He had no interest in being a CEO, though. “I’m a well-trained introvert,” he told me. “Being with people drains me of energy.” He had a wide range of interests, though, and deep pockets, and he wanted to marry both. He chose to become an angel investor. He put money into Digg, a social news site, and Twitter, among others. He joined the board of eBay. He wrote a blog that displayed his eclectic and wide range of interests-in books, TV shows, movies, politics, press criticism, Wall Street, debt to capital ratios.
The investment about which Andreessen is most passionate is Ning, a social network that enables those who join-artists, musicians, students, educators, a fan club for the Jonas Brothers, a snowboard community, etcetera-to create their own communities of interests. The idea came out of his association with Gina Bianchini, who met Andreessen soon after she received a master’s degree from the Stanford Business School and started a company in 2000. When her company was sold in 2004, Bianchini and Andreessen brainstormed her idea of forming a social network among those who seek like-minded communities and his idea of providing a platform on which to build them. They named the site Ning because that was the best name they could agree on that cost no more than $10,000, he said. The site would have two revenue sources: Google’s AdSense to reach advertisers wishing to communicate with each community and those niche channels willing to pay a monthly fee to Ning for a range of services, including $19.95 per month for space to sell their own ads with Google or to forgo ads entirely. By the summer of 2008, Bianchini said, there were 465,000 social networks on Ning, with 10 million registered users, 40 million unique users each month, 5 billion monthly page views, and 116 employees working from a building in Palo Alto. As chairman, Andreessen has an office there, but appeared only a couple of days each week, and rarely in the morning. “I wouldn’t be sitting here without him,” said Bianchini. “He funded Ning and made me CEO. He put up the money, and he took only 50 percent of the equity.”
His closest friend, Ben Horowitz, who worked with him at Netscape and in early 2009 became his partner in starting a $300 million venture capital fund, describes Andreessen as a Renaissance man. “You can talk about the economy, fashion, military strategy, whatever, with Marc. I don’t know anybody else like that who goes across so many domains.”
Andreessen likes to be alone, to stay up most of the night surfing the Web and reading, and rising late and avoiding meetings. He found a kindred spirit in Laura Arrillaga, who teaches at Stanford’s Business School and is the daughter of Silicon Valley ’s wealthiest real estate tycoon and Stanford benefactor, John Arrillaga. “Laura reinforces my hermitlike tendencies,” he said. “We love to be home.” They are, he said, “dream customers” for old and new media. “We have more DVDs. We have Blue-ray Discs. We do downloads. We’re a huge iTunes customer. We’ve got, between the two of us-she still uses her old house as her office-eight or nine Direct TV dishes. We’re about to add Comcast’s Video on Demand, because I want to try that. We’re about to add a Windows’ Media Center PC.” They have a Vudu box, Apple TV, two Tivos, several PVRs and DVRs, and numerous high-speed Internet connections. In all, their monthly subscription bill comes to about $2,500, he said.
Although he consumes old media, Andreessen delights in tossing grenades at it. As late as 2005 and 2006, he said, traditional media was “totally putting their head in the sand. They were in complete denial.” He cited YouTube, the burgeoning video Web site, as exhibit A: “YouTube ends up being this hub for tens of millions of people to watch video. In two years, it’s going to be a direct competitor to TV networks and cable networks. A direct competitor with more users and viewers… All of a sudden, that’s a new hub. It’s like the old joke: ‘Where are they going? I’m their leader and I must find them!”’
He sees the Internet as a medium that will soon have 2.5 billion users worldwide, an audience far larger than any reached by traditional media. And the audience will be composed of those who “want whatever they want when they want it.” They will want to skip commercials and watch movies or TV programs on multiple devices and be able to get DVDs of movies the day they are released in theaters. “When has the music industry and the movie industry and the TV industry ever had a market that big to deal with before?” Andreessen said. “And when has distribution ever been this cheap?” The costs that burden traditional media, from paper to printing and manufacturing to trucks to sharing revenues with movie theaters, could be drastically reduced, he said. “An entrepreneur looks at that and says, ‘Oh, my God, it’s a monster opportunity!’ Somebody who is protecting an existing business says, ‘Oh, my God, I’m going to go out of business!’ Now they’re both right. It depends on whether they radically make the changes they need to make.”
GOOGLE WAS BOLDLY MAKING CHANGES. It outmaneuvered Murdoch, Viacom, and Yahoo and stunned the media world when in October 2006 it purchased YouTube for $1.65 billion. The deal eclipsed any that Google had done before, and the potential impact of YouTube was vast. Since its start in February 2005, YouTube by the fall of 2006 was attracting thirty-four million monthly viewers, or four out of every ten video Web site visitors. And this number was soaring. What visitors viewed on YouTube was mostly “user-generated content,” or short homemade video clips: a pet trick, an artfully told joke, firsthand footage of the devastation from Hurricane Ka trina, Janet Jackson’s “wardrobe malfunction” at the Super Bowl-that users uploaded and sent to YouTube. Increasingly, though, YouTube was expanding its audience with clips from Saturday Night Live and The Daily Show with Jon Stewart, with sports highlights and music videos; these, too, were recorded and shared by users, arousing piracy concerns.
The reason YouTube was persuaded to sell, said cofounder Chad Hurley, then twenty-nine, was simple: They feared the site lacked the resources to cope with its explosive growth. “When we started, we thought one million daily uploads would be great.” Instead, they were getting a hundred times that many. “We thought we’d burn up our bandwidth. We worried our servers would go down.” The marriage to Google, he said, meant more investment capital, more servers and computers, more brainpower, more help finding partners and figuring out how to place advertising on their site. “We needed resources to scale the company. We only had a staff of sixty people dealing with the weight of the world. An option was to raise more money and hire more people and take a long time. But we were visible, unlike the early Google. We had competition. We were challenged by the old media.” He and his cofounder, Steve Chen, were enamored of Google’s focus on users and its emphasis on the long term. “They wanted to give us the freedom not to have to maximize revenues right away.”
YouTube and Google’s ambitions were immense. Hurley described the site as “a democratic platform” for user-generated and “independently produced content.” He vowed that the “creative people who produced content would have more opportunities in the future without answering to a network.” Had network executives heard those words, their paranoia would, no doubt, have been stoked. They would have been even more perturbed to hear Eric Schmidt say that YouTube’s real challenge was to figure out how to sell advertising. “If that works,” he told me, “it will seem like the birth of the CBS network in 1927.”