Webware

Yahoo has sold 1 percent of its stake in the Chinese-based business-to-business trading site Alibaba.com, the company said on Monday. Reuters first reported on the story.

In November 2007, Yahoo invested approximately $100 million in Alibaba.com when it went public on the Hong Kong Exchange. Writing in an e-mail, a company representative said that Yahoo's "sale of its shares in Alibaba.com is expected to generate pre-tax proceeds of approximately $150 million."

Although Yahoo has sold its entire direct stake in Alibaba.com, it still indirectly maintains ownership in the company.

According to Yahoo, it maintains approximately 40 percent interest in the Alibaba Group. "Alibaba Group owns approximately 70 percent of Alibaba.com," Yahoo wrote in the e-mail, "and as such, Yahoo continues to own an approximately 28 percent indirect interest in Alibaba.com."

Although its major holding is Alibaba.com, the Alibaba Group "also owns (Chinese Web sites) Taobao, Alipay, China Yahoo, and Koubei," the company wrote.

Yahoo's ownership interest in the Alibaba Group is, according to Yahoo, "an important long-term way to participate in the China market." It believes that through the Alibaba Group, it can solidify its position as a major investing partner with Chinese firms.

But that doesn't mean Yahoo will necessarily hold on to sites for too long. The company also wrote that it decided to sell Alibaba.com stock because its "1 percent direct IPO investment" increased so substantially that it felt compelled to sell it. Yahoo said that it "regularly evaluates its financial investments." If one of those investments seems profitable, Yahoo plans on selling the investment to yield that positive cash flow.

eBay wants to spin off telephony service Skype into a separate publicly traded company, but something's standing in the way: Skype's founders are threatening to take back some of the technology amid a licensing dispute.

The auction giant's solution, according to a Bloomberg report on Thursday: build a new one.

This was revealed in a 10-Q regulatory filing with the Securities and Exchange Commission; eBay is not commenting beyond the filing. You can decide whether "Frankenskype" or "Skypenstein" is a better name for the hypothetical creation.

Here's what has happened: Skype's founders have established a company called Joltid Ltd., which still owns the rights to some of Skype's technology. Joltid has made the accusation that eBay doesn't have the right to do everything it wants with all of Skype's code as a result; eBay is suing Joltid to get that technology back. (Is this like the Silicon Valley equivalent of body-snatching?) But the catch is that the trial isn't scheduled until next June, which could put a big roadblock in the way of eBay's plans for a Skype IPO.

So that's why eBay is working on a total rebuild of Skype's software.

There is, however, this little issue. "The new software will be expensive and might not work," Bloomberg's article summarized. "The company said it might have to shut down Skype if the dispute with the founders isn't resolved."

eBay purchased Skype in 2005 for $2.6 billion, but it hasn't proven to be the best fit for the company. Rumors circulated that it was looking to sell Skype, possibly to Google, but then opted to take the company public instead.

Download Skype for Windows | Mac | iPhone | Windows Mobile from CNET Download.com.

LogMeIn, the company behind a recent Webware 100-selected remote-desktop application that lets users access files and data on different computers, plans to go public.

According to documents LogMeIn filed with the Securities and Exchange Commission on Friday, the company plans to offer 6.6 million shares. It hopes to price those shares between $14 and $16.

Assuming that LogMeIn completes its filings and is eventually listed on the Nasdaq stock market, it will be faced with enhanced scrutiny. Not only will it be confronted with more, costly regulations at the hands of the Sarbanes-Oxley Act of 2002, it will also have a slew of new stakeholders that will require the company to operate at a high level. It's a tall order.

Regardless, LogMeIn ostensibly believes that it's up to the challenge. So now the question is whether its finances can match its desire. Is LogMeIn financially sound, now performing better than it has in the past? Let's take a look.

Want to own a piece of Tesla Motors? Facebook? LinkedIn? Unless you're a founder, employee, or a funding source for these companies, you're out of luck. That's what separates "public" companies from private: anyone can buy a piece of a public company on an open exchange. There are no wide-open exchanges for private company shares.

But there is now, at least to a degree. Sharespost is a marketplace where people who own pre-public shares can connect with investors who want that stock. Since these private companies also don't have open, audited books where potential investors can study up on the companies, Sharespost collects analysts' research on the companies in its market to help buyers and sellers agree on a value for shares being transacted.

The added values of the Sharespost marketplace, according to CEO Greg Brogger, are several. First, it connects buyers and sellers. Second, it helps with "price discovery," as noted above. Third, it facilitates the transactions by handling the paperwork and helping buyers and sellers work through contingencies attached to employee stock awards. And fourth, through an arrangement with US Bank, it processes and clears all the money.

Sharespost is not for the casual investor who wants to nab a few shares of Facebook for fun. Each transaction incurs a $2,500 fee (for both buyer and seller) from US Bank. And you must be an "accredited and sophisticated buyer" under SEC Regulation D, which limits the universe of buyers to people with substantial invested assets and experience. There is no such limitation for sellers. So if you're sitting on a few thousand shares of beached stock at a biggish private company, and baby needs a few thousand new pairs of shoes, Sharespost might be able to help you out.

Sharespost has only 100 companies in its market so far, and most have no activity.

(Credit: Screenshot by Rafe Needleman/CNET)

Bizzarely, Sharespost does not collect a piece of these transactions. Brogger doesn't want to make his company a brokerage. He doesn't want it to be seen as profiting from individual transactions on his site. Instead, he charges buyers and sellers a $34 a month fee for using Sharespost. "There are a lots of transactions happening now in coffee shops," Brogger says, and with his model, he doesn't care if that continues or if the sales are closed through the US Bank clearing system. Although with the amount of money per transaction involved here, I don't see why he doesn't go for a small bit of the action.

... Read more

Facebook has named former Genentech executive David Ebersman to the office of chief financial officer. He replaces Gideon Yu, whose departure was announced at the end of March.

"We received a lot of interest in the CFO position and had the opportunity to meet with many impressive candidates," said Facebook CEO Mark Zuckerberg. "We quickly recognized that David was the right person for Facebook. He was Genentech's CFO while revenue tripled, and his success in scaling the finance organization of a fast growing company will be important to Facebook."

David Ebersman earned a bachelor's degree from Brown University in 1991, according a university Web page.

(Credit: Brown University)

Ebersman served as chief financial officer at the San Francisco-area biotechnology company Genentech from 2006 through April 2009 after moving up the ranks in the company for about a decade. The company was sold to Swiss pharmaceuticals giant Hoffmann-LaRoche in March, shortly before Ebersman stepped down.

He will officially start at Facebook in September.

Gideon Yu's departure from Facebook came amid rumors that he had failed to secure enough venture capital to keep the advertising-based company pushing forward toward profitability, something that Facebook repeatedly denied. The company said its search for a new CFO would focus primarily on "someone with public company experience." Ebersman wasn't at Genentech when it went public in 1980, but certainly did have experience running the financial operations of a public company--as well as its sale to a bigger corporation.

Two months after Yu departed Facebook, the social-networking company announced that it had received an additional infusion of venture capital, to the tune of $200 million, from Russian investment company Digital Sky Technologies.

This post was updated at 12:01 p.m. PDT.

OpenTable was the special of the day on Wall Street on Thursday.

The restaurant-reservation company's stock soared on its first day of trading on Nasdaq, gaining nearly 60 percent to close at $31.89 after selling 3 million shares at $20 a share during its initial public offering Wednesday. Nearly 5 million shares changed hands, trading as high as $35.50.

OpenTable's stock performance is the biggest first-day gain for an IPO since energy-management systems firm Orion Energy Systems gained 65 percent in its debut in December 2007, according to IPO research firm Renaissance Capital.

OpenTable's revenue comes from monthly subscription fees charged to restaurants for access to the company's service, as well as a $1 fee paid by restaurants for each seated guest derived from reservations made on OpenTable's site.

The company earned 2 cents per share on nearly $16 million in revenue in the quarter ended March 31, 2009, and lost 10 cents per share on revenue of $13.2 million in 2008.

The San Francisco-based company says it has 10,000 restaurant customers around the world and has seated more 100 million diners since its inception in 1998.

Online restaurant reservation provider OpenTable is getting ready to go public.

According to a release, the company will price its initial public offering at $20 per share.

But a share price doesn't tell you the whole story about a company. Whether you're thinking about investing in OpenTable, or you simply want to see why the company's executives believe that it has a good chance to be successful on the Nasdaq, there's no better way to find out than to look at its current state of operations.

Profits (or no?)
According to its latest SEC filing, OpenTable earned $16 million in revenue during the three months ended March 31. During the same period in 2008, it earned $13.2 million in revenue. For the first quarter of 2009, the company generated a profit of $366,000. Last year, it lost $87,000.

Annually, OpenTable hasn't fared so well. According to its 2008 income statement, the company lost $1.02 million on revenue of $55.8 million. In 2007, the company generated a profit of $9.2 million on $41 million in revenue. That said, its profit was the result of a $9 million tax benefit. It lost $856,000 on operations in 2008 before it incurred that benefit.

It's been a big week for Mark Zuckerberg.

First of all, the young Facebook founder and CEO finally turned 25. That was last Thursday. But more importantly for the tech rumor mill, he's had to deal with a fresh flurry of speculation: did the company really turn down a $200 million funding round at an $8 billion valuation? Has it raised $150 million specifically so that employees can cash out their stock?

Needless to say, in Zuckerberg's interview Tuesday at the Reuters Global Technology Summit, he didn't answer any of those questions concretely. His response to the notion of more capital was, in short, that Facebook doesn't need it but that doesn't mean they won't raise it.

"If there's an investment to be done on very good terms, we will consider it if for no other reason than to have more buffer if we want to do something in the future," Reuters quoted Zuckerberg as saying. "Some of the rumblings that people are reporting on, are just different conversations that have happened, but there's really nothing new to talk about there."

He did say that it'll be "a few years" before the company chooses to go public.

There have been rumors that Facebook will launch an ad network for the developers using Facebook Platform and Facebook Connect. Zuckerberg offered the company's version of a neither-confirm-nor-deny answer when asked about this, saying (per Reuters) that "it could be a pretty natural extension for us to do something with ads or a number of other things that we've considered." Somebody's been well trained in the vague language department.

Only 25 years old, and he's already mastered that complicated Jedi trick known as the non-answer. Impressive!

One of my favorite companies from the last Internet bubble, OpenTable, has filed to go public.

In this economy? Are they out of their minds?

Perhaps not. The company is marginally profitable, and its total addressable market is still largely untapped. The OpenTable reservation system is not in place at all restaurants that could benefit from it, especially those outside the United States. From a product perspective, since the system does increase the number of chairs filled in a restaurant, it's a good and proven investment for a restaurant to make.

However, this is no magic bullet to save the dining industry. Restaurant revenues overall will decline during the recession, as people strive to save money on all discretionary expenses such as dining out. Restaurants will go out of business and some will no doubt be OpenTable customers. So without a stepped-up sales push, which IPO funds could provide, OpenTable's growth would be destined to slow this year.

OpenTable benefits from a strong network effect: The more restaurants that use it, the more valuable it becomes to consumers, and thus the more potentially valuable it becomes to restaurants not yet using it. That's assuming there's no open standard for online reservations, but I haven't seen any drive toward that, and I wouldn't expect the restaurant industry to devote resources to it as long as OpenTable treats its customers well.

One could argue that investors are wary of the public market now, for good reason, and one might thus think that any company making a public offering now will generate much less cash by doing so that it would during a bull market. That is not necessarily true. As one of the few companies are currently able or willing to go public, OpenTable will get a lot of investor attention.

According to Renaissance Capital, there were only 43 U.S. IPOs in 2008, down from 272 in 2007 and 221 in 2006. The last U.S. IPO in the technology sector was Web hosting firm Rackspace (RAX), in August 2008.

There's a financial analysis of OpenTable on TechCrunch: OpenTable Files for IPO, Reveals Finances.