This Profitable, $100 Million Revenue Startup Doesn't Want To Go Public

LegalZoom, the startup that makes it easy to build and use legal documents, has told TechCrunch it raised $66 million in funding from Kleiner Perkins and IVP.

This is despite the fact that the company says it's profitable with revenues over $100 million, the magic number most people say you need to hit to contemplate an IPO, and that tech IPOs are all the rage again. 

First of all, these are very impressive numbers for a fairly under the radar, but highly disruptive startup. LegalZoom isn't a legal consulting service, but replaces many of the rote services that lawyers do for large fees: think drawing up a will, incorporating a business and the like. Most of these documents can be standardized and you shouldn't need a lawyer for them. That's where LegalZoom's software comes in. 

LegalZoom CEO John Suh says he clearly wants to IPO at some point but it's too early and too much bother. It's interesting that big tech companies are still saying that despite the wave of blockbuster tech IPOs that's starting. 

More on IPOs:

• All The Arguments Against Going Public Are Bunk → 
• Xero Went Public Very Early And It Loves It →

Please follow SAI on Twitter and Facebook.

Join the conversation about this story »

See Also:

• Zillow Prices IPO At $20 Per Share
• This 21-Year-Old Just Sold Her Startup For $100 Million
• Ex-LivingSocial Sales Guy: "There's Going To Be An Implosion And A Major Shakeout In The Industry"

This Profitable, $100 Million Revenue Startup Doesn't Want To Go Public

Backlink: http://feedproxy.google.com/~r/typepad/alleyinsider/silicon_alley_insider/~3/EiHLRPXm9h4/legalzoom-2011-7

MYSTERY SOLVED: Here's Why Google Sites Revenue Is Growing Faster Than Google Network Revenue (GOOG)

On yesterday's earnings call, Google revealed that ad revenue from its own sites -- mainly search -- was up 39%. But ad revenue from partner sites -- AdSense -- was up only 20% from last year.

This is a huge disparity. It's also a relatively recent change -- for the first three (not four) quarters of 2010, Google's ad revenue grew in lockstep with or slightly SLOWER than its partners' ad revenue.

Plus it just seems weird. As a general rule, if overall Web activity and ad rates are going up, it seems logical that the growth rates should be about the same.

This caused Tom Foremski at Silicon Valley Watcher to question what was going on.

Three possible answers:

• Spam prevention. On both of Google's last two earnings calls, the company mentioned that it began cracking down on search spam in results. A lot of these low-quality sites used Google's AdSense to try and monetize the users they were getting from gaming Google Search. When Google turned off the spigot, these sites got less traffic, so AdSense revenue went down. Google started cracking down on spam in Q4 of last year, but accelerated it with a program called Panda that kicked off toward the end of Q1.

• Distribution deal loss. On Google's Q1 earnings call, ads VP Susan Wojcicki also mentioned that Google had lost a search distribution deal recently, and that had affected Network revenue. She was probably referring to the toolbar and app deal with Conduit, which Bing took away from Google in December 2010.

• Actually, this is a reversion to normal. If you go back a little farther (see chart below), Google Sites revenue has usually grown faster than Google Network revenue. It was really ONLY during late 2009 and early 2010 where that trend was reversed. That's probably because the recession caused a steeper dropoff in traffic to partner sites than in traffic to Google. So the partner sites showed a greater percentage rebound when the recession ended. Now we're far enough out of the downturn that the year-to-year comparables are going back to normal.

Here's a chart of ad revenue and annualized growth rate for Google Sites and Google Network stretching back to Q1 2008. The bold-faced quarters are the only ones where Google Network revenue grew as fast or faster than Google Sites revenue.

	Google Sites	Growth From Year Ago	Google Network	Growth From Year Ago
Q2'11	6,232	38.52%	2,484	20.41%
Q1'11	5,879	32.44%	2,427	19.20%
Q4'10	5,672	28.30%	2,495	22.06%
Q3'10	4,833	22.17%	2,199	22.10%
Q2'10	4,499	23.16%	2,063	22.51%
Q1'10	4,439	20.20%	2,036	24.30%
Q4'09	4,421	16.01%	2,044	20.73%
Q3'09	3,956	7.73%	1,801	7.20%
Q20109	3,653	3.48%	1,684	1.75%
Q1'09	3,693	8.62%	1,638	-2.85%
Q4'08	3,811	22.11%	1,693	3.48%
Q3'08	3,672	34.26%	1,680	15.46%
Q20108	3,530	42.00%	1,655	22.41%
Q1'08	3,400	48.99%	1,686	25.35%

Please follow SAI on Twitter and Facebook.

Join the conversation about this story »

See Also:

• Google's Q2 Earnings Blow Past Expectations -- Stock Up 12%
• Will Larry Page's Second Earnings Report Be Better Than His First?
• THE GOOGLE INVESTOR: Wall Street Weighs In On Google Earnings Before The Bell

MYSTERY SOLVED: Here's Why Google Sites Revenue Is Growing Faster Than Google Network Revenue (GOOG)

Backlink: http://feedproxy.google.com/~r/typepad/alleyinsider/silicon_alley_insider/~3/oQTqUQzz6Q4/mystery-solved-heres-why-google-sites-revenue-is-growing-faster-than-google-network-revenue-2011-7

THE APPLE INVESTOR: App Revenue To Exceed Music In Next Three Years (AAPL)

The Apple Investor is a daily report from SAI. Sign up here to receive it by email.

---

AAPL Down Against The Market 

Stocks are jumping after French President Nicolas Sarkozy hinted at a deal to resolve the Greek debt crisis that has hampered equities and worried investors. Shares of AAPL, however, are down nearly 1%.  Catalysts include second quarter results released in July; the next iPhone launch this fall (see below); smartphone push into China and emerging markets; iCloud rollout and adoption; the continued evolution and next generation of Apple TV; and new platforms such as books / publishing and social (Ping). Shares of Apple trade at 10.8x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).

iPhone Leads On Millennial Media Mobile Ad Network, But Android Crushes It On A Platform Basis (TUAW)

The iPhone is the top individual phone on Millennial Media's mobile ad network in May, while the iPad is on the rise with a 29% jump in impressions. On a platform basis, Android was the leading smartphone OS with a 53% impression share, while iOS was a distant second with a 27% impression share. Ad revenue from apps paints a different picture than the impressions data. In ad revenue, iOS and Android are neck and neck. iOS had a slight lead with 45% share, while Android had a 43% share. That will likely change soon.

The Secrets Of Apple's Retail Success (TUAW)

Apple's retail stores have grown into a multi-million dollar business due to its strict employee guidelines and thoughtful attention to minute details, like the music used on demo machines. What's the secret sauce? An emphasis on customer satisfaction:

• Approach customers with a personalized warm welcome.
• Probe politely to understand all the customer's needs.
• Present a solution for the customer to take home today.
• Listen for and resolve any issues or concerns.
• End with a fond farewell and an invitation to return.

Probably that's why the employees are unionizing.

Next iPhone Could Feature New LED Camera Flash (AppleInsider)

Apple's next-generation iPhone could feature a new LED camera flash module from a different manufacturer. The company is said to have "greatly reduced" orders of Philips LED flash components in the last one to two months. It could be a sign Philips isn't being used for the next iPhone, or at least not as-is.

Apple Looks To Sweden For Next Store (TUAW)

Apple has set its sights on Stockholm for a new Apple store. Clearly, not withstanding the announced departure this week of Apple's retail chief, the company's highly aggressive global retail strategy won't be impeded in the least by the changing of the guard in Apple's retail sector. Nokia's stomping grounds (or close).

App Income To Exceed Music Income In The Next 3 Years (Asymco)

According to an interesting analysis by Asymco, iOS app revenue should zoom past song sales by 2015. iOS developers and record labels together have pulled some $16.6 billion in cumulative revenues on Apple's iTunes content store since its inception: $2.5 billion to app developers and about $14 billion to music companies.

MacBook Air Might Earn Apple $3 Billion Annually (AppleInsider)

Apple is poised to realize a $3 billion opportunity with its line of MacBook Air computers as "break-out" growth of the portables continues. Mark Moskowitz of J.P. Morgan revised his April estimates of a $2.2 billion a year revenue stream upward to reach the $3 billion figure.

Facebook Wants To Bring Down Apples App Store (Various via iDygest)

Facebook is hoping to bring its app platform to mobile through a massive effort targeting iOS users. Project Spartan would bring the social network's apps to mobile Safari through an HTML5 wrapper that would replicate some of Facebook itself, such as Credits. However, rather than releasing software through the App Store, Facebook is supposedly pushing for browser-based apps and services (a la Google).

Please follow SAI: Silicon Alley Insider on Twitter and Facebook.

Join the conversation about this story »

See Also:

• Facebook's iPhone App Store End-Around Is Exactly The Right Idea
• Facebook's Plan To Clobber The App Store Will Fail
• Facebook Secretly Working On A Plan To Break Apple's App Store Stranglehold On The iPhone

THE APPLE INVESTOR: App Revenue To Exceed Music In Next Three Years (AAPL)

Backlink: http://feedproxy.google.com/~r/typepad/alleyinsider/silicon_alley_insider/~3/ytsMoRd4bXU/the-apple-investor-jun-17-2011-6

Groupon's REAL Revenue Last Quarter Was Not $645 Million

There has been a consistent error in the reporting on Groupon's financial performance: Its real revenue is nothing like the number that's tossed around by most news organizations (including us).

Conor Sen at Minyanville points out that Groupon's often cited $645 million in revenue for the first three months of this year is gross revenue. As in, that's all the money Groupon takes in from deals.

Of that, it keeps $270 million, which is Groupon's net revenue number.

So, Groupon's net revenue for the year will be something like $1.2 billion or more. Still impressive, but considerably less than what people are expecting.

For more head over to Minyanville >

For the latest tech news, visit SAI: Silicon Alley Insider. Follow us on Twitter and Facebook.

Join the conversation about this story »

See Also:

• CHART OF THE DAY: Groupon's Massive Revenue And Massive Losses
• The Weird Groupon IPO -- The SAIcast Discuss
• WHY WAIT FOR THE IPO? These 13 Groupon Execs And Investors Have Already Cashed Out To Tune Of $870 Million

Groupon's REAL Revenue Last Quarter Was Not $645 Million

Backlink: http://feedproxy.google.com/~r/typepad/alleyinsider/silicon_alley_insider/~3/uJwB9aByqrc/groupons-real-revenue-2011-6