-and-then-didnt/feed/ 0 New Yahoo CEO (And BoSox Fanboy) Scott Thompson Speaks: It's Still "Early Innings" http://allthingsd.com/20120104/new-yahoo-ceo-and-bosox-fanboy-scott-thompson-speaks-its-still-early-innings/ http://allthingsd.com/20120104/new-yahoo-ceo-and-bosox-fanboy-scott-thompson-speaks-its-still-early-innings/#comments Wed, 04 Jan 2012 17:28:27 +0000 Kara Swisher http://allthingsd.com/?p=159834

Yahoo actually let me talk with its new CEO Scott Thompson this morning, after the company announced it had hired him as its latest leader.

In an interview, the man who is leaving a job running eBay’s large and lucrative PayPal online payments unit was affable and — dare I say it — seemed very sweet, as well as gung ho on Yahoo’s prospects going forward.

Joking about how he took the job only because eBay and Yahoo are located close by each other in Silicon Valley and the commute was just as easy, Thompson opened by noting that those working at the online commerce giant have always had a “keen appreciation for what each other was doing.”

He said that when he was approached in November about the Yahoo job, although sources said it was just offered this week and took eBay by surprise.

Still, soon after being contacted by Yahoo’s exec recruiters, Thompson said he began “exploring in more detail what’s actually here.” As he did so, he added, he “became progressively more fascinated” that Yahoo had more promise than has been assumed in recent years.

“Its potential is still enormous, but the dialogue has not been about what the company is,” Thompson said. “I want to get this wonderful brand to where it could be again … so, as a starting point, this is a great starting point.”

Thompson’s premise is based on his belief that we are still in the early days of the Internet. And, because he is a Boston native — making him, of course, an ardent fan of its beloved Red Sox — he used baseball as a metaphor.

“It’s early innings, and there are the next eight innings in front of us,” he said, noting that he was in the stands with his father when catcher Carlton Fisk hit that famous game-winning home run in the 12th inning of the sixth game of the World Series in 1975.

Note to everyone who is not an obsessive fan like Thompson (and also, I might add, Walt Mossberg): It did take the Red Sox from 1918 to 2004 to actually finally win the Series again, so maybe Yahoo has a chance!

“This remains a great business, and I have no doubt its best days are ahead of Yahoo,” said Thompson, in that same hopeful spirit of this-year’s-gonna-be-the-one.

Thompson noted that he is fully cognizant of the major troubles at the company recently, and had a “real sense of urgency, but not by moving at breakneck speed, because you just do bad stuff faster.”

Instead, he said, he hopes to focus Yahoo the same way he did PayPal, by innovating, making commitments and keeping them, and overperforming.

None are easy tasks, and all have stymied Yahoo in the recent past. Thompson said that he thinks it might be because of not focusing equally on both consumers and Yahoo’s partners and advertisers.

He admitted that his lack of advertising experience was clear — it could be problematic, because it’s Yahoo’s biggest business — but said, “I readily admit what I don’t know, and am ready to learn and rely on Yahoo’s great team.”

While he would not go into deep specifics — Thompson does not start until next week — he said he planned to get some basic grounding, noting, “I have no preconceived notions.”

One thing is clear, said Thompson: “I can assure you I am going to be completely different.”

If that means doing what Fisk did, that would certainly be a home run for Yahoo.

]]> http://allthingsd.com/20120104/new-yahoo-ceo-and-bosox-fanboy-scott-thompson-speaks-its-still-early-innings/feed/ 0 Liveblogging the New Yahoo CEO Call: You Might Want to Refrain From Cussing, Scott! http://allthingsd.com/20120104/liveblogging-the-new-yahoo-ceo-call-you-might-want-to-refrain-from-cussing-scott/ http://allthingsd.com/20120104/liveblogging-the-new-yahoo-ceo-call-you-might-want-to-refrain-from-cussing-scott/#comments Wed, 04 Jan 2012 15:01:23 +0000 Kara Swisher http://allthingsd.com/?p=159759

This morning, Yahoo said it had hired PayPal President Scott Thompson as its newest victim, oops, CEO.

(You can read my interview with him too, here.)

AllThingsD.com had reported the pending development last night — which is how we roll here.

Now we will roll into the conference call on the matter, and are hoping that the head of the lucrative eBay payments unit will make an appearance, given that he does not start until next week.

One piece of advice I will extend Thompson: I would refrain from cursing, as previous Yahoo CEO Carol Bartz did on her first outing. (She was fired in September, although not precisely for the cussing she so enjoyed partaking in.)

Here we go!

7:02 am: It’s on, with Thompson present.

Yahoo Chairman Roy Bostock begins, and he is “very excited, very excited.”

I’d be very excited if Thompson talked and not Roy, who has been to this particular Yahoo CEO rodeo a few too many times before.

Bostock is making promises that this time it’s going to be different. Really!

He also notes that the company will continue its “strategic review” — but who knows what that means now.

And he thanks Tim Morse, the interim CEO who is moving back to the CFO job. (Agreed — nice work, Tim!)

7:06 am: Scott Thompson is on and is “just thrilled” to be the new Yahoo CEO.

I like his accent, which seems like he might be from Boston. He does look and sound like Cliff Clavin, the mailman guy at the Beantown bar from the television classic “Cheers.”

Except, given he has been the darkest of dark horses in this CEO race, nobody knew Thompson’s name.

Thompson is saying all the right stuff, about wanting to increase shareholder value and such.

He sounds so hopeful! Urgency! Thoughtfulness! A bright new morning at Yahoo!

I have been to this rodeo before too, but I am still hoping this time it’ll work.

Scott, if you let me down, I might cry, because you sound so nice.

7:09 am Q&A time already.

Congrats from the Wall Street analyst peanut gallery.

Then, it’s right into a question for Bostock, about the progress of the Asian assets deal.

Also, is Thompson too much of a technologist and not a media dude?

Bostock wants to talk about only Scott, but notes that there will be “no slowdown and no delay” in the Asian process. And Thompson will be all onboard when he comes on board, folks.

Bostock sounds tired, but starts to talk about how a “great customer experience” is the key to the advertising business. He notes that Thompson knows how to do this, hence he’ll be fantastic.

“I have every expectation he’ll be out there calling on advertisers,” says Bostock. I would hope so, given that is where Yahoo makes most of its lettuce.

Bostock is saying Yahoo has been “treading water” and now needs to swim fast. Treading water? I wonder who the top honcho at Yahoo has been while the company has been listlessly dangling its legs in the drink?

Roy — that’s who!

7:15 am: Another analyst asks about margins.

Thompson is not having any of it! He is polite when asking for time to get on the job to make proper statements.

But he does focus on the need to build “great, innovative” products. True, but Yahoo has been incredibly unable to do this of late.

Thompson gives no specifics, though. My big idea: I would steal the self-driving car from Google.

7:17 am: A question about what the core of Yahoo is, and about what lessons Thompson is bringing from his experience at PayPal.

Well, he has not met the team — literally. Yahoo’s board consulted almost no one in the top ranks of execs on this appointment.

But Thompson “suspects” there is talent there. Given the recent attrition, he’ll need a big Inspector Clouseau magnifying glass to find it!

From eBay’s PayPal, he says that the key was balancing the customer experience with network effect and, well, blah, blah, blah Internet-speak.

I am still thinking shoplifting the self-driving car is the bestest idea.

7:20 am: A question about Yahoo’s display business versus Google.

Thompson notes it is too early for him to say — though he had better say soon! — but notes that data is key. He is a well-known by-the-numbers guy, and that is clearly where we are going at Yahoo, now that he is the big dog.

Thus:

“The data these Internet businesses create, the ability to use analytical technology to build a better businesses for your customers … I feel certain that wealth of data is going to be exploitable for next generation products, next generation experiences … My instinct says down in that data we’re going to be able to find ways to compete and innovate that the world hasn’t seen yet.”

I am really liking this accent, which is almost lulling. And so polite! Sources tell me that being “collaborative” was a big goal in this hiring.

7:22 am: A question about the identity of Yahoo, and whether it should be public or private.

Thompson harps on the need for innovation, and hopes it will be the future.

“I would not be here if I didn’t think it was possible,” says Thompson.

Bostock takes the public/private question. Yahoo will be public, he declares! Mostly, because it would be too pricey to take private.

“It’s a moot point,” he says.

7:25 am: More questions about what Yahoo is.

Thompson declines to run off the rails on this dicey one, but he says he believes that Yahoo has great assets.

It does. It’s just that it has been crashed many times — by the people who just hired him — right into a wall.

Just sayin’ — a self-driving car would have done a better job.

7:27 am: A brain-drain question, and more on Asia and on mobile.

Bostock butts in again. He said that Thompson will not be distracted by that, and will concentrate on the core business. Hush up, Roy.

Thompson says that he looks forward to meeting the peeps of Yahoo. (’Cuz he has not, as yet!)

He also loves mobile — which Yahoo has largely borked.

7:32 am: A content strategy question. Early days, so Thompson is still keeping his yap shut.

In this, he’s like the anti-Bartz. Is this good? It’s certainly different.

He says again that, “I can’t wait to meet” everyone at Yahoo. Vice versa, because this dude came from left field.

Thompson promises that he will be a “sponge.”

He closes by noting that he is “genuinely excited,” and says he believes in Yahoo.

Indeed, when it comes to Yahoo, you definitely gotta have faith.

]]> http://allthingsd.com/20120104/liveblogging-the-new-yahoo-ceo-call-you-might-want-to-refrain-from-cussing-scott/feed/ 0 Former Top Yahoo Sales Exec Weishaupt Joins Criteo http://allthingsd.com/20111116/top-former-yahoo-sales-exec-weishaupt-joins-criteo/ http://allthingsd.com/20111116/top-former-yahoo-sales-exec-weishaupt-joins-criteo/#comments Wed, 16 Nov 2011 18:13:35 +0000 Kara Swisher http://allthingsd.com/?p=144830

Well-known online advertising exec Frank Weishaupt, who recently ran North American marketplaces for Yahoo, will join ad display performance firm Criteo to head up sales.

Weishaupt, who left Yahoo several months ago, will be based in Boston and will be hiring up to 100 salespeople. He’ll report to another former top Yahoo sales exec, Criteo President Greg Coleman.

Interestingly, one of the pair’s most pressing challenges going forward will be the recent move of Yahoo to block “retargeting” firms.

In a post last week, Peter Kafka wrote that Yahoo told Criteo and others that “it would stop selling them its ‘Class 2’ remnant inventory, which the companies used to purchase on behalf of clients and essentially resell at a premium. The idea, theoretically, is that Yahoo will sell more of those ads itself.”

Here’s the official press release:

CRITEO TAPS FRANK WEISHAUPT AND EXPANDS FOOTPRINT; OPENS BOSTON OFFICE

Leading online advertising performance platform expands US presence with Boston office and hires Former Yahoo! digital media veteran

PALO ALTO, CA — (NOVEMBER 14, 2011) – Criteo, the global leader in performance display today announced that Frank Weishaupt, former Vice President, North American Advertising Marketplaces at Yahoo!, will join the company as SVP of Sales. The company also announced the continued expansion into the US Market with the opening of an office in Boston, which will focus on sales and service to mid-market advertisers and publishers. With offices in over three continents, Criteo now employees over 400 employees while serving personalized ads on behalf of over 1200 e-commerce clients across 20 countries globally.

“Criteo is committed to bringing performance to the display advertising landscape,” said Greg Coleman, President of Criteo. “I am thrilled to have Frank, a true industry veteran with a very successful track record of scaling sales organizations, join the team to continue our momentum. Our goal at Criteo is to bring our solution to a wide variety of advertisers and publishers, and Frank will be focused on helping meet that objective.”

As a 15 year digital media veteran, one of Weishaupt’s key priorities will be to build a sales organization in Boston focused on mid-market advertisers and publishers. Weishaupt has been a key part of exponential growth for several of the world’s most influential digital media companies.

“Criteo has created a name for itself as the global leader in performance display advertising. I am excited to have joined a company that is committed to growth and a team with such passion to drive this industry forward,” said Frank Weishaupt, SVP of Sales at Criteo.

Prior to joining Criteo, Weishaupt held several key management at Yahoo! over a 10-year period. Most recently he had General Management responsibilities for the US Display, Search, and Ad Technology businesses. The focus of the role was overall monetization strategy, pricing and yield management, strategic direction of the Yahoo! Ad Network, and general management of the ad platforms and global exchange.

Weishaupt holds a bachelor’s degree in engineering from Northeastern University.

Criteo is hiring and looking for team members to join the global leader in performance online advertising marketing.

]]> http://allthingsd.com/20111116/top-former-yahoo-sales-exec-weishaupt-joins-criteo/feed/ 0 QOTD: Zuckerberg -- Go East, Young Geek! http://allthingsd.com/20111030/zuckerberg-go-east-young-geek/ http://allthingsd.com/20111030/zuckerberg-go-east-young-geek/#comments Sun, 30 Oct 2011 19:29:25 +0000 Kara Swisher http://allthingsd.com/?p=138049

There’s a culture out here where people don’t commit to doing things. I feel like a lot of companies built outside of Silicon Valley seem to be focused on a longer-term. You don’t have to move out here to do this.

— Facebook co-founder and CEO Mark Zuckerberg, in an interview this weekend at Y Combinator’s Startup School event, noting that he would have stayed in Boston if he were founding the social networking site all over again.

]]> http://allthingsd.com/20111030/zuckerberg-go-east-young-geek/feed/ 0 Potential Yahoo CEO David Kenny Now Much More Available http://allthingsd.com/20111026/potential-yahoo-ceo-david-kenny-now-much-more-available/ http://allthingsd.com/20111026/potential-yahoo-ceo-david-kenny-now-much-more-available/#comments Wed, 26 Oct 2011 21:34:21 +0000 Peter Kafka http://allthingsd.com/?p=137055

Akamai president David Kenny has stepped down after a year on the job — and in the midst of Yahoo’s CEO search, where his name has come up as a possible replacement for fired CEO Carol Bartz.

Kenny is also a Yahoo board member — joining early last year — and had quickly become one of the major forces in pushing for change at the company in the wake of the troubled Bartz regime.

In a statement distributed along with Akamai’s Q3 earnings, Kenny said he wants to “to return to my first passion of pursuing emerging opportunities on the consumer Internet.”

You can decide for yourself whether Yahoo represents an “emerging” opportunity or something else.

Sources said the departure from the networking company was mutual, although there has been an increasing amount of tension over Kenny’s involvement on the Yahoo board, which has been working on a massive strategic review.

Kenny, who was the initial leader of the effort, stepped down from that board task and also recused himself from any involvement in the simultaneous search for a new CEO.

Whether he will get the job is not a done deal by any means. He is among several candidates Yahoo has been contemplating pursuing, after only recently hiring Heidrick & Struggles for its executive search.

In fact, it’s not entirely clear Kenny wants to be CEO of Yahoo or if he would want to return to his roots at a consumer advertising agency. Another issue: He currently lives in Boston.

Before coming to Akamai, he was managing partner of VivaKi, the media and digital arm of marketing giant, Publicis Groupe. He came to the French concern after it bought relationship marketing services firm Digitas, which Kenny ran.

All that advertising experience is one of the reasons he is being looked at by Yahoo, which is contemplating doubling down in online advertising platforms and products if it does not sell.

Many assumed that Kenny’s move to the Web platform company meant that it would become more actively involved in Web media itself. But Akamai didn’t make any major moves or acquisitions during his tenure.

Meanwhile, back at Akamai, Kenny’s title will be assumed by CEO Paul Sagan, who had previously served as president as well.

]]> http://allthingsd.com/20111026/potential-yahoo-ceo-david-kenny-now-much-more-available/feed/ 0 Adventure World Is Bigger, Richer and More Treacherous, But It's Still a Zynga Game http://allthingsd.com/20110901/adventure-world-is-bigger-richer-and-more-treacherous-but-its-still-a-zynga-game/ http://allthingsd.com/20110901/adventure-world-is-bigger-richer-and-more-treacherous-but-its-still-a-zynga-game/#comments Thu, 01 Sep 2011 18:00:50 +0000 Liz Gannes http://allthingsd.com/?p=116205 It must be an interesting experience to be a Zynga game designer working on a new franchise launch. On the one hand, you’re creating something that is guaranteed to be used by an unfathomably large number of people, and you have corporate support to make the new product bigger and better than whatever came before. But still, you have to always be careful to keep things simple, to never ask too much from players, so that you can find a mainstream audience.

That’s what Nabeel Hyatt, general manager of Zynga Boston just went through. His team created Adventure World, Zynga’s new Facebook game that is being announced today and will launch in the next few weeks.

Adventure World features many innovations that are novel for Zynga: a game board that is 40 times larger than anything previous, a new 3-D rendering engine with customizable avatars, tasks that require the qualifications of Facebook friends based on their previous gameplay, and 200 possible quests that include puzzles and battles. Beware, coddled FarmVille and CityVille players: There are even good and bad consequences!

But this is still a Zynga game. Even though players can now swing 3-D machetes, they can’t necessarily wield them with skill, good timing, or in a particular direction. And even though friends can now work together on tasks, they still don’t have to do so at the same time — asynchronous game play is still a core part of all things Zynga.

“We didn’t want to make a hardcore game,” Hyatt said. “It’s a tough balance to make something that’s still in its essence a mainstream product.”

Hyatt (pictured at left) attested that Adventure World was inspired by “everything from Indiana Jones to ‘Jewel of the Nile,’ pulp movies of the ’30s and ’40s, ‘The Maltese Falcon,’ ‘National Treasure’ and the ‘The Da Vinci Code’ — the concept is the world is covered in secrets that you’re trying to uncover.”

Adventure World is Zynga’s third big launch this year, following Empires & Allies and Pioneer Trail, which was an update to FrontierVille.

Hyatt and his team came to Zynga when it bought Conduit Labs last year, and the Adventure World rendering engine was something they had been working on before the acquisition. The team now has about 35 people. The game will be launching in eight languages, but for now it is not available on any platforms other than Facebook.

]]> http://allthingsd.com/20110901/adventure-world-is-bigger-richer-and-more-treacherous-but-its-still-a-zynga-game/feed/ 0 Hurricane Irene Is Over; Power Still Out for Many http://allthingsd.com/20110829/hurricane-irene-is-over-power-still-out-for-many/ http://allthingsd.com/20110829/hurricane-irene-is-over-power-still-out-for-many/#comments Mon, 29 Aug 2011 13:27:14 +0000 Arik Hesseldahl http://allthingsd.com/?p=114701 What’s left of Hurricane Irene — which technically no longer qualifies as a named storm — has now moved on to Eastern Canada. Residents of the eastern United States are waking up this morning to messes of various kinds.

While New York City was largely spared — though Staten Island and Queens were whacked fairly hard — surrounding states, especially Connecticut and New Jersey, got a good thumping. As many as 700,000 people in Connecticut and 600,000 in New Jersey are without power in the wake of Irene, and many will go without for as long as a week.

Power outages in others states, in no particular order: Vermont is reporting another 50,000 residents without power, and at one point or another, every single road in that state, except for Interstates 89 and 91, were closed due to flooding.

Another 700,000 are without power in Massachusetts; 160,000 are without power in New Hampshire; power is out for 171,000 in Maine; and power is out for 284,000 in Rhode Island.

Power outages were still being addressed this morning in Maryland, Virginia and North Carolina; another 20,000 or so are without power in the District of Columbia. Delaware has 39,000 without power, and a tornado touched down there; Pennsylvania, including the Philadelphia area, has about 400,000 without power. The total number of homes and businesses without power up and down the East Coast was in the neighborhood of six million.

An estimate of the cost of damage to insurers, conducted by Kinetic Analysis, a firm that predicts storm damage, is about $3 billion, down from an earlier estimate of $14 billion. The death toll so far is 25.

Flooding is by far the biggest threat. The city of Troy, New York, is threatened by a swelling Hudson River and a fragile dam holding it back.

Overall, communications infrastructure held up pretty well — except in those places where it didn’t. In a conference call on Sunday, the Federal Communications Commission said that 130,000 wireline subscribers lost phone service, while nearly 1,400 cellular telephone sites were out of service. Another 1,093 cell sites were running on backup power, and 500,000 cable TV subscribers lost service. The agency warned the tally could get worse, as power outages remain and battery backup systems fail.

All the stock exchanges in New York will open normally, though lots of traders who typically come into the city on Metro North may have trouble getting to work.

Did I say New York was largely spared? By the storm, mainly, but not by slightly panicked officials. The Metro Transit Authority is scrambling to get the subway system back up and running normally. Having for the first time shut the entire system down, it was limping back to life as of 6 am Eastern time. While the Long Island Railroad is running a nearly normal schedule, Metro North is not expected to operate at all.

New York area airports are re-opening as of 7 am Eastern time. Traffic at Logan International Airport in Boston is still snarled, as is Amtrak’s Acela service. Flights into and out of Baltimore and Washington, D.C., were slowly getting under way.

Another casualty: Local public radio station WNYC suffered damage to its AM transmitter because of flooding in New Jersey, and directed listeners to its Web stream, though its FM transmitter was fine.

For all the trouble Irene caused humankind, a more fragile creature emerged unscathed from the storm’s path. USA Today has an interesting story about a rare whimbrel, a type of shorebird, nicknamed Chinquapin by wildlife scientists in Georgia, who tagged it with a radio tracking device and spotted its signal on the Caribbean island of Eleuthera. The bird had flown through the most dangerous northeast section of Irene when it was still a Category 3 hurricane. Whimbrels typically spend their summers in Canada and then fly south to Brazil to breed. That’s one tough bird.

]]> http://allthingsd.com/20110829/hurricane-irene-is-over-power-still-out-for-many/feed/ 0 Exclusive: Apple's Mobile Ad Head Andy Miller Departs for Highland Capital http://allthingsd.com/20110817/apples-mobile-ad-head-andy-miller-departs-for-highand-capital/ http://allthingsd.com/20110817/apples-mobile-ad-head-andy-miller-departs-for-highand-capital/#comments Wed, 17 Aug 2011 15:00:25 +0000 Kara Swisher http://allthingsd.com/?p=110984

Andy Miller (pictured here), the high-profile VP of mobile advertising at Apple, is planning on leaving the company, according to sources close to the situation.

Sources said Miller — who sold Quattro Wireless, the mobile advertising company he co-founded in 2006, to Apple in early 2010 for $275 million — will become a general partner at Highland Capital, the Boston-based venture firm that had funded Quattro.

Apple will search for a replacement for Miller, whose staff was told of the impending departure today.

Since Miller got to Apple, he has reported directly to its CEO and co-founder Steve Jobs, who noted after the acquisition:

“We tried to buy a company named AdMob, but Google came in and snatched them from us. So we bought Quattro, and they are teaching us. We are making ads that are different than anything I’ve ever seen.”

But Apple’s ad aspirations have been a bit of a bumpy road, as the company has tried to fine-tune the offering, even as competition — from Google, Facebook and a range of start-ups — has increased in the fast-growing space.

Not surprisingly, Apple shut down Quattro in favor of its much ballyhooed iAd platform a year ago. Via iAd, Apple has promised to serve up interactive rich-media ads on iPhone and iPod touch apps.

Some marketers balked at Apple’s tight control over iAds and their high prices, but recently the company has tried to give Madison Avenue more flexibility.

That’s because, while still small, mobile advertising will be a huge market. As The Wall Street Journal recently reported: “Marketers spent just $743.1 million on mobile ads in the U.S. in 2010, up 79% from $416 million in 2009, according to research firm eMarketer.”

At Highland, Miller will be working on a range of digital investments from its Silicon Valley office, sources said, and not just in the mobile space.

He has a varied background: Miller worked for mobile content company m-Qube and also WatchPoint Media, an interactive television start-up.

I have contacted Apple PR for a comment, but have not yet heard back.

]]> http://allthingsd.com/20110817/apples-mobile-ad-head-andy-miller-departs-for-highand-capital/feed/ 0 Now Is the (Larry) Summers of Our Silicon Valley VC: Economic Guru Joins Andreessen Horowitz as "Special Advisor" http://allthingsd.com/20110629/now-is-the-larry-summers-of-our-silicon-valley-vc-economic-guru-joins-andreessen-horowitz-as-special-advisor/ http://allthingsd.com/20110629/now-is-the-larry-summers-of-our-silicon-valley-vc-economic-guru-joins-andreessen-horowitz-as-special-advisor/#comments Wed, 29 Jun 2011 22:00:37 +0000 Kara Swisher http://allthingsd.com/?p=92874

In an unusual appointment for the longtime public servant, former U.S. Treasury Secretary Larry Summers will join Silicon Valley venture powerhouse Andreessen Horowitz as a part-time “Special Advisor.”

Summers got to know the firm with an assist from Facebook COO Sheryl Sandberg, who was a student of his when he was a professor at Harvard University.

Summers was later president of Harvard, as well as director of the White House National Economic Council in the Obama administration until late last year.

“I am doing this because I feel technology in general and information technology in particular is now having a real pervasive macroeconomic impact in our time,” said Summers in a phone interview this afternoon from his home in Boston. “Long after people have lost their memory of the dramatic financial crisis in recent years, they will remember what technology has done to transform our economy in these same years.”

Summers said he increasingly wanted to become closer to this important trend and thought he could contribute to the innovation in Silicon Valley by helping its portfolio companies better understand the global economy.

He was introduced to Andreessen Horowitz at first by Sandberg, who was also Summers’ chief of staff while at the Treasury Department, and was attracted to its investment philosophy.

“They have distinctive elements of strategy that seemed to be a good fit, such as their emphasis on market disruption,” said Summers. “They also have an audacity of the vision and were really supporting transformation.”

Summers said he would serve as an advisor to Andreessen Horowitz companies, focusing on global opportunities they should take advantage of.

He will not become a VC, though. “My life to date has been as a professor and public servant, so I am not in a position to be a major investor,” said Summers.

That said, Marc Andreessen quickly noted in the interview that “if Larry brings in a company, we are going to take a serious look at it.”

While he was not a partner, Andreessen said Summers’ compensation would be linked to the long-term performance of the firm.

Summers will travel between Massachusetts and the West coast, but will also continue to work on outside projects.

What he will not be doing is giving any long-winded economic lessons to entrepreneurs in Silicon Valley.

“I am not sure there is the attention span for some of my lectures out there,” he joked.

Here is Andreessen’s blog post about the Summers appointment:

Meet Larry Summers, Our New Special Advisor

By Marc Andreessen

Today I’m delighted to announce that economist and former US Treasury Secretary Larry Summers is joining our team as a part-time Special Advisor.

A lot of people already know who Larry is, but here are the highlights of a remarkable career to date:

* Admitted to MIT at age 16, originally to study physics — clearly our kind of nerd.

* Became tenured professor of economics at Harvard at age 28, where he first started mentoring a young undergraduate named Sheryl Sandberg, who ultimately became his chief of staff at the US Treasury.

* Received John Bates Clark Medal for his research at age 38, one of the two most prestigious awards in the field of economics (the other is the Nobel).

* On the staff of President Reagan’s Council of Economic Advisors in 1982-1983. (For those of you too young to remember, Reagan was a noted Republican.)

* Undersecretary for International Affairs and then Deputy Treasury Secretary for President Clinton between 1993 and 1999. Intimately involved in resolving major macroeconomic crises in Mexico, Russia, and elsewhere. Became US Treasury Secretary in 1999.

* President of Harvard from 2001 to 2006.

* Until late 2010, served as President Obama’s director of the White House National Economic Council.

* And, most importantly, a pivotal character in the recent movie “The Social Network”.

Larry will be an advisor to our firm and our entrepreneurs on several topics:

First, as technology continues its relentless colonization of broad swaths of the global economy, Larry will help us understand the scope and nature of the opportunities in front of us and our industry.

Second, many of our companies are seeking to restructure and revolutionize various markets — such as telecommunications, advertising, entertainment, education, health care, and financial services — and Larry will help us and our entrepreneurs analyze and understand the economics and dynamics of those markets.

Third, Larry’s deep insight into global economics and geopolitics will be highly useful to our companies that intend to expand globally — which is to say, all of them.

According to the New York Times, “Years ago, Henry Kissinger suggested that Mr. Summers be given a White House post in which he was charged with shooting down or fixing bad ideas.” We can’t arrange that, but we are excited to have him on our team, both to do that and to contribute lots of new ideas to us and to our companies.

]]> http://allthingsd.com/20110629/now-is-the-larry-summers-of-our-silicon-valley-vc-economic-guru-joins-andreessen-horowitz-as-special-advisor/feed/ 0 Zynga Hires Six Employees Through Boston-Area Acquisition http://allthingsd.com/20110318/zynga-hires-six-employees-through-boston-area-acquisition/ http://allthingsd.com/20110318/zynga-hires-six-employees-through-boston-area-acquisition/#comments Fri, 18 Mar 2011 19:43:38 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=3668 Zynga has announced its 10th acquisition in 10 months. The San Francisco social game company is hiring all six employees from Floodgate Entertainment but is not technically acquiring the Waltham, Mass.-based company. The employees, who will work from Zynga’s Boston office, worked on a wide variety of PC and mobile games. Floodgate founder Paul Neurath is becoming Zynga Boston’s Creative Director. Terms of the deal were not disclosed.

]]> http://allthingsd.com/20110318/zynga-hires-six-employees-through-boston-area-acquisition/feed/ 1 Another Mobile Payments Provider Raises Venture Capital http://allthingsd.com/20110222/another-mobile-payments-provider-raises-venture-capital/ http://allthingsd.com/20110222/another-mobile-payments-provider-raises-venture-capital/#comments Tue, 22 Feb 2011 16:08:14 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=3044 Boston-based Paydiant has raised $7.6 million ahead of launching its mobile payment services later this year. The first round was led by North Bridge Venture Partners and General Catalyst Partners. It’s unclear what part of the value chain the company will play in, but the co-founders Chris Gardner, Kevin Laracey and Joe Paratore, have all worked at payment companies before, including edocs and m-Qube.

]]> http://allthingsd.com/20110222/another-mobile-payments-provider-raises-venture-capital/feed/ 0 Myspace Is Certainly for Sale, but Not by Press Release http://allthingsd.com/20110210/myspace-is-certainly-for-sale-but-not-by-press-release/ http://allthingsd.com/20110210/myspace-is-certainly-for-sale-but-not-by-press-release/#comments Thu, 10 Feb 2011 22:10:53 +0000 Kara Swisher http://kara.allthingsd.com/?p=40320

Here’s what’s happening at Myspace, the troubled social networking site owned by News Corp.:

It’s for sale, as has been widely reported, along with that intent being declared recently by top company execs.

It’s hired Allen & Co. to sort out potential buyers and other options, as has also been reported.

It’s hardly begun the process and is pretty much at square one, which means making lists, sorting out inquiries both crazy and valid and lining up its proverbial ducks for Myspace.

What it’s not doing is taking bids via press release, as happened in a decidedly odd fashion last week when MocoSpace, a Boston-based mobile social networking site, issued one.

Titled “MocoSpace Reveals Itself As Interested Party to Potentially Acquire Myspace,” the look-at-me attempt to suck up some attention from the media was riveting and appalling at the same time.

“MocoSpace, the largest entertainment destination on the mobile Internet, is today announcing their interest in acquiring Myspace from News Corp.,” read the press release.

And, of course, in the email from its PR rep: “Their CEO [Justin Siegel] is revealing their interest and is available to chat with you to discuss why.”

While an amusing tactic, All Things Digital declined the generous offer.

Soon enough came another PR entreaty: “Wanted to provide the update that today Newscorp contacted MocoSpace and they are now in conversation.”

Oh, really? So, BoomTown phoned some sources there close to the situation and found them very perplexed at that characterization.

One source laughed at the gumption behind the MocoSpace press release, although added that the company was very much wanting to dispose of Myspace in the best possible way.

“No legitimate offers ignored,” said the source, who said a sale was more likely than bringing in new investors to recapitalize it. “But nothing has happened yet.”

Another source noted that the company had only sent an acknowledgement to MocoSpace, as it did for anyone who expressed any interest.

MocoSpace was kind enough to send me these emails, including one from News Corp. deal exec Jack Kennedy, which was entirely rote and referred Siegel to Allen & Co. “to fill you in w/respect to how the process may develop.”

Added another source: “Nobody at this point that can be considered ‘in conversation.’”

Oops!

Thus, more email spin from MocoSpace PR: “We never said that Newscorp contacted MocoSpace first. After MocoSpace released their statement, Justin Siegel did receive an email from Newscorp.”

And: “It seems that you may have misunderstood my email when I said they were ‘in conversation.’ I simply meant that after MocoSpace made their intention public, Newscorp did contact them–hence ‘in conversation.’

And: “I did not mean to imply that they were in any sort of negotiating conversation–if that is something that you took from the email, it was an assumption, and I am sorry for any confusion in the wording there.”

How ever could I be confused after all this mishegas?

Finally, Siegel weighed in via email, noting in part:

“It’s been brought to my attention that there’s some confusion and frustration….In addition, I’d like to clarify that this was/is not a publicity stunt. We made our interest in MySpace public. The interest it’s generated is surprising. To every person I’ve spoken to directly, I’ve made it clear that I’ve had no direct conversation with either MySpace or Newscorp regarding the sale.”

Like I said, no sale. Yet.

]]> http://allthingsd.com/20110210/myspace-is-certainly-for-sale-but-not-by-press-release/feed/ 3 RIM Preps Cloud Services, Considers Managing Non-BlackBerry Devices http://allthingsd.com/20110114/rim-preps-cloud-services-considers-managing-non-blackberry-devices/ http://allthingsd.com/20110114/rim-preps-cloud-services-considers-managing-non-blackberry-devices/#comments Fri, 14 Jan 2011 12:15:51 +0000 Ina Fried http://mobilized.allthingsd.com/?p=2468 Although it likes its current business of selling BlackBerry devices and the servers that businesses need to manage them, Research In Motion is open to some other alternatives.

In particular, the company is already working to re-architect its core BlackBerry Enterprise Server product so that it can also be offered as a cloud-based service, to be hosted by either partners or RIM itself.

“We will be launching a cloud service,” RIM Vice President Pete Devenyi told Mobilized in an interview following a Boston event focused on RIM’s 2011 enterprise strategy.

However, Devenyi said the service offered by RIM directly won’t cover as many types of email servers as its software is capable of supporting, leaving room for partners.

“We’re not going to launch a cloud service for everything, for every combination,” he said. “There are going to be mail servers out there that we don’t connect with through our cloud service. There will be other partners that choose to connect to other mail server providers and they may offer a hosted service on their own.”

Partners could even offer a combination of both mail server and cloud-based mobile device management. The company didn’t say when any of the cloud services might launch.

Another area that the company is exploring is whether to expand its software to manage mobile devices from other makers.

“BlackBerry is and will continue to be dominant in most corporations,” Devenyi said. “It’s not going to be the only device, given the fact that consumers have the choice to bring in their own devices, and IT departments are often letting them in. So there’s a question there. Do those corporations have to manage those devices differently or is there the possibility that RIM might extend capabilities to make it easier for those corporations to manage those devices as well.”

That business would not be entirely new. The company started a program years ago called BlackBerry Connect that allowed businesses to use their BlackBerry servers to manage certain devices when those devices communicated using BlackBerry protocols. However, the new venture, if RIM decided to go ahead, would expand that to managing devices that use their own methods.

“In this case, it would have to be done differently because it would be more native,” he said. “It wouldn’t use BlackBerry protocols to manage those devices, but conceptually yes, we did that with BlackBerry Connect.”

Devenyi stressed that although the company is talking about the possibilities in this area, it has nothing to announce.

“It is not something that we would say is never going to happen,” he said. “If enough of our customers really want us to do it, we know that BlackBerry management is far and away the best management console in the world, and if the right thing to do is to extend a subset of those capabilities to be able to manage other devices, it’s worthy of a conversation.”

]]> http://allthingsd.com/20110114/rim-preps-cloud-services-considers-managing-non-blackberry-devices/feed/ 0 RIM: Don't Worry About PlayBook's Battery Life http://allthingsd.com/20110113/rim-dont-worry-about-playbooks-battery-life/ http://allthingsd.com/20110113/rim-dont-worry-about-playbooks-battery-life/#comments Thu, 13 Jan 2011 16:59:40 +0000 Ina Fried http://mobilized.allthingsd.com/?p=2423 Speaking about its business plans on Thursday, Research In Motion briefly addressed its forthcoming PlayBook tablet and reported issues around the product’s battery life.

Senior Product Manager Ryan Bidan said that the tablet will have a 5,300-milliamp-hour battery that will offer plenty of battery life, but he wouldn’t quote a specific estimate.

“We’ll have good battery life,” he said. “Don’t worry about the battery life.”

Among other details, Bidan said that, unlike with the BlackBerry, RIM will deliver software updates directly to PlayBook devices. He also said that there would be a version of App World for downloading programs created by third-party developers.

The company also listed a number of technical specs for the device, including a 1GHz dual-core TI processor, a 3MP front-facing camera and a 5MP rear-facing camera, as well as mini-HDMI and mini-USB ports. Developers, he said, will have unfettered access to the camera and HDMI port, paving the way for all kinds of cool video-conferencing and presentation-delivery applications.

As for the key details, Bidan stuck to the company line, saying only that it will ship in North America this year and refusing to talk exact timing or pricing. “We’ll be competitively priced,” he said.

Bidan also demonstrated the tablet synching with his BlackBerry to display email and calendar information stored on the handheld. Each PlayBook can only synch with one BlackBerry at a time, Bidan said.

Update, 12:21 pm ET: Asked whether RIM is still aiming for eight hours of battery life, as it claimed at CES, Bidan said, “That is the case–our goal is to get a full day.”

That battery, by the way, is a fixed, nonremovable battery.

Asked about the size of the marketing campaign that will accompany PlayBook’s release, RIM executives declined to give specifics, but said it will be big.

“It’s not going to be a soft launch,” said VP Alec Taylor. “The magnitude will be commensurate with the opportunity.”

PREVIOUSLY

]]> http://allthingsd.com/20110113/rim-dont-worry-about-playbooks-battery-life/feed/ 0 Film Critics Don't Just "Like" "The Social Network"–They Love It http://allthingsd.com/20110108/film-critics-dont-just-like-the-social-network-they-love-it/ http://allthingsd.com/20110108/film-critics-dont-just-like-the-social-network-they-love-it/#comments Sat, 08 Jan 2011 23:31:29 +0000 Liz Gannes http://networkeffect.allthingsd.com/?p=2129 Today, the National Society of Film Critics hooked up with “The Social Network,” the Hollywood version of the founding of Facebook.

The movie was chosen for the group’s best picture award, while David Fincher got best director, Jesse Eisenberg as Mark Zuckerberg was named best actor and Aaron Sorkin received the best screenplay award.

The win is a strong indication that the movie is going to be the one to beat at the Oscars, which take place February 27. Nominations for the top prize for movies will be announced January 25.

“The Social Network” has already won awards from critics in Los Angeles, New York, Boston, Indiana and the National Board of Review.

It has also been nominated for multiple Golden Globe Awards, and was named to the American Film Institute’s top 10 of 2010.

(See the movie’s Web site for a thorough list of awards and nominations.)

]]> http://allthingsd.com/20110108/film-critics-dont-just-like-the-social-network-they-love-it/feed/ 0 Gilt City Leaves the Masses to Groupon, Skims the Cream Off the Top http://allthingsd.com/20110107/gilt-city-leaves-the-masses-to-groupon-skims-the-cream-off-the-top/ http://allthingsd.com/20110107/gilt-city-leaves-the-masses-to-groupon-skims-the-cream-off-the-top/#comments Fri, 07 Jan 2011 22:07:51 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=1397 As Groupon and LivingSocial scramble for first-mover advantage and launch in as many as eight new markets a day, Gilt City is taking a different approach to the group-buying market.

It’s skimming the cream off the top.

It will not blanket America with offers, but rather only enter markets where there’s enough luxury experiences and high-end restaurants for its target audience of highly educated, 25-to-40 year-olds (In other words–affluent, wealthy and plain ol’ rich people).

Gilt City is an extension of the New York-based Gilt Groupe, which provides invitation-only access to products and experiences at discounted prices. Gilt City competes more directly with Groupon and LivingSocial by offering discounts to spas, restaurants and cosmetic treatments, like Botox. So far, it’s launched in Boston, Chicago, Los Angeles, Miami, New York, San Francisco and Tokyo.

Gilt Groupe has raised upward of $50 million in venture capital, and will still have to contend with Amazon-based LivingSocial, and Groupon, which aims to raise up to $1 billion after spurning a buyout attempt by Google.

Gilt City’s President Nathan Richardson promises us it still has aggressive goals, but that its plans look different from the others. “We won’t be in a lot of secondary markets, but there’s 40 markets that have the depth we need.”

Meanwhile, Groupon and LivingSocial are in more than 100 markets each today.

“The high-end of the market is enormous,” Richardson says.

Unlike Groupon and LivingSocial, Gilt doesn’t send out a deal every day, but rather offers up to three deals in a weekly email, because “that makes it worthy of reading in your inbox.” In Chicago it’s up to sending two a week, and in Los Angeles and New York, it’s now sending two to three.

In addition to offering discounts on restaurants, spas and beauty, Richardson says Gilt is also selling experiences.

For example, on the Fourth of July in New York, it hosted a party on the retired aircraft carrier USS Intrepid, which was positioned right under the fireworks. ”Not only did the offer sell out, we had three times as many people on wait list,” he says. ”We have the opportunity to extend our curated lifestyle brand to events. People have come to expect us to be consistent. It’s not hit or miss. We want to make sure the email surprises our customers and is always on brand and something we feel proud of.”

To make his point, Richardson often talks about the deal’s “exclusivity,” not how deep the discount is. But why would an exclusive restaurant–which presumably has no trouble selling out–be interested in offering a discount to Gilt’s subscribers?

Richardson says it’s an opportunity for these brands to introduce new opportunities or extend its franchise to a new audience.

For instance, a new restaurant opening in New York’s Flatiron District offered a deal that introduced a new menu to the public. The chef signed the menu and visited the patron’s table for a chat. Another upscale eating establishment used Gilt to promote availability of a private dinning room.

Richardson says that in a survey Gilt conducted, customers said that 80 percent of the time they had the intention of going back to a restaurant, gym or skin-care provider at full price, and in 60 percent of the cases they did go back.

]]> http://allthingsd.com/20110107/gilt-city-leaves-the-masses-to-groupon-skims-the-cream-off-the-top/feed/ 0 Gilt Groupe Leans on Mixture of Equity and Debt to Fund Growth http://allthingsd.com/20101215/gilt-groupe-leans-on-mixture-of-equity-and-debt-to-fund-growth/ http://allthingsd.com/20101215/gilt-groupe-leans-on-mixture-of-equity-and-debt-to-fund-growth/#comments Wed, 15 Dec 2010 23:55:57 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=705 Gilt Groupe has secured about $15 million in a line of credit.

Despite new reports of the funding today, the line of credit from TriplePoint Capital is months-old, and we’ve learned it was used primarily for building out a new warehouse in Louisville, Ky.

According to our sources, who declined to be named, only $5 million of the $15 million has been drawn down from the facility, and it’s one of three lines of credit the company has. The company spokeswoman declined to comment.

The Gilt Groupe is a members-only online retailer focused on luxury brands. It has seen huge success in offering deep discounts on items for short periods of time. More recently, it has set its sights on the local deals business, similar to the businesses being built by Groupon and LivingSocial. It has also expanded into offering luxury travel deals.

Gilt’s local deals site, called “Gilt City,” offers bargains on items ranging from massages to frozen yogurt. So far, it’s launched in Boston, Chicago, Los Angeles, Miami, New York and San Francisco. It’s going up against two feisty and well-funded competitors: LivingSocial, which just raised $175 million in capital from Amazon, and Groupon, which turned down Google’s $6 billion acquisition bid.

A round of funding raised this summer supported those product rollouts. In total, the company has raised upward of $50 million from investors, including General Atlantic and Matrix Partners.

The line of credit shows that the emerging company still needs additional financing for one-off capital projects as resources are pulled in other directions. A big focus is likely on hiring a local salesforce, which is considered a specialty of Groupon. Still, Gilt Groupe is considered one of the more likely IPO candidates, and has said in the past that it expects to achieve gross revenues of $400 million to $500 million by the end of this calendar year.

]]> http://allthingsd.com/20101215/gilt-groupe-leans-on-mixture-of-equity-and-debt-to-fund-growth/feed/ 1 Thinking Outside the Dropbox with Minus–A New Image-Sharing Tool http://allthingsd.com/20101202/thinking-outside-the-dropbox-with-minus-a-new-image-sharing-tool/ http://allthingsd.com/20101202/thinking-outside-the-dropbox-with-minus-a-new-image-sharing-tool/#comments Thu, 02 Dec 2010 12:00:51 +0000 Drake Martinet http://voices.allthingsd.com/?p=32952

Friction: It keeps our shoes on, it’s a buzzword at product meetings and UX conferences. And in Web apps, it’s the sticking force that keeps money in people’s pockets.

So, reducing it can mean changing the game for an entire arena–just look at eBay’s PayPal and Netflix.

Minus, an image gallery-sharing service, was conceived to do exactly that.

The basic premise is this: Visit its Web site, min.us, highlight a mess of images on your computer (different types and sizes are fine) and drag them into your browser window. Almost instantly, thanks to clever Ajax and cacheing, you have a shareable coverflow-style gallery of all those images, hosted on Minus’s little piece of the Amazon EC3 cloud.

In a matter of seconds (no exaggeration here, probably two or three seconds) you see the gallery, get a short link for sharing, a second that allows editing privileges and a third link to download everything in the gallery as a single zip file.

The minds behind Minus are Carl Hu, a programmer based in Boston, and his partner, John Xie, currently a senior at nearby Babson College. Hu spent the last few years in enterprise software, most recently at a start-up called Spathe. Xie (the college student) has been studying, running a small Web-hosting business and, presumably, doing things that people try to keep off Facebook.

The guys say the whole idea was to make a product that was “super simple and fast.” They picked up the min.us domain before they even knew what product they intended to build on top of it.

But Xie said the whole point was to riff on URL shorteners and create a service that made some sharing process easier. They didn’t even want you to have to log in.

The pair borrowed some code from a demo project called DropMocks (built by Glen Murphy, designer for Google Chrome) and began adding features.

If you head over to DropMocks, the similarities are, um, evident. But the UI (or lack thereof) and basic premise is where the similarities start to fade.

You can think of Minus as a sort of weaponized version of DropMocks: Better security, more options, multiple permissions and, as of last week, an API so other developers can connect their pipe to the Minus backend.

In short, it’s becoming a real product.

Today, Minus works best (meaning with the drag-and-drop functionality) on Google Chrome, Firefox 3.6+ and Apple Safari on Mac. It will still work on the Microsoft Internet Explorer, but you will miss out on the real product. Hu said he hopes consumers will use Chrome, because it’s Adobe Flash-free there, thanks to some new CSS3 gallery tricks.

Minus’s next act, according to Hu and Xie, will be to add sharing for as many file types as possible, making it a sort of a lighter, faster Dropbox.

John says the vision is that users could assemble at a library for a study session or sit down to a meeting and immediately pass around the short link to a shared Web space for the group’s working materials.

The project is a month young and changing about as fast as a baby at that age. They are bootstrapped for now, but Xie says they are already fending off random emails with offers of angel investor cash.

They said they’ve had about 500,000 unique visitors since launch and that they seem to be far better known in Asia and Europe, although they expect the balance to shift back to the U.S. soon.

I spoke via Skype with Hu and Xie, whose thoughts on the progress of Minus are condensed in the video. The second video is a special bonus: A short screen capture of Minus in action, inside Chrome, and narrated by yours truly. You can watch a gallery being built, saved, viewed, shared, visited and downloaded from all in under a minute.

Enjoy:


[ See post to watch video ]


[ See post to watch video ]

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