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Glam Raises $84.6 Million Round
Today, Glam announced that it has raised $84.6 million in private financing, with $64.6 million in Series D funding and $20 million in revenue-based debt financing. Here are links to Glam's press release as well as The Wall Street Journal's coverage of the deal.
Feeling Vulnerable?
Palamida has released its list of the top five most overlooked open source vulnerabilities.
Often, developers embed popular open source code while developing applications that do not fall in the normal software procurement process. Businesses and users need to take ultimate care to ensure that they are up-to-date with the latest patches in order to reduce uncertainty and secure their software from security attacks.
Open source code is "not any more vulnerable than commercial software" and in some cases, less so, said Palamida CEO Mark Tolliver. Open source projects tend to acknowledge their vulnerabilities and fix them promptly, he added.
Often, developers embed popular open source code while developing applications that do not fall in the normal software procurement process. Businesses and users need to take ultimate care to ensure that they are up-to-date with the latest patches in order to reduce uncertainty and secure their software from security attacks.
Open source code is "not any more vulnerable than commercial software" and in some cases, less so, said Palamida CEO Mark Tolliver. Open source projects tend to acknowledge their vulnerabilities and fix them promptly, he added.
Home Is Where the Home Network Is
Dean Takahashi highlights the importance of home networking at this year's CES show in Las Vegas. (By the way, Takahashi quotes an analyst from Iconoculture, a Walden portfolio company.)
The idea of home networking has been around for more than a decade. But now 34.4 million homes in the United States have computer networks, according to International Data Corp. Of those, 12.4 million homes have living room devices (game consoles, video recorders or set-top boxes) that are connected to the Internet.
That represents a big market opportunity and, as a result, gadget designers are more aggressive about designing Internet connectivity into their gadgets. It allows them to claim that the era of convergence - when computers, communications and consumer electronics are linked - has truly arrived, said Jonathan Steuer, an analyst at consumer research firm Iconoculture.
The idea of home networking has been around for more than a decade. But now 34.4 million homes in the United States have computer networks, according to International Data Corp. Of those, 12.4 million homes have living room devices (game consoles, video recorders or set-top boxes) that are connected to the Internet.
That represents a big market opportunity and, as a result, gadget designers are more aggressive about designing Internet connectivity into their gadgets. It allows them to claim that the era of convergence - when computers, communications and consumer electronics are linked - has truly arrived, said Jonathan Steuer, an analyst at consumer research firm Iconoculture.
The Customer Is Always Right
Interesting article in today's Wall Street Journal about the changing face of online ads. Here's an excerpt:
The Web's emergence is forcing ad executives to succumb to marketers' demands that agencies reinvent how ads are created, and forgo their TV-centric approach. Clients are even calling for changes in the way ad firms are structured. But until now, few advertisers have spent more than 5% to 10% of their marketing budgets online. With the growth of online video and social networking, ad experts expect that percentage to jump significantly this year.
Softness in the economy also will likely drive more money to the Internet, which can be cheaper than other media and has a reach that is easier to measure, which is attractive to advertisers in slower times. Merrill Lynch predicts overall ad spending in the U.S. for 2008 will grow 2.3%, while the portion of that spending on the Web will increase 18%. Publicis Groupe's ZenithOptimedia says it expects the amount spent on Internet advertising to overtake spending on radio in 2008, and spending on magazines in 2010.
The Web's emergence is forcing ad executives to succumb to marketers' demands that agencies reinvent how ads are created, and forgo their TV-centric approach. Clients are even calling for changes in the way ad firms are structured. But until now, few advertisers have spent more than 5% to 10% of their marketing budgets online. With the growth of online video and social networking, ad experts expect that percentage to jump significantly this year.
Softness in the economy also will likely drive more money to the Internet, which can be cheaper than other media and has a reach that is easier to measure, which is attractive to advertisers in slower times. Merrill Lynch predicts overall ad spending in the U.S. for 2008 will grow 2.3%, while the portion of that spending on the Web will increase 18%. Publicis Groupe's ZenithOptimedia says it expects the amount spent on Internet advertising to overtake spending on radio in 2008, and spending on magazines in 2010.
Managing Risk
Palamida recently announced an important new focus area - security. Most corporations use open source software, and Palamida helps its clients determine whether they are in compliance with open source licenses. Now, Palamida also determines whether its customers are vulnerable to over 400 open source security issues, 148 of which are defined as High-Severity Common Vulnerability and Exposures. (These include cross-site scripting and buffer overflows, to SQL injections.) As Mark Tolliver, CEO of Palamida, put it, "Open source is inherently no more risky than commercial software. The majority of open source projects provide a patched version to any issue within hours of discovery. Users of open source, however, need a way to quickly and accurately verify what components they are using and associate them with known vulnerabilities so they can retrieve updated versions. Without a mechanism in place to perform this function, organizations put themselves at risk for introducing security vulnerabilities into their code base." Here's a link to Palamida's press release on the subject.
Glam Hits the Books
In this article, The New York Times' Saul Hansell writes about Glam's recently announced deal with Lifetime Networks, which he calls "a textbook example of how to co-opt potential competition":
[Glam CEO Samir] Arora has big plans for Glam. He would like to do similar deals in other categories including health, shelter and entertainment. He’s been able to attract high-powered managers including John Trimble from Fox Interactive and Joe Lagani, the publisher of Conde Nast’s House & Garden. (That’s a sure sign that Mr. Arora convinced them that either a public offering or a pricey acquisition is not that far off.)
The big question here is how many of these ad networks end up surviving. If there are many dozens, Glam may win because it locks up relationships with multiple partners. If smaller networks wither, Glam may still win because it has the right to roll up the inventory of the networks it runs into one big package that may be more appealing to advertisers.
[Glam CEO Samir] Arora has big plans for Glam. He would like to do similar deals in other categories including health, shelter and entertainment. He’s been able to attract high-powered managers including John Trimble from Fox Interactive and Joe Lagani, the publisher of Conde Nast’s House & Garden. (That’s a sure sign that Mr. Arora convinced them that either a public offering or a pricey acquisition is not that far off.)
The big question here is how many of these ad networks end up surviving. If there are many dozens, Glam may win because it locks up relationships with multiple partners. If smaller networks wither, Glam may still win because it has the right to roll up the inventory of the networks it runs into one big package that may be more appealing to advertisers.
Facebook Considers Its Options
With hiring already tough in Silicon Valley, Facebook has just made its HR head's life much more difficult. Here's an excerpt from an article in today's Wall Street Journal about the company's options dilemma [subscription required].
There is a little-noticed downside to Microsoft Corp.'s investment in Facebook Inc.: The deal will likely raise the price of stock options issued by the social-networking company and could make it more difficult to hire talented employees.
Last week, Facebook appeared to score a major victory when Microsoft said it would invest $240 million in the Palo Alto, Calif., start-up, in exchange for a 1.6% stake. The investment values Facebook at $15 billion, up significantly from last year when a financing round valued the company at $525 million, according to a person familiar with the matter. Microsoft's investment cemented Facebook's reputation as one of the hottest Web start-ups in Silicon Valley.
With the rise in valuation comes a rise in the value of employee stock options. And in Silicon Valley, where stock options can be a major component of employee pay packages, more expensive stock options mean less potential upside for the option holders once start-ups go public or are sold.
There is a little-noticed downside to Microsoft Corp.'s investment in Facebook Inc.: The deal will likely raise the price of stock options issued by the social-networking company and could make it more difficult to hire talented employees.
Last week, Facebook appeared to score a major victory when Microsoft said it would invest $240 million in the Palo Alto, Calif., start-up, in exchange for a 1.6% stake. The investment values Facebook at $15 billion, up significantly from last year when a financing round valued the company at $525 million, according to a person familiar with the matter. Microsoft's investment cemented Facebook's reputation as one of the hottest Web start-ups in Silicon Valley.
With the rise in valuation comes a rise in the value of employee stock options. And in Silicon Valley, where stock options can be a major component of employee pay packages, more expensive stock options mean less potential upside for the option holders once start-ups go public or are sold.
Pandora Gets Some Ink in Inc.
Inc. magazine has a cover story on Pandora in its latest issue. Here's a link to the story, and here's an excerpt:
Westergren realized he had a huge weapon in his arsenal: his customers. Westergren sends a welcome e-mail to everyone that signs up. It's an automated e-mail from an alias address, but whenever anyone replies, he replies back. Last year, when he was touring the country looking for new music, Westergren decided to begin holding meetings with listeners. He'd choose a locale, post it on the Pandora blog, and invite anyone in the area to attend. Four people attended the first meetup in Austin, but as he traveled to a senior center in Phoenix, a taco joint in San Antonio, and a lecture hall at MIT, the groups grew, and soon dozens, even hundreds, of listeners were attending. All the effort spent courting nonpaying customers might seem excessive, but it lets Pandora spend next to nothing on marketing. In any case, the listeners responded. Some have become so fanatic that they've written songs about the site, sent boxes of fudge, and even made donations.
That work turning customers into fans, Westergren realized, meant he could rally them behind the royalty rate issue. So he sent an e-mail to all the Pandora listeners that identified their representative and senator and asked them to write in. Pandorans responded. Westergren estimates that about one million e-mails, phone calls, or faxes were made or sent by Pandora listeners. California Democratic Senator Dianne Feinstein received 25,000 e-mails; in the office of Jay Inslee, a Seattle-area representative, correspondence about Internet radio equaled that concerning the Iraq war. Inslee and Illinois Representative Don Manzullo drafted a bill that brought Internet radio rates in line with those of satellite stations; in the Senate, Sam Brownback and Ron Wyden sponsored a companion bill. "I said, 'Oh, my gosh, this is a bombshell ready to explode with the small radio stations,'" says Manzullo.
Evidence Machine
H5 receives prominent coverage in this week's Forbes. Here's a link to the article [membership required] and an excerpt:
Corporations are evidence machines, generating terabytes of electronic documents, e-mails and digitally recorded phone calls each year. Lawyers try to sift through all this dross in search of the smoking gun that can determine the outcome of a case. But, so say studies by library scientists and others, the lawyers aren't very good at sifting. Worn down by the anesthetizing process of flipping through thousands of digital images a day, they miss as much as they find. That's where a San Francisco company, H5, comes in. "Our work is to discover the ideal narrative to walk into court with," says Nicolas Economou, 42. "We give you the bullets designed to win."
Corporations are evidence machines, generating terabytes of electronic documents, e-mails and digitally recorded phone calls each year. Lawyers try to sift through all this dross in search of the smoking gun that can determine the outcome of a case. But, so say studies by library scientists and others, the lawyers aren't very good at sifting. Worn down by the anesthetizing process of flipping through thousands of digital images a day, they miss as much as they find. That's where a San Francisco company, H5, comes in. "Our work is to discover the ideal narrative to walk into court with," says Nicolas Economou, 42. "We give you the bullets designed to win."
Mexico or Bust
This article about Pandora in today's Oakland Tribune adds a little color to Tim Westergren's recent article in VentureBeat.
"At our worst moment, we were being evicted from our office, sued by four employees for back pay," Westergren said. "We owed almost $1.5 million in back salaries. We were living on credit cards: I was making plans to go to Mexico."
Instead, he went on the road — meeting potential investors, making constant pitches.
When it was over, the cash was in hand. He said he went back and counted how many times he spoke to investors in four lean years.
"I just kind of kept going. We had survived the bust when no one else had and we had built a pretty significant data base," he said.
Finally, Larry Marcus, managing director of Walden Venture Capital of San Francisco, got on board, followed by Labrador Ventures of Palo Alto.
Funding finally came on his 348th pitch, Westergren said.
"At our worst moment, we were being evicted from our office, sued by four employees for back pay," Westergren said. "We owed almost $1.5 million in back salaries. We were living on credit cards: I was making plans to go to Mexico."
Instead, he went on the road — meeting potential investors, making constant pitches.
When it was over, the cash was in hand. He said he went back and counted how many times he spoke to investors in four lean years.
"I just kind of kept going. We had survived the bust when no one else had and we had built a pretty significant data base," he said.
Finally, Larry Marcus, managing director of Walden Venture Capital of San Francisco, got on board, followed by Labrador Ventures of Palo Alto.
Funding finally came on his 348th pitch, Westergren said.
Motivated Investors
Check out this article in VentureBeat by Pandora founder Tim Westergren. In "What Motivates an Investor to Say 'Yes,'" Westergren explains that he was turned down 347 times before Walden's Larry Marcus agreed to invest the first institutional capital in Pandora. Here's an excerpt:
As I reflect back on this most unlikely turn, I have come to a belief about what motivates an investor to say ‘yes.’ Or perhaps more accurately, what causes an investor to shift from looking for ways to say ‘no’ to looking for ways to say ‘yes’. For, in my mind, this is the key to raising money. Venture investments by their very nature require a leap of faith (none more than ours) that only comes when an investor becomes aspirational – when he or she wants the investment to make sense (even though statistically deals never do make sense). I believe that shift happens when three things come together for the investor: They personally believe in the entrepreneur; they have a sense (and it’s often just a gut feeling) that the idea could be very big; and finally they have a personal interest or background in the industry that gives them a leg up the diligence curve. Put these together and an investor will start bending their investment criteria.
Larry M. was a musician (or at least a drummer) and an avid student of digital media. In the Music Genome Project he saw an idea that could be big, and as an expert in the sector he had the confidence to trust his own ability to spot potential, even if it was buried in mud. We also got along very well personally. So we had the three ingredients that tipped him into the aspirational mode. He wanted to make the investment and we started working together to make it happen – convincing his colleagues and other investors.
As I reflect back on this most unlikely turn, I have come to a belief about what motivates an investor to say ‘yes.’ Or perhaps more accurately, what causes an investor to shift from looking for ways to say ‘no’ to looking for ways to say ‘yes’. For, in my mind, this is the key to raising money. Venture investments by their very nature require a leap of faith (none more than ours) that only comes when an investor becomes aspirational – when he or she wants the investment to make sense (even though statistically deals never do make sense). I believe that shift happens when three things come together for the investor: They personally believe in the entrepreneur; they have a sense (and it’s often just a gut feeling) that the idea could be very big; and finally they have a personal interest or background in the industry that gives them a leg up the diligence curve. Put these together and an investor will start bending their investment criteria.
Larry M. was a musician (or at least a drummer) and an avid student of digital media. In the Music Genome Project he saw an idea that could be big, and as an expert in the sector he had the confidence to trust his own ability to spot potential, even if it was buried in mud. We also got along very well personally. So we had the three ingredients that tipped him into the aspirational mode. He wanted to make the investment and we started working together to make it happen – convincing his colleagues and other investors.
Yahoo to Acquire BlueLithium
Here is an excerpt from Yahoo's press release, which is available here.
Yahoo! Announces Agreement to Acquire BlueLithium
Important Next Step in Yahoo!'s Mission to Lead the Transformation of How Advertisers Connect To and Engage With Their Customers
SUNNYVALE, Calif. & SAN JOSE, Calif., Sep 04, 2007 (BUSINESS WIRE) --
Yahoo! Inc. (Nasdaq:YHOO), a leading global Internet company, today announced that it has entered into a definitive agreement to acquire BlueLithium, one of the largest and fastest growing online global ad networks that offers an array of direct response products and capabilities for advertisers and publishers. Under the terms of the agreement, Yahoo! will acquire BlueLithium for approximately $300 million in cash.
"BlueLithium's products, technology and team will be an integral part of our drive to build the industry's leading advertising and publishing network," said Jerry Yang, chief executive officer, Yahoo! Inc. "This acquisition will extend our ability to deliver powerful data analytics, advanced targeting and innovative media buying strategies to our customers, who are increasingly looking for these insights. By leveraging BlueLithium's complementary expertise and tools, we will be able to better address the needs of our performance-based display advertisers and enhance the value of our publishers' inventory."
Yahoo! Announces Agreement to Acquire BlueLithium
Important Next Step in Yahoo!'s Mission to Lead the Transformation of How Advertisers Connect To and Engage With Their Customers
SUNNYVALE, Calif. & SAN JOSE, Calif., Sep 04, 2007 (BUSINESS WIRE) --
Yahoo! Inc. (Nasdaq:YHOO), a leading global Internet company, today announced that it has entered into a definitive agreement to acquire BlueLithium, one of the largest and fastest growing online global ad networks that offers an array of direct response products and capabilities for advertisers and publishers. Under the terms of the agreement, Yahoo! will acquire BlueLithium for approximately $300 million in cash.
"BlueLithium's products, technology and team will be an integral part of our drive to build the industry's leading advertising and publishing network," said Jerry Yang, chief executive officer, Yahoo! Inc. "This acquisition will extend our ability to deliver powerful data analytics, advanced targeting and innovative media buying strategies to our customers, who are increasingly looking for these insights. By leveraging BlueLithium's complementary expertise and tools, we will be able to better address the needs of our performance-based display advertisers and enhance the value of our publishers' inventory."
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