Fred Wilson, PrivCo’s Report On Tumblr Deal Is Total Garbage

Fred Wilson, who some consider the godfather of New York venture capital, made some money in the Tumblr deal. However he is quick to point out that a PrivCo report that suggested his firm, Union Square Ventures, netted a 5,000% return is “total garbage” Business Insider reported late Tuesday.

PrivCo is a private firm that reports on startups and they claim that they had access to details of exactly how much everyone made in the landmark $1.1 billion dollar deal between Yahoo and Tumblr.

Wilson took to Hacker News where he said “Total garbage. There is not one fact in this privco thing that is close to right. The numbers are good but nowhere close to that good. This is the same firm that predicted Foursquare would be out of business this year which will also prove to be nonsense.”

Time Magazine is reporting the Privco data, that Tumblr founder David Karp is taking home $253 million dollars in the deal. They’re also reporting that on a combined investment of $5.25 million dollars over 2007 and 2008, and in conjunction with Boston based Spark Capital Union Square Ventures saw a return of 50x which was worth $253 million to USV and $231 million to Spark.

Privco also suggests that Sequoia yielded $176 million and a combined, Greylock Partners, Insight Venture Partners, CrunchFund and Draper Fisher Jurveston made $88 million.

Wilson has not revealed what the actual numbers are, and probably won’t which could make this information just a shot in the dark.

Another early Tumblr backer, Bijan Sabet said on Twitter that the PrivCo report was “complete garbage and incorrect”.

Now check out Fred Wilson’s Venture Capital Do’s & Dont’s

New York Gets Billion Dollar Exit With Tumblr

Tumblr, Yahoo, David Karp, Marissa Mayer, Acquisition, Exit

Tumblr founder David Karp onstage at TechCrunch Disrupt 2011 (photo: K. Sandler for Thedroidguy.com)

This was the big startup news all weekend. At the end of last week, rumors started bubbling up via AllthingsD suggesting that Yahoo, and it’s new powerhouse CEO Marissa Mayer was looking for their biggest startup acquisition to date. That startup was Tumblr.

Last week we started hearing that Yahoo was prepared to buy Tumblr for $1 billion dollars. Many tech and startup pundits suggested that Facebook may try and jump in and swallow up Tumblr before the Yahoo board could get together Sunday and vote on the acquisition. Facebook reportedly, never made an offer.

In case you’ve been living out in the wilderness without internet access, Tumblr is a microblogging platform. They have over 100 million monthly visitors and see over 90 million posts made per day. Unlike the 140 character restriction on Twitter, people posting to Tumblr can write longer formatted posts and include pictures, videos etc.

Coincidentally Tumblr, and it’s founder David Karp, were the subjects of my most widely read story ever in my career is a “blogger”. Tumblr is just that popular.

Karp has been swatting off offers to buy Tumblr almost since it’s inception. Celebrities like Lady Gaga and others, flocked to Tumblr to add to their social media strategies. In fact GaGa actually posts on her own Tumblr, whereas her Facebook page is updated by a social media team.

The Wall Street Journal, and several other credible sources, have said that Yahoo’s board approved a $1.1 billion dollar acquisition of Tumblr. Many sources speculate that Mayer, a 13 year veteran of Google, hopes that Tumblr will be Yahoo’s YouTube. It’s also been reported that, for now, Tumblr will operate as it’s own business unit, and continue to be based in New York.

There are no solid revenue numbers for Tumblr reported online. What has been reported is that the startup, that was founded in Karp’s mom’s small New York apartment in 2007, has raised $125 million in venture capital and at one point Karp sold 25% of the company for$750,000. It’s unclear how much Karp still owns today.

Karp, along with girlfriend Rachel Eakley, a grad student and chef, lived in a modest west village apartment until last year when they moved into a $1.6 million dollar loft in West Brooklyn. Karp dropped out of high school, finishing up his education on his own and then moved to Japan where he coded for a living.

There’s no official word of how long Karp will remain with the company.

New York even has a ping pong startup!

Yahoo’s First Mayer Acquisition, New York Startup Stamped

Last April we brought you the profile of New York startup Stamped. Stamped, which is made up of a team of 11 with five being Xooglers, created a recommendation platform that allowed users to put their “stamp of approval” on their favorite places and things.

Stamped offers a unique value proposition by having a quick, easy to understand way of providing recommendations without having to read 1500 word reviews. It’s the recommendation platform for those on the go.

Stamped marks the first Yahoo acquisition under the leadership of new CEO Marissa Mayer who took over the helm at Yahoo six weeks ago after a thirteen year stint at Google.

Prior to this announced acquisition, Stamped had already attracted the attention and investment from Bain Capital Ventures and Google Ventures. Their first round of funding was $1.5 million dollars. They also have rockstar advisors like Instagram founder Kevin Systrom and food personality Mario Batail.

Financial terms of the acquisition were not disclosed. Mayer made it clear that acquisitions were part of Yahoo’s strategy going forward, in her first quarterly earnings call earlier this week. Several tech and startup focused sites have been speculating on some of the other possible target startups in Mayers cross hairs.

On Tuesday we brought you the story about the hot and heavy rumor that Yahoo may be looking to acquire Baltimore mobile ad startup Millennial Media.

Like Millennial Media, Stamped is a natural fit for Yahoo who hasn’t had a good review product, much less a mobile product for reviews. Mayer also said that mobile was one of the key focuses for Yahoo going forward as well.

Yahoo Senior Vice President Adam Cahan told the Associated Press that Stamped would be “a great asset as we expand Yahoo’s mobile efforts and build a world-class mobile development organization.”

Stamped issued a statement on their website today that said:

“We’re excited to start work again on something big, mobile, and new — but we can’t discuss the details just yet. And we’re really stoked to be able to hire lots of talented engineers and designers for this new project.”

Linkage:

Stamped is here

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CEO Remorse? After Firing Mollie Spillman On Vacation Is Marissa Mayer Eyeing Baltimore Startup Millennial Media?

The 37 year old fireball we’ve all come to know and love, Marissa Mayer, has been hard at work in her new role as CEO of Yahoo. During that time she’s mandated free smartphones for her staffers, made meals free, hired a new CFO and even had a baby of her own with just a few weeks maternity leave. Mayer knows that Yahoo’s share holders are looking for a big change and quick. So far she seems to be delivering.

The next thing Mayer and the Yahoo team have to do is lock down solid revenue streams.

It appears that Mayer is going to attack revenue from all angles and focus on the angles that she knows the best. A new version of the Yahoo home screen recently leaked out that showed a higher profile for search. For those that didn’t know Mayer had a long tenured history at Google.

She also seems to be honing in on Yahoo’s content properties and cutting away other under performing properties.

Mayer’s also focusing heavily on mobile a place she knows well from her Google days. Yahoo held their first quarterly conference call under Mayer, Monday afternoon. During that call Mayer spoke about her plan to focus the company’s efforts on mobile. At one point in Yahoo’s long dot com history the page, with their silly tv commercials, was a destination of browsers everywhere to find just about anything in a portal design moreso than a straight search engine.

In the early days of Google, Yahoo search was actually powered by their Mountain View rival. A time Mayer knows all too well from the other side of the fence.

Mayer is hoping to make Yahoo and it’s many apps a go to destination on mobile devices. Once their mobile product line is beefed up they are going to need a better monetization strategy than they currently have in place.

To that end, this past weekend Business Insider reported that Mayer may have her eye on Baltimore mobile ad startup giant Millennial Media.

Millennial Media was created by a group of former advertising.com and Verizon Wireless employees and is led today by co-founder and CEO Paul Palmeri who was integral part of the creation of Verizon Wireless’ v-cast service. With their engagement and developer centric mobile ad strategy Millennial Media quickly rose to prominence as the second largest mobile ad company in the world, eclipsing even Apple. Google is of course at the top, and by all accounts they are not for sale.

Millennial Media went public back in March. They debuted at $13 and quickly shot up to $25 with a high on opening day of $27.90. Unlike many of the tech companies and “startups” that went public this year, Millennial Media trades on a day to day basis, very close to where they debuted at, closing yesterday at $14.25.

All around it’s a solid company and a solid acquisition candidate for Yahoo.

Of course no one at Yahoo or Millennial Media is speaking about this however Yahoo could truly benefit from having the second largest mobile ad network behind Google in their stable.

There’s also a huge connection between Yahoo and Millennial Media. Millennial Media’s Executive Vice President and Chief Marketing Officer is Mollie Spilman. You may remember Spilman’s name as the CMO from Yahoo that was fired by Mayer while she was on her vacation. Perhaps there isn’t such bad blood between Mayer after all.

Linkage:

Millennial Media

Source: SAI

Here’s more startup news from “everywhere else”

Disgraced Yahoo CEO,Scott Thompson, Now CEO At Pennsylvania Startup ShopRunner

Last week Yahoo announced the ultimate in poaching executives attracting longtime Google Executive,Marissa Mayer to the open CEO position. Yahoo had been looking for a CEO to replace Scott Thompson after he was ousted for fabricating a Computer Science degree on his resume.

After leaving Yahoo it was unclear what he would do next. Today, several news sites including siliconvalley.com have reported that Thompson is now the CEO of Pennsylvania startup ShopRunner.

ShopRunner is based in Conshohocken Pennsylvania with a satellite office in Silicon Valley’s Meno Park. Thompson will most likely spend a lot of time at the Menlo Park location. He has been based in the Valley throughout a large portion of his career. Prior to the Yahoo appointment, Thompson was a high ranking executive at EBay owned PayPal.

eBay also owns a portion of ShopRunner, a service that provides shopping perks to a number of paid subscribers at various website e-commerce partners.

With Thompson’s experience at PayPal he should do very well at ShopRunner.

“Joining ShopRunner is a tremendous opportunity to build on the strong foundation that the company has already established. While PayPal and ShopRunner are fundamentally different businesses, there are similarities in each of their success,” Thompson said in the company’s news release.

Siliconvalley.com did notice that the news release announcing Thompson’s hiring made no reference about his educational background. It’s obvious that ShopRunner is not concerned about it.

“We are thrilled that Scott has taken us up on our offer to lead ShopRunner’s continued growth,” ShopRunner co-founder and its current CEO Mike Golden said in Monday’s news release. Golden will continue as president of the company.

Linkage:

Find out more about ShopRunner here

Source: siliconvalley.com

Nibletz is roadtrippin to startups “everywhere else” through September 2013 more info here

Holy Google’s Marissa Mayer Is Moving To Yahoo As CEO

As many of our loyal readers know, we don’t typically report on Silicon Valley news, unless it’s say as big as Facebook acquiring Instagram for $1 billion dollars, or Google’s Marissa Mayer getting the nod as CEO at Yahoo. Mayer replaces a disgraced Scott Thompson who was fired when it was discovered he did not possess a computer science degree that was on his resume and subsequently reported in filings to the Securities and Exchange Commission (SEC).

This is a significant accomplishment for an incredible woman who I’ve personally met on two occasions and have seen speak on more than a handful of occasions. Mayer was the first woman engineer at Google. She led Google’s search team for years before pivoting to lead Google’s maps team. She is one of the few, female or male, people that can withstand a Mike Arrington beating in the hotseat and still not give up any information.

It’s clear that Mayer has the strength, knowledge and expertise to go head first into straightening out the mess that was left in the wake of Thompson. This includes an erroneous patent battle Thompson put Yahoo in with Facebook. Google has been on both sides of similar patent situations.

Mayer is also a visionary and a respected leader in Silicon Valley. Yahoo co-founder David Filo (who still works at the company) said in a statement:

“Marissa is a well-known, visionary leader in user experience and product design and one of Silicon Valley’s most exciting strategists in technology development. I look forward to working with her to enhance Yahoo’s product offerings for our over 700 million unique monthly visitors.”

Mayer said, “I am honored and delighted to lead Yahoo!, one of the internet’s premier destinations for more than 700 million users. I look forward to working with the Company’s dedicated employees to bring innovative products, content, and personalized experiences to users and advertisers all around the world.”

“The Board of Directors unanimously agreed that Marissa’s unparalleled track record in technology, design, and product execution makes her the right leader for Yahoo! at this time of enormous opportunity,” said Fred Amoroso, Chairman of the Board of Directors.

While some may find it odd that Mayer is leaving Google for the CEO position, at what was once one of Google’s key competitors, it was actually a Facebook executive, Sheryl Sandberg who summed up Google’s internal philosophy on moves like this. While giving a commencement address at Harvard Sandberg told a story about her interview with then CEO of Google Eric Schmidt. After showing Schmidt a spreadsheet declaring that the position she was up for at Google matched none of her job criteria Schmidt told her “don’t be an idiot” “Get on a rocket ship”. The same holds true for this opportunity for Mayer, which direction that rocket ship is going is still unclear though.

Source: SAI

Yahoo Kills Livestand

Yahoo, a company with a brand new CEO, Ross Levinsohn, is shutting down it’s News stand that it started just months ago. In an application I nor many of you have ever heard about Livestand, was supposed to be Yahoos response to Flipboard which like many of Yahoo’s recent projects has failed. In an attempt to turn the company around Levinsohn is trying to streamline what the company does.

While we received great feedback on Livestand’s design and it earned a 4-star rating in the App Store, we committed ourselves to continuously measure and scrutinize what’s working and what isn’t. We have learned a lot from Livestand and are actively applying those insights toward the development of future products that are better aligned with Yahoo!’s holistic mobile strategy.

Regan Clark mentions on Yahoo’s Blog. While never making any inroads or showing any interest in Android, Yahoo is said to be wanting to push full steam ahead with Mobile, as seen with it’s recent launch of Axis.

Groupon To Go Head To Head Against Square On Mobile Transactions

Groupon the daily deals site is reportedly interested in entering the Mobile Commerce field to compete with the likes of Square and most recently PayPal. The company who is embroiled in controversy in almost anything it does, from how it reports it’s profits to how it stock raises, wants to handle your money.

Business Insider is reporting that it’ll charge 1.8% transaction fee and a $0.15 per transaction charge for payments that they process. Whereas Square charges 2.75% with no per transaction fee and PayPal Here charges 2.7%, also with no transaction fee. In a risky move, Groupon will provide not only the device that retailers can charge customers, but also an iPod Touch to take the payments with. Like Yahoo, which recently made waves by releasing a semi browser for the web, and an iOS application, Groupon which keeps failing and is being mishandled would rather throw as many things against a wall and see what sticks versus fixing what’s wrong and instead is trying to hide from this.

Source: Business Insider

Launching Tonight Yahoo’s Answer To Chrome, I Think

Yahoo, tonight is launching what they are calling a “Chrome Killer”. But there is a problem, as you can see right now you can download a plugin to use it on…guess what? Chrome.

I don’t get it either. As of now, when you go to axis.yahoo.com you are able to “Download it now”(Chrome Extension) view a video of it or see an ad for it. While having a new choice in browsers is nice, I’m still not sure why Yahoo will try something else it’ll fail at instead of fixing their problems they have now. Visually, it looks good until you realize how much quicker Chrome is to use, and return to using it.

Ford & Yahoo Team Up For Reality Show About Electric Cars

Being on the road in a Prius makes you really appreciate both the hybrid and the full on electric car. While traveling to cover startups in Chattanooga, Tennessee, Cameron and I saw charging stations out in front of local government office buildings, which was a breath of fresh air. We also brought you this story earlier this month about a NC startup that is re-inventing the charging station.

With all this talk about electric cars it’s no wonder that Ford has teamed up with Yahoo to release a web-based reality show about electric cars.

The new show called “Plugged In” will chronicle the lives of three two person teams driving the new Ford Focus electric. The teams will compete in scavenger hunt like challenges in 10 major cities including Los Angeles in New York, mostly on the east and west coast where electric cars are gaining popularity and where gas is over $4.00 per gallon and quickly approaching $5.00.

More after the break
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AOL Wont Pull A Yahoo And Sue, They’ll Just Sell Instead

AOL is rumored to be looking into possibly selling some of its patent portfolio Bloomberg reported earlier today. Tim Armstrong and Co. have watched their fortunes fall away since the split from Time Warner Inc. They have hired Evercore Partners to somehow bring in a cash infusion.

Starboard Value LP, an AOL shareholder, has stated they feel the patent portfolio may be valued as high as US $1 billion from licensing income. Bloomberg had this quote in their article earlier,

AOL’s portfolio includes “some of the foundation patents for the Internet,” AOL Chief Executive Officer Tim Armstrong said at a Barclays Capital conference this month.

While Yahoo recently sued Facebook over 10 patents and many people feel this is the low-road because it’s a last ditch effort to bring in some money. There is only one person I could find who agrees that Yahoo is doing the right thing.* AOL instead is possibly looking into licensing their patents.

AOL had announced in September 2011 that they had on retainer lawfirm Wachtell Lipton Rosen & Katz and the investment bank Allen & Co. after news had leaked of meetings with both. Many people have felt that AOL was looking to move to private ownership but as the ability to earn anything diminishes with each passing quarter. In Q4 2009 AOL had total revenue of US$809 million in Q4 2011 they had declined to US$576 million. Advertising revenue dropped from $471 million (Q4 2009) to $363 (Q4 2011) despite a growth year-over-year from 2010.

While the idea of licensing their patent portfolio may make Tim Armstrong giddy it remains to be seen if they will take the high road and attempt to license or take the low road and sell to any number of notorious patent trolls. It would not be the first time that a huge company starting with the letter A has chosen to work with an alleged patent troll. Apple came under fire after TechCrunch writer Jason Kincaid uncovered some interesting information

Put another way, Apple appears to have transferred its patents to the patent troll Digitude, though it first routed them through a shell company that shares the same office as Digitude’s lead investor and Chairman. Further evidence of the relationship between Apple and Digitude can be found on the ITC’s own website, where a list of files relevant to the lawsuit can be found. Many of these files are marked confidential, but it appears someone mistakenly left the file names intact. One of which is “Digitude-Apple License Agreement.”

At the end of the day we don’t know their plans at this point but we will keep you informed of any future updates.

*there’s a catch, it’s still wrong but it works for the greater good.

Source: Bloomberg

The Big Rumor: Google In Talks To Buy Yahoo

Although AOL’s Tim Armstrong has been trying to sway his board and Yahoo’s board for an AOL-Yahoo merger, it seems like another, bigger, company wants to sink their teeth into yahoo.

Reports are running rampant on the internet today stemming from a report from the Wall Street Journal that Google is in talk with private equity firms to merge (or at least attempt) to merge with Yahoo. This wouldn’t be the first time that Google did business with yahoo. Yahoo was one of Google’s biggest clients 10 years ago, providing back end search services to the yahoo internet portal.

As PCMag suggests Google hasn’t entered into any kind of agreement with Yahoo and no one is sure which private equity firms Google is talking to. It’s also important to note that a leak or rumor from the Wall Street Journal doesn’t carry near as much weight as it would have five years ago.

It is apparent though that Yahoo wants a large, stable suitor. It’s been widely reported that Microsoft has been looking at acquiring Yahoo’s assets along with those of AOL.

Although a marriage between Google and Yahoo would spend a long time under regulatory scrutiny, the potential for GoogleAds and Google+ with a merger with Yahoo is endless.

source: WSJ via PCMag