Maybe it's just me. Maybe I just don't get it. More about that in a moment.
First, I want to extend hearty congratulations to Scott Heiferman and Adam Seifer, on selling Fotolog to France's Hi-Media Group for $90 million. If anybody can pull down that kind of a payday, more power to them. When L' Homme wants to shower you with untold riches, who in their right mind would protest?
I'm not quite sure though what Hi-Media thinks it acquired. I have an idea what I think it thinks it's acquired. With roughly 10 million users--especially outside of the United States--the service proves among other things that voyeurism is alive and well all across the globe. As a species, we like to look. And there's always a way to monetize that peculiarity of our nature.
Besides, Fotolog fancies itself as more than just another Internet photo site.
"We're a social media network, and because of that it's a great network to offer search," is how CEO John Borthwick put it last month when the company struck a deal to place Google search boxes on every page of its site. Silicon Alley Insider estimated that the deal was worth about $75 million over three years. A nice bit of change for a company that previously had estimated 2007 revenue at $2.3 million.
Here's how today's press release put it:
"Fotolog began to monetize its audience in 2007 and expects that revenues in fiscal year 2007 will reach $2.3 million. While Fotolog has sustained losses since January 2007, its revenue has recently increased sharply (sales have increased by approximately 245% since January 2007), and management anticipates Fotolog will reach break-even within the six months following the acquisition, resulting in a positive contribution to the operating income of Hi-Media in 2008."
Maybe this will turn out to be a relative bargain for Hi-Media. After all, Fox Interactive Media paid a reported $250 million to acquire Photobucket. But this isn't the first time in my memory that big companies threw money at supposed can't-miss business propositions that everyone knew were destined to take over the world. Social network this and social network that--OK, I get the idea and dig social media sites as much as anyone. But we're not talking Facebook or MySpace here. We're talking about Web sites where a midget could hop over the barriers to entry with his eyes closed. I'm sure the MBAs at Hi-Media convinced their corporate bosses how the interlocking synergies unlocked by this combination would make this an exception to the rule. That history will not repeat itself.
I can only shrug and respond, chacun a son goût.