Alan Meckler posts today about the wave of new dotcom acquisitions. Meckler has made a business of buying up small sites to make something big. At WIN (The Weblogs, Inc. Network) we’re making small sites every day to make something bigtwo paths to the same place: niche b2b advertising dollars (not to mention brand extensions like conferences).
Alan and I are good friends and have breakfast every six months or so. A lot of people have “Meckler” stories, but I’ve always liked his brash “this is who I am and this is my view of the world” style. At least you know where you stand with Alan.
Last Friday brought news of two Internet deals. First, Yahoo purchased Kelkoo, a French company that runs online shopping comparison sites in nine countries, for approximately $575 million in cash (about 16x Kelkoo’s yearly revenues). And Infospace announced its acquisition of Switchboard (an American localized search company) for $160 million in cash and stock (paying 15x yearly revenues).These acquisitions hammer home the trend that Internet shopping and search information are two hot commerce areas. We are also seeing a rapid consolidation of properties in these sectors.
The large multiples being paid (in excess of 15x revenues) further indicate that the whole Internet sector is getting white hot. Some pundits are saying that the excesses of the 1990s bubble are erupting again. But 2004 is different than a few years ago because companies being acquired today are solvent, profitable and grabbing market share.