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Confirmed: Schultz and Efrusy to Leave Groupon Board; "Accounting Types" Joining

Kara Swisher — Mon, 30 Apr 2012 19:40:37 +0000

Spencer Platt | Getty Images News

According to sources close to the situation, Starbucks Chairman and CEO Howard Schultz and Accel Partners’ Kevin Efrusy will be stepping down from the board of Groupon.

Schultz’s departure will be effective today, but Efrusy — who was critical to the initial funding around the Chicago-based daily deals site — will not be standing for re-election at the company’s annual meeting in June.

The departures are voluntary, but sources said the pair will be replaced by two new directors with significantly more fiscal oversight experience, whom one source characterized as “accounting types.”

(Update: Groupon just posted a press release noting the board departures, with the names of the new board pencil pushers: Daniel Henry, CFO of American Express, and Deloitte Vice Chairman Robert Bass. Henry joins immediately in Schultz’s place. Full press release below.)

It is a move that is critical, given Groupon’s recent series of missteps around its financial reporting that have hurt both its reputation and, more importantly, its stock.

Interestingly, several sources noted that Schultz almost left the board right before Groupon’s public offering last fall, after several ongoing disputes with its management, but stayed on so as not to scuttle its IPO.

The board of the company has not involved itself as prominently in the accounting messes at the company, but it appears as if they will begin to now.

It must, given Groupon shares have been trading at a low of $11. Its stock has dipped to $10.98 today.

As Tricia Duryee wrote recently about the fall:

At that price, it is now worth just over $7 billion, down 57 percent since the company went public last November and well off the more than $10 billion it was valued at as tech’s hottest start-up of 2011.

Ironically, Groupon’s current market valuation is actually not much more than the $6 billion offered for it by search giant Google in late 2010.

The fall of Groupon has been swift, from the honorific of being the fastest-growing company ever to one that cannot keep control of that runaway growth.

That’s perhaps no surprise.

Perhaps most significantly, Groupon went public in just four years, delivering the biggest tech IPO since Google.

The quicksilver move was typical for it. In just two years’ time, the company ballooned from 37 employees to 9,625 and from serving five markets in the U.S. to 175 in North America alone. And that’s leaving out massive expansion abroad. In the past year, Groupon has acquired roughly 17 companies, including many international copycats.

The company also has entered many new segments, expanding from selling lower-priced and simpler deals on restaurants and spas to more complex and pricey arenas, including travel, physical goods and luxury items.

But Groupon is now learning that its original business does not work across just any segment, especially to more discerning customers of its higher-level and more expensive offerings.

In fact, it was those newer and potentially more lucrative markets that forced the company recently to revise the company’s fourth-quarter report after returns skyrocketed on luxury items, such as Lasik eye surgery.

The problems forced Groupon to lower revenue in the period by $14.3 million and net income by $22.6 million. It is now reporting a wider net loss of $64.9 million on revenue of $492 million, pushing it further away from its goal of profitability.

The company also disclosed at the time that independent auditors had noted “material weakness” in its financial controls. In addition, The Wall Street Journal reported that the Securities and Exchange Commission was examining Groupon’s revision.

With many companies, investors might have shrugged off such accounting issues, but the impact on the stock has been greater since they are only the latest in a string of similar mistakes at Groupon.

In its pre-IPO period, for example, Groupon was forced to restate revenues after counting both its portion of the revenue and the revenue that goes to the merchant together. It also had to dump a controversial accounting metric that made the company look more profitable than it was, because it did not include important costs, such as critical online marketing expenses to attract new customers.

Those came after the company retracted a statement by Eric Lefkofsky, Groupon’s co-founder and executive chairman, who told Bloomberg in an interview that Groupon would be “wildly profitable.”

At least the wild part was accurate.

Much of the blame for these missteps by Wall Street is being aimed at CEO and co-founder Andrew Mason, the iconoclastic 31-year-old entrepreneur who is largely responsible for defining the company’s culture, as well as Jason Child and Joe Del Preto, the chief financial and accounting officers, respectively.

Child joined the company in December 2010, coming from Amazon, where he held several roles over a 10-year period — including VP of finance, international, and director of investors relations. Prior to joining Amazon, he worked at Arthur Andersen as a certified public accountant.

Del Preto has been Groupon’s chief accounting officer for the past year and, before that, he was the company’s global controller for three months. Before Groupon, he was controller and VP of finance at Echo Global Logistics and also served as controller at InnerWorkings, the same company where Mason was a computer programmer in his early career.

Mason, of course, is the best known and the person most responsible for establishing the company’s whimsical culture and managing — or mismanaging, depending on how you look at it — Groupon’s hard-charging growth.

It will also be up to him to turn it all around, as the company sinks in both value and investor regard. Since the restatement, Mason has said little about how he intends to do that. In February, when Mason concluded Groupon’s first-ever earnings call, he said: “Thanks, guys, this was a lot of fun, and I look forward to many more of these.”

It’s not clear fun will be on the agenda at his next outing on Groupon’s first-quarter call in mid-May.

Here is the official press release from Groupon on the board changes:

Groupon Appoints Two Directors to Board Daniel Henry, CFO of American Express, and Robert Bass, Vice Chair of Deloitte

CHICAGO — (BUSINESS WIRE) — Groupon, Inc (http://www.groupon.com) (NASDAQ:GRPN) today announced that Daniel Henry, the chief financial officer of American Express Company and Robert Bass, a vice chairman of Deloitte LLP will join its Board of Directors. Both will serve on the Audit Committee with Audit Chair, Ted Leonsis. Daniel Henry was appointed to the Board on April 26, replacing Howard Schultz, who has stepped down from the Board. Robert Bass will stand for election at the annual stockholder meeting to be held on June 19 following his retirement from Deloitte, replacing Kevin Efrusy, who will not stand for reelection at that time. “With their deep financial, accounting and operational experience, Dan and Bob will provide invaluable expertise to the Board going forward,” said Eric Lefkofsky, Groupon Chairman.

Daniel Henry, 62, has been the Chief Financial Officer of American Express Company since October 2007. Henry is responsible for leading American Express Company’s finance organization and representing American Express to investors, lenders and rating agencies. He has also served as Executive Vice President and Chief Financial Officer of U.S. Consumer, Small Business and Merchant Services and joined American Express as Comptroller in 1990. Prior to joining American Express, Henry was a partner with Ernst & Young.

Robert Bass, 62, has been a vice chairman of Deloitte LLP since 2006, and a partner in Deloitte since 1982. He will retire from Deloitte on June 2, 2012. Bass has specialized in e-commerce, mergers and acquisitions and SEC filings. At Deloitte, Bass is responsible for all services provided to Forstmann Little and its portfolio companies and is the advisory partner for Blackstone, DIRECTV, McKesson, IMG and CSC. He has also previously been the advisory partner for priceline.com, RR Donnelley, Automatic Data Processing, Community Health Systems and Avis Budget. He is a member of the American Institute of Certified Public Accountants and the New York and Connecticut State Societies of Certified Public Accountants.

“I’m thrilled to have been a part of Groupon’s development,” said Kevin Efrusy. “The Company is well on its way to becoming the operating system for all local commerce.”

“Howard and Kevin helped guide us on our journey to becoming a public company and I want to thank them and acknowledge their contributions,” said Groupon CEO Andrew Mason.

“During my tenure on the Board, I was impressed by the game-changing opportunities that Groupon has delivered for both merchants and customers on a global scale,” said Howard Schultz. “Groupon has a strong sense of mission and purpose, and as I move on to focus on my other time commitments, I wish them the very best.”

Snapfinger Lets You Peer Inside the Restaurant -- From Your Living Room

Lauren Goode — Mon, 05 Dec 2011 15:19:53 +0000

Ordering from restaurants online can be a crapshoot. Sometimes you just don’t know if the menu is up to date, if “30-45 minutes” is an accurate delivery time, or whether the food you’ve ordered is what will actually arrive at your door.

One app maker is aiming to better that ordering process — by allowing customers to see in real time when a restaurant is running out of food or changing the menu.

Snapfinger, an Atlanta-based start-up that powers the online and mobile ordering of nationwide chains like Subway, Outback, California Pizza Kitchen and Boston Market, is updating its service so that it can be fully integrated into point-of-sale computer systems in restaurants.

Thanks to a new version of the app that is meant to serve — get it? serve? — both the restaurant employees and the customer who’s ordering the food from blocks away, the customer can now see menu changes and updates as the restaurant staff is entering them. So if there’s a special on the menu that night, the at-home diner can see it just as the people dining inside the restaurant can — and when the special runs out, the online or mobile menu will reflect that, too.

“We’ve realized that point-of-sale integration is crucial. As mobile ordering into restaurants gains momentum, the whole customer experience is really going to be dependent on systems like these,” Snapfinger’s CEO Jim Garrett said. He added that it is Snapfinger’s goal to be the “OpenTable of food ordering,” citing the popular reservation-making service that factors in available tables in real time as reservations are being made. Snapfinger currently powers online and mobile ordering for about 12,000 restaurants in the U.S.

Version 4.0 of the app, which is free, runs on iOS and Android devices. It also includes a map that gives directions to takeout restaurants, along with mobile prepayment features and the ability to have digital receipts sent to users’ iPhones and iPads.

While Snapfinger is spicing up its service — according to Garrett, it accounts for 70 percent of all U.S. restaurant-ordering applications — it still faces formidable competition from growing services like Seamless and GrubHub. Both sites have made acquisitions in recent months to expand their reach — Seamless bought MenuPages, which claims 35,000 menus in its database, while GrubHub acquired Dotmenu, which caters to college campus crowds and boosted GrubHub’s menu database significantly.

Garrett pointed out that both of those services are focused mainly on local markets in various cities, while Snapfinger has a foothold in big, nationwide restaurant chains and also serves as a white-label app.

Still, in recognizing the growing importance of the local market, Garrett said Snapfinger also plans to try to get more local restaurants to use Snapfinger in the coming year.

Gilt City Acquires Dine Private to Add Reservations Engine

Tricia Duryee — Mon, 03 Oct 2011 05:14:53 +0000

Gilt City, which focuses on offering daily discounts at high-end spas and restaurants, has acquired fine-dining booking engine DinePrivate.com. The company, which lets consumers choose from more than 90 private dining rooms in New York City, was co-founded by Joe Bastianich and Jeff Zalaznick. Bastianich, who is the son of TV celebrity Italian chef Lidia Bastianich, will join Gilt City as a private dining and restaurant advisor. Additional cities will come to the site in 2012.

OpenTable Investors Queasy After Google-Zagat Meal, Er, Deal

Tricia Duryee — Thu, 08 Sep 2011 23:06:34 +0000

OpenTable’s shares tumbled more than 10 percent during the day, following the announcement that Google was buying local review site Zagat.

By the end of the day’s trading, the restaurant booking site had regained some ground, closing down only eight percent, or $5.23 to $57.50 a share.

But at least one analyst called the market’s bluff, concluding that the purchase did not mean Google was interested in competing with OpenTable.

OpenTable currently accounts for 10 percent of all diners who end up being seated in a restaurant, while Google mostly gains customer reviews and surveys from Zagat.

“The risk here … is that this marks Google’s attempt to compete directly with OpenTable in the Restaurant Reservation segment. For now, we don’t believe it,” wrote Citigroup’s Mark Mahaney in a note to clients. “Although Google has thrown a few surprises by us recently, we see it as highly unlikely that Google would want to enter the salesforce-intensive/truck-roll/hardware & software-install Restaurant Reservation business.”

Mahaney also noted that there’s little risk that traffic to OpenTable will fall because of the deal.

Today, only five to 10 percent of all reservations come from third-party networks like Yelp, Google, Yahoo, Zagat, etc. OpenTable, for example, is the exclusive restaurant reservation service on Zagat. Another review site, UrbanSpoon, was purchased by IAC two years ago. IAC, which owns a very diverse portfolio of businesses, saw its stock sink 15 cents today to close at $39.53.

Citigroup reiterated its buy and said its current price target is $82 a share.

The purchase of Zagat is likely a bigger blow to Yelp, which is still seeking an exit of its own after turning down a half-billion-dollar offer from Google two years ago. The companies are not completely alike. Yelp has been fairly successful in gaining a very broad audience, especially since Zagat charges for many of its publications and mobile applications — a very un-Google approach.

Google said this morning that Zagat will work closely with its search and maps divisions, but it also would make sense for it to work closely with Google Offers, which is trying to be the local deals equivalent to Groupon.

Digital Grilled Cheese D9 Poll Results Are In: "The Kara" Edges Out "The Walt"

Kara Swisher — Wed, 08 Jun 2011 21:34:28 +0000

Personally, I preferred “The Walt” over “The Kara.”

But the attendees of the ninth D: All Things Digital conference seemed to like the grilled cheese sandwich made of “sharp” cheddar more than “experienced” gruyere.

In sampling by hungry D9 folks, 53 percent selected “The Kara” (sharp cheddar on potato bread with tomato basil soup) and 47 percent chose “The Walt” (experienced gruyere on white wheat with wild mushroom soup).

That’s according to founder Jonathan Kaplan, who demoed his new company called Melt.

With Melt, the focus is on grilled cheese, in an unusual mashup of smartphones, automation and comfort food.

You can order with Melt’s mobile app or from the Web and have your grilled cheese choice ready for you when you want it in a minute in his casual, fast-food restaurants.

The first stores open in San Francisco in August, but there are many more to come via many millions of dollars in funding from Sequoia Capital.

Obviously, grilled cheese is a very orthogonal move for Kaplan, who brought the world the ground-breaking Flip video camera.

Bought by Cisco for $590 million in 2009, the networking giant closed the unit down in April and killed the Flip. Kaplan still does not know why, he said onstage.

While I still mourn the Flip, I can say that the grilled cheese is pretty tasty.

Here’s a video of the Melt in action at D9 in a demo by Kaplan, as well as a video interview he did with Katie Boehret at the Science Fair booth at the conference:

[ See post to watch video ]

You Will Know Jack–Square CEO Dorsey Added to D9 Speaker Lineup

Kara Swisher — Tue, 24 May 2011 19:58:10 +0000

With the mobile payments space rapidly heating up, we thought it would be a perfect time to add the person most responsible for that current disruption–Square CEO and co-founder Jack Dorsey–to the speaker roster at the ninth D: All Things Digital.

By the way, Dorsey is the same man who also invented a little thing called Twitter, the groundbreaking microblogging service–where he also now serves as Executive Chairman and now its product guru once again.

In other words, Dorsey is just the kind of person Walt Mossberg and I are thrilled to have onstage at D9–a perfect entrepreneur to talk about the innovative product vision that has made tech in Silicon Valley so powerful.

Dorsey started Square in 2009, after serving as CEO of Twitter until 2008. A software engineer by training, he previously worked as a programmer at a bike courier dispatch service.

Just this week, Square made news by launching a new cash register for merchants and a new mobile wallet for consumers to make paying for retail goods extremely easy.

This is a quick development from the start-up’s original Square dongle and app, which allows consumers to use their smartphone or Apple iPad to accept credit card payments.

Square has distributed 500,000 of these dongles, which click into the headphone jack, and has recently said it is processing $2 billion in gross payment volume per month.

The new innovations should increase that if they catch on and Square can best a plethora of competitors, including a new digital wallet entry by Google (whose Executive Chairman Eric Schmidt will also be at D9 onstage demoing it too).

As Tricia Duryee wrote about Square’s latest effort:

It starts with the user’s card case, which must be set up in advance with a user’s credit card information. From the card case, the user will be able to see the menu of the restaurant, cafe or spa they are visiting. Users can click to order. When they go up to the register to pay, the consumer doesn’t hand over anything but their name.

Consumers and retailers will have to believe that using Apple products can be as safe and secure as big enterprise-grade systems that everyone is accustomed to seeing.

Square will also have to go up against a ton of other providers coming down the pike, including solutions from [eBay's] PayPal and payment giants such as Visa, MasterCard and American Express.

The San Francisco-based start-up recently received an investment from Visa.

Given that the future of the massive, badillion-dollar industry is at stake, it should make for a great interview session at D9.

Viral Video: David@Denny's

Kara Swisher — Mon, 09 May 2011 07:17:11 +0000

This is a very funny CollegeHumor video series, called
“Always Open With Dave Koechner,” a great if unsung comic. It is set at a Denny’s restaurant. Really.

This perfectly awkward episode features another comedy gem, Amy Poehler.

Maybe it is just me, but a lot of these small Web-only videos are really starting to get interesting.

Exclusive: OpenTable CEO Jordan Likely to Head to Silicon Valley VC Firm Andreessen Horowitz

Kara Swisher — Wed, 04 May 2011 05:28:00 +0000

Jeff Jordan, the president and CEO of OpenTable who unexpectedly stepped down from his job today at the online restaurant reservation leader, is set to take a job at a major venture firm in Silicon Valley.

Sources said Jordan has spoken to several major VCs about moving to their firms recently.

While Benchmark Capital was a big funder of OpenTable before it went public in 2009, sources said the likeliest home for the well-known Internet player–Jordan has also been a major exec at eBay–is Andreessen Horowitz.

The move would be a coup for the firm, which has been busy adding partners since its founding only a few years ago by Web icon Marc Andreessen and his longtime business partner Ben Horowitz.

Jordan’s announcement that he was leaving OpenTable today during its first-quarter earnings call caused the stock to decline precipitously today, even though he said he would remain active as executive chairman.

CFO Matthew Roberts was named as his replacement.

Explaining the move, Jordan said:

“I’ve been managing Internet businesses since 1999. That’s 12 years of being in the tornado, and it’s pretty exhausting. I’ll be looking at the next challenge, but in terms of operating an Internet business, I’ve scratched that itch very well.”

It’s an itch that he will be scratching as a VC apparently and likely at one of tech’s hottest firms, which has investments in everything from gaming phenom Zynga to social buying service Groupon to microblogging start-up Twitter.

A spokeswoman for Andreessen Horowitz declined to comment and Jordan has not responded to an email query.

With Jobs Definitely Mulling Appearance at iPad Event, Let's Hope the Focus Is on the Product

Kara Swisher — Tue, 01 Mar 2011 17:31:39 +0000

According to several sources close to the situation, Apple CEO Steve Jobs–who is on a health-related leave from the company–is definitely considering an appearance at its big iPad 2 event tomorrow.

But the possibility–which would be a big sensation at the San Francisco gathering and has been subject to great speculation–is also just as definitely not confirmed as yet, stressed sources.

If he did appear, sources said, Jobs would make at least a brief appearance on stage along with other top company execs in showing off Apple’s latest version of it hugely popular tablet.

The new device reportedly has a sleeker look, as well as a camera and other improvements, changes that tech’s top showman would certainly love to tout and that his legions of fans would like to see him introduce.

But what BoomTown would like to see would be more of a focus on the iPad 2 itself, rather than armchair diagnoses of Jobs’s fitness based on any appearance he might make.

That’s no small thing, given the appalling series of photos and video that have surfaced recently, which show the Silicon Valley icon from the worst possible angle and looking quite gaunt.

As I have written before, and as you can see from the photo above taken at last year’s D: All Things Digital conference interview, it is clear Jobs has suffered due to his bout with a form of pancreatic cancer.

Due to nutritional issues, his weight has suffered, one of the key reasons Jobs seems to have taken this latest leave.

That said, in recent weeks, he has made all kinds of public appearances both at Apple’s Cupertino campus and in Silicon Valley restaurants, including a high-profile dinner with President Barack Obama. Jobs sat immediately to the left of the president.

If he decides to make another outing tomorrow, it is certainly with the knowledge that everyone will be trying to figure out his health from a stage appearance.

That’s a risk for Jobs, of course, who relishes in introducing Apple products in presentations that typically garner well-deserved accolades.

Given how innovative most of those products are, what would be a welcome change in the coverage of Jobs’s personal struggles would be to show a level of respect to him by paying more attention to what bells and whistles the iPad 2 has rather than to how his jeans are fitting.

There is no question, with its latest iteration, Apple is making sure consumers realize that it is coming out with a second, flashier version, even before other manufacturers–mostly using the new Honeycomb version of Google’s Android mobile operating system–are still scrambling to get their initial competing devices to market.

That’s the truly dramatic story to watch here, rather than needlessly rubbernecking about the struggles of one man–albeit, a very significant man–to regain his health.

Foodspotting Captures $3M Series A

Liz Gannes — Mon, 10 Jan 2011 19:51:31 +0000

Foodspotting, the maker of visually pleasing apps for recommending particular restaurant dishes, has raised $3 million in a Series A funding round led by BlueRun Ventures, the mobile-focused venture capital firm.

The San Francisco-based company has accumulated 550,000 iPhone downloads and 300,000 monthly Web site visitors, and has just released an Android app. It launched only last year.

Foodspotting is competing with the likes of Yelp, which is known for restaurant reviews but also includes all sorts of local businesses. However, Foodspotting allows only positive reviews of food, with the idea that a user would show up at a restaurant or in a neighborhood and glance at the app to quickly zero in on the best dishes to order.

Check out this recent NetworkEffect post on the bountiful competition in the sharing-pictures-of-food sector.

Foodspotting had just raised $750,000 from Felicis Ventures, 500 Startups and High Line Venture Partners in July 2010.

We have a video interview with Foodspotting CEO Alexa Andrzejewski that I’ll post later on, but unfortunately the press embargo on this announcement was broken before I’d encoded the video. In our interview, Andrzejewski justified how such a seemingly narrow project, especially in such a competitive market, could have broad appeal.

So Hot Right Now: Pictures and Ratings of Food

Liz Gannes — Thu, 23 Dec 2010 21:38:51 +0000

Even the greatest menu in the world has all-star items and dishes that are just blah. Deciding which restaurant to go to is a prerequisite for eating out, but most important is what you decide to put in your stomach. I’m a terrible annoyance when trying a new restaurant, as I pull out my phone to see what Foursquare and Yelp users say I should order. But social media is often right, and I don’t mind sharing a bite of the good stuff.

A bevy of dedicated apps and recently launched features for existing local apps now enable smartphone users to take pictures of memorable dishes and rate them or comment on them. Here’s a sampler of the current offerings:

We’ll get to the familiar names in a moment, but first is a new iPhone app from a Seattle-based start-up called Chewsy that creates a “social menu” (pictured at right) for any restaurant, based on user rankings. Created by Microsoft employees in their spare time, the app is focused on building out ratings and comments for menu items, and does not yet support pictures. Getting critical mass for menu items has got to be even harder than getting critical mass for restaurants, but the company has already launched in 11 markets.

At the beginning of this week, the geo-social crew at Foursquare started giving users the ability to add photos to check-ins, tips and venues. That has rolled out for both the iPhone and Android Foursquare apps, and includes photos from linked accounts on Instagram, Picplz and Foodspotting. The company said in a blog post, “Tips with photos changes everything. See dishes before ordering them, figure out if a venue looks fun, or easily identify a hard-to-find spot. More info = better exploration.”

Social media local reviews leader Yelp put out its first iPad app (pictured at left) on Monday. In a blog post describing the launch, the company said the best part of the app is “our marquee feature: a fancy, schmancy new photo search results.”

The next day, Urbanspoon (the company behind that app where you shake to seredipitously find a place to eat) put out a new release that allows diners to submit a photo and review of a specific menu item directly from the app.

Foodspotting, the leading pretty app for sharing pictures of and locating nearby food, just crossed 500,000 downloads of its iPhone version on Tuesday, and said an Android beta would be out before the end of the year. It raised $750,000 in seed funding last summer and just acquired a small food blogging start-up called Eat.ly.

The incredibly addictive Instagram, which is not focused on food but is a leading distributor of the latte still-life, announcedon Tuesday its iPhone app had been downloaded one million times. It is currently raising funding.

Taking this whole concept in a different direction, NTT Communications has said it plans to release a healthy-eating app in Japan next month that will allow diners to take pictures of the food on their plate and report how many calories it contains.

Are food pictures just a feature? Sure, but you could also say food is just a feature of restaurants.

BoomTown Decodes Ron Conway's Super Angel Super Fit (So You Don't Have To)!

Kara Swisher — Fri, 24 Sep 2010 09:57:54 +0000

Ah, there’s nothing like a manly hissy fit amongst a passel of white dudes in Silicon Valley to open the fall television viewing season!

In this latest episode of “Glee,” a group of Super Angel Cheerios–who apparently like a good bottle of Kistler or two–plot to stop the entrepreneur kids from getting to the valuations they’ve been working so hard to inflate.

Dave “Sue Sylvester” McClure uses his bullhorn blog to call foul about a not-naming-names-but-still-really-mad-as-hell story of collusion by that creepy kid from the school newspaper who wants to blackmail Rachel into a date.

Well, that got the gleek club’s teacher, Mr. Ron Conway, mighty irked, and so he wrote an email–which was somehow, in some way “leaked”–to express his various, sundry and decidedly complex feelings.

Thus, the need for a thorough decoding:

Ron wrote: Subject: Super Angels Gathering

Translation: I myself am a Super Duper Angel and therefore am not at all hurt that I was not invited to the fancy wine restaurant called Bin 38, which I would so enjoy.

Not. At. All.

Sigh. I love a good Kistler chard.

Was Sacca there?

Ron wrote: I want to share my views on the two gatherings you had in June and this week and what they represent in my opinion.

So that I would not be influenced by any outside inputs I am writing this without sharing my thoughts with anyone including David Lee and the other SV Angel Partners.

I want to clarify once and for all my total disagreement with your values and motives for being investors.

Translation: I was not there, but this does not stop me from completely going all Judge Judy–indicting, trying and convicting you, and despite the fact that one of my own partners was at the faux-controversial dinner.

I do this with a sense of righteous indignation that shall endear me to the entrepreneurs I would so dearly love to steal right out from under you.

Ron wrote: I have stated consistently for year that I invest because I love helping entrepenuers and watching them learn and succeed.

I am honored that entrepenuers share their crystal ball views of the future of innovation and technology with us and respect the guts it takes to start a company.

Translation: Here’s where I spread it on thick.

Just a small town geek
Livin’ in a lonely world
He took the midnight train goin’ anywhere (actually Palo Alto).

Just a city boy
Born and raised in a very nice crib in San Francisco.
He took the midnight limo goin’ anywhere (except not to Bin 38).

Some Supers in a smoky room
A smell of wine and cheap perfume
For a smile they can collude all night
It goes on and on and on and on.

Ron wrote: At SV Angel we try to reciprocate by adding value any way we can.

I think that actions speak louder than words and SV Angel has always been a friend of entrepenuers and we focus our business to help entrepenuers achieve success.

Translation: I might not be able to spell “entrepreneur,” and perhaps an SV Angel partner was present and accounted for at this dinner, but please instead focus on my jazz hands that are telling a tale of entrepreneurial adoration.

Ron wrote: The world of startups would be a better place if you spent less time complaining about deal structures, terms, vc’s, and valuations etc and the cars you drive, and just helped entrepenuers build their companies.

Translation: I have never complained about such things, except in the video below, in which I do.

Particularly about Porches. Um, Porsches.

Ron wrote: The Free Enterprise system is very efficient…why not let the marketplace demands decide on these issues, its worked for many many years. These startups are binary…they succeed or fail so why waste time on deal structures, terms, vc’s, and valuations etc and just help entrepenuers build their companies.

Translation: From this moment out, there will be no more convoluted term sheets from me. I am just going to leave a barrel full of money by the door of my “entrepeneur”-paid-for-it apartment and any nerd can grab a handful or two.

Ron wrote: In my opinion your motives are driven by self serving factors around ego satisfaction and “making a buck”.

My motives and values are very different.

Translation: To paraphrase a line from the upcoming movie about Facebook–which is one of my investments, in case I did not mention it:

Making a buck isn’t cool. You know what’s cool? Making a billion bucks!

Ron wrote: They are so different I want to be up front with you and recognize this and disengage from any involvement with you. I will not be a hypocrite.

I am tired of seeing you and engaging in idle chit chat and not sharing my true feelings.

I think you have a different value set and lets agree to disagree and not have to even engage in any idle chit chat or discussion of any sort….ever.

Translation: Super Duper Angels are from Venus, Super Angels are from Mars.

Ron wrote: Furhermore, I regret David Lee was involved in the gatherings. I am sure he does too.

We talked about the first dinner and I encouraged him to write the email above and withdraw…I know he was uncomfortable with both gatherings…where no one was there to speak up for the interests of the entrepenuers.

Translation: David Lee, my partner, was very uncomfortable at the gathering. Which is why he went twice.

Two times, to make sure he was completely regretful.

One. Then two. He felt just awful.

To be fair, the wine was superb.

Ron wrote: By now you are rolling your eyes and saying “Ron’s a ___________(fill in the blank)…and who is he to pass judgement…..

We are all entitled to our opinions.

‘
Translation: How about this fill-in-the-blank: Ron’s a little old to be throwing mud pies at the other investors in a digital sandbox.

We are all entitled to our opinions.

Ron wrote: I am just being honest and transparent….the way most of the entrepenuers I invest are…

I wish the Angel community could have the same integrity and values of the entrepenuer community, but unfortunately I now believe that is hopeless and your actions prove that.

What do you think the entrepenuers you have funded are thinking right now.

Translation: Does this sound like pandering to the cheap seats, while also engaging in some not-so-subtle self-aggrandizement? Perish the thought!

But here’s what I hope they are thinking–let’s all dump the Super Angels and go back to Silicon Valley’s original Sugar Daddy Ron.

Ron wrote: This is despicable and embarrassing for the tech community in my opinion.

Can you learn from this ?

Translation: Oh, dear–here’s the part where Mr. Schuester sums up what all the kids learned this week, perhaps via a poignant song. I hope it’s not from “Cats.”

Ron wrote: Please keep this confidential even though I know that will be hard since two of you let your egos take over and show Arrington how important you are by telling him you were headed to a “secret” angel gathering.

Translation: Yes, don’t leak this by any means. Not by email, which works perfectly if you use your personal Gmail account.

I also have no idea how every investment strategy deck I do somehow reaches TechCrunch in its entirety.

It’s a mystery wrapped in an enigma wrapped in a Gmail–you know, in case you did not know, I was a very early investor in Google (GOOG).

Ron wrote: Dave McCLure…pls try not to blog about this and cause silicon valley more embarrassment with your unprofessional classless writings

Translation: Yes, Dave, leave the unprofessional classless writings to the professionals. Like BoomTown!

Ron wrote: Note: I did not include those who were at the gatherings who I don’t know well enough to form an opinion around their motives or values.

Translation: You’re next if you keep messing with my Super Duper Angel investing business.

Don’t stop believin’ that.

And here’s Ron unplugged:

OpenTable CEO Jeff Jordan Talks About Groupon, Mobile Growth and Why IPOs Aren't That Scary!

Kara Swisher — Thu, 09 Sep 2010 12:38:23 +0000

It was certainly high time that BoomTown made a reservation–oh, I had to make that pun–to check in with OpenTable (OPEN) CEO Jeff Jordan.

The well-liked and voluble Silicon Valley exec–who had worked in a top job at eBay (EBAY) before moving over to the online restaurant reservation service and taking it public last year–has actually been up to a lot recently.

That includes a discount-coupon program that was just rolled out called Spotlight, which Jordan doesn’t even try to pretend is not a copycat move to take advantage of all the excitement around Groupon.

And there has been more, from adding restaurant reviews to a cloud computing offering to, most importantly, a big push for its mobile apps, which have been growing wildly.

Jordan also discussed how leading a public company has been going, especially since many Internet outfits have been avoiding the prospect.

So far, the company’s post-IPO life has been going well. OpenTable stock has been performing strongly this year, up 118 percent in the year to date, compared to many more lackluster performances in the sector.

Jordan, who had been in consideration for many big Internet CEO jobs, talks about all this and more in the video interview below:

[ See post to watch video ]

Liveblogging the Geo-Location Announcement: Oh, the Facebook "Places" You'll Go

Kara Swisher — Wed, 18 Aug 2010 23:28:42 +0000

BoomTown motored on down the lovely Highway 280 in Silicon Valley to Facebook to hear execs talk about a new geo-location feature the powerful social networking site is rolling out today.

And, the new name of the service, which will be deeply integrated into its current update system, as I reported earlier, will be “Places.”

The service seems to be basic and useful–it is reviewed here by Walt Mossberg–allowing people to post their location on the Wall of their Facebook profile, much as you might a photo or video.

There will be no games, no mayors and no special discounts either in Facebook Places–just plain and simple checking in and, presumably, taking names.

Privacy is a big focus of the launch of Places, which will allow users to decline to be placed by others.

The $100 million question is how much Facebook will allow the integration of other competing services including Foursquare.

A lot, it seems, as sources said Foursquare Founder and CEO Dennis Crowley was invited to appear for the announcements, perhaps to minimize the idea that this is a Foursquare-killer.

It’s not. Today.

4:30 pm PT: Of course, I and a badillion other reporters arrived on time, to 1050 Page Mill Road in Palo Alto, Calif. in a mass of media force that would probably better be deployed on more weighty topics than the particulars of checking in from some hip dive bar in the Mission neighborhood of San Francisco.

After some waiting, we were finally bussed–or perhaps the better word is geo-located–to the actual HQ of Facebook nearby, and shepherded (just like sheep that we are!) into its cafeteria.

Except it had been duded up like a tiki lounge with palm trees and a driftwood stage. I felt as though I was suddenly on an episode of “Gilligan’s Island.” Cue Ginger for her big song number with the coconut bra!

Hey, Skipper…

5:18 pm: That skipper would be CEO Mark Zuckerberg, who was–as usual–dressed in jeans and a t-shirt and was endearingly awkward as always. It’s kind of touching that Zuckerberg still tries to have the just-us-guys posture, despite all the fame and fortune.

He quickly announced Facebook Places, across the U.S. tomorrow, on an Apple (AAPL) iPhone app and a mobile Web site.

He talked about deciding to finally launch Places after a dinner out with his girlfriend, when, deploying a test version, they realized another Facebook exec, Chris Cox and his fiance were nearby at another restaurant.

It was an earth-shaking moment, implied Zuckerberg.

Ahem, knock, knock…that’s Foursquare! Have you heard of it?

Yes, Facebook has been ogling the hot New York location start-up for a year, which is precisely why we are all here.

5:28 pm: Michael Sharon, the product manager of Places gave us a little run-through of the service, which was about what you would expect.

Foursquare except cleaner. Booyah except no games. Gowalla except, well, not Gowalla.

What’s important is that it is very integrated into Facebook’s current features, such as the Wall and status updates. Which is the right thing to do since Facebook has no business being all trendy.

The plains are covered with the bodies of pioneers, as they say, so what Facebook Places is, essentially, is a fast follow.

Sharon moved onto privacy, the big gorilla in the room. You have to opt-in and agree and click here and default to off and you can only tag your friends and you can also block them too.

Also, per Woody Allen’s “Bananas,” all Facebook citizens will be required to change their underwear every half-hour. Underwear will be worn on the outside, so we can check.

Next, lots of info about APIs, so partners can also be part of Facebook’s geo-locating universe.

Up trotted Gowalla’s CTO and Co-founder Scott Raymond, who showed off Gowalla and Facebook integration.

Then a Foursquare exec–not Crowley, who has apparently checked in at a Chipolte in New York at the time of the places launch–loped up to say how great it all is. Just great! Really! Frankly, what else would the Foursquares say at this point.

Next: Yelp dude. Great! Just great! Integration! Check-in and pull your Facebook friends into the Yelp app.

Of course, it would not be a set without Booyah’s Keith Lee. Loves it! Fun! Just great!

This felt like a slow-moving version of invasion of the geo-location snatchers, a parade of glassy-eyed hostages, some scurvy mates walking the platform plank. Aaaaarrrr.

5:50 pm: Finally, Facebook’s product head Chris Cox, who is perhaps one of the more fetching geeks out there, bounded onstage to be all fetching and smart.

He talked about places like home, work and, um, bars. Well, actually, community locations, quoting Ray Oldenburg.

I was honestly not really listening to him at all, because I was riveted on his new haircut, which is just like the buzzed one Vince got on “Entourage” this season.

Errant thought: Those guys on “Entourage” would never check in from a bar! They are totally busy getting their groove on with the ladies–even Johnny Drama–and chillaxing with the doobies and tequila!

When I checked in again mentally, Cox was still chattering away about some glowing phone that tells you everything that happened in that bar forever and ever, since everyone was checking in and memorializing the place over time.

Good god, isn’t it enough that Facebook has all those drunkey-drunk photos from college students nationwide.

No! It wants it all! Yay, all our our drunkey-drunk moments will now be preserved in check-ins for all eternity!

Honey, remember when I ended up in the gutter here? Fun times for our grandkids to unearth one day!

5:58 pm: The Skipper Zuckerberg was back to moderate the Q&A.

Privacy questions about making private places public. If a lot of people are there, it becomes public.

Next: What up with monetization with deals? Zuckerberg notes that Places is at its starting point and “certainly you can imagine these things in the future.”

There was a question about how Places started. Well, IMHO, the moment when Facebook saw Foursquare’s innovation and freaked out.

A very goofy question about what happens when drunkey-drunk places shut down and all those memories are gone, which made me wonder if the reporter asking was drunkey-drunk.

“That’s not a problem we can solve,” said Cox.

Good answer.

Now, the Skipper wants to show us a Facebook custom, which made me suddenly nervous. Sacrifice of the media? No, just some switch-pulling thing.

There was apparently also another tradition–for a six-year-old company, that is–of hitting some gong.

Aha, it’s “The Gong Show.”

Geo-locate that.

Blippy Opens to Public and Scores High-Profile Investors–Including Twitter's Evan Williams–For the Twitter of $$

Kara Swisher — Thu, 14 Jan 2010 14:00:05 +0000

Blippy, a start-up that lets users broadcast their credit card transactions online, will open itself up to the public today and announce a slate of high-profile Silicon Valley investors.

The size of the investment–$1.6 million–is actually not so large as the names on its funding roster.

They include: Sequoia Capital, Charles River Ventures, well-known angel investor Ron Conway, Twitter CEO and co-founder Evan Williams, and a trio of splashy entrepreneurs: Jason Calacanis, James Hong and Ariel Poler.

They are all presumably hoping the site–with the unlikely name of Blippy and headed by longtime Silicon Valley entrepreneur Philip “Pud” Kaplan–will become a viral hit with users and yet another step in the continuing socialization of everything a person does online.

The San Francisco-based company, which has only four employees (including Kaplan, who has also put his own money into the venture), has been in invitation-only private beta for the last several months.

In an interview last night, Kaplan said that the site now has about 5,000 users, accounting for $5 million in purchases in just the past few weeks. An average transaction, according to Blippy statistics, is just above $42.

Kaplan said he hoped Blippy would soon log $1 million in transactions per day.

“We are hoping to create a site that is useful and informative to people, based on a Twitter model of sharing information in an open way,” said Kaplan. “People care about what they spend and we think this is an obvious thing to share.”

Indeed, Blippy takes online transparency even further, allowing a user to automatically post on its Web site messages about the type and amount of the transaction every time they use a credit card–at least the one they designate as their “Blippy” card–for others to see and comment on.

The twist of Blippy–whose motto is: “What are your friends buying?”–is that it is more passive than the more active tweeting or texting.

While most of the transactions don’t contain a lot of information–for example, “cat spent $3.55 at In-N-Out Burger”–Blippy is obviously going for deeper information, which it already collects for sites like Apple (AAPL) iTunes and Amazon (AMZN).

Retailers, restaurants and other vendors might also benefit from the flow of information, finally learning who their best customers really are and perhaps rewarding them.

And, of course, the key part is that your friends see what you are buying and you can all jabber (or gripe) online about what you bought, how much you paid and what you thought of the purchases.

How all this will make money is still being pondered, of course, but one might imagine a dedicated Blippy credit card or some kind of innovative analysis of the spending data or even group-sale offers to users.

And integration with Facebook and Twitter seems inevitable, eventually widening the circle of nosy friends, as does the emergence of reviews, mobile apps, search and more.

Kaplan is best known for a site he created during the Web 1.0 bubble, FuckedCompany, which chronicled the ongoing start-up implosion as it happened.

He later started online advertising service AdBrite, followed by a short stint as Entrepreneur-in-Residence at Charles River Ventures.

It was there that he met Blippy co-founders Ashvin Kumar and Chris Estreich.

Kaplan said the money raised was enough to fund Blippy for the next 12 to 18 months.

But why not hear him talk about Blippy? Here is the video of a BoomTown interview with Kaplan, which I posted in late December:

[ See post to watch video ]

A New Search Engine Specializing in Fun

Katherine Boehret — Tue, 20 Oct 2009 21:54:04 +0000

If you’re like me, you like to make the most out of what little free time you have. One way of finding ideas for activities without wasting precious minutes is by searching online. But sometimes the process of browsing the Web can suck you in and waste more time than it saves.

This week, I tested a tool called Goby (pronounced go-be), www.goby.com, which works as an activity search engine to help you find things to do. It tries to be simple enough so that you can get some ideas and start doing the things you want to do rather than wasting hours in front of the computer.

[ See post to watch video ]

Goby uses three boxes—What, Where and When—with drop-down menus to find results for your query. It crawls the Web searching what it considers high quality information from 500 sources and employs a part-human, part-machine review process to ensure first-rate results. Goby searches through over 200 categories, including live music, art exhibits, outdoor festivals, spas, bed-and-breakfasts and restaurants.

Using Goby was an emotional roller coaster. With very little effort I found things in Washington, D.C., that I’ve never heard of in the seven-plus years I’ve lived here, including tea with Martha Washington and a stuffed Civil War hero horse on display at the Smithsonian. But I also found inaccurate Goby results like an activity in Washington state rather than Washington, D.C., or photos that were supposed to represent a tennis center but instead showed a celebrity’s child with the same name. And sometimes the same results were listed four times in a row.

Goby’s results took a serious nose dive when I looked outside the city in my hometown of Allentown, Pa. I searched for all performing arts and theater near Allentown, an area that I know first-hand has plenty to offer in the way of music, theater and dance. Goby returned two results—one for the Nutcracker in December and another for a Shakespeare play that was put on last July. A quick check of my hometown newspaper’s Web site showed hundreds of performances to attend in the coming months.

The Goby home page

Goby.com has been available to the public for only a few weeks and it is still working out some kinks. The more people use it, the more accurate its results will become—or at least that’s what its founders hope will happen. When Goby’s search results are accurate, they include the kinds of thing locals would want to see or do in their own hometown, and that’s no small feat. But people won’t have a lot of patience for some of the erroneous results that now show up in Goby. Also, this activity search engine currently lacks features like the ability to build and save itineraries, make one-click ticket purchases or book reservations.

Though Goby’s query boxes ask users to enter What, Where and When, the When is always an optional specification, and people can enter either What or Where if they only know one of these factors. General suggestions of categories also are made in Goby’s drop-down menus. The What box opens five categories: things to do, food and drink, events, places to stay and, right now, fall fun; many of these open several, more-specified subcategories. For example, I started a search and followed a four-part trail: things to do, outdoor recreation, horseback riding and horseback riding trails—all within the same drop-down menu.

If you know what you want to do but not where you want to do it, the drop-down arrow in the Where box opens an interactive map of the U.S. Users can pan around the entire country, zooming in on specific areas or small towns. I even zoomed in on Minot, N.D. (population 35,000) and found out about an event taking place at the Northwest Arts Center on Nov. 2.

This map comes in handy if you know the general geographic area where you would like to spend time, but don’t know the area’s name.

Lists of query results are deliberately designed to show more than just Web links, like what Google (GOOG) often displays. Suggested activities are displayed in a numbered list on the left side of the screen, and a map with corresponding numbers is displayed on the right, moving along with your cursor as you scroll on the page. A blue flashlight tool on the map can be dragged anywhere to pinpoint exactly where you want to find activities, and after you drop the flashlight on a spot, the left-hand list dynamically changes to correspond with that map view.

A “More Info” tab shows vital information for each query result like a description, time, address and Web site for the activity. If you are looking at lodging, you can adjust a price scale to limit or expand results for rooms that cost a certain amount per night. Lists of results can be sorted according to category: Art events can be sorted by relevance, distance, date or name; bed-and-breakfasts also can be sorted by price.

Photos representing these activities are pulled in from source sites like bedandbreakfast.com as well as from Google and Flickr. While these images can provide a quick glimpse of something while saving users from navigating to another Web page, some of the results weren’t accurate. For example, when I searched for tennis in Washington, D.C., a tennis program that I didn’t know about called “Tennis at Shiloh” was listed in results. But four out of six photos showed images of Shiloh, Brad Pitt and Angelina Jolie’s child of the same name. I called the organization to confirm that it is indeed a real program, but without calling, I would have seen the photos, doubted the quality of the place and looked for another spot to play tennis.

A “What’s Nearby” function is designed to help people expand their activity searches. It takes the address of a selected activity and suggests other things nearby like places to go for dinner or where to listen to live music.

Unfortunately, Goby doesn’t let you build an itinerary. So if you find a few possible activities for a weekend trip to Williamsburg, Va., and then use “What’s Nearby” to find a pub for lunch, a restaurant for dinner and a bed-and-breakfast for the night, you can’t save all of these findings using Goby. The company says it plans to incorporate these features in the near future.

Goby would be incredibly helpful if it had a mobile app. This Sunday when I was across town from my house and had an unexpected block of free time, I could have used Goby to find a nearby art exhibit or a spot for apple picking. Goby says it is working on an iPhone app, which it expects to release later this year.

If you get lucky with Goby, you’ll find activities that let you do as its name says: Go, be and enjoy your surrounding area. But the site’s results need to be much more accurate for me to start relying on it full time.

Edited by Walter S. Mossberg

Email mossbergsolution@wsj.com

Subservient Chicken, Whopper Freakout Come to BK.com

Andrew LaVallee — Mon, 20 Jul 2009 15:10:00 +0000

Burger King (BKC) has redesigned its primary U.S. site, BK.com, to feature well-known but long-gone ads such as “Subservient Chicken” and “Whopper Freakout.”

The site, which emerges from beta today, will still provide corporate information that it’s hosted in the past, such as nutritional information, menus and restaurant locators, but it adds the ability to dial that back and increase the video content, or vice versa.

Read the rest of this post on the original site

D7 Tech Demo: Siri

Oliver J. Chiang — Thu, 28 May 2009 19:00:37 +0000

Many would-be augurs have been trying to pinpoint the moment the artificial intelligence overlord known as Skynet gets it start: Some may one day point to the launch of Siri. Siri is a virtual personal assistant for your iPhone or computer, with a pedigree: It originated at the Stanford Research Institute and was spun out as an AI project financed by DARPA. Now, as an alternative to search, Siri is supposed to carry out tasks like finding your next flight out or ordering a pizza by crawling the Web and conversing with the user, processing requests, responding and learning from the interaction. It will do this via a combination of technologies, including speech recognition, natural language processing and semantic Web search.

Demo Highlights

[ See post to watch video ]

Live Blog

Siri CEO Dag Kittlaus comes out. He introduces himself and the product. It’s been many years of work in the making, he says.
Siri is about making interactions between the Web and user much simpler. It is focusing on mobile first. He shows the interface on an iPhone with both a Google screen and Siri screen side by side. Dag types in a flight query to both.
Siri figures out what you mean. Dag asks it a question, compares the results between Siri and Google (GOOG). Walt: Google is terrible! Dag: It gets really interesting when you ask it do a service. Walt: Can’t Bing do this?
It can take actions on your behalf too. For instance, “Il Forniao [Italian restaurant] reservations tonight for 3 at 5pm.” Siri takes your information and pulls up the reservation function for the restaurant.
Siri is sort of a giant mashup of services, Dag says.
It’s “Carol Bartz,” not “Sheryl Bartz,” Dag. Now let’s try asking for a movie. Siri returns the closest location and time for “Angels and Demons.” Siri has an API.
“Get red sox yankees tickets in boston”–this is one for Walt, says Dag. $1,649–the price is wrong? But Siri delivers. Shows a map of the stadium and seats/tickets.
Walt: so Google is constantly stupid, we see that now. But is it only good for certain services? How about ballet? Dag: It learns, we break it out into various areas of expertise. Right now, for instance, it doesn’t do TV listings. Siri has a Q&A function. Dag asks a question to the True Knowledge Web service. Kara: Ask it “How old is Kara?” Siri’s answer: “Dag, it’s not polite to ask about women’s ages.” It’s arguably broken Asimov’s Second Law already. Someone get John Connor, just in case.
Now Dag is demoing on the Apple (AAPL) iPhone, speaking into the phone. Voice recognition is pretty good. He tells it: “Find a plumber near my house.” Siri pulls up a list of nearby plumbers. Kara: Do you have to have a voice like yours for it to work? Dag: It gets pretty good, it learns. Kara: I like.
Walt: Will it be in the App Store? Dag: This summer, and it will be a free app. Walt: Revenue stream? Dag: Tie-ins with the other platforms, i.e., OpenTable. We’ll start with mobile and then build it out.
Walt and Kara: Thanks; that was really cool.

The OpenTable Binge and Purge

John Paczkowski — Mon, 25 May 2009 20:31:04 +0000

Anyone remember Foodline.com? Judging from the performance of OpenTable’s IPO last week, it would seem few do. Like OpenTable, Foodline was an online restaurant reservation business. And it too boasted some high-profile investors–Zagat, American Express (AXP). But it never went public. It went bankrupt in 2001, leaving the online restaurant market to OpenTable, which survived the bust to try its luck on the open market a few years later.

Ancient history, I suppose. But perhaps worth thinking about in light of OpenTable’s rather astonishing IPO last week. Originally priced at between $12 and $14, shares in the company were instead listed at $20. They opened at $24.50 and then spiked to $33 before closing at $31.81. A 59 percent surge on the first day of trading. For a company whose business is built on the recession-brutalized fine-dining industry? Impressive. Must have made for quite a windfall for OpenTable’s’s larger investors. Especially those who took the opportunity to dump their stakes in the company. Charles Schwab (SCHW), Pacific Asset Partners, W Capital Partners, Venture Frogs, Zagat and a number of small private investors sold off all their OpenTable shares as part of the company’s IPO (click on chart below), according to the SEC filing.

Interesting, yeah? Seems at least some of the company’s investors had been hoping for an exit. And they fled for it in unison, pockets full, when one was offered. Perhaps they’d lost their appetite for risk after reading through the Risk Factors section of Open Tables IPO filing, which grimly noted that “a significant majority of our restaurant customers are fine-dining restaurants which have been particularly affected by economic downturns such as the one we are currently experiencing.”

Or perhaps, like Scott Sweet, a senior managing partner at I.P.O. Boutique, they remember Foodline and the last dot-com bubble and bust. “People don’t truly know the story here about this company. It’s a one-trick pony company,” Sweet told the New York Times. “Pricier restaurants in San Francisco, Tampa, New York are not that hard to get in right now. In fact, one can do it themselves if they choose, with 15 minutes notice.”

OpenTable Shareholders Apparently Booking Reservations in Empty Restaurants

John Paczkowski — Thu, 21 May 2009 17:53:44 +0000

Anyone who dismissed OpenTable’s IPO price of $20 as grossly overpriced has, in short order, been proven grossly mistaken. Shares in the online restaurant reservation company opened at $24.50 apiece, up 23 percent from its IPO price. As I write this, they’re trading at $28.72 after topping out at $30–more than double their original price range.

Astonishing for a restaurant reservation company going public in the middle of the worst recession in decades. And especially for OpenTable, which has posted operating losses in four of the last five years and saw the total number of reservations seated by its restaurant customers drop 10 to 15 percent for the fourth quarter of 2008 from the same period in 2007. Sure, revenue increased 36 percent in 2008 and 21 percent in the first quarter of 2009 compared to prior years. But come on–booking reservations in empty restaurants? At a time when the public is chowing down on Top Ramen?

“This [is] reminiscent of the 1999-2000 IPO pricings,” IPO Boutique partner Scott Sweet said in a research note to clients. “This IPO environment has not and should not see a pricing like what was chosen, considering the restaurant business is very prone to the recession. I believe that once sanity prevails, it will likely trade down hard.”

Will OpenTable Be Just What Silicon Valley Ordered This Week?

Kara Swisher — Mon, 18 May 2009 10:35:54 +0000

One of the first Silicon Valley start-ups to go public in a long while–OpenTable–is expected to come to market this week, with venture firms hoping it will prove a tasty treat for Wall Street.

Whether the $42 million initial public offering of the online restaurant reservation service proves to be a bellwether or not is unclear since its business has–despite strong revenue gains over the last two years–run up operating losses for much of its lifespan of 10 years.

OpenTable’s last three months of results, though, have seen a small profit. It makes money primarily from fees from restaurants it gets for a variety of services.

Revenue for 2007 was $41.1 million and for 2008, $55.8 million.

OpenTable is most definitely a creature of Silicon Valley. Its CEO, Jeff Jordan, is a former top eBay (EBAY) exec, and one of its VC backers is Benchmark Capital, among others. Its venture funding has totaled about $50 million.

Barring any unforeseen circumstances, the San Francisco-based OpenTable is expected to price from $12 to $14 a share and then begin trading on Nasdaq under the ticker stock symbol OPEN later this week.

Proceeds from the sale of three million shares, OpenTable has said in regulatory filings, will net it about $16.1 million, with 48 percent of shares being sold by existing shareholders.

The IPO, underwritten by Merrill Lynch & Co., would value the company at about $280 million, which is about five times its 2008 revenues.

(You can look at OpenTable’s initial public filing in January about the IPO here.)

The Ad Business Is Either Not as Bad as You Think, or Worse

Peter Kafka — Wed, 04 Mar 2009 21:07:40 +0000

Love the gang at Ad Age. The more their industry gets battered, the more compelling their stuff becomes. But I would like them to help me out here: Are things getting worse or are they getting better? Because these two headlines (and their subheads, really) on the publication’s homepage today confuse me.

And now, via the aggregators’ best practices playbook: Links! Pick your reality:

Glass half-empty? The ad market is so bad that no one can attend the ad industry’s biggest conference.

Or glass half-full? The ad market isn’t that bad: Just ask the people who run high-end restaurants.

[Image credit: thrig]

More CEO Choices for Yahoo: Freston, Jordan, Bonnie and Two Rosenblatts!

Kara Swisher — Wed, 19 Nov 2008 08:00:08 +0000

BoomTown might have been remiss in my post yesterday on top candidates for the Yahoo CEO job, after the news Monday that Jerry Yang is stepping down, by leaving out several key possibilities.

Yesterday’s roster included News Corp.’s Peter Chernin, Google’s Tim Armstrong, Kevin Johnson of Juniper Networks (JNPR) and also two Yahoo board members, among others. (The main internal candidate, Yahoo President Sue Decker, seems unlikely to get the nod.)

So here is an addendum to my initial list–all of whom are Yahoo (YHOO) outsiders.

Tom Freston:

Chernin is not the only media mogul whose name is being bandied about–the other prominent one is former Viacom head Tom Freston.

Freston apparently got shafted by the–let’s be polite here–disturbingly volatile founder of Viacom (VIA), Sumner Redstone, for not buying MySpace. In fact, News Corp. (NWS), which also owns this Web site, did. But Freston remains a well-respected and creative exec and has been dabbling in the Internet space since leaving Viacom.

Also, Oprah and Arianna love Freston–which is all I need to know.

Jeff Jordan:

Jeff Jordan, the former top eBay (EBAY) exec who is now the CEO of OpenTable, was also on the short list for COO at Facebook, a job that went to former Google exec Sheryl Sandberg.

While the restaurant reservations Web start-up has been headed for a public offering, that event has obviously been pushed out indefinitely by the econalypse, which might be just the impetus to convince Jordan that bussing tables all day is too dull.

Some speculate that Yahoo could buy OpenTable and get Jordan in the process.

Richard Rosenblatt:

Another interesting idea is Richard Rosenblatt of Demand Media, a company that Yahoo was sniffing around not too long ago.

The network of social-networking sites and apps maker is an innovative play in the space and might give Yahoo some much needed Web 2.0 DNA. Demand could still be bought by Yahoo, in order to put Rosenblatt into place.

(Rosenblatt, for those who do not remember, ran the company that owned MySpace, and he was key to selling it to News Corp.)

Also, Lance Armstrong likes Rosenblatt.

Shelby Bonnie:

A reader actually made the excellent suggestion of former CNET head Shelby Bonnie, who is now investing in start-ups. Bonnie is another steady exec–despite leaving CNET, now owned by CBS (CBS), under an options backdating controversy–and is well-liked in the Internet industry.

Yahoo would be a much bigger job than he has ever held, although he certainly has both tech and advertising experience online.

David Rosenblatt:

Lastly, especially if Yahoo is interested in an exec who has turnaround talent, there is probably no better a choice than DoubleClick CEO David Rosenblatt. An experienced online advertising exec, he is also sharply outspoken and knows how to get companies in line and fast.

He is also impossibly rich after Google (GOOG) bought DoubleClick out from under–wait for it–Yahoo recently. While he is still running the show for Google, after having decided to stay, Yahoo might present an interesting challenge for the very savvy Rosenblatt.

Please see this disclosure related to me and Google.