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Yahoo buys MyBlogLog… for real!

Updated: 8.58 pm: A few minutes after we had ordered our dinner at Mehfil Restaurant in San Francisco’s SOMA district, Scott Rafer, chairman of Orlando, Florida-based MyBlogLog, checked his Blackberry Pearl, and broke into a smile.

An unusually intense man, it was an unusual sight to see him smile. He typed out his response, and asked his lady friend to press the little Pearl to send the email. “It’s done,” he said, referring to the sale of MyBlogLog to Yahoo.

raferandom.jpgThough we have reported on the deal in the past, including this morning, when Marketing Shift reported that the deal was done, only to pull out the story a few hours later. I refrained from asking Rafer, who is a close friend. We normally don’t discuss business, the only reason our friendship has survived the trials of time. But this was special, and he shared his big news, though we had planned to have dinner almost a month ago.

Rafer declined to comment on the rumors about the price, and I didn’t press him for the details. Whatever the amount might be, it is clear that five-employee company (including Rafer) have done well, primarily because the company was completely boot strapped and raised zero dollars in angel or venture capital investment.

The team is going to join Yahoo and will be based in Berkeley and San Francisco and will be part of the Yahoo Developer Network. Most will report to Chad Dickerson, Sr. Director, Yahoo! Developer Network. This is part of Yahoo’s efforts to become increasingly social. Given how much effort Yahoo is putting on their Panama advertising platform, there must be some publisher-advertising angle to this deal, something we will discuss with Yahoo executives at the next opportunity.

More than the actual deal, it is the company’s past that makes it an interesting story. It was nearly eight months ago when I met Eric Marcoullier at yet another dinner with Rafer.

Marcoullier, who is based in Orlando, Florida had started the company with Todd Sampson in 2005. The two are fifth grade buddies. Eric had been trying to get bloggers to use his traffic measurement tool, though for some odd reason I did not bite. Rafer had contacted him via LinkedIn, and convinced them that they were sitting on a bigger opportunity than plain traffic measurement business.

Rafer suggested the company become a distributed social network, an idea that has been championed by Josh “Da Konnector” Kopelman of First Round Capital. Kopelman was one of the investors in Feedster, Rafer’s previous start-up, that is apparently limping along despite numerous setbacks. Soon there after, the MyBlogLog widgets started to show up on blogs, and a certain buzz started to form around the company. Since then 45,000 folks have signed up for the service, which is described as a blog-based social network.

In Fall 2006, at the Web 2.0 conference in San Francisco, Josh Kopelman hosted many start-ups in his private suite, and it was here he introduced MyBlogLog to some of the Yahoo folks, and soon the rumors of a pending deal started to fly. However, it was only this evening that the deal closed.

Footnote: This just might be one of the first few virtual company acquisition. One of the founders lived in Massachusetts, while another called Orlando his home, along with two other developers. Rafer lives in San Francisco. And they met on LinkedIn. Yup, something for our friends on Web Worker Daily to chew on!

Photo by Chasse Carroll

55 Responses to “Yahoo buys MyBlogLog… for real!”

  1. batman22

    So by Don Dodge’s and Om’s numbers:

    $3-5 mil for 45,000 users = $67-111 per user

    Or by other numbers:

    $10-12 mil for 45,000 users = $222-267 per user

    Superficially, I don’t see a huge barrier to entry in terms of technology, so it’s gotta be about the users, right?

    Can someone run an article on how this compares to PayPerPost’s acquisition or, albeit perhaps apples to oranges since it’s of about two orders of magnitude in dollars, with YouTube and MySpace?

    So aspiring entrepreneurs need only build a user base of 45,000? C’mon experts, time to write something about this.

  2. Congratulation, guys!
    The coolest feature of MyBlogLog is displaying COLORFUL photos of the FACES behind websites! Just fantastic real time format!

    I live in Ukraine and this morning joined MyBlogLog to highlight my “Open Letter to Alex Tew, Pixelotto” at mini-news.livejournal.com.
    It’s about introducing the Next Big Thing: my BILLION Dollar Homepage made of IFRAMES only.

    But YOUR success looks like a FAIRY TALE!
    Tell the Yahoo I’m just started eBay auction for the first 3Kb of Live IFRAME Ads space of my Mini-News.com.
    They could be interested too!!!

    http://Mini-News.com

  3. for those wondering about how this fits / why would they do it / how do they make money:

    consider using MyBlogLog as an extension to YPN, providing more than just affiliate payments, but in addition also enabling basic web stats, information on who’s visiting your site, and a way to profile & find out more about what people want to read on your site.

    this would be a significant differentiator from Google AdSense, and would combine several features smaller (& larger) bloggers would like in one package:
    – basic web stats / blog stats
    – basic social networking features
    – affiliate payments
    – viral discovery of similar sites

    given where YPN is at & where it would like to be, that strikes me as plenty of reason to do this deal… and at $10M, given MyBlogLog’s already decent audience, is probably a steal.

    (& a damn shame several of us didn’t get any money into the deal before Y! snapped them up ;)

    congrats Eric, Scott & team

  4. MyBlogLog is pretty cool, but I don’t see how it is worth $10M. I ran the numbers using four different valuation methods and my guess was between $3M and $5M.

    If Yahoo can knit together Delicious, Flickr, MyBlogLog, and others into a cohesive synergistic strategy that produces revenue…it could someday be worth more than $10M. Today, from a distance…I don’t see it.

    See my blog for valuation models and estimates. http://dondodge.typepad.com/thenextbigthing/2007/01/yahooacquires_.html

    Don Dodge on The Next Big Thing

  5. The source wasn’t bad… I did something my wife had asked me not to do and that is use information from a personal friendship as blog fodder. There were no Yahoo! attorneys trying to contact me but rather my wife. My story was 100% accurate and confirmed by a couple of other 3rd parties but I pulled it down without a retraction statement because I wanted to minimalize as much damage as possible on my personal friendships and my home life.

    ~jason

  6. Congrats to Scott and the MBL guys. MeasureMap was slick but MyBlogLog was much more functional and envelope pushing. Lets hope they can thrive in a mother ship.

    Om, give Mehfil some link love! ;-)

  7. I know that I’ve hypnotized you into thinking that the world revolves around me [ ;) ] , but MyBlogLog was founded by Eric Marcoullier and Todd Sampson in January 2005. I joined 11 months ago.

    And, you promised photo credit to “Chasse Carroll.”

  8. I would say buying MyBlogLog would be a smart move for anyone… it’s one of the few things “social” that works in terms of making people aware of content.

    Not too sure how successful the subscriptions idea for the premium package is though.

  9. I’ve come to the conclusion that I am going to make my first million tomorrow morning. I’m not waiting any longer! Tonight while I’m in bed, I’m going to “brew” a fresh steamer. We’ll call it Dump 2.0. Then, I’m going to dump my “homegrown” concoction in a cardboard box and mail it to Yahoo! along with a term sheet. Should be worth a few million, what do ya’ll think?

  10. if it’s actually happened, that’s a very good move and at a reasonably rational valuation by the looks of it. i just hope yahoo has a cohesive strategy for its increasingly fragmented web apps. but, i like and respect yahoo – the first and they can once again become the best.