Now that Feedburner Story….

Every so often we hear about Chicago-based FeedBurner, the RSS remixer/syndicator is getting bought by someone. This morning, Sam Sethi pointed out that Feedburner was in talks with Google. Valleywag says they have a confirmation and the price range is in the $100 million ballpark. Is it true?

I am not sure – because last year FeedBurner was linked to AOL, a deal that almost happened but it didn’t! Will it happen this time around? Google declined to comment on the rumor. FeedBurner guys are being impolite and not calling back.

Now if the deal does happen – not that I have any first hand knowledge – it would at least get Google extend its AdSense platform to RSS feeds, one part of the digital media business where they failed.

So, why would Google pay such a high multiple, about 10 times revenues, for the startup? Probably, for the same reason it has developed Google Analytics: it is another way for Google to tie in independent online publishers. [Valleywag]

This would be part of a trend that is likely to continue for a while. I was speaking with Glover Lawrence, a veteran investment banker from McNamee Lawrence & Co., and he pointed out that while big buyouts like the $6 billion Microsoft-aQuantive deal might get all the attention, there is a lot of action in the smaller deals. Lawrence pointed out that future advertising-related deals would be around filling out technology holes or start-ups that have an area of specialization.

From a valuation standpoint the $100 million number being thrown around by Valleywag seems like a reasonable guess: FeedBurner has raised in excess of $17 million.

How does it impact the customers like myself? It was ok for a start-up like FeedBurner to sell ads on my RSS content, but with Google I am not too sure. I am getting increasingly dissatisfied about Google’s cut of the ad-dollars on our content. In fact, the best way for Yahoo and Microsoft to mess with Google’s AdSense business: match publisher’s AdSense check from say last month for three months, give publishers more share of the gold and be absolutely transparent about how much cut they are keeping. And gurantee that!

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