Uncrunched

I’ve only been skimming the news about Facebook’s IPO over the last 24 hours, but two or three times now I’ve read that Facebook’s CFO David Ebersman “decided” to increase the size of the offering at the last minute. Example (and, shame on the WSJ for just publishing what was fed to them).

This is the fall guy. This is the guy that I suspect Facebook is throwing to the wolves. Because someone has to be thrown to the wolves.

Some would say this is exactly what CFOs are for. The wolves.

Obviously Ebersman didn’t make the decision in a vacuum. If he did then Zuckerberg and the board are really to blame for not paying attention (something none of the stories mention). This was a joint decision by Facebook management and Morgan Stanley.

The whole Morgan Stanley mess isn’t over yet, either. There’s another very big part of the story that I’ve heard whispered at TC Disrupt that hasn’t broken yet. I may track that down tomorrow after the conference if it’s still unpublished.

I refer back to my Facebook IPO Spin article, which in hindsight looks 100% right. I wouldn’t be surprised to see Reuters reporters get subpoenaed at some point as lawmakers try to find out more about their sources.

All this aside, I still think Facebook has a certain destiny to fulfill. They completely blew their IPO from a psychology standpoint. But I like Facebook as a stock. I bought some shares on Monday below the IPO price. That’s both a disclosure and a statement of my belief that they’ll be growing significantly in the future. CrunchFund also owns some shares in Facebook from an acquisition that took place recently.

I’m happy to announce that Dave Feldman has joined CrunchFund as our first Entrepreneur-In-Residence (EIR).

Dave has deep product and engineering experience. Most recently he was at AOL as Senior Director, Special Projects. He volunteered to lead the TechCrunch rebuild last year despite the fact that he worked in a completely separate group under Brad Garlinghouse and did a spectacular job getting the various internal and external designers and engineers to work together (just to be clear, this was one of his least challenging technical efforts). He was well known at AOL as an excellent product executive who didn’t mind getting his hands dirty in the actual code while dealing with the internal politics that come with any large organization. His team was particularly loyal to him.

Prior to AOL Dave was Director of User Experience at Yahoo. He has a computer science degree from Harvard.

When Dave left AOL a few months ago we talked about his desire to build his own company. He’s knee deep in that process now, although he’s still figuring out the team and final product. We’re honored to have him join us as he continues that journey, and look forward to tapping into his leisure time to help us with all this venture capital stuff.

You can follow Dave on Twitter here, and at his personal blog Operation Project.

Dueling Facebook IPO demand stories today:

Bloomberg at 4:53 am: Facebook IPO Said to Get Weaker-Than-Forecast Demand

Reuters at 5:53 am: Facebook’s IPO already oversubscribed: source

Confusing? Yep.

Here’s what’s going on.

The Bloomberg story broke and team Facebook (the company and their investment bankers) reacted, choosing Reuters to voice the counter message.

Bloomberg was first and has named sources. Reuters is all “people close to” sources.

Since the company’s in a quiet period, all the positive stuff they and their bankers say has to be off record. But it’s still worth noting that the first story has named sources, the second (reactive) story has none.

Still, you can’t read much into that. The Reuters story (fed by team Facebook) would read the same whether the Bloomberg story was correct or not.

My sources say that the road show is a bit slow and investors don’t like some of what they’re seeing. In particular, the massive move users seem to be making to mobile.

That doesn’t mean Facebook’s IPO is failing. Not even close. But from what I can tell right now the Bloomberg story is correct, and the Reuters story isn’t.

As an aside, I haven’t talked much about IPOs over the years much because, well, there haven’t been many of them.

But as a lawyer I worked on dozens of IPOs and other public offerings in the late 90s, and the games that are played are fantastically entertaining. Deal psychology is very important and monitored closely.

Interesting line in PandoDaily’s article a couple of days ago about TechCrunch – “Kara Swisher was kicking some tires [about buying TechCrunch] to add the brands to the expanding All Things D franchise.”

Then a full retraction yesterday:

There’s only one part of yesterday’s story that I regret, and that’s mentioning Kara Swisher as a possible buyer. That was my screw up. Sarah didn’t want to put it in, because Swisher hadn’t responded to her attempts to contact her for confirmation. I had heard the “tire kicking” rumour from someone who was in a position to know, and so I felt it important to include Swisher in the paragraph speculating on possible buyers. When Swisher and Sarah finally spoke, Swisher flatly denied the suggestion, adding that her statements about wanting to buy TechCrunch had been just a joke.

Kara’s tweets on the first story:

I founded TechCrunch, so my interest level in hearing the truth about anyone trying to buy it is high. So I called a few people to track down where the story came from.

And here’s what I found. Swisher contacted multiple TechCrunch employees, AOL executives and others about buying TechCrunch earlier this year. She definitely had a “ha ha” attitude about it, but said that Tim Armstrong had personally reached out to her about buying TechCrunch, that “It’s not getting sold for real money,” and that she wanted to know how the writers would, ha ha, feel about her taking over.

Her relationship with News Corp. is less than perfect and, say multiple sources, News Corp. vetoed her attempt to staff up big after the TechCrunch disintegration late last year, to fill that void. Her contract with News Corp. is up in 2013, she hasn’t been happy with that relationship and is looking for a way to move on, say sources who spoke with her.

Hilarious.

Why?

Rocky Agrawal, who writes regularly for VentureBeat, is getting some criticism on Twitter for slamming Groupon repeatedly without disclosing that he has financial bets against the company.

A recent post – Why Groupon Now won’t work, where he heavily criticizes the company. Or yesterday – Why Andrew Mason is still wrong about Groupon’s prospects, where he again criticizes the company.

None of these posts have any disclosure of his short position or various bets on the company’s downfall. He does list all of those on his personal blog. One example: “I have a bet with Mark Rogowsky that Groupon goes to zero by 4/5/13. I can claim early if it is delisted for being worthless.”

He also apparently attempted but failed to get directed shares in the IPO at the offering price. Which is weird (that he tried) given how negative he is on the company.

VentureBeat, which has occasionally (and erroneously) criticized TechCrunch over ethical issues, needs to button this up.

The issue isn’t that Agrawal has a short position and is criticizing the company, in my opinion. Transparency in such a situation is fine by me (the SEC might be a different issue). The issue is that there’s no disclosure in the post, or even on the author page. And his personal blog isn’t linked from that author page, either.

The disclosure needs to be right up front in each and every blog post he discusses Groupon. Anything else is dishonest and unfair to readers and Groupon.

I note with interest that Agrawal thought the Yahoo CEO resume issue was about Silicon Valley snobbery over computer science degrees. It wasn’t about that, it was about the character of the man running Yahoo.

Similarly, this issue isn’t about the conflict of interest (to me at least). It’s about the failure to disclose it in the posts.

I should also add by way of disclosure that Agrawal wrote guest posts for TechCrunch for a time in 2011, before their IPO. We stopped working with him for a variety of non-ethical reasons.

Transparency. Truth. Bias.

Google tells me to be on the lookout for a better Google+ notification experience in email in the next week.

And by “email” they mean Gmail. And by “better” they mean more precious email real estate given up to a service that I don’t use. And by “to users who’ve upgraded to Google+” they mean everyone, since you can’t seem to get rid of Google+ no matter what you do.

Yay.

Great products are not forced on users. Google’s a little more like Microsoft every day.

Thank God for IMAP.

The news that Yahoo CEO Scott Thompson has lied about having a computer science degree is now four days old. Neither Yahoo nor Thompson have denied that this happened or have presented any sort of story that mitigates the damage. And as of today Thompson still has his job.

I understand that it’s been a long while since Yahoo was able to hold its head high in Silicon Valley. It seems like yesterday, but the company has been ridiculed since early 2008 when they absolutely bungled the Microsoft acquisition attempt. For shareholders, employees and users, it’s been all downhill from there.

It doesn’t matter. It doesn’t matter if Yahoo is a shadow of its former self. Employees still get up every morning and come to work and do their best in a difficult environment. These are good people – not all of them have left or been terminated over the years. And they deserve a CEO that they can believe in.

And so does the community.

We are still a community. Despite all the competition, all the fighting and the insane amounts of money flowing around us, Silicon Valley is a community. There is an incredible willingness for people to help each other. It’s the only reason I’ve stuck around.

The ups and downs of the valley move in cycles. Even in 2007 I was bitching about how we needed a downturn. “Times are good, money is flowing, and Silicon Valley sucks,” I wrote. That was nothing compared to today.

When all the money goes away so do most of the jerks. That happened in 2001 and everything was great for half a decade. The people that were here were here for the right reasons. Enough of the others had slipped away in the night that life was unquestionably pleasant in the valley.

Now the money is back and then some. And the kinds of people who hung out here in the late 90s are back too.

Yes, we get a regular lineup of jerks here, just like everywhere else. Thompson isn’t the first person to screw up.

But in the past at least people seemed a little embarrassed by their actions, there was some display of shame. There were some basic standards people were held to. Right?

Today we have a Yahoo that seems to be standing by their man. A man who lied about who he is.

And I’m not talking about the shame of having a CEO who doesn’t have a computer science degree. That’s irrelevant. What’s hugely relevant is that a man who’s willing to lie about something like that has not only risen to the level of CEO in a famous public company, but that the company is also willing to stand by him when the lie is revealed.

How can Yahoo hold its remaining employees to its code of ethics, which the CEO has clearly and egregiously violated? How could Thompson even show his face after that? How did the board of directors not revoke his security card?

It’s all about the money, apparently. Which is a damned foolish way to do business, in my opinion.

Yahoo has hit rock bottom. There’s really nothing else they could do to fuck things up further.

Which is an excellent opportunity to really do something crazy. Clean house, bring in a leader who cares about product and who cares about integrity. Someone who makes no sense at all on paper, but makes all the sense in the world on the ground.

Someone who doesn’t think the answer to all problems is more layoffs. Someone who instead energizes thousands of employees into doing more, giving more, creating more.

Someone who isn’t there for the multi-million dollar golden parachute if things don’t work out. Someone who cares far more about product than about the business model.

Someone old enough to have lived through Steve Jobs bringing Apple back from the grave in 1997, but young enough to still think they’re Superman and unstoppable.

Someone who let’s Yahoo employees hold their head high when walking down the street.

Someone who isn’t so insecure that he lies on his resume and so unapologetic that he doesn’t even have the stomach to resign after he’s been caught.

Someone better than that.

Yahoo’s Code Of Ethics clearly prohibits things like falsifying biographical and resume information. Page 13 of that linked document, for example, urges employees to make sure that any information disclosed is clear, truthful and accurate. The legal department should be notified, it says, of any inaccuracies.

Yahoo takes this stuff seriously.

Not seriously enough to do a simple background check on an incoming CEO who fabricates a computer science degree, apparently, but seriously enough to have a really amazing “IntegrityLine” phone number and website to report violations of the code of ethics. Page 44 of the linked document:

And damn if they don’t pick that phone up on the first ring.

“Hi, I’d like to report an omission, inaccuracy or falsification in Yahoo’s business records filed with the U.S. Securities and Exchange Commission. Is this the right place to do that? Apparently the board of directors hired someone to be the CEO and didn’t do a background check on him and now it looks like he made up this computer science degree? I thought that might be relevant since we’re a technology company.”

“The visionary lies to himself, the liar only to others.” – Friedrich Nietzsche

Yahoo CEO Scott Thompson has lied about receiving a computer science degree. Or at any rate he’s never corrected his biographical information that includes that information, and it’s nearly impossible to believe that he simply never noticed it.

The allegation was first raised by Third Point LLC, a Yahoo shareholder, in a letter to the board of directors earlier today (embedded here).

Yahoo confirmed the accuracy of the allegation, calling it an “inadvertent error.”

I’m sure that was a fun conversation.

“Um, hey, Scott, did you just make up that part on your resume where you said you had a computer science degree? I’m only asking because our shareholders and all the press are asking, and this might make us look simultaneously dishonest and stupid if it’s true. There also might be a few lawsuits or something.”

“Oh, you did make that up? Ok. Well, I’ll just issue a statement that it was an inadvertent error for now. I’m sure this will blow over.”

“Oh! It’s nearly 5 pm. Quittin time! Good luck with all this, Scott.”

Business Insider shows how Thompson has been using this fake bio information for years. ReadWriteWeb questions how someone can go a decade without noticing that this on their resume.

They don’t.

Thompson has to go. I wouldn’t even take a phone call from that guy at this point. The kind of people who lie on their resume…those people don’t belong in Silicon Valley.

You can’t PR your way out of this, Yahoo. This is conduct unbecoming of a public company CEO, or anyone else who wants to be taken seriously.

Update: I JUST CALLED YAHOO’S 24-HOUR INTEGRITY HOTLINE