• Ross Fadner, Mar 27, 2009, 11:31 AM
  • Is Facebook Running Out Of Cash? BusinessWeek BusinessWeek's Spencer E. Ante reports that Facebook has been trying to secure as much as $100 million in debt financing over the past few weeks, at a time when banks and other lenders are becoming more cautious about extending credit to companies. Facebook is aiming to use the credit lines to help it finance leases for the growing number of computers needs to run its popular Web site. As Ante notes, such leases are a common way to finance equipment purchases in Silicon Valley. The social network has been shopping for credit from a large number of financial institutions, including Bank of America, its primary commercial bank, which just received $25 billion to shore up its balance sheet from the federal government. According to Ante's sources, Facebook has not yet secured new debt financing from BofA or any other lender.

    Yet Ante raises questions about the timing of Facebook's debt offering, but Facebook maintains that its effort to find new financing is simply part of the normal course of business. "Facebook always seeks to keep its costs of capital as low as possible, particularly in these uncertain economic times," the company said in a statement. "Along with other Silicon Valley companies, we rely on a range of tools to do so, including equipment lease lines to acquire equipment."

    Why does the company need more money now? Ante points out that Gideon Yu, Facebook's chief financial officer, has already raised more than $500 million, "an enormous amount for a startup." One obvious question is whether Facebook has enough money stockpiled to maintain its current strategy of growth over revenue. Facebook declined to comment, but Ante notes that a month ago, Facebook board member Peter Thiel said the company did not need to raise more cash. Read the whole story...
  • Skype Readies iPhone Client GigaOm Skype is apparently close to launching an iPhone version of its P2P voice and IM service, says Om Malik.

    "A tipster -- a very reliable one -- tells me that Skype is almost ready to launch that iPhone version, perhaps as soon as next week," he says, adding that the announcement will likely come at next week's CTIA Wireless event in Las Vegas. Skype already offers a Windows Mobile version of its client.

    "As I've said before, Skype will have to turn to mobile to keep its growth intact," says Malik. He points out that services like iSkoot have stopped supporting Skype in recent months, while others, like Truphone and Nimbuzz, have added the service to their communication clients. Despite this activity, "a standalone Skype client would get a lot of traction among the Skype faithful," says Malik. "In the meantime, I think Skype is slowly flexing its muscles and swatting away little VoIP players with some of its recent moves." Read the whole story...
  • 'Freeconomics' Fails To Hold For Music Biz The Guardian The Guardian's Helienne Lindvall is none too impressed by Wired Editor Chris Anderson's "freeconomics" theory, which will be outlined in his forthcoming book on the subject. After seeing Anderson's keynote at SXSW interactive, Lindvall says, "I was really hoping he would have the panacea he proclaims, but just as The Long Tail (his prior book) has its flaws, so does this one -- at least when it comes to music."

    In fact, Anderson uses the music business in China as an example of how piracy creates celebrity, which in turn creates cash. "Chinese pop stars make money not off music sales, but from making personal appearances, starring in advertisements, etc," Anderson says.

    It's not so easy, in fact, says Lindvall, who points out that, "touring is a loss-making venture until you can fill venues that hold a few thousand people or more. Then you can at least break even." Meanwhile, she adds that advertising hasn't been able to save newspapers or ad-supported music sites like SpiralFrog, which folded recently. Even YouTube, "a site that actually has people looking at the screen while listening to the music," can't afford to pay musicians more than what they're paying so far, which one musician claims is 6 pence for more than 10 million views. Says Lindvall, "either Chris Anderson's 'freeconomics' theory is faulty or Google, the owner of YouTube, is lying." Read the whole story...
  • Federated Media Launches MarchTweetness VentureBeat Federated Media, which on Monday announced that it would aggregate executive feeds onto a Twitter page currently sponsored by Microsoft, is bringing a similar idea to the NCAA College Basketball tournament.

    Called MarchTweetness, the new site lets you tweet with others who are watching the same tournament game. The site will be sponsored by telecom giant AT&T.

    As VentureBeat's Eric Eldon notes, this is the second vertical site launched by Twitter and FM this week, and others are sure to follow. Eldon says this strategy, currently the only up-and-running revenue model for Twitter, is somewhat problematic for third-party developers, who are also building niche vertical sites for Twitter. The company needs to be careful about building sites that could compete with third-party offerings, Eldon says, because Twitter doesn't want to stifle innovation. Read the whole story...
  • Tweeting Athletes And Celebrities The New York Times Read the whole story...
  • Microsoft Hires Another Former Yahoo Search Exec PaidContent.org Read the whole story...