One of the biggest recent deals in technology took place this week when Yahoo! snapped up the Tumblr blogging empire for a cool $US1.1 billion.
It’s a good deal for Yahoo!, which is attempting to get back on its feet under Marissa Mayer, and for Tumblr founder David Karp, who at 26 years old has made perhaps the biggest deal he’ll see for a long, long time.
Karp is an interesting guy. He taught himself to code at just 11 years old, and he has a minimalist approach to design Steve Jobs would be proud of.
He also quit high school at the request of his mother.
As this New York Times article points out, his mother Barbara Ackerman knew David was spending a lot of time on his computer. So she just recommended the next best thing:
“I saw him at school all day and absorbed all night into his computer,” said Ms. Ackerman, reached by phone Monday afternoon. “It became very clear that David needed the space to live his passion. Which was computers. All things computers.”
Karp never finished high school or went to college, but he built Tumblr. And now he joins a number of other Silicon Valley members under 30 who have been able to strike massive multibillion dollar deals.
As the NYT piece points out, he’s an interesting guy. He’s been criticised for desiring fame too much, and can often speak for several minutes without taking a break. As this piece describes, he can be reclusive:
“Where I feel the most productive and engaged is when I’m buried in code, buried in some project, tweaking some designs,” he said. “I’m certainly introverted.”
If you’ve paid attention to the tech news this week, then you’d have seen Karp’s name. This is a nice little piece which gives some insight into his creative process – and shows just how smart this 26 year old can be.
Inside Facebook’s failed IPO
Rumours of a Facebook public listing have been around ever since the company started, so last year’s float on the NASDAQ wasn’t much of a surprise.
The bad performance, however, certainly was. The company certainly didn’t see the type of success other tech companies such as LinkedIn and Groupon – at the time – had enjoyed.
Over at The Atlantic, there’s a new piece which delves into why the Facebook IPO didn’t go so well.
On the first day of the IPO roadshow, chief financial officer David Ebersman admitted to Morgan Stanley the social network had cut revenue projects. This type of correction was not heard of just before a company is about to go public.
Facebook and Morgan Stanley knew they had to make a public disclosure. But what to disclose? The law requires companies to share all information that would likely influence an investor’s decision to buy stock. Plus, Morgan Stanley’s research team was still advising clients based on figures that Facebook now considered wrong.
Of course, this all led to more confusion, with some press outlets reporting demand for Facebook stock was dropping, while others were reporting the float was already oversubscribed.
This doesn’t even account for the glitch in the NASDAQ, which saw many investors not receive a confirmation as to whether they had bought stock or not.
The Facebook float was something of a disaster. This piece goes into detail about why this happened – and hopefully serves as a warning why it shouldn’t happen again.
The Irish tax dodge
There has been plenty of noise lately about whether Apple is dodging taxes in several different countries, including Australia and the United States.
Chief executive Tim Cook even fronted the American Senate this week to answer questions about the company’s tax policies.
The key is an Apple holding company situated in Ireland, which allows the tech giant to miss out on paying a higher tax rate.
But as this piece in the New York Times points out, this situation is unlikely to change – especially as Apple has reportedly struck a deal to pay just a 2% corporate tax rate in Ireland.
Although Ireland denies this, there is no denying the country’s economy isn’t in great shape. And a higher corporate tax rate is the last thing they want.
Irish politicians through the years have stood behind the country’s official 12.5 percent corporate tax rate, so much so that three years ago when the previous government negotiated the international bailout, it refused to budge when European negotiators wanted to make a higher tax rate a condition for a deal.
Although politicians may want Apple to pay its fair share, getting Ireland to budge will be the key – and it doesn’t look like that’s going to happen.