A VC - Latest Comments in Geocities

Re: Geocities

Ed — Wed, 29 Apr 2009 02:37:34 -0000

Wonderful article! I got my start on the net setting up a Geocities homepage in '95. It had lots of animated gifs and a hardwood background since I was into basketball. Now I'm a marketing manager for a fairly large Nordic online property.

Re: Geocities

Greg Solovyev — Mon, 27 Apr 2009 20:08:57 -0000

It seems to be a trend with them. Somehow they manage to buy many great startups with great ideas and products, but then these startups stop evolving. Flickr's falling behind Picasa, Zimbra isn't beating MS Exchange. By the time, Y! Mail switched to Oddpost's new interface, GMail has already out of beta. Inktomi, Overture, Altavista, and Alltheweb altogether never caught up with Google. Anyone remember Bloomba? Will IndexTools beat Google analytics? Where's Maven Networks now? Couldn't HotJobs combined with Geocities and yahoo profiles be what LinkedIn is now? Just sad...

Re: Geocities

grishick — Mon, 27 Apr 2009 19:52:36 -0000

Geocities is the prototype of today's social networks and blogging websites. It could have been hugely successful, had Yahoo! managed it right.

Re: Geocities

fredwilson — Mon, 27 Apr 2009 16:30:54 -0000

Hi Harry

Thanks so much for stopping by and leaving your thoughts

I am sure you are right about John. I did not have the benefit of working with him directly but he clearly was dealing with hypergrowth before a lot of people knew how to manage that

And the board/investor dynamics were certainly interesting

Re: Geocities

Eddie D — Mon, 27 Apr 2009 14:44:08 -0000

Having been at Yahoo! during this acquisition (as well as Bcst, Launch; pry the best $12M Y! ever spent! etc....) it's clear we were 10+ years ahead of our time in not being able to monetize social media. Yes, it brought scale, but other than that, we never figured out an efficient way to package the best and cleanest of the content into meaningful brand campaigns. Reminder that we had no "adsense" monetization effort at the time (pre Overture days), had let search slumber, and were all about big-ass brand campaigns. Looking back, it's not surprising we weren't able to effectively integration and monetize under the model that existed.

But, I will say Lisa and her cohorts were a blast to party with and brought endless fun to the old school sales conferences!

Re: Geocities

Harry Lambert — Mon, 27 Apr 2009 14:13:26 -0000

Fred-
You give me and colleagues too much credit here, and I can only echo Jerry's observations below ,and thank you guys again for the chance to work with you on this very interesting and most successful deal. I had been frustrated previously in another fund, when I had been unsuccessful in selling parners on investing in Multex,both when you had first done that deal at Euclid, and later.

GeoCities was a fasinating deal from many angles. David Bohnett was no doubt the Father of Community, and his passion for the deal jump-started and maintained the growth ride, wild for that era. He was, and remains, a true internet visionary. John Rezner, our technology point man was making it up as we went along, and did so very successfully. In retrospect it's easy to forget his contribution, but I believe he presided over the greatest,fastest growth the web had seen to that time, with very little to guide him.

The Board and Shareholder dynamics leading up to the IPO, and later the deal with Yahoo, were at times bordering on the bizarre, with many different "points of view" advanced at every turn, and each critical juncture. But at the end of the day things came together in a deal that I believe was good for all involved at GeoCities. All's well that ends well!
A great post, Fred.

Re: Geocities

Will — Mon, 27 Apr 2009 01:35:59 -0000

"But for someone who wants to build something of value that lasts for a generation, it makes zero sense. But does anyone really do that anymore? Would anyone even be able to keep their job in this environment if they set out to build something that lasts for a generation? "

I think Wikipedia will very likely last for generations, and it's a company designed to last for generations. It has over 2 million articles and continues to balloon with every waking moment. There are no serious competitors. I don't see another user-generated encyclopedia EVER coming along and knocking Wikipedia off its throne because it's lead is so magnanimous. I won't be even marginally surprised if Wikipedia is around in 2109 and still viewed as the preeminent source of reliable information.

That said, Wikipedia and Google may be the only two Internet companies with a high probably of lasting over 100 years, and perhaps that's sad.

If I was forced to pick a third Internet company with a chance of being around in 2019, I would pick Mahalo Answers for one simple reason. For whatever reason, people will always need to ask questions and get immediate answers from other real people. Yahoo Answers has been the market leader in the U.S. since it's inception, and Wiki Answers etc. have barely carved into it's market share. But Mahalo Answers will because it's the cleverest of these answer services by design. Once it overtakes Y! Answers, it could very likely retain its lead for generations and generations.

Re: Geocities

fredwilson — Sun, 26 Apr 2009 16:38:33 -0000

What did you do at geocities?

Re: Geocities

lisa witz — Sun, 26 Apr 2009 15:44:09 -0000

I enjoyed your article. I was an employee at GeoCities during all this and it's so interesting to read about it from your perspective - I was sad, too, upon hearing that Yahoo is shutting it down but it's a great chapter in internet history.

Re: Geocities

George Nimeh — Sun, 26 Apr 2009 15:19:31 -0000

Jason, an inspired reply and wonderful incentive for others to build strong and valuable relationships that endure. Everyone knows you always had a ton of drive, but determination alone never would have done it, imho. It was your ability to see the opportunity of instances like this and take 'em for all they were worth. And lucky for you Fred and Jerry weren't the type to pay you on the day and forget about you the next.

As for Fred, Jerry and the Flatiron crew, it certainly would seem that they got a very good deal at the time, but that they've also paid it back in more ways than cash or shares. Once again, their way of doing business should serve as a model in more ways than one.

Hat tip to all of you. Respect.

I'm inspired, once again. :-)

@iboy

Re: Geocities

fredwilson — Sun, 26 Apr 2009 12:26:20 -0000

That's 400 shares (two 2/1 splits) times $120, so it had better be a good cause Jason!

Re: Geocities

jasoncalacanis — Sun, 26 Apr 2009 12:23:52 -0000

At the time Acme Ventures--aka Flatiron--was paying $1,000 to come in for lunch twice a month and talk about the internet. I was a 24 year old kid from Brooklyn starting up his own magazine, getting tons of attention, had a killer 3/4 black leather jacket, was going to all the right parties, eating at Nobu and was dating a Germany eight years my senior.

No one in New York City had it better than me as far as I could tell--no one.

I told everyone on the planet I read business plans for Flatiron Partners in order to get meetings, emails and subscriptions and advertisements for Silicon Alley Reporter. Also, the home run of Geocities forever burned in my mind the value of stock options... good lesson to learn at that age frankly.

I didn't grow up rich and I didn't even understand what venture capital was. Fred and Jerry explained to me what a limited party was, a term sheet, and even a business plan. They taught me the ropes even after I stopped reading business plans for them.

Additionally, Fred and Jerry have championed my cause for over a decade. Jerry gave me tons of advice on Weblogs, Inc. and Fred met with me for hours when I was coming up with the idea for Mahalo.com (he even angel invested which he didn't need to do and I didn't need to take since we were oversubscribed--but we did because we're friends and we've been in this so long together).

I'm certain they weren't throwing stock options at everyone helping them out so there are no hard feelings--in fact he opposite. Jerry and Fred gave me some of the my first critical chances.... which I took, resold, flipped and exaggerated into the career I've got now.

Fred's been an older brother to me for 15 years and I'd have a hard time thinking of anyone else who's gone to bat for me more times.

Also, I never have to the pick the up the check when we eat expensive sushi.

Finally, it's never too late. If Fred can't live with the guilt he can donate the 100 shares he would have given to me to some amazing cause of his choosing. :-)

Peace and love for the old skool,

jcal

Re: Geocities

fredwilson — Sun, 26 Apr 2009 08:59:13 -0000

I believe we paid him for his time

Re: Geocities

fredwilson — Sun, 26 Apr 2009 08:58:11 -0000

Just to be clear, we did "paper over" the deal

Re: Geocities

George Nimeh — Sun, 26 Apr 2009 08:55:16 -0000

Great post Fred. Another beauty. The transparency and history make for a great read.

While I'm sure he'd say something like, "I got a lot of great experience and an ad partner for my new mag" I'm sure Jason Calacanis quietly burns from not getting any Geocities equity from his involvement in the deal. At the time, there were very few people who understood the players and the market. And you needed that info, which I'm sure was incredibly valuable in the process.

I know he's learned a ton about the VC/investment side of the biz since then (and has obviously done well as a result), but I can't help think that you knew what this young lad was contributing to the process, but you were more than happy not to have him reap any of the rewards.

Looking back, do you think that was fair?

@iboy

Re: Geocities

Armand Aguillon — Sun, 26 Apr 2009 08:14:04 -0000

Great post Fred! I came across your article from a twitter link.

I work for a Private Equity company in Australia and although VC is a little different (but still a type of PE), the way you did the deals (over dinner and a handshake) was quite remarkable. And I believe a lot of deals were done that way back in the internet days... I'm not sure if deals are still done today like they used to (especially at these times).

Nevertheless, I enjoy your post and I have saved this site as one of my favorites. Thank you Fred.

Re: Geocities

fredwilson — Sun, 26 Apr 2009 06:23:23 -0000

I think it was 10%, Softbank and yahoo! Together owned something like 25%

Re: Geocities

fredwilson — Sun, 26 Apr 2009 06:23:09 -0000

Thanks for the nice words Kevin.

Re: Geocities

Gianluca Dettori — Sun, 26 Apr 2009 06:21:43 -0000

Great post!!
g.

Re: Geocities

Aaron Klein — Sun, 26 Apr 2009 01:45:28 -0000

That's the part of greed that is good. Well put.

Re: Geocities

McLarty — Sat, 25 Apr 2009 22:15:00 -0000

My uncle always says "You have to leave something on the table, for the next guy"...

...words have done me nor him no harm, so far.

Re: Geocities

Steve Kane — Sat, 25 Apr 2009 21:14:17 -0000

i forgot that yahoo already owned a chunk of geocities before they acquired the company

hard to tell from your post, but looks like they owned 20% ?

if so, actual acquisition cost was $2.8 billion ($3.5 billion X 80%)?

Re: Geocities

Aruni S. Gunasegaram — Sat, 25 Apr 2009 16:57:29 -0000

I enjoyed this post. These kinds of stories reinforce the relationship aspect of any business. No matter how much people try to automate things and how much we rely on virtual connections, there is no replacement for face to face, human to human connections to make things happen.

Re: Geocities

fredwilson — Sat, 25 Apr 2009 14:19:13 -0000

Yes I do. But I also know that luck has played a big part in my career

Re: Geocities

fredwilson — Sat, 25 Apr 2009 14:18:22 -0000

Indeed

I'm involved with isaak and his team again in a company called infongen