Tuesday, April 15, 2008
AOL’s Big Give and Whirling Dervish Show!
AOL is turning into the Oprah Winfrey of the digital world, it seems, opening up Time Warner’s (TWX) checkbook to as many start-ups as it can.
Last month, it was $850 million in cash for social-networking site Bebo.
And, today, it’s a much smaller slug for Sphere, which started as a blog search engine and morphed into a widely distributed “contextually relevant” content engine, used on news and blog sites across the Web (and which AllThingsD uses on this site, in fact).
While one source said the price was upward of $25 million, sources at other companies to whom the San Francisco-based start-up also talked, including Google (GOOG), said Sphere was looking for more than that.
In any case, the sale is surely a win for CEO and Co-Founder of Sphere Tony Conrad, a longtime entrepreneur who also has been a VC at True Ventures, which also invested in Sphere.
Oh, it’s a mosh pit of jolly interbreeding in the Web 2.0 start-up world!
Sphere raised about $4.25 million from many investors, some of which included Radar Partners, Trident Capital and well-known Web players Scott Kurnit and Will Hearst.
AOL has surely shown a knack for snapping up small and innovative properties with clever technologies–the Truveo video search engine and communications app maker Userplane, for example–and has let them stay relatively intact, as it has promised it will do with Sphere.
But it also has not exactly leveraged any of them in a massive way either and still faces the problem of holding onto talent from those start-ups, as BoomTown reported here.
One hopes that AOL can do more with the more complex and elegant Sphere, which has deep relationships with major publishers all over the Web, including many Time Warner properties like Time.com and CNN.
It would be a shame for Sphere to fall into one of AOL’s deep holes there.
But perhaps not, given all the frenetic multitasking activity at AOL of late, including yesterday, when it also announced a deal in which its Platform-A online ad division would sell ads for Verizon (VZ) on the Web and for its mobile units.
Oh, and its top execs, CEO Randy Falco and President Ron Grant, whom AOL sources tell me have been AWOL of late, have also been ferreting away on a possible deal to be the alternative for Yahoo (YHOO) in its takeover battle with Microsoft (MSFT).
While Yahoo troops are not really happy with such a union, as BoomTown reported here, neither are some top Time Warner execs at the possibility that AOL might simply be being used as a stalking horse by Yahoo, in an effort to get Microsoft to up its bid.
“Do you think they’re using us?” joked one Time Warner exec to me yesterday, given the deal activity seemed to have slowed down this week.
Um, yes, of course!
While that wouldn’t be sporting, if Yahoo does end up going to Microsoft, it just means AOL will need to get a lot more energetic and do a lot more Spheres in the future to keep up.
