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The Almighty Buck Businesses Programming

GitHub Seeks Funding At $2 Billion Valuation 80

itwbennett writes: GitHub, the most popular Git hosting site, is reportedly seeking $200 million in an upcoming private funding round that values the company as high as $2 billion. "GitHub is an interesting company," said analyst Frank Scavo, president of Computer Economics. "It is partly a hosting service for developers and partly a social media site." And it's a great place to recruit developers. But company-specific factors aside, there's also a lot of money in the market "looking for homes," said Rob Enderle, principal analyst with Enderle Group.
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GitHub Seeks Funding At $2 Billion Valuation

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  • by opus_magnum ( 1688810 ) on Wednesday June 17, 2015 @04:28AM (#49927687)
    does it mean they will become like them after they're bought?
    • by Anonymous Coward on Wednesday June 17, 2015 @04:40AM (#49927713)

      Let's hope not, it's been a great service up until today at least.

      SourceForge has gone so down that even their mirror hosts are evaluating whether they should provide them resources anymore. There's been a campaign aimed at SourceForge's mirrors to get them to cut their cooperation. It's been somewhat successful and got a lot of attention after people realized SourceForge had hijacked Firefox, too, among other big open-source projects.

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      I don't see what open source project hosting site Github has to do with malware distribution site Sourceforge.

    • does it mean they will become like them after they're bought?

      Github is not selling out: they're offering a 10% stake. Even if the entire offering is bought by one entity, that entity will not have the power to force github to do anything the existing structure doesn't want.

      Possibly worth noting that Andreessen Horowitz already has a 13% stake, and he hasn't managed to make them Evil. Raising outside ownership to 23% isn't going to give the vultures control.

      • by _merlin ( 160982 )

        You're not taking preferential shares into account. They often have nasty conditions attached. For example the venture capitalists may be able to liquidate the company without needing a majority.

    • See sourceforge - this is how you make money, get a VC to fund your 'exciting and innovative game-changing' service and get pots of cash. Revenue totally optional, advertising irrelevant.

      The trouble with businesses today is that some of them have a bricks-1.0 mindset that expects to receive revenue by selling stuff (even if its adverts and malware)! pffft.

      • You do realize that VCs don't just give away money. There are revenue expectations that come along with it.

        • they can expect as much as they like... but in these times, the money comes from pumping up expectations and selling overpriced shares to investors, and then selling the company to facebook or Google for way more than its worth!

    • by AmiMoJo ( 196126 )

      The massive over-valuation is looking bad. Investors will require growth and monetization, and their current premium accounts aren't going to cut it. It really isn't a good sign because no matter how well intentioned the staff are and how good they are to work with so far, shareholders demanding value will screw it up.

      Sad times. What happened to realistic valuations and growing a long term, responsible business? This just seems like wanting to hype the platform up as much as possible and then cash out at th

      • Re: (Score:3, Insightful)

        by Anonymous Coward

        Sad times. What happened to realistic valuations and growing a long term, responsible business? This just seems like wanting to hype the platform up as much as possible and then cash out at the top, before it all comes crashing down.

        Because in a bubble, lifestyle businesses are a waste of capital. If it's more important to have the word "founder" on your business card than it is to make money, the founder should sell the business at a bubble valuation and use the money to start another.

        Which of these compan

  • Enderle? (Score:5, Interesting)

    by NaCh0 ( 6124 ) on Wednesday June 17, 2015 @04:48AM (#49927747)

    That Enderle guy is still around? He has been so discredited that it's amazing. One thing is for certain, whatever his opinion, the opposite will be true.

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      Github runs Linux man! That means Darl will be entitled to all the brazillions that github gets from the funding, and Rob can finally get paid. Good thing too, 'cause there's not as much money in drunken keynotes as there used to be.

  • A better word: Fantasy... An even better word: Fraud! This is how bubbles are made.

  • $2b / 9m users (Score:5, Insightful)

    by goose-incarnated ( 1145029 ) on Wednesday June 17, 2015 @05:08AM (#49927803) Journal
    So each user is worth $222? Please... this has all the characteristics of a bubble. There is no way they are ever going to be able to monetize users to the tune of $222/user.
    • by Shados ( 741919 )

      The enterprise plans aren't cheap, and private github repos are pretty popular with startups (of which there's a bazillion of them now).

      Of course they aren't going to get 222/user per year. If they did, their valuation would be 5-10 billion, not 2. No company makes their entire valuation in revenue every year.

      • The enterprise plans aren't cheap, and private github repos are pretty popular with startups (of which there's a bazillion of them now).

        Of course they aren't going to get 222/user per year. If they did, their valuation would be 5-10 billion, not 2. No company makes their entire valuation in revenue every year.

        Firstly, I never claimed $222/year. Secondly, almost every commercial (i.e. have money to spend) dev team can have their own private enterprise git repo on a number of different VPS's out there for chump change. A few years ago it was different, it was expensive to host your own server. Now it's cheap. Host multiple ones in different sites and you also get redundancy and backup, probably for a lot less than the enterprise github plans.

        • by Shados ( 741919 )

          The time your devops will take to setup that stuff, unless they're way underpaid, is almost not worth it. Github also has brand recognition.

          Regardless of whats worth it or not, a TON TON TON of companies are using private github repos or github enterprise. Maybe it doesn't make sense, people still do it.

          Company i work for does it. And its not that we don't do VPS. We spend more money in hosting and VPS than we do on payroll (a few hundred employees, mostly engineers). Even if you just go and dump git on a h

          • Gitlab's Omni-installer makes it very easy for a standard installation of a private Git server. It's very simple and works great for basic installations.

        • And then someone has to take care of, and maintain that shit. That's time not spend making something useful.
      • I probably paid at least that back when I had private repos to hold my unpublished research while at uni. We used svn on university servers for a while, but corrupted server databases and difficulty backing up the repo were a never ending source of trouble. git and github were rock solid.
    • by Anonymous Coward

      Bbbbbut... cash grab. Instant billionaire. Laugh all the way to the bank.
      It's the new business model.

    • by Anonymous Coward

      oblig:

      https://www.youtube.com/watch?v=I6IQ_FOCE6I

    • I doubt the valuation is based purely on user count. Maybe moreso critical mass - unless they do something monumentally stupid, I can't see any situation in the near future that replaces GitHub as the go-to. I said the same thing about facebook during its IPO, and apparently I was wrong as hell.

      • Github is really nice, but git itself is the core tech, and undermines the heck out of their lock-in. If they push too hard to monetize, a competitor will come along and everyone will just push their repos there or self-host. Some of the ticket stuff might not migrate well, but many of the nice activity plots, etc... that github provides are just visualizations of data that is in your repo.
    • by Dunbal ( 464142 ) *
      Doesn't matter. All that matters is that a bank can find someone dumb enough to pay for it. There's always one.
    • So each user is worth $222? Please... this has all the characteristics of a bubble.

      You're thinking of this the wrong way. Look, Google spent over $3 billion to buy Nest. So, a better way to value GitHub is in terms of fancy thermostats. Here's a back-of-the-envelope calculation: assuming Nest has more customers than GitHub - which is probably quite generous, if not downright wrong - then each user is worth 2/3 of a thermostat sale. Put in those terms, it sounds fairly reasonable.

    • While I agree it's probably an overvaluation, I should point out that valuations also take into account the likely future growth of a service. Github is the dominant repository site, and still growing. Other repositories are being out-competed and shrinking or shutting down. If you put a valuation of $100 per user (more reasonable) with an expectation that they will double in size in the next few years then the valuation is understandable.

  • Git (Score:2, Funny)

    by Anonymous Coward

    while the gittin's good...

  • Who? (Score:4, Insightful)

    by bmo ( 77928 ) on Wednesday June 17, 2015 @05:39AM (#49927869)

    Rob Enderle, principal analyst with Enderle Group.

    This fucking clown? This guy who sided for years and years with SCO? This guy who gets things more wrong than even Dvorak, and at the same time is sincerely not trying to troll (unlike Dvorak) thereby exhibiting his utter incompetency?

    Since when does his fucking opinion fucking matter? How the fuck does one get a gig doing what he does and get even NPR to pay cash money for idiotic punditry?

    >group

    OF ONE FUCKING PERSON. Self-importance, bloviation, and inaccuracy all rolled up into one neat douchebag.

    WHY DOES SLASHDOT, OF ALL PLACES, LEND THIS GUY ANY SORT OF CREDIBILITY BY BLOGGING HIS CRAP HERE?

    Oh, I know, Dice.

    Hnnnnggggghhh...

    --
    BMO

    • Rob Enderle, principal analyst with Enderle Group.

      A highly speculative article on a pump-and-dump marketing site used as the basis of a highly speculative article on formerly popular social click-bait for technology site, Slashdot, said, um, basically, nothing of substance.:-

      [weasel-speak]
      A (un-named) spokeswoman for GitHub (allegedly)declined to comment. A representative for Andreessen Horowitz didn’t immediately respond to a phone call and e-mail seeking comment.
      [/weasel-speak]
      Emphasis and bracketed comments mine.
      tl;dr Merrill Lynch own a chun

  • "... a lot of money in the market looking for homes"

    Yeah. That's what happens when interest rates are zero.

    Analyst/consultant type smells money...

    • "... a lot of money in the market looking for homes"

      Yeah. That's what happens when interest rates are zero.

      Analyst/consultant type smells money...

      And one of the reasons that interest rates are so low currently is because banks are full with people's money, since they are trusted more than various "financial analysts/consultants" who mis-advised them recently - not so productive for the economy to have money buried in bank accounts instead of being invested directly to businesses, nor "healthy" for society to mis-trust its "money experts", but when i read about GitHub's "2 billions valuation"... i can only think: bubbles! [youtube.com]

    • by Rich0 ( 548339 )

      "... a lot of money in the market looking for homes"

      Yeah. That's what happens when interest rates are zero.

      Well, that and the fact that everybody has a dream of spending half their life working overtime, and the other half of their life not working at all but living as if they had the same kind of income. Everybody wants investment growth and is investing a LOT of money, and that tends to create bubbles. I suspect that when all those people start trying to live off of all that saved money the results won't be pretty. Suddenly we move from labor surplus to labor shortage, but we still have that surplus of mone

  • However 2Billion is a big stretch.

  • Just as Google basically ceded the high end enterprise market to companies like Autonomy by refusing to package their software for individual and group licensing, GitHub's enterprise fees were ridiculous for what you got from them. When they openly advertised the prices, it was like $5000/year/20 users. $10000 for 50 users for a perpetual license? A lot of companies could have gotten into that, but a subscription is ridiculous especially when you consider that things like issue tracking are terribly simplis

  • I am surprised (Score:4, Interesting)

    by Daniel Hoffmann ( 2902427 ) on Wednesday June 17, 2015 @08:03AM (#49928513)

    I am surprised that github still does not have a job board on the site, not only is it a MAJOR money income, it is also quite useful for the devs themselves. It is one of the few win-win monetization situations as long as the user can opt-out of seeing the job ads. Pretty much any job ad that asks you to send your github profile would be advertising there.

    • Honestly, as a hiring manager of developers, a github profile link (that contains actual work) will get you hired faster than anything else on your resume.

      A job board/partnership would be pretty reasonable imo.
      • I never liked the concept that developers either have to volunteer help people (at stackoverflow) or donate time (at github) in order to be considered a valuable employee. I mean, for someone with no work history, but beyond entry level??

        • It is kind of unfair really, some jobs allow you to contribute to opensource, others do not. Those who can work on open source projects at the job will have more notable github accounts, that does not necessarily mean they are better than the guy who does not have a github account. It is unfair, but the hiring manager position is understandable, it is one thing to hear about a project and another to see the code.

        • by dave420 ( 699308 )
          If you work with open source packages in your job, chances are you'll come across something which can be improved. If you improve it for your own use, you might as well try to get your changes included in the package by issuing a pull request. It just shows a conscientious developer who understands the value of open source, and you get to look at their code as well. It's pretty clever, really.
    • They do: https://jobs.github.com/ [github.com]

      • Huh, I was not aware of that. They should put those job ads when you are checking out repositories cross-reference the job positing with the repository files for better matches (and of course put a "disable job ads" option on your profile)

  • by Holi ( 250190 )
    But in what world does GitHub have a value of 2 Billion dollars? Do they have some hidden patent portfolio we don't know about?

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