Archive for September, 2008

Articles of the Day

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

MSFT’s Mehdi Upped To Lead Much Of Online Services—But Not As President — Microsoft vet Yusuf Mehdi will now lead much of the company’s online services, including marketing, business development, product management for MSN, and search, according to Kara at AllThingsD. However, CEO Steve Ballmer has yet to appoint an overall replacement for Kevin Johnson, who left his post as president of the platform and service division in July. We suggested earlier this month that Mehdi and Brian McAndrews, SVP-advertiser and publisher solutions, were the most likely contenders to fill Johnson’s shoes. Mehdi, along with McAndrews and Satya Nadella, SVP-search, portal & advertising, are now heading up different aspects of advertising in the company. Formerly SVP-strategic partnerships, he’ll now be responsible for part of the portfolio of SVP Bill Veghte, who will focus on leading Windows and Windows Live.

Yahoo Reorgs Connected Life Division; Next Phase Focused On Making Money On Mobile — Yahoo is reorganizing the Connected Life division with the intention of actually making money. The reorganization, announced internally today at an all-hands meeting, includes a management shuffle and the new goal of contributing to Yahoo’s bottom line by 2009, according to an email we obtained. The email was sent out today to employees by Marco Boerries, Yahoo’s EVP of the Connected Life Division, who also made the announcement at a meeting this morning.

Interview: MediaNews’ Singleton On What’s Ailing Newspapers: It’s The Economy, Not The Internet — It’s been a rough few years for the newspaper business. With the migration of readers and advertisers from print to online, and then the past year’s economic downturn and market meltdown this month, it’s hard to figure out where the fixes are going to come from. William Dean Singleton, CEO of Denver-based publisher MediaNews Group, believes he can address the challenge presented by online media to newspapers by tying print and interactive ad sales more closely together and by relying on cooperative services from Yahoo (NSDQ: YHOO), the AP and real estate ad net Zillow. But the economy, that’s a whole other problem. I spoke with Singleton following Yahoo’s heralding of its APT display ad sales delivery and targeting system last week. During the Yahoo press conference, Singleton said he expects up to 22 percent of the privately-held company’s revenue this year will come from online newspapers, with that number reaching 50 percent in five years. Rather than looking too far ahead though, our conversation focused on the here and now.

AP Signs Up 500 Papers For Online News Sharing Service — While the Associated Press has been trying to beat back threats to defect by member newspapers over the fee structure being implemented next year, a sizable number are still interested in sticking around to take advantage of its growing web tools. The wire service company says that 500 newspapers have signed up for AP Member Marketplace, the online system that lets its subscribers exchange stories, photos and graphics. The service, which was unveiled back in April, is set to get some enhancements this week. In Ohio, 53 papers have asked for access so far, with 45 in Pennsylvania and 26 in Texas are among the 20 states where 10 or more member newspapers have signed up.

AOL Brings Back Digital City As (Yet Another) Blog — In keeping with AOL’s blog-a-week rollout that it’s been doing for the past year to revamp its portal site, the Time Warner company is looking back to its Digital City brand. The site used to resemble *IAC’s* CitySearch network, but Digital City’s new incarnation is more of a general interest blog, with the entertainment, food and nightlife topics underpinning its posts. Perhaps trying too hard to depart from the old Digital City, the site’s postings represent a farrago of topics: a paean to gourmet grill cheese is sandwiched between a post on the upcoming vice presidential candidates’ debate and a post critiquing media coverage of John McCain’s closeness to the gambling business. The general nature of the site makes it more curious as to why AOL needs another site like this, especially when its been sharpening its offerings with sites like the new female focused Lemondrop and the older male counterpart Asylum. Either way, it represents more space to sell ads in struggling display market. Like the other sites, the revamped Digital City’s ads will be handled by Platform-A, AOL’s online ad group.

Broadband ISPs Vow Ad-Targeting To Be ‘Opt-In’ In Congressional Hearing — Although they don’t currently target ads to their broadband subscribers, representatives from AT&T, Time Warner Cable, and Verizon Communications appeared before a Senate committee and promised to adopt a system that would seek customers permission first before serving behavioral ads, ClickZ reported. In a period of increased scrutiny on behavioral targeting, cable companies and telcos are still holding out hope that they can convince lawmakers to allow the industry to self-regulate. Both houses of Congress have been looking into online ad targeting since the summer, when Charter Communications executives were summoned to Capitol Hill to outline a planned test of behavioral ad provider Nebuad’s system.

Articles of the Day

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

Liberty’s Malone: We’ve Held Limited Talks To Get AOL Access — Talk of a Yahoo-AOL combo has once again heated up, but what becomes of the access business? Its final home could still be Liberty Media. CEO John Malone told the FT that his company and Time Warner have had “limited talks” to swap the declining (but profitable) dial-up business in exchange for Liberty’s stake in Time Warner (NYSE: TWX). Of course, as Malone notes: “Time Warner still needs to divide the business.” Yeah, the process of splitting access and portal isn’t exactly “done” yet. The other party that’s clearly interested in AOL access is EarthLink, which has had some success in improving dial-up profits by cutting costs.

McClatchy Loan Deal Wins It Flexibility—With Costs — The McClatchy Company, like just about every other newspaper publisher, has found itself even more squeezed by the current economic convulsions. On Friday, the Sacramento company announced it has renegotiated $1.175 billion of debt, which includes banks loans and available lines of credit. While the company insisted it was in no danger of default, it needed to amend its debt agreements to alleviate the pressure from falling ad revenues, particularly in its California and Florida markets. But as the company’s SacBee points out, McClatchy will be faced with higher interest rates—about 25 percent extra—and the amount of credit it can access has been reduced. Ultimately, McClatchy’s borrowing costs could increase by $11 million annually, treasurer Elaine Lintecum told SacBee.

Glam Media Readies Male Version; Tries 7 Percent Solution, Cutting Workforce By 14 Jobs — Glam Media, the women’s fashion and entertainment ad net, has had a lot of activity lately. It’s now prepping a men’s channel and ad net with the working title CodeBlue, Venturebeat reports. The content will be comprised of in-house posts and videos in addition to bringing material from outside. The channel is being readied for a November launch under a different name—CodeBlue. NBC/*News Corp.’s* Hulu, Sony Music and MTV are rumored to be signed up as content partners and Glam is said to be talking with other media companies as well. Venturebeat is uncertain as to whether Glam will own CodeBlue completely or if this is to be part of a joint venture. This comes as Glam is cutting 14 jobs, or 7 percent of its 200-person workforce.

Auto Site Autobytel Cuts Staff; Puts Up a For Sale Sign — Online auto site Autobytel, based in Irvine, CA, has laid off about 75 employees under a cost-cutting plan it began last year, it said, citing, as usual, the economy. These represent about 35 percent of its work force. It has also hired RBC Capital Markets to explore a possible sale of the company. “We believe our current stock price as well as overall market conditions are conducive to, and have driven, increased interest in Autobytel from various third parties,” Autobytel CEO Jim Riesenbach said in a statement. The company will record $2.2 million during Q3-Q4 related to severance and other employee-related costs. It expects to save about $10 million each year as the result. In Q2, the company reported revenues of around $19 million, down from $21.6 million in the year-ago quarter.

Health Sites Aim To Stave Off Economic Ills — Health information sites have continued to show growth even as more and more players crowd into the category. Data released earlier this month by comScore showed that traffic in the segment increased 21% in the last year, four times the growth rate of the U.S. Internet audience. But as the wider economic weakness spreads to online advertising, will health sites be immune to the downturn? Driving that surge have been newer properties such as Revolution Health Network–launched by former AOL chairman Steve Case, which nearly tripled traffic to 11.3 million as of July, the rebranded AOL Health, almost doubling to 11 million, and Everyday Health Network, jumping 63% to 14.7 million. Longtime category leader WebMD grew only 3%, but was still comfortably on top with a monthly audience of 17.2 million. The site also boasted the biggest share of views for display advertising, at 18.6%–compared to almost 13% for Revolution Health, 12% for AOL Health, and about 10% for Everyday Health.

Digital Media VC

Posted in Deals, Digital Media, News with tags , , , , , , , on September 26, 2008 by Dave Liu

Trion World Network Raised $70 Million In Series C — Redwood City, Calif.-based publisher of server-based games, has raised $70 million in Series C funding. ACT II Capital led the round, and was joined by DCM, Trinity Ventures and return backers Rustic Canyon, Time Warner, Peacock Equity and Bertelsmann. Raised $13 Million In Series B — San Mateo, Calif.-based platform to help online publishers monetize video content, has raised $13 million in Series B funding. Spark Capital led the round, and was joined by return backers Redpoint Ventures and Gemini Israel Funds. Raised $3.4 Million In Series C — Boston-based operator of a trading platform for books, CDs, DVDs and video games, has raised $3.35 million in Series C funding led by Safeguard Scientifics.

Cramster $3 Million In Series A — An online homework aid business based in Pasadena, Calif., has raised $3 million in Series A funding led by Shai Reshef, who has been appointed Chairman of the company.

Digg Raised $29 Million Third Round — Digg Inc., an Internet startup that specializes in rating news stories, is making a little news of its own with a $28.7 million round of financing. Highland Capital Partners and three previous Digg investors – Greylock Partners, Omidyar Network and SVB Capital – are providing the latest infusion. All told, Digg has raised $40 million since Kevin Rose started the service four years ago.

Digital Media M&A

Posted in Deals, Digital Media, News with tags , , , , , , , , , , , , on September 26, 2008 by Dave Liu

MTV Buys Remaining Stake Of Social Net Aggregator Flux — MTV Networks has acquired Social Project Inc., the company that runs social media aggregator, which has been working with the Viacom unit to build up community tools around its sites over the past two years. Terms weren’t disclosed. The announcement was made at a press conference at MTVN’s offices by Mika Salmi, president, global digital media for MTVN (NYSE: VIA). MTVN first invested in Tagworld, which became Social Project, in November 2006. Flux now has 7.6 million, with 2 million adding since opening up its platform last fall.

Online Video Syndication Service Voxant Acquired By Anystream — Online video encoding and content management firm Anystream has acquired another small vendor in its sector: it has bought out online video syndication service Voxant. Financial details were not disclosed. Both of the companies are based in Virginia, and share two venture investors SoftBank Capital and Court Square Ventures, which probably helped in the deal.

Online Streaming Delivery Firm Abacast Buys P2P CDN — More activity in the CDN market: Abacast, the streaming media delivery firm, has bought out a smaller P2P-based CDN Tukati, for an undisclosed sum. The two companies had been partnering for a while… combined they will offer streaming; on demand video, game, and software distribution; progressive video delivery; and push delivery.

BankRate Acquires Bankaholic For Up To $15 Million — Financial info site BankRate is expanding its financial product listings, as it’s acquiring Bankaholic, which provides info on deposits, savings accounts, and money market accounts. The company will pay $12.4 million up front, with another $2.5 million possible earnout over the next 12 months. Bankaholic’s sole employee John Wu will assist in the transition and remain for an unspecified period of time. BankRate, of course, is exposed to some of the nastier aspects of the economy, though it’s held up fairly well and continued to grow. It’s also made acquisitions in order to diversify its range of financial products—last December it acquired and Nationwide Card Services for at least $29 million. The company has also seen competition from TheStreet, which acquired BankingMyWay, a much smaller site with a similar service.

Interactive Marketer ClickSquared Buys UK’s Rocket Science — Looking to expand into Europe, lead gen and email marketer ClickSquared has bought UK online marketing services provider Rocket Science. Terms weren’t disclosed. Waltham, MA.-based ClickSquared says it had been searching for the right European complement for over a year. The company’s European base will operate from Rocket Science’s existing UK offices in Leeds and Middlesbrough. As part of the merger agreement, all of Rocket Science’s 27 staffers will report to Andrew Campbell, managing director ClickSquared Europe.

Articles of the Day

Posted in Digital Media, News with tags , , , , , on September 26, 2008 by Dave Liu

Yahoo Hires Bain To Help ‘Streamline Processes’; Layoffs To Come? — And to think what they could’ve gotten from Microsoft… Yahoo, whose stock continues to languish, has hired Bain & Co. to help it “(explore) ways to streamline our processes and bring new agility and efficiency to how we work as an organization.” in the words of spokesman Brad Williams, who spoke to Bloomberg. He says it was premature to speculate on whether the company would in fact have layoffs, but that’s often what the word “streamline” means. Valleywag has a copy of a letter sent out by Jerry Yang, in which he talks about the “great progress” the company has made, the challenges it faces in light of the economy, and the need to “get fit.” Kara Swisher has also reported that top brass is telling employees about likely layoffs. So barring some massive misreading of the tea leaves, it looks like Yahoo will soon face cutbacks. The news comes just as the board reportedly authorized merger talks with AOL (NYSE: TWX). While such a combination would likely be talked about using some lofty rhetoric about strategic synergies and whatnot—but a big part of the appeal would have to be the chance to cut costs through redundancies.

Discovery Expands Partnership With YouTube; Creating New International Channels — I recently observed firsthand how well Discovery (NSDQ: DISAB) Channel content works internationally… Now the network is expanding its use of YouTube to reach global viewers. The network (which recently became fully public), will launch a series of localized channels on YouTube to promote popular shows, like MythBusters. Meanwhile, Discovery plans to use tonight’s episode to promote the YouTube channel, where fans can submit myths they’d like to see busted. As Discovery’s current channel notes, the network has been on YouTube since 2006.

Display Ads’ Growth Rate Was Cut in Half In H108; Category Gained 8 Percent In First Six Months — Another sign of display ad spending’s travails this year… This time, TNS Media Intelligence says display grew 8 percent in H108 over the same period last year. At that time, display ads were up 17.7 percent in the first six months of ‘07 to $5.52 billion, accounting for 7.6 percent of all media ad expenditures, according to TNS. No word from the researcher as to what the share of display was from January through June this year. Still, it could be worse, as TNS points out that total ad spending during H108 fell 1.6 percent and media expenditures in Q208 was off 3.7 percent versus last year, the steepest quarterly drop since 2001.

MSN-Hearst’s JV Food Site Launched — MSN, which has decided to go the AOL way in launching standalone site, has launched its previously announced food site, the rather curiously British-named MSN is only the distributor…the main project has been executed by Hearst: Hearst Magazines Digital Media is in charge of the design, development and editorial content. MSN is responsible for ad sales and syndication of the site’s content through the MSN network. The content comes from Hearst brands,, and, plus non-Hearst brands such as EatingWell, Food & Wine, and Sterling Books. Some more details in the Hearst-owned paper Seattle PI, here. Tons of competition in the space from the likes of Scripps, CondeNast and other independent and specialized food site, so remains to be seen how Delish scales up.

NBCU’s Digital Health Net Strikes Video Deal With Six Distributors; Google TV Ads Signs Up Bloomberg — Two fledgling digital projects have struck agreements designed to give them legs: NBCU’s Digital Health adds six sites: NBC Universal’s Digital Health Network, a video-heavy ad net that was launched last spring, has added six new sites to its distribution stream. The addition of more partners come as the network is also unveiling a new video portal called Aside from content sites like the general science and tech focused redOrbit and Wellsphere, which offers answers to a range of health questions, the new additions include organizations like the American Cancer Society, library services company EBSCO Publishing, marketing firm StayHealthy and digital signage company Windstone Communications. By tying up with entities that offer more than just website placement, NBCU hopes to expand the Digital Health Network to more of a general offline audience. Bloomberg TV to use Google TV Ads: Since exiting from beta this summer, Google TV Ads has been trying to make the case for its self-serve, targeted ads to pay TV networks and marketers.

Gmarket/eBay deal gets conditional approval from FTC — Korea’s Fair Trade Commission (FTC), granted conditional approval for eBay’s bid to buy Nasdaq-listed Korean online retailer Gmarket yesterday, according to a FTC statement released on its website. The terms of FTC stated that ebay will be prohibited from increasing its commission from sales for the next three years after the acquisition and is required to restrict fee increases for registration and advertising to rates lower than the local inflation rate. Ebay, the US listed online auction company is in discussions with Interpark, the listed online Korean retailer to buy 36% stake in Gmarket. Interpark, the parent of Gmarket, said last month it had filed for approval with FTC, said a previous report. Source: mergermarket.

Yahoo Opens R&D In Grenoble; UK Too Expensive, Too Few Engineers? — Yahoo yesterday opened an R&D facility in Grenoble, France, claiming the region is becoming the “Silicon Valley of Europe” with a big pool of engineers. The new site will work on what Yahoo called its “key strategic priorities” – internationalizing Yahoo Answers and developing search, specifically semantic search. It’s also thought Yahoo’s Kelkoo shopping comparison site will be developed from there, though we know Kelkoo had a development centre in Grenoble at least as far back as 2004.

Articles of the Day

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

Is Yahoo Trying To Sell Yahoo Answers? — Part of Yahoo’s survival strategy beyond merging with AOL may be to sell of what they consider to be non-core assets for cash. We heard from a source that Yahoo may be quietly reaching out to a couple of potential buyers to see if they’d be interested in their Yahoo Answers property. We filed the rumor away under “ridiculous” until today, when we confirmed with a different source at a major Internet company that they were in fact approached, in a very informal way and through an intermediary, about a possible acquisition. Yahoo Answers, which was launched in late 2005, is a staggeringly huge site. Recent Comscore stats say the service attracts nearly 150 million monthly visitors worldwide and generates 1.3 billion monthly page views. That’s 67% unique visitor growth in the last year. Yahoo as a whole, though, has nearly 100 billion monthly page views, so it isn’t a material percentage of total Yahoo traffic.

MySpace Launches Ad Service — MySpace is rolling out a new advertising product called the Self-Serve Ad Service that makes it easy for anyone to promote their product or service on the social network. Users can upload ads they’ve created or make new ones using the MySpace system. To create new ads, users choose from a list of templates and upload an image to place in the ad. They can then target their audience by gender, age, region, city/state and interests. The system allows for such hypertargeting as women aged 27-52 who live in Rancho Cucamonga, Calif. and love the book “Brave New World.” After setting your target, you select the amount you’re willing to spend on the overall campaign ($25 minimum) and how much you’re willing to spend per click ($0.25 minimum). Then, you simply give them your credit card info. How MySpace calculates the value for the placements was not disclosed.

Consoles Gain In Popularity, May Steal Ad Dollars — Worldwide revenues from connected consoles–or gaming systems that are connected to the Internet via broadband–are set to top $4 billion in just two years, according to new data from Parks Associates. Companies like Sony, Microsoft and Nintendo will increasingly compete with cable providers and set-top box makers for user and advertiser dollars as they reach those projections.

NHL.Com Puck Drop: New Look; Subscription Video Live, Any Market; Yahoo Fantasy Hockey With Video — Usually the new-look focus at the start of a hockey season is on the teams—or in some cases, the owners. This year,, the National Hockey League’s online headquarters, gets in on the action with the Wednesday launch of a public beta version, live subscription game video viewable from any U.S. market and a new co-branded premium fantasy game with Yahoo Sports. The changes and additions fit into the overall strategy of the NHL as media company. They also represent a mix of fr*ee info, live games and archived video and features that probably are more than enough for the average fan and premium projects for the most avid.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , , , , on September 24, 2008 by Dave Liu

Yahoo Board To Meet, Consider AOL Deal — The Yahoo board is set to meet for the first time since Carl Icahn and two new board members were added. As Kara Swisher reports, there will be much to discuss, particularly the company’s stock falling to a five-year low. What can Yahoo do to boost shares? Swisher says the purchase of AOL from Time Warner looks to be Yahoo’s “most attractive option,” and that the talks are “more serious than (have) been reported.” Other problems that need to be addressed include attracting new top-level talent, reacting to the troubled economy (in which display advertising looks particularly weak), and appeasing disenchanted investors. However, Swisher that Wall Street’s recent meltdown might not weigh as heavily on the Web giant as previously thought. “In relative terms, with a strong balance sheet, the company is quite healthy compared with many firms,” she says, adding that Yahoo may become a reliable place “advertisers flee to in times of uncertainty.”

Antitrust Group’s Advice On Google-Yahoo Ad Pact: Limit Incentives For Yahoo To Run Google Ads — Given the name, it’s probably not a surprise that the American Antitrust Institute has issued a white paper (PDF) calling the Google-Yahoo ad pact “anticompetitive.” But in a glass half-full take, the group does cite some “pro-competitive” benefits to the deal as well. It also has some advice for keeping the deal intact without skirting antitrust rules. The partnership, which is being examined by the U.S. Department of Justice for potential antitrust violations, gives Yahoo (NSDQ: YHOO) the option of placing Google (NSDQ: GOOG) ads on its search results. The AAI, which describes itself as non-profit education, research and advocate, wants assurances that the deal won’t create “a black hole that swallows up Yahoo, despite Yahoo’s intentions to stay in business.” The AAI’s paper adds that in general, it is more than natural to be concerned about any deal between two such larger players that potentially gives the dominant firm a market share in excess of 90 percent.

Google Android Phone G1 Live: T-Mobile G1 Will Be For Sale In US Oct. 22 For $179 — T-Mobile USA announced today that customers in the U.S. will be able to pre-order the T-Mobile G1, beginning today at General availability will begin Oct. 22 at select T-Mobile retail stores and online in the U.S. The G1 will cost $179 with a two-year voice and data agreement. The T-Mobile G1 will also be available in the United Kingdom beginning in November, and across Europe in the first quarter of 2009. Countries include Germany, Austria, Czech Republic and the Netherlands. Data plans will start as low as $25 and go up to $35 a month for unlimited messaging and Internet browsing.

Amazon Confirms Music Store For The Google Android G1 — As rumors indicated yesterday, (NSDQ: AMZN) confirmed today that it will provide an Amazon MP3 music store for the T-Mobile G1, which is just a half an hour away from being unveiled at a press conference in New York. The store will allow T-Mobile G1 users to search, download, buy and play music from a catalog of 6 million DRM-free MP3 songs from all four major music labels and thousands of independent labels. But wait, don’t get too excited because as you may suspect, the tracks will have to be downloaded over a Wi-Fi connection, however, users can still browse, listen to samples and buy on the T-Mobile network. Still, this is an improvement over even Nokia’s (NYSE: NOK) highly anticipated Comes With Music service, which is expected to be a side-loading only affair. More than 1 million songs cost 89 cents, while albums are priced between $5.99 to $9.99. Engadget couldn’t have said it better when it said: “How you like them Apples, Apple.

AP Moves Online Video Network From Microsoft To thePlatform — Looking to revamp its Online Video Network, the Associated Press is handing over the running of its video player and uploading service from Microsoft (NSDQ: MSFT) to thePlatform, the Comcast-owned broadband and mobile video services provider. The AP didn’t offer a reason for the switch from Microsoft in its announcement. It comes just as the wire service is preparing to rollout a new video platform by December. The two-year-old OVN service sends news video to—and from—AP’s global affiliates. The move also comes as the AP finds itself battling back a rebellion from its members of its fee structure and more competition from online sites like, which has struck deals with local newspapers to share its coverage of Washington DC as part of its new ad network.