I just got off the phone with Jason DeZwirek, the CEO of Kaboose — which is publicly-listed on the Toronto Stock Exchange — who told me that the acquisition of Bubbleshare is the first in a series of steps the company plans to take to move its various family-oriented websites (including BabyZone, Kaboose.com and Funschool) into the social networking arena.
Jason said that the Kaboose network gets about 10 million unique visitors a month, which makes it the third-largest in the North American online family segment, behind Disney and Viacom (according to comScore). About 80 to 85 per cent of the company’s traffic comes from the U.S. The Kaboose CEO also said that the company is expected to post sales of about $22-million for 2006 and has $30-million in the bank.
Social networking tools for moms and families “is going to be a big initiative for us in 2007,” Jason said, and the Bubbleshare team will be part of making that happen. Kaboose expects to add social networking services both by developing them in-house and by buying other companies in that space.
For more details on Kaboose, check out my Globe and Mail blog here.
According to one source with some knowledge of the deal with News Corp., the deal fell off the table not because of the publicity but because Ross Levinsohn quit, and it was his idea. Without him, it couldn’t get any traction within News Corp. and so Bubbleshare went looking elsewhere.
Not that long ago, there were some red-hot rumours that Bubbleshare — the Toronto-based photo sharing site started by serial entrepreneur Albert Lai — was about to be acquired by News Corp. for a price in the neighbourhood of $5-million. That deal reportedly fell through, however, and now I learn from my friend Mark Evans’ blog that Bubbleshare has been bought by Kaboose for $2.25-million (I’d like to point out that Jeneane Sessum wrote about it first, as she notes here).
Kaboose is a little-known Toronto company that owns a number of kid-oriented websites and networks such as BabyZone, and describes itself in its press release as “the largest independent, family-focused, online media company in North America.” As Mark points out in his post, this deal makes a lot of sense because Bubbleshare — while a great and useful service — has always seemed more like a feature than a standalone business.
The question of whether the News Corp. deal fell through because the details leaked out, a theory that emerged shortly after TechCrunch wrote about it, remains unanswered. I find it hard to believe that a little publicity would scare off a giant like News Corp., but you never know. In any case, congrats are due to Albert and the team for building a great service and getting a nice exit.
I will add my congratulations to those already expressed by Michael O’Connor Clarke, Alec Saunders and Jeneane Sessum. It will be interesting to see what Kaboose does with Bubbleshare, and whether the Toronto company plans to make a bigger push into the area of social networking — especially given the popularity of sites like Club Penguin, and Disney’s recent social overhaul of Disney.com.