Rumors circulated by the technology blog All Things Digital last month were that the world's biggest search engine Google was in talks to buy Meebo, the startup that helps online publishers connect their websites with social network sites, has finally been confirmed by company officials. Late on Monday, Meebo's blog announced that Google had officially acquired the company.
The blog noted, "We are happy to announce that Meebo has entered into an agreement to be acquired by Google. For more than seven years we've been helping publishers find deeper relationships with their users and to make their sites more social and engaging. Together with Google, we're super jazzed to roll up our sleeves and get cracking on even bigger and better ways to help users and Web site owners alike. We've had a blast building Meebo so far, and we're really excited to start the next leg of our journey."
Commenting on the same development, Google representative also reportedly said, "We are always looking for better ways to help users share content and connect with others across the web, just as they do in real life. We look forward to closing the transaction and working with the Meebo team to create more ways for users to engage online."
However, Google did not announce any price for acqusition, although, the report from All Things D, which suggested that Google was in talks to pick up the company, also revealed that the purchase price was around $100 million. In a follow-up post recently, TechCrunch said that number is accurate, adding that Meebo had raised about $70 million across four rounds of funding ahead of the sale, and has laid off some of its staff as part of the deal.
Why Buy Meebo?
Few analysts were pre-assuming that Google acquired Meebo to dissolve it in the Google+ team and Google confirmed the same. Logically, this also makes a lot of sense, given Meebo's seven years of experience in chat. Further many reports also claim that the real reason is not just Meebo's cool technology and experience with the actual chat interface; it is also because Meebo found a way to actually monetize chat.
Industry insiders are also speculating that Google might have bought Meebo to bolster its online advertising business. Meebo recently introduced a new advertising format, Meebo Bar, which is now popularly distributed. It also introduced a new service for consumers which seemed to position the company in the field of social discovery.
Hence, Meebo would actually offer a lot of new advertising opportunities in and around a chat experience and could create a whole new ad-unit for Google.
Talking about Meebo, it started as a system for connecting people by instant message but has since built other communication features used by an audience of about 100 million Web people in the U.S. Meebo has raised $70 million in venture capital since it was founded in 2005 by Seth Sternberg, Elaine Wherry and Sandy Jen. Sternberg, who formerly helped IBM Corp. identify acquisition targets, served as Meebo's CEO.
On the other hand, Google Plus, which debuted nearly a year ago has attracted more than 170 million users. Despite that impressive growth, Google so far has had trouble persuading people to visit its social networking website as much as Facebook's more than 900 million users.
Google Inc. has spent more than $16 billion buying 140 companies since the end of 2009. That includes a just-completed $12.5 billion acquisition of cellphone maker Motorola Mobility Holdings, the biggest deal in Google's 14-year history.
Google shares fell 59 cents after hours to $578. They ended regular trading up $7.61 at $578.59 before the deal was announced.
