Yahoo buys BuzzTracker, but why?

September 14, 2007 |

Yahoo buys BuzzTracker, but why?

By John Pospisil

Yahoo buys BuzzTracker, but why? Two-year-old Participate Media, the company behind the BuzzTracker software and BuzzTracker.com website, has been acquired by Yahoo. The deal has has left one big question on pundits’ lips, why?

BuzzTracker aggregates news and blog postings from 90,000 hand picked sites. Yahoo was in the process of negotiating a license for BuzzTracker when it elected to buy the company instead. It seems to be a case of “I liked it so much I bought the company”.

While Yahoo did not reveal how much it paid for Participate Media, it is believed to be around US$5 million.

All four BuzzTracker staff will move over to Yahoo, including CEO Alan Warms, 41, who will run Yahoo News as Vice President and General Manager

“The decision to sell the business and move to Yahoo! was relatively simple, as anyone playing in the online space understands, online media is all about scale,” said Warms.

“The ability to garner real CPMs, the ability to sell ads directly, the ability to provide innovative solutions to advertisers, all depend on having tens of millions of unique visitors. As the Publisher of BuzzTracker.com and before that RealClearPolitics.com, that point has been drilled into my consciousness over the past two years.”

Internet pundits have expressed surprise about Yahoo’s interest in BuzzTracker:

Here’s how Mathew Ingram put it:

I have to confess that while I have heard of Buzztracker, it seems like a distant also-ran in the meme-tracker game. I check Techmeme.com religiously … and also check Tailrank and Sphere from time to time, but have never paid much attention to Buzztracker. And I don’t think I’m alone in those habits.

Ingram offers a number of possible reasons about why Yahoo purchased BuzzTracker including that “Yahoo isn’t all that bright” or that someone at Yahoo! thought that Warms would be a good choice to run Yahoo News.

However, according to Kara Swisher of the Wall Street Journal, Yahoo did talk to BuzzTrackers competitors but they “apparently had too lofty valuations”.

Still, from Warm’s perspective the rumored $5 million for a two-year-old four-person company isn’t too shabby. Good luck to him I say!