The Business Behind The Google/FeedBurner Buzz

Google is reportedly close to a deal to purchase FeedBurner, a Chicago-based analytics and advertising firm which helps publishers monetize their RSS and XML feeds, according to published reports and sources.

FeedBurner vice president Rick Klau refused to confirm the deal, but told, “We have a firm policy not to talk about speculation or market rumors. So I’d hope nobody on our side will fuel the rumor mill.”

But the mill is buzzing already. Call it confirmation that there’s at least talk of talks, but nothing more. The deal is expected to close in 2-3 weeks and should come in around $100 million, according to sources cited first by Valleywag and then TechCrunch.

A Google spokesperson also refused to comment on “rumors and speculation.”

So it’s up to everybody else to figure out exactly what Google might be after with an estimated $100 million. It’s also worth looking into whether Google rivals Microsoft or Yahoo will be making similar buys anytime soon, given the recent spate of “me too” acquisitions in the online advertising space.

JupiterResearch analyst and online advertising industry-watcher Emily Riley told the buy, should it go through, wouldn’t be a surprising one for Google. She said the advertising and analytics services FeedBurner offers to syndicating publishers are similar to what Google wants to offer.

“[Google CEO] Eric Schmidt says relatively often that Google’s goal is to serve every ad dynamically, so [RSS advertising&#93 makes a lot of sense because it is interactive,” Riley said.

Stats from Web metrics firm Hitwise indicates Google would be buying a company that has at, the very least, dramatically raised its public profile in the last year. Hitwise reports that U.S. traffic to FeedBurner’s site grew by 204 percent between April 2006 and April 2007.

Count Pheedo CEO Bill Fritter as one glad to see the syndication industry finally being taken seriously. Fritter agreed to a characterization of his company, Pheedo, as FeedBurner’s twin, separated at birth. That’s because, like FeedBurner, Pheedo is built to monetize syndication technologies. The only difference is its also designed for marketers instead of publishers.

But Fritter didn’t stress the differences. Not after hearing of Google’s three digit offer for Feedburner.

“[This acquisition] validates what FeedBurner and Pheedo have been working on for the last three years. It validates something we’ve known all along, both FeedBurner and Pheedo, that there is an opportunity and RSS  is a hard nut to crack,” Fritter said.

Fritter said he’s confident that after Google sets the market, its competition is going to come calling. He said he expects calls from both Microsoft and Yahoo.

“I’m waiting for that call. Google figured it out. I think [Yahoo] has to. I think they can’t ignore it any longer,” he said. “RSS isn’t going away.”

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