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Summary:

Yahoo continues with its Web 2.0 makeover. The company snapped up the bookmarking service del.icio.us today, according to a post by founder Joshua Schachter on his website. “We look forward to bringing you new features and more servers in the future,” he writes. (Scale matters!) Jeremy […]

Yahoo continues with its Web 2.0 makeover. The company snapped up the bookmarking service del.icio.us today, according to a post by founder Joshua Schachter on his website. “We look forward to bringing you new features and more servers in the future,” he writes. (Scale matters!) Jeremy gives Yahoo’s take!

Niall Kennedy has more details. No mention of what they paid for it, but what will be the ultimate pay-off, its hard to say. It also is an acknowledgement that the whole My Web 2.0 thing wasn’t going to well?

You can read what Union Square Ventures, one of the investors in the deal, think about the deal. It has to be a good exit for them. No one clearly knows what was going to be the business model for del.icio.us, and how it could get past early adopter market.

Jeff Clavier writes, “I mentioned social bookmarking as one of the areas I saw a “bubblet” on the rise in my panel on “Investing 2.0” in Paris, with 10+ (if not 20+) companies developing very similar functionality to delicious – which had the first mover advantage but a reasonably limited barrier to entry.”

Eric Goldstein, co-founder of Clipmarks writes, “…what i’m more disappointed in is how celebrated the announcement is within the “web 2.0″ community. I guess it kind of saddens me that the annointed leader of the web 2.0 movement has sold out this early in its life. sure, they made some good money and that’s cool…can’t blame them. but doesn’t this kind of serve as a reality check to new companies that even the leaders are just in it to flip it?”

Of course, there is that whole Digg phenomenon, and emergence of newer competitors such as TailRank. What could be the price of this deal? The company had raised $1.3 million, and if that got the VCs around 25% of the company, my guess is the final price is between – $10 and $15 million. I am speculating here, and have no information. So treat it like that…. simple speculation.

  1. Kudos to USV and the del.icio.us team for proving that business models don’t matter in the Web 2.0 economy when companies like Yahoo will snap them up just on the basis on being the new cool thing.

    I don’t think del.icio.us ever generated one dime in revenues during its entire existence (aside from slapping some AdSense placements if that).

  2. eric goldstein Friday, December 9, 2005

    Hey, i’m the co-founder of Clipmarks and wanted to express my gut reaction to this announcement. My reaction might change, as gut reactions often do, but i figured i’d post it here (also posted it on the clipmarks site).

    i’m kind of indifferent to the deal. it is what it is. what i’m more disappointed in is how celebrated the announcement is within the “web 2.0″ community. I guess it kind of saddens me that the annointed leader of the web 2.0 movement has sold out this early in its life. sure, they made some good money and that’s cool…can’t blame them. but doesn’t this kind of serve as a reality check to new companies that even the leaders are just in it to flip it? i can’t predict what the fate of Clipmarks will be (good, bad or otherwise), but i guess it just disappoints me that delicious didn’t hang in there and try to fight. am i alone in this?

  3. Software Only Friday, December 9, 2005

    Social Media Consolidation Act 8: Yahoo takes del.icio.us out

    First, I apologize for my complete silence over the past week or so, but I have been completely swamped by a number of things – that I can’t talk about yet, and I have just returned from Paris where I spoke at the excellent Les Blogs 2.0 organized by…

  4. I think your readers should read the excellence article written by Jim Collins, author of “Built to Last,” in the March 2000 issue of Fast Company, “Built to Flip.” (http://www.fastcompany.com/online/32/builttoflip.html)

  5. Things That … Make You Go Hmm Friday, December 9, 2005

    MyWeb.icio.us? Yahoo acquires del.icio.us

    Busy week for Yahoo. News that they were going to add VoIP to messenger, then Yahoo Answers, and now the announcement that Yahoo has bought tagging sensation del.icio.us: And just like we’ve done with Flickr, we plan to give del.icio.us the re…

  6. Make You Go Hmm: » MyWeb.icio.us? Yahoo acquires del.icio.us Friday, December 9, 2005

    [...] This should complement Flickr nicely but really, I’m skeptical what this means for MyWeb. Guess we’ll have to just wait and see. Haven’t seen any details of the finances disclosed, though Om Malik speculates it could be between $10 to $15 million, while BusinessWeek’s Heather Green says she talked To Joshua Schachter and “there isn’t going to be a press release, which is typical of smaller deals.” While Greg Yardley hints at $30-$40 million (linked earlier). [...]

  7. Alec Saunders .LOG Friday, December 9, 2005

    del.icio.us: How Much Did the Employees Get?

    I will preface this by saying I know NOTHING about the actual deal between Yahoo and del.icio.us.  Om Malik’s posting, in which he speculated about the buyout price, set me thinking about the various scenarios for employees in this buyout.&…

  8. Davenetics* : Yahoo Finding a Lot del.icio.us Friday, December 9, 2005

    [...] The startup appetite over at Yahoo is not declining. The giant just followed recent purchase of Flickr, Upcoming, Oddpost and others with the buyout of del.icio.us. [...]

  9. Congrats… I doubt they could have ever made money on their own and this is a good way to cash out.

    Chances are yahoo is going up and buying everything 2.0 related so that other companies can’t get ahold of it.

    I believe that what we define as web2.0 at its core threatens yahoo’s very existance. If they don’t crush or own the space they will lose billions in a couple of years down the road.

  10. » Yahoo Family Friday, December 9, 2005

    [...] Om has some input on the subject and here is the post from Joshua the founder of Del.icio.us. [...]

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