Shawn Fanning Finally Gets A Real Payday: Electronic Arts Buys Rupture For $30 Million
Erick Schonfeld
70 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.
For someone who disrupted an entire industry and changed the way an entire generation thought about music, he deserves it. Well done!
Well done, you really changed the way i bought music…umm i mean download music.
reminds me my 2001 gamers-oriented social network http://www.esfrance.net and just makes me think i fucked up something somewhere
Yup, good guy finally gets his payday. Nice.
LOL ! It looks like its the same 5 people that keep starting companies and selling them …. He will probably start more successful companies .
Congrats !
“LOL ! It looks like its the same 5 people that keep starting companies and selling them ”
Name brand effect
Wow. I guess legal _is_ cooler.
Yay, Shawn got money. What did EA get? Doesn’t look like much…
Congrats 2400 BAUD!
When was Napster, 5 years ago? more? this is guy persistent . I am glad it paid off.
EA is like Microsoft, they have to keep buying things so that they can make the company look like it’s going somewhere.
Congrats!!
I thought Seth Green started Napster?
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.
@nitsuj hilarious. I think he got an IMDB out of it too with a cameo??
Dont forget his neat VW Ads on TV
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!!!
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
Actually, they are paying him in itunes credits.
Congrats to Shawn.
19: Not Pogo?
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.
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
Heh… empty social net is worth #30M? Wow!
Well played sir…well played
@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 ____ …
http://youtube.com/watch?v=CSjwLmepdtk
Loved the ad
I never knew he was such a celebrity. Funny ad.
kudos shawn ! keep it up
you are just getting started !
yeah, congrats to Shawn Fanning !
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!
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.
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.
GAMERSALOON.COM
Ah, the days of stringing a telephone line across the room, with my 33.6k connection…
Wow. Congrats Shawn. You da’ man!
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).
GameStrata > Rupture
I think EA got ripped off.
Congratulations, Jon and Shawn. All those years of hard work are finally paying off for you. See you soon in SF!
Congratulations, really nice paycheck for a gaming network!
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
Darkstar, you are correct. If there is a risk that open encrypted volumes of interest would close on power loss, it is preferable to employ a live forensic tool and not to cut the power. Yes, that’s a very tough call for a first responder to make. Then again, LE also has the option of arresting the perp and requesting/coercing the password.
Because of this huge payoff prepare for more gaming social network sites to pop up in the future; if not in the next few months. Warcraft having any many subscribers as they do, make it obvious that the money is in targeting WoW users.
The question I ask is, do gamers truly want to venture out from their fake online “in game” personas to continue socializing within their gaming culture? I’d imagine they’d prefer to spend what time they have playing their favorite game and then using social tools like facebook/myspace to socialize in reality…or at least I’d hope so.