The company we almost forgot about manages a face-saving exit as Google’s gaming grab continues.
Quick: What do you know about Slide? I know, I know—Max Levchin founded it. What else?
If you’re having trouble answering that question, you’re not alone. Here’s the short answer: it makes social widgets.
But here’s why anyone cares about Slide: it was founded by former PayPal CTO Max Levchin, who said he would consider it an abject failure if Slide went for less than the $1.5 billion that PayPal raked in. By his own standards, Google’s acquisition of Slide for an apparent $182 million, announced by Sara Lacy last night, is such a failure. Even the $228 million that Business Insider reports doesn’t come close to his benchmark. And it is a step down from the $500 million valuation it got from a $50 million investment from T Rowe Price and Fidelity Investments in January of 2008. Given the $78 million Slide took in venture investment, it’s true that this exit is no grandslam.
BUT for an outside observer $228 million is an insane amount of money for a widget company.
Here’s the slightly longer description of what Slide does: it makes apps, mostly games, that sit on top of Facebook and other social networks. It’s revenue comes mostly from the virtual goods bought through those games.
Yes, that description also fits the insanely successful Zynga, but we’ve all heard of Zynga’s games—way more often than we'd prefer, from all our friends now addicted to cow-selling. By contrast, see how many of Slide’s apps you recognize. The screenshot below is from their product page:
As for what Slide used to do, Business Insider gives a helpful history of the metamorphosis:
In 2005, the company began as a desktop-based, photo-oriented shopping search engine. Max built it for his wife, so she could shop for shoes faster. […] The plan was to make money sending traffic to ecommerce sites.
But later that year, Slide became a photo-sharing embeddable widget for MySpace and Facebook profiles.
Then, in 2008, Slide took $50 million in funding at a $500 million valuation. It began describing itself as an ad network built on top of a portfolio of widgets including hits like Top Friends and SuperPoke. During this era, Slide opened a New York sales office.
But by July 2009, Slide exited the business of selling standard ad units. The new plan, Slide VP Keith Rabois told us at the time, was to sell " integrated sponsorships" for $500,000 to $1 million a pop. It shuttered its New York office.
Then in 2010, Slide became a company that made money selling to users -- and allowing users to sell -- virtual goods
It's hard to dominate a market when you hop markets every year.
Nonetheless, Google is desperate for social and gaming talent, and Slide is as good a place as any to find it. The search behemoth has tried to grab a piece of the social pie for years, so far to no avail. Google Buzz fizzled. But it can’t afford to fail for long. Facebook now holds the greatest potential for personally relevant search results, which could one-up Google’s core product, and for personally relevant advertising, which would one-up its revenue model. There's a lot riding on Google Me, its much-rumored but yet-to-be-confirmed forethcoming games-based social network.