The Mountain View, Calif.-based company tries to boost online companies’ revenue by placing targeted promotions and offering incentives at the point of checkout.

It’s a bit similar to how grocery stores try to boost sales by strategically placing tabloid magazines, gum and candy bars at the register to spur last-minute impulse buys.

Instead, TrialPay makes last-minute offers to give people incentive to make a purchase when they are on the fence.

As an example, TrialPay’s CEO Alex Rampell said that when people visit Fandango’s site, they may get an offer for a free movie ticket if they sign up for Netflix. Or, in a Zynga game, you might be offered a virtual bouquet for free, in return for purchasing real flowers on Valentine’s Day.

Visa’s participation in the investment, which is being announced later this morning, is rare. Over the years, the payments company has made a few acquisitions, including PlaySpan, CyberSource and Fundamo, but Visa’s only investment in recent memory was in payments darling Square, which allows anyone to accept payments using a cellphone.

Rampell said that with Visa’s help, TrialPay will be able to expand to offline merchants from working exclusively with online retailers, by giving it a way to track if a person visited a store and made a purchase.

“The question is, how do we send traffic to Starbucks or McDonald’s or any other offline merchant?” Rampell said. “We already have access to people online who are buying or thinking about buying something. It would be great if we could could give you 20 virtual coins if you shopped at McDonald’s. But how do we close that redemption loop?”

Today, TrialPay, which has 130 employees, reaches more than 70 million monthly active users worldwide. In 2011, Rampell said, revenues more than doubled; he declined to offer specifics.

Rampell also declined to provide details about potential partnerships with Visa. Visa also declined to comment.

Investors in the company’s fourth round included new investors Greylock Partners, Visa Inc., T. Rowe Price, DAG Ventures, DFJ Growth and QuestMark Partners. Existing investors also participated. To date, it has raised roughly $70 million.

For more of Rampell’s opinions on how the payments space will evolve, check out his Web 2.0 speech from October:

The company debuted at $13 a share, and in early morning trading rose to nearly $18 a share before settling at around $16 a share, representing an increase of 23 percent. Angie’s List had intended on selling 8.8 million shares at $11 to $13 apiece.

Angie’s listing closely follows Groupon, which jumped on its first day to a high of $31 in early trading, after pricing at $20 a share.

Angie’s List can be found trading on the Nasdaq market under the symbol ANGI.

The company, which is not profitable, intends to spend the proceeds on advertising strategy to drive membership growth, and for general working capital.

Those with stakes greater than 5 percent include TRI Investments, Battery Ventures, BV Capital and T. Rowe Price Associates. Battery Ventures and BV Capital offered 403,224 and 574,376 shares, respectively, resulting in sales of $5.2 million and $7.5 million at $13 a share.

The company’s founder, Angie Hicks, offered 72,000 shares, resulting in a payout of nearly $1 million.

Aneel Bhusri

Today, Workday will announce that it has just raised $85 million in new financing, bringing its total amount of capital raised to $250 million. Sources familiar with the terms of the deal tell me that the investments value Workday at $2 billion.

The funding round isn’t coming from traditional venture capital players, but from institutional investors who will want to be shareholders of Workday when it goes public in the second half of next year. The round, which is being described as a Series F, includes T. Rowe Price, Morgan Stanley Investment Management, Janus, and Bezos Expeditions, the personal investment entity of Amazon CEO and founder Jeff Bezos.

I’m also told, by sources familiar with the deal, that William Danoff, the manager of Fidelity’s $80 billion Contrafund, the mutual fund giant’s largest stock-based fund, has participated in this funding round. This would be the Contrafund’s third recent investment in a privately held Internet company, the other two being Facebook and Zynga. In fact, it’s the same group of funds that took part in a huge round with social gaming force Zynga in February; in Groupon in January; and which earlier this year bought nearly three million shares of Facebook for $25 each.

Previous investors include Dave Duffield and Greylock Partners, who are in for $90 million across four rounds; and New Enterprise Associates, which joined a $75 million Series E round in 2009.

Why raise from institutionals and not VCs? “Because Workday is going to go public, and probably before the end of next year,” Bhusri told me. “Rather than do a round that adds an overhang to the existing capital structure, this is a group of investors who will likely buy more in the IPO,” he said. “In some ways, it’s an early debut of an IPO.”

And while there’s no S-1 filing from Workday to peruse just yet, Bhusri told me that Workday is growing plenty fast. Having disclosed $160 million in billings in 2010, Workday, he says, is on track to do twice that — or about $320 million in 2011 — and that it’s close to breaking even. So this round of capital is insurance. With the world economy so out of joint, if no logical window for an IPO emerges in 2012 — a reasonable worry — then Workday won’t be forced, should the need arise, to raise more capital in a difficult market.

So what is Workday, exactly? For the answer, you have to turn the clock back to 2004, when the software giant Oracle made its initial hostile bid to take over PeopleSoft. Bhusri was a senior executive and co-chairman of PeopleSoft’s board. After losing the battle to resist Oracle, he and co-founder Dave Duffield decided that the next battle for enterprise software would be in the cloud. Workday was born within months of their departure from PeopleSoft.

The plan, Bhusri says, was to create the next generation of PeopleSoft’s software, or the next generation of SAP’s Human Resources and Enterprise Resource planning software — essentially, software that businesses need to run day to day. But rather than deliver it in the traditional manner — run it on machines at the customer’s location — it’s all delivered via the cloud. “It’s as if you were going to start over with a clean sheet of paper and design this kind of software all over again,” Bhusri says.

And Workday’s customers aren’t exactly small players. Its average customer has between 10,000 and 15,000 employees. Among its 250-odd customers, the biggest is Flextronics, the huge electronics manufacturing company, which has 200,000 employees. Other customers include Time Warner, Thomson Reuters, Chiquita Brands, and perhaps unsurprisingly, Salesforce.com. There are some two million employees on the system. All that after only four years of actively selling the product.

And what Workday sells is a system that tends not to get replaced very often in large companies — perhaps once a decade. That gives the company an advantage when it asks for contract commitments that last three years; most cloud companies offer their services on a pay-as-you-go basis.

Workday’s targets are Bhusri’s old customers who bought PeopleSoft software to run their businesses one product generation back, and also those who run SAP software. So when a new customer signs on it’s usually one or the other being displaced. Other rivals include Lawson, Infor and, occasionally, the payroll giant ADP.

The typical new customer, Bhusri said, is using one of those other platforms and is ready to upgrade. “To upgrade to the newest version, they get a price quote that’s so high they start looking for a better way,” he says. “That’s when they find us.”

And Workday isn’t sitting still with HR software. Its next battle will be in financial planning software that companies rely on to handle money — accounting, expenses, procurement. Workday already has 50 customers running the financial stuff. Once they try Workday’s HR, they like what they see, making for an easy upsell. Others just swap out both the HR and financial parts in one go, Bhusri said. And the competitive targets are the same as well: Oracle and SAP. One wonders if they aren’t just a little worried.

Whether or not to sell any of their shares in Twitter is the big decision facing stakeholders of the microblogging service right now, as the second $400 million part of the company’s recent funding by Russia’s DST Global is completed in the next several weeks.

That includes everyone from early angel investors to those who bought it on the secondary markets to Twitter’s 600 employees, all of whom can sell a portion — up to 20 percent, sources said — of their holdings.

It’s all part of a recent $800 million mega-funding by Twitter, valuing the San Francisco company at $8.4 billion.

While $400 million went to Twitter, the second tranche of $400 million of the total was targeted to cash out current investors and also employees of the company.

Current investors include Benchmark Capital, Union Square Ventures, Spark Capital and several other venture firms, as well as a spate of prominent angel investors, such as Ron Conway.

Whether DST — as well as other smaller buyers, including early Twitter investor Chris Sacca and T. Rowe Price, according to the tender offer — gets them and others to sell enough shares is the big question, especially since few want to get caught in what one shareholder called the “Facebook idiot box.”

That would be referring to those who sold their investments in Facebook two years ago, when the social networking giant allowed its employees to sell 20 percent of their stakes to DST.

The financing was part of a $100 million add-on to a $200 million investment in the social networking company by the aggressive Russian investor.

At the time, the tender offer valued Facebook at $6.5 billion for the common stock, or $14.77 a share.

Of course, Facebook is worth upward of more than 10 times that now. Oops!

That’s why high-profile Silicon Valley venture firm Andreessen Horowitz, for example, is not selling out any of the shares it bought earlier this year in an $80 million transaction in private secondary markets.

Reasons to sell, of course, are also compelling.

Some investors might want to lock in upside, especially if they think the latest valuation is too high.

For venture capitalists in the company, some might want to return a win to their limited partners, while Twitter employees might want to put a down payment on a house after years of toiling in the start-up.

Others might also be worried about Twitter’s prospects going forward and might determine that the recent round was the high point of its market value. Twitter has indeed struggled to find a sustainable and lucrative business model, focused on advertising.

In addition, although it has recently stabilized, others might worry about Twitter’s management changes over the last year, as co-founders Biz Stone and Evan Williams have departed. Twitter creator and other co-founder Jack Dorsey is now running the company’s product efforts, with CEO Dick Costolo (who looks a lot like that Woody Allen shot above from the classic movie, “Take the Money and Run”).

Then again, that was exactly the take on Facebook several years ago, so it is now a case on all sides of seller beware.

Twitter declined to comment and I have not heard back yet from DST about the status of the transaction.

In February, Boomtown’s Kara Swisher reported that Zynga was raising $500 million, which would value the company at $10 billion.

Sources said the round included big institutional investors, such as Morgan Stanley, T. Rowe Price, Fidelity Investments and a smaller amount from existing venture investor Kleiner Perkins.

Today, Inside Social Games reports that the San Francisco-based games company, known for social games like Mafia Wars and Zynga Poker, filed a document with the State of California on April 14, showing that it has sold $490 million in Series C preferred Stock.

Occasionally, these documents are not a fair representation of the situation because they show intent rather than the completion of the round. They can also be out of date. A Zynga spokeswoman declined to comment.

Here’s the document from Inside Social Games:

Zynga April 2011

The round includes big institutional investors Morgan Stanley, T. Rowe Price, Fidelity Investments, as well as a token investment from existing venture investor Kleiner Perkins, in order to establish the huge valuation.

The big funding is essentially a precursor to an initial public offering.

Zynga has already raised more than $500 million from a panoply of Silicon Valley VCs such as Kleiner and Andreessen Horowitz, as well as Russia’s DST Global.

Their interest has been in Zynga’s explosive growth in social gaming, with such hits as FarmVille, CityVille and Mafia Wars.

The company grew virally, initially due to its close relationship with social networking giant Facebook.

Since then, it has tried to find other ways to distribute its games, although it still depends largely on Facebook’s audience.

While some worry about Zynga’s reliance on Facebook, as well as its sharing some of its revenue, sources said the company’s sales of virtual goods and advertising is closing in on $1 billion and more annually.

The massive valuation for the San Francisco-based Zynga comes after similar rounds by large Wall Street players in social media hotshots.

Facebook raised $1.5 billion from Goldman Sachs and others and social buying site Groupon raised close to $1 billion from T. Rowe Price, Fidelity and others.

The New York Times reported tonight the round was $250 million and named T. Rowe Price and Fidelity as possible investors. Earlier this week, The Wall Street Journal also had the round at $250 million.

Next week, at the DLD conference in Munich, Germany, BoomTown will be interviewing one of my favorite start-up CEOs: Andrew Mason of Groupon.

And what’s my very first question for the adorkable toast of the digital town, who has just collected a billion dollars in funding, giving his hot social buying site a $4.75 billion valuation?

No, it’s not about what Mason is going to do with all that moolah.

Not, it’s not about why Groupon spurned the $6 billion acquisition offer from Google (and the Yahoo one before that).

No, it’s not about what hair care products Mason uses to get his hair looking so much like Justin Bieber’s coif.

Most of all, what I want to know is how he’s going to manage his ridiculously large–and, let’s be honest, very opinionated–investor group, which is made up of a big chunk of the digital arena’s most prominent VC firms, institutional investors and angels.

Consider the list, which is much more diverse than Facebook’s at a similar time in its gestation (and, in fact, it feels a lot like the social networking site’s current investor stampede):

Andreessen Horowitz, Battery Ventures, Greylock Partners, Kleiner Perkins Caufield & Byers, Mail.ru Group (formerly DST Global), Maverick Capital, Silver Lake, and Technology Crossover Ventures, New Enterprise Associates, Accel Partners, T. Rowe Price, Fidelity, Capital Group, Morgan Stanley, former AOL exec Ted Leonsis and others.

(How in the world is the ubiquitous Ron Conway not shoved in this pig pile? Or is he?)

And, of course, the inevitable Allen & Company acted as financial advisor for this massive funding, which also feels like a bit of a private pre-IPO.

It will be interesting to see exactly whom among this shareholder group that Mason and the other top Groupon execs will listen to and who will have the most influence over the next year.

None of the new moneybags got a board seat, which is probably a good thing. As most entrepreneurs know all too well, investors can be a tricky thing–at once helpful and then not so much.

Mason, a clearly gifted exec, certainly has his hands full now, managing expectations for the fast-growing company, as well as the business itself.

Let’s hope that now that this surreal investor sideshow circus is over, that Groupon’s precious time can be focused on just that.

Groupon has officially completed the raising of half of a $950 million funding, getting $500 million from a range of top-drawer investors, said sources close to the situation.

Those investors include Russia’s DST Global, T. Rowe Price, Fidelity, Capital Group and Morgan Stanley.

It’s unclear how much each investor has put in and who will make up the next tranche of funding, which will also close imminently.

The New York Times previously reported on the regulatory filing related to the funding, as well as investments from T. Rowe Price, Fidelity and Morgan Stanley.

Now completed, the investments value the Chicago-based social buying service at $4.75 billion, which is less than the $6 billion Google offered to buy Groupon.

Those acquisition talks failed. But Groupon is still attracting interest from other possible buyers.

For now, though, it’s just talking a pile of money–probably the right strategy–to keep growing its explosive business. A big chunk will also go to some Groupon execs and early investors.

Groupon has competitors, of course, such as LivingSocial, but has established itself as the leader in the local online discounting space.

Allen & Co. is advising Groupon on the fundraising.

A Groupon spokeswoman declined to comment.

This morning, after AOL execs ring the opening bell at the New York Stock Exchange, the latest chapter for the long-troubled Internet icon begins as it tries to convince Wall Street that this time will be the charm.

AOL officially spins off from Time Warner when the markets open for trading on the NYSE, and here is what the company is whispering to investors:

Really. We promise this time will be different. Really. Not like the last time we promised and it was not different at all and, to be honest, was worse! Or the 17 times before that. Cross our hearts. We’ve changed. Really.

Still, despite AOL’s various missteps over the years–including being part of one of the more disastrous mergers in history–several big investors BoomTown asked this week said they were willing to give the company a break.

Shareholders of record at 5 pm ET on Nov. 27 got one share of AOL for every 11 shares of Time Warner (TWX) on the day of the long-expected spinoff of the Internet service.

A typical response was Henry Ellenbogen’s of T. Rowe Price. While noting he does not comment on the firm’s trades, he added: “[AOL CEO] Tim Armstrong has laid out a thoughtful plan focusing on rebuilding the fundamentals of the business.”

As a big holder of Time Warner shares, T. Rowe Price now has a clutch of AOL stock–which will trade under the “AOL” ticker–from its 3.64 percent stake in the media giant.

Another big stockholder of AOL, who wanted to remain unnamed, said much the same: “They still have tons of problems and issues. But, I really like Tim. If it can be turned around, he’s the best guy to do it.”

Added the investor: “It’s very cheap, so I think it’s like owning an out-of-the-money options. You can make a lot of money if it works
when you start with a $2.4 billion market cap.”

That’s what AOL is valued at today, although it was worth a lot more only a month ago, a valuation based on Time Warner’s share price, which made AOL worth just over $3 billion when the spinoff plan was announced. (The stock has actually been trading on a “when issued” basis.)

But let’s have a moment of solemn reflection: AOL was valued at about $163 billion at the turn of the century.

In any case, the real game begins this morning, when AOL flies free from Time Warner for good (riddance?).

The new company’s execs and clients were certainly flying high last night on the floor of the NYSE, where AOL held a big, honking party.

Here’s a video I did of the event, which includes a parade of AOL execs posing with guest celeb, Diddy.

As in the hipster rap mogul, who has also been known as Puff Daddy, P. Diddy and, of course, Sean Combs, whom Armstrong should put on the AOL board pronto.

Maybe then we can say AOL has definitely changed!

Judge for yourselves from this video (I will also have another video up later of my interviews with various AOL execs at the party, and you can see the video tour of AOL HQ and an Armstrong interview I did yesterday here):

]]> http://allthingsd.com/20091210/will-wall-street-heart-aol-today-even-if-it-partied-hearty-at-the-nyse-last-night/feed/ 3 http://allthingsd.com/20090928/twitter-investors-celebrate-the-paparazzi-proof/ http://allthingsd.com/20090928/twitter-investors-celebrate-the-paparazzi-proof/#comments Mon, 28 Sep 2009 16:30:52 +0000 Kara Swisher http://kara.allthingsd.com/?p=18871 Well, it’s not like Twitter’s investors are Britney Spears or anything, but somehow, the $1 billion valuation of Twitter deserves a BoomTown all-lenses-shooting response.

After all, I have made much hay from taking the name of one of its founders, Biz Stone, and making lighthearted wordplay with it, especially around the idea that a business plan is sorely lacking at the microblogging hottie start-up.

As in: No-Biz-Like-No Biz Stone. Or Ain’t-Nobody’s-Biz-If-There-Is-No-Biz Stone. And, Biz Stone-Cold-Profits.

So, I rummaged around and found this perfect image of one of its money men celebrating Twitter’s recent $100 million funding.

Thus, here’s the photo proof of one Twitter investor–who looks a lot like T. Rowe Price’s Henry Ellenbogen to me–in his true state:

]]> http://allthingsd.com/20090928/twitter-investors-celebrate-the-paparazzi-proof/feed/ 2 http://allthingsd.com/20090924/new-twitter-valuation-clearly-in-need-of-character-limit/ http://allthingsd.com/20090924/new-twitter-valuation-clearly-in-need-of-character-limit/#comments Thu, 24 Sep 2009 18:00:15 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=25446

]]> http://allthingsd.com/20090924/new-twitter-valuation-clearly-in-need-of-character-limit/feed/ 0 http://allthingsd.com/20090720/slides-max-levchin-talks-about-web-20-redux/ http://allthingsd.com/20090720/slides-max-levchin-talks-about-web-20-redux/#comments Mon, 20 Jul 2009 09:27:54 +0000 Kara Swisher http://kara.allthingsd.com/?p=16021

Almost two years ago, just as Web 2.0 was heating up, BoomTown did a three-part interview with Slide founder and CEO Max Levchin.

Soon after, the popular maker of social networking applications, often called widgets, grabbed a big pile of cash from new investors–$50 million from Fidelity and T. Rowe Price–which put the value of the company at $550 million.

So, it was high-time for another visit to see him, especially after the recent recession has forced a lot of high-flying Silicon Valley darlings like Slide to wise up a little and get down to business.

That has meant tightening up costs, abandoning some business plans and drilling down on others.

Previously, Slide’s financial strategy had included making money from selling premium versions of its software, as well as selling advertisers on its large, although disparate, audience with display ads.

Now, says Levchin, it is still about premium products, but also about selling a brand “experience” rather than less effective and increasingly commoditized network-style advertising.

The products have also evolved, although Slide still essentially makes a wide range of innovative widgets that have been attracting many millions of users each. They include everything from slide shows to a software program called SuperPoke that allows a user to poke another in a super way.

A lot of Slide’s initial growth had been through taking advantage of the popularity of MySpace and Facebook.

But, since then, the company has been trying to be a kind of distributed content and application company that is not wholly dependent on large platforms.

Here’s a video of my interview with Levchin at Slide’s new HQ in San Francisco:

]]> http://allthingsd.com/20090720/slides-max-levchin-talks-about-web-20-redux/feed/ 1 http://allthingsd.com/20080205/max-levchin-on-slides-500-million-valuation-and-other-widgety-issues/ http://allthingsd.com/20080205/max-levchin-on-slides-500-million-valuation-and-other-widgety-issues/#comments Tue, 05 Feb 2008 14:38:45 +0000 Kara Swisher http://kara.allthingsd.com/20080205/max-levchin-on-slides-500-million-valuation-and-other-widgety-issues/

With all the noise about Microsoft’s $41 billion offer to buy Yahoo, I dropped the ball on posting about a chat I had about a week ago with Slide’s Max Levchin (pictured here) about the recent $50 million investment that valued the widget maker at an astonishing $500 million.

To say I was dumbstruck by the market value, given that the profitless start-up has only about $10 million to $12 million in annual revenue and a still unproven business plan, would be wrong.

Incredulous, yes. Gobsmacked, indeed. Feeling like I was back in 1999, most definitely. But not dumbstruck!

Thus, I queried the always voluble Levchin, who agreed to talk to me readily (no Jerry-Yang-cave-dwelling behavior for this 32-year-old Web 2.0 serial entrepreneur!) about the investment by two old-line institutional investors–Fidelity and T. Rowe Price–and its implications for Slide.

“We’re like a teen in our clock cycle,” said Levchin about what he thinks the money means to Slide. “Now, we have to figure out how do you get a job and work in the real world.”

It’s juicy quotes like this that make it easy to see why the young geek–whose last score was PayPal, which was sold to eBay for $1.54 billion–has become such a press darling, especially combined with his restlessly complex mind, curious intellect and a much longer view than your average dot-com entrepreneur.

And that’s why it sometimes feels effortless to start shaking your head in rapt agreement, even if you don’t agree at all, as he laid out the reasoning behind his contention that Slide and its giant bag of cash will now emerge from puberty fully mature.

This, despite the lack of profits in the here and now, which Levchin did not dispute. “We could start to turn toward profitability with not too much of a stretch,” he said, with a strong trace of his Ukrainian roots in his stilted speech patterns that make him sound a bit like a robot.

Instead, Levchin said he was more interested in the opportunities that he saw emerging for Slide–which has grown to almost 150 million monthly visitors and several billion monthly page views, by offering to consumers its range of software to make slide shows, engage in SuperPokes and do other often pointless widgety things.

“We were [operating] super-thin, but with a whole lot of ideas, so we had to prioritize what we had to do,” said Levchin, who said he did not plan to raise more money until recently. “We later brought up to the board that we were seeing all this growth in places.”

That was true on social-networking sites like MySpace and Facebook, where Slide was grabbing enormous growth, although Levchin has been trying to aim future increases off those platforms to other social networks like Bebo and Hi5, as well as internationally on its own.

To do that required money and lots of it, and from non-VC investors to give it more credibility beyond the bubbly go-go tone of Silicon Valley.

So using Allen and Co., a well-connected New York investment firm, Slide grabbed a pair of firms that reeked institutional, Fidelity and T.Rowe Price, which Slide still does not name.

“I thought it was best to raise money from people people who invest for a living and have some combination of risk-taking and knowledge,” said Levchin, who later noted that he would have thought the investment was frothy, if he could not convince anyone but VCs to hand over cash at the lofty $500 million valuation.

“I think it was flattering that these were not jokers,” said Levchin of his new investors.

He said he stopped potential laughing by unveiling a steady pipeline of revenue from sponsorships, impressions and clicks of all kinds.

More importantly, he noted, he began to outline a new way of reaching consumers more efficiently that was “not the bleak world of brand advertising.” Still, that does mean more consumer brand links, like the one Slide made this week with Kodak to make it easy for users to move around their photos.

But the heart of Slide’s promise, like a lot of socially oriented Web companies, lies in manipulating the information it is collecting from consumers. That essentially means using an intense version of e-metrics–data of when, how, where and why consumers click on things.

“It’s no surprise that we are mathematical … and we study data carefully,” said Levchin. “We’re building a predictive model that is close to perfect … where we can say what the revenue per user will be.”

Well, we’ll see about that–along with obvious privacy issues, the jury is still out on the effectiveness of social networking and its payoff, and also on how spammy such advertising can become. Last week, for example, Google blamed its weakness in its recent quarter on lack of progress in monetizing these platforms.

In an article in The Wall Street Journal today, for example, Kevin Delaney noted: “Since advertising on social-networking and video-sharing sites is still largely experimental for marketers, it could be more vulnerable in an ad-spending pullback.”

Thus, Levchin’s investors are betting Slide will surmount those challenges.

Happily, he discounted any revenues that Slide has made selling ads to other widget companies to improve their rank on sites like Facebook.

In fact, Levchin agreed that it was a bit of a “Ponzi scheme” and not a big part of Slide’s future. “It’s a little business that is going to go away,” he said.

Levchin hopes, of course, that does not describe Slide, which he has said he wants to get to a $2 billion valuation, somewhat based on his last experience at PayPal.

“I have said I have a chip on my shoulder and that it is PayPal-motivated … but I have no black line in the sand about it,” said Levchin. “But I do want to see that I can do it again…Call it obsession, call it megalomania, but I am definitely not crazy.”

Indeed, of all the players in this trip down the rabbit hole, Levchin is probably the most sane of all. After all, he’s got the money in the bank.

]]> http://allthingsd.com/20080205/max-levchin-on-slides-500-million-valuation-and-other-widgety-issues/feed/ 2 http://allthingsd.com/20080118/slip-sliding-into-a-fortune/ http://allthingsd.com/20080118/slip-sliding-into-a-fortune/#comments Fri, 18 Jan 2008 22:32:57 +0000 Kara Swisher http://kara.allthingsd.com/20080118/slip-sliding-into-a-fortune/

It’s Bubble Time!

As BoomTown broke the news in its post earlier today, Slide grabbed a big pile of cash from new investors–$50 million from Fidelity and T. Rowe Price–which puts the value of the company at $550 million.

In our post, we said the San Francisco start-up, whose widgets are among the most popular on Facebook and MySpace, was completing a round of funding that could value it at many times a multiple of its most recent $60 million to $80 million valuation.

The investment from the pair of private equity funds gives them a 9% stake in the maker of widgets and other social-networking applications.

Allen & Co., the media-connected New York-based investment firm, helped Slide execs in raising the latest round.

Don’t think we did not notice that the venture investors already in Slide did not pony up more funds at this–let’s just say it, shall we?–crazy valuation.

But it is noticeable that such mainstream investors are jumping into the giant pool of Kool-Aid that the social-networking industry has been swimming in over the last year.

Slide’s last round–an investment of $20 million–took place in November of 2006 with investors that included Khosla Ventures, BlueRun Ventures, Founders Fund and the Mayfield Fund.

So Slide’s investors, of course, were smart to get in on the ground floor to take advantage of the bubble that is expanding at alarming rates.

The ground-zero of that trend came when Facebook got a $240 million investment from Microsoft that valued the company at $15 billion.

Of course, while garnering revenues, neither Facebook nor Slide has the kind of business yet to deserve being worth this lofty amount, except for the fact that investors are counting in its potential and recent quick growth.

Slide’s business plan includes making money from selling premium versions of its widgets, as well as selling advertisers on its large, although disparate, audience.

The company calls itself the “largest personal media network in the world, reaching more than 134 million unique global viewers each month and 30% of the U.S. Internet audience.”

But the company recently said reports had put that number at 144 million, excluding its 50 million users on Facebook. Its competitors include other widget-makers like RockYou.

Slide makes a wide range of software, called widgets, that have been attracting many millions of users each. They include everything from slide shows to a program called SuperPoke that allows a user to, well, poke another in a super way.

A lot of Slide’s current growth has been through taking advantage of the huge spike in users first at MySpace and now at Facebook, which is promising, but also not certain.

To say that we have seen this story of fast growth, insane valuations and then the inevitable drop-off would be an understatement.

But Slide Founder and CEO Max Levchin and his team consider the company to be a new kind of distributed content and application company that is not dependent on large platforms like Facebook and MySpace and has huge potential.

Minor blogging annoyance: Of course, in a fit of pique since we revealed the funding without their help, Slide hand-fed the details of the deal to the New York Times and BusinessWeek, both of which somehow forgot to link to our post that said Slide was landing the deal. (Brad, Sarah: Please, please don’t tell us you figured it all out on your own this morning over eggs.)

UPDATE: A New York Times deputy tech editor just wrote an email to tell me its reporter already had a “previously scheduled” meeting with Slide about the deal–like I said, hand-fed!–this morning, which “inspired” its post and did not know of BoomTown’s news of the funding (even though it was up since 12:06 a.m. and noticed by everyone else, including Slide). Also, they had the hand-fed details! They did! I admit it! I went hungry, since I did not agree to an embargo! “In light of this we didn’t feel that a link was warranted,” he wrote me.

But we’re not bizarrely ungenerous like that, so here is the link to the New York Times story, in which Slide’s Levchin said his company makes Facebook and MySpace worth using. (And here is the BusinessWeek link too.)

“It’s impossible for social networks focused on scaling the network itself to build all the niche applications that bring people and keep people on these sites,” Levchin said, noting Slide widgets “add the bulk of perceived value to the consumers of these Web platforms.”

He also said he would use the money to expand its repertoire, but said Slide would try to develop in-house.

But others close to Slide said this was not exactly so, and that the company would also look around for good acquisition targets, using stakes in the newly valued Slide as currency.

]]> http://allthingsd.com/20080118/slip-sliding-into-a-fortune/feed/ 5