Posts Tagged ‘tumblr’

Early Tumblr Investor Saw ‘Raw Talent,’ Capital Efficiency

One of Tumblr’s biggest fans is a venture capitalist who helped steer the blogging service from its earliest days to a deal to be acquired by Yahoo for $1.1 billion in cash.

Spark Capital

Bijan Sabet.

Bijan Sabet, a general partner at Spark Capital who is best known for leading the Boston firm’s investment in Twitter, said he first started using Tumblr when it was just one of several Web applications that founder and Chief Executive David Karp had developed while running a Web consulting company called Davidville.

Karp has “raw talent when it comes to design and user experience, and self-taught technical talent,” Sabet said in an interview Monday. With anything he built, “you could just tell it was a David Karp product.”

But Tumblr was what caught Sabet’s eye and he thought Karp should focus on a single product early on. Starting in the spring of 2007, Karp and Sabet spent several months talking about what it would take to turn Tumblr into a business before Karp, who was happy running his profitable, self-funded consultancy, agreed to go forward.

Spark and Union Square Ventures were among the earliest investors in the company and today are its largest venture shareholders, Sabet said, declining to disclose their ownership stakes. The two firms contributed to a $775,000 round in October 2007 and led a $4.5 million Series B round in December 2008. Tumblr has raised about $125 million from investors, who also include Greylock Partners, Insight Venture PartnersMenlo Ventures and Sequoia Capital. Its last round, in 2011, was said to be at an $800 million valuation.

What marked Tumblr from the start was its capital efficiency, operating with two people for the first 15 to 18 months and then four people for the next year. Karp concentrated on a series of constant improvements to perfect the Tumblr experience, Sabet said. Rather than trying to move the company quickly into the mainstream, the CEO was “more focused on delighting the users he had already signed up.”

Besides its slow, steady approach, another key to Tumblr’s success was its move from the Web, where it started, to mobile devices, Sabet said. “They were able to build a wonderful, compelling mobile experience in the last couple of years.” Well over half Tumblr’s users access the service via its mobile app, Sabet said.

Spark and Union Square, who are both Twitter investors, were in no rush to have Tumblr generate profits, although Sabet acknowledged that obviously is the ultimate goal. “We believe in profitable business models–I am a venture capitalist,” he said. Like Twitter, investors figured, Tumblr should concentrate first on building a big base of users.

“You’ve got to scale first and monetize second,” Sabet said.

The Tumblr acquisition will be Sabet’s second exit in a little over a year. In March 2012, Zynga acquired Spark-backed gaming company Omgpop for about $180 million. The company had raised about $16 million from investors.

Karp was one of the people who introduced Sabet to Omgpop founder Charles Forman. Sabet said the two companies had little in common except that both Karp and Forman have a “strong, strong affinity around design and technology.”

Write to Russ Garland at russell.garland@dowjones.com. Follow him on Twitter at @RussGarland

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Article from SFGate.

“Here’s a mind-numbing stat: Americans spent a total of 53.5 billion minutes on Facebook in May, according to a new Nielsen study released Monday.

In fact, the media-measurement firm’s new report on social networking found that Americans spent more time on Facebook than on any other website – and it wasn’t even close. Yahoo was second with 17.2 billion minutes in May and Google ranked third at 12.5 billion minutes.

With Americans now spending nearly one-quarter of their overall Internet time on social networks and blogs, Nielsen said the results show “how powerful this influence is on consumer behavior, both online and off.”

“Whether it’s a brand icon inviting consumers to connect with a company on LinkedIn, a news ticker promoting an anchor’s Twitter handle or an advertisement asking a consumer to ‘Like’ a product on Facebook, people are constantly being driven to social media,” said Nielsen’s first-ever State of the Media report to focus on social networking.

The report took a snapshot of online activity during May and found nearly 4 of every 5 active U.S. Internet users went to social-networking and blogging sites, accounting for 22.5 percent of the total amount of minutes people spent online. Online gaming was next with 9.8 percent, followed by e-mail at 7.6 percent.

In the social-networking and blogging category, Palo Alto’s Facebook was the runaway leader with 140 million unique visitors during the month, with Google’s Blogger blogging platform a distant second with 50 million unique visitors spending about 723 million minutes.

But the up-and-coming blogging platform Tumblr was third with 623 million minutes, edging out both San Francisco microblogging service Twitter Inc. with 565 million minutes and the professional social network LinkedIn Corp. of Mountain View, which had 325 million. Nielsen said New York’s Tumblr Inc. has nearly tripled its audience since May 2010 and is now “an emerging player in social media.”

Also, the report said 70 percent of all adult social-network users shop online. But 60 percent of social-network denizens create reviews of products or services, making them more likely to be influential for online and offline purchases.

And compared with average Internet users, social networkers are 26 percent more likely to post their political opinions, 33 percent more likely to say what they like or don’t like on television and 75 percent more likely to spend heavily on music.

Other Nielsen findings include:

— The profile of the most active social-network user is of a woman of Asian/Pacific Islander descent between the ages of 18 and 34. The majority of social-network users are women, but men are more likely to visit LinkedIn.

— About 31 million people watched nearly 157 video streams on social networks or blogs in May. More women than men watched video this way, but men spent 9 percent more time watching those streams.

— While almost all social-media users access their networks by computer, a growing segment – about 37 percent – now do so with their mobile phones. More than twice the number of Internet users age 55 and older accessed social media on their phones than a year ago.”

Read more here.

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Article from NyTimes.

“With Facebook’s membership approaching 600 million, and more features and apps continually being added to the site, it sometimes seems as if it’s the only social network around. But it’s not the only one, even if it’s dominant. Specialized networks are catching on with users who prefer a more focused way to share photos, videos or music, or who simply don’t want everyone on Facebook looking at their pictures.

Some of these networks leverage the existing huge audiences of Facebook or Twitter to let their users reach the maximum number of friends. But if you’re worried about Facebook’s potential privacy holes and want to steer clear of them, there’s a network for that, too.

INSTAGRAM Instagram, a photo-sharing network based around a free app for Apple’s iPhone, is the breakout hit of specialty social networks. The service, which was introduced in October, says that more than a million users have already signed up.

Instagram’s secret weapon is its built-in photo filters, which modify your pictures before you upload them. Some effects are corny, but some — like the sepia-inspired Early Bird filter or the soft-color Toaster — work wonders at removing the often harsh lighting and jarring colors of cellphone photos. With the help of the filters, the images may look better than those uploaded to other social sites, like Facebook.

Davin Bentti, a software engineer in Atlanta, uses Instagram to control where he posts photos.

“Instagram lets me share photos on Facebook, Twitter, Flickr, Posterous, Tumblr and Foursquare,” he said. “When I take a photo, I can put it everywhere without having to think much about it. But I can also put it only where I want it to go.”

For example, Mr. Bentti said, he skipped Twitter when posting a recent photo of his dog, because his Twitter followers are mostly professional colleagues.

To get started, download the free Instagram iPhone app, and sign up for an account. If you own an Android phone, be patient; an app for that operating system is in the works, the company said.

To find friends to share your photos with, start the app and tap the Profile option at the bottom right of its screen. Instagram offers several ways to find people: log in to Facebook or Twitter to see lists of your friends there who are already signed up with Instagram; search your phone’s contact list to match the e-mail addresses with existing users; send invitations to those in your contact list who have not yet signed up; search Instagram’s database of users and usernames; browse a list of suggested users whom the company has deemed worth following for their photos.

“We don’t see ourselves as an alternative” to Facebook, said Kevin Systrom, Instagram’s chief executive. “We see ourselves as a complement, to allow for sharing on multiple networks, all at once.”

PATH Path, a photo and video sharing network, also sees itself as an enhancement to Facebook; users can log in to Facebook to find Path users to share with. But Path limits the sharing to 50 friends at most, rather than with everyone you know. And you can’t post your Path photos to Facebook itself. Your friends need to check their Path app or Path’s Web site to see your images.”

Read more here.

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Here is an article from SF Gate.

Intel invested an undisclosed amount in social media incubator Betaworks to gain insight into real-time user behavior on social networks, the chip maker said on Thursday.

The investment could help Intel develop better hardware for mobile devices or servers that either access or provide real-time social media services, said Mike Buckley, managing director of Intel Capital. Buckley declined to comment on how much Intel invested in Betaworks.

Intel joined other companies, including Aol, that invested in Betaworks on Thursday. An Aol spokeswoman confirmed the investment in Betaworks but declined to comment on the amount.

Betaworks is best known as an investor in social media companies that include Twitter, Tumblr, Bit.ly and TweetDeck.

Betaworks received a total of US$20 million in investments from companies that included The New York Times and SoftBank, said Josh Auerbach, senior vice president at Betaworks. The company will use that money to continue investing in social media networks, Auerbach said.

Intel is known primarily as a hardware company, but the investment in Betaworks isn’t directly tied to its hardware operations, Buckley said. But real-time Web services where users exchange messages instantly are gaining popularity and offer the potential to create additional demand for products ranging from mobile phones to servers, Buckley said.

“Twitter is the one that jumps out, and a lot of companies Betaworks is involved with are in the Twitter ecosystem,” Buckley said. “This is more of an eyes-and-ears investment to gain more and deeper insights into how this segment evolves.”

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