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?