Archive for November 10, 2008

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , , , , , on November 10, 2008 by Dave Liu

Razorfish CEO Kokich: Microsoft’s Not Selling Us—But Ask Me Again In Two Years — Clark Kokich, the CEO of Microsoft (NSDQ: MSFT) online ad agency
Razorfish, is downplaying rumors that its parent Microsoft is shopping it
around. He tells Techflash pointedly that Microsoft has no plans to sell
the company, which became part of the Redmond company when it paid $6
billion for Razorfish parent aQuantive in May 2007. However, he did leave
the door open to sale in the not-too-distant future. Just because there are
no plans at the moment, doesn’t mean that in “two to three to four years
from now, it might not happen,” Kokich said.

UK’s Virgin Media May Sell Content Divison — Days after negotiating an
improved deal to bring Sky’s basic TV channels back to it’s 3.5 million TV
customers for upwards of £30 million, Virgin Media (NSDQ: VMED) is now
considering selling its content division, according to sources quoted by The division includes digital channels Virgin 1, Dave and Watch,
and though’s sources stress the company has not been “hawking the
business around” to potential buyers, a sale has been discussed at board
level. Conversations ran along the lines of turning the business into “a
series of communication platforms rather than producing any content of is
own”, the story says.

YouTube’s Content Thaw: MGM Posting Full Shows and Movies On It — Frozen
out of most of mainstream full length content, YouTube’s repository is
beginning to thaw a bit, as traction among competitors such as Hulu and TV
networks’ own sites begins to grow: Metro-Goldwyn-Mayer Studios (MGM) is
tying up with the Google-owned video site, and will start posting episodes
of its decade-old “American Gladiators” program to YouTube, along with
full-length action films like “Bulletproof Monk” and “The Magnificent
Seven” and clips from popular movies like “Legally Blonde,” the NYT
reports. Some would point out that the financially troubled MGM has nothing
to lose from these experiments, unlike other studios still sitting on the

Blockbuster Changes Its Mind: To Roll Out Set-Top Box For Holiday Rush
AppleTV, Netflix flicks on Xbox 360, and now … a set-top box from
Blockbuster? Consumers can expect one this holiday season, according to Jim
Keyes, Blockbuster’s CEO and Chairman. The company plans to roll out a unit
that will deliver movies on demand from its Movielink download service.
Keyes made the announcement during an investor call this week, Home Media
Magazine reports, though he didn’t offer any details about the
manufacturer, pricing or availability. It’s a complete about-face from what
he told us back in August: namely, that Blockbuster (NYSE: BBI) felt no
urgency to launch its own set-top box any time soon. Perhaps the continued
success of rival Netflix (NSDQ: NFLX) sparked the change of heart—after
all, Netflix had a stellar Q3 (in contrast to Blockbuster’s lackluster
performance), and continues to broker content distribution deals with new
partners like TiVo and Apple.

Yahoo’s Restructured Deal With AT&T: $350 Million Upfront Payment — Yahoo
(NSDQ: YHOO) restructured its AT&T (NYSE: T) broadband/DSL co-branded deal
earlier this year, and at the time, no specific amount was announced,
though Yahoo expected aggregate revenue outside of traffic acquisition
costs to decline by $150-200 million over 2007 because of the
restructuring; Yahoo also expected a $300-400 million upfront payment from
AT&T recognized over the life of the contract. Now in its 10-Q for Q308, it
has the exact number: $350 million as the upfront it got from AT&T, which
was recorded in long-term deferred revenue in Q108 and is being recognized
in marketing services revenues over the underlying service period. Also
this year, it restructured a similar Verizon (NYSE: VZ) deal, though no
specific details have come out for that.

NYTCo Takes $166 Million Writedown For New England Media Group; Faces $400M
— The New York Times Company (NYSE: NYT) filed its 10-Q with
the SEC Friday and it’s not a pretty sight. The company projected a
$140-150 million write down for the New England Media Group when it
reported Q3 results Oct. 23; the number reported in the 10-Q is $166
million with adjustments to come in Q4. That puts the Q3 loss for the News
Media Group at $153 million and the overall loss for Q3 slightly over $106
million. The company has two $400 million revolving credit agreements, one
due in May 2009 and one in 2011. S&P lowered its rating twice this year,
the second time below inv*stm*nt grade; Moody’s has lowered its rating once
and serviced notice that it may do so again. As we reported recently, NYTCo
isn’t in danger of breaching its covenants; there are also no accelerated
payments subject to ratings downgrades. But the downgrades do make
financing trickier and more expensive—and they almost certainly guarantee
that the company faces more restrictive covenants. From the 10-Q: “We are
evaluating future financing arrangements and are in discussions with our
lenders regarding the expiration of one of our credit agreements, scheduled
for May 2009. Based on these discussions, we expect that we will be able to
manage our debt and credit obligations as they mature.” (For the dramatic
interpretation, read this from SAI while listening to Celine Dion. Update:
Should have added that one of SAI’s investors is Kohlberg Ventures, which
is run by James Kohlberg, one of the dissident shareholders appointed to
the NYTCo board. ).

Former Time Vet Robin Domeniconi To Head Up MSFT Ad Sales In U.S. — After
a string of high-profile ad-exec departures,Microsoft has made a key hire:
former Time Inc. vet Robin Domeniconi. Starting January 1, Domeniconi will
serve as VP of U.S. ad sales, reporting to VP of global sales and marketing
Bill Shaughnessy; she’ll oversee sales across MSFT’s roster of digital
products, including MSN and Windows Live, Xbox LIVE, Live Search, and
Facebook. The senior executives who have left MSFT recently include Kevin
Johnson, President of Platforms and Services, and Digital Sales GM Lisa
Utzschneider. While it’s clear that Domeniconi is not taking Johnson’s
place, it’s not clear who will be reporting to her. A company spokesperson
said that the hierarchy won’t be determined until she starts.

Admeld Launches New Platform, Adds Barrett As CEO — Ad optimization
technology provider AdMeld today is expected to launch a new platform to
help publishers maximize revenue from digital ad networks and ad exchanges.
The AdMeld platform, which is emerging from an eight-month beta program,
attempts to leverage dynamic pricing and advanced targeting to better route
inventory from publishers to generate higher revenue for each ad served.
AdMeld is also announcing the appointment of new Chief Executive Officer
Michael Barrett. The online ad veteran most recently served as EVP and
chief revenue officer for News Corp.’s Fox Interactive Media.

BitTorrent In Complete Disarray: President and CEO Leave; 18 Employees Laid
— Goes to the point that P2P is not a business model in itself, and
then, of course, bad management will even make it worse: BitTorrent, the
San Francisco-based company that has been trying to develop an online video
service and company around the open source P2P delivery technology, has
been in deep trouble for a while now, and the issues came to fore this
week, as the CEO and President of the company have left. The company has
also fired about half of its employees, 18 in number, and this after it
laid off 20 percent of the staff in August.