Yahoo’s recent acquisition binge is the topic of a Red Herring print article this week called “Hungry Hungry Yahoo”. Liz Gannes, who wrote the article, discusses Yahoo’s recent acquisitions and speculates on a few likely candidates for future Yahoo shopping sprees. The article lists 37 Signals, MeasureMap, Digg, YouTube and Technorati as the ones to watch. (Note: Liz interviewed me for this article last month and I am quoted in it)
Liz goes on to write that Technorati is the most likely to be bought:
But most of all, Technorati would perfectly align with Yahoo’s recent espousal of tagging. Technorati created the de facto standard for introducing tags into blog posts; it uses teh tags to improve its searches.
CEO Dave Sifry’s response?
When Red Herring called Technorati CEO David Sifry to confirm the revelation, his response was…”No comment.”
Well, “no comment” be damned, I believe that Yahoo should, and even may, acquire Technorati in the near future.
First of all, Yahoo has already acquired the “fraternal twins” of tagging – Flickr and Del.icio.us. Both were pioneers in their respective markets, and relatively cheap ($20 – $30 million each). Flickr made tagging of pictures popular; Del.icio.us did the same with bookmarks.
But Flickr and Del.icio.us are not twins. They are tagging triplets along with Technorati, which created and popularized blog tagging in 2005. Today, the majority of blogs use tags and categories to label their posts.
Second, Technorati should be just about out of money. They raised a speculated $14 million in the summer of 2004 from Draper Fisher Jurvetson, Mobius Venture Capital and August Capital. If they’ve raised more since then it has not been announced (or leaked). I know of a few unannounced financings, but I have not heard anything about Technorati raising additional venture capital. Technorati may need money.
Third, Yahoo’s blog search isn’t great. Technorati’s blog search is the best on the web right now after much needed upgrades over the last six months.
So, in my opinion, an acquisition makes sense. Stephen Baker at Business Week thinks Microsoft will be the suitor. But it’s got to be Yahoo.
Why won’t it happen? Given today’s funding environment Technorati may be (or have already) raised additional funds to take them to the next level. And given an approximate $30 million valuation even back in 2004, it would take a much larger acquisition than the $30-$50 million we are seeing in deals today to get them. Technorati’s VCs just wouldn’t pull the trigger, and they certainly have veto rights over an acquisition.
In the end, I just want this to happen. The tagging triplets need to be under one roof.
I understand what you are saying and if only judged from the persective of aggregation and thematic coherence and maybe even artistic integrity – you might have a point. Also, if Technorati is going to be acquired, by goodness I would prefer it to be Yahoo than Google or MS too as the whole folksonomy concept could be said to sit well with a culture of a company that started with two guys just trying to show the world the sites that they thought were cool rather than two guys who seem to be more comfortable having a drink with an algorithm. (Victory for Captain Kirk rather than Spock) But I can’t help thinking that this is the wrong context to thing of this in. I prefer the thoughts of VC Peter Rip in his recents post about what was wrong with building companies to flip. I really would hope that one of the big three could remain an independant company and go all the way to IPO.
*shudders* is it only me who dislikes the idea of good companies being bought out by trash like Yahoo? Yahoo has been nice to its aquisitions so far, but that may not continue…
I don’t understand..why should Technorati or any good small web operation be concerned about getting acquired?
Excuse my blatant self promotion but my point of view is I didn’t start my venture with the thought of Yahoo or Google or whoever visiting me and showing me a buyout number..I started my venture with the passion to help make the Internet experience better for people and businesses. And I also started it to challenge their business model of offering a branded web service with an intermediary service offering the best the web services by smaller but better content/server providers, like Technorati.
I grew up with the Internet since ‘94 and not feeling the thought the web in ‘05 should be about mergers and acquistions with the status quo, not free enterprise and competition.
BTW, most of the companies Yahoo acquired were weak anyway with a business model of displaying Google Ads.
Do a majority of blogs really tag and categorise their posts? More specifically do they do it in a Technorati fashion? I find that claim hard to swallow considering all the Blogger.com, Xanga, LiveJournal, MySpace etc. blogs without a tag or category in sight.
Should they aquire Technorati, Yahoo should slowly begin to think about “compatibility” of tagging patterns. Three services with three different tagging syntax – they should consider defining kind of “standard” for tagging.
Technorati offers very little to yahoo and at the price it would come at would make almost no sense.
I’m not sure why you think it’d be a good idea under any circumstance. It makes me wonder about this post…
-david
Haha, I love the prediction that the next acquisition will be MeasureMap. First of all, MeasureMap is not a company, but an application done up by the people at Adaptive Path, and second of all, it’s not even out yet!
Damn journalists sporting their buzzwords….
A Technorati purchase would make perfect sense for Yahoo given that they are going full force into “tagging” and the Social Web.
If you’re going to do it, you might as well do it right. Technorati is definitely tops in its area of expertise.
If Technorati is purchased, it would only leave Yahoo with a the need for video tagging(perhaps a purchase of YouTube), and Clips (perhaps a company like Clipmarks).
Put it all under one roof, and you’ve got the tagging capital of the world.
Yahoo has also shown that it can nicely integrate everything under one umbrella, as can be seen with the new Yahoo Go.
I’m with Mike A on this one. But Yahoo also needs a social video company if they want the full set. YouTube?
Technorati is crap. Why would yahoo want them. Yahoo goes after companies that are slightly funded not funded like technorati. Next up is: reddit or something of this size.
i’d be interested to know how they burned through the 6.5 million he 2 years, that’s so not web 2.0 hehe.
Hopefully never. Now MeasureMap, Digg, YouTube and Technorati are really good, when Yahoo will touch them they will became a disater. Just like with Konfabulator. It was nice and useful and now you need more space for it, dumb questions before you open a widget…awful
If I was David Sifry I would not sell at this point. David and his team are embarked in a different style of search that is catching on big time. Technorati´s founding principle makes sense, why search when people are dying to be found? Technorati relies on people´s desire to tell their story. Personally see a bright future in the bragging business.
Nah, won’t happen. Yahoo’s Blog search technology is okay – it’s just the interface that sucks. Technorati’s tags either have no value, or give technorati no advantage (since any search engine can use them anyway – have you seen the Google Reader API?). The tags are only valuable in aggregate if you can remove spam, which Yahoo can do just as well as Technorati.
There is one other big potential buyer, though – News Corp. I’m not sure they would want it though – it doesn’t really match their Web 1.0 (keep the eyeballs on their own properties) thinking.
I wish Yahoo! would acquire Technorati so they could straighten out the bugs that Technorati seems to not be able to fix. Both with manual pings and automatic pings, I cannot get Technorati to update its index of my site and I’m not the only one with this problem.
Technorati being the “best of the bunch” in blog search (in and of itself debatable) is not the same as saying they’re good.
Yahoo! would be better served by seeking out a newer, smaller, younger company that they can help get it right from the start, or by simply focusing on their own existing tool, rather than trying to fix more entrenched issues that dog Trati.
just a reminder:
T’rati is good only in English blog search results. indexing of non-english blogs is mediocre.
People in San Franciso bay part of the world often forget that blogging is international. When you try many of web20 services and type non-latin letters you see only some abracadabra as those developers never heard about Unicode. If Google can support any language in their services why others can’t?
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Never I hope. Technorati is one of the blogger’s best tools. Why let Yahoo meddle with it?