No Bubble 2.0 yet

The recent acquisition of YouTube by Google for a stunning $1.65 billion made me wonder whether we were seeing a rise in the price. While the New York Times sees a return to the crazy valuations of the 90s, a look at the acquisition landscape does not seem to support their conclusions. Let’s take a quick look at the most noticed acquisitions (and if I missed some, please drop a note in the comments and I’ll add it):

Feb-03BloggerGoogle$20 million (rumored)
Jul-04PicasaGoogleUnder $5 million (rumored)
Jul-04OddpostYahoo$20 million (rumored)
Jul-04WebshotsCnet Networks$71 million
Jan-05LiveJournalSixApart$20 million (rumored)
Feb-05BloglinesIAC (AskJeeves)$25 million (rumored)
Mar-05FlickrYahoo$30-35 million (rumored)
May-05DodgeballGoogleAround $10 million (rumored)
Jul-05MySpaceNews Corp$580 million
Sep-05SkypeEbay$2.6 billion
Oct-05Weblogs Inc.AOL$25 million (rumored)
Oct-05weblogs.comVerisign$2.3 million
Oct-05Upcoming.orgYahooAround $1 million (rumored)
Dec-05del.icio.usYahoo$30-35 million (rumored)
Jan-06WebJayYahooAround $1 million (rumored)
Feb-06MeasureMapGoogleLess than $5 million (rumored)
Mar-06WritelyGoogleAround $10 million (rumored)
Aug-06GrouperSony$65 million
Sep-06RojoSixApart$10 million (rumored)
Sep-06JumpcutYahoo$15 million (rumored)
Oct-06YouTubeGoogle$1.65 billion

So yes, Google is paying $1.65 billion for youtube, Ebay spent $2.6 billion on Skype (making the Google/YouTube deal look like a cheap deal), and News Corp. paid $580 million for MySpace (making them look frugal compared to the other two big deals) but the truth is that, across 20 major deals, those 3 stand out as the exception and not the rule. It appears that, on average, deals are generally below $50 million and, in most cases, lower than $10 million.

Bubble 2.0?

I’m sure people are going to call me out on this because I’ve previously warned about the possibility of a new bubble being created. However, at the current time, it seems the data does not support that conclusion yet.

What it appears to support, however, is an interesting calendar anomaly: it appears that major deals generally happen in the 4th quarter of the years (either that, or I got my data set wrong)

Another interesting point is that I haven’t found any other chart of that type around the net. So I figured this page can be a starting point. Hopefully, faithful readers will help me fill this chart with more data points so we can do more granular analysis

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