Feedburner Sale to Google Confirmed

Techdirt is reporting that the rumored sale of Feedburner to Google has been confirmed. "Feedburner is in the closing stages of being acquired by Google for around $100 million. The deal is all cash and mostly upfront, according to our source, although the founders will be locked in for a couple of years."

Comments

VCs have changed?

[hirschma]

Back in the Web "1.0" days, VCs would never have settled for a payout that small. In fact, they'd rather have the company die - they were in the business of hitting grand-slams, looking for the billion(s) dollar(s) payout.

This is "only" 10x. Does that mean that VCs have come to their senses? Anyone have any insight into this?

Re:VCs have changed?

[shelterpaw]

Yes. It all depends on the investment size and how much the VC owns and the market potential. Most VC's look for 20% to 30% ownership and estimate market potential between 3 and 5 years. 5 Years is pretty normal anything beyond that and they're looking for a larger return. But companies can be funded from as little as 1mm to 150mm. So the expected return will vary with investment size. With something like this company they must have met potential. A return of 10 times investment is pretty nice and I doubt you'll hear investors complain. Obviously not as lucrative as yesteryear but pretty substantial nonetheless.

Re:VCs have changed?

[jonesvery]

This is "only" 10x. Does that mean that VCs have come to their senses? Anyone have any insight into this?

The difference is more in the scale than in the multiple. 10x is a respectable rate of return for a VC investment; the ending number is "small" because Feedburner only took $10MM in two rounds of funding, where some 1.0 companies burned through that much VC cash on lunches with their branding consultants.

That said, the B round, at least, came from VCs that never lost their senses to begin with (Brad Feld @ Mobius and Fred Wilson @ USV). In both cases they're also specifically working at a smaller scale these days, making smaller investments earlier and focusing on working closely with the companies that they fund. So in that sense, yes -- some VCs, at least, are working differently these days. The dramatically dropping costs of starting a Web venture play a part in that, too: there are more companies online that can really get going with "small" amounts of money they days when a Web shop had to drop $1MM on Oracle licenses and another $1MM on the servers to run it are fading away.

Why bother?

[garcia]

Google already gets my feed itself through feedfetcher and it is one of the few subscribers to my feedburner feed. It also subscribes itself to several other feeds (bloglines).

I don't see what good it does Google to own this company.

Re:Why bother?

[Anonymous Coward]

Are you kidding me?

Google gets to see your RSS readership data. That's quite important for advertising....

Benefits

[jshriverWVU]

It seems Google as acquired a lot of these marketing/advertising/blogging sites. What does this one offer the rest didnt or google couldn't develop themselves?

yawn

[Anonymous Coward]

A firm that pays very generously to the highly qualified (in traditional academic terms) to snap them up and squander their research, while growing by buying up moderately successful, established firms for peanuts and pouring in the capital.

Wait, were we talking about Microsoft or Google?

what exactly does feedburner do?

[andres32a]

Excuse me if this question is dumb but what exactly does feedburner do? I just don't get it.

All style, little substance

[Anonymous Coward]

It seems Google as acquired a lot of these marketing/advertising/blogging sites. What does this one offer the rest didnt or google couldn't develop themselves?

For all of the macho recruiting process that Google is known for, and for all of the accompanying swagger, the reality is that Google's employees are unable to deliver beyond the patented PageRank search algorithm produced by Brin and Page and the patented Overture advertising system that Google licenses from Yahoo. That is why in the space of just a couple of years, Google has been rapidly buying up companies, from Keyhole (the original creators of Google Earth) to YouTube to DoubleClick. There is nothing technologically shattering or innovative about YouTube, so it speaks to volumes that Google paid such a large amount of money to acquire it. Every dollar spent on an acquisitions is a public admission of the incompetence of its internal employees.

Re:All style, little substance

[larry bagina]

It's a slight exaggeration, but there's a lot of truth in there. Google has 2 dozen people working on a powerpoint webapp. The Paul Graham/YCombinator article a couple weeks back mentioned someone who was working on something similar in his spare time. Google tried to buy it out from him, but he turned them down. Buying something for the name value, goodwill, existing users, etc is one thing, but when you can't compete with an unreleased, part time project, maybe something is wrong.

That said, google is smart to be buying up other companies. The google stock price is inflated and will fall someday. Trading it in for other companies is financially prudent.

Google buying traffic again. But why?

[Animats]

What's so weird is that, as with YouTube, Google is buying traffic. Not revenue. Not technology. Traffic. One wouldn't think that Google needed more traffic. More revenue from its traffic, maybe, but more traffic from free services?

Google, according to Alexa, is #2 in traffic, and Yahoo is #1. But Google isn't far behind. These buys look like a desperate attempt to displace Yahoo as #1. Whether this make economic sense isn't clear.

Interestingly, Google traffic takes a dive every weekend, as does Feedburner, but Yahoo traffic does not. Look at the Alexa graphs. That gives a sense of how much work-related use the site gets. Slashdot, incidentally, has a strong weekly cycle, much stronger than Google.

It's still not clear if Google's expansion beyond search will be seen a few years hence as a good move or as corporate megalomania.

All your accounts are belong to us

[Kris_J]

Great. That's another new Google account I have to nuke to keep my personal stuff off this juggernaut. Methinks I need my own php/mysql server on the net somewhere so I can just write and host my own stuff.

Re:am I the only one

[laffer1]

RSS isn't for everyone. I only use it for a limited number of sites. Most often I use it with slashdot to see if there are new stories I want to read. I can just hit the menu in firefox and see if I care about any story. Other sites like CNN.com are not quite as useful with RSS. They don't give you much information and the titles are often misleading. Plus, I refuse to watch stories that are video only with the exception of the WIFI story today. Their video feeds work only in a handful of configurations and not in firefox 2 + vista's media player. Changing to IE to watch a video story is lame.

I consider RSS to be like the IE 4 active channels or whatever they were called. Netscape had something similar. I happened to like them but really it was just a different view of the same data. Websites can be much more interactive and entertaining. The only advantage to RSS over the previous technologies is that its easier to generate content automatically. As a website maintainer, I found it annoying to distribute multiple versions of the same website. Just throwing it in a database wasn't always enough. The downside is that RSS does not offer anything to visitors beyond avoiding a lot of crap on sites. The IE 4 feature allowed you to enhance content since you knew you were targeting a rich client with lots of support for newer web technologies. (at the time) RSS readers might be very simple; images, audio, video and other content might not be supported in a feed reader.