Meet Watercooler, a startup developing social network applications for all the usual suspects - Facebook, MySpace, Bebo, Hi5, and Friendster - that allow fans to rally around their favorite sports teams and TV shows.

The Mountain View-based firm raised a previously undisclosed $4M in Series A funding from Canaan Partners this past September. While it’s been developing Facebook apps soon after the launch of that social network’s platform in July 2007, it just recently launched a corporate website to provide a more unified front to its efforts.

While you may not associate the name “Watercooler” with the more famous app developers Slide and RockYou, as well as SGN and Zynga, the company has created over 700 community-building apps. Watercooler’s installs and active users earns it the #9 spot on Adonomics top Facebook developer list.

Watercooler’s apps focus on particular shows and teams, and give fans an opportunity to discuss recent events, share photos, and take quizzes. The applications can also communicate with each other, allowing for interaction between rival groups, even across the supported social networks. The company’s platform allows the company to produce these applications very quickly, each tailored to a particular show or team.

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Meet Watercooler, a startup developing social network applications for all the usual suspects - Facebook, MySpace, Bebo, Hi5, and Friendster - that allow fans to rally around their favorite sports teams and TV shows.

The Mountain View-based firm raised a previously undisclosed $4M in Series A funding from Canaan Partners this past September. While it’s been developing Facebook apps since July 2007, it just recently launched a corporate website to provide a more unified front to its efforts.

While you may not associate the name “Watercooler” with the more famous app developers Slide and RockYou, as well as SGN and Zynga, the company has created over 700 community-building apps. Watercooler’s installs and active users earns it the #9 spot on Adonomics top Facebook developer list.

Watercooler’s apps focus on particular shows and teams, and give fans an opportunity to discuss recent events, share photos, and take quizzes. The applications can also communicate with each other, allowing for interaction between rival groups, even across the supported social networks. The company’s platform allows the company to produce these applications very quickly, each tailored to a particular show or team.

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Putting a value on private companies is hard enough for insiders and venture capitalists who have full access to the company’s financial statements. When outsiders try to do it, even well-informed ones, it is nothing more than a guessing game. But it is nonetheless perhaps one of Silicon Valley’s favorite parlor activities.

Today, Henry Blodget & Co. at Silicon Alley Insider try to peg valuations on 25 private Web companies. Facebook is at the top of the list, but it is valued at $9 billion instead of the $15 billion that Microsoft’s investment put on the company. Why? Because everyone knows that the $15 billion is too high, so SIA decided to apply a 25X multiple on Facebook’s 2008 revenue forecast of $350 million. Does that make its valuation correct? Probably not. But in the absence of any true market pricing, anyone can go ahead and make a guess.

The same goes for any of the valuations on the SIA 25 list, which puts Wikipedia’s worth at $7 billion, Craigslist’s at $5 billion, Mozilla’s at $4 billion, LinkedIn’s at $1.3 billion, Ning’s at $560 million, RockYou’s at $325 million, and Spot Runner’s at $250 million. Note that three of the top five (Wikipedia, Craigslist, Mozilla) are essentially not-for-profits sitting on very valuable assets. The valuations for those three are based on what they would be worth if they were run differently with an eye towards maximizing revenues—which, of course, could impact how consumers interact with them, which in turn would impact their valuations.

Another 25 startups make up the contenders list, which includes Federated Media ($245 million), Yelp ($225 million), Meebo ($220 million), Mahalo ($150 million), Digg ($125 million), Etsy ($115 million), Powerset ($80 million), and Twitter ($75 million). A full list that changes dynamically every 20 minutes, based on changes in the Nasdaq, can be found here (although, exactly how the valuations are linked to the Nasdaq is never clearly explained)

Some of these valuations have more merit than others. Some have none whatsoever. For instance, SIA gets at its $125 million valuation for Digg by “splitting the difference” between a $200 million buyout rumor we reported and the $60-to-$80 million that Kara Swisher came up with. Splitting the difference between two rumors is not exactly the height of financial analysis.

But what are you gonna do? At least SIA acknowledges that the list is an imperfect work in progress. Don’t get too caught up in the actual numbers. It is more useful really as a starting point to think about relative valuation between different startups. Is Meebo really worth three times as much as Twitter? Is Ning worth as much as Slide? Let the parlor game begin.

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Multiple fake reviews for the Funwall App on Facebook have been deleted after it was discovered that the reviews came from employees of Slide, the apps owner.

Fake reviews seem to be part of the norm these days, however most companies are smart enough to cover their tracks; Slide employees on the other hand post from accounts that are part of the Slide Inc Facebook network.

A couple of samples (via this thread on Facebook)

FIVE STAR RATING
I can’t live without it!
by Sohyen Claire Kim at 2:12pm on January 30th, 2008
http://www.facebook.com/s.php?k=1000000 … ref=fbprvw

You can enjoy this super amazing FunWall apps!!!!
Very Strongly Recommended!!!! big_smile

FIVE STAR RATING
Fantastic Application!!
by Mayumi Yoshida at 1:44pm on February 1st, 2008
http://www.facebook.com/s.php?k=1000000 … ref=fbprvw

I totally love FunWall!! I can put Youtube videos, greeting cards, neat pix and fun postings…it’s super convenient and addictive!!
And I love how I can forward my friends’ fun stuff that they sent me!!

Hooray for FunWall!! Seriously, a Wall cannot get any better than this.

FIVE STAR RATING
w00t!
by Adora SlideEleven at 6:41pm on February 16th, 2008
http://www.facebook.com/s.php?k=1000000 … ref=fbprvw

love it.

FIVE STAR RATING
luv it!
by Adora SlideEight at 1:15am on February 17th, 2008
http://www.facebook.com/s.php?k=1000000 … ref=fbprvw

The Adora Slidexxx names are a particularly classy touch: not only is Slide spamming Facebook with fake reviews, they’re also using fake accounts with fake names and more staggeringly adding the fake accounts to the company only Facebook group (The name Adora comes from Slides Sr. Product Manager Adora Cheung). A full list of the fake accounts on Slide Inc here; there are pages upon pages of fake accounts, which also breach Facebook’s TOS.

MikeP on the same thread sums it up beautifully: “Slide writing fake reviews on their own reviews board is hilarious! is that really the behavior of a company worth $500M?”

Here’s a new theme song for the bright sparks at Slide who thought this was wise:

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Dow Jones VentureSource put out some data on Web 2.0 deals in the U.S. earlier this week that I’ve put together into these charts. The first one above shows how much money has been invested in Web 2.0 startups so far this decade. In 2007, venture capital poured into Web 2.0 companies at a record pace—$1.34 billion. That was up 88 percent from the $716 million invested in 2006.

But did Web 2.0 deals peak last year? Take out the $300 million raised by Facebook, and the amount invested was up only 46 percent, a marked slowdown from the 132 percent dollar growth the year before. (The amounts charted above, starting with 2001, are $68 million, $29 million, $79 million, $232 million, $716 million, and $1.343 billion)

The growth in the number of deals is also slowing. Last year, there were 178 Web 2.0 deals in the U.S. That was up only 25 percent, after doubling every year for the previous four years. And in Silicon Valley last year, the number of deals actually dropped from 74 to 69.

In 2007, the median deal size was $5 million, up 22 percent. And the median pre-money valuation was $10 million, up 66 percent (from $6 million in 2006). Both deal size and valuation for Web 2.0 companies remained below the average VC deal across all industries ($7.6 million and $16 million, respectively)

Here is a list of some of the biggest venture financings of 2007, including ones for Facebook, Ning, Zillow, Veoh, MyStrands, and Hi5. Slide’s $50 million isn’t included because that was in 2008. Hey, maybe things haven’t peaked after all.

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Investment banker Michael Montgomery has his chance to prove he’s still relevant in the tech banking world if this VentureBeat story is true. The rumor is that Meebo has hired Montgomery & Co. to represent them in a new fundraising round that may value the company at a cool $250 million.

If they pull it off, they’ll set Meebo’s value at half of the $500 million Slide was recently able to talk the markets into. That Slide deal had Montgomery & Co. competitor Allen & Co. behind the deal.

In fact, Allen & Co. seems to be representing all the hot startups these days. In addition to representing Slide in that massive valuation, they’ve worked with Bebo in their recent sale to AOL and Digg in their ongoing acquisition talks, etc. Montgomery, meanwhile, has been taking on lower profile deals like Technorati’s recent fundraising/sale effort. If Montgomery pulls of this deal, perhaps Silicon Valley startups will stop looking exclusively to Allen & Co. for the big stuff.

Is Meebo worth half a Slide? Well, I’m not sure Slide is worth half a Slide, to be honest. If anything, though, Meebo is a potentially more interesting platform. They have created a syncronous world of chat that works perfectly along side a number of applications. Gaming, for example, is a natural fit with Meebo.

Still, Comscore says Meebo has only 4.6 million unique monthly visitors. That’s valuing each of them at $54. That’s significantly more than AOL paid for each of Bebo’s 22 million Comscore visitors ($39). My guess is the valuation may get taken down a notch or two before the deal’s done. Or perhaps not, if Montgomery does his job and gets a few bidders going after the deal.

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On Monday AOL will announce the acquisition of San Diego-based Goowy, a startup founded in late 2004 and which launched, incidentally, in my living room in late 2006 (we had a TechCrunch party where Goowy, Meebo, Sphere and other startups launched). The size of the deal is not being disclosed.

Their first product was a Flash-based webtop or alternative operating system. But later they went into the widget space with their YourMinis product, and that is the reason AOL has acquired them.

AOL SVP of Social Media, Messaging and Homepages David Liu said this was a deal they’ve been considering for the last nine months, and that they plan to integrate Goowy’s technology into both user-facing AOL products (to widgetize them) as well as their Platform A advertising network. Expect Platform A to launch significant new advertising products in the widget space soon, Liu says.

This is a significant win for Goowy founder and CEO Alex Bard, who has run a tight operation over the years. The company has just six employees and raised a single round of financing from Mark Cuban in April 2006 (the size of that round remains undisclosed, but it was almost certainly under $1 million). He says the Goowy team will remain in San Diego for at least the short term.

Goowy competes with a number of startups in the widget advertising space, including Widgetbox, ClearSpring and Gigya. VideoEgg, Slide and RockYou also compete in this area.

AOL has been busy acquiring promising young startups - they bought Israel-based Yedda last November as well.

Goowy

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It should come as no surprise that the ad inventory on social networks like Facebook are not worth much. A new offer by Lookery, a startup that places ads on social appss inside Facebook and Bebo, is offering a guaranteed ad rate of 12.5 cents for every thousand impressions (CPM). The promotion, which runs through April is probably close to what Lookery can get for ads it places on Facebook. Add in 2 cents per thousand impressions for serving the ads and you get to about a 15 cent CPM. That is probably a good average for the bulk of inventory on Facebook, which makes up the vast majority of Lookery’s business.

This is a market-share play for Lookery. By offering a guaranteed rate, it hopes to attract enough application publishers to get to a billion impressions a month, up from 170 million in December. Lookery is smaller than the other major social-app ad networks, like Slide, RockYou, and Social Media. On social networks, more so even than on the Web in general, advertising is obviously a volume game. And Lookery is trying to catch up to the larger app ad networks, which may very well have higher average CPM rates, by taking all the low-hanging penny inventory that is out there.

Social Media

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Slide

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RockYou

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Google and Facebook are fighting hard to hire this years crop of computer science graduates, we’ve heard, and ground zero is Stanford. Most of the class of 2008 already have job offers. Last year, salaries of up to $70,000 were common for the best students. This year, Facebook is said to be offering $92,000, and Google has increased some offers to $95,000 to get their share. Students with a Masters degree in Computer Science are being offered as much as $130,000 for associate product manager jobs at Google.

Apparently the popular Facebook Applications class is getting a lot of attention from other startups, too. Slide and RockYou are both recruiting hard. One source says that RockYou is approaching students and telling them they aren’t hiring them, they’re “acquiring” their applications and will let them continue to work on them after graduation. That is, of course, some serious smoke blowing - any code they’ve been working on in the class is likely to be shelved by RockYou. Still, it’s a great way to recruit by making these students feel like they’re entering into an M&A transaction.

“Lesser” degrees in math or statistics are fetching just $40k - $50k, which still isn’t bad for a first year salary.

Something tells me the Pitzer students who’ve taken the YouTube class aren’t getting the same types of offers.

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Google and Facebook are fighting hard to hire this years crop of computer science graduates, we’ve heard, and ground zero is Stanford. Most of the class of 2008 already have job offers even though graduation is months away.

Last year, salaries of up to $70,000 were common for the best students. This year, Facebook is said to be offering $92,000, and Google has increased some offers to $95,000 to get their share of graduates. Students with a Masters degree in Computer Science are being offered as much as $130,000 for associate product manager jobs at Google.

Apparently the popular Facebook Applications class is getting a lot of attention from other startups, too. Slide and RockYou are both recruiting hard. One source says that RockYou is approaching students and telling them they aren’t hiring them, they’re “acquiring” their “companies” and will let them continue to work on their applications after graduation. That is, of course, some serious smoke blowing - any code they’ve been working on in the class is likely to be shelved by RockYou. Still, it’s a great way to recruit by making these students feel like they’re entering into some kind of an M&A transaction.

Something tells me the Pitzer students who’ve enrolled in the Learning From YouTube class aren’t getting the same types of offers.

If you are a CS student at Stanford or another top university, tell us what’s happening with recruiting.

Update: Good comments below from students confirming these (and even higher) salaries.

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