Looks like big media companies are taking a page right out of “acquire a startup a week” Google, and may be trying to bolster their online properties (perhaps, amongst other things, to capture online ad sales) with web2.0 functionality. Case in point: Hearst which has recently acquired Kaboodle, a social networking site for shopping, so that it might better integrate itself into its online magazine properties.
These kinds of magazines online magazines (such as Cosmopolitan)”feature” a variety of commercial products and services, and so it seems like an good fit with them. While Hearst might be acquiring Kaboodle to directly affect the bottom line (in an indirect fashion — increase brand, increase “stickiness” and sharing of items across friends via Kaboodle, increase the opportunity for cross/up-selling via affiliate relationships and so on), Forbes is taking a different route, it seems.
VentureBeat reports (and Forbes confirms in the comments) that Clipmarks, the social bookmarking tool, was bought not necessarily for the benefit of its readers — but so that it could be a tool that helps its journalists share information about stories faster, file stories quicker, and have the information in the hands of its readers that much sooner. I think the proof will be in the pudding as to how these acquisitions go for big media.
Personally, I think this a really fascinating story that actually integrates many different memes that I like to blog about, including the evolution of old and new media, coupled with the rise of “Web2.0″, startups and the goings on in the Valley. If big media can find ways to make these acquisitions pay off, could these web startups actually be the answer to declining newspaper profits, by acting as catalysts for further online growth (to balance the fall in offline revenues)?
Maybe.
Because if it does it might in fact be the win-win-win that everyone’s looking for. Big media win because they stave off extinction and finally evolve into an entity that is relevant and profitable online as off. Startups win because they get to cash out with acquisition being the exit strategy (and more players willing to pay for them). And VC companies win when Startups win. With all due respect to 37signals, I do wonder if the startup boom of 2006 – ? will be marked with more “companies” than ever being built not, for example, to turn a profit, but with the aim to be acquired. Of course, the ending will only be happy if big media can actually integrate these properties to make them work for them in some kind of strategy that makes sense. Heck, if Yahoo has a hard time doing it, what does that portend for big media companies? Luckily this chapter is only getting started, and I, for one, am eager to see how it plays out.
