D-on-Net

Facebook gets $550M valuation

Marketwatch's Bambi Francisco has reported Facebook received a $550M post-money valuation after raising $25M in its latest round of financing from Greylock ventures.  My intial reaction was WOW!  However, the market sets the price and considering Facebook has been a highly courted company, who am I to dispute the valuation.  After all, Bambi is right, when digging through the numbers it looks like NewsCorp paied bottom dollar for MySpace. 

Facebook reportedly has 7M registered users, which to put the $550M valuation in perspective equates to approximately $78 per registered users.  MySpace was acquired for $580M and had 18.5M registered users equating to approximately $31 per registered user.  Facebook reportedly turned down a $750M offer from Viacom, which we will assume Facebook had 7M registered users during the time of the offer equating to $107 per registered user or approximately 3x the price paid per registered user for what NewsCorp paid to acquire MySpace. 

Google Enterprise Search throwing open API party

Today, Google announced the release of a new, smaller and beefed up Google Mini Search appliance.  More interesting are all of the enterprise software players who have developed APIs for the appliance such as Cognos, Oracle, Salesforce.com and SAS.  The release also mentioned others, including Google's enterprise partner, Bearingpoint, have devloped APIs for the appliance broadening Google's enterprise search capabilities.  Google's API is open to developers, so I expect other enterprise software players to follow the herd in developing APIs for the appliance as well.  Revenue from the company's search appliances obviously accounts for an immaterial portion of the company's revenue to-date, but I believe this has the potential to become meaningful in the long-run.  Google is clearly becoming more focused on making a push into the enterprise and I expect more frequent announcements regarding their efforts.

Yahoo! CFO flattered by Google

For the second quarter in a row, the day after Yahoo!'s earnings release, Yahoo!'s CFO, Susan Decker, was interviewed on CNBC to discuss the company's earnings and outlook.  I bring this up because this time she was asked about Google as a competitor and how Yahoo! feels about all of Google's new product releases, such as Google Finance etc.  She responded by saying everyone at Yahoo! is flattered Google is adopting the strategy Yahoo! outlined years ago.  I thought her response was interesting because the CNBC anchor continued to hammer on the dreaded "portal" label of yester year and CFO Decker never once acknowledged Yahoo! as a "portal."  Well, it is obvious Google is becoming a portal and that Yahoo! is and has been one almost since inception, but I find it laughable it seems nobody wants to be labeled something "so early-90s."  Instead of describing Yahoo!'s strategy as a "portal strategy", CFO Decker went on about Yahoo!'s multiple platforms increasingly drawing more and more consumers on a global scale (reportedly at 500M consumers or 1 out of 2 internet users go to a Yahoo! site on a daily basis) and with it, more advertisers.  I for one have not given up on Yahoo! and do believe they offer one of most dynamic experiences on the web.  However, they have become the turtle of innovation, yes, Google is the rabbit, and need to continue investing to improve existing properties in order to keep the eyeballs coming back for more.  I for one believe Google has a long way to go in terms of catching up to Yahoo! on a true portal strategy, but the velocity they are able to innovate could enable them to close the gap sooner than many realize. 

As for 1Q06 earnings, Yahoo! didn't exactly hit a homerun in 1Q06, but they did'nt puke like they did in 4Q05.  Coming in slightly above consensus estimates on the top-line and equal with EPS estimates was enough to set a positive tone for the quarter and their peers such as GOOG, EBAY, AMZN, BIDU all of which responded positively in after hours trading.  The bears have been hammering Yahoo! for months because of lost search market share.  Management spent a great deal of time talking about the rollout of its new search features scheduled for 2H06 on the call and is reportedly going to be releasing more details during its analyst day May 17th.

Google launches first mobile ads offering in Japan

Google announced they are serving mobile ads in Japan.  However, the press release provides no indication when the company will  begin doing so in the U.S.  The ads are served in the same manner as when searching on a PC, but Google reported the ads will not be shown on the right of the user's mobile screen and will instead be on the top and bottom of the search results.  However, more interesting is the ads also feature click-to-call functionality, so users can connect directly to the advertiser.  This is interesting news and continues to demonstrate the velocity with which Google is able to roll out new product features.  Asia clearly represents a large opportunity for Google, and I love that team Google chose to roll out the feature first in Japan where Yahoo! has such a dominating presence.  Once again, it is time for Yahoo! and MSN to play follow the leader. 

Google and EarthLink set to tango again

The WSJ reported EarthLink is planning on teamming up with Google to bid on providing Wi-Fi to another city, which is TBA.  EarthLink's CEO, Garry Betty, also shared some interesting insight regarding how they plan on collaborating with their next Wi-Fi initiative, which differs from their San Fran joint proposal.  While the San Fran proposal involves a two-tiered system with one being free and supported by advertisements, their next proposal is set to offer more limitied free access to users.  Non-paying subs will only be able to sync up to Google's ad-supported Local Search service and specific area websites.  Google is reportedly supplying the technology that will prevent non-paying subs from gaining full access to the web and will be sharing some of the revenue generated through advertisements with EarthLink.  While this is not monumental news it does confirm Google has interest in pursuing Wi-Fi outside of the Bay area, which several Google insiders have denied for the past several months.  I believe the two companies will contiune to collaborate on Wi-Fi and won't stop at only a second city.  The opportunity to provide location based services and serve local advertisements is too larg for Google to remain on the Wi-Fi sidelines, and I expect more of these announcements to follow.

It will be interesting to see what kind, if any, of a response Google sees on the Wi-Fi front from Yahoo! and MSN.  Yahoo! and MSN have deep relationships with some of the telcos, which could pose as a barrier in forming any meaningful Wi-Fi partnerships.  While Google is the clear leader in online search and local search is the next big opportunity that is currently up for grabs.  All of the major players are racing to form partnerships with wireless carriers and mobile device players in order to position themselves for local search, but to date, Google is the only one making any moves on the municipal Wi-Fi front. 

MSN Search down today

MSN's search engine was reportedly down for almost four hours today.  MSN has yet to comment on what caused the outage.  Can't help but wonder how many chairs CEO Ballmer broke over this disaster.

Google & Earthlink win San Fran WiFi deal

The WSJ reported Google and EarthLink have been selected to roll out WiFI in San Francisco.  However, it appears there is still some negotiating to take place between San Fran and Google/EarthLink, which all parties hope to have complete by this fall.  Part of the negotiations stems around Google wanting to support one of the WiFi tiers with advertising.  This is a big win for Google and EarthLink and is actually EarthLink's second win as they were also selected to provide WiFi to the city of Philadelphia last year.  EathLink is struggling in the same veign as AOL with a deteriorating dial-up business and is betting its WiFi initiatives will aid in recouping lost cash flows.  However, there is also talk of EarthLink spinning off its WiFi division.  For Google, this means they will have a larger (10x the population of Mountain View, CA - another Google WiFi zone) audience to begin testing new local advertising technologies and strategies, such as location based services.  This is yet another win that puts Google ahead of its peers on this front.  Depending on how long the negotiations drag on, it remains possible the network could be up by the end of 2006.  The question remains if the two will join forces in bidding to win WiFi contracts for other cities.  On the equipment side, EarthLink reported it will be using devices from Motorola and privately held Tropos Networks. 

Background on partnership:  In February, Google and Earthlink decided to squash their separate bids and join forces in order to submit a two-tiered offering to the city.  Users will have the option of selecting Google's slower service (5-6x > dialup) for free or paying a monthly fee, reported at $20/mo., to gain access to Earthlink's faster (20x > dialup) connection.  EarthLink's president of municipal networks has said the company would pay for the majority of the $15mn cost to build and maintain the network over the next 10 years.  However, it is likely Google will be sharing a portion of its ad revenue generated through the network with EarthLinK.  The decision of Google to join with an ISP did not come as a shocker.  Google has a long standing relationship with EarthLink and both parties clearly believed they had a better chance of winning through a collaborative offering.  Google and EarthLink beat out five other proposals from Communication Bridge Global, NextWLAN, Razortooth Communications LLP, MetroFi and SF Metro Connect, and a partnership that included SeaKay, Cisco Systems and IBM.

Google selected by Clear Channel as exclusive search partner; What about DMarc?

Clear Channel announced they have selected Google as their exclusive online search partner resulting in Google Search powering over 1,100 of Clear Channel's radio station web sites.  However, the announcement is much more interesting than Google simply getting to add its search bar across this large network of sites.  Google is also getting access to tons of local advertisers in which the release states "Clear Channel's local advertisers will also benefit from the deal, as they will have the option to have their advertisements showcased first, followed by Google's sponsored links and Web search results."  Although the release doesn't go into the specific details regarding this "option" it safe to assume this involves local advertisers to pay a premium.  The most important aspect of this partnership is the fact it appears Clear Channel's radio stations will be educating local advertisers on Google's Adwords platform, again giving Google more feet on the street at the local level.  Aside from AdSense for Search and Google Web Search, AdSense for Content is also scheduled to be implemented across the network of sites.

After reading info. on Clear Channel's website it appears their radio stations are operated down to the local level.  I interpret this to mean each station is likely responsible for their own ad sales, tracking, reporting and implementation (although I am sure advertisers can run campaigns across several of Clear Channel's stations if they choose).  This brings me to Google's acquisition of DMarc Broadcasting.  This partnership with Clear Channel could be the beginning of a beautiful friendship if Google is able to get Clear Channel to implement DMarc's technology across its vast newtwork of radio stations.  I would bet these discussions are already in progress and this announcement was simply the precursor of more things to come. 

YouTube raises more $$

Today, YouTube announced they have closed on an $8mn Series B round from Sequoia Capital bringing the total amount raised to $11.5mn (Series A $3.5mn - Nov. 05).  The release provides some interesting stats, such as 35mn videos watched daily on YouTube and over 100mn page views per day with over 6mn unique daily users.  YouTube says "the additional capital will be used to advance the company's rapid growth, expand sales and marketing efforts, and to accelerate the build-out of its world-class data centers."  Steve Chen, YouTube's CTO and Co-founder also said "by accelerating the build-out of our data centers around the world, we are poised to continue to serve up billions of videos in the most scalable and cost-effective way."

Google says "me too" with new real estate search features

The blogosphere has been chatting up a storm about Google's [GOOG] new real estate search features.  However, this really is just another "me too" offering by Google and isn't worth getting too fired up over.  It appears the listings so far are coming from Google Base, which is cool, but isn't really any different from Yahoo!'s [YHOO] real estate service, which also aggregates real estate listings from Yahoo! classifieds.  MSN [MSFT] also has a real estate serivice, but aggregates its listings through realtor.com, which is also the case for the online real estate verticle player Homestore.com [HOMS].  Clearly the dramatic difference at this stage of the game is the fact Google has such little inventory available.  For example, conducting a home search by my zip code yielded one result through Google's platform, but yielded 61 through Yahoo!, and 133 through MSN.  I also decided to run the same search through the two most popular real estate agencies in my area, which are Coldwell Banker Burnett and Edina Realty.  CBB yielded 369 results, and Edina Realty yielded 129.  MLS online also resulted in approximately 134 results.  In my opinion, this is a decent first step, but Google has a lot of work to do if they have any desires of making this more than a "me too" offering.

One unique feature Google incorporated into its real estate listings is the results are displayed within Google Maps.  Search results yield red balloons on the map and clicking on the balloon shows information corresponding to the search results on the left including a picture of the home plus a description of the property and more.