Sony Acquires Grouper for $65m

Sony Pictures has acquired video startup Grouper for $65m. The deal was initially denied by Grouper. However, it has no been confirmed and reported on several blogs and onling magazines. The acquisition price was very high.

Grouper has three products offerings:

• An online video sharing site
• A video editing client
• A P2P networking client used to distribute video in a closed network (not yet released)

Grouper claims 8 million unique users while ComScore reports 554,000 unique users. Pretty big difference. I wonder if this is due to a difference between web based users and users of Grouper's client software. Grouper does have some unique functionality, e.g., such as the ability to leave video comments on a video. This feature is demonstrated nicely in a funny video showing Grouper beating up on their competitors I found on Howard Lindzon's blog who also posts about the acquisition.

Grouper was founded by veteran entrepreneur, Josh Felser, who previously ran Spinner.com which was acquired by AOL for $320m in 1999.  Grouper raised $5.25 million from Duff Ackerman & Goodrich LLC,  T-Venture, and angel investors

TechCrunch does a nice job comparing Grouper's per user valuation (it's much higher) against similar recent acquisitions iFilm and Atom Entertainment. Some bloggers (and here is another  and another) believe Sony overpaid. Mike Arrington suggests that Grouper's larger per user valuation may be due to the value of their P2P client.

Here is the press release.

Thanks to Brian Goffman, from Madrona Ventures, for bringing this to my attention.

Comments

[Alexi]

The bubble has returned...

[Michael Hoffman]

I don't think this is about per users. I think its about potential users and how the technology can leverage Sony's content and what's the value of that.

[bvljkd]

Good morning!


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