David Ebersman is Facebook’s New CFO
Facebook named a new CFO today, his name is David Ebersman. Ebersman has some prior CFO experience at other firms and should be a huge asset to Facebook. I think the question that we have all been wondering about will soon be answered, and that question is, “when will we see the Facebook IPO?”
I suspect that it’s going to take a few months, possibly even a year for the new CFO to get a grasp on everything that Facebook has going on. Let’s face it, from the onset Facebook hasn’t been your typical startup, they have been able to woo millions from angel investors and even pulled in way more than any web startup I have ever seen without facing up close and personal scrutiny from the government or SEC. To put it bluntly, I am surprised that they have existed this long w/out going public. The amount of money takes to fund an online community like Facebook would blow it’s users minds.
One other thing that I am going to be paying close attention to is how Facebook plans to make money. Sure, i know they have their ad sales, which are probably substantial, but probably not the complete answer. I think that they missed the boat on the whole “vanity url” thing, that could have been epic. Here’s the press release for those of you that might have missed it:
PALO ALTO, Calif. — June 29, 2009 — Facebook today announced that David Ebersman, the former executive vice president and chief financial officer (CFO) of Genentech, the pioneering biotechnology firm recently acquired by Roche, will become the company’s chief financial officer.
Ebersman will report to Chief Executive Officer (CEO) and Founder Mark Zuckerberg. He will oversee Facebook’s finance, accounting, investor relations, and real estate functions. He also becomes a part of the company’s executive management team, which directs all aspects of company strategy, planning and operations. Ebersman will formally start in September 2009.
“We received a lot of interest in the CFO position and had the opportunity to meet with many impressive candidates,” said Mark Zuckerberg. “We quickly recognized that David was the right person for Facebook. He was Genentech’s CFO while revenue tripled, and his success in scaling the finance organization of a fast growing company will be important to Facebook.”
“After meeting with Mark and the rest of the team, I was thoroughly impressed with everyone’s drive and sense of purpose to help people connect and share,“ noted Ebersman. “Mark is constantly pushing the company forward and he’s assembled a world-class team that is achieving remarkable results both for its users and as a business. I’m excited to join this effort and this new industry.”
Ebersman worked at Genentech for nearly 15 years. He served as the firm’s executive vice president and CFO from 2006 through April 2009, when Roche Group acquired the company. Prior to joining the company’s finance organization, he was senior vice president of Product Operations. He joined Genentech as a business development analyst. Previously, he was a research analyst at Oppenheimer & Company Inc.
Facebook Raises $200M; Now Valued at $10 Billion
I am somewhat familiar with what all goes into the valuation process of a standard website, but I would know where to start estimating the value of a social network like Facebook, I can only imagine the work that went on behind closed doors to arrive at $10 Billion Dollars, whew!
One thing that amazes me about the whole Facebook thing is how they have been able to remain a private company and raise so much capital, amazing!!! I know that employee shares of Facebook were going for $10 a share a little while back (if you knew someone), but I am going to venture to say that that price has probably gone up a little bit. I don’t see Facebook slowing down anytime soon…
Although that’s below the $15 billion valuation that was placed on the social network when Microsoft invested $240 million for a small stake back in 2007, it’s significantly higher than recent speculation that placed the value of Facebook as low as $2-3 billion.
As part of the deal, Facebook employees are cashing in some of their shares. According to a statement from the company “DST has indicated that it is planning to offer to purchase at least $100 million of Facebook common stock from existing common stockholders that would facilitate liquidity for current and former employees’ vested shares in the company.”
If the name DST doesn’t immediately ring a bell, it’s probably because most of its investments are outside of the US. But, so are most of Facebook’s users, as CEO Mark Zuckerberg points out. “We’ve worked hard to bring more than 200 million people – 70 percent outside of the U.S. – onto Facebook to share with friends, family and co-workers. A number of firms approached us, but DST stood out because of the global perspective they bring,” he said.
Recent stats show that Facebook has grown more than 300 percent in Europe in the past year, and is the number one or two social network in all countries except for Germany (#4), Russia (#7) and Portugal (#3).
Thus, DST would seem to make some sense strategically – one of its biggest investments is in Mail.ru, a top Russian-language site, and the company goes onto state in today’s release that its “main assets account for over 70 percent of all page views in the Russian-speaking internet and its social networks are the market leaders in more than 13 countries, addressing a combined population of more than 350 million.” In other words, expect Facebook (
) to continue to push hard into Europe, with a bit of help from its newest investor.
SEC Allows Additional Facebook Investors
We learned today that the SEC has issued a ruling that will allow Facebook to take on more than 500 investors. 500 is generally the magic number that the SEC keys on when evaluating a company. Keep in mind that Facebook is still privately held but is surpassing it’s rival MySpace which is now publicly held component of News Corp.
For those of you who are new to my blog I should probably state for the record that I am all-involved with the Facebook project and have been for about the last year or so, both from a developmental standpoint as well as being a committed user of the social network and open developers api / facebook connect.
Techcrunch: When most private companies reach 500 shareholders, they trigger an SEC rule which effectively treats them like a public company and requires them to some of the same reporting requirements. Google ran into this issue just before it went public. Now Facebook is quickly reaching that same threshold as it continues to hire and allows employees to sell shares to outside investors.
But in a letter dated October 13, 2008 (embedded below), Facebook’s lawyers argue that rule should not apply to Facebook because most of the shareholders are employees. The SEC granted the exemption.
So Facebook can keep issuing both restricted stock and options to new employees without fear of triggering the (costly) reporting requirements. As long as most of those shares stay inside Facebook, the company should be all right. But if enough employees take advantage of its program allowing them to sell shares to outsiders, and the number of outside investors grows beyond a handful or a few dozen, the SEC might want to revisit this decision.
SEC Gives Facebook The Greenlight To Go Beyond 500 Shareholders Without Going Public
Facebook Gets $100M Loan for Servers
Wow, talk about a bank note! Facebook just got a $100 million dollar loan from a venture capital group out of California so they can add additional servers to their infrastructure. Get this, they were able to pull off this deal without tying up any equity in the company. I think in some ways this lends a lot of credibility to the social networking side of the web.
All of this news also comes amidst more rumors that Microsoft is entertaining purchasing Facebook again. I have said many times that I think Facebook is the top Social Networki on the web right now in terms of it’s mechanics (software and functionality) as well as it’s quality of users even though MySpace still continues to have a lot more users.
The company has already said the entirety of the new money will be used to acquire servers to help accommodate the swiftly increasing numbers of new users and popular plug-in applications that have made the site one of the big success stories of the social networking world.
The new funding is in addition to $360 million already raised by the company in the last seven months.
Recent reports put Facebook’s user numbers at over 35 million in the US. Estimates have put the company’s current data center capacity at roughly 10,000 servers. The new money will give it the means to add approximately 50,000 more servers, leaving plenty of room for expansion.
Facebook reportedly secured the loan without giving up equity in the company. The loan was provided through a venture deal with TriplePoint Capital, a lending company based out of California. This is reportedly TriplePoint’s largest deal to date.
According to reports, Facebook has not disclosed which vendor or vendors it intends to tap for new servers, but the company has been a major customer of Rackable Systems in the past. That company reported in recent statements that 17 percent of its first quarter revenue, $11.5 million, came from Facebook.
Web Host Industry News | Facebook Gets $100M Loan for Servers
Twitter = $80 Million Valuation
To me this is a little hard to understand. I have just been writing off Twitter’s recent reliability issues and poor service to lack of funding, growing pains, and Ruby on Rails in general, but after reading how easily these guys have been able to secure investors and financing it makes me wonder if it’s just a matter of super-crazy growing pains or maybe Ruby on Rails? My guess is it’s a combination of both. If it’s growing pains, investors will likely be pretty happy because these things tend to fix themselves over time and hopefully the large user base won’t go away completely to a similar but more reliable platform, but if the underlying reason for Twitters reliability is that it is built on Ruby (which is rumored to not be as scalable as once thought), investors might find themselves having to back away at some point. Don’t get me wrong, I am not a ROR (Ruby on Rails) Hater, or a Twitter hater for that matter, but if Twitter doesn’t start showing some reliability in their software, folks will start dropping like flies…
Given the obsession with all things Twitter, this has been one of the most anticipated and hotly discussed fundings in a while: Om reports that after much jostling, the micro-blogging/messaging company has nailed down a $15 million second round, bringing its total raise to around $20 million. The pre-money valuation is said to be $80 million. Past backer USV participated as well as an unspecified lead investor.
Pretty much every discussion about Twitter has to revolve around (at least) one of three things: reliability, mainstream adoption and business model. The new round comes amidst a particularly bad stretch at the company, which has been suffering blackouts on a daily basis as of late. While there’s hope that the new funding could help solve some of these woes, it’s not clear that the problem is something that will just go away with more money thrown at it. A recent post on the company’s blog basically states that the crux of the problem is unknown. As it wrestles with this issue the company has had some turnover among its key engineers. Still, it’s not obvious what long-term effects Twitter’s downtime will have on the company. Faithful customers are obviously frustrated by it, but not necessarily to the point where they’ll stop using it. Growth, meanwhile, has been off the chart.
Of course the business model remains a bit of a mystery, and perhaps more than anything, this new round is about buying the company time to figure that out without resorting to something cheap and obvious like banner ads across the site.
Twitter Gets $15 Million Second Round; $80 Million Valuation: Report | paidContent.org
