Friday, May 9, 2008

EA Expands Potential Social Network For MMORPGs, Finally Makes Shawn Fanning Rich


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. Rumors of a possible deal for just such a buy-out offer began swirling in early February when TechCrunch first broke the story, but did not know the identity of 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 MMORPGs 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.

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 pity fu mercy acquisition.

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