From the desk of Bob
Facebook Structures Barter Deal With Interpublic Group To
Drive Ad Revenue In Win-Win Arrangement
How much is friendship worth? That’s an open-ended question,
certainly. However, to the likes of social networking sites
like MySpace and Facebook, the figures these days are truly
And for Facebook, according to some analysts, the company is
approaching a possible $2 billion valuation, after
capitalizing the numbers on their recent transaction with
the Interpublic Group an ad agency, marketing and public
Facebook, which focuses on the college crowd (with 8 million
registered members listing their favorite bands, books and
hobbies, on the site), has just traded one-half of 1% of its
equity stake to the Interpublic Group for a commitment by
IPG to place $10 million in advertising on its web site.
The Facebook barter agreement, in essence, says, “Generate
$10 million in ad revenue for us and we’ll provide you with
equity in our company.” Plus the link up with IPG should
further Facebook’s development of an ad model.
The partnership is also a brilliant move for IPG, for not
only do they obtain an equity position in a hot social
networking site (the second most popular and one of the top
ten most trafficked sites on the Net), but they will receive
preferential access to prime ad space on Facebook. And, IPG
also acquired the exclusive access to Facebook’s user data
for research purposes.
Mark Zuckerberg, the former Harvard college student who
started Facebook in February 2004, is grinning from ear to
ear. According to Business Week, he reportedly turned
down an offer of $750 million for Facebook prior to this
Agassi & Graf Trading On Brilliant Careers &
Tennis stars Andre Agassi and Steffi Graf have both been
world-renowned professional tennis players. Graf retired in
1999 after winning 22 major singles titles. And Agassi, who
is one of only five men to have won all four Grand Slam
events, is retiring after the U.S. Open later this summer.
The married couple have launched Agassi Graf Development
LLC, a real-estate development company focused on luxury
home and resort projects. Their first venture is Tamarack
Resort, a mountain vacation area about 90 miles north of
Boise, Idaho; Bayview Financial, a Miami-based real-estate
investment, development and mortgage-finance company is the
equal equity partner.
Agassi pointed out that in addition to attaching their names
to the venture they will also be pouring themselves into the
effort...working on the 225-room condo-hotel at Tamarack’s
village with a spa and golf course and at least 35 houses
with ski in/ski out access.
Costs for the project are forecast at $400 million. As
equal equity partners, and after making a small
financial investment, the value of trading on their fame,
reputations, contacts, and involvement is considerable.
Shades Of Joseph Jamail....
The law firm of Sterns Weaver Miller Weissler Alhadeff &
Sitterson of Miami are receiving $247 million for the effort
they put forth in a class-action suit in which gas-station
owners accused Exxon of over-charging them for gasoline. The
full fee award was one of the highest legal ever in a
class-action suit. The firm had been working on the case for
15 years, taking it all the way to the Supreme Court! (Total
settlement was $1.08 billion.)
The Miami law firm essentially employed the same strategy
which Joseph Jamail’s Texas law firm used back in the late
1980s when he traded on his firm’s time and expertise
to represent Pennzoil in its court battle with Texaco.
Given Pennzoil’s financial condition at the time, Jamail got
the case because he chose to barter his abilities for a
percentage of the award if he prevailed, versus collecting
an hourly fee for his firm’s services. His confidence and
the size of the eventual victory, $3 billion, saw Jamail
earning an estimated $420 million for his firm’s trading
Bingo! Big Red Paperclip Reaches
Goal...Barters For House
On April 25 we reported about Montrealer Kyle MacDonald’s
efforts to trade a big red paperclip into a house. We
editorialized that the reason barter’s so exciting is
because value is subjective not objective. Proof of such a
belief is the successful conclusion of MacDonald’s
Last Wednesday the Canadian got a call from Bert Roach in
Kipling, Saskatchewan, a small town located 90 minutes
outside of Regina. MacDonald was offered a two-story, 1920s
farmhouse that he and his girlfriend have accepted. The town
council is planning a major party to welcome its newest
MacDonald was nearly speechless when offered the property.
“I just couldn’t believe it,” he said. “People keep asking
me how much is the house worth?” MacDonald says that’s so
not the point. “I’ll never sell the house, this is all about
relative value,” he stressed. “What’s more important to a
man dying of thirst in the desert, $1 million or a glass of
MacDonald, whose long journey which began July 12, 2005, now
has one last goal, to convince Rocker Alice Cooper (who was
one of the legs in the barter progression) to play a free
concert at his planned massive house-warming party this
coming Labor Day.
Multi Media Distributor Straddles TV,
Bulk TV & Internet,
www.bulktv.com, offers a la carte programming as well as
comprehensive packages for apartments, condominiums, mobile
home communities, hotels, assisted living facilities,
correctional facilities, hospitals and student housing.
They are a nationally licensed wholesale distributor for
both DirecTV and Dish Network satellite, and a nationally
licensed distributor for Guest-Tek, one of the largest
providers of high speed Internet covering more than 450,000
units in the U.S. and Canada.
All back issues of
"From the Desk...” can be accessed by
free to forward our newsletter to your friends and
colleagues. We have a “box” at the end of the
newsletter for your convenience.
See you next week. . .)