Sunday, November 27, 2011

Why Haven?t We Seen A Rollup Yet in Online Video?

rollingOnline 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 can?t occur organically, but rather, through financial engineering or cost cutting. This is partially why we haven?t 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.

Source: http://feedproxy.google.com/~r/Techcrunch/~3/Xn7NXto9bZU/

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