Venture capitalists invested $21.68 billion in 2005, $44 million more than in 2004, according to statistics released on January 24, 2006 by Thomson Venture Economics, PricewaterhouseCoopers and the National Venture Capital Association. With Internet firms such as Google and Yahoo continuing to grow rapidly, venture capitalists invested $2,93 bullion in the Web-based firms, the most venture capital committed to Internet startups since 2002 when $3.7 billion poured in.
The venture capital industry as a whole raised $25.2 billion in 2005, marking the first time in five years that the amount of money flowing into venture capital firms outpaced the total invested, according to data Venture Economics and the National Venture Capital Association. With the stockpile of funds growing, many industry analysts believe that venture capitalists are likely to accelerate their investment pace in 2006.
Online Media Mergers and Acquisitions Rise in 2005 The number of mergers and acquisitions in online media and information industries surged in 2005, reaching levels not seen since 2000, according to the Jordan Edmiston Group (JEGI), an investment bank specializing in midsize transactions in the media and information industries.
Over 175 deals valued at $15 billion occurred within the online media sector (double that of 2004). In 2004, the majority of acquisitions were done by larger companies such as like Yahoo and Google, but in 2005 the majority of deals were done by diversified media groups, such as Gannett, New York Times, Dow Jones and News Corp. Many of these firms are expected ton continue acquiring additional online content and delivery channels in 2006. Noteworthy deals included IAC/Interactive Corp’s purchasing of AskJeeves for an estimated $1.85 Billion, and Alibaba's acquisition of Yahoo China for $1 billion.