OpenSocial: Google takes a plunge into the social scene

Google is expected to launch its Social networking platform tomorrow, Halloween 2007, and we are wondering how many social networking companies will be shivering in their boots!

No it is not yet another social network. What it is, is a common API which will enable developers to build Social applications to a single set of standards, instead of having to learn a new syntax, like every other month, to accommodate the idiosyncrasies of each social network.

Google’s OpenSocial network will extend to partners such as  XING, Friendster, hi5, LinkedIn, Plaxo, Newsgator and Ning, according to TechCrunch.

This could be huge, with Google suddenly becoming the “operating system” for the social networks, as Microsoft did for the desktop several decades ago, leaving Facebook and Myspace with their proprietary systems behind (a-la Mac).

Earlier this month Google was roundly snubbed by Facebook as they chose Microsoft as their Ad partner. It was clear that Google would not be sitting still for long. But
this transition to a truly open social platform still came way sooner than expected. Google sure knows how to keep a secret!

Earlier today, we wrote about Explode, a social aggregator engine that is seeking to share information across the social networks. It is not clear if Google’s latest plans will help Explode or not (make it possible for Explode to unify networks like LinkedIn and Plaxo that Explode has not yet attacked) or whether, as happens with many things Google, Explode and other companies will just find themselves redundant as time goes on.

* Pictures courtesy of GigaOm and therealmccrea

Technorati Tags: Google, OpenSocial, Myspace, linkedin, plaxo, ning, friendster, explorde, xing, hi5

Explode - the social engine for social sites

Explode is a “meta-social engine” that lets you gather together all your friends on various social networks in one place, and lets you communicate with them, even if they are on a different network. You can view their profiles and leave them messages.

For those who have been groaning under the weight of their multiple social networks, this is a great idea!

However, a  like this is hard to implement, for a couple or reasons.

1. Major sites are not accessible: respects robots.txt and does not catalog profiles from sites which do not allow it (robots.txt is a gatekeeper file which site owners can implement with directions on how they want their sites to be viewed by search engines). Well, that excludes Facebook and Myspace, both of which shun search engine robots at the door.

2. Hard to correlate user info: While on many social and professional networks, members use their real names, on sites like YouTube (that Explode does search) the norm is to use more “fun” names so it will be difficult for an engine such as Explode to connect a member’s different persona from various social sites.

Explode does plan to implement OpenID, which allows users to use a single digital identity across the web, so Explode will work for those who choose to be found.

Explode has made a good start with social networks such as YouTube, Twitter, , Tribe and Flikr. It does not cover business sites such as , yet. It goes a step beyond people search engines such as , by allowing people to connect across the networks.

Explode is an engine to watch as they build up more steam in the social networking arena!

Technorati Tags: Explode, Facebook, myspace, youtube, twitter, jaiku, flikr, social network, social search engine

Stealth mode: Great for the B2, not so much for startups

Folks at Path 101 are doing a very interesting experiment. They are liveblogging their start up. Everything about the start up is out there, including their to-do list from Monday meetings - with items such as preparing presentations for investors, etc. Fred Wilson at Union Square Ventures wrote about Path101 in his blog A VC. The company calls themselves pre-monster - it is a place for college students to figure out what they want to be.

Companies that are developing their products or sites entirely in stealth mode might be missing out on a very valuable opportunity - to get opinions and critiques on their products before they are built. Great entrepreneurs tend to treat their startups like a bowl of spaghetti - they build a prototype and throw it out there. Whatever does not stick, they rework and taste test again.

The reality is that there are few, truly radical ideas. For every person who has a notion regarding a ground breaking product, there are 10 more out there who have the same idea. While great ideas have a lot of value, what wins the race in the end is the execution.

I recently encountered three web 2.0 companies that were building the same product. Each of the groups believed that they were the only ones that had the product! When they finally got out of stealth mode, and launched, they were a bit surprised to find that there were about 5 other companies in that space, two in the same city.

In this day and age when people are using Crowdcasting (we wrote about Innocentive which uses crowdcasting to outsource R&D for companies) for everything from personal advice, to building a product, trying to start and build a company in stealth mode carries a certain amount of risk. One needs to get outside information - particularly from people in totally unrelated fields as they are very often able to look at a problem very differently, and might even come up with radical solutions.

One of the big ironies of life is that you must have a lot of whatever it is you are looking for. A friend’s dad who was a banker always used to say “Don’t go to the bank looking for money when you need it. Go to them when you don’t need money”. Good advice when you are looking for funding for your start up.

Similarly, ideas are like a currency for start-up companies. The more you are willing to give or put out there, the more you will get back!

Technorati Tags: stealth mode, crowdcasting

$10M Bribe to CEO by the VC firm

verus_logo In 2002, Richardson Roberts founded Verus Financial Management. The company focused primarily on merchant services of credit and debit card acceptance. The company was backed by Financial Technology Ventures.

Verus had significant organic growth among the private merchants with over 100,000 merchant clients doing about $10 billion in annual merchant payment volume.

In 2005, Sage Group PLC, agreed to acquire Verus for $235M. The CEO Roberts made about $50M from the transaction. The VC firm, which owned about 40% of the company earned about $155M from the sale.

Then, Roberts sued the VC firm for $10M side deal that the had entered in to. Robert says that he agreed to the sale only because he was promised extra $10M from the VC firm for the sale.

The judge ruled this week that Roberts committed “an egregious breach of fiduciary duty of loyalty” by putting his personal financial interests over those of his shareholders.

Roberts had told the venture capital firm that without the side payment he wouldn’t sell his credit and debit card financing company because it was still growing and could fetch a higher price at a later date — and because he was going through a divorce at the time.

Even if the sale was in the interests of the company, the side deal was illegal because it would have meant extracting a payment by threatening not to support an advantageous corporate action.

The VC firm said that the investor group didn’t pay Roberts the $10 million because the sales price had been above expectations and because Roberts already stood to earn $50 million from the deal, according to the ruling.

This side transaction was wrong from so many angles. It was wrong for the CEO/Founder to seek extra money on the side, it was wrong for the VC firm to agree to a side deal, it was wrong that the transaction wasn’t approved or discussed in the board, it was wrong that the CEO allowed his personal divorce situation to cloud his judgment.

Unfortunately transactions like these happen way too often. “It’s not a bribe, it is just a tactic to properly incentivise the parties”, they argue. At the time of sale, every participant looks at the cards that they are holding, and attempt to gain some leverage or advantage, and invariably get in to issues with the required corporate formalities, or stepping on the toes of other share holders.

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