No Bubble 2.0 yet
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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-03 | Blogger | $20 million (rumored) | |
| Jul-04 | Picasa | Under $5 million (rumored) | |
| Jul-04 | Oddpost | Yahoo | $20 million (rumored) |
| Jul-04 | Webshots | Cnet Networks | $71 million |
| Jan-05 | LiveJournal | SixApart | $20 million (rumored) |
| Feb-05 | Bloglines | IAC (AskJeeves) | $25 million (rumored) |
| Mar-05 | Flickr | Yahoo | $30-35 million (rumored) |
| May-05 | Dodgeball | Around $10 million (rumored) | |
| Jul-05 | MySpace | News Corp | $580 million |
| Sep-05 | Skype | Ebay | $2.6 billion |
| Oct-05 | Weblogs Inc. | AOL | $25 million (rumored) |
| Oct-05 | weblogs.com | Verisign | $2.3 million |
| Oct-05 | Upcoming.org | Yahoo | Around $1 million (rumored) |
| Dec-05 | del.icio.us | Yahoo | $30-35 million (rumored) |
| Jan-06 | WebJay | Yahoo | Around $1 million (rumored) |
| Feb-06 | MeasureMap | Less than $5 million (rumored) | |
| Mar-06 | Writely | Around $10 million (rumored) | |
| Aug-06 | Grouper | Sony | $65 million |
| Sep-06 | Rojo | SixApart | $10 million (rumored) |
| Sep-06 | Jumpcut | Yahoo | $15 million (rumored) |
| Oct-06 | YouTube | $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
Comments
1OSSEMBANDALARGA — Nov 21, 2006 : 5:33 pm
$10,000,000 Picasa Google $5,000,000 MeasureMap Google $5,000,000 Writely Google $2,000,000 Dodgeball Google $1,000,000 Upcoming.org Yahoo $1,000,000 WebJay Yahoo $1,000,000 Fonte: http://www.tnl.net/blog/2006/10/09/no-bubble-20-yet/
No Bubble 2.0 yet
YouTube was not the only recent takeover target. Tristan Louis, a BizTech blogger, recently published a list of major corporate takeovers in the internet space. He concluded, and we agree, that a new internet “bubble 2.0″ is not looming.
the tone of conversations. Firstly, there are the “where’s the web (2.0) going†type of questions, like Don Dodge’s and Robert Scoble’s “Is Facebook Worth more than YouTubeâ€, as well as interesting analyses on trends and bubbles (see “No Bublble 2.0 Yetâ€), like this table of significant acquisitions since 2003: [IMG] However, it appears that the conversations have now turned slightly uglier, as YouTubers start to ponder on the implications and others have started discussing the possibility of
Comment: Launched in May, 2006 and being brought in January 8, 2007. Making $10 millions in six months…… Which company will be next? Do you think it will be digg? or Technorati? or FaceBook? Source of this article: No Bubble 2.0 yet
Analysis With the notable exceptions of Skype, YouTube, MySpace, Photobucket, etc — the bulk of Web 2.0 companies (that have managed to cash out) had an acquisition price of somewhere between $10-30M. This post by Tristan Louis does a great job of summing up the various Web 2.0 acquisitions. Some of the notable few: Google / Pyra Labs (rumored $20 million) Flickr (rumored $30M) del.icio.us (rumored $30M) Weblogs Inc. (rumored $25M)
Flash Si dice che Google abbia speso addirittura 10 milioni di dollari per Dodgeball. (0) Leggi tutti i flash »
posted my first warning shot about signs of a new bubble coming. As is customary with TNL.net, this is probably early in the cycle but I am still worried that a bubble is heading our way and hope that this time, we will be able to manage it better. In October 2006, I set out to demonstrate how the numbers would show the rise of that bubble. Only one problem: they did not so I actually reported that, confusing people in the process as they thought that I had been anti-web 2.0 all along. Let me make this clear, I
9Greg Linden — Oct 10, 2006 : 1:19 pm
There is a much longer and more detailed list of Google’s acquisitions in Wikipedia:
http://en.wikipedia.org/wiki/List_of_acquisitions_by_Google
Most of them are very small.
10Brian solis — Oct 10, 2006 : 3:44 pm
Interesting piece. I definitely concur. While Web 2.0 is drawing alot of attention, I think the only similiarity between the “bubbles” is the hype. The numbers eluding to bubble 2.0 just aren’t there right now.
[...] Die meisten Übernahmen liegen unter 50 Mio. Dollar. [...]
[...] No Bubble 2.0 yet: it’d be interesting if they broke out the valuations and purchase price according to stake-holders in the equity stake. Those numbers are real as well, and a bit more real than this. [...]
[...] Unser Lottomillionär und 3-facher Vater hätte bei flickr noch zuschlagen können – ja wenn er eher auf seinen Tipp gekommen wäre und Yahoo! ihm nicht zuvor. LiveJournal könnte vielleicht grad noch in sein Budget passen. Ich wünsche viel Spaß beim Einkauf! [...]
14Vishal — Oct 10, 2006 : 10:01 pm
This is a good list, how about crate alist of dotcom (web 1.0) top buy outs and compare with web 2.0. It will put things in perpsctive for people who don’t know about dotcom bubble much.
[...] These are the first few from a list of 26 takeovers, going back to Deja News, in February 2001. The original list is more informative but has fewer entries. [...]
16JK87 — Oct 11, 2006 : 12:59 am
Overpaying for a web site is overpaying. It doesn’t matter if you paying $40 million for a website, or $400 million . If the site doesn’t make money, and really stands little chance to, it is overpaying, and a bubble is born.
The irony is the only purchases on that list that really have any HOPE of paying back their new owners ARE the huge ones.
17Devitry — Oct 11, 2006 : 1:10 am
here is another old list of google buys.
http://www.seobythesea.com/?p=64You should put this in a graph that shows total spending per month or quarter.
18Jason Beck — Oct 11, 2006 : 1:16 am
Given that Google makes it’s money on advertising, I’d like to see a “Daily Traffic” collumn added to the table above. It is likely that the 3 standouts in acquision price are also the standouts in traffic generated…if acquision price and traffic scale appropriately, then that would tend to deflate the bubble theory.
19dan — Oct 11, 2006 : 1:56 am
How can there be a bubble? SOX has eliminated the IPO/Bubble component. These are all cash/equity M&A deals, the average punters who rode high and then crashed in 2000 aren’t at the table…..yet.
[...] If you put all the pieces together in your head, you’ll realize that Google’s purchase of YouTube, while its largest and most dramatic deal, isn’t the first huge one they’ve made. Luckily, Tristan Louis has compiled all the important Web 2.0 deals in a single page, letting you compare the cash involved, so you can see just how much damn money has been spent. Philipp takes the list and orders it by cash involved, letting you see where the big spenders are. [...]
21Maharaja — Oct 11, 2006 : 2:08 am
Fairfax took out Trade Me for $460 million in March.
[...] read more | digg story [...]
23Stephen — Oct 11, 2006 : 2:16 am
What about all of Oracle’s acquistions?
24cornholio — Oct 11, 2006 : 3:23 am
what about $600mln eBay-shopping.com deal?
25Jawad Shuaib — Oct 11, 2006 : 3:25 am
Fear not, there is not going to be a Bubble 2.0. For such a thing to happen, these mega corporations would have to collapse from over spending on buying startups. That is not gonna happen, ever.
[...] No Bubble 2.0 yet [...]
[...] Trying to put the recent Google/ YouTube deal in perspective, Tristan Louis put together a great overview on tech acquistions of the last few years.read more | digg story Filed under: Gadgets by — TechManager @ 08:46 [...]
[...] In a great post called “No Bubble 2.0 yet” you can find a list of all the biggest “2.0″ deals of the last couple of years. My main takeaway from this was that Y! spent just north of $100 million on del.icio.us, flickr, webjay, jumpcut, upcoming and a few other things. So, is Y! the M&A mash-up king? And why isn’t it getting kudos for its thrifty shopping style? It might be shopping at Matalan, but it looks like it’s been to Selfridges. [...]
29Keith — Oct 11, 2006 : 6:43 am
So far, the two billion dollars takeover are Skype and YouTube. One can imagine how much Google is earning from people around the world to have that much money to pay these companies! Wish my site is worth as much as a million too.
[...] Trying to put the recent Google/ YouTube deal in perspective, Tristan Louis put together a great overview on tech acquistions of the last few years.read more | digg story [...]
31Colin Grady — Oct 11, 2006 : 9:20 am
Don’t forget the Microsoft acquision of Visio Corporation back in January of 2000. $1.5 billion. Here’s a link to Microsoft’s press release: http://www.microsoft.com/presspass/press/2000/Jan00/DealPR.mspx
32Tristan Louis — Oct 11, 2006 : 9:28 am
Actually, most of the other deals listed (like Visio, shopping.com, or even the deals that Oracle has made in the last few years) would not count as Web 2.0 deals as they were traditionally established companies. Those could show the rise of a bubble in tech in general but they could also be part of the standard operating approach to deals in tech in general (if I were to start tracking deals outside the Web 2.0 space, I'd have to also track deals across all industries in order to understand the overall picture) For example, the takeover of ATT by SBC, using this type of measure, dwarfs all the Web 2.0 deals done in the last few years (and that's just one deal, off the top of my head). So I decided to focus on acquired companies that met the standard definition of Web 2.0 when I drew up the list.
[...] Here’s a nice list of internet purchases over the past few years. I’m starting to come to grips with the fact that even if you create a great company the payout is not that spectacular unless it’s the one in a hundred deal like a YouTube, Skype, Broadcast.com, etc. As one of the VC’s down at Mashup Camp pointed out those are the exceptional exceptions to the normal rule of deals worth millions, not billions. Even in those deals only a handful of people make more than a few million. [...]
34bn — Oct 11, 2006 : 3:44 pm
eBay bought Rent.com for $415 million in Dec ‘04
35Avi — Oct 11, 2006 : 8:36 pm
I think CNet bought Consumating.com last year also.
[...] En relación con lo publicado por el NYT sobre una “nueva burbuja” encontré este post donde se listan con price los más importantes deals en el mercado de internet de los últimos tiempos. Por más que muchos digan que no, a mi me circunda un feeling a burbuja… [...]
37Metrics 2.0 — Oct 15, 2006 : 9:25 am
No Bubble 2.0 yet, but the measurements of bubble 2.0 is becoming sticky – sticky 2.0
[...] via Google Blogoscoped, Tristan Louis [...]
[...] [*] – neoficiálnà od(do)had Zdroj: TNL.net, Tristan Louis [...]
40Morpheus7 — Oct 16, 2006 : 12:53 pm
The bubble isn’t with exits, but with what venture guys are paying in private transactions. This will be the real shakeout when many of these companies blow up or get sold for cents on the dollar.
41CleverShark — Oct 17, 2006 : 9:53 am
It’s all a bit of a moot point. Google paid the $1.65 billion in stock; now I read somewhere that this (at the time) represented 1.4% of their market cap, but Google shares jumped a little over 2% on the news.
So, technically, the purchase has already more than paid for itself when one looks at it from a shareholders’ point of view.
42Henkie — Oct 17, 2006 : 10:52 am
nov 2004: eBay acquires Dutch trading site Marktplaats.nl for $290 million
[...] 트리스탄 루ì´ìŠ¤(Tristan Louis)ì˜ ìžë£Œë¥¼ 필립 ë ŒìŠ¤(Philipp Lenssen)ì´ ì¶”ê°€í•˜ê³ , ê·¸ê²ƒì„ ë‹¤ì‹œ í•œêµ ê¸°ì—…ì„ ì¶”ê°€í•œ ê°€ì´ë“œë¥¼ 공개합니다. 단위는 미화로 통ì¼í–ˆìœ¼ë©°, 1불당 950ì›ìœ¼ë¡œ ê³„ì‚°í•˜ê³ ì´í•˜ 반올림 했습니다. [...]
44Nicole — Oct 29, 2006 : 9:30 am
Really good chart. It was just what i’ve been looking for. And yes, i haven’t found any one like that. It will be nice, if there was another one but with acquisitions that happens in the first bubble. Thanks!
[...] Une seconde sphère est constituée des nouvelles sociétés financées par le capital risque qui aujourd’hui cherchent plutôt un scenario de sortie par acquisition plutôt qu’une introduction en bourse. Les tours de financements moyens sont de quelques millions (rarement plus de 15) de dollars pour des valorisations comprises entre 3 et 20 millions de dollars. Par ailleurs les prix d’acquisitions de ces jeunes sociétés sont ne dépassent rarement les 50 millions de dollars (voir cette table des acquisitions). Dans les 12 prochains mois environ 700 millions de dollars vont être investis en capital risque dans l’internet. 700 millions, vous me direz c’est beaucoup, mais ce n’est rien en comparaison des 13 ou 14 milliards de dollars qui vont être investis dans le high tech en général (notamment les clean tech et le biotech). Le coût d’accès à la technologie étant désormais très bas il possible de créer un service générant des profits avec quelques centaines de milliers de dollars . Quel est le risque réel de voir un échec total sur ces investissements créer une bulle ? Impossible à savoir mais improbable de voir une bulle éclater. [...]
[...] Trying to put the recent Google/ YouTube deal in perspective, Tristan Louis put together a great overview on tech acquistions of the last few years.read more | digg story [...]
[...] 延伸閱讀：No Bubble 2.0 yet [...]
[...] La plupart de ces sociétés sont jeunes mais contrairement à ce qui est dit dans l’article beaucoup ont déjà des revenus y compris YouTube dont on estime les rentrées publicitaires (en croissance importante) à plus de 10 millions de dollars par mois et qui vient de signer un partenariat important avec Verizon. L’ecosystème internet existe bien mais l’on ne peut demander à des sociétés de moins de 12 mois d’afficher des revenus importants ou même une rentabilité. Google, Yahoo et beaucoup sont passées par là . Il faut aussi savoir que beaucoup de sociétés financées par Capital Risque ont des revenus non négligeables et ont aussi atteint la rentabilité, par exemple LinkedIn mais aussi Xuqa dont nous avons parlé. Je ne fais pas référence aux sociétés déjà revendues à un prix plus que raisonnable (et je suis près à tenir le débat sur Youtube; et par ailleurs Google qui a payé en action et non en cash, a obtenu cette société pour rien, son cour ayant pris 2% le jour de l’annonce). [...]
[...] With that as a starting point, I‘ve come this far (click to check out the spreadsheet). As you can see, after scouring over press releases, a number of random articles, and the regular rumor mills, I was able to fill in blanks here and there. I chose measurements that were reported, as well as publicly available benchmarks such as a site’s Alexa Ranking. As I looked, I also looked to see if anyone else was doing what I was trying to do. I was surprised not to file a spreadsheet like it. [...]
[...] Also note the following table from the TNL.net blog which shows that while there have been some enormous deals (MySpace, YouTube), the average Web 2.0 acquisition is somewhat more modest. [...]
[...] Une seconde sphère est constituée des nouvelles sociétés financées par le capital risque qui aujourd’hui cherchent plutôt un scenario de sortie par acquisition plutôt qu’une introduction en bourse. Les tours de financements moyens sont de quelques millions (rarement plus de 15) de dollars pour des valorisations comprises entre 3 et 20 millions de dollars. Par ailleurs les prix d’acquisitions de ces jeunes sociétés sont ne dépassent rarement les 50 millions de dollars (voir cette table des acquisitions). Dans les 12 prochains mois environ 700 millions de dollars vont être investis en capital risque dans l’internet. 700 millions, vous me direz c’est beaucoup, mais ce n’est rien en comparaison des 13 ou 14 milliards de dollars qui vont être investis dans le high tech en général (notamment les clean tech et le biotech). Le coût d’accès à la technologie étant désormais très bas il possible de créer un service générant des profits avec quelques centaines de milliers de dollars . Quel est le risque réel de voir un échec total sur ces investissements créer une bulle ? Impossible à savoir mais improbable de voir une bulle éclater. [...]
[...] TNL.net, Tristan [...]
