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Last night just before 12 a.m., Twitter began exploding with the news: Facebook had raised $500 million — from Goldman Sachs. Bolstered by a $50-million stake from Russia’s Digital Sky Technologies, a previous FB investor, the Wall Street behemoth had slapped down $450 million to snag the Internet behemoth — now valued at a cool $50 billion. As if on cue, the internet noted that yes, that was cooler than a million dollars.

Notes the NYT’s Dealbook, which broke the scoop: this makes Facebook “worth more than companies like eBay, Yahoo and Time Warner.” It also doubles Mark Zuckerberg’s multi-billion-dollar worth. It also makes Goldman Sachs the gatekeeper to who now gets to invest in the super-hot Facebook, and to the inevitable Facebook IPO. According to Dealbook’s Andrew Ross Sorkin and Evelyn Rusli, Goldman is “planning to create a ’special purpose vehicle’ to allow its high-net worth clients to invest in Facebook, which would allow for max investment while circumventing disclosure rules for companies with 500 or more investors. Clever, that.

So: This is a big deal. Everyone’s already saying that this is putting Google even more on the ropes (seeing as now Facebook is the most visited website in the land) and that Goldman couldn’t be sitting prettier. Here are a few other things it means:

(1) Facebook hiring spree! To paraphrase Antoine Dodson, hide your startups, hide your engineers — Facebook’s a-comin’. Snapping up Hot Potato and Drop.io? Poaching Foursquare’s Nathan Folkman? That’s nothing compared to what Facebook’s got coming. Rumor has it they’re about to close on purchasing the Sun Microsystems campus in Menlo Park from Oracle. That’s probably not just for the scenery. They want to stock up, preferably with talent – and, importantly, companies – that will help it integrate across every platform possible. (I’m guessing one of the new buzzy photo apps will be snapped up.) If you think people are complaining about a developer shortage now, just wait.

(2) China! Mark Zuckerberg recently returned from a trip to China. Innocent pleasure jaunt for the Mandarin-speaking Facebook founder or connection-making relationship-building fact-finding mission to the land of 450 million potential users? China is certainly not an easy place to do business — they just kicked out Skype — but in a globalized, connected world, it’s certainly tough to ignore. Approximately 33% of its massive population is online and as we all know from the rest of the world, that is growing. It’s an insane market to ignore and smart, Mandarin-speaking audacious visionary CEOs probably aren’t going to shy away from trying. Facebook China. It’s gonna happen.

(3) Goldman’s PR Whitewash The Vampire Squid just attached itself to the buzziest, growing-est, Oscar-nominated-est, Person Of The Year-iest tech company around. Who will remember their year of scandal and record bonuses and how everyone hated Goldman Sachs (sample Gawker headline: “Who do you hate more, BP or Goldman Sachs?“). Goldman’s not there for you to like them, people, they’re there to make money — lots of it. But they did have a bruising year and being attached to the shining future-makers at Facebook (never mind the gatekeeper to the Facebook IPO) will certainly help. This lets them offer something shiny to their clients, and bask in that reflected glow. (And guaranteed cashola.) That doesn’t fool the people who know — I like Howard Lindzon’s take:

For Goldman Sachs, this is a no lose situation. If it works, they get the IPO and make some money. That is their job. They got off so easy with the government that this is like Vegas money they probably thought would be the taxpayer’s at some point a year back…The only thing I DO know is that Goldman could give a rat’s ass about the social web and sharing. If they are the top in social web, it’s small potatoes. The war in bonds, currencies and commodities is where the real money is at. This is play money. I hate that Facebook is letting them in.

This is not a coup for Goldman Sachs, this is a shame for the social web.

Okay I lied. I love Howard Lindzon’s take. So, maybe Goldman’s got an uphill PR sell. But — they’ve also got Facebook. Watch the narrative change.

(4) Bigger Players, Bigger Bets When Lindzon points out that this is small potatoes for Goldman, he’s not kidding. But now the bigger fish are sniffing around and what started as mutterings about a bubble somewhere in the late fall now seems to be turning into a gold rush. (Doesn’t Google and their adorable $6 billion offer for Groupon seem so quaint right now? Never mind Twitter’s recent $3.7 billion valuation.) These are billion-dollar figures, and they are actually now starting to sound…eensy. As Ray Kurzweil points out, when technology advances it does so exponentially — so it makes sense that the explosion of tech startups would chicken-egg in conjunction with an explosion of investor dollars — not just the usual (and educated!) suspects, but people on the sidelines reading about Facebook in their Time magazines and deciding that maybe the Internet’s not a fad, after all. (Yes. These people do exist, and many of them have a LOT of money.) High valuations, big deals, young companies getting scooped up — it’s gonna be a dizzying year.

(5) Sympathy For The Google. It’s official: Facebook has gone from underdog challenger of the mighty Google to the top social-tech dog. So watch for everyone to start rooting for Google again. After a wave of backlash (see here and here), the pendulum will swing back around to rooting for the loveable search giant with the cuddly name. Google can take your pity – its market valuation is almost four times Facebook’s at $190 billion, and its current year revenue is about $22 billion to Facebook’s $2 billion. Back to Lindzon: “I think that Google has to buy Twitter and that will start to be a meme soon. It’s a chess game and nuclear war now in the social space.” That sound you hear is the sound of the tech press collectively wetting itself. Ew. But still — everyone likes to root for an exciting matchup. Expect to see some bold moves from Google, soon — if they’re smart. Big “if” (RIP Google Buzz). But isn’t that how underdogs like it?

(6) New Facebook Ad Models. All that said…Facebook has made a big point about how it hasn’t really focused on the silliness of “making money” yet, despite that $2 billion annual rev and nearly 1 trillion display ads per year. I believe them — can they really not do better than targeted ads for Jewish singles in your area? You bet they can: They also make a point about knowing every little bit of information about you for the ultimate in micro-targeting. The online ad industry is evolving and innovating right along with the rest of the web (see AdKeeper) and the key to dominating going forward will be data — using it wisely to convert your users into dollars for advertisers. This is where smart technology will take user data and figure out how to map it on top of shopping data, so that purchasing intent can best be harvested. The stigma about buying online has now pretty much disappeared. With more people using the web, and mobile devices, more often do run more of their lives, there are big bucks at stake. And I’m not even TALKING about how Facebook is looking to horn in on search.

(7) New Facebook Business Models. They have all these users. All this data. They’d be crazy just to stick with what they’ve got. Hell, now they’ve got fun money just to fling up into the air and see where it goes. They’re poaching the best and brightest who all gush on and on about how “exciting” and “creative” and “free” it is. Clearly these people are getting to work on some fun stuff. So far Facebook has shown itself as adept at replicating the innovations of its competitors (see: Foursquare –> Facebook Places). But with all the resources at their disposal and innovations happening across every industry on every platform, they’d be nuts not to at least test the waters. Hey, that car’s not gonna drive itself. Oh, wait.

(8) People Generally Freaking Out This has already started to happen. First Groupon (“What? But they AREN’T EVEN A TECH COMPANY!!!”) and now Super-Sized Facebook. Entrepreneurs and founders and people with fledgling ideas that are half-built that they’ve been slaving over at night are obsessing about all day are suddenly freaking out that they have to get to market NOW before the bubble pops and the money dries up. Chill out, dude. (And, ladies!) If you’re making something of value, it’ll take. Just focus on it, be smart, and don’t let Twitter and TechCrunch freak you out. (Here, take some advice from these people.) Just a moment of Zen amidst the craziness. All right, now – onward! It’s 2011 and YOU’D BETTER NOT SCREW THIS UP. Haa, just kidding. Mostly.

Well: It should be interesting. Happy New Year, everybody!

Related:

Goldman’s Facebook Coup [Felix Salmon - Reuters]

The Social Web Index … All-Time Highs in Pressure and Price and Shame on Facebook [Howard Lindzon]

Was Goldman wise to invest $500m in Facebook at a $50B valuation? [Quora]

Goldman Sachs Just Bought The Facebook IPO [Business Insider]

Follow Rachel Sklar on Twitter here.

Illustration of Mark Zuckerberg as Avatar-ized Time Person of the Year from Sandbox World (via Boing Boing) (hat tip: Bnter).

Until this week, the lies about death panels were some of the worst spread by Sarah Palin and the Republicans to scare seniors about health care reform and the Affordable Care Act (ACA). Now there's a real death panel, and John Boehner is in charge -- it's the Republican legislative campaign to undermine the ACA. Boehner and the Republicans want to give our health care back to the insurance companies, kill strong consumer protections that end the worst insurance company abuses and sentence more than 30,000 Americans a year to death because they can't afford health insurance.

As one of the first acts of the 112th Congress, the Republicans plan to repeal the Affordable Care Act and all the benefits and consumer protections that are making a real difference in the lives of millions of Americans right now. What are they replacing it with? Nothing. They're referring that question to a bunch of committees that will deliberate for months and play political football with our lives and health. What does that really mean? It means letting the insurance companies off the hook so they can run roughshod over consumers and deny our care and jack up our rates whenever they please.

Here are some of the things that will happen in the real world if the Republicans are successful with repeal:

Seniors who received $250 checks from Medicare last year to help buy prescription drugs will have to return the money to the Treasury Department.

Seniors will lose the 50% discount on brand-name drugs when they have reached the "donut hole" of their prescription-drug plans - a benefit worth more than $12,500 over 10 years to those who qualify. Instead of closing over the next several years, the "donut hole" will stay open permanently.

Seniors will stop receiving no-cost annual physicals, mammograms and cancer screenings under rules that had just taken effect this week. Also, a voluntary program to enable seniors to live independently would be wiped out, forcing more people to crowd into nursing homes.

Millions of consumers, including children, will be denied coverage and care due to pre-existing conditions and branded "uninsurable." Health plans will go back to kicking young adults off their parents' coverage instead of providing benefits until age 26.

Many Americans with sick family members will be forced to file for bankruptcy protection when insurers restore lifetime and annual caps on benefits.

Health plan premiums will resume their double-digit increases as insurers return to grabbing however much they want from your premiums to pay for excessive profits, CEO pay, an army of lobbyists and a bureaucracy that turns away the sick. New programs to block unreasonable rate hikes would be dismantled.

Taxpayers would pay hundreds of billions of dollars in excessive fees to private health insurance companies that enroll seniors in Medicare Advantage plans at much higher costs than if the government provided benefits directly. The Medicare trust fund's projected solvency will give back the 10-year extension it got from the ACA.

You can see an excellent overview here of what we will lose if the ACA is repealed. You can also see the district-by-district impact of health reform here.

After a century of legislative and political combat, working families and small businesses finally won and ended the insurance companies' stranglehold over our health care. Naturally, Boehner wants to roll back the new health care law and let the health insurance companies resume their reign of terror. That's why Boehner and his band of corporate shills, including House Majority Leader Eric Cantor, Senate Minority Leader Mitch McConnell and a raft of presidential wannabes, have made repealing the law the Republican Party's top priority for 2011.

The Congress needs to fix the economy and create millions of jobs to put American back to work, but instead Cantor prefers to make bogus claims about an election mandate to repeal the health care law. Nevermind that 68% of Americans favor consumer protections such as allowing people under 26 to remain on their parents' plans, and 60% don't want health insurers to turn away sick people. Cantor isn't deterred by facts because his mission is partisan politics, not governing.

And so is this typically understated comment from Boehner:
"I believe that the health care bill that was enacted by the current Congress will kill jobs in America, ruin the best health care system in the world, and bankrupt our country... That means we have to do everything we can to try to repeal this bill and replace it with common sense reforms to bring down the cost of health care."
Wow. Sounds like the end of the world as we know it.

Boehner and his fellow Republican repeal-mongers dismiss economic projections they don't like, such as those showing that the ACA will create millions of new jobs, that the law now requires insurers to use a new minimum acceptable percentage of premium dollars for actual medical care instead of profits and bureaucracy, and that the ACA will reduce the federal budget deficit.

The Republicans are kowtowing to right-wing extremists, corporate executives and billionaire investors who secretly spent millions of dollars to help Republican election campaigns last fall, including deceptive ads attacking the health care law. Those deceptions continue still. The ACA protects consumers from the worst health insurance company abuses and provides seniors with better health care through the Medicare program.

Thankfully Senate Majority Leader Harry Reid and the Democrats in the Senate will stop Boehner in his tracks. However, when you cut through the political hyperbole, the GOP's search-and-destroy mission is serious business. The repeal vote in the House scheduled for next week is part of an all-out assault on the new law in the Congress, the courts and state legislatures. And it's an assault with well-funded corporate sponsors.

Everyone already knows that the Republican Party is a wholly-owned subsidiary of the health insurance industry and other profit-hungry corporations. In case there was any doubt, the Republicans have begun hiring insurance and health care industry lobbyists for key positions on committees and members' staffs. So far, two health care industry lobbyists have joined the powerful House Energy & Commerce Committee, which has jurisdiction over health care legislation. One of them was named staff director. In addition, a top lobbyist from the medical device industry has joined Boehner's staff as policy director, a post he will undoubtedly use to try to roll back the new tax on medical devices that is part of the ACA. Expect to see more hires like these.

If that picture isn't disturbing enough, look at the cynical demagoguery of GOP presidential hopefuls, like Fox News personality and former Arkansas Gov. Mike Huckabee. Huckabee has been running TV commercials trashing the health care law and offering a petition to demand that Congress repeal it. It turns out that Huckabee hired a notorious scam artist to help him with the exploitative ad campaign, which is nothing more than a front to raise money. Three days after Think Progress reported about the scammer, Huckabee was forced to fire the guy. A few months ago, Huckabee, a Baptist minister with a pre-existing condition of his own, said it was OK for health insurance companies to turn their backs on people with pre-existing conditions. Like Boehner, he's the new face of the Republican Party on health care. He works for the insurance industry and other big corporations, not the rest of us.

The interests of middle class and working families are of no concern to Republican Party leaders. To them, it's just smart business to spend political capital on protecting the financial interests of the billionaires and big corporations who make up their base -- the "haves and the have-mores," as President George W. Bush famously described them.

And yet, these are the same Republicans who complain about having to wait a few weeks for their health benefits to take effect while they rush into the 112th Congress with a plan that will revive working families' fear of going bankrupt because of crushing medical expenses and of getting dropped from your insurance if you're sick.

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Thursday, January 6, 2011

Help Making Money

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