Onetime social-networking pioneer Friendster unveiled a new design on Thursday, and it's focusing on the demographic that has kept it afloat for the past few years: the Asian youth market. And according to Reuters, Friendster may also be sold to a buyer in Asia by the end of the month for at least $100 million.
Yes, Friendster still exists. The first big social network to take off, it was surpassed by the likes of MySpace and Facebook, and its popularity in much of the world quickly faded. Now, it says it has 75 million registered users (no word on how many are active), and that 90 percent of its traffic comes from the Asia-Pacific region. It started offering translated versions of the site two years ago.
New to the revamped Friendster are a suite of features designed to capitalize on the social-gaming craze: a virtual currency, an array of games, and virtual gifts.
Friendster CEO Richard Kimber confirmed to Reuters that the company was shopping itself to buyers, and that investment bank Morgan Stanley had been hired to handle the sale and that the company is working with "a shortlist" of potential suitors. It won't be the first time it's been looking to sell: CNET reported in 2005 that investment bank Montgomery & Co. had been hired for the same purpose.
Kimber, a former Googler, joined Friendster last year right around the same time that it raised $20 million in venture funding in a round led by IDG Ventures.
Collaborative-storage provider Box.net on Tuesday announced that it had acquired Mountain View, Calif.,-based Increo Solutions, a company with two Web products: Embedit.in and Backboard.
Financial terms of the deal have not been disclosed.
Embedit.in, which was launched in June, lets users post and share their documents in the cloud using an Adobe Flash-based viewer. And Backboard, which is the company's only paid product, lets users get feedback and collaborate on projects using that same document viewer.
In a company blog post on the acquisition, Box's community manager, Sean Lindo, said these products will continue to run independently but that both would later be integrated into Box.net as added features.
Citizen news site NowPublic has been sold to another company in the "hyperlocal" space, Examiner.com, the two companies announced Tuesday.
The two sites will operate independently, but Examiner will integrate NowPublic's technology into its site and will encourage NowPublic's contributors to also write for Examiner--right now, the buyer says it has grown 200 percent since the beginning of the year (it launched in April 2008) and has 15,000 active contributors, hoping to hit 30,000 by year's end.
NowPublic's executives, including CEO Leonard Brody, will join the management team of Clarity Digital Group, parent company of Examiner.
"Every day, we hear discussions about whether hyperlocal content will ever be scalable, sustainable, or profitable as a business entity," Examiner CEO Rick Blair said in a release. "With the acquisition of NowPublic, we have the technology to further engage our community of more than 17 million unique visitors per month, and distribute our stories in new and innovative ways."
Was this a bargain-basement acquisition? The companies did not disclose financial terms. But an insider in the space told CNET News that NowPublic had been shopping itself to some pretty big media companies for some time at a higher price than potential buyers were willing to pay. The company had raised about $12 million in venture funding.
Many media companies have simply been launching their own "citizen journalism" initiatives, like CNN's iReport and blogging experiments from newspapers like the Washington Post, which could make an exit tougher for the smaller players.
Digital-media companies like AOL and InterActiveCorp have also made plays to dominate the local-news market--AOL recently acquired local-focused start-ups Patch and Going, the former of which was already a personal investment on behalf of CEO Tim Armstrong, and the Barry Diller-run IAC has been placing a big emphasis on business directory Citysearch.
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.
Nokia has signed an agreement to acquire Cellity, a small German company that creates social-network contact management and address book aggregation services for mobile devices.
Cellity's 14 workers will become Nokia employees. But the service will be shut down and existing user accounts will not be transferred to Nokia.
Cellity, which was founded less than three years ago, is based in Hamburg.
Terms of the deal have not been made public. The acquisition is expected to close in the current quarter.
Acquiring small start-ups is nothing new for Nokia. It acquired Plazes last year while the locator start-up was still in private beta, for example. The mobile conglomerate also has a history of willingness to rebrand. After acquiring a media-sharing site called Twango several years ago, Nokia ditched the start-up's moniker and folded it into a new software division called Ovi.
Whoa. This was unexpected: Amazon has agreed to a stock takeover of Zappos.com, a Las Vegas-based online retailer that has become famous for its unusual corporate culture.
While Zappos started out selling only shoes, it has since expanded to other products.
"This morning, our board approved and we signed what's known as a 'definitive agreement,' in which all of the existing shareholders and investors of Zappos (there are over 100) will be exchanging their Zappos stock for Amazon stock," a memo posted to Zappos by CEO Tony Hsieh read. "Once the exchange is done, Amazon will become the only shareholder of Zappos stock."
Until this point, Zappos was privately owned.
Amazon provided more details in an official release: The company will acquire all outstanding Zappos shares in exchange for roughly 10 million shares of Amazon common stock, which comes out to be about $807 million. Additionally, the transaction involves about $40 million in cash and restricted stock units to Zappos employees. The transaction is expected to be complete this fall.
"We think that there is a huge opportunity for us to really accelerate the growth of the Zappos brand and culture, and we believe that Amazon is the best partner to help us get there faster," Hsieh wrote in his memo, adding that he and other Zappos executives plan to stay on board. "Amazon supports us in continuing to grow our vision as an independent entity, under the Zappos brand and with our unique culture."
Zappos.com got a new look a little over a year ago, when it broadened its offerings beyond just shoes.
Hsieh has become a regular speaker on the tech and marketing conference circuit because of his offbeat way of running a company: encouraging employees to Twitter, offering prospective hires $2,000 to turn a Zappos job offer down, and placing customer service at the top of the priority list with free shipping and returns.
"As you know, one of our core values is to build open and honest relationships with communication, and if I could have it my way, I would have shared much earlier that we were in discussions with Amazon so that all employees could be involved in the decision process that we went through along the way," Hsieh wrote. "Unfortunately, because Amazon is a public company, there are securities laws that prevented us from talking about this to most of our employees until today."
Reports had circulated recently that Amazon was looking at acquiring movie rental outlet Netflix. It has a history of being quite acquisition-friendly. Last year, the company bought audiobook retailer Audible for $300 million, rare book site AbeBooks for an undisclosed amount, and book-centric networking site Shelfari (also for an undisclosed amount).
Amazon actually operates its own shoe and handbag retail site, Endless.com, which is mostly free of Amazon branding. The site launched early in 2007.
This story was last updated at 2:01 p.m. PDT.
A nice little summer shopping spree for AOL: Under the auspices of new CEO Tim Armstrong, the company has acquired "hyperlocal" news site Patch and hipster-oriented events listing site Going.com.
The acquisition of Patch isn't too much of a surprise. Armstrong founded and invested in Patch while at his former gig as Google sales chief. The start-up offers a model for local news on the Web and plans to have launched in a dozen cities by the end of 2009. Going, meanwhile, has been around since 2006 and offers event and invitation services along with ticketing. It's likely that AOL will use its technology to take the service beyond its party-friendly current target demographic.
"Local remains one of the most disaggregated experiences on the Web today--there's a lot of information out there but simply no way for consumers to find it quickly and easily," Armstrong said in a release. "Going forward, local will be a core area of focus and investment for AOL. The acquisitions of Patch and Going will help us build out our local network further with excellent local services that enable people to stay better informed about what's going on in their neighborhood."
He's not the only new-media executive thinking local: in his keynote address at the Advertising 2.0 conference on Wednesday, IAC/InterActiveCorp CEO Barry Diller called local "one of the few areas that hasn't been colonized" on the Web. IAC owns Citysearch, with which AOL has partnered in syndication deals.
Caroline McCarthy rightly rebuts all the "so-and-so will buy Twitter!" nonsense, but there's a very good reason for this nonsense:
The microblogging service still makes little to no money, and the assumption is that it will continue to fail to do so, absent a big-brother type that can turn its community (that word again!) into cash.
As Google discovered with YouTube, however, big community doesn't necessarily equal big cash. The same is likely true of Twitter.
Some communities simply aren't designed to be monetized directly. Unfortunately, advertising isn't the panacea we once supposed, either, so Twitter can't just fall back on that tired Web 2.0 fix-all.
Hence the need for a big brother. Silicon Alley Insider insists that Microsoft should buy Twitter, MyStoreCredit's CEO suggests that Amazon.com should, while Valleywag's noncommittal declaration is that Apple "could" buy Twitter.
Of course it could, but it almost certainly won't, as McCarthy points out.
And yet, we continue to prognosticate about who will buy Twitter when. Twitter has no business, and so it must be rescued by someone that can gift it a business model.
Unfortunately, this is the very reason that would-be buyers remain on the sidelines: perhaps they don't know how to monetize Twitter, either. Twitter has a rich community of users but a poor community of payers. Back in the dot-com days, that seemed like a winning combination. In the recession, it's a recipe for failure.
So, here's my prediction: the minute that Twitter demonstrates an ability to make money, it will become ripe for an acquisition. Guess what? That's the same minute it won't need one, which is why if it does get bought, its valuation will be stratospheric.
Funny how that works.
Follow me on Twitter @mjasay.
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.
Amid stormy economic seas, auction giant eBay has thrown overboard StumbleUpon, the recommendation and "discovery" start-up that it purchased in 2007 for approximately $75 million.
Replacing corny nautical puns with corny alcohol puns, this looks like a symptom of the hangover that followed eBay's acquisition binge during Web 2.0's heyday. Even though many speculated that eBay would use StumbleUpon's technology to power product recommendations, the two companies just didn't find a fit--or a way to make a decent return. eBay's acquisition habits have been more vocally criticized when it comes to Skype, the online telephony start-up that was acquired for $2.6 billion in 2005. It's a well-received product, but never had an obvious niche within eBay and observers have long speculated it would do better on its own.
Financial terms of the StumbleUpon spinoff were not disclosed, but it appears that the company was sold back to the two founders, Garrett Camp (who will serve as CEO) and Geoff Smith, and investors Accel Partners, August Capital, and Ram Shriram of Sherpalo Ventures.
"We are grateful to eBay for its guidance. However, we realized there were few long-term synergies between the two businesses. It is best for us to part ways and focus on our respective strengths," Camp said in a statement. "This change makes it possible for StumbleUpon to continue to innovate and focus on becoming the Web's largest recommendation service."
Last fall, a rumor spread that eBay had hired investment bank Deutsche Bank to help find a buyer for StumbleUpon.
The big question now: Will it do the same with Skype?
