Watercooler’s SN Apps for Fans Backed by $5M
Meet Watercooler, a startup developing social network applications for all the usual suspects - Facebook, MySpace, Bebo, Hi5, and Friendster - that allow fans to rally around their favorite sports teams and TV shows.
The Mountain View-based firm raised a previously undisclosed $4M in Series A funding from Canaan Partners this past September. While it’s been developing Facebook apps soon after the launch of that social network’s platform in July 2007, it just recently launched a corporate website to provide a more unified front to its efforts.
While you may not associate the name “Watercooler” with the more famous app developers Slide and RockYou, as well as SGN and Zynga, the company has created over 700 community-building apps. Watercooler’s installs and active users earns it the #9 spot on Adonomics top Facebook developer list.
Watercooler’s apps focus on particular shows and teams, and give fans an opportunity to discuss recent events, share photos, and take quizzes. The applications can also communicate with each other, allowing for interaction between rival groups, even across the supported social networks. The company’s platform allows the company to produce these applications very quickly, each tailored to a particular show or team.
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Watercooler’s SN Apps for Fans Backed by $4M
Meet Watercooler, a startup developing social network applications for all the usual suspects - Facebook, MySpace, Bebo, Hi5, and Friendster - that allow fans to rally around their favorite sports teams and TV shows.
The Mountain View-based firm raised a previously undisclosed $4M in Series A funding from Canaan Partners this past September. While it’s been developing Facebook apps since July 2007, it just recently launched a corporate website to provide a more unified front to its efforts.
While you may not associate the name “Watercooler” with the more famous app developers Slide and RockYou, as well as SGN and Zynga, the company has created over 700 community-building apps. Watercooler’s installs and active users earns it the #9 spot on Adonomics top Facebook developer list.
Watercooler’s apps focus on particular shows and teams, and give fans an opportunity to discuss recent events, share photos, and take quizzes. The applications can also communicate with each other, allowing for interaction between rival groups, even across the supported social networks. The company’s platform allows the company to produce these applications very quickly, each tailored to a particular show or team.
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Blodget Says Facebook Is Only Worth $9 Billion, Hypothetically Speaking
Putting a value on private companies is hard enough for insiders and venture capitalists who have full access to the company’s financial statements. When outsiders try to do it, even well-informed ones, it is nothing more than a guessing game. But it is nonetheless perhaps one of Silicon Valley’s favorite parlor activities.
Today, Henry Blodget & Co. at Silicon Alley Insider try to peg valuations on 25 private Web companies. Facebook is at the top of the list, but it is valued at $9 billion instead of the $15 billion that Microsoft’s investment put on the company. Why? Because everyone knows that the $15 billion is too high, so SIA decided to apply a 25X multiple on Facebook’s 2008 revenue forecast of $350 million. Does that make its valuation correct? Probably not. But in the absence of any true market pricing, anyone can go ahead and make a guess.
The same goes for any of the valuations on the SIA 25 list, which puts Wikipedia’s worth at $7 billion, Craigslist’s at $5 billion, Mozilla’s at $4 billion, LinkedIn’s at $1.3 billion, Ning’s at $560 million, RockYou’s at $325 million, and Spot Runner’s at $250 million. Note that three of the top five (Wikipedia, Craigslist, Mozilla) are essentially not-for-profits sitting on very valuable assets. The valuations for those three are based on what they would be worth if they were run differently with an eye towards maximizing revenues—which, of course, could impact how consumers interact with them, which in turn would impact their valuations.
Another 25 startups make up the contenders list, which includes Federated Media ($245 million), Yelp ($225 million), Meebo ($220 million), Mahalo ($150 million), Digg ($125 million), Etsy ($115 million), Powerset ($80 million), and Twitter ($75 million). A full list that changes dynamically every 20 minutes, based on changes in the Nasdaq, can be found here (although, exactly how the valuations are linked to the Nasdaq is never clearly explained)
Some of these valuations have more merit than others. Some have none whatsoever. For instance, SIA gets at its $125 million valuation for Digg by “splitting the difference” between a $200 million buyout rumor we reported and the $60-to-$80 million that Kara Swisher came up with. Splitting the difference between two rumors is not exactly the height of financial analysis.
But what are you gonna do? At least SIA acknowledges that the list is an imperfect work in progress. Don’t get too caught up in the actual numbers. It is more useful really as a starting point to think about relative valuation between different startups. Is Meebo really worth three times as much as Twitter? Is Ning worth as much as Slide? Let the parlor game begin.
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Hummer Winblad Partner Will Price Resigns To Head WidgetBox
It’s not often a partner at a successful venture capital fund leaves to do anything except retire. But Will Price, a general partner at Hummer Winblad Venture Partners, has resigned from his firm and, as of today, is the CEO of widget backed Widgetbox.
The company has raised $14.5 million from Hummer Winblad, Sequoia Capital and Northgate Capital. Hummer Winblad has been around since 1989 and has invested $620 million of so in startups. Price feels that Widgetbox is poised to take advantage of the huge surge in widget usage. And if the AOL acquisition of Goowy and the recent Slide valuation is any indication, there’s lots of room to grow for Widgetbox.
I asked Price to write a guest post telling us why he made the decision to leave a very safe and very lucrative job and enter the very unsafe and risky world of startups again. His post is below, although it can largely be summed up in this post, too. If you want to follow Price’s regular updates, his blog is here.
My name is Will Price and until yesterday I served as a General Partner at Hummer Winblad Venture Partners, an early stage venture capital firm that was founded in 1989 (investments include TheKnot, Napster, HubPages, Omniture, Powersoft, Hyperion and others). While passionate about the firm and the venture industry, I am leaving Hummer Winblad today to take the CEO role at one of the startups I invested in - Widgetbox.
Michael Arrington kindly offered me the chance to explain my decision to leave venture capital and to join Widgetbox as the CEO. While the detail follows, in summary the combination of my personal aspirations to return to an operating role and my passion for the widget market and the company (which I helped seed fund) made this a no-brainer move for me.
My logic:
The best markets and the best companies ride the tide of history. Widgets are such a market.
The Web’s tide is open, distributed, standard, user-defined, and, in many ways, the most powerful force of the modern era. Widgets are not a fad, or web 2.0-hype, but fundamentally they are the unit by which users are assembling and defining their web experience.
Widgets are portable applications that are user-defined, user-assembled, and consumed independent of the source of the underlying content, commerce, and application functionality. The combination of user-control and decentralized interaction to important services represents an important paradigm shift in how users discover, select, and consume the best of the web.
In Nov 2007, Comscore reported that 650m global uniques, or 65% of the web universe, interacted with a widget. The growth in widget adoption and social media speaks to users’ unmet needs and frustrations with traditional web models. Today, brands, developers, media companies, and established Internet players are racing to understand the forces driving user behavior and the power of a more componentized and distributed web. While widget penetration is at 65% of Internet users and growing, spend in the widget category in 2007 was less than $20m, or 0.1% of the total online ad spend
market.
The 650x differential between spend and the record growth in user adoption is very powerful to consider. Users are always ahead of the market, as evidenced by the systemic under-allocation of ad dollars on-line; 21% of media consumption is on-line vs. 7% of ad spend. However, this 3:1 imbalance is steadily eroding and the widget market will prove to be no different and no less transformative. Traditional portal models that aggregate users and resell that aggregation are fundamentally at odds with the emerging paradigm of user and community defined experience and distributed consumption.
Marketers need to fish where the fish are, however, in an early market there are often more questions than answers. While widgets are enjoying end-user success, the commercial relevance of widgets remains unclear to many. Are widgets a new marketing channel? If so, are they effective? How do you build them, buy them, track them? What is the unit of value; an impression, an install, an engagement…? What type of ecosystem will form around the phenomena? In order to move beyond fad status, an economic model for the widget ecosystem needs to be better developed and measurable value delivered to both end-users and marketers.
Widgetbox, along with Slide, Rockyou, Goowy, Clearspring, Gigya, and others, is working to enable users, developers, brands, media houses, and incumbents to ride the tidal wave of web componentization.
Widgetbox, backed by Hummer Winblad, Sequoia Capital, Northgate Capital, and Michael Dearing, is the web’s largest gallery of widgets. Widgetbox’s growth in the past year has been extraordinary, with a current monthly audience of 30m uniques, 400m monthly widgetviews, and widgets installed across 230,000 domains.
For those of you who read my blog, you know that I am passionate about the venture capital industry and its importance in supporting innovation and entrepreneurship. As a General Partner at Hummer Winblad, I enjoyed the exposure and access to some of the key innovators and drivers of the new economy; company’s like Omniture, Move Networks, Mulesource, Widgetbox, and many others. At 36, however, I felt a persisting and important pull to embark on a new journey of growth, discovery, and learning.
In my career to date, I have found that if you follow your heart, work tirelessly, and fish in good waters, good things will happen. For Widgetbox and our colleagues in the space, good things will continue to happen if we stay true to the web’s architecture of openness, distribution, and standardization and to users’ passion for empowerment, expression, and need for community.
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Amid Yahoo Turmoil, AOL Makes An Acquisition
On Monday AOL will announce the acquisition of San Diego-based Goowy, a startup founded in late 2004 and which launched, incidentally, in my living room in late 2006 (we had a TechCrunch party where Goowy, Meebo, Sphere and other startups launched). The size of the deal is not being disclosed.
Their first product was a Flash-based webtop or alternative operating system. But later they went into the widget space with their YourMinis product, and that is the reason AOL has acquired them.
AOL SVP of Social Media, Messaging and Homepages David Liu said this was a deal they’ve been considering for the last nine months, and that they plan to integrate Goowy’s technology into both user-facing AOL products (to widgetize them) as well as their Platform A advertising network. Expect Platform A to launch significant new advertising products in the widget space soon, Liu says.
This is a significant win for Goowy founder and CEO Alex Bard, who has run a tight operation over the years. The company has just six employees and raised a single round of financing from Mark Cuban in April 2006 (the size of that round remains undisclosed, but it was almost certainly under $1 million). He says the Goowy team will remain in San Diego for at least the short term.
Goowy competes with a number of startups in the widget advertising space, including Widgetbox, ClearSpring and Gigya. VideoEgg, Slide and RockYou also compete in this area.
AOL has been busy acquiring promising young startups - they bought Israel-based Yedda last November as well.
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How Much Is a Facebook Ad Worth? Lookery “Guarantees†(Drum Roll) 12.5-Cent CPMs.
It should come as no surprise that the ad inventory on social networks like Facebook are not worth much. A new offer by Lookery, a startup that places ads on social appss inside Facebook and Bebo, is offering a guaranteed ad rate of 12.5 cents for every thousand impressions (CPM). The promotion, which runs through April is probably close to what Lookery can get for ads it places on Facebook. Add in 2 cents per thousand impressions for serving the ads and you get to about a 15 cent CPM. That is probably a good average for the bulk of inventory on Facebook, which makes up the vast majority of Lookery’s business.
This is a market-share play for Lookery. By offering a guaranteed rate, it hopes to attract enough application publishers to get to a billion impressions a month, up from 170 million in December. Lookery is smaller than the other major social-app ad networks, like Slide, RockYou, and Social Media. On social networks, more so even than on the Web in general, advertising is obviously a volume game. And Lookery is trying to catch up to the larger app ad networks, which may very well have higher average CPM rates, by taking all the low-hanging penny inventory that is out there.
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Meebo Turns Chat Rooms Into A Web Service
Today, Web-based IM and chat room provider Meebo is releasing full-fledged APIs for its Meebo Rooms that will allow Websites to embed chat functionality in an automated fashion. Currently, Meebo Rooms can be embedded on sites or blogs manually by pasting in the appropriate code, which has already led to a proliferation of such widgets. There are more than 200,000 Meebo Rooms, attracting millions of visitors a month. (See our previous coverage here and here). Explains Meebo CEO Seth Sternberg:
Now, the servers of our partners can say, “I want to create a room.” It automates the creation process on a server-to-server basis. Also, we will be putting advertising into these rooms.
In addition to the APIs, the company is also announcing the Meebo Network, which will serve ads inside Meebo Rooms across the Web, splitting the revenues with the Websites hosting the rooms. Since each Meebo Room is formed around a particular interest, ads can be targeted. And to the extent that sites participating in the network have demographic data on their members, that can be used for ad targeting as well. Only Meebo Rooms created through the API will show ads, not the ones created manually.
The launch partners joining the Meebo Network are Piczo, Revision3, RockYou, Social Project, and Tagged. Revision3, for instance, will create a Meebo room on its site where fans can watch a synchronized loop of Web TV shows while chatting. Access to the full APIs and the ad network is by invitation only at this point. Social networks could use the new APIs to automatically add chat rooms to every group page. Rock bands or movie sites could add Meebo Rooms to their sites for visiting fans.
Comparisons can be made here to Userplane, a white-label chat service which was bought by AOL in 2006 and powers many of the chat rooms on MySpace. But there are subtle differences. Most notable is the fact that Meebo Rooms can spread anywhere on the Web. Anyone can grab the embed code and put it on their blog or MySpace page as I’ve done below. Notes Sternberg:
A user cannot take a room off of MySpace and throw it somewhere else. We have all our rooms networked. A user can take the CBS Jericho room, and throw it on their WordPress blog. Our chat rooms are networked versus islands within Websites.
It is very hard to get a synchronous conversation going. You won’ get enough people on your MySpace page to have a conversation. But with Meebo Rooms, most of the traffic is coming from somewhere else. It solves the problem of the Web being so distributed.
The power of Meebo Rooms is that they let anyone create live conversations on their site by aggregating people with similar interests from other sites. In fact, it links people between sites. And that, hopes Sternberg, will give it enough scale to become an ad network of sorts. Meebo has raised $12.5 million from Sequoia Capital and Draper Fisher Jurvetson.
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Stanford Computer Science Grads Getting $95k Offers From Google
Google and Facebook are fighting hard to hire this years crop of computer science graduates, we’ve heard, and ground zero is Stanford. Most of the class of 2008 already have job offers. Last year, salaries of up to $70,000 were common for the best students. This year, Facebook is said to be offering $92,000, and Google has increased some offers to $95,000 to get their share. Students with a Masters degree in Computer Science are being offered as much as $130,000 for associate product manager jobs at Google.
Apparently the popular Facebook Applications class is getting a lot of attention from other startups, too. Slide and RockYou are both recruiting hard. One source says that RockYou is approaching students and telling them they aren’t hiring them, they’re “acquiring” their applications and will let them continue to work on them after graduation. That is, of course, some serious smoke blowing - any code they’ve been working on in the class is likely to be shelved by RockYou. Still, it’s a great way to recruit by making these students feel like they’re entering into an M&A transaction.
“Lesser” degrees in math or statistics are fetching just $40k - $50k, which still isn’t bad for a first year salary.
Something tells me the Pitzer students who’ve taken the YouTube class aren’t getting the same types of offers.
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Google, Facebook Battle For Computer Science Grads. Salaries Soar.
Google and Facebook are fighting hard to hire this years crop of computer science graduates, we’ve heard, and ground zero is Stanford. Most of the class of 2008 already have job offers even though graduation is months away.
Last year, salaries of up to $70,000 were common for the best students. This year, Facebook is said to be offering $92,000, and Google has increased some offers to $95,000 to get their share of graduates. Students with a Masters degree in Computer Science are being offered as much as $130,000 for associate product manager jobs at Google.
Apparently the popular Facebook Applications class is getting a lot of attention from other startups, too. Slide and RockYou are both recruiting hard. One source says that RockYou is approaching students and telling them they aren’t hiring them, they’re “acquiring” their “companies” and will let them continue to work on their applications after graduation. That is, of course, some serious smoke blowing - any code they’ve been working on in the class is likely to be shelved by RockYou. Still, it’s a great way to recruit by making these students feel like they’re entering into some kind of an M&A transaction.
Something tells me the Pitzer students who’ve enrolled in the Learning From YouTube class aren’t getting the same types of offers.
If you are a CS student at Stanford or another top university, tell us what’s happening with recruiting.
Update: Good comments below from students confirming these (and even higher) salaries.
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PlayFirst Takes $16.5 Million Series C, Inks Deal With RockYou
Casual gaming startup PlayFirst has secured $16.5 million Series C in a round led by DCM that included original investors Mayfield Fund, Trinity Ventures and Rustic Canyon Partners. The new round brings total funding for PlayFirst to $26.5 million.
San Francisco based PlayFirst was founded in 2004 and is focused on creating “shared casual game experiences around lasting original brands” that includes game play “rich in story and character.” PlayFirst titles include Wedding Dash, Chocolatier, and Dream Chronicles.
Accompanying news of the funding was a new deal between PlayFirst and RockYou. Under the deal RockYou will distribute PlayFirst games through its widget and social networking service, with Wedding Dash the first title to be made available to Facebook users. PlayFirst sees the deal a way of tapping into the growing popularity of social networking sites as a gaming platform. According to PlayFirst, Wedding Dash has so far been downloaded 200 million times by users on PC, Mac, mobile and handheld platforms.
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