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?

[Richard McBeef]

Back in the Web "1.0" days, VCs would never have settled for a payout that small...This is "only" 10x

No shit. This is way worse than the 0X that most VC companies reaped back in the days of web 1.0.

Re:VCs have changed?

[foniksonik]

Definitely changed... looking for 3x plus on mid-terms.

I was at a startup for 4 years that just sold last year for 165M... w/ 60M in VC money. The early investors got 3X the late got 1.5X but at a better pricepoint (they could buy more). First round was 15M, second was 30M, 3rd was 15M. I made 8.5K via options exercised as a lowly employee on a 1.5k pricepoint (0.15 per share, 9650 shares approx) but VCs got 3x that on average with several million shares each at different prices.

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.

Re:VCs have changed?

[Richard McBeef]

Did they do a good job picking up your garbage?

Not only that, but they did it for free. And if anyone beat their price, the next pickup was 50% off plus they'd mow your lawn and wash your dog all while delivering 50 cents worth of groceries (20% off) on a motorbike from a store 15 miles away.

Re:VCs have changed?

[davidu]

I've never heard of a VC say they expect a 100x return. Not in your wildest dreams. Maybe if the amount of total investment is like under $50,000 could I see that expectation.

Sequoia Capital is one of the best in the business and they have had 5 exits, maybe 10 at most, that were over a billion dollars.

10x is nothing to sneeze at. 20x is great. 50x is fantastic. 100x is abnormally impressive.

-david

So what if they are locked in?

[Timesprout]

They are getting $100 mil and they probably dont leave their parents basements all that much anyway.

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?

[drinkypoo]

I think they're just stamping out competition. And they don't have to keep doing it forever, either. They buy one or two more of 'em and people will stop starting them. When Google has the top three of whatever, people will mostly stop making whatever. The procedure worked for Microsoft time and time again, why not Google? :)

Re:Why bother?

[SatanicPuppy]

Meh. If microsoft hadn't won, then decided that, since they'd won, all further development was a waste of time, there would have been no niche for new operators. We'd all be on IE11 by now, because they'd have agressively ported it to all operating systems in a bid to globally corner the hugely important browser market, and then they'd have built online application inventories through their massively dominant search portal that were tied directly to the pc through activeX.

Instead, they acted like fools, and blew their lead. So don't assume that because the last player who tried to be dominant mistook the game for the special olympics and got beat down, that the next competitor won't learn from their mistakes.

Eat my dirt, techcrunch!

[mfaras]

I googled techdirt, and I searched their blog, and there's nothing about google and feedburner, take a look:
http://www.techdirt.com/search.php?q=feedburner

So I'm betting scuttlemonkey typo'ed it, and it's actualy techcrunch, as the link says.

Please correct the summary.

--
Eat my dirt.

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?

"Locked in for a couple of years?"

[PHAEDRU5]

This can't end well.

I've been in this room for eight years now, Clarice. I know they will never, ever let me out while I'm alive. What I want is a view. I want a window where I can see a tree, or even water. I want to be in a federal institution, far away from Dr. Chilton.

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.

Re:what exactly does feedburner do?

[Weaselmancer]

Pretty much the same thing CompuGlobalHyperMegaNet does, but with RSS.

Re:what exactly does feedburner do?

[Kalriath]

Excuse me if this question is dumb but what exactly does feedburner do? I just don't get it. Do you get the Slashdot RSS feed? Feedburner does that. (In fact, the Slashdot RSS feed IS a Feedburner feed). I think it adds advertising to the RSS... or something. Never seen it though.

Re:what exactly does feedburner do?

[andres32a]

Dude i actually googled CompuGlobalHyperMegaNet and still 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

[charlesnw]

I couldn't agree more. Google has produced NOTHING else of any substance beyond search. And even then the search isn't all that great. The algorithim isn't even all that inovative and is implemented by many search engines.

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.

Re:All style, little substance

[aussie_a]

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. Yes, it says Google with all of their name power, is still willing to buy others with name power.

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.

Not Good

[Jack Action]

I use Feedburner heavily for various blogs and podcasts; and if you asked me a year ago about the Google take-over, I would have said great (or, who cares?).

But since then I've seen too many half-assed Google projects (especially around rss feeds: the Google reader for example is terrible compared to a competitor like Bloglines). Google recently redid the presentation of the statistics service they aquired (Google Analytics), making it worse. Feedburner is currently a great service that is intuitive, innovative and easy to use. But when Google gets through with it, I fear it too be half-assed.

As it has no doubt been said by others, Google is shaping up to be another Microsoft: using its dominance in one area (search), to force consumers into using inferior products. Google is doing it though by "killing with kindness" -- buying up the innovators and strangling them, rather then Microsoft's heavy tactics.

am I the only one

[sentientbrendan]

who doesn't see what the big deal is with RSS feeds? Or doesn't see why they need to be included in every little application (like safari, firefox, thunderbird, etc).

Usually when I am *online* and want to look at the news from a site... I don't grab their RSS feed, I just go to their site...

It seems like an okay way of exchanging information between different sites in a very limited fashion, but that doesn't make it important or worth spending a lot of money on. It's just one more xml schema for doing something really simple... I don't understand the hype.

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.

Re:Beats the fuck outta me

[Richard McBeef]

Not that I don't not disagree with about what worthless pieces of shit that Slashdot editors aren't, but linking to Wikipedia is the epitome of laziness. It is so full of unfactual misinformation that it can't be not trusted in it's integrity or, as one would say, lack thereof.

RSS for quick summaries and checking updates

[Quevar]

Usually when I am *online* and want to look at the news from a site... I don't grab their RSS feed, I just go to their site... You seem to be missing the idea of RSS feeds. You shouldn't be grabbing the RSS feed, your application should be and displaying the information to you so you don't have to go to their site to see what has changed. I have about 20 different sites that I pay attention to. It takes a noticeable amount of time to go to all twenty sites. So, I subscribe to their RSS feeds and when they change the content, I will see that I haven't looked at an article. Without even going to their site, I can can look at the headline and a brief summary to see if I want to read more. Many times, just a headline and a summary is all I want. I can glance through the summary in a small fraction of the time it takes to open up all the sites.

Another way of thinking about it is for sites that don't change much. Imagine I have 50 friends who have websites that I want to check. Most of my friends only update their pages a couple times a month, but that means that on average, two sites are updated a day. I don't want to load them all every day, only when they change and RSS gives me the ability to know when they have changed.

5 years ago, I could surf for hours at a time. Now, I have read all the aritcles I want in about 30 minutes a day and still keep up with stuff just as much.

Re:RSS for quick summaries and checking updates

[Xtravar]

Okay, now can someone please explain what the fuck is Feedburner and why the fuck it would be worth $100 million?

I don't know. I go to their site and it looks like buzzword jibberish to me. I am so confused and angry right now that I might throw a freakin' chair. Seriously, this article summary sucks, and from the look of it Feedburner looks like it sucks too.

Traffic = Data?

[MenTaLguY]

It's the only thing I can think of.

Google's brand alone does it

[cyberianpan]

Also: Google has huge brand recognition, until today I didn't know that feed broadcasting was big business. Now I do because Google paid $100m .... and who do I know that now does feed broadcasting ? So if I was actually a webmaster that earned some bucks from ads & was thinking about RSS - I'd now go straight to GoogleBurner. I don't even bother looking for competitors (who might be marginally better) as : It keeps things simple for me: I just have to hold one concept in my head "Google good: Google has good products, Google finds the new good products ". Given this brand "synergy" effect I'm surprised they got away with a 10x deal.

What is a feedburner?

[Tibor the Hun]

Although I do not know what a feedburner is, I would like to formally announce (if any Microsofties are reading) that I am their #2 competitor with great things coming down the pipeline. My product leverages the newest mashup technologies to provide a very compelling value proposition, at an outstanding ROI, with an incredibly low TCO.

You can have it, with no strings attached for 200 mil. (US $ naturally)

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.