Secret Merger Talks Between Technorati And b5media Blow Up
Blog search engine Technorati was days away from merging with blog network b5media when the whole deal blew up earlier this week, according to a source familiar with the negotiations.
Technorati has been searching for a new strategy ever since it appointed CEO Richard Jalichandra last October. It was recently trying to raise an additional round of financing, and pitching venture capitalists that it could turn itself into a blog advertising network and/or even pursue a blog roll-up strategy.
According to our source, the deal with b5media never went through, though, because of personality conflicts between the CEOs and a lack of transparency on Technorati’s part during due diligence. At least that is how the b5media side sees it. Prior to its dalliance with Technorati, b5media was itself trying to raise another venture round that would put a $20 million valuation on the company. But there were no takers. So b5media started talking to potential merger partners or acquirers (including at one point Federated Media Publishing). A combination with Technorati could have made both Technorati and b5media more appealing to later-stage venture investors. But now the two need to keep looking for other options before their time (and cash) runs out.