Today's Big Rumor: Google Buying FeedburnerThe big rumor today first on Sam Sethi's Vecosys and now on Techmeme is that Google may be acquiring Feedburner. Valleywag blogs about why Google might want Feedburner and says the rumored purchase price is $100 million.
Much like in the Google-YouTube deal there is also lots of content passing through Feedburner that Google would like to have ads on. Search Engine Land writes that Google is already testing ads in feeds and asks "so why is Google buying them?"Text ads in feeds receive so little attention from readers that Google, which pursued its own trial, abandoned the experiment. Feed readers, the applications and sites on which geeky internet users scan news items, often do not support the graphical ads which brands prefer, closing off that avenue for a broker such as Feedburner.
So, why would Google pay such a high multiple, about 10 times revenues, for the startup? 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. It is more valuable as a publishing service than an ad broker.
Feedburner already has an ad network so technically Google would be buying a competitor. So far Feedburner has focused on some of the larger feeds with hundreds or thousands of subscribers. This leaves tons of smaller feeds with little or no ads running on them. Google already has lots of advertisers using AdWords so they are constantly looking for more places to put them. Feedburner would fill this need for Google and it would make it much easier for Google to reach feeds and own the data on how people are subscribing to feeds. The deal makes good sense for the advertising behemoth but so far it is still only a rumor that they are about to acquire Feedburner.
Posted on May 18, 2007