Aquisition crazy in 2007 ?

[Shane]

is it just me do you think 2007 will be aquisition crazy ?

seeing as the web (dare I say web 2.0..lol) is almost seen as safe to throw cash at again by mainstream business, investment chimps and the like, and the "it's a fad... we don't need a web presence" dinosaurs have realised that the web is here to stay and is in fact eroding real world foot traffic sales at a year on year rate.. it leaves many businesses with the need to better placed online and get stuck in.

but starting from scratch is so hard, in some sectors the head start is years worth of links, content, members, reviews, branding etc.

I get the feeling there's going to be some serious cash flying about over the next 12 to 18 months on site aquisitions and the odd buying and bidding frenzy will take place on some sites and sectors.

the number ones, twos, threes etc, in some sectors may be out of reach of sensible money for some so it could be compromise time for many not so rich buyers, taking lower placed sites with potential for less cash than the top spots.

Maybe even an affiliate or two will benefit if well placed

what say ye ? ... yay, nay, dunno or don't care ?

[Mutual]

It's an interesting point. It was announced that AOL have offered the best part of $900m for TradeDoubler yesterday, which is a strategic move and a half (and no doubt there to offset the threat of Google moving into the space); and while it's difficult to debate whether this is full price or not (since it depends much on what happens next), it does show that the space is seen as one that is attractive and that holds a long-term future.

It could also set off all manner of alarm bells in other corporations who may feel that they need to jump on the bandwagon and move into the space before everything else worthwhile is taken out.

Generally, acquisition is a momentum issue - you buy to gain or increase market share and you can then leverage that market share further still with the increased presence and resource. Multiple acquisitions in an industry then make it highly noticed, resulting in more companies believing they have to make acquisitions, hence pushing the prices up before it grinds to a halt because every company suddenly believes it should have a Google-style PE despite only trading for a year and not actually making a bean.

It was said about 2006 - that it'd be the year of acquisition - I guess sooner or later it _will_ be a year of acquisition (or more to the point, consolidation), but I'm not convinced that the market needs to consolidate just yet.