Archive for the ‘Acquisitions’ Category

Correcting the Google Real Estate Story

January 17, 2010

Enough people who were at the Inman Real Estate Connect show have come forward or made comments now that this needs to be clarified: “Google to Scoop Up Real Estate Sites.” I wasn’t there and was writing based on vicarious information.

Here was the quote, from Google’s Sam Sebastian, as it was reported

 “We’re actively looking to acquire one to two small real estate companies a month.”

Apparently that’s a misquote. Rather, he said something more like this:  “We’re actively looking to acquire one to two companies a month.”

In the context of a real estate conference and discussion about the Google-Trulia acquisition rumor it’s easy to see how this could be taken as a statement that Google will be acquiring real estate companies specifically. 

Here’s what Google CEO Eric Schmidt said during the Q3 earnings call about acquisitions:

The way we think about acquisitions is we have historically done an acquisition, perhaps one a month or so. And those are typically small and they are typically complete an offering, they are typically technology intensive, they’re not very expensive in the scheme of things and they bring some specific technology.

Sebastian may have been repeating this “generic” comment about Google’s policy and attitude toward acquisitions in general rather than commenting on real estate acquisitions in particular. 

Yet I would still bet that Google is going to do some real estate acquisitions because it’s a local-vertical that’s very lucrative and important to consumers.

What Will Yahoo! Buy in Local This Year?

January 15, 2010

Yahoo! CEO Bartz said that 2010 will be a year of acquisitions for the company. And she emphasized local in a discussion with Bloomberg/BusinessWeek:

Bartz, previously CEO of Autodesk, says she’s interested in ways to bolster Yahoo’s local content. “Local is extemely important,” she says in response to a question about whether Yahoo might try to buy Yelp, which lets users post reviews of nearby businesses. “People do some outrageous percentage of their commercial spending five miles from their home.”

The immediate question is: Will Yahoo! make a run at Yelp? It would make sense but the price might be too rich for Yahoo! at this point. Yahoo! Local used to be the leading local destination but it has suffered from several years of neglect. Yahoo! Maps was also the category leader and innovator several years ago. That would be an area where an acquisition would make sense.

The article also says that Bartz wants to buy users:

Bartz is interested in purchases that bring Yahoo more users, “whether it’s a place like Mexico, a place like Brazil,” she says. In 2009 Yahoo bought Arabic Web site Maktoob.com and, with a partner, Australian travel site totaltravel.com.

Historically Yahoo! has bought properties only to see them languish or shut them down in many cases. Recently Yahoo! outsourced most of it shopping engine to PriceGrabber. Absent that move I would have argued that Milo or Krillion would have been a good buy in shopping (tied to local).

There were rumors that the company was looking to sell Yahoo! Small Business. If that’s so the company probably wouldn’t want to buy a company like Yodle (or Clickable  or Kenshoo), which would otherwise make sense if it were pushing more aggressively into the SMB segment.

Mobile is an area where Yahoo! needs to make some successful moves in 2010. That might mean an ad network or “exchange” or a consumer property (Loopt?). It could also mean technology, such as voice search vendor Vlingo, which Yahoo! has invested in.

A service like Aardvark could also be an interesting crossover PC-mobile acquisition that would complement Yahoo! Answers.

What are the other potential acquisitions that Yahoo might make in local (or social, verticals, mobile)? What do you think?

Google Adding ‘Events’ to Place Pages

January 14, 2010

Mike Blumenthal sent me a link to his blog that reflects Google’s apparent effort to add time sensitive “events” (here broadly construed to include sales) to a local business’ Place Page:

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The page above is the example Mike uses; I looked for others but couldn’t find them. Mike focuses on the lack of visibility of coupons on Place Pages as a potential deterrent for local businesses to use them to announce offers or deals in this way. Yes, that’s certainly an issue.

I would add to that the challenge of getting these SMBs to serve up this content. Google does need to increase the visibility and prominence of these deals or discounts but it also should make them easy to create.

To that end it might think about incorporating Twitter in one or more of several ways, as Citysearch has done. Better yet Google should think about buying or creating the capability to update once (from Google LBC) and push them out to Facebook and Twitter.

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Google just posted about this:

Holding a special event today? Want to post a coupon for 5-7pm tonight? Have a new product in stock? You can now get the word out by posting to your Place Page directly from your Local Business Center dashboard. Once you’ve logged in and are on your business’ dashboard, post an update and it will go live on your Place Page in just a few minutes.

Here’s my more recent and more complete post at SEL about this.

Didn’t Get Enough 2010 Predictions . . .

January 11, 2010

Matt McGee has compiled a megalist over at Search Engine Land. Here, in particular, are the Local-Mobile ones (with my snarky editorial remarks in parentheses). Maybe I’m in a gumpy mood here but none of these offer great or truly new insights. Perhaps Andrew Shotland’s is the most interesting of the lot:

IPOs a Comin in 2010?

December 21, 2009

In the post “Yelp turned down Google” chatter the word is the company is headed for IPO city. Here’s Business Insider:

Why would Yelp’s investors allow Jeremy to turn down a $550 million deal when the company’s revenues are only in the tens of millions of dollars?

But our source tells us investors are the ones most opposed to selling.

They speculate that Microsoft inquired but also was rebuffed and that a deal with Google could still happen.

I could be way off, but I think running Yelp as a public company would be tough. But as a public company Yelp would change out of necessity I suppose.

The board would probably want a more Wall-Street-Friendly CEO and the company would need to find a strategy to grow revenues substantially and keep them growing; it would need to turn into a version of ReachLocal in essence.

The Yelp brand is very strong and they’ve built a terrific entity. But I probably would have taken the money.

Google-Yelp Deal Now Off

December 21, 2009

180 degrees . . . apparently Google is not buying Yelp. Something changed over the weekend and Yelp rejected Google’s $500+ million offer.

As I wrote last week: When Money’s on the Table, Take It. While many Yelpers — and the rest of the local ecosystem — many not have liked the idea of a Google-Yelp combination, you don’t say “no” to this kind of money without a very concrete alternative plan. Everyone from the VC-investors to the company executives want an exit.

We haven’t heard the full story yet, but there’s a great deal more here going on than simply “walking away.” We’re probably talking about one of two alternative scenarios:

  • Another buyer or major investor will be announced
  • Yelp has decided to pursue an IPO (perhaps with a major investor to provide additional cash to get it to $100 million in revenues)

What do you think happened?

Next Up for Google: Trulia?

December 19, 2009

Let the rumor-machine keep a rollin’ . . .

The latest is that Google is “eyeing” Trulia. From AllThingsD via CNET . . . Another local content site in the important vertical of real estate.

We’ll see . . . More later.

Off now to a winter solstice party; drinking, human sacrifices, that sort of thing . . .

Why Isn’t AT&T the Buyer of Yelp?

December 18, 2009

Again, nothing has been confirmed yet but let’s assume that Google acquires Yelp. I’ve been talking to people all day about this question and the implications for both companies.

A more interesting question to consider may be: Why didn’t AT&T (owner of YellowPages.com) buy Yelp? AT&T, with its large sales force could have provided Yelp with ad sales and Yelp could have broadened the reach of AT&T online and in mobile to audiences that aren’t using yellow pages. 

Here’s what I wrote previously in my post “If I Were a Yellow Pages Publisher . . .”

So if I were AT&T I’d be buying Yelp. The sales force could sell the ads and the brand would be an enormous addition to AT&T interactive  . . . Notwithstanding the chart at the very bottom, Yelp’s traffic is already bigger than the IYPs . . .

So what kept AT&T from trying to buy Yelp? Was it:

  • Lack of vision
  • Lack of an entrepreneurial culture
  • Too many layers of approval
  • Inability to act quickly

Or have they tried and Yelp investors wanted more than they were willing to pay? What do you think?

Local in a ‘Post-Yelp’ World

December 18, 2009

It’s still a rumor so take everything I’m about to say in that context. (Though it’s being confirmed by Claire Miller at NYT; “more than $500M”.) However if Google does succeed in acquiring Yelp, it will be a huge deal for everyone the local space. Earthquake was the metaphor I used in my post at Search Engine Land last night.

In many of its markets Yelp is the strongest online local brand next to Craigslist. And among younger users it’s a far stronger brand than yellow pages or newspapers. Yelp also operates a telephone sales force. This would give Google the basis of an active outreach effort to the local market.

This is a cultural shift for Google and a major competitive change potentially in the local segment.

If Google does buy Yelp it will have much less “need” for its current roster of reseller partners, with limited exceptions perhaps. The combined consumer pull of Google + Yelp in the local space would present an almost insurmountable challenge to many local publishers. Their “feet on the street” advantage would also be diminished.

But my sense is that a Yelp acquisition would also open up opportunities for others. This is not to say that Yelp would lose vitality or momentum (although it could). It could be come the “YouTube of local.” But my intuition tells me that it would create an opening for others with interesting new approaches to the market.

Twitter and its open API and developer community represents a challenge to Yelp, as does Facebook (which I believe will acquire FourSquare). FourSquare may be a threat to Yelp in a very limited way but it is not a mainstream service — absent some dramatic changes and shifts.

Forced by the rise of Facebook in mobile, Loopt is trying to become a version of Yelp now. And AlikeList, which just launched, has great potential.

Yelpers will initially be quite upset about their site and community being absorbed by Google; however they’ll get over it just like YouTube users did. But in the process the Yelp brand identity will lose some of its edge, which is what will partly create the opening for others.

Mobile, where Yelp is also strong, is of course creating opportunity for companies in the local space that aren’t incumbents on the PC.

It’s premature to congratulate anyone at Yelp unless or until this rumor is confirmed. But if so, it caps a great success story: part luck, part experimentation, part great execution. I’ve watched it from the very beginning (when I was skeptical).

At one point a few years ago CEO Jeremy Stoppelman told me that Yelp was working to figure out “the formula” around entering new cities. When he used that phrase (assuming my memory is correct) I thought to myself: “formula, what formula could there be?”

But their execution has proven that there was one and that it has been working very well. Stay tuned.

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Update: David Mihm reports that a stat mentioned last week by Yelp COO Geoff Donaker is that Yelp has 200 salespeople. Google will likely boost that and use it to sell Local Listing Ads as well as Yelp. It could also use the team (over time) to expose Google Apps and other services (e.g., Voice) to SMBs. It’s not just about ads for Google.

Even if people defect and leave Yelp, I believe Google will be using telephone sales going forward. Reach, Yodle and other independing local sales channels will need to broaden and reposition if what I’m saying comes true.

Is Google Making a Play for Yelp?

December 18, 2009

TechCrunch is reporting that Google is “advanced acquisition negotiations” to buy Yelp for $500 million or more. TechCrunch has been generally correct recently about many of the rumors it has reported recently (i.e., Google Phone) so we should take this seriously.

Yelp has raised a little over $30 million over several funding rounds. Revenues are heading toward $50 million according to several sources. If the price suggested by TechCrunch is correct, it would be about 10X estimated revenues.

There has been an imbalance between Yelp’s success as a consumer brand and destination and its ability to “monetize” among small business advertisers. However that $50 million in revenues, if correct, would be very respectable.

Buying Yelp would be a different sort of acquisition for Google — a major one — because it’s not really a technology platform so much as a local brand, community and sales channel. If Google does buy Yelp, what exactly does it get?

It gets a local-social network with roughly 26 million users across the US, Canada and the UK. Yelp reportedly has 8.5 million reviews. This is a huge amount of content that Google can’t generate itself and which it is already leaning on pretty heavily on its Place Pages as part of its increasing focus on local. But Google is also doing things on Place Pages that potentially threaten sites like Yelp longer term (e.g., sentiment analysis).

The rest of this post is at SEL.

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Ideally the buyer should be AT&T or another YP publisher rather than Google. Indeed, Yahoo! would also be in some ways a better cultural fit for Yelp (or the old Yahoo! at least). But Google seems to have beaten the others to the punch. And hypothetically IAC could combine Citysearch, Urbanspoon and Yelp into a local empire of sorts; however Barry Diller doesn’t have quite enough cash to pick up Yelp it would appear.

Even eBay should have taken a run at Yelp, but it probably lacked the vision to do so.

When Money’s on the Table, Take It

December 16, 2009

TechCrunch is reporting that Friendster sold not for $100 (the rumor) but something less than $23 million:

The total purchase price paid was $39.5 million. But lots of stuff was deducted, totalling $13 million and change . . . The total to shareholders after the deductions? About $26.4 million. And $3.8 million of that is being put into escrow.

The site raised just over $45 million in four funding rounds. It famously turned down an early $30 million offer from Google and apparently there were some $100 million-plus offers last year that were declined.

This episode should be a lesson to “take the money.”

Spot Runner is another good example. There were/are many rumors and hearsay information about big Internet company X and search engine Y offering very big money for the company, which was declined because of a) too much investor money in and b) inflated expectations about what the company was worth or would eventually sell for.

There’s also Aardvark, which was rumored to be evaluating a sizable offer from Google. Who knows if that’s true but if it is and the company declines, it could later regret the move. I understand the concern about not realizing the startup’s potential or the founder’s original vision. The DodgeBall acquisition by Google is a good example of a startup that languished after an acquisition. There are also many such examples at Yahoo, where the startup was later shuttered and given only minimal attention after the acquisition.

Yet it’s very hard to actually build a business online with real revenues; only a few can. Others have to hope they’re incorporated into a larger entity.

So unless taking the offer represents a breach of fiduciary duty to shareholders, company executives are better off taking the money “on the table.”

If I Were a Yellow Pages Publisher . . .

October 8, 2009

The past few days I’ve been thinking quite a bit about the predicament of yellow pages — and by extension other traditional local media. I realize it’s very easy to be someone who sits back and critiques others’ mistakes. I often liken analysts, myself included, to movie critics. It’s much more challenging to make a movie than to criticize one after it’s been made. And in my work and writing I always try to put myself in the position of someone who’s actually under pressure to accomplish something and has real-world P&L responsibilities.

With that . . . No one has asked me to run a YP company but here’s what I’d do:

Work on the brand:

Relying on Google SEO is a losing game over the long term. You’ve got to do SEO and get even better at it — optimize for the long tail and so on. But you’ve got to develop a brand. RHD’s Dex has done this to a degree. Yellowpages.com has sort of done this (but not really). Many consumers are responding to the “generic” URL rather than brand loyalty. Superpages is trying to do this around the Super Guarantee. But it’s something that needs more attention.

Develop other brands:

Build out verticals or alternative brands that appeal to different demographic segments. See this data from the TMPDM-comScore study about usage:

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As you might expect: print is used by older people; younger people use search engines. So if I were AT&T I’d be buying Yelp. The sales force could sell the ads and the brand would be an enormous addition to AT&T interactive (I’ve got no financial stake in Yelp and nothing personal to gain from recommending this). Notwithstanding the chart at the very bottom, Yelp’s traffic is already bigger than the IYPs:

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If you can’t read the chart, Yelp is the blue line, Yellowpages.com is green (#2), Superpages is #3. I would argue that other YPs should try and buy Yelp but they probably can’t afford to. AT&T is probably the only one that has the cash.

Change the sales culture:

I understand that most YP publishers are working on this, but somehow they’ve got to shift the commission structure so that reps are equally incentivized to sell digital. The folks at the Kelsey Group will have more insight into the sales/commission issues and the status of those efforts than I have, however.

Work on the cost structure of the business:

Newspapers have been killed by their cost structure, which can no longer be supported by declining ad revenues. YP publishers have moved faster and more deliberately than newspapers, but they are now in danger of going the way of newspapers — less and less usage, fewer revenues.

Aggressively syndicate data/ads/etc:

YP publishers are already doing some version of this: get the ads and data out to third parties. Why not create a Local AdSense offering? To succeed it probably needs to be collaborative because there’s not enough ad coverage from any individual publisher.

Mobile — Yes

AT&T has to date been the most aggressive and experimental in mobile. Superpages has got some interesting things to announce, however, this week. Mobile is a critical area that needs to be developed much further than it is today. The new Yell iPhone app is an example of conservative thinking that may win some usage but won’t turn any heads or gain the loyalty of younger people. Here a “segmentation strategy” is probably also be called for.

More community, more social

Work with Praized, AgendiZe, Facebook Connect. Social efforts to date, with a few exceptions are weak. Facebook (and maybe Twitter) + local may be the other punch the industry didn’t see coming.

Create a lab environment where people can do crazy stuff and be creative:

Superpages’ Seattle office (former InfoSpace) is the best example I know of this. Rod Diefendorf and Pete Schwab in that office are working on some “crazy shit” as they say. The Twitter implementation, even if it doesn’t wind up driving lots of traffic, is an example of a creative risk. They’re doing other interesting stuff as well. Their freedom and the fact that they’re not from the traditional YP culture enables them to think differently about the product.

YP publishers, at least on the interactive side, need to be more flexible and willing to launch less than perfect products and improve them over time. Risk taking is now key, paradoxically, to survival.

The European Directories-Skype deal is another creative experiment; it may not “work,” but it’s a worthy effort. And if it does kudos to them.

The consumer culture has changed drastically around traditional media companies and most of them have not changed to reflect the new reality. Culture shift in organizations is extremely difficult but it has to be done: flatten them, reward risk, creativity and initiative.

We’re now in the third quarter:

I apologize for the sports metaphor. I heard from one of the attendees at the Kelsey-YPA show that there was an underlying sense of anxiety bordering on a kind of nascent panic. That’s appropriate because things are getting much worse for YP publishers. Print directories and yellow pages will never go away but they will get a lot thinner and lose many more advertisers if they don’t accelerate change. As the “third quarter” metaphor suggests, they don’t have infinite time to make cultural changes that will help them remain viable.

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Source: TMPDM-comScore, 9/09

Local.com and the Case of the Fake Release

October 3, 2009

Picture 229A fake press release went out late Thursday falsely stating that Microsoft had acquired Local.com:

The Microsoft Deal buyout of Local.com Corporation (LOCM) at over a 100% premium is just shy of a $200 Million dollar deal, a real success for shareholders of LOCM which has increased from teh $3 range to over $5 by close of trading today.

On Friday morning the company issued its own statement to correct the false impression:

The company has not been acquired, nor is it in discussions with Microsoft about a potential acquisition.

Barron’s has more detail on the controversy. I suspect it might have been someone trying to pump up the stock and then sell it before the truth was discovered. It’s unclear what went on exactly but it appears to be more than a prank.

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Plusmo Acquistion: Strategic Role of Mobile

October 1, 2009

Picture 211Anyone in the local segment that isn’t already up and running in mobile or doesn’t have a mobile strategy is in a difficult spot. There’s a deepening connection between local and mobile, between the PC and mobile handset, as evidenced by yesterday’s announcement of the acquisition of app and widget developer Plusmo:

AT&T Inc. today announced the acquisition of privately-held Plusmo, Inc., a leading provider of cross-platform mobile application solutions, bringing to AT&T an open standards technology that will simplify mobile application development, accelerate innovation and deliver a better application experience for consumers. Plusmo will become a part of AT&T Interactive, and the Plusmo mobile application development platform is expected to be used by multiple AT&T subsidiaries, including AT&T Mobility. Terms of the deal were not disclosed.

As the quote from the release says this is about a range of AT&T properties and use cases, not just local. But it will be housed in the locally focused shop AT&T Interactive. Plusmo has strength in the feature phone area as well, which can be potentially exploited by AT&T to reach broader audiences than would be available exclusively through a smartphone strategy alone. There are roughly 40-45 million smartphones in the US market (comScore says 32 million), out of a total of well over 250 million mobile users (CTIA says 270 million).

It will be very interesting to see what comes out of Plusmo and AT&T over time. It could well be highly verticalized widgets/apps and movement away from YP branded properties (see Have2P, Have2Eat, etc.). 

Stepping back what we’re starting to see with directories is less a focus on particular products (print, online, mobile) an a growing focus on “leads” (in some cases performance-based) driven through whatever mechanism, platform, network or  source. The publisher wants, however, to own as much of that as possible to reduce their costs and increase margins.

Meteor Solutions: A Company to Watch

September 24, 2009

I got briefed a few weeks ago by a company called Meteor Solutions. It’s based in Seattle and being run by Ben Straley, who was with Judy’s Book. The company measures so-called “earned media” and social media ROI. I was impressed with what I heard.

The company was founded earlier this year and already has a fair amount of traction with marketers and publishers. The company groups media into three categories: paid media (ads), owned media (publisher and marketer sites) and “earned media” (passed links and social media conversations). Here’s the company’s chart:

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Directed at the third category, Meteor tracks online word of mouth and identifies “influencers” and “where they share content.” Unlike many “buzz tracking” applications and platforms that are based on inferences, Meteor’s is based on actually tracking who passes links and what happens thereafter. The system has the ability to track a shared link from its originator to a conversion of some sort and see who was most influential in that process.

The company uses javascript code and unique IDs for each person its tools encounter. Another slide from the company’s deck:

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In other words: I pass an offer link to you (50% off NY Hotel X) and you send it to others, who in turn send it to others. Some people click; some people “convert.” All that is tracked. Within that melee of passed links, the system can determine who’s having the biggest effect on conversions: me, you or somebody else. In this way it can identify the biggest influencers, which opens the door to do targeted promotions to those individuals. It’s very interesting because you’re actually seeing what’s happening as people disseminate links to one another.

Much of this activity would be totally invisible to marketers and publishers otherwise. In a different way AgendiZe has the ability to do something similar and is doing that with local directory publishers.

Meteor is also helping to power Microsoft’s new experimental “Looking Glass” social media monitoring and tracking tool.

Because it’s analytics are real and it “fills in the blanks” in many ways, Meteor is likely to be a near-term acquisition candidate by an analytics provider or by one of the big ad platforms/search engines.

Surprise: Kelsey Brand Trumps BIA

September 21, 2009

Usually in an acquisition a newly acquired subsidiary brand is maintained for a period of time until the latter’s customers or clients get used to dealing with the parent. But BIA, which bought the Kelsey Group last year, has decided to keep the Kelsey brand and changed the company’s name to BIA/Kelsey:

BIA Advisory Services will now be known as BIA/Kelsey, representing the culmination of BIA’s acquisition of The Kelsey Group last October and the complete expanse of services the combined company now offers to multi-delivery platforms . . .

BIA probably came to the (correct) conclusion that it had limited recognition and credibility in the digital sector vs. the Kelsey brand. Hence the name change.

Yahoo! Small Business on the Block

September 21, 2009

Yahoo! appears to be shedding assets fast and furiously. Zimbra, for which the company paid a cool $350 million, is reportedly now for sale. And, according to Reuters, Yahoo! is also going to shed its small business unit:

Yahoo Inc hopes to get up to $500 million for a unit that hosts websites for small companies, after putting it on the market for several months, two people familiar with the matter said.

Yahoo has received interest from corporate buyers and private equity firms, one of the sources familiar with the situation said. It is unclear if any party has made an offer.

But some potential corporate buyers who have looked at the asset in recent months have decided not to bid because they think the price is too high, a second source said.

HotJobs is also for sale. The sale rumors surfaced first in July (see my SEL post).

Let’s assume by virtue of its persistence that this report is correct and Yahoo! Small Business is for sale. It would represent a carving out of what was once a very strategic asset:

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At one point several years ago, I was told by Rich Riley (then head of Y SMB and now head of Yahoo!’s European operation) that Yahoo! was the biggest SMB webhosting firm in the US. This should have been a gateway into online marketing for SMBs. But Yahoo! failed to create the simplified products necessary to capitalize on the opportunity. Yahoo! Small Business could really have been a jewel within the organization.

As recently as a little over a month ago, on the Yahoo! Q2 earnings call, CEO Carol Bartz discussed the importance of local and SMB advertising. She said that thes segments were increasingly important to Yahoo! and she announced a new deal with AT&T (to sell display ads on Yahoo to SMBs). She added that between AT&T’s yellow pages sales force and the company’s newspaper consortium partners Yahoo effectively had “13,000 sales reps” in local markets around the US.

Here’s the verbatim Bartz quote from the earnings call transcript:

We also know that local relevance of both content and advertising is increasingly important to our users and capturing more of the local ad market is a big focus to us. To this end, we have announced today that we have expanded our relationship with AT&T to include the reselling of Yahoo! display ad inventory by AT&T’s advertising sales force. Grouped with our strategic newspaper consortium partnership we now have a local sales force 13,000 reps strong. These relationships extend our reach into the fast growing local online advertiser segment.

So most of this goes out the window post-sale in all probability. It’s also the case that Yahoo! webhosting could have been extended to the the SMB advertisers of newspaper publishers who are part of the Yahoo! consortium.

In Yahoo!’s still not approved deal with Microsoft, all the self-service paid search business goes through Microsoft adCenter, while the “premium” (read: brands) search business will be handled by Yahoo!

There’s something sad in all of this for me, having seen the opportunity for what seems like a very long time and the organization’s inability to really seize it.

eBay Selling Skype to Investors: A Bad Move?

September 1, 2009

Picture 14According to the NY Times, eBay is set to announce the sale of Skype to private investors let by former Netscape co-founder Marc Andreessen. Reportedly eBay wants approximately $2 billion for Skype, having written down the value of the investment. Originally the company was acquired almost four years ago this month for nearly $3 billion in cash and other consideration.

At the time of the acquisition then eBay CEO Meg Whitman said the following:

“Communications is at the heart of ecommerce and community,” said Meg Whitman, President and Chief Executive Officer of eBay. “By combining the two leading ecommerce franchises, eBay and PayPal, with the leader in Internet voice communications, we will create an extraordinarily powerful environment for business on the Net.”

There were all sorts of visions of PPCall for local merchants as well. In theory it was a great fit but eBay couldn’t make the marriage work. Now, at a time when Skype seems to be building momentum online and in mobile, eBay is unloading it.

Do you think it’s a good move to get rid of the company now — or a boneheaded one?

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Update: eBay signs agreement to sell Skype for $2.75 billion:

The buyer, who will control an approximately 65 percent stake, is an investor group led by Silver Lake and includes Index Ventures, Andreessen Horowitz and the Canada Pension Plan (CPP) Investment Board. eBay is expected to receive approximately $1.9 billion in cash upon the completion of the sale and a note from the buyer in the principal amount of $125 million. The company will retain an approximately 35 percent equity investment in Skype. The transaction, which is not subject to a financing condition, is expected to close in the fourth quarter of 2009.

Canpages Buys GigPark with Big Plans

August 25, 2009

Picture 32Canpages acquired competitor ZipLocal in June and just announced the acquisition of social directory GigPark as part of a more aggressive expansion into the broader North American market. I wrote about GigPark a couple of months after it launched last year:

GigPark is a Toronto-based startup that seeks to create a network of friends so you can tap their knowledge base about local-anything, but predominantly service providers . . . In the US there are dozens of competitors. In its home market, GigPark faces competition from ZipLocal, Torstar’s Toronto.com, iBegin and YellowPages.ca (not to mention the search engines) . . .

The problem right now is that there’s basically no there there, just an aggressive effort to get people to upload their contacts and to start posting about local businesses . . . If the site were widely adopted by my friends and their friends (or the parallel Facebook app) you’d have a potentially rich database of content. But the site hasn’t bought a commercial database (InfoUSA, Axciom, Localeze, iBegin Source) so that there’s at least some content to jump start that process. This is the chicken and egg problem taken to new levels.

According to an article appearing today in Canada.com:

Canpages, a private company based in Vancouver, plans to integrate the user recommendation functions from Gigpark.cominto Canpages.ca by the end of the year, creating Canada’s first hybrid local search-social networking site.

Not exactly. Google Maps features reviews (and the ability to write reviews) and Yelp.ca pretty  much fits the description above.

The article also says Canpages’ revenues are north of $100 million (Canadian?) and the site is profitable. The terms of the GigPark deal weren’t disclosed. The deal makes sense because it makes Canpages social, while GigPark really had no future (or a very long term future provided funding could hold out).

Canpages is currently a yellow pages lookalike site and the GigPark acquisition signals a move away from that approach. The Canada.com article quotes CEO Olivier Vincent:

“I think [the brand] Yellow Pages is a liability more than anything else. It’s associated with a print experience,” Mr. Vincent said. “In the past year we’ve got 70% of the traffic they do. David is almost as big as Goliath.”

Goliath is of course YPG in this case.

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EveryBlock Bought by MSNBC

August 17, 2009

Picture 11From the EveryBlock blog:

After considering a number of options (some wildly different from others), we decided that working with MSNBC.com was the best fit for our site and our team . . .

[I]t means that we’ll have resources to expand EveryBlock profoundly. MSNBC.com is the most-visited news Web site in the U.S. and is in solid financial shape in a time when news organizations around the world are struggling. We’re excited about the possibilities of pointing a massive audience at EveryBlock and having the resources to beef up our technological infrastructure and staff.

The site was a recipient of a $2 million Knight Foundation grant, so there are no investors to pay back.

According to the blog post EveryBlock will maintain its current site but we’ll probably see data rendered in various ways on the MSNBC site, in association with a range of story types. There may even be a mini-EveryBlock within MSNBC. I wonder also to what extent EveryBlock’s content will make its way into NBC’s “hyper-local” affiliate sites.

How much do you think the site sold for: $2 million, $3.5 million, $5 million . . . or more?


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