First it was News Corp., then CondeNast and CBS Interactive. Now Hearst and Forbes have joined the Web 2.0 party, snapping up start-ups, and trying to capture the ongoing online shift of both audiences and advertising dollars.
Now the Wall Street Journal is reporting that Hearst has snapped up Kaboodle, another bookmarking service that allows online shoppers to clip and save information, for an undisclosed amount
. According to sources Kaboodle went for somewhere around $40 million. Manish Chandra, founder and CEO of the 18-month old start-up based in Santa Clara, Calif., declined to comment on specific terms of the deal. When I asked him why he decided to sell the company, he candidly replied, that “the stakes are getting higher, and others [competitors] are raising a ton of money.”
The company had about 2.2 million unique visitors in June 2007, having grown 20 folds since its launch just 18 months ago. It had raised about $5 million in venture capital led by well known Silicon Valley investors including Kanwal Rekhi, John Dougery and Samir Kumar, Managing Directors of Inventus Capital Partners, along with Rajeev Motwani – the Stanford professor who provided early guidance to the founders of Google. Kaboodle was in the process of raising another round when the exit opportunity emerged.
Chandra said that since a large percentage of Kaboodle users are women, and the site has an e- commerce/shopping component, it fit nicely with the larger goals of Hearst. He also added that the deal doesn’t impact its deals with Conde Nast properties.
There is an interesting pattern in some of the buys by big media corporations. They are not just buying pure-content, but instead seem to be interested in content-enhancing tools that rely on communities than individual content creators. Newroo, Photobucket, Reddit, Last.fm, Clipmarks and now Kaboodle fit that profile.
From a Silicon Valley perspective, emergence of buyers outside of the Google, Yahoo, Microsoft triumvirate is a good thing as it ensures that there are more buyers with cash.
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