BoomTown » venture capitalist

Digital Management Musical Chairs: The Tooth-Free Edition

Kara Swisher — Tue, 08 Sep 2009 13:30:00 +0000

Brad Garlinghouse’s appointment to a new job at AOL today as its new communications czar is yet another sign of an interesting trend for those keeping score of the comings and goings of top Internet execs.

Garlinghouse came to the Time Warner (TWX) online unit after a year-long break, preceded by six years at Yahoo (YHOO).

As anyone who watches the digital space knows by now, this kind of management musical chairs is common and never-ending.

In fact, borrowing a quote by IAC/InterActiveCorp (IACI) CEO and chairman Barry Diller from an onstage interview I did with him at the sixth D: All Things Digital conference and switching out Hollywood for Silicon Valley: “[It] is a community that’s so inbred, it’s a wonder the children have any teeth.”

But, given all the movement of late, this insider seat-switching seems more frantic than ever, as allegiances shift, competitors become friends and colleagues become rivals faster than you can tweet.

When he left Yahoo last summer, in fact, the digital chatter was that Garlinghouse would take a job either as a venture capitalist (he had been one once) or helming a start-up (that too, at Dialpad.com).

In fact, sources said, Garlinghouse had been considering two mobile gigs, but opted for helping to try to overhaul a troubled Web giant.

Fixing messes was the impetus of Owen Van Natta, who left a top job at social networking giant Facebook in early 2008 and by the end of the year, headed over to run Project Playlist, a controversial online music-sharing service.

But then he had hightailed it by spring to try his hand at reviving MySpace, as its CEO.

His boss, News Corp. (NWS) digital head Jon Miller, did the same, getting the hook (unfairly to my mind) at AOL several years ago and then creating an investment firm with former MySpace head Ross Levinsohn.

The pair considered being part of a bid to oust Yahoo management in 2008.

Miller’s freedom lasted only until he got an offer that he presumably could not refuse from News Corp. head Rupert Murdoch recently. (Full disclosure: News Corp. owns Dow Jones, which owns this site.)

The list goes on, chock full of ex-Yahoos, in fact.

Its one-time COO, Dan Rosensweig, left the company in 2006, for example, and joined the well-known private-equity firm, Quadrangle Group.

But, soon enough, he was scooped up by Activision Blizzard (ATVI) to run its Guitar Hero division.

Yahoo Network head Jeff Weiner also departed from the Internet giant, in mid-2008, for a stint at two VC firms.

He landed at LinkedIn, the business-networking service where he was named CEO in late June.

Greg Coleman ran Yahoo ad sales until mid-2007 before taking a job at AOL earlier this year, which he lost after it got new management soon after.

At Yahoo, Coleman sparked with former advertising sales head Wenda Harris Millard, whom he ousted. She went onto Martha Stewart Living Omnimedia (MSO) and left there this spring for the Media Link consultancy.

Presto! She is now helping MySpace’s Van Natta fix the social networking site’s ad business.

Current Yahoo U.S. advertising head Joanne Bradford actually came from Microsoft last summer, via her own short visit to the troubled ad start-up SpotRunner.

Former Yahoo search techie Qi Lu now runs digital for Microsoft (MSFT), along with a big gang of ex-Yahoo techies he has recruited.

And Scott Moore is even better at the switcheroo. He was at Microsoft running MSN U.S. content, switched to Yahoo as its media poobah, left last year to consider a start-up and then headed back to Microsoft as head of U.S. content this year.

But former Google (GOOG) execs have also been busy shuttling hither and yon, mostly to innovative start-ups.

Of course, many find refuge at Facebook (COO Sheryl Sandberg, PR major domo Elliot Schrage and many more) and Twitter (GC Alexander Macgillivray and COO Dick Costolo).

Recent departures–such as Sukhinder Singh Cassidy, who landed at Accel Partners for now–are also likely to find new homes soon enough.

And, of course, there’s always Garlinghouse’s new boss, former Google ad head Tim Armstrong, who took over at AOL earlier this year.

We’ll skip former Joost CEO and former Cisco (CSCO) exec Mike Volpi (who is now a VC); former Netscape Communications/short-term VC/ex-banker/current-for-now CBS (CBS) digital head Quincy Smith; and Joanna Shields, who has worked at Real Networks (RNWK), Google and Bebo (which was bought by AOL)–for now.

Because, around and around and around it always goes, as you can see in this funny video below, which I posted previously:

[Musical Chair designed by Jacob Mathew.]

Take That, Twitter! Facebook's Cox and FriendFeed's Taylor Talk About the Deal (But Not BoomTown's $50 Million Guess on the Price)

Kara Swisher — Mon, 10 Aug 2009 20:42:14 +0000

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:

[ See post to watch video ]

AOL Mulls Director Choices for New Board of Spinoff

Kara Swisher — Fri, 10 Jul 2009 13:30:33 +0000

It’s not often these days that you get any kind of public offering in the market for tech companies–so a lot of people in Silicon Valley and elsewhere are looking at the fall spinoff of AOL very carefully.

That’s because, even though AOL is widely considered to be an also-ran by Silicon Valley (same as it ever was, actually, even at the height of its power in the late 1990s), many are very interested in serving on its board.

According to many sources, exactly who will be on what will likely be a 10-12 member board of directors for the company is up for grabs, once it decouples from owner Time Warner (TWX).

Thus, AOL, with Time Warner’s top execs’ involvement, sources said, has compiled a list of about 70 possible candidates–picked, suggested and self-nominated–and is now proceeding to vet them and begin the process of asking people to serve.

It should not be a tough sell. After all, despite its recent struggles, AOL remains one of the major Internet sites, with massive traffic, several well-known products and a large advertising business.

In addition, people seem inclined to see what kind of overhaul new CEO and Chairman Tim Armstrong can pull off and whether the former Google (GOOG) exec can work some magic.

He’s been formulating plans for what stays and what goes in the company as he tries to shine up the apple–or put lipstick on the pig, depending on your perspective–for investor consumption.

That includes keeping the access business, which many thought would be sold off, and putting many of the companies it has recently acquired–including its pricey Bebo social networking site–in a separate ventures unit, which will try to attract outside investment or sell off assets.

The strategy will focus AOL on several key areas, including media, local, “scaled” advertising and communications.

The jury is out on how successful Armstrong will be at innovating at AOL. But with almost zero IPO action and little prospect of any in the near future, it’s about the only such game in town as it moves to what is likely to be an October spinoff.

To help Armstrong sort through the choices, BoomTown is now compiling a suggestion list of fancy names I would recommend, and will do another post on that next, along with a general idea of what stays and what goes.

Until then, here are the broad outlines of what AOL needs to look for in a board:

One media mogul, one consumer electronics exec, one entrepreneur, one publishing exec, one Time Warner exec, one social networking exec, one advertising exec, one entertainment/Hollywood exec, one telecom/mobile exec, one consumer brand exec, one Internet mogul, and, of course, Armstrong.

And, as a definite requirement, given that there are way too many on way too many Internet company boards: No venture capitalists need apply.

New VC Marc Andreessen Speaks About Going to the "Dark Side" and More!

Kara Swisher — Mon, 06 Jul 2009 04:00:22 +0000

It’s finally official: Marc Andreessen has crossed over to what he once called “the dark side” and is now a venture capitalist.

Several weeks ago, BoomTown broke the news that the Silicon Valley legend and serial entrepreneur (pictured here) and his longtime investing partner, Ben Horowitz, had completed the raising of $300 million for a new venture fund.

And, indeed, the new firm–which is made up of just the two of them–is now launched and called Andreessen Horowitz. It has $50 million over the $250 million the pair had initially planned.

In an interview with me last week, Andreessen said that unlike many VC firms, Andreessen Horowitz will invest in companies at any stage of life–from early stage to late–and of any size and in any kind of digital sector.

That will mean about 60 to 80 seed investments, 15 that need following rounds and two to three late-stage companies.

In addition, the firm is able to take large equity stakes in public companies.

“We are unafraid of investing in 400 people instead of 40 people,” said Andreessen. “And we could invest $50,000 to $50,000,000.”

He noted the new firm would aim for areas the founders were more familiar with, such as the consumer Internet and mobile.

One certainty, though, was that the firm would focus on companies led by tech-savvy founders.

“We believe in entrepreneurs and those who live and breathe the tech product that they have created,” said Andreessen.

Andreessen said several major institutional investors–universities, for example–have invested large chunks in the fund, while a spate of tech luminaries has put in smaller amounts.

The quick completion of the fund raising, in the midst of a national econalypse, is a good sign. But the reputation of both longtime entrepreneurs seems to have helped.

Andreessen co-founded Netscape–the iconic browser company that was key to introducing the modern Internet to consumers in Web 1.0–and a lot of other start-ups.

He has also morphed into a mentor to many Web 2.0 entrepreneurs.

Andreessen made news when he announced on the “Charlie Rose” television show in February that he was creating the new fund.

“For the first time in my life, I am crossing over into the dark side,” said Andreessen at the time, in a joke about VCs being like Darth Vader.

Andreessen said he was essentially professionalizing the active angel investing that he and Horowitz had been doing.

Over the last several years, either together or apart, the pair have invested in a large variety of start-ups, such as Twitter, Aliph, Digg, LinkedIn and many more.

Andreessen is on the board of Facebook and an adviser to Twitter too.

Now, as a VC, he is upping the ante. “It’s important to have more capital,” he said. “Sometimes having a huge checkbook is a great thing.”

But, more important, he said, was to develop a knack for investing in successful companies with a fearlessness he said he learned from well-known VC John Doerr.

“John is always swinging for the fences,” said Andreessen. “I want to get into a cycle of backing radical ideas.”

Here’s a video interview I did with Andreessen about his new venture firm:

[ See post to watch video ]

Back to the Future: AOL Goes Local With Two Acquisitions (Including CEO's Company)

Kara Swisher — Thu, 11 Jun 2009 16:29:55 +0000

Adding the final leg of its new strategy to reinvigorate AOL, the Time Warner online unit said it was buying two small local start-ups, Patch Media and Going.

Each acquisition–which focuses on hyperlocal community news (Patch) and events (Going)–is small, about $10 million.

Ironically, local has previously been a big arena for AOL, which launched its Digital City unit with great fanfare more than a decade ago. AOL still runs Digital City, as well as its CityGuide listing offering.

But, in a move that will surely be scrutinized, Patch is a company whose principal investor has been AOL’s new CEO Tim Armstrong. AOL declined to say how much he had invested in the company, but sources said it was less than $5 million.

Armstrong addressed the issue in an internal memo to staff about the deal, noting he would forgo any profits from the AOL transaction for Patch and get back the seed money he put into the start-up in the form of AOL shares:

“On a personal note, I was an early investor in Patch and committed significant dollars to the vision of improving local communities with deeper online information, accountability through journalism, and a platform for communicating. In discussing our local strategy, AOL and Time Warner looked at Patch as a possible acquisition and I recused myself from that process. At the Time Warner negotiated acquisition price, I was in a position to earn a return on my investment in Patch. However, I have decided to forgo any profit from my seed investment in Patch and I have asked to receive just my seed capital in AOL shares once we separate from Time Warner.”

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

In another interesting twist and blast from the past, Boston-based Going was funded–its last investment was $5 million in mid-2007–by two Web 1.0 portal execs, George Bell of Excite and Bob Davis of Lycos.

Both are now venture capitalists–Bell at General Catalyst Partners and Davis an Highand Capital Partners.

Going, which was originally called HeyLetsGo.com, connects its users with events and each other in a variety of big cities, such as San Francisco, Boston, Chicago and New York.

The focus on local will round out Armstrong’s new push for innovation at AOL, the final piece of his ongoing 100-day evaluation of the much-beleaguered company.

Armstrong has been busy in that time in making massive changes to the structure of AOL, sweeping aside its current set-up almost completely as it prepares for a spinoff from Time Warner (TWX).

That spinoff was announced recently and will result in AOL becoming a standalone company.

AOL’s new business strategy under Armstrong includes keeping its longtime access business, which many thought would be sold off, and putting many of the companies it has recently acquired–including its pricey Bebo social-networking site–in a separate ventures unit, which will try to attract outside investment.

The strategy will focus AOL on several key areas, including access, media/content, “scaled” advertising and communications, and now, local.

Local is also a big focus for players like Yahoo (YHOO) and Microsoft (MSFT) again. Yahoo CEO Carol Bartz specifically mentioned adding more community news, especially about local sports, to its offerings, in an onstage interview two weeks ago with me at the seventh D: All Things Digital conference.

Here’s the internal memo and press release about Patch and Going below:

AOLers –

Our strategy to win in the five areas we’ve discussed starts with innovation and passion. Of the five areas, Local remains the largest white space and offers us an ability to improve the lives of many consumers. It’s a space that’s prime for innovation and an area where we already have strength with a local network that reaches more than 54 million UVs a month and a valuable brand in mapping services, MapQuest.

Our vision isn’t just about optimizing what we have–it’s about overhauling how we approach this space, drawing on our legacy of connecting communities and our long history of organization through DMOZ. It’s about taking one of the most disaggregated experiences on the Web today and making it truly quick and easy for consumers to find the local information they need.

Today, we’re announcing two acquisitions that will enable us to better serve audiences by providing experiences that are highly focused on users’ own neighborhoods–Patch and Going.

Patch.com was built to provide local towns with a robust and interactive platform to publish news and information, with full-time journalists for each town covering government affairs, education issues, and community events. One of the AOLers in our All Hands meeting on May 29 asked what our plan is to help towns, like his, where the local newspaper has gone out of business. Patch is an acquisition that may eventually help that town. Under the leadership of co-founder and CEO Jon Brod, Patch has been able to launch five initial town sites since February and has just announced four additional communities. Moreover, Patch has already received over 230 user requests for “Patches” spanning 39 states and 12 countries.

The second acquisition is a small company located in Boston–Going. Going has developed a local events platform to discover and share information about things to do in a number of leading cities across the country. Under the leadership of CEO Evan Schumacher, Going has launched sites in 30 cities–including New York, Chicago, Los Angeles and Miami–and provides users with RSVP tools and advertisers with self-service event advertising.

On a personal note, I was an early investor in Patch and committed significant dollars to the vision of improving local communities with deeper online information, accountability through journalism, and a platform for communicating. In discussing our local strategy, AOL and Time Warner looked at Patch as a possible acquisition and I recused myself from that process. At the Time Warner negotiated acquisition price, I was in a position to earn a return on my investment in Patch. However, I have decided to forgo any profit from my seed investment in Patch and I have asked to receive just my seed capital in AOL shares once we separate from Time Warner.

Overall, I believe both Patch and Going will add strength and talent to our local efforts and give us an ability to have a unique and defendable local offering that helps people improve their lives. I’m excited that we’ve reached the stage where we can begin implementing in our five key strategy areas, and with today’s announcements we’re off to a great start in Local.

Please join me in welcoming the employees of Patch and Going to AOL and the future of AOL Local. –TA

AOL Acquires Two Local Services, Patch and Going

Acquisitions Add to AOL’s Leading Network of Local Services with a Community-Specific News and Information Platform and a Local Event Platform

NEW YORK, NY–June 11, 2009–AOL today announced two acquisitions in the local space: Patch Media Corporation, http://www.patch.com, a local news and information platform aimed at serving local towns and communities and Going, Inc., http://www.going.com, a local platform for people to discover and share information about things to do in a number of leading cities across the country. Both Patch and Going offer local experiences, content and self-service applications for consumers and advertisers.

“Local remains one of the most disaggregated experiences on the Web today–there’s a lot of information out there but simply no way for consumers to find it quickly and easily,” said Tim Armstrong, AOL’s Chairman and CEO. “It’s a space that’s prime for innovation and an area where AOL has a significant audience and a valuable mapping service in MapQuest. Going forward, local will be a core area of focus and investment for AOL. The acquisitions of Patch and Going will help us build out our local network further with excellent local services that enable people to stay better informed about what’s going on in their neighborhood.”

The acquisitions extend AOL’s network of local services, the largest online local network,* reaching more than 54 million total unique visitors per month.** Both acquisitions also leverage a consumer and marketplace trend toward greater consumption of news and information online.

A recent survey by the Pew Research Center for the People & the Press found that more people now say they get most of their news from online sources than from traditional newspapers (40% vs. 35%).***

In addition, local searches grew 58% in 2008 year over year, while overall searches climbed just 21%, according to research conducted by the Yellow Pages Association in March 2009.

Local advertising (online and offline) represents an approximately $103 billion market (approximately 39% of total U.S. ad spending), according to Borrell Associates in 2009.

Founded in December 2007 and headquartered in New York, Patch combines localized, professional journalism with community contribution and a platform that puts all town assets online – in effect, digitizing the community. Patch, which expects to be available in a dozen communities by the end of the year, currently has “Patches” in five communities with four more in development.

“We are excited to join the AOL family,” said Jon Brod, CEO of Patch. “AOL’s substantial network will help us extend the reach of Patch into more and more communities. And Patch, as part of AOL’s local strategy, will create new opportunities for AOL to delight consumers and provide marketers access to highly targeted and deeply engaged audiences.”

Launched in September 2006 and headquartered in Boston, Going is one of the leading local communities for 20-somethings looking for things to do in cities across the country. Going is available in 30 leading U.S. cities, including New York, Los Angeles, Chicago, Miami and Boston, with several more planned this year. Going also provides local promoters, event organizers and venues a fully automated, self-service RSVP, ticketing and advertising engine to maximize the attendance and value of their events.

“Going allows young people in leading cities to discover upcoming events, parties and new hot spots – and most importantly connect with others who share a similar lifestyle. By joining with AOL, we have the opportunity to greatly expand the reach of our platform to more cities both in the U.S. and around the world,” said Evan Schumacher, Going’s CEO.

“AOL has a legacy of connecting people to the content, community and services they care most about,” said Armstrong. “Patch and Going, combined with our existing network, will enable the company that got America online, to connect consumers around the globe to their communities online.”

* April 2009 U.S. comScore Media Metrix; Local Networks category is a custom built category by AOL.
** Custom AOL-defined Local Networks report, based on comScore U.S. Media Metrix Audience Duplication report (April 2009).
*** Pew Research Center for the People and the Press, “Internet Overtakes Newspapers as News Outlet,” December 2008.

Liveblogging the Steverino (Ballmer) Show at Stanford: Soul Mates!

Kara Swisher — Wed, 06 May 2009 23:40:30 +0000

BoomTown went down to Silicon Valley’s most exclusive country club–also known as Stanford University–where Microsoft CEO Steve Ballmer took to the stage today for a talk at Memorial Auditorium for the Entrepreneurial Thought Leaders Seminar.

4:32 pm PDT: Ballmer was pretty much on time, delivering a rousing hello and some good words about being back. He had attended Stanford Business School many moons ago, before dropping out and joining Microsoft (MSFT). Good move, I’d say.

He offered anyone in the room jobs, if they were smart, and then gave out his email. Although he did leave out the pertinent fact that the software giant just laid off 3,000 workers earlier this week.

Well, that.

Then, Ballmer launched into his speech, which began with him talking about the “tough economy.”

The slide behind him was a picture of a glass half-empty or half-full, depending on your attitude, with the notes:

Economic “Reset”

Less debt, more innovation and productivity.

Optimistic about the future.

4:40 pm: Ballmer then told his “entrepreneurial” story. There was a lovely picture of the young Ballmer with some hair. Not much, but some.

Lots of chatter about old computers ensued. Zzzzzzzz.

The early days of Microsoft were next, including how founder Bill Gates was worried about how Ballmer would bankrupt the nascent company by hiring more staff, a delightful story the pair told at our D: All Things Digital conference last year.

4:46 pm: Then the “emerging technology trends.”

Which are, according to Ballmer: many-core processing; screens everywhere; natural UI; all content digital.

Like All Things Digital! I always knew Steve and I were soul mates!

Because it is Microsoft, he moved into “software-powered experiences,” which means, according to Ballmer’s slide: a rich client + cloud, spans multiple devices and is persistent and personal.

“You world needs to be brought together,” said Ballmer. “You may not want to manage the cacophony of devices you deal with today.”

I may not. Or I may. Ballmer, may I?

4:55 pm: It was not a long or much of a content-rich speech. Ballmer wrapped up with the idea that “The Time Is Now.”

He noted that it is a great time for start-ups, with “all the right ingredients” that “dream big.”

What ingredients? What dreams? Ballmer was not saying much about his secret cooking tips for baking a tech behemoth.

4:57 pm: Time for questions from the students.

The first was about whether big- or small-company experience is better.

Both, said Ballmer. Depending on the problem. “You want to blend those things pretty well,” he said.

It is all about the ingredients! And blending. Also sifting, in my humble opinion.

The next question was about the state of the browser business.

Ballmer said it will get more innovative. We’re waiting!

The next was about what the main problem typically is with companies that have trouble making it.

“Too many companies can actually hang on for almost too long because there has been too much money funding these ideas,” said Ballmer.

Yes, we are soul mates!

5:04 pm: The next question was about the culture of a company from its start and how Ballmer has shaped Microsoft’s culture.

“I would say I have shaped Microsoft culture a lot,” he said. “Sometimes for the better, sometimes worse.”

Ballmer compares himself and Gates to “parents” of Microsoft.

That was very Iowa of him.

(As I said: soul mates!)

5:09 pm: The next question was about how he decided to leave Stanford Business School.

“They still have a spot for me if I want to go back and finish my MBA,” Ballmer joked.

But, he noted, it was not much of a risk to leave school.

When Ballmer did waver about going back to school, Gates convinced him to stay. Thank goodness, as he said he would have become an investment banker or a consultant.

The next question was about Google (GOOG), which was not named, I suppose for fear that it would set Ballmer off and there would be chairs a-flying.

“The No. 1 player [in search] is a lot bigger than us,” said Ballmer. “We are like a start-up.”

Well, a really, really, really rich start-up, which has been sued by the federal government for antitrust violations, and convicted.

5:14 pm: The next question was about ideas he might have missed.

Ballmer called himself “a mini-venture capitalist,” noting that figuring out what investments to make is tough.

He joked about the disastrous Microsoft Bob product. That always gets a laugh.

The next question was about how much attention Microsoft will give to cloud computing.

It gave him the chance to make a pun using the movie, “Three Men and a Baby,” noting that the “future is about three screens and a cloud.”

Ahahahahahahaha! Okay, not at all.

A question was asked about taking risks and tips for dealing with it.

“Valuable experience is valuable experience,” said Ballmer.

Say what? Is that a word puzzle? This is starting to feel like “Angels & Demons.”

Ballmer advised the students to “love doing the work that you’re doing.”

It is apparently all about the love at Microsoft. Who knew?

5:22 pm:

Two questions about consolidation, which is code for Yahoo (YHOO).

“I’m glad we went down the road,” said Ballmer, waxing nostalgic about the failed takeover attempt.

But he added he still thought a partnership of some sort between the pair is a good idea. “There may or may not be appropriate discussions,” said Ballmer.

There may. Or may not. Carol, may Steve?

Then there is some love for competitors, Facebook, even Apple (AAPL) for the iPhone.

Feel the love!

5:25 pm: The last question is about what he wished he had done if he could do it over.

He would have taken more computer science courses.

We are so not soul mates.

Silicon Valley Start-Up Whisperer (And Twitter Investor, Natch) Sacca Speaks!

Kara Swisher — Mon, 04 May 2009 12:28:49 +0000

Since leaving Google (GOOG) several years ago, where he last worked on wireless spectrum issues, it’s hard to say exactly what role the digital jumping bean who is Chris Sacca plays.

He’s not an entrepreneur, although he seems to know all of them in Web 2.0 world and advises 18 start-ups. He’s no longer a big-company exec, although he was one and knows a lot of them too. He’s not a venture capitalist, although he is involved in a private equity firm and invests in a lot of the start-ups he advises, like the red-hot Twitter, and knows those guys too.

Of course, Sacca blogs and tweets a LOT, even as he travels incessantly to Ethiopia, Dubai, and various places where Bono might be hanging.

(Thus, don’t miss this very funny mocking of Sacca’s tweets under the name fakesacca, reportedly done by Googler Dick Costolo, with pitch-perfect tweets like: “Wow, not sure what city i’m in. The food says London, the prices say Tokyo, and the women say Los Angeles. I’m going w/ Hong Kong,” “Going over my SXSW talk on ‘why I should have equity in your startup.’ Getting inspired just proofreading it” and, my personal favorite, “If you’re pole-dancing & heli-skiing & in the ny times w/in 12hr of each other, something has either gone horribly wrong or horribly RIGHT!”)

With all this dabbling Sacca does, BoomTown has decided to dub the Silicon Valley gadfly: The Start-Up Whisperer.

Here is my video interview with him, about those start-ups like Twitter and about what’s next in tech innovation, all while a lovely piano player at San Francisco’s Zuni restaurant tinkled in the background:

[ See post to watch video ]

Entrepreneur-Turned-VC Satish Dharmaraj Speaks About His Very First VC Investment!

Kara Swisher — Mon, 27 Apr 2009 13:00:18 +0000

Little known factoid: Every time a penny drops onto a start-up, a venture capitalist gets his wings.

Well, OK, not so much, but it’s one way to look at it.

An example of that, though, is this video interview I did with serial Silicon Valley entrepreneur Satish Dharmaraj, who has been on the ground floor of a number of tech start-ups–such as Zimbra, which sold to Yahoo (YHOO) for $350 million in late 2007–and has now made his first investment as a new VC.

It’s in virtualization company VMOps, which was founded last year. VMOps, according to its Web site, “develops software that allows companies to launch an elastic computing cloud and offer it as a service to end-users.”

Dharmaraj left Yahoo early this year.

But he decided not to start another company, instead opting to take a spot as a partner at Redpoint Ventures. There, he is focusing on business software, the enterprise arena and infrastructure.

It’s an interesting move for an entrepreneur like him since way too few VCs have started companies and because it will be interesting to see how a more experienced operator like Dharmaraj does.

Here’s the interview, where we talk about all that and more:

[ See post to watch video ]

Microsoft's Man in Silicon Valley, Dan'l Lewin, Speaks!

Kara Swisher — Thu, 12 Mar 2009 17:07:47 +0000

A few weeks ago, BoomTown had lunch at Microsoft’s Silicon Valley campus in Mountain View with Dan’l Lewin, the software giant’s corporate VP for strategic and emerging business development.

In other words, Microsoft’s friendly face in the Valley, in charge of its operations there, which has about 2,000 employees.

Most of them work for other Microsoft (MSFT) divisions, leaving Lewin primarily responsible for the company’s relationships with start-ups, venture capitalists and industry partners.

It has, for example, relationships with Web 2.0 players like Digg and Facebook of late (pricey friendships, but friendly nonetheless). And it bought Tellme several years ago.

But Microsoft is not much of a big acquirer and has long been portrayed as Silicon Valley’s nemesis.

But times change and that image has been slowly shifting as its hammerlock of power has lessened with the surge of important players like Google (GOOG).

Lewin attributes that to more predictability from Microsoft (translation: not coming down like the Visigoths and pummeling folks without warning).

Unlike many Microsoft execs, Lewin has worked all around the tech industry, including at Apple (AAPL), NeXT Inc. and GO.

Here’s my chat with Lewin, where we talked about all that and more:

[ See post to watch video ]

There's No Biz Like No Biz at Twitter! (And Will Google Swoop In Before It All Comes Crashing Down?)

Kara Swisher — Fri, 13 Feb 2009 22:41:58 +0000

Since BoomTown constantly called the $15 billion valuation of Facebook “insane” when Microsoft (MSFT) forked over $240 million in 2007 and gave Slide’s Max Levchin a very hard time when his widget company got a $550 million valuation a year ago, it’s only fair that I say something equally appropriate about Twitter.

The hot microblogging service just got its very own $250 million valuation, all without a dime of revenue in sight. (I know, Bijan, it’s coming, it’s coming!)

After all, Facebook and Slide got their funding in boom times and here we are hurtling toward a possible Depression: The Sequel, even as Twitter hauls in $35 million more in investments.

But I am torn.

Should it be “WTF?” given that the current economic meltdown really seems to have little impact on Silicon Valley venture capitalists?

I guess they have to put their money somewhere and that’s probably the best choice out there, due to Twitter’s strong growth and, perhaps more importantly, overhyped media mindshare.

Or maybe: “Don’t Stop Believin’!!? I mean, you almost have to admire the appalling suspension of disbelief for Benchmark Capital and IVP to hand over such a sum.

In fact, they are probably right now down at at Il Fornaio in Palo Alto, telling everyone who will listen that Google (GOOG) was founded in the last tech downturn.

Actually, I think the only thing to say is to reference the search giant: “Let’s hope Google has another YouTube moment and decides it must own the start-up pioneering real-time search and status updates no matter the price.”

That’s kind of long, so I will distill it to this Calgon-inspired thought: “Larry and Sergey, take me away!”

Because while I appreciate that Twitter co-founder Biz–I can’t help it, but I laugh every time time I write his name in relation to a company that makes bupkis–Stone underscored that the company was ready to make some money using the new funding, an acquisition by a big, nervous Internet giant is the only way this is going to end well.

In his post, ironically titled “Opportunity Knocks,” Stone noted, “We are now positioned extremely well to support the accelerating growth of our service, further enable the robust ecosystem sprouting up around Twitter, and yes, to begin building revenue-generating products.”

That would be nice, because right now, there’s no Biz like no biz.

And not to sound like a skunk at this Silicon Valley garden party, but Twitter might want to start doing that sooner than later.

I know, I know, I am such a bummer with all this talk of things not just growing to the sky in a world without end.

But as Facebook–valuation now officially $3.7 billion, although probably more if it were to be sold–has found out, the delta between dreamy funding and revenue reality can be quite huge.

And, by that, I am not saying it can’t be done, I am simply saying: Do it.

Until then, here is a lovely Calgon commercial and also a video of that amazing last scene in the finale of “The Sopranos” with the Journey song playing until it is abruptly cut off (I say Tony was shot in the head by the guy in the bathroom, but please weigh in):

Huffington Post Nabs $25 Million in Funding–Here's a BoomTown Interview With Oak Investment's Fred Harman

Kara Swisher — Mon, 01 Dec 2008 11:53:26 +0000

The Huffington Post will announce this morning that it has raised $25 million, in a single investment from Oak Investment Partners.

The large round by Oak, which was led by Palo Alto, Calif.-based venture capitalist Fred Harman, will give the popular online news and blog site a valuation of just “south of $100 million,” a source said.

The new funding, the Huffington Post’s third, will be used for expansion of its offerings and the hiring of editorial and business talent.

“There is an inevitable shift from offline to online with people increasingly getting their news media online, and this election proved how powerful the Huffington Post could be,” said Harman (pictured here), in an interview with BoomTown. “And I think the post-election perception of the Huffington Post has changed in the eyes of advertisers to being a key mainstream news site.”

Indeed, the Huffington Post–which is now billing itself as ‘”The Internet Newspaper”–has been hitting on all cylinders during the current election season.

And it hopes to continue building that momentum into the Obama administration, which will give the liberal-leaning site a lot of advantages in coverage.

The Huffington Post has also become a powerful news aggregator, much as the more conservative Drudge Report has, sending traffic all over the Web from its site by linking with a variety of online sites. It also has a strong offering of high-profile bloggers.

But the site’s leaders are also hoping its traffic strength will allow it to be as strong in arenas outside of its flagship political arena, including in business, local, “green” and investigative news.

It will also use the money to make acquisitions, the company said in a press release about the funding, which it put out this morning.

It’s certainly a long way from May of 2005, when its high-profile co-founder, Arianna Huffington, was roundly mocked for launching the site. Today, she has seen her power grow as the site’s traffic and influence have.

The site’s namesake operates out of her California-based office in Los Angeles, while the company has its HQ in New York.

The Huffington Post’s traffic in September 2008, for example, quadrupled from a year before to 4.5 million unique visitors, according to comScore (SCOR). That performance made it the No. 1 “stand-alone political blog and news site,” besting Drudge.

“The cycle of print media is accelerating downward and there are not as many companies with a balance sheet and focus to do it right online,” said Harman, who will join the Huffington Post’s board. “The news market is really up for grabs in a lot of ways…and it is a good time for those who are viewed as authoritative.”

But, like a lot of advertising-reliant businesses, the Huffington Post is also facing a tough market and must show it can compete under more dire economic circumstances and build a sustained and profitable business.

This slug of money should give it a lot of room to do so, said Harman, who has invested in several digital media companies, such as Demand Media and Federated Media. He was also one of the lead investors in aQuantive, the digital advertising business that was bought by Microsoft for $6 billion in 2007.

“Who knows how deep this economic situation is going to be,” said Harman, who noted that he and others kept investing in aQuantive through the last Web downturn. “But strong companies that keep investing through a bad cycle can emerge as winners.”

Previous investments in the Huffington Post have totaled about $12 million. That funding has come from Softbank Capital and Greycroft Partners, as well as seed money from co-founder Kenneth Lerer and former AOL exec Bob Pittman.

Funding reports about the Huffington Post appeared about a week ago in the Times of London, with the post claiming a $15 million investment and expansion into investigative and local news.

But the most detailed posts were done by paidContent, which was the first to name Oak as the new investor and said the round was $20 million.

A Picture's Worth a Thousand Words–So What Does a Big Smile in a Layoff Story Mean?

Kara Swisher — Mon, 27 Oct 2008 16:42:04 +0000

Maybe: Happy days aren’t here again?

BoomTown always enjoys chatting with the always sunny Loïc Le Meur of Seesmic (and will, in fact, be appearing at his Paris-based digital conference in December, called Le Web).

But I am not quite sure what to make of his big, happy smile that was in this picture above (click in the image to make it larger), which went with a story in the New York Times about start-ups cutting costs.

In fact, the whole Seesmic crew is grinning awfully hard, putting a very game face on recent layoffs that cut the staff at the video blog service by more than a third.

Money–or, more accurately, non-money–quote from the Times piece:

“To preserve cash, many tech start-ups are rushing to lay off employees and cut expenses. They are shelving their dreams of Google-size riches and getting small, humble and thrifty, all with the more modest goal of surviving the coming economic winter.”

In a less puritan mode, Seesmic raised $6 million in May from a bunch of high-profile angels, of $12 million total.

They include LinkedIn’s Reid Hoffman, former AOL head Steve Case, SoftTech VC Jeff Clavier, entrepreneur Mark Pincus, former Goldman Sachs analyst Michael Parekh, entrepreneur Ariel Poler, investor Ron Conway, FON founder Martin Varsavsky and an investment group called Atomico founded by Skype founders Niklas Zennström and Janus Friis. Tech bloggers Jeff Pulver, Michael Arrington and Dan Gillmor have also invested.

Now, Le Meur is trying to stretch his dollars in the economic downturn, spurred by venture capitalists who have been pressing entrepreneurs like him to do so.

“If I can’t make this work in three years it will be a failure,” Mr. Le Meur said to the Times. “If I can and I get through this, it will be much stronger.”

In other words, what doesn’t kill us …

C’est la vie in Silicon Valley!

But in more bon-vivant times, back in February, I did a video post on my happier visit to Seesmic’s San Francisco HQ.

(Note: Many in the video are no longer at Seesmic and neither are the shows discussed, as well as the now-defunct Web 2.0 sentiments about growth without revenue.)

Here’s the video:

[ See post to watch video ]

Image Credit: Jim Wilson/New York Times

Irony Alert: Bubble-Making Venture Capitalists Start Popping Them

Kara Swisher — Thu, 09 Oct 2008 08:47:55 +0000

Is it just me or does the sudden prospect of venture capitalists–the very investors who fueled the Web 2.0 valuation insanity with their typically egregious overfunding of start-ups–lecturing about the bleak economy and the need to tighten belts seem just a tad ironic?

It’s kind of like Washington politicians who handed out-of-control bankers one deregulation after another in exchange for campaign donations now mounting their high horses and decrying Wall Street greed in the current economic meltdown.

And yet, just like that, Silicon Valley’s investors–who could spin you all the way to next Sunday about how Facebook was actually worth $15 billion, despite not having much revenue quite yet–are turning into penny-pinching accountant types.

As reported by Om Malik of GigaOm in a piece titled “Sequoia Rings the Alarm Bell: Silicon Valley Is in Trouble,” for example, Sequoia Capital–one of tech’s most powerful and successful VC firms–held a meeting where it told its portfolio companies that the downturn was quite serious and advised them to start cutting costs.

Apparently, there was even a picture of a gravestone with “R.I.P.: Good Times” displayed at the gathering, in case the start-ups did not get the sledgehammer message. (And here is an update on the meeting by Malik.)

The last time Sequoia did this was when the Web 1.0 bubble was popping in 2000.

The same communication was also sent out to entrepreneurs by angel investor Ron Conway then, and now yesterday again.

The typically jovial Conway (pictured here) sent out a grim email to the start-ups he is invested in, advising they lower their burn rate to get ready for the tough times ahead.

Wrote Conway: “Unfortunately history DOES repeat itself but I hope we can learn from history and prevent the turmoil from occurring again. The message is simple. Raising capital will be much more difficult now … the name of the game in this environment in some respects is survival–survival until conditions change.”

Now he tells us!

In all seriousness, these kinds of prescriptions should have been front and center when times were presumably good, especially after the first orgy of Internet frothiness ended with such a thud.

Instead, the all-trees-grow-to-heaven attitude, the massively inappropriate valuations, the revenue-what-revenue strategies have been pushed on entrepreneurs in this cycle by too many VCs, most of whom should have known better.

And, while it is right for Sequoia and Conway to sound the alarm, I expect all the VCs who touted loudly will now climb aboard this somber bandwagon.

Because, after handing over too much money to start-ups like drunken sailors on shore leave, it is apparently now Sunday morning and time for a little salvation.

But not completely, of course, since this is still an industry where the dreams of hitting it big never die.

After I jokingly called Conway “Oh voice of doom and gloom” after reading his email, he quickly wrote back: “NO WAY DOOM AND GLOOM. I think innovation in the Valley will continue to thrive and I will continue to invest.”

Of course, Conway will. It wouldn’t be Silicon Valley if he didn’t.

And to raise your spirits from these wet-blanket VCs, here’s a video of Mike Settle singing the classic “What Shall We Do With the Drunken Sailor”:

Kara (and Walt) Visit DEMOfall!

Kara Swisher — Tue, 09 Sep 2008 08:18:11 +0000

Walt Mossberg and BoomTown are in San Diego for DEMOfall, which is one of two big tech start-up demo conferences taking place this week (the other is TechCrunch50 in San Francisco).

At both conferences, a passel of start-ups come to show off their wares to an audience of media, venture capitalists and one other.

The big focus at DEMOfall this year has been on social networking, mobile technology and cloud computing–three of the big Web 2.0 trends–although I liked the company that can make a stolen cellphone sound like a really annoying car alarm.

Walt and I also appeared here this afternoon onstage in what was called “Head-to-Head,” a feature we hope to debut on this site soon.

Essentially, the idea is to discuss and debate the top tech issues of the moment, although it was not meant to be a wrestling match between Walt and me (perish the thought!).

Thus, we interviewed each other–much as we do tech leaders on the stage of our D: All Things Digital conference.

Yesterday’s topics included the Google new Chrome browser, the growing power of the search giant, business prospects for social networking and the future of cellphones.

(I also did a decent impression of Alaska Governor and Republican Vice Presidential candidate Sarah Palin, but that’s another story.)

It will all eventually be available on DEMOfall’s Web site soon, but here’s my video about the conference so far:

[ See post to watch video ]

Kara Visits AlwaysOn's Venture Summit East!

Kara Swisher — Wed, 09 Apr 2008 07:05:46 +0000

Yesterday, I moderated a panel at AlwaysOn’s Venture Summit East in Boston, called “Is There Still Upside in the Internet?”

Short answer: Always and forever, as long as there are venture capitalists with bags of other people’s money and enough rat holes to shove the cash down!

In all seriousness, it was a great discussion, centering on the lack of exit for start-ups via IPO, the slowing down of the M&A scene and a need to build businesses that have strong revenue outlooks.

As to hype? Social networking, of course! And underhyped? Mobile.

The panelists included: David Kidder, CEO, Clickable; Waikit Lau, Co-Founder, ScanScout; Bob Davis, General Partner, Highland Capital Partners; David Beisel, VP, Venrock; and, one of my personal favorite VCs and charmingest Yahoo (YHOO) board member, Eric Hippeau, Managing Director, Softbank Capital.

I gave Hippeau a teeny hard time about the MicroHoo situation (essentially, WTF!!?). He deftly ignored me and made the most salient point of the panel about the continuing transformative power of the Web.

(Thus, shaming me for my tiny-minded, here-and-now focus! Well, I was only ashamed just for a second, but it was a really long second!)

Here’s the video with interviews with Hippeau and others, including conference organizer Tony Perkins:

[ See post to watch video ]