Zuckerberg Opportunity Part II – Silicon Valley Legacy at Risk?

The NY Times is doing a followup piece to my post called The Zuckerberg Opporunity. They are following up on my first post and story called The Zuckerberg Opportunity. The Zuckerberg Opportunity was a followup on the story on the big story that I have been tracking on Microsoft buying Facebook. The NY Times goes deeper into the deal side dynamics of the Zuckerberg Opportunity. (Note: I’m glad to see the NY TImes run with my original piece – it needs deeper analysis and more detailed reporting – thanks Steven)

NY Times DealBook has a great followup post to my post Zuckerberg Opportunity. The professor Steven Davidoff pens a detailed post around some of the tactical challenges around the Zuckerberg Opportunity.

What’s interesting here is how Silicon Valley and the VC community will respond to this. Silicon Valley has been an environment where the VCs have always maintained a balance between the ‘greed’ part of their job with the ‘unwritten’ rule of maintaining the legacy of Silicon Valley.

Lately, we have been seeing an environment lately where VCs really don’t care about screwing entrepreneurs over for a quick buck or shutting ventures down over political internal VC partnership fighting. If this trend of not building great sustainable companies continues then the legacy of Silicon Valley will be at risk.

I love Silicon Valley for what it has been famous for – innovation and the celebration of entrepreneurship. An enviroinment that rewards innovation, entrepreneurs, and entrepreneurship will create great companies and yield great profits for investors.

If Silicon Valley becomes known as a place not friendly to entrepreneurs and quick rich VC plans, then the legacy of Silicon Valley is at risk.

Facebook Closed Event – Innovation? – Are They Stuck In The Middle?

Facebook is having an open house today – oh no one knew about it so it really was closed.

What strikes me about Facebook is that they seem to be ‘stuck in the middle’ as it goes in business school. Are they a software developer of a great user experience web service or are they an innovative advertising solution? With all the mounting pressure to monetize they may be falling in the trap to force a monetization strategy that will fail.  What comes to mind is the Portal crazy in the late 90s.

Back in late 90s Google created a kick ass search app then just picked up (copied) the search paradigm from Goto.com. Why? Because they developed a great app called search.  Search drove Google’s success in advertising because their core competency was in algorithms and data center efficiencies that translated directly to what the ‘scaling’ ad market wanted.  Google was smart.  They knew what they wanted to do.

Here we see Facebook (I wasn’t invited so I can’t comment on what they presented) rolling out a new design for the profile page. It feels like a little AOLish to me. I just don’t get the feeling that Facebook gets UI, discovery, and search.  Are they force fitting the UI, navigation, and user experience to get paid on the monetization side?  What I will be looking for here is how well they design the ‘utility’ for users. If they try to hard to monetize they will fail. Facebook has to innovate on the software side or they will lose users fast. Facebook has to solve their ‘clutter problem’.  Additionally, I hope that they are more open for integration for developers.

If Facebook screws this up they won’t be the next Google, but instead be a victim of what we saw with Portals in the late 90s.  We all know how that ended up.

Will Facebook be the Portal model of Social Networks? What is their core strength?

Facebook seems to be stuck in the middle.

Zuckerberg’s Opportunity – The Silicon Valley Way – Be Extraordinary Create the Market Make Money; It’s All About the Founder

Kara Swisher writes a memo to Mark Zuckerberg about the possible scenarios facing Facebook. She references my post called Facebook IPO – It’s Microsoft Not The NASDAQ . I see this as an opportunity for Facebook. Recently Facebook has been hiring ‘quote seasoned executives’. Facebook’s future is in Mark’s hands – it’s all about the founder.

Silicon Valley has two kinds of companies: 1) build real long term value for employees, investors, and build a great culture, and 2) build a value proposition (venture backed) and sell making the venture capitalist rich and the founders rich. We haven’t seen the kind of company like HP, Apple, or Google for some time (obviously Google is most recent). We have seen tons of companies sell out.

What makes a great company? The Founder and the founding team – Bill and Dave; Steve Jobs, Sergey and Larry; Facebook is stuck in the middle here. Strong founders with passion and drive to build a long term viable company and a cast of characters with ‘seasoned experience’. What’s more important seasoned execs or young and hungry founder led teams?.

In the final analysis it’s all about the founders. When founders get replaced the companies usually die. Why? Because Founders know best.. Founders see things others don’t. Founders can do deals, hire employees, lead people, create products, and do things differently. Founders are extraordinary people. Mark is one of those founders. He’s done amazing things at Facebook. The question is what does he do next.

The Silicon Valley Way is to build great companies, create markets, AND, create wealth for stakeholders (including employees – they don’t have employeess ‘resting and vesting’). Mark as CEO of Facebook has an opportunity now. He is at an inflection point. The same inflection point Bill Gates had when he had to negotiate his way around the big IBM monopoly to get a ‘killer’ license deal for DOS. Remember Google when they did something no one thought was possible – they ran their IPO as an auction and create dual classes of stock. Why? Because the founders were extraordinary.

My advice to Mark – do something extraordinary – stop the PR Bull; Make a strong move in this market – Be Extraordinary.

Microsoft needs you and you need Microsoft – If that doesn’t work substitute Google for Microsoft.

Mark: you are in the drivers seat. Take the cash and structure something extraordinary. Remember going public isn’t the dream job – shareholder bickering, filings, tons of BS.

This is an extraordinary situation in a time in history where conventional wisdom is irrelevant.

UPDATE: NY Times DealBook has a great followup post to my post Zuckerberg Opportunity. The professor Steven Davidoff pens a detailed post around some of the tactical challenges around the Zuckerberg Opportunity

Facebook CEO Responds to Rumors – Stresses They Won’t Be Sold

Facebook is saying that they want to be independent but it’s what they aren’t saying that’s very telling.

Facebook CEO Mark Zuckerberg stresses in a Reuters story that Facebook will not be sold. In response to my blog post of the rumored Microsoft move post Yahoo Search buy this week, Mark denies any deal.

The fact that he is so defensive creates an interesting posture for Facebook. Coverage is so deep on this possible Microsoft Facebook move that something is brewing and fast. I think that it’s a good move for Microsoft to make a bid for Facebook. A Microsoft Facebook combination puts a credible force to compete with Google. Many of the bloggers agree this is a good possibility for both Microsoft and Facebook.

Facebook’s recent moves say alot about what’s going on. For example Facebook is so afraid of Google that their move to shut down Google’s Friend Connect is their version of a ‘save me cry’ except it’s a cry to Microsoft. Their move to shut down Friends Connect is like Yahoo saying to Google save me from Microsoft. Now Facebook is basically saying Microsoft save me from Google.

All unfolding.

Silicon Valley Rumor: Microsoft to Buy Yahoo Search and Then Facebook

My sources say that the Yahoo and Microsoft teams are bunkered down in a Palo Alto hotel hammering out the final stages of a transaction that will have Microsoft picking up the Yahoo search business. Word is that this deal will be done this week. While this is not surprising, it does bring to question the motives and plans of Microsoft.

Techmeme is buzzing about the latest Microsoft Yahoo talks that has Microsoft buying the Yahoo Search business only. Here is Microsoft’s and Yahoo official statements.

Why would such a complicated transaction (just Yahoo search with all the headaches and all) be in the cards for Microsoft? After the failed bid for $40 plus billion for all of Yahoo, Microsoft’s intentions are clear. Buy the search business from Yahoo and take that team and go spend at least 20 billion for Facebook. Integrating the search team at Yahoo with Facebook puts a formidable army to take on Google.

What a move this makes. Yahoo gets everyone off their back, Microsoft gets a credible position in search, and buys Facebook to compete with Google. The price about $45 billion.

This is going to be good.

Update: here is a post from Kara Swisher – Microsoft’s Kevin Johnson’s “We Can Compete” memo – Microsoft needs Facebook and Facebook needs Microsoft.

Update 2: Robert Scoble (my former employee 🙂 ) is taking my report of Microsoft buying Facebook conversation to the next level. This will be developing further but in the meantime the jockeying is going on. This explains the recent moves at many levels… take the employees of Google leaving to join Facebook.. Facebooks posture toward Google, and the general platform behavior lately of Facebook. Maybe they knew that they were pulling a Netscape last week – knowing that Microsoft guns for hostages were coming into town.

Update 3: This is why I love this guy Umair.. Leading minds see the strategy…good post Umair.

Facebook Just Pulled a Netscape – Hey Facebook What Are You Thinking

Facebook just pulled a Netscape. What the hell are they thinking? They just flipped off Google and others in this openness war – how? by being closed.

Most of the Facebook kids were not around when Netscape blew it to Microsoft. Now Facebook is making a blunder to fight Google on a frontal basis.

Here they write via their developer blog ….hold on let me get the violin out..”Now that Google has launched Friend Connect, we’ve had a chance to evaluate the technology. We’ve found that it redistributes user information from Facebook to other developers without users’ knowledge, which doesn’t respect the privacy standards our users have come to expect and is a violation of our Terms of Service. Just as we’ve been forced to do for other applications that redistribute data in a way users might not expect or understand, we’ve had to suspend Friend Connect’s access to Facebook user information until it comes into compliance. We’ve reached out to Google several times about this issue, and hope to work with them to enable users to share their data exactly when and where they choose.”

Kara Swisher please decode this for us? I think that this is garbage for Facebook to do this – Hello Beacon…

I have been following Facebook for some time and never got one response from their PR people. I’m tired of waiting. My opinion is that this move is bad. What a PR blunder.

Update: Mike Arrington has a detailed post from both companies. Nice post Mike!.

Facebook: Privacy my ass – This is a Facebook PR stunt backfired…this imho only hurts Facebooks platform development efforts because FB need to develop the platform and this petty shit has to stop.. ..Elliott’s 2nd day on the job. Nice job pal – NOT.

Social Gaming Network Lands $15m in Funding

Social Gaming Network lands a round of $15 million in venture funding.  Eric Eldon at Venturebeat has the best  writeup on the company and the news.

I think that Social Gaming Network is on to something really big.  The social graph is working and these guys have proven how fast applications can grow.  The big news here is the scale of their reach and the platform that they are building for Social Graphs and Social Networks.

This is a very important trend to watch.