This is hardly a surprise since rumors of this deal have been all over the blog world for the better part of the past month. But it is true that FeedBurner has been acquired by Google. The price has not been disclosed, but the return to Union Square Ventures was close to three times our invested capital in less than 18 months.
The financial return on this investment, like many of our investments, pales in comparison to the returns we’ve gained both personally and professionally though our involvement with FeedBurner.
According to FeedBurner founder and CEO Dick Costolo, I was one of the first hundred people to use FeedBurner’s service when it launched in early 2004. I was hooked instantly. The whole thing about blogs and feeds was new to me. I understood that people could subscribe to my blog and receive updates every time I posted through the use of a feed. But I had no idea how many people were actually doing that. And I wanted to know.
So I started running my feed through FeedBurner. The insights I got from my FeedBurner dashboard allowed me to quickly understand who was reading what. I was able to see my readership grow, and I was able to see what topics were of the most interest.
About a year after I started using FeedBurner, they started offering the ability to run ads in feeds. That’s when I understood where this was all going. It hit me that content was not going to live on a single page anymore. It was going to be syndicated all over the web using feed technology and that the ads would be syndicated along with the content. That led to our early insights into the distributed media landscape that we now find ourselves in the midst of.
By late 2005, it was obvious that we needed to be invested in FeedBurner. There were already a very solid group of VC investors including Portage, DFJ, Mobius, and Sutter Hill involved in FeedBurner. But we convinced FeedBurner and the other investors that Union Square Ventures could add value, and they let us invest.
I think we’ve added significant value to FeedBurner, and it’s been mutual. FeedBurner has helped a number of our portfolio companies as well. Along the way, we’ve gotten to know the entire founding team really well and a number of the senior management team too. FeedBurner is one of those companies you can’t help but like and root for. They have a sense of humor, they have a sense of responsibility for their service, and they understand how to play nice in the Internet ecosystem.
Now they will be part of Google. It’s a good match. For all of FeedBurner’s success, monetizing the feeds has been a struggle. The inventory they manage always seems to grow so much faster than the advertising they sell. Their self service advertising system never really took off, and that made it even harder to monetize all the inventory they manage.
Google is the king of monetization and has a self service advertising system that is the envy of everyone in the advertising business. FeedBurner fits like a glove into the Google advertising system, adding feeds to the growing number of places an advertiser can reach audiences through the AdWords system.
It always seems to be bittersweet when a portfolio company is sold. We’ll miss the daily emails from Dick and his team. We’ll miss the ability to engage in the strategic development of the company. And we’ll miss being on the inside of a company central to the development of the distributed media model.
But it’s important to remember that starting companies and building businesses is ultimately about making money. We were able to do that because of the insights and hard work of the founders and managers of FeedBurner. We’d like to thank them and congratulate them on a job well done.