Morrow is a controversial figure within Clarium, a hedge fund Thiel founded after leaving PayPal, the payments company he cofounded and sold to eBay for $1.5 billion. Morrow was once chief investment officer at the San Francisco-based company, but was pushed out of Thiel's inner circle after he had a nervous breakdown on the trading floor. Morrow slowly worked his way back into Thiel's good graces, and was assigned to run the company's then-small New York office. Recently, his influence over Thiel and Clarium has grown.

Earlier this year, Morrow wrote a paper called "The Bull Market in Politics." His thesis was that "government influence — over trade policy, social programs, decisions of war and peace — becomes much more important" to investors. One key policy area: immigration, where Morrow thinks there is a rising consensus for restrictions.

A politically driven drop in immigration has broad economic implications, especially on the housing market; with less population growth, housing prices will continue to suffer for much longer than most anticipate.

But Morrow is not merely forecasting the market. He has cajoled his influential boss to spend money to make his forecast a reality.

A NumbersUSA spokesman called me to deny that Thiel had made a donation. But the money trail out of Clarium is clear, insiders say, and it would be a simple matter for Thiel to have arranged to make his donation through a third party like DonorsTrust, a conservative foundation through which charitable grants can be directed. The reason why Thiel would want his donation to be anonymous is simple: Even while he's betting against immigration with his hedge fund, he's making money off of immigrant-run startups in Silicon Valley.

However Thiel is getting the money to NumbersUSA, it has specific goals: upgrading NumbersUSA's computer system; hiring a full-time fundraiser to solicit large donations from the wealthy; and hiring Luntz Maslansky Strategic Research to run focus groups on public attitudes toward immigration.

So Thiel, like many wealthy sorts, is getting into politics. What's interesting about this is his shift from outspoken Libertarian. At PayPal, he had ambitions of using his payments startup to undermine illiberal economies and create a new world financial order. Many of his employees, first at PayPal and then at Clarium, were attracted by this powerful (if outlandish) vision.

That he's now fallen under the sway of a right-wing Christian conservative is a bit crushing to the true believers Thiel attracted to his cause. Thiel once aimed to overturn the system. Now he just wants to work within it. As much as his anti-immigration views render him noxious to the Northern California mainstream, his turning away from an embrace of freedom make him an enemy to the rebellious thinkers he's hired.

In a bankruptcy, holders of Tesla's debt will have priority over all holders of common and preferred stock in the company — including the Valley celebrities like Google cofounders Larry Page and Sergey Brin and eBay billionaire Jeff Skoll who have invested in Tesla. Raising this round of debt, followed by a bankruptcy filing, could be Musk's way of squeezing out other shareholders — especially cofounders Martin Eberhard and Marc Tarpenning. Employee with unexercised stock options will get wiped out in such a scenario.

Current shareholders will have a right to invest in this debt round according to their current share — but Musk may well be counting on the short 30-day offering period and tight financial markets to shut out anyone who doesn't have the cash handy.

Why do I think this is a likely scenario? Because Musk has done something similar before.

When Musk briefly served as PayPal's CEO, he'd run the company's bank account to six weeks' worth of cash. PayPal insiders say Musk was pulling "financial machinations" to maintain his control of the company — but the board fired him instead and replaced him with cofounder Peter Thiel, who steered the company to its $1.5 billion purchase by eBay.

Unfortunately for Tesla, there's no obvious white knight like Thiel on the horizon.

That's because Thiel, who practically makes a fetish of finding the best talent wherever he can, has benefitted from immigration personally. He was born in Germany, and his tech fortunes are due in large part to the genius of Ukrainian-born programmer Max Levchin, his cofounder at PayPal who is now CEO of Slide.

But Morrow is unlikely to suffer any consequences from his support of the cause. A right-wing intellectual and financial analyst, Morrow, too, has made a lot of money for Thiel. Much of Clarium's breathtaking performance over the years stems from his prescient thinking on the decline of the dollar and the mortgage bubble.

But we're not. A source told us it's being held at the rented mansion of Facebook board member Peter Thiel, the former PayPal CEO and founder of Clarium Capital, a hedge fund. Thiel backed Ron Paul in the primaries, but what we really want to know is: What is the gay investor's position on California's proposed gay-marriage ban? Festivities start at 6 p.m. Oh, need directions? Thiel is listed in the phone book.

Update: Lead21 chair Sonia Arrison writes:

Just thought I'd let you know that your information source for the location of the Lead21 election party was wrong. It is not at Peter Thiel's home, but it is at a location in the same general area.

If I find out more, I'll let you know.

(Photo by Eric Eldon/VentureBeat)

Peter Thiel, the fabulously successful (and successfully fabulous) hedge-fund manager and Facebook board member, was on Charlie Rose last Friday, Paul Kedrosky notes. The economic analysis is already dated, but the bit where Thiel stumbles over a simple metaphor for someone offering an insult that might well apply to the person uttering it. It's like he wanted to say "the pot is calling the kettle black," but worried that it might sound racist. Has the Bay Area really turned this arch Libertarian politically correct?

Levchin's Slide promotes the practice of sharing every precious and not-so-precious moment with the world at large, and that his company has massive amounts of Facebook user data at its disposal thanks to the popularity of the company's Facebook applications. Yes, the rich are different than you and I: They don't buy into the crap they sell us.

Zuckerberg lives in an unfurnished one bedroom apartment and Facebook, which Zuckerberg doesn't even entirely own, will earn revenues of only $300 million this year. Meanwhile, Thiel — who rents a mansion, not an apartment — runs a $5.5 billion hedge fund, which though it lost $1 billion in August is still up 27 percent so far this year and is on target for its usual annual return of over 30 percent. Sure, given Facebook's popularity among the normals, Zuckerberg could someday possess much more actual wealth than Thiel. But that'll only happen if Zuckerberg's continues to obey Thiel's infamous command — "don't blow it" — an outcome key Zuckerberg hires have made far from certain.

Yammer is a business-friendly copy of Twitter. It's an offshoot of Geni, a Web-based genealogy site started by former PayPal COO David Sacks, which raised $100 million in venture capital last year. TechCrunch50's prize panel, composed of Arrington and a few TechCrunch insiders (shown here, in a spy photo taken at the event), passed over more promising startups like FitBit, the maker of a wellness-monitoring gadget.

Quality aside, a sense of fairness might have led Arrington to give Yammer the skip: Neither Sacks nor Geni needed the $50,000 prize. Arrington's crush on Geni has been obvious since before its launch. (Most recently, he claimed Geni had close to a million visitors a month in August; according to a link to Compete.com Arrington himself included in his writeup, it's actually 400,000, a fraction of the audience enjoyed by established genealogy sites like Ancestry.com and MyHeritage.)

The problem with events like this is no one is unconflicted. But Sacks is in particularly deep: His former boss at PayPal, Peter Thiel, now runs VC firm Founders Fund, one of TechCrunch50's sponsors. Arrington has long been rumored to favor startups backed by the VCs who sponsor his event. He brags that he doesn't charge startups directly to appear on stage. But he seems to like to have them in his pocket, one way or another.

The loss comes after a stunning track record of the firm's biggest monthly loss, beating an 11 percent drop in March 2004. Strangely, this topic went uncovered in TechCrunch editor Michael Arrington's interview of Thiel on Monday. Arrington let Thiel repeat, unchallenged, his assertion that there is no bubble in technology. To which we would add: Perhaps so. But there may be a bubble in a certain hedge fund. (Photo by VentureBeat)

• Wendi Deng Murdoch, MySpace China
• Chris DeWolfe and Tom Anderson, MySpace
• Max Levchin, Slide
• Robin Li, Baidu
• Markos Moulitsas, DailyKos
• Elon Musk, SpaceX
• Ali and Hadi Partovi, iLike
• Mika Salmi, MTV
• Dmitry Shapiro, Veoh
• Quincy Smith, CBS
• Andrew Ross Sorkin, New York Times
• Peter Thiel, Clarium Capital
• Evan Williams, Twitter
• Andrew Zolli, PopTech

Silicon Valley has a lot of noise, a lot of hype. People are very excited about all of the Facebook stuff, Facebook applications. It's just been a huge hype over the last year when actually ... there isn't really that much value. It's just a bubble. It's almost a distraction. Whereas here, there is certainly less activity. But at the same time, you don't have these bubbles of nonsense out here.

The swift executive rotation was a deliberate strategy of former eBay CEO Meg Whitman, a management consultant by training. She called it "repotting" — moving executives around through different parts of the business. While it may have helped her charges' careers, it did nothing for PayPal. The latest potted plant to occupy PayPal's C-suite, Scott Thompson, is bragging to investors that PayPal will soon derive more than half its revenues from websites other than eBay. A good thing, considering how growth in eBay's core auction business is grinding to a halt.

Thiel saw this as a problem back in 2002. eBay was growing fast at the time, but PayPal's investors — the company was briefly publicly traded before eBay bought it — were worried about its dependence on another company. After eBay bought PayPal, executives spent years grinding away at "integration" — even though PayPal, as an independent concern, had managed to neatly fit its payment service with eBay's auctions, without much help from eBay — in fact, with eBay actively trying to replace it with its own BillPoint payment service.

In the years since, what has eBay done with PayPal? It's recycled ideas from the Thiel era, and tried to tout them as "innovatons." It has swollen the size of the PayPal unit to some 7,000 employees. ("What do they do?" a former PayPal executive asked me.) And it has leaned on PayPal to mask slow growth in its core business.

How much would PayPal be worth now on its own, without eBay's bloated management? Would Amazon.com and Google even be trying to challenge it in the payments business? Perhaps it's a question that shouldn't remain abstract.

eBay tried to buy PayPal several times; every time eBay returned to the bargaining table, PayPal's price went up. It finally took the workings of a liquid market to determine PayPal's worth; after PayPal's IPO, eBay had to pay a fair price for the payments company.

Yes, it's time for another PayPal IPO. Too bad Peter Thiel isn't available to run the company — he's making far more money on his hedge fund than he ever did from PayPal.

(Photo by David Orban)

Ignominiously, the botched launch ended up splashing the ashes of James Doohan, the actor who play Scotty in Star Trek's ashes all over the Pacific. Perhaps more materially, three satellites — two from NASA and another form the department of defense — also saw their trips cut drastically short. Thiel's $20 million follows $100 million of Musk's own money already sunk into the project. As friendly as the two are now, Thiel's investment has to be humiliating — a reminder that Musk may have the occasional clever idea, but it takes a Thiel to make it pay off.

Last fall, Microsoft paid $240 million for 1.6 percent of Facebook, along with an advertising deal. That wasn't because it was a popular social network, but because the tech press was talking up Facebook as a platform for social applications — a Windows for widgets.

Facebook's platform has fallen far short of that promise. The successful apps widgetmakers created in the first year of the platform's existence succeeded through spammy viral tactics, not by being particularly useful or fun for Facebook users. Social-games maker Zynga, for example, makes its games easier to win for users who invite their friends to play. Facebook began changing its platform rules to discourage such tactics in January. This summer, it brought out the stick, suspending popular applications like Top Friends for violations.

Now comes the carrot, in the form of the fbFund. To taste Facebook's cash, developers must meet a specific set of criteria from Facebook. We've translated them from PR-speak below.

Facebook's criteria:

• Originality of Concept: Does the application introduce a great idea in a new and unexplored area?
• Market: Is this application targeted to key audiences or meet compelling market needs?
• Social/Useful: Does the application enable people to interact with each other? Does it deliver real value to users (including entertainment)?
• Expressive: Does the application allow people to share more information?
• Intuitive: Is the application compelling and easy to use? Does it have a well-thought-out user experience?
• Potential: Can it be a real business someday?
• Team: Do you believe this team can execute and is driven to succeed?

Facebook's criteria, translated:

• Originality of Concept: Does the application do more than bring a ripoff of a popular MySpace feature to Facebook? You know, the kind we can have an intern copy between yawns?
• Market: Would you use the app if it weren't created by you?
• Social/Useful: No really, would you?
• Expressive: Does the application allow people to share more information? Will it advance peace talks in the Middle East?
• Intuitive: Is the application easy to use? For a drunk frat boy at UCLA?
• Potential: Can it be a real business someday? Do you know what a real business is?
• Team: Do you believe this team can execute or do you we need to execute your team?

(Photo by Bill in Ash Vegas)

In a word, yes. I instant-messaged Denton — that's the only way he communicates, really — asking him to elaborate, and he replied: "Oh, just because he's got such a nauseatingly successful track record."

A British-born Financial Times beat reporter sent to cover Silicon Valley during the dotcom boom, Denton reinvented himself as a technology entrepreneur. He sold a dotcom events business, First Tuesday, in a luckily timed deal as the bubble was bursting. He briefly entangled himself in an online newsfeeds venture called iSyndicate before starting a direct competitor, Moreover (that's "more OH ver," you Yanks.) But he quit as CEO years before VeriSign bought the company. He's the first to admit that his success is more from good timing than hard work.

Denton's clearly wealthy. He owns a fancy loft in New York's SoHo neighborhood. He funded Gawker Media, as best I can tell, out of his own pocket. At the same time, he invested in other blog ventures like Treehugger and Curbed. But he's far, far short of Thiel's $500 million a year. In 2004, when he first courted me as a blogger, I asked him where he made his fortune. He gave me a vague answer about currency trading and investing in London real estate. Denton is familiar with the business of manipulating markets. He cowrote All That Glitters, a book on on the 1995 collapse of Barings Bank caused by one young trader.

Having observed Denton for years, I have to say this: He's never seemed happer than when working as an editor. I was almost sorry to replace him as Valleywag's editor a year ago, because he so clearly enjoyed the role. When he appointed himself editor of Gawker in January, it seemed more a homecoming than a temp gig.

That's why I found Denton's note so mysterious. Could he be unhappy as the blogosphere's success story? Does he wish he'd instead joined the lucrative hedge-fund world?

I'll admit I barely know the man. In an age of oversharing, Denton makes an art of revealing no personal details. That's what makes those four words stand out: "Thiel makes me sick!" I almost wish I hadn't asked him to explain himself.

(Photo of Thiel by David Orban; Denton by Matt Haughey)

Through voting rights, Zuckerberg controls both the seat Andreessen fills and the remaining vacancy, so it's not surprising to see Zuckerberg picked an entrepreneur-friendly, don't-sell-if-you-don't-have-to mentor like Andreessen to join the board. Some Facebook shareholders are already offloading stock, perhaps growing impatient with Zuckerberg's slow progress toward an IPO. Other CEOs might be worried about retaining investors' goodwill. Zuckerberg, free to pack the board with another ally after Andreessen, doesn't have to. Jealous?

Zivity has been accused of using female sexuality as a ploy to get attention. A ploy, or a business model, one might ask. Mary Hodder, founder of online video startup Dabble, wrote, "It's not that we object to porn, just to the using (or appearance of using) girl geeks to get back their cred. Even if that's not what's happening from their perspective, the rest of us who would like to *not* be sexualized and objectified in our work lives really find the Zivity association disconcerting."

So maybe it is impossible to separate selling images of female sexuality from the sexist tech scene, but when it comes to the question of objectification, Banister objects. "I don't think the opinion that Zivity demeans anybody is one that's held by the majority," she told Valleywag. "I'm a tech vet, and I used to be very similar — you want to strip your sexuality and just live in your brain, and be a talented, smart individual so you can compete in a male-dominated space. You become sexless — but why can't I be both? Why can't I be beautiful and sexy and be smart?"

And a legitimate executive. Zivity isn't just another porn site aping MySpace, which is precisely why it's threatening. Zivity has a Silicon Valley pedigree, which means for the first time, a company that openly embraces female sexuality is rubbing shoulders with Valley oldtimers and chasing Valley money — $8 million in venture capital so far. When female entrepreneurs feel as if they have to fight for equal time as it is, sharing space with Zivity is tantamount to being asked to sleep with the enemy.

But for women, the enemy in this case isn't porn: It's turning against each other based on what's between our own legs. Is it any woman's fault that tech pundits don't give women a fair shake? "I think there's a lot of resentment for how much coverage we get," said Banister. "But we did place at TechCrunch40, and we're venture funded — and it's not just because I took my top off. The investors and the press aren't that naive."

Nor are we. Banister didn't mention it, but Banister's husband Scott was an early employee at PayPal, and some of the funding came from Peter Thiel, Scott's former boss. Part of Zivity's assumption-challenging reality: The Valley's most prominent gay venture capitalist is helping women make money undressing.

Banister told us that though she offered to bow out of the speaking opportunity, the Bay Area Girl Geeks asked her to stay. Dinner organizer Angie Chang told a San Jose Mercury News blogger:

We invited Cyan to give a 3-5 minute introduction as she was voted Sexiest Geek Alive in 2000 (just like Ellen Spertus of Google won the award in 2001 — Ellen was invited by Google to give the intro talk at the first Bay Area Girl Geek Dinner). Cyan is also the cofounder of a Series A funded technology startup, which I respect greatly as a female tech entrepreneur myself.

That is, if embracing women in tech is really about changing the rules, then all women have to have a seat at the dinner party. Even if you don't approve of what they do for a living.

(Photo via takeitez)

Francisco worked for as a reporter for MarketWatch when it was part-owned by CBS, and also worked as a business anchor for San Francisco's KPIX, which is wholly owned by parent network CBS. But that was before an article by CNET News.com reporter Greg Sandoval exposed her ownership stake in the online video startup focused on "innovators" and her financial relationship with Clarium Capital's Peter Thiel, a Vator.tv investor. Sandoval called into question her journalistic independence. Francisco resigned from MarketWatch, now owned by Dow Jones.

In the video clip, Francisco seems to ask a tough question about whether the $5 million acquisition of Wallstrip was "worth it." But when Marquez exclaims that MobLogic.tv — the project from the Wallstrip producers featuring former Wallstrip host Lindsay Campbell — is "doing extremely well," Francisco doesn't challenge it. While we've enjoyed Campbell's hardboiled reporting, we hear the show is struggling to attract viewers. And the show's YouTube channel hasn't cracked five figures in views.

But the most entertaining consequence if CBS were to buy Vator.tv would be the prospect of Francisco and Sandoval meeting at a company picnic. Awkward!

Previously:

• A is for Adelson, who cofounded Digg
• 
  
• B is for Botha, who sold YouTube big
• 
  
• F is for Fitzpatrick, and "hookers and blow"
• 
  
• L is for Levchin, who never goes slow
• 
  
• P is for Parker, the Valley's bad boy
• 
  
• R is for Rose, who made Digg his toy
• 
  

Because Zuckerberg doesn't have to. Microsoft owns 1.6 percent of Facebook; Li, even after doubling his take, only 0.8 percent. Neither stake is large enough to merit a board seat. Andreessen is, like Thiel, the former CEO of PayPal, an entrepreneur-friendly choice; he bypassed Sand Hill Road altogether to raise Ning's $100-million-plus in funding.

Just yesterday, we'd heard that Zuckerberg, who owns 27 percent of Facebook, had the right to appoint two board members. That leaves him one more seat at the table to fill. Anyone want to take odds on the moneymen getting left out once again?

We hear Clarium's holdings are up 30 percent in a year, from $3 billion to $5 billion. For hedge funds, the standard deal is that the managers keep 20 percent of profits, which means Thiel's take would come to $400 million. Has anyone on Wall Street been posting those kinds of numbers lately?

1) conservative political education and activism, 2) life extension research, 3) a specific strain of Christian philosophy, and 4) university life.

With a starting salary between $100,000 and $200,000 and business-class everything — "none of the usual economizing associated with nonprofits" — the gig actually sounds pretty sweet. That is, if you can embrace Thiel's necessarily nuanced right-wing politics and get over reporting to a guy whose name ends in a roman numeral. Send your resume along with SAT scores to: foundation.th@gmail.com.

An old Ron Paul newsletter blamed the looting during the riots on the following:

Civil rights, quotas, mandated hiring preferences, set-asides for government contracts, gerrymandered voting districts, black bureaucracies, black mayors, black curricula in schools, black tv shows, black tv anchors, hate crime laws, and public humiliation for anyone who dares question the black agenda.

Clarium already has an office in New York, and Thiel an apartment there. So the move would have more of an effect on his employees than on Thiel. As brainy as the Valley is, financial expertise is still centered in New York, as are the deep pools of capital Thiel would tap. For Clarium's existing workers who might be asked to move, the prospect is unsettling.

There is one other aspect to Thiel's move that fascinates. I've been told Thiel has been dating Matt Danzeisen, a vice president at BlackRock, for some time and the handsome fellow pictured above to the right of Thiel. (No one has yet confirmed for me if they're still going steady.)

An acquaintance of Thiel scoffs at the idea that Thiel would do anything for romantic reasons. Thiel, he says, is an utterly rational thinker. But the heart is capable of its own rationalizations. The mere possibilty that Thiel might maximize happiness, rather than profit, is a comforting thought.

The venture is called the Zynga Game Network and it's the company behind social network apps such as "casual games" Poker, Attack, and Battleship. So far, Zynga makes all its money by promoting other applications, earning 50 cents each time a user installs one on their profile.

Pincus told the New York Times Zynga has already broken even and has not yet tapped into any of its venture capital. Users click on about 50,000 links to application install pages each day.

Let us know when Coca-Cola buys ad space. Until then, the Facebook application platform will remain a viable economic ecosystem like the Hapsburgs were a model of genetic diversity.

Facebook is some kind of extension of the American imperialist programme crossed with a massive information-gathering tool. The US defence department and the CIA love technology because it makes spying easier.

The real face behind Facebook is Silicon Valley venture capitalist and futurist philosopher Peter Thiel. Thiel is an avaricious capitalist. At Stanford, he founded a rightwing journal. The internet is immensely appealing to neocons such as Thiel because it promises a certain sort of freedom in human relations and in business, freedom from pesky national laws, national boundaries and suchlike. By his own admission, Thiel is trying to destroy the real world, which he also calls "nature", and install a virtual world in its place.

For my own part, I am going to retreat from the whole thing, remain as unplugged as possible, There are seeds to be sown in my own back yard. I don't want to retreat from nature, I want to reconnect with it. Damn air-conditioning!

It's not clear how interested Yahoo really is. And it's unlikely Powerset will command a high price, if it sells. The company's core technology, XLE, is licensed from Xerox PARC, and for the rest, it mostly uses open source. But for Yahoo, whose in-house efforts to improve its search haven't made a difference in the marketplace, Powerset may hold enough interesting technology to be worth a look. Or perhaps Yahoo, bleeding engineers, is eager to hire en masse through an acquisition. Alas for Powerset's employees: They'd just be trading a small soap opera for a larger one.