Yahoo! plans US$100m acquisition of CafeMom

18 Aug 2010

Yahoo! is currently pushing to close its acquisition of a social networking site for mothers called CafeMom, according to reports.

The portal giant is trying to fend of other eager potential buyers like Disney and according to Kara Swisher’s All Things Digital, CafeMom may be holding out for a US$200m bid.

New York-based CafeMom has 6.7 million unique visitors to its site each month.

The company is already profitable and turns in annual revenues as high as US$30m.

The acquisition could give Yahoo! the kind of nous it wants to navigate the expanding world of social media and compete with Facebook for social advertising bucks.

Social network advertising on sites like Facebook and Twitter is expected to reach 6.7pc of all online advertising taking place in the US this year, according to new research from analyst eMarketer.

Social network advertising is getting renewed attention in 2010. The US’s gradual economic recovery, combined with marketers’ incessant focus on reaching consumers via social media, has led companies to make big increases in social network ad spending in the first half of 2010.

eMarketer estimates US advertisers will spend US$1.68bn on social networking sites this year, a more than 20pc increase over 2009. Spending will rise even further by 2011 to more than US$2bn.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years