Yahoo! buys

Yahoo continues with its Web 2.0 makeover. The company snapped up the bookmarking service today, according to a post by founder Joshua Schachter on his website. “We look forward to bringing you new features and more servers in the future,” he writes. (Scale matters!) Jeremy gives Yahoo’s take!

Niall Kennedy has more details. No mention of what they paid for it, but what will be the ultimate pay-off, its hard to say. It also is an acknowledgement that the whole My Web 2.0 thing wasn’t going to well?

You can read what Union Square Ventures, one of the investors in the deal, think about the deal. It has to be a good exit for them. No one clearly knows what was going to be the business model for, and how it could get past early adopter market.

Jeff Clavier writes, “I mentioned social bookmarking as one of the areas I saw a “bubblet” on the rise in my panel on “Investing 2.0” in Paris, with 10+ (if not 20+) companies developing very similar functionality to delicious – which had the first mover advantage but a reasonably limited barrier to entry.”

Eric Goldstein, co-founder of Clipmarks writes, “…what i’m more disappointed in is how celebrated the announcement is within the “web 2.0? community. I guess it kind of saddens me that the annointed leader of the web 2.0 movement has sold out this early in its life. sure, they made some good money and that’s cool…can’t blame them. but doesn’t this kind of serve as a reality check to new companies that even the leaders are just in it to flip it?”

Of course, there is that whole Digg phenomenon, and emergence of newer competitors such as TailRank. What could be the price of this deal? The company had raised $1.3 million, and if that got the VCs around 25% of the company, my guess is the final price is between – $10 and $15 million. I am speculating here, and have no information. So treat it like that…. simple speculation.