parislemon

The FriendFeed 70x Exit

Sun, 05 Feb 2012 10:27:05 -0800

When Facebook acquired FriendFeed in the summer of 2009, it was widely-reported to be a fairly straightforward “acqui-hire” deal. The price was more complicated.

$50 million sounded good on paper, but it was believed that only a small amount was in cash, the rest was in Facebook stock. It was Facebook stock which was just valued at $6.5 billion thanks to the DST investment. Some felt that it was overpriced, and as such, not a great deal for FriendFeed.

Boy were they wrong.

Looking at Facebook’s just-released S-1, Alyson Shontell of Business Insider noticed that in August 2009 (the month of the FriendFeed deal), Facebook issued just over 11 million shares of Class B common stock to ten individuals and one entity — this is most definitely the FriendFeed team, their individuals investors, and probably their lead VC firm, Benchmark Capital.

Today, leading up to their IPO, Facebook is worth just shy of $100 billion. Those FriendFeed shares are now worth around $330 million as a result. In other words, their August 2009 acquisition has shot up just about 7x in value since that time.

Certainly, some of the players have since sold off those shares in subsequent Facebook raises or on the secondary markets and have done well as a result. But those that didn’t have been rewarded very handsomely.

A 10x exit on paper magically turned into a 70x exit. And counting, by the way…

Now I’ll use this opportunity to once again link to the first post I ever wrote for TechCrunch in April 2009, four months before the deal: You Will Be Using FriendFeed In The Future — But It May Be Called Facebook

I haven’t been drunk in 3 years... and I’ve been partying way more than you.

Sat, 04 Feb 2012 19:09:27 -0800

I haven’t been drunk in 3 years... and I’ve been partying way more than you.:

Fantastic post on the joys of not drinking by Darius Monsef.

Google's Mysterious “Entertainment Device”

Sat, 04 Feb 2012 18:51:59 -0800

Google's Mysterious “Entertainment Device”:

If I were a betting man, I’d bet on Google getting into the hardware game with an unexpected device at some point this year. Nice find by Stacey Higginbotham of GigaOm.

Apple Controls 75% Of The Profits In The Key Mobile OEM Space

Fri, 03 Feb 2012 17:24:19 -0800

Apple Controls 75% Of The Profits In The Key Mobile OEM Space:

Speaking of crazy charts… these great ones by Horace Dediu of Asymco are just bonkers.

In the first, you’ll see that Apple retains the top rank in profitability among mobile phone OEMs for the third straight year…

In the second chart, you’ll see that Apple snatched the revenue crown back from Samsung last quarter.

But the third one is the best. It’s not just that Apple is ahead in profit share, they’re destroying everyone else. That includes Samsung.

(And if you can’t see Sony, LG, and Motorola on that chart, it’s because they’re making little or no profit.)

Apple now makes an astounding 75% of the profit in the industry amongst their peers. That’s with just 9 percent unit share (smartphones and feature phones are combined), as Dediu points out. Amazing.

“Let’s see how the competition...

Fri, 03 Feb 2012 16:54:00 -0800

“Let’s see how the competition goes…”

Just to beat a dead horse, after seeing the post noting Apple’s iPhone business now brings in more revenue than all of Microsoft’s businesses combined, Jason Hiner reminded me of Steve Ballmer’s classic 2007 video laughing off the iPhone announcement (above).

To be fair to Ballmer, he does say that selling a $500 fully-subsidized phone is insane, and Apple did end up dropping the price, which has fueled sales. Still, the business argument sounds like something RIM would (and did) make. How’s that working out for them now?

As for “I like our strategy, I like it a lot” — there’s simply no excuse. Windows Mobile was quickly exposed for the turd it was, and Windows Phone, while good, was far too late. But 2007 wasn’t all bad for Ballmer…

I went ahead and re-did two of Ed Bott’s charts to better...

Fri, 03 Feb 2012 16:17:00 -0800

I went ahead and re-did two of Ed Bott’s charts to better reflect the reality of the situation.

I’m reminded of this…

(And no, it’s not really to scale. I did this in about 3 minutes. I didn’t feel like breaking out my high school math book to figure out correct cylinder volume circumference ratios…)

Size Matters

Fri, 03 Feb 2012 15:21:00 -0800

Earlier, I linked to this set of three pie charts by Ed Bott, but it’s worth mentioning something else about them. The subtle point that it seems Bott is trying to make is that out of Microsoft, Apple, and Google, Microsoft has the best business because it’s the most well-rounded. (Meanwhile, Google has the worst because it’s entirely dominated by one thing: advertising.)

At a high-level, that’s an interesting point to make, I think. But without context, the Apple chart is a little misleading.

It looks like Apple’s business is mainly about iPhone. And while it’s true that the iPhone is responsible for over half of Apple’s total revenue, it’s important to consider that Apple’s total pie is now significantly larger than Microsoft’s. Actually, it’s more than twice as large.

Last quarter, Microsoft brought in $20.89 billion in revenue. Apple brought in $46.33 billion.

Put another way: Apple’s iPhone business alone is larger than all of Microsoft’s businesses combined.

And — just as remarkably — if you took away Apple’s iPhone business from the chart, the remaining Apple businesses would still be larger than Microsoft’s total business. And Apple’s earnings would look a lot more evenly distributed then.

Point is: these charts don’t actually show Microsoft is a better business because they’re the most diversified. They just show how out-of-this-world Apple’s iPhone business is at this point.

Update: Just to drive the point home…

Panasonic Comes In At Negative $10 Billion

Fri, 03 Feb 2012 14:54:12 -0800

Panasonic Comes In At Negative $10 Billion:

Swimming in a sea of red, Panasonic is the bloodiest yet. A $10.2 billion annual loss. That’s not just bad, it’s insanely bad.

But again, they’re hardly alone. Reports Tim Kelly and Yoko Kubota for Reuters:

Together, Panasonic, Sony and Sharp Corp expect to lose $17 billion this year, highlighting the savaging of Japan’s electronics industry by foreign rivals led by South Korea’s Samsung Electronics, weak demand and a strong yen.

$17 billion. And the underlying subtext here is that all are (were) key players in the television set industry. The low-margins and competition finally caught up to these guys. To some, this will raise more questions about Apple entering the industry. But to me, this signals yet again that they need to enter it. The system is in disarray. Ripe for disruption.

How Does Facebook Make Money?

Fri, 03 Feb 2012 12:20:02 -0800

How Does Facebook Make Money?:

Great chart by Dan Frommer.

Facebook, like Google, makes the vast majority of their revenue from advertising. But, unlike Google, Facebook has been seeing a meaningful trend towards diversification of their revenue stream.

iBooks Author 1.01 out with updated EULA

Fri, 03 Feb 2012 12:07:00 -0800

iBooks Author 1.01 out with updated EULA:

Notes Megan Lavey-Heaton for TUAW:

The change is an important one though, clarifying that Apple has rights over the format a book is in, not the content.

And we have yet another bit of controversy to file away under: Apple Is Not Fucking Stupid.

I haven’t weighed in on the EULA hubbub for this exact reason. If Apple was actually trying to suggest that they own the content of all iBooks published via iBooks Author, then yes, obviously that’s bad. But get this: Apple is neither the devil nor are they fucking stupid — as we’ve seen before.

I Paid, Now What?

Fri, 03 Feb 2012 11:52:00 -0800

In the don’t-call-them-comments notes section on my post about Tumblr’s new Highlighted Posts feature, Jenna Wortham brings up a good point:

Def agree its smart of Tumblr to try new things - but the return here seems minimal. You aren’t broadening yr audience by highlighting content to people who already read you. Best case: Someone spends an extra 5 secs looking at your post. Then what?

On the surface, true. But I think there are several interesting things this feature opens up for Tumblr. A “Highlighted” area is the most obvious. Or maybe something like: pay $1 to highlight a post to your followers, pay $10 to highlight to all of Tumblr. That would probably get a bit spammy so maybe you see the option to highlight to all only if you got enough “hearts” from the $1 highlight to those following you.

That’s just a few quick ideas. There is a lot of potential here.

But even the most simple angle may be interesting. You pay to highlight and your post get more hearts and reblogs as a result, so perhaps that post is seen by many more people than they normally would be. Doesn’t seem like a bad bet for $1.

More importantly, if Tumblr can get more credit cards on file for one-click transactions… a whole new world opens up.

Paid highlighted posts is a great idea. I don’t know if it...

Fri, 03 Feb 2012 11:29:00 -0800

Paid highlighted posts is a great idea. I don’t know if it will ultimately work, but it’s a smart thing to try.

Some will complain that it will lead to spammy-like behavior, but it works because the rules are the same: only follow people on Tumblr you actually want to follow and seeing reading their content.

I do wonder what would happen if Twitter did this? Yes, they have Promoted Tweets, but it’s a brand thing right now. What if regular people you followed promoted Tweets? There would undoubtedly be an initial shitstorm, but it would be an interesting idea as well…

I also love that Tumblr easily allows you to donate $1 to the Red Cross with each Highlight sold. Well played.

And you’ll notice the font and container box of all Highlighted posts is slightly larger as well…

Update: I Paid, Now What?

RIM Offering Free PlayBook Tablets to Android Developers

Thu, 02 Feb 2012 20:12:51 -0800

RIM Offering Free PlayBook Tablets to Android Developers:

Personally, I would have gone with the following headline: RIM Offering A Cup Of Shitty, Hot Coffee To Those In Hell.

The 1%

Thu, 02 Feb 2012 19:56:07 -0800

The 1%:

The good news: In the past month, the spread of Ice Cream Sandwich across Android devices has nearly doubled.

The bad news: “Nearly doubled” means going from 0.6% of devices to 1% of devices.

Three months in, 1%. That’s progress.

Verizon's Cozying Up With Comcast Draws Attention

Thu, 02 Feb 2012 18:26:07 -0800

Verizon's Cozying Up With Comcast Draws Attention:

There has been a lot of talk behind the scenes, but not a lot of talk in the public recently about a few deals that sure make it seem like Verizon and Comcast are in the midst of a sort of de facto merger.

Or, said another way, collusion.

Good to see people are starting to take notice.

The Peek Bites The Dust

Thu, 02 Feb 2012 18:03:41 -0800

The Peek Bites The Dust:

Can’t believe a service/device predicated solely around the worst thing in the world, email, would fail to catch on.

Next they’ll be telling us the Tax Time! board game wasn’t a big hit this holiday season.

"Think Loss."

Thu, 02 Feb 2012 10:26:24 -0800

"Think Loss.":

Speaking of profit problems, Sony lost $2 billion on revenue of $23.37 billion last quarter. For the full year, the losses are going to be more like $3 billion. Ouch.

The upside is that they just got a new CEO, Kazuo Hirai. Maybe he can come in and do the “Think Profit” moves. Sony needs it. Badly.

“Think Profit.”

Thu, 02 Feb 2012 00:11:20 -0800

“Think Profit.”

Fathoming Facebook

Wed, 01 Feb 2012 15:48:41 -0800

Amidst my snark, there are a few high level things about Facebook’s numbers that I find interesting.

First:

So Facebook had nearly double the profits of Amazon in 2011…
— MG Siegler (@parislemon) February 1, 2012

Second:

Facebook revenue and profit are both about about 1/10th that of Google (which went public 7.5 years ago). They. Are. Coming.
— MG Siegler (@parislemon) February 1, 2012

Third:

Facebook has more profit than Google had revenue when they went public.
— MG Siegler (@parislemon) February 1, 2012

Fourth:

Google had $961.8 million in rev and $105.6 million in profit when they went public. At same point, Facebook is a refined profit machine.
— MG Siegler (@parislemon) February 1, 2012

I certainly don’t love everything about Facebook, but there’s no denying that it’s an impressive company — one of the most impressive ever built. You have to respect the fact that they have no fear when it comes to completely changing their product on the fly. Most companies would not have the balls to do half of what Facebook has done over the past few years from a position of power. That alone is why I’ve been bullish on Facebook for a long time.

Obviously, the entire Internet is creaming itself over S-1 filing right now. But I actually don’t think it’s unjustified. When you consider the Google numbers listed above, it’s exciting to think that we’re entering a new era of growth and prosperity for technology companies. It’s exciting not just for Facebook, but for everyone in this space.

The cynics will say these good times won’t last. And they’ll ultimately be right because well, nothing lasts forever. But as the Internet and technology in general continues to be intertwined into the lives of every person on this planet, I can’t help but think this is all just the start of something that we can’t even fathom right now.

Longform for iPad

Wed, 01 Feb 2012 14:24:45 -0800

Longform for iPad:

Great new app by the Longform guys. They auto-stock and auto-curate longer form articles from various publications for you to read on your iPad (optionally using Readability to remove the clutter).

I’m a big fan of services like Instapaper and Read It Later, but I recognize that plenty of people don’t want to take the time to go out and find their own content to read later (though those services have their own way of surfacing curated content as well). This is a nice alternative that fulfills Longform’s mission of surfacing comprehensive journalism. And, of course, it works with Instapaper and Read It Later too.

The app is $4.99 in the App Store.