Earlier this year, we wrote here that billion dollar acquisitions are over and that large companies will pursue IPO routes over sales. Facebook is one example that comes to mind, having turned down offers from Viacom for $800M, Yahoo! ($1B and $1.6B). When you realize that Google’s two billion dollar babies - dMarc and YouTube - have had challenges, you see that there is a line that is being drawn in the sand.
New companies that have “clean” capital structures with relatively no skeletons in the closet can continue on an independent route, because their financial backers are patient and they are not war-torn.
But companies that survived the dot com explosion of 2000-02 are increasingly making the decision to cash out:
Yesterday, Comcast bought Fandango for a reported $200M.
Today, Paid Content is reporting on rumors that are circulating that Yahoo! is about to plunk down $100M for Rivals.com.
Both Fandango and Rivals.com face considerable competition, but both have strong businesses in their own right. Ultimately, the founders, managers and investors want out, fearing that if they don’t cash out now, they might miss yet another golden opportunity.
New businesses, even those that are much smaller than Facebook, tend to have a more patient outlook, thinking that this time things will fare differently. Regardless of the outcome, things are getting very interesting.
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