A week of hot news on the web: Trade sales mark the boom
I am behind on my blogging, so I thought I’d make some very brief comments about a host of extremely interesting announcements that have come out this week.
Google acquires Feedburner.
Feedburner has been prominent in enabling the world of RSS. This acquisition, estimated to be worth $100 million, makes eminent sense for Google in being able to create more value for both publishers and advertisers. Feedburner’s analytics are a key part of that. This is a powerful combination.
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Real Networks enables video downloads.
Real Networks’ new version of Real Player allows users to download streamed online videos and flash to their computers. This includes videos from YouTube and other video sites; the player can download anything that isn’t specifically wrapped in Digital Rights Management software. Until now all this streamed video content has been embedded, requiring people to go to those sites, unless they had significant technical capabilities. This could change the dynamics of online video, including the business models.
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Google launches Google Gears.
Google Gears, an open source browser plug-in that allows developers to create offline web applications, is likely to significantly change the web application space. There has been a strong shift to web-based applications for the last couple of years. Easily being able to provide offline functionality with synchronization will make these far more viable competitors to desktop applications. Sometime in the future, we will be always connected with high bandwidth, wherever we are. In the meantime, providing offline functionality will enable the transition. It’s interesting that Google has chosen to do this as an open source project, but it makes all the sense in the world. This means it is almost certain to become the standard in the space.
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CBS acquires Last.FM.
I first wrote about Last.FM in 2003 – I’m a big fan of the service and the model. It was acquired by CBS for £140 million. The big question is what CBS does with it. I personally would be very disappointed if the filtering model were compromised, which appears possible. However this would leave the space open to others – consumers would move elsewhere.
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Last.FM Founder Richard Jones’ blog post
eBay acquires StumbleUpon.
StumbleUpon has been another very prominent player in the “collaborative filtering” space, enabling people to “stumble” upon sites that they’re likely to find interesting. eBay has spent $75 million acquiring them, and has said that for now they will leave them untouched. I noticed the other day that StumbleUpon is selling to sponsors clicks to their sites, which users may not be keen on. However I think eBay could find a number of interesting ways to integrate StumbleUpon’s capabilities into their spectrum of offerings down the track.
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There is a lot to pull out from this series of announcements in terms of understanding industry directions. Just taking the most prominent feature: these are primarily acquisition stories, supplementing the recent acquisitions of aQuantive by Microsoft for $6 billion, DoubleClick by Google for $3.1 billion etc. etc. As has become well evident this year, we’re back into boom times. In contrast to the boom over the turn of the century, IPOs are a rarity this time. Trade sales are where the action is. As we wrote in our Future of Media Report 2006:
“The media is run by ageing baby boomers that still think wearing a pair of Levi 501s is cool. Many of these traditional media companies will find it difficult to adjust to the new media landscape of mobile platforms and customer created content due to their investments in old-media infrastructure and business models. Most innovation will therefore come from the outside, either from young people, or from companies outside the existing media establishment.”
We are absolutely seeing that today more and better innovation is coming from outside major corporations. The large players are recognizing this and actively acquiring the companies that are setting the scene for the next phase, resulting in prices often being pushed up beyond what would many would deem reasonable. So today entrepreneurs and venture capitalists are gearing up their companies for trade sales rather than the public markets.
