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Web 2.0 - Friday, June 1, 2007

Google Now Manages Your RSS Feed With Feedburner Buy

Google has indeed bought Chicago-based Feedburner. Both companies affirm the idea that the deal gives publishers the dream 360 degree metrics package.

Here again, is our summary of why we think it a great deal for both companies, as well as for publishers:

1) Analytics roll-up. We would guess that Google is more interested in Feedburner's analytics side than its RSS ad server or revenue potential. As a publisher, we know its a pain to daily combine your web site numbers with your RSS, email (plus maybe mobile numbers). We want one place to give us our numbers and aggregate growth. Google + Feedburner analytics would be a big step forward.

The real value in Feedburner is in the analytics and data.

2) Install base. With Feedburner rep'ing feeds from 400K+ publishers and mounting, Google + Feedburner would make it very difficult for the Google wary to opt out of working with Google. Google will have so many touch points on so many publishers it may become pointless to even try to keep Google at arm's length. Same goes for advertisers, where Google would now have another channel to sell.

3) RSS is not simple as advertised. Google will gain knowledge on how to manage RSS from a handful of people who get it and know how to manage the RSS feeds for thousands of publishers.

4) Sector dominance. Feedburner dominates RSS feed management and has a hugely loyal audience. These are attributes that are worth paying a premium for. Unlike game or mobile advertising where there are multiple players, it is unlikely that anybody is going to topple Feedburner from its dominant position. Feedburner's subscriber number chicklet has become a de-facto industry standard for measuring RSS and Google ownership would likely lock that down.

The ubiquitous Feedburner subscriber number, found here on valuable TechCrunch home page real estate.

5) Tier A to the long tail. In other channels, startups tend to focus on either the long tail or the top tier publishers. Feedburner has both.

6) Google knows publishers better than they know themselves. Google's data mining reach gives it a great understanding of traffic across the Internet. By adding data from RSS feeds, Google gains another key layer of data.

7) For Feedburner, it will gain advertising expertise. The company was staffed by tech pros, not ad jockeys.

8) While Google and Yahoo have largely stood on the sidelines in RSS advertising, other online ad networks have started to add RSS ads as a module: Quigo, Textlink Ads, etc. The timing is right to get in front of that wave by building a bigger brand presence with Google and Feedburner.

9) On the finance side, $100M is a rounding error for Google, while it would be a sweet payday for Feedburner and investors (who only put in $10M. ) Feedburner is reported to have done $10M in revenues, so a 10x valuation for the industry leader is on par with what Google paid for Doubleclick. One blogger noted that Google would be paying $243 per publisher, but that logic doesn't account for that fact that Feedburner manages feeds for huge sites like USA Today, IDG Publications, and Reuters. $243 for a big account like USA Today! Forget it.

10) Oh yeah, and Feedburner is also powering a lot of podcast sites, so Google would get entree to two channels in one deal.

Hazards
+ Feedburner is a relatively open system. Publisher can run their own RSS ads while managing their feeds in Feedburner, without running Feedburner ads or Adsense. If Google + Feedburner tries to force RSS Adsense on people, they may see a revolt from users.

Read - Feedburner post
Read - Google post