Tristan Louis (TNL.net)

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-03 Blogger Google $20 million (rumored)
Jul-04 Picasa Google 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 Google 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 Google Less than $5 million (rumored)
Mar-06 Writely Google 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 Google $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