Ethan Oberman is the co-founder of SpiderOak, which provides cloud backup, synchronization and sharing solutions. Since its launch in December 2007, the active user base has grown quickly, with customers ranging from individual consumers to businesses to governments.
I recently caught up with Oberman to talk about his company, as well as the Facebook IPO:
Q: What makes your company different?
A: Cloud storage is becoming an increasingly crowded space. Google (NASDAQ:GOOG) is the latest to jump aboard the consumer cloud storage bandwagon with Google Drive. However, the same privacy concerns that currently exist in their other offerings exist equally here — if not more so. As such, we have continually asked the question “What exactly are cloud storage providers able to guarantee in terms of privacy?” We wanted to carve out a corner of the cloud where users could take advantage of this technology in a truly “zero-knowledge” privacy environment.
Internet advertising revenue hit $31 billion last year, and companies like Google and Facebook are bringing in a big portion of that by selling ads and thus by selling user data. Our point of differentiation from companies such as these is that we can never — and thus will never — go down that road.
Q: What’s the impact of the Facebook IPO from a privacy perspective?
A: I don’t think Facebook will be proactive regarding transparency and overall user privacy. Given their sheer size and commanding presence in the social media space, their opaque privacy practices won’t likely impact their stock price in the short term. However, as the fight for consumers’ privacy rights gains traction in Washington and elsewhere — coupled with advocacy organizations dedicated to the task like the Electronic Frontier Foundation — Facebook might be forced to make adjustments to their longer-term revenue model.
Q: What are your thoughts on Facebook buying Instagram? Is there a social media bubble in the Valley?
A: I am not sure I fully understand the Instagram deal. One could postulate that it was an overly defensive move — defining Facebook as unable to innovate internally beyond its core scope.
One word I seem to be hearing much more of these days is “frothy”; it appears no one wants to come out and say the word “bubble.” So, let’s now say that the social media world is starting to get frothy, and Instagram is a good example. Facebook also has huge ripple effects elsewhere, as they were the source of the private-exchange model of raising capital, which everyone from Twitter to Dropbox is now using. Facebook further pushed social into the enterprise by transforming the way people interact both inside and outside their work life. This has spawned the creation of a new market around social business software — fomenting new offerings by tech giants like IBM (NYSE:IBM) and Salesforce.com (NYSE:CRM), and new companies like Jive (NASDAQ:JIVE) and Yammer.
Q: Any final thoughts?
A: One certainly cannot underestimate the power of Facebook. After all, the company has created a new way for all of us to think about communication in this modern digital era. That said, just as Facebook wasn’t around 10 years ago, so too might another wave of “social” concepts sweep through that do a much better job thinking about and understanding user privacy and anonymity.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook”, “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.