Xobni is about to sell to MSFT, supposedly. I think that is a natural home for Xobni; while in the short term Xobni is limited in terms of capability, email and the inbox remain central to all communications, so maybe selling too soon is not the best decision, who knows.
But I wonder where the entrepreneurs who build companies are. Facebook deserves some credit for trying to remain independent and build an actual company. Let’s face it, Facebook could have very easily been seen as a simple product part of Yahoo!, MSFT, Google, Viacom, IAC or News Corp.
I am not sure if Facebook remained independent, however, because of a deep belief that they should remain independent; I think Facebook did not sell because every time someone made then an offer, Mark Zuckerberg and his Board thought they were worth more.
The reason for that is practical: it takes time for a seller gathers all of the documentation and submits it to a buyer, the buyer takes additional time to assess all of that info and conduct some due diligence. They maintain an eye on developments and new milestones, but the buying party then submits an offer largely based on the info that was submitted, and not the additional material. But the selling party has access to more information and - assuming the company is growing and going in the right direction - more bullish on their prospects and value. This is a very normal thing to consider in M&A.
I know the feeling all too well: since Q2 2006 we have had informal M&A talks with different parties and each and every time, what someone was willing to pay (even if admittedly it’s always been informal) has been a bit less than what I thought we should sell for. Moreover, of the lot, the two companies who seemingly have agreed to what we were seeking in a potential sale never backed it with an actual term sheet, suggesting that they were being nice and diplomatic and not sincere (I am not saying they were not sincere in overall talks etc., I am referring to them seemingly agreeing to the price but not backing it up, so not sincere in believing we were worth what we were asking for, basically). Frankly, money was always secondary to fits and the other deal details.
Anyway, the thing is, and I swear this is not gamesmanship, I actually think we have a business that can remain independent and pull the rug from under many traditional media companies whose cost structures and overall modus operandi simply will not compete with us. I could list about 74 reasons why over time, it’s easier for a disruptor in online video content to beat a traditional media company, that does not mean that we’ll put anyone out of business… it just means we can create enough value and build enough revenue to remain independent. Bear in mind, value does not mean generate more revenue, it just means have investors be more bullish about your prospects than others’. Google, for example, does not generate more revenue than most companies, but it’s a Top 10 company by market cap.
This is where Paul Graham is somewhat right: ultimately, would-be buyers did not offer enough for the respective sellers. All sane business people realize there’s a price that is worthy of accepting even if their head and heart says they can continue.Google itself could have been a mere search box in Yahoo!, MSFT, [you name it] but no one thought they were worth much. Truth is: even the Googlers themselves did not really see how big the market would be, thinking that invariably if nothing else panned out, they could slap on some Doubleclick code and serve some banners… how ironic then that Google would buy DCLK for $3.1B.
Anyway, it would be nice to see more and more entrepreneurs hatching businesses that are built to last, and not built to flip. I guess it would also be nice if entrepreneurs weren’t driven by money… which begs a whole other post on the matter.
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WatchMojo NewsletterCenter Networks makes the case for Facebook to dive deep into a CPA-centric advertising strategy. It’s not a bad one, frankly… and much the same way that Google embraced CPC after Yahoo! had embraced CPM, it only makes sense for Facebook to continue along the spectrum by going after CPA.
Of course, that’s not where the big Fortune 500 advertising budgets are, and I am not sure that CPA can justify Facebook’s massive $15B business… but the flip side is that pursuing a CPM business (branded advertisers, basically) will pan out. I’ve covered this a bit in:
- Memo to Facebook Sales Team
- MySpace, Facebook’s Billion Dollar Opportunity?
For more on CPM, CPC and CPA and other online marketing lingo, click here.
When I began blogging on HipMojo.com, I really did not know which direction I wanted to go. Over time, somewhat by default, I realized the best angle would be that of an online publishing / advertising / search and mainly video executive’s perspective on the industry. I covered why in Should CEOs Blog?
That’s why I was a bit surprised and I guess impressed to see this blog place relatively high on this list.
A couple of disclaimers:
- TechMeme is not as representative as some would like it to be,
- Anyone can play with data and make it yield some kind of conclusion,
However, that being said, I was a bit surprised to see how many posts I had made since January 1 turn into top headlines on popular tech blog aggregator TechMeme: 16… which means this blog is ranked #89. The ranking by of and itself means little… what immediately stood out for me were actually two things:
#1 - I really should not be blogging as much if my main role is CEO of a company. True, I can pump out [what I believe is] high quality content at a faster clip than many of the journalists and bloggers out there; but hey, just because you can do something does not mean that you should. The truth is blogging here has helped in many tangible and intangible ways (and I guess, in other ways, hurt as well), but net-net I would not stop blogging for anything.
#2 - Fred Wilson has the biggest blog (according to this admittedly skewed list) for any non-journalist / reporter. He would have the top blog by a VC.
# 3 - But guess who has the biggest (based on this list) blog for an entrepreneur / executive / insider? Yep, that’s right, yours truly. I place one position ahead of whom I expected to have that honor, Jason Calacanis who made this art into a science and business with Weblogs Inc. Of course, Calacanis is now building Mahalo… he sits one position behind me.
Mind you, everyone on that list is entrepreneurial to a large extent, so we’re not talking about that.
I am talking about business insight and analysis spoken from someone in the industry. That’s why I am not referring to tech-oriented Scripting.com (by Dave Winer) and Scobleizer (Robert Scoble) as executive blogs, in fact, Scoble now works for Fast Company.
Related to all of this is why I think Henry Blodget’s SAI has done so well, there was a need for some business analysis in blogging. He certainly brings that. However, while his blog’s name is Alley Insider, he remains an outsider who is peering into the industry, especially when it comes to his analysis on companies like YouTube or Google where he guesstimates metrics when true insiders can pontificate with certainty. This is not a knock… however, it’s worth noting that the name of his initial blog was in fact InternetOutsider. Obviously, insiders need to be more careful what with NDAs and privileged information courtesy matters… you also can’t bash someone then next day hop on a call and try to strike a business deal. It’s just a whole other ballgame.
As they say you don’t believe your own PR, but it’s kind of rewarding that I set out to have the best (though not necessarily biggest) blog by an insider / executive and maybe we’re well on our way to have that.
When I launched, I sometimes would joke to people and tell them “this is the best blog no one reads” but over time I check the stats and read enough email/comments to realize a lot of people indeed read it… and seeing the TechMeme leaderboard results was somewhat rewarding…
Related:
Social media - which includes user generated content and those found on social networks - will never get advertising money. I am glad to see more and more people come to their senses and realize this.
Much the same way that investors were bamboozled once with B2B plays (remember the skyhigh prices of Ariba, Commerce One?) and wireless opportunites (Helio anyone?), social media is not monetizable.
eMarketer talks about the growth of UGC and asks can UGC generate revenue?
Nope. To quote Andrew Keen, author of Cult of the Amateur, said in a Newsweek interview, “Nobody wants to advertise next to crap.” Keen is a critic of social media, but even those who see the value thereof are starting to admit that its value is not necessarily based in advertising.
In fact, most agree: ”Advertising revenues against user-generated content are modest, and they are expected to stay that way for some time”, says Paul Verna, eMarketer Senior Analyst and author of this latest report.
“Given the size and level of engagement of the audience, advertising revenues around user-generated content will not approach the level one might expect,” says Mr. Verna.
Nevertheless, eMarketer anticipates US user-generated content advertising revenue will reach $824 million in 2012, up from $162 million in 2007.
Sure, that’s why you are seeing ad networks generate revenue: treading to no man’s land. But considering that US online ads were $25B in 2007, focusing and getting so jazzed up on $162M is foolish.
But that’s why it’s called the greater’s fool theory after all.
PLAY
