In our trawl of the weekend’s tech coverage we noted reports on how LinkedIn founder Reid Hoffman stands to reap a US$600m fortune when the social network IPOs, how new laws in California could affect social networking privacy rules and how some believe Amazon has killed the book publishing business.
LinkedIn founder proves it’s good to network
The Observer reported how Reid Hoffman, founder and CEO of LinkedIn, the social network for professionals, stands to scoop US$600m when the company goes public. Silicon Valley is a place where the young and thin dream of making millions on the next hot tech startup. Reid Hoffman is portly, “old” and far more successful than most can ever hope to be.
The 43-year-old is set to make himself another $600m after announcing plans to sell shares in LinkedIn, the social network for suits widely used by headhunters to trawl for potential job applicants. LinkedIn will become the first US social network to go public when it joins the New York Stock Exchange on Thursday, as increasingly frenzied investors clamour to get in on the new generation of internet firms.
The share sale will value the whole company at up to $3.35bn (£2bn), significantly higher than the $2bn expected when LinkedIn first filed IPO documents in January. The increase comes as its peers, including Facebook, online discount service Groupon, and social gaming firm Zynga, line up their own IPOs at ever-increasing valuations. Facebook’s valuation is now approaching $100bn, Groupon is said to be worth $25bn, and all those people playing Farmville have driven Zynga up to $10bn. Hoffman is first in line to collect on all of them.
New laws could transform social networking
The San Francisco Chronicle reported that new laws in California will force social networking sites like Facebook to change their privacy rules. California could force Facebook and other social-networking sites to change their privacy protection policies under a first-of-its-kind proposal at the state Capitol that is opposed by much of the Internet industry.
Under the proposal, SB242, social-networking sites would have to allow users to establish their privacy settings – like who could view their profile and what information would be public to everyone on the Internet – when they register to join the site instead of after they join. Sites would also have to set defaults to private so that users would choose which information is public.
Currently, some sites, like Facebook, have default settings that make certain information – such as photos, biographical information and family information – available to everyone on the Internet after a user registers, unless the user changes those privacy settings.
And while Facebook itself has not told the Legislature it is opposed to , the bill’s author, Sen. Ellen Corbett, D-San Leandro, said the social-networking giant has worked in “stealth mode” to oppose it.
The legislation would require that privacy controls be explained in “plain language.” Willful violations of the law would result in a $10,000 fine for each violation.
Is Amazon killing the book publishing industry?
The Mail on Sunday reported how Amazon has been accused of trying to ‘wreck’ the book trade by turning itself into one of the world’s leading publishers.
Critics claim the online retailer’s plans to produce its own titles will give it a stranglehold on the industry and drive traditional publishing houses and book shops out of business.
One literary agent who asked not to be named said: ‘It is a crazy and ridiculous idea which will end up wrecking the publishing industry.’
Amazon has already come under fire for ‘ruthlessly’ undercutting traditional retailers on the price of books.
The genie is out of the bottle for Yahoo!
The Financial Times reported that an escalating war of words between Alibaba Group, the Chinese e-commerce powerhouse, and Yahoo, its largest shareholder, has called into question the US internet group’s ability to maintain its grip on its most valuable asset.
The dispute, triggered by the sale of an Alibaba-owned online payments business, has also underscored the risks of minority ownership of companies in the world’s largest internet market.
On Friday, Alibaba disputed a complaint by Yahoo on Thursday that the transfer of Alipay to a group controlled by Jack Ma, Alibaba’s chief executive, had transpired without notice to or approval by the Alibaba board, on which Yahoo has a seat.
Alibaba also rejected Yahoo’s account of the timing of the transfer, which the US company said had occurred last year, with notice to Yahoo given just six weeks ago.
The Alibaba directors were “told in a July 2009 board meeting that majority shareholding in Alipay had been transferred into Chinese ownership”, Alibaba said.