August Capital and Draper Richards are the first to cash in on the social networking craze. The VCs should see a respectable return on their combined investment of $9 million in Tickle Inc. (formerly known as Emode). Job site Monster.com has agreed to acquire the social networking company for about $95 million in cash and stock.
Could this signal consolidation among social networking sites? Tickle itself acquired a competitor named Ringo last November.
Bob Kagle, a general partner at Benchmark Capital, one of the investors in Friendster, says the Tickle deal is more a sign of how difficult it is for other social networking sites to compete with Friendster. Tickle “may be acknowledging the difficulty of overcoming an early lead in a network effects business and a willingness to be sold out in the face of that challenge,” Kagle says.
Fast-growing Friendster last week hired former NBC exec Scott Sassa to drive further growth.