Nasdaq fined for Facebook IPO - Nasdaq has been fined $10 million by the Securities Exchange Commission for alleged securities laws violations related to its mishandling of the Facebook IPO. The $10 million fine is the largest ever imposed against a stock exchange and comes into addition to the $62 million Nasdaq owes trading firms due to sustained losses during the botched IPO. Facebook’s IPO took place on May 18th, 2012 and was overrun with glitches preventing trades and orders from going through. Nasdaq has agreed to pay both fines without admitting or denying the accusations.

Waze integrates Facebook Events - Waze announced integration with Facebook Events. If a user has connected to the app with their Facebook account, the app will now provide directions to the event with a single click. Users do not need to know the address before hand to be directed there. The crowd-sourced traffic and navigation app also provides users with the ability to see the location and ETA of friends who have RSVP’d to the event. Facebook has been in talks of purchasing the app, but has talks have since broken down.

Sandberg speaks at D11 - Facebook COO, Sheryl Sandberg spoke at AllThingsD conference, D11, this past Wednesday. Her first return to the conference since 2008, Sandberg discussed Facebook Home, dropoffs in teen demographic, search and ad placement. She also discussed temporary sharing apps like Snapchat and the lack of trust in Facebook. Sandberg explained, “We need to be transparent about what’s happening on the site. We have always given you lots of options, when it comes to sharing, but it was too confusing. We are trying to simplify that, and make it more visual.” She added, “We don’t need you to share more to make our ad model work better.”

Facebook speeds up Activity social plugin  - Last week, Facebook Engineering launched a lighter and faster Activity social plugin. The plugin is now five times lighter and two times faster. The update was rebuilt from scratch and comes in addition to recent Send, Like, Likebox, Login, Facepile, and Recommendations plugin optimizations.

Facebook maps users listening habits - Facebook has mapped out the volume of listens for three of the most popular songs in the U.S. over a period of 90 days. Using a beatquake inspired by old school visualizers, the graphs pull information from the 40 billion plays coming from apps integrated with Facebook Open Graph. Facebook worked partnered with San Francisco-based design and technology studio Stamen which specializes in map and data visualizations.

Article courtesy of Inside Facebook

Facebook and Timelines Inc. have reached a settlement in the trademark case against the social network, according to a document Facebook filed with the Securities and Exchange Commission.

Timelines Inc. operates Timelines.com, a website for people to create and collaborate on historical timelines. The company sued Facebook in September 2011 after it debuted an overhauled profile page it called “timeline.” Timelines Inc. has registered trademarks for “Timelines,” “Timelines.com” and its “Timelines” logo.

Facebook had asserted that its use of “timeline” was generic and qualified as “fair use.” Facebook requested a summary judgment to prevent the case from going to trial, but the U.S. District Court for the Northern District of Illinois denied the motion. The case was set to go to trial last week, but then delayed without explanation.

It seems the companies worked out a settlement agreement in the meantime. Terms of the agreement were not disclosed, apart from the following in Facebook’s 10-Q quarterly report:

“We are also party to various legal proceedings and claims which arise in the ordinary course of business. Among these legal matters, in two cases, Summit 6 LLC v. Research in Motion Corporation et al., and Timelines, Inc. v. Facebook, Inc., we have reached agreements to settle the matters. The cost of settlement in each case, which is included in the accompanying condensed consolidated financial statements for the three months ended March 31, 2013, was not material to our business, financial condition, or results of operations.”

Through the lawsuit, Timelines Inc. sought to prevent Facebook from continuing to use the term and to receive compensation equivalent to Facebook’s ad revenue generated on Timeline pages. However, it is unlikely the settlement was close to that range. It also seems Facebook will be allowed to continue to use the “timeline” name for its profile product.

A Facebook spokesperson declined to comment. We’ve reached out to Timelines Inc. for comment, but have not yet gotten a reply.

Article courtesy of Inside Facebook

Earlier this month, we wrote that High Fidelity, the virtual world startup led by Second Life founder Philip Rosedale, had raised $2.4 million of a $3.4 million round, according to a filing with the Securities and Exchange Commission. However, we didn’t know who had actually made the investment — until today.

Tony Conrad of True Ventures just announced that his firm led High Fidelity’s Series A, and that Google Ventures and various angel investors also participated. The High Fidelity website now mentions Mitch Kapor and Linden Lab (the company behind Second Life) as investors too.

In his blog post, Conrad praises Rosedale’s achievement in building virtual world Second Life. Then he offers this description of what the new company does:

Philip is truly a Founder of a movement—his passion for authenticity in our virtual interactions is unparalleled. So it stands to reason that his most recent company, High Fidelity, is building a next-generation virtual world enabling even richer avatar interactions, driven by sensor-equipped hardware, simulated and served by devices (phones, tablets and laptops/desktops) contributed by end-users. Together with Co-Founders Fred Heiberger and Ryan Karpf, the High Fidelity team is creating a version of the SETI system, but with computers powering a tiny piece of the virtual world rather than folding proteins or looking for aliens.

If I understand Conrad’s description, as well as the details available on the High Fidelity homepage, the company wants to harness the collective computing power in user devices to build a new kind of virtual world. In case this clears things up: The site also emphasizes the importance of low latency in virtual world interactions, and it declares, “We work in labcoats. Starched and ironed.”

Conrad’s blog post does not mention the size of the round. I’ve emailed True Ventures for to ask and will update if I hear back.

Article courtesy of TechCrunch

Editor’s note: Danae Ringelmann is a co-founder of Indiegogo. Prior to that, she was a securities analyst at Cowen & Co. where she covered entertainment companies, including Pixar, Lionsgate, Disney and Electronic Arts. Follow her on Twitter @gogoDanae.

Happy Anniversary! One year ago, U.S. lawmakers joined together with overwhelming bipartisan support to pass the JOBS Act. It was an exciting moment in history — one that my co-founders and I at Indiegogo didn’t expect to see for many years, especially not within just five years of launching our perks-based crowdfunding platform in 2008.

While the Securities and Exchange Commission’s rule-setting period has taken a bit longer than originally hoped and thus equity crowdfunding is taking longer to introduce than the Act anticipated, we’re quite pleased that the SEC is taking the process seriously.

Regulations: A Hard Balance

Striking a balance between the need for regulation and the danger of over-regulation is tricky. Too little regulation could lead to risky behavior — while too much regulation could stifle innovation and competition, and actually block the very economic activity equity crowdfunding is poised to create.

Crowdfunding rose into the mainstream long before the JOBS Act was passed. Since the launch of our perks-based approach to crowdfunding over five years ago – where entrepreneurs, artists and causes raise money in support of their dreams online by offering perks to funders — hundreds of other platforms have followed suit across the world.

When equity crowdfunding is introduced and allows funders actually to own a piece of the new businesses, pro-JOBS Act platforms like perk-based incumbents Indiegogo and Rockethub, or new equity-only players like Crowdfunder, will need to innovate by developing and testing new procedures that are safe, robust and customer-driven. As this is the first time equity crowdfunding will be possible in the Internet age, platforms need the opportunity to experiment, learn and build what customers actually need and want — rather than what regulators might think customers could want. Too much regulation could simply stifle the innovation required to make equity crowdfunding work.

Too much regulation could also reduce competition and lock out smaller equity crowdfunding platforms from launching, as burdensome regulation would make it expensive to get off the ground. Ironically, this would benefit well-resourced incumbents like us. But this is not what we would want.

Indiegogo Perspective on the Risk of Over-Regulation

For Indiegogo, we have a healthy and growing perks-based business and do not need equity crowdfunding to happen. That said we’d be disappointed if equity crowdfunding never has the chance to realize its innovation potential. The concept of equity crowdfunding is 100 percent in-line with our mission to make finance efficient and fair — removing gatekeepers from interfering with making dreams come true. We’ve innovated and developed an algorithm-driven platform in order to deliver a gatekeeper-free experience on our trusted perks platform. It would be disappointing — for example – if regulation somehow required us to put the gatekeeper back into the process, thus stifling our innovation and ability to make finance efficient and fair.

We’d also be disappointed if the regulation killed our competition, leaving us the sole player. As an equal opportunity platform, we’d defy our entire reason for being by hoping for a competition-free world.

Indiegogo pioneered crowdfunding as a way for people to fund what matters to them — whatever that might be. We don’t curate. We don’t judge. There are no gatekeepers on Indiegogo. We believe every idea (as long as it’s legal) deserves the right to connect with its audience and see if its audience is willing to fund it.

As a result of our inclusive approach, unique ideas — creative, cause and entrepreneurial — are coming to life through crowdfunding on Indiegogo as I write. They include the Breathometer that turns a smartphone into a breathalyzer, the athletic bag company Activyst that supports girls sports programs across the world, and the band  Avasa & Matty, a husband-wife duo working on their next album. Even the world’s first baby was crowdfunded last year. (The campaign helped a family pay for in-vitro fertilization). These ideas are not alone. Every week, Indiegogo distributes millions of dollars in four currencies to campaigns in every country.

Given we aren’t in the business of curation, we want to empower as many people around the world as possible. Nothing proves this better than the fact that we not only allowed, but often recognized that we had another crowdfunding platform use Indiegogo to raise money to launch.

So if the rules were up to us, given our inclusive approach and equal-opportunity philosophy, we would opt for a more open environment where platforms could innovate and compete freely to prove themselves superior, even if that meant more competition for us.

Despite Delays, Crowdfunding Continues To Grow

At Indiegogo, we’re excited to see the SEC release the rules. However, even without equity crowdfunding, new businesses have continued to thrive on Indiegogo. In the last year since the JOBS Act passed, more than 15,000 entrepreneurial campaigns raised money on Indiegogo in the U.S. alone.

Businesses like the first package-free grocery store In.gredients raised $15,000 to open its doors. Due to the market validation from crowdfunding, now traditional financiers are calling the team to ask how they can help the business expand. Innovative products like the 1:Face Watch, raised more than $357,000 to bring their watch to market, while giving people the opportunity to support the cause of their choice. Due to the risk-mitigation benefits of crowdfunding, the team didn’t face the risk of overproduction or underproduction.

Shareconomy ventures like the mobile canning service for craft brewers The Can Van also benefitted by garnering publicity they never could have imagined through their campaign. Due to social media integration, crowdfunding helped this team turn supporters into grassroots marketers overnight.

These job-creating endeavors and their entrepreneurial neighbors on Indiegogo received money from more than 200,000 people across all 50 states who voted with their dollars to bring these ideas to life. This clearly demonstrates how crowdfunding provides a catalyst not just for funding, but for traction, awareness and market validation as well.  I wonder what the numbers would be when equity is part of the picture — when the JOBS Act turns two. Exciting times are ahead. History in the making.

Article courtesy of TechCrunch

Following an investigation sparked by Netflix CEO Reed Hastings’ announcement that Netflix subscribers had passed the 1 billion hours viewed milestone, the SEC today announced that in specific circumstances, it can be okay to announce key company information and stats on social media channels like Facebook and Twitter. The one caveat they stipulate is that investors must be primed to watch those channels by companies if information is being released there first.

The major issue at question was whether or not Hastings had violated Regulation Fair Disclosure (Regulation FD), which stipulates that companies must distribute info material to their financial success in a way designed to make sure it’s available as broadly and “non-exclusively” as possible. Hastings had publicly defended his actions, once again via Facebook, saying that since his reach is over 200,000 on Facebook, including reporters and bloggers, the company considered it a public channel. Plus, Hastings added, they didn’t really consider this particular milestone material to their business, since they’d announced via their blog that they were approaching that total anyways.

The SEC’s report today agrees that social media channels are public, but those belonging to an individual corporate officer are unlikely to fall under the category of an acceptable means of conveying previously unreleased information material to a company’s bottom line is not okay, unless investors are told in advance to look for it there. The SEC puts it like this in a summary of its findings:

The report of investigation explains that although every case must be evaluated on its own facts, disclosure of material, nonpublic information on the personal social media site of an individual corporate officer — without advance notice to investors that the site may be used for this purpose — is unlikely to qualify as an acceptable method of disclosure under the securities laws. Personal social media sites of individuals employed by a public company would not ordinarily be assumed to be channels through which the company would disclose material corporate information.

Note that neither Netflix or Hastings are actually facing any kind of punishment for the original FB announcement; the SEC was just using it as a jumping off point to look into how social media might be used with respect to Regulation FD, since it recognized that there’s not much clarity around that issue as of yet.

The area of social media and its role in the business news cycle remains one that not only the SEC, but also companies like Marketwire (now rebranded as Marketwired and with a new key social analytics focus) are only beginning to adapt to. This new report comes as a reaction to real-world changing circumstances, but don’t expect it to be the last word, especially now that some kind of guidance has been issued which companies could potentially run afoul of.

Article courtesy of TechCrunch

Do you have a favorite coffee shop or dressmaker in your neighborhood? Now you can do a lot more than simply rave about your favorite local business to a friend: microloan giant, Kiva, is bringing crowdfunding to U.S. businesses. Normally reserved for struggling, developing-world entrepreneurs, Kiva is piloting a new project, called Zip, to allow small business owners to solicit micro-investments from their neighbors.

“This is a very big deal,” said President Bill Clinton, announcing the Zip pilot project in his hometown of Little Rock, Ark. “We have gotten ourselves in a situation now where the only people who can get real money are the people who don’t need to borrow it.”

Mass online investing has been an entrepreneurial dream for years, but political hangups at the Securities and Exchange Commission have delayed progress on so-called “crowdfunding”. To this day, there are still regulations about the number of investors a business can have and their minimum personal wealth.

Zip cleverly skirts regulation: “Kiva is a nonprofit and makes no money from the loans we facilitate, instead we depend upon optional donations,” explains co-founder Premal Shah. “Kiva lenders make no money from the money they lend, they only expect the money they put in as a loan to be paid back. Because of this model Kiva’s crowdfunding platform falls outside of SEC rules.”

Lending money, regardless of regulation, so Kiva requires that small businesses have the confidence of a “Trustee,” on organizations or individuals who vouch for the credibility of the borrowers. Trustees function like any other noteworthy investor in a startup, but in a more public way that permits the masses to invest confidently without an elite network of established investors.

To give microlending some viral flare, “When borrowers successfully repay their loan, they too can become Trustees and endorse other small business owners in their community.” Ideally, success begets more success, facilitating a cascade of local consumption and investing.

Zip caters especially to local businesses with a social good edge. At Old Skool Cafe, at-risk youth serve piping hot Java, to give them a better future outside the prison system. Mandela Foods Cooperative specializes in cooking up healthy desserts.

Loans start out as low as $25. You can check out Kiva’s pilot project here.

Article courtesy of TechCrunch

Federal regulators are investigating Microsoft for allegedly bribing foreign governments for favor in software contracts. “Lawyers from the Justice Department and the Securities and Exchange Commission are examining kickback allegations made by a former Microsoft representative in China, as well as the company’s relationship with certain resellers and consultants in Romania and Italy,” sources familiar with the allegations, tell The Wall Street Journal, which broke the story earlier today.

An anonymous tipster alleges that Microsoft’s China division instructed him to offer kickbacks in exchange for signing off on software contracts. To further complicate the allegations, the tipster was also involved in a labor dispute with the software giant. The tipsters contact with Microsoft ended in 2008.

“Like every large company with operations around the world we sometimes receive allegations about potential misconduct by employees or business partners,” John Frank, Microsoft’s vice president and deputy general counsel, tells The Journal. “We cooperate fully in any government inquiries,” Frank added.

The probe is also investigating bribery practices in Italy, related to consultants of Microsoft’s customer loyalty program. Consultants were used as “vehicles for used such consultants as vehicles for lavishing gifts and trips on Italian procurement officials in exchange for government business.”

Federal investigators are conducting the probe under the Foreign Corrupt Practices Act and a new whistleblower program at the Securities and Exchange Commission. “Filing allegations simultaneously with the company and the government provides whistleblowers some job security. Companies can face private lawsuits for sacking employees in retaliation for submitting allegations to the SEC, even if the tips never lead to an enforcement action,” explains the Journal.

While Microsoft says it is diligent about investigating corruption, it has offices in over 100 countries and roughly 640,000 partners businesses around the globe.

Interestingly enough, ZDnet argues the claims against Microsoft should be taken with a healthy dose of skepticism, since The Journal itself was recently investigated for bribery, but never pursued by the U.S. government. “It comes only a few days after the Journal itself was investigated by U.S. federal authorities over what appear to be claims of bribery, but were not pursued by the U.S. government. Instead, the Journal, owned by the Rupert Murdoch’s News Corporation empire, blamed China for retaliating against the newspaper’s critical reporting of Beijing in recent weeks,” writes Zack Whittaker.

More on this story as it develops.

Article courtesy of TechCrunch

Yahoo today issued its annual 10-K report to the Securities And Exchange Commission. These kinds of forms have a lot of boilerplate language that is reused again and again — often, companies just change the relevant revenue numbers and leave everything else the same for years (come to think of it, isn’t that the excuse former Yahoo CEO Scott Thompson made for the errors in his official bio?)

But with this latest 10-K, its first with Marissa Mayer at the helm as CEO, Yahoo switched up its language in an interesting way. Yahoo is now labeling itself first and foremost as a “global technology company,” in the place where it used to call itself a “digital media company.”

Here is the first sentence of today’s 10-K:

“Yahoo! Inc., together with its consolidated subsidiaries (‘Yahoo!,’ the ‘Company,’ ‘we,’ or ‘us’), is a global technology company focused on making the world’s daily habits inspiring and entertaining.”

And here are the first two sentences of the 10-K Yahoo filed last year and the year before, respectively:

“Yahoo! Inc., together with its consolidated subsidiaries (‘Yahoo!,’ the ‘Company,’ ‘we,’ or ‘us’), is a premier digital media company.”

“Yahoo! Inc., together with its consolidated subsidiaries (‘Yahoo!,’ the ‘Company,’ ‘we,’ or ‘us’), is a premier digital media company that delivers personalized digital content and experiences, across devices and around the globe, to vast audiences.”

It seems that Mayer, a bona fide engineer by training, is helping to put an end to that long-running debate as to whether Yahoo is primarily a media firm or a tech firm. Like other corporate moves since Mayer has taken over as CEO, it’s a small change, but it’s a potentially very important and symbolic one.

Article courtesy of TechCrunch

Approximately 27 million users bought virtual goods using Facebook Payments in 2012, up from 15 million in 2011, according to a document the company filed with the Securities and Exchange Commission today.

Facebook generated $810 million in payments revenue in 2012. CFO David Ebersman said only $5 million of that came from sources outside of games, such as Gifts and user promoted posts. Overall, payments and other fees revenue in 2012 increased $253 million, or 45 percent, compared to 2011, despite close to doubling the number of users buying virtual goods.

That could be because of Facebook’s promotions to get more users spending money in games. Although the volume of paying users increased, it the amount new payers spend could be much less than other players. Another factor could be growth in international markets. Facebook says 51 percent of its revenue from marketers and developers based in the United States, compared to 56 percent in 2011. This figure includes advertising revenue as well, but international developers are increasingly finding success on the social network and the overall number of international users is growing much faster than in the U.S.

San Francisco-based developer Zynga, on the other hand, is not the source of revenue it once was for Facebook. Payments fees and advertising from Zynga made up 7 percent of Facebook’s Q4 2012 revenue and 9 percent of its total 2012 revenue. That’s down from 11 percent in Q4 2011 and 12 percent overall in 2011. Facebook said in its filing that to date,  Zynga has generated the majority of its payments revenue, but its contribution has decreased over time and the company believes this trend will continue.

In November 2012, Zynga and Facebook agreed to end their business relationship that gave the developer certain privileges but also limited where it could launch its games and how Facebook advertising appears on Zynga.com. That deal goes into effect in March this year.

Article courtesy of Inside Facebook

President Obama will reportedly name former attorney general for the Southern District of New York, Mary Jo White, to the top spot at the Securities and Exchange Commission (SEC). Technology startups have been eager for the SEC to approval rules for “crowdfunding” (raising capital from family, friends, and other non-accredited investors) but the process was stalled by a mini-scandal with the former SEC boss and her subsequent departure.

As the lead prosecutor of mob boss John Gotti, White breaks tradition with predecessors as a financial outsider, perhaps making her more likely to aggressively pursue Wall Street misconduct. Unfortunately, it also means we don’t know much about her views on crowdfunding.

Early last year, it was revealed that former SEC chairman, Mary Schapiro, stalled the implementation of crowdfunding, as mandated by the overwhelmingly popular JOBs Act, for fear that it would harm her legacy.

In an email to Corporation Finance Director Meredith Cross related to a last-minute lobbying effort to derail crowdfunding rules, Schapiro wrote “I don’t want to be tagged with an anti-investor legacy.” The email included the incriminating subject line, “Please don’t forward.” She continued: “In light of all that’s been accomplished, that wouldn’t be fair, but it is what will be said …”

Now that Schapiro is gone, startups might finally be able to raise capital from outside the traditional deep-pocketed circles of Silicon Valley venture capitalists and banks.

Of course, the operative word here is “may.” We’ll keep readers updated as this story develops.

Article courtesy of TechCrunch