For startups that have the wherewithal, it’s a great time to shop for assets.
That’s partly why Seattle online automotive enthusiast site CarDomain pounced on StreetFire, a Los Angeles-based competitor, acquiring StreetFire in an all-stock transaction announced this morning.
CarDomain may do additional acquisitions this year, with the goal of building out its network as opposed to preparing the company for a sale, founder Alex Algard said.
“On the M&A side, CarDomain will be focused more on doing acquisitions rather than selling in this environment,” he said.
Algard — who also owns Seattle-based WhitePages.com — said CarDomain is the largest online auto community and StreetFire was the second largest.
The sites also took different approaches. While CarDomain is more akin to MySpace, StreetFire was more of a video sharing site with better video handling technology.
Combined, the company will about 25 employees divided between Seattle and Los Angeles. It will have 5 million monthly visitors, or 9 million counting the extended reach of StreetFire’s video widget, Algard said.
CarDomain has generally been profitable since it was founded in 1998. Algard decided to forgo profitability and bulk up the business in 2004, but reversed course last year. It cut the majority of its staff, shed its retail business to focus on the online community and moved the remaining dozen employees from Westlake Avenue offices to smaller digs in Fremont.
With the restructuring and acquisition, CarDomain should return to profitability in June, Algard said.