By Tom Taulli, Forbes Blog,
As companies like Pandora (NYSE:P) and LinkedIn (NYSE:LNKD) have pulled-off great IPOs, tech entrepreneurs are definitely gunning for this type of exit. However, it can be extremely tough. Instead, I think a much more realistic outcome is an acquisition.
So this is why the recent $100 million deal for myYearbook caught my eye. “We have an opportunity to build a global brand,” said Geoff Cook, who is the CEO. “Merging with Quepasa (NYSE:QPSA) will make it easier to realize this strategy.” The company is a top social network in Latin American countries.
So how did myYearbook get to this point? Well, the company got its start in 2005. Of course, MySpace was the dominant player and Facebook was just an upstart.
“To be successful, we needed to find a way to set us apart from the competition,” said Geoff. “We noticed that social networks were about communicating with your friends. But what if we could create something that helped you find new friends?”
It was certainly a good idea – and would help to solve a big problem. Interestingly enough, for the first year or so, myYearbook actually did not focus on monetization. Instead, the goal was to improve the site’s friend-finding capabilities. It was really an obsession.
Along the way, there was much temptation to move away from its focus. But myYearbook didn’t give in.
The result is that the site has over 20 million active users, with more than 1 billion mobile page views per month. Last year, myYearbook increased revenue by 53% to $23.7 million and generated EBITDA of $4.9 million, up 315%.
“For tech companies, I think there is too much desire to pivot,” said Geoff. “It’s important to be true to your vision.”
Tags: entrepreneurship, Georgetown alum, Latin America, myyearbook, Quepasa (NYSE:QPSA), Social Networks, start-ups