Google Buying FeedBurner for $100 Million?

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ValleyWag says they have confirmed Sam Sethi's post that Google is buying FeedBurner and that the price is in the $100 Million range. So, why would Google pay such a high multiple, about 10 times revenues, for the startup?

Quote:
Probably, for the same reason it has developed Google Analytics: it is another way for Google to tie in independent online publishers. Feedburner provides an array of services to sites, such as email newsletter publishing, and the integration of external news and photos.

ValleyWag story

Comments

Not to mention, as blogs get

Not to mention, as blogs get more and more aggressive with nepotistic links, paid links, automated content creation, etc. this might be a way for Google to understand what they should trust from that part of the web graph a bit better.

Even if they didn't profit at all from Feedburner, I have to think that having another source of data for a non-link based web graph (to create algorithms to filter and flag the link based web graph) is a significant strategic value.

Visitors = Dollars

Aggregating data from all their resources, while it would eventually turn into a worthwhile effort, isn't a reason to spend that kind of money.

The key to ruling the web is having a wide variety of visitors that you can target market or otherwise monetize. Feedburner has a wide array of visitors from as many different markets as you can imagine and their market position is such that their value will increase exponentially as the use of RSS gradually spreads.

They bought Feedburner for the customer base. It was a smart move - even if they did overpay. I doubt they will be handing over cash at the time of sale anyways.

seobook is right

Having another tie in to your content gives google search another advantage over the competition. I wouldn't be surprised if blog spam is the fastest growing type of spam, and controlling feedburner gives Google an insiders view of your blog.

Google will eventually have a copy of all your data, why fight the inevitable?

Google already has

Feedburner's customer base. They bought it for the data.

Think they could use

Think they could use subscriber numbers as a quality signal?

Between Google Reader users

Between Google Reader users and Feedburner they would have the best measure of signal to noise in the blog vertical.

How many blogs actually use

How many blogs actually use Feedburner, though, as a percentile? I would have thought Feedburner and Google Reader will still only provide a fraction of the data required to determine blog readership & quality factors.

They don't need 100%

They don't need 100% coverage, and those blogs with large reach are more likely to be using Feedburner and are more likely to be subscribed to many times via Google Reader.

Arrington says the deal is confirmed

The rumors:

Quote:
are accurate and are now confirmed according to a source close to the deal. Feedburner is in the closing stages of being acquired by Google for around $100 million. The deal is all cash and mostly upfront, according to our source, although the founders will be locked in for a couple of years. The information we have is that the deal is now under a binding term sheet and will close in 2-3 weeks, and there is nothing that can really derail it at this point.

TechCrunch link

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