This week’s cover story for New York magazine is a rather defensive profile of Mark “Watch Out My IPO Pop” Zuckerberg that seems designed to convince readers that Zuck having 57 percent of Facebook voting shares is a great idea. The piece is penned by none other than dotcom champion and Business Insider CEO Henry Blodget. In honor of Mr. Blodget’s reappearance in the mag, we considered opting for a BI classic like “The 25 Hottest Facts from Henry Blodget You Won’t Believe!!!” or even “CONFIRMED: Mark Zuckerberg Is a ‘Brilliant CEO’” as the story sets out to prove.
Unfortunately, the story is a write-around, which means Mr. Blodget didn’t get access to Mr. Zuckerberg–natural during the quiet period. And if you’ve read David Kirkpatrick’s The Facebook Effect, seen Zuck sweat on stage with Kara Swisher, perused Ken Auletta’s excellent profile of Sheryl Sandberg, or can name the founders of Andreessen Horowitz, there isn’t much news to report.
We did, however, enjoy Mr. Blodget’s opaque nod to that time he got banned for life from the securities industry for pumping up stocks in public, while he was bad-mouthing them in private:
“Many promising tech companies place too much emphasis too soon on the business rather than the product. They worry too much about “making money.” This sounds nuts—aren’t companies supposed to make money?—and it sounds especially nuts in the wake of the dot-com bust. But that crash was a product of investors’ and analysts’ overexuberance (sorry!), not evidence of a fundamental flaw in the tech industry’s start-up ecosystem.”
It would be easier to forgive Mr. Blodget if he spent some time in the magazine talking about why he thinks Facebook’s IPO will be “enormous Muppet bait,” as he tweeted last week, rather than taking Zuck at his word in an SEC filing when he wrote, “We don’t build services to make money; we make money to build better services.” As documents have shown, Facebook Timeline, for example, is a better service . . . but for brands.
Update: Perhaps Mr. Blodget has some insider intel on Mr. Zuckerberg’s motivations that we don’t. New York magazine neglects to mention it, but Facebook director Marc Andreessen, whose venture capital firm owns 6.6 million Facebook shares according to the latest S-1 filing, has also participated in Business Insider’s last three investment rounds. Allen & Company, one of the investment firms underwriting Facebook’s IPO, has also repeatedly invested in Business Insider, the company where Mr. Blodget serves as cofounder, CEO, and editor-in-chief. Andreeseen Horowitz, who Mr. Blodget eagerly credits in New York mag for ushering in an era of “founder CEOs,” also made $78 million from Facebook’s billion purchase of Instagram, a decision Mr. Blodget praises effusively in the magazine.
Update, 5.10 p.m.: Lauren Starke, New York magazine’s communication manager respond to Betabeat’s inquiry about disclosures by email:
“Henry Blodget is transparent about his associations with the firms and companies he writes about on Business Insider, and has also openly questioned whether Facebook shares will be worth what other valuations have priced them at. That said, disclosure is always a good thing, and our article should have noted that Marc Andreessen is an investor in Business Insider; the online version of the story will be updated accordingly.”
Where Mr. Blodget, a former star analyst for Merrill Lynch before Eliot Spitzer intervened, really shines is in a handy table about the intersection between tech and Wall Street called “Silicon Valley Is Allergic to Slicked-Back Hair.” According to Mr. Blodget:
Goldman Sachs needs a new barber.
One of Goldman Sachs’ main Internet bankers in Silicon Valley is named Scott Stanford. And one problem with Stanford, says a Valley executive, is that “his UI,” or user interface, is “off-putting.” Pressed for details, the executive mentioned Stanford’s “slicked-back hair.”
It pays to be a banker in the street, but a geek in the head, at least for Morgan Stanley star Michael Grimes.
He’s described as “incredibly hardworking” and “honest, direct, and smart” but also “weird” (one V.C. mentions Grimes’s alleged habit of playing video games until 5 a.m.) and “a dork” (a Valley executive tells of the time Grimes received a call from a client in the middle of a conference room in which lawyers, bankers, and accountants were working around a table drafting a financing document; instead of excusing himself, Grimes slid under the table and continued the conversation, murmuring away as the drafting session ostensibly continued above).
Andrew Ross Sorkin’s source on Goldman’s private-placement memo, may have been coming from inside the industry:
There’s a tantalizing conspiracy theory to Goldman’s Facebook debacle. Before Facebook kicked off the Goldman transaction, the story goes, CFO David Ebersman called Morgan Stanley and JPMorgan to give them the heads-up. Knowing the headaches it could cause Goldman, one of these bankers called the Times’ Sorkin and tipped him off. Goldman likes this version. The idea that it would be so ham-fisted as to blow up its own deal is mortifying.
We’d also recommend taking a look at the ever-incisive Paul Ford, who makes an appearance in New York mag’s Facebook cover package as well. Mr. Ford argues that Facebook hasn’t peaked because of its OAuth service, which lets you log in to websites and apps. Having hundreds of millions of people use your product as an identity layer has a way of giving it legs. See, now that is brillz.