That deal had something of a transformative effect on the cloud software landscape. Soon, other players in its niche were snapped up. Oracle acquired Taleo for $1.9 billion, and Salesforce.com acquired Rypple. Meanwhile, Workday is growing fast and prepping for what looks to be the biggest IPO of the second half of the year.

So back to SuccessFactors. A quick look at the infographic below gives you some idea of the outsized impact it has had on the wider world. SuccessFactors alums are in senior positions at companies as varied as Okta, Pandora, Workday and Marketo. It sounds cool, but looks a lot cooler when presented in a snappy infographic like the one below. Click on it to make it bigger.

Its shares rose 11 percent to $11.45 in after-hours trading.

Read the rest of this post on the original site »

Facebook’s imminent IPO might mint a mess of millionaires in Silicon Valley by Friday, but in the meantime, it’s driving wealth in a few newly public Internet companies, as well.

With the social networking company’s offering reportedly oversubscribed, some investors are looking for ancillary ways to profit from it, and seem to be turning to Facebook’s already public social networking peers.

As Arvind Bhatia, a financial analyst who covers Facebook for Sterne Agee, observed: “I do sense some ‘temporary’ momentum for these related social media stocks.”

Consider: Shares of LinkedIn, Zynga, Pandora, and Yelp have all been trading up in advance of Facebook’s IPO. On Wednesday, LinkedIn closed at $113.49; on May 1, it was trading around $106. Pandora shares ended Wednesday at $11.37, having closed at $8.56 on May 1. More recently, shares in Yelp — which had been slipping lower in value — saw a sudden uptick around May 11.

It’s the same thing with Zynga, which accounts for about 15 percent of Facebook’s revenue. While its stock has been down 25 percent in the last month, it’s been up 2.75 percent in the last five days.

Also on the upswing: RenRen, the so called “Facebook of China,” whose shares were up more than 7 percent Tuesday.

You could add Groupon to this list, as well — although much of the recent upswing in its share price is likely due to the company’s strong first-quarter results that beat Wall Street expectations.

Coincidence? Hardly.

More likely, these stocks are all benefiting from the halo of interest surrounding Facebook’s IPO, an offering that may well prove to be the biggest-ever in the Internet space. Investor drive for a piece of Facebook is becoming the drive for a piece of a company like Facebook or, better yet, one that might be acquired by it.

“LinkedIn, Zynga, Pandora, Yelp … these are all potential acquisition bait for Facebook,” Ironfire Capital founder Eric Jackson told AllThingsD. “If Facebook is going to trade at a premium — like $150 billion to $200 billion, why not buy the fish and the bait, too?”

But this is all pre-IPO chatter. What happens on Friday, and the Monday following — and in the months to come — will provide a hard-and-fast answer to the question of whether the Facebook halo has any true longevity.

If Facebook’s IPO delivers the gains investors expect, sentiment toward the social media stocks may well continue to improve, making the decision to “buy bait” the past few days a wise one indeed.

Said GreenCrest Capital analyst Max Wolff: “By Friday mid-morning Facebook will be the anchor in a sector with several names, a diversity of stories and well over $130 billion in market capitalization.”

Code Advisors is getting a $25 million investment from financial services giant JPMorgan Chase for a minority stake in the Silicon Valley-based boutique investment bank and advisory firm.

The influx of cash will allow Code to grow quicker, said Quincy Smith, one of the firm’s founders, which also include Michael Marquez and Fred Davis.

The non-exclusive deal, the two firms said, is the natural extension of a longer-term relationship that has been developing for a while.

“To the extent that the money means we are getting even closer together, that’s great,” said Smith in an interview earlier today. “This solidifies a partnership that has existed for some time.”

Plus, it presumably also gives each what the other cannot offer clients. Usually a big bank might try to kill or buy a firm like Code, so this move is unique.

“We are growing our business and getting access to next-generation entrepreneurs that Code knows well,” added Kurt Simon, co-head of Technology, Media and Telecom Banking at J.P. Morgan. “And it’s a sign of continued investment in our important West Coast businesses.”

Indeed, J.P. Morgan has been competing with Goldman Sachs and Morgan Stanley for a higher profile in Silicon Valley. It recently was selected with the pair as one of the lead bankers in the upcoming Facebook IPO. It has also worked recently with LinkedIn, Skype and Pandora.

Code has taken on smaller deals with a range of hot start-ups and entrepreneurs, which was one of the attractions for J.P. Morgan. That includes representing Spotify and LivingSocial, and making investments in Path and Flipboard.

“For J.P. Morgan, it’s like making an limited partner investment in another venture firm,” said Smith. “And for us, we can offer a lot more services to our clients as they grow.”

As part of the deal, Jes Staley, CEO of J.P. Morgan’s investment bank and a member of the firm’s operating committee, will become a non-voting observer on Code’s board.

Here’s the full press release on the deal:

CODE ADVISORS ANNOUNCES A $25 MILLION INVESTMENT FROM JPMORGAN CHASE

San Francisco May 3, 2012 — Code Advisors announced today that JPMorgan Chase (NYSE: JPM) has agreed to make a $25 million minority investment. Jes Staley, CEO of J.P. Morgan’s Investment Bank and a member of the firm’s Operating Committee, will also act as a non-voting observer at Code’s Advisory and Investor Board meetings.

“We are thrilled that JPMorgan Chase has decided to invest in Code Advisors,” said co-founder Quincy Smith. “This transaction demonstrates how together we might energetically adjust to serve the new needs of entrepreneurs and companies. The chance to work more closely with Jes and his team gives us awesome global and experienced perspective.”

J.P. Morgan’s investment and relationship will allow Code to accelerate its growth opportunities and allow each team to offer complementary services to their respective and shared clients.

“Identifying and supporting great ideas early in their development is particularly important in the technology space,” said Staley. “Code continues to uniquely identify next generation companies, and together we are excited to help those entrepreneurs grow and expand their businesses.”

Let’s begin by drawing the distinction between a tool and a robot. Tools enable us to work more efficiently. Robots do the work for us (in fact, the original word robata means “hard work” in Czech). The vast majority of the Web sites and apps we use today are tools that enable us to work, play and share more efficiently. Over the last few years, through advances in artificial intelligence and data science, Web sites and apps are evolving. There is a new breed of applications focused entirely on working on our behalf. As humans, we constantly seek means to reduce the amount of work needed to reap rewards from a system. While the tools of today allow us to work less, the robots of the future will eliminate much of the work in the first place.

This incredible transformation is happening right before our eyes.

Your Search Robot

A long time ago, we would search for information by painstakingly looking up sources in a card catalog and reading a book. As much of that knowledge moved online, the directory (like Yahoo!) enabled us to browse and find content of interest. In time, the amount of information flowing online overwhelmed the directory — it would simply require too much work to browse the entire Web. Fortunately, a revolutionary tool, search — Google, really — made it very easy to find the documents that contain the answers we’re looking for. But while search presents us with a huge set of choices, it still takes a lot of work to find the answers.

Today, a new technology is eliminating that work by acting on our behalf to find the answers and even solve our problems. Siri is an artificial intelligence client that turns our devices into a virtual assistant. It removes the steps between searching for answers and finding them. Have a question about converting metric units? Ask Siri. Need to order your mother flowers? Let Siri handle that. Need to make dinner reservations for your date Friday? Let Siri do the work for you. And we’re just scratching the surface. We possess the vastness of all human knowledge in our pockets, yet much of our usage is limited to Angry Birds. This transformation to intelligent machines means we no longer have to work as hard to apply the knowledge locked in our devices; they’ll do the work for us.

Your Location Robot

In the 20th century, an enormous yellow book was delivered to our doorstep every year. We would heft this behemoth and flip through hundreds of pages to find a local business or restaurant of interest. Eventually, that process gave way to more efficient tools as local information moved online through apps like CitySearch and Yelp. Recently, via the mobile check-in, we can be presented places of interest and people near our current location. This new layer of geographical context is great, but checking in is still work.

Today, ambient location apps like Foursquare, Radar and Highlight are beginning to do that work for us. By passively monitoring our locations, they alert us to interesting people and places around us. Over time, as they learn our preferences, they’ll be able to filter these places and help us discover the best restaurants and people wherever we are. At last, we are within reach of the “Danger, your ex-girlfriend is in the area!” robot.

Your Personal Robot

Not that long ago, the primary way we would discover new media was through browsing a printed newspaper, magazine rack or record store. As this content moved online, it became much more accessible and real-time. As the option pool grows, we have to put in more and more work to find the content that’s interesting to each of us. There are more and better options than we could ever imagine. But it would take an incredible human effort to find all the needles in the growing haystack.

To address this, many Web sites have offered customization tools for users to focus their experience. But manual customization also requires a lot of work, and it usually fails to paint the rich, dynamic picture of who we are and what we like. Fortunately, a solution is emerging from companies like Pandora (and, full disclosure, my own company, Gravity). Using machine learning, these platforms get to know you based on the things you read about, listen to, or share. They can then move way beyond customization by generating adaptive, personalized experiences that bring the best content on any website or app right to the top. It completely shifts the paradigm from you having to search for information to information searching for you. It’s like having a personal robot who thinks just like you do reach across the Web and return the best music, stories, videos, even daily deals everywhere you go. “Welcome back to ESPN, Amit. The surf report in Venice tomorrow is 3-4 feet, and the Lakers are leading by 10 points at the half.”

All of this paints just a small picture of what’s to come. Imagine the applications in fields like education, health care, or personal finance (wouldn’t you love a robot that does your taxes?). As the Internet starts to work for us, it will enrich our lives in ways we can’t even imagine. I, for one, am very excited that my childhood dream of owning my own robot is finally coming true.

Amit Kapur is the CEO and co-founder of Gravity, a company that makes the Internet adaptive and personalized. He was formerly the COO of Myspace. As an early Myspace employee, he led the development and growth of Myspace Music and Myspace Mobile.

But for the record: Marc Andreessen, who is now perhaps Silicon Valley’s most prominent investor, does not think we’re in a bubble.

Andreessen has been saying this for some time — like a year ago, at All Things Digital’s D9 conference – and he repeated himself at Wired magazine’s business conference this morning.

The main thrust: This can’t possibly be a bubble, because leading technology firms like Apple are trading at relatively modest multiples. Meanwhile, most of the highly celebrated tech companies that have gone public in the last year, like Demand Media, Groupon and Pandora, have all seen their stock prices get hammered.

“If we’re in a bubble, it’s the weirdest bubble I’ve ever seen, where everybody hates everything,” Andreessen told Wired editor Chris Anderson.

But that’s the public market, Anderson pointed out. What about the private deals, where very young start-ups are frequently being valued at $1 billion or more?

Well, maybe there’s something off there, Andreessen conceded. A “strangeness in the way the market is behaving.” Some of that stems from the way that capital is flowing, because institutional investors are looking for places other than the stock market to park their cash. But that’s only relevant for a “small number” of companies and investors, so that can’t qualify as a bubble, either.

We will listen respectfully to Andreessen, because he has a big brain, and has been intimately involved in a bubble or two himself (that 1996 Time magazine cover featuring him marked the beginning of the Web 1.0 irrational exuberance phase). But for a commonsense, plain-English counterpoint to all of this, see BuzzFeed. (Really!)

The company was slated to announce the pacts — with Universal Music Group, Warner Music Group, EMI Music Group and Sony — at the South by Southwest conference today. CNET reported on Turntable’s Warner deal last week, and I think that report helped accelerate today’s announcement.

The fact that Turntable was able to get deals done in less than a year — the company is the result of a well-documented pivot from something called Stickybits — says a lot about the newfound flexibility on the part of the music business. Especially since Turntable has carved out a new business model — basically a hybrid between “on-demand” services like Spotify and “radio” services like Pandora.

The flip side is that the buzz and momentum Turntable was generating last summer has gone away. That may be due mostly to Spotify’s U.S. launch, which by all accounts has been a huge success. But it may also be because not that many people want to listen to other people play music.

I do, though, so I hope the deals give Turntable the ability to turn things around. Right now, when I visit the service I don’t see any of my pals there. And while I’m sure I could find some cool people playing cool songs there if I dug around for a while, I don’t want to do a lot of digging.

One thing the deals won’t do is give Turntable the ability to open its doors to users outside the U.S. But it does give the company a better chance of getting international deals done.

That would give Turntable a leg up on rival Pandora. But there are a gazillion legal ways to get your hands on digital music, for very little money these days — from Spotify to Rhapsody to iTunes Match to Deezer. Getting heard above that din will be a challenge.

No problem, says CEO Joe Kennedy, who is happy to describe a glass more than half full in an interview before the company’s earnings call this afternoon.

He wants investors to pay attention to the company’s increasing share of the radio listening market, which he estimates has doubled, to 5.5 percent in the last year.

And he says they should also be impressed with his mobile ad revenues, which hit $33 million last quarter and totalled $100 million for the fiscal year. That’s up from $25 million over the previous year.

Mobile is particularly important for Pandora, since it was the iPhone, along with Android handsets, that really spiked its growth in advance of its IPO last year. But Wall Street has worried that Kennedy wouldn’t be able to take advantage of that growth.

Kennedy argues that Pandora made more money on mobile ads than any other Web company besides Google last year. (Anyone want to help fact-check that?)

OK. So what about the misses? Kennedy notes that Pandora still delivered revenue within its guidance range, though that’s not the kind of argument that Wall Street generally goes for. More practically, he says that holiday ad spending was a “touch lighter than we expected.”

On top of that, the pricing that Pandora got for its unsold ad inventory, which it hands off to third-party ad networks, was also lower than expected in January.

Kennedy made the same arguments during his earnings call, but that hasn’t convinced traders, who have pushed Pandora shares down 20 percent since the market closed.

That data point comes from NPD, which says 78 million Americans bought music in 2011, up 2 percent from 2010. And that’s the second consecutive year the number has bumped up.

Since CD sales continue to decline, the uptick here comes from the digital side, just like people have been predicting since … forever. NPD says 45 million people bought digital downloads at Apple’s iTunes and Amazon, up 14 percent from 2010.

Given that it’s easier than ever to listen to free music, legally, via streaming options like Pandora and Spotify, the fact that paid downloads are up is a little counterintuitive.

But that’s always been part of the streaming music service pitch to the big labels: Let us give away your stuff, and we’ll help increase demand — just like radio used to do.

We’re starting to hear murmurs from the labels that this is actually how it’s working in the real world, too. Again, too early to tell if it’s a long-term trend, or perhaps just an Adele-inspired bump. But near-term good news is still much better than years of decline.

A year later, he’d done just that, raising his already big bet on radio — a business that many would argue is in decline. Now, under his guidance, the nation’s largest radio broadcaster is implementing an aggressive digital music strategy in the hopes of stealing the online radio spotlight from Pandora.

In an interview with Kara Swisher at our D: Dive Into Media conference, Pittman chatted about Clear Channel, the future of radio and why social networking is one of its greatest allies.

“Radio is a party,” Pittman said, contrasting it with music-collection services like iTunes and Spotify, which are more individual experiences. “It’s like walking down the street and seeing a crowded bar and wanting to go in and socialize. One of the reasons radio does so well is that it’s inherently social.”

If that’s the case, how important are social networking services to Clear Channel’s future? Pittman said that some are more important than others, and the most important of all is Facebook.

“In terms of the social platform, Facebook is where you want to go,” Pittman said, noting that the company does partnerships very well. “Google is also trying to do social in other ways, but it’s just not a company that builds partnerships in the ways that we like to do them.”

Pittman continued, noting that radio is a much broader service now than it is perceived as.

“What we build in radio are these incredible franchises,” Pittman said. “However our listeners want to get to those franchises is fine — whether it’s radio or Internet or TV,” Pittman said. “Everyone’s trying to protect business models, but in the end it’s the consumer that rules, and we have to deliver the content to them however they choose to consume it.”

How worried, then, is Pittman about music services like Pandora and Spotify. Are they rivals?

“We look at other radio as competitors,” Pittman said. “We do compete with Pandora on some aspects, but music collecting is really not what we do. At the end of the day, we are radio people, we know how to curate. What you see with iTunes and Spotify is a new way of merchandising music. We don’t do that, nor do we have an expertise in it.”

That’s because the remaining $55 million never got spent, according to sources familiar with the company. That funding was contingent on the start-up hitting certain milestones that were never met.

So that’s a bit of good news — or at least coulda-been-worse news — for Beyond Oblivion’s backers. That list includes Allen & Co., the nonprofit Wellcome Trust and News Corp., which owns this site.

Beyond Oblivion’s pitch — a subscription music service that came bundled with hardware — was always a head-scratcher, in large part because an earlier incarnation had already failed, even though it had been backed by Nokia and Universal Music Group.

But then again there still aren’t many people that have really figured out digital music. If you place Pandora and Spotify in the “jury’s still out” category (Pandora has yet to turn a profit, and Spotify is still in its early stages), then the only companies that have really made digital music work have been Apple and Amazon — two giants that don’t depend on digital music at all.

So, my guess is that we’ll continue to see other folks like Beyond Oblivion’s Adam Kidron, who was convinced he’d cracked the code. Here’s an interview I conducted with him back in March, when he was still very much an optimist.

]]> http://allthingsd.com/20120103/a-55-million-silver-lining-for-beyond-oblivions-backers/feed/ 0 http://allthingsd.com/20120103/final-tech-stock-tally-for-2011-rout-roh/ http://allthingsd.com/20120103/final-tech-stock-tally-for-2011-rout-roh/#comments Tue, 03 Jan 2012 13:25:55 +0000 Kara Swisher http://allthingsd.com/?p=159140

Last week, I posted on the so-so overall performance of tech stocks in 2011.

Most were in the negative numbers going into last week, and they stayed that way for the full-year comparison.

Bottom line: Tech was a bad investment if you started buying stocks on the first day of trading in January of 2011. And you got really socked if you bought into most of the IPOs of a spate of new Internet companies.

No pressure for 2012, Facebook! (I’m talking to you, Sheryl Sandberg!)

As we open trading this morning after the holidays, here’s where we stand with share prices since one year ago from a sample group I wrote about the most in 2011:

UP

Google: Rose 8.7 percent.

eBay: Rose 8.98 percent.

Apple: Rose 25.6 percent.

Jive Software: Rose 6.7 percent (went public December 15, 2011).

DOWN

Amazon: Declined 4.3 percent.

Yahoo: Declined 3.01 percent.

Microsoft: Declined 6.99 percent.

Cisco: Declined 10.6 percent.

ROUT-ROH DOWN

AOL: Declined 36.3 percent.

Hewlett-Packard: Declined 38.8 percent.

Juniper: Declined 44.7 percent.

FRESHMAN SLUMP (AND INVESTOR DUMP)

Zynga: Declined 0.95 percent (went public December 19, 2011).

Groupon: Declined 20.99 percent (went public November 7, 2011).

LinkedIn: Declined 33.2 percent (went public May 20, 2011).

Pandora: Declined 42.5 percent (went public June 16, 2011).

Yandex: Declined 49.3 percent (went public May 25, 2011).

]]> http://allthingsd.com/20120103/final-tech-stock-tally-for-2011-rout-roh/feed/ 0 http://allthingsd.com/20111226/most-tech-stocks-were-naughty-some-nice-and-only-apple-merry-as-year-ends/ http://allthingsd.com/20111226/most-tech-stocks-were-naughty-some-nice-and-only-apple-merry-as-year-ends/#comments Mon, 26 Dec 2011 21:06:59 +0000 Kara Swisher http://allthingsd.com/?p=157036

The stock market is closed today, as part of the Christmas holiday. But it is doubtful — barring any major announcements — that the vastly different performances seen by a range of tech companies will change much.

Which is to say, some companies — such as eBay and Google — did well, although only Apple shares rose significantly enough to cause festive feelings.

As of Friday, Google rose almost 7 percent for the year to date, eBay rose 10.8 percent and Apple was up almost 26 percent.

As for all the others in tech? Lumps of coal for investors of varying size.

Let’s start with the better negative performances: Amazon was down 1.95 percent, Yahoo was down 2.7 percent and Microsoft was down 6.7 percent.

Not exactly anything to wassail about. And Yahoo shares were only down a little, since the recent swirl around its possible sale gave its stock a recent bump, or the performance would have been worse, based on its financial results.

And the oft-troubled AOL? Down 35.3 percent.

The crop of new Internet companies was also not doing so great. The latest, Zynga was down only 1.2 percent, Groupon down 12.5 percent and LinkedIn down 32.3 percent. Pandora truly tanked, with a 42.5 decline in share price. Only Russia’s Yandex bested that, with a 48.6 percent drop.

Enterprise-focused companies also had a lackluster year. While recently public Jive Software was up 9.2 percent, Cisco was down 8.7 percent and Hewlett-Packard was down 38.5 percent. Juniper got truly socked, with a 43.6 percent decline.

The music you are looking for right about now is “(Hey, Won’t You Play) Another Somebody Done Somebody Wrong Song” by B.J.Thomas, which you can enjoy here in this timely video:

]]> http://allthingsd.com/20111226/most-tech-stocks-were-naughty-some-nice-and-only-apple-merry-as-year-ends/feed/ 0 http://allthingsd.com/20111216/game-on-zynga-slightly-higher-on-first-day-of-trading/ http://allthingsd.com/20111216/game-on-zynga-slightly-higher-on-first-day-of-trading/#comments Fri, 16 Dec 2011 16:15:08 +0000 Tricia Duryee http://allthingsd.com/?p=154628

Zynga has opened its stock-market debut at $11 a share, a small increase over its initial pricing from last night.

Late last night, the San Francisco social games company officially priced its shares at $10 apiece. It was hoping to sell up to 100 million shares at $8.50 to $10 apiece. At $10, Zynga was able to raise $1 billion in capital.

But investors aren’t going nuts for the stock. At one point this morning ZNGA shares were trading below their initial price at $9.50 a share.

That’s certainly not the kind of pop companies look for. On the bright side, perhaps the small (or non-existent) bump will make the company less likely to suffer the double-digit declines that recent Web IPOS like LinkedIn, Pandora, and Demand Media have all experienced this year.

At this price, the company is valued at $7.6 billion. That makes CEO Mark Pincus’s stake worth $1.2 billion.

]]> http://allthingsd.com/20111216/game-on-zynga-slightly-higher-on-first-day-of-trading/feed/ 0 http://allthingsd.com/20111213/rara-sells-streaming-music-to-everyone-who-hasnt-heard-of-streaming-music/ http://allthingsd.com/20111213/rara-sells-streaming-music-to-everyone-who-hasnt-heard-of-streaming-music/#comments Tue, 13 Dec 2011 10:00:53 +0000 Peter Kafka http://allthingsd.com/?p=152951 You get your legal music on the Web from services like Apple, Amazon, Google, Spotify and Pandora. Also, perhaps, from services like Rhapsody, MOG and Rdio, etc.

Yet here comes one more, via Rara.com. The U.K.-based company launches in 18 countries today, selling a streaming music service to an audience that either hasn’t heard of streaming music services or is baffled by the existing ones.

The basics: Rara is run by Rob Lewis, the founder of Omnifone, which powers music services for the likes of Sony and Research In Motion — as well as Rara. For $5 a month, users get unlimited, ad-free streaming music delivered via the Web; for $10, users get to take their music on the go, via an Android app (an Apple app is coming, Lewis says).

In other words, it’s exactly the same model offered by the likes of Rhapsody, and very similar to the one offered by Spotify. Except Spotify offers a free, ad-supported service as well.

So why bother launching another competitor? Lewis argues that:

• Existing music services are more complicated than they should be.
• Most people don’t use the legal music services that are out there.

True on both counts. Figuring out how to sync music across devices, or how to cache songs on your phone, can be difficult even for people who pay attention to this stuff for a living (cough).

And there are perhaps five million people worldwide paying a monthly fee for music. Which is many more than there were a few years ago, but a tiny number in the grand scheme of music listeners.

And, so … what? Lewis argues that Rara offers an incredibly easy interface, with plenty of preprogrammed stations for people who like music but don’t want to work for it. I haven’t used it myself, so I can’t argue with him on those counts. But I’m not sure about the notion that there are lots of people who would pay for streaming music, but don’t because it’s too complicated. I figure most people don’t pay for streaming music because they’re satisfied with the free options they have.

In any case, we get to find out now. Rara is launching with an assist from Hewlett-Packard, which is embedding links to the service on some of its PCs. It’s also offering a three-month trial for 99 cents a month.

]]> http://allthingsd.com/20111213/rara-sells-streaming-music-to-everyone-who-hasnt-heard-of-streaming-music/feed/ 0 http://allthingsd.com/20111202/zynga-ups-the-ante-on-ipo-to-raise-as-much-as-1-15-billion/ http://allthingsd.com/20111202/zynga-ups-the-ante-on-ipo-to-raise-as-much-as-1-15-billion/#comments Fri, 02 Dec 2011 11:16:43 +0000 Tricia Duryee http://allthingsd.com/?p=149654 Zynga is officially on its way to IPO-Ville.

The company filed documents with the Securities & Exchange Commission this morning, indicating that it intends to raise between $850 million and $1.15 billion in its public offering.

At the high end of the range, that would translate to roughly $150 million more than it had previously estimated it could raise.

The company is seeking to sell 100 million shares at $8.50 to $10 a share and will reserve 15 million additional shares for extra demand. It expects to trade on the Nasdaq under the ticker ZNGA.

Under the best circumstances, the company will be valued at nearly $7 billion based on 699.3 million shares outstanding. That falls below some of the rumored expectations that have been floating around over the past few weeks.

Still, at that value, it will come close to the public valuation of Electronic Arts, which hovers around $7.8 billion, but falls short of other game publishers, like Activision, which has a value of  $14 billion.

Zynga has made its riches off selling virtual goods in social games on Facebook. Some of its most recognizable titles include FarmVille, CityVille, Poker and Words With Friends.

Virtual goods often allow players to continue to play the game and level-up faster, such as an energy boost. They also can be decorative in nature, like an outfit for an avatar or seeds to plant on a farm. Of the roughly 230 million monthly active users, very few players ever bother making a purchase.

Since the beginning, the company has a very close relationship with Facebook, which has been contentious at times, especially since the platform started collecting a 30 percent tax on all virtual goods sold. More recently, the company has tried to expand to other platforms, including the launch of several games on mobile and Google+. It also has its own online game network in production.

The company’s IPO will be one of the largest tech offerings in recent memory.

In early November, Groupon raised $700 million including overallotments. It had originally sought to raise $750 million. Other recent tech IPOs include Angie’s List, Pandora and LinkedIn.

But some critics think Zynga is rushing its offering before a broad financial collapse. If it waited until reporting fourth-quarter results, it could paint a stronger growth story as it completes the busy holiday period.

The San Francisco company, which was founded in 2007, was named after Founder and CEO Mark Pincus’s dog named Zinga.

In 2010, Zynga recorded a profit of $27.9 million on revenues of $597.5 million. In the first nine months of 2011, it broke even on revenues of $828.9 million.

While its revenues continue to grow, the number of daily active users that play its games has fallen two quarters in a row and some critics question whether the company can keep up its aggressive growth.

In recent weeks, Pincus has come under harsh criticism for his heavy-handed leadership approach. But to his credit, he has overseen rapid growth, including the acquisition of dozens of smaller game studios. Today, his company has 2,500 employees.

At the mid-range of its expectations, Zynga will bring home proceeds of $889.4 million after selling shareholders take their winnings.

The primary purpose of the sale is to increase its visibility in the marketplace and create a market for its stock. Proceeds will go towards working capital, but also $83.6 million will be spent to satisfy tax withholding obligations related to stock of current and former employees. Additionally, it plans to use a portion of the proceeds for charitable causes through its Zynga.org initiative.

As part of the sale, the company will have three classes of shares. Class A stock will have one vote per share; Class B stock will have seven votes; and Class C will have 70 votes.

Pincus owns some Class B shares, and all of the company’s Class C shares. Following the offering, he will control 36.2 percent of the company’s voting power.

As Kara Swisher previously reported Pincus will not sell any shares in the offering.

No other executives have plans to sell stock, either. But a number of the company’s early investors will sell stock, including Institutional Venture Partners, Union Square Ventures, Foundry Venture Capital and Avalon Ventures. Other interesting names that made the list include Google, which will sell 1.7 million shares.

The company’s largest institutional holder, venture capital firm Kleiner Perkins Caufield & Byers, which owns 11 percent of the shares, will not sell any of its stock in the offering either.

]]> http://allthingsd.com/20111202/zynga-ups-the-ante-on-ipo-to-raise-as-much-as-1-15-billion/feed/ 0 http://allthingsd.com/20111122/pandora-beats-the-street-which-yawns/ http://allthingsd.com/20111122/pandora-beats-the-street-which-yawns/#comments Tue, 22 Nov 2011 22:43:55 +0000 Peter Kafka http://allthingsd.com/?p=146811 Pandora turned in revenue and earnings numbers that were in line with Wall Street’s expectations, and boosted its forecast for next year and the rest of 2011.

Investors are yawning, though, and perhaps even frowning a bit — they’ve knocked a few cents off the company’s share price in after-hours trading, and it’s now down 3 percent, to $11.50.

For the record: The streaming music/Web radio service generated $75 million and non-GAAP earnings of 2 cents, topping street estimates of $71 million and a one-cent loss. It bumped up revenue and earnings predictions for both the next quarter and all of 2012.

And while the initial earnings report doesn’t disclose the breakdown, Pandora CEO Joe Kennedy says that mobile streams — Pandora is huge on the iPhone, and very big on Android — once again constituted about 70 percent of the music the company pumped out in the last quarter. Mobile ads made up about half the company’s ad revenue, he said.

So what about competition from new services like Spotify, which launched in the summer and got a huge boost from Facebook this fall, and Clear Channel’s “iheartradio” service? Nothing to see here, Kennedy said during his prepared remarks: “We have seen no impact on our growth trends from any of the activities of other digital music services.”

(Image from animal-space.net)

]]> http://allthingsd.com/20111122/pandora-beats-the-street-which-yawns/feed/ 0 http://allthingsd.com/20111121/tunein-the-sequoia-funded-radio-app-with-more-usage-than-pandora-and-spotify/ http://allthingsd.com/20111121/tunein-the-sequoia-funded-radio-app-with-more-usage-than-pandora-and-spotify/#comments Mon, 21 Nov 2011 14:00:16 +0000 Liz Gannes http://allthingsd.com/?p=146096 It’s getting harder to find a diamond in the rough among Internet start-ups. Investors hurry to hand out seed funding. No press release seems too small to get picked up by a blog or two. Baby companies even get coverage when they’re accepted to start-up accelerators.

But here’s a contender: TuneIn is a radio app that gets more usage on iPhone and Android than Pandora or Spotify, according to a recent study.

In fact, TuneIn told AllThingsD last week, in October it had 30 million active users listening to 58,000 different stations from all over the world, with 200 new streams, podcasts or on-demand channels added every day.

Palo Alto, Calif.-based TuneIn is not your average start-up. It was founded in 2002 in Dallas as RadioTime, and for years built an online directory for radio stations that was available through partnerships with makers of devices like the Logitech Squeezebox and Sonos.

Then an outside developer made a popular iPhone app called TuneIn that used the directory to help users stream and record radio on their phones.

RadioTime bought TuneIn last year, and renamed itself and its radio apps for nearly every phone, living room and car app platform. Some 150 of those platforms have TuneIn available now, many of them preinstalled.

TuneIn users can browse among stations and genres; they can also search for an artist or song to find stations that are currently playing it. Most of the apps are free, but on iOS, Android and BlackBerry, users can pay for a pro version that lets them record what they’re listening to.

Late last year, Sequoia Capital secretly invested $6 million in the company and moved it to California. In recent months, it helped find a replacement for the longtime CEO with gaming industry vet John Donham. Donham most recently co-founded Metaplace and sold it to Disney, where he ran technology and product operations for Disney Interactive Media Group.

Donham (pictured below) said in an interview last week that he was happily going about his business at Disney and about to blow off a call from Sequoia’s recruiter because he’d never heard of TuneIn, when he realized he already had the app installed on his phone. Then he looked at some of the glowing TuneIn app reviews from people listening to their hometown radio from halfway around the globe. And then he got a look at the usage stats.

“There’s nothing viral about TuneIn,” Donham recalled thinking. “How did it get to millions of people with no viral and no marketing?” He joined in August.

Of course, there’s a good reason that Spotify and Pandora get more love than TuneIn. They’re creating new music discovery experiences, rather than simply translating existing radio content for a new medium. And they are personalized and social.

(This weekend, while listening to a random pop station on TuneIn at the gym, I heard its local ads for a laser hair removal shop in Minnesota. It’s probably not going to be getting my business anytime soon.)

But while apps like Spotify and Pandora may be shiny and better-known, Donham said, radio is still the top way people find new music.

For now, TuneIn doesn’t add its own advertising, though that will probably come, Donham said. The company is starting a campaign this week with listener-funded stations — like its local KQED — to solicit donations from listeners directly within its apps. It will also soon add discovery and sharing features.

Update: This story was updated to reflect that Sequoia Capital’s investment came in 2010.

]]> http://allthingsd.com/20111121/tunein-the-sequoia-funded-radio-app-with-more-usage-than-pandora-and-spotify/feed/ 0 http://allthingsd.com/20111117/peter-chernin-on-hollywood-asia-growth-and-not-yahoo-the-full-asiad-interview-video/ http://allthingsd.com/20111117/peter-chernin-on-hollywood-asia-growth-and-not-yahoo-the-full-asiad-interview-video/#comments Thu, 17 Nov 2011 22:34:20 +0000 Kara Swisher http://allthingsd.com/?p=145420

We are now posting the full videos from the recent AsiaD conference, which took place in Hong Kong in October.

We’re following the schedule of the actual event. Up now: Hollywood mogul Peter Chernin.

The much-respected entertainment exec, who was the longtime president of News Corp. (which owns this Web site), now runs his own production company in Santa Monica, Calif.

Chernin Entertainment has had some big early successes, including the hit movie “Rise of the Planet of the Apes,” and the adorkable television show “New Girl.”

But Chernin has always been much more Internet-curious than the average Hollywood mogul. He was deeply involved in the creation of the Hulu premium video service, and now serves on the board of the Pandora online music site. He’s also been giving the troubled situation at Yahoo a look-see with some private equity firms.

Chernin declined to talk about this deal in an onstage interview with Peter Kafka, but he does discuss the prospects for the old media world in the digital age, and the giant opportunities in Asia:

]]> http://allthingsd.com/20111117/peter-chernin-on-hollywood-asia-growth-and-not-yahoo-the-full-asiad-interview-video/feed/ 0 http://allthingsd.com/20111115/kindle-fire-a-grown-up-e-reader-withtablet-spark/ http://allthingsd.com/20111115/kindle-fire-a-grown-up-e-reader-withtablet-spark/#comments Tue, 15 Nov 2011 23:28:03 +0000 Walter S. Mossberg http://allthingsd.com/?p=144524 It’s often said that there isn’t really a tablet market, just an Apple iPad market with a bunch of other contenders fighting over the remnants. But, starting this week, that is likely to change, because Amazon is adding a multifunction color tablet to its popular Kindle line that costs less than half as much as an iPad 2.

This new $199 device is called the Kindle Fire, and after testing it for a week, I think it’s a good—though not a great—product and a very good value. It doesn’t just add color to the Kindle, it adds a robust ability to store and stream music, TV shows and movies—and a weaker ability to store and display color photos. And it offers about 8,500 apps at launch, including Netflix, Angry Birds and QuickOffice.

To be clear, the Kindle Fire is much less capable and versatile than the entry-level $499 iPad 2. It has a fraction of the apps, a smaller screen, much weaker battery life, a slower Web browser, half the internal storage and no cameras or microphone. It also has a rigid and somewhat frustrating user interface far less fluid than Apple’s.

Kindle Fire

But the Fire has some big things going for it. First, the $199 price, though the Fire’s seven-inch screen is less than half the surface area of the iPad’s display. Second, the Amazon and Kindle brands, already known and loved for e-readers and more. Third, Amazon is the only major tablet maker other than Apple with a large, famous, easy-to-use content ecosystem that sells music, video, books and periodicals. The Fire can be thought of as a hardware front end to all that cloud content.

Finally, while the Fire, like many other tablets, is based on Google’s Android operating system, Amazon has taken the bold step of hiding Android. It shuns its user interface and nearly all of Google’s apps and services, including Google’s app store. The Fire’s software is all about the content and apps Amazon has sold you and the easy purchase of more.

When compared to the iPad 2, I suspect the Fire will appeal to people on a budget and to those who envision using the iPad mainly to consume content, as opposed to those who see the larger tablet as a partial laptop replacement. For instance, while the Fire has a decent Web browser and a rudimentary email program, it lacks basic built-in apps, such as a calendar, notepad or maps. However, for people primarily interested in reading books and periodicals, the Fire may seem too heavy and costly when compared with a low-end Kindle or Nook.

Barnes & Noble’s Nook Tablet

The Fire isn’t only competing with the iPad and other general-purpose tablets. It has to contend with a new, low-price, similar-size color tablet out this week from e-reader rival, Barnes & Noble. This device, the Nook Tablet, is B&N’s second-generation color slate and costs $249, still less than an iPad. I’ve also been trying it out for a few days and found it has some pluses and minuses compared with the Fire.

The Nook Tablet boasts double the internal storage and a slot to expand it. It has better battery life and a more interactive approach to children’s books. But beyond books and magazines, it lacks either Amazon’s or Apple’s large, simple, built-in ecosystem for other kinds of content, such as music, movies and TV shows.

Instead, Barnes & Noble boasts it offers choice, by including video apps like Netflix and music apps like Pandora. However, these same apps also appear on the Fire and the iPad, along with the Amazon and Apple stores.

And it appears to offer even fewer apps than Amazon does (Barnes & Noble doesn’t provide a number). Also, while its screen is the same size as the Fire’s, the Nook is larger overall, though a bit lighter.

Hardware

The Fire’s hardware is plain and clunky. It’s a thick black box with zero style. There isn’t even a volume control or a physical home button, and the on/off button is a small thing hidden inconveniently on the bottom edge.

In the quest to meet the $199 price point, Amazon omitted many features common on other tablets. There are no cameras or microphone, no GPS for determining your location, no Bluetooth for headsets or wireless speakers and no included earbuds. The Fire is Wi-Fi only—it has no built-in cellular connectivity. There isn’t even an included cable for connecting to a computer, something you may want to do to get photos into the Fire, since Amazon lacks an online photo service.

There is just 8 gigabytes of memory, half the total of the base iPad or the Nook Tablet, and only about 6 gigabytes of that is available to store content. If you want to download movies, you won’t be able to fit many into the Fire.

User Interface

When I first saw it, I really liked the Fire’s user interface. Instead of screens full of icons or folders, it presents virtual shelves filled with the books, magazines, music, TV shows, movies, apps and websites you’ve used. A large one has the most recent items, with smaller shelves below it. These are for your favorite items. Across the top is a search bar and a list of categories, like Books, Music, Videos, Apps.

But I became frustrated with the interface. There’s something off with the touch calibration on the top shelf, or Carousel, which scrolls through a seemingly endless stream of items. It can be difficult to get it to stop on the item you want and it takes more pressure than it should to open the selection.

Also, you can’t configure the main screen much. You can’t reorder the top shelf, and while you can place items on the favorites shelves, they are in the order you added them, not how you like them.

On the Nook Tablet, the user interface is a jumble of different approaches, which I consider confusing. There’s a main screen where you can place favorite icons but also see a scrolling row of items, a drop-down list of other items and a bottom row of tiny icons representing categories. But there’s also a separate interface called the library, with categories and shelves.

Browser

A big selling point for the Fire is a supposedly speedy Web browser called Silk, which splits the task of fetching Web pages between the tablet and Amazon’s super-fast cloud computers. The latter can cache common, static page elements and learn which sites and pages people most often use, so they are pre-fetched and ready to go when needed.

However, in my tests, the Fire’s Silk browser was noticeably slower than the iPad 2′s browser.

This pattern was consistent over scores of Web pages, and on four Wi-Fi networks and two different Fire devices. Amazon’s explanation is that its split-browser system requires lots of user data to achieve its speed advantages, and only a small number of people are using it, so it will get faster over time.

Content

I found it easy to buy, stream, download and use content on the Fire. Reading books was a pleasure, as on any Kindle. Movies and TV shows looked good, and music played quickly and well, despite weak speakers. In general, I found magazines and newspapers looked better on the iPad, mostly due to the larger screen.

Recognizing this, Amazon offers a “text view” of magazines, which makes them easier to read but loses the original formatting.

Screen

After years of suggesting the gray-scale, E-Ink screen on the Kindle was better for reading than a color LCD screen, Amazon now has a Kindle with the latter display. If anything, it struck me as glossier than the iPad screen. It’s vivid and sharp, but not high definition. When I asked an Amazon executive about the reading issue and the company’s past position, he suggested people who prefer E-Ink buy one of each Kindle and use the older style for reading, pointing out the pair would cost less than an iPad. I said, while that was true, such people would be carrying two devices, not one.

Battery Life

In my standard tablet battery test, playing back to back videos with the wireless turned on and the screen at 75% brightness, the Fire lasted 5 hours, 47 minutes, or less than 60% of the iPad 2′s performance on the same test, and about an hour less than the Nook Tablet’s performance. In more general use, I didn’t find myself worrying about the battery. But the Fire requires charging much more often than the traditional Kindle.

Bottom Line

At $199, and with Amazon’s content ecosystem behind it, the Fire is an attractive alternative for many people who might otherwise have bought an iPad or another Android device, especially if their principal interest is content consumption.

The Nook Tablet also is worth considering, though it lacks a music and video ecosystem.

Email Walt at mossberg@wsj.com.

]]> http://allthingsd.com/20111115/kindle-fire-a-grown-up-e-reader-withtablet-spark/feed/ 0 http://allthingsd.com/20111115/nokia-launches-pandora-like-service-for-new-lumia-phones/ http://allthingsd.com/20111115/nokia-launches-pandora-like-service-for-new-lumia-phones/#comments Tue, 15 Nov 2011 14:35:14 +0000 Peter Kafka http://allthingsd.com/?p=144215 It’s the week for tech giants to unveil music plans, apparently: A day after Apple launched iTunes Match, and a day before Google launches its music service, Nokia is taking the wraps off Mix Radio, a Pandora-like streaming service. The app will run on Nokia’s new Lumia handsets using Microsoft’s Windows Phone operating system; music tech start-up the Echo Nest will power the app’s personalization engine.

]]> http://allthingsd.com/20111115/nokia-launches-pandora-like-service-for-new-lumia-phones/feed/ 0 http://allthingsd.com/20111109/amazon-reminds-nook-buyers-that-the-fire-will-have-netflix-too/ http://allthingsd.com/20111109/amazon-reminds-nook-buyers-that-the-fire-will-have-netflix-too/#comments Wed, 09 Nov 2011 14:59:32 +0000 Peter Kafka http://allthingsd.com/?p=142241 So this is an Amazon press release worth reposting: Confirmation that when the Kindle Fire ships next week, it will give users the ability to install apps from Netflix and Pandora, among others.

No surprise there — Netflix and Pandora are two of the four apps Amazon talked up at the Fire’s rollout event (along with Facebook and Twitter).

But it’s worth reminding folks that the tablet will work with third-party video and music services, because those are the same two services that Barnes & Noble referred to, over and over, when it unveiled its own Nook tablet this week.

Barnes & Noble’s suggestion — actually, the company spelled it out repeatedly — was that while its tablet wouldn’t have an integrated music/movies vending machine like Amazon will have, that was actually an advantage, because it meant it could work with outside services like Netflix and Pandora.

Anecdotally, that seems to have been an effective ploy — lots of folks I’ve talked with about the two tablets are under the impression that Amazon won’t have Netflix, because Netflix is a rival to Amazon’s in-house service. That said, the Nook will have access to Hulu Plus, and the Fire doesn’t (for now).

The Nook and the Fire are also on equal footing when it comes to Google’s Android Market — users won’t be able to shop there using either device, even though both tablets are built using Android. Barnes & Noble was upfront about this earlier this week; Amazon doesn’t spell it out but makes it clear via the release below, which says Fire users will be able to use “several thousand of the most popular Android apps.”

Press release excerpt:

Facebook, Pandora, Netflix, Rhapsody, Games from Electronic Arts, Zynga and Rovio, and Several Thousand More Apps and Games Coming To Kindle Fire Next Week

Just like with movies and TV shows, music, books, and magazines, Kindle Fire offers a fully-integrated Android apps and games experience – purchase or register for an app or game once, enjoy it on your Kindle Fire and other Android-based devices – and all apps and games are backed up in the Amazon Cloud for re-download anytime

SEATTLE – November 9, 2011 (NASDAQ: AMZN) – When Kindle Fire customers across the country open their boxes next week, they will be able to choose from several thousand of the most popular Android apps and games, including Netflix, Rhapsody, Pandora, Twitter, Comics by comiXology, Facebook, The Weather Channel and popular games from Zynga, EA, Gameloft, PopCap and Rovio. Kindle Fire customers will be able to download these apps and games without having to register multiple times and using Amazon’s simple and secure 1-Click payment technology. Plus, all apps are Amazon-tested on Kindle Fire for the best experience possible, customers can get a great “paid” app for free every day, and once you’ve downloaded an app from the Amazon Appstore, it’s available on Kindle Fire as well as your other Android-based devices.

“We started talking to app developers everywhere the day we introduced Kindle Fire, and the response has been overwhelming,” Dave Limp, Vice President, Amazon Kindle. “In addition to over 18 million movies, TV shows, songs, books, and magazines from Amazon, we are excited to offer customers thousands of apps and games to choose from on Kindle Fire – from Pandora and Rhapsody to Facebook and Twitter to Netflix, as well as popular games from EA, Zynga and many other top game developers. And this is only the beginning – we’re adding more apps and games every day across all categories.”

With the Netflix app, Kindle Fire customers who are Netflix members can browse and instantly watch unlimited TV shows and movies and resume watching where they left off on their TV or computer. “We’re excited to team up with Amazon to give what we think will be a huge community of Kindle Fire owners the opportunity experience all that Netflix has to offer,” said Bill Holmes, Vice President of Business Development at Netflix. “We’re certain that our members will have a great viewing experience on Kindle Fire.”

… Additional examples of apps and games that will be available to Kindle Fire customers include Allrecipes, Bloomberg, Cut the Rope, Doodle Fit, Doodle Jump, Fruit Ninja, Jenga, LinkedIn, Zillow, Airport Mania, Battleheart, Pulse, The Cat in the Hat, Quickoffice Pro, Jamie’s 20-Minute Meals, IMDb Movies & TV, and Monkey Preschool Lunchbox.

]]> http://allthingsd.com/20111109/amazon-reminds-nook-buyers-that-the-fire-will-have-netflix-too/feed/ 0 http://allthingsd.com/20111107/the-nook-doesnt-need-the-cloud-the-nook-needs-the-cloud-discuss/ http://allthingsd.com/20111107/the-nook-doesnt-need-the-cloud-the-nook-needs-the-cloud-discuss/#comments Mon, 07 Nov 2011 19:49:31 +0000 Peter Kafka http://allthingsd.com/?p=141354 If you buy the new Nook Tablet, you won’t have to depend on the Cloud to get all the media you love.

Except when you have to use to the Cloud to get all the media you love.

Confused? Not surprising. Barnes & Noble’s messaging around the Nook, which launched today, is a bit muddled. But let me try to spell it out for you:

Unlike Amazon and its Kindle Fire, Barnes & Noble isn’t marketing its tablet with a proprietary cloud service that will get you access to music, movies and TV shows. Instead, the bookseller is leaving that up to other cloud-based services, like Netflix and Pandora.

But make no mistake — these are cloud-based services. Which means you’re almost always going to need an Internet connection to make them work.

And while Barnes & Noble is playing up the fact that its tablet comes with twice the storage capacity of the Kindle Fire, it doesn’t really think you’ll use that storage for music and video.

That is: You can “sideload” media you own onto the Nook from your PC or another device. But the company doesn’t think you will. It thinks you’ll stream your stuff instead.

In order to move movies and TV shows on the gadget, for instance, you wouldn’t be able to use any digital video you bought from Amazon or Apple. Instead you’d have to get your hands on unencrypted MP4 video files, or something similar. And if you know what that means, or how to do it, you’re not the Nook’s target audience.*

And while it’s possible to move music from your iTunes collection onto the machine, B&N doesn’t think you will do that, either.

Here’s a transcript of the brief exchange I had with B&N CEO William Lynch after his press conference, because I wanted to make sure I understood the company’s take:

Peter Kafka: Do you expect regular users to move media from their device to a Nook, or do you think most of them are going to get music and movies via Pandora and Netflix?

William Lynch: Probably more of the latter. Just because they have most of their libraries … I mean, you have a level of sophisticated user that does the former. But as I said, if you look at Netflix, they have 30 million [sic] subscribers..

Kafka: Right. And if I have music on iTunes, can I move it onto the Nook?

Lynch: You can take your MP3 and MP4 players …

Kafka: So I can convert it to an MP3, and move it …

Lynch: And move it, sideload it.

Kafka: OK. So it’s not really a mainstream use. You expect most people to stream music and movies to the device.

Lynch: That’s right.

After this conversation I triple-checked with B&N’s PR reps, who tell me that customers shouldn’t have to convert iTunes files, because most of them will already be in DRM-free AAC format. But the fact that the company’s CEO thinks they won’t want to sideload anyway is the real takeaway.

[UPDATE: Subscription music service Rhapsody, which will work with the Nook Tablet, tells me users will be able to cache some songs for offline play, so the storage capacity could put to use there. I've asked MOG, another Nook-compatible subscription service, if they're doing offering the same thing.]

There’s nothing wrong with that approach, theoretically. But if you’re not going to store movies on the device, then B&N shouldn’t argue that you could watch 5 HD movies on a long airplane flight, on a single charge, since you wouldn’t have any way of actually getting them (good luck streaming HD movies on airplane wireless). And it shouldn’t tell us that we could watch up to nine hours of video on the machine with wireless off, for the same reason.

It’s also a bit odd for B&N to play up its access to Netflix and Pandora, since those are two of the four apps that Amazon all but promised it would have on the Fire. (To be fair to B&N, it is also offering access to Hulu Plus, and Amazon hasn’t said boo about that.) And again — those are cloud-based services, which means they ought to be careful about reminding us that “people aren’t always connected to the Cloud,” which they did repeatedly throughout their press conference.

Product claims aside, the real story behind the mixed messaging seems to be that B&N still fundamentally views the Nook as a reading device which will let you read the stuff it sells. And you will be able to store lots of that stuff on the Nook, which means you won’t need Internet access to get it.

Digital books, magazines, etc., are a $65 billion to $70 billion market, Lynch said during his press conference. And that’s plenty for him for the time being: “We’re not going to launch something where we don’t think we can add material value just to get into the game.”

Reasonable enough. But Jeff Bezos and company are very much in that game. And if Lynch decides he wants to play later, he’ll have to play catch-up.

*B&N’s target audience is a woman with 2.3 kids, Lynch said after the event. So at the risk of perpetuating a stereotype, I’m going to assume that the advice a B&N rep gave me today — to rip a DRM-free MP4 from a DVD, then port it to the tablet — isn’t the one it’s going to bring up very often in its marketing materials.

]]> http://allthingsd.com/20111107/the-nook-doesnt-need-the-cloud-the-nook-needs-the-cloud-discuss/feed/ 0 http://allthingsd.com/20111102/regional-carrier-c-spire-offers-another-twist-on-unlimited-data-for-the-iphone/ http://allthingsd.com/20111102/regional-carrier-c-spire-offers-another-twist-on-unlimited-data-for-the-iphone/#comments Wed, 02 Nov 2011 12:00:15 +0000 Ina Fried http://allthingsd.com/?p=139249 Sprint is no longer the only game in town when it comes to unlimited data on the iPhone, at least if you live in certain parts of the U.S.

Starting Nov. 11, regional carrier C Spire (formerly Cellular South) will offer the iPhone 4 and iPhone 4S with a number of unlimited options.

The two lower-priced options, at $50 and $70 per month, include unlimited Web surfing and other data, but specifically exclude streaming media services like Netflix and Pandora. Two higher-priced plans, at $90 and $100 per month, include truly unlimited data, along with either 1,000 voice minutes or unlimited calling.

C Spire will sell the iPhone 4 and iPhone 4S at the same prices being offered by Sprint, AT&T and Verizon. Both Verizon and AT&T had unlimited data plans for the iPhone, but they no longer offer them to new customers.

“(The) iPhone 4S offers an abundance of new features, and with our Choice Infinite data plans customers can enjoy all of them on our network without having to think about their next bill,” C Spire CEO Hu Meena said in a statement.

]]> http://allthingsd.com/20111102/regional-carrier-c-spire-offers-another-twist-on-unlimited-data-for-the-iphone/feed/ 0 http://allthingsd.com/20111028/music-for-nothing-and-the-fans-for-free/ http://allthingsd.com/20111028/music-for-nothing-and-the-fans-for-free/#comments Sat, 29 Oct 2011 00:10:56 +0000 Hany Nada http://allthingsd.com/?p=137483 Consumers won’t pay for recorded music in the future — but fans will pay for music experiences.

When the dust finally settles between the artists, labels, and distribution companies, everyone will finally realize fans are more valuable than recorded music. As traditional monetization models for recorded music sales slowly fade away, new monetization methods centered on the fan will emerge.

How do we know music will become free? The stats point to this trajectory. Total revenues for CDs, vinyl, cassettes, and digital downloads worldwide dropped 25 percent from $38.6 billion in 1999 to $27.5 billion in 2008, according to the International Federation of the Phonographic Industry (IFPI). The same revenues in the U.S. dropped from a high of $14.6 billion in 1999 to $10.4 billion in 2008.

As the stats show, sales of recorded music are headed one way — down. Sure, digital music sales have been on the rise in recent years, but they have only partially replaced physical sales, so the overall sales figures are still headed south. And it surely isn’t because people are listening to less music. It’s simply because the old adage holds true: why pay for something that you can get for free? In addition, artists, the ones with the talent, aren’t making money off digital sales. Artists get about $0.09 per song sold digitally on iTunes or Amazon. So for a million downloaded hits, an artist earns $90K. Subtract manager, lawyer, agent and other “fees”, and an artist selling one million downloads would barely make minimum wage off of the recording.

Source: CNN, Forrester

Already, there is a deluge of great (and legal!) sites providing free music — including Pandora, YouTube, Spotify, Grooveshark, MOG, Rdio, and other online destinations. This is a big change from the early days of online music, when free meant illegal. Today, music start-ups have caught on to the profit potential in “giving it away.” Companies like Pandora, which generated $67M of revenue in 2011 Q2, and Spotify with over two million paying users, don’t charge for entry-level service. Instead, these music innovators found a way to monetize music indirectly through advertising and other means. Music still comes at great cost — start-ups still pay high licensing fees to labels — but as the economics shift, licensing fees are likely to decline. (Yes, labels will do a lot of kicking and screaming.)

So how will labels offset the decline in recorded music revenue? How will artists capture more value for their creative work? The clear answer is from their fans. Musicians have really never engaged their fans, maybe every three years while they were on tour, but otherwise they just released albums and expected fans to buy them. Myspace was the first experiment with direct musician-fan engagement, and it started a trend that has continued. Now, over 300,000 musicians have BandPages on Facebook. Just about every musician has a Web site, e-commerce site, and a web strategy. Many are putting their music “out there” for discovery and promotion before it’s ever part of an album. Soundcloud has seven million users who upload their music and recordings, for example. YouTube’s most popular videos are music-related. Bands, managers, and labels understand this trend and are finding new and innovative means to monetize fans.

We anticipate a lot of “creative destruction” and changes to the value model based on fan-driven music marketing models. There are ways to make money from the music experience, and those channels — new and old, low- and high-tech — are creating opportunities for artists, labels, and music start-ups.

Here are some of the ways the music industry will make money going forward.

• Live Music
  While recorded music sales continue to decline, live music revenue has increased in the past few years. The industry has been following this trend closely and focusing more and more on live tours and events. There really isn’t a way to replicate or pirate the live experience. As cellist Zoe Keating joked about piracy at the recent SFMusicTech conference: “Go ahead, try copying me! Just try!”


Source: CNN, Forrester as above

• Patronage
  In the Elizabethan era, artists were supported by wealthy patrons; we’re headed back toward that world. Two models are possible here, and will probably coexist as supplements to the live music monetization. The first is corporate sponsorship, which is already used widely. Take the OK GO music video “This Too Shall Pass,” in which the band discreetly thanks State Farm for making it possible, or the somewhat distasteful product placements ($500K worth) in Britney Spears’s “Hold it Against Me” video. The Black Eyed Peas have become so intertwined with brands that The Wall Street Journal dubbed them the “Most Corporate Band.”

  The other sponsorship model is direct fundraising from fans – also known as crowdsourcing. In 2007, Radiohead released its album “In Rainbows” for free, asking fans to pay as much or little as they pleased. And more recently, Nataly Dawn from Pomplamoose used a Kickstarter campaign to fund her forthcoming solo album. She set out to raise $20,000 but fans overfunded her project by $104,788. This may not seem like a huge sum, but crowdsourcing will make all the difference for indie artists worrying how to pay their rent.

• Curation, Discovery and Network effect
  MP3 players were around for years before the iPod took them from the technophiles to the masses. Likewise, music services spread when they are easy to use and approachable. Pandora has managed to attract tens of millions of users to its radio service because of the KISS principal (keep it simple, stupid). While this sounds easy, it took them years to develop the music genome and “taste” algorithms that analyze billions of thumbs up/down votes to offer effortless music curation.

  Upstart Spotify made access and friends the top priority for its music service, and has unseated Rhapsody as the top dog in on-demand listening. Others like Turntable let listeners do the heavy lifting — letting anyone be a DJ and mix tracks via a competitive, social, cartoony environment. And still others, such as the Hype Machine, rely on the old-school expertise of hardcore music junkies, letting bloggers curate their own selections. The ad-supported model is all about building audiences, and it’s an ongoing cat-and-mouse game where new methods continue to emerge.

• Whales
  One dirty little secret in the free-to-play online gaming world is that “whales” — to use a Las Vegas term for big spenders — often account for a significant portion of the revenue. In many examples in the free-to-play world, the top 10 percent often contribute 50 percent or more of the revenue for virtual goods, game play, tokens, premium versions and more. In one recent example, one happy gamer spent more than $76K on a single social game buying the accessories he needed to build his fortress. Would “whale” fans of Arcade Fire spend tens of thousands of dollars to sit in on a studio recording session? Yes, and I’m offering!

  And beneath the mega-whales, there is a larger base of dedicated fans willing to pay to be a part of the experience, even if they don’t have thousands to spend. “Baby whales” mostly tend to buy merchandise: T-shirts, caps, branded toys, etc. These baby whales are still a small share of any overall fan base, but collectively, an extra $50 each from a small percentage of fans can really add up.

• Unique Experiences
  People love to engage with unique experiences — things you just can’t replicate — and will often pay top dollar for them. Concerts are one kind of unique music experience, but there are others. Nataly Dawn’s Kickstarter campaign offered big donors rewards, like their choice of a song for her to cover, early prerelease access to her album, and even a private in-house concert. In addition, there are now countless apps that let you be a part of the music, from the T-Pain auto tune app to ShapeMix’s tool that lets you remix songs yourself with isolated melody/bass/drums/vocal stems and post those to your friends. While, selling these extra experiences may not be a major monetization method, such methods do allow indie artists to generate income, and top artists to experiment with new avenues to engage and grow their fan bases.
• The Bottom Line
  Music is getting closer and closer to free. Distribution is becoming commoditized, so monetization must change. To this end, artists will have to pull out the stops to engage with fans more directly, and actively seek out fans and benefactors willing to pay more than usual for their work. The music startups that will make money over the long term are those that will connect artists with fans, help people filter and discover new music they love, and offer unique experiences. People will never stop listening to music — they’ll just change how they find it, hear it, and pay for it.

Hany Nada is a founding partner of GGV Capital (www.ggvc.com), a $1B venture capital firm with a dual focus on China and the U.S. Some of GGV’s investments include Alibaba Group, Pandora Media, YY, RootMusic, Buddy Media, Tudou, SuccessFactors, Square, and 21ViaNet.

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