Joel Liu's Library tagged Acquisition →  View Popular, Search in Google

The purchase price was somewhere between $22 million and $50 million, we’ve confirmed via multiple sources. Employees, say one source, appear to be getting paid based on that lower number. But there is clearly an escrow and an earnout as well that is bumping the total price, if that money is paid out, to something over $30 million. Our best guess is the total price is somewhere around $35 million.

That’s not bad for a company that’s raised just $2.8 million in funding. But Tapulous was profitable almost immediately and didn’t need to raise a lot of money to scale. Revenue comes from multiple sources – ads, song downloads referred to iTunes, song downloads into the game, among others. Last year revenue was around $5 million. This year they are already hitting $1 million/month and will likely have $15 million of so in revenue for all of 2010.

Acquirers will also have to get better at picking winners. They generally do better than investors, because they pick later, when there’s more performance to measure. But even at the most advanced acquirers, identifying companies to buy is extremely ad hoc, and completing the acquisition often involves a great deal of unneccessary friction.

I think acquirers may eventually have chief acquisition officers who will both identify good acquisitions and make the deals happen….Maybe in the future big companies will have both a VP of Engineering responsible for technology developed in-house, and a CAO responsible for bringing technology in from outside.