Acquisition Fever: My Prognosis
When Microsoft is willing to fork over $6 billion to buy an online ad network, in the wake of a $3.1 billion bid by Google for another, you know the industry was going to develop a serious case of faux acquisition fever.
It is characterized by heedless speculation, rampant rumormongering and delusions of grandeur. The known pathogens: investment bankers and venture capitalists, who ramp up their spiels in the froth that results from a series of major deals in an industry sector.
And so comes the rumor that Yahoo was kicking the wheels at the social-networking site Bebo, which is the third big player in the business after MySpace and Facebook with particular strength in Britain, in this report in that country’s Sunday Telegraph.
Though Yahoo surely is looking for a social-networking site after it failed in its attempt to buy Facebook for upward of $1.5 billion, it seems a reach that it would pay $1 billion for Bebo, which is significantly smaller and less high-profile (though it is a well-done service). In fact, let us pooh-pooh this particular rumor as wishful thinking, despite the fact that eventually Bebo will be sold.
And what of the many other heated rumors out there?
FeedBurner: Will Google pay $100 million for the Chicago-based company that has been one of the first to place text advertising links into the news feeds? According to my sources at both companies, yes indeed.
And it seems a bargain for the search giant to move swiftly ahead in an area it has lagged in and acquire a solid management and engineering team made of people quite like Google’s. Unless there is a competing bid, expect this one to be completed sooner rather than later.
Photobucket: Will News Corp. spend the big bucks for the company (based in Denver and Palo Alto, Calif.) that stores and distributes all kinds of media for users of sites like News Corp.-owned MySpace? Also, yes indeed.
But the price is more likely to be $300 million for this deal that is now in its final stages of negotiation. Given that Photobucket is a remora fish to MySpace, riding along on its growth, few others would make the play for it, even though one might expect that News Corp. will try to make the service bigger than just MySpace (well, they better if they are paying that rich price).
Facebook: Will Mark Zuckerberg, who has his own delusions of grandeur, give it all up for the big bucks? Um, no. Despite an endless series of speculative articles, such as this recent one that gets points for creativity (Facebook to Google? And hurt Orkut’s feelings?), this will not occur anytime soon.
Unless, that is, there was an offer so disgustingly over the top that it wouldn’t be possible to turn it down. And that’s not happening. While there has been lots of looking and endless talking (yes, Yahoo, Viacom, even Microsoft have been to its Palo Alto headquarters), this company will remain independent and perhaps attempt an IPO.
Whether that is a good idea or not is the subject of another post, but here is a direct quote I put in a post that I got from Jim Breyer of Accel Partners, which is one of the principal investors in Facebook, only a few weeks ago. I think “Facebook is not for sale” kind of says it all.
Unless Breyer is a liar–hey, that rhymes!–but he’s not.
Please see this disclosure related to me and Google.