Posted November 17, 2006 1:13 pm by with 8 comments

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I must admit to being a little perplexed as to why Yahoo decided it needed to acquire Bix, a company that provides online karaoke and contests.

The company does have 1 million users and has gotten to that size by offering contests with prizes worth as much as $50,000. But online karaoke?

I suspect this deal is as much about the people, as it is about the intellectual property. Here’s what TechCrunch has to say about the founder of Bix.

[CEO Mike] Speiser was previously the founder of Epinions…Yahoo! got a seasoned social media man to put in charge of a number of product management at the company’s most social products.

The fact that the terms of the deal were not disclosed, but likely less than $15 million, it’s highly likely this was a human capital driven deal.

Anyone using Bix? Am I just too old and out of touch? Anyone want to share their karaoke video?

  • Hey now, I’m not posting my karaoke videos until you post yours!

  • Hah! Maybe that’s our next contest!

  • Well you never know what these major search engines are planning to do by acquiring various sites, especially sites that generate more traffic.

  • Well i am not sure what exacly are their plans with that. I guess they are following the footsteps of google now. They needed a change for sure from the routine.

  • I guess Yahoo knows what they are doing. I sure can’t tell from here.

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  • I have a pretty good sense of why they did the acquisition, for a number of reasons. Basically one hot area in brand advertising (where Yahoo makes a ton of money, and Google does not) is the idea of “brand integration” – i.e., having microsites and feautres within the portal where people participate in sponsored advertising.

    So it’s very clear to me that Bix is a great platform for Yahoo to run contests with their community, and leverage their advertising relationships to create more brand ad inventory for their network. That way, they can give users something fun while making it very easy to monetize. Think of contests like, “Sing a song about your car” and other ad-friendly concepts.