Tuesday, September 28, 2010

AOL Buys TechCrunch

   The company I work for owns about 2000 shares of AOL from Time Warner's spinoff last year. Based on today's rise of about $0.68 in AOL shares, the company made about $1400 on paper. I'm not privvy to the firm's complete holdings but I get to open the mail every once in a while so it's all good. AOL's buying technology blog Tech Crunch for what appears to be $25 million. In Tiernan Ray's Barron's article on the acquisition today, he writes:

"AOL’s official release doesn’t disclose terms. Business Insider’s Nicholas Carlson says sources close to AOL say the company has said it paid $25 million for TechCrunch. A CNBC report this afternoon, however, pegs the figure at $40 million.
Carlson thinks the figure is surprisingly low, given that TechCrunch founder Michael Arrington has said the company’s revenue is running at $10 million a year."

   Carlson might want to ratchet down his valuations of news sites. If Tech Crunch is bringing in $10 million in revenue every year, a 2.5X buyout isn't out of the ordinary for a network of news sites. Tech Crunch also operates MobileCrunch, CrunchGear, TechCrunchIT, GreenTech, TechCrunchTV and CrunchBase.


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