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As Brad Stone reports in the New York Times, Slide just raised $50 million by selling 9% of their company at a valuation of $550 million. This represents a major step up in valuation for Slide and sets them on the path for an IPO with a significant warchest to use in their current battle with RockYou and coming battle with Facebook.

As Kara Swisher is quick to pessimistically point out in AllThings Digital, she’s convinced It’s Bubble Time. This is her standard line in any story that relates in any way to the coming dominance of Facebook as the first mainstream Social Operating System. In fact, Kara actually spends half the article making a petty argument over who should have gotten credit for the scoop.

As Sarah Lacy summarizes in BusinessWeek, Max Levchin is out to prove that PayPal was no fluke and that his goal is “generating more than the $1.5 billion PayPal fetched from eBay (EBAY) in 2002“. In order to do this, he most likely pitched this investment as a mezzanine round for Slide’s Q4 2008 IPO that will be in the $2 billion plus range.

Although I’ve been very vocal and bullish about Facebook’s valuation really being $100 billion, I don’t really know enough about Slide’s plans to speak with authority about this valuation goal in a post-IPO world of $2+ billion. Assuming a 40 P/E ratio after they go public, this would imply $50 million in earnings for Slide. They may be able to get there via advertising but they will always have a HUGE RISK FACTOR related to not controlling their underlying platform.

When Max Levchin and Peter Theil built PayPal on the back of eBay, they were able to achieve traction with eBay’s power sellers (who really control eBay more than Meg Whitman does) and this traction forced eBay to acquire PayPal before someone else did. Had Yahoo or Amazon or Microsoft acquired PayPal, they could have whittled away at the yoke that eBay has around the necks of its power sellers. This strategic threat to eBay helped PayPal go for a premium over their public market price.

This time around, it will be interesting to see if Slide can build a social network of their own that competes with both Facebook and MySpace. As I said when OpenSocial was announced, Slide’s Top Friends app is already the 3rd largest social network in the US. Now that Facebook is licensing their API, it seems quite possible Slide will roll their users on MySpace and Facebook into an App-Centric social operating system that bridges several social networks.

The Adonomics valuation for Slide’s top 8 Facebook apps is $74 million and this valuation doesn’t take into account that they are all owned by the same company. On Facebook alone these apps have 87 million installs and probably around 35 million unique Facebook users.

This makes Slide a strategic threat to Facebook just like PayPal was a strategic threat to eBay.

Congrats to Max on setting himself up for another big win and look out to Mark Zuckerberg who may find himself in the position of eBay’s Meg Whitman in that he may have to pay a post-IPO premium to recapture his user base and protect them from competitors like Google.

Thanks,
Lee Lorenzen
CEO, Altura Ventures — the first Facebook-only VC
(c) 2008 Altura Ventures LLC