What does del.icio.us devour mean?

I learn this morning from Chris Fralic that del.icio.us has been acquired by Yahoo. Slashdot apparently had it early and as of writing this, had 188 comments. Other blog news, speculation, and discussion followed. At first I thought - here we go again.....the wanna be bubble......the "we gotta be in the new bubble...."

So I asked around. Some said, "yeah, something like that was 'a comin' on the heals of other blog and social media acquisition of late. (or something to that effect). Others said, "yeah, but for how much?" and others said "what's del.icio.us and why does Yahoo care?" We assume everyone knows what's hot or perceived to be hot within the four corners of the Silicon Valley blogosphere. I'm still not over the ridiculous price paid for Skype.

Chris references an excerpt from the December 12, 2005 issue of Fortune titled “Yahoo’s Latest Play: Searching for the Future of Search.”

“…MyWeb 2.0 follows in the path of del.icio.us, a site that grew up with Flickr and pioneered the concept of social bookmarking. But both del.icio.us and MyWeb 2.0 offer a revolutionary approach to search. Essentially, they are open-source versions of Yahoo’s original hand-built directory, which once relied on hundreds of web surfers to manually assemble lists of sites. As the Net exploded, automated search supplanted the directories."

Jeremy Zawodny on what's so cool about del.icio.us?

I haven't seen an acquisition number yet although I'm sure some in the industry have their hands on it and this will become a key discussion over the next few days. Seattle PI said it well - "A cult favorite among the Internet cognoscente, del.icio.us allows users to create a personal account so they can create a page devoted to their favorite online articles, music and reviews. The material can be shared with others by sending along the Web link. The content also can be identified with labels, or "tags," to make it simpler to find."

Yet its only at just over a quarter of a million users, with only eight employees, so what would the fair market value be at this early stage?