Articles of the Day


Google To Take On Baidu’s Music Site — Google, the worldwide leader in search, is taking on Baidu.com, the undisputed No.1 in China, by launching its own music search site — except this one only points users to music that’s legal to distribute. The site, which is only available to Chinese users, points to songs hosted by Top100.cn, a Chinese music site backed by NBA star Yao Ming. It will be ad-supported, with Top100.cn sharing the ad revenue with its music partners. Ars Technica says the move is a direct response to Baidu’s dominance of the music search market. The Chinese search leader has made a name for itself providing deep links to endless quantities of illegal music. Recently, the Music Copyright Society of China and the International Federation of the Phonographic Industry (IFPI) questioned Baidu for its MP3 deep-linking policies in lawsuits filed against the search engine for enabling copyright infringement. Three labels represented by the IFPI seek a maximum of $9 million in damages, though the organization claims Baidu could be forced to pay billions in reparations.

AOL Split On Track, But Options Open On Sale Of Access; Prudent Aquisitions — Time Warner is making good progress, says CEO Jeff Bewkes, on curating the proper portfolio of assets. Cable is obviously on track and the deal to spin it fully off should be done by the end of the year. On AOL: “We’ve now made key financial and strategic decisions that will enable us to operate the access and audience.” But it still sounds a tad murky: assets of the company has been divided into three categories: access, audience and something called shared services. TWX will pursue prudent acquisitions, but only ones that provide a meaningful financial return, and one that’s superior to other uses of cash. Given the low share price, it will be difficult to find acquisitions, says Bewkes, that will be superior to just buying back stock. That being said, given all the financial changes the company is undergoing, buybacks are currently on pause. Following the big one-time dividend from TWC? Same. Prudent acquisitions if possible, but expect more cash returned to shareholders.

WebMD Q2 Revs Up 15 Percent; Income Up 25 Percent; Pharma Ads Coming Back?— Health portal WebMD reported revenue of $89.2 million, a 15 percent increase from $77.3 million in the year-ago quarter. Net income from continuing ops of $6.4 million ($.11 per share) were up 25 percent from last year’s $5.1 million ($.09 per share). The company’s core segment, online services, had revenue of $84.6 million, up 16 percent from last year. That was mainly due to 19 percent growth in advertising and sponsorship revenue. Earlier this year the company lowered its outlook for the year due to advertiser hesitance and the business climate, but in the announcement the company simply maintains the forecast. As for the company’s merger with HLTH, it currently expects the deal to close in October.

Bebo Write Down Looms For Time Warner — AOL, which continues to weigh down Time Warner’s stock and may soon be sold, could be forced to write down its recent acquisition of Bebo, says Silicon Alley Insider’s Peter Kafka. In its most recent SEC filing, Time Warner reveals that $760 million of the $857 million it paid for Bebo price was attributable to goodwill, while another $86 million went to “specific amortizable intangible assets.” That leaves $11 million for the actual company. In other words, says Kafka, “there’s almost no there there.” Goodwill represents the premium AOL paid for the social network. It was almost all premium. Now, this may be standard practice in the Internet biz, but sometimes, when the asset doesn’t deliver as promised, the acquirer is forced to come back and tell investors that it paid way too much, then it gets to write down the loss. Time Warner had to do this with AOL in 2003. EBay had to do this with Skype in 2007.

CondéNet Integrates Ad Sales Teams; Staff Reorg Focuses On Verticals, Not Titles –Times are getting a little tougher for online ad revenues. And so with marketers’ demands for one-stop shopping across a company’s sites getting louder, CondéNet has decided to simplify its two ad sales teams into one. Up until now, there was one team handling ads for Style.com, Men.Style.com, and flip.com, and a separate sales team selling Epicurious.com, Concierge.com, NutritionData.com, HotelChatter.com and Jaunted.com. While categories like food, travel, fashion and teen, focus on different subjects, the reasoning is that the broad audience demos they attract make it more worthwhile to explore where visitors to those sites intersect. And so, sales staff will operate according to particular verticals, not titles.

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