Yahoo buys MyBlogLog — but why?

by Mathew on January 9, 2007 · 27 comments

Okay, so Yahoo finally fronted the cash (reportedly about $10-million) for MyBlogLog, the viral social network that a couple of guys started awhile back and that has been growing by leaps and bounds according to Alexaholic. As you can find out from any of the bazillion posts on Techmeme this morning, there was a rumour back in November of such a deal, but nothing came of it.

That explains the nervousness with which people posted yesterday morning about another acquisition report, this time from a blog called Marketing Shift — which put up a post, and then just as quickly pulled it down. Om Malik posted something and then retracted it, but last night got to retract the retraction, after getting confirmation from his buddy Scott Rafer, the CEO.

My favourite part of this story, as told by Om, is that the two co-founders of the company are friends from elementary school, and that they raised zero — yes, zero — dollars in financing from angels or VCs (of course, it helped that Scott probably brought in some money from his previous stint at Feedster Note Scott’s comment below). Now that is a Web 2.0 story.

mybloglog.gif

This is great for the MyBlogLog guys, and as I have written before I am a big fan of the application. I like the way it connects people who read different blogs, including mine. I like looking at the pictures of who has been reading, and then clicking on the pictures to see who that person is and whether they have a blog. That is social networking, pure and simple.

My only lingering question is: what the heck is Yahoo going to do with it? Their track record so far doesn’t exactly fill me with optimism about how they’re going to make use of their new acquisition. Don’t get me wrong — I like the fact that they haven’t screwed up Flickr or del.icio.us, both of which I am a huge fan of. But that doesn’t mean that owning them makes a lot of sense either.

How have they been integrated or made Yahoo better? The short answer is that they haven’t (my friend Stowe Boyd is similarly puzzled). Maybe Yahoo has a master plan that I haven’t been able to figure out — but I’m not betting on it. Tony Hung has some thoughts about what the company should do with it over at Deep Jive Interests. And Don Dodge does the math and decides Yahoo overpaid.

  • Pingback: Tailrank - Top News for Today

  • Pingback: Mark Evans - A Canadian Take on Tech

  • Pingback: Matt McAlister

  • Pingback: The RSS Blog

  • http://blogcritics.org Eric Berlin

    Perhaps Yahoo! doesn’t need to do anything with it, at least for the time being. If MyBlogLog continues to grow as it has been — and I think there’s a good chance it will — it has a shot at being a “MySpace for bloggers” in terms of numbers. In terms of snatching up a hot property, I think Yahoo! made a great acquisition here.

    One thing that would make me frown is if Yahoo tries to integrate MyBlogLog with Yahoo 360 :-(

  • http://www.mathewingram.com/work Mathew Ingram

    I know you’re right in a way, Eric — and I think MyBlogLog is great, and definitely worth buying. And I suppose there’s always the chance that Yahoo could try to integrate it with other things and fail miserably. But from a strictly business-oriented point of view, most companies buy things in order to do things with them, to leverage them, to integrate them, to gain efficiencies, etc. If Yahoo just buys things and then does nothing with them then it winds up being a kind of Web 2.0 mutual fund.

  • http://blogcritics.org Eric Berlin

    True. Makes you wonder if Yahoo! will one day roll out a Yahoo Wizbang product that incorporates all of its content offerings, 360, del.icio.us, MyBlogLog, etc. into an all-in-one experience.

    But it seems as though the scramble is on to snatch up all of the hot new web 2.0 plays, doesn’t it? A coworker mentioned just yesterday that she felt Google’s acquisition of YouTube was a defensive maneuver.

    So it seems that the idea is buy first, figure out what to do with it later. In any event, as a fan of MyBlogLog (I see my thumbnail pic staring back at me even now!) I think it has great potential to bridge the gap between the still relatively separate blogging and social networking worlds.

  • Pingback: Starked SF, Unforgiving News from the Bay » Blog Archive » Linker Barn: Tuesday, January 9

  • http://www.kbcafe.com Randy Charles Morin

    The fact that no venture money was involved, made the transaction a lot easier. $10M is a drop in the bucket for Yahoo! They bought hits that are growing. And the founders got a quick penny. Sounds like a win-win.

  • http://fitrans.blogspot.com Ryan Coleman

    The way I see it MyBlogLog is the ideal stats platform for integrating into their Flickr & Del.icio.us properties – especially Flickr. I find more and more that I want more detail from how my Flickr stuff is being viewed and it just isn’t there. When you look at Flickr, most already have an account, those with accounts have pictures. With a common Yahoo! ID suddenly all the Flickr users could easily have MBL accounts and start to show up in the widget all over the web. I think it’s a win-win acquisition for Yahoo! adds value to an existing property and potentially creates more value in the new property. (provided they bother to integrate them all :/)

  • Mathew Ingram

    I think you’re right that the lack of VC probably made it easier to do, Randy.

    And Ryan, that’s a good point — I hope that’s the kind of thing Yahoo is thinking of, but they’ve had delicious and Flickr for a long time now and I fail to see how they have done any of the interesting things they could have with either one.

  • Pingback: Misleading Advertising Law

  • http://drumsnwhistles.com Karoli

    I think Yahoo has done an excellent job of acquiring companies which have unique attention algorithms or applications. When they filed the patent application for Flickr’s attention algorithm last year, it occurred to me that Yahoo! was positioning themselves to try to own new and innovative attention mechanisms.

    You said it in your own post — you like clicking the pictures, you like visiting the other blogs, you like the social networking posts. Combining that with MyBlogLog’s stat package and fairly vanilla community site features gives Yahoo! yet another mechanism to harness and quantify attention.

  • http://dumpsterbust.blogspot.com/ Eric Berlin

    Yes, I think that MyBlogLog’s functionality could pretty neatly be tied to other kinds of social bookmarking sites. It’s really a very nice extension away from “traditional” social networking — where it seems like people are there… just to be somewhere — to social networking that meets the needs of standalone sites/communities who want to connect with one another (blogs) and, perhaps, existing cohesive communities (flickr, let’s say).

  • Mathew Ingram

    A fair point, Karoli. And perhaps Yahoo has plans that will make use of all those things at some future date — I’d just like to see a little more evidence of that. But then, I’ve always been impatient :-)

  • http://www.robhyndman.com Rob Hyndman

    I see little evidence so far that the peanut butter in the manifesto (ie more selective focus) is sticking.

    (groan)

    Though Yahoo’s email foray with the iPhone is pretty cool.

  • Pingback: Yahoo Buys MyBlogLog Why

  • http://www.en-dash.com/blog Jake

    I think there’s some value to buying entities like these and just letting them do their thing–I just don’t know how much value that is. But I will say that Yahoo’s acquisitions, and the fact that they haven’t done anything bad with them once they acquired them, changed the way I viewed the company. I think they “get it,” or at least I think they’re a lot closer than the old days when they released mediocre web service after mediocre web service of their own design. I think Google benefits similarly from acquisitions like Blogger, Writely, etc–their corporate purchases have personality and whimsy, rather than pure profit-seeking. Or at least that’s how it comes off. those in the know view Yahoo/Google (and maybe even Microsoft) as benevolent overlords (and, potentially, benevolent employers!).

  • http://www.fridgebuzz.com Vanessa Williams

    Ummm… put advertising on it? If Yahoo!’s business model is anything like Google’s, they make far more money from ads placed on their own properties than on other people’s properties. So if MyBlogLog gets lots of eyeballs, nothing more is required for Yahoo! to realize instant revenue. I keep MyBlogLog open all day long, refreshing as often as I remember to. Stickiness = $$$. Makes absolutely perfect sense to me!

    Not to mention that by knowing which Bloggers are associated with each other in some way (most likely some shared interest), they acquire better ad targetting information through segmentation by “communities of interest.” (Though who knows if they have the will to do that—it would require actual effort.)

    Sorry if that’s a downer viewpoint, but you gotta know it’s ALL about advertising, baby. Media companies aren’t in the business of innovation, as I’ve mentioned elsewhere ;-)

  • http://mybloglog.com/buzz/members/rafer Scott Rafer

    I’ve only been part of the Yahoo! team for a few hours, but I think you’ll be pleased with the ways we’ll use the technology to make the web a more amusing and rewarding “place.”

    For the record, I only put in $24,000, and most of it after the rumor broke in November.

  • http://fitrans.blogspot.com Ryan Coleman

    Rub it in why don’t you :)

    Nice job Scott (and team)…

  • http://www.mathewingram.com/work Mathew Ingram

    Good point, Vanessa. And Jake, buying things and just letting them be may have a feel-good aspect to it, but in the long run it tends not to make for a good business, unless you happen to be Warren Buffett.

    Thanks for the comment, Scott. My skepticism about Yahoo aside, I’m looking looking forward to seeing what you guys can do with MyBlogLog going forward. Best of luck.

  • Pingback: Dreams for MyBlogLog and My Continued Cheerleading for Yahoo at Disruptive Thoughts

  • http://ulik.typepad.com/leafar/2006/11/why_yahoo_kicks.html leafar

    Yahoo is puzzling Virtual Identity.
    They now have more than half of the pieces.
    http://ulik.typepad.com/leafar/2006/11/why_yahoo_kicks.html

  • http://spap-oop.blogspot.com tish grier

    I was puzzled by this myself–since Eric Marcoullier, one of the guys who developed MyBlogLog’s a friend, and I was using it when it was just a different kind of stats package. I’m not social on the ‘net in the way MBL would like me to be, and I’ve had some sploggers “add” me as a friend (which quite frankly, has bugged me–told Eric)

    I’d bet it has something to do with MBL interfacing with Yahoo 360 and becoming a MySpace-type thingie for grownup bloggers (who just aren’t happy with comments and checking their stats pages)

  • http://www.oponia.com Leigh

    http://vcratings.thedealblogs.com/2007/01/yahoos_horowitz_on_mybloglog_p.php

    “Bradley Horowitz, Yahoo!’s vp of product strategy, explained his company’s motivation for acquiring MyBlogLog in an interview yesterday with The Deal’s David Shabelman.”

    If you go to the url above, there is a link to the interview. But I don’t have a Deal account so dunno if it will enlighten anyone….

  • http://mini-news.com Beloy

    Mathew, there are other “from $0 to Million Dollar Homepage” stories, icluding my own: I joined MyBlogLog 3 days ago to introduce the BILLION Dollar Homepage Mini-News.com , – first website in the world made mostly of IFRAME ads!

    It may be hard for you to imagine there are countries where average people don’t have the starting capital $1,000+ of a poor Brit. student Alex Tew, let alone professionals that work in the US legally. Please see my Mini-Billion.blogspot.com and “Open Letter to Alex Tew” for more.

    As for the MyBlogLog purchase, Yahoo would be shocked to learn that first 3Kb of Live IFRAME Ad space for Mini-News.com is now on eBay for only $100.

Older post:

Newer post: