Drama 2.0's Blog

The economic landscape may not be great but that's not stopping big internet players from making acquisition moves. This week's news was dominated by M&A and M&A-related items.

If you are to believe data portability proponents, one of the biggest challenges facing the internet today is the difficulty users have in sharing their data across multiple services.

Expectations are an often-overlooked factor in an internet startup's prospects for success or failure.

Hype, in one sense, is the irrational raising of expectations to a point beyond what is realistic and/or healthy.

Facebook has added another huge pile of cash to its bank account, this time in the form of a $100m debt financing from TriplePoint Capital.

The company, which has already raised more than $350m in equity financing from investors such as Microsoft and Hong Kong billionaire Li Ka-shing, says that the money will be used "entirely for servers."

Crowdsourcing has been touted by some as a revolution.

Popularized by Web 2.0 and the concept of "the wisdom of crowds," the idea that businesses and organizations can leverage a "crowd" (often for free or at minimal cost) to perform all sorts of tasks that would have otherwise been done by employees or contractors is one that is naturally appealing.

Perhaps one of the most challenging questions for an entrepreneur to answer is 'what does my company really do and what is its true role in the marketplace?'

It's a simple question. But it is difficult for many entrepreneurs to answer realistically, because there's a natural tendency on their part to think their companies do more and have more potential than is actually true.

Craigslist is more than just a popular online classifieds service. The bare-bones site created by Craig Newmark represents, to some, the epitome of the New Internet.

It is fueled by a dedicated community and Craig has eschewed the temptation to fully exploit its commercial potential for his personal gain, even going so far as to state "my exit strategy is death".

Microsoft might be the software company that everyone loves to hate, and Steve Ballmer might be crazy .

But Microsoft and Ballmer proved two things by deciding to walk away from an acquisition of Yahoo this past weekend - they are not desperate and they are not stupid.

This week's hodgepodge of articles I found interesting includes news that could impact the Microsoft-Yahoo courtship, online streaming music, digital thieves and young entrepreneurs.

Would you:

1. Put $20m into a company that you're valuing at $75m and has no proven mainstream appeal, scalability problems or business model?
   
2. Invest $25m at a $200m valuation in a company that has already raised $12.5m, has reportedly generated about $1m in revenues since its launch in 2005 and was unable to develop acquisition interest at $250m?
   
3. Give $50m and a $500m valuation to a profitless company that does $10-12m in annual revenues and whose CEO has said, "We’re like a teen in our clock cycle. Now, we have to figure out how do you get a job and work in the real world"?