Blog Post

FIM-MySpace’s Effect on Social Media M&As

Well, if you ask me, somewhere Reid Hoffman is smiling…he knows he’s next. Anyway, for more candidates in the social media space, you might want to check out our March’s “Buyout Countdown List“.

So the valuations will shoot upwards, for one. Secondly, everyone knows this is the natural evolutionary cycle in the industry…no one knew it would start rolling up so fast after the spate of fundings last year. In retrospect, the social media/networking industry is not a standalone industry anyway..it is a transitionary industry, one step in and away from the media companies.

Anyway, Bambi Francisco thinks Skype will go next, to one of the portals, possibly Google. (Tie that up with Google’s investment in Current Communications, and you have something going…)

TheDeal: At the very least, the acquisition will boost the valuation of other social networking companies, argued Bill Burnham, managing director of VC firm Celsius Capital. “Whenever a credible company goes out and pays a huge premium for a particular kind of company, it makes all the other properties in the neighborhood worth more,” Burnham said.

Some VC blogs are also buzzing:

Bill Burnham: For VCs, this sale is significant because it represents the first real payday in the social networking space, a space that to date has seen lots of VC hype but very little returns.

Jeff Clavier: I am sure that Accel partners felt even better about their investment in Thefacebook this morning.