Category Archives: Bessemer Venture Partners

Acquisitions, Advertising, Allen & Co, angel investors, Bessemer Venture Partners, Business, European Founders Fund, Funding, Greylock, Internet, Investments, Money, Sequoia Capital, Social Networking, Society, Software, Technology, the European Founders Fund, Venture Capital, Web 2.0

LinkedIn is out pitching for a major round at the staggering $1B pre-money

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The rumors across the valley are that LinkedIn is out trying to raise a new round at $1B pre-money valuation. They are using the service of the New York based secretive investment bank Allen & Co. where the Managing Director Dave Wehner seems to be engaged with the effort to help LinkedIn secure its next round of funding.

There were clearly rumors over the past months that LinkedIn was looking for potential sell out as one of the rumored suitors was News Corp., but as it often happens nowadays after you fail to sell out you are raising a new round instead at preferably huge pre-money valuation to keep your company alive until IPO and M&A markets improve. Similar deals were done by many web 2.0 start-ups from the valley and among others are Slide, Ning, Federated Media and most recently Meebo.

If those rumors turn out to be accurate it will be one of the most expensive private venture deals in recent history. So far LinkedIn is said to have taken $27.5M in total over three rounds. They have also claimed publicly they will reach anything between $70M and $100 million in revenue in 2008. Yet if this is true that they need new round before their exit it means they are barely profitable.

The latest numbers from LinkedIn are as follows: over 20M registered users worldwide, more than 1M new users get registered on their social networking site each month and the average user is said to be 41 years old making around $110,000, which the company says allows it to charge advertisers $75 per thousand impressions.

However, both Quantcast and Compete do report for no more than 4 up to 5M uniques per month to their site. 

This past January, cofounder and board chairman Reid Hoffman told the Sydney Morning Herald that the company will most likely file for an IPO before 2010 if “he isn’t first tempted to sell to one of the suitors that have inquired about buying LinkedIn. Hoffman wouldn’t identify the suitors.” This simply sounds like invitation for the suitors to sweeten their offers.

More about LinkedIn

LinkedIn is an online network of more than 20 million experienced professionals from around the world, representing 150 industries. When you join, you create a profile that summarizes your professional accomplishments. Your profile helps you find and be found by former colleagues, clients, and partners. You can add more connections by inviting trusted contacts to join LinkedIn and connect to you. Your network consists of your connections, your connections’ connections, and the people they know, linking you to thousands of qualified professionals.

Through your network you can:

  • Find potential clients, service providers, subject experts, and partners who come recommended
  • Be found for business opportunities
  • Search for great jobs
  • Discover inside connections that can help you land jobs and close deals
  • Post and distribute job listings
  • Find high-quality passive candidates
  • Get introduced to other professionals through the people you know

LinkedIn is free to join. We also offer paid accounts that give you more tools for finding and reaching the right people, whether or not they are in your network.

LinkedIn participates in the EU Safe Harbor Privacy Framework and is certified to meet the strict privacy guidelines of the European Union. All relationships on LinkedIn are mutually confirmed, and no one appears in the LinkedIn Network without knowledge and explicit consent.

LinkedIn is located in Mountain View, California and is funded by world-class investors including Sequoia Capital, Greylock, the European Founders Fund, and Bessemer Venture Partners.

More about Allen & Co

Investment bank Allen & Company has been involved in a number of high profile mergers and acquisitions in the past. Interesting for the Allen & Company is the privacy the investment firm seems to be working in as argument for which is the absence of even a basic site for the company on Web. Perhaps they don’t like publicity. Yet, we have found the firm’s contact details, which can be found among the other links on the end of the story’s page.

For Allen & Company, there’s no business like financing show business. The investment bank serves variously as investor, underwriter, and broker to some of the biggest names in entertainment, technology, and information. Viewed as something of a secret society, the firm has had a quiet hand in such hookups as Seagram (now part of Vivendi) and Universal Studios, Hasbro and Galoob Toys, and Disney and Capital Cities/ABC. The firm’s famous annual retreat in Sun Valley, Idaho, attracts more moguls than a double-black ski run (Warren Buffet, Bill Gates, and eBay CEO Meg Whitman have attended). Brothers Herbert and Charles Allen founded the company in 1922.

Key people and executives for Allen & Company LLC are as follows:

  • Non-Executive Chairman Donald R. (Don) Keough
  • President, CEO, and Director Herbert A. (Herb) Allen
  • Managing Director and CFO Kim M. Wieland

More

http://www.linkedin.com/
http://blog.linkedin.com/
http://www.linkedin.com/in/reidhoffman
http://www.usatoday.com/tech/webguide/internetlife/2008-01-20-linkedin_N.htm
http://venturebeat.com/2008/05/05/whats-happening-at-linkedin-is-it-getting-bought/
http://www.techcrunch.com/2008/05/05/allen-co-pitching-linkedin-at-1-billion/
http://www.crunchbase.com/company/linkedin
http://www.crunchbase.com/financial-organization/allen-and-company
http://uk.techcrunch.com/2007/11/28/more-linkedinnews-corp-reports-coming-in/
http://venturebeat.com/2007/11/27/source-yes-linkedin-and-news-corp-are-working-on-a-deal
http://www.thestandard.com/news/2008/04/29/linkedin-prepares-lucrative-push-europe
http://venturebeat.com/2007/12/09/linkedin-launches-platform-redesign-a-better-business-social-network
http://www.smh.com.au/news/biztech/serial-entrepreneur-with-the-golden-touch/2008/01/22/1200764231508.html?page=fullpage#contentSwap2
http://500hats.com/
http://venturebeat.com/2008/02/20/trends-secretive-new-york-bank-allen-co-gets-into-silicon-valley-media-tech/
http://www.hoovers.com/allen-&-company/–ID__51026–/free-co-factsheet.xhtml
http://quantcast.com/linkedin.com
http://siteanalytics.compete.com/linkedin.com?metric=uv

Benchmark Capital, Bessemer Venture Partners, Business, DAG Ventures, Funding, Internet, Investments, Money, Social Networking, Travel, Venture Capital, Web 2.0

Yelp: $200M valuation, $31M total funding, 8M uniuqes, SEO – all for local reviews

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The 4 years old Yelp, which is a local review site, has already reached a hefty popularity on Web. Today we have read online the site claims to have more than 8M unique visitors per month, which can already be called a hugely popular site and all that achieved within 4 years only. Pretty impressive one may say. But the company seems to have raised tons of money in 4 rounds totaling $31M to date. The pre-money valuation was rumored to be in the $200M range, which for a site with almost 10M uniques per month is becoming an industry standard already. The revenues, also rumored, are said to be in the $10M range per year, which was widely criticized on different tech blogs as not enough taking into consideration the site’s already massive reach. Well, we are not quite agreeing with those critics. Take for example Digg and Technorati, both sites are hugely popular and their revenues are not quite impressive either and are perhaps in the Yelp’s annual range. Not even to mention WordPress.org‘s case and their strong NO to a $200M buyout deal last year on little to no revenues, as far as we know. We would guess that just like Digg and Technorati, Yelp will also try to shop itself around and their investors are in fact looking for an acquisition deal with hefty exit price tag rather then building a self-sufficient company taking into consideration the very favorable time for web 2.0 companies in the Valley. Yet, we think $10M per year off 8M unique visitors per month is pretty well done job in monetizing their traffic, for now. 

Their forth round of funding is said to be in the $15M range and led by DAG Ventures. Yelp says that they will be using the money to expand geographically, add onto their sales team, and establish an office in NYC. With this latest round, DAG joins previous investors Max Levchin who put $1 million back in the summer of 2004, Bessemer Venture Partners with their $5 million round closed in 2005, and Benchmark Capital ($10 million, Q4 2006). The company’s total funding is now $31M. If the rumored pre-money valuation is correct then DAG Ventures seems to have bought only 7.5% for its money.

The company is based in San Francisco and was founded back in 2004 from former PayPal early employees.

Yelp claims they are relying on “word of mouth marketing” but from what we have seen their site is heavily search engine optimized with several million of indexed pages at Google, which is well done and good after all, but you should refrain from claiming you are all about word of mouth marketing. We have no access to their Google Analytics files where the traffic sources are visible, but we are pretty sure a vast majority of their 8M uniques per month is coming from Google and some of the other top search engines. 

Other critics of the company’s strategy say that a viable approach to building a company like Yelp would be to prove that your business model works in the cities that you initially target and then replicate that model elsewhere once you have your validation. If you cannot establish a profitable business model in the cities you initially target, expanding your sales force, adding additional offices and replicating your unsuccessful model elsewhere are not viable solutions for developing your company.

The local space is very crowded area as it seems. Yelp’s competition includes companies like InsiderPages (acquired by Citysearch), Viewpoints, YellowBot, Google Local, Yahoo Local, JudysBook.com, Rummble, LocoGopher.com, Zvents, Upcoming, Qype, Tipped, GenieTown, YellowPages.com, among others.

More about Yelp

Yelp is the fun and easy way to find, review and talk about what’s great (and not so great) in your world. You already know that asking friends is the best way to find restaurants, dentists, hairstylists, and anything local. Yelp makes it fast and easy by collecting and organizing your friends’ recommendations in one convenient place.

Yelp is the ultimate city guide that taps into the community’s voice and reveals honest and current insights on local businesses and services on everything from martinis to mechanics. Yelp is just real people, writing real reviews, and that’s the real deal. Yelp is a fun and engaging place for passionate and opinionated influencers to share the experiences they’ve had with local businesses and services. Yelp is the definitive local guide in the San Francisco Bay Area and a force to be reckoned with in Chicago, New York, Boston, Los Angeles and Seattle. But really, we’re everywhere. From Austin to Madison and everywhere in between, reviews are coming in from all over the country!

Yelp is word of mouth marketing – amplified. Savvy local marketers now have a great channel to effectively target local consumers. Since July 2004, co-founders Jeremy Stoppelman (CEO) and Russel Simmons (CTO) and their Yelp crew have been striving to make life better for people who love to patronize great local businesses. Discovering accurate information on local establishments has never been this entertaining. Writing reviews has never been this fun, easy and addictive!

The Yelp Management Team

Jeremy Stoppelman
Co-founder and Chief Executive Officer
Jeremy co-founded Yelp Inc. in July 2004 with former colleague and friend Russel Simmons.
Prior to Yelp, Jeremy was the VP of engineering at PayPal. He left PayPal in the summer of 2003 to attend the Harvard Business School. Upon completing his first year at HBS, Jeremy joined an incubator started by Max Levchin (co-founder of PayPal) for a summer internship. It was there that he was reunited with his old colleague Russel Simmons and the two teamed up to create a vibrant community around local information. Jeremy holds a B.S. in computer engineering from the University of Illinois.

Russel Simmons
Co-founder and Chief Technology Officer
Russ co-founded Yelp Inc. in July 2004 with former colleague and friend Jeremy Stoppelman.
Prior to Yelp, Russ was one of the early employees and the lead software architect at PayPal. He led a team of top engineers on critical projects related to security, scalability, stability, and internationalization as the company scaled rapidly. Following his time at PayPal, Russ joined Max Levchin’s (co-founder of PayPal) incubator, where he teamed up with Jeremy. Russ holds a B.S. in computer science from the University of Illinois.

Geoff Donaker
Chief Operating Officer
Geoff joined the team in November 2005.
Prior to Yelp, Geoff spent five years building Web communities at eBay, most recently as director of international category management and previously as director of collectibles. His previous experience includes business development and marketing management roles at Excite@Home, Voter.com, Classifieds2000 and Mercer Management Consulting. Geoff has a B.S. in mechanical engineering from Stanford University.
More

http://yelp.com/
http://blog.yelp.com/
http://jeremy.yelp.com/
http://www.google.com/search?q=site%3Ayelp.com
http://www.techcrunch.com/2008/02/26/yelp-raises-15-million-fourth-round-valuation-200-million/
http://www.drama20show.com/2008/02/27/yelp-raises-more-money-for-business-stuff-and-parties/
http://valleywag.com/tech/jeremy-stoppelman/the-hard-life-of-a-web-founder-244590.php
http://valleywag.com/tech/party-report/party-correspondent-confronts-ghosts-of-yelp-parties-past-331048.php
http://www.timeout.com/chicago/articles/features/25797/amateur-hour
http://www.npr.org/templates/story/story.php?storyId=18349445
http://money.cnn.com/2008/01/23/smbusiness/manage_online_reputation.fsb/index.htm?postversion=2008012409
http://www.washingtonpost.com/wp-dyn/content/article/2007/08/14/AR2007081401782.html
http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticleHomePage&art_aid=64844
http://startup.wsj.com/ecommerce/ecommerce/20070719-richmond.html
http://www.informationweek.com/news/showArticle.jhtml?articleID=199100332
http://online.wsj.com/article/SB117272184209823054-search.html?KEYWORDS=yelp&COLLECTION=wsjie/6month
http://venturebeat.com/2006/10/04/local-review-site-yelp-raises-10-million-from-benchmark/
http://www.techcrunch.com/2007/09/25/garageseek-rates-mechanics-but-yelp-will-kill-this-category-too/
http://gesterling.wordpress.com/2008/02/27/yelp-raises-15-million-in-round-four/
http://bub.blicio.us/?p=732
http://www.crunchbase.com/company/yelp
http://joeduck.com/2008/02/27/yelps-new-funding-round/
http://www.alleyinsider.com/2008/2/yelp_raising_more_money_opening_ny_office
http://en.wikipedia.org/wiki/Yelp%2C_Inc.

Acquisitions, Advertising, Bessemer Venture Partners, Business, Draper Fisher Jurvetson, Draper Richards, Entertainment, Internet, Money, Technology, Venture Capital, video, Web 2.0, William Randolph Hearst III

Revver, the video-revenue sharing site finally sells out, but the price is not hefty

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The site best known as the first video site that started to split the ad revenue with publishers and video creators and producers on a 50/50 basis is being reported sold. The troubled video site Revver was bought by Brad Greenspan’s LiveUniverse for what is rumored on several tech blogs to be under $5 million. No more public information at this hour is available but the price seems quite low taking into consideration the huge amount of money the company has taken so far. Revver is known to have raised $12.7 million from Comcast, Turner, Draper Fisher Jurvetson, Bessemer Venture Partners, Draper Richards and William Randolph Hearst III. Checking on Revver’s blog gave us no further details on the deal.

Earlier this month Revver was put up for sale where the price tag was set to be $1.5 million or less in cash and debt assumption. CNET was among the first media to report on the potential deal between LiveUniverse and Revver, though they did say the deal had fallen apart.

A person from inside the company has commented on the deal that way: “I wouldn’t say anyone got rich, but everybody was happy.”

Many independent creators still prefer the service, though web video stars Ze Frank, Ask a Ninja, Lonelygirl15, and Invisible Engine have discontinued using it as their main platform.

Perhaps everything boils down to the simple fact it is pretty hard to monetize video site. Even though the traffic is perhaps playing little to no role for Revver’s business model it is interesting to note their visitors are not that much – below 1M unique visitors per month as reported on Quantcast.

The Revver team has indicated they plan to work under the new ownership, and no lay off plan has been announced for the video sharing company at present.

The buying company LiveUniverse is probably most popular with the fact it has been founded by one of the founders of MySpace – Brad Greenspan. With over 55M monthly unique visitors, LiveUniverse is one of the world’s largest online entertainment networks. They operate several successful and popular websites across three core verticals: Video, Social Networking & Music. LiveVideo is one of their sites, which about a year ago instigated a scandal on YouTube when it reportedly paid top YouTube users to come to its platform. LiveUniverse founder Brad Greenspan, who was involved with MySpace early on, is perhaps best known for his lawsuits protesting the company’s sale to News Corp.

Additionally in 2006, Greenspan also initiated a lawsuit and activism site against his former company, MySpace, calling attention to the fact they were censoring widget makers and software service providers using MySpace as a development platform.

More about Revver

Revver is a video-sharing platform built the way the internet really works. We support the free and unlimited sharing of media. Our unique technology tracks and monetizes videos as they spread virally across the web, so no matter where your creativity travels, you benefit.

Revver is also the viral video network that pays. We connect video makers and sharers with sponsors in a free and open marketplace that rewards them for doing what they do best.

Revver is committed to the artist. You have something to say and we built our network to empower you to say it.

How does it work?

  1. Upload your video.
  2. We pair your video with a targeted advertisement.
  3. Share your video across the web. The more people see it, the more money you can make.
  4. We split the ad revenue with you 50/50.
  5. Sharers earn money too! Help spread Revver videos and earn 20% of the ad revenue. The remaining money is split 50/50 between the creator of the video and Revver.

We’ve built all sorts of cool and easy sharing tools to help you make your work go viral and earn more money. Share and shared alike. Can you feel the love?

Revver API
Attention developers! Want to build your own video-sharing site like Revver.com? You can use our API to do it. The Revver API includes all the tools you need to create your own video portal complete with user accounts, uploading, sharing tools and access to the full Revver library of videos. Revver covers the bandwidth and shares all ad revenue with you and the video makers.

More

http://revver.com/
http://liveuniverse.com/
http://mashable.com/2008/02/14/liveuniverse-buys-revver/
http://newteevee.com/2008/02/14/liveuniverse-buys-revver-for-more-than-a-song/
http://blog.revver.com/
http://mashable.com/2008/02/06/revver-for-sale/
http://www.contentinople.com/author.asp?section_id=429&doc_id=142633
http://nalts.wordpress.com/2007/02/07/livevideo-vs-youtube-2/
http://mashable.com/2006/11/02/myspace-founder-sues-news-corp-over-censorship/
http://livevideo.com/
http://www.news.com/8301-10784_3-9865731-7.html?part=rss&subj=news&tag=2547-1_3-0-20
http://en.wikipedia.org/wiki/William_Randolph_Hearst_III
http://www.dfj.com/
http://www.bvp.com/
http://www.draperrichards.com/
http://www.quantcast.com/revver.com

Ampersand Ventures, Bessemer Venture Partners, Business, DN Capital, Enterprise, Granite Global Ventures, Intel Capital, Internet, Investments, Lehman Brothers, Money, SAP, SAP Ventures, Search Engines, Software, Technology, Venrock Associates, Venture Capital

More deals in the enterprise search sector

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A couple of weeks after Microsoft announced its $1.2 billion acquisition of FAST Search & Transfer, enterprise search competitor Endeca is getting a $15 million cash infusion from both Intel Capital and SAP Ventures. This is on top of the $50 million Endeca has already raised in the past few years from Lehman Brothers, Granite Global Ventures, Ampersand Ventures, Bessemer Venture Partners, Venrock Associates and DN Capital.

“In just more than seven years, Endeca went from one customer and modest revenue to 500 customers and $100M-plus in sales. The next target is the elusive $500M milestone,” said Bruce Richardson, chief research officer at AMR Research, in his January 11, 2008 report entitled Endeca Set to Lead the Information Visibility Revolution. “What makes Endeca unique is its ability to provide visibility for everyone that needs it, whether for finding a part or selling to a customer or prospect… It could be years before Endeca faces products comparable to its own.”

“Visibility into enterprise-wide information assets is a key area of interest for customers,” said Jennifer Scholze, Investment Partner at SAP Ventures. “By taking a fundamentally new approach to accessing and analyzing enterprise-wide data, Endeca is poised to disrupt multi-billion dollar markets and is uniquely suited to address the core opportunity of the information economy.”

“No company better understands the importance of enterprise data to today’s information-centric businesses than SAP. Our collaboration will open new doors and accelerate the realization of our vision to arm all knowledge workers with the critical enterprise data they need to inform daily decision making, regardless of source or format,” said Steve Papa, chief executive officer of Endeca. “As an SAP customer and now a key part of their investment portfolio, Endeca is on a favorable path to learn from — and work closely with — the most influential information applications company of our time.”

“Information access platforms play a crucial role in linking vast collections of data,” said Arvind Sodhani, president of Intel Capital. “Our investment in Endeca will further their capabilities by capitalizing on Intel’s next generation multi-core platforms in this market segment.”

“Endeca’s success to date would not have been possible without the innovations Intel has brought to market. Multi-core computing will play one of the greatest enabling roles for adoption of next generation information access technology,” said Steve Papa, CEO of Endeca. “This investment from Intel Capital has the potential to accelerate Endeca’s success in gaining adoption for information access.”

More about Endeca

The Endeca Information Access Platform is a new platform built specifically to address an emerging market that is poised to fundamentally change the way people access and interact with information. The platform is designed to help people explore, analyze, and understand information in ways not possible with search engine, database, and business intelligence solutions. Powered by Endeca’s MDEX Engineâ„¢ technology, it unites the ease of search with the analytical power of business intelligence, bringing Endeca’s trademark Guided Navigation® user experience to new classes of applications. As a result, organizations can increase revenue, decrease costs, and streamline operations by helping their customers, employees, and partners answer high-value questions with unprecedented ease and confidence.

The Endeca Information Access Platform aids information-based problem solving across a wide variety of business processes, including eCommerce, marketing-campaign analysis, product design and parts reuse, knowledge management, customer service, and more. To meet highly specific industry and application requirements, Endeca offers a range of market solutions, each designed to accelerate time-to-market and maximize return.

Discovering our name

The company name “Endeca” is derived from the German word “entdecken” meaning “to discover.” Viewed in the context of information integration and navigation, Endeca technology not only allows users to find what they are looking for, but also to discover the possibilities they never knew existed along the way.

Over 500 leading global organizations including ABN AMRO, Boeing, Cox Newspapers, The (US) Defense Intelligence Agency, Dell, Ford Motor Company, Hyatt, IBM, John Deere, The Library of Congress, Texas Instruments, and Walmart.com rely on Endeca to power business-critical applications that increase revenue, reduce costs and streamline operations.

Headquartered in Cambridge, MA, Endeca has operations in North America, Europe and Asia. It has 500 employees and over $100 in sales for the last year. The company was founded in 1999.

About SAP Ventures

Since 1996, SAP Ventures has been investing in companies that offer exciting new technologies and applications. Leveraging years of experience and drawing on a network of powerful business relationships, SAP Ventures helps entrepreneurs and management teams recruit the best people, make the right technology decisions, win new business, and build their own partner networks. The goal of SAP Ventures is to grow businesses that create shareholder value for everyone involved.

About Intel Capital

Intel Capital, Intel’s global investment organization, makes equity investments in innovative technology start-ups and companies worldwide. Intel Capital invests in a broad range of companies offering hardware, software and services targeting enterprise, home, mobility, health, consumer Internet, semiconductor manufacturing, and cleantech. Since 1991, Intel Capital has invested more than US$6 billion in approximately 1,000 companies in more than 40 countries. In that timeframe, about 157 portfolio companies have gone public on various exchanges around the world and another 187 have been acquired by other companies. In 2007, Intel Capital invested about US$639 million in 166 deals with approximately 37 percent of funds invested outside the United States.

Interesting information has popped up online while we were researching on the deal for more details. It seems that their product empowers IBM while IBM appears to be developing their own in joined forces with Yahoo!: http://omnifind.ibm.yahoo.net/  & http://omnifind.ibm.yahoo.net/productinfo.php

Other commentaries we have dug up from Web reveal some rumors that Endeca was pretty close to do an IPO last year. The same sources claimed something must be going not very well with the company since they have chosen to go in bed with bigger names in the business and raise VC money rather than going the IPO road. 

More

http://endeca.com/
http://endeca.com/corporate-info/press-room/pr/pr_2008-1-23.html
http://endeca.com/corporate-info/press-room/pr/pr_2008-1-23-SAP.html
http://www.techcrunch.com/2008/01/23/intel-and-sap-put-15-million-into-enterprise-search-company-endeca/
http://endeca.com/_assets/pdf/AMR_Endeca_Revolution.pdf
http://www.sapventures.com
http://www.intelcapital.com
https://web2innovations.com/money/2008/01/08/microsoft-bets-on-enterprise-search-offers-to-buy-fastno-for-12b/

Bay Partners, Bessemer Venture Partners, Business, Customer Relationship Management, Funding, Investments, Public Companies, Software, Technology

Force.com takes $25 million from Bay Partners & Bessemer Venture Partners

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Bay Partners and Bessemer Venture Partners have teamed up with Salesforce to invest $25 million in businesses building on the recently announced Force.com application platform over the next three years. Investments will be around $500,000 each where some convertible notes are also included. Investments may go as high as $2 million depending on the company’s stage and needs.

Force.com is owned by Salesforce.com, Force.com is presented and offered as platform as a service (PaaS).  Force.com is the world’s first Platform as a Service (PaaS), enabling developers to create and deliver any kind of business application, entirely on-demand and without software. It’s a breakthrough new concept that is making companies radically more successful by letting them translate their ideas into deployed applications in record time.

With Force.com Salesforce is planning to enter the custom software market. It is a new platform that will allow developers to create database driven applications and deploy them as services. So if Salesforce doesn’t offer what you are looking for, and no one has built it for you on Salesforce’s AppExchange, you can simply build it yourself using the Apex framework.

Basically there is a number of rival start-ups that are focused on offering users easy way to create and deploy database driven applications – DabbleDB, Zoho Creator, Rollbase (from former Taleo executives), LongJump, Coghead  and WyaWorks, among others. Unlike some experts predicting that this is sort of game ending for some of the start-ups above, we think this is just a step towards improving the custom software market’s environment and competitiveness among the players from which the end users would only benefit from. Also, some of the smaller companies within the sector are cost-effective and are positioned towards different market niches by targeting different customers when compared to the Salesforce.com. To me it looks more like a beginning of the game.

Many experts in enterprise SaaS right now know that ultra-configurable platforms such as Force.com are the envy of the industry for many reasons. Suffice it so say they enable extremely rapid expansion of the core and beyond into adjacent market segments as well as completely new markets – even long-tail micro-markets driven and executed entirely by end-users.

Bottom line is that users are being given more and more power to develop their own on-demand apps. This is a mega-trend in enterprise software and all significant players will need a strategy to deal with it. Users are becoming much more empowered to design, build, deploy and even distribute their own custom business apps without even knowing how to program.

Highly configurable do-it-yourself SaaS for business users is the future of software and Force.com is a fantastic example of where things are headed. Just about every enterprise software company, especially those targeting SMBs, will want to be running on their own version of this kind of platform over the next several years in order to compete.

Again, this is by no means a game-ending proposition for any of the companies working in this space. Oppositely, some great strategic acquisitions will emerge here as enterprise software companies figure out how to deal with this phenomenon. Multi-tenant, meta-data-driven, configurable SaaS is difficult stuff to build right. The startups that can and are doing a good job now will command a premium in the near future.

On the other hand Salesforce.com has always been seen and known as an aggressive company.

Salesforce.com is the worldwide leader in on-demand customer relationship management (CRM) services. More companies trust their vital customer and sales data to salesforce.com than any other on-demand CRM company in the world.
 
Why? Perhaps it’s because we deliver integrated, completely customizable enterprise applications for companies of all sizes. Or maybe it’s because Salesforce is so easy to learn and use, and thanks to the power of the on-demand Force.com platform, it can be up and running in weeks or days—not the months or years required by traditional client/server CRM software. Or it could be the unprecedented speed with which our customers see real, tangible ROI. Or maybe it’s because of our 100-percent dedication to the success of our customers.

In fact, more than 35,500 companies worldwide depend on Salesforce to manage their sales, marketing, customer service, and other critical business functions. We are proud to be contributing to the success of companies of all sizes, in all industries, around the globe including:

  • Corporate Express
  • Daiwa Securities
  • Expedia Corporate Travel
  • Dow Jones Newswires
  • SunTrust Banks
  • Kaiser Permanente

Salesforce.com was founded in 1999 by former Oracle executive Marc Benioff, who pioneered the concept of delivering enterprise applications via a simple Web site. Salesforce.com is constantly building on that legacy by improving and expanding our award-winning suite of on-demand applications, our Force.com platform for extending Salesforce, and our one-of-a-kind AppExchange directory of on-demand applications.

Salesforce.com has received considerable recognition in the industry, including:

  • Technology of the Year (InfoWorld, 2004, 2005, 2006)
  • Editors’ Choice Award (PC Magazine, 2002, 2003, 2004)
  • Visionary Award (SDForum, 2004)
  • Best of the Web (Forbes, 2003)
  • CRM Excellence Award (Customer Inter@ction Solutions, 2003, 2004, 2005, 2006)
  • Top 100 Innovators Award (BusinessWeek, 2006)
  • Innovation Award (AMR Research, 2005)
  • CODIE Award for Best CRM (2002, 2003, 2004, 2005, 2006)

The growing list of global business partners dedicated to providing complementary products and services to salesforce.com customers includes IBM, Microsoft, BEA Systems, Sun, TIBCO, PricewaterhouseCoopers, Miller Heiman, and dozens more.

It is believed that the partnership will provide Bay and Bessemer early leads to new companies and Saleforce’s assistance during due dillegence.

Bay Partners have already invested in many Appexchange integrated companies (Xactly, Eloqua, Cornerstone, eProject) and are looking to get in earlier this time around. Notably, Bay Partners has also invested in Facebook’s platform by putting aside funds for 50 investments. So far they’ve closed three, as far as we know.

The investment program has been underway over the past couple of months. Bay has been looking at 12 deals and already committed to one. The deals are judged on a case by case basis.

The Force.com venture program is being led by Neil Sadaranganey and Salil Deshpande from Bay Partners and Byron Deeter from Bessemer Venture Partners.

Saleforce.com is one of the first web based companies to go against the practice to sell software as a product. Instead, they do believe that the software is best to be offered as a service – Software as a Service or so called SaaS. Marc Benioff is salesforce.com’s Chairman & CEO. 

The company is publicly traded on NYSE.

 SALESFORCE.COM INC (NYSE:CRM)  
 
After Hours: 56.73 0.00 (0.00%) on 11/30/07
 
Last Trade: 56.73
Trade Time: 4:02PM ET
Change:  1.47 (2.66%)
Prev Close: 55.26
Open: 55.62
Bid: N/A
Ask: N/A
1y Target Est: 59.36
 
Day’s Range: 55.29 – 57.73
52wk Range: 35.55 – 58.00
Volume: 3,314,902
Avg Vol (3m): 1,694,100
Market Cap: 6.70B
P/E (ttm): 630.33
EPS (ttm): 0.09
Div & Yield: N/A (N/A)

The company’s current market capitalization is more than $6 Billion. Larry Ellison is one of the early investors in Salesforce. 
 
Ok, when people speak for SaaS (Software as a Service), we should take into consideration the following aspects, as some SaaS entrepreneurs are pointing out.

1. Enterprise Software companies which have not yet switched to SaaS are feeling the pressure and in many cases this is already affecting their bottom lines.

2. In order to adopt a SaaS strategy a quick way to do this is to partner with SaaS and build on the Force.com platform, but this is not an end-game strategy, it is a stop-gap measure. Ultimately Salesforce will want to own all major categories, Benioff (Salesforce.com’s Chairman & CEO) wants to build the next SAP/Oracle/PeopleSoft on – demand and why wouldn’t he? However, this causes a fundamental conflict with a partner who would ever consider Force.com their primary platform.

3. It is hard to believe that other enterprise software companies out there are going to bow down to Force.com, give up, and hand over the keys to Benioff. Every enterprise software company will need a strategy to compete with this kind of platform and allow their own applications to be customized, expanded, and even new apps created in an ecosystem, in order to remain competitive. And there is much more of a business case for a successful stand-alone enterprise software company to build or buy to get there versus give up and run on Force.com. There could also be a number of consolidations within the sector of some of the smaller players.

Force.com is a fantastic platform, but it represents a very new very big change that is happening in enterprise software today. It represents an incremental shift in power to end-users in terms of their ability to customize and build applications specific to their business needs. It is the intersection of the do-it-yourself web with enterprise software (e.g. YouTube ==> YouSoft). To say that Salesforce.com has and will continue to have a monopoly on this sector is short-sighted.

Some of the Salesforce.com’s latest press releases, news and announcements:

Salesforce.com CEO Marc Benioff Named 2007 Agenda Setter and Top Ten Business Leader for Championing Software-as-a-Service (http://investor.salesforce.com/phoenix.zhtml?c=141811&p=irol-newsArticle&t=Regular&id=1081407&)

Salesforce.com CEO Marc Benioff Named 2007 Agenda Setter and Top Ten (http://investor.salesforce.com/phoenix.zhtml?c=141811&p=irol-newsArticle&t=Regular&id=1081140&)

Salesforce.com CEO Marc Benioff Named 2007 Agenda Setter and Top Ten Business Leader for Championing Software-as-a-Service (http://investor.salesforce.com/phoenix.zhtml?c=141811&p=irol-newsArticle&t=Regular&id=1080863&)

Salesforce.com Executive Vice President of Products and Marketing to Present at the Credit Suisse Technology Conference
(http://investor.salesforce.com/phoenix.zhtml?c=141811&p=irol-newsArticle&t=Regular&id=1081140&)

Toyota Motor Europe Standardizes on Salesforce across Europe (http://investor.salesforce.com/phoenix.zhtml?c=141811&p=irol-newsArticle&t=Regular&id=1080863&)

Via

[ http://www.techcrunch.com/2007/09/30/bay-and-bessemer-add-25-million-in-monetary-muscle-behind-forcecom/ ]
[ http://www.salesforce.com/company/investor/ ]
[ http://www.techcrunch.com/2007/09/13/salesforce-enters-custom-application-market-with-forcecom/ ]
[ http://www.salesforce.com/company ]
[ http://www.salesforce.com/platform/ ]

Advertising, Bessemer Venture Partners, Draper Fisher Jurvetson, Funding, Galleon Crossover Fund, Rho Ventures, VantagePoint Venture Partners

$12 million more for online local advertising. No it’s not ReachLocal it is now Yodle

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Yodle has raised a whopping amount of money in its second round – $12 million for its web-based local advertising business. The company manages online advertising campaigns for small businesses on all of the big search engines and drives traffic to pages designed specifically to attract new leads. Yodle also employs customer management tools for tracking both incoming calls and emails that your small business is generating from its web presence.

Yodle helps your company generate new business by connecting you with customers searching online for the services you offer. First, Yodle advertises your business online to customers in your local area. Second, Yodle directs these customers to your website so they can learn about your business and view your offers. Third, interested customers call into your business to set an appointment.

According to the company, Yodle grew 400% in the third quarter. The company also estimates that every dollar spent with them generates an average of $8 in additional profit for small businesses. Yodle’s new round of funding was led by Draper Fisher Jurvetson, with Bessemer Venture Partners also participating in the round. Yodle got founded under the name Natpal in 2005.

A couple of months ago a major competitor called Reach Local raised a massive amount of money – $55 million at a pre-money valuation in the $300 million range.

ReachLocal provides online advertising services for small businesses. The company’s investors include Rho Ventures, with Galleon Crossover Fund also participating, and VantagePoint Venture Partners as return investors. This recent round of funding comes after the $12.7 million the local ad company has raised since its inception in 2004. This gives ReachLocal an estimated valuation at $305 million, which is $55 million more than its previous valuation.

On the ReachLocal’s video, it seems that their real value proposition is that they’ve integrated online and offline touch points (points of contact), and can track and report on this for small & medium businesses, which in most cases do not have high hurdles of integration.

The location based advertising market seems to be hot these days after Nokia snatched Navteq for $8B and is seen to be using some of the technologies in an effort to tap into the huge market of mobile value-added services, both location based mobile services and location targeted mobile ads.

Other similar companies include SquidBids and upspring.

Leaders in the location based online advertising and leads are Yellowpages and SuperPages (owned by Idearc Media). Superpages.com is the expert in local search receiving over 17 million monthly unique visitors and completing over 200 million searches per month. Idearc Media has also recently acquired LocalSearch.com.  

[ via Mashable ]

[ via Mashable ]

[ via MarketingPiligrim ]

[ via Private Equity Hub ]