Posts filed under 'Acquisitions'
Techcrunch and the Wall St. Journal are both talking about a potential Google acquisition of YouTube for 1.6 billion. Before I comment further on this, let’s review a few things:
1. YouTube has been reportedly losing money due to bandwidth costs.
2. Much of YouTube’s use is driven by content it doesn’t own, and could potentially (and probably will be) sued for.
3. Much of it’s traffic and usage is driven by a competitor (Myspace) that could at any time block YouTube videos from being posted on its site, and people from Fox have made comments about making Myspace less of an enabler for other companies. That’d be a mistake on Myspace’s part in my opinion, but it doesn’t mean it wouldn’t badly hurt YouTube if they did it.
4. Google already has a competing service in Google Video.
5. Google normally buys small companies for their technology, not large established ones for insane amounts of cash.
Does that equal a 1.6 billion purchase?
However, of the likely companies to buy YouTube, Google would be able to handle the bandwidth costs and the possible legal issues the best as they are experts in both areas. They also have spent a lot of money on properties like AOL and Fox Interactive in order to secure advertising rights. This could be a similar move to assure that they get a lot of ad placement on YouTube, and it could possibly push them farther with video advertising.
I think the bottom line is that it would shock me if Google did this. The price is very high, and it just doesn’t seem like a Google type of deal.
October 6th, 2006
Jumpcut, a multimedia upload/share/edit/mashup site that launched about six months ago, has announced they’ve been acquired by Yahoo on their blog, and the Yahoo Search blog has confirmed it. No terms have the deal have been reported.
Along the lines of Sony acquiring Grouper a few weeks back, this appears to be an acquisition for the people/technology opposed to buying a site with a large and established user base.
Early theories are that Jumpcut technology could be integrated with Yahoo Video, as well as other Yahoo-owned properties like Flickr and Upcoming.org.
Even though it seems pretty clear Yahoo will want to use Jumpcut’s technology, it’ll be interesting to see if Jumpcut remains a standalone site. I imagine it will because Yahoo has left it’s previous acquisitions in the social media space relatively untouched, and as delicious recently announced their growth since being acquired by Yahoo has been tremendous.
September 27th, 2006
New rumors/reports are out that Facebook is talking to Yahoo along the lines of a $1 billion acquisition, and that YouTube is only for sale if you’re talking about buying them for $1.5 billion.
I guess there is really power in eyeballs again as both sites don’t have much in the way of unique technology, just a whole lot of eyeballs using their services. One side of me says they’re worth it as it looks like News Corp got a bargain in buying Myspace for $580 million.
However, the other side of me would be very scared about spending that much money on either company. Facebook has a strong grip on the college market, but there isn’t much of a defensible moat to their business. College students are fickle and if Facebook becomes uncool, that uncoolness can spread just as fast as their coolness did in the first place. Also, if they piss off their audience like they did recently by changing the way users can see information, they could see large groups of users leaving. There are also some interesting stories about Facebook founder Mark Zuckerberg and how he has been handling the talks as highlighted in this Techcrunch post, it sounds like he might be a little full of himself and Facebook’s place in the world.
YouTube also has problems in not having much of a defensible moat, and they also face some serious problems with copyright that could be a big legal mess for whoever would acquire them. Imagine if someone had spent $1 billion to buy Napster a few years back, how would that investment look now?
It used to be that to be acquired for numbers like this you’d need to have world-beating technology. Do Facebook and YouTube really have something here that can’t be ripped away from them quickly? I’m not so sure.
September 21st, 2006
As 2006 began I made a set of predictions for what I thought would happen related to web applications, comipanies, and “Web 2.0”.
We’re two-thirds through 2006, so I figured it was a good time to revisit how many of them have come true, and if any are still likely to occur in the rest of 2006.
1. RSS will become two-way with the help of 175.entry”>Simple Sharing Extensions.
Hmm, well, this is slowly improving, but I don’t think I really nailed this one. Hopefully we’ll see more of this in the future but the buzz around it seems to have died down or just moved behind the scenes.
2. Social news site Digg will expand into other content areas and media types and then will be acquired.
I was half right on this one. Digg did indeed expand into other content areas and media types, but no acquisition has occurred. Will that still happen? There hasn’t been any buzz around it lately, and Digg has gone through some recent problems as bloggers have noticed that Digg might not be as democratic as we thought, and they’ve lost some top users to Netscape’s offer to pay top social news finders.
Digg also faces competition from other social news services like Reddit, Newsvine, and Netscape, and while none of them has gotten to Digg’s level, it’s still early in the social news race. There are also numerous sites launching all the time which work just like Digg but are focused on specific verticals. It may be that what they’re doing isn’t unique enough now to really warrant someone wanting to acquire them that badly.
3. Web 2.0 will be looked down upon as a buzzword, and it’s usage will drop off dramatically.
This has definitely occurred, and more people seem to be moving past the term into just accepting things as new web applications. We’re also hearing “social web” or “social media” for a lot of Web 2.0 applications.
4. Face-recognition photo application Riya will be acquired by a major player.
Oops, didn’t happen yet either. Riya switched up their model a bit and are taking on an even bigger challenge of web image search with their facial recognition technology being a big part of that mix. I’d say at this point an acquisition in 2006 is unlikely, but I wouldn’t rule it out in the long term.
5. Some ecommerce shopping applications using the more recent advancements in social web technologies will be developed and will succeed.
Web shopping seems to move a little slower than other applications, but we have seen some cool new shopping applications. Jellyfish probably has made the most noise this year with their Value Per Action advertising model, but taking a look at this Alexa graph it doesn’t look they’ve had much traffic uptake from consumers. Of course, don’t always trust Alexa, I think Jellyfish is compelling although not revolutionary, but has a long way to go before it’s a major player. 
6. Google Analytics will again drop the hammer on the web analytics industry.
Another one I missed, there hasn’t been much out of Google Analytics besides finally opening up to the public. Google may be spread too thin in this case, or maybe they have no new analytics ideas, but they haven’t done anything special with it since launching it.
7. A forward thinking company will build technology to support transparency, efficiency, and relationships in the online advertising business.
Hey, what do you know, Right Media is doing this. Okay, I’ll admit this was a loaded prediction when I knew it was happening. Still, I think we’ve made great progress in 2006 thus far, and the rest of the year and 2007 could be really special.
8. Microsoft will launch a contextual advertising network that will either be huge, or fail miserably.
They have started issuing beta invites for advertisers to particiate in their content ad network. So we don’t really know yet if it will be a success or not. There hasn’t even been much detail yet on what the service will consist of, but if Adcenter is any indication it could have some interesting features, but be very IE-specific and bug heavy.
9. Two to three new startups will be so cool and successful they will make the heroes of 2005 like Flickr and del.icio.us seem small and insignificant.
I think YouTube makes a strong case for this being a correct prediction, and Digg has also been pretty cool and successful, although neither of them have been acquired like Flickr or Delicious. Of course, let’s recall that those two were not acquired for huge amounts of money though.
10. The venture capital investments and acquisition bubble will heat up even more, then deflate in the 2nd half of 2006 after a number of companies fail..
It seems as if things have cooled a bit in the 2nd half of 2006. Rojo was recently acquired by Six Apart, and there have been some recent venture capital investments but nothing too crazy.
Overall
Not bad, but I think I can do better with future predictions. I think I’m just early on a few of them, and maybe flat out wrong on one or two.
September 10th, 2006
Jay Weintraub beat the press release by pointing out that Vendare Media and Netblue will merge.
Vendare does a little of everything with their display ad network, email marketing, search marketing, co-registration, and more. Netblue is more of a high-volume direct marketer, so it should be an interesting merger. They’ll probably cover more ground, and from my distant view there does seem to be some good strengths they can use together.
If it helps publishers and advertisers, it’ll be a good thing. Congrats to the two companies.
June 13th, 2006
The blogosphere was filled with 2006 web predictions, including my own. Looking back at mine, only one or two have come true thus far, but the year is still young. Now that we’ve already got reality for the first quarter of the year, it’s time for some quick End of Q1 Web Predictions for the rest of 2006.
1. Applications are ahead of the curve.
The Web 2.0 world will start to realize that some of the cool applications being built are fantastic, but still ahead of the curve. I think some examples of this are applications that I really like such as Newsvine and Edgeio. They are well made, but I don’t think there are enough sophisticated users yet to make these applications really take off. I’m not saying they won’t, but I think they’ll have slow growth until it really kicks in about two years for them. It’s a reason that it’s sometimes best to keep things simple. Digg took off because it isn’t complicated, it takes a lot more time to figure out how to get the most out of Newsvine.
2. We’re short on attention.
The early adopters that are using all these new web applications only have so much attention, so it will take more users to keep many of these businesses viable and growing. For example, I’ve tried out 10 social bookmarking applications, yet I only have time to use one. My mom will never use one, my daughters are still 10 years away from using one, and the majority of my coworkers in a technology industry still don’t use one. Basically, this means some will crash and burn.
3. The rise of vertical social networks will quicken.
Myspace, Facebook, and their brethren have really taken off over the past year and a quarter. We’re now going to start seeing them tighten some rules to appease advertisers and investors, and growing problems with things like the police, school administrations, and others meddling will stunt growth a bit and make them lose some “coolness”. Combine that with some getting tired of how large and unfocused they are, I think we’re going to see more social networks popping up for specific industries, topics, and areas of interest. Dogster is such an example that’s been around for a while for dog lovers. Joga from Nike/Google is an example of how we’ll start seeing social networks for sports.
4. Facebook will regret turning down $750 million.
I don’t see how they’re worth $1 billion, but maybe I’m wrong. I just feel like they’re not going to be able to get a better offer and should have taken the money while the space was still red hot.
5. MSN will release their contextual product to poor reviews and results.
MSN will release their adCenter contextual network to publishers, and publishers won’t like the experience or the results. It will be the 2nd major company to try and present a great alternative to Adsense that won’t quite deliver.
6. Google Calender will be good, which will be a shock.
Google’s upcoming calendar application will be good, which will be a bit shocking compared to some of their recent product releases which sometimes feel half-finished. 30Boxes will be okay, but others trying to enter the calendar space will be in trouble. What is 30Boxes business model by the way? Getting acquired? Premium options? Ads?
7. Blog networks won’t get acquired, but will realize their income isn’t too bad.
After the About.com and Weblogs Inc. acquisitions there was a whole bunch of blog networks that started up. Whether they were motivated by the acquisitions, I’m not sure, but I don’t think we’re going to see many more networks get acquired by larger players. However, due to multiple streams of income such as advertising, sponsorship, and affiliate programs, the owners will realize that it’s not too bad of a business.
8. Niche Ad Networks Will Start Popping Up
FM Publishing may have been one of the first, and in some ways blog networks are like them, but we’re going to start seeing niche ad networks being created by entrepreneurs who realize that large ad networks can’t focus on getting sites targeted deals in all the various industries out there. It’s not a business to build and flip, but a small team can make some great income by starting an ad network focused on one type of industry or site and maximizing that site’s inventory.
9. Content producers will start to realize the value of microchunking content, monetizing it with built-in ads, and letting it go.
While NBC did the wrong thing in forcing sites to remove the viral hit “Lazy Sunday” Saturdy Night Live video clip, it was a prime example of how microchunked content can spread, and the opportunity that exists for smart content producers. If NBC had immediately placed the clip on their site after the show with an ad or two built into it, they could have made a lot of money from that video being passed all over the web and viewed by millions. Instead, it got put out there without any monetization at all, although NBC still benefitted from the resurgence of interest in Saturday Night Live.
10. Bloggers will complain.
Bloggers will continue to complain about things such as the snarkiness in the blogosphere and what’s going on with their Technorati rating.
That’s it for now, let’s see what develops in the rest of 2006.
April 2nd, 2006
Mike Rundle at BusinessLogs.com discusses some recent rumors that Facebook has turned down an acquisition offer for $750 million, and Businessweek now reports they won’t sell for less than $2 billion.
Wow. I know Facebook is big, I know Myspace sold for $580 million, and I know that Mike made some good points about how he thinks Facebook will just keep growing as the high school kids in Myspace graduate into Facebook. Of course, as those college students graduate from Facebook they’re also losing their audience. It’s a good question if they should build some sort of “post-college” service or just stay focused on the market they’ve dominated.
I congratulate Facebook on their success, but I hope turning down $750 million doesn’t come back to haunt them. It’s a bubbly time.
March 29th, 2006
Google bought Writely. Nobody is that surprised, and it makes it clear Google is taking Microsoft on head on in the office application world but will of course do it on the web instead. It will be a fun battle to watch, and I’ll be glad to see some competition in that space.
The next question is if Google will build the other common office applications like spreadsheets and presentations, or if they’ll snap up some other companies.
March 10th, 2006
As had been rumored for a while, Google has announced the purchase of blog analytics tool MeasureMap. MeasureMap was developed by a team within Adaptive Path, and the MeasureMap team will now be joining Google.
What’s interesting about this is that MeasureMap has been in private beta for months now, but hasn’t been released to the public. It’s amazing how early companies can get acquired. I recently received a beta invite and have been tracking this blog, I’ll probably post my thoughts on the actual application in the next week or so. TechCrunch also weighs in.
What’s most interesting about this acquisition is what Google will do with it. There are really two options that come to mind:
- Use it to improve the interface of Google Analytics, thus combining the products. MeasureMap has a better user interface, it’s simpler, easier to understand, and prettier. Google Analytics has much more to it though as far as stats are concerned, so it’d be interesting to see how they’d pull that off.
- Attach it to Blogger/Adsense as an integration piece. Just like they did with allowing Adsense to be easily added to blogs, it seems like they could just give Blogger users the option to turn on MeasureMap, or have it on by default with their blogs. That would fit the Blogger ease of use very well. I think this is the more likely scenario in my mind, we’ll probably know soon.
Congrats to those involved.
February 14th, 2006
There is a new and unconfirmed rumor that Yahoo is interested or going to buy Odeo. Who the heck knows if it’s true, however I will say that like I mentioned with Feedburner, there are some companies out there that seem like they’ve still got a good shot even if acquisitions start to slow down. These are the companies that have applications I found extremely helpful, and they’re so well done and easy to use it all just makes sense.
When I signed up for Odeo, it took me about 30 seconds to figure it out and record my first audio and see how to use it. It was one of the easiest and cleanest user experiences I’ve had in a long time in starting to use a web application. While I still don’t know if podcasting is the future, there is value in user-created audio and I think that is an area poised for growth. Odeo is the best solution I’ve seen so far, and they’ve got an experienced team. Whether or not the rumor is true, it smells like a long term winner to me.
February 7th, 2006
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