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Workshop on Venture Capital and Antitrust, February 12, 2020
Venture Capital and Antitrust Transcript of Proceedings at the Public Workshop Held by the Antitrust Division of the United States Department of Justice February 12, 2020 Paul Brest Hall Stanford University 555 Salvatierra Walk Stanford, CA 94305 Table of Contents Opening Remarks ......................................................................................................................... 1 Fireside Chat with Michael Moritz: Trends in VC Investment: How did we get here? ........ 5 Antitrust for VCs: A Discussion with Stanford Law Professor Doug Melamed ................... 14 Panel 1: What explains the Kill Zones? .................................................................................... 22 Afternoon Remarks .................................................................................................................... 40 Panel 2: Monetizing data ............................................................................................................ 42 Panel 3: Investing in platform-dominated markets ................................................................. 62 Roundtable: Is there a problem and what is the solution? ..................................................... 84 Closing Remarks ......................................................................................................................... 99 Public Workshop on Venture Capital and Antitrust, February 12, 2020 Opening Remarks • Makan Delrahim, Assistant Attorney General for Antitrust, Antitrust Division, U.S. Department of Justice MAKAN -
DIRECTOR's REPORT September 20, 2018 FIGHTING COMMUNITY
DIRECTOR’S REPORT September 20, 2018 FIGHTING COMMUNITY DEFICITS On July 10th, OLBPD hosted its annual Family Fun and Learning Day in Cleveland at the Lake Shore Facility. OLBPD hosted 85 registered patrons who enjoyed tours of the Sensory Garden and OLBPD, as well as guest speakers Tracy Grimm from the SLO Talking Book Program, and Beverly Cain, State Librarian of Ohio. OLBPD patrons also enjoyed listening to keynote speaker Romona Robinson, WOIO-TV evening news anchor and author of “A Dirt Road to Somewhere,” and Pam Davenport, Network Consultant from the National Library Service. Exhibitors were also on hand from the Cleveland Sight Center, Guiding Eyes for the Blind, Magnifiers and More, and others offering products and services of interest to our patrons. FORMING COMMUNITIES OF LEARNING Summer Reading Club The 2018 Summer Lit League (SLL), formerly known as Summer Reading Club provided reading and engagement activities that were thematically aligned with Yinka Shonibare’s art installation The American Library. The exhibit in Brett Hall was a part of FRONT International: Cleveland Triennial for Contemporary Art, a regional art show held in Cleveland, Oberlin and Akron. Key aspects of the collaborative exhibition include international cultural diversity, immigration and the ever- changing political climate of an American City. As it relates to summer programming, the key aspects FRONT built the programmatic foundation of the SLL programmatic experience. Programming content focused on world art and culture activities. Throughout the summer program, participants participated in a variety of enrichment activities that promoted the arts, inclusion, community building, reading, writing and other forms of creative expression. -
Making It LOUD
Making it LOUD 2011 Annual Report WWW.USFIRST.ORG1 For over 20 years, FIRST® Founder Dean Kamen and everyone associated with FIRST have been on a mission to spread President Barack Obama, along with White House Technology Officer Aneesh Chopra, continued to feature FIRST teams as perfect examples of the president’s national White the word about the many educational, societal, economical, and House Science Fair initiative promoting STEM (science, technology, engineering, and Dean Kamen will.i.am planetary benefits of getting youth and adults alike involved in theFIRST math) education and celebrating science and math achievement in American schools. Morgan Freeman experience. Despite not having access to the millions of marketing Soledad O’Brien dollars required to make FIRST a household “brand,” the program has continued to grow each year at a blistering pace. …aND loudER Books, magazines, newspapers, cable TV, and the Web helped us create noise, too, with ongoing national coverage by Bloomberg, CNN, Popular Mechanics, In 2011, however, thanks to the fervent interest of major figures Popular Science, Wired, ESPN Magazine, WallStreetJournal.com, and more. Author Neal Bascomb brought the FIRST experience to life in his inspiring in government, the media, and mainstream entertainment, the book, The New Cool.Time Warner Cable incorporated “volume” of voices promoting FIRST... FIRST into its national “Connect A Million Minds™” initiative, featuring our FRC program in its TV show “It Ain’t Rocket Science.” The clamor of FIRST recognition continues to grow ...GOT TuRNED UP loud...VERY loud! louder every day. The continuing mainstream exposure is helping propel us toward our goal of making FIRST known and recognized around the globe. -
Venture Capital Limited Partnership Agreements: Understanding Compensation Arrangements Kate Litvak†
File: 07 Litvak Final Created on: 4/2/2009 2:10:00 PM Last Printed: 4/2/2009 2:13:00 PM Venture Capital Limited Partnership Agreements: Understanding Compensation Arrangements Kate Litvak† This Article uses a hand-collected dataset of venture capital partnership agreements to study venture capitalist (VC) compensation. Several new findings emerge. First, VC compen- sation consists of three elements, not two (management fee and carried interest), as common- ly believed. The third element is the value-of-distribution rules that specify when during the fund’s life VCs receive distributions. These rules often generate an interest-free loan to VCs from limited partners. A shift from the most popular distribution rule to the second-most popular rule can affect VC compensation as much as or more than common variations in management fee (from 2 percent to 2.5 percent of committed capital) or carried interest (from 20 percent to 25 percent of fund profit). Second, VC compensation is often more com- plex and manipulable than it could have been. However, more complex management-fee provisions predict lower total compensation; thus, complexity is not used to camouflage high pay. Third, common proxies for VC quality predict higher levels of the more transparent forms of VC compensation (carried interest and management fee) but do not predict the levels of opaque compensation (interest-free loan, as determined by distribution rules). Fourth, long-term VC performance predicts fund size (which in turn predicts VC pay, con- trolling for fund size), but recent performance does not predict changes in fund size. Finally, VC compensation is less performance-based than commonly believed: for vintage years between 1986 and 1997 (most recent years for fully liquidated funds), about half of total VC compensation comes from the nonrisky management fee. -
Twitter Valued in Billions As Popularity Climbs 15 December 2010
Twitter valued in billions as popularity climbs 15 December 2010 veterans Mike McCue and David Rosenblatt to its board of directors as it tightens its focus on turning its popularity into revenue. Twitter co-founder Evan Williams stepped down in October as chief executive, ceding the helm to Google veteran Costolo, who was brought in last year to help the micro-blogging service make money. Costolo, whose Web content distribution company Feedburner was purchased by Google in 2007, has A fresh infusion of investment cash pushed Twitter's been at the forefront of efforts to begin monetizing market value up to 3.7 billion dollars on Wednesday with Twitter since he joined the company last year. the number of people using the microblogging service climbing to 175 million. Twitter, which allows users to fire off messages of 140 characters or less known as "tweets," has enjoyed skyrocketing popularity since it was launched in 2006 by Williams, Jack Dorsey and Biz A fresh infusion of investment cash pushed Stone. Twitter's market value up to 3.7 billion dollars on Wednesday with the number of people using the McCue is chief executive of social magazine iPad microblogging service climbing to 175 million. application maker Flipboard while Rosenblatt's resume includes stints at Microsoft, Google, More than 25 billion "tweets" were fired off during DoubleClick and Netscape. the past 12 months, with Twitter adding 100 million new accounts during that same time frame, the "These additional resources and expertise will be firm's chief executive Dick Costolo said in an online extremely helpful as Twitter continues to grow as a post. -
Precursor Backgrounder on Google-Admob
Precursor Backgrounder on: FTC Case against Google’s Acquisition of AdMob Scott Cleland, 703-217-2407, [email protected] President, Precursor LLC, http://www.precursor.com/bio_long.htm Chairman, NetCompetition.org, www.Netcompetition.org Publisher of www.GoogleMonitor.com & www.Googleopoly.net I. SUMMARY A Google acquisition of AdMob would eliminate Google’s only substantial rival platform in mobile in-application advertising and catapult Google from an estimated 25% share to over 75% share of this strategic gatekeeper market for monetizing mobile Internet applications. Combined with Google’s search advertising monopoly and dominance of mobile search advertising, Google’s acquisition of AdMob, “the world’s largest mobile advertising marketplace,” would likely tip the broader mobile advertising marketplace from a competitive to a monopoly trajectory. In short, the AdMob acquisition threatens to foreclose competition and facilitate monopoly in a strategic gatekeeper market essential to the Internet economy, which would harm: consumers, developers, advertisers, publishers, smart-phone manufacturers, and broadband providers. II. TOP 10 REASONS WHY GOOGLE-ADMOB IS ANTI-COMPETITIVE 1. Google-AdMob would combine the #1 & #2 mobile in-application display advertisers in a highly-concentrated and exceptionally-strategic gatekeeper market, effectively eliminating Google’s only substantial rival competitive platform in this market. 2. Acquiring AdMob’s ~50% share would catapult Google to >75% share of the mobile in-application display advertising market. 3. Preserving competition in this market is key to preserving a competitive mobile ecosystem. 4. Google-AdMob would tip mobile advertising toward a monopoly trajectory. 5. The extraordinary price paid for AdMob is evidence of acquisition of market power. -
Venture Capital Communities 1
Venture Capital Communities 1 Amit Bubna Indian School of Business Gachibowli, Hyderabad, India 500 032 Sanjiv R. Das Leavey School of Business Santa Clara University, CA 95053 Nagpurnanand Prabhala Robert H. Smith School of Business University of Maryland, College Park, MD 20742 February 27, 2014 1Comments welcome. We thank Alexandre Baptista, David Feldman, Jiekun Huang, Ozgur Ince, Vladimir Ivanov, Pete Kyle, Josh Lerner, Laura Lindsey, Robert Marquez, Vojislav Maksi- movic, Manju Puri, Krishna Ramaswamy, Rajdeep Singh, Richard Smith, Anjan Thakor, Susan Woodward, Bernard Yeung, and participants at the CAF, FIRS, Midwest Finance Association, World Private Equity and TAPMI conferences, and seminar participants at Blackrock, Florida, George Washington University, Georgia State, Georgia Tech, ISB, Kellogg, Maryland, NUS, the R User Group, Rutgers, UNSW, and Villanova for helpful comments. The authors may be reached at their respective email addresses: amit [email protected], [email protected], and [email protected]. Abstract Venture Capital Communities While it is well-known that syndication is extensively used in venture capital (VC) financing, less is known about the composition of VC syndicates. We present new evidence on this issue. While VC firms have a large pool of syndicate partners to choose from, they tend to draw from smaller groups of partners that we call VC \communities." We implement new techniques to uncover these groups and use them to understand preferences driving syndicate partner selection. We find a complex pattern in which preferences for dissimilar partners to extend influence coexist with preferences for similarity in terms of functional style on dimensions of industry, stage, and geographic specialization. -
Rise of the Global Entrepreneur: Leveraging the India-U.S
STVP-2005-010 [Rev. Feb 2, 2006] Rise of the Global Entrepreneur: Leveraging the India-U.S. High-Tech Corridor It was a bright warm day in Bangalore on January 15th, 2005. The aftermath of the catastrophic Tsunami disaster was still unfolding and people all around the Indian Ocean were grappling with the uncertainty of life. The high-tech industry in India however hadn’t missed a beat; the Mumbai stock exchange was still healthy and the average Bangalore resident was contemplating new ways to succeed in India’s burgeoning high-tech economy. Kumar Ramachandran1 knew that his life had changed forever. He had just resigned from his position as Managing Director at Applied Materials, India and was ready to start a company of his own. The future would be full of new challenges he thought. As he sat in his chauffeured car on his two hour, 30 mile commute, he started making a list of people to call. He was glad to be following his heart. After all, life was too short to not pursue your passion. Although Kumar did not know what awaited him on the road ahead, he was determined to leverage his past experience and network of working relationships to launch a new venture of his own. Given his professional background and his knowledge of the new areas of growth in India’s services industry, he firmly believed that the best opportunities for him laid within the realm of engineering services outsourcing. India had pioneered the outsourcing of Information Technology Enabled Services (ITES) and Business Process Outsourcing (BPO) starting in the 1990s. -
Sequoia Capital Invests in Klarna
May 05, 2012 12:10 BST Sequoia Capital invests in Klarna Sequoia Capital is investing in Klarna AB ("Klarna"), one of the Nordic region’s leading e-commerce payment solution providers, and will become Klarna’s largest single owner. Sven Hagströmer, Chairman of Investment AB Öresund ("Öresund"), has been named Chairman of the Board of Klarna, and Michael Moritz, Partner at Sequoia Capital, has been made a member of the board. During his tenure at Sequoia Capital, Mr Moritz has invested in companies such as Google, Yahoo and PayPal and has served on the boards of these companies. - Sequoia Capital has extensive expertise and many years’ experience in investing in and developing promising growth companies operating in industries that are exciting for successful global companies. We are now stepping up the pace of our international expansion, first in Europe and then globally, said Sebastian Siemiatkowski, CEO of Klarna and previous CEO of Kreditor. Sequoia Capital’s previous investments include PayPal, Google and YouTube. E-commerce in Europe is growing rapidly, and Sequoia Capital sees great potential in Klarna. - Klarna has done a fabulous job serving the needs of merchants and consumers in Europe’s e-commerce market, said Michael Moritz, Partner at Sequoia Capital. With e-commerce growing rapidly across the E.U., where card based payments are only 1/3 that of the U.S., Klarna has an incredible opportunity to be the most trusted solution in the $40 billion global payments market. Klarna will also do a directed new share issue of SEK 70m in conjunction with the change of ownership. -
Lookout! (V108)
Crossing the Digital Divide (v108) “Lookout!” by Joseph Feigon for the Observer Scott McNealy is an American businessman. He is most famous for co-founding the computer technology company Sun Microsystems in 1982 along with Vinod Khosla, Bill Joy and Andy Bechtolsheim. Oracle Corporation (Larry Ellison’s database client) purchased Sun Microsystems in 2010. Mr. McNealy was one of the relative success stories in the early days of the Internet. Sun Microsystems built exceptional servers, and was a market leader with their Unix operating system as well as their corporate support of the Open Source movement, including Linux. Sun ‘cuda been’ a contender. Lookout was McNealy's inverted name for Outlook, Microsoft's e-mail client. McNealy says you need to "look out" for trouble when using Outlook. McNealy frequently cites Outlook's well documented security problems. He says that to get the most functionality out of Outlook you'll also need Microsoft's Exchange Server. But the combination, and the Microsoft- only mail and calendaring protocol required to connect them (MAPI), is yet another example of how Microsoft locks businesses into proprietary technologies that eliminate choice and flexibility. Microsoft is still here, Sun Microsystems is not. Proprietary software continues to dominate the retail customer (Windows, anyone?), as well as many big companies. Those success stories in the Open Source space build applications on an Operating System (Linux, BSD, NetBSD, FreeBSD, etc.) that is open, meaning, free to you and me. Open, as in, anyone with the desire and/or ability can review each line of coding that makes things work. -
Linkedin Corporation 10-K
10APR201419231192 April 2016 To Our Stockholders: In 2015, we delivered a strong year of innovation focused on further connecting our members and customers to opportunity. For members, we made significant progress by focusing on two core value propositions: staying connected and informed, and advancing members’ careers. • In December, we launched our re-imagined flagship mobile application, the culmination of a year-long focus to create a dramatically simplified core LinkedIn experience. Since launch, we have seen meaningful increases in feed engagement, messages sent, and content interaction. • With respect to careers, we spent much of the year working on fundamental building blocks including doubling the number of jobs on LinkedIn to more than six million, improving jobs relevance, and re-launching the jobs experience on the desktop. This work resulted in a significant increase in overall engagement with jobs throughout 2015 compared to 2014. For customers, we focused on innovating the core value drivers in each product line: • Within Hiring, we announced the re-launch of Recruiter, the first full refresh of our flagship product since its original launch. The new Recruiter will rollout to customers throughout 2016 alongside the new Referrals product. The goal is that these products will further strengthen and extend our competitive position within the talent acquisition space in the coming years. • Within Marketing Solutions, Sponsored Updates increasingly evolved into the core of our advertising business, contributing approximately half of total ad revenue in 2015. Digital marketing remains a fast-evolving and competitive landscape, evidenced by the significant decline in our display ad revenue in 2015. To that end, we believe our primary focus on Sponsored Updates will continue to make LinkedIn the most effective platform for marketers to engage professionals. -
The Billionaire Professor Behind New Networking Startup Apstra - WSJ 30/03/16, 08:24
The Billionaire Professor Behind New Networking Startup Apstra - WSJ 30/03/16, 08:24 This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com. http://www.wsj.com/articles/the-billionaire-professor-behind-new-networking-startup-apstra-1459294850 TECH The Billionaire Professor Behind New Networking Startup Apstra Computer scientist David Cheriton has founded and funded multiple tech winners David Cheriton was an early investor in Google. PHOTO: APSTRA By DON CLARK Updated March 29, 2016 8:29 p.m. ET Computer scientist David Cheriton has been a quiet force behind the scenes in Silicon Valley for decades, using his brains and bank account to fund vendors of equipment that transmits data between computers and over the Internet. Now he wants the customers of those suppliers to feel free to shop elsewhere. The Stanford University professor, whose early investment in Alphabet Inc.’s Google helped make him a multibillionaire, recently bankrolled a startup called Apstra, which has been working on software for managing networking devices from multiple vendors. Apstra’s software makes it easier to integrate equipment from various suppliers as better options come along, Mr. Cheriton said. It could reduce customers’ reliance on vendors like Cisco Systems Inc. —which first made Mr. Cheriton wealthy in 1996 when it bought a startup he co-founded—and Arista Networks Inc., a leading maker of network switches that he co-founded in 2004. Network hardware companies tend to lock in customers as they http://www.wsj.com/articles/the-billionaire-professor-behind-new-networking-startup-apstra-1459294850 Page 1 of 4 The Billionaire Professor Behind New Networking Startup Apstra - WSJ 30/03/16, 08:24 develop expertise in running particular systems and become accustomed to proprietary features.