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November 25, 2011 10:14 am GMT
Online video is booming and the are tons of small video companies across production, advertising, distribution, and technology. Yet we have yet to see a serious attempt to roll up the industry. The reasons, I submit, boil down to egos and greed.What is a Rollup?Historically, large private equity firms have rolled up various small companies in a given market through mergers or acquisitions in order to reach economies of scale. A rollup is different than a simple merger in that it involves multiple parties, oftentimes taking place in a mature industry where growth cant occur organically, but rather, through financial engineering or cost cutting.This is partially why we havent seen that many rollups of Internet companies, because usually a merger is all it takes to reach considerable market dominance. Sometimes rollups make sense because building a product or business would take too long to build internally and grow organically. Ask Jeeves bought Interactive Search Holdings for $343M in March 2004 to double market share and then sold to IAC a year later for $1.8 billion.
Original Link: http://feedproxy.google.com/~r/Techcrunch/~3/Xn7NXto9bZU/
Why Havent We Seen A Rollup Yet in Online Video?
Online video is booming and the are tons of small video companies across production, advertising, distribution, and technology. Yet we have yet to see a serious attempt to roll up the industry. The reasons, I submit, boil down to egos and greed.What is a Rollup?Historically, large private equity firms have rolled up various small companies in a given market through mergers or acquisitions in order to reach economies of scale. A rollup is different than a simple merger in that it involves multiple parties, oftentimes taking place in a mature industry where growth cant occur organically, but rather, through financial engineering or cost cutting.This is partially why we havent seen that many rollups of Internet companies, because usually a merger is all it takes to reach considerable market dominance. Sometimes rollups make sense because building a product or business would take too long to build internally and grow organically. Ask Jeeves bought Interactive Search Holdings for $343M in March 2004 to double market share and then sold to IAC a year later for $1.8 billion.Original Link: http://feedproxy.google.com/~r/Techcrunch/~3/Xn7NXto9bZU/
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