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WhitePages.com to buy Snapvine

Two Seattle companies are joining forces as WhitePages.com has agreed to purchase Snapvine, maker of a voice player for social networking Web sites.

The companies were going to such lengths to keep the talks secret that they denied even the possibility of a deal a week ago. It was officially signed this week.

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TechCrunch puts the price at $20 million, not much more than the $12 million Snapvine previously raised from investors such as Bridgescale Partners, Draper Fisher Jurvetson, First Round Capital and former Microsoft executive and Kleiner Perkins' partner Russell Siegelman.

I received a solid tip last week about the deal, which prompted me to call and e-mail the founders of both companies.

At the time, Snapvine Chief Executive Joe Heitzeberg dismissed the tip as a "rumor" and noted that there was no truth to the report. Heitzeberg went on to say that he maintained a friendship with the WhitePages.com team, but there was no acquisition in the works. Pressed on the possibility of an acquisition, Heitzeberg said there "is nothing there to talk about" and that he would not comment on "speculative things like that."

"I think they were looking at other VoIP companies," said Heitzeberg, referring to WhitePages.com's attempts to buy Jangl.

In an e-mail from May 28, WhitePages.com founder Alex Algard said that the company "does not comment on rumors or speculation."

Given those responses, I was interested to see Algard's comments about the acquisition in TechCrunch today.

Maybe Heitzeberg didn't want to talk because -- as TechCrunch point outs -- the deal is far below the rumored $50 million valuation that Snapvine previously commanded.

I have calls in to both companies.

As part of the deal, Snapvine's Heitzeberg is expected to become vice president of a new division at WhitePages.com. He will report to Algard, whose online directory is on pace to reach $70 million in revenue this year.

UPDATE: In an interview, Heitzeberg described the deal as a positive outcome for Snapvine investors though he declined to discuss the valuation or the amount that his investors made.

"We wouldn't have gotten the deal done (if) we weren't all happy about it," he said. As to his denials last week about the acquisition talks, Heitzeberg marked that up to being an "un-media trained guy."

And the $20 million purchase price reported by TechCrunch? "I have no idea where that number came from," said WhitePages.com CEO Alex Algard. He declined to comment when asked if it was in the ballpark.

Snapvine, with more than 6 million registered users, including about 60 percent from a widget that allows people to leave voice comments on MySpace pages, had yet to drive much revenue. The company considered other buyout opportunities, but Heitzeberg said WhitePages.com was a "wonderful strategic fit." Informal talks have been going on for the past eight months.

Most of Snapvine's 25 employees are expected to join WhitePages' staff of 125, though some layoffs are possible.

As part of the deal, WhitePages plans to integrate the Snapvine voice player into online listings so that users can create a personal voice mail account alongside their profile. That means a user could leave a voice mail, with a text message or e-mail sent to the recipient notifying them of the message.

Heitzeberg said the Snapvine platform can handle massive amounts of call volume, noting that about half a billion audio messages have moved through the system to date.

WhitePages will continue to look at acquisition opportunities, though Algard added that it is unlikely that the profitable company will try to go public this year.

Intelius, a Bellevue competitor of WhitePages, has filed to raise money through an initial public offering.

Posted by at June 4, 2008 9:41 a.m.
Categories: ,
Comments
#135738

Posted by unregistered user at 6/4/08 11:14 a.m.

Ha, ha! I wouldn't want to talk either. If it did indeed come in at 20M this is an embarassment and, quite frankly, a gift that Whitepages will regret.

Snapvine was being gonged in the space by others who figured out that calls+messaging might just offer more value.

A brutal exit.

#135742

Posted by unregistered user at 6/4/08 11:23 a.m.

I wouldn't call the exit brutal. I'd call it the kind of exit that made logical sense in the circumstance. Far too often a founder's ego prevents them from considering anything less than 75-100 million in an acquisition scenario like this. Instead they spend another year digging themselves into a deeper hole until they eventually lose all of the invested capital. Hats off to Joe for not falling into that trap.

#135743

Posted by unregistered user at 6/4/08 11:24 a.m.

Congratulations Snapvine and WhitePages.com! Just ignore Cook's remarks. He's unhappy that he has been relegated to reporting on just rumors because nobody in management will speak with him.

#135797

Posted by slaggg at 6/4/08 1:20 p.m.

Hey I like John Cook's reporting. Stop bashing the guy - he does a good job.

On SnapVine - SnapVine used to have a very cool and innovative way to listen to podcasts on your cell phone on the way to work. It is a product that no one has yet been able to match - it was fantastic and I assume scrapped due to telcom costs. I wish they'd have found a way to make that product work because it was a great boost to the commute to have an easy way to bring fresh podcasts to my car.

#135905

Posted by unregistered user at 6/4/08 8:28 p.m.

This is probably the lamest merger in quite some time. Strategic fit for WhitePages? You have got to be kidding me. Smacks of the eBay purchase of Skype and look how that turned out!

#135920

Posted by unregistered user at 6/4/08 8:58 p.m.

single digits

#136030

Posted by unregistered user at 6/5/08 9:41 a.m.

John Cook sure did write a lot about how the two CEO's denied rumors and wouldn't disclose information to him. It sounds as though he was personally affended. Of course they're not going to disclose this information. I think the acquisition is a smart move and it will be cool to be able to leave voicemails on WhitePages.com. Congrats to both companies.

#136498

Posted by unregistered user at 6/6/08 8:39 a.m.

Way to go WhitePages.com! I like the bold move in trying to shift your business in a different direction

#136554

Posted by unregistered user at 6/6/08 10:51 a.m.

It was just a matter of time.. Every traffic monitor indicates that SnapVine lost its lead a long time ago. That's what happens when the head of marketing has "For Dummies" books piled up on his desk.. Such a shame to see one of the most popular add-ons to myspace flush their opportunity away only to become an odd list of assets for an online telephone book..

#140199

Posted by unregistered user at 6/18/08 12:12 p.m.

I interviewed at SnapVine and can tell you that both Joe and their VP of Marketing lacked vision. They had a product that people liked, a ton of capital, and no interest on monetizing on it. They had some ideas, but no vision. Their interview process went something like this.. "So, myspace? Myspace! Have you Myspaced? What do you think of Myspace? Are you a thorough user of myspace? How would you market us? Myspace? Every correct answer was myspace. Not once did anything I brought to the table, make sense until I said myspace. What a joke.

#141007

Posted by ysth at 6/19/08 1:12 p.m.

I also interviewed at snapvine, albeit quite a while ago.
I was impressed with their technology and plans. As far
as monetizing goes, sometimes you can have a great product
but just don't hit the market at the right time. That's the
part of the "venture" part of venture capital.

With regard to the comments about John Cook's tone, he's a
reporter. If he's investigating a rumor and one executive
lies to him while another doesn't, well, that's news and
should be reported.

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