GenuineVC David Beisel's Perspective on Digital Change

November 21, 2005

In the context of recent discussions of Yahoo’s biz dev folks stating that the company is directly competing with VCs for deals, Paul Kedrosky says of Google,

“It’s just that rather than buying some of the equity of early-stage, pre-revenue companies, in typical venture fashion, Google’s always buys all the equity. It is a de facto and targeted form of financing for many companies, albeit narrowly available, but let’s still call it what it is: venture capital.”

Yes, it appears that a trend has emerged this past year, not just with the Yahoo/Google, but with companies in this industry as a whole – the bipolarization of internet acquisitions. We’ve seen it happen over the past twelve months, so this statement is not a revelation by any means. But to crystallize it, I put together a chart below counting the number of acquisitions in various price ranges by AOL, eBay, IAC, Google, News Corp, Viacom, and Yahoo this year.

bipolarization2.bmp

If one assumes that nearly all of the “undisclosed” prices are also under $50M, we can clearly see this bipolarization emerging. The internet acquisitions have been either small “venture acquisitions” (to Kedrosky’s point) –or– pricy purchases of companies with demonstrable viable business models (Shopping.com, ASK) or expansive reach (MySpace, Skype). As such, there has been a dearth of everything in between. There just aren’t that many companies in the $50M to $500M range being acquired by the big guys – they’re either gobbling them up early or waiting (perhaps to a fault) until these startups are too valuable to pass up.

(I’ll post some of backup data in the comments below.)

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  • Rob Go
     - 19 hours ago
    RT @joshk: 1/ There’s been a good discussion recently about the state of tech startup/venture market recently. Our thoughts: https://t.co/V…
  • David Beisel
     - 20 hours ago
    Thanks to everyone who made the #WebInnoTurns10 event so special last week. @PrettyInstant took great photos: http://t.co/ZNLxikDJt9
  • David Beisel
     - 20 hours ago
    The Growing Pre-Seed Opportunity In VC Financing on @CBinsights https://t.co/cREWyO7Gpe
  • Rob Go
     - 20 hours ago
    And the rebirth is complete. Congrats @Accomplices on the new name. The Phoenix rising from the Atlas and FKA ashes :)
  • Lee Hower
     - 21 hours ago
    the "crazy" play hasn't worked out for Greece and that which seemed inevitable finally seems to be playing out

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