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Twitter Turmoil Not Finished: Engineering VP Lee Mighdoll Out [Silicon Alley Insider]

read morePeter KafkaThu, 24 Apr 2008 05:00:00 -0500

Blaine Cook isn't the only high-profile engineer to leave Twitter in recent weeks. Lee Mighdoll, brought on in early January as the startup's VP of engineering and operations, is also out.

"After three months, both Lee and Twitter came to the conclusion that the match was not perfect," Twitter co-founder Biz Stone told SAI via email. "We are seeking to fill this role with a refined search criteria that fits with our plan to scale Twitter as a company and as a service."

What's going on at Twitter? More than one thing, from what we can gather. While Blaine has taken a lot of heat in certain corners of the blogosphere for Twitter's scaling/downtime issues, people familiar with the company say his departure from the company was indeed amicable, and that he hasn't been held directly responsible for the service's stumbles and lurches.

But when Lee came on board January 8, the company described him as a "perfect match" who had "demonstrated experience creating sophisticated back-end software along with his genuine enthusiasm for building global systems that operate at scale."

We won't opine about the technical challenges that Twitter is facing, because we don't understand them -- we're happy when we can make our DVR work. But we do understand that the company is preparing to raise a Series C round, after raising some $5 million at a $20 million valuation last summer. If Twitter wants more money and a higher value, it's going to have to convince investors it has its tech talent issues solved.

Pumped About Milken Global [Paul Kedrosky's Infectious Greed]

read morepkThu, 24 Apr 2008 02:43:33 -0500

Not to econo-geek out or anything, but I'm pumped about the Milken Global Conference in L.A. the first part of next week. Sure, I'm on a panel with Felix and others on Monday, which will be good fun, but this is one of the rare conferences where I'm actually struggling trying to fit in all the sessions that I'd like to see -- as well as all the people I want to talk to.

Seeding Your Hedge Fund [PureVC]

read moreHedge FundsJames ChenThu, 24 Apr 2008 02:08:13 -0500

We've been getting all sort of emails and notes from people who are looking to seed their hedge fund. Some of them are lift-outs from other firms, others are first time funds from people with some prior experience, and others are from people with no industry experience. I've previously written about hedge fund seeders and what they typically look for. The truth is that most hedge fund managers will not qualify with a traditional seeder who is looking for the pedigree, track record, and the connections.

So what to do if you are in that other 99% of fund managers that want to start a fund? To put it simply, you have to view launching your hedge fund the same as you would launching any other startup. It takes hard work, salesmanship, persistence, and skill. Nobody really cares that you returned 100% last year based on a back-tested simulated model in ten different markets. Nobody really cares that your system is invincible and that you have worked at various firms in the industry. What really matters is that you know how to start and run a business and have great products.

In the hedge fund industry the business is managing other people's money and "institutionalizing" the business with analysts, traders, and capital raising specialists. The product is a good fund with good returns. How many traders do you know that can do both things well?

Thus, in this industry you tend to find people that are good at one or the other but not that great at both.

If you are a new hedge fund starting up, treat your business like any other business - take risk and invest time and energy accordingly. VCs love to see entrepreneurs who have invested a ton of their own capital and time into a business. Similarly, a new fund manager should invest all or most of his net worth into his own fund. VCs like to see entrepreneurs who have raised an insider round from family and friends - this shows that the person has invested a lot into the company and put relationships on the line. Similarly, a new fund manager should have some investors and have significant skin in the game.

The list can go on and on of things that are important for someone starting a new fund. I'm not going to spell everything out, but if anybody wants me to keep going on, let me know.

Microsoft Employees Want To Kill Yahoo Deal (MSFT / YHOO) [Silicon Alley Insider]

read moreYHOOMSFTHenry BlodgetWed, 23 Apr 2008 23:16:00 -0500

Two days before its fish-or-cut-bait deadline for Yahoo expires, Microsoft (MSFT) is sending messages to Yahoo (YHOO) shareholders through the press again. But regardless of Microsoft's ulterior motives, these messages ring true:

Microsoft might walk away from the deal.
Many Microsoft employees want Microsoft to walk away from the deal.
Microsoft might stick around and fight.

The last message was delivered through the WSJ this evening, when Microsoft leaked the names of the some of the directors on its board slate. The first message--we might walk away--was delivered in Milan on Thursday, by Steve Ballmer himself. And the middle message--lots of Microsoft employees hate the deal and want us to drop it--was also delivered this evening through the Wall Street Journal.

And we believe it.

Why?

Because, like us, some Microsoft employees think that Microsoft has other things to worry about besides competing with Google in search and display ads. Specifically, says the Journal,

Inside Microsoft, unrest over the Yahoo deal is focused in two areas: people in Microsoft's online services group worried about their future and people in other Microsoft divisions who believe the task of absorbing Yahoo will divert top management's attention and other resources away from other pressing challenges, say the people familiar with the matter.

Concern about Yahoo is also fueling what some Microsoft employees say is high attrition in the company's online services group, in particular the teams who sell online advertisements.

Mr. Ballmer and other proponents of the deal have done little to communicate their thinking on the deal internally after an initial wave of statements, say people familiar with the company.

Microsoft didn't include this in tonight's message to Yahoo shareholders, but we also think another constituency is lobbying Steve Ballmer to walk away from the deal--Microsoft's shareholders.

When Microsoft announced its bid, its stock dropped, and every time cracks appear in the deal, its stock rises. We think some Microsoft shareholders agree with us that a Yahoo acquisition will be a disaster, and we think others just think it's an unnecessary waste of $44 billion. So we expect Steve is hearing "walk away, walk away" not just in Redmond corridors but in one-on-one meetings with big institutional shareholders.

So, yes, all this is no doubt partially just a last-ditch attempt to scare Yahoo into caving. But we think there's also some truth to it.

Microsoft Unveils Yahoo Director Slate For Proxy Fight [Silicon Alley Insider]

read moreMSFTYHOOHenry BlodgetWed, 23 Apr 2008 22:49:00 -0500

Steve Ballmer did implicitly threaten to walk away from the Yahoo (YHOO) deal in Milan this morning, says the Wall Street Journal, agreeing with our earlier interpretation.

And, later in the day, keeping its options open, Microsoft (MSFT) leaked many of the names on the slate of directors it plans to file if instead it goes forward with a proxy fight. The list has 10 nominees and three alternates, says the WSJ. The nominees include:

John Chapple, former Nextel Partners Inc. CEO
Edward Meyer, former Grey Global Group Inc. CEO
Jaynie Studenmund, former chief operating officer of Overture Services (acquired by Yahoo) and
Vanessa Wittman, Adelphia Communications Corp. CFO

Lots of "formers" in there. And not a lot of Valley bench strength. But we guess that's to be expected. (The nominees, after all, will have a short tenure in which they do one thing: vote to merge with Microsoft.)

Must. Hype. RIMM ... Must. Push. FSLR. [Paul Kedrosky's Infectious Greed]

read morepkWed, 23 Apr 2008 20:38:51 -0500

This is the best thing I have read in ages. It is a quote from Overstock CEO Patrick Byrne speaking on the Fox Business Channel to Liz Claiman:

I think that there’s been an unhealthy collusion developed between certain short sellers and certain journalists. They center around your competitor, CNBC. I happen to know for a fact that there’s a fax machine in the CNBC offices where hedge funds send instructions and journalists sit around and take instructions.

What? No-one is supposed to know about the CNBC Fax Machine and the daily instructions to on-air journalists from nefarious hedge fund managers. I only learned about the Fax Machine because I held a restroom scrap paper over a toaster and a cryptic message to Joe Kernan emerged slowly from lemon juice.

Must. Push. FSLR ... Must. Skewer. SBUX ... Hate. Environmentalists ... Await further instructions.

[via Herb]

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