AOL Acquires Truveo
Michael Arrington
19 comments »
AOL announced the acquisition of media search engine Truveo today. My original profile of Truveo is here. Terms of the deal were not disclosed publicly, but this was not a small deal.
Truveo has an innovative way for quickly indexing media content such as audio and video, and figuring out what it is even if there is little or no meta data associated with it. It is an incredibly useful technology and search engine.
I like Truveo, which launched in September, because it relies on a core hard-to-duplicate technology rather than a business plan which creates a network effect. The only other web 2.0 company that I can think of off the top of my head that is similar is Riya, which is also building some very tricky stuff. This doesn’t mean I don’t like network-effect companies. To the contrary, I love them. But if you can build something that is protectable on the IP side as well, then you may just have a large liquidity event, too.
Jeff Clavier is an advisory to Truveo and wrote about the acquitision today as well. I’ve gotten to know Jeff quite a bit over the last few months. I am not saying he is fully or even mostly responsible for this acquisition (I have no idea), but I do think that he adds a lot of value to his clients and his “stamp of approval” is becoming a seriously valuable asset. If you are luck enough to work with him, your chances of success increase dramatically.
That’s interesting… I was only thinking the other day what would become of Truveo. Hadn’t heard of it since it launched.’
It appears that a boom of established tech/media firms ‘buying out’ rising tech stars to avoid competition or VC capital seeding of those stars.
This only proves two thing (1)The status quo dotcom/media companies cannot create new ideals or feel secure with their current strategy against new and rising competition. They should be scared. I smell the fear from radio station managers knowing their best djs can be signed away to XM or Sirius with a contract like Stern. (2) People in the know can salvage a mediorce or quickie web 2.0 company and sell it to these larger firms and pocket some nice cash.
Does the combination of hard to duplicate technology plus a network effect equal a killer app? I think so, especially if the network effect happens at a velocity that allows a platform (technology & key processes in the value chain)to be built before the gorillas awaken.