HealthCentral.com raises $50M, valued at (guesstimated) $150M.

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HealthCentral has a network of about 30 sites on specific health topics, such as migraine, pain management, Alzheimer’s and they also own Drkoop.com, healthscout.com websites, among others. The websites that they own, tend to have very long names like myDiabetesCentral.com, HighBloodPressureConnection.com, and MyDepressionConnection.com.

Traffic numbers are: $7M unique visitors with 30M page views monthly.

From PaidContent, we hear that they have raised $50M led by IAC (InterActice Corp, a public company listed on NASDAQ), and carried forward previous investors like Sequoia and Carlyle.

IAC acquired, and I quote:

a major (though still minority) stake in HealthCentral.

A major, but minority stake: could be anything from 25% to 49%, I guesstimate that it is closer to 35%, giving the guesstimated valuation of Health Central at $150M, with an error bar of 50M.

You probably think that I am going to crib about the valuation again or try to contort arguments to justify the valuation. Nope!

Healthcentral has launched a series of TV health specials, hosted by Dr. Dean Edell and now syndicated on over 70 TV stations including major market stations like WCBS-New York, KABC-Los Angeles, and WLS-Chicago) with a potential viewership of over 60M.

So it seems that the investment is made to implement some of the multimedia strategy of Web, radio and TV, and considering that it is number two health related network (after WebMD), the numbers seem to make sense.

The HealthCentral Network was acquired in 2005 by Polaris Ventures, Sequoia Capital, The Carlyle Group and Allen & Company, so it is a nice turn around.

Via AlarmClock



$425M invested in Virtual Worlds and that’s just the last quarter.

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Virtual worlds (and their ecosystem of game developers) have attracted a great deal of attention, both by the VC firms and by the technology and media companies.

During the period Aug-2006 and Sep-2007, the amount invested in the Virtual worlds was close to $1B.

Two notable acquisitions last year were Club Penguin ($600M) by Disney, and Havok by Intel ($100M).

Prominent investments in the Virtual World sphere were: Trion World Network ($30M) by Rustic Canyon Venture Partners, Double Fusion ($26M) by Norwest Venture Partners and others.

If you do not recognize some of these names, that is because these companies provide backend support. Havok’s product line includes tool sets for physics, animation, and character behavior. If the waves in the water, or the trees in the Second Life look realistic, it is because of the software written by Havok. Double Fusion provides in-game advertisements, a clever way to capture the attention of the gamer.

During the last quarter 4Q07, the investment in the virtual worlds has been about $425M. Most of the investors in the Q4 are venture funds. For example, ZeniMax Media, publisher of original content for gaming consoles, received investment from Providence Equity Partners.

The most crowded segment is probably the virtual worlds for teens. Some of the Teen Virtual World games that received funding include Gaia, Hidden City, Numedeon and Star In Me.

Virtual World Management Industry forecast contains predictions from several Virtual world luminaries. Many have suggested that the virtual world will become common place in a group collaboration.

Even though there are companies like Quaq and Unisfair, offering attractive solutions for group collaboration, I do not believe that we will see any significant level of adoption of Virtual Worlds in a business setting any time soon. I also think that many of the group coloration suites offer a great deal of “eye-candy” in terms of what can be done, but the hardware is not ready, bandwidth allocation is not there and masses are not waiting for real time collaborative tools.

Unisfair might offer online conventions but trade conventions are much more than just electronic booths with LCD displays.

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There is no doubt that Virtual Worlds will see massive growth. It is not mainstream yet, but it will become so. It took years before businesses adopted the Instant Messaging technology. Similarly, once virtual worlds start permeating and pervading everything we do, THEN the business folks will jump in.



Slide valued at $500M+, half a billion dollars

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From Today’s NYTimes:

Slide, the maker of applications for social networks, has raised another round of funding - $50 million from the private equity funds at Fidelity and T-Rowe Price, two major Wall Street investment houses. The firms have taken a 9 percent stake in the three-year-old, 64-employee Slide, valuing it at $550 million.

Most interestingly, the investors are Fidelity and T. Rowe Price.

I guess one could argue that Slide is not a widget company but an ad network.

Here is what Max Levchin said in his interview a few months ago:

Think of Slide as a giant media network for people to transmit information. The content that’s in there now has been provided by users — it’s whatever they want it to be.

But my issue with that argument is that the slide is not hosted voluntarily by MySpace and FaceBook - users put it there. It is unlikely that MySpace will let Slide monetize their presence on their pages and Facebook looks kind of dicey too. The point is that Slide is not in control of their visitor count - they rely on other networks to get the audience.

How much is a Facebook application worth? Face book is valued at $15B which equates to $250 per user. There are some, who argue that an application on Facebook is worth $250 times the number of users. That is just wrong!

Facebook applications are like little antenna balls for the car. Don’t tell me that the goofy antenna ball is worth as much as the car. Some have argued that each install of an application is worth $3 to $0.30 for each install, which is high but at least in the ball park. Again, the number is per install, not per application view.

Slide is not saying that they have 150M registered users or 150M installs - just 150M visitors. They might have 25M to 35M install base. With $550M valuation, they are valuing it at $20 per install. Also, the widgets have a short lifespan; they come and go, so active install base might be smaller.

And then there is the Facebook "tax" (rev-share that Facebook will demand), which further reduces the value.

Some may argue that the basic fallacy in this valuation calculation is that you are looking at current numbers - extrapolate to 2011 and then calculate the valuation. Its the growth potential that demands a much higher premium. I don’t fully agree with it but the argument has a certain conceptual merit. One should calculate these numbers by examining the forward flow and not the current numbers. Not sure if I can stretch my imagination to 2011, but if Fidelity with deep pockets can see farther than I can, more power to them.

This sort of reminds me of the BlueMountain network, it was valued at $780M when @Home acquired Excite for $6.7B (at $400 per user) during the period of last exuberance.

But I am glad that deals are happening, and the developers are creating more applications. And if widgets are being valued highly in the marketplace, I am giddy, incredulous but giddy nonetheless.



Guy Kawasaki’s 10-20-30 Rule for presentation

 

 

 

Guy Kawasaki’s 10-20-30 rule for presentation:

  • 10 slides
  • 20 minutes
  • 30 point font

I don’t think I agree with rule as a blanket statement, but I do agree with the concept that one should have fewer slides and leave some room for questions and not use too small a font on the slide.

The number of slides and the font size is dependent on the audience. Angel investors like to see a lot of details - they are funding the “idea” and want to see it flushed out a bit more. So for that audience 10 slides in 30 point font won’t work.

Also, I have noticed that the power point presentation at a VC firm get circulated to a lot of people who weren’t there at the presentation. For their benefit, the slides need to have enough content to provide context.

I tend to use 30 points font for the basic ideas but also include small font text in a bulleted list form. So if any member of the audience has a specific question, I can point to the small text.

If you have already established yourself as an “authority” in the subject that you are going to talk about; you can get away with 10-20-30 rule but if you are pitching the idea to angel investor group, you need to show that you have thought about various elements in your presentation and that, unfortunately, requires use of small fonts on the slide.

This is especially true now when the power point presentation has taken the place of a business plan. It is not uncommon to hear from a VC “send me your power point and a one pager”. I am not suggesting that you try to cram the business plan in to the power point, but you need to be cognizant of the fact that VCs very often don’t read the business plan and may rely on the power point presentation. So use the fewest number of slides you can get away with and make sure that all the core concepts are in size 30 font.



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