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Thurs morn catchup in Silicon Valley: Ellison's double dip, Google's genetic search & more

two stanford grads.jpg
(photo credit: Ethan Hill)
Breaking through the ol' boys network -- Here's a noteworthy story about two female Stanford graduates, and how they succeeded in building a national concierge business called Circles. It is a little long, but has some good parts, including the part about an older VC who looks down his nose when they are asking him for capital and asks them about what happens when one of them gets pregnant.


Alexa not accurate on Facebook numbers -- We may be in the minority disagreeing with Om on his analysis of the web traffic for social-networking site, Facebook. But we've been tracking Alexa's numbers of Facebook on and off for more than six months, and have been appalled by its unreliability. We've purposefully avoided referring to Alexa when it comes to Facebook. If you are going to cite Alexa's numbers for February and March, then how are you going to ignore the ridiculous figures for January and in fall of last year? And no, the school season doesn't account for all of this. We contacted the folks at Facebook to figure out what was going on with those Alexa numbers, and they had no idea either. Somebody else is saying something about this in Om's comments. That said, we admit contritely that it is easy to point to Alexa charts because they are freely available; we have pointed to Alexa charts in past, and may continue to do so for lack of a better tool -- but not when it comes to Facebook. And of course, it is entirely possible that Alexa's recent numbers showing Facebook range-bound reveal something real here, and Om might be correct in the end; it's just that we don't know.

By the way, the Paid Content folks have weighed in, saying Facebook has raised a large round of VC, and suggests the buyout rumor is "media manipulation." We repeat, we know nothing, but just pointing this stuff out. Sure, when a rumor arises, chances are there is a real event that is driving it. But we've observed that truth can always get distorted as it filters through the community (remember the Riya hoopla about a buyout from Google, which never happened, but which came about the time Riya raised another VC round?).

Prosper to face competition from Zopa in online lending auction -- Prosper is a San Francisco-based online market place where people can negotiate loans on their own terms -- largely cutting out the middleman. Competitor Zopa, until now mainly focused on the London market, has raised $15 million in a second round of funding, and is headed to launch its product in the California too -- with offices not far away from Prosper's. So this should get interesting, as Benchmark Capital is an investor in both companies. (Bessemer and Wellington are also investors in Zopa).

In fact, we'd been preparing a Mercury News story about Prosper when this Zopa news hit. We just talked with Zopa's chief executive, Richard Duvall, to figure out how Zopa's business models differs from Prosper. To summarize briefly, Zopa doesn't let lenders choose the particular individuals it loans to. It only allows them choose categories of borrowers, based on their credit ratings and how long they want the loan for. Zopa also doesn't encourage the theme-based borrow groups pushed by Prosper. There's more to discuss here, including Zopa's thorough background check of its borrowers, but we'll save it for our Merc story, which we will point to.

In the beginning, there was Wikipedia, now there is Wikia -- Wikia is another wiki start-up co-founded by the person behind Wikipedia, Jimmy Wales. This time, Wikia lets you do everything outside of an online collaborative encyclopedia. It enables "groups to share information, news, stories, media and opinions."

It is not a Silicon Valley company, but we point to it because the Wikipedia phenomenon made such an impression here in the valley, and because there are several Silicon Valley investors behind this project. Bessemer Venture Partners led a $4 million investment in the company, joined by Omidyar Network, Marc Andreessen, Dan Gillmor (our former colleague at the Mercury News, who is increasingly looking like an angel investor/start-up guy), Reid Hoffman, Josh Kopelman, Joichi Ito, and Mitch Kapor. The company wants to find a way to help these sites run advertising too. The company launched in Nov. 2004 under a different name, and has seen 1,000 wikia already created. It is different from Jot or SocialText, other wiki companies, because the latter focus on selling wiki products to companies for internal use.

Coghead raises $3.2 million to give you AJAX -- Redwood City-based Coghead, which has developed a set of tools for customers to run and manage AJAX-enabled applications, has raised $3.2 million in its first round of funding. El Dorado Ventures led the round. AJAX is the technology that is all the rage right now, and is behind the cool dragging features of Google Maps, for example.

Intel launches $50 million Brazilian venture capital fund -- It is about time that Silicon Valley's big chip company, Intel, goes to Brazil to invest in Latin American companies in a big way. Intel Capital, its VC arm, just announced such a fund. Brazil is the last major frontier for Silicon Valley's investors to conquer. A few months ago, ePlanet Ventures' Jamal Asad told us he too is eyeing Brazil. Basically, you use Brazil as a hub to invest in Latin America. Intel has already invested in a few companies down there, but this move makes things serious. Increased wealth and recent economic stability will see this Brazil trend strengthen.

Radiate, a Silicon Valley start-up, to launch mobile, networking, location-based product soon -- VentureWire has few details about Radiate, other than it has raised $1.55 million from big VC firms New Enterprise Associates and Sequoia Capital. We heard about this company a few months ago, while doing our story on young entrepreneurs. The founders are juniors at Stanford, and have managed to create a bit of buzz in the typical valley circles -- they showed up at the most recent Techcrunch party -- but we haven't talked with them directly. We'll wait and see.

Google stirs controversy with alleged genetic info search -- In his book The Google Story, author David Wise writes about a supposed collaboration between Google and human genome expert and entrepreneur Craig Venter to create a searchable online database of all the genes on the planet. Well, now a group in Brazil is blasting Google for engaging in "biopiracy," or trying to "monopolize" genetic resources -- information which the group fears could be abused. Keep in mind that Google has refused to comment on the issue, and that Venter "has denied any ongoing relationship." So we don't know. Is any of this true about Google and Venter in the first place?

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Kleiner adds yet another -- As usual, we take note when Kleiner Perkins, one of the valley's leading venture capital firms, hires new people. Wen Hsieh is the latest to join; John Doerr introduced him to the audience at the Cleantech Venture Network conference last week. He is probably relatively junior, because Kleiner usually makes an official announcement when partners join. Hsieh worked at consulting firm McKinsey & Co., where he led the Asia semiconductor practice as associate principal. Before that, he founded OnChip Technologies, a startup developing -- take a deep breath -- "MEMS microfluidic-based protein chips for high-sensitivity and high-throughput proteomic separation and identification applications. He studied electrical engineering at Caltech.

According to VentureWire (sub required), he's joining Kleiner's growing "China" team, which also includes Ying Lee, Ellen Pao, Aileen Lee and Ted Schlein.

Larry Ellison's double dip -- So NetSuite, the San Mateo hosted software company, plans to go public later this year, according to this story. As Alarm:Clock points out, it is noteworthy that Larry Ellison, chief executive of Oracle, founded this company in 1998 and still owns 60 percent of the company. Is there a conflict of interest here with Oracle's operations? Don't know. Any thoughts?

You are paying a 10+ percent premium in Silicon Valley -- Here's an interesting study by Dow Jones (sub required), showing that CEO compensation at venture capital-backed companies has risen 32% since the height of the dot-com boom in 2000.

Northern California continues to lead with the nation's highest paid start-ups CEOs, with median compensation hitting $275,000. Not far behind is the Northwest, where compensation jumped to $250,000 from $200,000. In the Northeast compensation dropped to $253,000 from $275,000 last year and the South saw a decline to $240,000 from $246,000.

Google's lobbying grows more intense -- Here is a story from the NYT (registration required) about Google's intense lobbying efforts in Washington; it comes a couple of months after we pointed to Google's single employee in Washington.


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Comments

Alexa numbers are very unreliable. They do not do any checking based on even just the IP address.

Here's an easy way to boast your traffic. Use a web browser that supports tabbed browsing, (such as the IE7 beta), create a bookmark folder with 25 saved bookmarks to a single site, then open the folder with a single click.

This instantly created 25 sessions to the same site which Alexa will count.

Do this a few times per day for a typical smaller site that you own; Then view your alexa stats. You'll see your traffic go way up.

Robert E Spivack on March 30, 2006 11:03 AM
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Alexa had problems in January losing the data of numerous websites: http://awis.blogspot.com/2006/01/hey-where-did-my-traffic-go.html

Our site, http://www.ratemybabypics.com, which should have been around 20,000 or so (we track with Google Analytics) fell off the face of Alexa for nearly two months. It finally took a series of emails for them to correct the error. We're not alone tho judging from the response.

EJV on March 30, 2006 11:40 AM
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Matt,

RE: Ellison...I don't think he's got a conflict of interest per se, although he DOES have an interesting decision to make. Logically, it would seem NetSuite would be afforded a higher multiple as a standalone than as part of Oracle proper. So Ellison has to ask whether NetSuite's addition to the Oracle Fusion project would be enough to drive Oracle shares out of the doldrums.

Ultimately, shareholders will also have to decide how comfortable they are investing in a public company that is, in essence, under sole control by Ellison. I doubt Larry would be willing to let go of his majority shareholder position in a public share offering.

Jason

Jason on March 30, 2006 2:45 PM
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This is interesting. What happens when advertisers and readers begin to realize that these traffic numbers are built on a house of cards? That they are hyped. That even the honest guys feel pressure to start artificially pinging their own sites so that their numbers don't start declining because they are being judged relative (market share, reach, etc) to everybody else. Yes, there will soon be a Web 2.0 crash, a major disillusionment when people figure out the stats are not what they seem, and advertisers are no longer willing to pay per thousand page views, but instead switch to measure click throughs, and demanding to look at "registered" users, etc. Then things will get sober, alright.

Matt Marshall on March 30, 2006 4:12 PM
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An interesting issue about Zopa: the name they picked sounds in Russian nearly exactly as... um.. buttocks. Moreover, they claim their name does not mean "ruination" in "any of world 5000 languages" but in Russian there is an idiom "get in zopa" which means exactly that - "be ruined". Funny they did not check one of the world's biggest spoken languages...

Yuri Ammosov on April 1, 2006 5:56 PM
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