From Valleywag:
Here’s a word you’re going to be hearing a lot more: the rollup. At least half a dozen groups, including private equity groups and entrepreneurs such as Ross Levinsohn, are establishing funds to acquire — or roll up — internet media companies.
Here’s the logic:
- internet advertising is booming;
- established media and internet companies can’t buy everything, because they have a hard enough job integrating the units they already have;
- the public offering route is still closed because of excessive regulation;
- venture capital partnerships typically invest at an earlier stage;
- and some internet entrepreneurs have profitable businesses, impatience for some personal financial return, and no obvious exit. Which is where the rollup funds come in.
Let’s see, where to start. Having worked with the characters on both sides of the equation, I think a lot of people are over-estimating the opportunity and over-simplifying the challenges at hand here. It’s not money they’re burning, so enjoy the long list of people who will be competing in the space here.
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