When Rupert Murdoch's News Corp bought Intermix Media, owner of Myspace.com, for $580 million last year the acquisition signaled the rebirth of the Internet boom, including its overpriced valuations.
Take for instance the robust investment activity taking place in the social networking space. Facebook, the social networking site for college students has raised $38.2 million; Bebo, a social networking site that's a cross between Myspace and Facebook (with a Skype-powered IM service) recently raised $15 million; TagWorld, a social networking site that includes video chat and a music discovery engine has raised $7.5 million; Tagged.com, a social networking site specifically for teens recently raised $7 million; and even online teen community Habbo raised $7.7 million in a partnership with Movida Group -- a joint venture by SoftBank BB Corp. and Asian Groove -- in Japan.
But it's not only social networking raking in healthy heaps of cash. Consider blog search engine Technorati that raised $7.6 million in its third round of venture capital financing recently.
It's both exciting and scary.
Just last week it was rumored that Bebo turned down a $552 million acquisition offer from British Telecom Group. And back in March, Facebook turned down a $750 million offer in hopes of fetching as much as $2 billion.
Whether they'll be acquired or move toward IPOs, are any of these viral Web-only models going to be worth the stake?
Related Stories: | Topics:Technology, internet + web, Facebook Inc., Science and Technology, Technology, Internet, Social Software and Tagging |
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Recent Comments | 7 Total
July 18, 2006 at 12:45am by Dharmesh Shah
It seems highly unlikely that more than a small fraction of these Web 2.0 companies will create a meaningful return for their VC investors.
July 18, 2006 at 3:34am by Derek B
Is that supposed to be $2 billion in the second to last paragraph, or $750,000?
July 18, 2006 at 10:18am by Sergio Muscat
Sounds very much like a pre-bubble-burst hype. Social networking is indeed a very powerful tool, but as always, everyone (i.e VCs) just seems to raid the market for anything available once something cool is discovered, which leads to the cheapish stuff being bought up too... We know the result of that, and its not something to look forward to.
July 18, 2006 at 10:50am by Anonymous
How much money a company or website rounds up does not determine how good the service is.
BlueRoof.com just launched in Utah and is already one of the best home search sites on the web and it was funded internally.
Craigslist was started with very little money and has continued to be profitable since before the first tech bubble.
July 19, 2006 at 1:01am by Russell Page
It's still not like the money tossed around in the '90s.
August 10, 2006 at 5:30pm by Suzanne
I really enjoyed your article on Web 2.0! We are hosting an event called The New New Internet: Web 2.0 for business on September 20th in the Washington DC area. Michael Arrington, Stowe Boyd, and Dion Hinchcliffe are all supporting our efforts to make this conference a success as we help establish the East Coast as a viable participant in Web 2.0 developments. Please take a moment to visit our site: www.thenewnewinternet.com. We would love for you to be there!
Suzanne Coffin
Director of Events and Marketing| ExecutiveBiz
Phone: 703.752.7453 x208 | Fax: 703.752.7454
suzanne@executivebiz.com | www.executivebiz.com
September 28, 2007 at 4:05pm by randolph
i love this