All Things Digital

Last night, dressed in my kindergarten soccer-coach best (sneaks, sweats and athletic socks–glam!), I ventured over to the Tenderloin district of San Francisco to attend VentureBeat’s party in honor of the launch of its new digital media blog.

Held at the Ambassador club on Geary Street, it was as if 1999 had never ended, and the huge crowd was partying like it was, well, 1999.

Shoulder to shoulder–or, in my puny case, shoulder to stomach–entrepreneurs, PR folks and a healthy smattering of press jammed into the venue, chattering about valuations, venture deals and other vacuous topics of Web 2.0.

Attendees included Mashable’s Pete Cashmore, Craigslist’s Jim Buckmaster, blogger Dan Gillmor and Microsoft-man-in-Silicon-Valley Dan’l Lewin (who gave us bupkis info about the deal, as you can see in the video).

Also in the video, in order, Meebo Co-Founder Seth Sternberg (fresh from a big funding); VentureBeat’s new editor of its digital media blog, Eric Eldon; Lewin; Gillmor; Valleywag’s Owen Thomas; and, finally, VentureBeat Editor and Founder Matt Marshall.

Here’s a few video clips of Yahoo’s Jeff Weiner, executive vice president of its Network division, onstage at paidContent’s Economics of Social Media conference on Tuesday.

In the first, he egregiously ignores BoomTown’s subtle (as a hammer!) way of asking about the Microsoft (MSFT) situation.

In the second, Weiner talks about Yahoo’s (YHOO) social-networking strategy (translation: this is not yet another social network, because we–oops–neglected to build one people liked!).

In the third, he talks about Yahoo’s “White Hat” ad plans to allow consumers to someday pick their own ads.

And, finally, in the fourth clip, Weiner disses YouTube’s (GOOG) business model (or lack thereof).

Unfortunately not here, our back-and-forth about what kind of food Yahoo would serve if it were a restaurant–you had to be there–given its reputation for being all over the map. My suggestion: Everything.

But, personally, BoomTown really enjoyed Weiner’s wire-cutting performance in the Yahoo spoof video, called “All Hands, the Movie,” which Yahoo execs made and showed to its troops recently.

Weiner’s performance, which is at the start in a James-Bond-diffusing-the-bomb moment, is actually really good (and especially compared to other execs, like the golf sadist role for CEO Jerry Yang and the broom-wielding President Sue Decker).

Plus, finally–a really good use for his legendary “Miami Vice” stubble beard.

Here’s a link to Valleywag, which got a copy of the full (and quite clever) video, and a screen shot of Weiner below.

Valleywag got a hold of a sticker (see below) that Bebo employees are passing around in anticipation of the close of the purchase of the third-ranked social-networking site by AOL for $850 million in cash.

The motto: “I, for one, welcome our new AOL overlords.”

Why shouldn’t they? As BoomTown reported, every Bebo employee has had their previously granted stock options accelerated and fully vested under terms of the deal.

This is typical in acquisitions by the Time Warner (TWX) online subsidiary, since it cannot offer enough of its moribund old media stock.

Unfortunately, those kind of deal terms don’t make for the kind of environment that encourages already jumpy entrepreneurs to stay. In fact, it kind of gives them a free pass to leave.

Still, it is nice to see Bebo minions celebrating their new bosses, including AOL CEO Randy Falco and President Ron Grant, who helmed the Bebo deal.

But to clarify for Bebo staff: Falco and Grant’s nickname at AOL is Smithers and Burns, that lovable pair from “The Simpsons,” and not overlords.

It goes without saying that further errors like this will not be tolerated.

So what prompted TechCrunch Editor Michael Arrington to pen a pugnacious piece on how blogs should not be raising so much venture capital and instead roll themselves into a “Dream Team,” with the unusual title of “More Bloggers Raising Money. Here Comes Politics. And Here Comes My Rant” yesterday?

Well, besides garnering Arrington a big dollop of traffic and attention, which is perhaps one of the blog entrepreneur’s most impressive talents, could it have something to do with the fact that he’s been busy recently talking to several well-known tech blogs about joining a roll-up organized by TechCrunch itself?

Or that he has told several people I spoke to that TechCrunch was considering doing this by raising as much as $15 million, giving it a $35 million valuation?

Reached by email last night, the voluble Arrington declined to comment.

Thus, a BoomTown translation of his TechCrunch piece is Job No. 1!

Arrington wrote: More blogs are raising venture capital, we’re hearing from people they’ve pitched. Newcomer Silicon Alley Insider is looking for a $3 million to $5 million round, if reports are correct. And paidContent is pitching for a second round in that same range (paidContent raised a round of “less than $1 million” in 2006). We’re also hearing that paidContent is trying to sell the company for $15 million or more, and just bail out with some spending money.

Translation: If that scalawag Henry Blodget thinks he can steal even an iota of my thunder, he better get ready to rumble. And while it is entirely incorrect that paidContent is selling itself or raising that much money, I love the smell of napalm in the morning and FUD in the blogosphere!

[BoomTown actually contacted paidContent’s founder, Rafat Ali, who strongly reiterated that the site might raise a very small amount of money, nowhere close to $3 million to $5 million, and was not trying to sell the company at all.]

Arrington wrote: These rumored deals come as funding for bloggers is heating up in general. Just a month ago VentureBeat reported a $320,000 raise. In 2007 we saw Sugar Inc. ($10 million), GigaOm ($1 million), Xconomy, Blogher ($3.5 million) and The Huffington Post ($10 million) raise venture capital. That’s at least $25 million in 2007 invested in blogs and blog networks.

As far as we know, no significant investments were made in blogs in 2005. Weblogs, Inc. raised around $300,000 in 2004, but before they got around to spending it they had sold themselves to AOL (TWX) for an estimated $25 million. The investors, including Mark Cuban, received 15x on their initial investment.

Translation: And if that elfin Jason Calacanis can score, where’s MY payoff!?! I mean, I am the Jason Calacanis of Web 2.0, aren’t I!? The Mac Daddy of the widget economy! The Sultan of Zing! And did Calacanis ever have the chutzpah to pose for a picture lighting cigars with a handful of crisp, flaming Benjamins! I think not!

Arrington wrote: But apart from that first 2004 investment in Weblogs, Inc., there haven’t been any sales or liquidity events to suggest these investments will be a success. And back then blogging was a cakewalk. Most bloggers linked to each other constantly in a state of brotherly or sisterly love. No one was making any money or getting much attention, so for the most part people got along (with notable exceptions like engadget/gizmodo, who play to win).

Translation: The rain may never fall till after sundown./By eight, the morning fog must disappear./In short, there’s simply not/A more congenial spot/For happily-ever-aftering than here/In Camelot.

Arrington wrote: Those salad days are long gone. Writers suddenly want to be paid market wages, far above the $5 per post that they received two years ago. No, we’re talking a big salary, with benefits, and stock options. There went half your margins at least.

Translation: Wages?! Big salary!? Benefits!? Stock options!!!??? Half your margins!!? Who do these people think they are? The Web 2.0 shooting stars I write about incessantly in TechCrunch?

Arrington wrote: And writing good content is only half the battle. You have to figure out the complex, dynamic web of politics between bloggers and mainstream media before you post to know where to get support. And you’ll need support in the form of links from other prominent bloggers. An early push can take a post and make it a headline on TechMeme, which leads to page views and notice by sponsors. But since blogging is almost by definition a conversation between bloggers, fights tend to break out over emotional issues. Cliques develop. Can you count on them to support you down the road?

Translation: TechCrunch is from Mars, Valleywag is from Venus.

Arrington wrote: Personally, I’ve found that if a fight is necessary, fight clean and fight hard. Make it as bloody as possible and end it fast, with no loose ends dangling about. Leave no lingering emotional stone unturned. When everyone gets up and dusts themselves off, the issue should have been resolved one way or the other, and both sides should be happy to shake hands and tango another day, even if the handshaking is done privately. Those that aren’t capable of doing that tend to push themselves to the outskirts of the blogosphere, where their main job is to lob in attacks at random intervals, pursuing long-forgotten insults.

Translation: Bloody tango? Ouch. Ew. Yuk. And handshakes after that seems unhygienic. But let’s solider on. Aha! Another Broadway musical clue! The Jets are gonna have their day/Tonight/The Jets are gonna have their way/Tonight/The Puerto Ricans grumble/”Fair fight”/But if they start a rumble/We’ll rumble ‘em right.

Arrington wrote: So today, at best, I’d describe the blogosphere as a frontier town with no lawman (I mean, O’Reilly has a badge on, but no gun and no jail). You can do just about anything you want, but the politically savvy folks tend to arm themselves to the teeth and gang together to protect their property. Everyone else is in the middle of chaos, either fighting blindly for attention or politely asking (by linking early and linking often) if they can join the big Gang.

Translation: Wait, now the metaphor has shifted to the Old West? OK, we can keep up: Anything you can do, I can do better./I can do anything better than you./No, you can’t./Yes, I can./No, you can’t./Yes, I can./No, you can’t./Yes, I can, Yes, I can!

Arrington wrote: And now that the big guys in the Gang are being injected with capital, hiring tens of employees and expanding their businesses, they suddenly have a lot more to lose. Linking is never done just because. Rather, links are your political capital that must be expended appropriately. Don’t link at the right time and in two weeks when you’re pushing your own headline, you’ll wish you had. When you stop seeing other blogs as people you admire and want to discuss things with, and start to see them as your competitor, your brain shifts and you stop linking the way you had previously.

Translation: Hey, how did we get to Washington, D.C. and the inside of Sen. Hillary Clinton’s cerebral cortex in the midst of yet another compromised political calculation? It’s like we’re on “Fantastic Voyage”!

Arrington: Luckily, the newbie bloggers are there to fill in the links when they’re needed. That’s why, if you are a mid-level blogger, you are likely courted by the bigger blogs looking to get your support. If you know what’s going on and are willing to play the game, you can see your blog rise very, very quickly. Choose the wrong blog, though, and you may find yourself alone and lonely in your forgotten blog.

As an aside, when I see a young but promising blogger, I’ll start linking to him or her constantly to build them up (others, like Winer, Scoble, Jarvis and Rubel did that for me). The goal is to help move them up to a position of influence as quickly as possible. The more non-crazy influencers in the game, the easier it is to ignore the noise generators and the better the overall conversation becomes. Over the last year, for example, Silicon Alley Insider, CenterNetworks, LouisGray and Mathew Ingram I’ve been pushing hard. These guys rarely agree with me, but when they talk I listen because they’ve put some thought into what they are saying and how they are saying it. Those guys haven’t hit the big politics yet, and tend to link out a lot to everyone. They are a very important part of the ecosystem–pushing their link votes toward stories they find interesting and helping those other bloggers get headlines and maintain their place in the Gang.

Translation: Next stop, the stylings of Mr. Michael Corleone! There are many things my father taught me here in this room. He taught me: keep your friends close, but your enemies closer.

Arrington wrote: So what’s the point of this rant? Well, all this money flowing into the blogosphere is disrupting the complicated and emotional, but also stable way things are done. Bloggers with money and employees and health care programs and boards of directors and shareholders have to play politics with a whole new group of people, splitting them away from what they do best–Fighting the Blog War. Their behavior can become erratic as they have to decide to tone down their writing to get a certain type of sponsor on board, which in turn lets them make payroll. Investors want to see growth, so more and more blogs are launched, but perhaps without the right talent to grow it into a long-term business.

If a VC hands you a check, their intention is not to hang around for 20 years while you build a nice lifestyle business for yourself. What they want to see is an exit, preferably a 10x or higher exit, within 3 to 4 years. But something tells me that few of these networks are going to be able to grow quite as easily as they think and reach those liquidity events. The talent is, increasingly, locked up. Even when new talent is discovered or trained, every niche has serious heavyweights already there with page views and advertising dollars to back them up for a long fight.

Translation: Finally, the point! Which is: Assimilate or Die!

Arrington wrote: At some point it’s going to become painfully obvious that the only way to get to a massive valuation is for the top talent to band together in a company where they each have an equity stake and therefore a reason to work all night on that next great story. They’ll each have their own space to stretch their legs and let their personality run around a little. Someone needs to pony up a big round of financing around an existing blog, or perhaps a new entity, and then start rolling them up into a big fat CNET-crushing $200 million/year in revenue business.

Translation: This is my sneaky but clever way of floating a trial balloon of an effort I am already trying to organize. The existing blog? Mine! The new entity? Run by me! The $200 million a year? Mine, again! Now, enough about me–what do you think of me?

Arrington wrote: It can happen. In fact it’s almost certainly going to happen. But if you bloggers go out there and raise $3 million to $5 million on say a $10 million valuation, you’ve just priced yourself out of the roll-up. That option will be closed to you, and you’ll be stuck out in the cold, taking life-support payments from Federated Media or another ad network, and having a generally awful time running your business.

Translation: Luca Brasi sleeps with the fishes.

Arrington wrote: What I’d like to see, and even be a part of, is the blogger equivalent to the 1992 U.S. Men’s Basketball Dream Team. That team could take CNET apart in a year, hire the best of the survivors there, and then move on to bigger prey.

Translation: After we are done bloody-tangoing with Neil Ashe at CNET (CNET), Owen Thomas and his evil overlord Nick Denton better sleep with one eye open.

Arrington wrote: Just the thought of being a part of something like that has held us back from raising any outside capital at all. I believe we have the beginning of a team that can play a role in this new Dream Team.

So think twice before taking that venture money, guys. You may be shutting more doors of opportunity than you realize.

Translation: By saying we have held back from raising any outside capital at all, what I really mean to say is that I am going to do it.

Resistance is futile.

I could not agree more with both Michael Arrington of TechCrunch and Valleywag’s Owen Thomas, an unlikely and motley trio we three, when I say: Leave Sarah Lacy alone.

OK, the interview she did with Facebook Founder and CEO Mark Zuckerberg at SXSW on Sunday was a little silly at times and she probably annoyed people when she flacked her new book. (Full disclosure: I have written two books, so I can relate to the unfortunate impulse to do so.)

But to make such a big hairy deal in blogs and on Twitters seems a bit of overkill, doesn’t it?

Even including a wee bit too much girly hair-twirling by Lacy into the equation (which looked like simple nervousness to me), I just don’t get the uproar.

If Britney Spears had mounted a mighty steed and ridden naked down Hollywood Boulevard, trampling cute little bunnies as she went–it could happen!–it would not engender the level of vituperative online bloviating that the encounter of Lacy and Zuckerberg did.

Were there no other pointless blogging debates to be had yesterday? Aren’t there indignant Digg-for-sale stories to chew over? Wasn’t there a good open-source kerfuffle to get into angry exchanges about? Didn’t Robert Scoble do something that we can endlessly argue between and amongst ourselves?

I guess not and that’s too bad.

Arrington got it exactly right (except in singling out only journalists for the Lacy-bashing, since it was, well, everyone piling on), when he wrote:

“Perhaps they just got caught up in the fun of a witch burning. But whatever drove them to write those articles, it certainly wasn’t journalism. Nor was it professional. And, worst of all, it wasn’t accurate.”

And Thomas made the most salient point of who should have been the focus of the interview, when he wrote:

“I agree with the popular take on Sarah Lacy’s Zuckerberg interview at SXSW to this degree: The audience was revolting. Lacy threw an unbecomingly petulant tantrum onstage. But the Twitter reaction was equally self-indulgent. The debates over her performance obscured the man who should have been under the microscope: Mark Zuckerberg.”

Well, exactly.

I am, in fact, probably going to be interviewing Zuckerberg onstage at our upcoming D: All Things Digital conference in late May. I hope it goes well, but you never know.

But here’s an offer: If everyone promises to stop needlessly pummeling Lacy for her SXSW interview, I’ll consider twirling Zuckerberg’s hair during my interview with him.

Twitter that.

Also, here’s the video of the Lacy-Zuckerberg interview, so you can make your own judgment:

It’s hard to resist one of the winners from a content sponsored by Valleywag and Fark for the best Photoshopped depictions of what a Yahoo-Microsoft coupling would look like.

Pretty funny, actually, and here is my favorite:

And here is a new cartoon from the Joy of Tech duo, Nitrozac and Snaggy, which is also featured in our site’s Voices section today. It was inspired by a BoomTown post called “No More Sand for the 98-Pound Weakling of the Web”:

While we at D: All Things Digital don’t style ourselves as peacemakers, one of the genuine sateen pillows that we had tossed blithely about our party in Las Vegas at the Consumer Electronics Show on Tuesday night seemed to have a dulcet effect on bringing together faux foes.

Pictured below is Mahalo CEO Jason Calacanis and Valleywag writer Jordan Golson resting their weary heads in a very intimate and touched-by-an-angel moment of togetherness. (Golson “stole” one with our papal dispensation.)

Typically, the bloggy entrepreneur and the Silicon Valley gossip site trade barbs and snark back and forth in a traffic-generating online equivalent of a wrestling match.

What can we say? Our work is done.

P.S. My Flip camera flipped out Tuesday, so I cannot bring you my riveting video of the party, including an exclusive interview with our very own ATD version of very glammy booth ladies who greeted guests at the Venetian’s Tao. But pictures of the soiree to come.

What a slimy mess the “Here Comes Another Bubble” is leaving in its wake as it travels all over the Web.

Today, Daryl Lang of PDNPulse, a blog from Photo District News, reported that it contacted more photographers whose pictures were used in the popular Web 2.0-mocking video by the San Francisco-based singing group, the Richter Scales.

Four of them responded that they also did not like the use of their work one bit, some objecting to the credit given, others to the non-payment and still others to not being asked for permission to use their photos.

Some objected to all three issues, all of which have to do with “fair use” under copyright law.

“I’m totally against the unauthorized use of my image,” said Ramona Rosales, whose picture of TechCrunch blogger Michael Arrington was used in the video and who said she was going to ask that the photo be removed, to PDNPulse. “I was never asked permission nor have I received any compensation for its use; furthermore I don’t feel it is justified simply because they gave me credit.”

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The take-down of the popular Web 2.0 music video, “Here Comes Another Bubble,” didn’t last too long. The Richter Scales, a San Francisco singing group that did the piece, have posted a new one–Version 1.1–that it hopes is copyright safe.

They have a full list of credits here and also on the video, and have a blog post on the problems related to the music video here.

Here’s the new version of “Bubble”:

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Let’s be clear on one thing: We won’t be getting any financial information out of the company about Facebook’s performance or the slate of its shareholders until it’s good and ready to hand it over.

That’s because, although it has been widely reported, the hot social network will not fall under the Securities and Exchange Commission’s old “500 shareholder rule,” which would have forced it to report such information when the number of shareholders, including those holding just stock options, reached 500.

While companies like Google got caught in that net several years ago, the SEC actually recently changed that rule to exempt those just holding options, which the vast majority of Facebook’s growing legion of employees (about 400) have been given.

In fact, said many sources, Facebook only has several dozen individual shareholders who actually own stock and that number is unlikely to rise in the future.

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While there have been reports that Facebook will be picking investors by today, sources close to the company expect the mulling over to take a little while longer.

So, while it would be great theater, it is unlikely that Facebook founder and CEO Mark Zuckerberg will do more than the usual hemming and hawing on stage this afternoon at the Web 2.0 Summit in San Francisco.

That’s because there are two tracks going–which intersect a bit, but not completely. The first is to sign a commercial deal with either Microsoft, Google or Yahoo for the company’s international ad market.

The second is to rake in the dough in a megaround of investment, which would value the social-networking start-up at $15 billion.

“We’re getting responses and responses to responses,” said one Facebook source about both deals. “We’re obviously trying to get the best deal all around for the company.”

And that obviously means playing the top two bidders in the commercial deal–Microsoft and Google–against each other to Facebook’s advantage. Microsoft CEO Steve Ballmer is especially keen on besting the search giant, in a mania that Facebook execs find almost obsessive.

The funding deal is also complex and has, said another Facebook exec, “more moving parts than you can imagine.”

Oh, we can imagine. As I said in this post, beyond what I have written about the ridiculous $15 billion valuation Facebook is asking for, I will not evaluate the worth of the commercial deal especially, because of a particularly obvious personal conflict of interest related to Google in this case (click here to read more disclosure on the topic).

So you might click on over to Valleywag for an interesting recent take by Owen Thomas on the deal.

Here’s the money quote:

Why would Microsoft, Google and Yahoo be so willing to throw money at Facebook? Not, as some have suggested, simply because they’re desperate to get a foothold in social networking. These companies are not run by dummies. They want to learn from Facebook, it’s true–but they can take their learnings and run the results across their entire ad networks, improving their targeting. And they’ll also build up relationships with large advertisers. The long-term benefits will accrue to Facebook’s new minority investor, in other words. And Facebook? Once the deals expire, it will have to start from scratch.

If Zuckerberg’s smart, he’ll scatter all three term sheets to the wind.”

Please see this disclosure related to me and Google.

I think we can safely say the magic multimedia strategy once touted back in Web 1.0 as the savior of old media is now almost completely discounted.

So posits Valleywag’s Owen Thomas in an excellent short analysis of the deal for NBC Universal to buy women’s media cable channel and Web site company Oxygen Media for $925 million announced Tuesday.

“The fact that I’m describing it as, yes, a ‘cable-TV channel’ speaks to Oxygen’s failure,” wrote Thomas yesterday. “Conceived in 2000 as a multimedia empire that would bridge the Web and TV, Oxygen failed to thrive in either medium.”

While it seems like about a million years ago, the Oprah-backed Oxygen, headed by TV veteran exec Geraldine Laybourne, had a very splashy debut only seven years ago and sported a slate of prominent backers like talk show behemoth Oprah and also a spate of dot-com luminaries of the time.

What was stressed then was the tight integration between the cable network, original television programming and pricey Web site, which actually included very good early versions of what would later be called blogs and other small innovations. It was all supposed to herald a cross-promotional matrix of untold influence.

None of this came to pass, of course, and NBCU, said one longtime television exec to me today, was essentially only buying itself a women’s cable play to add to its stable of other cable properties, more than any doubling down in the Web space to aid NBC-owned iVillage.

Thus, the search for multimedia nirvana goes on.

Leave it to the freakishly tall Megan McCarthy of Valleywag to impugn our stature at BoomTown.

In her post late last week that I missed (I was traveling and therefore not aware of her cruel, cruel taunts), she pointed with dread to a recent promise I made to try out a new wearable camera I saw at the TechCrunch40 conference earlier in the week, a la Justin Kan of Justin.tv.

Writes McCarthy:

One thing to keep in mind about this new development: Swisher, unlike Kan, is tiny–about 5′2″, if that. Any hat-camera she wears will be eye-level with Silicon Valley’s chest. We look forward to watching her conversations with Walt Mossberg’s sweater.”

First off, I am 5′2″ (really!!) and not a “little person” as one VC once called me.

Second, Walt never wears sweaters.

And third: Chest-level was the plan, if you must know!

Silicon Valley’s chest=big traffic!

Or as Valleywag overlord Owen Thomas added to the post in note wherein he also harasses my innocent employee, Digital Daily’s John Paczkowski:

Rowr.

I had an entertaining lunch with Owen Thomas and Megan McCarthy, both of Valleywag, the Silicon Valley online gossip rag that is part of the Gawker Media blogging empire.

(Megan had asked for some advice about the fine art of covering parties–that is, making an interesting story where there is not one–since I started my career covering parties for the Washington Post.)

Thomas, whom I have know for many years, is the new managing editor of Valleywag, a gig he got in July after many years as an editor and writer at Business 2.0 magazine.

Here is a talk with him about the state of the blog and Valleywag’s focus under him, as well as an appearance by McCarthy, and more info after the jump:

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Oh dear.

I put up a simple funny illustration that looked at the striking resemblance between Walt and Anton Ego–a character from the current Pixar animated film “Ratatouille”–and my good friend Owen Thomas, the new head wag at Valleywag, tries to spin it into a faux feud I might be having with my most illustrious partner, Walt Mossberg.

Perish the thought!

In the movie, which I have not even seen as yet, Ego is apparently dour and humorless–although I understand he is redeemed by the end–which seems about right for the food critic he is. Also, I might add, he is a CARTOON.

While Walt might not be actually animated, his personality and writing surely are, and he can also be very funny. And I have nothing but admiration for him, except when he mocks my deep love of Barry Manilow (that’s right–I am a Fanilow!), about which we shall speak of no more.

I mean I wouldn’t jump to the conclusion that Owen necessarily giggles were one to poke him in the stomach, for example, even if I were I to, say, compare him to the Pillsbury Doughboy (although he is most certainly Pop ‘n’ Fresh).