Lets put this in a time capsule and revisit it in 5 years:
..Rubin also said the simple mathematics of Motorola’s single-digit marketshare would keep Google from overly interfering. “Even if I was completely insane, it wouldn’t make any sense for me to think that we could get Motorola to be 90 plus percent marketshare,” and compete with the huge field of Android vendors, he said. “It just isn’t gonna happen.”
By gosh, we couldn’t possibly compete with third parties distributing our own platform! We are just a search engine, how would we steal all of those customers?
In 5 years, Google will have 90% of the Android phone/tablet market share courtesy of Motorola.
Internet Brands, the owner of vBulletin, is being taken private for $640 million.
Besides vBulletin, Internet Brands owns a bunch of message boards and websites across different categories. Back before their 2007 IPO it appears they dealt primarily with vehicle and mortgage verticals. After their IPO they expanded to new categories such as careers and travel, using the IPO money to buy up lots of developed websites and domain names.
The exact benefits or reasons for going private are hard to tell. I would suspect it may have to do with the current availability of cheap credit and the owners/directors not having a very positive outlook on their long term future. On the other hand it eliminates the costs of regulatory compliance being a public company and allows a company to operate without making all their business activities public via SEC filings (its easy to demand more money when you know exactly what your prospective buyer has been paying out to everyone else.)
There are several other companies like Internet Brands that have a strong track record of purchasing the type of websites developed by self employed website publishers. The biggest mistakes I see publishers make are building out sites in the wrong vertical and treating their business activities as a part time hobby.
Even though companies such as Demand Media are heading the other direction and seeking an IPO, both events are good for website publishers because they publicly establish financial valuations that allow more investors to “understand” the business. Publishing content is very much a hot area and you can count on more copycat acquirers to help drive up the valuations of your internet properties. Also don’t be afraid to use your knowledge of how the business works to purchase, or short sell, companies that make money from content publishing (however understanding how to read company financials is just as important.)
Tech bloggers everywhere have been talking and throwing out predictions over the failed Yahoo Microsoft merger.
I’ll keep it simple. Google is a data company. Yahoo is a content company. That difference is night and day when it comes to focus and performance.
Content is a fine business model. Long term, a “be everything” model it is destined for failure. Niche publishers and aggregated feeds will grind away at their audience and profit margins.
Short term, the mis-focus has caused Yahoo to fail miserably by screwing up Panama. Also, for far to long they allowed garbage traffic access to the same PPC feed as high quality publishers and domainers. And thats just the beginning of the list. These are mistakes data companies don’t make. Google sure didn’t.
Microsoft has submitted a $44.6 billion bid to buy Yahoo.
This is the only scenario I can see as someone becoming a serious threat to Google. Yahoo attempted to become a content company rather than a data company, as Google is. They made a lot of mistakes, going entirely in the wrong direction, in my opinion.
This business is all about sending traffic to the most valuable source. Google understands that. Yahoo didn’t, or doesn’t. The question now, will Microsoft?
1. Stupidly obvious wins. Filesharing caught on because people wanted to download music for free. Youtube was the obvious next step — share video.
2. Push the rules. More than a few people have said Youtube is a copyright infringdement honeypot. Neither Napster nor Kazaa had the law on their side. Why should Youtube?
3. Social networking is very profitable. At least, it can be profitable for you if you can exploit its traffic stream.
4. Sometimes it pays to be a big loser. Youtube has been footing a bandwidth bill big enough to rival a mega-yacht’s fuel bill at full power. Hosting videos when no advertising is displayed compounds the problem.
5. The big three rivalry can be your gain. Google wants to be first. So does Microsoft. So does Yahoo. The worst case scenario for a company looking for a buyout is having one company being in the market to buy you. Three companies with obnoxiously deep pockets? Home run.
IAC/InterActiveCorp the owner of Ask.com, LendingTree.com, Match.com, Hotels.com etc. announced today that it has purchased a 51% share of CollegeHumor.com’s parent company. An exact price has not been released but it is believed to be in the 8 figure range.
This is a good example of the added value recurring traffic has. CollegeHumor has built up a site where loyal readers come back again and they tell their friends. A large portion of their traffic is eBaumsworld-style movie clips and pics — certainly not unique. CollegeHumor has been able to build a presence and mindshare online, targeting a specific demographic and adding unique content (daily “blog” posts from multiple authors.)
My strategy for internet publishing has been to establish niche traffic streams and then build online communities around them. It is hard, it takes a long time, and you can make a lot more money sending the traffic elsewhere — and that is why established, profitable web sites are worth so much money the the big players (Fox Interactive Media/News Corp and IAC at this stage of the game.)
Here we go again, News Corp just bought out 2 more internet companies, kSolo.com and Newroo Inc. Prices of the two aquisitions have not been disclosed.
On Monday Time announced that it purchased Golf.com. While no price was publically announced, it may be made available in future in SEC filings. Golf.com is perhaps one of the largest golf sites on the web with a Alexa rating of 32,000.
I just read an astoundingly good post by David Card over at JupiterResearch’s blogs who comments on two stories from the New York Times today. If you read this article News Corp’s purchase of MySpace will make even more sense.
The articles about the generation of millenials and the impact technology is having on their media consumption. Its no secret that newspapers are in serious trouble, but television is too. They aren’t reading newspapers and they aren’t watching much TV either.
It sounds a little wierd to blog about another blog post about a newspaper article (usually I just comment on the article itself) but David makes a very good conclusion at the end of his post — “Somebody has to create what everyone talks about. And facilitate the talking.”
This is it guys — this is the business to be in. I fully expect website buyouts by major media companies to continue at an accelerating pace for the next 5 years, at least. And may be, just may be, a young web publisher will turn into the next Bill Gates.
Here is another one from Paidcontent — Yahoo just bought social bookmarking site del.icio.us. No word on the price. But, judging by the fact that Yahoo had tried launching similar services themselves with minimal success, I’m going to guess they paid quite a bit.
On an interesting note — its pretty obvious they have an absolutely wierd domain name. The question is, did the domain name hurt, or help them?