Archive for November, 2008

Digital Media M&A

Posted in Deals, Digital Media, News with tags , , , , , , , on November 27, 2008 by Dave Liu

Yahoo Sells Off European Comparison Shopping Site Kelkoo To PE Firm — Yahoo (NSDQ: YHOO), which has been trying to sell off its European comparison shopping service Kelkoo for a while now, has finally found a buyer, according to a report: it has been sold to a little-known UK-based private equity firm called Jamplant, for something less than euro 100 million ($126 million). Yahoo bought the service in 2004 for a price then of about 475 million euros (now $598 million).  

Disney Sold Movies.com To Comcast For $17 Million — Earlier this year in June, Fandango, the online movie tickets service that is part of Comcast (NSDQ: CMCSA), bought out movies-info site Movies.com from Disney (NYSE: DIS), for a then-undisclosed sum. Now the amount has come out, in Disney’s latest annual 10-K filing with the SEC: The movies.com business was sold for $17 million on June 18, 2008, resulting in a pre-tax gain of $14 million.

Digital Media VC

Posted in Digital Media, News with tags , , , , , , , , , on November 27, 2008 by Dave Liu

PlaySpan Raised $16.8 Million In Series B — Santa Clara, Calif.-based operator of an in-game commerce network, has raised $16.8 million in Series B funding. Return backers include Easton Capital, Menlo Ventures, STIC International (South Korea) and Novel TMT Ventures (Hong Kong). It had previously raised $6.5 million.

KickApps Raised $13 Million In Series C — New York-based developer of social networking tools for existing websites, has raised over $13 million in Series C funding, according to a regulatory filing. No new investor is listed, although an outside lead is likely. Return backers include Prism VentureWorks, Softbank Capital and Spark Capital. The company had previously raised $17 million.

FanSnap Raised $5.5 Million In Series B — Palo Alto, Calif..-based live event ticket search engine, has raised $5.5 million in second-round funding led by return backer General Catalyst Partners. The company is currently in beta, and is run by Mike Janes, former chief marketing officer of StubHub. Nabbr.com Raised $2.6 Million In Seires B — New York-based online marketing company that distributes promotional content via social networking sites, has raised $2.57 million in Series B-4 funding, according to a regulatory filing. Return backers include Allen & Co. and Avalon Ventures.

HuffingtonPost.com Raising $20 Million — HuffingtonPost.com is in the midst of raising a $20 million funding round at a $90 million pre-money valuation. Oak Investment Partners would be among the new investors, while returning shareholders include Greycroft Partners and Softbank Capital Partners.

Brands4friends Raised Euro10 Million In Third Round — German online shopping club for fashion and lifestyle, has raised more than €10 million in third-round funding. Partech International led the round, and was joined by return backers Mangrove Capital Partners and Holtzbrinck Ventures.

Winkee.com Raised $9.5 Million In VC Funding — Chinese online advertising firm, has raised around $9.5 million in VC funding from DT Capital and Shenzhen Fortune Venture Capital, according to SinoCast.

Boafeng.com Raised $15 Million In VC Funding — Chinese developer of online video software, has raised $15 million in VC funding from Matrix Partners China and IDG.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , on November 27, 2008 by Dave Liu

Google May Power Search, Ads For Russia’s Odnoklassniki Social Net — Russia’s top social network Odnoklassniki.ru is testing Google’s search box, both companies confirmed to business paper Kommersant, leading to a possible ad sales split in what is one of the world’s fastest growing online ad markets. With Google’s acquisition of RuNet portal Rambler’s Begun contextual ad agency recently blocked by anti-trust authorities, the search tie-up could offer a further foothold in a market that is booming despite the US slowdown in web ads’ growth. One Russian ad agency boss told Kommersant an Odnoklassniki.ru deal would add five percent to the 32 percent share of the Russian ad market Google (NSDQ: GOOG) would enjoy if the Begun deal goes ahead. It’s said to be the brainchild of new president Nikita Sherman, who has set about adding more paid features and driving monetization opportunities. Kommersant says the deal could make the portal an extra $1.5-$2 million next year, though the estimate isn’t explained. 

WPP Launches Ad Network In China, Latest Push By A Madison Avenue Biggie — WPP Group is extending its digital footprint into one of the largest and fastest growing online markets – China – and it’s doing it via an alliance that will form a new online advertising network. The move is interesting for two reasons. One, it makes good on WPP chief Martin Sorrell’s vow to establish more of a presence in China. Secondly, it marks yet another move by a big agency holding company to form its own advertising network, a step that could potentially disintermediate the array of third parties that dominate the space.  

NYT Claims To Have Figured Out Facebook As A Business Tool — The NYT is declaring that it cracked the code on using Facebook as a promotional vehicle. The company says that a branding campaign this month aimed at building Facebook fans around election news netted the paper “4.3 times the value of our spend,” according to a memo by president Scott Heekin-Canedy and posted on Harvard’s Nieman Journalism Lab site. It’s unclear exactly what that means: Heekin-Canedy doesn’t say what the baseline value of its ad spend was, and we called for clarification but didn’t get an answer. 

Music Service iLike In Search Of A Buyer: Report — Social music service iLike is on the block, MediaMemo reports—with existing stakeholder Ticketmaster and online music pioneer RealNetworks at the top of the potential buyers list. ILike has raised about $16 million in funding since its launch in 2006, with Ticketmaster and Bob Pittman’s Pilot Group as its investors. If this situation sounds familiar, it’s because it is. Fellow music-focused social media company Imeem is also on the hunt for a buyer, a sign that both companies’ management teams are wary of functioning independently in an increasingly cash-strapped market. Still, investors haven’t shied away from from pumping money into the digital music space: distributor TuneCore closed a $7 million funding round just last month, and Facebook has even been pondering its own music offering. Facebook also could be a likely buyer, given that iLike is one of its most popular apps, attracting about 5.4 million active users per month, but a pure stock play is likely to go over as well as it did with Twitter.

Articles of the Day

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

LinkedIn CEO: Everything’s Rosy Here — The San Francisco Chronicle sits down with LinkedIn CEO Dan Nye to discuss the professional social network’s fortunes in 2008. At last count, LinkedIn was the fourth largest social networking site, behind MySpace, Facebook and Classmates.com. It is also the fourth fastest growing social network, according to the Chronicle report, behind Twitter, Tagged.com and Ning, with membership of 30 million. The private company is expected to rake in $100 million in ad revenue in 2008, up from $10 million at the end of 2006. In June, LinkedIn raised new capital valuing the firm at $1 billion. “What’s most gratifying is seeing the success that people are having on the network,” Nye says in a lengthy interview. “There are just amazing stories about people making money, finding opportunities, getting advice, avoiding disasters from reference checking, reconnecting with important people in their lives, getting introductions, getting access.”

Collective Media Debuts Performance-Based Network — As if direct marketers needed another ad network to choose from, ad network and technology provider Collective Media today is expected to unveil its own performance-based ad network–Directive Network. The company’s CEO, Joe Apprendi, however, is confident that the new Directive Network will stand out among the more than 200 such networks saturating the market today.

Google Debuts Display Ad Builder Features — The upgrades, based on user feedback, aim to provide greater customization and make building display ads easier. The image picker feature lets users choose from previously uploaded images when creating ads. Real-time editing lets users see text and other custom edits without having to click the “update preview” button. 

Microsoft To Rebrand Live Search — Microsoft is once again rebranding its search engine, TechCrunch says, citing a Microsoft source. The software giant plans to rename Windows Live Search sometime early next year, and “Kumo”, a Japanese word meaning “cloud” or “spider” is apparently the frontrunner, according to the blog LiveSide. Microsoft recently purchased the Kumo.com domain name. According to TechCrunch, very few people inside Microsoft are privy to the pending change, and “Kumo” has not been confirmed, although a source claims that a final decision about the new name has been made.  

Job Sites Step Up As Unemployment Hits 14-Year High — Unemployment in the U.S. has hit a 14-year high as companies cut back. That has sent masses of laid-off workers flocking to the Web in search of opportunities — and job sites have been stepping up to meet the challenge. New job sites with names like MarketVendorJobs.com have sprung up to take advantage of growing user interest amid the economic downturn. Established sites, such as CareerBuilder.com, have also started rolling out new features to improve the relevance of job listings for candidates and make their résumés stand out, among other things. And some sites, such as Vault.com, are providing career counseling and other new services.

Articles of the Day

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

Acquisition Talks Between Facebook And Twitter Break Down — So, Twitter still believes it can figure out how to generate some revenues. Kara Swisher is reporting that the rumors about Facebook acquiring Twitter were not only true, but that talks between the microblogging company and the social-network site broke down three weeks ago. The social net was offering to acquire the company for $500 million of its stock, but Twitter execs and investors apparently believe the company should “take a shot” at building revenues “as well as it [has] done building its growth” and not just jump at the first chance it gets to sell the business. Of course, there was also the matter of price—or, in this case, is half-a-billion dollars worth of Facebook stock really worth half-a-billion dollars? Facebook was pricing the transaction based on its own $15 billion valuation following Microsoft’s investment in it. But Twitter believed a more accurate valuation was $5 billion, making the deal worth $150 million.  

Random House To Double Size Of Its Digital Book Catalog — With consumers pulling back on in-store book purchases lately, Random House may be picking a good time to ramp up its ebooks offering. The publisher is expected to increase the number of ebook titles it has to 15,000 from the current 8,000, the LAT reports. Although ebooks represent just 1 percent of total book sales, that could change as both publishers and consumers adjust their habits in the current economic climate. Wider adoption of e-readers like Amazon’s Kindle could help too, although the dismal financial picture could depress growth there as well. Matt Shatz, Random House’s VP for digital operations, is crediting the Kindle with driving ebook sales’ growth by triple-digit percentages this year. He declined to offer the LAT any specific figures, indicating that the revenues and sales units are still comparatively small. 

Xing CEO Logs Out, Replacement Coming From eBay — LinkedIn rival Xing’s founder and CEO Lars Hinrichs has stepped down from the post to concentrate on “new entrepreneurial challenges”, and is being replaced by Dr. Stefan Gross-Selbeck, eBay’s general manager for Germany. But Hinrichs remains on the company’s board and remains its largest shareholder, he confirmed on his blog. No further info given behind the CEO swap. Under Hinrichs, Xing has tried to scale up to fight LinkedIn by buying smaller, country-specific European business networks – its acquisitions in Spain and Turkey totalling EUR 14 million ($17.6 million). On its home ground in Europe, it’s beating LinkedIn.  

Social Networking Services Growing, Advertising Not So Much — The use of social networking sites will continue to grow, but advertising will not necessarily expand along with it, according to market research firm IDC. Framingham, Mass.-based IDC says in a new study that social networks will face slow ad sales until they can get users to do more than just keep up with friends. That’s because members of social networks such as Facebook, MySpace and Bebo tend to click on ads less than the U.S. Internet users overall.  

AdBrite Launches CPC Auction For Banner Ads — Marking a significant departure from traditional CPM-based advertising, ad exchange AdBrite has launched a cost-per-click auction for graphical banner ads. When direct-response advertisers pay on a CPM or per- impression basis, they assume the full risk of impressions that may never convert into clicks or sales. AdBrite advertisers can now pay for graphical banner advertising in the same way they pay for search placements and text ads–paying only when their ad is clicked.  

EMarketer Revises ’09 Forecast Down Again — In yet another sign that “the industry needs to completely rethink display ads,” eMarketer has revised its online advertising outlook for 2009 down again, cutting its forecast to $25.7 billion, from $28.4 billion. Six months ago, the online industry research aggregator forecast that online spending would total $30 billion. That figure has now been cut twice. Meanwhile, Google should remain the biggest beneficiary of the 9% growth projected for 2009, down from 11% growth in 2008, as its search advertising system is widely believed to drive sales and conversions for marketers. In fact, eMarketer actually raised its search advertising estimate for next year to $12.3 billion next, up from its August estimate of $11.9 billion.  

Google To Lay Off 10,000 — Google is reportedly preparing to lay off as many as 10,000 workers, according to sources at the blog Web Guild.
Hundreds of employees have already been laid off and there are reports that about 500 of them were recruiters for the search giant. In fact, this is
one of the reasons the company was able to meet Wall Street’s Q3 expectations, Web Guild claims. Google has clearly managed to get around
the SEC’s requirement that it publicly disclose layoffs by classifying close to 30% of its workforce as contract workers. According to SEC
documents, Google has 20,123 employees, but Web Guild claims the actual number is closer to 30,000. Many of these workers will be getting the boot. As Google co-founder Sergey Brin said, “There is no question that the number (of workers) is too high.”

Articles of the Day

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

SEC Won’t Enforce Rule That Would Make Facebook Finances Public  — Facebook isn’t a public company and it isn’t going to have to act like one any time soon. According to BusinessWeek, the SEC agreed that it won’t enforce a rule that would require public disclosure of financial results when the number of equity holders hits 500 and the assets total more than $10 million because the only class likely to be affected covers employee equity granted through restricted stock units (RSUs). The RSUs won’t be issued unless the company changes hands or launches an IPO. The SEC’s promise of no action—the equivalent of an exemption—was issued last month following a letter from Facebook law firm Fenwick & West in anticipation that Facebook could hit the 500 mark for employees with equity. The exemption wouldn’t cover the company’s common stock or preferred stock for Series A, B, & D, which involve investors or a mix of employees and investors.

BBC Trust: BBC Must Drop $100 Million Local Video Plan; Would Hurt Commercial Rivals — The BBC has been blocked from beginning a £68 million ($101 million), four-year program to add video bulletins to its 65 local UK websites – a proposal that had been vigorously contested by concerned commercial publishers. After a five-month inquiry, the BBC Trust regulator said on Friday the plan would hurt the nascent online video efforts of struggling local newspaper publishers, many of which were forced to answer falling profits and the classified ads downturn with layoffs this week.

Kaiser Family, Other Non-Profits Launching Independent Health News Services — Sensing a void in health care policy news coverage these days, the non-profit Kaiser Foundation is jumping on a recent trend and starting its own web-based news service, NYT reports. Kaiser, which focuses almost exclusively on the subject of national health care concerns, plans to form content sharing arrangements with a variety of media outlets. The service will build on Kaiser’s existing site, which includes aggregated news reports and policy papers. That site has about 100,000 daily pageviews and 55,000 subscribers. 

With Ad Spend Still Down, Financial News Turns To Rising Readership For Revenue Boost — Although financial news providers’ audience numbers have shot up markedly since the global economic crisis erupted this fall, that hasn’t reversed the downward slide of ad dollars. Now, more financial publishers are looking for a revenue boost to come from subscriptions, while those that already primarily rely on such fees are counting on partnerships to support rising audience demand for more content. Even premium products seem poised for growth as publishers seek to tap as many alternatives to the ad model as possible, an IHT piece suggests. Surveying the burst of attraction financial content is getting from cable TV and website users—e.g., WSJ.com’s uniques doubled to 40 million last month, while CNBC’s Q3 daytime viewership rose 26 percent—IHT finds publishers like Financial Times’ parent Pearson (NYSE: PSO) continuing to emphasize reducing its reliance on advertisers, as it has for the past year. So far, its plan seems to be working: less than one-third of FT Group’s revenues now come from ad dollars. 

GigaOm Network Parting Ways With Federated; Going With IDG’s Tech Ad
Network
— Giga Omni Media (GOM), the parent company of the popular network of tech sites including GigaOm, is parting ways with its long time ad partner Federated Media, and moving to a more enterprise-focused IDG TechNetwork, IDG’s tech ad network, we have learned and confirmed from the two companies. The new deal with IDG is for all CPM-based online advertising across GOM’s network of seven sites, and the company will still sell events and online sponsorships directly on its own. While this is not a significant monetary setback for Federated, it does point to what the
John Battelle-founded online-ad company is giving up as it continues to scale: Its focus has been on large-scale national advertisers and creating
both general and custom programs with them, as opposed to the more ‘intimate” sells required for enterprise-focused vendors that GOM attracts.
FM has a big-brand focus, for most part, and beyond its early start with tech sites, it has now moved into all kinds of other verticals like parenting, food, graphic arts, small business and others.  

WSJ Targets NYT’s Luxury Advertisers; NYTCo Stock Hits New Low On Ad
Worries
— The increasingly Murdochized WSJ has been aggressively trying to lure NYT’s luxury advertisers in much the same way the financial newspaper has been trying to broaden its coverage to grab its rivals general news readership. For example, high-end retailer and long-time NYT ad client Saks Inc. has recently been promoting a new Chanel boutique and men’s suit sale in WSJ, Milton Pedraza, CEO of market researcher Luxury Institute, points out to Bloomberg. WSJ is definitely taking away luxury ad dollars from the NYT, both on the print and digital sides, Pedraza told me. Although luxury marketers are shifting more of their declining overall ad spend online, the fight over the category will become more intense he expects.

Articles of the Day

Posted in Digital Media, News with tags , , , , on November 23, 2008 by Dave Liu

Ad Industry Moves Analytics Toward Forecasting Demand — Publishers looking for a method to visualize their inventory and understand the constraints of selling to advertisers will soon have an application that theoretically forecasts availability and price. The application will officially become available in January through the start-up Yieldex, a San Mateo, Calif.-based Web-services company founded in 2007 that analyzes and predicts available online advertising inventory to help optimize campaigns. Three unnamed companies have been testing the platform for six weeks.  

Microsoft, Yahoo Said To Be Hammering Out $20 Billion Search Buyout; Denied — Microsoft (NSDQ: MSFT) is working out a deal that would ultimately net it Yahoo’s search business for $20 billion, The Times Online reports, but has been denied outright by parties involved. If it turns out to be true, it would be complex deal with many moving parts: MSFT would initially only invest $5 billion, with the option to buy out the new unit for $20 billion after two years. Yahoo (NSDQ: YHOO) would continue to run its own email, messaging, display and content services businesses in the event of a buyout. Velocity Investment Group founders Jonathan Miller and Ross Levinsohn would likely lead the new search division; and they’d match MSFT’s funding with $5 billion from external investors. The new unit would end up with a 30 percent stake in Yahoo, and the external investors would have the right to appoint three of Yahoo’s 11 board directors. Senior execs at both MSFT and Yahoo have reportedly agreed on some of the terms, but the deal hasn’t been finalized—and may not be approved at all, The Times’ sources say. Now would be an opportune time to hammer out the details: Yahoo’s stock has been battered and the company is essentially functioning sans executive leadership since Jerry Yang stepped down as CEO two weeks ago.  

Icahn Increases Yahoo Holdings By Nearly 7 Million Shares — Apparently no one told Carl Icahn this was supposed to be a slow news day … the Yahoo director added nearly 7 million shares to his holdings in the company this week at an almost bargain-basement cost of roughly $67 million. According to a filing with the SEC Wednesday, various Icahn entities acquired 3,697,181 shares at $9.7988 per share Monday, 2,704,780 shares at $9.9678 Tuesday, and another 376,843 shares at $9.9988 Wednesday. That brings his total stake in Yahoo to 75.6 million shares. This last batch averaged well below one-third of the $34.75 per share Icahn suggested Microsoft (NSDQ: MSFT) pay for Yahoo back in June.

Lycos Europe To Shut Down After Failing To Find Buyer — It’s the end of the road. After putting itself on the auction block in April, Lycos Europe has finally conceded what had become increasingly clear – no one wants to buy the ailing portal. It confirmed Wednesday morning it will wind up its portal and its web-hosting activities. It’s now about asset stripping – the company said it still wants to sell its domain names, its Danish business and its shopping sites. As a result, Lycos Europe will give back $60 million (€50 million) to its shareholders. All subject to a December 12
shareholders meeting. As the Web 2.0 fraternity might say, “epic fail”. 

Mobile Internet Use Surges In U.K. — Mobile internet use in the United Kingdom is growing while the number of people going online via a PC is slowing, analyst firm Nielsen Online has found. Some 7.3 million people accessed the net via their mobile phones, during the second and third
quarters of 2008. This is an increase of 25% compared to a growth of just 3% for the PC-based net audience — now more than 35 million. The survey also found that the mobile net audience was younger and searched for different things. While Google remains the most popular site for those logging on via the desktop in the U.K., on mobile internet BBC News is the most visited site, with nearly a quarter of mobile internet consumers using it. Other popular sites include BBC Weather and Sky Sports.