From the monthly archives:

April 2012

“We are seeing slowing growth [at Facebook], which is never a positive thing,” said Lou Kerner, founder of SecondShares.com.

Read the full article here: http://on.wsj.com/JLbPEP

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Lou Kerner, founder of SecondShares.com, downplayed the significance of Facebook’s results. Facebook is expected to hold the largest Internet IPO in history next month, raising as much as $10 billion and achieving a valuation that could top $100 billion.

“Few investors are buying Facebook for first-quarter results,” Kerner said. “Facebook is trying to dominate a massive new sector — social media — and is willing to forgo short-term revenue growth and profitability.”

Read the full article here: http://lat.ms/IhvKZR

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Lou Kerner said Facebook’s IPO represents a divide between old guard and the new tech community. “The world’s never seen an IPO with as much global demand outside of Wall Street as there exists for Facebook,” Kerner said. “It can have a highly successful offering even if traditional, institutional investors are tepid.”

Read the full article here: http://nyp.st/IEQUkt

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Lou Kerner on Bloomberg TV

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Yesterday we got yet another reminder of the spectacular period of wealth creation we are in as Instagram, a company barely two years old, was acquired by Facebook (a company itself just seven years old and sporting a $100 billion valuation).  How can a mobile photo app possibly be worth $1 billion?  Here are 10 reasons why Instagram’s worth $1 billion:

  1. Mobile – The future is mobile.  The thought of being tethered is already quaint.  While Facebook knows mobile’s the future, they’ve struggled to create a great mobile experience like Instagram.
  2. Scale – with 30 million users, Instagram is arguably the largest mobile social network,
  3. Growth – Instagram added 1mm users in just 12 hours after launching on Android last week.  OMG!
  4. Talent – You don’t “acq-hire” a company for $1 billion, but talent is selling for an increasing premium, and Kevin Systrom and Mike Krieger are premium talent.
  5. Photos- are a pillar of social media.  There are over 300 million photos uploaded every day to Facebook, it’s the core app, and Facebook dominates the category.
  6. Platform – The most value and the biggest companies are those that open their APIs and let others enhance the functionality.  Instagram opened up its API in February, and since then, dozens of companies like Postagram have launched cool new apps leveraging Instagram.
  7. Open Graph Integration – According to Inside Facebook, Instagram has been working directly with Facebook to deeply integrate with Instagram such that the photos are optimized for Timeline.  Apps publishing to Timeline will see significantly increased growth, and there are only a few app partners that Facebook is currently working with to enable that integration.
  8. Google/Competitors – Facebook now keeps Instagram out of the clutches of its only credible competitor and also keeps it out of the hands of Twitter, which is broadly leveraged by Instagram users.
  9. A Billion Is Cool – Especially after you just closed a round at $500mm.  The deal could not have gotten done without a 2X premium to the just closed round.
  10. Brands Already Love Instagram – Thousands of brands from news sites (ABC, NBC, CNN) to clothing lines (Buberry’s,  Gucci) already leverage Instagram.

The Time Is Now – Fasten your seat belts, the Social/Mobile Land Grab of 2012 has officially begun.  It’s going to be a wild year as every major online and offline company rushes in to acquire the capabilities it needs to accelerate its growth, or stench its decline.  With Facebook’s pending IPO, prices aren’t going down any time soon.

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