A number of otherwise smart people suggest that Napster should be worth “at least as much as Last.fm”, whom CBS bought for $280M.
Napster? They’re worth $70M, and if you look at their net value, it’s trading at, hum, $0.
Last.fm was private when CBS bought it; Napster is publicly traded. What does that say? Well, for one, Last.fm was hip in 2007 when CBS bought it (see our story here). Napster hasn’t been cool since 2000, then Bertelsmann invested in the company and the other media companies killed it.
Napster was one of the coolest and disruptive forces, but today’s Napster has very little to do with that Napster, other than in name, which Roxio bought. I’d like to a story but I’m lazy now. Ok, not cool, here you go.
We’re not trying to compare Last.fm’s cool factor with that of Napster, which ever Napster you refer to. The point is: being private is the new public. If you want to buy Napster (2008’s Napster) all you need to do is buy up shares in the public market, or approach the company and make a tender offer adding a premium to the most recent share price. With Last.fm, there was no market for the shares.
That’s ironic.
Historically, startups traded at a discount specifically due to that liquidity discount. Today, being public is a nightmare, you find yourself knocked over, lying on your back, legs up in the air. Not a nice position to find yourself in.
Alternatively, if you wish to buy a private company, you have to act cool… anything else is a sure-fire way to walk away empty-handed.
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WatchMojo NewsletterI think I am Yahoo’ed out. I am tired of Jerry Yang, can’t stand Sue. It’s quite appalling that these people just evaporated 50% market value in a month and basically promoted their yes-men in a re-arrangement-of-the-chairs while the boat is going down, fast.
I wasn’t going to say much, anymore, but came across this comment on Alley Insider by a gentlemen named Steve Baldwin that I thought was worth reading, pretty funny, or sad, but true.
Steve Baldwin (URL) said:
Okay, gang - I couldn’t resist. Here’s my translation of Yahoo’s latest verbiage.
YAHOO REORG MEMO TRANSLATED INTO PLAIN ENGLISH
SUNNYVALE, Calif.–(BUSINESS WIRE)–Yahoo! Inc. (Nasdaq:YHOO - News), a leading global Internet company, today announced changes to its organization aimed at improving its products, technologies and execution.
Translation: Our products are undistinguished, our technologies are iffy, and our execution has been egregious. We’re going to throw all the chess pieces in the air now, and hope they magically rearrange themselves in a way resembling a credible strategy.
The moves support its strategy to be the starting point for the most users, the must-buy for the most advertisers and the platform of choice for developers.
Translation: We haven’t evolved from a portal, we still depend on “bulk tonnage” media buys, and we’re desperately hoping that outside developers will do something interesting with Yahoo before Carl Icahn and his buddies bail out and send the stock to $10 a share.
Key Elements
Yahoo! announced are the centralization of consumer product development to enhance the company’s ability to release products worldwide; the creation of a U.S. region focused on bringing products to market for users, advertisers and publishers; formation of an insights strategy team; and enhancements to the technology infrastructure to optimize the use of data and improve coordination between product and engineering teams.
Translation: Somewhere along the way we lost track of where our people worked, what they did, who they reported to, and why we even hired them in the first place. We haven’t developed many consumer products that have been of any interest to users recently (because we’ve been so busy talking up advertisers and publishers), and have been so focussed on on the Far East, where Baidu.com has been making us money (at least on paper), that we plain forgot that it kind of matters what we do in the U.S., hence the new group. As far as our new “Insights Strategy Team,” we’re hopeful that they can come up with a more interesting strategy than this tired portal-start-page business, which nobody takes seriously in a Web 2.0 world.
“These moves accelerate the ability of our deep and talented team to build great products, grow our audiences and improve monetization globally,” said Jerry Yang, CEO. “They are designed to put us in an even better position to leverage our leading global audience and capture the opportunity we see in the convergence of search and display advertising.”
Translation: Peek-a-boo: I’m Jerry Yang and miraculously, I’m still here! By the way, our whole game is dependent on the dubious proposition that display ads (which don’t work) can be turned into gold by making them stalk you as you surf around the Web. It’s inevitable that some sorehead will eventually point out that this idea is a chimera but we’ll all be outta here by then.
Business and Product Changes
The company is creating three new teams that will report to President Sue Decker. An Audience Products Division will assume responsibility for companywide product strategy and product management.
Translation: We still think of our users as “an audience” that should be talked to, not listened to. After all, the main thing that keeps us going is big brand spenders who really don’t care about all that fancy-dancy “conversation” stuff.
It will be led by Ash Patel who previously managed the company’s Platforms & Infrastructure group. A U.S. region with accountability for all go-to-market activity in the U.S. will be led by Hilary Schneider, who previously headed the company’s Global Partner Solutions group. Finally, an Insights Strategy team will assume responsibility for centralizing and executing a common strategy for the use of data and analysis across Yahoo!. The company plans to name this group’s leader within the next few weeks.
Translation: We’re enshrining “Failing Upward” as our new company slogan.
“The changes we’re making today will help deliver superior global products for users and enable faster and better decision-making,” said President Sue Decker. “This is a logical next step in light of our success last year in moving to a more centralized approach to developing world-class marketing products. We have planned these changes deliberately over the past several months to clarify responsibilities and to capitalize on the scale advantages while allowing for fine tuning to meet local market needs.”
Translation: I’m Sue Decker and I speak in mind-numbing generalities. I don’t expect you to know what the heck I’m referring to when I speak of last year’s “success… in moving to a more centralized approach to developing world-class marketing products” but trust me: we’re on the right track. Oh, and we weren’t panicked into making these changes by everything that’s happened since February. We’ve been planning them since 1997.
Technology and Infrastructure Changes
Yahoo! is making changes to its technology organization, led by Chief Technology Officer Ari Balogh, to better position the company to execute on its strategic priorities. Principal changes are developing a world-class cloud computing and storage infrastructure; rewiring Yahoo! onto common platforms; and creating a stronger partnership between product and engineering teams.“Since my arrival at Yahoo! earlier this year, we’ve carefully evaluated the best possible configuration of our technology group to support our business strategies,” said Balogh. “I’m excited by the depth of our team which—combined with the talent we continue to recruit—will execute even better under this new structure.” In order to expand its cloud computing capabilities, the Company will form a Cloud Computing & Data Infrastructure Group, charged with developing a computing infrastructure that balances scalability with cost effectiveness. It will move all consumer-facing platform teams to the Audience Technology Group, led by Venkat Panchapakesan. In addition, it is putting new leadership in place behind Yahoo!’s search group, naming Prabhakar Raghavan to direct search strategy and Tuoc Luong as the interim leader of the search product team. Both Prabhakar and Tuoc will also continue in their roles as the leaders of Yahoo! Research and Search Engineering respectively. In addition, David Ku will lead the Advertising Technology Group within Search. Yahoo!’s Marketing Products Division, Connected Life and Corporate Marketing groups will continue to operate as they do today.
Translation: Lots of fun changes afoot in the engine room! We can’t tell you what the heck cloud computing has to do with our unchangeable portal strategy, but maybe we can finally develop some kind of product beyond Flickr that people would actually pay for so we’re covered when the banner ad bubble pops. Hey - did you notice that we haven’t actually mentioned any layoffs in this memo? Don’t worry: they’re coming, and it’s more than likely that the grunts, not the execs, will take the brunt. Why cut fat when you can cut muscle?
About Yahoo! Inc.
Yahoo! Inc. is a leading global Internet brand and one of the most trafficked Internet destinations worldwide. Yahoo! is focused on powering its communities of users, advertisers, publishers, and developers by creating indispensable experiences built on trust. Yahoo! is headquartered in Sunnyvale, California.
Translation: We still live and die by raw, undifferentiated traffic. Just about everything we do is duplicated by competing services, so the “creating indispensible experiences” phrase is there strictly for laughs. We still have a hell of a memorable domain name, however, and it’s for sale at a price that I’m sure you’ll all find reasonable.
All right, back to work. I feel better now.
Valued at a nosebleed $42.5M value when it received its Series A round, VentureBeat is reporting that Microsoft has acquired PowerSet for $100M.
The company - who licensed search technology from Xerox - has nothing to be ashamed of: a $100M value creation enterprise is impressive, but at a 2x return, Powerset is underwhelming, let’s hope MSFT can leverage its technology to make it match even half of the hype and fanfare it launched to.
I will say this: Powerset is one of the first examples of the excitable TechMeme/Blogosphere-fueled era:
The formula is simple = a little bit of tangible + a lot of buzz = questionable value as perceived by a larger company desperately trying to make up for a shortcoming.
I’m just saying. I actually thought technology and product offering wise, Powerset should have merged with Podzinger/Everyzing.
Much the same way that you are seeing a cornucopia of broad aggregator and distributors of web video content (think YouTube, MySpace, Veoh, Hulu, etc.), you are seeing a lot of vertical aggregators, too.
Last year we saw a barrage of How To sites: 5Min.com, Howcast.com, VideoJug, just to name a few. This all on the heels of Demand Media’s acquisition of eHow.com, the market leader in the space.
Last year we also saw the rise of comedy sites: Will Ferrell’s funny or die being one example, MyDamnChannel another. While Funny or Die and MyDamnChannel initially started off as content creators, they’ve now turned to other producers to scale. Companies that from the get-go looked for UGC continued to grow: Lions Gate made an investment in Break.com validating the space, since launching numerous derivative properties, too.
Today we see Viacom tossing its hat in the ring, too, leveraging Atom.com and Comedy Central to create a multi-platform opportunity in the comedy space.
Will Atom.com be successful? We shall see, as Silicon Alley points out:
The site inherits 1.9 million monthly uniques from Atom Films, the company said. We hope for Atom’s sake, and for Break.com, Metacafe, Stupidvideos, Heavy.com, FunnyOrDie, Comedy.com, etc, that there are enough funny shorts and young, bored guys to go around.
With YouTube now garnering a gargantuan 75% market share in the video space, no wonder you are seeing aspirants in the aggregation/distribution tackle the space with a vertical approach. Unlike you are backed by two of the leading media companies and armed with $100M in financing - as Hulu was - it makes little sense to dive deep into the storm.
It’s thus no surprise to see Viacom learn from FunnyorDie and MyDamnChannel and immediately turn to outside producers from the get-go:
Atom.com will share a percentage of ad revenue with creators that achieve “pro” status.
I will take a look at the site. Considering that we publish 10 comedy clips per month, it might be one additional spot for us to syndicate clips to.
Viacom is also borrowing from one of their old ideas: Web Junk, by taking some of the web highlights and taking them on TV. That was something Viacom did by combining its iFilm acquisition (bought for $49M) with VH1.
That’s something I especially like about this is the fact that some clips “may also get on TV: Comedy Central launched “Atom TV,” a half-hour series airing Monday nights at 2 a.m.”
2am? WTF… well, beggars can’t be choosers… this would help us realize our dream of turning the WatchMojo.com Comedy Troup into the 21st century version of Mad TV or SNL…
Let’s hope this initiative - built on the $200M Atom Entertainment acquisition - turns out to be more successful.
To check out WatchMojo.com comedy segments, skits, fake ads and much more on the following spots:
- WatchMojo.com
- MySpace TV
- YouTube
- Hulu
- as well as countless others.
I probably don’t make too many friends saying this, but I predict that our generation’s answer to Pets.com won’t be Dogster.com (that actually makes sense), but rather, the Slide’s and Rock You’s of the world. I could be very, very wrong… but no way is Slide worth $100M, let alone $500M.
Anyway, if what Tech Crunch is saying is true - that Facebook just deleted one of Slide’s applications - then Slide might not be worth $5M, let alone $500M.
Investors in Max Levchin’s ride (still don’t understand how someone who helped build PayPal would think that Slide is a good way to deploy his skills but then again, who cares what I say) might want to read up on our post on why building your business on Facebook might not be a grand idea and shall inevitably slide you into oblivion.
Mind you, the way the Web is now operating in bizarro mode, maybe this is a glitch and Facebook will apologize for the mistake and reward Slide with even more shelf space of its otherwise useless and nefarious apps.
Or, maybe, the bong effect has worn off Mark Zuckerberg and he realized that his otherwise useful and intuitive social network was becoming as valuable as a warm bucket of spit thanks to the Rock You and Slide’s of this world.
Worth noting that Founders Fund (Peter Thiel’s fund) is an investor in Slide, Thiel is an investor in Facebook. If this is not a mistake and Zuckerberg did in fact put the kibosh on Slide, then I am sure Thiel has been in the middle of some interesting exchanges in the last 24 hours, but, of course, we’re speculating.
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