M&A
You are currently browsing the articles from the VoIP Digest matching the category M&A.
After much speculation (including a blog post I wrote yesterday), Yahoo finally acquired MyblogLog for $12- $10-million, according to Om Malik. Obviously, Yahoo put MyBlogLog in play last month when the rumors of its interest started to percolate. Of course, it didn’t hurt MyBlogLog’s M&A prospects that its social networking/community tool started to gain a lot of momentum in recent weeks judging by the number of widgets that started to pop up on peoples’ blogs. To be clear, MyBlogLog has some interesting features but it’s not much of a business given its only source of revenue is a statistics package that costs $3 a month or $25 a year, which competes against free services such as Google Analytics, Performancing and Sitemeter.
Yahoo is proving be an even better dream-maker for Web 2.0 start-ups than Google given the number of small acquisitions (Flicker, Blo.gs, Bix, Jumpcut). The question is what is Yahoo going to do with all these different pieces other than try to drive these users to other Yahoo services? And whatever happened to the Peanut Butter Manifesto?
Update: Om Malik has more details here. For some insight into MyBlogLog’s revenue potential and traffic, Fred Wilson had some thoughts last month. Mathew Ingram wonders out loud what Yahoo intends to do with MyBlogLog, which he highlights raised zero venture capital.
Technorati Tags: M&A, Web 2.0
Written by Mark Evans on January 9th, 2007 with no comments.
Read more articles on Web 2.0 and Main Page and M&A.
Well, it turns out the buyer of Bubbleshare isn’t News Corp. Instead, it’s Toronto-based Kaboose Inc., which is buying the photo-sharing service for $2.25-million to strengthen it’s position as “the biggest independent, family-focused online media company in North America”. (That’s a real mouthful, eh!).
Anyway, the deal will see Bubbleshare CEO Albert Lai and his team join Kaboose, which is looking to develop its community and social networking activities. It’s a small transaction but can only be seen as a successful for Lai, who made its first entrepreneurial splash when he and his partners sold MyDesktop to JupiterMedia in 1999. Hopefully, it will also provide Canada’s Web 2.0 community with some inspiration/encouragement that there are rewards if you take the plunge. I’ve got a lot of respect for Lai but the reality was Bubbleshare was more a feature than a business so it’s future hinged on a buy-out. At the end of the day, he and Bubbleshare did well.
The question you have to ask is whether News Corp.’s apparent $5-million offer for Bubbleshare was pulled off the table when details of the deal were leaked.
Under the terms of the transaction, Kaboose will buy BubbleLabs Inc. for $2.25 million with another $750,000 on the table based on an earn-out.
Update: Much to my surprise, Kaboose offered up its CEO, Jason DeZwirek, for an interview (and you thought only the mainstream media got to interview CEOs). I’ll provide a Q&A later in the post (see “continue reading” at the bottom) but wanted to highlight a couple of things from our discussion. Kaboose attracts 10 million unique visitors a month during its peak season (October to December) - 80% to 85% from the U.S. When asked whether the Bubbleshare purchase could inspire Canadian Web 2.0 entrepreneurs, here’s what DeZwirek had to say: “I hope that’s the case. If it is a by-product of it, that would be great. I think it’s a real shame that Canadians aren’t as active in the new media environment as we could be. Part of the reason is we are too Canadian-focused. People who are working on things are focused on the Canadian audience only, and that is not what the Internet is about. Although Kaboose and Bubbleshare are Canadian companies, we are both developing tools and applications that have universal appeal.”
Technorati Tags: M&A, Web 2.0
Can you talk about when discussions with Bubbleshare started?
We have been aware of bubbleshare since early summer and have been talking to them on an off over that time. Things accelerated over the last 30 days or so. But our belief has always been and is today they have a great set of tools with respect to sharing photos that are extremely easy to use. From our perspective, our audience of 10 million users a month is largely families and from that largely moms, and photos are a big part of preserving and sharing family memories. We have needs across the board for all our properties, not only photo sharing tools but other tools and applications, and the development team at bubble has a great skill set.
There are dozens of photo-sharing services out there. Did it help that Bubbleshare was in your backyard?
Yes, it was [helpful]. We weren’t specifically shopping for a photo sharing company. We were doing ‘buy, build partner’ scenarios for social networking tools and applications, which we view photos as an integral part of. From that angle, [Bubbleshare] is a great company and a great team where we have a photo application pretty much baked and ready to go and the team and technology can server as basis for a number of other social networking tools we plan to introduce this year.
Are you looking for more acquisitions?
We are very acquisitive company. This is our ninth acquisition. Our company has been built on acquisitions. This is the first time we have really bought tools and applications or technology. We have bought larger operating companies and larger Web companies. Ultimately, we see the Bubbleshare tools as generating traffic, retaining user and generating more pageviews. We are still focused on buying properties but our mission is helping parents plan and share family life.
Written by Mark Evans on January 5th, 2007 with no comments.
Read more articles on Web 2.0 and Main Page and M&A.
Maybe I’m out of the loop but something you don’t hear too much about these days is whether Technorati is a takeover target. It wasn’t that long ago that there was all kinds of speculation Technorati would be acquired by Google, Yahoo or Microsoft. Now, the buzz seems to have evaporated.
Maybe Technorati’s business model isn’t compelling enough to attract a buyer, or maybe its VC are demanding too high of a price tag, or maybe Technorati just wants to stay independent for a little while longer until the capital markets improve and it can do an IPO. I don’t know what to make of Technorati these days. It has a huge database of information about the blogosphere, a bunch of cool features and a CEO, Dave Sifry, who has all kinds of passion and energy. But it isn’t one of my go-to destinations every morning for whatever reason. Maybe Technorati’s M&A window of opportunity has come and gone but I suspect there’s probably a buyer out there somewhere.
A far more intriguing M&A target is FeedBurner, which now has more than 500,000 feeds and more than 300,000 publishers (blogs, etc.). Part of FeedBurner’s appeal is how it is helping traditional media such as Dow Jones establish a stronger online foothold at a time when they are under siege. FeedBurner also has a growing ad network business and moved into the blog search market with the purchase of Blogbeat earlier this year. If I was looking for an investment opportunity within the blog/RSS/content syndication worlds, FeedBurner strikes me as a far more compelling opportunity than Technorati.
Update: Juxtaviews recently did an interview with FeedBurner co-founder Matt Shobe.
Update II: Hitwise is reporting that Google Blog Search has surprised Technorati in market share visits. For some thoughts, check out the Next Net.
Technorati Tags: FeedBurner, M&A, Technorati
Written by Mark Evans on December 29th, 2006 with no comments.
Read more articles on Uncategorized and Main Page and Venture Capital and M&A.
The Wall St. Journal has an intriguing story about whether Web 2.0 is another bubble. It features a discussion between Todd Dagres, a founder and general partner with Spark Capital, and David Hornik, a general partner with August Capital. Dagres believes Web 2.0 is a bubble and that “billions will be lost on Web 2.0 companies when all is said and done”, while Hornik takes a more pragmatic approach. Here’s another take on the whole Bubble v.s non-Bubble debate: it strikes me the biggest worry-warts/advocates of Bubble 2.0 are the media rather than investors. Whether it’s the WSJ or Time or BusinessWeek, the media is doing a wonderful job talking about Bubble 2.0 and/or the red-hot Web landscape. Of course, it’s difficult to have a bubble when the investors involved are still mainly VCs and large institutions - as opposed to retail investors who lost their collective shirts during the dot-com boom by buying into hype rather than substance. Of course, VCs are not immune from hype either but, in theory, they’re supposed to be smarter, more pragmatic investors..right?
For more thoughts, check out Paul Kedrosky, who describes Dagres and Hornik as “bubble babies”, and Ouriel.
Written by Mark Evans on December 28th, 2006 with no comments.
Read more articles on Web 2.0 and Venture Capital and M&A.
According to YNet, Metacafe - one of the more popular video sharing services not called YouTube - has been acquired for $200-million. So who's next? Who's going to be left without a seat when the music stops playing?
Written by Mark Evans on December 8th, 2006 with no comments.
Read more articles on video and Main Page and M&A.
Rather than jump right into the Peanut Butter Manifesto comment-frenzy, I decided to let it simmer for a bit while doing some serious NFL channel-surfing. So what's the deal other than the shrouded motives of Yahoo senior V.P. Brad Garlinghouse, who thinks the company is spreading its resources too thin? If you go way up the strategic food chain, it may suggest the idea of trying to be all things to all people is fundamentally flawed. Yahoo, for example, has acquired everything from Flickr and del.ico.us to blo.gs and Musicmatch. The question is where there is a common theme behind Yahoo's M&A activity other than the need to buy cool technology/services and smart people? For that matter, does any of the major players' acquisition plan make complete sense? What many companies seem to be forgetting is their core purpose. In other words, what are they are offering and is that offering clear to potential and existing customers? What is Yahoo's meaning in life other than attracting as many people as possible and making money from them. If that's the strategic premise, the acquisition of Overture makes complete sense. As for anything else, that's open for debate. Perhaps the biggest concern from Garlinghouse's rant, P.R. exercise, power move, etc. is the M&A dreams may be coming to end an abrupt end for all those Internet start-ups who were banking on being acquired as a way to escape the reality a flawed or non-existent business plan, and/or a dwindling bank account. For an interesting look at acquisitions made by Yahoo, Google and Microsoft, check out this chart compiled by Shmula.com. Some other measured takes on the PBM come from Rob Hyndman, who believes it hints at senior management changes within Yahoo, and Mathew Ingram, who post titles - This peanut butter is del.ici.us - is among the most creative I've seen in a long time. Tags: Yahoo, Brad Garlinghouse, M&A, peanut butter
Written by Mark Evans on November 20th, 2006 with no comments.
Read more articles on yahoo and Web 2.0 and Main Page and M&A.
Interesting to see Yahoo snap up Bix and MyBlogLog. I've had MYB's visitor widget on my blog for many months, and consider it one of the best ways to get a handle on the links that resonate with visitors. That said, I have not participated much in MYB's community efforts, which seem to be at the root of Yahoo's estimated $10-million acquisition. It's not that I don't like the community tool, it's more than I just haven't had the time to explore it properly. Stepping up the food chain, it is interesting to see a new wave of mini-acquisitions taking place these days as the big online players look enhance their feature portfolio. In Toronto, we're still on pins and needles (well, not really that excited!) to see if the rumours about Bubbleshare being acquired by News Corp. for $5-million are accurate. Bubbleshare's Albert Lai has been invisible in recent days (he even failed to appear at the recent mesh meet-up) so something must be up. Tags: Yahoo, MyBlogLog, Bix, M&A, Bubbleshare
Written by Mark Evans on November 18th, 2006 with no comments.
Read more articles on Web 2.0 and Main Page and M&A.
What does Motorola's purchase of Good Technology mean? Does it suggest the consolidation of the mobile e-mail market is picking up steam? Will HP make a play for Seven Networks now that Good and Intellisync (Nokia) have been snapped up? Does this finally mean Research in Motion will see some real competition after owning the mobile e-market for the past five or six years? And what about the much-vaunted Motorola "Q" that was supposed to sell millions of units this year but appears to have stalled? It would be interesting to see how much Motorola coughed up for Good, which has raised more than $200-million in private equity from investors such as Kleiner Perkins. Canaccord Capital analyst Peter Misek said Good had no choice but to sell because the 470-employee company was "running out of money". For more, check out Blogging Stocks. Tags: Motorola, RIM, mobile e-mail, Kleiner Perkins
Written by Mark Evans on November 14th, 2006 with no comments.
Read more articles on Wireless and Main Page and M&A and Research in Motion.
Has it already been more than a year since eBay decided to cough up as much as $4.2-billion for Skype? The International Herald Tribune takes a look at the deal and how Skype has evolved within the eBay empire. So did eBay get suckered into making a pre-emptive bid ahead of rival suitors such as Google, or did eBay made a savvy move by acquiring the world's leading VoIP player? So far, there has been little indication eBay has been able to do anything with Skype strategically other than giving sellers the option of putting "Skype Me" buttons on their stores. On the other hand, Skype as a telecom service provider is showing promise as a standalone business. In the past year, the number of registered Skype users has more than doubled to 136 million, while Skype's revenue is expected to more than triple this year to $195-million from $60-million in 2005. But is that enough to justify spending $4.2-billion? The answer - and apologies for being so wishy-washy - is only time will tell. But let's conservatively assume Skype's sales see compound growth 25% over the next five years. This would result in sales of $675-million by 2011 with healthy profit margins. That's a pretty good business. Let's also assume eBay can use Skype to get into the pay-per-call market, which the Kelsey Group forecasts will become a $1.4-billion to $4-billion business by 2009. Assuming Skype captures 10% of the PPC market, that would be another $140-million to $400-million of sales - boosting Skype's total revenue to $810-million to $1.1-billion. Again, that's a pretty good business. Of course, the $4.2-billion price-tag will always be used as a benchmark on how the deal is "valued". But if Skype grows as expected, its acquisition may look like a pretty good move in five years. Tags: eBay, Skype, VOIP, M&A
Written by Mark Evans on November 14th, 2006 with no comments.
Read more articles on Skype and Main Page and M&A.
At ad|tech there's a lot of talk about online advertising - it's real, it's coming, it's very exciting, advertisers have no choice but to spend more of their money on the Web - but few people actually know how to walk to walk. In other words, no one has a strong idea or, for that matter, a particularly strong view on how to embrace online advertising. Instead, you get a lot of strategic mumbo-jumbo. For example, advertisers are struggling with how to approach the video market. Do they sponsor videos, do they make pre-roll placements, and do they get involved with user-generated content? What about virtual worlds such as Second Life? "I'm not a Second Life person but I feel we all better experiment there because more and more people are embracing it," said Peter Naylor, senior vice-president, digital media sales with NBC Universal, during a panel this morning. And what about social networks? Sure, Google is prepared to spend $910-million on MySpace but how do advertisers, in general, capitalize the social networking phenomena? What role will consumers play in creating advertising - a trend evident by the number of companies running contests that involve consumers creating ads for the Super Bowl. New York Times advertising columnist Stuart Elliot quasi-suggeseted that "two Super Bowls from now or five Super Bowls from now, all the major commercials will be created by consumers".
Of course, the key player in the online advertising market's evolution are advertisers, which explains why everyone was so interested in listening to the views of Ted McConnell, Interactive Innovation Director with Procter & Gamble, which plans to allocate more of its multi-billion dollar advertising budget online. McConnell, whose decisions can make or break the online advertising dreams of many companies, joked that is has "100,000 people who want to help me do my job".
With everyone (advertisers, ad agencies, ad networks, Web sites) interested in doing more business online, education will be an important element so advertisers are comfortable spending more money on the Web and where exactly to run campaigns to build brand and sell more stuff. It's still early days so all the talk is good but it would be refreshing to see more people say "I don't know what's going to happen".
Update: Apparently, there are lots of people definitely interested in learning more about the online advertising market given more than 12,000 people pre-registered for ad|tech. The show's popularity stands in contrast to 2001/2002 when the conference was held in a single room.
Tags: advertising, P&G, social networking
Written by Mark Evans on November 8th, 2006 with no comments.
Read more articles on Uncategorized and Main Page and Media and M&A.
A little Web 2.0 math: one acquisition (Wired Digital acquires Reddit) involving a company with four employees that received $100,000 of seed capital = frenzy within the blogosphere. Can anyone say "echo chamber"?
Written by Mark Evans on November 1st, 2006 with no comments.
Read more articles on Web 2.0 and Main Page and M&A.
Google's shopping trip through the Web 2.0 start-up market continued with the purchase of Wiki maker Jot.com. In the scheme of things, it's chump change for Google but it does put the spotlight back on Google's online application suite, which will come as little surprise to anyone when it's eventually launched one day. Jot.com is a nice addition because it brings a collaboration tool into the mix. The purchase got me thinking about what people are currently doing to cobble together an online office suite. Since I started working from home (and I can't be too effusive about not having to commute anymore!), I've really got into Web-based tools. This includes Skype, Google Talk, Writely, Yahoo Mail, PBWiki, along with Flock and Firefox. I'd be curious to see what other tools are people are using. Tags: Google, M&A
Written by Mark Evans on November 1st, 2006 with no comments.
Read more articles on Google and Web 2.0 and Main Page and M&A.
There is no doubt the newspaper industry needs to change its ways as the Web becomes more popular with readers and advertisers. There has been a lot of talk about how newsrooms need to evolve (for example, my "5 Ws Post") but little focus on the newspaper "business" so it was interesting to read a comment from a group interesting in buying Baltimore's The Sun newspaper from Tribune Co. In discussing how his group was approaching the potential puchase, Theodore Venetoulis told Reuters they understood it will "not be an investment that will provide the usual yield and return that some investors will be used to." That's a pretty telling and blunt concession, although you could argue it's also a savvy negotiating tactic. That said, Venetoulis put the spotlight on the new economic realities of the newspaper industry, which needs to reduce its operating costs amid the loss of advertising revenue. For newspaper owners, this means maintaining operating margins and profits by becoming lean and mean (e.g. smaller, less expensive newsrooms) or accepting lower profit margins and profits compared with historical levels. While this is happening, newspapers such as the Toronto Star, Los Angeles Times and newspaper chains such as Tribune Co. and Dow Jones Inc. are under growing pressure from investors unhappy about slumping stock prices. Unless there are more investors such as Venetoulis willing to accept lower ROIs, newspapers are going to be much different creatures. My advice for newspaper owners: aggressively embrace the Web, and reposition your newsrooms to cover less news (the Web is increasingly taking over the job of covering breaking news), and focus on providing analysis, perspective, context. For many newsrooms, it may be having a smaller, smarter, more flexible group of reporters.
Written by Mark Evans on October 30th, 2006 with no comments.
Read more articles on Main Page and Media and M&A.
In the name of speculation, rumination and guess-timation, I have unscientifically compiled a "who's next" list when it comes to M&A activity in the wake of Google's $1.65-billion bid for YouTube. My methodology is admittedly simplistic and possibly prone to mistakes but it is Sunday morning. The "sources" for this list are ComScore and HitWise rankings and anecdotal evidence. It's open to criticism as well as suggestions. In no particular order, here goes:
1. Photobucket: With more than 25 million members, it's a surprise Photobucket hasn't been picked off like Flickr was by Yahoo. Photobucket raised $10.5-million in a Series B round led by Trinity Ventures earlier this year.
2. Facebook.com: It is just a matter of time before Yahoo pulls the trigger on a $1-billion acquisition? With MySpace part of Rupert Murdoch's Web portfolio, Facebook is ripe for an acquisition but what's the price. Clearly, Yahoo CEO Terry Semel is agonizing over this issue as we speak.
3. Gorilla Nation: an online ad sales representation firm that handles media sales for more than 250 high-traffic Web sites. In August, it was the 22nd highest-ranked Web site in the U.S. with 25.9 million unique visitors.
4. Weatherbug: Another highly-ranked Web site (40th in unique visitors), Weatherbug has 8,000 tracking stations and 1,000 cameras throughout the U.S. It's also got a bad reputation as a purveyor of spyware.
5. CareerBuilder: A popular job site that was the 29th most popular site in the U.S. with 20.6 million unique visitors in August.
6. Digg.com: Another one of those Web 2.0 start-ups ripe with takeover potential, it seems to be only a matter of time before a deal materializes.
7. Technorati: Maybe Technorati's time has come and gone. If it was going to be acquired, it might have already happened. Then again, blogs are still in their relative infancy so a tool to track traffic could be pretty valuable. I still think Google is a potential suitor given how underwhelming Google Blog search has been since its launch.
8. FeedBurner: After establishing its as one of the leading RSS publishing services/tools, FeedBurner's appeal will only increase as RSS becomes less of an acronym and more of a mainstream tool embraced by people who want to easily personalize content.
9. Heavy.com: a popular video-sharing service that cheekily bills itself as the "#1 broadband destination for wasting time". According to HitWise, Heavy was the second most-popular video sharing service in the U.S. during the first week of October with 17% market share.
10. Zoho: If the Web 2.0 office suite and the Office 2.0 movement actually take root (propelled, in part, by Google's efforts), Zoho could become an appealing target.
11. WordPress/Typepad: Blogging is only going to get bigger so it makes sense that two of the most credible players could be snapped up.
This list, of course, is incomplete so if you have suggests, fire away. There are lots of other people thinking about the same topic such as Tech Trader Daily and Tolman Jeffs, managing director with the Jordan, Edmiston Group. For some perspective, Tristan Louis also put together a list of recent Web 2.0 acquisitions. CNet, meanwhile, has a list of some high-profile Internet deals that succeeded and failed. As well, the New York Times has a sad tale of how Friendster founder Jonathan Abrams turned down a $30-million takeover offer from Google in 2002. If Abrams had accepted the offer, he would have received pre-IPO Google shares that now might be worth $1-billion.
Written by Mark Evans on October 15th, 2006 with no comments.
Read more articles on Web 2.0 and Main Page and M&A.
In this week's
Talking Tech podcast, Kevin Restivo and I discuss the impending disappearance of BCE and the decision to convert Bell Canada, the country's largest carrier, into an income trust (the
Globe & Mail has a huge feature series today on the rise of income trusts). We also touch upon Google's proposed $1.65-billion acquisition of YouTube, including the copyright issue that has everyone in a tizzy. Finally, we look at how legal digital music downloads doubled in the first half of the year. Of course, this doesn't mean illegal downloads have disappeared. One of the big questions in the music industry is whether Russia's
AllofMP3.com, which sells CDs for between $1 to $2, is legal or illegal.
Written by Mark Evans on October 15th, 2006 with no comments.
Read more articles on Web 2.0 and video and Main Page and Podcasting and M&A.
Here's a theory about the decision to blow up BCE and turn Bell Canada into an income trust. Perhaps the biggest strategic mistake made by BCE CEO Michael Sabia was not buying Microcell Telecommunications, the country's fourth-largest wireless carrier, when he had the chance a few years ago. Instead of acting aggressively and having to deal with the federal competition bureau, Sabia allowed Rogers to swoop in and acquire Microcell for $1.4-billion. Yes, Microcell used GSM while Bell Mobility was on CDMA but the other benefits (a larger exposure to the fast-growing wireless business, tax-loss carry-forwards, etc.) far outweighed any technology issues. Why BCE didn't move more quickly and/or aggressively is a huge mystery. After all, technology could not have been an issue given Telus, which also uses CDMA, had put Microcell in play by making the initial bid. Instead, BCE's failure to buy Microcell left it with just 20% of its revenue coming from wireless and that (along with a host of other issues) made BCE a low-growth entity. As a result, the move to an income trust became more of an option. Another spin on the Microcell story is Manitoba Telecom should have made a strong bid for the wireless carrier. Instead, Manitoba Tel decided to buy Allstream for $1.8-billion, which now shows all signs of being an expensive strategic mistake.
Written by Mark Evans on October 13th, 2006 with no comments.
Read more articles on Wireless and Main Page and ILEC News, Analysis and M&A.
Robert Scoble asks whether Facebook is worth as much as YouTube. Well, it depends on how badly someone wants to buy it. Maybe the answer is "yes" as the major players such as Yahoo scramble for some of the big Web properties still in play now that MySpace (News Corp.) and YouTube (Google) have been taken off the table. If you're Facebook, what you do is hire some hot-shot investment bankers to start a bidding war? eBay massively over-paid for Skype because Tim Draper and Niklas Zennstrom did a wonderful job convincing Meg Whitman there were other parties (Google?) interested. Maybe Facebook will do the same.
Written by Mark Evans on October 12th, 2006 with no comments.
Read more articles on Web 2.0 and Main Page and M&A.
With Google gulping down YouTube for a mere $1.65-billion, how does this affect the competitive landscape? The New York Times takes a look at Yahoo, which apparently made a bid for YouTube and has an interest in acquiring Facebook to get a bigger foothold in the social networking market. The NYT articles suggests Yahoo has to do something because it has fallen out of favour with investors and "losing its initiative" in rolling out new services in areas such as video and social networking. To be honest, this "critique" is a bit of a reach and illustrates how Google has captured the imagination of the media and investors with every single little move it makes (see the buzz over the launch of Google Docs today). That said, with YouTube becoming part of Google's arsenal, it will be interesting to see how Yahoo, Microsoft, AOL and News Corp. respond. Maybe there will be an M&A frenzy as the major players scramble to make sure they have the properties they need to attract traffic and advertising. (Check out CNNMoney's story on the potential M&A activity) Part of the challenge making deals is the Web landscape is constantly shifting. A red-hot company today such as Facebook could be worth $1-billion today but $150-million tomorrow if new players enter the market and start to attract a following. Do not be surprised if there is growing pressure on online executives to do something aggressive. I would suggest any site/service with large amounts of traffic has become a takeover candidate. Of course, this means there will be mistakes made as panic-stricken executives massively over-pay for acquisitions - much like we saw during the dot-com boom.
Update: TechDirt has an intriguing post looking at whether the lack of the lack of an IPO market is hurting innovation. It also raises the point that IPOs during the dot-com boom did little to promote innovation but, instead, shifted the investment risk from VCs to the public. As well, Blogging Stocks has a post on whether Yahoo needs to buy something. Among those mentioned is Dabble (a TV guide for online video) and Heavy.com.
Written by Mark Evans on October 11th, 2006 with no comments.
Read more articles on Web 2.0 and Main Page and M&A.
Mark Cuban may have missed the mark when he refused to believe Google would buy YouTube but now that the deal's getting done, his unorthodox stance on the $1.65-billion marriage shouldn't be ignored. His post today - somewhat hard to find amid the blogosphere tsunami unleashed yesterday - raises an excellent point: with YouTube poised to become of the Google empire (and bidding a champagne-drenched farewell to its status as a scrappy, peoples' champion start-up) how long will it take before Google's major rivals (e.g. Fox, which owns MySpace, which also delivers a lot of video) unleash their legal hounds on YouTube? After all, Google will be a major player in the video business so why would content owners let it use unlicensed material to support the YouTube's growth. The other side of the coin is Google may be content to deal with any content issues if that's what it takes to own the world's biggest online video brand. Two other points before you go onto to read everything you ever wanted to know about YouTube: 1. YouTube was started in 20 months ago; it raised its first round of VC last November, and talked about an IPO a few months ago. It's been a wonderful, wild ride from Chad Hurley and Steven Chen; and 2. Sequoia Capital, which also had a major stake in Google, could see its $11.5-million investment in YouTube be worth as much as $500-million. Sweet.
Update: Nice to see the New York Times has finally caught up to me - :) - with a story about how Sequoia was the only VC to back YouTube. It is interesting that Sequoia was able to corner the deal, particularly when YouTube raised a second round after it had gained some serious traction.
Written by Mark Evans on October 10th, 2006 with no comments.
Read more articles on Google and Web 2.0 and video and Main Page and M&A.
Amid the speculation (and eventual reality) about Goolge buying YouTube, something that hasn't received much attention is how Sequoia Capital invested $3.5-million in November 2005, and $8-million in April, 2006. (Sequoia appears to be the only VC to make an investment in YouTube.) So how much of YouTube does Sequioa own and, more important, how much could its stake be worth? Last October, Om Malik suggested Sequoia's initial investment in YouTube was done at a pre-money valuation of $15-million. For the sake of argument,
let's assume Sequoia own 25% of YouTube. If YouTube is worth anything near the $1.6-billlion being bandied about by the NYT and others, Sequoia is looking at $400-million, or a 40x return on its money. Now, that's a big-time home run - perhaps not a Skype-like monster blast home run but a home run nonetheless.
More: Mr. Wave Theory crunches his own numbers to come up with the booty split between YouTube's VCs, founders (Steven Chen and Chad Hurley) and employees. Here's a video interview featuring Hurley and Chen on how YouTube was started.
Update: DealBook reports Google's purchase of YouTube could happen as early as this afternoon. Google ended up making a $1.65-billion bid for YouTube.
Written by Mark Evans on October 9th, 2006 with no comments.
Read more articles on Web 2.0 and video and Main Page and M&A.
Mark Cuban really doesn't like the idea of Google buying YouTube. His latest rant, which not surprisingly includes the word "moronic", hammers the point that YouTube's appeal is largely based on its ability to offer unlicensed content - a gig, he contends, that will eventually disappear when the lawsuits starting flying. Perhaps YouTube sees the writing on the wall, which would explains the potential deal with Google. But maybe YouTube's M&A appeal has more to do with its strong brand and the Web's ability to deliver content to anyone at anytime. As for whether YouTube is worth $1.6-billion, I would argue it's worth whatever someone is willing to pay for it. Was Cuban's Broadcast.com worth $5.7-billion when it was acquired by Yahoo in 1999? Were any of the $1-billion+ acquisitions made by Nortel during the telecom boom worth it? Is the bag of organic milk you bought yesterday worth $9? Where there's smoke, there's fire, which means YouTube is in play - and the investment bankers are already counting their commissions and placing their orders for new BMWs. Maybe YouTube's copyright issues will be a factor in the final price but I think many of Cuban's arguments - while passionate - won't be a consideration at all.
Written by Mark Evans on October 8th, 2006 with no comments.
Read more articles on Google and Main Page and M&A.
After a one-week hiatus, Talking Tech is back. Not surprisingly, I "hi-jacked" the show to talk about my decision to jump from the world of journalism to the blogosphere by becoming vice-president of operations with b5media, which operates a global new media network with more than 150 blogs that attract two million unique visitors a month. In response to a few inquiries, I'll continue to write my blogs and, hopefully, keep my hand in journalism a little bit. As for the rest of Talking Tech, Kevin and I spent quite a bit of time talking about Research in Motion co-CEO Jim Balsillie's purchase of the Pittsburgh Penguins for $175-million. It also gave us an excuse to talk about the Blackberry Pearl, which became available in Canada earlier this week. Finally, we touched up on the Google-YouTube rumours, which picked up steam after a Wall St. Journal story and a TechCrunch post. Notes: The show notes for Talking Tech can be found here, the podcast is here. Thanks again to Fleishman-Hillard's David Jones and Ed Lee for their production magic - and their decision to keep working with Kevin and I even though we're no longer daily technololgy newspaper reporters...:)
Written by Mark Evans on October 7th, 2006 with no comments.
Read more articles on Uncategorized and Web 2.0 and Main Page and Podcasting and M&A and Research in Motion.
Another day, more rumours ("totally unsubstantiated", mind you) that YouTube is going to be purchase for a kazillion dollars. Let's just auction the damn thing on eBay and auction it off so we can finally kill this weird YouTube obsession. There, I feel much better now. Update: Om Malik said dismissed the prospects of a YouTube-Google deal, suggesting "it has as much chance of happening as me dropping 40 pounds". In his typical pragmatic approach to rumours and speculation, Paul Kedrosky opines that "the blogosphere has predicted nine of the last three Google acquisitions, so skepticism is highly warranted".
Update: ComScore has some food for thought about the Google-YouTube speculation. For example, the number of unique U.S. visitors in August:
Yahoo! Video 21,141
MySpace Videos 19,406
YouTube 19,089
MSN Video 15,414
Google Video Search 11,891
And % of U.S. video streams in August:
Yahoo! Sites 11.3%
MySpace 20.3%
YouTube 9.0%
Microsoft Sites 2.2%
Google Sites 0.8%
Written by Mark Evans on October 6th, 2006 with no comments.
Read more articles on Web 2.0 and Main Page and M&A.
If you're a serious gamer, Voodoo Computers is the PC industry's Rolls-Royce with cool-looking and powerful systems (albeit at a premium price). Earlier this week, the Calgary-based company said it had agreed to be acquired by Hewlett-Packard for undisclosed amount. So why rush into the arms of HP rather than raising venture capital or doing an IPO? Well, this story goes back to January 2005 when Voodoo came to a strategic fork in the road. As it strived to stay on the bleeding-edge, it ran into size and scale issues because innovation is challenging when you have limited sales volume. Ravi Sood, who owns Voodoo with his brother, Rahul, said discussions with HP started to take place but things were moving at a snail's pace until Mark Hurd took over as CEO. Hurd recognized the value of Voodoo's brand and how it could fit into HP's gaming strategy and leverage its $3.5-billion of R&D. The deal, however, took on some complexity when Dell, which approached Voodoo about a potential acquisition. Ravi Sood said Dell's advances were rejected because Voodoo didn't see any synergy between the two companies. Meanwhile, HP started to look more attractive because it respected the Voodoo brand and it wanted to keep Voodoo in the high-end of the market. "This deal isn't about one plus one," Sood explains. "We weren't motivated to take a check and run the business at status quo. The difference here is HP has applied a veil of autonomy on the Voodoo brand and will integrate their technology." For more check out, CNet and Real Tech News.
Written by Mark Evans on September 30th, 2006 with no comments.
Read more articles on Main Page and M&A.
GigaOm has the details on Six Apart acquiring RSS feed reader Rojo.com, as well some views on the RSS reader market. This is just a hunch but I think we're going to see lots of these kind of deals in the coming months as struggling/weak/under-financed Web 2.0 start-ups scramble into the arms of thriving/strong/well-financed Web 2.0 players. The Six Apart-Rojo deal (and the Tucows purchase of Kiko on eBay, or FeedBurner's acquisition of Blogbeat) are perhaps signs that the funding frenzy (FF) could be losing some of its steam as a growing number of start-ups run out of money and have nowhere to go. This Web 2.0 "consolidation" could be sold as a win-win scenario. The stronger players acquire cool technology at low prices, which could make them more viable and sustainable entities. Meanwhile, the weaker players find a way for their technology to live on, a place for some of their employees to keep working, and maybe some cash and/or shares for investors. These deals should be seen as a healthy development because it suggests investors aren't willing to pour good money after bad to sustain companies that would be better off gone. Maybe there's a job out there for a Web 2.0 middleman. Perhaps TechCrunch could morph itself into a wheeler-dealer? Update: Kevin Burton, who co-founded Rojo, has some personal views on Rojo as well as a re-cap of other blogosphere thoughts.
Written by Mark Evans on September 6th, 2006 with no comments.
Read more articles on Web 2.0 and M&A.
It turns out the mystery eBay buyer for Kiko was Tucows Inc. and my friend, Elliot Noss. Noss explains the Toronto-based company's rational in a lengthy post. Essentially, it boils down to Tucows' need for a calendar application within its e-mail system, and buying Kiko for $258,100 on eBay provided Tucows with good technology much faster than developing it internally. "We all believe that a calendar is a very important function in the messaging suite for small businesses," Noss said. "Given that people don't want to maintain separate services for personal and business use, and because the line between personal and business services is getting blurrier, we felt this functionality was a big hole for us." For people unfamilar with Tucows, it provides more than 6,000 ISPs, hosting companies and service providers with wholesale tools such as blogging publishers (Blogware), software, e-mail and domain name registration. The company also operates a software download site with more than 40,000 titles.
Update: For more check, out Mathew Ingram and Don Dodge. TechCrunch has done a podcast with Noss about the Kiko deal.
Written by Mark Evans on September 6th, 2006 with no comments.
Read more articles on Web 2.0 and Main Page and M&A.
Nortel has agreed to sell its UMTS unit to - surprise, surprise - Alcatel for $320-million. It was only a matter of time before Nortel sold the money-losing business, and Alcatel seemed to be the most logical buyer. While Nortel can certainly use the $320-million, it is below the expectations of analysts, who were looking for about $500-million. Nortel held a conference call today at 9 a.m. to provide an “update on advances to the execution of its business planâ€.
Written by Mark Evans on September 1st, 2006 with no comments.
Read more articles on Main Page and Nortel Networks and Telecom Equipment Makers and M&A.
Now that Cisco is sexy again (stellar fourth-quarter results, strong growth for fiscal 2007, savvy acquisition of Scientific-Atlanta), tech/TV watchers should pay heed to its latest acquisition: the $92-million purchase of Arroyo Video Solutions, which makes software to help cablecos and carriers deliver video-on-demand services. The acquisition is the latest in a string of video-related deals that Cisco has made in recent years (perhaps Linksys could be included given it expand video within the home) to reposition at a time when many of its rivals (Nortel, etc.) are scrambling to figure out where they want to be and what they will look like in the wake of fierce competition. Cisco, meanwhile, is ahead of the pack with a strategy that may be CEO John Chamber's legacy. Watch this space, watch this company.
Written by Mark Evans on August 22nd, 2006 with no comments.
Read more articles on Telecom Equipment Makers and M&A.
Forget about an IPO, let's just get YouTube sold right now. Fortunately, Russell Shaw has come up with a list of
potential suitors. It includes (drumroll, please!): Adobe, Google, Sony, Time-Warner, News Corp. and Yahoo. I'm don't think Adobe or Sony should be on the list, while I'd be surprised if Time-Warner made such a bold move. As for Google, it's not one to make big, flashy deals. So that leaves Yahoo and Rupert Murdoch. If I was a betting man, I wouldn't be surprised for Rupert called YouTube CEO Chad Hurley for a chat soon. Before any kind of deal - or IPO - is consummated, YouTube will have to tackle is the sticky issue of copyright infringement given more
content owners are asking for their content to be removed as YouTube gets more popular.
Update: The Guardian has a story that YouTube overtook MySpace as the most popular "new generation. According to Alexa, YouTube has 3.9% of global Internet visits each day compared with 3.35% for
MySpace.
Written by Mark Evans on August 1st, 2006 with no comments.
Read more articles on video and Main Page and M&A.
Boy, the folks south of the border sure like our tech companies. This time around it's Burnaby, B.C.-based
Convedia Inc., which has been acquired by
RadiSys Corp. for US$105-million. It's a sweet return for Convedia's
investors, which includes Ventures West, Mayfield Ventures and Terry Matthews' Wesley Clover. Convedia makes media servers for telecom carriers and enterprise customers that want to offer VoIP and IMS services. Convedia, which had has won a ton of industry awards recently, was on a revenue run-rate of $20-million based on its second-quarter results. The RadiSys press release can be found
here.
Written by Mark Evans on July 27th, 2006 with no comments.
Read more articles on Main Page and Telecom Equipment Makers and M&A.
In a marriage that makes a lot of sense, FeedBurner has bought Blogbeat, which offers a user-friendly, statistics service for blogs. While many people are familiar with FeedBurner, Blogbeat has been a relatively low-profile player in the stats world behind MeasureMap (now part of Google), Mint, StatsCounter and, most recently, Performancing. I've been using Blogbeat for several months and, for the most part, it's a good service. That said, Blogbeat has been plagued recently by performance issues - perhaps caused by the growing pains of heavy traffic. As well, I'm not sure how successful Blogbeat's subscription service ($24 a year) has been faring. With FeedBurner's financial support, Blogbeat should have the financial resources it needs to improve. This deal is interesting from a big-picture strategic perspective because it offers insight into M&A activity within the blogosphere. Rather than mega-deals, you will probably see smaller transactions as players expand their service portfolios. A growing number of these deals will involve companies that have interesting technology but find themselves running out of cash.
Update: For more, check out the FeedBurner blog, TechCrunch and Likeitmatters.
Written by Mark Evans on July 17th, 2006 with no comments.
Read more articles on Uncategorized and Web 2.0 and Main Page and M&A.
