Posts filed under 'Acquisitions'
Over the last week some surprising publishers have been snapped up by larger companies for what appears to be some monetary victories for the publishers. I’m not sure why it’s surprising, beyond the fact that I don’t think there were many rumors about these companies, and it’s an eclectic mix that seems to point towards a general trend in a particular hot industry.
Here’s the deals announced over the past week:
Discovery buys Treehugger for $10 million – A single blog that grew into a community with forums and more, but $10 million seems pretty solid for a blog in a specific industry. Although it is a very important and growing industry.
Disney buys Club Penguin for $350 Million or More? – This one looks really bizarre if you had no background on Club Penguin. However, it’s an insanely popular site with kids. One has to wonder though, how long will penguins be the cool virtual pet for kids? Apparently there are earnouts in this deal to the tune of another $350 million. Without really doing much analysis, it feels like Club Penguin’s founders are sitting back laughing they sold a site about being a penguin for at least $350 million.
Handheld Buys Ebaum’s World for $15 million or More? – Another deal that has more earnouts with performance goals. Ebaum’s has been around forever, so you’d wonder why they’d be selling now? And are they kicking themselves they could have been YouTube but just missed out on a few basic things?
Rumor: Sparkpeople to sell for $75 Million – Doesn’t look like this one is confirmed yet, but I’d never heard of Sparkpeople. Apparently it’s the third-largest dieting site. Good for them.
Then we also have publisher success like Markus Frind of PlentyofFish who has long been a proponent of growing independently and not building out a huge business. He’s either announcing he’s for sale as well now, or is really serious about going from a one-man operation to a full-fledged company with employees and a sales team.
What does this recent activity mean? Are we in a bubble where publishers are taking advantage and selling for a crazy premium? To some it seems that way, but in other ways you wonder what would happen if the publishers continued to hold out and grow their business even more. Some of the publishers who sold out back in the early part of this decade would be worth far more today had the stayed independent. At the same time, I think it’s never black and white and in many cases depends on the particular situation each publisher finds themselves in. Can they grow more on their own? Are there more advantages that a bigger parent company can provide to further their mission?
Unfortunately I don’t have the answers, but I think it’s a great time to be a successful web publisher. You can potentially find a solid offer for your business if you wish to be acquired, or you can keep on growing and building. It’s still a very young industry.
August 4th, 2007
Read/Write Web has a nice post detailing Yahoo’s cheap acquisition strategy over the past couple of years. The implication is that although Yahoo was hammered by the media and investing community for not spending billions on YouTube and Facebook, they actually may have a good strategy in investing in cheap acquisitions that turn out to be big and very important down the road.
One could easily argue that Flickr and del.icio.us were very smart and cheap acquisitions, and that MyBlogLog and others could be much bigger than they are today.
Additionally, it’s nice that Read/Write Web was positive about Yahoo’s investment in my employer Right Media for our ability to monetize display advertising now and what innovations we may bring in the future.
January 16th, 2007
Announcements are all over the place, as MyBlogLog has been acquired by Yahoo! and will be made part of the Yahoo Developer Network.
MyBlogLog is pretty fun, kind of a social network for bloggers and blog readers at this point which makes it feel like a blog social network/LinkedIn hybrid, with an added voyeur twist of both seeing who’s browsing your blog or being seen reading other blogs. While I’m not sure it fits perfectly with the social network aspects, MyBlogLog has some simple blog analytics built in as well, so if you have the code for the reader widget like you see in my right sidebar, it also is tracking some basic stats for me.
The analytics it provides are basic but useful for most bloggers, and I actually find myself looking at them more often than some other analytics packages I used or have used simply because I’m using MyBlogLog to add a contact or join a community. So, simply having the location of the analytics being part of something else useful is making mre more likely to use them. They also have a few more advanced analytics that you have to pay to have access for. It’d be interesting to know what percentage of blog publishers are paying for analytics. 5-10% perhaps?
Being that I work for a company that Yahoo is a minority investor in, when I heard about the announcement I immediately started of thinking of ways that the application I head up called RMX Direct could potentially work with MyBlogLog. My immediate thought is that if bloggers using MyBlogLog for analytics, perhaps we could do an intergration of some type to provide ad network management through RMX Direct as well. Perhaps I’ll get in touch!
January 9th, 2007
A space that’s been full of promise for the past few in the online advertising world is behavioral targeting. It’s actually probably been talked about far more than it’s been put into practice, but most studies and tests seem to show that it always provides much better results than showing users random ads.
Who’s been doing it? Well, Yahoo has been a leader due to all the data they have on a user as well as the massive reach, and a couple of ad networks with a focus on it are Tacoda and Revenue Science. You could make an argument that Google is doing behavioral targeting by showing you ads based on what you’re searching for, but I’m not sure it fits the standard definition perfectly.
The concept is great. You store data on users and where they go and what they do, then find them in other places and show them ads related to what they are interested in. The problem is that to work effectively companies end up needing a lot of data and a massive reach to find users they have information on in the right places to show them ads. It’s really been the primary reason that this type of targeting has been slow to pick up.
Now comes news that Microsoft is getting serious about it. I guess they’ve been testing it for over a year, but I was surprised that they weren’t already offering this to advertisers. After I got over that, I read an interesting post on HipMojo.com that theorizes that Microsoft will acquire an advertising network to expand it’s reach. Being that reach has been a problem for behavioral marketers, this seems to make sense. Especially when most people think AOL’s purchase of Advertising.com was a smart move for AOL. Who does HipMojo.com suggest they might acquire?
- aQuantive
- Valueclick
- Tribal Fusion
- Revenue Science
- Tacoda
- etc.
aQuantive is the operator of ad server Atlas DMT which is heavily used by agencies and large online advertisers. That could potentially provide a lot of reach in some ways, but Atlas has not been that known for having publisher relationships, although they recently acquired ad serving company Accipter which is more known to be an ad server for publishers.
Valueclick operates a number of businesses such as Commission Junction so it might be more than Microsoft needs if they’re looking for reach, but Valueclick’s ad network is one of the largest.
Tribal Fusion is more of a pure play network and may have a higher inventory quality than Valueclick, but it’s reach is most likely less.
Revenue Science and Tacoda are both leaders in behavioral targeting so that may make sense for technology reasons, but they also don’t have the reach of the larger players mentioned above.
Many interesting options, and it’s the first prediction I’ve seen that suggests Microsoft would acquire an ad network. In some ways I think it’s unlikely because Microsoft may figure they have the reach they need with all their properties, but I’m not sure they really do on the level they need to make it work. I’m not sure advertisers are thinking of going to Microsoft today as much as Microsoft would like, and maybe an acquisition like this would make them more of a player in the online advertising space.
December 31st, 2006
Perhaps one of the most well-known acquistion guys in the Web 2.0 world is Fox Interactive President Ross Levinsohn. The following is a paraphrased conversation he had with John Battelle at the Web 2.0 Summit earlier today:
JB: So you bought Myspace, it exploded. Google bought YouTube. You said that if YouTube had shopped themselves maybe they could get 2 billion, is that what you’d pay?
RL: No, I went on to say we probably wouldn’t participate at the price they sold for. YouTube is a fantastic property. It would have been fun to be involved. It went very fast, and perhaps it was the right deal for both companies.
JB: Give us some insider information, what happened when you heard about the deal? You and the folks at Fox weren’t pleased?
RL: No, that’s not fair. Pre-Google I had always expressed my support and had spent some time wtih Chad and Steve and the VCs there, and expressed an interest that we’d like to be involved if they ever wanted to sell.
JB: So after they sold they made a visit, did they have to make nice since Myspace provides so much traffic to YouTube?
RL: No, they didn’t need to make nice. Google is a large strategic partner for us, they are our largest partner really, and we are a big partner of theirs. When you look across the web, those who are your biggest partners are often your biggest competitors. You just have to manage these relationships and make them work.
JB: So the deal you did with Google and Myspace. $900 million deal across Fox Interactive. What is that $900 million for?
RL: It’s for Google to power search across Fox properties except FoxSports due to our MSN deal. It’s a pretty simple deal although the negotiations were fast and complex. People were saying years ago I was the dumbest guy on the planet and that News Corp was crazy for paying what we did for Myspace. You’re neither as dumb or smart as people make it seem. This is a hard business, nothing is as it seems. It wasn’t as bad a deal as it seemed at the time, and if we don’t pay 100% attention to it and grow it, it won’t be as good as some think it is now.
JB: Myspace streams more videos than YouTube, so really that price tag for it’s worth is now over 1.65 billion. Do you plan on ever selling it?
RL: You’d have to ask Rupert, but we have no plans to do so. But never say never.
JB: According to Nielsen, traffic declined at Myspace from August to September. Are you worried about that?
RL: I’m not worried, most sites are down at that time of year, it’s seasonal, and we had a similar dip a year ago. We’re launching internationally, Myspace Japan, etc. We added 320k profiles yesterday, that’s like the size of Buffalo. Time spent on the site has grown 30% in the last 6 months, and we’re up to 38 billion page views a month.
JB: What do you look for in a company when you’re thinking about an acquisition, and are you still looking?
RL: IF we’re not looking we’re not doing our job. we haven’t bought a single company in the last four to five months however.
JB: Does that mean there aren’t any good companies now? Have they all been bought up?
RL: No, I’ve been here all morning at this conference meeting with people and my head is spinning. It’s a great time in this business and media. I get excited about new things. It’s much easier for us to integrate companies into Fox now than it was a year ago. When I look at acquisition targets, I look at the people, and you can see their passion. I’ve met with people who I could tell they were just buliding to sell.
JB: Barry Diller said yesterday that an entrepreneur with a great idea shouldn’t sell. Do you agree?
RL: I disagree. Not to hedge, but in some cases if you’re building a really good feature, it may make more sense to sell. If you’re building the next Google, then obviously you don’t want to sell too early.
JB: One of the previous founders of Myspace keeps suing you guys. He’s now suing you over censorship because you are blocking his sites apps from being shown on Myspace. What can you say about this?
RL: It’s Brad Greenspan, and every motion he’s filed against us has been thrown out. It’s like a boxer who fought Mike Tyson who kept getting knocked down and then getting back up. He got thrown out of the company years before we bought it, and he made $40-50 million in the sale but won’t let it go. Life is too short.
Question from an audience member: Will Myspace open up it’s data like Facebook?
RL: Email Tom Anderson. It’s a good idea and one we’re thinking about and talking about.
November 9th, 2006
Halloween was a blast, both in the office as seen above and taking my kids out and about.
It was interesting to note the acquisition announcements as both Jotspot and Reddit were acquired by Google and Conde Nast respectively. I used both services on occasion and liked them both. I was reading Jotspot founder Joe Kraus’ blog back before he actually started Jotspot, so it was good to see it run the life from startup to acquisition.
I think the lesson is that if you build a great tool and technology that is useful and easy to use, you’ll have success whether you’re acquired or not.
November 1st, 2006
Evan Williams and other Odeo employees buying control of Odeo back from their VCs is definitely an interesting piece of news because it’s not that common, and it says something interesting about what some companies are experiencing right now. Williams sees that putting out quick products with small teams and seeing what becomes a hit is a better strategy than planning and growing some specific and larger application, and perhaps things weren’t going as fast as the investors wanted.
Mark Evans theorizes this may become common to Web 2.0 companies who aren’t seeing the amount of progress their investors want.
I disagree, I think that this is a pretty unique case as Evan Williams happens to have millions of dollars to pull such a thing off, while the majority of investors don’t have that kind of money sitting around. Sure, there are a few companies out there that have been started in the last couple of years by entrepreneurs who have had previous successes that may give them that kind of capital, but I think generally it’s not going to be something we see on a regular basis.
October 26th, 2006
Techcrunch breaks another “scoop” that Digg may be in acquisition talks but it could end up being a 2nd round of funding. The number being thrown around is a minimum of $150 million. Whew. That’s a lot of cash when you consider their traffic and the rumored revenue of about $3 million per year.
Good for them if they can pull it off. It’s amazing that companies can talk about such valuations these days without unique technologies or true competitive moats. True, Digg has a powerful community and I’m definitely not one to underestimate the value in that, but there are many examples on the web of communities disappearing quickly for the next greatest thing.
October 24th, 2006
Still shocks me, but the Google purchase of YouTube is official. PaidContent has more details.
October 9th, 2006
Apparently Google is ignoring my advice and has continued with their quest to purchase YouTube.
Also, Techcrunch points out that there could be copyright technology involved that could help the fight against being sued left and right. Both Google and YouTube are putting together deals with many of the major studios and music companies which could also help protect them, but I still think there could be significant legal hurdles in the future.
It may be a big blow to large competitors of Google as they’ll have a pretty big hold of the video space with YouTube and Google Video combined.
Another interesting note is that the NY Times post mentions that Google sped up the pace of negotiation after Techcrunch initiall announced the rumors.
October 9th, 2006
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