Founded in 2006, San Francisco-based SlideShare had only raised $3 million in funding, with its Series A round back in the beginning of 2008. The acquisition is comprised of 45 percent cash and approximately 55 percent stock.

Lead investor Venrock tells me the SlideShare acquisition represents a 15x return for the firm. I’d previously covered SlideShare’s Web conferencing product launch and its move to HTML5 from Flash.

SlideShare hosts 9 million presentations, with 29 million monthly unique visitors to its own site as well as traffic to embedded versions on more than 1.4 million domains. It’s led by the married team of CEO Rashmi Sinha and CTO Jonathan Boutelle.

LinkedIn, meanwhile, now has 161 million members and 107 million unique visitors. It just released an iPad app with calendar integration — along with SlideShare, another natural and overdue move toward helping its members get things done.

Much of what we saw at CES relates to things we’ll be seeing 24 months out. In my mind, it’s all good: we’ll be able to target better, we’ll be able to segment better. The ads will be delivered on screens that are sharper, look better, larger, which ultimately provides more effective communication. There’s one last element: in the role that we [media buyers] play, we have a responsibility to ensure that technology develops in a manner that doesn’t shake up the supply-and-demand equation of our business, doesn’t destroy the content amortization business, isn’t disruptive simply for the sake of being disruptive.

If it does alter the supply-and-demand equation, it needs to do so positively, not negatively. When you have the share of the deal volume that we do, you can’t just be passive about it. You have to try and influence it. The technologies and devices that begin to get manifested at a trade show like this needs to be guided, so that it all works out in the best interests of our clients.

– Irwin Gotlieb, Global CEO, GroupM; originally appeared at TVExchanger

We have a responsibility to ensure that technology develops in a manner that doesn’t shake up the supply-and-demand equation of our business.

A bold statement and, it seems, a common mindset for many incumbent business giants in their respective industries; a mistaken belief that they can somehow coax disrupting forces (be they new companies, or larger macro consumer trends) into conforming to their legacy business models and cost structures. As we have seen countless times, the actions of incumbents when faced with technology disruption often is to turn to litigation, legislation or other non-market strategies (i.e., anti-trust investigations, artificial price barriers) in an attempt to delay or block the challenging technology or companies. This perhaps works as a delaying tactic in the short term (Rio MP3 player case, Napster, book publishing agency pricing model with Amazon) but fails in the long term.

Mr. Gotlieb’s apparent belief that he and other advertising agency leaders can “ensure that technology develops in a manner that doesn’t shake up the supply-and-demand equation of our business” is futile in the long run, but perhaps more pernicious is the implicit arrogance of thinking the market force of the Web can be channeled into their bank accounts by sheer force of will. Of the many problems with this way of thinking, paramount is the ability to rationalize away making the hard choices and decisive actions to ensure the GroupMs of the world play a vital role in the new economy as they have done in the legacy one. (Cue Scotty from Star Trek… “You cannot change the laws of physics.”) For GroupM and other incumbents, it’s difficult to fathom, given how entrenched and advantaged they are, that they could drop the ball. But many will, as history has so often shown in times of market transformation.

Technology forces that bring greater efficiency and transparency to markets simply don’t care about privilege, access and rolodexes. They disrupt predecessor markets because of structural problems like price opacity and false scarcity that no longer “work” in the new market. Look at Google: its entire approach to advertising is to remove the middleman — just as, increasingly, the media-buying side of traditional agencies is reliant on the inefficient middleman, marketing up the cost of media to provide their services. Google is now selling $40B of media every year, the majority of it without a middleman (or at least with a different sort of middleman, and in any case, getting far lower margins than in traditional media bought by agencies.)

We watched as the music industry delayed its demise by suing Rio, Napster and literally hundreds of others, delaying the adoption of new business models not based on scarcity. We listen to Jeff Bewkes decry Netflix as the Albanian Army, as he feverishly works to reduce its influence with his content. We observe the movie industry fight with everything it has to protect the windowing strategy and defend limited access to content instead of moving toward open and immediate paid access to their movies. (Fantastic post on this from Rich Greenfield here, “Innovate Don’t Legislate” — registration required.)

And, as a microcosm of this larger conversation, we watched, over a very short period of time in the SOPA/PIPA debate, as the Web demonstrated the disruptive advantages of network effects and scale, as over a period of weeks, legislation that appeared all but ratified was shuttered, up to and including an implied Presidential veto.

Heady stuff. Granted, if we extend the metaphor and use SOPA/PIPA as a microscope, there are extremes on both sides, and it will be messy and require compromise if the big media incumbents and new technology disruptors are to learn how to co-exist. For big media companies and the service businesses that cater to them, this means recognizing the practical realities of changed business models — probably for the most part that their cost of production needs to drop dramatically and they need fundamentally to re-think distribution and customer relationship management to remain profitable and relevant.

On the tech side, it means recognizing that progress requires some level of institutional engagement and political compromise — because like it or not, this is the way our system of government works and how laws get written. This won’t be easy or natural, as it’s anathema to the culture of how new media tech and the start-ups that encompass it conceptualize and operate in our worlds. Facing reality and then demonstrating a bit more collaboration and compromise, however, would go a long way and be better for the customers who, like our democracy, these industries ultimately serve. Because it’s the customers who are in the driver’s seat, and increasingly they know it.

Perhaps it’s pollyanna-ish, but I bet on technology. Big media has the most to lose, because after decades of the game being rigged in its favor, the tables are turning. Of course it’s difficult and painful for media incumbents to embrace digital markets, considering these markets ultimately are smaller and have less attractive economics. That’s presumably why big media executives are so well compensated — if it were easy, anyone could do it. The alternative, however, is to be disrupted by new entrants that don’t have any allegiance to aging business models, and couldn’t care less how out of whack someone else’s cost structure is.

Coming back to Mr. Gotlieb’s view, I offer these thoughts. First, incumbents won’t be able to meaningfully guide the technology juggernaut of more efficient advertising mechanisms, so it’s perhaps better for them to focus their energies and advantages toward thoughtful reinvention. New technologies are bringing actual measurable performance and more efficient means of buying to a large share of advertisers. The challenge for incumbents is to adapt their enterprises to embrace this chaos and profit from it. The good news is, it’s doable. However, to think they can bluster their way out of this disruption is a fool’s errand.

David Pakman has been an internet digital media entrepreneur since 1997. He co-founded the Apple Music Group in 1995, worked at N2K (one of the first online music companies), co-founded MyPlay (pioneer of digital music locker), and was COO/CEO of eMusic for five years. Pakman is now a Partner at Venrock in NYC, investing in early stage internet and digital media companies.

Klout CEO Joe Fernandez said Kleiner Perkins lead the round, with Chi-Hua Chien joining the Klout board. KP partner Bing Gordon is also staying on the board. Fernandez wouldn’t comment on the price or valuation but called it a “strong round.”

Sources said the funding closed back in November and valued the company at about $200 million.

Other backers who participated included Institutional Venture Partners, Venrock, Greycroft Partners and ff Venture Capital.

Klout’s main product is a scoring system that measures people’s influence and reach on sites like Twitter, Facebook and Google+ — something that social media marketing types pay a lot of attention to. The concept of Klout scores has been somewhat controversial, but that seems natural for a system that quantifies a person’s worth.

Klout’s mission, said Fernandez, is “to empower every person by unlocking their influence.” He said Klout now handles 10 billion API calls per month, up from 100 million per month in January 2010.

Klout last raised $8.5 million a year ago. Its current business model is Klout Perks, where marketers can target influential people with free stuff. Fernandez said Perks are going well, with 300,000 people having received them last year, but “there’s a lot more we can evolve to.”

Whether explicitly or not, everyone has their own answer to this question, and based on the success rates of start-ups, those answers by and large stink. I don’t have a Magic 8 Ball on the topic, but two things make this the issue I wrestle with most:

1. The often-unpredicted success or failure of “nobodies” or “sure things” respectively
2. The outsized rewards for locating great people, juxtaposed with the probability of abject failure when settling for good ones

There is no central casting for these players — many of the A+ entrepreneurs with whom I have partnered have come in unusual packages: a biology post-doc who thought about opening a microbrewery B&B; a large-animal veterinarian who went to business school in his late 30s; and an ex-EMT who was also a nephew of the President. The best VCs seem to show the same diversity of background.

I now focus on these attributes:

• Great talents find a way to win, and are relentlessly driven to do so. They follow through and complete the task at hand — after all, starting is easy, it’s finishing that takes real will. It is not that they think outside of the box, there simply is no box for them. They view ambiguity as opportunity, not risk. When things get uncertain is when they really perk up and start to pay attention, because that is when real change is possible. Most of all, they exceed expectations. They bend the space-time continuum in some fashion, and their accomplishments are extraordinary.
• Experience is overrated. By and large, the world is changed by the young and the hungry. Experience can be enabling or constraining, but it is not even close to the dealbreaker that many believe it to be. If you are seeking a VP marketing or head of sales at a 100+ person company, absolutely, look at a resume. But to find someone with the passion and uniqueness to actually create an early-stage venture, you have to take time: Watch them and see what they do, talk to them and see what they think, ask around and see how well respected they are.
• Balance exploring/driving with learning/listening. Great people have a very clear grasp of their vision, while understanding that the world has a lot to teach them. They are humble students of the game, but are very confident in their abilities, and never “do what they are told.” They don’t avoid conflict and will always bet on themselves rather than shy away from risk. They ask questions and argue on facts, balancing innumerable data streams with a gut feeling to get to what they believe is the right answer.
• Great people are magnetic. They are not only smart and driven, they attract resources when all the data suggests they should not — whether capital, people or partners — and thereby become larger than just their singular efforts.

While it’s a potentially controversial idea today, I have come to believe that great entrepreneurs and great VCs are two sides of the same coin. Both embody these attributes. They are maniacally focused on changing the way we live with innovations that others thought were not possible. They are passionate about building a great company, and put the company before themselves. Their roles are complementary, like looking down opposite ends of a telescope, but those different perspectives on a problem can be extraordinarily synergistic. Great future entrepreneurs can look like great young VCs, and vice versa — in fact, three of my recent investments are stellar companies started by folks who have crossed from one role to the other.

All venture firms are simultaneously never, and always, looking for team additions. I believe this is a direct result of how difficult it is to identify those who will be not only smart, passionate, personable and high integrity, but also successful in this ever-changing, ambiguous entrepreneurial world, in which a strategy that worked the last time is not a recipe for a future win, but more likely charts a path to mediocrity. In fact, my own difficulty in finding great new additions for our firm is what spurred putting these thoughts on paper.

Bryan Roberts is a partner at Venrock and has been the highest-ranking healthcare investor on Forbes Midas List since 2008. You can follow him on Twitter at @brobertsvc and learn more about him at Venrock.com.

Aside from the horror at the events in Norway, the incident gave me new insight into the language chasm that still exists on the Web. For one thing, that there may have been lots of people turning to Norwegian news sites from outside that country, many of them non-Norwegian and probably non-English speakers. Why isn’t it easier, I wondered, to have text written in a language other than your own, more readily available in the language you do speak?

It turns out there’s a company right here in New York that’s doing just that. Smartling describes itself as a Translation Delivery Network, and uses the cloud to give sites the tools they need to easily serve up their pages in pretty much any language. Its customers already include foursquare, Scribd and SurveyMonkey, and it just landed a $10 million Series B funding round from IDG Ventures, with prior investors US Venture Partners, Venrock and First Round Capital also participating. Its Series A was $4 million.

I talked earlier this week with Smartling’s CEO and founder Jack Welde. He’s a former Air Force pilot who still flies today. He came up with an interesting language problem: In one context, “going into a bank,” means walking into a financial institution; in another it means maneuvering a plane. Most translation engines use a statistical method and so assume that “bank” means the financial building, without allowing for the fact you may be reading an aviation site. Context is kind of a big deal.

Welde tells me there’s a significant opportunity for companies on the Web to reach out to speakers of other languages. Four-fifths of U.S. residents are already on the Web, but only about 30 percent of China’s population is on the Web, to say nothing of other countries like Brazil, India and elsewhere. “The growth in Web users is occurring outside the U.S., and language is a key component to taking advantage of it,” he says.

Welde compares Smartling to Akamai, the Web-caching specialist that caches content to make its delivery more efficient. Smartling serves up on-demand versions of Web content from the cloud. Site owners choose the languages they want their content translated into, and redirect their domain name servers to point to those controlled by Smartling. There are three options for translation: One is machine translation, one is crowdsourced by a network of volunteers, and there’s also an option for professional translation. There are three tiers of service, starting at free and going up to $249 a month.

One advantage over relying on static translations like those delivered by Google Translate, Bing Translator or Yahoo’s Babel Fish is that the content becomes searchable in the translated language. That’s Smartling’s cloud network dynamically serving multilanguage versions of a client’s site, and then discarding them a few hundred times a second. It’s currently serving about 500 million page views a month.

Smartling has also partnered with CloudFlare, the Web security start-up to offer Smartling’s translation service as an optional add-on for its customers.

As product endorsements go, it wasn’t one that CloudFlare CEO Matthew Prince would have sought. Nevertheless, it showed in a very public way that the company was onto something potentially big.

Now we get an idea of how big it might be. CloudFlare has been running so far on a relatively small Series A investment of $2 million from Venrock and Pelion Venture Partners. Today it announced that it has landed a beefy $20 million Series B round, led by New Enterprise Associates, with Venrock and Pelion also participating. Scott Sandell, a general partner at NEA, will join CloudFlare’s board of directors.

NEA has backed companies as varied as Atheros, the wireless chip company now owned by Qualcomm; Fusion-io, the chip-based server storage concern; and Groupon.

So what does CloudFlare do? Webmasters can — for free — point their domain name servers to CloudFlare’s, rather than those operated by their Web hosting provider. The result of that simple change adds the site to CloudFlare’s distributed network, which protects against common attacks by hackers and spammers and makes a site resistant to distributed denial-of-service attacks that typically overwhelm servers and knock sites offline.

CloudFlare evolved out of Project Honey Pot, a nonprofit project that aimed to fight spam by creating a distributed system to find and track spammers and the bots they use to harvest email addresses. Launched in 2004, it was basically a hobby for Prince and the other founders — until the day in 2007 that the Department of Homeland Security called to say it saw real value in the data the project had collected on how fraud is conducted online.

And like Project Honey Pot before it, CloudFlare gets better as more people use it. Hosted in 12 Equinix data centers around the world, it has the computing muscle to keep its customers’ sites online when a server crashes or a hacker with a botnet attacks. Pretty much anyone who operates a Web site can have it up and running in minutes. On top of its free service, CloudFlare offers a Pro account for $20 a month. A more powerful offering aimed at enterprises is coming in the fall, Prince says.

But there’s more to it than just security. It turns out, through an unexpected benefit of programming, that CloudFlare also has a tendency to make sites load faster than they do from their main servers. The initial worry was that adding a layer between the user and the site’s hosting servers would slow things down. Some obsessive attention to the code, intended to prevent that slow-down, had an interesting effect: Sites started loading 30 to 40 percent faster. From these two benefits comes the mantra you’ll hear Prince repeat often: “We help the Internet run faster and safer.”

Did I say CloudFlare is onto something? Prince reckons that about 200 million users visit CloudFlare-protected sites every month. He declined to say exactly how many sites are using CloudFlare, but characterized it as in the tens of thousands. He did say the service is adding roughly 1,000 new customers a day, from small personal sites to huge companies.

So what’s the plan for all that money? To build out CloudFlare’s team and create new services, some aimed at large enterprises, says Prince, who notes that a business-class service is coming soon. “We’ll be adding a lot of new features that our business customers have been asking for,” he says. After that comes the enterprise-class offering.

Beyond that lie some interesting services aimed at making the Web business easier. Case in point: SSL, or Secure Socket Layer, the Web’s primary security technology. “Right now it’s way too hard for Web masters to deploy SSL on their sites, and there are too few sites using it,” Prince says. “We think we can do something important to address that.” Another thing that’s too hard: The looming transition from IPv4 to IPv6. “The solutions that are being provided right now are too complicated, and we can do something about that,” Prince says.

One recent addition was the official election results site for the nation of Turkey, which held its general election on June 12. On the night before the election, its site administrator joined CloudFlare. “The next day we saw a lot of traffic from Turkey,” Prince says. Traffic from 75 million Turkish citizens all hitting “refresh” every few minutes would have brought nearly any Web site down, and at first it looked like a massive new distributed denial-of-service attack coming out of Turkey. “We quickly figured out what it was,” Prince says, “and suddenly we were really proud that we were able to keep that site online while the whole nation was coming through the service.”

With the close of the round, the Durham, N.C.-based company now has investments from each of the major wireless OS-makers — well, sort of.

Here’s how it could argue the case: Venrock is venture capital arm of the Rockefeller family, which was one of the early investors in Apple. Appia’s other investors include Tomorrow Ventures, the investment arm of Google’s outgoing CEO Eric Schmidt, and BlackBerry Partners Fund is associated with Research In Motion.

To date, the company has raised $28.5 million.

The company is aspiring to build the largest independent marketplace of applications and to become a white-label solution for third parties, such as recent customers, like Opera Software and Mexico’s largest operator Telcel.

Appia said it will use the new capital to fund product development and the launch of additional app stores around the world.

In June 2008, PocketGear was spun off from Bellevue-based Motricity, which at the time was also based in North Carolina. It raised $3.2 million from Noro-Moseley Partners and Wakefield Group, which were the original backers of Motricity, and then later acquired long-standing app publisher, Handango.

Competitors include native app stores, such as Apple’s App Store and Google’s Android Market. But it also competes against independent stores, like GetJar and Amazon’s AppStore, which launched last week.

Of course, all of these players are trying to piggy back on the rise of the smartphone.

A research report by Frost & Sullivan predicts that total downloads from smartphone app stores are expected to increase from 9.6 billion in 2010 to more than 120 billion by 2015 around the world.

So use that context to think about this news: Media6Degrees, a behavioral advertising technology start-up, has raised a $17 million funding round led by Menlo Ventures.

Earlier investors U.S. Venture Partners and Venrock, which had helped the 2-year-old company raise another $12 million before the new B round, are re-upping.

The money is targeted for general expansion, not M&A, says CEO Tom Phillips, who joined the company in 2009 after a three-year stint at Google.

Phillips says his company will end up booking $20 million in revenue in 2010. And he says that by Q4 it had ramped up to a $30 million annual run rate–that is, it will do about $7.5 million in the last three months of the year.

Media6 describes what it does as “Social Targeting,” which sounds as if it’s trying to find links between your various social networks. But the company’s work has nothing to do with your Facebook or Twitter profiles. While it doesn’t like the term “behavioral targeting,” that’s essentially what it’s doing.

In a nutshell, Media6 Web marketers track the surfing behavior of their existing customers, then try to find similar behavior patterns–a matching “social signature”–for other surfers, so they can show them ads.

Depending on your perspective, that’s either creepy or a common-sense strategy to help advertisers spend their money more efficiently. If it does weird you out, you can go ahead and opt out. But Phillips and his company would like you to know that the company never tracks individuals–only their anonymized browsers.

Still don’t want any part of this stuff? In theory, companies like Media6 will be in trouble if lots of surfers really do start opting out of data collection. They can do that by telling individual Web sites and ad networks not to track them–or, more ominously, by using browsers with “do not track” filters built into them.

But we’re a very long way from that kind of change. And the start-up’s investors seem to be betting that it’s never going to come.

But besides valuations, perhaps a more severe symptom of a brewing bubble is the recklessness by which venture capitalists are making their investment decisions.

Speaking Wednesday at the Digital Hollywood conference in New York, Venrock’s David Pakman tossed out an observation that makes the investment game sound like the Wild West.

“We are seeing what I would call bad behavior with investors looking at these hot spaces,” Pakman said, speaking specifically about ventures in social media and mobile. “Deals are getting done with little to no due diligence.”

Read the rest of this post on the original site

Top-tier funds like Union Square Ventures, Spark and First Round Capital are showing up at AOL’s (AOL) New York headquarters in a couple weeks for what they’re dubbing a “VC Demo Day,” aimed at start-ups looking for seed money. The signup page for the event explains the conceit efficiently: “This will be just like every other Demo Day, only the VCs will be pitching their funds to entrepreneurs looking to raise capital. We’ll have a keg of beer and food available.”

What to make of this? We’re certainly not back in 2000, when Kurt Andersen famously declared that raising money is as “easy as getting laid in 1969.”

But the event, hosted by AOL Ventures and Betaworks, is a good reminder that we’re well past Sequoia’s 2008 “Good Times RIP” admonition. For a certain kind of start-up, there’s a long list of early round investors now clamoring to give you money. Another less visible sign: The prevalence of convertible debt in early round deals, which is supposed to favor entrepreneurs at the expense of investors.

Other VC Demo Day participants: RRE Ventures; Metamorphic Ventures; True Ventures; Venrock; IA Capital Partners; Lerer Ventures; DFJ Gotham.

Not entirely on topic, but this is my favorite pitch scene of all time:

Earlier this week at Twitter’s Chirp conference, Venrock’s David Pakman seemed to strike a chord by coining a new buzzword that deserves to gain some level of acceptance.

On a panel BoomTown moderated, in answer to my question about what kinds of investments and trends he is looking for in the social networking space, Pakman said:

“The ‘right-time’ Web is more valuable in some cases than the real-time Web. Real-time data is only interesting when I’m actually looking for that information. There’s no service today that’s giving information when it’s really needed. If your company is doing that…I brought my checkbook.”

While the checkbook was a nice touch, Pakman is actually making a good point, as much as I hate the proclivity of techies to coin new and often silly terms to wow the general public.

But one of the key issues being raised of late about making all these status update data streams helpful is that they are super-useless 98 percent of the time, resembling a raging flooded river more than a way to navigate to any place that is actually useful.

Someone does have to significantly drop the signal-to-noise ratio on all this blather, cutting through to find the really valuable information we all know has to be there.

Until someone does, please enjoy the Mighty Diamonds, singing their classic song, “Right Time”:

Here’s a video BoomTown did yesterday at the Twitter Chirp conference, where a lot of noise was made about a lot of things.

Like: Twitter has a Google (GOOG) Android app; Twitter has a link shortener; Twitter does more searches than you think; Twitter has 105.8 million registered users and is adding 300,000 a day; Twitter users write 55 million posts a day; Twitter is being archived at the Library of Congress.

Also more blah-blah-blah on geolocation, metadata called Annotations and, of course, @anywhere, which is essentially Facebook Connect for Twitter.

And–oh, yes–making money. That.

Apparently, according to the execs in attendance, I will have to stop making fun of Twitter co-founder Biz Stone’s name, calling him things like: No-Biz-Here Stone, Ain’t-Nobody’s-Biz-Ness-If-We-Don’t-Have-a-Business-Plan Stone and Biz Stone-Cold-Profits.

Now, given that the San Francisco microblogging service is introducing a number of advertising-related efforts in a quest to make some bank, I will have to change the name to Hey-Zuckerberg-We-Have-a-Biz-Too Stone.

Or, given some of the tensions with third-party developers over Twitter moving into their space in core development areas: Pardon-Us-While-We-Stomp-on-Your-Biz Stone.

In fact, that issue was the main focus of a panel I moderated yesterday afternoon at Twitter’s Chirp, titled “Investing in the Ecosystem.”

My dudes-only panelists included Polaris Ventures’ Mike Hirshland, Venrock’s David Pakman, Bijan Sabet of Spark Capital, and Benchmark Capital’s Peter Fenton.

Mostly, they took my guff about the state of the Twitterverse, in what turned out to be a lively discussion.

While yesterday was all talk, from COO Dick Costolo (who mistakenly thinks he is as funny as I am), Twitter CEO and co-founder Evan Williams, Stone and others, Chirp today is 24-hour hackathon.

Here’s a video I did of interviews with a wide range of Twitter staff, investors and advisers–and blogger Robert Scoble, of course, who is as inevitable at an event like this as air:

]]> http://allthingsd.com/20100415/some-twits-chirp-from-twitter-conference-ev-biz-and-more/feed/ 3 http://allthingsd.com/20100414/what-shall-boomtown-ask-the-twits-oops-i-mean-twitter-loving-vcs-at-chirp-today/ http://allthingsd.com/20100414/what-shall-boomtown-ask-the-twits-oops-i-mean-twitter-loving-vcs-at-chirp-today/#comments Wed, 14 Apr 2010 15:21:08 +0000 Kara Swisher http://kara.allthingsd.com/?p=26701

Later today at Twitter’s Chirp conference in San Francisco, BoomTown is moderating a panel titled “Investing in the Ecosystem.”

Or as I like to call it, “How Do You VCs Come Up With Those Crazy Valuations: Magic 8 Ball? Ouiji Board? Darts?”

I have a choice group of dudes–of course, they are all dudes–for the panel, all of whom have invested in a range of start-ups, including Twitter.

They include: Polaris Ventures’ Mike Hirshland, Venrock’s David Pakman, Bijan Sabet of Spark Capital, and Benchmark Capital’s Peter Fenton.

Presumably, the group of venture capitalists will give the audience the 411 on what goes into finding, feeding and nurturing the many innovative start-ups that populate the Twitterverse.

That is, until you actually try to compete with Twitter or make some dough without its sanction, wherein all the nice Whos-down-in-Whoville sweetness of the folks who run Twitter turns into the backroom at the Bada Bing with Tony Soprano and the boys.

(You can see Twitter COO Dick Costolo here, in fact, giving us his best Don Corleone in this video interview with MediaMemo’s Peter Kafka.)

The tensions of late between Twitter and the many third-party developers circling it are perhaps going to add some frisson to the two-day event at the Palace of Fine Arts, which costs $469 to attend. Twitter also just announced its advertising platform plan.

The first day is all talk, from Costolo, Twitter CEO and co-founder Evan Williams, co-founder Biz Stone and others. The second day is 24-hour hackathon.

For those not there, Twitter will be streaming the event live with the help of Justin.tv.

And, of course, there will be tweets–lots and lots of tweets.

[Sticker image courtesy of Zazzle.com]

]]> http://allthingsd.com/20100414/what-shall-boomtown-ask-the-twits-oops-i-mean-twitter-loving-vcs-at-chirp-today/feed/ 0 http://allthingsd.com/20100225/apple-billions-of-songs-billions-of-apps-not-much-profit/ http://allthingsd.com/20100225/apple-billions-of-songs-billions-of-apps-not-much-profit/#comments Thu, 25 Feb 2010 12:53:05 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=16713 Apple is patting itself on the back for delivering 10 billion songs from its iTunes Store. And it frequently boasts about the number of apps customers download from iTunes, as well–the tally is now past three billion.

But you won’t hear Apple boast about how much money it’s making from iTunes. Because there’s not much to boast about.

Even at today’s hyper volume, the digital store is still running at “a bit over break-even,” the company reminded analysts during its earnings call last month.

Here’s the relevant excerpt from that call, via Seeking Alpha (thanks to Venrock’s David Pakman for pointing this out yesterday at the Digital Music Forum East):

Maynard Um–UBS
We have seen a number of industry revenue forecasts for applications and just given kind of the expected explosive growth there I am just wondering if that is still a break-evenish type of business as you look forward over the next couple of years?…

[Apple CFO] Peter Oppenheimer
…Regarding the App Store and the iTunes stores, we are running those a bit over break even and that hasn’t changed. We are very excited to be providing our developers with a fabulous opportunity and we think that is helping us a lot with the iPhone and the iPod touch platform.

As Oppenheimer says, this isn’t a new development. Apple (AAPL) has always maintained that iTunes wasn’t a real money maker. It’s supposed to help sell iPods, iPhones, and soon, iPads.

For years, industry observers figured that as the iTunes business scaled, this would change. An alternate theory, held by some of Apple’s media partners–the company was being overly modest about its success.

Apple doesn’t break out iTunes sales, but lumps them into a category called “Other music related products and services,” which generated net sales of $4 billion last year. That’s an increase of 21 percent over 2008, and the company attributed this growth to “increased net sales of third-party digital content and applications from the iTunes Store.”

]]> http://allthingsd.com/20100225/apple-billions-of-songs-billions-of-apps-not-much-profit/feed/ 0 http://allthingsd.com/20091110/more-money-for-real-time-ad-tech-appnexus-raises-5-million/ http://allthingsd.com/20091110/more-money-for-real-time-ad-tech-appnexus-raises-5-million/#comments Tue, 10 Nov 2009 13:11:16 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=12866 More money for ad technology: AppNexus, an ad-buying “platform,” has raised $5 million in a round led by Kodiak Venture Partners, along with Venrock and First Round Capital. The company is one of many trying to take advantage of “real-time” bidding for Web display ad inventory.

The funding is an “inside round”–only existing investors participated in the funding–which sometimes, but not always, raises a red flag. In this case, AppNexus says the funding is also an “up round”–its existing investors now think the start-up is worth more than they did the last time they bought in–but didn’t disclose a valuation.

There’s also a bit of fuzziness, still, about what exactly AppNexus does. The company says it provides a “gateway” to ad buyers who want access to ad exchanges like the ones operated by Google (GOOG) and Yahoo (YHOO)–Microsoft (MSFT) will launch its exchange next year–though many industry types think that AppNexus is itself an ad exchange.

The company certainly boasts lots of ad exchange bona fides. Co-founders Brian O’Kelley and Mike Nolet are both veterans of Right Media, the ad exchange Yahoo bought in 2007. And in September, the company brought on Michael Rubenstein, who had been running Google’s exchange.

]]> http://allthingsd.com/20091110/more-money-for-real-time-ad-tech-appnexus-raises-5-million/feed/ 0 http://allthingsd.com/20090602/emusics-new-boss-is-the-same-as-the-old-boss/ http://allthingsd.com/20090602/emusics-new-boss-is-the-same-as-the-old-boss/#comments Tue, 02 Jun 2009 17:34:24 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=7851 The eMusic subscription music service site, which specializes in nichey tunes for the “High Fidelity” set, has signed a deal to start carrying Sony’s (SNE) back catalog.

But I have a question: Whatever happened to eMusic’s search for a new CEO?

David Pakman, who ran the company since 2005, left last fall to join Venrock, the Rockefeller family’s venture capital arm. Last I heard, in late October, the company was “looking at a handful of very qualified candidates” to replace him. And in the meantime, eMusic Chairman Danny Stein–who runs the investment company that owns eMusic and who ran eMusic himself prior to Pakman–was serving as interim CEO.

So who’s the new boss? Same as the old boss. It’s also old news.

Stein says that’s he’s going to run the company for the foreseeable future, and that he figured that out way back in December: He just never announced it. “It was an easy decision to make”, he says.

Stein says he saw plenty of “very capable people”  but figures, a la Dick Cheney, that he was the right man for the job. He also says that the various headhunting companies who say they’re helping eMusic find a new CEO are doing so without his knowledge (or dollars).

Fair enough! The bigger question, as it has been for many years, is how eMusic fits into the larger digital music ecosystem. It sells DRM-free MP3 downloads, which some consumers like, via a subscription service, which most consumers don’t enjoy. Stein says the company has around 400,000 subscribers, and that that number has remained stready for a while. But he says his topline revenue still grew 40 percent last year, to $70 million. (No word on profits or lack thereof).

That’s a pittance compared to Apple’s iTunes (AAPL)  store, which moves about $2 billion worth of songs every year. And while eMusic was once a couple of signatures away from selling to Amazon (AMZN), that window looks like it’s closed, as the retailer launched its own MP3 store a year ago.

But perhaps there’s still an M&A opportunity for eMusic for a different retailer that wants to get into digital goods; Best Buy (BBY) did something similar when it bought up Napster last year.

]]> http://allthingsd.com/20090602/emusics-new-boss-is-the-same-as-the-old-boss/feed/ 0 http://allthingsd.com/20090513/exclusive-blogher-nabs-7-million-in-new-funding/ http://allthingsd.com/20090513/exclusive-blogher-nabs-7-million-in-new-funding/#comments Wed, 13 May 2009 11:00:10 +0000 Kara Swisher http://kara.allthingsd.com/?p=13421

BlogHer, which bills itself as “the community for women who blog,” has gotten $7 million more in a Series C funding, which will bring the total investment in the site to about $15.5 million.

The new round includes a return by two existing investors, Venrock and Peacock Equity, a fund run by GE (GE) and its NBC Universal unit. Azure Capital is joining as a new investor.

In an interview with BoomTown, BlogHer CEO Lisa Stone said the site’s recent fast growth was the impetus for the new round, in order to improve tools offered to its 2,500 vetted bloggers as well as investing in better research and advertising technology.

“This is a true grassroots effort that shows the growing influence of women in social media,” said Stone. “We want to focus on taking advantage of that growth and momentum with this new funding.”

According to the start-up–which was founded in 2005 by Stone, Elisa Camahort Page and Jory Des Jardins and now has 30 employees, located mostly in Silicon Valley–the BlogHer Network reaches more than 14 million unique visitors a month.

Besides the site, BlogHer also runs a popular conference and is hoping to expand its suite of social-networking tools as well as its publishing and advertising network.

“We have been trying to create a place for women to participate in social media with civil respect and also to engage readers,” said Stone.

While it is not yet profitable, Stone added, BlogHer is ahead of its internal financial projections, and “I hope next year I can raise a glass of champagne to meeting that goal.”

]]> http://allthingsd.com/20090513/exclusive-blogher-nabs-7-million-in-new-funding/feed/ 0 http://allthingsd.com/20090318/viacom-ceo-dauman-yep-were-still-suing-google/ http://allthingsd.com/20090318/viacom-ceo-dauman-yep-were-still-suing-google/#comments Wed, 18 Mar 2009 21:10:35 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=5439 Viacom (VIA) CEO Philippe Dauman just spent more than an hour giving the most detail-free answers he could possibly deliver to BusinessWeek’s Ron Grover, who was interviewing him at an industry conference.

So no surprise that Dauman had little to say about his company’s giant, glacial lawsuit–two years and counting–against Google (GOOG) over copyright infringement at YouTube. But for the record, Dauman still thinks… something will happen, someday.

“We’re in U.S. litigation-land. We are in discovery. A lot of documents have been produced. One thing about technology, there’s so many more documents now,” Dauman noted, accurately. And so what does that mean? “We continue to be confident in our position. There’s not much more we can say, and there will be an outcome.”

So there you have it.

Dauman did say that his suit helped push Google to install a filtering system that susses out videos that shouldn’t be on the site (more on that soon). And he did say that his son, Philippe Jr., continues to enjoy working at Google–a hire that Dauman says both he and Google CEO Eric Schmidt signed off on. “He’s doing very well there. He loves it, it’s a great company.”

]]> http://allthingsd.com/20090318/viacom-ceo-dauman-yep-were-still-suing-google/feed/ 0 http://allthingsd.com/20081211/lady-blog-network-blogher-gives-partners-a-pay-cut/ http://allthingsd.com/20081211/lady-blog-network-blogher-gives-partners-a-pay-cut/#comments Thu, 11 Dec 2008 18:03:53 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=1989 BlogHer, a women’s ad network/publishing network and conference organizer, is cutting the amount it pays to its blog partners by 10 percent. That’s really sort of a double cut, since the blog owners/writers in its network get paid based on the ads BlogHer can sell, and ads are already under pressure.

The only real surprise here is that the BlogHer founders–Lisa Stone, Elisa Camahort Page and Jory Des Jardins–don’t blame the economy for the cuts. Rather, they say that they have to reduce payments because they’re so successful:

When BlogHer’s network was created in 2006, we began with 35 blogs, a few advertisers and a small number of staff members to sell and manage the entire network. Today, BlogHer’s network is more than 2,500 blogs strong, and we’re working with dozens of advertisers each quarter. We have had to grow our technology infrastructure and staff dramatically to keep pace with network growth. Because many of these costs are fixed, expanding our network to compete for Fortune 500 advertisers has been a major investment.”

BlogHer was founded in 2005, and has received funding from Venrock, the Rockefeller family’s VC arm, and Peacock Equity, the JV between GE’s (GE) NBC and GE Commercial Finance.

Here’s the full text of the email from the BlogHer founders to their blog partners:

December 10, 2008
Hi everyone,

This is a long letter, but an important one, so thank you for your attention during this busy time of year. We’re writing to share with you:

* One change that BlogHerAds is making to our contract terms with you, effective January 1, 2009. This change will require your agreement, and instructions will be provided on how to indicate your agreement.

* One change in our payment processes, also effective January 1, 2009

* One new benefit: A new way to receive your payments online, immediately available to all members

This letter explains what the changes are, and how they will affect you.

In the past year, BlogHer expanded and competed for more advertising dollars for your blogs. The good news is that we successfully grew our business in the worst economy in the nation’s history. However, because of the current climate, we need to make some changes so that BlogHer can continue to invest in the resources necessary to recruit the very best advertising for your blogs.

* Contract Change -Your revenue share percentage

When BlogHer’s network was created in 2006, we began with 35 blogs, a few advertisers and a small number of staff members to sell and manage the entire network. Today, BlogHer’s network is more than 2,500 blogs strong, and we’re working with dozens of advertisers each quarter. We have had to grow our technology infrastructure and staff dramatically to keep pace with network growth. Because many of these costs are fixed, expanding our network to compete for Fortune 500 advertisers has been a major investment.

Currently, you get a revenue share of 100 percent of gross advertising fees received by BlogHer. Effective January 1, 2009, we will apply your revenue share to 90 percent of gross advertising fees, thus reducing your revenue share by 10 percent. To document this change, we need to amend the first sentence of Section III.A.3 of our Agreement to read:

For the purposes of this Agreement, the term “Revenue” means the gross fees actually received by BlogHer for Advertising Impressions originating from the Advertising on Partner’s Blog, less an administrative fee equal to ten percent (10%) of the Gross Fees to cover sales commissions, costs associated with serving the advertisements, administrative third party fees, campaign referral fees and other miscellaneous administrative expenses.

Here’s what the difference will mean to individual bloggers:
Currently, on a $10 CPM, a network blogger earns $5 per 1,000 impressions if the number of impressions on the blogger’s site is equal to less than one million. With a 10% deduction from gross revenue to cover our operating costs, a network blogger will now earn 50% of $9.00, or $4.50 per 1,000 impressions. (As always, BlogHer will not take a revenue share on BlogHer house ads or on remnant inventory – 100% of that total revenue will still go directly to you.)

While we have needed to make this change for some time, we held off for as long as possible. We are acting now in order to continue aggressively pursuing new revenue for you and your sites.

What we are asking you to do now:

We have added a section to your BlogHerAds profile with a summary of this change. Please visit your BlogHerAds profile and check the box indicating that you accept these changes to your contract by December 19, 2008. If you have any questions, please don’t hesitate to contact us via our help desk form.

This is an opt-in contract change, so you must indicate your acceptance of these terms. If you do not visit your profile and accept these terms, we will have to suspend ads on your site, starting January 1, 2009, until acceptance is received.

Please accept these changes now by logging into your profile at
https://www.blogherads.com/user/login and clicking the Accept Terms of Service box.

* Payment Process Change – Net 45-days payment terms for each month’s payment of your revenue share

Our contract with you currently allows us to pay your revenue share 45 days from the date we receive payment from our advertisers. We’ve actually been paying you much sooner than we receive payment! BlogHer has consistently sent payments within 30 days following the close of each month for that month’s revenue. As we have scaled in number of both bloggers and advertisers on the network, we need to extend our payment schedule to 45 days from each month’s close, rather than 30 days. This is a more realistic schedule and will allow us to continue to scale, while continuing to get your payment to you more quickly and efficiently than paying you 45 days after we receive payment.

To effect this change, there will be a one-time 45-day gap between your payment for November’s revenue and your payment for December’s revenue. Subsequent to that you will continue to receive a check every 30 days, by the 15th of each month.

Here’s how your payment schedule will look:
Your revenue share for December 2008, which would normally have been received by January 31, 2009, will now be received by February 15, 2009. Going forward, you will continue to receive a check on the 15th of each month for the calendar month prior to the immediately preceding month (as long as you’ve earned or accrued at least $25 by the end of that calendar month.)

Near-term schedule:
November 08 revenue will be paid December 30th
December 08 revenue will be paid February 15th
January 09 revenue will be paid March 15th
February 09 revenue will be paid April 15th
March 09 revenue will be paid May 15th

* New Benefit (optional) – switching from paper checks to electronic payments

Many of you have asked about receiving ad revenue shares via electronic payments. Effective January 1st, BlogHer is making it possible for all members, domestic and international, to select PayPal as a payment option. We have switched to using Mass PayPal, which has the following benefits:

* No charge to you. BlogHer covers the entire surcharge for using Mass PayPal

* Using PayPal eliminates paper checks, and any inefficiencies with the U.S. Postal Service or if you should move physical addresses

If you are interested in switching to PayPal, you may choose the PayPal option of payment, along with entering your PayPal email address, by logging into your profile and going to Your account > Edit > About You, and selecting either check or PayPal under the Payment Preference header.

This change is optional and offered as a service to our bloggers. We hope it is good news to many of you! Please let us know if you have any questions about PayPal payment of your BlogHer Network revenue share.

As 2008 comes to an end, we are thankful for our partnership with each of you and proud of the pioneering publishing network for writers that we are building together. We and the entire BlogHer team will be working very hard to make 2009 a year of continued growth.

Best,

Elisa, Jory and Lisa

]]> http://allthingsd.com/20081211/lady-blog-network-blogher-gives-partners-a-pay-cut/feed/ 0 http://allthingsd.com/20080303/if-at-first-you-dont-succeed-try-try-again/ http://allthingsd.com/20080303/if-at-first-you-dont-succeed-try-try-again/#comments Mon, 03 Mar 2008 11:42:21 +0000 Kara Swisher http://kara.allthingsd.com/20080303/if-at-first-you-dont-succeed-try-try-again/

Was it just me or did you also get a bit of déjà vu upon reading a story today by the New York Times’s Laura M. Holson about yet another mash-up of a Hollywood talent agencies with Silicon Valley VCs.

That’s apparently what is happening with a new investment venture that includes the William Morris Agency, Accel Partners, Venrock and–filling out the unlikely foursome–AT&T (T), as a limited partner.

The focus of the investment fund will be to hand out cash–and, presumably, expertise–to digital media start-ups in Southern California.

While the Times drilled in on the presence of a big cellphone carrier–just the kind of company that my partner Walt Mossberg has dubbed one of the “Soviet ministries” for stifling innovation with overly controlling behavior in the mobile space–I am more focused on the rocky road of many such deals that have been struck in the past.

Now, I think all the players involved are very smart, including Accel’s Jim Breyer, Venrock’s David Siminoff and also William Morris CEO Jim Wiatt (as well as Morris’s Paul Bricault).

That said, a lot of sharpies have gotten sucked up in the past into the this-has-to-be-a-marriage-made-in-heaven dreams of the perfect Hollywood-Silicon Valley pairing.

Today, there are a number of interesting efforts, such as Comedy Central’s deal with the creators of “South Park” to create a joint-venture digital studio, as well as the better-known pairing of Sequoia Capital with the Will Ferrell-led Funny or Die comedy site (see my video interview with Sequoia’s Mark Kvamme about the site below).

And, of course, although nothing was actually settled, the recently ended writers’ strike was all about content revenues that might–or, perhaps more accurately, might not–be coming from digital sources in the future.

But if the past is prologue, this new group of investors might have to learn to be a bit patient.

Breyer acknowledges as much in the Times’s article. “There is always a fear, I know, that the bubble is about to burst when a parade of actors and actresses comes through my door,” he said, before noting, “this time the discussions are much more rational.”

I guess that is why the funding is in the tens of millions of dollars, the article noted, rather than the larger sums that have been spent in previous attempts to forge these kind of tech and entertainment alliances.

In fact, Holson herself penned a very good piece in 2002 about the failure of one much-touted experiment in such an integration–LivePlanet–between celebs Ben Affleck and Matt Damon and Redpoint Ventures.

That company was supposed to be a multimedia wunderkind, straddling the tech and media worlds with all sorts of gizmo-content wonders. One of its debut press releases in 2000 was, in fact, titled: “LivePlanet Unveils Integrated Media Concept–Entertainment Experiences that Span Traditional Media, New Media and the Physical World.”

Now, it is a shadow of that. According to a January article in Variety about the shuttering of its film unit, “LivePlanet evolved into a satellite company that [partner Sean] Bailey, Affleck and Damon would return to when not engaged in their own projects.”

In the 2002 piece, after a series of problems, including the bust of the dot-com bubble, Affleck himself got it dead right.

”If we stick around long enough and convince people we can do these things, we will matter in the new economy. I’d like to slip to the last page to see how it ends. But who knows.”

And, even six years later, who knows?

Here is the Kvamme video, in which he discusses Funny or Die:

[ See post to watch video ]

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