Gawker: valleywag, norwest venture partners

MyYearbook scores $13 million to cater to more 13 year olds

Alaska Miller — Wed, 30 Jul 2008 13:40:00 EDT

MyYearbook, a social network for teens turned off by the old people thronging Facebook and MySpace, has raised an additional $13 million in venture capital. The social-network startup wooed by Barry Diller's IAC last year, but a deal never happened. The site claims to be the third biggest social network in the U.S.

Some prize: Numbers from Hitwise give MyYearbook 1.5 percent of U.S. traffic to social networks. Compared to MySpace's 71.9 percent and Facebook's 16.9 percent, that's a limp into bronze. Norwest Ventures Partners, US Venture Partners, and First Round Capital participated in this second round of funding. MyYearbook says that it will "use the money to create new services and make more money." One likely way it will do the latter: Dropping Glam Media as its online-advertising network so it can keep more of its advertising revenues.

Rackspace applies for a $400 million IPO

Nicholas Carlson — Tue, 29 Apr 2008 17:00:00 EDT

Managed-hosting service Rackspace has filed with the New York Stock Exchange to raise $400 million in an initial public offering. Investors Norwest Venture Partners, Sequoia Capital and company chairman Graham Weston stand to profit from the exit. Rackspace reported $18 million in 2007 profits on $362 million revenues. We called the IPO in January, but we're not sold on its merits.

Last fall, Rackspace went through a major outage that released many of its customers from their long-term contracts. Then, earlier this year, Tumblr founder David Karp publicly voiced his discontent with Rackspace and the company cut its prices by 80 percent in order to keep his business. Karp didn't take the offer, telling us its cheaper for startups to load up on redundant servers than to depend on Rackspace's 100 percent up-time promise.