The last six months have seen some consolidation of existing online companies in exchange for rather large figures. The most notable of these was Google’s acquisition of YouTube for $1.65 billion, a deal in which Google won over rivals Yahoo. YouTube claims more than 100 million videos are viewed daily on its site, making it the No.2 video site on the internet after MySpace. The industry viewed the move with a variety of opinions much of which circled around the price. Rob Enderle, principal analyst with Enderle Group said of the deal “Google paid an incredibly high price for a property that has yet to generate any appreciable profit”.
In January DoubleClick Inc a leading provider of digital advertising technology and services announced its acquisition of rich media pioneer and provider of digital advertising technologies TangoZebra for $30m. DoubleClick Inc were subsequently acquired by Google in April for $3.1 billion.
Determined not to fall behind in the video market MySpace has reached a preliminary deal to acquire photo and video sharing site Photobucket. for $300m. Photobucket is growing fast with 85,000 new registered users each day and according to Comscore received 17.6m unique visitors in January. The acquisition bodes well as data from Hitwise shows MySpace generates almost 60% of its traffic.
Currently there are a number of contenders, including Vodafone and Orange, who are bidding for Ya.com, Spain’s fourth largest broadband provider which reflects a change of strategy as the mobile market matures. The expected bid is thought to be in the region of £340 million for the Deutsche Telekom owned company.
On Friday 4th May 2007 a number of prominent wall street papers reported that the merger between microsoft and Yahoo is no longer in consideration but rather the 2 companies are exploring a strategic partnership. If this merger/acquisition were to have gone through the sums would have dwarfed Google’s acquisitions as Yahoo’s market capitalisation is estimated at more than $44 billion!
Edit:
Further to the purchases above, news of Microsoft’s acquisition of aQuantitive hit the news on Friday 18 May. The purchase involves a number of companies specific to online advertising for $6 billion in cash. The acquisition marks a huge step forward in the evolution of Microsoft into the internet advertising opportunity.
Meanwhile, advertising giant WPP group is buying 24/7 Real Media for $649 m and Yahoo purchased the rest of Right Media for $680m.
Over the weekend the Sunday Telegraph reported the Yahoo attempted takeover of Bebo, Brtain’s most popular social networking site. Last Summer an offer was turned down from BT worth about £300m as well as an offer from Viacom who were also outbid for MySpace. The figure is rumoured to be around $1bn, however a figure of $1.6bn was offered last year for fellow site Facebook.
