AOL Buys Sphere’s Blog Content Engine
Michael Arrington
42 comments »
Tomorrow AOL will announce the acquisition of San Francisco-based Sphere, a blog content engine that launched in 2006. The price is not being disclosed, but sources are suggesting it’s in the $25 million range, or possibly a little more. More details from Om Malik
When Sphere first launched as a blog search engine they were already late to the blog search game. Technorati and others had been around for some time already, and even Google Blog Search was nearly eight months old. Sphere had some nice features, but it was in a tough and competitive space.
But CEO Tony Conrad, a former venture capitalist, quickly adapted to the changing market and focused on delivering blog results relevant to content delivered by big news and content sites. Time was the first to go live with “Sphere It” links, and most of the big news sites followed over time. In July 2007 we noted that they had very quietly completed a transformation into a “related content” engine.
Sphere lands in Bill Wilson’s organization, the EVP of Programming at AOL. His division controls AOL’s content properties (Entertainment, Finance, Weblogs, etc.). In a phone call today, Wilson told me he doesn’t intend to change Sphere’s approach or brand. They are growing a number of micro/niche brands, he said, and leveraging what he calls “passion points” of small but passionate audiences. Sphere fits right into that by showing relevant content to users, and getting AOL content in front of more users.
Congratulations to Conrad on the aquisition, as well as the rest of the Sphere team (Martin Remy, Steve Nieker, Toni Schneider, Mike Garfias, Alex Bendig, Andy Cabell, Anne Dorman, Jeff Yolen, Adam Embick, Josh Guttman, Kevin Cowan, Sven Henderson, Troy Vitullo and Michael Harzheim). Sphere had raised $3.5 million in venture capital over two rounds.
It would of been better if someone else bought this. Sphere is pretty cool and hopefully they will keep the momentum going.
Hope its ends up better than delicious
According to compete.com, they went from 0 visitors a year ago to 1,688,973 last month and to the $25 mil payout this month. Nice flip.
Great acquisition for both AOL and Sphere. What does this mean for technorati?
AOL could leverage it “related links” service across its web properties as well as launch its own news/blog search engine
Congratulations to the Sphere team.
its own news/blog search engine
Thanks Mike - you introduced Sphere (twice!) and it’s niced to have you close the loop and make the announcement. It’s been a fun ride and we’re really thrilled about joining AOL.
Sphere It, a very nice and elegant service, well deserving the exit, congrats!
Impressive AOL, aggressively… nice for the startup market!
Congrats!!
AOL has a good eye for buying startups lately.
Congrats to Tony and his team. Sphere is a great product and a great group of folks.
$25M of which probably half goes to the VC, angels, friends+family and whoever else provided early funding. Next in line would be the 4! main founders, and then finally the 10 employees. So $12M to spread across 14 people, heavily weighted in favor of the founders, of course. So say $8M for the founders at $2M each and $4M for the 10 employees, which would amount to $400k each, pre-tax. That’s an average year for a decent engineer at Google or Yahoo when you factor in ESPP, grants and bonuses.
My point is simply that $25M is not a lot of money for what appears to be a successful company.
JoeUser:
Sure, but that $400K is on top of their salaries. They won’t be able to retire, but…
Congrats TC and Team for such a great win!!! This has been a terrific entrepreneur’s journey, and you really deserve this.
Thank you for your incredible dedication, creativity and hard work from all of us at True.
Well done.
Best,
Jon
Is that the same Toni Schneider who is CEO of Automattic?
Great going - and in just about 30 months.
Who else provides a similar service to Sphere?
I wonder how much http://www.nametaggs.com would go for….
Congratulations to everyone involved! This was a great move by AOL.
First Goowy and now Sphere. I’m detecting a trend ;-).
Usually these “feature” startups are bought for the make or buy price range of $10 - $25 million.
@Matt - Who else provides a similar service to Sphere?
Give Conteio’s alpha DEMO a try: http://www.conteio.com/site-demo-query2/
We’ve got a testing corpus of >2M news articles so far & the entire English Wikipedia that we can match/relate content to.
It works very well on news articles.
Good luck on your quest!
Conteio
Hi Matt, Lingospot is a similar service to Sphere in our focus on content discovery, but our services are primarily in-text. You can check it out at http://www.lingospot.com.
Congrats to Tony and his team for a great run and a successful exit!
Otis, my point was more that $400k (which is probably a very generous guess) is very little in the risk/reward game. For an engineer to take a gamble on joining a small startup, the reward needs to be higher given that so many of them don’t make it. If you can coast along in a larger more stable company making 80% of that every year guaranteed, why in the world would you take the startup risk. Of course, the founder math is completely different, but if the founders can’t hire engineers, they aren’t going to get very far.