Old media wants some of that Web 2.0 mojo. Hearst, the magazine company that publishes Cosmo, Esquire, and Seventeen, is buying social-shopping startup Kaboodle. And Forbes is reportedly closing in on a deal to buy Clipmarks, a bookmarking site that lets you clip, save, and share parts of Webpages you find interesting No official word on the purchase price for either one, but the word in the Valley is that Kaboodle sold for between $30 to $40 million.
Why are media companies buying Web software startups? Because simply feeding people information—whether it's stock tips or style tips—is no longer enough. If media companies want people to stick around their Websites, they need to give them something to do. And that requires Web-based software. Clipmarks makes it easy for people to share information with each other, while Kaboodle lets them create virtual shopping lists.
What is not clear is whether these Web services will be better off as captive arms of big media companies than they are on their own. For Kaboodle, the risk is that instead of becoming the general social-shopping engine of the Web (it's previous ambition), it will be seen as nothing more than a feature of the various Hearst magazine Websites. That opens up the field for other competitors such as ThisNext (see earlier post), StyleFeeder, or Stylehive to pursue that goal.
For Clipmarks, selling might be the best move, since it doesn't seem to be gaining much ground on other social bookmark services such as del.icio.us (owned by Yahoo) or reddit (owned by Conde Nast/Wired).
But look at what's happened to del.icio.us since Yahoo bought it. According to Alexa, traffic has been coming down. (See graph at right, where dwindling del.icio.us is in blue, steady reddit is in brown, and laggard Clipmarks is in red).
Update: Joshua Schachter, founder of del.icio.us, disputes Alexa's numbers in an e-mail to me:
Just wanted to note that Alexa's not a great indicator of traffic (they're showing a lot of sites down in exactly the same pattern.)
We passed 2.5m users a few months ago and are seeing huge traffic from the firefox extension, which I don't think is even counted in their metrics.
A quick check on Compete and Quantcast, shows traffic growing, especially in the past two months. As does comScore, which measures monthly unique visitors at nearly 1.5 million for July, up from 1.1 million in May. And these don't include off-site usage, as Schachter points out. So perhaps del.icio.us will prove to be an exception in this case. We'll see.