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DST

This Week In Social Media

by loukerner on April 8, 2011

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Facebook Value Stays Steady at $77.8B

 

The market for trading private shares is still in its infancy, and while there are hundreds of private companies with shares available for trading, Facebook continues to dominate trading actively, with Twitter, Groupon, Linkedin, Zynga & Yelp also getting investor attention, but with limited trading activity to date.

 

For the fourth straight week, this week’s Facebook auction took place on Wednesday and cleared at a price of $31.50 implying a value of $77.8 billion.

 

 

 

 

Other Private Company Trading Activity:

  • Twitter (230 million shares issued):
    • 70k shares traded $32 on 3/28/2011 implying a $7.4 billion valuation.
    • 27k shares traded $31 on 3/16/2011 implying a $7.1 billion valuation.
    • 35k shares traded $34.50 on 3/4/2011 implying a $7.9 billion valuation.

 

  • Groupon (300 million shares issued):
    • 25k shares were traded at a pre split price of $47.67 or a $7.2 billion valuation on 3/10/2011 (Groupon shares have split 2:1 resulting in 300 million shares issued)

 

  • Zynga (310 millions shares issued):
    • $9.3 billion valuation implied by trade on 2/26/2011

 

  • LinkedIn (91 million shares issued):
    • $2.8 billion valuation implied by trade on 3/21/2011

 

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THIS WEEK IN FACEBOOK

by loukerner on April 8, 2011

Facebook Dominates Social Networking Landscape, Surpasses 250mm Mobile Users

Facebook’s dominance of social networking is on full display in the below chart recently released by Pingdom which shows every social network with over 1 MM daily visitors.

 

We expect Facebook’s membership to continue to grow, particularly in the less saturated demographics (55+) and in countries with lower penetration.  But we also believe that there are massive opportunities for other networks that either offer a unique communications platform (e.g. Twitter), or meet vertical needs (e.g. LinkedIn for work, Badoo for dating).

 

Also this week, Facebook had several major mobile announcements.  The announcement that got the most press was the revelation that Facebook had surpassed 250 million mobile users.

 

The second, and more meaningful, was the rollout of a major upgrade to its mobile platform (m.facebook.com).

 

On March 31st, Facebook announced:

 

“Today we’re excited to start rolling out a major upgrade to m.facebook.com that delivers the best possible mobile Web experience no matter what device you’re using. Previously, we solved this problem by building multiple versions of mobile Facebook: m.facebook.com for less feature-rich mobile devices and touch.facebook.com for touch devices.

There are two major problems with this approach:

  1. 1. We were limited by the lowest common denominator for each site. We couldn’t use JavaScript and had device specific file size limitations on m.facebook.com. Supporting a wide array of touch phones of varying quality on touch.facebook.com limited our ability to use modern CSS and JavaScript APIs.
  2. 2. Every time we launched a new feature, we had to build it multiple times across different code bases: once for facebook.com, then again for m.facebook.com, touch.facebook.com, and in native applications as well. Honestly, we weren’t very good at doing this, so certain features were missing on different devices.

With the new m.facebook.com, users with high-end touch devices will see a rich touch-friendly interface; for users with feature phones, the site will look and work great.”

The bottom line is that the world’s dominant social network has a keen appreciation for the global secular trend to mobile, and is operating its business accordingly.

As a Facebook spokesperson stated: “We think it’s important to provide an excellent mobile Web experience.  Now, whenever we launch new features on the mobile site, they’ll be available on any mobile browser, presented in the best possible experience. We’re excited to roll out the new m.facebook.com site to everyone over the next few weeks.”

Facebook Continues to Build Its Washington Presence

Undoubtedly, one of the major risks to Facebook remains government regulations.  Anytime a company gets as big and powerful as Facebook, the company attracts government scrutiny like moths to a flame.  Facebook clearly recognizes this.  In fact, Facebook’s COO, Sheryl Sandberg, is a former Clinton administration official, and Facebook’s General Counsel (Ted Ullyot) is a former clerk for Supreme Court Justice Antonin Scalia.  So it’s no surprise to see Facebook continuing to take the appropriate measures to make sure that Washington understands and appreciates their perspective, and is best able to place Facebook’s actions in the right context.

 

The latest rumored addition to the Facebook Washington team is Robert Gibbs, the former Communications Director for President Obama.  Gibbs would bring an intimate knowledge of Obama’s agenda as it relates to the regulatory issues facing Facebook, as well as strong relationships within the administration.   Obama is widely perceived to be a fan of Facebook.  One of Facebook’s founders, Chris Hughes, played an important role in Obama’s campaign by heading the Facebook Connect integration.  More recently, Mark Zuckerberg sat next to the President at dinner as part of a group of tech titans that dined with Obama in Silicon Valley.

 

While the fight over talented programmers gets the most press in the Valley, recruiting the right talent in Washington D.C. may prove a similarly important key to Facebook’s future success.

 

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Pivoting

by loukerner on April 8, 2011

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Lou Kerner, Social Media Analyst at Wedbush Securities and Partner at Secondshares.com, talks about Goldman Sachs and their investment with DST in Facebook On CNBC.

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Lou Kerner on Bloomberg:Goldman’s investment in Facebook

January 4, 2011

Share Lou Kerner, Social Media Analyst at Wedbush Securities and Partner at Secondshares.com, talks about Goldman Sachs and their investment with DST in Facebook On Bloomberg.

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DST Buys ICQ For $187 Million – Did Zuckerberg Miss The Writing On The Wall?

April 29, 2010

Share SocialBeat’s Dean Takahashi reports that Digital Sky Technologies (DST) has agreed to pay AOL $187.5 million for ICQ, the largest instant messaging service in Russia, and a number of other markets.  According to Time Warner, ICQ has over 100 million accounts registered, and more than 32 million unique visitors per month, which was started [...]

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