Webware

(Credit: Dan Farber/CNET Networks)

Marc Andreessen, founder of Netscape and co-founder of Opsware, and Ben Horowitz, also co-founder of Opsware, are launching on Monday a new venture fund, cleverly named Andreessen Horowitz (previous story). The fund's mission is financially broad but technologically narrow. Andreessen told me the $300 million fund will invest from $50,000 to $5 million in start-ups, which means it's part angel fund and part typical venture capital firm.

Technologically, Andreessen is keeping things in one wheelhouse: his. "We're ruling out products we don't understand," he says. So no clean tech, no energy start-ups, no green companies, biotech, life sciences, car companies, content, or space vehicles (Andreessen must know that I have a profile of Steve Jurvetson upcoming). Good technologies for the fund include consumer Internet companies, cloud computing, and Web infrastructure plays. Andreessen Horowitz will headquarter on Sand Hill Road in Palo Alto, Calif., and will invest in "almost nothing" outside of Silicon Valley.

The firm will invest in what Andreessen calls "technical founders," those entrepreneurs who get their hands dirty when developing products, and not business wonks who tend to hire developers to implement their vision. "We love it when founders want to be CEOs," Andreessen says.

The fund has made no investments yet, but privately Andreessen has experience as an angel investor. He has put his own money in Twitter, LinkedIn, Aliph, Digg, and Delicious (which was acquired by Yahoo).

What Andreessen knows

I told Andreessen that I thought it was an awkward time to launch a new venture fund. Many of the funds launched during the last bubble (1999) are, by any metric, failing. Andreessen, in fact, quotes stats that show that only about 10 to 20 of the approximately 700 extant funds deliver good returns. With money tightening, there's simply no way the majority of funds--which, to liberally paraphrase Andreessen, suck--will be able to raise money to keep going.

"The top firms have the ability to find and invest in the good companies, " Andreessen said. "We put the case forward that we'll be able to find them."

But even so, I asked him, aren't the exits, or liquidity events, closed for venture-funding companies now and for the foreseeable future? Andreesen: "I don't think there's an exit problem. I think there's a valuable company shortage." He pointed out that there are exits, just not many of them: Data Domain is in the process of being sold in a bidding war for about $2 billion; Pure Digital was sold for $590 million to Cisco Systems; Opsware (Andreessen's company) got picked up by Hewlett-Packard for $1.6 billion; and OpenTable went public and LogMeIn filed for IPO recently.

"The problem is that there aren't valuable companies being formed. And there never have been," Andreessen continues. There are, he says, on average 15 tech companies launched a year that will ultimately do $100 million a year in revenues, and these companies are responsible for 97 percent of the returns in the venture industry overall. "There just aren't that many great founders."

The model for Andreessen Horowitz, when it picks up a company early, will be to give a small company a small amount of money--enough to last three to five engineers nine to twelve months--while they are building their product and have minimal expenses. New Web-based development and hosting products make development fast and cheap. Andreessen won't take a board seat early. He doesn't believe a company needs a board at all until they take in much more money.

Once the product is built, then he'll follow on with $5 million to $10 million, and help the company transition to one with a sales staff, a board, and the headaches of marketing and human resources.

Nothing that Andreessen Horowitz is doing in its firm is revolutionary. The timing is odd, but the philosophies of the fund are straightforward. As is the case for all tech entrepreneurs, the vision is just the opening of this story. The rest of the tale is the execution. We don't know yet if Andreessen Horowitz will pick winner entrepreneurs and companies, although with the firm's connections and Andreessen's history, it's got a chance.

Sometime on Thursday, the one millionth site was created on Ning, the build-your-own-social-network company that was co-founded by Silicon Valley baron Marc Andreessen. It launched just over two years ago.

Ning now has 22 million registered users, about 6.1 million of whom are considered active. Out of the million networks, about a fifth are currently active.

While these numbers are still small compared with the likes of Facebook (on whose board Andreessen sits) it's impressive considering Ning lost 20 percent of its page views in December when it chose to shut down networks containing porn and other adult content. Traffic had recovered in February, CEO Gina Bianchini told CNET News.

Bianchini added that much of Ning's growth comes from networks that aren't ultra-niche, but are focused on something that has a rabid and vocal following. Case in point: thetwilightsaga.com, an official fan site for the vampire-themed book series that converted to a Ning network shortly after the first book was turned into a hit movie. In two months, 94,000 people joined, she said.

"I believe that no one is doing and thinking about graphing interests and passions, and thinking about people as their interests and passions, except us," Bianchini told CNET News.

As has been repeatedly rumored, Silicon Valley legend Marc Andreessen will be taking a seat on Facebook's board of directors. In a press release issued Monday afternoon, the veteran entrepreneur--co-founder of Netscape, former CTO of AOL, and now co-founder of social site Ning--was announced as the board's fourth member. He'll join Facebook founder Mark Zuckerberg as well as two of the company's early investors, Accel Partners' Jim Breyer and PayPal co-founder Peter Thiel, now of the Founders Fund and Clarium Capital.

"Marc is an industry leader, and we're fortunate to have him join our board," Zuckerberg said in the release issued Monday.

Not surprisingly, the 24-year-old hopes that Andreessen can act as a sort of Obi-Wan Kenobi figure. "He has experience that is relevant to Facebook in so many ways: scaling companies that are experiencing extraordinary growth, creating successful technology platforms, and building strong engineering organizations. I know Marc will be a great mentor to me and our leadership team," Zuckerberg said.

Perhaps most interestingly, Facebook's release refers to Ning as "a complementary platform to Facebook." When rumors began to swirl about Zuckerberg wanting Andreessen on his board of directors, some critics suggested that he'd have a conflict of interest as co-founder and chairman of a potential rival. But Ning is more a Web 2.0 spin on the discussion forums of old (say, 1998), allowing members to create micro-niche communities centered around discourse. Facebook, for many, is the 21st-century edition of an address book: highly effective at what it does, but centered on maintaining connections rather than letting interest groups flourish. Facebook's own "Groups" feature, for example, is very stripped-down compared with Ning.

And it doesn't look like Andreessen sees Facebook as the competition either. "Facebook is one of the most innovative companies on the Web and it's an honor to join the board," he said in the statement. "I'm looking forward to helping the team as Facebook continues to grow."

I'm In Like With You, a social-network-turned-gaming-site that caught a brief flurry of press for its eye-popping design when it launched, has just closed a $1.5 million round of venture funding led by Spark Capital. It's the first funding the site has received since its angel round last year.

In addition to Spark, the round includes current investors Baseline Ventures, Betaworks, and veteran investor Ron Conway, as well as an investment from Netscape and Ning founder Marc Andreessen.

The funding round was widely rumored as the site--having failed to live up to the hype it first generated as a flirty social network--started rebranding itself as a hub for social games but would clearly need more funding (or a corporate parent) to do so. Founder Charles Forman, a fixture on the New York digital-media social circuit known for handing out giant business cards and owning a seemingly endless supply of pink T-shirts, was introduced to Spark's Bijan Sabet through other local young entrepreneurs late last year.

In a phone interview, Sabet praised Forman's creative vision and willingness to completely change the site's direction when he saw a new opportunity in the growing niche of social gaming. I'm In Like With You is keeping its trippy, cartoonish design but the focus is now on multiuser casual games like Blockles, Gemmers, Draw My Thing, and an impending game that involves hamsters.

To complement the funding round, Forman has started expanding his team, including the hire of Skype veteran Poojitha Preena as chief operating officer as well as several game developers. Forman told CNET News.com that the entirety of the $1.5 million would be used to throw a large-scale party, but we think that one's a joke.

Facebook has asked tech veteran Marc Andreessen to join its board of directors, according to Kara Swisher at All Things D. The deal isn't finalized, apparently, but Andreessen has "verbally agreed" to the commitment.

The Netscape founder is currently at the helm of his own social-networking site, Ning, which lets Web users create their own branded community sites without technical expertise. Because of its focus on niche communities rather than mass communication, it's not a direct Facebook competitor.

Facebook, meanwhile, has been padding its ranks with seasoned industry leaders as a means of competing with the Valley's biggest names. Google sales executive Sheryl Sandberg was brought on recently as chief operating officer, and this week it was announced that Google communications czar Elliot Schrage would be making the jump to Facebook as well.

Current Facebook board members include Accel Partners' Jim Breyer and PayPal co-founder and Founders Fund investor Peter Thiel.

SAN FRANCISCO--"It turns out that the Internet has worked pretty well," industry mainstay Marc Andreessen told an audience at the Web 2.0 Expo here Thursday morning.

Andreessen's keynote interview with Federated Media chief John Battelle was somewhat of a history lesson into the distant past of the Web (you know, 15 years ago) followed by the requisite speculation about an uncertain future.

Marc Andreessen looks back and ahead at the Web 2.0 Expo.

(Credit: Seth Rosenblatt/CNET Networks)

"It was a very confusing time," Andreessen said of the Net's early days. In the early days of Mosaic, the browser created by Andreessen that eventually evolved into Netscape and then Mozilla and then Firefox, "the conventional wisdom in the business world and in large parts of the press was that interactive television was going to be the future...the Internet, really, at the time, and the Web and Mosaic were really sort of renegade academic research projects."

But Andreessen's current project, Ning, couldn't be less renegade. The slick dot-com, which taps into the social-media craze by letting members build their own social networks without requiring technical expertise, has been fueled not only by Andreessen's Valley cred but also by a sky-high valuation and a recent $60 million funding round that the exec famously said was for an economic "nuclear winter."

"I have no idea what's really going to happen," Andreessen said when Battelle asked him about the "nuclear" comment. "There's this huge irony for our industry...we got blamed for a lot of the last crash. We are the most remote uncorrelated part to this crash that's happening because tech may have lots of issues but we tend to not have a lot of debt and this is all about debt and credit.

Regardless, Andreesen seems to think his own company's well-prepared. He proudly touted some Ning statistics: more than 250,000 individual social networks have been created, 75 percent of which are active. Page views are going up 10 percent week over week; a million new members are joining every month; and 1,500 networks are created every day.

But Ning, like Battelle's Federated Media, could take a big advertising hit in a recession. Once again, Andreessen reminded Battelle and the audience that things tend to be unpredictable. Back in the early days, he said, "everybody told us there was no way to make money on the Internet."

Battelle made sure he touched upon a particularly touchy subject for Andreessen: Microsoft. Gates & Co. famously dealt a fatal blow to Andreessen's Netscape Navigator browser in 1995 when it released Internet Explorer. Anyone hoping for nastiness would've been disappointed, though, as Andreessen's take on Microsoft was quite friendly. "It's hard to even conceive what this industry would be like if Microsoft hadn't standardized the operating system," he said.

"Our view was, we adapt," Andreessen said when asked if he'd freaked out over the debut of Explorer. "The browser turned into Mozilla, which turned into Firefox, which has been a huge success."

Andreessen also addressed Microsoft's ongoing desire to acquire Yahoo. "If the deal goes through I think it will actually be a really good deal. I think they'll get a lot out of it," he said.

But he added that he'd be a bit sad for Yahoo. "It's always a little bit sad, the prospect of an entrepreneurial company, especially one that's had that kind of success over the years, not being independent. But over time these things are part of the natural evolution."

The media business hasn't figured out that direction yet, in his view. "Most of the major media companies are still largely unprepared for the shift, which is ironic considering how long the stuff has been around. If you look at newspapers right now they're just in absolute freefall from a business standpoint."

He kept talking about evolution. But somewhat paradoxically, he repeatedly emphasized that nobody can really tell where it's going. "We're 15 years into it, and yet things are still developing, and a lot of things are still unknown."

I would be wary to predict a mass exodus from currently popular social networks, but after playing around with Ning in the last few days, I'd say it could easily steal users from MySpace. Ning lets you create your very own social network, with custom branding, forums, photos, and videos. Everything is fully integrated and customizable with really slick looking themes that put less focus on individual user profiles, and more of an emphasis on group sharing and communication.

Compared to MySpace and Facebook, you still get to create and manage an extensive personal profile. The main difference is that Ning isn't just a network of profiles; it's a network of groups. Each time you join one of these groups, your profile can be customized with information that's pertinent to that group, making your profile a little more dynamic, depending on which users are accessing it. This allows more room for creativity and interactivity with other users.

Webware's Ning page

(Credit: CNET Networks)

Adding media to a Ning page is really simple. Ning hosts videos and photos itself, with really simple uploading tools that let you upload content straight from your hard drive. You can also point to sites like YouTube, Google video, or Flickr to incorporate media from other sites, although you have to jump through hoops to use Flickr (other sites, like MyPunchBowl and SplashCast, make it much easier). There are two core uses for Ning: Mingling with large groups of people who share similar interests, and establishing smaller community groups for your friends. In either instance, you can sign up with your Ning ID, a login that's shared throughout the entire Ning network. It's a little bit like Blogger, which lets you contribute to multiple blogs with the same networked identity.

Ning offers premium services that come at a monthly cost. You can add your own advertising, use a custom domain, and bump the amount of storage and bandwidth for uploaded media. At the free level, each Ning networked site is given 500MB for private content and 5GB for public content, which should be plenty for most small groups but has the potential to fill up with large groups.

Ning has a really fresh feel about it. There is an incredible amount of customization and potential for people who want to create a community site, but don't feel like jumping through the hoops of buying a domain, purchasing a hosting plan, and finding someone to code the project. While you do have to give up some of the freedoms of running your own site, Ning offers a really great sandbox for the casual user, and those seeking more than a sea of profile pages.

Webware's Ning can be found here.

In Marc Andreessen's vision of the future, MySpace is going to face stiff competition from a million mini MySpaces.

One of the cofounders of Netscape and a symbol of the technology revolution of a decade ago, Andreessen is now backing a company called Ning, which launched a set of new tools on Tuesday designed to help even the most tech-challenged person build a social-networking site.

"(Ning) is essentially MySpace version 2," Andreessen said last week, adding that he is placing a bet that social-networking sites will follow a similar development path to that of Internet service providers of the 1990s.

"It's like the Web," Andreessen said, "After people get used to it, they want freedom. The analogy that I think is very relevant is that it's very much like the public's shift to the Web from AOL, CompuServe, and Prodigy. Stuff gets started and one-size-fits-all makes a lot of sense, but as people get farther into it, they want customization, they want control, they want flexibility."

(Credit: CNET Networks)

That's what Palo Alto, Calif.-based Ning offers. Andreessen predicts that people will want to create more niche sites for people with similar pursuits and interests, and the MySpaces of the world will be too big to meet their special needs. MySpace and similar sites allow users to post their profiles on individual pages. Such sites control the advertising on those pages, as well as much of the technological functions of the pages.

Instead of just pages, the 2-year-old Ning is offering users the ability to build their own Web sites. Premium services let users choose their own domain name and give them control over the ads on their pages.

Ning also allows users to choose from an array of features, such as videos, photos, music, forums, profiles, and blogs. They can choose logos and decide whether to restrict access to the site to certain people.

The service, says Ning cofounder and CEO Gina Bianchini, allows users to select certain designs and move them to their pages in a drag-and-drop function.

"You don't need to know HTML," Bianchini said. "If you do know it, then you can do anything."

Anyone using the free service will have to settle for ads posted by Ning. For the right to go with the ad service of their choosing--or no ads at all--users must pay $19.95 a month. To use their own domain name, people must pay $4.95. For sites with lots of traffic, Ning sells additional bandwidth and storage at $9.95 per month per unit; a unit consists of 5GB of storage and 100GB of bandwidth.