This past year has been a very eventful one in the M&A arena, with many of web 2.0’s biggest names being snapped up. A few stand-outs include the likes of YouTube, Photobucket, Feedburner, Last.fm, and StumbleUpon.
Yet, there still remains a number of juicy, mouth-watering targets available on the market. This may be a great opportunity for traditional media, as well as some of the Internet behemoths, to make a leap into the new web world. Let’s explore some of the most sought-after names still available on the market.
Digg: Traditional media is losing ground fast. Social news sites and blogs are starting to attract a lot more traffic and attention, as people turn to these alternatives for news. Digg is a pioneer in this space and leading the charge. Close rival Reddit was purchased late last year, indicating interest in the space. Although Digg will be looking for a substantially higher price tag, my intuition tells me that the company will not refuse any offer over $150 million. Potential buyers include Yahoo, NYTimes, MSN, or any major company looking to add a social spin (i.e. community-powered voting) to their news section. Other companies of interest in the space include Newsvine, NowPublic, and ShoutWire.
Note: Now may be a good time for any company looking to acquire Digg. My guess is that the recent HD-DVD meltdown may have eroded a significant portion of Digg’s current market valuation (at least in the short term). This unfortunate situation pitted Digg vs. the community. In the end, the company was forced to let a submission containing an HD-DVD key reside on the site and deal with a cease-and-desist order. The community backlash coupled with a potential lawsuit most certainly shrunk the valuation to some degree.
Technorati: Blogs are undoubtedly helping to shape the new media landscape. Having said that, users need to be able to search these blogs. Technorati is the status quo blog search engine. This popular search vertical is here to stay. Competition is lacking (with the exception of Google Blog Search). This is inexcusable for any major search engine. Yahoo and/or MSN may want to consider the addition of Technorati to strengthen their core search offering.
Netvibes: Personalized homepages are not a fad – their long-term future is certainly optimistic. Netvibes is an AJAX-ified start page that offers information aggregation and page customization. Such an offering would provide a great doorway for any portal or media site. Though monetization of the homepage itself may be difficult, an extended service offering could generate revenues via this customer acquisition tool. Potential buyers include major portals lacking such an offering, such as About.com or Lycos. Though Google, Yahoo, and MSN all offer such a service (Google IG, My Yahoo, Live), Netvibes also brings to the table a large user base and, perhaps, a better service. Other companies of interest in the space include Pageflakes and Protopage.
SimplyHired: Job aggregators facilitate the job-seeking process by pulling postings from numerous sources. This saves valuable time and hassle for the searcher. Traditional job sites lack breadth, depth, and diversity. For this reason, aggregators are able to attract huge traffic and a diverse audience. Any current portal or high-traffic property looking to add a job listing component may want to contemplate SimplyHired. Potential buyers include Google and traditional publishers. Other companies of interest in the space include Indeed and Jobster.
Spock: The growth and success of Google goes without saying. This means that start-ups looking to enter the ‘search’ space are forced to choose a niche, if they want to stand a chance at competing. For this very reason, vertical search has exploded onto the scene this year. One search vertical, people-search, has garnered a huge amount of press recently as several new players have entered the market. One in particular, Spock, has attracted the most attention and scrutiny. This stealth start-up had been operating under a high level of secrecy until recently. Potential buyers include any major search engine looking to enter into people search vertical. Other companies of interest in the space include ZoomInfo, Wink, and ex.plode.us.
BONUS – Facebook: This social network continues to dominate the headlines and expand at a blistering rate. Along with this growth has come an unprecedented amount of acquisition rumors and speculation. However, Mark Zuckerberg has repeatedly stifled such rumors, indicating that a sale is not in-store. Even if an acquisition was contemplated, a steep price tag would likely ward off many potential acquisitors. Facebook would be ideal for any large Internet player with deep pockets, looking to tap into a juicy database of demographic information. Yahoo is a front runner, but Google or MSN could also provide a good fit.
Other companies that were considered for the list include:
- 37signals – Any major ASP may be interested in this web-based app producer (Basecamp, Backpack, Writeboard, etc..), although the company has repeatedly expressed its reluctance to sell.
- Cafepress – This on-demand, customized product creation company would be a great additional for any large e-commerce site (Amazon?).
- Compete – Criticism surrounding Alexa rankings has paved the way for this new entrant; any company looking to venture into the statistic/analytic space may be interested.
- Kayak – A simple, travel search engine that could be a great addition to any portal or outdated travel offering.
- LinkedIn – This social network vertical is prized for its highly sought-after business professionals and high net-worth individuals.
- Ning – The Ning platform allows anyone the ability to create and customize their own social network; the introduction to a larger audience would likely trigger widespread adoption.
- Pandora – Social music recommendation site; the acquisition of Last.fm by NBC shows interest in the space.
- SixApart – This parent company could introduce personal blogging (via Vox or LiveJournal) and business blogging (via Movable Type or TypePad) to an old media player (Yahoo?).
- Yelp – Business reviews by real people; it would be a great addition for any information portal.
With a limited number of high-quality names still available, it will be interesting to keep an eye on M&A activity in the near future. Though many of the top names have already been scooped up, there still remain a few gems. Fit and congruence are two important factors that cannot be overlooked when considering an acquisition. If the purchase does not tie into corporate goals and strategy, then it should be dismissed. If a deal is forced, it may be a waste of time and valuable resources (both financial and human). Nevertheless, a smart acquisition can provide added depth to any company offering. We’ve witnessed this with MySpace‘s strategic purchase of Photobucket. It made sense – the fit was there. In the end, it was an easy decision.
Any companies missing from this list? Any companies that should be removed?