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Andrew Hill SEC’s ruling won’t make many Facebook friends

April 3, 2013 11:42 am by Andrew Hill

The digerati are having fun with the Securities and Exchange Commission’s ruling that US companies can use social media to distribute market-sensitive information such as earnings reports. “Facebook Flap Forces SEC Into 21st Century,” says Forbes.

Not so fast. The US regulator’s decision to drop its inquiry into Reed Hastings, Netflix’s chief executive, who boasted about new viewing figures on his personal Facebook page, is only an incremental advance into the new millennium. It makes sense for the SEC to acknowledge the growing use of social media (I’m guessing more people saw Mr Hastings’ Facebook post than have viewed any regulatory announcement in corporate history), but I don’t think the decision will prompt fearful CEOs to tweet their earnings much more than they do already – and, even if it does, it won’t make much difference to investors. Read more

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Posted in Media, Regulation, Technology |

Andrew Hill Zuckerberg: if you’re going to fail, fail fast

September 12, 2012 11:49 am by Andrew Hill

Social media buzzed around Mark Zuckerberg’s comment on Tuesday that he wrote the “founder’s letter” for Facebook’s initial public offering registration statement on his mobile phone. (Big deal – investors who have suffered since must wish he’d used the phone’s computing capacity to set the offer price at a more reasonable level.)

I was more interested in his admission that the social networking group had “burned two years” betting on the wrong mobile technology. For most companies, that doesn’t sound like a long time to spend exploring a potentially highly profitable dead-end, but remember, Mr Zuckerberg hit the button that launched “Thefacebook.com” on February 4 2004. It has barely been in existence eight years. In that context, to burn two years is like Ford (founded 1903) wasting a quarter of a century developing a five-wheel car or General Electric (1892) blowing 30 years exploring the possibilities of a steam-powered lightbulb. Read more

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Posted in Technology |

John Gapper Facebook’s cloud passes over sunny Silicon Valley

June 5, 2012 4:55 pm by John Gapper

The dismal performance of Facebook’s initial public offering, after several years in which it was expected to crown the emergence on public markets of social networks, is bound to dampen the mood in Silicon Valley.

Paul Graham, who runs Y Combinator, a start-up incubator, says the effect will be what you might expect – early-stage valuations will suffer. His email to portfolio companies, obtained by Business Insider, contains this warning:

“If you haven’t raised money yet, lower your expectations for fundraising. How much should you lower them? We don’t know yet how hard it will be to raise money or what will happen to valuations for those who do. Which means it’s more important than ever to be flexible about the valuation you expect and the amount you want to raise (which, odd as it may seem, are connected). First talk to investors about whether they want to invest at all, then negotiate price.”

 Read more

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Posted in Business, Technology, US |

Andrew Hill With SAP deal, Ariba’s 13-year headstart pays off

May 23, 2012 2:14 pm by Andrew Hill

Investors with long-ish memories will recall that Ariba, the business-to-business ecommerce network that SAP has just agreed to buy, was a dotcom IPO star of 1999: its stock surged 291 per cent on its debut, giving it a market capitalisation of $3.7bn – only just short of the $4.3bn that the German enterprise software company has agreed to pay for it 13 years later. Those were the days, Facebook investors may ruefully reflect.

Ariba had much further to go in the short period before the dotcom bubble deflated in 2000 – at one point it was worth a heady $30bn. But its longevity, before finally being snapped up by one of the companies it successfully challenged, demonstrates the durability of its underlying offering. Ariba’s early potential was obviously hugely overrated at the peak of the internet boom, but it grew into that original valuation. Read more

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Posted in Business, Technology |

John Gapper Facebook’s banks have to do some underwriting

May 21, 2012 2:06 pm by John Gapper

The 33 banks that signed up for the Facebook initial public offering may have thought they were heavily discounting their normal six or seven per cent underwriting fee in return for some good publicity on a sure-fire winner. It doesn’t look like that now.

Facebook’s sputtering IPO is drawing scrutiny both to the role of Nasdaq, which has admitted to “embarrassing” mistakes  on Friday, but to the price stabilisation tactics that the banks, led by Morgan Stanley, had to employ. Read more

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Posted in Business, Technology |

John Gapper The looming problem for Madison Avenue

May 17, 2012 4:40 pm by John Gapper

The travails of old media businesses are well-known but I’m starting to feel sympathy for advertisers and media buyers.

That sentiment was brought on by looking (in old media fashion) at the front of the print section of the New York Times today. The lead article is about Madison Avenue’s scepticism on whether Facebook is a good advertising medium and underneath that is a piece on Dish Network’s new ad-skipping digital video recorder.

Facebook’s advertisers have been struggling with whether display ads on the social network will produce results, with General Motors pulling its $10m Facebook ad budget ahead of the intial public offering.

Meanwhile, Dish has upset US television networks in the “upfront” season where they show off their next season wares to advertisers but producing a box that automatically skips all the commercials between network shows. Read more

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Posted in Advertising |

Andrew Hill Private views on Facebook’s public offering

May 16, 2012 6:32 am by Andrew Hill

Facebook investors: you have been warned. The last time I was in Silicon Valley was 12 years ago, in the very week that the Nasdaq crashed, marking the end of the dotcom boom. That I should fly back into San Francisco on the eve of the social network’s initial public offering cannot be a good omen.

I’m not here to write about Facebook – for expert insights, read the analysis of my San Francisco-based colleagues or the FT Lex team – but the IPO overshadows most discussions. What strikes me is how entrepreneurs, technology executives and analysts I’ve met are reluctant to talk publicly about Facebook and its founder Mark Zuckerberg. Ask them what they think about him and they tend to preface their remarks with a polite request that this part of the interview should be off the record. Read more

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Posted in Business, Media, Technology |

John Gapper Facebook reverses Google’s IPO innovation

May 7, 2012 2:24 pm by John Gapper

Facebook’s video for retail investors in its forthcoming initial public offering is a nice innovation, but fundamentally, Facebook is taking a step back from Google’s IPO in 2004.

The IPO bookrunners and co-managers are a litany of Wall Street names, led by Morgan Stanley, JP Morgan and Goldman Sachs. But Facebook has dropped Google’s attempt to upend the IPO process by running an electronic auction. Read more

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Posted in Technology |
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