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Google

If search is any indication of what people want, they want Facebook more than twice as much as Google and Yahoo according to Google Trends.

I also compared the most popular social media companies to Facebook on Google Trends, to see if perhaps social media properties skew higher than the old Internet titans.  They don’t.

I was curious how Google compared to the old titans, and interesting, Yahoo and Google are neck and neck.

To be fair, these results are based on Google search results, so I’m not quite sure why someone would go to Google to search the keyword term “Google”, but it was fun to pulling the data.

To learn more about how Google Trends are calculated, click here.

Jay Gould maintains a long position in shares of Facebook (private).

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As we’ve said before, the need for growth companies to be acquired or chase that rubber chicken laced road show circuit to go public through an IPO aren’t private companies only option anymore.  While the world can only speculate as to what Groupon will ultimately do, one thing is for sure, they have done wonders in creating shareholder value and increasing their private market value in their very public negotiations with Google.

Perhaps Google was Groupons’ BATNA (best alternative to a negotiated agreement) to the secondary market?  Just eight months ago Groupon raised $135 million on a $1.3 billion valuation from DST, which at the time was intended to be used to buyback equity from Groupon’s then 90+ employees as well as their early investors.  Today, Groupon reportedly has 1,000 plus employees, and their revenues are north of $2 billion annually.  With that kind of trajectory, did Groupon know their downside of walking from Google, or better yet, use Google to pump their valuation up for a new secondary sale of their private company stock, which will provide less dilution, preserve more control and protect their unique culture?

Again, one can only speculate.

The reality is, we just don’t know why Groupon would go public if the private market is providing a higher valuation for their shares and maintains more control for the founders that clearly seem to know what they are doing.  We believe that with $2 billion in annual revenue, Groupon is already a “real-live business.” Further, we believe that Groupon can comfortably take its “fuck you money” off the table without having to negotiate further with any public company, Google included. Groupon could sell less shares to the private market than the public market, for less dilution, less scrutiny, less regulation while providing sufficient liquidity to its founders, investors and employees.

So perhaps a congratulations is in order for Groupon.

Jay Gould maintains a long position in shares of Facebook (private). This post was edited by Bill Auslander.

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Facebook vs. Google on CNBC

by loukerner on September 15, 2010

In this clip from CNBC, Lou Kerner, partner at SecondShares and social media analyst at Wedbush Securities, discusses the implications of Facebook’s passing Google in terms of total time spent in the U.S. and the potential that Facebook has to provide a competitive search application to Google.

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In this clip from Bloomberg TV, Lou Kerner, partner at SecondShares and social media analyst at Wedbush Securities, discusses Facebook’s entry into location based services and whether Google will attempt to compete with Facebook in social networking.

Lou calls Facebook the “Second Internet”, saying “really sitting as a layer on top of the first Internet, but more powerful in many ways than the first Internet because we’re all connected.” In response to whether Google will attempt to compete with Facebook, Lou says “Eric Schmidt has says the world doesn’t need another Facebook, but I do think they’re going to play a big role in social.”

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SecondShares’ Lou Kerner was on CNBC yesterday after he initiated Google with an ‘underperform,’ making him just the second analyst to put a ‘sell’ on the stock. Kerner put a price target on Google at just $525.

According to Kerner, Google is making the vast majority of its revenue on a pay-per-click basis to drive traffic to web sites”, and “given its huge base of over 500 million members, the majority of which log on every day, Facebook is already driving more traffic to some leading web sites and it is poised to dramatically grow its share of traffic generation just based on clicks from user news feeds.”

According to CNBC, Google shares are down 21 percent this year, underperforming competitor Yahoo, which is down 17 percent. Yahoo was downgraded to ‘hold’ today by BGC Financial analyst Colin Gillis, who cited flat display advertising in June.

Lou Kerner is a partner at SecondShares and an analyst at Wedbush Securities.

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This post is written by Guest Author Byrne Hobart, a marketing consultant at NYC-based Blue Fountain Media. Blue Fountain Media helps clients with website design & development, online marketing, graphic & logo design and more.

A few months ago, it would have been fair to treat Zynga as a partially-owned subsidiary of Facebook. The big question for investors was how much Facebook ‘owned’. Since Facebook was Zynga’s platform—their sole source for new customers, and the only way existing customers worked with them—Facebook could theoretical “tax” Zynga, demand a change in strategy, or even shut it down. Owning shares of Zynga was a bet that Facebook would ignore them, lose to them, or buy them out (a situation analogous to Paypal before its eBay acquisition).

But in the last few months, that situation has changed completely.

It started in May: Zynga had an all-hands meeting in which they prepared to leave Facebook entirely.

Days later, they announced a settlement: Zynga will use Facebook credits, and Facebook will give them free advertising. This may have been one of the best pieces of corporate Jiu Jitsu in history: in a single deal, Zynga turned Facebook from a company that basically owned them into the company that gave them a torrent of cheap new users. That was the prior status quo.

But at the same time, Zynga was pushing those new users into interactions outside of the site:

  • FarmVille is one of the top 20 game Apps in the iTunes store.
  • Zynga’s poker app remains popular.
  • Zynga.com is the most popular game site on the Internet. According to Compete.com, it gets more traffic than gaming stalwarts like AddictingGames.com, Newgrounds.com, Miniclip.com, Pogo.com, and even games.yahoo.com (based on Alexa’s estimate of Yahoo’s subdomain traffic, and Compete’s estimate of Yahoo’s total traffic). It’s also an engaging site, with a high ratio of visits to unique visitors compared to other gaming sites (only Pogo is higher, and by a small margin).
  • Pogo.com is the second most popular game site; Farmville.com is third.
  • Farmville is marketing itself through 7-11.

And now, Google has invested at least $100mm in Zynga, and is preparing to launch “Google Games”. If there’s one company that can bring in more attention than Facebook, it’s Google (for the moment). As TechCrunch points out, that’s not the only benefit: Zynga will also have an opportunity to use Google Checkout instead of Facebook credits. Suddenly, their ultimatum from May got a lot more effective: it’s not a choice between Facebook and nothing, but a choice between two companies that can provide an almost equal amount of traffic.

The likely outcome: Zynga is too valuable a prize for either of them to risk. Zynga will be able to keep negotiating to keep an aggressive cut of the revenue their games generate, and they will be able to keep adding new online and offline partners. And of course, Zynga continues to learn more about user behavior, more quickly than their competitors.

Zynga’s competitive position has completely changed. For potential partners, they are a way to turn a large number of pageviews into 1) revenue, and 2) more pageviews. This makes them part of a tiny minority of web services that can be plugged into a wide variety of sites in order to make them more profitable. And if the other services—Amazon Associates, Google Adsense, and Paypal—are any indication, the result could be extremely profitable for Zynga.

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David Kirkpatrick Video Interview – Author of “The Facebook Effect”

June 2, 2010

Share We had the opportunity to sit down with David Kirkpatrick, the author of “The Facebook Effect” for a 35 minute interview a few weeks ago.  The book’s subtitle, “The Inside Story of the Company that is Connecting the World,” is about Facebook’ss history and massive global impact. David’s been writing about technology and the [...]

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Demand Media Hires Goldman, Bolsters Board – IPO Coming?

April 20, 2010

Share Demand Media has been killing it for four years now. The snapshot from Alexa below show’s ehow.com‘s inexorable rise from Alexa global ranking below 800 to an Alexa ranking of 144 over the last two years. In the U.S., ehow is the 44th most trafficked site according to Alexa.   Demand has driven this remarkable [...]

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