All about the Benjamins, or How Mark Zuckerberg cemented control of Facebook $100 at a time
One hundred dollars doesn’t go very far these days.
But for Facebook co-founder Mark Zuckerberg, a C-Note was the key to cementing his control over the social networking phenomenon.
As we learned last week when Facebook filed its prospectus for a $5 billion initial public offering, Zuckerberg has the voting rights to shares owned by some of Facebook’s biggest stakeholders, including venture capital firm Accel Partners, Digital Sky Technologies and former Facebook President Sean Parker.
In an amended filing on Wednesday, Facebook provided a little more color about the agreements that contributed to Zuck’s controversial control of 57 percent of the company’s voting shares.
Most intriguing was the price that Zuckerberg paid each of the various shareholders in exchange for handing him their voting rights: $100 in cash.
That’s not a typo.
One hundred bucks may seem like a pittance for such an important right. But it’s possible that the $100 payment was merely a formality, and that forfeiting voting rights to Zuckerberg was the real price of admission for (the raging horde of) investors seeking to buy into Facebook.
Is Zynga’s lead slipping on Facebook?
Electronic Arts, the second-largest video game company in the U.S., is stealing market share away from Zynga, the top dog in social games on Facebook, according to a new report on gaming behavior.
The report, released on Wednesday, is based on data that tracks the game play of more than 10 million users of Raptr, a website that automatically tracks its users’ video game activity on Facebook, consoles and PCs.
“EA has stolen 10 to 25 percent playtime from Zynga’s top games,” the report said.
Since the launch of Sims Social, EA’s Facebook game that has more than 66 million monthly active users, Zynga games such as FarmVille, CityVille and Empires & Allies have all lost players, the report shows.
To be sure, Zynga still dwarfs EA’s users on Facebook by more than 2-1 according to the website AppData.
The report comes a day after Zynga unleashed a barrage of games upon its rivals and gave a sneak peek of a mysterious new platform called “Project Z” that could reduce its reliance on Facebook.
One of the key finding is that EA succeeded in bringing players of the Sims franchise to its Facebook game “but more impressively they were able to capture market share from Zynga.” EA can also tap games from PopCap, the company it bought over the summer, such as Plant vs. Zombies and Bejeweled 3 to start releasing more games on Facebook, it said.
I agree with most of Zyngas moves..I can’t wait to play Karma Kingdom on my Ipad.
Zynga herding its users like sheep from game to game: data
Social games company Zynga is adept at converting its current players to its new games, just as smoothly as some of the top video game franchises like Call of Duty, according to a new 21-page report by the game tracking service and social network Raptr.
The report takes into account more than 3 million Zynga players who use Raptr’s game tracking applications.
“If Zynga were to release a new game tomorrow, our data reveals that 90 percent of users of that new game will come from an old game,” said Dennis Fong, Raptr’s co-founder.
While 90 percent is such a high conversation rate any company might strive to that target, it also means that Zynga could cannibalize its users if it doesn’t find new players.
“A 90 percent average means that only 10 percent of its users are new,” Fong said. “Zynga has its pool of players, which is admittedly very large and they are basically just herding them around from game to game. Where is their growth going to come from? That’s a big question mark.”
The report is full of nuggets that could give potential investors in Zynga’s IPO a better picture of how people are playing social games. It shows that Zynga players play up to 8 sessions a day and that those sessions are 5 minutes long. Gamers are playing hardcore games on consoles and PCs like Call of Duty and World of Warcraft for longer periods of time, but for fewer sessions.
UPDATED: News Corp’s new independent director Breyer not so, says investor
Updated with official News Corp response below.
We don’t know what quite to make of this but CtW Investment Group, a union-affiliated shareholder lobbyist, is raising a stink about News Corp’s new independent director appointment, Accel Partners’ Jim Breyer.
CtW, which claims its affiliations represent pension funds of some 5.5 million Americans or some $200 billion in assets, says Breyer, a venture capitalist best known as an early investor in Facebook, isn’t as independent as the board claims.
In a 1,400-word letter addressed to Viet Dinh, chair of News Corp’s nominating & corporate governance committee, CtW lists a range of claims about Breyer’s relationships with News Corp, the Murdochs and his record as a director with major names like Wal-Mart and Dell.
A few highlights include:
- News Corp’s “close business relationships” with Accel Management Inc, of which Breyer is a partner
- An Accel investment in a MySpace subsidiary that employed Wendi Murdoch, wife of CEO Rupert Murdoch
Accel pumps $60 million into Atlassian. Who?
What do Facebook, Shell and Pfizer have in common?
They all use software by Atlassian for product development. The Atlassian name may not have the same familiar ring to it as heavyweight software players like Oracle or Salesforce.com, but the company just got a major endorsement from Silicon Valley venture capital firm Accel Partners.
Accel invested $60 million in Atlassian on Thursday, representing the firms’ largest single-round bet on a company in nearly a decade.
The cash infusion should allow the 8-year old Australian company to ramp up its international expansion, make some acquisitions and provide liquidity to employees, said Accel partner Ryan Sweeney, who led the investment along with Accel partner Richard Wong.
Atlassian, whose products allow companies to collaborate on product development and do things like track bugs, generated $59 million in its fiscal 2010 and has been profitable from the get-go, , according to Accel.
Accel isn’t saying how much equity it got for its $60 million other than to note that the VC firm now has a minority stake in the company and a board seat.
As for a potential exit?
from Summit Notebook:
Even the best VCs strikeout — a lot
Got access to a couple million bucks and want to be a venture capitalist? A miner of start-up business gold? Then get used to being wrong.
That's one lesson we learned during a discussion with Venture Capitalists at the Reuters Technology Summit: even the most successful investors -- those who finance the bandwagon others jump on when it comes to the likes of Facebook, Myspace and Twitter -- meet with entrepreneurs, like what they hear, write a check, and watch the investment go up in smoke.
Rich Wong, partner of Accel Partners, an investor in social networking site Facebook and mobile advertising network AdMob, the rate of picking winners is much like baseball batting averages, where top players like Joe Mauer, Albert Pujols or Ichiro Suzuki do not get a hit 7 of every 10 times they come to the plate.
You can bat .300 or .400 and you are doing really well (even though) you are wrong a reasonable percentage of the time.
So how do I know where to invest my million? For sure, it takes heady research and years of experience, but sometimes its about a vibe. Wong says:
For me, a phrase that i have in my head is "the authenticity of the entrepreneur." Do I like the entrepreneur? Do they actually understand the problem statement in an authentic way that they say they are trying to solve? (They could be failures because the market will evolve and competition pop up) but if they really understand the customer base or the core technology or the problem they are trying to solve, then they are going to have a better ability to navigate their way through it.
But then we still bat .300 or .400.
from Summit Notebook:
VC’s Lament: the ones that got away
Whether it’s passing up on a ticket to Woodstock or not buying Apple stock at $80 a share in January 2009, everybody has regrets.
So what do VCs regret?
We asked the panel of three money-men gathered for the VC Panel at the Reuters Technology Summit for their biggest laments when it comes to the deals they let get away.
“For me the one that comes to mind is AdMob,” said Khosla Ventures partner David Weiden, referring to the mobile advertising firm that Google announced plans to acquire for $750 million in November.
“I talked to Omar (Hamoui, AdMob’s founder and CEO) when he was one employee and spent a bunch of time with him early on and then we didn’t end up doing the investment together and I absolutely regret that,” he said.
Of course, with the Google acquisition now being held up by regulators, AdMob could end up remaining independent after all.
Accel Partner’s Richard Wong did take a chance on AdMob, with Wong now sitting on the company’s board of directors. Wong’s biggest regret has to do with Siri, a maker of voice-activated smartphone software for handling personal tasks that was recently acquired by Apple for an undisclosed sum.
Google loses another executive
Another high-level Google executive is jumping ship.
Sukhinder Singh Cassidy, president of Asia Pacific and Latin American operations at Google, is joining venture capital firm Accel Partners as CEO-in-Residence.
Singh Cassidy, a six-year Google veteran, was responsible for Google’s commercial operations across 103 different countries in APAC and Latin America, according to an announcement by Accel Partners.
Singh Cassidy is no stranger to Accel Partners: she co-founded an online finance start-up in the late 90s called Yodlee, which was backed by the venture capital firm.
Her move comes one month after Tim Armstrong, president of Google’s Americas Operations, took the top job at AOL.
After Armstrong’s exit, there was speculation in the blogosphere that Singh Cassidy would fill his shoes. But Armstrong’s job ultimately went to another Google exec, Dennis Woodside.
High-level departures have been relatively rare at Google, with Armstrong and Sheryl Sandberg – who took the Chief Operating Officer position at Facebook – as two other biggies.
