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The surge in the perceived value of some start-ups has even surprised some entrepreneurs who are benefiting from it. A year ago, Yahoo invested in Right Media, a New York company developing an online advertising network. Yahoo’s investment valued the company at $200 million. Six months later, when Yahoo acquired Right Media outright, the purchase price had swelled to $850 million.
What changed? According to Right Media’s co-founder Brian O’Kelley, very little, except for the fact that Microsoft and Google were writing billion-dollar checks to buy online advertising networks, and Yahoo felt that it needed to pay any price to keep up.
“I have to say I giggled,” O’Kelley, 30, said of Yahoo’s acquisition, which earned him $25 million. “There is no way we quadrupled the value of the company in six months.”
Must hurry! Develop the next big thing, have my 10-month old daughter name it (x-gibberish), and then… profit!