Archive for July, 2008

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , on July 31, 2008 by Dave Liu

comScore Revs Up 34 Percent; Net Income Soars — Shares of internet measurement firm comScore are spiking hours after the company reported another very healthy quarter. Excluding the impact of the M:Metrics acquisition, revenue was up 34 percent to $27.8 million and adjusted income more than doubled to $2.57 million. Including M:Metrics, revenue was up 38 percent and EPS would have been $.06 per share. Meanwhile the company is still winning customers, netting 64 in the quarter, bringing its total to 1,013. International revenue is still small at $4.1 million, but it grew at a 75 percent clip, and accounts for for 14 percent of the total. With M:Metrics factored in, the company is calling for revenue of $119-$120 million, a few million ahead of current estimates.

IAC/InterActiveCorp to make multiple buys under USD 100m — IAC/InterActiveCorp., the New York-listed internet company, plans to engage in multiple buys, reported the Wall Street Journal. The report, part of a story looking at the company’s second quarter results, cited IAC chief executive Barry Diller as saying the company plans to use USD 1.3bn in dividend payments from its spin-off to make multiple buys. According to the report, Diller said the deals will each be under USD 100m and if it can’t find good targets it will return cash to shareholders. Source: Wall Street Journal

Dubai Group, Blackstone Eye Informa — The Blackstone Group has teamed up with Investment Corp. Dubai to bid on UK media group Informa PLC (LSE: INF), according to The Financial Times. Earlier reports had an alternate consortium of Carlyle Group, Providence Equity Partners and Hellman & Friedman, but today’s FT story says that Hellman & Friedman has walked away.

Cobalt Rolls Out Search Tools — Cobalt has developed a new set of paid search marketing tools under its PowerSearch automotive advertising platform. The tools, which are based on search traffic research and ongoing auto industry trends, offer clients new keywords and bidding strategies to capitalize on consumer interest in parts and services, as well as financing. The ads can run across Google, Yahoo and MSN.

Interpublic Makes HUGE Bet On Digital Marketing — Taking a majority stake in online agency HUGE, Interpublic Group has bolstered its digital marketing capabilities. The deal gives Interpublic an interactive shop that specializes in building sophisticated, transactional Web sites for clients such as JetBlue, IKEA, Scholastic and Time Warner Music Group. Its clients’ sites together generate $3.5 billion in annual revenue and draw more than 120 million visitors a month.

IAC: Search Ads Hold Up, While Display ‘Spotty’; Looking At All Deals, But Will Be Selective — For its last call as a single company, all five CEOs and their CFOs are on IAC’s conference call. Kicking off the call, Diller noted that it’s not even worth talking about Old IAC anymore, in part because it’s almost gone, but really because “It’s just too much complexity and information.” That statement speaks as much to the company’s conference calls and earnings releases as it does to the whole notion of Old IAC: ‘just too much complexity’. Hence the breakup. Right now the company doesn’t have precise timing on the split, except that it will be “very soon”. Diller said he hoped to talk about all five companies on the call, and that he didn’t want New IAC to hog the time, but almost every question was on New IAC (NSDQ: IACI). At a couple of points, Diller, from the position as a shareholder in each company, took the job himself to ask questions of the other CEOs.

Amazon Launches Online Payment Services — In a move to rival eBay’s PayPal and Google’s Google Checkout, Amazon launched on Tuesday two online payment services, Checkout and Simple Pay. The difference in the two is that Checkout provides capabilities to support real time shipping, tax calculation, promotions and other tasks like cancellations and shipment tracking, while Simple Pay enables customers to use payment information already on file.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , on July 30, 2008 by Dave Liu

EarthLink To Aggressively Pursue AOL Dial-Up Merger; Other M&A Hopes — EarthLink, which earlier today reported its Q2 earnings, said that it wants to facilitate consolidation in the dial-up ISP space, including going after AOL’s dial-up business, which parent Time Warner has already said it is looking to sell off. CEO Rolla Huff: “We believe we’re best-positioned to be the consolidator in this industry…When an industry reaches a point of maturation and growth stops, it simply makes good economic sense to consolidate into one cost platform.” In a separate interview with WSJ, Huff expanded on this: he said merging the two would create cost savings and better service, benefiting customers as well as shareholders of both companies. “We think it’s worth aggressively pursuing,” he said.

ESPN To Launch Online Action Sports Network; Morphing EXPN Into It — Right on cue around the X Games, ESPN has announced plans to launch an online action sports network, imaginatively called ESPN Action Sports Network. The online channel, slated for a fall launch, will have a slew of sites, each focused on action sports such as surfing, skateboarding, motocross and snowboarding. This will expand on its X Games franchise that it created more than a decade ago. The network also developed the EXPN.com website about a year ago to start offering daily content of different extreme sports, but that will now become ESPN Action Sports Network, the company says.

Marchex Relaunches Local Ad Platform — Local online advertising company Marchex today will relaunch its local ad platform with the integration of its online and call-based ad services. “We fundamentally believe that phone calls are the currency that local businesses operate under,” said Leigh McMillan, SVP of marketing and communications at Marchex. Marchex Connect 2.0 represents the proverbial fruit from the company’s acquisition of call-based ad unit VoiceStar last year for $28 million. That deal also added more than 100 local advertiser aggregators including Comcast, The Cobalt Group, R.H. Donnelley/Dex, and YellowBook USA to Marchex’s roster of partners.

Collective Media Launches Video Ad Network — Online ad network and technology provider Collective Media is launching its own video ad network. The network, supported by Collective’s proprietary AMP platform, provides advertisers with video content from publishers within the Collective Network, along with a suite of in-stream ad units, including pre-roll and overlay video formats.

Google Working On a Formal VC Arm — Google has done a number of strategic investments over the years, and usually big amounts in big-issue-tackling companies, like powerline internet, WiMax, and others. It even has a non-profit Google.org foundation to invest in global challenges. Now it wants to start a formal venture capital arm, a la Intel Capital, Time Warner investment, Steamboat (Disney’s (NYSE: DIS) venture arm) or BlueRun Ventures (formerly part of Nokia), reports WSJ, citing sources. The group will be lead by David Drummond, Google’s SVP of corp dev, chief legal officer, and it has also hired William Maris, a 33-year-old former entrepreneur who has worked as an investor, to help set up the venture.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , , , , , on July 29, 2008 by Dave Liu

MySpace Revamps Classifieds Business With Oodle — As social nets look to increase their ad revenues, MySpace is taking a more serious stab at the online classified market with a new channel. The Fox Interactive unit’s new MySpace Classifieds promises better search and pricing guides. But the main difference is that the listings are now linked to MySpace profiles – not anonymous IDs. MySpace got an assist on the new site from online classifieds operator Oodle. As explained in a post on Oodle’s blog the hope is that users will encourage friends in their network to help them buy or sell through MySpace bulletins and blogs. MySpace says the past classifieds site drew roughly million members monthly. Now, it will be able to draw on the 200-plus listings sites in Oodles network.

IAC’s Life123 Comes To Life; Goals Include Saving You Time, Ranking Well In Search — If you must think of every new thing as the “something-killer” then you’d probably call Life123 an About.com-killer, or a Mahalo killer, or a Google Knol killer. Fortunately, as Robert Deutsch, VP of content development & operations at the new IAC-owned unit, assured me, About.com doesn’t have to die for Life123 to thrive. We first broke the news that IAC was cooking up a new how-to aggregator back in April. At the time, we knew it as Life333.com, which was in fact an early name for the project. Turns out, in testing, users didn’t like the concept of dividing content into 3-minute, 30-minute and 3-hour chunks so that named got ditched for the current one. The new site still offers users the chance to dive into a topic at various depths from quick and dirty summaries to more thorough explorations.

24/7 Real Media’s COO Hsu Upped To CEO; Moore To Stay On As Chairman — David Moore, the ad exec who has helped lead WPP Group interactive shop 24/7 Real Media since its days as a startup 12 years ago, is stepping aside as CEO and handing the reins to Jonathan Hsu effective immediately. Hsu, 36, previously served as 24/7’s EVP/COO. As part of the move, Moore will take a wider focus on crafting strategic relationships, recruitment and business development. He’ll also still work with WPP Digital on getting the various parts of the company to be more tightly integrated.

Yahoo Japan boss has not discussed sale of shares with Softbank or Yahoo — Yahoo Japan’s chief executive stated he has not discussed the potential sale of Yahoo Japan shares owned by Softbank or Yahoo. Cited in a Wall Street Journal report, Masahiro Inoue said he had not talked about any such sales with officials from California-based internet company Yahoo or Softbank, the Japanese mobile-telecoms group. Should Yahoo decide to sell its Yahoo Japan stock, Softbank would have the right of first refusal, Inoue pointed out. He added his belief that investment in the Asian region is important at a time when the Asian internet-services industry is experiencing strong growth, the report said. The piece noted that the company announced a first-quarter net profit of JPY 19.16bn (USD 177.6m), up 18% on the previous year; sales rose 16% to JPY 65.56bn. Source: mergermarket.

Google, Mediatel and several financial groups interested in acquiring Seznam — Google, Mediatel, the Czech privately-owned publishing group, and some financial groups are interested in acquiring Seznam, the privately-owned Czech Internet portal, reported E15. The brief report cited another report in Ekonom.cz but did not name any sources for the information. It said the minimum price being asked was USD 900m. The report said it is understood that Microsoft has not been approached yet over buying Seznam. E15 said Ivo Lukacovic, Seznam’s majority owner, continued to deny that Seznam was being sold. Seznam is the largest Czech Internet portal, as earlier reported. Source: mergermarket.

Sohu.com Q2 Revs Up 162 Percent; Income Soars; Will IPO Games Unit Separately — The major Chinese portals continue their torrid pace of growth, as Sohu.com (NSDQ: SOHU) announced Q2 revenue growth of 162 percent to $102 million. GAAP net income of $40.2 million or $1.02 per share was up over 600 percent from last year. The top-line was helped by 53 percent ad revenue growth, as well as 450 percent growth in non-advertising revenue, largely from online games. The company’s in-house developed MMO Tian Long Ba Bu grew 11.5 fold since its inception in May 2007. In addition to boosting the top line, it also helped expand profitability: Gross margins stood at 76 percent, compared to 61 percent in the year ago period.

Digital Media VC Fundings

Posted in Deals, Digital Media, News with tags , , , , , , , , , , on July 28, 2008 by Dave Liu

ContextWeb Raised $30 Million Series D Round — New York-based developer of contextually-based online advertising solutions, has secured over $26 million of a $30 million Series D round, according to a regulatory filing. Investor Growth Capital was joined by return backers like Draper Fisher Jurvetson, DFJ Gotham Ventures and Updata Ventures.

Biosocia Raised $1.5 Million Series A Round — New York-based developer of online communities that are structured like games, has raised $1.5 million in Series A-1 funding, according to a regulatory filing. Backers include Spark Capital, Baseline Ventures, Betaworks Studio and Ron Conway.

GumGum Raised $1.0 Million Series A Round — Santa Monica, Calif.-based licensing and distribution platform for content online, has secured $500,000 of a $1 million Series A round, according to a regulatory filing. First Round Capital led the deal, with partner Howard Morgan taking a GumGum board seat.

LivingSocial.com Raised $5.0 Million Series A Round — Washington, D.C.-based social discovery and cataloging network, has raised more than $5 million in Series A funding. Grotech Ventures led the round, and was joined by Steve and Jean Case.

MyToons.com Raised Undisclosed Amount In Series bRound Los Angeles — based operator of an online animation community, has raised an undisclosed amount of Series B funding co-led by Syncom Venture Partners and Barshop Ventures.

Zynga Game Network Raised $29.0 Million VC Funding — San Francisco-based social gaming company, has raised $29 million in new VC funding. Kleiner Perkins Caufield & Byers led the round, and was joined by Institutional Venture Partners and return backers Avalon Ventures, Foundry Group and Union Square Ventures.

TicketLeap.com Raised $2.0 Million Series A Round — Philadelphia-based online ticket exchange, has raised $2 million in Series A funding. Backers include MentorTech Ventures and Ben Franklin Technology Partners of Southeastern Pennsylvania.

Tradual Raised $2.4 Million Series A — Tradual Inc., a Boston-based social media company focused on the foreign currency exchange marketplace, has secured $2.4 million of a $4 million Series A round, according to a regulatory filing. North Bridge Venture Partners is leading the financing, with partner Jeff Beir taking a board seat.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , , on July 28, 2008 by Dave Liu

Yahoo Not Only Shutting Music Store, But Orphaning DRM Buyers — We knew Yahoo Music was shutting down but not that it was planning to take down its DRM servers at the same time. Ars Technica reports that Yahoo has notified customers the license servers will shut down Sept. 30. Yahoo had already said its music subscribers would be migrated to Rhapsody. Microsoft eventually took another approach when it stopped MSN Music, promising after a fuss that the DRM-protected music will work through 2011. What does this mean? Unlike subscription music users, who are leasing music and have no reason to expect it will be available after a service closes, buyers of DRM-protected music think they have acquired the rights in perpetuity.

NBCU Unscathed (So Far) In GE Slimdown — NBC Universal will be one of four “segments” in the slimmed-down General Electric announced today after the market closed today. CEO Jeff Immelt, under fire for the company’s poor stock performance during his tenure, is downsizing from six to four “core” segments, creating “infrastructure” businesses for technology and energy and consolidating all financial services into GE Capital. GE already had announced a possible Consumer & Industrial spin-off. As for NBCU, it puts the “media” in Immelt’s definition of GE as “a global infrastructure, finance and media company.” From the release: “Led by Jeff Zucker this segment is unchanged and will continue to focus on its strategic evolution through globalization and diversification.”

Netflix Q2 Revs Up 11 Percent; Beats On EPS; Ups FY Guidance; Stock Jumps — Netflix reported Q2 revenue of $337.6 million, an 11 percent increase from $303.7 million a year ago. Net income was up just 3 percent to $26.6 million. A significant reduction in shares outstanding, however, meant that EPS rose 13.5 percent to $.42 per share from $.37 per share. That surpassed analyst estimates of $.40 per share, and the company raised its full year outlook slightly. Total subscribers now stand at 8.4 million, a 25 percent year-over-year gain. Net subscriber adds for the quarter were 168,000, compared to a decline of 55,000 a year ago.

Clear Channel And Katz Launch Big Online Network — Clear Channel Radio and Katz Media Group are launching what they say is the largest online radio advertising network ever, the companies revealed today. The new Katz Online Network will combine over 1,200 Clear Channel stations and Katz affiliates with a number of independent online radio stations, with a total unique audience of about 5 million listeners per week.

Ex-Google Execs Debut ‘Cuil’ Search Engine — Several ex-Google engineers will unveil a new search engine today, according to The Associated Press. Cuil, pronounced “cool,” is backed by $33 million in venture capital and is the brainchild of Anna Patterson, her husband, Tom Costello, and two other former Google engineers: Russell Power and Louis Monier. Cuil’s search index spans 120 billion Web pages.

Wayward Microsoft — Let’s not underestimate the significance of the botched Microhoo deal on the future of Microsoft’s business, says Ars Technica contributor Don Reisinger. Microsoft thinks its future is online, but without Yahoo, the software giant has very little to stand on, on the Web. It’s a pitiful third in search advertising, with just a 9% share, and its overall online business operated at a deficit of $1.2 billion this year. Now, how can Microsoft move forward when it’s back to square one? Still, CEO Steve Ballmer pipes on: “There is this huge, huge, huge new opportunity around the Internet and online and we have to embrace that opportunity and invest in that opportunity,” he told analysts and shareholders last week, adding that the company would now invest another $500 million in the company’s online business.

Digital Media M&A

Posted in Deals, Digital Media, News with tags , , , , , , , , , on July 25, 2008 by Dave Liu

PodTech (Palo Alto, CA) Acquired by ViewPartner — PodTech, a provider of an online video network featuring original technology and digital entertainment programming, was acquired by ViewPartner (Los-Angeles, CA), on July 18, 2008 for an undisclosed amount. Previous investors in the comany include Venrock Associates, U.S. Venture Partners, and individual investors, among others.

Modern Luxury Media Acquires Fashion E-Zine Julib — Modern Luxury Media (MLM), the publisher of about 34 city magazines across U.S., has bought online and e-mail fashion magazine Julib. The company said Julib has e-mail newsletters for about 14 cities in U.S. and has 700K readers. Terms of the deal were not disclosed. As MLM readies for the September launch of Manhattan magazine, the Julib.com reach in the New York media market will help it in that growth, the company said. The newsletter was founded in 2002 with 400 readers and a single New York edition. MLM was founded in 1993 in Chicago, and is now owned by Clarity Partners, the media-focused PE fund based in Los Angeles.

Digital Shop Rosetta Acquires Brulant — Significantly expanding its industry presence, interactive agency Rosetta Marketing today is expected to announce the acquisition of companion agency Brulant. Rosetta’s client list includes Johnson & Johnson, Bristol Myers Squibb, Allergan, Shire, HSBC and Microsoft. The firm’s 2007 revenue totaled $50 million. Clients of the Cleveland-based Brulant include Borders, Coach, Nationwide, Citizens Bank, National City Bank, Marriott and Scholastic.

Rosetta Marketing Buys Rival Interactive Shop Brulant — New Jersey digital shop Rosetta Marketing has bought the interactive agency Brulant, Mediapost reported. Terms of the deal weren’t disclosed. Chris Kuenne, Rosetta’s founder and CEO, said he expects the combined entity’s revenues will reach $130 million by the end of the year. In 2007, he said 10-year-old Rosetta’s revenue was $50 million. Brulant will also add its 370 staffers to Rosetta’s 230 employees. As part of the deal, Brulant will give up its name. Len Pagon, Brulant’s founder and CEO, will stay on as vice chairman of growth initiatives for Rosetta. Pagon tells Mediapost that the new entity is already planning additional purchases, in the areas of rich media, social networking and mobile.

Clear Channel Shareholders OK Buyout — Clear Channel Communications shareholders yesterday approved a $17.9 billion buyout offer from Bain Capital and Thomas H. Lee Partners. Approximately 97% of shares were cast in favor of the transaction, which is slated to close next Wednesday.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , on July 25, 2008 by Dave Liu

Microsoft Announces Search Deal With Facebook; Expands on Ad Deal — Google-MySpace Part II? WSJ reports that Microsoft will unveil a search deal with Facebook at today’s analyst meeting…. Update: The news was just announced by Microsoft’s Satya Nadella on stage at the company’s analyst meeting, after first reciting a long list of technical accomplishments that the company had achieved in search. Here’s the exact announcement based on the transcript (so it’s a little sloppy): “One last thing I want to talk about is an extension of our Facebook relationship where we are extending it to search and page search. We will be providing an API to Facebook where they will create a rich search experience for the Facebook users and that is something that they will launch in the fall working with us. And it will carry both our web results, as well as our page search advertising. We are excited (transcription error here) as an opportunity to further expand the Live Search reach. That is what I have in terms of anteing up and focus (sic) our invention and reinvent the business model. Let me flip back to Steve.”

AOL Trimming Up For Sale; Sun Sets On XDrive, AOL Pictures, Mobile And Others — Some belt tightening has started at AOL,, as it prepares and dresses itself up for a sale: It is discontinuing some of its tech projects, and also trimming some of its content blogs under the Weblogs Inc network. According to an internal memo sent by Kevin Conroy, AOL’s EVP of Products and Marketing, products Bluestring, Xdrive and AOL Pictures “will be sunset,” meaning closed down after a transition period. “These consumer storage products haven’t gained sufficient traction in the marketplace or the monetization levels necessary to offset the high cost of their operation,” according to the memo posted here by TC.

McClatchy Q2 Revenues, Profits Plummet, As Online Ad Sales Grow 12.5 Percent — The McClatchy Company’s financial struggles only seemed to deepen in Q2, as Gary Pruitt, the publisher’s chairman and CEO, pinned the weakening economy and the shift from print to digital on its revenue and income decreases. Revenues were down 15.6 percent to $489.7 million in Q2 compared to last year’s $580 million. And while online ad sales grew 12.5 percent in the quarter, since they made up only 11.8 percent of total ad dollars—compared to an 8.6 percent share for all of 2007—it was not enough to offset wider declines. In all, McClatchy’s ad revenue fell 16.8 percent to come in at $406.3 million. Meanwhile, Q2 net income from continuing operations was $20.1 million, or 24 cents per share, down by roughly 50 percent from last year’s $40 million.

Vivendi’s H1 Revs up; Universal Music’s Digital Revs Up 33 Percent — Vivendi, the France-based media giant and parent of Universal Music Group, has reported its first half 2008 and Q208 earnings, and its revenues totaled $17.7 billion, compared to $16 billion for the first half 2007. For Q2, Vivendi’s revenues totaled $9.4 billion compared to $8.15 billion a year earlier. Out of the units: Universal Music Group saw a 2.4 percent decline in revenues, while Vivendi Games saw the largest revenue drop, at 11.2 percent.

Blockbuster’s Digital Kiosks and Movielink Plans; August Launch — Blockbuster, which recently abandoned its foolish quest to buy Circuit City, is now on to the next thing, which it has been talking about for the last year: its digital re-invention. The company has a strong presence at Comic-Con going on this week in San Diego, and is also demo-ing its digital kiosks, reports Home Media magazine. It has talked about these kiosks before…they are being tested in select Blockbuster stores in the Dallas area, and plans are to roll it out country-wide in the next three years. These kiosks allow consumers to download movies to portable devices in less than two minutes, though for now, it only works on Archos portable media devices.

Moneysupermarket Rebuffs Ontario Teachers — Moneysupermarket.com, a publicly-traded price comparison website based in Britain, has rejected a preliminary buyout approach from Ontario Teachers’ Pension Plan. Moneysupermarket shares rose 22% yesterday, to increase the company’s market cap to £419 million.