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May 8, 2008

Shawn Fanning Finally Gets A Real Payday: Electronic Arts Buys Rupture For $30 Million

Erick Schonfeld

63 comments »

Shawn Fanning, best known for founding Napster, has a new job. He will be working at Electronic Arts, which is about to buy his social-network-gaming startup Rupture for $30 million, according to sources with knowledge of the deal. His co-founder Jon Baudanza will also join Electronic Arts. We first heard of a possible deal back in February, but did not know who was the buyer. Rupture’s first product was a social network for players of the online video game World of Warcraft, but it only came out with a beta version and kept delaying its public launch.

Electronic Arts is buying the company for its technology, since it doesn’t have a lot of users (it was only ever in beta) and never launched the second version of its service. Presumably, creating social networks around massively multiplayer video games is a key component of its online strategy. The company has not yet officially announced the acquisition, but it is expected to do so soon. [Update: The closing of the deal is imminent, but there are still some papers to sign].

Rupture had previously raised only $2.5 to $3 million in an angel round last summer from investors including Ron Conway, Joi Ito, Reid Hoffman, and Baseline Ventures. Although this is not Fanning’s first startup, it is his first real payday. Napster helped change the music industry, but it went bankrupt doing so. And although he just sold his second startup SnoCap to Imeem, that was more of a mercy acquisition. It is doubtful that he made more than a few pennies on that sale. You know what they say. Third time’s the charm.

CrunchBase Information
Rupture
Shawn Fanning
Information provided by CrunchBase
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This entry was posted on Thursday, May 8th, 2008 at 3:12 pm and is filed under Company & Product Profiles. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Trackbacks/Pings (Trackback URL)

  1. TekROI » News Wire » Payday for Shawn Fanning (formerly Napster)

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  2. Did I call it or what??? EA buys Rupture! | The Greenskin

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  3. Shawn Fanning negotiating to sell social gaming company Rupture for $30M » VentureBeat

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  4. WiiZeels.com » Blog Archive » EA buys WoW social networking site Rupture

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  5. EA buys WoW social networking site Rupture | Warcraft-News.com

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  6. MMO Clerks » EA buys WoW social networking site Rupture

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  12. MMO Clerks » EA purchases the Rupture social networking site

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  13. myxbox360blog.info » Blog Archive » Rumor: Napster creator to join EA

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  14. funXgame.com - all about gaming and fun » Blog Archive » Rumor: Napster creator to join EA

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  15. Creador de Napster vende foro de Wow en US$ 30 millones » El blog de KnxDT

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Comments

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  1. Shafqat

    May 8th, 2008 at 3:16 pm

    For someone who disrupted an entire industry and changed the way an entire generation thought about music, he deserves it. Well done!

  2. Azhar

    May 8th, 2008 at 3:27 pm

    Well done, you really changed the way i bought music…umm i mean download music.

  3. Simon

    May 8th, 2008 at 3:32 pm

    reminds me my 2001 gamers-oriented social network http://www.esfrance.net and just makes me think i fucked up something somewhere :D

  4. Rex Dixon

    May 8th, 2008 at 3:33 pm

    Yup, good guy finally gets his payday. Nice.

  5. Biznews

    May 8th, 2008 at 3:35 pm

    LOL ! It looks like its the same 5 people that keep starting companies and selling them …. He will probably start more successful companies .

    Congrats !

  6. nitsuj

    May 8th, 2008 at 3:42 pm

    “LOL ! It looks like its the same 5 people that keep starting companies and selling them ”

    Name brand effect

  7. Bill

    May 8th, 2008 at 3:55 pm

    Wow. I guess legal _is_ cooler.

  8. jim

    May 8th, 2008 at 4:16 pm

    Yay, Shawn got money. What did EA get? Doesn’t look like much…

  9. Dzaaam

    May 8th, 2008 at 4:20 pm

    Congrats 2400 BAUD!

  10. jon

    May 8th, 2008 at 4:28 pm

    When was Napster, 5 years ago? more? this is guy persistent . I am glad it paid off.

  11. EH

    May 8th, 2008 at 4:54 pm

    EA is like Microsoft, they have to keep buying things so that they can make the company look like it’s going somewhere.

  12. Fabian Schonholz

    May 8th, 2008 at 5:09 pm

    Congrats!!

  13. nitsuj

    May 8th, 2008 at 5:09 pm

    I thought Seth Green started Napster?

  14. Larry Chiang

    May 8th, 2008 at 5:11 pm

    Congrats Mr Conway!

    I’m glad I won’t have to worry about your deal flow - kidding! Congrats

    p.s. I had to zing you in public because I was at the theatre (on comp tix) and there you were in a huge ad– Nice that you model too.

  15. Larry Chiang

    May 8th, 2008 at 5:13 pm

    @nitsuj hilarious. I think he got an IMDB out of it too with a cameo??

  16. Mrinal

    May 8th, 2008 at 5:34 pm

    Dont forget his neat VW Ads on TV

  17. Alex

    May 8th, 2008 at 5:38 pm

    Fanning great job!!! Congrats….. I will go out on a limb and predict your next company will be worth hundreds of millions. The money you’ve made here will give you some breathing room to come up with the next one…

    As fas as for the investors - beautiful text book 10x return on what should be the higher end of an internet investment these days. Congrats!!!

  18. Arthur Madrid

    May 8th, 2008 at 6:13 pm

    Congrats to Shawn! I am a fan…and i appreciated the three projects. Even if the last one wich paid does not seem to me the most innovative. So there is a justice in business or maybe…entrepreneurs are believers and believers get always right one day.
    My conclusion: Games is the only Entertainemnt industry were things are easy to make legal.

    Arthur http://www.wixi.com

  19. Anatoly

    May 8th, 2008 at 6:22 pm

    Actually, they are paying him in itunes credits.

  20. Jay

    May 8th, 2008 at 6:24 pm

    Congrats to Shawn.

  21. EH

    May 8th, 2008 at 6:25 pm

    19: Not Pogo?

  22. Brooke

    May 8th, 2008 at 6:58 pm

    Actually, EA has a new MMORPG releasing this fall and Rupture seems like the perfect service to launch their integrated social network. It wouldn’t shock me to see a Warhammer Online port for Rupture, which is hilarious since I just wrote a (prophetic?) post about the need for MMORPGs to extend beyond the game client this afternoon.

  23. Kevin Allman

    May 8th, 2008 at 7:04 pm

    congrats to shawn..now everyone knows napster wasn’t a fluke hehe…he’s a pretty smart guy and still very young

    http://www.blubert.com - the cool stuff in tech

  24. DaveS

    May 8th, 2008 at 7:08 pm

    Heh… empty social net is worth #30M? Wow!

  25. BuzzCritic

    May 8th, 2008 at 7:11 pm

    Well played sir…well played

  26. gregory

    May 8th, 2008 at 7:15 pm

    @simon #3 above…

    luck, timing, karma, universal flow…. there is no real explanation for who succeeds and who doesn’t, in any field… art, tech, whatever…. people think, ha, I did it… not true… life does it, it just happens, the ideas come from who knows where, and to who knows who… not such a big deal as the business press makes out…

    all we can do is enjoy the flow, do the best we can, the fruits of our efforts are up to ____ …

  27. adam

    May 8th, 2008 at 7:17 pm

    http://youtube.com/watch?v=CSjwLmepdtk
    Loved the ad

  28. ineedhits online advertising

    May 8th, 2008 at 7:50 pm

    I never knew he was such a celebrity. Funny ad.

  29. srini kumar

    May 8th, 2008 at 8:06 pm

    kudos shawn ! keep it up :) you are just getting started !

  30. Ti-rage

    May 8th, 2008 at 8:16 pm

    yeah, congrats to Shawn Fanning !

  31. Donovan

    May 8th, 2008 at 11:31 pm

    You put Shawns name on any social networking start-up and you’ll have the start-up capital you need. Kudos for Shawn, Smart move for Rupture!

  32. AnnaM

    May 9th, 2008 at 12:30 am

    Congrats…. it’s been more than half a decade since napster shut down - well before iTunes was ever allowed to sell music, and years before imeem re-created napster in a web browser and bought snocap. 3rd time is a charm as they say.

  33. J Liles

    May 9th, 2008 at 8:10 am

    It’s refreshing to see a story where an entrepreneur fails a few times before succeeding; so much of the media coverage centers around young entrepreneurs who strike gold on their first attempt. Moral of the story: iIf your first idea fails, take what you learned (and leverage your growing network) and pursue your next idea. Keep iterating.

  34. Zach Weisman

    May 9th, 2008 at 11:33 am

    GAMERSALOON.COM

  35. josh

    May 9th, 2008 at 12:12 pm

    Ah, the days of stringing a telephone line across the room, with my 33.6k connection…

  36. Adriana

    May 9th, 2008 at 12:25 pm

    Wow. Congrats Shawn. You da’ man!

  37. Pandrogas

    May 9th, 2008 at 12:42 pm

    Congrats to Shawn, 30 Million for a gaming network is pretty big. Granted, now that EA actually has Rupture, I expect it to begin dying immediately, but that’s just my opinion of EA. This still constitutes a major milestone in the buying and selling of online gaming based properties (that aren’t actually games themselves).

  38. Peter

    May 9th, 2008 at 3:31 pm

    GameStrata > Rupture

    I think EA got ripped off.

  39. Janet

    May 11th, 2008 at 7:17 pm

    Congratulations, Jon and Shawn. All those years of hard work are finally paying off for you. See you soon in SF!

  40. Gadgeteer10

    May 12th, 2008 at 1:55 am

    Congratulations, really nice paycheck for a gaming network!

  41. Tim

    May 13th, 2008 at 2:30 am

    Congrats.

    I find it astonishing EA was willing to pay that much for a beta website (cool as it may be) without any traffic nor real launch.

    But good to see you made it :-)

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