Dotspotter Purchased By CBS For $10 Million

Celebrity gossip is big on the web, as the success of Perez Hilton and TMZ.com has shown. That is why Anthony Soohoo, a former VP at Yahoo!, founded Dotspotter in January 2007.

Essentially, Dotspotter is Digg for celebrity news, photos and video, aggregating content from various celebrity websites and blogs.

Now, just 10 short months after its incarnation, it has been reported that CBS will become the new owner of the web service at a cost of $10 million.

CBS has already acquired social music community Last.fm and the stock market videoblog Wallstrip, which makes me curious about how Dotspotter will fit into their online strategy. Although Valleywag says they “can only conclude that [their] strategy is to buy a lot of startups, throw them against the wall, and see what sticks,” perhaps Dotspotter will see some integration with existing CBS website, The ShowBuzz. Take a look and you will see that the two sites already look quite similar and have similar content.

One thing I question though is the $10 million price tag, which seems excessive for a service started in the same year as its purchase. Matthew Ingram, whose consensus is that CBS is contributing to 'bubble 2.0', also made a very good point when stating:

“So, Dotspotter is worth $1-million for every month it has been alive. By that measure, a site like TMZ.com or Perez Hilton (or Gabe Rivera?s WeSmirch.com) should be worth about $100-million ? which, of course, would be insane (no offense, Gabe).”

paidContent, however, mentions that a reliable source says “the price is not for the site itself, but the team that has built it…that may also mean there?s a heavy earn-out component, possibly.” Of course, I guess this action should have been expected by CBS, as they acquired Wallstrip before it reached a one-year anniversary and seemed to be paying more for Lindsay Campbell than Wallstrip as a company.

It will be interesting to see what happens to Dotspotter from here since CBS has various existing celebrity websites (ET, Insider, ShowBuzz) with which its new acquisition could work with.