According to numerous sources, Yahoo has been shopping around Zimbra, the open-source email company it bought in late 2007 for $350 million.

Zimbra is only one of the many assets of Yahoo (YHOO) that are now on the block, including its personals business, its HotJobs online classified unit and many more to come, said sources.

The effort to unload Zimbra is yet another sign that the company is trying to slim down its diverse portfolio, even as it strives to redefine itself this week with a new, pricey marketing campaign that seeks to position Yahoo primarily as a consumer company.

As first reported by BoomTown last week, Yahoo will be introducing a massive branding campaign tomorrow on the second day of Advertising Week in New York.

The new focus Yahoo is aiming for with advertisers is to stress its huge size and scale with consumers. The troubled Internet giant is still one of the most trafficked sites on the Web.

And consumers will also be reminded of this. The Wall Street Journal wrote a follow-up story yesterday on the marketing effort, noting that the $100 million campaign’s tagline is “It’s You.”

Get it? The “Y” in Yahoo is the same as the one in You!

The details of the plan will be made public tomorrow at a press conference immediately after a keynote speech–titled “Yahoo’s Consumer Revolution…Round II”–that the company’s new CMO, Elisa Steele, is set to deliver at the Interactive Advertising Bureau’s MIXX conference.

The goal, said several sources at Yahoo, will be to stress Yahoo’s consumer business over all others, which are supported mostly via brand advertising, leaving more extraneous ones out in the cold.

Which is why Zimbra–like a lot of other Yahoo properties–is being shopped around by its top mergers and acquisitions exec, Greg Mrva and others.

(Mrva’s new job title should be: VP of un-mergers and de-acquisitions.)

Backed by Benchmark Capital, Redpoint Ventures and Accel Partners, Zimbra was an innovative start-up whose main business was to provide clients–including Comcast (CMCSA), many ISPs and a number of colleges–with white-label email software capabilities.

Yahoo bought the company to goose that business, whose main rival has been Google (GOOG)–along with using Zimbra technology to improve its massive consumer email offering, also under siege from Google.

That integration has gone slowly, and Yahoo now has less interest in selling email products to others.

But the price Yahoo would get, many think, would be significantly lower that what it paid for Zimbra.

Nonetheless, potential buyers include Comcast and Google, as well as private-equity investors.

In addition, it is not out of the question that its former venture investors could be interested in a classic Silicon Valley buyback.

Zimbra’s founder and CEO, Satish Dharmaraj, who left Yahoo earlier this year, is now working at Redpoint.

Here is a video interview I did with Dharmaraj in early 2008, after the Yahoo deal was struck:

In the ongoing game of musical chairs among top managers at Internet companies, former Yahoo exec Brad Garlinghouse–famous for his controversial “Peanut Butter Manifesto,” which correctly chided the Internet giant for becoming so lugubrious several years ago–is taking a job at AOL very similar to the one he left at Yahoo last year.

Garlinghouse, 38, has been named president of Internet and mobile communications at AOL, putting him in charge of the New York-based Time Warner (TWX) online unit’s powerful email and instant-messaging properties, including ICQ and AIM.

He has only been in talks with AOL–which used Spencer Stuart’s Internet-top-exec-finder-in-chief Jim Citrin–for a few weeks, in a deal that came together quickly, he and the company said.

Garlinghouse, a longtime Web entrepreneur and exec, had reportedly been considering a number of start-up and venture-related jobs since he left Yahoo last summer after six years there.

Sources said he was seriously considering becoming the CEO of a mobile firm.

He was most recently at Silver Lake Partners, as an “in-house senior advisor,” the private equity firm that recently bought the Skype Internet telephony firm for $1.9 billion. Garlinghouse also reportedly helped work on that deal.

“It’s really exciting to be to able to rebuild and revitalize an industry giant,” said Garlinghouse in an interview with BoomTown earlier today. “I make no bones that these [properties] are in need of that…but there is also a huge opportunity to do something cool.”

Garlinghouse has to hurry. Despite being among the top communications players online–a group that also includes Yahoo (YHOO) and Microsoft (MSFT) and, more recently, Google (GOOG)–AOL has lost relevance with key audiences, even as social networking properties like Facebook and the microblogging service, Twitter, have innovated in the communications space.

The hiring of Garlinghouse, well known in Silicon Valley circles, is meant to counter that.

He will head up AOL’s operations from its Mountain View, Calif., campus–which is also the former HQ of AOL-acquired Netscape Communications–where, said AOL CEO Tim Armstrong, Garlinghouse will “be CEO of Silicon Valley for us.”

Between all its various properties, AOL has several hundred employees in the Northern California area.

Armstrong said AOL–which was founded 25 years ago on the East Coast and has tried and failed many times to get a true foothold in the West–thinks having an important player at the center of the tech industry is critical as it moves to spin off as an independent company by the end of the year.

“We have a triple play in getting a great executive, who is a master in the communications on the Web and who is well known out there,” said Armstrong. “Brad is our senior AOL manager there.”

Along with running all of AOL’s communications properties, Garlinghouse will inherit some of its community properties, although AOL’s Bebo social networking unit–now considered to be an overpriced acquisition error–now resides in its ventures unit, headed by Jon Brod.

Garlinghouse will also be aiding Brod, said Armstrong, with AOL on the lookout for acquisition opportunities in communications and other arenas.

While Garlinghouse declined to be specific about what would pique his buying interest, he was responsible for such big Yahoo deals as its $350 million purchase of Zimbra in the fall of 2007.

He was also key to bringing both Oddpost, which is at the heart of Yahoo’s email offering, and the popular Flickr photosharing service to Yahoo.

Garlinghouse said he has admired what Twitter and Facebook have done, but that they were not destroying traditional online communications, pioneered by AOL, as some assert.

“It’s a vibrant segment and this just means there are a lot of opportunities to enable integration,” he said. “I think of it as an expansion of online communications and I hope AOL can do more collaboration and partnerships.”

Garlinghouse also has to watch AOL’s basic products like email, which was recently passed by Google’s Gmail as the No. 3 email service in the U.S. Yahoo Mail is the top email, while Microsoft’s Hotmail is second.

How much Garlinghouse can do will depend on the future financial strength of AOL. Its advertising business has been hit hard in the econalpyse, with hopes it will return before its money-generating access business continues its slow decline.

Armstrong is now in the midst of looking over AOL’s cost structure and employee base, which most expect will eventually result in another round of layoffs and cuts.

He has been busy creating a different strategy for the company since he arrived earlier this year, as well as hiring (and firing) top execs to create a new management structure.

Now, that includes Garlinghouse.

So, for a look-see at AOL’s latest talent acquisition, here’s a video interview I did with him, just after Yahoo bought Zimbra:

And here’s the full press release from AOL about the hiring of Garlinghouse:

AOL NAMES BRAD GARLINGHOUSE AS PRESIDENT, INTERNET AND MOBILE COMMUNICATIONS

NEW YORK, N.Y.–September 8, 2009–AOL today named Brad Garlinghouse as President of Internet and Mobile Communications, spearheading AOL’s global efforts to expand the reach of its e-mail and instant messaging. Garlinghouse will also take on an expanded leadership position for the company, heading up AOL’s Silicon Valley operations from its Mountain View campus and serving as the West Coast lead for AOL Ventures, the company’s venture capital arm headed globally by Jon Brod. Garlinghouse was most recently at Silver Lake Partners as an in-house Senior Advisor.

Prior to Silver Lake, Garlinghouse spent nearly six years at Yahoo!, where he led that company’s communications and community products. Garlinghouse will report directly to AOL’s Chairman and CEO Tim Armstrong.

” Brad Garlinghouse is an all-star in the Internet industry with an unparalleled background and proven track record, having led Yahoo’s communications products to unprecedented growth,” said Armstrong. “In addition to leading our efforts to grow our communications products, Brad will be bringing his global leadership and business experience as a key member of our company’s executive leadership team. He will also be a major force for AOL in Silicon Valley, working to expand our presence there and in the tech community in general. We’re delighted to have Brad on board and know he’ll do great things for AOL.”

“It’s a tremendous opportunity to join AOL at this pivotal moment in its history,” Garlinghouse said. “Tim has set out a clear strategy and vision for where he is taking this company as it becomes independent again. I’m looking forward to working with him and the rest of the team to realize that vision.”

Armstrong, who joined AOL in April, identified Communications as one of the five key areas of strategic focus for AOL after an extensive 100-day review of the company’s business. Other focus areas include Content, Advertising, Local & Mapping and AOL Ventures.

Garlinghouse spent nearly six years at Yahoo! where he most recently served as SVP of Communications and Communities. Prior to that he served as SVP of Communications, Communities and Front Doors, which included the Yahoo! home page. He came to Yahoo in 2003 as VP, Communication Products. During his time there, Yahoo! Mail went from No. 3 to leading all competitors by a wide margin, and the company’s instant messaging service rose to become the leader in that market as well. Garlinghouse also oversaw the company’s Flickr photo-sharing service and Yahoo! Groups.

Prior to Yahoo!, Garlinghouse was CEO of Dialpad.com Inc., responsible for all aspects of the company’s operations, finance, sales and marketing. He was also General Partner at @Ventures, Category Manager of Media Development for the @Home Network, Inc., and Manager at SBC Communications.

Garlinghouse, 38, received his BA in economics from the University of Kansas and his MBA from Harvard Business School.

Google CEO Eric Schmidt gave what he just had to know would be a much quoted comment to the Nikkei today, explicitly saying that the company had “begun seriously looking into acquisitions again.”

Music to the beleaguered mergers and acquisitions market, to be sure, especially after a recent uptick from other big companies pulling out their wallets again as the impact of the econalypse subsides.

According to sources, Google (GOOG) is working on at least a half-dozen acquisition deals, most of which are small start-ups in the online advertising and cloud computing arenas.

That would be welcome news for many.

That’s because, as The Wall Street Journal noted in a piece today, “August was shaping up to be the worst month for deal making since 1995, according to data provider Dealogic” (see the chart).

That was, until Disney (DIS) bought Marvel for $4 billion, in a deal announced Monday.

Then yesterday, eBay (EBAY) traded 65 percent of its Skype Internet telephony unit to a group of free-spending private investors, led by Silver Lake Partners, for $1.9 billion.

While eye-popping numbers like that make dealmakers smile, most think it is in the spate of smaller venture-backed companies that more of the action will happen, with big companies like Google, Microsoft (MSFT), Apple (AAPL) and even Yahoo (YHOO) as predators.

Many of these were funded in the Web 2.0 boom and have done well enough, but are figuring out that a link with a larger fish will likely make for a better outcome, along with filling in tech and product gaps at the giants.

Think about Facebook’s $50 million acquisition of social networking site FriendFeed recently and you have the right idea.

According to more than a half-dozen Silicon Valley VCs I have spoken to this week, this is the likeliest kind of exit for a large group of their portfolio companies.

Thus, they are putting on their finest and placing themselves on display in the store window, offering talent and innovation.

“We all realize that a lot of these companies are not going to be independent, so we’re all trying to figure out where they best fit in,” said one VC. “We essentially did business development for a lot of the large companies.”

Thus, here are some companies whose names have been bandied about of late by M&A types who say they are more likely candidates for sale:

Veoh, the Web video portal that MediaMemo wrote about in July, has reportedly been searching for a home for a while now as it struggles in a costly space dominated by giants like YouTube and Hulu.

That goes for many other similar video efforts, such as Joost, Metacafe and Dailymotion, all of which have been trying to gain traction.

There is also likely to be a shakeout in the gaming and “guy” content space, which has also seen a lot of funding in the last several years and less monetary success.

Some possible names here include: Xfire, a gaming instant-messaging company Viacom (VIA) bought a couple years ago for $100 million; Giant Realm, a 20-something guy site funded by Comcast (CMCSA) and others; and UGO, Hearst’s version of a 20-something guy site.

Probably, given the need to focus on monetization, the most active M&A space will be in online advertising.

Sources said Google, for example, has been interested in companies such as Teracent, a dynamic ad-serving and optimization start-up in San Mateo.

There are lots of names in this general arena to pick from, from Tumri to Quantcast to AdMob to the Rubicon Project, not all of which are for sale, but might be for the right price.

Lastly, there is the smart phone and telecom space, where there might be some of the bigger deals.

While Palm (PALM) has been trying mightily to gain traction with its Pre offering, many think that if it does not go as well as hoped, the company will be an acquisition target eventually for giant companies like Nokia (NOK).

While many think Microsoft could also be a buyer of Palm, given the lackluster performance of its Windows Mobile devices, it might be more attuned to a much bigger catch: Research in Motion (RIMM) and its business-oriented BlackBerry empire.

Such a massive acquisition–most of those I bounced that idea off agreed–would be an uphill battle, but it would be perhaps the best fish story ever.

Please see this disclosure related to me and Google.

The board of iLike planned a meeting earlier tonight to go over a buyout offer by MySpace, several sources close to the situation said. But it was suddenly canceled because of some thorny tax implications related to the talent-retention part of the deal to purchase the social music start-up.

This does not mean the pending acquisition is in jeopardy, sources said, and it could be on track to be signed as early as today, barring any more complications.

That is what both iLike and MySpace execs are hoping, said sources, one of whom described the outstanding issues as a “technicality.”

What’s also been unclear is the actual price the social networking giant is paying for iLike, which has been reported as about $20 million.

In fact, only $13.5 million will be paid upfront in cash, with about $8 million of that money likely going to one of its major shareholders, Ticketmaster Entertainment (TKTM), due to its preferred shares.

Another $6 million has been promised by MySpace in forward payments to retain some key employees–including iLike co-founders and twin brothers Ali and Hadi Partovi.

Although those employees can remain in Seattle, where iLike has its HQ, they must stay employed at Beverly Hills, Calif.-based MySpace for two and a half years to get their money.

It’s that talent part of the deal that caused the Partovis to cancel the iLike board meeting, which they explained to key investors was necessary due to some confusion over how the money paid to these employees would be taxed.

A person briefed on the issue said that if it was taxed as compensation, it would have a much higher tax rate than if it were considered long-term capital gains.

The Partovis said in the email that they were working on the problem with their advisers on the sale, Allen & Co., as well as with lawyers and accountants.

Tax snafus in the middle of a sale are not exactly the way the entrepreneurial Partovis envisioned it was going to go for iLike (see my various video interview related to iLike below) when they created the compelling music sharing and recommendation service in 2006.

After only a few years, the innovative start-up claims it has 50 million registered users overall.

A lot of that growth was due to iLike quickly becoming one of the most popular widgets on social networking sites like Facebook, where it has also been the top music application, with 10 million active monthly users.

The Partovis–who once were close with execs at Facebook (see my party video below), particularly founder and CEO Mark Zuckerberg–placed great faith in its growth lifting all Web 2.0 boats.

It did not turn out that way, though, especially from the important financial point of view, and iLike scrambled to diversify.

The iLike service recently began offering a music downloading service, for example, as well as other such features, all of which would be attractive to the music-centric focus at MySpace.

Once an Internet sensation, MySpace has been struggling to restructure itself after losing momentum and buzz in recent years, as well as a huge advertising revenue drop in its most recent quarter.

Its owner, News Corp. (NWS), replaced its founders with new management four months ago, including former Facebook exec Owen Van Natta as CEO.

After making major staff layoffs and rejiggering management, Van Natta and his new team have been working on an overhaul of the MySpace product and seem to be refocusing it to become a global music and entertainment service.

MySpace also has a joint venture with major music labels, MySpace Music, which has been trying to attract consumers and build a viable business. Sources said MySpace Music could also buy into the iLike deal or simply license its technology to improve its features.

Thus, purchasing iLike would fit in well with MySpace’s overall plans.

And iLike has also been in need of a fix itself.

For all its popularity, especially on Facebook, it has moved slowly toward profitabilty, and its $17 million in funding has been dwindling, as has its viability as a standalone company.

Back in more frothy Web 2.0 days, iLike’s generous funding gave it a valuation of more than $50 million, which has also lost steam over time and as the economy has worsened.

In the last quarter of fiscal 2008, for example, Ticketmaster wrote down its $13 million investment by $6 million.

Tensions between its execs and iLike have gotten worse over time, although some thought at one time that Ticketmaster would buy iLike.

No longer, which is why the founders turned to Allen & Co., as MediaMemo reported as far back as November, to find another big investor or buyer.

Wrote Peter Kafka: “Delivering free music on the Web has so far proven to be a high-cost, low-revenue endeavor…”

So, the New York deal-making firm ginned up a small group of suitors, which included Facebook, Activision Blizzard (ATVI) and Microsoft (MSFT), as well as MySpace.

Of the three, Activision was most serious, with interest in integrating iLike’s community and technology tools with its Guitar Hero franchise.

But Activision never actually made a formal bid, said sources.

Both Microsoft and Facebook also considered the purchase, but sources said they would only offer stock in a deal. But iLike wanted cash in the deal.

The Partovis were also was wary about working at either place.

Both Partovis, for example, had worked at Microsoft (Ali after selling it LinkExchange in 1998 for $265 million; Hadi several times, once following Microsoft’s acquisition of Tellme Networks, which he co-founded).

As it has turned out, in its short life, iLike’s last, best alternative is apparently MySpace.

“Look, iLike has been shopped around for a while, and while the team and technology are great, it only has one choice and that’s to be sold,” said one person involved in the various scenarios. “The question for the buyer then is whether it was worth it to pay up or just move on and do it ourselves.”

So until the bean counters settle this IRS nightmare, here is my video interview with Hadi Partovi about a year ago at iLike’s HQ in the Capitol Hill section of Seattle, when times were a little more hopeful:

And here is a very dark and very shaky video I did when iLike threw a fete in Silicon Valley to celebrate its start-up two years ago and to send some appreciation in Facebook’s direction–it is so dated that Facebook COO Sheryl Sandberg, who is in the video, is still at Google (GOOG).

(Full Disclosure: News Corp. also owns Dow Jones, which owns this site.)

]]> http://kara.allthingsd.com/20090817/sale-of-ilike-to-myspace-135-million-in-cash-6-million-for-talent-retention-delayed-over-tax-issues-reallyplus-the-list-of-other-suitors/feed/ 0 http://kara.allthingsd.com/20090817/more-local-heat-msnbccom-buys-everyblock/ http://kara.allthingsd.com/20090817/more-local-heat-msnbccom-buys-everyblock/#comments Mon, 17 Aug 2009 16:00:29 +0000 Kara Swisher http://kara.allthingsd.com/?p=17636

It looks like the local market is heating up even more, with MSNBC.com announcing the acquisition of Chicago-based EveryBlock.

MSNBC.com–a joint venture of Microsoft (MSFT) and GE (GE) unit NBC Universal–paid several million dollars for the “hyper-local” information site, which is up and running in 15 cities, including New York, San Francisco, Seattle, Chicago and Boston, sources said.

In June, Time Warner (TWX) online unit AOL paid about $10 million to buy Patch Media.

The New York-based start-up is a platform that does deeply localized coverage of communities on a range of topics, from announcements to news to events to obituaries. It is aimed at competing with local newspapers and other media.

EveryBlock takes a slightly different approach, scouring a mass of publicly available data in a variety of U.S. cities from a variety of public records–such as crime stats, building permits and restaurant inspections–and reassembling them into more comprehensible and geographically relevant news feeds, depending on what a user asks for.

It also pulls up related Flickr photos and information from Web sites like Yelp and Daily Candy and can get very granular, down to keeping track of what is happening on your block or neighborhood.

Maps are also deeply integrated into EveryBlock, as it was on an earlier effort–ChicagoCrime.org–of founder Adrian Holovaty.

The innovative little start-up has a tiny staff of a half-dozen, still calls itself a “project” on its Web site and was started with $1.1 million in grant money won from the Knight News Challenge, an annual contest held by the Knight Foundation.

MSNBC.com is the news channel for Microsoft’s MSN portal, whose execs are very interested in weaving more local results into the site, as well as into the software giant’s new search offering, Bing.

The aim of having EveryBlock data integrated, for example, would be to create a local information dashboard on MSN.

Here’s a screen grab of EveryBlock’s take on my zip code in San Francisco, below (click on the image to make it larger)–and a video interview with Holovaty on YoChicago in early 2008:

]]> http://kara.allthingsd.com/20090817/more-local-heat-msnbccom-buys-everyblock/feed/ 0 http://kara.allthingsd.com/20090810/now-that-theres-facefeed-does-that-make-twoogle-more-inevitable/ http://kara.allthingsd.com/20090810/now-that-theres-facefeed-does-that-make-twoogle-more-inevitable/#comments Mon, 10 Aug 2009 22:59:43 +0000 Kara Swisher http://kara.allthingsd.com/?p=17321

MicroHoo. Check! FaceFeed. Check!

And Twoogle? Let’s check!

Yahoo (YHOO) and Microsoft (MSFT) have finally partnered. Microsoft is already a big investor in Facebook. And today, the huge social networking site just picked up online content-sharing site FriendFeed, which is chock-a-block full of ex-Google execs.

Now, one has to wonder if it wouldn’t be easier if Google (GOOG), the cash machine of a search giant, finally ponied up and bought the most recent star of Web 2.0?

That would be, of course, Twitter.

While previous rumors in the early spring that Google was imminently poised to acquire Twitter proved premature, the investors of the fast-growing microblogging service and Google execs have got to be thinking the same thing right about now:

Do we need each other to make some real-time noise?

It’s true that a lot of the hubbub around the idea of Twitter selling out has been mostly hype.

In addition, there are a lot of good arguments to be made that the San Francisco start-up is likely to be fine on its own and will soon find some very lucrative revenue streams.

Still, it is probably very disconcerting for Twitter to be holding onto the tail of the tiger of its own phenom and hope that it will not turn out to be a bad decision to imagine it will always be thus.

Linking up Twitter and Google is certainly a big idea, giving Google de facto ownership of real-time search, a big lift in the status-update game and yet another major and innovative Internet name brand.

It would also likely ensure that Twitter will dominate its sector for a very long time.

In other words: Gentlemen–and, since this is Silicon Valley, I do mean pretty much all gentlemen–start your engines.

Because whatever happens, it certainly will be fun to watch from the sidelines as MicroHoo, FaceFeed, Twoogle and more crash into one other and make the Internet as thrilling a place as it has ever been.

Please see this disclosure related to me and Google.

]]> http://kara.allthingsd.com/20090810/now-that-theres-facefeed-does-that-make-twoogle-more-inevitable/feed/ 3 http://kara.allthingsd.com/20090810/take-that-twitter-facebooks-cox-and-friendfeeds-taylor-talk-about-the-acquisition-but-not-the-price-at-which-boomtown-makes-a-guess/ http://kara.allthingsd.com/20090810/take-that-twitter-facebooks-cox-and-friendfeeds-taylor-talk-about-the-acquisition-but-not-the-price-at-which-boomtown-makes-a-guess/#comments Mon, 10 Aug 2009 20:42:14 +0000 Kara Swisher http://kara.allthingsd.com/?p=17258

After Facebook announced today that it had acquired online content-sharing site FriendFeed, BoomTown had a short chit-chat with Facebook’s Director of Product, Chris Cox, and FriendFeed co-founder Bret Taylor.

Although neither budged on telling me about the purchase price, which various Silicon Valley venture capitalists I spoke to estimated to be about $50 million in cash and stock, they both talked about how copacetic the two companies were.

Benchmark Capital and angel investors had put about $5 million into the start-up, which–while innovative–has failed to garner the red-hot growth of either Twitter or Facebook since it was founded in 2007.

(I mean, even if No. 1 FriendFeed Fanboy Robert Scoble said that too, it must be so!)

Cox and Taylor said the companies came together after several months of casual conversations, probably sometime after Twitter spurned Facebook’s $500 million stock-and-cash offer last year.

But, as in failed love affairs, moving on is the next best thing to do!

“At its core, we have the same vision for these types of products around real-time sharing and discovery,” said Taylor. “The ideas we have and view from Facebook were converging, so this made sense.”

He also noted that Facebook’s huge user base of upward of 250 million people–especially compared to FriendFeed’s one million monthly unique visitors–”was an offer we could not pass up.”

While in a previous interview with me Taylor and one of his other co-founders, Paul Buchheit, said they wanted to remain independent, the former Googler said “this was right thing for our company.”

And how, since Facebook was working on a lot of the content- and update-sharing features that FriendFeed had been pioneering so well, and Twitter had pulled so far ahead in the horse race.

Taylor agreed, referring to Facebook. “When such a large successful company is working on solving that problem too, we realized we could work more effectively in their organization,” he said.

Facebook’s Cox agreed that one-plus-one equaled Twitter-killer. (Well, he did not say that–I did!)

“We have watched [FriendFeed's] products from the beginning and the people themselves are just amazing,” he said, making the purchase sound a lot more like a talent acquisition than anything else.

Cox noted that time was a-wasting too in the real-time and sharing arena.

“I think all this stuff is evolving very quickly and and at the speed of light and there are not many that understand it at a deep level,” said Cox. “We just feel it’s important to have those people in the room and in the building, and not just on Facebook.com, but everywhere in the world.”

While it is unclear what kinds of products would evolve, both said a “culture match” would facilitate good things.

Not that it will be easy, said Cox: “Facebook operates at such a scale that we approach this with a high degree of humility.”

Neither would comment about my question of which side would have to now reign in FriendFeed fanatic Scoble, who loves the service the way a tween girl loves Robert Pattinson of “Twilight.”

Here is my video interview with Taylor and Buchheit last December, as well as a tour of FriendFeed’s Mountain View, Calif., HQ:

]]> http://kara.allthingsd.com/20090810/take-that-twitter-facebooks-cox-and-friendfeeds-taylor-talk-about-the-acquisition-but-not-the-price-at-which-boomtown-makes-a-guess/feed/ 0 http://kara.allthingsd.com/20090810/facebook-acquires-not-twitter-oops-friendfeed-plus-the-full-press-release/ http://kara.allthingsd.com/20090810/facebook-acquires-not-twitter-oops-friendfeed-plus-the-full-press-release/#comments Mon, 10 Aug 2009 19:26:16 +0000 Kara Swisher http://kara.allthingsd.com/?p=17251

Facebook said today it is acquiring FriendFeed, the online content-sharing site.

It is a logical fit for the huge social networking site, which has lagged behind microblogging kingpin Twitter in the real-time news, search and status game of perception in Silicon Valley.

Mountain View, Calif.-based FriendFeed has also trailed well behind Twitter, despite its top-notch pedigree of ex-Google (GOOG) staffers, such as Paul Buchheit and Bret Taylor. The other ex-Google co-founders of FriendFeed are Jim Norris and Sanjeev Singh.

Benchmark Capital and angel investors had put about $5 million into the start-up, which had been a darling among the digerati.

Despite that, the start-up only broke one million unique visitors recently, according to several reports, while San Francisco-based Twitter was reported to have upward of 44 million in June.

But FriendFeed will surely get a turbocharge from its Facebook ownership, especially as its technology is fed to its 250 million users.

While Facebook–which is based in Palo Alto, Calif.–has added some of the same functionality that FriendFeed has innovated into its famous News Feed, it will surely get its own boost from adding FriendFeed’s dozen employees, 11 of whom are engineers.

Terms were not disclosed, but the purchase price is likely well under the $500 million Facebook offered Twitter last fall.

In fact, sources estimate to me that the price was about $50 million in cash and stock for the company, which was founded in 2007.

It is also unclear what will happen to the standalone FriendFeed service in the long run, although Taylor said in an uber-cute blog post (see below) that it would remain intact for now.

This move, although prominently unmentioned by Facebook in its full press release below, is most certainly a shot across Twitter’s bow.

Here’s the official word from Facebook, as well as that blog post by FriendFeed’s Taylor about the acquisition:

Facebook Agrees to Acquire Sharing Service FriendFeed

PALO ALTO, CALIF.–August 10, 2009–Facebook today announced that it has agreed to acquire FriendFeed, the innovative service for sharing online. As part of the agreement, all FriendFeed employees will join Facebook and FriendFeed’s four founders will hold senior roles on Facebook’s engineering and product teams.

“Facebook and FriendFeed share a common vision of giving people tools to share and connect with their friends,” said Bret Taylor, a FriendFeed co-founder and, previously, the group product manager who launched Google Maps. “We can’t wait to join the team and bring many of the innovations we’ve developed at FriendFeed to Facebook’s 250 million users around the world.”

“As we spent time with Mark and his leadership team, we were impressed by the open, creative culture they’ve built and their desire to have us contribute to it,” said Paul Buchheit, another FriendFeed co-founder. Buchheit, the Google engineer behind Gmail and the originator of Google’s “Don’t be evil” motto, added, “It was immediately obvious to us how passionate Facebook’s engineers are about creating simple, ground-breaking ways for people to share, and we are extremely excited to join such a like-minded group.”

Taylor and Buchheit founded FriendFeed along with Jim Norris and Sanjeev Singh in October 2007 after all four played key roles at Google for products like Gmail and Google Maps. At FriendFeed, they’ve brought together a world-class team of engineers and designers.

“Since I first tried FriendFeed, I’ve admired their team for creating such a simple and elegant service for people to share information,” said Mark Zuckerberg, Facebook founder and CEO. “As this shows, our culture continues to make Facebook a place where the best engineers come to build things quickly that lots of people will use.”

FriendFeed is based in Mountain View, Calif. and has 12 employees. FriendFeed.com will continue to operate normally for the time being as the teams determine the longer term plans for the product.

Financial terms of the acquisition were not released.”

FriendFeed accepts Facebook friend request

We are happy to announce that Facebook has acquired FriendFeed. As my mom explained to me, when two companies love each other very much, they form a structured investment vehicle…

The FriendFeed team is extremely excited to become a part of the talented Facebook team. We’ve always been great admirers of Facebook, and our companies share a common vision. Now we have the opportunity to bring many of the innovations we’ve developed at FriendFeed to Facebook’s 250 million users around the world and to work alongside Facebook’s passionate engineers to create even more ways for you to easily share with your friends online.

What does this mean for my FriendFeed account?

FriendFeed.com will continue to operate normally for the time being. We’re still figuring out our longer-term plans for the product with the Facebook team. As usual, we will communicate openly about our plans as they develop–keep an eye on the FriendFeed News group for updates.

What about the FriendFeed API?

The FriendFeed API will also continue to operate normally. As above, we will let you know as we settle on our plan to more fully integrate with Facebook.

Check out the official press release for more information.

]]> http://kara.allthingsd.com/20090810/facebook-acquires-not-twitter-oops-friendfeed-plus-the-full-press-release/feed/ 0 http://kara.allthingsd.com/20090723/liveblogging-at-fortune-brainstorm-tech-aol-ceo-and-chairman-tim-the-plumber-armstrong/ http://kara.allthingsd.com/20090723/liveblogging-at-fortune-brainstorm-tech-aol-ceo-and-chairman-tim-the-plumber-armstrong/#comments Thu, 23 Jul 2009 19:09:01 +0000 Kara Swisher http://kara.allthingsd.com/?p=16371

It did not start out too well for AOL CEO and Chairman Tim Armstrong, with a poll on the screen showing most of the attendees in the ballroom at Fortune Brainstorm Tech voting that the Time Warner (TWX) online unit was either out of juice or irrelevant.

The event, which is taking place over three days in Pasadena, Calif., is packed full of Web and media luminaries, so BoomTown will be sitting in the front row and liveblogging some of the sessions here, such as this one that I did for the session with Bob Iger, CEO of the Walt Disney Company (DIS).

Armstrong did not break any news in the interview with Fortune’s lively interviewer, David Kirkpatrick, relying more on projecting an I’m-in-charge-here attitude and saying confident things like “a challenge is also an opportunity.”

In general, Armstrong tried to be upbeat about the prospects for AOL, which has for too long been the Web’s sad sack of an Internet company.

“We are still in a very large trade wind,” he said, referring to advertisers spending money online. “If someone asked you if advertising [online] is going to go up, I think you would have to say yes.”

To take advantage of that, Armstrong said AOL would be focused on investing “in content systems that connect with advertising systems–that’s a white space we are going after.”

He noted that AOL needs to have the same “plumbing approach” to content that Google (GOOG)–where Armstrong had been a major advertising exec before taking his new job–has had to search advertising.

“You have to take the Silicon Valley approach to content,” Armstrong declared.

Armstrong also talked a little bit about his recent 100-day trip around the AOL empire worldwide and what he got out of it.

“I got a lot of advice from different people about what to do,” he said.

His takeaway, which he will discuss at an all-hands meeting scheduled for tomorrow with AOL staff: “It’s really about strategy. If we don’t have the right strategy, we’re not going to win.”

Which is kind of stating the obvious, but it sounded good.

Armstrong also touched lightly on the issue of getting rid of various assets AOL has compiled over the last several years, like it pricey purchase of the Bebo social networking site.

But some, as I recently reported–such as the Truveo video search service and the information search company Relegence–are staying.

Armstrong also talked of buying, but judiciously–noting to me later that AOL had 900 possible acquisition deals blocked in its pipeline.

Someone call a plumber stat!

Armstrong said he has put a stop to a lot of those deals, including putting the kibosh on a $400 million check he was supposed to sign right when he got there.

It was, as he told me after his interview, a windfall that supposed to go to a big computer maker for a distribution deal, which he chose to pass on.

“Everything has to make sense from a return-on-investment basis for me,” said Armstrong. “It’s that easy.”

And that hard, although he did move the crowd, which was polled with the same questions about AOL’s chances after Armstrong talked.

He got more people in the audience to vote that AOL would “return to health as a major Internet player,” which is–as legions of the company’s leaders have shown–no easy task.

[Photo credit: Brad Markel for Fortune]

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