In what is probably the most anticipated document ever received by the U.S. Securities and Exchange Commission, Facebook has filed to take its company public in a $5 billion initial public offering later this year.

Having endured lots of speculation around who owns exactly how much, there are now some hard numbers from the S-1 filing that hit the SEC Web site today.

Here are some details of the cap table, which is made up of both Class A and Class B shares, which carry different voting powers. Class B are the common shares.

Not surprisingly, co-founder and CEO Mark Zuckerberg owns the most equity of any single person. His 1.1 billion Class B shares give him almost a 57 percent stake — about half of which he owns and half of which are owned by others but over which he exercises proxy voting authority.

The 27-year-old entrepreneur also holds 42.2 million Class A shares, which represents a 36.1 percent stake of that group.

Facebook’s filing said he will sell some shares in the IPO, although it doesn’t specify how many. However, it noted that most of the proceeds from the sale will go toward paying taxes on his purchase of 120 million options of Class B common stock he also has.

Peter Thiel, the PayPal founder and CEO who sold that company to eBay, owns a 2.5 percent stake, which has decreased over time from the more than 10 percent he owned as Facebook’s first angel investor. Not bad for a $500,000 investment made in 2004.

Jim Breyer of Accel Partners controls more than 201 million Class B shares, amounting to a little more than 11 percent of Facebook’s equity, having led Accel’s participation in Facebook’s $25 million Series A way back in 2006. Breyer is also a personal investor; 11.7 million shares are his, and about 190 million shares are Accel’s.

Digital Sky Technologies, the Russian investment firm, has 5.4 percent of the Class B equity, or 94.6 million shares, owing to its $200 million investment in 2009, plus an additional $500 million in 2011. DST has also been buying Facebook shares from existing shareholders, allowing some to cash out their equity. It also has 36.7 million Class A shares, or 31.4 percent.

Goldman Sachs has a sizable 66-million share slice of Class A shares, or 56.3 percent. Last year, it was involved in the $1.5 billion round that included DST.

There’s also a batch of individuals with single-digit stakes and smaller ones of note.

Dustin Moskovitz: The Facebook co-founder owns 7.6 percent of the company or 133.8 million Class B shares.

Zuckerberg’s father, Edward Zuckerberg, a dentist, was rewarded with two million Class B shares in consideration for his providing early start-up capital to his son in 2004 and 2005. He was given an option to purchase the shares, but the option expired a year after it was given to him, without his exercising it. The board of directors — minus Mark Zuckerberg — issued the 2 million shares to Glate LLC, a company controlled by the elder Zuckerberg.

There are also a few names of note who don’t appear in the filing:

Microsoft had bought a stake amounting to 1.6 percent, stemming from its $240 million investment in 2007, which included a strategic alliance for advertising. Its stake, now likely less, is not mentioned in the filing.

Eduardo Saverin, the Brazilian co-founder, also has a stake worth a few points, but he is not mentioned in its cap tables.

And other VC investors, Greylock Partners and Meritech Capital Partners, are barely mentioned as well. T. Rowe Price owns 6 million Class A shares, or 5.2 percent, as well as 12.1 million Class B shares.

The filing shows that the top five highest compensated employees are:

Mark Zuckerberg’s base salary is $500,000 a year. Effective January 1, 2013, his salary will be reduced to $1 per year. He has options to buy 120 million additional shares of the class B common stock at a strike price of six cents a share, which expires in November of 2015.

COO Sheryl Sandberg made $382,000 in salary and bonuses in 2011 and received $30.5 million in stock awards. She has options to buy 4.7 million shares, of which 3.5 million have a strike price of $10.39, and 1.2 million a strike price of $15. Sandberg already holds 1.9 million shares of Class B common shares and holds 39.3 million restricted stock units, too.

David Ebersman, the quiet CFO whom AllThingsD profiled yesterday, made $382,000 in salary and bonuses and has 2.2 million Class B shares and 7.5 million RSUs.

Mike Schroepfer, vice president of engineering, made $334,000 in salary and bonuses last year. He holds 2.1 million in Class B shares and 6.1 million RSUs.

VP and general counsel Theodore W. Ullyot also makes $275,000 per year and is eligible for a $400,000 annual retention bonus during the first five years of his employment, through 2013. He has about 1.9 million shares and exercisable options and holds 3.8 million RSUs.

Then, there are Facebook’s outside directors: Venture capitalist Marc Andreessen; Erskine Bowles, the former White House Chief of Staff under Bill Clinton; Breyer; Washington Post CEO Don Graham; Netflix CEO Reed Hastings; and Thiel. Each were paid $16,700 in fees for sitting on the board. Bowles got 601,400 shares, while Hastings got 593,400 shares.

Andreessen also has 5.3 millon RSUs that vest over four years. Graham has one million RSUs. Bowles and Hastings also each have 20,000 RSUs.

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The Twitter investment, through his Kingdom Holding Co., was just announced via press release and confirmed by Twitter.

A spokesman for Twitter said he had no additional details to share beyond the release.

Twitter’s last round of funding, which closed this summer, valued the company at $8.4 billion and was led by Digital Sky Technologies (DST) of Russia.

Of late, the most well-known international Web investor has been DST founder Yuri Milner, who has stakes in Twitter, Facebook and Zynga. Prince Alwaleed has been more active as a media investor, with a large stake in News Corp. (which owns AllThingsD), for instance.

In a statement, a Kingdom Holding Co. executive noted the coming impact of social media on the media industry, and Twitter’s potential to monetize it.

If you’re looking to get a better sense of Prince Alwaleed, here’s a Charlie Rose interview from last year.

So exactly how fecund is “FarmVille”?

If reports hold, we’ll all find out today what the yield is from the online gaming phenom Zynga, which will finally be filing its regulatory documents sometime today.

The S-1 for a public offering valued at up to $20 billion, which will contain all kinds of juicy information about the San Francisco-based start-up’s business, is likely to come out after the markets close. Zynga is expected to raise $2 billion in the offering.

Before everyone gets to see what’s in it, there’s a lot that investors should be looking out for, based on recent IPO filings by similar companies, such as Groupon.

Digging Up New Accounting Ground

As Tricia Duryee pointed out, Zynga will be the “first major U.S. company supported primarily by the sale of virtual goods” to file.

That’s what will likely make the Zynga filing very interesting, from an accounting point of view.

How Zynga handles its accounting is sure to be much scrutinized, especially since Groupon attracted all kinds of ugly from its unusual treatment of its financial results.

To defocus from its money-losing under GAAP acounting, the Chicago-based social buying service used the more attractive “Adjusted CSOI,” which is defined as adjusted consolidated segment operating income.

My definition: Sketchy!

Zynga’s finances are expected to look better, reportedly generating about $400 million in profit last year on about $850 million in revenue.

It will be important to pay attention to the breakdown of those revenues and about what period of time the company accounts for them.

As Duryee wrote, Zynga has several choices:

Game-based model: The company recognizes revenue over the life of the game.

User-based model: Revenue is recognized over the estimated life a user plays the game.

Item-based model: Revenue is recognized based on the implied or explicit life span of the item — in other words, how long it would last in the real world. Examples of more durable goods are virtual vehicles, furniture or weapons. Revenue from these would be recognized for as long as the player stays active in the game. Revenues from a more consumable item, like a virtual cup of coffee or a jolt of energy, would be recognized almost immediately.

And there are still other factors to take into consideration, such as whether the goods were paid for with virtual currency or real cash, and how much information a company has for establishing the averages.

In the Revenue Weeds

Another interesting thing to study will be the revenue breakdown for Zynga, especially as it relates to its biggest platform provider, Facebook.

Such as: How many in-game items are purchased directly on Facebook versus through gift cards purchased in the store? How big (or small) is Zynga’s advertising business? What about mobile games? Will the profitability of individual games be called out, with details about their performance?

And, of all its various distribution platforms for its games, where does it get the most mojo?

That’s important, since Zynga will be seen as a proxy for Facebook’s business. Thus, a lot of investors might find some nuggets of information, since the pair are so tightly intertwined as businesses.

Facebook, of course, has been famously trying not to IPO, so any indication of the social networking site’s business will be carefully studied.

Reaping the Insider Rewards

Lastly, it’ll be important to see who is selling what and when among current Zynga investors.

Groupon ran into a buzz saw of criticism from the giant payouts its founders took out of the company from its massive venture funding rounds.

As Peter Kafka wrote:

Groupon raised a total of $946 million in two funding rounds last winter. It kept $136 million of it to help run the money-losing company. The remaining $810 million was paid out, via stock purchases, to CEO Andrew Mason and some of his backers, including Eric Lefkofsky, and, notably, the Samwer brothers, who sold their CityDeal company to Groupon in 2010 … Of note: This wasn’t the first time Groupon had raised money and taken cash off the table. In April 2010, the company raised $130 million, and handed $120 million to many of the same people.

My definition: Even sketchier!

Along with its founder and CEO Mark Pincus, Zynga investors are the pantheon of venture players, including Digital Sky Technologies, Kleiner Perkins, Union Square Ventures and angel investors LinkedIn founder Reid Hoffman and Peter Thiel.

How much Pincus and others inside the company have taken out and are selling should be one of the first places new investors should look.

Because with the hyped valuations that many of these Web 2.0 companies are getting, who’s zooming who should be a key sign to pay mind to.

But the current market tempts VCs to change the game plan by buying shares of late-stage Web companies wherever they can find them–from start-ups directly or from employees and previous investors.

VCs didn’t start the fire; folks like Yuri Milner from Digital Sky Technologies (Facebook, Zynga, Groupon) and private company marketplaces that help stave off IPOs, like SecondMarket and SharesPost, did.

But these new Web giants’ valuations just keep going up. Think Facebook’s valuation was bloated at $50 billion? After seeing huge demand at that price, a month later, the company is exploring selling employee shares at a $60 billion valuation.

Watching those numbers rise so quickly makes VCs lose their hang-ups about price and just want to get in on the hotness.

Kleiner Perkins is reportedly buying $38 million worth of Facebook shares from existing shareholders at a $52 billion valuation, according to VentureWire. Meanwhile, Andreessen Horowitz bought $80 million worth of Twitter shares on the secondary market, after not participating in the company’s recent $200 million funding round, led by Kleiner Perkins.

Both those firms, along with Battery Ventures and Greylock Partners, also invested in Groupon’s last huge round, after the daily deal site walked away from talks of a $6 billion buyout by Google.

It’s not just the big names doing such deals. Venture capitalists were the buyers in more than 40 percent of transactions on SecondMarket in the fourth quarter of 2011.

VC activity easily outpaced other buyers, which were individuals, hedge funds, mutual funds, secondary funds and asset managers.

According to SecondMarket Head of Public Affairs Mark Murphy, VCs representing the largest percentage of buyers is a recent trend that started in the third quarter of 2010.

This comes at a time when raising money for a VC firm is tougher than ever.

What are VCs buying on SecondMarket? Facebook accounts for the single largest portion of transactions, at 39 percent. After that are LinkedIn, Etsy, Chegg, Epocrates, Silver Spring Networks, CafePress and Reply, and some other companies that declined to be named.

SecondMarket does not share pricing or volume stats or trends, except to say it sold $157.8 million worth of stock in the fourth quarter, up from $75 million in the third quarter.

Some VCs are steering clear of secondary markets and late-stage deals. Redpoint’s Geoff Yang was willing to go on the record about it in a recent interview. “What do venture capitalists know about being a momentum hedge fund?” he said.

It’s not just proven hits big enough for the secondary markets that are attracting funding interest. Everyone is still eager to find the next Groupon or Zynga. The Q&A site Quora, led by former Facebook CTO Adam D’Angelo, raised $11 million at a valuation of $86 million last year before it had even launched to the public. After success with early adopters, the start-up is now fending off offers of much more money than that.

So there’s pressure to either get in very early, or get in late if you can, because the time in between is fleeting.

VCs are also actively trying to get more involved in seed funding deals. For instance, Google Ventures recently set up its Startup Lab to attract early-stage companies where it charges them $5 per month for office space (see our video tour). And just this morning, NetworkEffect covered how VCs are actually more active than angels on the early-stage investment matchmaking service AngelList.

The news cycle about the deal spun out of Facebook’s control after leaks emerged around the new year, with the social networking company taking a beating for the tricky and elitist way it had raised funds in a seeming evasion of the public markets, and Goldman changing the rules of the deal after much interest and scrutiny.

Since then, the leaks have kept coming, with no official acknowledgement of the deal from Facebook, until now.

Facebook today shed light on some terms of the transaction: It had the option to accept between $375 million and $1.5 billion from Goldman Sachs, and elected to choose $1 billion in an offering that was completed today.

The company distanced itself from the deal, effectively saying that it didn’t need the money and it expected to cross 500 shareholders this year anyway (something All Things D was first to report).

DST and Goldman Sachs approached Facebook to express their interest in making an investment, and Facebook decided it was an attractive opportunity to bolster its cash reserves and increase its financial flexibility with limited dilution to existing shareholders….

Even before the investment from Goldman Sachs, Facebook had expected to pass 500 shareholders at some point in 2011, and therefore expects to start filing public financial reports no later than April 30, 2012.

Please see the disclosure about Facebook in my ethics statement.

Tonight, an hour-long special on the topic will air at 9 pm ET on Bloomberg TV (and will be streamed live on Bloomberg’s Web site), featuring Yuri Milner, CEO of Digital Sky Technologies and one of the key investors who helped put together that deal. Unfortunately, while Bloomberg’s press release listed Milner as a “guest,” it neglected to mention that he won’t be an actual live guest (as initially reported here). Instead, clips from a Milner interview last year will be interspersed with current commentary from writers David Kirkpatrick, Paul Kedrosky and Bill Cohan, and marketing professor Scott Galloway.

Goldman has reportedly given its clients limited information and only until the end of the week to pony up a minimum of $2 million to invest in Facebook. One Goldman customer told Reuters he felt like he was being expected to invest on “blind faith.”

BoomTown’s Kara Swisher yesterday described the Goldman-Facebook deal as “sneaky,” “elite” and “opaque.”

Here’s the promo for the Bloomberg program:

Please see the disclosure about Facebook in my ethics statement.

Goldman Sachs is leading a new yet-to-be-completed investment into Facebook, according to a report by the New York Times’ Dealbook tonight.

Here are the key numbers:

• $500 million=Total amount of investment, mostly from Goldman Sachs, with $50 million from Digital Sky Technologies
• $50 billion=Valuation for the new deal. The market value
  for the social networking powerhouse has been growing quickly, most recently at $42.4 billion according to SharesPost, or as much as $56 billion according to some other secondary market transactions.
• $75 million=Portion of Goldman stake that it can sell to DST, under the terms of the deal
• $1.5 billion=Amount Goldman would be entitled to raise from high-net worth clients through a “special purpose vehicle” to buy Facebook shares
• $15 billion=Estimated paper net worth of Facebook CEO Mark Zuckerberg after the new valuation
• Priceless=The golden opportunity to take Facebook public

Please see the disclosure about Facebook in my ethics statement.

Of course. But has it raised nearly $1 billion?

That’s the number being thrown around today by VCExperts, which claims to have seen documents filed by Groupon with the Secretary of State’s office.

And our sources say that’s the right number, with the company’s valuation placed at $4.75 billion, but that the deal hasn’t firmed up yet, and it doesn’t involve any one major new investor. A Groupon representative declined to comment on the report.

In the meantime, Groupon has the gigantic round it raised eight months ago to lean on. BoomTown’s Kara Swisher reported in April that Groupon raised $135 million at a $1 billion valuation.

The big thing that’s likely changed since then is the company’s run-rate, now at $2 billion annually (up from the previously reported $500 million).

The group-buying site, which offers consumers discounts of 50 to 70 percent on things like trips to spas and restaurants, already has a plethora of investors.

It has raised money from the same Russian investors that backed social networking powerhouse Facebook and game phenom Zynga, as well as from Digital Sky Technologies and Battery Ventures. In December, Groupon nabbed $30 million in its second round of funding, led by Accel Partners.

The money in April was being set aside for growing the business and getting ahead of its numerous rivals.

One investment source that has since dried up is Amazon, which decided to back Groupon’s nearest rival, LivingSocial, with $175 million. Kleiner Perkins has been named as a potential candidate, but it would also be nice to see a deep-pocket media company step in.

Newspapers, specifically, have been hard hit by a shift in local advertising and classifieds. A Groupon partnership could make it less appalling that they’ve missed yet another trend.

Last week, MediaMemo’s Peter Kafka reported on a new funding effort by Twitter.

Sources said the San Francisco microblogging phenom, which has seen huge growth of late, is considering a round of upward of $200 million.

That would more than double the $160 million Twitter has garnered so far.

And who are the moneybags who might be the ones to keep Twitter CEO Dick Costolo in diamonds and furs–and away, for now, from the enticing clutches of a socially awkward and, thus, acquisition-minded Google?

Actually, those at the top of the list will be familiar to those following big funding rounds in the social space: Russia’s DST Global, Silicon Valley venture powerhouse Andreessen Horowitz–which is raising its own giant new fund–and a spate of more recently interested private equity players.

DST seems the likeliest investor, given it likes to play big in the space and has handed over gobs of money to social networking giant Facebook, social gaming upstart Zynga and social deals start-up Groupon.

DST Global is also pretty hands-off as an investor, such as not demanding board seats for its dough.

Alexander Tamas of DST Global, which is an affiliated international investment unit of Digital Sky Technologies (which recently filed to go public itself), said in an email to BoomTown that he “can’t comment on any deal rumors.”

But here’s an excerpt from an interview he did with me in July:

“As to its future investments, Tamas said the company will likely fund start-ups that ‘check the boxes,’ including exponential growth and social virality.”

That would be…drum roll, please…Twitter.

A Twitter spokesman told Kafka last week that the company did not need the cashola (there is apparently plenty of the old stuff left in the kitty) and no decisions had been made about additional financings.

Nonetheless, many sources close to the situation said Twitter was deep into the consideration of potential investors.

Of course it is, as it needs to expands its staff and infrastructure and more aggressively seek ways to monetize its growing audience via advertising.

In Twitter’s last funding of $100 million, it did so at a billion-dollar valuation.

It’s not clear what a new valuation would be, but if completed it would obviously be a lot more.

And, if Twitter takes this path, it could stave off the persistent speculation that Google would make an offer Twitter could not refuse, in an attempt by the search giant to jumpstart its own lackluster social efforts and assuage its deep insecurities about Facebook.

In addition, more money would also give Twitter breathing room to figure out its business model, before pressure starts to perhaps also reward investors and employees via a public offering.

Now a new report from Bloomberg puts a finer point on it. Citing three anonymous sources, it says the social network will “probably” push off an IPO until 2012.

That certainly sounds plausible. It’s not clear that Facebook needs to raise any cash for operations, given the booming ad business it has finally gotten off the ground. And more money will be coming in the door this year when the company launches its own payment/credits system for virtual goods.

Zuckerberg has structured his board, and ownership structure, so he retains control of the company, so investors who would agitate for an IPO don’t have much leverage. And if the company does want to sell shares, it has plenty of options in the private market.

Assuming Bloomberg’s story is correct, there is at least one significant ripple effect here. If Facebook doesn’t IPO for another 12 months or more, that reduces the pressure on social games giant Zynga to go public too.

The two company’s finances are tightly intertwined–for now, Facebook represents most of Zynga’s revenue, and Zynga is a big chunk of Facebook’s business. Which means that whoever goes public and opens their books first is also opening the other company’s books to some degree. There’s an interesting game of chicken going on there, and it’s worth keeping an eye on.

Meanwhile, if you’re dying to buy Facebook on the open market, you may be able to do it in a roundabout way next year anyway. Russian investor Digital Sky Technologies, which bought a chunk of Facebook last year, is reportedly planning on a 2011 IPO.

After Russia-based Internet investor Digital Sky Technologies got $388 million in a stock-swapping deal with South Africa media giant Naspers–coming after an earlier $300 million investment from China’s Internet behemoth Tencent–BoomTown dialed up DST partner Alexander Tamas in London to interview him about the implications.

This developing international spiderweb of digital and media companies begged the question of what DST might do with all this new dough, especially since it has created quite a splash over the last year investing massive gobs of money in high-profile, social-focused U.S. Internet companies.

That has included, most prominently, social networking powerhouse Facebook, as well as Groupon and Zynga.

Actually, said Tamas, the money is for expansion of DST’s core businesses in Russia, Poland and the Baltics–in email, social networking, gaming and entertainment–at units such as Mail.ru, which was co-owned by Naspers and DST.

In essence, said many analysts, it will simplify its ownership structure, and could eventually lead to an IPO for DST.

For a 30 percent stake in DST and the $388 million, Naspers forked over its 39.3 percent stake in Mail.ru into DST.

“The idea was for us to be able to completely control our Russian portfolio,” said Tamas, part of a series of moves which included its recent purchase of AOL (AOL) instant messaging unit ICQ for $187.5 million in cash. “We wanted 100 percent at one company.”

Also a goal: To better link its services with those in China, owned by Tencent, which invested $300 million in DST in April, giving it just over a 10 percent stake.

Naspers, by the way, owns 35 percent of Tencent.

“It’s a pretty good dialog all around,” said Tamas (pictured here), linking companies with both global and local aspirations.

But it’s the global ambitions that have attracted the most attention to DST of late, which, Tamas noted, created some confusion and unfair maligning of the company.

Interestingly, although it is all mashed up on its Web site, DST itself is not technically the entity that maintains its investments in companies such as Facebook.

That would be DST Global, its international arm which directly hold the stakes. It is not part of the Naspers or Tencent deals.

Of course, both are run by the same people, especially DST CEO Yuri Milner, and DST has a stake in DST Global.

“Initially, DST did fund those transactions,” said Tamas. “But we wanted to separate these investments from the Internet company to give investors the clearer differentiation.”

As to its future investments, Tamas said the company will likely fund start-ups that “check the boxes,” including exponential growth and social virality.

That means only two investments annually, as opposed to 10.

He also said DST would continue to fork over large sums–its invested well over $100 million in each of its U.S. deals.

“There is a perception that we pay high prices,” admitted Tamas, who noted its Facebook investment is now valued at much more. “But we have a global outlook on what we are investing in.”

DST is also a believer in getting some of that financing in the hands of founders and early investors, since it relieves financial pressure to sell or go public before a start-up’s time.

“We want to give the companies we invest in a year or two run,” said Tamas. “That is the sweet spot.”

He said, after its U.S. flirtation, that DST is now looking more in Asia and Europe.

But, even with its expansion and getting investments from well-known media giant such as Naspers, Tamas said he is not sure DST can shake the continued questions about the sources of its funding, especially given some of its initial investors are clearly part of the much-maligned Russian business oligarchy.

“We always have to explain and justify all of Russia,” said Tamas defensively. “Obviously, Naspers did its due diligence, as have others, and they feel comfortable with DST.”

Still, Russian issues will remain a concern for the long term. As noted in a recent report by Bank of America (BAC) investment unit Merrill Lynch, for example, on the Naspers-DST deal:

“We are also concerned that DST’s dominance in the Russian internet space (close to 70% market/mind share) may attract the scrutiny of the Russian government. The precedent with the other leading Russian internet company Yandex, when the government got a veto on sale or a golden share, signals that the government may not welcome a full takeover of DST by Naspers or Tencent.”

“We know the issues,” said Tamas. “But the best digital companies going forward are going to have to understand and operate in different parts of the world that are not just in Silicon Valley.”

Naspers, a South African international media group said one of its subsidiaries was taking a nearly 30 percent stake in Digital Sky Technologies.

Russia-based DST has made a splash in Silicon Valley by investing massive gobs of money in high-profile, social-focused U.S. Internet companies, such as Facebook, Groupon and Zynga.

Both Naspers and DST are already close, as co-owners of Mail.ru, a large Russian Web firm with email, social networking, gaming and entertainment businesses.

Naspers said it will be contributing its 39.3 percent stake in Mail.ru into DST, as well as investing $388 million in cash in it.

In April, another international multimedia giant, China’s Tencent, invested $300 million in DST, giving it just over a 10 percent stake in it.

And, drum roll…Naspers owns 35 percent of Tencent.

It’s not clear what to make of this developing international spiderweb of digital and media companies, except to ask: What will DST do with all that new money now?

Until all is revealed, here is an interview I did at the seventh D: All Things Digital conference about a year ago with DST’s partner Alexander Tamas and Facebook COO Sheryl Sandberg about the firm’s aspirations:

And here’s the official press release:

NASPERS MAKES STRATEGIC INVESTMENT IN DIGITAL SKY TECHNOLOGIES (DST)

DST to assume full control of Mail.ru upon share swap with Naspers

Johannesburg and Moscow, 14 July 2010–Naspers Limited (“Naspers”), the broad based international media group, and Digital Sky Technologies Limited (“DST”), one of the largest internet companies in the Russian-speaking markets, announces today that Naspers’s subsidiary Myriad International Holdings B.V. (“MIH”) will take a 28,7% stake in DST. The transaction will be effected by Naspers contributing its 39,3% stake in Mail.ru into DST and investing US$388m in cash. Concurrently, Mail.ru management and other minorities will also convert their shares into DST.

Upon the close of this transaction, DST will own over 99,9% of Mail.ru. Mail.ru is the leading communication and entertainment platform in the Russian-speaking internet world, with over 50m registered email accounts, leading market share in MMO games and one of the leading social networks in Russia.

Naspers and DST have worked closely together over the past three years as co-owners of Mail.ru and today’s transaction will enable them to further strengthen that relationship.

Chief Executive Officer of DST, Yuri Milner, said, “Naspers’s strategic insight has already proven to be valuable in our partnership and we welcome the expertise they will bring to DST. We are delighted to this transaction and look forward to creating further value through our relationship.”

Antonie Roux, head of Naspers’s internet operations, commented: “We have known DST and its management for years and we share a similar view and approach. We are excited to strengthen our partnership. This opportunity further expands our exposure to emerging markets and the fast-growing internet sector.”

]]> http://allthingsd.com/20100713/facebooks-russian-investor-gets-an-south-african-investor/feed/ 1 http://allthingsd.com/20100528/groupon-deals-for-members-but-what-about-the-investors/ http://allthingsd.com/20100528/groupon-deals-for-members-but-what-about-the-investors/#comments Fri, 28 May 2010 12:00:27 +0000 Ty McMahan http://voices.allthingsd.com/?p=25524 When asked if it’s truly possible that his portfolio company Groupon Inc. could transform in 17 months from an idea to a business worth more than a billion dollars, New Enterprise Associates Partner Peter Barris chuckled in a way that indicates even he recognizes it may be a dangerous assumption.

But Barris and other investors who accepted a $1.35 billion valuation on the group-buying Web site after a recent round don’t see a return to Internet bubble levels of price inflation. Instead, they think Groupon is one of a new breed of Internet companies worth their weight in gold because of how quickly they can grow.

These days, “you can build a big company, a very, very big [Internet] company,” Barris said. “Business is back to measuring revenue and profits.”

Groupon attracted $135 million in funding, mostly from Russian investment firm Digital Sky Technologies, which has done similar deals with Facebook Inc. and social gaming company Zynga Inc. in the past year. The balance came from new investor Battery Ventures. Early investors NEA and Accel Partners did not reup, but they didn’t take any capital off the table, either.

Read the rest of this post n the original site

]]> http://allthingsd.com/20100528/groupon-deals-for-members-but-what-about-the-investors/feed/ 0 http://allthingsd.com/20100510/the-secret-life-of-chatroulettes-hacker-founder/ http://allthingsd.com/20100510/the-secret-life-of-chatroulettes-hacker-founder/#comments Mon, 10 May 2010 15:23:59 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=19244 Can’t read enough about Andrey Ternovskiy, the kid who built Chatroulette? You’re in luck: This week’s New Yorker has an excellent profile of the Russian teenager.

The piece seems to have been primarily reported this winter, just as Chatroulette was becoming a phenomenon and shortly before Ternovsky lit out for the United States. If you’re interested in digital media investing, there are a few tasty tidbits, like Union Square Ventures partner Fred Wilson’s assistance in arranging a visa for Ternovskiy, and the programmer’s disdain for Digital Sky Technologies’ Yuri Milner.

And there’s a tiny bit about Chatroulette’s finances, at least as of a couple months ago: Since Google (GOOG) wouldn’t get cut him an AdWords check, Ternovsky’s sole source of revenue was Mamba, a Russian dating service. But that was enough: He was generating $1,500 in advertising a day, which he said covered his costs. Still, there’s not much in the way of “news” here.

But make a point of reading Julia Ioffe’s story, which paints a compelling portrait of Ternovsky’s Moscow childhood. It’s going to seem both familiar and alien to a lot of you.

He was born on April 22, 1992, less than four months after the collapse of the Soviet Union, and grew up in a tidy apartment in a typically dingy Moscow high-rise. His mother, Elena, is a talented mathematician who works on differential equations at the élite Moscow State University. His father, Vladimir, is an associate professor of mathematics at the same university, and dabbles in cybernetics. Their household was loving but turbulent. The couple fought and frequently separated, and Vladimir started a parallel family, an issue that was never openly discussed. (“It’s a little game we play,” Elena said of the arrangement.) Andrey retreated to his room, where, thanks to Vladimir’s belief that “the future would have something to do with computers,” there was always a machine, as up to date as the family could afford. Vladimir invested great effort in Andrey’s upbringing, engaging a Chinese tutor, a weight-lifting coach, and a chess teacher. But most of Andrey’s learning occurred alone, with his computer. He started with games, usually of the reality-simulating variety. By fourth grade, he was writing code.

Like many young Russians with programming skills, Ternovskiy turned to hacking. When he was eleven, he came upon zloy.org (which translates as angry.org), a hacker forum led by a young man named Sergey (a.k.a. Terminator), who trained his followers in cyber warfare. Using the handle Flashboy, Ternovskiy soon mastered the art of the denial-of-service attack, wherein a target system is paralyzed by a mass of incoming communication requests. Next came Web-site and e-mail hacking, a service he gladly performed for girls who asked nicely. By 2007, at the age of fifteen, Ternovskiy had learned about what hackers call “social engineering”–getting what one wants through deceit or manipulation. Posing as a teacher, Ternovskiy got access to some practice tests before they were delivered to his school.

You can, and should, read the rest here.

]]> http://allthingsd.com/20100510/the-secret-life-of-chatroulettes-hacker-founder/feed/ 0 http://allthingsd.com/20100429/social-e-commerce-goes-into-overdrive-livingsocial-raises-another-14-million/ http://allthingsd.com/20100429/social-e-commerce-goes-into-overdrive-livingsocial-raises-another-14-million/#comments Thu, 29 Apr 2010 11:30:29 +0000 Kara Swisher http://kara.allthingsd.com/?p=27847

Could the social group-buying space get any frothier?

Well, yes, it could.

After the recent $135 million funding of Groupon that valued the Chicago start-up at upwards of an eye-popping $1 billion, rival LivingSocial announced to today that it had raised a more modest $14 million in a Series C round.

The Washington, D.C. start-up had raised $25 million in a Series B venture financing only a month ago. And it raised $10 million on top of that since 2008.

Sources estimated the valuation for LivingSocial is several hundred million dollars now.

The newest round was led by Lightspeed Venture Partners; Earlier investors U.S. Venture Partners, Grotech Ventures and Steve Case’s Revolution are also participating.

Ironically, Case’s former No. 2 at AOL (AOL), Ted Leonsis has been an early investor in Groupon.

LivingSocial said it will use the new pile of cash to expand to dozens of new markets, adding it was launching four new cities now: Portland, Orange County, Charlotte and Philadelphia.

It now operates in 18 cities across the country.

For those in Silicon Valley who do not consider these prices for all these social e-commerce sites high at all, BoomTown is here to tell you that in the real world the figure is not actually modest, except in comparison.

But LivingSocial will need every penny if it is to compete with Groupon and a growing spate of competitors in the local space, much as is also happening in the social status update arena.

The local outcome for most will inevitably be a sale to a big Internet company like Amazon (AMZN).

Or oblivion, especially since so many similar offerings makes the whole market confusing for both local businesses and customers

In general, most offer a daily deal with a huge discount on a wide range of products and services–from spas to skydiving–in dozens of U.S. cities, for large groups of potential buyers on the Web, through email or via social networking sites like Facebook and Twitter.

Using social tools, the idea is use collective buying power to get low prices and push customers to local businesses.

If a deal reaches the number of buyers it needs, which can be in the thousands, these services sell vouchers to the consumers and collect a hefty fee for the sale from the businesses it sends customers to.

The plus for many small businesses is to get a crack at a lot of new consumers–think of it as social networking lead-generation.

This kind of thing has been tried before, of course, centering on consumers who group together to get discounts on items by purchasing in bulk.

In Web 1.0, there were many group-buying sites, most of which failed badly. One of the more high-profile ones, Mercata, received $90 million in funding from investors, including Paul Allen’s Vulcan Ventures.

No matter in 2010!

That’s due to the VC frenzy going on, spurred by winner-take-all theories–Groupon, for example, got most of its recent mountain of cash from champion Russian overspenders, Digital Sky Technologies.

However it turns out, here is LivingSocial’s official press release:

LivingSocial Raises $14 Million Series C Round Led by Lightspeed Venture Partners; Launches in Portland, Orange County, Charlotte and Philadelphia

Company Also Begins Offering Hyperlocal Deals in Seattle Area–Users Can Now Get Deals Even Closer to their Homes

$14 Million Round Comes on Heels of $25 Million Series B Announcement Last Month

Washington D.C., April 29, 2010–LivingSocial, the social commerce leader behind LivingSocial Deals and top Facebook applications Visual Bookshelf and Pick Your Five, today announced that it has completed a $14 million Series C round of venture funding led by Lightspeed Venture Partners, with U.S. Venture Partners, Grotech Ventures and Steve Case’s Revolution, LLC participating. Because of the rapid growth, and high user demand, LivingSocial will use the capital infusion to expand into additional markets–bringing Deals to dozens more cities throughout the U.S. in 2010. This additional funding comes on the heels of the company’s recent $25 million Series B round announced last month.

“We’ve known and admired the LivingSocial team for a long time, and I have bought many of their terrific local offers. They’ve done an excellent job of growing their user base through smart media buying and excellent knowledge of social channels and virality,” said Jeremy Liew, managing director of Lightspeed Venture Partners. “With this financing round, LivingSocial is very well positioned to bring their great offers to even more people.”

LivingSocial is also launching its Deals program in four new markets: Portland, Orange County, Charlotte and Philadelphia. This brings LivingSocial live in 18 cities across the country with major plans to expand to dozens of markets throughout the year.

“We’re constantly receiving requests from our users to expand and launch in their markets, and this recent funding round will allow us to do just that,” said Tim O’Shaughnessy, CEO and co-founder of LivingSocial. “We’re really excited to introduce LivingSocial to Portland, Orange County, Charlotte and Philadelphia to continue generating huge savings for our users and even bigger returns for our merchants.”

LivingSocial users throughout the country saved an average of more than $32 each in March, and have saved tens of millions of dollars since the launch of Deals in 2009. By signing up for LivingSocial’s free daily online service, people are saving an average of 50-70% at their favorite places, such as the hottest local restaurants, spas, sporting events, hotels, and other local attractions.

Because LivingSocial wants to give consumers more availability to the program, the company is launching hyperlocal deals for the Seattle area. Now consumers in areas like Tacoma and Bellevue will start getting deals targeted to their location, in addition to Seattle proper. Hyperlocal deals not only help more consumers explore new things in their city, but these deals also provide merchants with a greater opportunity to reach local audiences on the LivingSocial Deals platform.

LivingSocial is now live in 18 markets including: Washington, D.C., New York City, Boston, Atlanta, Austin, Seattle, San Francisco, Los Angeles, the Twin Cities, Chicago, Raleigh Durham, Denver, San Diego, the San Fernando Valley, Portland, Orange County, Charlotte and Philadelphia. Dozens of additional cities are expected to roll out in the coming months. For more information or to sign up your city, go to http://livingsocial.com.

]]> http://allthingsd.com/20100429/social-e-commerce-goes-into-overdrive-livingsocial-raises-another-14-million/feed/ 3 http://allthingsd.com/20100428/sold-finally-digital-sky-technologies-buys-aols-icq/ http://allthingsd.com/20100428/sold-finally-digital-sky-technologies-buys-aols-icq/#comments Wed, 28 Apr 2010 11:52:52 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=18814 AOL clears another asset off its books, just in time for Q1 earnings: Digital Sky Technologies, the Russian investors with a seemingly insatiable appetite for American Web properties (Facebook, Zynga, etc), is buying Tim Armstrong’s ICQ chat service. They’re paying $187.5 million cash, and AOL expects the deal to close in Q3.

AOL has been auctioning off the service since last fall. By February, it had narrowed the field to four buyers, who were looking to pay around $200 million, Kara Swisher reported. Release:

DIGITAL SKY TECHNOLOGIES TO ACQUIRE AOL’S ICQ INSTANT MESSAGING SERVICE

Moscow / New York – April 28, 2010 – AOL Inc. (NYSE: AOL) and Digital Sky Technologies Limited (DST), the largest Internet company in the Russian-speaking and Eastern European markets, announced today that they have reached an agreement for DST to acquire ICQ – the leading instant messaging service in Russia and a number of other international markets – for $187.5 million.

ICQ was created in 1996 by the Israeli company Mirabilis. AOL acquired the assets of Mirabilis, primarily ICQ, in June 1998. Available in 16 languages, ICQ has more than 32 million unique visitors per month.* Approximately 80 percent of ICQ users are between the ages of 13 and 29 and spend an average of more than five hours a day connected to the service, according to internal data. ICQ has built a successful presence in markets like Russia, Germany, Czech Republic and Israel.

“The acquisition of ICQ is a strategic enhancement of our business in Russia and Eastern Europe.  ICQ’s long-standing brand name and its sizeable loyal customer base together represent a very attractive opportunity to further strengthen our position in the region,” said Yuri Milner, Chief Executive Officer of DST.

“As AOL continues its turnaround effort, we’re fortunate to find a great home for ICQ with DST,” said Tim Armstrong, Chairman and Chief Executive Officer of AOL. “DST is a leading innovator in the Internet investment space and has a significant presence in the markets where ICQ is strong. Founded and run in Israel, ICQ has been a revolutionary company on the Internet. We wish them great success as a part of DST and will be rooting for them going forward.”

*February 2010 comScore Media Metrix data

]]> http://allthingsd.com/20100428/sold-finally-digital-sky-technologies-buys-aols-icq/feed/ 0 http://allthingsd.com/20100423/welcome-to-the-hotel-california-heres-whats-really-happening-in-the-foursquare-pig-pile/ http://allthingsd.com/20100423/welcome-to-the-hotel-california-heres-whats-really-happening-in-the-foursquare-pig-pile/#comments Fri, 23 Apr 2010 08:37:37 +0000 Kara Swisher http://kara.allthingsd.com/?p=27556

No, Facebook is not in serious talks to buy Foursquare. Yet.

No, Microsoft is not poised to snap up the social location start-up, beyond a cursory should-we-look query to itself. Yet.

No, there is no longer a crazy bidding war going on among major venture players in Silicon Valley, all waiting with bated breath for Foursquare founder and CEO Dennis Crowley to make a decision about which of them he will deign to take a big pile of money from.

In fact, Andreessen Horowitz partner Ben Horowitz was entirely correct when he told BoomTown in an interview earlier this week that his firm was dropping out of the race to fund the company:

“This is playing out too much in public and clearly someone has an interesting agenda here, so this is not something we want to participate in.”

Interesting indeed, although cloddish is probably a better word for what the simple process of deciding on funding versus selling has turned into.

New York-based Foursquare, which hit one million users yesterday and is unprofitable, lets its users “check in” from a variety of locations.

It’s an innovative and entertaining concept and a lot of fun, unless you are among those trying to do a deal with Foursquare.

From VCs to Facebook to Yahoo (YHOO)–the only serious bid to acquire Foursquare so far–sources close to every single player mentioned in the hubbub around the start-up expressed stupefaction about the confusion Crowley’s endless Hamlet act has resulted in.

And, in no small measure, annoyance too.

“It’s hard to make rivals all agree on one thing,” said one person close to the situation. “But this just became a pig pile.”

Indeed, that was the impetus for Horowitz speaking on the record about the experience of dealing with Foursquare, a move that was unprecedented.

“If the process was changed, we still like the company,” said Horowitz. “But since it has been long and undefined, it is prone to manipulation.”

While some have suggested that this was just sour grapes on the part of Andreessen Horowitz because Foursquare decided to pass on a lower funding offer it made, others involved–including rival VCs–applauded the move.

“Foursquare is being just as vague and unclear to us, which I think means they don’t know what they want,” said one VC, who has been considering funding it. “No one minds losing out to someone else, as much as feeling like you’re being played.”

The game got another boost today by rumors that Facebook is intently interested in buying Foursquare and delayed its announcement of location features at its f8 conference Wednesday because the social networking site did not want to scotch the impending deal.

Actually, no.

What is true is that Crowley has been to visit Facebook execs, including CEO Mark Zuckerberg, and there were only cursory discussions about a range of possible ways to work together, including a plan to federate third-party location services at the social networking giant.

Also, why not meet?

“It’s was a free look,” said one person with knowledge of the chitchat, the kind that happen all the time between Facebook and companies. “You always say yes when people want to talk, because you can learn a lot.”

As to a purchase: Unlikely at the price of $100 million-plus that Yahoo offered, if ever.

“Yahoo needs a solution in the mobile location and local space, because they have nothing,” said another source of the build-or-buy decision. “Facebook has all the tools it needs, as well as 500 million users used to updating their statuses, so what Foursquare is doing is not hard to replicate.”

As for Microsoft (MSFT), sources said, it, as well as companies like Nokia (NOK), simply have had their interest piqued by all the noise surrounding Foursquare.

That is also typical around hot start-ups, and perhaps more so with Microsoft, since it recently signed a deal with Foursquare to integrate its customer data with the Bing search service’s map apps.

So what’s left? Well, Silicon Valley VCs, of course, who are always interested in a deal.

Despite negligible revenue, Foursquare raised $1.35 million last August, valuing it at $6 million.

Foursquare’s current VCs include O’Reilly AlphaTech Ventures and Union Square Ventures, as well as a spate of well-known angel investors.

New VC valuations have hovered from $50 million to $80 million.

But both Accel Partners and Redpoint Ventures, sources said, do not have active talks going on with Foursquare.

One wild card: Free-spending Russian moneybags Digital Sky Technologies, which has already sunk copious funds into Facebook and games powerhouse Zynga.

For certain, after Andreessen Horowitz pulled out, the last one standing seems to be Gideon Yu of Khosla Ventures.

And while the eager firm has made an offer, sources said, it has yet to hear back from Foursquare, which is taking its sweet time mulling things over, which can’t make Yu happy either.

In other words, mangling the old Eagles song, “Hotel California”: You can check in any time you like, but you can never leave.

So while Crowley searches for the most lucrative exit, let’s enjoy the Eagles classic in this video:

EAGLES – HOTEL CALIFORNIA
Uploaded by hushhush112. – Music videos, artist interviews, concerts and more.

]]> http://allthingsd.com/20100423/welcome-to-the-hotel-california-heres-whats-really-happening-in-the-foursquare-pig-pile/feed/ 11 http://allthingsd.com/20100419/boomtown-reimagines-hamlet-soliloquy-for-foursquare-founder-crowley-as-yahoo-deal-stays-alive/ http://allthingsd.com/20100419/boomtown-reimagines-hamlet-soliloquy-for-foursquare-founder-crowley-as-yahoo-deal-stays-alive/#comments Mon, 19 Apr 2010 19:49:22 +0000 Kara Swisher http://kara.allthingsd.com/?p=27068

Much to the chagrin of valuation-hyping Silicon Valley VCs, Yahoo is still in the running to acquire Foursquare, the hot social geolocation start-up, much longer than expected.

Foursquare’s board met last week about the possible acquisition deal. But, so far, it’s turned it down flat.

Nonetheless, (YHOO) is still interested, sources said.

Yahoo declined to comment, and I have an email into Foursquare, which has yet to respond.

But sources close to the situation said that Foursquare CEO Dennis Crowley is holding his cards very close to the vest about whether Foursquare will reconsider the offer–which could reportedly go up to $125 million to $150 million in cash–from the Internet giant.

Crowley’s alternatives are two powerful venture firms–Andreessen Horowitz and Khosla Ventures–which had put lucrative funding deals on the table, trying to entice Foursquare to remain independent and turbocharge its fast-growing status-update service.

Other big firms have dropped out of the race, although sources said more are now sniffing around, including free-spending Russian moneybags, Digital Sky Technologies. It has already sunk copious funds into social networking giant Facebook, game powerhouse Zynga and, today, social buying site Groupon.

The VC selling point is freedom, the ability to sell for more later and perhaps a more modest payout for talent, including Crowley, by buying some of their common shares. Their valuation is hovering around $80 million.

Crowley (pictured here) controls a large chunk of the shares of the start-up and has so far turned down the $100 million offer from Yahoo, despite the fact that Foursquare is still small (about one million users) and unprofitable.

But it has grown dramatically and raised $1.35 million last August, valuing it at $6 million. Funds came from O’Reilly AlphaTech Ventures and Union Square Ventures, as well as a spate of well-known angel investors.

Yahoo CEO Carol Bartz hopes to best all VC offers after having recently made some significant noise about starting to engage in aggressive M&A to attract talent and inject innovation into the company.

She has mentioned mobile start-ups specifically, and Foursquare is indeed among the hottest in the space, offering its growing base of users an ability to “check in” from a variety of places.

But the location-based services arena is heating up, with multiple competitors to Foursquare, such as Gowalla, as well as recent efforts by Facebook and Twitter to enter the space in a big way.

In fact, Wednesday at its F8 developers event, some expect Facebook to talk about its own version of Foursquare.

Still, Crowley may welcome the challenge after selling a similar location service called Dodgeball to Google (GOOG) in 2005 and ending up with very little. He left the search giant on bad terms two years later, and Dodgeball was closed down by Google in early 2009.

At the time, Crowley called the experience of being at a large company “incredibly frustrating.”

Which is why it will be interesting to see the choice he makes in what one person close to the situation called: “A very deft Hamlet act.”

Until he does, this is a perfect time for my Foursquare version of the indecisive Prince of Denmark’s most famous soliloquy–with apologies to Shakespeare–redone for a New York-based hipster Web 2.0 dude:

Dennis Crowley Does Hamlet:

To sell, or not to sell, that is the question:
Whether ’tis nobler in the mind to suffer
The slings and arrows of outrageous Facebook,
Or to take arms against a sea of Twitters,
And by opposing end them? To die, sleep,
No more; and by a sleep to say we become Digg with
The heart-ache, and the thousand natural shocks
That over-hotness is heir to, ’tis a consummation
Devoutly to be avoid’d. To die, to become Friendster;
To sleep, perchance to be crammed down:
Ay, there’s the rub;
For in that sleep of death what hotter start-ups may come,
When we have shuffled off this overhyped coil,
Must give us pause to check in constantly:
there’s the respect
That makes calamity of so long it takes for funding;
For who would bear the whips and scorns of bloggers,
The oppressor’s wrong, the proud man’s contumely,
The pangs of despis’d love by Andreessen and Yu,
the law’s delay,
The stalker ways of those scary Russian investors,
and the spurns
That patient merit of the unworthy lowball offers,
When he himself might his quietus make
With a bare bodkin of no profits?
Who would these fardels bear,
To grunt and sweat under a Yahoo life,
But that the dread of something after death,
The undiscover’d acquisition, from whose bourn
No Flickr returns, puzzles the will,
And makes us rather bear those ills we have
Than fly to VCs that we know naught of?
Thus overvaluation does make greedy piggies of us all;
And thus the native hue of resolution
Is sicklied o’er with the pale cast of Pets.com;
And Web 1.0 enterprises of great pith and moment,
With this regard, their currents turn awry,
And as was predicted by Economics 101.

]]> http://allthingsd.com/20100419/boomtown-reimagines-hamlet-soliloquy-for-foursquare-founder-crowley-as-yahoo-deal-stays-alive/feed/ 1 http://allthingsd.com/20100418/groupon-grabs-135-million-from-dst-and-battery-valuation-above-1-billion-for-social-buying-site/ http://allthingsd.com/20100418/groupon-grabs-135-million-from-dst-and-battery-valuation-above-1-billion-for-social-buying-site/#comments Mon, 19 Apr 2010 02:07:24 +0000 Kara Swisher http://kara.allthingsd.com/?p=26948

Groupon, the social buying site that has become one of the hotter start-ups of late, has gotten a giant round of funding from the same Russian investors that backed social networking powerhouse Facebook and game phenom Zynga.

Digital Sky Technologies is the main funder of the round, but Battery Ventures is also participating.

The money, the company said, will be used to grow the business–and to speed far ahead of numerous rivals–as well as cash out employees and early investors.

Groupon is profitable and has 270 employees.

In December, Groupon nabbed $30 million in its second round of funding, led by Accel Partners.

The innovative Chicago-based service, which launched only a year ago, previously received $4.8 million in funding from New Enterprise Associates, as well as $1 million from an angel investor.

Groupon features a daily deal with a huge discount on a wide range of products and services–from spas to skydiving–in dozens of U.S. cities, including Chicago, Boston, New York and San Francisco, for large groups of potential buyers on the Web, through email or via social networking sites like Facebook and Twitter.

Using social tools, Groupon–a mashup term for “group” and “coupon”–tries to use collective buying power to get low prices and push customers to local businesses.

If it reaches the number of buyers it needs, which can be in the thousands, Groupon sells coupons to the consumers and collects a hefty fee for the sale from the businesses it sends customers to.

At the cost of discounting and paying off Groupon, small businesses get a crack at a lot of new customers–think of it as social networking lead-generation or perhaps, the “Social Shopping Network.”

Groupon grew out of a project of The Point, an online community launched in 2007 for organizing group action.

This kind of thing has been tried before, of course, centering on consumers who group together to get discounts on items by purchasing in bulk.

In Web 1.0, there were many group-buying sites, most of which failed badly. One of the more high-profile ones, Mercata, received $90 million in funding from investors, including Paul Allen’s Vulcan Ventures.

But now the group-buying space has been reinvigorated, with a spate of competitors, some of which are clear copycats of Groupon.

Here’s an interview BoomTown did with Groupon CEO and founder Andrew Mason, one of the more affable and level-headed entrepreneurs around–at least until this megafunding. (Don’t go changing, Andrew!)

I have been quite interested in the innovative Groupon, as I said in that post in March:

“The last time I really was truly bullish on a start-up and its founder–BoomTown’s motto is wait-and-see rather than hype-it-up–was AdMob’s Omar Hamoui. That turned out pretty well, with the sale of the mobile advertising site to Google (GOOG) for $750 million last fall. My 2010 start-up that passes the slightly-less-raised-eyebrow test is Groupon.”

Here’s the video interview with Mason:

Here’s the official press release:

GROUPON RECEIVES $135 MILLION FROM DST AND BATTERY VENTURES

Investment to Support Rapid Growth of Social Commerce Globally

Chicago/Moscow, April. 19, 2010–Groupon, the leading social commerce site, today announced that DST, a leading global internet investment group, will lead an investment round of $135 million in the Company. A portion of the investment will be used to fuel Groupon’s global expansion, and the rest will be used to facilitate liquidity for employees and early investors.

DST comprises the majority of the investment, with participation from Battery Ventures, which is also a new investor in Groupon.

Groupon leverages group buying and social media to provide its millions of customers big discounts on the best local businesses in more than 50 cities across the United States and in Canada. To date, customers have purchased over four million Groupons on deals ranging from spa treatments and golf outings to fine dining and skydiving and have collectively saved over $150 million on these deals.

“Our growth is a reflection of the positive impact Groupon is having on consumers and businesses at a very early stage of the market development,” said Andrew Mason, founder and CEO of Groupon. “We are very pleased and excited to welcome DST and Battery as shareholders and we look forward to benefiting from their vast knowledge and experience of the social media sector as we continue executing on our growth plans in North America and globally.”

“This investment underscores our view that social networking and community based activity will drive, shape and define the web’s evolution in the years ahead,” said Yuri Milner, Chief Executive of DST. “Groupon, with its strong management team, offering and vision, is pioneering social commerce and is redefining the local advertising space. We look forward to being long-term partners of a company that is on a path to becoming a global Internet leader.”

“We’ve followed the social commerce phenomenon for many years, and are thrilled to have the chance to back such a visionary management team,” said Roger Lee, General Partner, Battery Ventures. “They saw a massive opportunity very early, and have executed flawlessly to define it and take the leadership position. We think there is a lot of runway ahead, and are energized to support the team in their quest.”

Founded in November 2008, Groupon has been aggressively expanding to cities throughout the United States, with plans to be in 100 cities by the end of 2010. Earlier today Groupon announced that it has launched its service in Orlando, Fort Worth, Tucson and Toronto, its Canadian city.

]]> http://allthingsd.com/20100418/groupon-grabs-135-million-from-dst-and-battery-valuation-above-1-billion-for-social-buying-site/feed/ 2 http://allthingsd.com/20100416/can-yahoo-nab-foursquare-for-125-million-or-will-vcs-prevail-the-race-for-the-hot-mobile-start-up-nears-its-end/ http://allthingsd.com/20100416/can-yahoo-nab-foursquare-for-125-million-or-will-vcs-prevail-the-race-for-the-hot-mobile-start-up-nears-its-end/#comments Fri, 16 Apr 2010 16:54:48 +0000 Kara Swisher http://kara.allthingsd.com/?p=26841

You have to give Yahoo an A for effort, if perhaps the ultimate grade in its ongoing quest to buy hot mobile social network Foursquare is an F.

While Foursquare founder Dennis Crowley–who controls a large chunk of the shares of the start-up–has so far turned down several $100 million-plus offers from Yahoo, sources said the company’s newish head of mergers and acquisitions, Andrew Siegel, is back in New York today still trying to convince him to sell.

So far, especially because the effort has dragged on for a while and Yahoo (YHOO) has not made an overwhelmingly massive show of financial might, Crowley appears to have develop a case of cold feet about marrying the Internet giant.

Sources said Foursquare has so far turned down Yahoo flat.

Meanwhile, two powerful venture firms–Andreessen Horowitz and Khosla Ventures–are putting lucrative new funding deals on the table, trying to entice Foursquare to remain independent and turbocharge its fast-growing status-update service.

Other big firms have dropped out of the race, although sources said more are now sniffing around, including free-spending Russian moneybags, Digital Sky Technologies, which has already sunk copious funds into social networking giant Facebook and games powerhouse Zynga.

Their selling point is freedom, the ability to sell for more later and perhaps a more modest payout for talent, including Crowley, by buying some of their common shares. Their valuation is hovering around $100 million.

“Why sell now, when they are on a roll no one is going to catch them for a year at least,” said one person involved in talks with Foursquare. “There is a lot of benefit in waiting to cash in totally.”

Foursquare has grown dramatically, from 50,000 users less than a year ago to closing in on one million soon.

Despite negligible revenue, Foursquare raised $1.35 million last August, valuing it at $6 million.

Foursquare’s VCs include O’Reilly AlphaTech Ventures and Union Square Ventures, as well as a spate of well-known angel investors.

The choice for Crowley: Take the big pile of money from Yahoo–which is offering all cash, giving Crowley a huge windfall–and run, or double down with VCs.

“Yahoo should just pay a huge premium and scare away the VCs to become relevant among the cool kids again,” said one person close to the situation. “”In my mind, it’s a litmus test for Yahoo.”

Yahoo is well known in the tech space for hemming and hawing over acquisitions. Dithering over price and copyright issues, it famously lost a nearly completed purchase of YouTube to Google (GOOG), which swooped in with a bigger and cleaner offer almost overnight.

A similar scenario played out when Yahoo tried to buy Facebook when it was very small. Facebook not only remained independent but is considered to have surpassed the once mighty company in innovation and consumer appeal.

In addition, as many big companies have, Yahoo has bungled purchases of hot start-ups before, such as Flickr, the pioneering online photo service.

But CEO Carol Bartz has recently made some significant noise about Yahoo starting to engage in some aggressive M&A to attract talent and inject innovation into the company.

Internally, sources said she has told staff that Yahoo has to start engaging externally and with force.

She has mentioned mobile start-ups specifically, and Foursquare is indeed among the hottest in the space, offering its growing base of users an ability to “check in” from a variety of places.

The location-based services arena is heating up, with multiple competitors to Foursquare, such as Gowalla, as well as recent efforts by Facebook and Twitter to enter the space in a big way.

Still, Foursquare is the start-up of the moment among the digerati, striking deals with a wide range of partners, as well as tech giants like Microsoft (MSFT).

Thus, it has attracted a lot of look-sees, from AOL (AOL), Twitter and Google, although none have made a serious effort to buy Foursquare.

Even Facebook has contemplated the start-up, although it is more likely to try replicating its own version of Foursquare, which is could announce at its F8 developers event next week.

Twitter also indicated at its own conference this past week that it will continue to offer similar location features.

The challenge for Foursquare’s Crowley is in the timing, and deciding if he can look such a large gift horse in the mouth.

He sold a similar location service called Dodgeball to Google in 2005, but left the search giant on bad terms two years later. Dodgeball was closed down by Google in early 2009.

At the time, Crowley called the experience of being at a large company “incredibly frustrating,” while Google sources said Crowley was a bit of a frustration to them.

Translation: No tears were shed on either side by his leaving.

In any case, he rebounded with Foursquare and is now being pursued again in the throw-caution-to-the-wind manner some entrepreneurs enjoy.

“It’s an insane offer, in a lot ways, but big enough that we all have to take it seriously,” said one person close to Foursquare.

Insane is what some think Yahoo has to be.

“Yahoo needs to kneecap everyone near Foursquare,” said one with knowledge of the situation. “This is a strategic purchase, not one based on any metric of revenue or users, so it’s just as crazy at $100 million as at $150 million.”

Well, a little crazier, but you get the point.

Yahoo declined to comment, and I have an email into Foursquare, which has yet to respond.

Silicon Alley Insider first wrote about Yahoo’s interest in Foursquare about two weeks ago.

]]> http://allthingsd.com/20100416/can-yahoo-nab-foursquare-for-125-million-or-will-vcs-prevail-the-race-for-the-hot-mobile-start-up-nears-its-end/feed/ 2 http://allthingsd.com/20100208/the-bids-are-in-for-aols-sale-of-icq-its-down-to-a-u-n-of-four-buyers/ http://allthingsd.com/20100208/the-bids-are-in-for-aols-sale-of-icq-its-down-to-a-u-n-of-four-buyers/#comments Mon, 08 Feb 2010 13:02:26 +0000 Kara Swisher http://kara.allthingsd.com/?p=24126

AOL has taken another step closer to selling off its ICQ instant messaging service, culling seven bids to four “serious” ones, said sources close to the situation.

The price for the service is hovering just under $200 million, several sources said, with one bid higher.

An AOL spokeswoman declined to comment.

BoomTown reported news of the sale of ICQ by AOL (AOL) in November, part of a deleveraging of units from the newly independent Internet company as it focuses more on its content and advertising business.

While other reports a month later said the sale was closer to completion than it actually was, the process is proceeding in a more traditional manner, with bidders making proposals to AOL’s investment bankers, Allen & Co. and Morgan Stanley (MS).

Sources said that the solicitation of bids is now over and that there are four “serious” ones, which one person close to the situation described as a “U.N. of buyers.”

Translation: The bidders are likelier to be international Internet companies rather than from the U.S.

That’s because ICQ–which has 40 to 50 million active users across the globe–has a stronger overseas business, especially in Germany, Russia, Eastern Europe and Israel.

While I could not get the exact names of those left in the running, the most obvious possibilities include:

Russian investment group Digital Sky Technologies, which has invested in both Facebook and social gaming site Zynga; China’s huge Tencent-owned QQ instant messaging and gaming service; Naspers, a multimedia giant known as the MIH Group and based in South Africa; Seznam, the largest Web portal in the Czech Republic; and, perhaps, Yandex, Russia’s leading search engine.

In the U.S., some felt Google (GOOG) would be a bidder for ICQ, though it was Yahoo (YHOO) that apparently made a much lower offer, which took it out of the running.

In any case, the price will likely be much lower than what AOL paid in 1998.

The then-powerful AOL acquired ICQ, which was one of the most explosive online communications tools, for $287 million, with another $120 million in earnouts for the team. It was part of a Tel Aviv, Israel, start-up called Mirabilis.

But ICQ’s popularity in the U.S. lagged compared with rival services from Microsoft (MSFT), Yahoo and Google. In addition, Facebook and Twitter have become major players in the status-update space.

AOL’s AIM service, in contrast, is quite strong, typically clocking in as one of the top instant messaging properties.

ICQ is still based in Israel with about 100 employees and is moderately profitable. Bidders, sources said, are now talking with the ICQ team as part of the process.

]]> http://allthingsd.com/20100208/the-bids-are-in-for-aols-sale-of-icq-its-down-to-a-u-n-of-four-buyers/feed/ 1 http://allthingsd.com/20100127/with-google-gone-elevation-invests-in-yelp-just-like-it-wanted-to/ http://allthingsd.com/20100127/with-google-gone-elevation-invests-in-yelp-just-like-it-wanted-to/#comments Thu, 28 Jan 2010 05:15:46 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=15614 Whatever happened between Google and Yelp is now officially kaput. Instead of selling the entire company to the search giant, Yelp’s owners will be taking up to $100 million in funding from private equity shop Elevation Partners.

I still don’t know how close Google (GOOG) and Yelp came to actually consummating a transaction, but Elevation’s involvement does clear one thing up. As I noted in December when news of the would-be Google deal broke, Yelp had already been exploring a large funding round. And now sources tell me that Elevation had been in the mix for months.

Elevation, whose most prominent portfolio company to date has been Palm (PALM), will put $25 million into the local reviews site for expansion and has earmarked up to $75 million more to buy shares from employees. That structure is similar to the deals Russian investors Digital Sky Technologies have done with Facebook and Zynga–and as in those deals, the Elevation bet means any public offering has likely been pushed back by a year or more.

BusinessWeek pegs the value of the round at $475 million. TechCrunch first reported Elevation’s involvement earlier this month.

]]> http://allthingsd.com/20100127/with-google-gone-elevation-invests-in-yelp-just-like-it-wanted-to/feed/ 0 http://allthingsd.com/20091218/zyngas-mark-pincus-talks-about-big-funding-offer-ad-controversies-and-more/ http://allthingsd.com/20091218/zyngas-mark-pincus-talks-about-big-funding-offer-ad-controversies-and-more/#comments Fri, 18 Dec 2009 11:32:42 +0000 Kara Swisher http://kara.allthingsd.com/?p=22050

Just days after selling $180 million in private stock to a group of investors, including Facebook funder Digital Sky Technologies of Russia, Zynga’s Mark Pincus came to visit the BoomTown Worldwide HQ for a video interview.

The San Franisco-based Zynga creates and distributes online games, including Mafia Wars and FarmVille, which are played on social networking sites like Facebook. It claims 60 million active daily users.

While playing, users can also buy virtual goods with real dollars.

Zynga took the pile of money, Pincus explained to me, so it would not have to do what everyone thought it was set to do soon: Go public.

But with 700 employees and a reported annual revenue “run rate” of $300 million, the fast-growing start-up needed more options, he added.

Thus, rather than selling out or going public, Pincus went for megafunding, a path similar to the one Facebook took.

Along with DST, which accounted for the majority of the funding, investors include Andreessen Horowitz, Tiger Global and Institutional Ventures Partners.

Previous investors in Zynga are Union Square Ventures, Clarium Capital, Foundry Group, Avalon Ventures, Pilot Group, Kleiner Perkins, along with personal investments from Silicon Valley players such as Reid Hoffman.

Pincus will need all that cash given that the arena is heating up and consolidating fast.

Playfish, a competitor, was recently snapped up by Electronic Arts (ERTS) for $275 million in cash and $125 million more in stock and earn-outs, for example.

This is not a fate Pincus says he wants for Zynga, instead insisting he would rather create a powerful and innovative standalone gaming company of the future.

Obviously, Zynga is the big shot at that prize for the longtime entrepreneur, whom I met way back when I was a reporter in Washington, D.C., in the early 1990s, when Pincus co-founded another start-up, called Freeloader.

In our interview, Pincus talks about the new infusion of cash, controversies around questionable “offer” advertisements that appeared on Zynga’s site and more.

Here’s the longish video:

And here is a video interview I did with Pincus, back in May of last year:

]]> http://allthingsd.com/20091218/zyngas-mark-pincus-talks-about-big-funding-offer-ad-controversies-and-more/feed/ 2 http://allthingsd.com/20091216/dst-invests-in-a-farmville-plot/ http://allthingsd.com/20091216/dst-invests-in-a-farmville-plot/#comments Wed, 16 Dec 2009 20:41:43 +0000 Andrew LaVallee http://voices.allthingsd.com/?p=19210 Digital Sky Technologies, a Russian firm that has pursued investments in Facebook and AOL’s ICQ, said Wednesday that it is buying a $180 million stake in social-gaming company Zynga.

Zynga, which is closely held and based in San Francisco, is behind casual videogames like FarmVille and Mafia Wars, which have become popular time-wasters on Facebook and MySpace. It says that more than 230 million consumers play its games each month.

The company makes money through online advertising and sales of virtual goods in its games, and it said it will use DST’s investment for further growth.

Read the rest of this post on the original site

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