What's former MySpace CEO Chris DeWolfe up to these days? He wants to be the next big name in the social-gaming craze, we hear.
In late July, TechCrunch floated a report that DeWolfe was hitting up big private equity outlets to amass cash, at least $100 million, for a new venture that would involve "a roll-up of an Internet industry vertical," but TechCrunch didn't specify what that sector was. Three months prior, DeWolfe had been ousted from the troubled MySpace and replaced by former Facebook executive Owen Van Natta.
Former MySpace CEO Chris DeWolfe
(Credit: Michelle Meyers/CNET)Now, several well-placed sources have told CNET News that DeWolfe intends to make a move in social gaming, a red-hot space currently dominated by the Mark Pincus-headed Zynga, and that his "roll-up" plans involve buying up a number of smaller social gaming companies so that he and Pincus can go directly head-to-head.
Multiple sources have indicated that DeWolfe is working on this new venture with Aber Whitcomb, who left his role as the News Corp.-owned MySpace's chief technology officer in late September.
We don't know what kind of progress DeWolfe, who did not reply to a request for comment, has made in securing that private equity money he was reported to be hunting for this summer. We don't know what the company's name will be--if he's settled on one yet. Nor do we know which smaller companies he wants to agglomerate.
But social games are on the brains of multiple ex-MySpace bigwigs, who were able to witness from the front lines the explosion of the industry when game developers started tapping into the viral channels on big social networks. Another MySpace executive, Jason Oberfest, left the company after just over a year to join social gaming start-up Ngmoco.
One source said that Ngmoco's valuation may already be too high for DeWolfe to consider it for his roll-up plans. Rather, DeWolfe is likely looking at very small gaming companies run by a handful of stellar developers but that lack the legal, business development, and dealmaking resources to make any kind of a dent in the current social-gaming market. He also may be looking at companies that had some initial buzz but have since seen their growth plateau or drop off.
We hear that in the months before DeWolfe's departure from MySpace, there was a lot of talk of gaming as the social site, rapidly losing ground to Facebook, attempted to refocus itself as an entertainment destination. When DeWolfe was in charge, MySpace inked a deal with casual-games maker Oberon to power a gaming platform, but that deal is no longer in place. (We've contacted Oberon for comment.)
Now, under the direction of Van Natta and several former MTV execs like Courtney Holt and Jason Hirschhorn, MySpace's "entertainment" direction is much more focused on music, and gaming has taken a back burner for the time being even though there are some hugely popular games on MySpace's developer platform.
Things couldn't be more different in the social-media industry at large, where gaming is currently front and center. While there was early on a close rivalry between two companies, SGN and Zynga, the far and away leader right now is Zynga--which is pulling in between $100 and $250 million in revenues depending on which industry blog you read, and spends tens of millions of dollars each year just buying up Facebook ads for marketing.
A few companies, like Playfish and Playdom, have also grown big (though still smaller than Zynga), and there are persistent rumors that one of them may be sold to an established gaming-industry player like Electronic Arts.
Most other companies in the space are easily several orders of magnitude smaller. Trying to make inroads when there's already a clear, formidable leader is difficult, and the economic climate means the private equity sector might be skeptical about handing a blank check to someone because he happens to have CEO experience.
What we have heard, though, is that DeWolfe already has someone to model himself on: Rupert Murdoch, the News Corp. CEO whom DeWolfe was reportedly very close to during his tenure at MySpace. With a roll-up of acquisitions, he would plan to do for the gaming industry what Murdoch did for newspapers: pluck them up across the industry, and build an empire.
Ambitious, yes.
We've been hearing a few sneaky tips from folks within earshot of the Boston, Mass., set of "The Social Network," the Columbia Pictures movie about the contested origins of Facebook. This week, the film crew has been on the Charles River working on scenes in which Cameron and Tyler Winklevoss, the identical twins who had a lawsuit against Facebook founder Mark Zuckerberg, are depicted at a Harvard crew practice.
That Boston Globe report about the Harvard heavyweight crew team getting cast in the background? Not quite.
Ivy League athletic restrictions bar current athletes from being film extras, and filming has been an all-day operation while classes are still in session, so an open casting call was held at the new Community Rowing Inc. boathouse on the Charles River in Newton, Mass.--and former Harvard and Northeastern University rowers are among those in front of the cameras. The CRI boathouse, tipsters tell us, has also been the filming HQ for the crew scenes.
The rowers are serving as body doubles for the actors and extras, as well as the actual muscle to power the boats in team scenes. And a few of them indeed have their faces marked up for the CGI superimposing of actor Armie Hammer's visage--he's playing both of the Winklevoss twins.
One thing we've heard is that one of the characters in the scenes is Harry Parker, Harvard's longtime varsity heavyweight crew coach. He's not playing himself, nor does it appear that a well-known actor has been cast to play him (because this would be a great cameo role), but rather a lookalike actor has the role instead.
Most interestingly, a tipster also tells us that while filming of the crew scenes is expected to wrap up this week, that it'll be headed to the iconic Henley Royal Regatta in the U.K. this June. There is indeed a scene in the "Social Network" that takes place at Henley, and it sounds like they're hoping to film it on-site--though we haven't been able to confirm that the formal, buttoned-up annual regatta will allow a movie crew on the grounds.
Other confirmed filming locations for "The Social Network" are Los Angeles and Johns Hopkins University in Maryland, which will be standing in for Harvard's campus. Will the cast, which includes "Zombieland" star Jesse Eisenberg (as Mark Zuckerberg) and pop star Justin Timberlake, actually do any filming in Silicon Valley? No word on that yet.
"The Social Network," directed by David Fincher ("Fight Club"), is based on Ben Mezrich's recent book, "The Accidental Billionaires." Facebook has maintained a stance that it stretches the truth.
The crew of "The Social Network," the David Fincher-directed retelling of Facebook's earliest days, is headed to film in the Boston area soon with a widely reported start date of October 19.
Rumors on Web forums indicate that the Harvard Square neighborhood of Cambridge, Mass.--the eponymous university's epicenter--will be the backdrop for some scenes involving actor Jesse Eisenberg, who plays Facebook founder Mark Zuckerberg. Eisenberg himself has been quoted as saying that the movie will actually be filming on Harvard's campus, something that the university would not confirm.
Facebook was founded in a dorm at Harvard when Zuckerberg was a sophomore there; he later dropped out to run the site full-time. "The Social Network" script was based on writer Ben Mezrich's "The Accidental Billionaires," an unauthorized tale of Facebook's origins that doesn't portray Zuckerberg in the most positive manner.
Boston.com reported Thursday that a Somerville pub called the Thirsty Scholar has confirmed that it'll be used as a filming location, but couldn't confirm what everybody wants to know--whether pop star Justin Timberlake, who plays early Facebook exec Sean Parker, will be on-set.
Here's the catch. I've read the Aaron Sorkin-penned script for "The Social Network"--granted, it's a draft with a May 2009 date on it, so who knows what has changed--and Sean Parker doesn't even appear in any Boston scenes. Sorry, Boston.
Twitter's long-anticipated business plan had better be close on the horizon, because according to the Wall Street Journal, the site has some new investors on board: Mutual fund T. Rowe Price, Insight Venture Partners, and a handful of others have reportedly pumped $100 million into the microblogging phenomenon.
TechCrunch reported last week that Twitter was putting together a round of funding at around a $1 billion valuation. But that report suggested that the company would do so by raising about $50 million--half of what it actually has, per the WSJ, in a deal expected to close Thursday.
Twitter still doesn't make significant revenue. But its founders have said that paid corporate accounts, in the form of a sort of "analytics dashboard," are imminent. Advertising isn't out of the question either, despite what some of the company's executives have said in the past.
The company's initial round of Series B funding last year valued it at about $80 million, but soon added to the round in a deal that upped the valuation well into the hundreds of millions.
News Corp.-owned MySpace is "close to acquiring" social music service iLike, according to TechCrunch.
The price tag is rumored to be in the neighborhood of $20 million. Representatives from iLike were not immediately available for comment.
The report comes within days of iLike launching a music download store--a development first reported by CNET News--with MP3s available from all four major record labels.
The deal, if confirmed as accurate, highlights the often complicated connections in digital media's elite ranks.
iLike, for example, rose to fame through its close ties to Facebook. The iLike application, since re-branded to simply Music, was one of the first big applications to launch on Facebook's platform at its debut. Its ad-supported streaming music service has become one of the most prominent in a packed field--it now has about 50 million users and just launched a suite of iPhone apps. But the streaming music niche has proven difficult to monetize and has left some players in the space reportedly hunting for an exit.
MySpace, meanwhile, has seen stagnant growth as the once-far-smaller Facebook has rapidly overtaken it in the social-networking race, thanks in part to the proliferation of third-party apps like iLike on Facebook's groundbreaking developer platform. As part of an executive restructuring earlier this year, MySpace installed former Facebook chief operating officer Owen Van Natta as its CEO, replacing co-founder Chris DeWolfe.
Attempting to refocus and return to its roots as a hub for music and pop culture, MySpace launched its own streaming music service, called MySpace Music, and hired MTV veteran Courtney Holt to run the division. MySpace Music, a joint venture with the record labels, does not operate its own download store but instead directs users to Amazon MP3 downloads through affiliate links. But MySpace Music hasn't received thoroughly positive reviews from the record labels hoping to profit from it.
Disclosure: CNET News is part of CBS Interactive, which also publishes Last.fm, a competitor to iLike.
Updated at 7:38 a.m. PDT with additional details and background.
Is this Facebook's big assault on Twitter?
(Credit: Screenshot by Jason Baptiste)Facebook, it appears, was not about to let Google get this week's award for shadowy new projects. On Tuesday night, a number of users--including Mashable blogger Ben Parr--received notifications that they were beta testers for something called "Facebook Lite."
The notifications, as well as the site hosted on the subdomain lite.facebook.com, disappeared within minutes. It seems to have been rolled out prematurely by mistake.
"Last night, the test was temporarily exposed to a larger set of users by mistake," an e-mailed statement from Facebook representative Brandee Barker read. "We have not opened up access to lite.facebook.com to all users at this time. People who are not part of the test and are trying to access 'Lite' will be directed to Facebook.com as usual.
From what it looks like, Facebook Lite is a simpler version of the site and pares down profiles to basic information and a stream of status updates. The easy conclusion is that this would make Facebook's service look a whole lot like Twitter. And given the fact that Facebook had attempted to acquire Twitter, got snubbed, and then acquired the significantly smaller real-time streaming site FriendFeed this week, a Twitter-like service would be rife with implications.
Here's Facebook's official explanation: "We are currently testing a simplified alternative to Facebook.com that loads a specific set of features quickly and efficiently. Similar to the Facebook experience you get on your mobile phones, Facebook 'Lite' is a fast-loading, simplified version of Facebook that enables people to make comments, accept friend requests, write on people's walls, and look at photos and status updates."
Blogger Jason Baptiste managed to get screenshots.
The obvious guess is that this is yet another attempt on Facebook's part to stay abreast of Twitter in the race to own the "real-time streaming Web." There are, potentially, other reasons for launching a simplified site:
• For use on slower connections.
• For stripped-down computers in developing markets, where the 250,000,000-member Facebook wants to make inroads.
• As a more "portable" profile that could potentially tie into Facebook's aim of being all over the Web rather than a destination site.
Facebook hinted that the "developing markets" answer could be an accurate one. "We are currently testing Facebook Lite in countries where we are seeing lots of new users coming to Facebook for the first time and are looking to start off with a more simple experience," the statement from Facebook explained.
Got any guesses, speculation, or conspiracy theories? Comments are welcome.
This post was updated at 7:46 a.m. PT.
Seriously, how much is Facebook worth? It's been an enigma in tech gossip for years now, as the social-networking company grows bigger and bigger and yet remains privately held. And some of Facebook's most rapid growth has taken place in the midst of a stormy economic climate that could batter any company's balance sheet. So here's a rundown of what tech blogs, news outlets, investors, and Valley gadflies have said thus far about just how much Facebook is worth.
Are all these numbers accurate? In a word, no. Some of them were rumors (albeit decently strong ones, as we've omitted some of the more ridiculous ones), and others refer to Facebook's preferred-stock valuation, which as we learned during its legal tiff with onetime rival ConnectU, that isn't necessarily anywhere close to the company's paper valuation.
One thing that's interesting: Take a look at the trajectory. Facebook's perceived valuation keeps climbing and climbing and climbing right up to its $240 million investment by Microsoft. Then, once the hype dies down (and the market starts to sputter) it tanks. It's not until, perhaps not coincidentally, the departure of chief financial officer Gideon Yu and the stronger likelihood of a new investment round that Facebook's valuation starts to climb again.
What's next? Digital Sky Technologies' investment in Facebook assumed a preferred-stock valuation of $10 billion, and employee stock trades have started at about a $6.5 billion valuation. It's not yet clear how much more the company's worth will fluctuate before, at long last, founder and CEO Mark Zuckerberg and his team decide to take it public. That is, of course, assuming that actually happens.
| Playing the Facebook valuation game Everyone's constantly talking about how much Facebook is worth. But how much has that number changed over the past few years? A lot, it turns out. Here's our cheat sheet.
| |
| Few thousand | February 2004: Backed by a few thousand dollars from its co-founders, Facebook goes live as a small, minimalist social-networking site limited to Harvard undergraduates. |
| $10 million | June 2004: PayPal co-founder Peter Thiel becomes Facebook's first outside investor. He invests $500,000 into the 4-month-old social network, which has by now taken its home base of Harvard and a scattering of other elite colleges by storm. Later that year, there are shaky rumors that Friendster--still a major player in U.S. social networking at the time--offered $10 million for Facebook and was turned down. |
| $100 million | April 2005: Facebook raises a $12.7 million Series A round of funding from Accel Partners. Rumors peg its valuation at about $100 million. |
| $750 million | March 2006: BusinessWeek reports that Facebook turned down a $750 million acquisition offer and was shopping itself to potential buyers at closer to $2 billion. |
| $525 million | April 2006: Facebook raises its Series B round of funding to the tune of $25 million. The round is led by Greylock Partners, with contributions from Meritech Capital Partners, and prior investors Accel Partners and Peter Thiel. The company's pre-money valuation is reported to be $525 million. |
| $1 billion | September 2006: Rumors--which are later confirmed--start to swirl that Yahoo has offered to acquire Facebook for as much as $1 billion. |
| $8 billion | December 2006: Early Facebook investor Peter Thiel, who fueled the small social network with $500,000 in June 2004, tells Bloomberg that he believes the company is worth as much as $8 billion but says it is not for sale. |
| $15 billion | October 2007: Microsoft invests $240 million in Facebook at a $15 billion valuation. Although it's not really made clear at the time, the company later clarifies that this investment was in preferred stock and that therefore $15 billion is not the company's actual valuation. |
| $3.75 billion | June 2008: Previously redacted court documents from ConnectU v. Facebook, the trial in which the creators of a onetime rival social network at Harvard sued Facebook CEO Mark Zuckerberg--claiming he stole their code and business plan--reveal that at this time, Facebook valued itself at $3.75 billion. |
| $4 billion | August 2008: Reports surface that Facebook, with early employees growing restless about stock options that they thought they could've cashed out by now, is about to launch a program to permit the sale of some vested shares. The internal valuation is said to be $4 billion. By the end of October, rumors start to spread that chief financial officer Gideon Yu was spotted in Dubai, supposedly to drum up interest from new overseas investors. |
| $3 billion | March 2009: Months later, the Silicon Valley rumor mill still won't stop talking about employees' private sales of Facebook stock--and apparently, the numbers aren't too pretty. The figures tossed around indicate that the stock is trading at a valuation well south of $3 billion. Later in March, Facebook CFO Gideon Yu leaves the company. Persistent rumors hint that he was unable to secure new funding for the company. |
| $2 billion | April 2009: TechCrunch reports that Facebook received a term sheet from potential investors with a valuation of $2 billion and turned it down. |
| $4 billion | April 2009: On the same day, VentureBeat reports that Facebook was on the verge of accepting new funding at a $4 billion valuation, but that Zuckerberg said no. |
| $8 billion | May 2009: The latest rumor is that Facebook turned down yet another term sheet--this one for a $200 million investment at an $8 billion valuation. |
| $10 billion | May 2009: Later in the month, Facebook finally gets that long-rumored cash. The company receives an investment of $200 million from the Russian firm Digital Sky Technologies at a $10 billion preferred-stock valuation. Also included: a plan to buy back a limited amount of vested employee stock. |
| $6.5 billion | July 2009: Digital Sky Technologies begins its buyback of up to $100 million in Facebook employee shares. Each share of common stock is selling for $14.77, which assumes a valuation of $6.5 billion for the company. |
| Source: CNET News research | |
Facebook employees and investors can now sell some of their stock to Digital Sky Technologies, the Russian investment firm that infused $200 million into the social network this spring.
Part of the deal at the time of the investment would be that Digital Sky Technologies would buy back up to $100 million in common stock from shareholders whose shares have vested.
Now, Digital Sky Technologies is purchasing stock at $14.77 per share, which assumes a valuation of about $6.5 billion for Facebook, according to Brad Stone of The New York Times, who first reported the news. That's lower than the $10 billion valuation at which DST originally invested, as well as the $15 billion at which Microsoft invested $240 million in the fall of 2007. But those two figures are considered to be preferred-stock valuations, not paper valuations.
But $6.5 billion is still a higher valuation than a few months ago. Before DST's investment brought some order to Facebook's internal stock trading, an employee at a firm that brokers privately-traded stock told CNET News that some Facebook employees, frustrated that they had not yet had a chance to cash out stock through an acquisition or an initial public offering, were looking to unload stock at a valuation well under $3 billion.
That sort of trading was difficult for Facebook to control. With the DST investment, employee stock sales became more official and easily regulated.
"While individuals must make their own decisions about participating in this program, I'm pleased that the price DST is offering is much greater than the price originally considered last fall," Facebook founder and CEO Mark Zuckerberg said in a statement. "This is recognition of Facebook's growth and progress towards making the world more open and connected."
On the flip side, the relatively low valuation may mean that Facebook employees will be more reluctant to sell to DST. Some may prefer to hold out for the possibility of an acquisition at a higher valuation, or wait until Facebook goes public--something that always seems to be just off the horizon.
Facebook's valuation has been one of the most talked-about numbers in Silicon Valley, especially as the company (reportedly) toys with the idea of an IPO. There were rumors that Zuckerberg had rejected funding that would value the company at $4 billion, shortly after legal documents from the ConnectU vs. Facebook trial revealed that the company then valued itself at $3.7 billion.
And Facebook can look forward to be even more front-and-center in the gossip industry's crosshairs: the alleged tell-all about the social network's origins, Ben Mezrich's "The Accidental Billionaires," hits stores on Tuesday.
(Credit:
Doubleday)
David Fincher is in "advanced talks" to direct the Columbia Pictures movie about the origins of Facebook, according to Variety.
The movie, based on Ben Mezrich's upcoming "The Accidental Billionaires," was written by "The West Wing" creator Aaron Sorkin. It's being produced, Variety reported Tuesday, by Scott Rudin and Michael De Luca along with Dana Brunetti and actor Kevin Spacey. Variety said the movie is called "The Social Network." We hear this is a very preliminary working title. (It, obviously, could also be called "Accidental Billionaires.")
Fincher's past directorial work includes "Fight Club," "The Curious Case of Benjamin Button," and "Panic Room."
An entertainment industry source tells CNET News that early casting searches are under way and that the list of young actors being eyeballed to play Facebook founder Mark Zuckerberg includes both Michael Cera ("Superbad," "Arrested Development") and Shia LaBeouf ("Transformers"). They aren't the only ones, and it's not clear whether either of those two in-demand actors would want to take a turn away from comedies (Cera) or action movies (LaBeouf) to play Zuckerberg.
Cera is, according to the source, a top choice because audiences find him particularly likable. Rumors about the plot of the book "Accidental Billionaires" hint that Zuckerberg is going to be portrayed rather unfavorably--basically, as an obnoxious nerd--and obnoxious nerds are not the world's biggest box-office sell. Cera could make the part a little bit more sympathetic.
But in LaBeouf's favor, I saw "Transformers: Revenge of the Fallen" last night, and the guy really does sound a lot like Zuckerberg.
Meanwhile, Facebook itself reportedly isn't thrilled. The social network consistently hasn't commented publicly about "Accidental Billionaires" and is said to have warned employees not to talk to anyone affiliated with the movie.
Guess what! Google is going to buy Twitter! No, Facebook's going to buy it! Or Yahoo--oh, wait, they can't afford it anymore. The latest and most absurd rumor, floated by Valleywag, suggests that Apple has been looking at buying Twitter, too.
Yes, Apple. It's a hardware company that really only markets and hypes up software as a means to sell more hardware--like how iTunes really exists to sell iPods--and yet apparently it wants to buy Twitter. I'm not sure Twitter could convince me to buy any hardware, except maybe a water balloon to carry around in the hopes that maybe I could lob it at annoyingly Twitter-happy Ashton Kutcher.
You know what? If I had $500 million in cash lying around, I'd look into buying Twitter, too. I'd also buy a flying car. Twitter happens to be, oh, the hottest start-up in the digital-media business right now, so it'd probably be a good investment. But it's also buzzworthy as a form of communication and news delivery--and with the iPhone, it's completely understandable that Apple would be interested in this sort of property. A BusinessWeek report highlights this: Twitter apps are hot on the iPhone, it'd be a cheap buy for Apple--so why not? It ends on a rather smart note, that perhaps Apple ought to invest in Twitter, not buy it.
Why does this sound so familiar? Maybe because we've heard it all before. Two years ago, Google and Microsoft and Yahoo and News Corp. and probably several Abu Dhabi oil billionaires were reportedly in the running to buy Digg, back when it was on the top of Silicon Valley's start-up heap. It was almost a done deal. And again. And again. And none of that has happened yet.
Somebody will probably buy Twitter eventually, unless it manages to come up with a magic-pixie-dust secret sauce business model that blows everyone's minds and it files for a phenomenally successful initial public offering and it totally single-handedly ends the recession and saves Silicon Valley and the world and yaaaaaay! But until that bright and sparkling day, let's stop getting all totally worked up whenever an executive from some huge tech powerhouse is spotted walking into Twitter's office's front door. Maybe they were just there to play foosball.
This is all giving me a headache. And I don't think you want me Twittering that I have a headache again.
