If you want a quick analysis of why Facebook would pay $1 billion for popular photo-sharing service Instagram, please ignore the obvious financials that just don’t add up at all and have most of the typically unshockable digerati shocked by the sheer amount of the price.

Actually, it’s pretty simple: Photos. Photos. And, oh yes, mobile photos — lots and lots and lots of them.

Astonishingly, Facebook users already upload an average of more than 250 million images daily, making it the most popular photo-sharing service on the Web.

But it’s not the best by far and not the most mobile, which is Facebook’s biggest weakness — that has been accomplished many others, especially Instagram, the favorite of power users who scoffed at Facebook’s weak tools. (The horror of no filters!)

Now — instead of all those billions of juicy digital photos snapped by an ever-growing legion of smartphone users loading up to the beautifully designed Instagram mobile app and living on the servers of the small San Francisco-based start-up — Facebook has now captured all these memories for its massive social networking site.

And while $1 billion seems an awful lot to pay for that privilege — Twitter is quaking with “OMG!” and “Wow!” and “WTF!” tweets about the acquisition — this is apparently priceless for Facebook in a deal that went down quickly and quietly in recent weeks.

That and the fact that the huge sum prevented Instagram from being scooped up by Google.

It’s a clear signal from CEO and co-founder Mark Zuckerberg — who rules all product efforts at the company — of his intent to dominate all innovations that have to do with owning the social experience.

Because while many Instagram photos quickly made their way onto Facebook — sharing on the service, as well as on Twitter, was a big part of the app’s offering — the future of the Menlo Park, Calif.-based company is tied to having control over key elements of the user experience.

Of all of those — communications, status updates, content linking — it has been photos that have become perhaps the most important part of Facebook, almost since its beginnings.

Photos are what allowed Facebook to grow so quickly and what made it more than just a blue sea of text and links to consumers. Its new Timeline depends on big, pretty photos, and Facebook even recently announced that it would allow full-screen viewing of high-resolution photos on its Web site, a pricey endeavor.

So, perhaps it was inevitable that Zuckerberg would pay up for Instagram, too — he knows a good entrepreneurial success when he sees one and apparently has the power to convince start-ups that he can make their bigger dreams come true.

Whether or not Instagram ever makes money is perhaps beside the point at this moment in time, as Facebook is poised to go public at 100 times the amount it forked over for Instagram.

But that it considers such a purchase worth as much as one percent of its expected valuation says a thousands words. And most of those words are “mobile” and “photo.”

As Ben Jacobs noted on Twitter: “Kodak goes bankrupt and Instagram is worth a billion dollars. 2012, y’all.”

Indeed. And, I have no doubt if Zuckerberg could figure out a way to shove all those Kodak moments from analog snapshots onto Facebook easily, he’d have paid up for that, too.

Facebook has just announced that it will acquire Instagram, the popular mobile photo-sharing service, for $1 billion in cash and shares.

The social networking giant posted on the acquisition, its biggest yet, on its site, as well as on CEO and co-founder Mark Zuckerberg’s Timeline on Facebook.

Photos are critically important for Facebook, which has been slow to innovate in the fast-growing mobile arena in the important consumer space. By contrast, Instagram has taken the arena by storm, with its delightful and elegant app and the motto, “Fast beautiful photo sharing.”

Consumers have responded (including me — it is the only non-communications app I use many times a day). The San Francisco-based company — with only 13 employees — had 30 million Apple iPhone users before it came to Google’s Android last week, where it got more than a million new users in just 12 hours.

Still, despite all the usage, Instagram had not articulated a plan for, you know, making money. Now, that will presumably be Facebook’s problem to solve.

The Facebook acquisition has been kept very quiet, with its CEO Kevin Systrom working on it in conjunction with new fundraising efforts that would have valued the company at $500 million. Liz Gannes reported on this effort last week, which was poised to close, in fact, before the Facebook deal was struck over the weekend.

Until now, Instagram has received Series A funding of $7 million led by Benchmark Capital just over a year ago, when it only had 1.75 million registered users.

Seed investors include Andreessen Horowitz — which did not follow on later — and Baseline Ventures. Also in the Benchmark round: Twitter creator Jack Dorsey, former Facebooker Adam D’Angelo and Chris Sacca.

In a blog post titled “Instagram + Facebook,” Systrom promised no change, except for the $1 billion mountain of cash:

“It’s important to be clear that Instagram is not going away. We’ll be working with Facebook to evolve Instagram and build the network … The Instagram app will still be the same one you know and love.”

Zuckerberg also promised that Facebook would keep Instagram independent, and that such a large purchase would be rare for the company, which is set to go public soon.

“This is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users,” he wrote. “We don’t plan on doing many more of these, if any at all.”

Here is the full press release from Facebook:

Facebook to Acquire Instagram

MENLO PARK, CALIF. — April 9, 2012 — Facebook announced today that it has reached an agreement to acquire Instagram, a fun, popular photo-sharing app for mobile devices.

The total consideration for San Francisco-based Instagram is approximately $1 billion in a combination of cash and shares of Facebook. The transaction, which is subject to customary closing conditions, is expected to close later this quarter.

Mark Zuckerberg, founder and CEO of Facebook, posted about the transaction on his Timeline:

I’m excited to share the news that we’ve agreed to acquire Instagram and that their talented team will be joining Facebook.

For years, we’ve focused on building the best experience for sharing photos with your friends and family. Now, we’ll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests.

We believe these are different experiences that complement each other. But in order to do this well, we need to be mindful about keeping and building on Instagram’s strengths and features rather than just trying to integrate everything into Facebook.

That’s why we’re committed to building and growing Instagram independently. Millions of people around the world love the Instagram app and the brand associated with it, and our goal is to help spread this app and brand to even more people.

We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience. We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook.

These and many other features are important parts of the Instagram experience and we understand that. We will try to learn from Instagram’s experience to build similar features into our other products. At the same time, we will try to help Instagram continue to grow by using Facebook’s strong engineering team and infrastructure.

This is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users. We don’t plan on doing many more of these, if any at all. But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together.

We’re looking forward to working with the Instagram team and to all of the great new experiences we’re going to be able to build together.

The Menlo Park, Calif., venture firm, which has backed tech companies such as Google Inc. and Zynga Inc., is preparing to raise its 15th early stage fund — which is regarded as its main fund — said these people. Kleiner has told investors its new fund will be around the same size as its prior early stage fund, Fund XIV, which it raised in 2010 sized at around $650 million, said these people.

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The company, founded by Ren Ng in 2006, has built a whole new kind of camera capable of performing a number of tricks that standard digital cameras just can’t do. The technology works by capturing a whole scene and digitally recording all the light available, instead of bringing a specific element into focus.

Lytro calls the resulting images “living pictures,” because each one contains more data than the single visible frame can display. After taking the picture, users of the camera can choose what they want in focus, and even switch between 2D and a subtle 3D image.

“We’re capturing this multi-dimensional set of data and… we can create some really really different and amazing pictures,” Lytro Chairman Charles Chi said, while demonstrating the camera on stage at AsiaD.

In addition to its bag of tricks, Lytro is touting the speed of the camera. Because the camera doesn’t need to focus, the image capture is nearly instantaneous. The light field technology also improves picture-taking in dark places without a flash.

The technology is an outgrowth of Ng’s doctoral work at Stanford in what is called “light field” imaging.

Ng hopes Lytro can upset a digital camera industry that has been dominated by the Japanese giants of imaging, Canon and Nikon, for generations. Its first cameras will ship early next year, with models starting at $399.

As for the camera itself, it boasts an f/2 aperture even when using its 8x zoom. It only has two buttons, with a touch surface used for the zooming. The back of the camera is a small multitouch screen that can be used to compose and view pictures.

The technology behind Lytro is compelling enough to have attracted $50 million in venture investment to date, including sizable chunks from Andreessen Horowitz, Greylock Partners, K9, and NEA.

All are hoping Lytro can take a serious chunk out of the traditional digital camera industry, which the company claimed was worth nearly $40 billion in 2010.

AllThingsD‘s Ina Fried contributed from Hong Kong.

Speaking on a panel at the Global Technology Symposium in Menlo Park on Friday, Yahoo’s Steven Mitzenmacher said the company had gone through a couple of years where acquisitions weren’t on the agenda.

“But we’ve come out now…guns blazing,” he said, adding that executives around the company “want to do more.” Yahoo made only a handful of buys over the last couple of years, including web content provider Associated Content for $100 million last May.

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News of the move was first reported in the Palo Alto Daily Post in November, and multiple reports of real-estate transactions have been published since. (Those realtors are a chatty bunch!)

Facebook will finally make things official on Tuesday at Menlo Park City Hall.

Its relatively new office complex is on the east side of Highway 101, near the Dumbarton Bridge and not much else. It was formerly occupied by Sun Microsystems, which moved out after being bought by Oracle. When Sun occupied the buildings, most employees had private offices, so Facebook has already been working to tear down walls to create the sort of open floor plan it enjoys at its current office. According to a former Sun employee, every time he’s passed by in recent weeks, the dumpsters have been overstuffed with detritus.

Coincidentally, the address for the new office park is 1601 Willow Road; Facebook’s current main building is 1601 S. California Avenue in Palo Alto.

Facebook’s current offices in Stanford Research Park are definitely less cool than the company’s original home, which was surrounded by restaurants and cafés in downtown Palo Alto. And eastern Menlo Park is much, much less cool. It’s also less bikeable and convenient to public transportation.

But it is considerable consolation to employees that the campus is more accessible to San Francisco, especially relative to most other nearby major tech campuses in the deep south Peninsula and South Bay.

Facebook moved to its current offices in just 2009, and has since expanded down the street to a building on Page Mill Road that currently holds much of its nontechnical staff. The company currently employs 2,000 people, although sources say it expects to grow to as many as 3,500 before the end of 2011.

Staffers don’t have much reason to venture out, since they are fed three gourmet meals a day plus unlimited snacks.

Prior to the 2009 move, Facebook had expanded to 10 or more buildings in downtown Palo Alto, where it had operated since formalizing operations after being founded by Mark Zuckerberg and some of his Harvard classmates in 2004. The company celebrated its seventh birthday last week.

For most of those years, Facebook offered employees a $600 monthly stipend if they lived within a mile of the offices. When the company uprooted itself two years ago to California Avenue and ended the stipend program, many employees moved their homes out of the immediate area. Facebook now offers multiple shuttles per day from San Francisco and from Caltrain stations near its offices.

Moving from Palo Alto’s main business district to a quiet office park owned by Stanford was a big change for the company, but a necessary one after it outgrew the downtown area. Many of the company’s former downtown offices are now occupied by the analytics start-up Palantir.

Those noisy, frequent shuttle buses that come with a swarm of young employees migrating to work every day are among the annoyances that caused much tension with the residential neighborhood that surrounds Facebook’s current office on California Avenue. Residents of the College Terrace neighborhood have persuaded the city of Palo Alto to institute an actively enforced two-hour parking limit, in part to keep Facebooker vehicles contained in the company’s designated parking lots.

Commenters on local news discussion boards complain that these NIMBY folks drove Facebook, its employees’ business and corporate tax revenue out of town. But the reality is that the social networking giant is too big for its current space, which it had said from the beginning was temporary.

The new Menlo Park campus has 57 acres and one million square feet of office space, and Facebook has already reportedly purchased nearby buildings, likely to ensure it has room for further growth.

Plus, fostering a close-knit pod of employees all living within walking distance of the office has become less important as Facebook expanded. With the company saying it’s likely to go public next year, expectations are that many employees will be buying mansions in the suburbs and pieds-à-terre in the city soon enough.

(You might ask, why do I know so much about the minutiae of Facebook’s office locations? Well, in addition to having covered the company for the last six years or so, I grew up in Palo Alto, my mother lives around the block from Facebook’s current offices (where I am now in constant fear of parking tickets) and my husband (as mentioned in my ethics statement) has done research for the company off and on for the last three years.)

And, in case that’s hard to remember, for short we will refer to it as “so-lo-mo,” like do-re-mi from the “Sound of Music,” except without much “Glee” for retailers.

That’s because other than the recession, this past year may represent the biggest challenge for the retail industry since the mid-’90s, when e-commerce was born.

Here’s how this daunting, yet exciting and opportunistic, trifecta played out this year:

Mobile: There’s definitely an app for that. As smartphones go mainstream, savvy shoppers use apps to price-check and read reviews of products in the store.

Result: Retailers watch in horror as shoppers leave their stores empty-handed and drive across town to another store or go online to order a different or cheaper product.

Social: Friends and social circles influence purchase decisions through the rise of Facebook and Twitter. Users check in on apps, such as Foursquare and shopkick, for discounts and incentives.

Result: Retailers who don’t bone up on their social media skills may miss out on generating conversations across the Web that result in online sales or traffic to their stores.

Local: Advertising begins shifting to Groupon and LivingSocial, as group discounting and daily deals gain popularity.

Result: At least initially, these deals have been successful at locking in sales for local stores and restaurants looking for a bump in visitors.

These trends led Cathy Halligan to leave her cushy job as chief marketing officer of Wal-Mart Stores, the world’s biggest retailer, for PowerReviews, an obscure social commerce early-stage start-up.

As the company’s SVP of marketing and sales, she explains her decision:

“I’ve been in retail for 22 years, and starting in fourth quarter of last year, I saw that consumers were adopting different tools, techniques and shopping methodologies at scale. I saw things like Groupon and Foursquare, and then there were things like [eBay's] RedLaser, which lets you scan an item on a retailer’s shelf to get a price from the retailer across the street.”

That’s a catastrophic change she hasn’t seen since her days at Blue Nile when the high-end jewelry e-retailer was just getting off the ground.

The big difference with these trends in 2010 vs. e-commerce in the mid-90s, she said, is adoption: “Consumers are adopting stuff and actually using it.”

The uptick in behavior started occurring as early as the first quarter.

Now, at the San Francisco-based company, she’s mostly focused on the social component of the retail experience.

The PowerReviews platform works across more than a thousand e-commerce sites, including REI’s, and Diapers.com (now owned by Amazon), to let consumers leave messages about products and link their reviews to their Facebook profile, if they choose.

In 2010, Facebook shifted the shopping scene to become one of the leading ways people discovered new products, she said.

The social network did so by becoming a significant source of referral traffic to e-commerce sites–and, in some cases, surpassing Google. The “Like” button allowed users to connect to brands and helped them spread virally.

The most stunning example of the year, in her opinion, was when Apple released the Beatles on iTunes and more referrals came from Facebook than from Google.

Eva Manolis, Amazon’s VP of retail customer experience, had a contrarian viewpoint for the online behemoth.

“There’s still a ton to be done. Social hasn’t really gotten farther than sending an email,” she said.

Amazon allows users to log in to their Facebook account on the site in order to get recommendations for bands, movies, etc., based on what their friends have “Liked,” but she says one of the more exciting social uses is the Wish List functionality that allows users to tag products from all over the Web to a list.

The feature is 11 years old, but it was particular popular during the 2010 holiday season, with Wish List purchases increasing six times compared to the rest of the year. Manolis said it’s logical that “the rise in being more comfortable with social is making Wish List more popular.”

But if it’s not social, it’s mobile that’s creating retail disruption this year.

EBay is not the only major retailer that has a price-comparison app. Among many barcode readers, Google has one. And this year, Amazon launched Price Check on the iPhone, which allows users to search by scanning a barcode, clicking a picture of a product or speaking the product’s name into the phone.

This week, Amazon disclosed that there were millions of Price Checks from Black Friday through its Free Super-Saver Shipping cutoff date for delivery before Christmas.

Mobile also often intersects with social.

Take shopkick, the Menlo Park, Calif.-based start-up that already counts big retailers as its clients, including Target, Macy’s, Best Buy and others.

CEO Cyriac Roeding, a former EVP for CBS’s mobile unit, created the concept to get people inside stores by giving points and other rewards to consumers who check in on their mobile phones.

Founded in the summer of 2009, shopkick is already getting some positive feedback. Sports Authority details its experiences after running several tests over a four-month period. After increasing the amount of rewards they gave, the sporting-goods store saw a 50 to 70 percent increase in shoppers walking into the store.

Users can then exchange the “kickbucks” for gift cards, Facebook Credits and more, or retailers can provide discounts on items in the store.

Likewise, Foursquare also tries to encourage consumer loyalty.

Merchants may team up with the so-lo-mo network to offer discounts or other incentives for check-ins, or for those who visit often enough to become the “Mayor.” While discounts and incentives were only beginning to take off at the start of the year, Foursquare now has a steady stream.

Just take the middle of nowhere as an example: The Pizza Hut in El Dorado, Kan., will award the Foursquare Mayor one free order of breadsticks per day with purchase of a large pizza. And in neighboring Wichita, Payless ShoeSource is giving first-time check-ins $5 off any $25 purchase.

The idea of being rewarded for being a consumer is getting a lot of heat of late, as retailers seek to take advantage of the fast-moving social phenom among consumers, especially young ones.

Thus, a wide range of efforts to combine location-based mobile apps with purchasing, both online and offline.

Earlier this week, BoomTown posted on a funding for one such start-up, Topguest, which links check-ins with airline and hotel loyalty programs.

Today, another company in the space, shopkick, announced it had added another store–Minneapolis-based Target–to its list of retailers deploying its platform and mobile app.

As with customers of Macy’s, Best Buy and others, users of the shopkick app will receive points and other rewards, as well as instant mobile coupons, just for walking in the store.

The point being: Retailers need to reward foot traffic and not just purchases.

The Target partnership is limited now to 242 stores in the Chicago, Dallas, Los Angeles, Miami, Minneapolis, New York City and the San Francisco area.

Target will also offer scannable mobile coupons to customers for redemption at checkout.

It will be interesting to see how effective apps such as shopkick are as they roll out, as consumers test them.

Unlike others that offer quick deals–from Foursquare to Facebook to, now, Yahoo–shopkick uses its “kickbucks” as an enticement simply for being present in a store or scanning certain barcodes.

It’s certainly easy enough–my son, Louie, did it with ease and definite enjoyment–although a user does need to remember to fire up the app when entering a participating store.

There is also a small device retailers need to install need to make the shopkick ecosystem work.

CEO Cyriac Roeding, a former EVP for CBS’ mobile unit, created the concept for the Menlo Park, Calif.-based start-up while an entrepreneur-in-residence at Kleiner Perkins.

The company has raised $20 million in venture funding from Kleiner’s iFund, longtime Silicon Valley investor Reid Hoffman, as well as Hoffman’s home at Greylock Partners.

Here is a video interview I did with Roeding about where shopkick is going next:

]]> http://allthingsd.com/20101116/shopkick-checks-in-with-target-ceo-cyriac-roeding-talks-about-social-shopping/feed/ 1 http://allthingsd.com/20101109/exclusive-boku-to-be-added-as-option-to-facebook-credits-setting-up-face-off-with-rival-zong/ http://allthingsd.com/20101109/exclusive-boku-to-be-added-as-option-to-facebook-credits-setting-up-face-off-with-rival-zong/#comments Tue, 09 Nov 2010 22:32:17 +0000 Kara Swisher http://kara.allthingsd.com/?p=37063

For the past 18 months, mobile payments start-up Zong has had the enviable prime spot on Facebook Credits as its sole option for users wanting to use their cell phone number to buy virtual goods for social gaming and other services.

But, according to multiple sources, that’s about to change later this week, when the social networking giant starts A/B testing its rival, Boku, as an alternate payment method to Zong.

The face-off on Facebook to allow consumers to charge virtual purchases to their wireless bills is just another point of conflict, among many, between the two top Silicon Valley mobile payments companies.

Both have received large amounts of venture funding from prominent investors–$38 million for San Francisco’s Boku and $15 million for Menlo Park, Calif.-based Zong.

And there has been acquisition attention as well from big companies–such as Apple, Google and more–who are mightily interested in the fast-growing space of late.

Sources close to Facebook said the move to include both on its king-making platform is a natural one for the company, giving its users a range of options in the mobile payments area.

One person noted that Facebook execs told both Zong and Boku that it was important to enable people to buy Facebook Credits via whatever means they choose.

The plan is to use both for a while, said another source, gauging how users like them, although it was not considered “a horse race between them” by Facebook.

Nonetheless, that’s just what both Zong and Boku think it will turn into on Facebook.

“It is all about performance,” said one person with knowledge of Boku’s strategy. “Facebook is testing the landscape, especially outside the U.S.”

Indeed, mobile payments are currently much more important internationally than in the U.S. market, although that is changing fast, especially as smartphone usage booms.

Zong CEO David Marcus, in an interview with BoomTown today at the Open Mobile Summit in San Francisco, said that competition was inevitable.

“Every single large-scale mobile process needs to have a backup, especially as mobile payments reach the scale everyone expects it to,” he said. “But we are confident that we have the best product for the Facebook platform.”

Performance and distribution will be much on the minds of potential acquirers, in much the same way Apple and Google snapped up mobile advertising companies Quattro Wireless and AdMob, respectively.

Most expect both Zong and Boku to eventually be bought, although both companies have said they intend to remain independent.

Selling out might also have its downside–if, for example, Boku were bought by Google for its Android mobile operating system, it would quickly become less attractive for the search giant’s growing archrival Facebook to feature it.

The same goes for Apple, since it also has its own agenda with the iPhone.

But there are other possible buyers, such as Amazon, eBay’s PayPal and a spate of credit card companies.

Whatever happens, the new battle on Facebook will surely be an interesting one to watch.

To get up to speed, here is a video interview I did with Boku’s top execs–CEO Mark Britto and Ron Hirson, SVP of product and marketing–in July, followed by a more recent one I did with Zong’s Marcus:

]]> http://allthingsd.com/20101109/exclusive-boku-to-be-added-as-option-to-facebook-credits-setting-up-face-off-with-rival-zong/feed/ 2 http://allthingsd.com/20101104/start-ups-are-drawn-to-pulse-of-downtown/ http://allthingsd.com/20101104/start-ups-are-drawn-to-pulse-of-downtown/#comments Thu, 04 Nov 2010 12:00:42 +0000 Pui-Wing Tam http://voices.allthingsd.com/?p=32058 Many Silicon Valley start-ups are increasingly hankering for downtown, urban offices.

The shift can be seen in Redwood City, where many tech companies long have made their homes–but primarily in the Redwood Shores office parks where Oracle Corp. and Electronic Arts Inc. are headquartered. This year, a trickle of start-ups has moved into downtown Redwood City, with digital ad companies Turn Inc., YuMe Inc. and compensation research firm Equilar Inc., among others, relocating to the area since January.

“We used to be located in the Redwood Shores area, but I didn’t like it because it was too remote,” says Bill Demas, chief executive of Turn, which moved into a 10,000-square-foot office in the restored late 19th-century Alhambra building in downtown Redwood City in January. “We wanted to be in a more urban location, we wanted more restaurants and bars near us.”

Redwood City is just the latest beneficiary of a downtown migration by start-ups. In Mountain View, demand is high for offices around its downtown Castro Street area. In Palo Alto, start-ups are seeking space around lively University Avenue. Commercial vacancy rates are particularly low in the downtown areas of some Silicon Valley towns, with downtown Menlo Park’s prime office space just 3.3 percent vacant in the second quarter compared with the city’s overall 14.8 percent commercial vacancy rate, according to Cornish & Carey Commercial Newmark Knight Frank.

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]]> http://allthingsd.com/20101104/start-ups-are-drawn-to-pulse-of-downtown/feed/ 0 http://allthingsd.com/20101021/zongs-david-marcus-talks-about-the-next-big-thing-in-mobile-payments/ http://allthingsd.com/20101021/zongs-david-marcus-talks-about-the-next-big-thing-in-mobile-payments/#comments Thu, 21 Oct 2010 13:00:40 +0000 Kara Swisher http://kara.allthingsd.com/?p=35971

There’s no question that mobile is the way an increasing number of payments are made for a variety of virtual goods.

Recently, BoomTown visited San Francisco-based Boku, one of the players in the race to win in this competitive space.

And, earlier this week, I motored on down to Menlo Park, Calif., to visit Zong.

While I would like to know why these services require such odd names, it’s clear Zong is good enough for Facebook to make it the mobile payment option for its Facebook Credits.

Zong is a spin-off from a company called Echovox, based in Switzerland. Zong garnered $15 million in funding from Matrix Partners earlier this year.

That investment was made by Dana Stalder, who was the former exec of PayPal, the pioneering online payment company that was bought by eBay.

Still, even with help, Zong has a complex business to run, which requires maintaining relationships with wireless companies around the world.

Sort of like herding cats, I would imagine.

Here’s my video interview with CEO David Marcus, who talks about where the business is headed:

]]> http://allthingsd.com/20101021/zongs-david-marcus-talks-about-the-next-big-thing-in-mobile-payments/feed/ 0 http://allthingsd.com/20101001/fighting-monsters-and-defusing-bombs-in-augmented-reality/ http://allthingsd.com/20101001/fighting-monsters-and-defusing-bombs-in-augmented-reality/#comments Fri, 01 Oct 2010 15:00:45 +0000 Timothy Hay http://voices.allthingsd.com/?p=30556 Osuke Honda, a general partner with Menlo Park, Calif.-based venture firm DCM, says he has been traveling back and forth between Japan and the U.S. all his life. He spearheads many of DCM’s investments in Japanese companies from the firm’s office in Tokyo, and this week participated in a $12 million Series B funding for augmented-reality company Tonchidot Corp.

With a couple of downloads and the camera application on a smart phone, users of Tonchidot’s software can view information on their phone screen about their physical location, drawn from geo-tagged content submitted by users. They can also battle virtual monsters or defuse virtual bombs in real-world environments. Tonchidot’s technology combines the “check-in” elements of companies like Foursquare Inc. with social games similar to those of Zynga Game Network Inc.

Honda says his favorite Tonchidot game is called Sekai Hero, in which he checks in to a location to collect points with his pink-haired monk avatar. He can also fight monsters that might be lurking in the location’s augmented reality space. “I play quite a bit,” he said. “My wife is actually fed up with me.”

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]]> http://allthingsd.com/20101001/fighting-monsters-and-defusing-bombs-in-augmented-reality/feed/ 0 http://allthingsd.com/20100513/painting-silicon-valley-a-new-shade-of-green/ http://allthingsd.com/20100513/painting-silicon-valley-a-new-shade-of-green/#comments Thu, 13 May 2010 07:00:53 +0000 Pui-Wing Tam http://voices.allthingsd.com/?p=24990 Silicon Valley is trying to become a hub for clean technology–companies that specialize in alternative energy or energy-efficient products. Helping to lead the shift are local venture capitalists such as Vinod Khosla.

The 55-year-old, who co-founded Sun Microsystems Inc. (JAVA) and was a partner at venture-capital firm Kleiner Perkins Caufield & Byers, now runs his own firm investing in clean-tech companies.

Last September, Mr. Khosla announced that his firm, Khosla Ventures, had raised two new funds that totaled more than $1 billion, giving him ammunition to nurture clean-technology start-ups.

In a recent conversation at his offices on Sand Hill Road in Menlo Park–widely known as venture-capital row–Mr. Khosla discussed the competition to be the nation’s clean-tech center, how Silicon Valley stacks up in that race, and what green products he uses himself.

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]]> http://allthingsd.com/20100513/painting-silicon-valley-a-new-shade-of-green/feed/ 0 http://allthingsd.com/20100209/better-times-for-vcs-redpoint-raise-400-million-fund-focused-on-social-mobile-cloud-and-clean/ http://allthingsd.com/20100209/better-times-for-vcs-redpoint-raise-400-million-fund-focused-on-social-mobile-cloud-and-clean/#comments Tue, 09 Feb 2010 08:15:13 +0000 Kara Swisher http://kara.allthingsd.com/?p=24183

Redpoint Ventures announced that it had closed a new $400 million fund to invest in early-stage start-ups in the “social and mobile Internet, cloud computing and clean technology spaces.”

The last fund that the Menlo Park, Calif.-based venture firm raised was $250 million in March 2007. It was called Redpoint Omega and aimed at later-stage start-ups.

The last early-stage fund, Redpoint III, was in February 2007, and was also $400 million.

While Redpoint’s new fund size did not increase, as they often do, is today’s closing a sign that things are looking up for the venture business–especially in Silicon Valley after one of the toughest years in a dozen, with the amount VCs made in 2009 dropping 37 percent, according to a recent report?

Who knows–but here’s the skinny on the Redpoint IV fund:

Redpoint Ventures Forms $400 Million Fund for Social and Mobile Internet, Cloud Computing and Clean Technology

Redpoint Portfolio Exits Total Nearly $2B in Aggregate Market Value in Past Six Months

Menlo Park, CA, February 9, 2010–Redpoint Ventures today announced that it has closed Redpoint IV, a $400 million early stage, venture capital fund. Redpoint IV will be used to back entrepreneurs and companies that will accelerate innovation in the social and mobile Internet, cloud computing and clean technology spaces. In the past six months, Redpoint entrepreneurs have realized significant liquidity, totaling nearly $2B in aggregate market value including: the IPO of Fortinet, and the acquisitions of LifeSize, WiChorus, Networks in Motion, and Kazeon. Additionally, portfolio companies Calix and Solyndra have filed for their IPO.

“This latest Redpoint fund will help entrepreneurs fulfill their dreams in a world of promising opportunity, and signals an exciting period for early stage investing over the next five years,” said Geoff Yang, founding partner of Redpoint Ventures. “We continue to find entrepreneurs who have brilliant ideas and an increasingly strong desire to change the world. We are committed to invest in those entrepreneurs, to stand behind their ideas and to help them achieve their goals.”

Redpoint’s mission from the start has been to stand behind entrepreneurs to build businesses that shape the future. Redpoint’s collective strength and experience as a team has produced strong results investing in companies such as Danger, Fortinet, HomeAway, MySpace, LifeSize, RightMedia, and Zimbra. Redpoint has also invested in emerging leaders including: 2tor, Answers, BlueKai, Clearwell, Envia, Gaia Online, Heroku, Jumptap, and Scribd.

“As the worldwide leader of online vacation rental listing, our goal is to become a well-known alternative to hotels for vacation travelers. HomeAway represents nearly 430,000 vacation rental home listings across more than 120 countries,” said Brian Sharples, CEO of HomeAway.com. “Redpoint, as our earliest investor, has helped support and guide the company since the beginning.”

“We had a vision of democratizing publishing and changing the way people express themselves through the written word, and we sought out investors who are passionate about what we want to achieve,” said Trip Adler, CEO of Scribd, the largest social publishing company in the world. “The Redpoint team stands behind what we are trying to accomplish and has been an invaluable source of advice about how best to navigate the evolution of our business and our industry.” Scribd currently hosts more than 10 million documents read by tens of millions of readers each month.

“We are highly selective about how we invest in this current economic climate and only choose partners that are in a position to help accelerate game-changing companies,” said Fred Giuffrida, Managing Director of Horsley Bridge Partners. “Redpoint has a proven history of identifying and enabling disruptive technologies that have a lasting impact on the world.”

]]> http://allthingsd.com/20100209/better-times-for-vcs-redpoint-raise-400-million-fund-focused-on-social-mobile-cloud-and-clean/feed/ 1 http://allthingsd.com/20091005/new-yorker-bezos-initial-google-investment-was-250000-in-1998-because-i-just-fell-in-love-with-larry-and-sergey/ http://allthingsd.com/20091005/new-yorker-bezos-initial-google-investment-was-250000-in-1998-because-i-just-fell-in-love-with-larry-and-sergey/#comments Tue, 06 Oct 2009 04:30:36 +0000 Kara Swisher http://kara.allthingsd.com/?p=19130

Considering the ongoing skirmishes going on right now between Amazon and Google over digital book publishing, it’s more than ironic that Amazon CEO and founder Jeff Bezos was one of only a few initial investors in the search giant.

But–in one of the many interesting details in New Yorker author Ken Auletta’s new book, “Googled: The End Of The World As We Know It”–it was indeed Bezos who invested $250,000 in the start-up in 1998 at four cents a share.

(Some previous reports have had it at six cents a share and at a $100,000 level.)

Three of the others, according to Auletta, all of whom ponied up the same amount, were Stanford University computer science professor David Cheriton, entrepreneur Ram Shriram and Sun Microsystems (JAVA) co-founder Andy Bechtolsheim.

Later, more angels invested in Google (GOOG), followed by the big $25 million venture round by Kleiner Perkins and Sequoia Capital in mid-1999.

While it was known back when Google went public in 2004 that Bezos held about three million shares in the IPO (Auletta said it was precisely 3.3 million shares), the book has a lot of the details about the meeting between him and Google co-founders Larry Page and Sergey Brin in the Menlo Park, Calif., garage of current Google exec Susan Wojcicki.

He had been brought there, according to the book, by Shriram, who had sold his company, Junglee, to Amazon (AMZN) in 1998.

“I just fell in love with Larry and Sergey,” Bezos told Auletta in an interview–not that there’s anything wrong with that considering the flip-flop relationships of Silicon Valley.

He’d presumably be more in love–and less inclined to be fighting Google, first in search with A9 and now in online publishing–if he had held onto those shares.

That stock would be worth $1.6 billion today.

But a spokesman for Amazon declined to comment on what Bezos did with his Google stake, noting it was a personal investment.

Interestingly, Bezos is also an early investor in the current hotsy-totsy microblogging start-up, Twitter.

A part of Auletta’s book, which is slated to come out Nov. 3, is in this week’s New Yorker in an excerpt called “Searching for Trouble.” It is, oddly, not available online.

In any case, the piece is mostly about the various ways Brin and Page dissed big media moguls, figuratively (destroying old media advertising business models) and literally (showing up at meetings sweaty and wearing skates and gym shorts).

Good thing they never did that to Bezos.

Please see this disclosure related to me and Google.

]]> http://allthingsd.com/20091005/new-yorker-bezos-initial-google-investment-was-250000-in-1998-because-i-just-fell-in-love-with-larry-and-sergey/feed/ 1 http://allthingsd.com/20090817/surveymonkeys-dave-goldberg-speaks-plus-a-tour-of-his-new-planet-of-the-apes-lair-in-silicon-valley/ http://allthingsd.com/20090817/surveymonkeys-dave-goldberg-speaks-plus-a-tour-of-his-new-planet-of-the-apes-lair-in-silicon-valley/#comments Mon, 17 Aug 2009 13:09:56 +0000 Kara Swisher http://kara.allthingsd.com/?p=17677

BoomTown was as surprised as anyone when longtime Silicon Valley Web music entrepreneur Dave Goldberg said in May that his next move was going to be investing in and running an online survey company with the unusual name of SurveyMonkey.

Most expected the former Yahoo music head to land at an entertainment or media giant, running its digital operations.

But it is at SurveyMonkey where Goldberg has swung himself and he has now made good on his promise to open a Silicon Valley office of the Portland-based start-up.

But Goldberg’s background does not suggest an interest in digital clipboards and checking boxes.

He joined Yahoo (YHOO) in 2001 and headed its global music operations after it bought a company he co-founded in 1994 called LAUNCH Media.

Previous to that, Goldberg was director of marketing strategy and new business development at Capitol Records in Los Angeles.

After leaving Yahoo more than two years ago, he worked for a while as an entrepreneur-in-residence at Benchmark Capital and told me he was attracted to the online survey creator most of all for three key reasons:

It’s profitable. It’s an open field. And, it’s much more of a consumer product than people realize.

That’s presumably why he also put up some money to become a minority investor in SurveyMonkey.

It was part of a deal in which Spectrum Equity Investors and others, including Bain Capital Ventures, acquired a majority interest in the company.

Since it was founded in 1999 by Ryan Finley and Chris Finley, who remained minority investors and working at the company, SurveyMonkey has become the largest such survey company online, with competitors that include Zoomerang and Constant Contact.

SurveyMonkey–which has signed up two million users, with six million surveys created and 200 million responses completed–charges a variety of fees for premium versions of its service, sitting between expensive software packages on one side and free, featureless Web surveys on the other.

Here’s a video interview I did with Goldberg last week about all this and more, as well as a tour of the new SurveyMonkey digs in Menlo Park, Calif., in former CBS (CBS) Interactive space:

]]> http://allthingsd.com/20090817/surveymonkeys-dave-goldberg-speaks-plus-a-tour-of-his-new-planet-of-the-apes-lair-in-silicon-valley/feed/ 0 http://allthingsd.com/20090205/mike-homer-laid-to-rest-today/ http://allthingsd.com/20090205/mike-homer-laid-to-rest-today/#comments Thu, 05 Feb 2009 13:00:04 +0000 Kara Swisher http://kara.allthingsd.com/?p=9439 Many BoomTown readers have asked for more information and also about the funeral for well-known Silicon Valley exec Mike Homer, who died earlier this week after a severe and unusual illness.

His funeral is today at 10:30 a.m. at Saint Raymond Catholic Church in Menlo Park.

A “Friends of Mike Homer” Facebook group page has also been created, with lots of great memories posted on its wall.

In 2007, Homer (pictured here with Netscape co-founder Marc Andreessen) was diagnosed with Creutzfeldt-Jakob disease.

A rare, neurodegenerative “prion” disease, which in Homer’s case occurred sporadically rather than via infection (the well-known variant that occurs in animals is called mad cow disease), CJD’s incidence is one case in a million annually, and few survive beyond a year after exhibiting symptoms.

There is no known cure for CJD, and treatments have been few. That might change, given the push that Homer, his family and friends had been making to accelerate the pace of discovery for treatments and a cure by raising many millions of dollars for the cause and pushing for even more aggressive development.

Here is the obituary that the Homer family wrote:

Michael (Mike) J. Homer: February 24, 1958-February 1, 2009

Mike Homer, high-technology executive, passed away on February 1, 2009 at his home in Atherton. He suffered from the rare neurodegenerative disorder Creutzfeldt-Jakob disease, known as CJD. Mike, 50, is survived by his wife of ten years Kristina and their three children, James, Jack and Lucy, as well as his mother Irene and sister Sue. In addition to family, he leaves a legion of friends, colleagues and business associates, including his best friend, Bill Campbell. Everyone who knew Mike will miss his extraordinary intellect, tenacity, fierce loyalty and of course, his hearty sense of humor.

Mike was born and raised in San Francisco, attended St. Ignatius College Prep, and treasured the many lifelong friendships developed during those years. He earned a Bachelor of Science degree from the University of California at Berkeley. A Silicon Valley presence for more than twenty years, Mike launched his career at Apple, excelling as both a technical innovator and savvy marketer. He held executive positions at GO and EO, before making an indelible mark on the success of Internet pioneer Netscape. Mike was an active board member at Opsware and Palm, and an investor and advisor to Tellme Networks, Tivo and Google. He started Kontiki and Open Media Network and served on the board of Cinequest. His appreciation for film led to the role of executive producer for an award-winning documentary, “Speed and Angels.”

All who have enjoyed the privilege of knowing Mike would agree that his love of family defined his success even more than his professional accomplishments. Mike enjoyed every opportunity to share his free time with family and close friends, gathering for backyard BBQs or Tahoe getaways that always included plenty of boat rides. An avid baseball fan, Mike could often be found cheering for the San Francisco Giants at the stadium or at The Old Pro in Palo Alto surrounded by a table filled with friends. He inherited his love of baseball from his father Jim, passed it onto his own children, and jumped at the chance to coach both of his son’s little league teams.

Often sought after for his sage advice, Mike was always generous with his time and friendship. Mentoring was a way of life for him and he took great pleasure in sharing his expertise with others. His larger than life personality and genuine warmth will be profoundly missed by all whose lives he touched, and his legacy reflected in part by their accomplishments.

Mike was also a philanthropist. He and Kristina started The Homer Family Foundation to fund education and programs for the underprivileged. He was a major donor to the Ronald McDonald House at Stanford, The Haas Center for Responsible Business at Berkeley, The Computer History Museum and The California Institute for Quantitative Biosciences at UCSF. This past fall, Sacred Heart High School in Atherton unveiled the Michael J. Homer Science and Student Life Center.

A rosary will be recited at 7:00 p.m. on Wednesday, February 4 at the Church of the Nativity, 210 Oak Grove Avenue in Menlo Park. On Thursday, February 5 at 10:30 a.m., a service will be held to honor Mike’s extraordinary life at Saint Raymond Catholic Church, 1100 Santa Cruz Avenue in Menlo Park.

In lieu of flowers, donations can be made to Creuzfeldt-Jakob Disease Foundation at www.cjdfoundation.org.

]]> http://allthingsd.com/20090205/mike-homer-laid-to-rest-today/feed/ 0 http://allthingsd.com/20090201/farewell-to-mike-homer/ http://allthingsd.com/20090201/farewell-to-mike-homer/#comments Mon, 02 Feb 2009 00:12:42 +0000 Kara Swisher http://kara.allthingsd.com/?p=9258

We all liked Mike. In fact, we all loved the pugnacious, energetic and restlessly entrepreneurial Silicon Valley exec.

Sadly for those who knew him, Mike Homer died today at his home surrounded by family and friends, after a long battle with a severe illness. He was 50.

Homer is survived by his wife, Kristina, and three young children: James, Jack and Lucy.

His funeral is at Saint Raymond’s Catholic Church in Menlo Park on Thursday.

In 2007, Homer was diagnosed with Creutzfeldt-Jakob disease.

A rare, neurodegenerative “prion” disease, which in Homer’s case has occurred sporadically rather than via infection (the well-known variant that occurs in animals is called mad cow disease), CJD’s incidence is one case in a million annually, and few survive beyond a year after exhibiting symptoms.

His illness inspired his family and many friends to find treatments and a cure for the cruel disease, and include the man–Dr. Stanley Prusiner–who won the Nobel Prize in 1997 for discovering prions, infectious agents that are at the heart of CJD.

In late 2006, Homer began suffering from memory problems. Another close friend, Netscape co-founder Marc Andreessen, aided Homer in getting to the right doctors at Stanford University Hospital, where he was diagnosed.

Quickly, via angel investor and close Homer friend Ron Conway, who serves on the board of the University of California, San Francisco, Medical Foundation, Homer’s case was moved to UCSF. The hospital there is the only place in this country that has a major laboratory doing both research and clinical trials on CJD.

Still, there is no known cure for CJD, and treatments have been few. That might change, given the push that Homer, his family and friends had been making to accelerate the pace of discovery for treatments and a cure by raising many millions of dollars for the cause and pushing for even more aggressive development.

At an event in Palo Alto in 2007 for those interested in helping beat CJD–organized by Conway and well-known Silicon Valley exec and Homer mentor Bill Campbell, with Homer in attendance–he was in fine form, greeting well-wishers with a laugh and sassy attitude, especially given the dire situation and obvious difficulties with speech and movement.

As I wrote then:

Such fighting spirit was typical of Homer, whom I met when I was doing my first book on the rise of America Online more than a decade ago, when he was an executive at the then-high-flying Netscape.

He had also, like many, put in time at Apple and was known throughout the industry for his hard-charging and straightforward style. He needed it in the later days of Netscape, when he arduously tried to shift the company’s focus from a browser-software business besieged by Microsoft to a portal business.

Despite his sometimes tough demeanor, Homer was always willing–unlike so many others–to debate his business in an all-out-on-the-table manner I found refreshing compared to the sometimes earnest and smooth spin of most dot-com entrepreneurs.

Most of all, even when you disagreed over an issue, he always left such arguments at work and was ready with his quick laugh or a razor-sharp quip no matter what.

Recently, before his illness, Homer had been investing in and mentoring a series of start-ups. But he had also been focusing a lot on philanthropy and, most of all, his family and, especially, his three small children.”

My deep condolences go out to them and, really, everyone who had the privilege of knowing Mike.

More about his career and memories of Mike to come. But until then, here’s the video that was shot at the 2007 Palo Alto event called “The Fight for Mike,” which is introduced by Campbell:

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