In the wake of Facebook’s acquisition of Instagram, Lou Kerner recently hosted a conference call and published a new deck profiling the deal. Robert Scoble, Peter Relan and Vic Singh (whose slides are below), participated in the call.

To listen to a replay of the call, dial 888-632-8973, or 585-295-6791 (if outside the U.S.), The replay code is 599-456-76#

“We are seeing slowing growth [at Facebook], which is never a positive thing,” said Lou Kerner, founder of the Social Internet Fund, which invests in social-media companies but doesn’t own any Facebook shares.

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

Lou Kerner, founder of the Social Internet Fund, 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

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

Lou Kerner on Bloomberg TV

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.

It’s hard to pick up a paper of any kind (WSJ, NYTimes…) without reading a story about the rapid rise of Jeremy Lin and/or Pinterest.  Interestingly, they are currently generating about the same amount of Google searches:

It shouldn’t be surprising to learn that there are whole boards on Pinterest, dedicated to Jeremy Lin. They’re, as the puns continue, referred to as Linterests.

As remarkable as any graph I’ve seen over the last two years is the Alexa chart on Pinterest, which is undoubtedly, the fastest growing website in history.

Pinterest is now the 18^th most trafficked site in the U.S. per Alexa.  Another milestone reported last week was the fact that Mark Zuckerberg (Zuck on Pinterest) had joined the site.

While much credit is due to the founders and employees of Pinterest for creating such an enormously useful and engaging site, Pinterest is clearly a reflection of the times, of the rise of what I call “The Social Internet“, and what is more broadly referred to as the rise of social, mobile and cloud.  Now that more then 800 million people are on Facebook, and another 100mm use Twitter regularly, cool new sites can spread like wildfire .  With more then 1.2 billion mobile web users worldwide, people can add pins to their boards on Pinterest or view pins 24/7.   We almost never hear of Pinterest being down, other then for scheduled maintenance, because Pinterest can leverage cloud computing to seamlessly handle the meteoric growth of its computing and storage needs.   And it’s my bet, that Pinterest will not be the fastest growing website for long.  Something else newer and cooler will come along in 2012, to better leverage the increasingly connected and mobile web.

Yet, as pervasive as social media sometimes appears to be in terms of driving discovery, it still pales in comparison to the King of Discovery of the first the siloed internet…Google.  Google crushes Facebook by more than a 5-1 margin in terms of driving traffic (i.e. being the upstream site) to the Top 25 U.S. e-commerce sites (per Internet Retailer):

If social is so great for discovery, why doesn’t it drive more commerce?   The answer is because Internet commerce is dominated by offline companies that are still trying to get the First Internet, the siloed Internet, right.  The only pure internet companies among the Top 25 internet retailers are Amazon, NewEgg (an online retailer of computer hardware and software) and Netflix.  Of those, only Netflix gets social, (with 11% of Netflix’s traffic coming from Facebook), in part, because they’re the only internet retailer based in the Valley.   The only other Top 25 Internet retailer over 10% is Victoria’s Secret, and that’s, in part, because the fashion industry is on the leading edge of social media (a fact which doesn’t appear to help The Gap).

It’s amazing that even today, Amazon sells more online then Staples, Apple, Dell, Office Depot, Walmart, Sears, and QVC…combined.    That’s because Amazon started out as an Internet company, the Internet is at the core of Amazon’s DNA.  Walmart put a “.com” at the end of its name, and opened up Walmart.com (a remarkable six years after Amazon launched), but that didn’t make Walmart an INTERNET company.   All the Internet spoils went to Amazon.  Walmart didn’t go away, it just grew at a slower rate as retailing slowly started to migrate to the web/Amazon.  Thus Walmart didn’t create the massive shareholder value that Amazon did (Walmart’s share price is lower than its peak reached more than 12 years ago!).

Just as it took Amazon to lead the way in e-commerce, it’s going to take a Second Internet company to lead the way in social commerce.  It’s going to take a company BORN social, with social at the core of it’s DNA.  I’ve been waiting for that company, and it’s finally arrived…. Fab.com.  Fab is one of the great pivots of all time.  The pivot story is a must read, and can be found on here.  Fab was born social, has social at the core of its DNA.  It just feels social when you visit Fab.

But the proof is in the pudding, in where it derives its traffic from, and I believe Fab to be the first e-commerce company of scale (reportedly at a $100mm+ run rate) to have more traffic driven by Facebook than by Google.

This shift in commerce discovery is a REMARKABLE sea change in how commerce happens on the Internet.  We are witnessing a monumental moment in time, not unlike when Amazon ushered in the original era of online commerce.  And Fab isn’t alone.  8thBridge calls this period eRetail 2.0, and highlights the 10 companies below as leading the way:

The future of social commerce is clearly here today.   It’s still the top of the first inning, but all the recent articles about commerce on Facebook not working, are missing the point, most in the mass media simply don’t appreciate how The Social Internet works, and most have likely never heard  of Fab, or Birchbox, or any of the sites in the graph above.  And while Facebook is at the center of the Social Internet, massive levels of social commerce will be also driven by Twitter, YouTube, Tumblr, and most definitely Pinterest.

While Fab leads the way on Facebook, Fab isn’t leading the way on Pinterest.  ModCloth, a site for vintage and retro clothing that describes itself as “an online clothing, accessories, and decor retailer that aims to provide a fun and engaging shopping atmosphere for you, our customer” has the highest amount of it’s traffic coming from Pinterest of any site I could find:

I can’t wait for the Second Internet site that’s going to grow even faster than Pinterest, and see what new fortunes its spawns.  It’s the dawn of a new era, we are witnessing The Rise of Social Commerce.

While I thoroughly enjoyed my time as a Wall Street analyst, compliance issues hampered my ability to blog on SecondShares.  Now that I’m back angel investing, I look forward to sharing thoughts and analysis on the social and mobile companies I refer to as “Social Internet” companies.  Just as the siloed internet companies disrupted the offline leaders (e.g. Amazon v Walmart), Social Internet companies that are BORN social, will disrupt incumbent firs internet leaders.  I first outlined my thesis in the only real thought piece I wrote a year ago.  I now update those thoughts in a deck “The Social Internet“.  While the deck is meant to be given live (which I love doing, as it’s such a fun dynamic topic to discuss), a lot of value can be derived by reviewing the slides.   Enjoy the deck, share it, and I look forward to future posts.