Ken Yarmosh is a web strategy consultant who helps organizations, businesses, VCs, and technology developers maximize their Internet and web investments.
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[...] With recent eBay auctions of websites like Kiko and Huckabuck, there’s a lingering question as to how many new web services will sell. In the past, large companies like Microsoft, AOL, and Google have purchased smaller ones as a way of either removing potential competition or acquiring talented developers. In both cases, the actual company itself was purchased in its entirety; computers, servers, Aeron chairs, and the developers themselves. [...]
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TECHNOSIGHT is written by Ken Yarmosh, Internet overlord and overall fun guy.
September 2, 2006 at 1:57 pm
I think that a lot of these services will indeed sell, although probably not for a quarter-mil a pop, a la Kiko. I doubt people will make extremely high margins on these sites, but it’s quite possible that they don’t have to. You could probably make that back on Google AdSense and upsells, if you know what you’re doing. (Which begs the question, exactly who bought Kiko?)
It is interesting to note that we’re at the point where people are selling the code itself as the “company.” Historically, software firms would be purchased by larger companies not for the software itself, but for access to the developers who wrote it (BeOS bought by Palm, etc…). With the Web 2.0 sites, this is not the case.