The original address for this post is No Bubble 2.0 yet. If you're reading it on another site, please stop by and visit.
The recent acquisition of YouTube by Google for a stunning $1.65 billion made me wonder whether we were seeing a rise in the price. While the New York Times sees a return to the crazy valuations of the 90s, a look at the acquisition landscape does not seem to support their conclusions. Let’s take a quick look at the most noticed acquisitions (and if I missed some, please drop a note in the comments and I’ll add it):
| Feb-03 | Blogger | $20 million (rumored) | |
| Jul-04 | Picasa | Under $5 million (rumored) | |
| Jul-04 | Oddpost | Yahoo | $20 million (rumored) |
| Jul-04 | Webshots | Cnet Networks | $71 million |
| Jan-05 | LiveJournal | SixApart | $20 million (rumored) |
| Feb-05 | Bloglines | IAC (AskJeeves) | $25 million (rumored) |
| Mar-05 | Flickr | Yahoo | $30-35 million (rumored) |
| May-05 | Dodgeball | Around $10 million (rumored) | |
| Jul-05 | MySpace | News Corp | $580 million |
| Sep-05 | Skype | Ebay | $2.6 billion |
| Oct-05 | Weblogs Inc. | AOL | $25 million (rumored) |
| Oct-05 | weblogs.com | Verisign | $2.3 million |
| Oct-05 | Upcoming.org | Yahoo | Around $1 million (rumored) |
| Dec-05 | del.icio.us | Yahoo | $30-35 million (rumored) |
| Jan-06 | WebJay | Yahoo | Around $1 million (rumored) |
| Feb-06 | MeasureMap | Less than $5 million (rumored) | |
| Mar-06 | Writely | Around $10 million (rumored) | |
| Aug-06 | Grouper | Sony | $65 million |
| Sep-06 | Rojo | SixApart | $10 million (rumored) |
| Sep-06 | Jumpcut | Yahoo | $15 million (rumored) |
| Oct-06 | YouTube | $1.65 billion |
So yes, Google is paying $1.65 billion for youtube, Ebay spent $2.6 billion on Skype (making the Google/YouTube deal look like a cheap deal), and News Corp. paid $580 million for MySpace (making them look frugal compared to the other two big deals) but the truth is that, across 20 major deals, those 3 stand out as the exception and not the rule. It appears that, on average, deals are generally below $50 million and, in most cases, lower than $10 million.
Bubble 2.0?
I’m sure people are going to call me out on this because I’ve previously warned about the possibility of a new bubble being created. However, at the current time, it seems the data does not support that conclusion yet.
What it appears to support, however, is an interesting calendar anomaly: it appears that major deals generally happen in the 4th quarter of the years (either that, or I got my data set wrong)
Another interesting point is that I haven’t found any other chart of that type around the net. So I figured this page can be a starting point. Hopefully, faithful readers will help me fill this chart with more data points so we can do more granular analysis
Tristan Louis, a serial entrepreneur most often found at tnl.net, where this was initially posted under the title No Bubble 2.0 yet. You can follow Tristan on Twitter at @TNLNYC