Adam Lashinsky's dispatches on finance from the West Coast
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November 28, 2007, 8:07 am

LinkedIn CEO: We’d only sell for “a helluva lot”

I sat down Tuesday afternoon in Mountain View, Calif., with Dan Nye, the newish CEO (he joined earlier this year) of LinkedIn. That’s the company that is like Facebook for grownups, a businessperson’s social networking site. Nye’s looking for press because LinkedIn plans to unveil some nifty new features on Dec. 10. (I got a look, but agreed not to divulge anything yet.) I was interested in hearing what he had to say, in part because of the rumors flying around that LinkedIn plans to sell the company early next year to News Corp. (NWS)

The buyout gossip began with an item last week in the UK version of TechCrunch. Never mind that LinkedIn founder Reid Hoffman (a made man in the PayPal mafia and a buddy of mine) categorically denied the rumor in the Daily Telegraph. Anything that suggests that Rupert Murdoch would expand his social-networking empire is sure to set tongues wagging. Breakingviews.com wrote an intelligent summary of why a LinkedIn acquisition would make sense, largely because of the opportunities to leverage LinkedIn’s tools with the Wall Street Journal readership.

Not surprisingly, Nye didn’t deny that News Corp. made an offer for his company. Instead, he said that when he joined the company he told the board — comprised of Hoffman, Sequoia’s Mark Kvamme and Greylock’s David Sze — that he was only interested in taking the job if the goal was to “go long.” But is he selling out anyway? “We’re excited about building this company,” said Nye. “It would take a helluva lot to get us off that path.” Does that mean $1 billion? “A lot more than that,” said Nye, who worked at Procter & Gamble (PG), Intuit (INTU) and Advent Software (ADVS) before joining LinkedIn.

LinkedIn clearly is playing to win. The company has mushroomed from 60 employees when Nye joined in February to almost 200 today. At the time, LinkedIn had 9 million members; today it has nearly 17 million. Nye predicted revenues will range from $75 million to $100 million next year.

LinkedIn has the virtue of having survived adversity. Before Facebook and MySpace existed — back when Friendster was hot — LinkedIn was just getting going. It’s still going. Independent or part of News Corp., it’s fun watching this plucky company succeed.

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October 18, 2007, 9:05 am

Google worried? Doubt it.

I saw something more than a little scary last week at Google (GOOG): A calm, confident, friendly management team that seemed more comfortable in its own skin than I’ve ever seen them.

For the first time, Google invited a handful of journalists to its annual Zeitgeist conference for advertising partners. Afterwards, Larry Page, Sergey Brin and Eric Schmidt held an on-the-record chat with us over sandwiches. They talked about their interest in wireless spectrum. They fretted that their biggest challenge (still) is managing their growth. They even showed their sense of humor. When I noted the unusual stability of the top executives beneath the ruling troika (as a prelude to asking if that stability would continue), Page quipped, “Emotionally or physically?” More seriously, he predicted continued stability and suggested a leadership training program is helping. (The word is that many of Google’s “economic volunteers,” a term that’s actually used within the company, will be retiring soon and that turmoil will hurt.)

The arrogance remains, of course. Schmidt held forth on how much the company is doing to address the concerns that caused Viacom (VIA) to take Google to court over YouTube’s policies regarding content it doesn’t own. He said filtering technology is in “various stages of rollout,” as if that were good enough. He said Viacom “rushed” into litigation. He obviously has the luxury of knowing the suit has done nothing to blunt YouTube’s advance.

On the subject of social networking, and Facebook in particular, they made it very clear just how interested Google is in getting into the game in a more meaningful way than its Orkut service. (Read my colleague Josh Quittner for a contrary view on how much Facebook worries Google.)

Bottom line: From my perch, these guys were cool as cucumbers. Genuinely relaxed, engaged and at the top of their game.

By the way, Google reports earnings Thursday. The company’s worth $200 billion. And its founders give off the vibe that they’re just getting going. As I’ve written in the past, Google’s management isn’t perfect. Its previous quarter was sloppy. My gut tells me this one won’t be.

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September 7, 2007, 3:37 pm

MySpace AND Facebook: Yesterday’s news

It’s become cliche for people in the know to say that MySpace, the News Corp. (NWS)-owned Internet company, isn’t cool anymore. Facebook is the site that’s got the momentum, these people say.

An recent interesting throwaway line in a really fascinating article shed some light on this debate:

The kids all said that a) no one listens to the radio anymore, b) they mostly steal music, but they don’t consider it stealing, and c) they get most of their music from iTunes on their iPod. They told us that MySpace is over, it’s just not cool anymore; Facebook is still cool, but that might not last much longer; and the biggest thing in their life is word of mouth. That’s how they hear about music, bands, everything.

That’s a quote from Mark DiDia, head of operations for Columbia Records, which is owned by Sony (SNR). It comes from an article in last weekend’s New York Times Magazine, “The Music Man,” about Rick Rubin, the guru-like record producer that Sony hopes will save its slowing dying business. The “kids” DiDia refers to are recent college grads in a focus group. I’m certain that the management team at MySpace and Facebook will tell you a million reasons why the kids are wrong and that their business story will continue for years. Still, the thing about focus groups is that they don’t lie.

For what it’s worth, the kids may think Facebook is about to become uncool, but the oldsters are just discovering it. When I returned from a weeklong vacation I had 23 “friends” requests at Facebook, 9 from people I actually consider my friends or meaningful acquaintances. I go to Facebook about once every three weeks just to see who has asked to be my friend. I quickly leave, however, and suspect most of the 30-year-old-plus people who are now finding out about Facebook will do the same.

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July 23, 2007, 10:26 am

Blasphemy at eBay

What with all the exciting stuff going on in the Web world of late — Google (GOOG) laying a rare earnings turd, Facebook becoming the next Google, Yahoo (YHOO) losing altitude fast — a morsel from eBay’s (EBAY) earnings call last week was undereported. CEO Meg Whitman, vowing to rejuvenate eBay.com’s core listings, promised to market more offline. She also commented briefly on eBay’s recent spat with Google. Consider this from the New York Times:

Last month, eBay temporarily stopped buying keyword advertising on Google, the Web’s largest search engine. EBay said the suspension did not have had significant effect on its bottom line. “We learned a great deal from that test,” Ms. Whitman said. “It actually had no impact on the financials of the quarter, and we learned a lot about where we want to spend money and where we think we can save money on Internet marketing.”

Think about that. eBay, once and perhaps still Google’s largest advertiser, saying that perhaps online advertising isn’t all it’s cracked up to be anymore. That’d be fine, say, if Procter & Gamble (PG) decided it had had enough of this newfangled form of advertising. But not eBay, an Internet pioneer. Internet advertising taking a back seat to offline marketing? The horror, the horror.

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June 29, 2007, 10:05 am

Are oldsters embracing MySpace?

My former boss Eric Pooley published a juicy, access-laden cover story about Rupert Murdoch in the current issue of Time Magazine. There’s a small amount of news, like Murdoch confirming that he discussed combining MySpace with Yahoo (YHOO), a conversation he had with former CEO Terry Semel. Pooley also describes how Murdoch threatened to walk away if the Bancrofts didn’t submit a more reasonable response to his $5-billion bid to buy the Wall Street Journal. Murdoch also voices support for newly installed Journal managing editor Marcus Brauchli. All in all, it’s a good read, with the cover line “The Last Tycoon”, after the Fitzgerald novel.

There’s also an intriguing throwaway line from Murdoch deep in the story, regarding MySpace. “It was an education for me, the way it took off,” Murdoch tells Pooley. “It was the cool young site. Now the average age is climbing.”

What’s intriguing about Murdoch’s point is that MySpace CEO Chris DeWolfe went out of his way to make a similar point to me Wednesday morning over breakfast in San Francisco. He told me 40% of MySpace’s audience is 35 years or older. The reason for stressing this is to counter the assumption that rival site Facebook has a better plan for growing beyond its youthful audience. I don’t doubt that more older people are using MySpace, and Facebook, for that matter. When I asked DeWolfe, however, what percentage of time spent on MySpace is attributed to the 35-year-old-plus crowd, he said he didn’t know but agreed with my assumption that the figure would be well below 40%.

I still doubt that adults, the kinds with careers to build and families to raise, will spend much time on sites like MySpace and Facebook in years to come. The owners of those sites disagree, of course. Their businesses depend on it.

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June 22, 2007, 9:30 am

What it takes to change online behavior

David Kirkpatrick and I have been having a cordial argument about Facebook. He thinks it’s going to be the next big thing. I think it’s really annoying. He likes to send me messages through Facebook, which then notifies me, by email, that I have a message on Facebook from David. I ask him to send me emails instead. I just can’t see myself ever spending significant amounts of time on Facebook. It’s cute and all, but, well, I don’t know, it’s just not my thing.

That got me thinking about just how difficult it is to change one’s behavior online. I believe that kids use Facebook and love it, and I’m sure many will keep using it when they grow up. Most, however, will have to attend meetings and do actual work during the day — unless, of course, they become journalists — and therefore won’t have the time to see who is “poking” them on Facebook.

Similarly, I was stunned by news that Google (GOOG) now has 56% of the U.S. search market, up from 49% a year ago. Then again, I’m sort of surprised anyone doesn’t use Google. I keep meaning to spend a whole day using Ask.com’s search. (Jim: LOVE the new commercials.) But then I forget, so ingrained is Google in my search psyche. (The IAC (IAC) unit also didn’t do as good a job of helping me find a news story about search marketshare as Google did.) Then there’s Google Finance, which is doing some really neat stuff — and has started a new blog (Katie, you’re a blogger!). I like Google Finance. But I rarely use it. Yahoo (YHOO) Finance has been my browser home page for about … forever. I just can’t conceive of not seeing Yahoo Finance when I go online.

What will it take to change that?

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May 25, 2007, 3:22 pm

Will grown-ups use Facebook?

I didn’t attend Zuckfest in San Francisco Thursday. (I was busy, not uniterested.) But I did read David Kirkpatrick’s comprehensive report on what Facebook is up to with its new platform concept, as well as a whole bunch of other descriptions of the attempt by CEO Mark Zuckerberg - whom I’ll always remember for his one-of-a-kind business card - to create Macworld-like drama the way Apple (AAPL) CEO Steve Jobs does. (Particularly worth reading is a contrarian take by paidContent.org that throws a fair amount of cold water on Facebook’s dramatic announcement.)

What interests me here is whether anyone over about 25 will really use Facebook, including folks who use it in college and then go out into the real world. Last fall, when Facebook started expanding to allow corporate e-mails to be used to establish accounts (around the same time the company reportedly turned down a billion-dollar offer to be bought by Yahoo (YHOO)), I asked Facebook to start one for Fortune’s editorial employees. I then invited everyone on staff to be my “friends.” Three accepted, and I’m not naming names, nor did I take the rejection personally. It was more that no one seemed to care. Since then I’ve been steadily getting invitations from all over the place for people to be my “friends,” many from people I’ve never met or met only once. My hunch is that adults are finding out about Facebook and then inviting everybody they can think of. But will they actually visit the site and see who is “poking” them? I seriously doubt it. I don’t use LinkedIn much either, but I know that lots of people do, and I understand why: It’s got content that helps them do their job. And even then, it’s not like you’re going to spend a ton of time on LinkedIn, the main premise behind Facebook and News Corp.’s (NWS) MySpace. Professionals get in and get out. They’re too busy to do otherwise.

(Will adults use Facebook? Have your say in this poll.)

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Adam LashinskyWall Street watchers think of capital markets and financial players out west as being on the "other" coast. That's not how it's viewed in the Pacific time zone. From the venture capitalists of Sand Hill Road to the bond kingpins of Orange County to the corporate finance department at a certain software company in Redmond, Wash., there's plenty going on "out there." Adam Lashinsky should know. A native of Chicago, he has covered West Coast finance for a decade, with an emphasis on money matters in Silicon Valley. If it involves money and it's happening west of the Mississippi, look for it in Go West.
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