Disqus and Zeta

Today, our portfolio company Disqus, which makes the software that powers the comments on this blog, is announcing that they have joined the Zeta Global empire.

Zeta Global operates the largest independent marketing cloud for enterprises. Zeta competes with companies like Salesforce, Adobe, Oracle, IBM, and others to provide enterprises the marketing services they need to grown and sustain their businesses.

Zeta Global has grown mostly by acquisition and they operate many different businesses that they have bought over the years. They will continue to operate Disqus as an independent service and brand. The Disqus management team have joined the Zeta organization and I will be joining the Zeta Advisory Board in connection with this transaction.

The Zeta management team understands that community is part of the marketing equation and they understand that Disqus powers more communities on the Internet than any other tool, by a wide margin. I expect that Zeta will continue to invest in the Disqus comment system to sustain it as the best community tool out there.

Personally, I am happy that the Disqus founders and team have found a transaction that allows them an exit while finding a good home for the Disqus comment system in the process. They have been building Disqus since the summer of 2007, over ten years. They have done a great job staying focused, winning the market, getting profitable, and now finding a great exit. It has been a pleasure to have a front row seat to that ride.


Comments (Archived):

  1. JamesHRH

    Congratulations are in order.It was a great idea and well timed.

  2. JimHirshfield

    Congrats to Jason and Daniel. Zeta’serve to celebrate.

    1. karen_e

      And you played a huge role as well

      1. JimHirshfield

        Huge is an overstatement. But thanks.

    2. obscurelyfamous

      Thank you @JimHirshfield:disqus — I know that some of Disqus’ best years were when I was fortunate enough to work with you!

      1. JimHirshfield

        You’re awfully kind. Thanks.

      2. The Terminator

        You guys make it very hard to contact you. So here I am on what looks to be a public board.For some reason some of my posts are being blocked. Marked as “Pending”. That never changes. It’s always pending.I have read them several times and there is nothing offensive, wasn’t fighting, no four letter words. I see nothing in the post that would stop it.A while back you blocked a post and I copied and pasted 5 times until it went through.Am I being blocked for a reason?

      3. The Terminator

        Thanks for the reply

  3. cavepainting

    Congratulations to everyone involved! For a company that raised ~$10.5 M, this seems like a great exit (rumored purchase price of ~$90 M). That should be a >10x return for early investors.

    1. jason wright

      for such I high profile consumer web brand that price seems de minimis, although I’ve always struggled to understand where the long term revenue streams will come from in this brave new world of blockchain decentralisation. Disqus seems vulnerable to it.

      1. Vineeth Kariappa

        That may be the reason they sold 🙂

        1. jason wright

          I sense it.

      2. sigmaalgebra

        What does Disqus have to do with blockchains?By reading AVC and some other Disqus fora, it becomes clear that running a good forum is not trivial; so, there’s a lot more to it than blockchain, even if there is a role for blockchain at all.

        1. jason wright

          a Disqus-type of service running on a token based model seems inevitable, and an enhancement of this Disqus product I am using to type this reply.Can Disqus make the change from old to new, or is its architecture ‘fixed’ and not reconfigurable to token economics? I don’t know.

          1. Michael Elling

            Do you see Kik as a close proxy to what you describe? Why couldn’t the two companies have formed some JV to accomplish what you describe?BTW, I think a lack of “inter-working” at scale and the myth of immutability of each network (or sub-network), will become an issue across the crypto and blockchain ecosystems.

    2. LE

      Parsing Fred’s language above and seeing the cost per customer acquired I don’t think I would label this as a great exit.

      1. cavepainting

        You are correct and I am sure they would have wanted a bigger exit for such a strong brand. But $90m over $10.5 as cash on cash is not that bad ( if reports are true). Of course the specific returns for investors depend on the valuations at which they put the money in. I was thinking that people who got in really early at <$10m valuation would still see a decent return.Also do not know if the company raised any debt and if they have had down rounds. Hard to figure out the actual return for a specific stakeholder without knowing all that transpired.

        1. PhilipSugar

          See my comment to LE.The one thing I am fairly certain of is that the rumors didn’t come from anybody that had the deal book. (Never can be sure)If I had to guess and that is a total guess, they came from an employee with options they were cleaning up, and if that’s the case they only know the option clean up price.

          1. LE

            I can also see a situation where incorrect info was leaked in order to advantage zeta in future acquisitions. In that case (and generally) having a lower number being ‘public’ is helpful. That lower number then helps set the expectations (even given that all companies are different) of another company they are interested in acquiring.My thoughts come as much from what I think about disqus as a company as well as what Fred said (his actual words and tone) more than the number.Like this:I am happy that the Disqus founders and team have found a transaction that allows them an exit while finding a good home for the Disqus comment system in the processie ‘allows them an exit’. and ‘found a good home for the comment system’.

          2. PhilipSugar

            I don’t know, and sure somebody that knows could leak information both high or low.When you sell something you have worked on for a decade (overnight success anybody?) you don’t want to sell it to an a-hole, it is your baby and the employees are your kids. These can come in many flavors: P/E, a company where you can’t stand management, one that is really just going to merge you in and shut you down.As far as exit, if you do a merger with another smaller company that is not an exit, selling to somebody that has raised $250mm probably is, again I don’t know any terms.

          3. LE

            you don’t want to sell it to an a-hole, it is your baby and the employees are your kids.All else equal (and it rarely is) sure. But in the end nothing heals like cold steel [1] . Nobody is taking a haircut on a deal because of soft factors.If it’s close I can see it happening. Or if the founders intend to work later then definitely. (Like you for example).Also I am thinking that a companies investors certainly don’t care about if the buyer is an ahole. If I was an LP I certainly wouldn’t. If I own stock in a public company as a shareholder even minor why would I care?JLM would definitely care if his tenant(s) were assholes and maybe not rent to them. But the company that buys the 1000 unit complex he is selling? Take the money and spif everyone you care about that works for you to solve that issue.[1] From ‘House of God’ ie ‘surgery over medicine’.

          4. sigmaalgebra

            Sounds to me like Disqus should just have gone public on their own instead of getting public company stock (I’m guessing that Zeta is a public company) via M&A. E.g., the stock market seems high now;so, do an IPO?Reason? Disqus earnings were not yet high enough to excite the investment bankers but the Disqus communities did have good value for a company focused on marketing?

          5. cavepainting

            You are 100% correct. Most investors don’t care.I have seen situations where even founders don’t care what happens to the company and its employees post acquisition as long as they felt they were making out ok.Life is not often the way idealists want it to be. Human nature is complex, messy, and unpredictable, especially when things turn out badly.That does not mean we should not aspire to hold ourselves to high standards of empathy and understanding. Just saying that in the real world, things get fucked up very often.

          6. LE

            Look one of my best employees ever (back in the 80’s) was an graphic designer that was just everything you would always want in an employee. So I went out and bought an expensive complex machine (Linotronic L300) that I knew she could operate. And she knew I was buying the machine and so on and helped in the evaluation process. That machine was not only expensive it was my money on the line in future payments. Not OPM. I also bought that machine because I had a big customer that gave us work and was happy and loved to deal with us. Then the ‘risk of being in business’ sets in. The employee told me a week before delivery (or something like that) she was leaving to go out on her own and the big customer decides to bring the work in house. Poof. And I am saddled with a machine, large monthly payments (at 15% 80’s interest) and the loss of, at the time, one of our largest customers.And that is why they call it business. When it came time to sell, and I had someone who was ready to buy, I sold. The buyer was fine but honestly even if he was an ahole I would have sold to him for what he offered.My manager who was also somewhat of a friend was miffed that I sold because given how young I was. He never thought I would sell and of course I kept it secret from him as long as I could. I had other reasons for doing so but in the end he could have also left if he had a better opportunity there were no contracts etc.He ended up leaving after two years and started his own company and is still at that today. He is probably still pissed but as Joanne said on her blog the other day ‘you have to be cruel to be kind’ applies.

      2. fredwilson

        “great exits” are few and far between. this was a good one.

        1. PhilipSugar

          I would say your “bar” for great exits is very high. I’m sure for many people this was great.

  4. jason wright

    MeetupDisqus…pattern recognition?

  5. pointsnfigures

    Congratulations. Congrats to Disqus. Liquidity is a nice thing.

  6. creative group

    CONTRIBUTORS:Exits, exits, exits. Earning season for VC’s? No?

  7. LIAD

    disqus was always one of my favorites from the usv cohort.seemed like they eschewed the startup/tech hype and just tried their hardest to build a solid product.over the years felt on occasions they performed excellently whilst having had the deck stacked against them whilst on other occasions they may have fumbled easy wins (could have owned THE INTEREST GRAPH).glad they’ve achieved a win. i hope the product isn’t dismembered.

    1. Donna Brewington White

      A favorite here too. Definitely has impacted my life. Also appreciate how the team has engaged with the community and sought feedback over the years.Thank you, Disqus team, and major congratulations!

    2. bsoist

      disqus was always one of my favorites from the usv cohort.seemed like they eschewed the startup/tech hype and just tried their hardest to build a solid product.Agreed. On both counts. I was not always sure they executed perfectly along the way, but no question in my mind they cared about the product.

    3. sigmaalgebra

      “Interest graph”? IIRC there used to be Yahoo Groups with hundreds of fora, each with a focused interest. Then there was Google Groups or some such. These didn’t seem to make a big splash, either individually or even all together.As far as I have seen, Hacker News is the main forum with a focused interest.So, it looks like mostly “interests” don’t do well spawning fora, i.e., discussion groups, communities, etc.Or, there are a lot of people out there with a lot of interests — e.g., Google search is a big deal, and I’d guess that nearly everyone who does a Google search does it for an “interest” — but somehow those interests have a tough time spawning significant fora.Or, maybe if I took a look, actually got some lists of fora at Yahoo, Google, Disqus, etc., I’d find a lot of fora spawned by “the interest graph”. Maybe.I’m trying to understand: My startup is partly related to “the interest graph”.What do you think?Q 1. E.g., why aren’t there more Web sites as active as Hacker News?Q 2. Even before the Internet, there was software for fora called bulletin boards (BBS). Some of the software was fancy, and there was at least one, e.g., long used heavily by eGullet, that was fancy and used for the Internet. But apparently the growth was not there?Q 3. There’s a fundamental problem: Usually the quality of the voluntary submissions is not very good? The quality on Hacker News is relatively high due to some severe moderation and the fact that people are both reading and writing about their careers in a very serious industry?Q 4. E.g., how could “the interest graph” be “owned”? E.g., I’m guessing that for now there is no practical way to “own the interest graph”.

  8. JLM

    .Bravo! Well played!Disqus is one of those things which I think — “How did the world function before Disqus?”I am surprised you would want to be on the acquirer’s board when you seem to have gone to the paywindow?JLMwww.themusingsofthebigredca…

    1. LE

      you would want to be on the acquirer’s boardAs I say ‘when something doesn’t make sense there is probably something you don’t know that is going on..’.Fred going on advisory board could mean any (or none) of the following:a) Payout not a cash purchaseb) Future investment in Zetac) Fred has extra time on his hands to help (haha)d) Zeta to acquire other USV companiese) None of the above

      1. PhilipSugar

        If Fred is on the Advisory Board (that very specifically is not Board of Directors) he gets a look into how this company works and what they think. They’ve acquired lots of companies. They get Fred’s knowledge, but he has no responsibility. I’d say that’s a win win.

        1. LE

          f) Merger between a USV company and Zeta

          1. PhilipSugar

            Don’t know.I don’t speculate on potential deals: Even the company doesn’t know until the ink is dry.Deal terms? Unless you have the deal book, you really don’t know.I know that when people have speculated about deals I’ve done and tried to get the details by telling me their speculation it is kind of annoying as you know they are really wrong but you can’t say anything.It could be anything from an all stock deal to an all cash deal with anything in between, with all sorts of terms, that change the mechanics and valuation of the deal.

    2. PhilipSugar

      Advisory Board not Board of Directors. Who would not want to have Fred on their Advisory Board, and for Fred he gets influence but not responsibility.

      1. JLM

        .Fair play to you. I think when you sell something you should close the door after you.I doubt this is the highest and best use of Mr. Fred Wilson’s most important asset, his time.JLMwww.themusingsofthebigredca…

        1. PhilipSugar

          I’d say being on an Advisory Board with Ester Dyson and Edward Mathias, Managing Director of the Carlyle Group might not be a waste of time, but that’s just me.

          1. JLM

            .You Googled too hard. I thought they sold it to the Zetas, the Mexican drug gang. My bad. [This is a joke.]JLMwww.themusingsofthebigredca…

    3. fredwilson

      advisory board

  9. Tom Labus

    A VC without comments seems a very long time ago!!Congrats to all.

    1. Steven Kane

      actually avc.com had comments since inception. just not disqus 😉

      1. fredwilson

        yup. typepad comments, which ended up full of spam. it was a nightmare

  10. DJL

    Congrats to the team and AVC. Awesome tool.Just make it part of the deal – Never, EVER censor! With great reach comes great responsibility.

  11. WA

    Seems like yesterday comments were posted directly to the blog. Wow. 10 years. Whoosh. Congrats to all on the next decade.

  12. karen_e

    Proud to have glued Disqus on to my trade association’s blog after using it here for a year or two. It’s still in use over there, too.

  13. Kirsten Lambertsen

    Congrats to everyone involved. Def a smart move by Zeta 🙂 I’ve felt for a long time that comments data is under valued.

    1. Pete Griffiths

      Deeply agree wrt comments

    1. Ronnie Rendel

      Now there’s a business pioneer! Just kdding. Also, Fred & Co Mazal Tov on Blockstack. Tell me are there any AVC companies that don’t exit? What’s gonna be with SoundCloud? WorkMarket is also wicked awesome, but they got some time before the world catches up to them.

  14. Arnold Waldstein

    Big congrats to all.

  15. BillMcNeely

    Congrats! I love using Disqus to find comments of mine I can turn into blogs

    1. bsoist

      Love this comment! IMHBAO, a lot of comments should be blog posts instead. 🙂

  16. mplsvbhvr

    Congrats all!

  17. Michael Wiley

    It was a pleasure working with you, the board and the Disqus team, Fred.

  18. Eric Friedman

    What a ride – learned so much from this company, this team, this deal, and the platform.

  19. Adam Parish

    Because of your blog, Fred, I’ve really grown to appreciate Disqus. All the best to the Disqus team and keep up the great product management under the Zeta umbrella.

  20. Mario Cantin

    Congratulations to all involved!

  21. Ro Gupta

    10 years flies. Thanks to Daniel, Jason and Fred for allowing me to be a part of it. A little #tbt below of an early, rejected logo concept. Zeta has permission to this IP as well.https://uploads.disquscdn.c

    1. ryanv12

      More recent onlookers see your portrait painting on the wall and wonder, “Who is that?”It takes me and maybe only a couple of others to keep the history revisionists from taking it down.

    2. Kim

      I miss this.

      1. aftab

        most welcome on my websitehttp://sportscentre4u.com

  22. sigmaalgebra

    Disqus is fun to use. It appears that the Disqus people wrote a lot of good code. Writing good code and seeing it run is fun stuff! It appears that the Disqus people made quite good use of JavaScript: For my startup I have not written even a single line of JavaScript, but for what my Web pages do JavaScript is not needed. But, for Disqus, good use of JavaScript! Gee, who’d thunk that basically an at first quite simple word whacking markup language could become such complicated and widely used software!

    1. Michael Elling

      Need to give the user more control in order to increase engagement. The internet (TCP-IP) stack is imbalanced with respect to risk. Disqus balances the risk a bit, but (riskless) control is still mostly on the side of the publisher; not the reader/commenter.

  23. obscurelyfamous

    Thank you Fred and the AVC bunch for the ongoing support, appropriate complaining, and being decade-long beta testers for our new features.Disqus and the AVC community are like siblings, if not fraternal twins. At the very least, first cousins. I’d like to think we grew up together. Myself and Disqussers, past and present, will forever be grateful for everything we’ve learned about blogs, commenting, and communities from this group of Internet semi-experts. 🙂

    1. fredwilson

      nice comment daniel.

  24. sigmaalgebra

    Okay, now that I read the TechCrunch article athttps://techcrunch.com/2017…I see, e.g., as in the articleDisqus gives these marketers the ability to target users based on their interests. Okay, new, better ad targeting from Internet user input is the key source of the planned revenue for my startup.Uh, likely I have better data and targeting applied math than Zeta with Disqus!E.g., from the article,Zeta Global’s acquisitions have typically focused on more fundamental technologies like AI and machine learning, … sounds like Zeta is already behind and off the field!Sounds like the Zeta guys saw that computing was important, heard a lot of hype, and got sold that the best computer programming was from the computer science community and, thus, went for “AI and machine learning”.Uh, Zeta guys, mostly computers will do what they are told. And computer science guys are good at telling computers what to do and somewhat more. But, really, for ad targeting, what is crucial is what to tell the computers to do.So, the computer will manipulate available data and produce results. Those manipulations, especially since a computer does them, are necessarily mathematically something, understood or not, powerful or not. Well, for more powerful manipulations with more valuable results, far and away it is best to proceed mathematically. It’s called applied math and has since Newton been the main tool of physical science, engineering, and technology.For your “AI and machine learning,” they have much that is good and new. However the new is not very good and the good, not very new.Ah, what was it that P. T. Barnum said, IIRCA sucker is born every minute. or was it,A fool and his money are soon parted. Uh, Zeta guys: Plainly, honestly, bluntly, solidly, current computer science “AI and machine learning” are 2% content, 90% hype, and the rest water.Instead, the good stuff is in original pure/applied math usually based on some advanced pure math prerequisites.Bluntly, factually, too many chaired profs of AI in the best academic computer science departments don’t know even how to write math and don’t much know how to read it and next to nothing on how to do it.Look, it’s totally simple to see: The US, especially in US national security, is just awash in beautifully conceived, planned, and executed and spectacularly successful projects in technology taken broadly. A good example is GPS. In these projects, pure and applied math had usually the most important seat at the table. Well, so far essentially none, zip, zilch, and zero, of these projects had “AI and machine learning” in the room or even in the building.My interests are in business, not publishing academic research, but, Uh, I’ve done single author peer reviewed publications in applied math in high quality journals of original research and several co-authored papers in AI in low quality journals and conference proceedings. I’m proud of the applied math publications. Damn those AI publications!With some pleasure, one of my applied math publications totally blew the doors off the AI work! There I used some pure math work in group theory in abstract algebra and measure preserving as in ergodic theory. You won’t find either of those in your “AI and machine learning”, and nearly no AI or machine learning chaired prof even knows what measure preserving is. Indeed, for that paper, a chaired prof of computer science at MIT and editor in chief of one of the best computer science journals wrote me “Neither I nor anyone on my board of editors has the mathematical background to review your paper.”. He was correct.But a chaired professor of high end EE and editor in chief of an Elsevier journal did have the background.Uh, EE went through a period: They were good with alternating current, resistors, capacitors, and inductors, moved into vacuum tubes and transistors, got good with Maxwell’s equations, but then wanted to know what the heck to have the hardware devices actually DO. So, from some of EE we got some good applied math, e.g.,R. B. Blackman and J. W. Tukey, The Measurement of Power Spectra: From the Point of View of Communications Engineering.Michael Athans and Peter L. Falb, Optimal Control: An Introduction to the Theory and Its Applications.Eugene Wong, Stochastic Processes in Information and Dynamical Systems.Blackman was at Bell Labs and contributing to why the Internet works so well now. Tukey was at Bell and Princeton and long a pillar of pure and applied math and statistics. Athans was in EE at MIT, and Falb was in applied math at Brown. Wong was in EE but later did, right, relational database. Tukey, of course, was as in the Cooley-Tukey fast Fourier transform that did and continues to revolutionize signal processing, for the US Navy, oil prospecting, and much more — some really nice applied math. It was nice to me — paid for my high end Camaro, some good French wine, etc.Nice books!This point is, it’s applied math, guys, not “AI and machine learning”. It’s not about me, but I can give you the benefit of some of my experience.Guys, we’ve recently had again, once again, over again, yet again, one more time, an AI Spring of Hope. Soon we had an AI Hot Summer of Hype. We’ve been in a AI Fall of Failure. Now we are starting another AI Winter. It stands to be a long, cold winter, guys.You should expect something else from yet another potion of mysterious, “we don’t really know why or where it works” snake oil? Guys, serious work knows very well just what the heck it is doing and doesn’t drink snake oil.Zeta guys, with your “AI and machine learning” you bet on a sick horse, and the owners of that horse saw you coming. Sorry ’bout that!I know; I know; I know; sometimes it’s possible to make money in finance of companies without knowing much about what the companies are doing. Sometimes.But an old story was that horse buyers were good at checking out the health of horses. Eventually finance in technology will conclude that it is also important to evaluate the technology.Uh, doing that won’t be nearly new since, thankfully for US science, the NSF knows this! Thankfully for US national security, so does a lot of the US DoD! Thankfully for US health care, so does the NIH.For me? I’ve worked in technology on a lot of projects with a lot of people of wide variety. Some of the people were excellent, some of the best in the world. Then it took me a long time finally to accept what I was seeing: Finance for technology doesn’t evaluate, consider, or understand, or even try to understand, the technology!Since I do understand, especially for my chosen work, I have an advantage. I can safely outline the high level lessons because it will take 10+ years for anyone to do anything that might compete with me from what I am saying!Years? Yup: First they will need a good ugrad pure math major. Right, NOT computer science. The relevant computer science is next to trivial. The math is big stuff, high, center crown jewels of civilization. Biggie difference. And that’s not even the openers in this game!In terms of the first Indiana Jones movie, computer science is “digging in the wrong place”.

  25. Drew Meyers

    Huge Huge fan of Disqus, always have been. Congrats to Daniel and the rest of the team.

  26. Michael Elling

    You put it in economic terms. Shame on you. Haven’t you heard? Bitcoin/blockchain is a new religion. http://bit.ly/2BMS3FS Jump on the bandwagon. Get on the moral high-ground before it is too late!

    1. creative group

      Michael Elling:We hope that response was loaded with 100% sarcasm. If BTC is viewed as a new Religion we claim it is deep in heresy.No fundamentals to guide no investment from us unless it starts under $1.00 (Speculation)Captain Obvious!UNEQUIVOCALLYUNAPOLOGETICALLYINDEPENDENT