Since Ancestry.com (ACOM) went public after much speculation a little over a year ago, I’ve rejected negative comments from investment blogs who claimed that they had nothing to offer. The continued growth by Ancestry has shown outstanding marketing acumen on behalf the company.

An article appearing on TheStreet.com on Wednesday, November 17, reported that few investors appreciate the growth prospects of Ancestry’s service. I agree.

What’s makes Ancestry attractive to potential buyers?

  • Ancestry had a great third quarter revenue and gained 39% to $57 million, boosted by 43% growth on its core Web site
  • Average revenue per subscriber expanded 7.7% to $17.75
  • Cash flow more than doubled in just over a year to $20 million
  • The Who Do You Think You Are television series on NBC has been picked up for another season in the same time slot.
  • The company acquired iArchives and its subsidiary Footnote.com
  • It also purchased ProGenealogists
  • The database of historical documents is being expanded
  • It’s debt free

As we know, when a public company is doing well it attracts potential buyers and TheStreet is now openly speculating that Ancestry would be an ideal target for a Google or Facebook purchase. I heard many of these speculative pronouncements when I worked in the corporate world and it’s often disturbing. This type of speculation or rumor usually disappears as quickly as it appears.

TheStreet suggests that Ancestry’s $1.2 billion market capitalization would be an easy acquisition (a no brainer) for Google, which is currently competing with Facebook whose service directly challenges Gmail and Gchat. This, according to TheStreet, makes Ancestry attractive to Google and would shore up its knowledge base and cultivate a social element for their business model. For the same reason Facebook could also be interested in Ancestry.

As for Facebook, if their privacy issues remain unresolved the number of people dropping out will continue to increase.

Up until now Ancestry appears to have done everything right, which does make them a target in the shark pool. Do we see a potential pawn in a game between two giants?

If you’d like to take a look at the complete article click on the following link:

TheStreet.com

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