Buzznet acquires music social network Qloud

image Buzznet, a Los Angeles based company has bought the music sharing social media company Qloud.

Qloud’s application embedded in social networks such as Friendster and Facebook, allows users to download unlimited amounts of free music.  Furthermore, members can discover and share music with each other. Qloud has been funded by Steve Case and several well-known music industry veterans.

image Buzznet is a multimedia social network where users generate content around their favorite singers and bands.  In the social network, members, photos and videos get "buzzed" (rated) and rise up the popularity charts. The site gets about 4 million visitors a month and carries content submitted by a million users.

Qloud’s MyMusic application on Facebook has 1.8 million users. The offerings of the two sites are clearly complementary ,and cater to the teen and twenty-something demographic.

Buzznet is rumored to be raising a further $25 million in funding, according to PaidContent, on top of the $6 million in Series B raised last year.



Constant Contact - what happened?

Constant contact has filed for a secondary offering following its IPO last year- but that is not good news.

image Constant contact is a provider of direct marketing e-mail software. We were a bit surprised when the company filed for its IPO in July of last year. The very first day the company’s stock rose to over $30 a share, well above the initial pricing of $16 per share, putting its market cap at $200 million with 67 million shares sold. This was one of the hot tech IPOs to watch in 2007. Since then the stock has fallen to $14 per share.

Recently Constant Contact registered to sell 4.2 million shares from current stockholders.  Ironically, the stock is being sold to pay the expenses for the offering! 658,620 additional shares are expected to be floated this time around. It appears that insiders are selling after the expiration of the lock-up period.

So what happened to Constant Contact? Back in February of this year Kris Tuttle of Seeking Alpha had predicted that  after the end of the lockup period, prices would come down to a more realistic $10 to $12 per share. Some of the reasons he had were:

1.The  earning expectations for the company are much higher than would be expected of a SAAS company.

2. Customer acquisition costs are pretty high.

3. The e-mail marketing game is very crowded an expectation of 40 month customer lifetime is not realistic

4. The expectation of return on invested capital is low.

Looks like that prediction was on the money!



The Forbes billions

And so are we in a recession?  You wouldn’t know it from the latest Forbes billionaires list which now boasts of 1,125 members, breaking four digits for the first time.

imageBill Gates is down at number three, giving up the number one spot to his good buddy Warren Buffett , at $62 billion - with a 6x surge in net worth since last year, thanks to flying shares of Berkshire Hathaway. The number two spot now belongs to Carlos Slim Helu of the Mexican wireless telephone company, America Movil.

Interestingly, the Ambani family of the Indian company the Reliance group might have come in first on the richest list with a combined worth of $85 billion, except that the warring Ambani brothers Mukesh and Anil split up their fortune and showed up in fifth and sixth positions respectively, with individual net worths of $43B and $42B.

And how about the youngest self made billionaire? Yes, you guessed it - it is 23 year old Facebook genius Mark Zukerberg who is worth $1.5 billion. Of course this number is based upon Microsoft paying $240 million last October for  a 1.6% stake in the company, which pegged Facebook’s value at a whopping 15 billion. Not many believe this huge valuation, and the story going around is that Microsoft paid up not necessarily because it believes that the company is worth as much, but more to keep out those who might be thinking about taking over all of Facebook!

While on unnamed suitors for Facebook, Google founders Larry Page and Sergei Brin made the top of the Forbes thirtysomething list with $19 billion apiece.

 

 

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Amazon’s new twist on the order fulfillment business

Amazon continues to amaze as it innovates on taking products, services and processes that have already made it good money, and throws it out in the marketplace for other businesses and entrepreneurs to use.

The latest in its cache of outsourced products and services is a new API that is designed for its "Fulfillment by Amazon" pack and ship service that was introduced in 2006.

This is how it works.  A business physically ships its inventory to Amazon to store.  When a product is sold, the seller notifies Amazon where the product gets packaged and shipped to the customer.  This is clearly a win-win strategy.  The small-business owner outsources his warehousing and shipping (and some cost, of course) while Amazon gets a client into their ecosystem where they can cross sell everything from pay-per-click advertising to its storefront related services.

Fulfillment by Amazon API allows businesses to automate the order processing through Amazon

According to Amazon handling fees start at $0.50 per item plus $0.40 per pound with a storage fee of $0.45 per cubic feet per month and saves sellers the time and money needed to store, pick, pack, ship and provide customer service for the products sold online.

The new Fulfillment by Amazon API allows businesses to automate the order processing through Amazon. Order labeling, shipping and tracking and can now be followed with minimal  human intervention.



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