MediaFile

OpenX opens kimono to reveal financials – prepwork for an IPO?

It’s the season for getting a peek at private Internet companies’ financial results.

Wall Street is still chewing over Facebook’s recently revealed numbers, and on Monday, OpenX Technologies, a private, venture-backed online ad company, served up some financial gristle of its own.

The company, which provides an online ad exchange as well as ad server technology, said that it is now on track to generate more than $100 million in revenue on an annualized run rate basis and that it became profitable in the fourth quarter of 2011.

And it said it expects to profitable in 2012.

The move comes a few weeks after Facebook, the world’s No.1 Internet social network, pulled the curtain back on its financials for the first time, revealing $3.7 billion in 2011 revenue, with the release of the prospectus for its upcoming IPO.

OpenX CEO Tim Cadogan said the release of some of its financial results was not a sign that it planned to follow Facebook’s footsteps into the public market — at least not immediately.

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.

from Paul Smalera:

Facebook.coop

Facebook shouldn't pay its users. Its users should pay to own Facebook.

“Facebook was not originally created to be a company,” founder Mark Zuckerberg wrote in his letter to investors announcing the IPO of his already hugely successful and profitable company. “It was built to accomplish a social mission — to make the world more open and connected.”

Facebook has succeeded wildly, despite internal admonitions that its “journey” is only 1 percent finished. Journalists have latched onto Zuckerberg’s statement that Facebook wants to “rewire” the way the world works. In a world of thousands of self-anointed “social media experts,” only Zuckerberg can claim to have basically invented what the world thinks of as social media. He has etched himself into the timeline of human innovation.

Pity then, that Zuckerberg hasn’t turned his talents or attention toward Facebook’s financial underpinnings. After all, an IPO? How ho-hum can he get? If Mark really wants to accomplish his social mission with Facebook, he should share the company’s ownership with the people who helped him create it. Not just his Harvard contemporaries. Not just the programmers. Not even just the venture capitalists.

Corporate co-dependence: when good partnerships go bad

One of the biggest surprises in Facebook’s IPO filing was that it depended on game-maker Zynga  for 12 percent of its sales last year.

In 2010, the online game company famous for “FarmVille” and “Words With Friends” nearly declared war with the social network over a change in Facebook’s policy involving credits — the currency Zynga players use to buy virtual goods. Facebook wanted to take a 30 percent cut of transactions.

Bing Gordon, a video game veteran, Zynga board member and partner at Kleiner Perkins Caufield & Byers, described the standoff during the TechCrunch Disrupt conference in May as a Silicon Valley version of the Cuban Missile crisis, where Zynga was at one point prepared to walk away from Facebook.

Facebook, is this the best you can do?

In the world of Internet IPOs, it doesn’t get bigger than this: Facebook, the world’s biggest social network, files for the biggest ever Internet IPO! On first glance, everything about it seems outsize: The company’s raising $5 billion! It made $3.7 billion in revenue last year! And $1 billion in net income! Even the stated mission — “to make the world more open and connected” — is impossibly expansive. It’s all so expectedly huge it’s almost bland.

Here’s the thing about the big, honking 187-page prospectus Facebook filed late Wednesday. Once you dig past those headline numbers, the company itself ends up looking pretty unremarkable — kind of like the lives portrayed in the typical Facebook timeline. You end up wondering if its best years aren’t already behind it.

Facebook’s revenue grew 69 percent in 2010. That’s down from 154 percent in 2009, but still not bad at all. It’s much better than the 29 percent growth rate Google saw last year, and close to the 68 percent growth rate for Apple. But those companies are much larger (Facebook’s 2011 revenue was less than 3 percent of Apple’s). And for Facebook, there are signs that its growth rate is already starting to slow dramatically.

IPOverload: Facebook goes public

The least suspenseful waiting game in Silicon Valley is now over, thank heavens. Facebook, which began as a decidedly private Harvard hangout, has begun the process of going absolutely, totally, unabashedly public.

Facebook filed for an initial public offering with the SEC Wednesday, which means we have the first raw glimpse of its financials. Advertising makes up 85 percent of its $3.7 billion in annual revenue. And it took in $1 billion of income in 2011. For more of the best data points, see my colleague Anthony De Rosa’s rundown.

Facebook is synonymous with the Internet in many ways: It boasts more than 10 percent of the world’s population as active users and has realizable ambitions to be the preeminent vetting service on the Net, making a “Like” as powerful and capricious as Caesar’s opposable thumb.

Lots of IPOs, just one Nasdaq bell

Nasdaq’s senior vice president of new listings and capital markets has some bad news for companies looking to hold an initial public offering: don’t expect to ring the opening bell.

The backlog of companies looking to list in the next few months is so big that “I’m going to disappoint a lot of people,” said Robert McCooey during an IPO panel at the Ernst & Young Strategic Growth conference.  “Some people won’t even get a closing bell ceremony.” He counts 210 companies hoping to list on public markets.

It’s not just the successful IPO of Groupon last week that has changed sentiment. It’s the better — if not outright good — economic news in recent weeks, along with a solid earnings season, that is creating momentum, said David Erickson, co-head of equity capital markets at Barclays Capital. He said the firm was currently working with four companies that hoped to set IPO prices by Thanksgiving, in little more than two weeks’ time.

The dreary details of Groupon’s future

By Kevin Kelleher
The views expressed are his own.

Underwriting is usually a cheerless business. Taking a company public involves long regulatory filings, endless hours of due diligence and PowerPoint-driven roadshows. Investors need details, even if the details are dreary.

And then there’s the Groupon IPO. The daily deal company went public at $20 a share Friday and surged as high as 40%, briefly valuing the company at $20 billion. It may not be the hottest tech IPO so far this year — that distinction belongs to LinkedIn, which doubled its value on its first day — but it is the most discussed and divisive deal. Bulls and bears argue over the company and its future with a kind of passion that belongs to the culture wars.

On its face, the IPO is just about a company raising money, but it’s also so much more: It’s a spectacle — a dramatic tale of the fastest growing company in history brushing off a $6 billion bid by Google to go public and quickly become worth three times as much. It’s a scrappy outsider vindicating critics who attacked it mercilessly during an enforced quiet period. It’s a gaudy billboard luring other tech startups to come into the public markets.

Seviche doesn’t love Groupon anymore

Groupon’s IPO roadshow pitch is revving into high-gear this week. But CEO Andrew Mason and the rest of the crew might want to first convince its own clients of the company’s benefits.

Seviche, the merchant prominently featured in Groupon Inc’s now-trundling IPO roadshow, is no longer keen on jumping on the daily deals bandwagon. Worse, one of its general managers is mildly contesting Mason’s account of the benefits of their promotion run in 2010.

Hap Cohan, general manager of the Louisville, Kentucky-based restaurant, said on Tuesday the Groupon was in fact run by previous management (the restaurant brought in new investors over the past year). The new owners do not immediately see the benefits of a Groupon, at least not now.

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.