Internet M&A: More To Come

Acquisition activity in the Internet sector has been picking up - and the pace is likely to pick up from here, according to Collins Stewart analyst Sandeep Aggarwal.

“In our view, this not only a signal of increasing confidence in economic recovery but also a major reinforcement that the Internet continues to experience high secular  growth and is getting more widely adopted,” he writes in a research note “This secular adoption of the Internet creates need among the largest Internet companies and category leaders to view M&A not only to create a bigger fish net for their suite of offerings but also to develop competitive moats around their core offerings.”

There’s actually been quite a few recent deals; in his note Aggarwal cites eBay/Gmarket, BankRate/Apax Partners, Amazon/Zappos, Intuit/Mint.com, Facebook/FriendFeed, Adobe/Omniture and Skype/private equity firms.

More interesting is his list of privately held companies that he considers likely to be acquired or go public:

• Facebook: Social networking.


• LinkedIn: More social networking.


• Twitter: Micro blogging.


• Coremetrics: Web analytics.


• Eye Blaster: Digital ad management.


• Eye Wonder:Digital advertising.


• Education Dynamics: Higher education marketing.


• Glam Media: Online lifestyle content publisher.


• Efficient Frontier: Search engine marketing.


• JumpTap: Mobile advertising.


• Meebo: Unified instant messaging.


• Zillow: Online real-estate sales.


• eHarmony: Online matchmaking.


• Digg: News aggregation.


• Exact Target:E-mail marketing.


• Rock You: Applications for social networking sites.


• Slide: More applications for social networking sites.


• Foresee: Web analytics


• Yelp: Consumer reviews

As for public companies that could be targets, he repeats several names he has offered up previously: ComScore (SCOR), TechTarget (TTGT) and ValueClick (VCLK).