Durov's theater: why the founder of VKontakte lost the battle for his social network

Pavel Durov' dreams of maintaining control over the company he founded never came true. What part of the blame for this lies on the founder of VKontakte?
Origin source
After putting numbers to press it became known that Ivan Tavrin sold its stake in "VKontakte" holding company Mail.Ru Group, which became the largest shareholder with a share of almost 52%. Tavrin explained that had long-term plans in the Internet business, but decided to sell an asset because of the "deepest" of the conflict between the founder and the USP Fund. Representatives of "VKontakte" called the increase in the share Mail.Ru positive step. According to the press-secretary of social networks, with Mail.Ru long been perceived as a competitor, but the general hostile forces, far from the Internet and IT, to bring positions closer.

"So, what you own, sooner or later begins to own you ..." - so began the next message on the social network "VKontakte", written by its founder Pavel Durov January 24 of this year for all its 240 million audience. It Durov said that he had sold his "friend Ivan Tavrin" all your network shares. "I was personally present when he published this post, and was shocked: count" likes "spun at a frantic pace, in a few minutes there were 20 thousand," - says the new CEO "VKontakte" DmitrySergeev. - Durov - a symbol of "VKontakte".

Why symbol "totem", founder and still CEO "VKontakte" Pavel Durov left his main creation? More recently, it seemed that he has the situation under control. His longtime partner and a senior he leave the company did not allow destroying a deal for a billion dollars, and triumphantly showing the middle finger of the world. After two and a half years of this "factor" I was facing the most Durov: he sold all shares established and grown their social network without waiting for the IPO nor loud, nor deal with the investor on the many billions of dollars. Why dream of our own Mark Zuckerberg did not come true and how much of the blame for this lies with the Durov?

Gesture per billion

In the summer of 2011 there was a truly extraordinary event: Pavel Durov came to Mail.ru Group office in Moscow for a meeting with the CEO Dmitry Grishin and discuss further friendly life. Two people, who for years represented the different poles of the domestic Internet, said the purchase of servers, combining data centers and otherx joint projects. Prior to the implementation of long-standing dream of full integration Grishina "VKontakte" in the Mail.Ru Group holding it was not much.

But a few days after the meeting Durov tweeted a link to a photo hung in his instagramme, which showed the middle finger. Photos accompanying caption: "The official response trash holding Mail.ru his next attempts to absorb the" VKontakte ". The public considered eccentric gesture next trick Durov.

Units knew that this finale to destroy Durov deal for $ 1 billion.

This money should have received the first Paul Vyacheslav Mirilashvili partners (№114 in the Russian Forbes list, the state of $ 950 million) and Lev Leviev, who for two owned 55.5% of shares of "VKontakte". Having invested in 2006 in the creation of a social network tens of thousands of dollars borrowed from Mirilashvili Sr., St. Petersburg gambling magnate mid-1990s, they were tired of waiting for "pie in the sky." Mail.ru Group are willing to pay them in cash since the days when it was called the DST, and her head was Yuri Milner (№58 among Russians in the world list Forbes; $ 1.8 billion). First there were dozens, then hundreds of millions of dollars, and a final "exit" at the cost of one billion seemed to them quite a decent option.

Mail.ru Group, another major shareholder "VKontakte", agreed to buy their share, based on the evaluation of the network at $ 2 billion, but it did not have the required $ 1.1 billion and Mirilashvili and Leviev agreed to accept as payment for the shares owned by Facebook, of Groupon and Zynga. What will happen to the "VKontakte" after the transaction, they were not interested. Durov - quite the contrary. In mid-July 2011, he, before indifferently watched the negotiations largest shareholders, suddenly changed his mind. And taking advantage of their legal right, he blocked the deal.

Friends at auction

Durov categorically do not like the idea of ​​"infusion" of his social network in Mail.ru Group: he believed "VKontakte" much more advanced design and internet holding company - a giant machine, in-line produces mediocre products and seeks to fill all the niches. The idea that "VKontakte" will dissolve within a corporation, Durov plunged into despair: he sincerely veyl, which creates a new history of Silicon Valley, is building in St. Petersburg, a new ecosystem around their social network.

"It seemed to me that we will emulate that came a whole generation of people who want to understand whether we can do something in Russia without serious relations", - said Durov.

Mirilashvili and Leviev did not hide resentment and anger when Durov snatched from their hands so close to a billion. Moreover, in the same July 2011, they were forced to perform a previous agreement with Mail.ru Group and to sell it to 7.5% from 55.5% of shares of "VKontakte" for $ 111.7 million. "Big" deal fell through, and their package became less control. Then, in March 2012, Durov "accidentally" turned out to be connected to a telephone conference at which they again discussed the sale of its stake, this time the main shareholder Mail.ru Group Alisher Usmanov (№40; $ 18,6 billion).

During the conference, co-founders of "VKontakte" not mince words when speaking of Duras, and the last on the same day removed their accounts in social networks, writing in his Twitter: "We organize an auction for the page numbers and id3 id4" VKontakte ". After a short time,I did Usmanov Durov generous gift, giving it the right to vote on the whole package Mail.ru Group on the board of directors of "VKontakte", that is, in fact, the sole right to manage the company as Mail.ru Group packages and Durov were in the amount of control. Usmanov also received some kind of guarantee that the founder and chief ideologue of "VKontakte" not to leave the company and thus reduce the cost of the asset.

A Mirilashvili Leviev and could continue slowly "push" by price: wanting to buy them this package and thus to quarrel with Russia's richest man was little. But is not that they were not at all: in the second half of 2012 on the package of the co-founders claimed minority shareholder of "Rostelecom" Konstantin Malofeev. Durov immediately responded in trademark style, accusing Malofeeva in order "attacks in the media" to "VKontakte" in order to persuade himself Durov and his former friends to sell its shares in the social network. Another shareholder is also perceived intentions of potential buyers as an attempt to capture a hostile: Malofeeva soured relations with Usmanov, afterAs the parties were unable to agree on the terms of sale Malofeev owned 10.5% of shares of "Rostelecom", accumulated set of mutual claims. Malofeev in conversation with Forbes denied that the negotiations on the "VKontakte".

And in April 2013, to buy from Mirilashvili Leviev and 48% of shares of "VKontakte" suddenly announced to all fund United Capital Partners (UCP) Ilya ShCherbovicha and its partners.

Shadow Sechin

Negotiations with ShCherbovicha Mirilashvili and Leviev began back in 2012, "according to Jewish religious channels," says one of the participants in the negotiations. By the time of their first personal meeting in Israel in March 2013 co-owners of "VKontakte" I was exhausted pressure Usmanov. "They were, to put it mildly, not happy with Usmanov, - says Scherbovich. - I had a feeling that Leo and Vyacheslav willing to sell their shares to anyone, but not him. "

According to the newspaper "Vedomosti", originally co-owners of the network would like to receive for their shares to $ 1.5 billion, based on the evaluation of the entire company at about $ 3 billion. But, as reported by Forbes source knowledgeable about the terms of the transaction, as a result"VKontakte" was rated only $ 1.75 billion, and Mirilashvili and Leviev received for its stake of only $ 840 million. Taking into account that the previous sales of Mail.ru Group shares social network they have earned, estimated to be about $ 180 million, a billion they received . However, they are not inherited Facebook shares, of Groupon and Zynga Mail.ru Group and then sold off in the market, having gained for them a total of about $ 2 billion.

The transaction took place quickly and secretly: Mail.ru Group and Durov learned about it after the fact, to them no one not previously consulted, nothing is notified pack owners do not even try to make a trade with another major shareholder. Mail.ru Group and USM Advisors Alisher Usmanov some time dumbfounded silence: who are these people, why they bought the package, as the bypassed condition «right of first refusal», in which the shareholder can buy a share in a company only if it was abandoned existing shareholders?

"I do not think it's right to comment on the deal," - then said Forbes Usmanov. Not in his nature to remain silent in the case of a hostile "approach" in its assets. Why is this case different? Forbes Some interviewees believe that he was struck mettlemaneuver and the speed at which a transaction conducted UCP. Other - what a new shareholder "VKontakte" looms the figure of the head of "Rosneft" Igor Sechin, to quarrel with anyone who does not want to. Certificates of participation of the largest oil company in the transaction could not be found, and Forbes interlocutors are confident that interest in "VKontakte" Sechin has never been.

UCP Foundation "sold" Sechin idea of ​​control over the country's main platform where young people gather, explains a high government official.

"They [Sechin and" Rosneft "] spit and" VKontakte ", and Durov, UCP simply filed the situation as politically important project," - said a close friend Durov.

ShCherbovicha such conversations are a nuisance. "These rumors are spreading our hard on" VKontakte partners "if the situation is really engaged Sechin, all liability conflicts would quickly run out", - said Scherbovich. Officially, a consortium of investors who bought the share of "VKontakte", a member of the UCP and its partners, including investors, also called chief consultant Qu Fundorum Igor Pavlov, President of "Rusgrain Holding" Ivan Tyryshkina, founder and Superjob.ru Fabrikant.ru Gabestro Sergei and Alexei Zakharov, as well as former shareholder of UFG, brother of Boris Fyodorov Pyotr Fyodorov. All these people want to know when their investment will be profitable.

War of the Worlds

"VKontakte" The Board of Directors has historically consists of four people, but in fact its meetings spend three: Pavel Durov (from myself and on behalf of the Mail.ru Group) and two representatives of the UCP. "Why should we discuss the entire agenda, sent it in advance, can all be defined in advance, come here, quickly discussed, we drank champagne and went," - puzzled people from UCP on one of them. "So you're a drunkard?" - Retorted "Totem" "VKontakte". The meeting ended with nothing again.

Entering the "VKontakte", the UCP acted prudently: said he expects growth in the value of "VKontakte" up to $ 10 billion in 5-10 years, as well as advised Durov finally appear for questioning in the case of collision at the beginning of April 2013 to inspector DPS in St. Petersburg, committed either with, or withoutparticipation "VKontakte" general director. "It is not clear it [Durov] unwillingness to resolve the situation simple turnout for questioning, accompanied by lawyers with a clear rationale for their position", - said at the time a representative of the UCP. Naturally, Durov this statement acted as a red rag to a bull. "I recommend the newly made shareholder VK refrain from commenting on media activity around the" VKontakte "- immediately he said.

Ilya Scherbovich, however, tried to negotiate with Durov: Immediately after the transaction, he wrote him a letter in which he said that the UCP aims to increase the capitalization of the social network, as well as the proposed "cut options." Scherbovich I convinced that Durov unhappy too small stake in the company:
"One day Paul woke up and realized that his brainchild could cost billions, but it turned out that the proportion of his very small. Instead of going to a civilized way and insist on options for himself and his team, Durov began the war with the shareholders. "

Then Durov's letter did not respond. After some time they talked on Skype, puffm Durov even visited a new shareholder in Moscow, where selected does not like. But communication is not adjusted: to understand each other people from completely different worlds can be difficult.

Conflicts arose on any occasion. UCP require a detailed business plan for the years ahead - Durov responded that such a plan may require only a complete ignoramus in an ever-changing online business. UCP required regular financial reporting - Durov replied that he was ready to pass it, but only by hand. UCP proposed the establishment of committees of the Board of Directors - Durov was furious, saying that such a proposal is an attempt to destroy the company.

But once Durov offered Scherbovich 4% of his remaining 12% stake. He said, we are ready, but with a number of conditions - not to sell the remaining shares to the IPO (which has not been designated period - Forbes.), Did not participate in the development of competing products and to invest in such products, not to appoint managers without the approval of the UCP. Durov called such terms "slave" and refused. Mail.ru Group Representatives unanimously declared Forbes, did not know about these negotiations and does not believe in ath their ability. Not all actions Durov amenable to logical explanation, but this may have been the logic.

you Telegram

Revenue "VKontakte" has increased by 44% in 2012, to $ 172 million, while net profit fell 94.5% to $ 1 million. A bad year? But the beginning of 2013 "VKontakte" managers noted chic. Durov, together with friends, top managers, their girlfriends and wives flew to Dubai. Paul lived in a royal room of a luxury hotel, friends - the same, but in the room a little easier. Rent several Ferrari and the Bentley, ate at expensive restaurants, they leave a tip for less than € 500. It has a lot of such information UCP - Fund carefully collects it in preparation for litigation.

Scherbovich recalls that in July 2013 met with Durov and expressed his dissatisfaction with the poor financial performance of the network and the lack of clear strategy. Durov, as always in person, was very "pleasant and polite", according ShCherbovicha, asked for three months and less bother him. "I promise that we, as shareholders, will be very happy. I was warned that it is not worth flth to believe, but I myself, in spite of the UCP colleagues, decided to accept. But after three or four weeks comes the news that Paul allegedly with the consent of the shareholders launched Telergam. Our hair stood on end ", - complains Scherbovich.

Telegram - is a free mobile messenger, analogue of WhatsApp, Facebook bought in February 2014 for $ 19 billion alone, the assurance of Durov, "better in every detail.". Production Telegram engaged American Digital Fortress, which means the owner of Paul's brother, Nikolai Durov. "This boom in a shabby sweater" - describes him one of the few people outside who met him "in real life". That Nicholas played a key role in the formation of "VKontakte" as a technology company: invented and built the network architecture, while Paul worked ideology. "Nicholas can solve the problem in 15 minutes, the rest of the day in the company will need," - said one of the representatives of the UCP.

On assurance Paul Durov, Telegram created his own personal money to people who have no relationship to the "VKontakte". The main "trick" the application - encryption of communications atAccording to the developers, Telegram messages can not be intercepted, read and decipher. It is the dream of brothers, Paul says: wanted to create a product that even a system administrator is not able to view the messages. The dream has become a reality: since its launch in August 2013 to the end of February 2014 the application has been downloaded over 20 million times (see infographic.).

Starting Telegram completely ruined the already strained relationship between UCP and Durov.

According ShCherbovicha, shortly after the release Telegram they held another conversation on Skype: "Paul, you are asked to have three months to start the Telegram?" - "It's a non-competitive project." - "No, this is a competitive project, and there are standards of corporate behavior, while the general director - the bounden duty towards the shareholders to act in the interests of the company! It called fiduciary duty ». - "Yes, it is interesting, but it's not for me." Scherbovich sure Telegram creates a conflict of interest and damages of "VKontakte". Durov objects: main audience network in Russia, and in Russia on the Telegram come latelyXia is less than 0.5% of registrations. In addition, the project does not make money, it is a non-profit, which means that there is no damage.

UCP Foundation at the moment of the arrival of "VKontakte" started this legal war, falling asleep letters Durov, Mail.ru Group, USM Advisors and other shareholders Mail.ru like the South African Naspers. A source close to Mail.ru Group, calls the action of UCP «typical greenmail" (a form of corporate blackmail by buying part of the shares of some companies and then offer to other shareholders to buy back the shares at a higher price). Most of the letters UCP regards finance "VKontakte": with the help of hired private detectives fund studies strongly any statements of expenditure senior managers of social networks, trying to find evidence of theft or misuse of the withdrawal of money from the company.

One of the parties to the conflict unhappy that Paul considered the money "VKontakte" his personal and spend it as he wanted. Others insist that the co-owner of a private company is not obliged to report to a third party. The second largest shareholder of "VKontakte" now occupied exactly the same actions, but attitudes Perekopskaya brothers. Igor was until recently CFO "VKontakte" Elijah - the vice-president and a close ally of Durov. Both are now consultants UCP.
Game of Thrones

In the summer of 2013 Durov offered UCP Ilya Perekop to the post of CEO «VKontakte": in a letter dated 12 July for himself, he proposes to introduce the post of president. This reshuffle Durov allowed to stay in the main company, passing the operational management of his closest friend. However, soon he changed his mind and said, Paul the UCP, that was joking. Why he wrote this letter, Durov did not answer, and his friends say that Paul is the "quenched in Europe" and was "still."

But the people of UCP do decide to meet with a potential CEO and discussed with him the strategy of network development. Perekopsky they liked: talk was not the example easier with him than with Durov, at least he is willing to answer questions and is not afraid of the word "monetization." What impact has this meeting - versions diverge. A source close to Usmanov confident that the former Vice President "VKontakte" has decided to conduct an elaborate urpy to overthrow Durov and validating myself at the post of director general. "Paul knew that we communicate with them, he trusted me to communicate with them, no conspiracy was not" - responds Perekopsky.

"Durov, of course, not very much so" naive oduvan ", as he is taken to represent, but Perekopsky he trusted very much, Ilya was a power of attorney to execute all financial transactions on behalf of the Durov, - said a source close to Mail.ru Group. - And Elijah no option has never been only bonuses, and at some point he probably took shape the idea that he gets too little. " Let the prosecution to present a very Durov, Perekopsky responds: "I said to him then: tell me where I have betrayed a single fact? He did not mention anything to me. " In January 2014 the dismissal of Ilya said the new shareholder, Ivan Tavrin. (Perekopsky resigned by mutual agreement.)

In February Perekopsky became a consultant to the UCP. "When this happened, they called and said:" You are the only one there, at least, adequate man. Maybe you work on the company's strategy? "- Tellingt Perekopsky. His opponents believe that his "relationship" with the fund began much earlier: people Usmanov hired detectives found that during 2013, the former vice president contacted by phone with the people of UCP at least 50 times.

Where I went Perekopsky in which hotels had lived, at whose expense paid trip - detectives now collect exactly the same papers that UCP collects against Durov.

"We have documents, papers, proof, I think, we will submit to the court Perekop. When? That check is complete "VKontakte" (its lead auditors Deloitte and Ernst & Young -. Forbes), and we will. I think within a month ", - said a source close to the new management" VKontakte ". "I'll think about going to court - parries Perekopsky. - Among the activities carried out audits only in 2013, deliberately avoiding the attention of Paul affiliated structures. If they continue to spread slander about me, I will give all the evidence of theft of funds Durov family in court. "

All of these claims are accompanied by a spy mania: within "VKontakte" trycalculate the "agents" Perekopskaya and Ilya refused to communicate with Forbes on a mobile phone for fear of listening.

Game over

Quarrels with the UCP, communication with law enforcement agencies, the shaft of legal letters and checking accounts - all this, of course, could be the reason for the withdrawal of the Durov torn Company conflict. But to deal with Tavrin, which, according to Forbes, was held in December 2013, there were other, more tangible reasons.

"We are in talks with the UCP, they are ready to sell its stake, based on the $ 4-7 billion marks for" VKontakte ". It's too expensive, but if you agree, we are ready to buy. Why not? "- Told Forbes source close to Mail.ru Group. After gaining control of "VKontakte" thanks to a deal with Durov Tavrin Ivan (№200 in the Russian Forbes list, the state of $ 500 million), general director of "MegaFon" Usmanov and junior partner in the "YUTV Holding», Mail.ru Group can afford to wait as long as he wants. Its main shareholder and the richest businessman Alisher Usmanov has long been the country's "rescued" all the investments in the Internet and does not need the money fast.

investmentNome fund the UCP, on the contrary, I want to make as quickly as possible. This can be done only one way - to sell more expensive package purchased. The options are not many, either to sell the second shareholder (unlikely there will be willing to repeat their path), or wait for the IPO and sell it. In the summer of 2013 the Board of Directors "VKontakte" approved the hiring of consultants for the IPO of the organization. "Well, UCP insisted we agreed, what a difference. No IPO is not, Mail.ru Group can not raise a rival to the IPO, it will cause a huge conflict of interest management "- says a source close to Mail.ru Group.

What in this situation wants to Durov, is not interested in any of the parties: for him a favorable outcome is not in any of the scenarios. The most likely: win Mail.ru Group, and will come true nightmare Durov takeover "VKontakte". Less likely: UCP and Mail.ru Group will continue to torment each other, and the company will live in constant conflict. The most incredible: the UCP will win, but in this case Durov has no place in the company. For a while, he will remain its CEO: the question of who will lead the "VKontakte" is also usedudet decided after the completion of the audit. But it's time for the Durov-shareholder to take the money and walk away: it updates the records Telegram downloads, and after the story of the sale of WhatsApp for $ 19 billion the whole project looks even more attractive.

However, Scherbovich insists that Durov must either leave the post of "VKontakte" director general, or to give a messenger of the "VKontakte": the UCP will prove that he is doing people from social networks and social network on the money. The second shareholder "VKontakte" claims to Durov in connection with the Telegram does not, but to take his side in this project is not going. "We asked: Pasha, you used the money for him and" VKontakte programmers "? He said no. We have: good faith. If he lied to us, will be responsible. To pursue it in court, we will not, but the "fit" also will not ", - said a source close to Mail.ru Group.

According to sources, over 12% of shares of "VKontakte" Pavel Durov received a $ 200 million to $ 400 million. Serious money for the 29-year-old man. But it is quite a bit for modern Internet business and hardly much to the founder of "VKontake ". Underlines the lack of interest in money - no more than a part of the media, the mythological image Durov, the creation of which he has worked closely for a long time.

"Durov genius? Yes. Eccentric? Yes. Disinterested? Well here by. He is a maximalist in everything tends to be the best. Therefore, he wants to be rich, very rich, "- said one of his good friends.

The first attempt failed, but bound to be others, not associated with the major Russian social network.