Studying Silicon Valley’s Higher Math

Microsoft’s $240 million investment in Facebook, which bought them a paltry 1.6% of the company, might now be a model for other social media investments.
According to The New York Times, Slide, the maker of applications for social networks, has raised another round of funding – $50 million from the private equity funds at Fidelity and T-Rowe Price, two major Wall Street investment houses. The firms have taken a nine percent stake in the three-year-old, 64-employee Slide, valuing it at $550 million.
Max Levchin, Slide’s chief executive, explained the valuation, “It’s impossible for social networks focused on scaling the network itself to build all the niche applications that bring people and keep people on these sites.” Just as consumers bought Windows to play games, organize their taxes or create documents, application makers like Slide “add the bulk of perceived value to the consumers of these Web platforms,” he said.
In other words, if Facebook is worth $15 billion then Slide is worth 1/30th of that.
All of which leads me to speculate on how much of the value in Slide, or another company like it, is found in the technology versus is in the brand. I understand the technology comes first in a company like this, but from there it’s about building the brand. Yet, is there a brand team at Slide? Do they work with consultants or an agency? Or does the Slide brand build itself?



About David Burn

I wrote my first ad for a political candidate when I was 17 years old. She won her race and I felt the seductive power of advertising for the first time. Today—after working for seven agencies in five states—I am head of brand strategy and creative at Bonehook in Portland, Oregon.