technoballs » m&a

Yelp Eyes Future IPO

the ballmaster — Mon, 22 Feb 2010 17:58:18 +0000

It’s official: Yelp has now turned away more suitors than Penelope, the long-suffering wife of Odysseus.

In December, the blogosphere reeled at the announcement that Google was stepping-up to buy restaurant-review site for a cool $500 million. Not bad for Yelp, considering it brief history as a startup, nor for Google, considering its botched attempts to dominate the local review market.

Observers did a double-take a few days later when it was announced that Yelp had walked away from the offer, citing fiduciary duty. It was further disclosed that an unnamed suitor was willing to pay more than 50% above Google’s offer price. Some observers correctly predicted that the only company desperate enough to make such an offer was Microsoft, which has never balked at paying excessive prices for a piece of the social networking pie. We now know that it was, indeed, Microsoft, which approached Yelp with an offer north of $700 million.

Which Yelp rejected.

Founder Jeremy Stoppleman is now sharing more details about his vision for the company, including a distant IPO:

Yelp “will definitely not go public this year,” he said. “2011, who knows? But why rush out the door if I can avoid it?”

This disclosure suggests at least a couple of things–

Yelp has enough cash in the bank to make it for a while, to which its recent injection of $100 million from private equity-shop Elevation Partners certainly attests.
Yelp estimates its true value north of $1 billion.
Yelp expects the IPO market for tech startups will significantly improve after 2010.

Time will tell if Yelp’s holdout strategy will work. It is a risky business, however, considering how quickly the market can turn against review sites.

Just ask CitySearch.

Yelp CEO Doesn’t See An IPO Anytime Soon.

Yelp Is Now In Play

the ballmaster — Tue, 22 Dec 2009 04:49:14 +0000

Wow. Not since Yahoo turned down Microsoft’s acquisition offer last year has the tech scene seen so much M&A drama. In a surprise move, Yelp’s board has rejected Google’s buyout offer of $500 million, citing its need to follow its fiduciary duty. This almost surely means that Yelp has received interest from another quarter.

The New York Times reports that this is, indeed, the case, and claims that the yet-unknown other party is willing to pay as much as 50% above Google’s offer for Yelp:

Yelp received interest from another company for a price of about 50 percent more than Google was willing to pay, according to a person who is close to the negotiations. That would put the price around $750 million.

This screams Microsoft, which is sitting on a lot of cash and has been known to overspend for a chance to get a piece of the social networking scene. (Remember its insane $15 billion valuation of Facebook three years ago?) Try as it might, Microsoft just cannot figure out how the hell to build a good social networking product.

Fiduciary duty, if narrowly interpreted, would lead Yelp’s board to accept Redmond’s higher offer– especially given the high premium Microsoft is willing to pay. The long-term interpretation of fiduciary duty, however, dictates that Yelp should run, not walk as far away from Microsoft as possible. What’s the last company that has flourished under Microsoft’s leadership? On the contrary, it seems that Microsoft suffers from that particular malady of not knowing what, precisely, to do with the companies it has overpaid to acquire.

A marriage of Yelp and Microsoft would yield some obvious synergies, including the integration of Yelp user content into Microsoft Maps and Bing, but this is merely a switching-out of search engines, as both functions are currently performed by Google. Care to see Yelp content filter into Microsoft Office? I don’t think so.

It’s easy to see what Microsoft gets out of this deal– a nice piece of the social media scene– something it hasn’t been able to figure out for the life of it. Hard to see what Yelp gets out of this deal except for a handsome payday.

via Yelp Turns Down Google, for Now – Bits Blog – NYTimes.com.

Google To Buy Yelp for At Least $500 Million

the ballmaster — Fri, 18 Dec 2009 21:52:38 +0000

Google, which has been on a buying spree for the past year, is in advanced talks to purchase Yelp for at least $500 million.

This is a smart move for Google in many ways. It had tried to usurp the world of local reviews earlier this year with its Place Pages– mini-sites that would show up at the front of search results pages and provide you with everything from the establishment’s address, phone number, location via Google Map, and user reviews. It would appear that, rather than reinvent the wheel, Mountain View has decided to pick up Yelp while the price is still relatively low. Doing so allows Google’s engineering team to focus on other areas; this price tag is largely about the value of Yelp’s user content.

This move by Google definitely serves as a shot across the bow to Microsoft and (to a lesser extent) IAC, whose CitySearch directory has been dying on the vine for the past seven years. It will be interesting to see how Microsoft responds.

Yelp has raised about $30 million across its four rounds of venture capital, and TechCrunch estimates the company’s value at $200 million.

Congrats to everyone at Yelp!

Google In Discussions To Acquire Yelp For A Half Billion Dollars Or More.

Facebook Valuation Jumps 42% to $9.5 Billion

the ballmaster — Fri, 20 Nov 2009 00:03:37 +0000

It may be a far cry from the $15 billion valuation it received three years ago from Microsoft, but Facebook has jumped to a new valuation of $9.5 billion. While this represents a downgrade since the highs of 2006, it is a considerable win for the social networking behemoth, which saw its valuation sink to $1.3 billion on the private exchanges as recently as one year after Microsoft took a stake in it.

What’s moving the stock? The fact that Facebook has continued its meteoric rise despite the global recession certainly counts for something. Chances are, however, that it has more to do with the fact that Facebook recently turned cash flow-positive. The holy grail of social networks– monetization –is beginning to happen, and investors are noticing. Also hovering in the background are persistent expectations that, as the economy continues to improve, Zuckerberg and company will have more opportunities to consider their exit strategy:

“The fact that the stock on these private exchanges moved — I’m sure that has to do with the fact that people think a deal is coming sooner rather than later,” said Bard, whose firm is based in Greenwich, Connecticut.

via Facebook Common Stock Valuation Jumps 42% to $9.5 Billion – Bloomberg.com.

Adobe Buys Omniture for $1.8 Billion

the ballmaster — Wed, 16 Sep 2009 06:29:39 +0000

Adobe, the venerable producer of such applications as Photoshop, Illustrator, and InDesign, announced today that it is acquiring Omniture for $1.8 billion. The goal is to attract companies who want better integration between content creation and web analytics.

Investor reaction to the deal was fairly standard: Adobe share prices fell by 4% in extended trading, while Omniture shares popped 25%. The deal is not without its challenges: Google Analytics provides many of the same features as Omniture, and is, oh yeah– free.

If anyone can make this deal work, it’s Adobe. It has acquired its way to greatness over the years, gobbling-up products like Photoshop, GoLive, InDesign, and Acrobat along the way.

via Adobe’s Pricey Omniture Purchase – BusinessWeek.

Intuit Determined to Snuff Out Innovation at Mint?

the ballmaster — Mon, 14 Sep 2009 12:56:44 +0000

Intuit, which produces popular accounting and personal finance tools Quickbooks and Quicken, is acquiring uber-cool Mint.com for a cool $170 million, according to Michael Arrington:

This is a terrific exit for Mint, which first launched two years ago… Their last round of financing valued the company at $140 million.

In all, Mint has raised $32 million over three venture rounds.

I’ve played with Mint, and like its dead-simple interface precisely because it is not Quicken. Will Intuit bog Mint down in old ways of thinking, or will it let the quickly-growing startup continue to run its own shop?

via Intuit To Acquire (Former TechCrunch50 Winner) Mint For $170 Million .