Monday, February 20, 2012

Facebook IPO Cites CEO Mark Zuckerberg Among Risk Factors


Mark Zuckerberg raised more than a few eyebrows on Wall Street when he included an unusual letter to shareholders within Facebook’s IPO filing to the SEC. In the letter Zuckerberg, who founded Facebook, boldly proclaimed his vision for the company, which seemed to prioritize the company’s social mission over its business one. 

“Simply put: we don't build services to make money; we make money to build better services,” Zuckerberg announced to the world.

In case there was any doubt, Facebook made it perfectly clear that its CEO’s grand vision could be at odds with shareholder’s interests and formally cited Zuckerberg himself as a risk factor to the company’s financial well-being.  

This passage is taken from the “Risk Factors” section of Facebook’s S1 filing to the SEC:  “Our CEO has control over key decision making as a result of his control of a majority of our voting stock.” 

For a company to cite its CEO’s voting power as a risk factor is not unprecedented, but combine that with Zuckerberg’s unusual letter and we have the signs of a brewing battle. From Wall Street’s perspective, Zuckerberg’s “make money to build services” quote is an upside down way to run a business. It doesn’t jive well with shareholders’ tendency to demand maximum profits in as little time as possible. 

In keeping with that short term outlook, at the moment Wall Street is content to licks its chops over the impending $100 billion windfall and glaze over the red flag waving from the CEO’s office. But, the stage is set for a high stakes struggle between a visionary CEO and the profit hungry shareholders of the company he represents. Can their interests align? Only time will tell. One thing is for certain, Wall Street would be wrong to assume Zuckerberg will capitulate. This is the same guy who turned down a billion dollar offer from Yahoo when he was just 22 years old. 

However the story unfolds, the media couldn’t have asked for a more dramatic plot line for Act 1 of Facebook’s journey to go public.



Like what you read?  Like Overheard on Facebook.

Saturday, February 11, 2012

Searches for “Knicks Online Streaming” Skyrocket - Will Jeremy Lin End the TWC / MSG Blackout?

Is Jeremy Lin the best thing that ever happened to Jim Dolan’s MSG Network?
The LINCHPIN of the Knicks

In recent weeks, interest in the Knicks began to wane as the team's record slipped. The promise of the Big Three, a team that Coach Mike D’Antoni billed as champion contenders, was fading fast.

This was very bad news for Jim Dolan’s MSG Network which is locked in a stalemate over fees with cable provider Time Warner.

As interest in the Knicks plummeted so did Dolan’s leverage over Time Warner Cable to pay up.

Then along came Jeremy Lin.  In just four games, Lin has captured the hearts of Knicks fans, the Asian-American community and NBA players. He may have even given Dolan his leverage back. One thing is for certain, interest in watching the Knicks is surging. And as a result, suddenly the blackout is relevant again.

Knicks fans who are Time Warner Cable subscribers (like me) are unable to watch Lin's incredible play.  This has led to a sharp increase in searches for alternative ways of watching the Knicks game live. The number of searches is also a useful metric for measuring interest in the Knicks.

Searches including keywords “Knicks Live Streaming” and “Knicks Streaming Online” have skyrocketed almost as fast as Jeremy Lin’s career.

The total searches driven by Linsanity has yet to eclipse the searches that occurred at the beginning of the Knicks season. Interest peaked then due to the pent up demand caused by the NBA lockout, the hype around the addition of Tyson Chandler and the looming blackout. But, the Lin dynasty is only just beginning. 




Dolan is surely thankful for the miraculous appearance of Jeremy Lin. But he may be in for a rude awakening. If consumers are able to find viable alternatives to his MSG Network, he may find that Jeremy Lin has hastened the demise, instead of saved, his business model.

Read More: How Xbox Live Can Disrupt the Cable TV Business


Like what you read?  Like Overheard on Facebook.