LinkedIn Shares Soar in IPO
Shares of LinkedIn soared to more than double their offering price in the company’s IPO on the New York Stock Exchange on Thursday morning.
LinkedIn began trading around 10:00 a.m. ET under the symbol LNKD and quickly surged to above $90 per share. The company had priced its shares at $45 each on Wednesday ahead of the IPO, and the move significantly higher now values the company at more than $8 billion. (Update: As of 10:20 a.m. ET, shares had settled in the $80-$85 range.)
The huge pop also makes founder Reid Hoffman a billionaire — his stake had been valued at $855 million at the original offering price.
LinkedIn’s IPO is viewed by many as a barometer of the public market’s appetite for Internet and social media companies, with the likes of Facebook, Groupon, Pandora and Kayak expected to IPO within the next year. Certainly, today’s huge pop in LinkedIn shares sends a signal that the market is once again hungry (if not starving) for tech.
Thursday, May 19, 2011
Eventbrite Takes on Ticketmaster With $50 Million Investment
Eventbrite announced Wednesday a $50 million round of funding led by Tiger Global. The five-year-old startup — once used primarily as a platform for organizers to sell tickets to small events — has grown up.
It’s now selling tickets to a Black Eyed Peas concert that can accomodate 60,000 people. And more growth looks to be on the horizon.
Eventbrite plans to use the cash influx for technology, including maintaining a platform that can handle traffic from events like the upcoming Black Eyed Peas concert in New York City’s Central Park, as well as international expansion. Since it was founded in 2006, it has raised almost $80 million.
“The excitement around what we’re doing is that we’ve created an enabling market, where anybody can sell tickets,” CEO Kevin Hartz tells Mashable.
But that doesn’t mean that Eventbrite can’t ably compete for the business of events that have the option to sell tickets on sites like Ticketmaster and Live Nation.
“Our number one source of referrals is Facebook,” Hartz says. “What that means is people are using Facebook to discover events. … We bring in more buyers without expensive billboards or things like that.”
Eventbrite says it’s on track to sell $400 million in tickets this year, of which it will take a 2.5% cut plus a 99 cents per ticket fee. Twenty percent of Eventbrite tickets sold last quarter were sold overseas, and this is one reason the company plans to be more aggressive with its presence there.
A new Eventbrite office is opening in London in the next few weeks, and Hartz says the company is considering financing a similar startup in China.
So is Eventbrite, as the New York Times recently proclaimed in a headline, planning to “Tackle Ticketmaster?”
“We have this worldwide market,” Hartz says. “In a lot of ways it doesn’t make sense to fight it out with one competitor. There’s a much broader opportunity.”
Maybe so, but Eventbrite’s scope is certainly starting to overlap with its more traditional, big-event counterpart
Eventbrite announced Wednesday a $50 million round of funding led by Tiger Global. The five-year-old startup — once used primarily as a platform for organizers to sell tickets to small events — has grown up.
It’s now selling tickets to a Black Eyed Peas concert that can accomodate 60,000 people. And more growth looks to be on the horizon.
Eventbrite plans to use the cash influx for technology, including maintaining a platform that can handle traffic from events like the upcoming Black Eyed Peas concert in New York City’s Central Park, as well as international expansion. Since it was founded in 2006, it has raised almost $80 million.
“The excitement around what we’re doing is that we’ve created an enabling market, where anybody can sell tickets,” CEO Kevin Hartz tells Mashable.
But that doesn’t mean that Eventbrite can’t ably compete for the business of events that have the option to sell tickets on sites like Ticketmaster and Live Nation.
“Our number one source of referrals is Facebook,” Hartz says. “What that means is people are using Facebook to discover events. … We bring in more buyers without expensive billboards or things like that.”
Eventbrite says it’s on track to sell $400 million in tickets this year, of which it will take a 2.5% cut plus a 99 cents per ticket fee. Twenty percent of Eventbrite tickets sold last quarter were sold overseas, and this is one reason the company plans to be more aggressive with its presence there.
A new Eventbrite office is opening in London in the next few weeks, and Hartz says the company is considering financing a similar startup in China.
So is Eventbrite, as the New York Times recently proclaimed in a headline, planning to “Tackle Ticketmaster?”
“We have this worldwide market,” Hartz says. “In a lot of ways it doesn’t make sense to fight it out with one competitor. There’s a much broader opportunity.”
Maybe so, but Eventbrite’s scope is certainly starting to overlap with its more traditional, big-event counterpart
Attn Entrepreneurs: Mark Zuckerberg Isn’t the Role Model. Reid Hoffman Is.
Forty-plus weeks traveling the emerging world has taught me many things. Chief among them is that most entrepreneurs outside Silicon Valley learn the wrong lessons looking in.
A lot of that is the fault of publications like TechCrunch: We get excited about new things. If it’s exploding like Groupon, all the better. But we even go nuts over things like Foursquare or Quora that have pretty muted user-bases. That’s what being evangelists and early adopters is all about. We tend not to write about all the apps that launch and go nowhere, with good reason: If we’re doing our job well, we probably thought they sucked to begin with.
But the bigger disservice we do is not writing enough about the boring companies who work every day to build something that becomes huge, giving the impression that starting a business is easy in the Valley. That somehow people wake up with an idea, and roll out of bed onto a pile of venture capital, press and adoration. A lot of times the companies we should be writing about more than we do are admittedly boring infrastructure or enterprise software names. But there’s a category of consumer names that should be sexy, but for whatever reason don’t get the hype.
I’ve always thought of Yelp in this category. Local plays like Foursquare and Groupon have always gotten more attention. Another one is Pandora. Spotify has gotten far more attention, despite Pandora pulling off what almost no other music startup has– surviving the full-barrel onslaught of the record labels. But the king of them all for the Web 2.0 crowd is LinkedIn.
You could understand if LinkedIn was just paling next to Facebook. I mean, who doesn’t? Facebook is one of those once-a-decade phenomenons. But LinkedIn started out as the less-sexy social network next to Friendster. And then it graduated to the also-ran next to MySpace. It has officially trounced both now that its IPO has priced at $45 a share, or $4 billion-plus valuation– the highest valuation for an Internet company debut since Google.
More than ten years ago, Reid Hoffman– LinkedIn’s founder– was one of the first people to believe in the comeback of the consumer Internet, investing in a host of startups, but putting the bulk of his money, personal brand, time and firepower behind LinkedIn.
LinkedIn is one of the only social networks that survived from the first social media frenzy. That’s quite an accomplishment when you think about it. Hoffman wasn’t exactly up against entrepreneurial slouches. All the big Valley venture capital guns were behind Friendster. Mark centerfold-of-Vanity-Fair-this-month Pincus was behind Tribe. And Sean You-Know-What’s-Cool? Parker was behind Plaxo.
One of the reasons LinkedIn outlasted that early generation of social networks was that it was boring and practical. In the early days of social networking, the only reason anyone could think to use these sites was for dating. But Hoffman knew that would always be a customer acquisition headache: Either a dating site solves your problem and you stop using it, or it doesn’t and you stop using it. LinkedIn on the other hand would be this thing in the background you would need your entire career.
You could argue the flaw with LinkedIn was the rational strategy that saved it worked too well. For many people, it became an indispensable tool for certain moments of professional panic, but not something you used daily or even monthly. I’ve always compared it to a AAA card, a comparison that visibly annoys Hoffman and usually results in suggestions of other ways I should be using it. But back in 2007, even he admitted the site’s biggest flaw was they weren’t giving people enough to do.
When the Web 2.0 craze took off in 2006 or so, Hoffman’s star soared, but shockingly it wasn’t really because of LinkedIn. It was his angel portfolio that got the bulk of media attention. That includes out-performers like Facebook, but also stars that shined bright and burned out like Digg and Six Apart. Ever the gracious interviewee, Hoffman would answer questions about the sexier companies, but always be sure to work in a LinkedIn plug. A favorite was regularly betting me an expensive dinner at the restaurant of my choice if LinkedIn couldn’t help me do a certain aspect of my job as a reporter better.
Hoffman wasn’t in his early twenties or a college dropout, and he’d be the first to admit he wasn’t a natural CEO. He’s said in previous interviews that he has a hard time firing people quickly enough– a skill that Mark Zuckerberg has excelled at. He’s left the CEO chair several times, only to come back when other candidates haven’t worked out. But even though he could easily throw out that old cop-out of “I’m just the guy who starts stuff; I’m not the CEO type” and wash his hands of the company, Hoffman cared about LinkedIn too much to ever be very far even when insanely sexier jobs were his for the taking. Even now in his role at Greylock, he spends the bulk of his time working on LinkedIn.
And yet, given all this, it’s LinkedIn that is the first social network to go public, the first multi-billion Web 2.0 IPO. It’s more than double the exit of sexy YouTube. And, in a rare case of startup justice, his day-in, day-out work building the social network no one ever wanted to get excited about has paid him handsomely: Netting him a boost of nearly $1 billion to his net worth. Few entrepreneurs who’ve spent a decade building a company get that kind of personal return, because few personally invest so much of their own cash along the journey.
Hoffman can’t comment on any of this of course. I haven’t talked to him in weeks. These are all my observations after ten years of interviewing him about LinkedIn, watching him shake his head at the unfairness of the hype cycle and keep slogging away at building LinkedIn regardless. Hoffman should be the role model for entrepreneurs star-struck by the seeming glamour and ease of Silicon Valley’s consumer Internet world. He’s the living incarnation of the reality of the Valley: It may be easier than ever to start a product, but building a company is just as hard as its ever been.
As for the brain-dead commentators wondering if LinkedIn’s IPO represents a bubble, somewhere Hoffman has to be laughing and shaking his head again. What part of spending a decade of building a business with more than 100 million users that no one hyped, that represents one of the few large-scale working examples of a freemium business model screams “BUBBLE” to you people? These are the same people that said Google was wildly overvalued when it priced at under $100 a share.
As most people with common sense have argued, we’re not in an Internet bubble now, because the soaring valuations are mostly contained within the frothy insider ecosystem. Secondary markets are starting to change that, but so far, there are exactly two $1 billion + Web 2.0 exits that I can count: YouTube and LinkedIn. Maybe you count a few more. It depends on your definition of “Web 2.0.” I count it as the wave of consumer Web social media companies started with the Friendster explosion. Some could count Skype (twice,) but I’d argue Skype is more of a sandwich generation company. But even if your definition is more generous, I bet you can count them on one hand. Five or fewer isn’t a bubble.
There’s exactly one aspect of Silicon Valley right now that I will concede does feel like 1999: It’s easy to start a company. Stupidly easy. And entrepreneurs like Hoffman are the antithesis of that archetype not a symptom of it.
Forty-plus weeks traveling the emerging world has taught me many things. Chief among them is that most entrepreneurs outside Silicon Valley learn the wrong lessons looking in.
A lot of that is the fault of publications like TechCrunch: We get excited about new things. If it’s exploding like Groupon, all the better. But we even go nuts over things like Foursquare or Quora that have pretty muted user-bases. That’s what being evangelists and early adopters is all about. We tend not to write about all the apps that launch and go nowhere, with good reason: If we’re doing our job well, we probably thought they sucked to begin with.
But the bigger disservice we do is not writing enough about the boring companies who work every day to build something that becomes huge, giving the impression that starting a business is easy in the Valley. That somehow people wake up with an idea, and roll out of bed onto a pile of venture capital, press and adoration. A lot of times the companies we should be writing about more than we do are admittedly boring infrastructure or enterprise software names. But there’s a category of consumer names that should be sexy, but for whatever reason don’t get the hype.
I’ve always thought of Yelp in this category. Local plays like Foursquare and Groupon have always gotten more attention. Another one is Pandora. Spotify has gotten far more attention, despite Pandora pulling off what almost no other music startup has– surviving the full-barrel onslaught of the record labels. But the king of them all for the Web 2.0 crowd is LinkedIn.
You could understand if LinkedIn was just paling next to Facebook. I mean, who doesn’t? Facebook is one of those once-a-decade phenomenons. But LinkedIn started out as the less-sexy social network next to Friendster. And then it graduated to the also-ran next to MySpace. It has officially trounced both now that its IPO has priced at $45 a share, or $4 billion-plus valuation– the highest valuation for an Internet company debut since Google.
More than ten years ago, Reid Hoffman– LinkedIn’s founder– was one of the first people to believe in the comeback of the consumer Internet, investing in a host of startups, but putting the bulk of his money, personal brand, time and firepower behind LinkedIn.
LinkedIn is one of the only social networks that survived from the first social media frenzy. That’s quite an accomplishment when you think about it. Hoffman wasn’t exactly up against entrepreneurial slouches. All the big Valley venture capital guns were behind Friendster. Mark centerfold-of-Vanity-Fair-this-month Pincus was behind Tribe. And Sean You-Know-What’s-Cool? Parker was behind Plaxo.
One of the reasons LinkedIn outlasted that early generation of social networks was that it was boring and practical. In the early days of social networking, the only reason anyone could think to use these sites was for dating. But Hoffman knew that would always be a customer acquisition headache: Either a dating site solves your problem and you stop using it, or it doesn’t and you stop using it. LinkedIn on the other hand would be this thing in the background you would need your entire career.
You could argue the flaw with LinkedIn was the rational strategy that saved it worked too well. For many people, it became an indispensable tool for certain moments of professional panic, but not something you used daily or even monthly. I’ve always compared it to a AAA card, a comparison that visibly annoys Hoffman and usually results in suggestions of other ways I should be using it. But back in 2007, even he admitted the site’s biggest flaw was they weren’t giving people enough to do.
When the Web 2.0 craze took off in 2006 or so, Hoffman’s star soared, but shockingly it wasn’t really because of LinkedIn. It was his angel portfolio that got the bulk of media attention. That includes out-performers like Facebook, but also stars that shined bright and burned out like Digg and Six Apart. Ever the gracious interviewee, Hoffman would answer questions about the sexier companies, but always be sure to work in a LinkedIn plug. A favorite was regularly betting me an expensive dinner at the restaurant of my choice if LinkedIn couldn’t help me do a certain aspect of my job as a reporter better.
Hoffman wasn’t in his early twenties or a college dropout, and he’d be the first to admit he wasn’t a natural CEO. He’s said in previous interviews that he has a hard time firing people quickly enough– a skill that Mark Zuckerberg has excelled at. He’s left the CEO chair several times, only to come back when other candidates haven’t worked out. But even though he could easily throw out that old cop-out of “I’m just the guy who starts stuff; I’m not the CEO type” and wash his hands of the company, Hoffman cared about LinkedIn too much to ever be very far even when insanely sexier jobs were his for the taking. Even now in his role at Greylock, he spends the bulk of his time working on LinkedIn.
And yet, given all this, it’s LinkedIn that is the first social network to go public, the first multi-billion Web 2.0 IPO. It’s more than double the exit of sexy YouTube. And, in a rare case of startup justice, his day-in, day-out work building the social network no one ever wanted to get excited about has paid him handsomely: Netting him a boost of nearly $1 billion to his net worth. Few entrepreneurs who’ve spent a decade building a company get that kind of personal return, because few personally invest so much of their own cash along the journey.
Hoffman can’t comment on any of this of course. I haven’t talked to him in weeks. These are all my observations after ten years of interviewing him about LinkedIn, watching him shake his head at the unfairness of the hype cycle and keep slogging away at building LinkedIn regardless. Hoffman should be the role model for entrepreneurs star-struck by the seeming glamour and ease of Silicon Valley’s consumer Internet world. He’s the living incarnation of the reality of the Valley: It may be easier than ever to start a product, but building a company is just as hard as its ever been.
As for the brain-dead commentators wondering if LinkedIn’s IPO represents a bubble, somewhere Hoffman has to be laughing and shaking his head again. What part of spending a decade of building a business with more than 100 million users that no one hyped, that represents one of the few large-scale working examples of a freemium business model screams “BUBBLE” to you people? These are the same people that said Google was wildly overvalued when it priced at under $100 a share.
As most people with common sense have argued, we’re not in an Internet bubble now, because the soaring valuations are mostly contained within the frothy insider ecosystem. Secondary markets are starting to change that, but so far, there are exactly two $1 billion + Web 2.0 exits that I can count: YouTube and LinkedIn. Maybe you count a few more. It depends on your definition of “Web 2.0.” I count it as the wave of consumer Web social media companies started with the Friendster explosion. Some could count Skype (twice,) but I’d argue Skype is more of a sandwich generation company. But even if your definition is more generous, I bet you can count them on one hand. Five or fewer isn’t a bubble.
There’s exactly one aspect of Silicon Valley right now that I will concede does feel like 1999: It’s easy to start a company. Stupidly easy. And entrepreneurs like Hoffman are the antithesis of that archetype not a symptom of it.
Tuesday, May 10, 2011
THIS IS THE FUTURE !
Google Partners With Sony Pictures, Universal And Warner Brothers For YouTube Movies
Google confirmed the existence of its YouTube Movies service earlier today and has just released more details on which studios and movies will provide the 3,000 titles in its repertoire. YouTube has partnered up with Universal, Sony Pictures and Warner Bros and others to offer full length feature films on YouTube.com/movies. Fox, which we mistakenly reported had joined the brood earlier, is noticeably absent.
From the YouTube blog:
“Today, we’re announcing another step in our goal to bring more of the video you love to YouTube: the addition of thousands of full-length feature films from major Hollywood studios available to rent in the US at youtube.com/movies. In addition to the hundreds of free movies available on the site since 2009, you will be able to find and rent some of your favorite films.
From memorable hits and cult classics like Caddyshack, Goodfellas, Scarface, and Taxi Driver to blockbuster new releases like Inception, The King’s Speech, Little Fockers, The Green Hornet and Despicable Me. Movies are available to rent at industry standard pricing, and can be watched with your YouTube account on any computer. The new titles will begin appearing later today and over the coming weeks to www.youtube.com/movies, so keep checking back.”
Google also sent us a helpful YouTube Movies FAQ, which I’m including below.
Q. What are some of the new studios you’re partnering with?
A. Universal, Sony Pictures and Warner Brothers.
Q. How many films have you added and how many total movies are now available on YouTube?
A. We have added a total of approximately 3,000 new titles including catalog and new releases from Sony Pictures, Warner Bros, Universal, Lionsgate Films and many great independent studios. This brings the total number of movie titles available to rent on YouTube to over 6,000.
Q. Where and when will the additional movie titles begin appearing on YouTube?
A. Movies for rent will be available at www.youtube.com/movies and new titles will begin appearing to users today and be added throughout the week.
Q. Where are the new movies located and when will they be available on the site?
A. The new movies are located at www.youtube.com/movies and will start appearing at that destination throughout the day.
Q. How many total studios are now represented at YouTube.com/movies and what are they?
A. Studio partners include Universal Pictures, Sony Pictures, Warner Brothers, Lionsgate Films, Starz, The Weinstein Company, and Magnolia Pictures, among others.
Q. How much will the movies for rent cost?
A. Movies are set at industry standard pricing (i.e. most new releases start at $3.99 and library start at $2.99).
Q. How long will a consumer have a movie once he or she has purchased it?
A. For most movies, viewers will have 30 days to begin watching their rental. Once they start watching the movie they will typically have 24 hours to finish.
Q. What transaction service are you using?
A. The service accepts all major credit cards.
Q. Will movies for rent be available at the same time as DVD releases?
A. It’s always up to the content owner, however, many movies will be available at the same time as DVD releases.
Q. Is this a subscription service?
A. No, this is a transaction offering.
Q. Are the movies downloaded, or streamed?
A. Streamed.
Q. Is this global?
A. No. This service is available to US YouTube users only.
Q. Do you need a YouTube account to purchase a movie for rent?
A. Yes.
Q. Will YouTube movies for rent be available on Google TV?
A. Yes, these will be available via the browser (www.youtube.com) on Google TV.
Q. Can rented movies be shared or embedded into other sites including blogs, Facebook and Twitter?
A. Users can embed movies on other sites. If a user who has not rented the movie views the embedded video, the embedded player will show the movie’s trailer along with an overlay that users can click on to rent the full movie.
Q. Is the content in HD?
A. YouTube supports video in up to 4k resolution, however, it is up to our partners to specify what video quality they provide. Most movies for rent will be available in standard definition.
Q. What is unique about the YouTube Movie experience?
A. Movies on YouTube are about providing a complete movie experience. With YouTube Movie Extras movie fans can get more into their favorite films through cast interviews, clips, alternate movie endings and other highly produced content from talented YouTube partners. YouTube reaches one of the largest and most engaged online audiences in the world, with hundreds of millions of views a day in the US alone.
Google confirmed the existence of its YouTube Movies service earlier today and has just released more details on which studios and movies will provide the 3,000 titles in its repertoire. YouTube has partnered up with Universal, Sony Pictures and Warner Bros and others to offer full length feature films on YouTube.com/movies. Fox, which we mistakenly reported had joined the brood earlier, is noticeably absent.
From the YouTube blog:
“Today, we’re announcing another step in our goal to bring more of the video you love to YouTube: the addition of thousands of full-length feature films from major Hollywood studios available to rent in the US at youtube.com/movies. In addition to the hundreds of free movies available on the site since 2009, you will be able to find and rent some of your favorite films.
From memorable hits and cult classics like Caddyshack, Goodfellas, Scarface, and Taxi Driver to blockbuster new releases like Inception, The King’s Speech, Little Fockers, The Green Hornet and Despicable Me. Movies are available to rent at industry standard pricing, and can be watched with your YouTube account on any computer. The new titles will begin appearing later today and over the coming weeks to www.youtube.com/movies, so keep checking back.”
Google also sent us a helpful YouTube Movies FAQ, which I’m including below.
Q. What are some of the new studios you’re partnering with?
A. Universal, Sony Pictures and Warner Brothers.
Q. How many films have you added and how many total movies are now available on YouTube?
A. We have added a total of approximately 3,000 new titles including catalog and new releases from Sony Pictures, Warner Bros, Universal, Lionsgate Films and many great independent studios. This brings the total number of movie titles available to rent on YouTube to over 6,000.
Q. Where and when will the additional movie titles begin appearing on YouTube?
A. Movies for rent will be available at www.youtube.com/movies and new titles will begin appearing to users today and be added throughout the week.
Q. Where are the new movies located and when will they be available on the site?
A. The new movies are located at www.youtube.com/movies and will start appearing at that destination throughout the day.
Q. How many total studios are now represented at YouTube.com/movies and what are they?
A. Studio partners include Universal Pictures, Sony Pictures, Warner Brothers, Lionsgate Films, Starz, The Weinstein Company, and Magnolia Pictures, among others.
Q. How much will the movies for rent cost?
A. Movies are set at industry standard pricing (i.e. most new releases start at $3.99 and library start at $2.99).
Q. How long will a consumer have a movie once he or she has purchased it?
A. For most movies, viewers will have 30 days to begin watching their rental. Once they start watching the movie they will typically have 24 hours to finish.
Q. What transaction service are you using?
A. The service accepts all major credit cards.
Q. Will movies for rent be available at the same time as DVD releases?
A. It’s always up to the content owner, however, many movies will be available at the same time as DVD releases.
Q. Is this a subscription service?
A. No, this is a transaction offering.
Q. Are the movies downloaded, or streamed?
A. Streamed.
Q. Is this global?
A. No. This service is available to US YouTube users only.
Q. Do you need a YouTube account to purchase a movie for rent?
A. Yes.
Q. Will YouTube movies for rent be available on Google TV?
A. Yes, these will be available via the browser (www.youtube.com) on Google TV.
Q. Can rented movies be shared or embedded into other sites including blogs, Facebook and Twitter?
A. Users can embed movies on other sites. If a user who has not rented the movie views the embedded video, the embedded player will show the movie’s trailer along with an overlay that users can click on to rent the full movie.
Q. Is the content in HD?
A. YouTube supports video in up to 4k resolution, however, it is up to our partners to specify what video quality they provide. Most movies for rent will be available in standard definition.
Q. What is unique about the YouTube Movie experience?
A. Movies on YouTube are about providing a complete movie experience. With YouTube Movie Extras movie fans can get more into their favorite films through cast interviews, clips, alternate movie endings and other highly produced content from talented YouTube partners. YouTube reaches one of the largest and most engaged online audiences in the world, with hundreds of millions of views a day in the US alone.
MICROSOFT CORP. AND SKYPE!
Microsoft Corp. is close to a deal to buy Internet phone company Skype Technologies SA for between $7 billion and $8 billion—the most aggressive move yet by Microsoft to play in the increasingly-converged worlds of communication, information and entertainment.
More
Deal Journal: Next Step for Microsoft-Skype: Making Real Money
A Venture-Capital Newbie Shakes Up Silicon Valley
Readers React: Good Deal, Bad Deal?
A deal could be announced as early as Tuesday, people familiar with the matter said, though they cautioned that negotiations aren't yet final and a deal could still fall apart. Including Skype's long-term debt, the total value of the deal is about $8.5 billion.
Representatives for Microsoft and Skype declined to comment.
Buying Skype—a service that connects millions of users around the world via Internet-based telephony and video— would give Microsoft a recognized brand name on the Internet at a time when it is struggling to get more traction in the consumer market.
Microsoft has invested heavily in marketing and improving the technology of its Bing search engine. While it has made some market share gains over the past year, Google Inc. still dominates the search market with more than 65% of U.S. searches going through its site.
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Agence France-Presse/Getty Images
Microsoft's chief executive, Steve Ballmer, sees the Internet as a key battleground for the company.
Ballmer's Big Bet
Microsoft, led by its CEO, Steve Ballmer, would be Skype's fourth owner in eight years.
2003: Skype founded by two software developers, grows to 663 million registered users (8.8 million paying users) by 2011.
2005: EBay buys Skype for $2.6 billion in cash and stock.
2009: EBay sells about 70% to private investors in a deal valuing Skype at $2.75 billion.
2011: Microsoft nears almost $8 billion deal to buy Skype, which posted revenue of $860 million and a $7 million loss in 2010.
At a value close to $8 billion, the Skype deal would rank as the biggest acquisition in the 36-year history of Microsoft, a company that traditionally has shied away from large deals. In 2007, Microsoft paid approximately $6 billion to acquire online advertising firm aQuantive Inc. Many current and former Microsoft executives believe Microsoft significantly overpaid for that deal. But they are also relieved that Microsoft gave up on an unsolicited $48 billion offer for Yahoo Inc. nearly three years ago. Yahoo is valued at half that sum today.
Microsoft Chief Executive Steve Ballmer, though, sees the Internet as an essential battleground for Microsoft, a company that still makes the vast bulk of its profits from Windows and Office software systems. Investors have become increasingly concerned about Microsoft's ability to squeeze continued growth out of those businesses, as rival technologies from Apple Inc., Google and others put more pressure on profits.
The division behind Microsoft's hugely lucrative Office suite of applications also makes a product, known as Lync, which ties together email, instant messaging and voice communications into a single application. Skype could strengthen that offering.
The deal shows how far Skype has come since it was launched in 2003 by Niklas Zennstrom and Janus Friis, two men who had created a file-sharing technology called Kazaa that became widely associated with music piracy. While Skype was initially popular with techies, it increasingly worked its way into the mainstream by offering free or cheap phone calls which were especially appealing to international callers.
When eBay Inc. purchased the company in 2005 for $2.6 billion in cash and stock, Skype was regarded as something of an experiment in which eBay's buyers and sellers would use the service to communicate about potential transactions.
The experiment faltered, and eBay gave up on Skype in 2009,selling a 70% stake to a group of technology investors including Silver Lake Partners, venture capital firms Index Ventures and Andreessen Horowitz, and the Canada Pension Plan Investment Board, who will make a handsome return on the Microsoft transaction.
Goldman Sachs Group Inc. and J.P.Morgan Chase & Co. advised Skype on the deal, according to people familiar with the matter. Microsoft is not using any financial advisers for the deal, the people added.
For all its promise, Skype has had a mixed history as an operating business. It has produced little net profit in the eight years since it was founded. Profits continue to remain elusive as the company expands its business world-wide. Last year the company posted revenue of $860 million and $264 million in operating profits, but still had a loss of $7 million. The company had $686 million in long-term debt as of Dec. 31.
Skype uses a technology called voice over Internet protocol, which treats calls as data like email messages and routes them over the Internet, rather than a traditional phone network. Skype's software, which can be downloaded free, allows users to call other Skype users on computers or certain cellphones for free. Skype users can also call land lines for a fee and conduct video calls.
Skype could play a role in Microsoft's effort to turn around its fortunes in the mobile-phone market, an area where it has lagged badly behind rivals Apple and Google. The company last year launched a new operating system for mobile phones known as Windows Phone 7 that has been well reviewed by technology critics but hasn't yet meaningfully improved Microsoft's market share.
Microsoft will likely need to tread carefully, though, in integrating Skype into its mobile software because of the potential for pushback from wireless carriers, whose support Microsoft badly needs. Skype could give consumers a way to make cheap phone calls over the Internet from mobile phones, without paying higher rates to the carriers.
Last August, Skype filed documents to go public but put its IPO plans on hold after bringing in a new chief executive, Tony Bates. Skype had expected to raise close to $1 billion through its IPO, people familiar with the matter said at the time. At the same time, the Luxembourg-based company entertained conversations in the past with potential buyers and joint-venture partners, including Facebook Inc., Google and Cisco Systems Inc., according to other people familiar with the matter. Skype had sought between $5 billion and $6 billion to sell itself, they added.
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A deal could be announced as early as Tuesday, people familiar with the matter said, though they cautioned that negotiations aren't yet final and a deal could still fall apart. Including Skype's long-term debt, the total value of the deal is about $8.5 billion.
Representatives for Microsoft and Skype declined to comment.
Buying Skype—a service that connects millions of users around the world via Internet-based telephony and video— would give Microsoft a recognized brand name on the Internet at a time when it is struggling to get more traction in the consumer market.
Microsoft has invested heavily in marketing and improving the technology of its Bing search engine. While it has made some market share gains over the past year, Google Inc. still dominates the search market with more than 65% of U.S. searches going through its site.
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Microsoft's chief executive, Steve Ballmer, sees the Internet as a key battleground for the company.
Ballmer's Big Bet
Microsoft, led by its CEO, Steve Ballmer, would be Skype's fourth owner in eight years.
2003: Skype founded by two software developers, grows to 663 million registered users (8.8 million paying users) by 2011.
2005: EBay buys Skype for $2.6 billion in cash and stock.
2009: EBay sells about 70% to private investors in a deal valuing Skype at $2.75 billion.
2011: Microsoft nears almost $8 billion deal to buy Skype, which posted revenue of $860 million and a $7 million loss in 2010.
At a value close to $8 billion, the Skype deal would rank as the biggest acquisition in the 36-year history of Microsoft, a company that traditionally has shied away from large deals. In 2007, Microsoft paid approximately $6 billion to acquire online advertising firm aQuantive Inc. Many current and former Microsoft executives believe Microsoft significantly overpaid for that deal. But they are also relieved that Microsoft gave up on an unsolicited $48 billion offer for Yahoo Inc. nearly three years ago. Yahoo is valued at half that sum today.
Microsoft Chief Executive Steve Ballmer, though, sees the Internet as an essential battleground for Microsoft, a company that still makes the vast bulk of its profits from Windows and Office software systems. Investors have become increasingly concerned about Microsoft's ability to squeeze continued growth out of those businesses, as rival technologies from Apple Inc., Google and others put more pressure on profits.
The division behind Microsoft's hugely lucrative Office suite of applications also makes a product, known as Lync, which ties together email, instant messaging and voice communications into a single application. Skype could strengthen that offering.
The deal shows how far Skype has come since it was launched in 2003 by Niklas Zennstrom and Janus Friis, two men who had created a file-sharing technology called Kazaa that became widely associated with music piracy. While Skype was initially popular with techies, it increasingly worked its way into the mainstream by offering free or cheap phone calls which were especially appealing to international callers.
When eBay Inc. purchased the company in 2005 for $2.6 billion in cash and stock, Skype was regarded as something of an experiment in which eBay's buyers and sellers would use the service to communicate about potential transactions.
The experiment faltered, and eBay gave up on Skype in 2009,selling a 70% stake to a group of technology investors including Silver Lake Partners, venture capital firms Index Ventures and Andreessen Horowitz, and the Canada Pension Plan Investment Board, who will make a handsome return on the Microsoft transaction.
Goldman Sachs Group Inc. and J.P.Morgan Chase & Co. advised Skype on the deal, according to people familiar with the matter. Microsoft is not using any financial advisers for the deal, the people added.
For all its promise, Skype has had a mixed history as an operating business. It has produced little net profit in the eight years since it was founded. Profits continue to remain elusive as the company expands its business world-wide. Last year the company posted revenue of $860 million and $264 million in operating profits, but still had a loss of $7 million. The company had $686 million in long-term debt as of Dec. 31.
Skype uses a technology called voice over Internet protocol, which treats calls as data like email messages and routes them over the Internet, rather than a traditional phone network. Skype's software, which can be downloaded free, allows users to call other Skype users on computers or certain cellphones for free. Skype users can also call land lines for a fee and conduct video calls.
Skype could play a role in Microsoft's effort to turn around its fortunes in the mobile-phone market, an area where it has lagged badly behind rivals Apple and Google. The company last year launched a new operating system for mobile phones known as Windows Phone 7 that has been well reviewed by technology critics but hasn't yet meaningfully improved Microsoft's market share.
Microsoft will likely need to tread carefully, though, in integrating Skype into its mobile software because of the potential for pushback from wireless carriers, whose support Microsoft badly needs. Skype could give consumers a way to make cheap phone calls over the Internet from mobile phones, without paying higher rates to the carriers.
Last August, Skype filed documents to go public but put its IPO plans on hold after bringing in a new chief executive, Tony Bates. Skype had expected to raise close to $1 billion through its IPO, people familiar with the matter said at the time. At the same time, the Luxembourg-based company entertained conversations in the past with potential buyers and joint-venture partners, including Facebook Inc., Google and Cisco Systems Inc., according to other people familiar with the matter. Skype had sought between $5 billion and $6 billion to sell itself, they added.
2011 Moot Corp. Competition
Cattle Vaccine, Chip Verification Software Take Top Prizes At 2011 Moot Corp. Competition
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Lora Kolodny
17 hours ago
TNG Pharmaceuticals, developers of a vaccine to keep cattle free of blood-sucking horn flies, took top prize at the “Moot Corp.” business competition this weekend.
Formally renamed the Venture Labs Investment Competition(VLIC) in 2010, but still widely referred to as “Moot Corp.,” the annual event began in 1984 at the McCombs School of Business at the University of Texas, Austin. At Moot, TNG Pharmaceuticals won a prize package including: $25,000 in cash; a range of free and discounted consulting and business services, and a full-page ad in Inc. magazine. The total value of the prize package, according to a McCombs spokesman is around $135,000.
TNG Pharmaceuticals’ chief executive, Jenny Corbin, said the company plans to use its winnings from McCombs — and from previous competitions held by the University of Cincinnati, the University of Nebraska at Lincoln, and at Rice University — to develop and test manufacturing processes for their cattle vaccine, FlyVax, then advance it through federal regulatory processes.
Corbin, who grew up and has worked around horses and cattle her entire life, explained the vaccine’s potential impact to the cattle industry:
“The horn fly causes an economic pain of $1 billion to the [cattle] industry in North America, annually. It makes cows lose weight and it decreases their dairy yield. It stresses them so that beef producers get less steak, dairy producers get less milk, and have to spend more time taking care of their cows.”
According to competition finals judge Mike Dodd, a partner at Austin Ventures, TNG Pharmaceuticals locked first prize because:
“The team was experienced and well-versed in [biosciences] and intellectual property, while understanding the dairy, meat and leather industry. They told us about the way the industry is dealing with the horn fly problem today. It is with something like a flea collar. It’s actually a tag that goes around the cows’ ears, and it doesn’t really work that well. Looking at an average annual population of 94 million cows in North America, there’s a huge problem. This vaccine could solve it.”
Another finals judge, Betty Otter-Nickerson, president of Sage North America’s Healthcare Division, added:
“TNG Pharmaceuticals’ biggest risk is a regulatory risk. Can they get through all the U.S.D.A. and F.D.A. stuff in the time period that they said they could? They have credible people on their board, supporting a time frame they’ve outlined. That helped them win.”
Second-place winners at the competition, Reveal Design Automation, created software to help chip makers avoid costly mistakes, and long delays in the verification and manufacture of their chip designs. The team is spinning its technology out from the University of Michigan.
Tech entrepreneur and investor Mike Maples, Sr. (who is also the father of Floodgate’s Mike Maples Jr.) judged at the Moot Corp semifinals this year, and observed:
“Reveal Design Automation is working on some very big problems. Their technology is supposed to do things like verify that millions of circuits are lined up properly, and make chip design verification thousands of times faster than what’s possible today. Even if the company has just a hundred potential customers — who would be [the makers] of next generation ARM processors — these are customers spending an awful lot of time and money on engineers to design, test and release those chips.”
Reveal Design Automation took hom $5,000 in cash from Moot Corp.
Last year’s Moot Corp. winners, Biologics MD, went on to secure a $2.3 million grant from the U.S. Department of Defense in January this year to continue testing and developing a drug that treats osteoporosis.
Biologics MD president Paul Mlakar wrote to TechCrunch this weekend: “We have actually started some of the pre-clinical work, and hope to move into our own lab space in July. We are also evaluating additional technologies that fit within our expertise and will add value to the company.”
Images:
UT-Austin longhorns logo, under creative commons license and
TNG Pharmaceuticals team photo, credit – Steve Moakley
A list of all of the 2011 Moot Corp. semifinalists follows below, with finalists denoted with an asterisk, courtesy of McCombs, UT-Austin.
cycleWood Solutions
University of Arkansas
cycleWood Solutions, LLC offers a sustainable and profitable alternative to conventional single-use plastic bags. Our product, the XyloBag, is comprised of a biodegradable lignin-based plastic and biodegrades in 150 days. We are targeting the $4 billion U.S. plastic bag market.
GalvaPlus Company
Thammasat University
Even with current preventative coating methods, the replacement and correction of steel corrosion in civil construction costs billions of dollars each year in the US alone. GalvaPlus offers an innovative nickel based alloy galvanization, improving steel corrosion by 4 times, at a lower cost, saving an average customer millions in annual maintenance.
Kalood*
Brigham Young University
Kalood is an online platform that connects merchants and consumers. Consumers use the platform to rate deals and be notified when deals they’re interested in are available. Merchants use the platform to measure demand for their store, and to target and send custom deal notifications to consumers who have rated their deals highly.
O2 Insights
Ohio State University
O2 Insights is commercializing a revolutionary oxygen diagnostic that meets a critical need in the growing 6.5M patient chronic wound market. The system has received strong buy-in from thought leaders in wound care. The technology will be brought to market for $4M (plus overhead) over the next three years.
Reveal Design Automation*
University of Michigan
Reveal Design Automation designs and sells an automated software solution for performing comprehensive formal verification of digital logic designs to key customers in the IC design industry. Reveal’s technology, based off University of Michigan research, scales to handle more complex designs with less time and with fewer people than existing verification solutions.
TheraCord
Johns Hopkins University
TheraCord is a medical device venture out of Johns Hopkins University developing a disruptive technology to optimize the collection of cord blood stem cells for use in regenerative therapies that could treat over 300 million people worldwide.
Titin Tech
Georgia Tech
Titin’s mission is to provide the absolute best in athletic training apparel. Titin’s weighted clothing is a patented hyper-gravity training shirt with integrated hydro-gel inserts. We strive to position ourselves at the top of the market in terms of comfort, performance, usability, and results.
TNG Pharmaceuticals*
University of Louisville
TNG Pharmaceuticals has developed a revolutionary vaccine that will alleviate the negative impact of the horn fly, considered the most health depleting and economically damaging pest of cattle. FlyVax is targeted to reduce the number of horn flies per cow, leading to increased farmer efficiency, production, and lower pesticide use.
Medtric Biotech
Purdue University
Medtric was founded in 2010 on a vision to deliver clinically robust and economically sensible wound care solutions. Medtric is pioneering a unique method of destroying bacteria for the prevention and treatment of infected wounds. This technology represents a new class of antimicrobial that combat infection and promote wound healing.
BlackLocus
Carnegie Mellon University
4digg
2 Comments
Lora Kolodny
17 hours ago
TNG Pharmaceuticals, developers of a vaccine to keep cattle free of blood-sucking horn flies, took top prize at the “Moot Corp.” business competition this weekend.
Formally renamed the Venture Labs Investment Competition(VLIC) in 2010, but still widely referred to as “Moot Corp.,” the annual event began in 1984 at the McCombs School of Business at the University of Texas, Austin. At Moot, TNG Pharmaceuticals won a prize package including: $25,000 in cash; a range of free and discounted consulting and business services, and a full-page ad in Inc. magazine. The total value of the prize package, according to a McCombs spokesman is around $135,000.
TNG Pharmaceuticals’ chief executive, Jenny Corbin, said the company plans to use its winnings from McCombs — and from previous competitions held by the University of Cincinnati, the University of Nebraska at Lincoln, and at Rice University — to develop and test manufacturing processes for their cattle vaccine, FlyVax, then advance it through federal regulatory processes.
Corbin, who grew up and has worked around horses and cattle her entire life, explained the vaccine’s potential impact to the cattle industry:
“The horn fly causes an economic pain of $1 billion to the [cattle] industry in North America, annually. It makes cows lose weight and it decreases their dairy yield. It stresses them so that beef producers get less steak, dairy producers get less milk, and have to spend more time taking care of their cows.”
According to competition finals judge Mike Dodd, a partner at Austin Ventures, TNG Pharmaceuticals locked first prize because:
“The team was experienced and well-versed in [biosciences] and intellectual property, while understanding the dairy, meat and leather industry. They told us about the way the industry is dealing with the horn fly problem today. It is with something like a flea collar. It’s actually a tag that goes around the cows’ ears, and it doesn’t really work that well. Looking at an average annual population of 94 million cows in North America, there’s a huge problem. This vaccine could solve it.”
Another finals judge, Betty Otter-Nickerson, president of Sage North America’s Healthcare Division, added:
“TNG Pharmaceuticals’ biggest risk is a regulatory risk. Can they get through all the U.S.D.A. and F.D.A. stuff in the time period that they said they could? They have credible people on their board, supporting a time frame they’ve outlined. That helped them win.”
Second-place winners at the competition, Reveal Design Automation, created software to help chip makers avoid costly mistakes, and long delays in the verification and manufacture of their chip designs. The team is spinning its technology out from the University of Michigan.
Tech entrepreneur and investor Mike Maples, Sr. (who is also the father of Floodgate’s Mike Maples Jr.) judged at the Moot Corp semifinals this year, and observed:
“Reveal Design Automation is working on some very big problems. Their technology is supposed to do things like verify that millions of circuits are lined up properly, and make chip design verification thousands of times faster than what’s possible today. Even if the company has just a hundred potential customers — who would be [the makers] of next generation ARM processors — these are customers spending an awful lot of time and money on engineers to design, test and release those chips.”
Reveal Design Automation took hom $5,000 in cash from Moot Corp.
Last year’s Moot Corp. winners, Biologics MD, went on to secure a $2.3 million grant from the U.S. Department of Defense in January this year to continue testing and developing a drug that treats osteoporosis.
Biologics MD president Paul Mlakar wrote to TechCrunch this weekend: “We have actually started some of the pre-clinical work, and hope to move into our own lab space in July. We are also evaluating additional technologies that fit within our expertise and will add value to the company.”
Images:
UT-Austin longhorns logo, under creative commons license and
TNG Pharmaceuticals team photo, credit – Steve Moakley
A list of all of the 2011 Moot Corp. semifinalists follows below, with finalists denoted with an asterisk, courtesy of McCombs, UT-Austin.
cycleWood Solutions
University of Arkansas
cycleWood Solutions, LLC offers a sustainable and profitable alternative to conventional single-use plastic bags. Our product, the XyloBag, is comprised of a biodegradable lignin-based plastic and biodegrades in 150 days. We are targeting the $4 billion U.S. plastic bag market.
GalvaPlus Company
Thammasat University
Even with current preventative coating methods, the replacement and correction of steel corrosion in civil construction costs billions of dollars each year in the US alone. GalvaPlus offers an innovative nickel based alloy galvanization, improving steel corrosion by 4 times, at a lower cost, saving an average customer millions in annual maintenance.
Kalood*
Brigham Young University
Kalood is an online platform that connects merchants and consumers. Consumers use the platform to rate deals and be notified when deals they’re interested in are available. Merchants use the platform to measure demand for their store, and to target and send custom deal notifications to consumers who have rated their deals highly.
O2 Insights
Ohio State University
O2 Insights is commercializing a revolutionary oxygen diagnostic that meets a critical need in the growing 6.5M patient chronic wound market. The system has received strong buy-in from thought leaders in wound care. The technology will be brought to market for $4M (plus overhead) over the next three years.
Reveal Design Automation*
University of Michigan
Reveal Design Automation designs and sells an automated software solution for performing comprehensive formal verification of digital logic designs to key customers in the IC design industry. Reveal’s technology, based off University of Michigan research, scales to handle more complex designs with less time and with fewer people than existing verification solutions.
TheraCord
Johns Hopkins University
TheraCord is a medical device venture out of Johns Hopkins University developing a disruptive technology to optimize the collection of cord blood stem cells for use in regenerative therapies that could treat over 300 million people worldwide.
Titin Tech
Georgia Tech
Titin’s mission is to provide the absolute best in athletic training apparel. Titin’s weighted clothing is a patented hyper-gravity training shirt with integrated hydro-gel inserts. We strive to position ourselves at the top of the market in terms of comfort, performance, usability, and results.
TNG Pharmaceuticals*
University of Louisville
TNG Pharmaceuticals has developed a revolutionary vaccine that will alleviate the negative impact of the horn fly, considered the most health depleting and economically damaging pest of cattle. FlyVax is targeted to reduce the number of horn flies per cow, leading to increased farmer efficiency, production, and lower pesticide use.
Medtric Biotech
Purdue University
Medtric was founded in 2010 on a vision to deliver clinically robust and economically sensible wound care solutions. Medtric is pioneering a unique method of destroying bacteria for the prevention and treatment of infected wounds. This technology represents a new class of antimicrobial that combat infection and promote wound healing.
BlackLocus
Carnegie Mellon University
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