News Update: Google's Sergey Brin: Facebook and Apple a threat to Internet freedom

In an interview with the Guardian, google co-founder Sergey Brin warned that the "open" Internet is in danger from very powerful forces, including Facebook and Apple.
"I am more worried than I have been in the past ... it's scary," he said
Brin identified the significant threats to the open Internet as repressive governments trying to control access to the Internet, entertainment industry crackdowns on piracy and so-called "wall gardens" that maintain more strict control over what can be done on their technology platforms, citing Facebook and Apple.
He said that Facebook and Apple are stifling innovation and risk Balkanizing the Web, and went as far as to say that search engine would never have come into existence if Facebook were dominant.
"you must play by their rules, which are really restrictive. the kind of environment that we collected google in, the reason that we were able to build up a search engine, is the web was so open. Once you get too many rules that will stifle innovation."
Of course, there is some self-interest and sour grapes in Brin's assessment. He would like to make all of the information inside Facebook and Apple apps accessible to search engine's google. A more open Web is certainly rather good for the world but it is also very good for search engine's bottom line. And, search engine's main hard work at social networking, search engine+, has a long way to travel to catch Facebook, which has more that four times the number of users and continues to gain momentum, including its recent purchase of the mobile photograph-sharing application, Instagram. In addition, Apple, which has ridden it is proprietary approach to become the most priceless company in our time, is search engine's main competitor in the smartphone and tablet arena, another area critical to search engine's business acomplishment.
Brin also complained about Facebook making it difficult for users to move their data to other services, presumably search engine+. "Facebook has been sucking down Gmail contacts for multiple years," he said.
Brin's comments on his chief competitors may be the start of an escalating war of words and science as the giant colonizers of the Web continue their competitive quests for dominance. Keep in mind what the Web's inventor Tim Berners-Lee has said:
A related danger is that one social-networking site--or one search engine or one browser--gets so big that it becomes a monopoly, which tends to limit innovation. As has been the case since the Web began, continued grassroots innovation may be the best check and balance against any one company or government that tries to undermine universality.

NEWS UPDATE: FACE-BOOKS UPCOMING IPO

It is not supposed to play out this way -- particularly for a company on the verge of one of the biggest IPOs in history.

Yet Mark Zuckerberg, 27, and standing atop the Internet world, has been quietly thumbing his multibillion dollar nose at the Wall Street process every step of the way -- and there is not a thing America's outlay titans can do about it.

First there was the meeting last month for financial analysts in which Zuckerberg was a surprising no show. Instead, he let his top people -- including Chief Operating Officer Sheryl Sandberg and Chief Financial Officer David Ebersman -- play host to the suits from New York. Zuckerberg wasn't even asked to fly to NYC on his private jet. The three-hour meeting was held at Facebook's sprawling headquarters in Menlo Park, Calif. He apparently had more important things to do.
Good to be the king. Even better to be emperor.

Next came reports that Zuckderberg up and coming to skip the IPO roadshow entirely. That's the one where the CEO suits up and travels around to big institutional investors to boast about the company. It was bad enough for the bankers that Facebook negotiated a bargain rate -- paying the underwriters 1.1% versus the typical 3% to 7 percent to arrange the IPO -- but now the CEO won't even come along for the ride.

Now we learn that Facebook's $1 billion purchase of the photo-sharing app Instagram came as a "surprise" to its bankers, including the lead advisers at Morgan Stanley. Skipping a boring meeting is perhaps understandable, but you'd think Zuckerberg would want go on the roadshow and give the guys charged with drumming up interest in the stock a heads-up that a $1 billion acquisition is in the works, especially since the stock is expected to initialize trading later this month or in May.
As one longtime Silicon Valley VC remarked to me about Zuckerberg's behavior: "Not if you are emperor."

And as resident emperor (at least in the social network world), Zuckerberg is doing things his way because he can. And why not since no one is suggesting that his attitude will dampen interest in Facebook's offering. Which is obviously why the brass on Wall Street are putting up with it. The deal itself, which still needs clearance from the SEC, is expected to raise as much as $10 billion for Facebook and value the company at around $100 billion.

There has long been a divide between Silicon Valley titans and Wall Street. Steve Jobs grudgingly dealt with Wall Street, although the kingdom he created is now the envy of every public company on the planet. google CEO Larry Page gave investors just a few minutes on his first call when he took over as CEO last year, replacing Eric Schmidt.

In some ways, Zuckerberg is following in that tradition; it's not like he rushed to go public. in fact, Zuckerberg fought it. The move eventually came because Facebook over and over bumped up against an SEC rule -- now rewritten as part of the JOBS Act -- that said any private company with more than five hundred "shareholders of record" must adhere to the same financial discloser requirements as public companies.

Peter Thiel, who was Facebook's first outside investor and currently sits on the board, could even be encouraging Zuckerberg to snub the Street's formalities. Thiel, after all, has derided Wall Street for its inability to comprehend Silicon Valley. "There continues to be a certain antipathy by Wall Street banks toward Silicon Valley businesses where they don't quite believe it's real," he told the Financial Times after LinkedIn's stock doubled on its first day, indicating that the banks did a bad job pricing the deal.
While that perceived disconnect might encourage some tech CEOs to work harder to make sure his bankers comprehend the value of the company, Zuckerberg apparently doesn't have those concerns. Or, more likely, he's comfortable leaving that job up to Sandberg and Ebersman and honestly feels his time is better spent worrying about the product and strategy.

"This is why he hired a COO," said another capitalist venturer. "The problem is the rest of the world expects a CEO to deal with these kinds of issues."

The sheer hype of this deal will likely mean that, barring something exceptionally bizarre, big investors will clamor to get a piece of it. it is hard to imagine many potential investors saying no because they want to talk to Zuckerberg.

Eventually, though, the pressure is on Facebook to perform financially, and that might require some face time with Wall Street. The company is set up in such as way that Zuckerberg retains an strange amount of control. He owns about 28 percent of the stock and 57% of its class B shares, giving him outsized voting power. That also gives him outsized responsibility. Will it also lead to a backlash with pubic investors if and when Facebook stumbles?

We'll learn the answer the first time Facebook has a lousy quarter.

Written By: Shannon Martin, founder ThisTailerSucks.Com