venture capitalist jeremy liew gives away his secrets. the prolific blogger and writer talks about the sales of two gaming companies totalling more than half a billion dollars. and the demo conference where great ideas are born finally finds its way to silicon valley. matt marshall gives us a preview of the $3,000 event. our reporters tom giles and kim

mcnicholas joins us. every once in a while you win big. case in point, light speed ventures. a venture capital firm that invest money in startups like playdom, both involved in online gaming. not the shoot them up games that most people think of when they think video games but the new trendy slower paced games like sorority life played on social networks, facebook in particular, they attract millions of players every month. what a venture capital firm wants is a payoff to make its investment public or sell it to a large company. that's what happened to the startups. the big playoff, playdom went to

disney for a deal worth at the top end, $763 million. 763 million smiles for jeremy liew. jeremy liew is managing partner at light speed ventures. he's a frequent columnist to "the wall street journal" and techcrunch. tom giles is with bloomberg business week and kim mcnicholas with "forbes." i say $763 million give or take a bit. that's the high end number. there were several venture capital firms involved in this. but that's still a staggering, staggering number for any company much less one that makes

this. >> this wave of social games has really taken off. >> $763 million. >> you have 275 million sold to electronic arts and they had visitors. seriously. >> i am always happy to take credit for other people's work and in this case the work was the guys that were building the company and the ceo did a terrific job of taking a company that had 30 employees when he started there about a year and a half ago and built it to this amazing organization. 300, 400, 500 people that disney saw the value in. it's been a terrific story. been a terrific ride. we couldn't be happier to be supporters of the company. >> another social gaming company when you look at their value on second market is up in the billions. i want to say in the neighborhood of 4.

will we look back in a couple years and say, wow, playdom could have gone for more had it been able to develop a little bit further and gained more users as an independent company. what do you think about the timing there? >> you know, disney made a very compelling proposition. they put a big number on the table. exciting to the founders. exciting to the management team and they made a case for a lot of the espn properties with disney properties that would allow the company to grow even faster than it could on a stand alone basis. >> ultimately a company that makes this sort of thing whether zinga or play fish or playdom are guys and women that know how to program flash. that's the barrier to entry on this. it would seem that that's too low a barrier of entry to have that kind of valuation. anybody can do this. not make a great game. i'll give you that. it has to be a fun game.

but lots of people can do what these companies do. >> i think this is increasabing true. battle to entry is low but battle to scale is difficult absolutely. playdom was doing tens of millions in revenue on an annual basis. had hundreds of employees. had 12 game studios. was able to publish a game out every month or even in some cases more than one a month. that ability to take multiple shots on goal is important in the gaming business because it is so hit driven. not every shot is going to go in goal. not every game is going to be a hit. being able to build a game factory and keep on building interesting games at scale is really difficult and then getting the ability to take those games and promote them and find an audience for each of them so it's not sitting off

waiting for someone to discover it but finding the people that want to play that game and getting them to open their wallets, that's what's difficult. >> disney does a lot for you there. is it inevitable that social games need this bigger outside company to give them that extra platform that they're going to need. we see that relationship between zinga and facebook for example. we see other deals that have gone down. is that inevitable or will some of these be able to remain independent for a while and get sort of a bigger high profile exit like an ipo? >> i think zinga is closer to having a shot at independence. as you pointed out on second market and in other places there's a valuation that's being attributed to them in billions of dollars. it's not an unreasonable one. absolutely there is opportunities for people to hook up with traditional gaming companies like play fish did with traditional media companies like playdom did. i think there's a lot of interest from the asian gaming

publishers building these free to play games for a long time now but they don't know how to crack that u.s. market necessarily on their own and i think there's also going to be interest from folks like google, technology guys. there's a lot of avenues for which these companies can go down. >> what are your predictions? one of your predictions for 2010 is social gaming will outflow beyond facebook but i would think this deal would be contradictory because i look at it as disney has a strong website. great games. really the ultimate in convergence between television and the internet and yet they are picking up this social gaming company that's really doing well on facebook. it almost seems they want to build up their facebook games. if you look at facebook and you look at disney, they have 54 pages of mostly disney puzzles, maybe dress up lindsay lohan's, my goodness, or what kind of

disney princess are you? >> disney coming into facebook? >> i think you are right. there's no question that facebook is still the primary mechanism whereby people play a lot of these social games but you see signs beyond facebook. microsoft has social games they are working on. yahoo! is promoting social games as well. google through acquisition of slide and social gold is making a play on social games there and we're seeing more than one avenue and especially in asia where there are more free to play gaming for a long time. if you look at the rest of the world then facebook is still very important but becomes less of the whole story. >> you have listed successful flash play companies. is this tapped out? if i watch this saying this is the new hot thing but we've seen

the acquisitions. is this space really mature? >> i don't think so. this space is less than two years old. we've seen phenomenal growth but we're seeing more of it. there are games breaking through in the last couple months that will get to hundreds of thousands of players every day and in some cases millions of players every day that didn't exist two and three months ago. so there is plenty of room for expansion. >> we'll come back with jeremy liew after the break in just a bit.

welcome back to "press: here." a quick reminder at pressheretv.com you can chat live about the show and the guests. we're continuing our talk with jeremy liew. before the break i said we're going to take a break so pick it up from there.

>> i want to know. you mentioned google briefly. we hear rumblings about this big social gaming initiative that they have in the works. the they say we don't want to recreate facebook. we're hearing more from apple about incorporating social gaming into their system. you get players coming in grappling with disney and facebook. how does that change the interesting players for you as a venture capitalist. >> it is terrific for the social gaming industry to have more and more of these avenues for people to discover games to play. not only apple you mention and google but also myspace has been staking all of its attempt around a comeback around entertainment and gaming has been a key component of that. you mentioned earlier that facebook is so central today. that creates a level of depe dependency with a game publisher that with new avenues you can

diversify your risk. that's inherently more stable. >> kym mentioned that you predicted the rise of social gaming. you blog and do op-eds in "the wall street journal," i would think venture capital is a secretive business in which you won't tell people what you think. why are you so involved in publishing your thoughts. >> i invest in internet companies and from internet companies innovation can come from anywhere. mark zuckerberg was a student at harvard. he wasn't a entrepreneur when he started facebook. to reach entrepreneurs with your views to see if they gel with yours, you can start a dialogue and have an investment conversation at the right time is helpful. there are many times i'm wrong

on stuff and views i don't hold. it's not about catching every entrepreneur all the time but the one that have a similar world view to your own and this is a good mechanism to having them find each other. >> venture capital is tight. what are you looking for right now? what types of companies are you looking to invest in? >> i'm excited in a trend in e-commerce that has emerged over the last year or two and that is making shopping fun. if you think about the real world, you go to a mall on a weekend and you see a lot of people walking around shopping without any particular list of things to do but they are enjoying themselves. they are looking to discover something new and be delighted and that manufacturing of finding something great is why they go to the mall. that really doesn't exist very much online today. online you are shopping list hits a bunch of chores that you are checking off. i need to buy visual camera so

i'll check reviews and check prices and buy it and if you think about amazon they have compressed that work flow of shopping down to a level that's one click to buy. and the mindset has been let's get you in and out as quickly as possible to do the things you enjoy. what if you enjoy shopping? you have a different mindset and so shoe dazzle a lot of flash sales companies, a lot of local deal companies like group bond and living social we're also an investor make it fun to shop again so you look forward to seeing what the offer is and look forward to see what the opportunity is. you may not buy it every day but you want to see what it is. it's like when the j. crew catalog comes to my house. if i'm not looking for anything, i may put it directly in the recycling bin. my wife even not looking for something will look at it and

circle a couple things and dog here a couple pages and it's fun. it's enjoyable. that idea that mindset of making shopping online fun again that is just fun to look and who knows what you'll discover, that's an overarching trend where we see a lot of it. >> jeremy liew is with light speed venture partners. we appreciate your time. up next, why it took years for a high tech conference to find the way to silicon valley. we'll talk with demo conference's matt marshall up next.

welcome back to "press: here." what do tivo, palm, leap frog and etrade have in common? they debuted at the exact same place. that place is the demo conference. if high tech were to have a ball, this is it. sales force.com had its coming

out party here. vm wear, 2 billion in revenue now debuted here as well. it's a gathering entrepreneurs, venture capitalist, angel investors and the press and it's never taken place in silicon valley until this year. a single ticket to attend is $3,000. matt marshall is the new executive director of the demo conference and also runs the blog venture beat. among the featured speakers this year, two guests on "press: here" in the past. finally in silicon valley despite that most of the companies that have debuted are from silicon valley. what took so long? >> people are more efficient these days. they're trying to be more productive. we had it in san diego and places like paul springs where people go off campus and stay for a couple days and network well. we realize we were missing

energy and excitement from silicon valley itself where you have all of the deal makers, investors wanting to be efficient with their time. we just -- i came in as executive producer this year and decided enough is enough. talked to enough venture capitalist who couldn't make it out to san diego or palm springs but they would love to just drive down 101 to santa clara which is where we're having it. >> why do companies need to go to your conference? why do they pay $18,000 to go on stage for six minutes when they can come on "press: here" and interview with scott mcgrew and get on for free. >> or participate in other conferences which should remain nameless but that make a point that they don't charge anything and have actually techcrunch in particular has sort of -- there's been a lot of trash talk

there. are you past that? >> thanks for asking a question. it gives me an opportunity to explain the background. a lot of conferences you go to you will walk in and all of a sudden you see oracle with $100,000 sponsorship taking over the signage. and you have a startup in the back that wants to be seen that's not being seen. what demo is all about is having the startup or company launching the product to be front and center on the stage with the best production value that you can get. hooking up with av, switching cameras back and forth and their demo comes across well. we have a demo coach coaching them on how to speak. you didn't coach me how to speak before i came here. writing the script out. making sure that their marketing works. we have a social marketing team that helps them use twitter and facebook and other messages to get the word across. we have press help writing press releases for them.

there is a real value there. if you have a microsoft or even adobe that come back and launches at demo. it's not just startups. they want the strong production values. if you were going to market with a product and you need to get market share, jeremy liew who was just on with playdom and asked why he didn't hold out longer, because he lost to zinga. that's the front runner. this is the time where speed is of essence. you have to move quickly. you have to grab market share as quickly as you can. why not get to a conference where you have 100 reporters, not just you guys, but hundred reporters and have it propagated to the world immediately. that's what we offering. $18,000 doesn't sound too bad in that context in my view. >> there's the ability with the internet now to get a lot of popularity very fast. there are -- i can't think of a startup off the top of my head that starts one day and is

talked about the next. it goes that fast. how do conferences deal -- i mean conferences in general, not just demo conference, with the fact that the internet moves so fast that i heard about it and will invest in that right now? >> there are two sides to the coin. the world is flat. anyone can do this now. and anyone can develop a product. you have companies with engineers in russia and the business team here. the flip side is that you have an amazing amount of speed. that's one of the trends we're seeing is the cloud is allowing the delivery of information in realtime. you've got to move fast. the reason to come to a conference is actually to get that out as quickly as possible. get the word out. if you're not going to do it, someone else is. >> you can't delve into specifics. can you give us a preview of what kinds of companies and trends in startups we'll see at

this year's conference. >> especially across singapore, russia versus the united states. >> i've been traveling to all these places. i spent six months trying to find the best ideas and went to russia and singapore and across the country. there are 70 companies launching. it's private because we're launching at the event. i can't really talk about the names. what we're seeing is a continuation of jeremy liew whos was just here talking about where there was one shopping where you go online and click a button on amazon and it's really efficient but now what he's doing is investing in a company that's making shopping fun bringing the catalog page, flip phenomenon online and that's what we're seeing across the web right now. i find that's most exciting. not only are you looking for a direction, you and the information but you are bringing on your social activities at the same time. what we're seeing are companies

letting you find doctors without any intermediaries and finding real estate without a broker and all kinds of other analogs with bringing your virtual life, everything and also taking it mobile and having friends there as well. >> when you say online, are you seeing it with the ipad and iphone which is almost sort of its own subset or are you seeing companies saying regardless of the platform, we'll be there. >> we'll see a lot of that. we're going to see amazing things at demo on tuesday and wednesday. you will control your pc with your ipad and iphone. we'll see a company doing that. you will be able to stream anything from your laptop screen

to your tv. people are doing that with wires now and there is apple that is doing it wirelessly but you have to have your itunes library but this technology is going to allow you to do it with anything wirelessly through usb antenna. >> when you looked at companies with the popularity of the ipad, what percentage of companies that pitched to you really were focusing on the ipad and what percentage did you limit it to? you probably had to say enough with the ipad innovation. we need to bring in another company. >> and partly what you're seeing is an excitement around those platforms and again we were just talking about social shopping and there's a company called groupon for example that are offering coupons online and great discount deals. everywhere i went there are me-to companies that are excited around these iphones.

we reduced the number of companies that weren't full of me-too companies. >> what was the one that you said oh, god, not you? not a brand name but was it the online coupon companies. we're starting an online coupon company. >> the coupons in 2010 were really the three or our four companies in each city that wanted toin aggregate coupons. social sharing coupons. it just went on and on. other than that just there are a lot of people in their garages wanting to launch the latest website. want the e-commerce shopping. one or two guys in the garage focused for six months and not realize that there's a lot of companies out there that hit the market having a hard time to s distinguish themselves. >> $3,000 to attend and not

present i'm getting my money's worth to see what the future is? >> close to $3,000 you can get in and you'll be not only seeing these 70 companies launching products but you're in front of an or with an amazing crowd. you have entrepreneurs and you've got ceo of s.a.p. so there's networking in the hallways. >> matt marshall. thank you.

>> hp's suit you don't think will go anywhere. >> what we think will happen is you know hp has sued to block the move to oracle. there's concerns about trade secret and confidentiality. in california the law really

tends to favor mobility of workers letting people who have expertise move from one company to another. we think that's going to carry the day. what's most likely from what legal experts have told us is that there's going to be a settlement out of court, maybe some concessions made by mark and the people at oracle in terms of what different kinds of things he can recuse himself from for example. but probably a settlement. >> thank you for your time. that's our show for this week. my thanks to jeremy liew and matt marshall. we'll be back next week. thank you for watching.