Archive for AOL

Articles of the Week

Posted in Digital Media, News with tags , , , , , , , , , , , , , , , , , , , , on January 16, 2009 by Dave Liu

AOL’s Web Strategy Refined Yet Again With MediaGlow — AOL is tweaking its website strategy yet again. As the company struggles with the slowdown in display ad activity, it is giving its web publishing unit a formal name, called MediaGlow. AOL’s Bill Wilson will go from EVP of programming to president of the new unit, which will oversee programming’s 75 sites, NYT reports. AOL plans to create 30 more sites this year. The formation of MediaGlow is meant to move AOL away from being a portal, as opposed to a publisher with niche sites, like “edgy” younger men’s site Asylum and its female counterpart Lemondrop.com, something it’s been working towards for over a year.

Hearst Says Seattle P-I Will Either Be Sold, Close Or Go Web-Only — Following yesterday’s leak to a local TV station that Hearst Corp. was planning to sell or close the Seattle Post Intelligencer, the parent company has confirmed that it is seeking a buyer for the daily, the paper itself reported. The unidentified source who tipped off KING-TV yesterday about Hearst’s plans told the station that the company is pessimistic about finding a buyer in this dismal environment. Publicly, Hearst sees three possibilities for the Seattle P-I, which is one of only two of the city’s daily papers: it will either be sold, turned into a web-only publication or shuttered.

CBS Interactive’s TV.Com Relaunches With Video From Showtime, Sony, Endemol And More — A follow-up to the TV.com relaunch we first reported last month… the CBS Interactive (NYSE: CBS) site, which already sports its new front-page look, is expanding its video catalog with content from Endemol, Sony (NYSE: SNE) Pictures TV, MGM, PBS, and sibling Showtime. TV.com is trying to tilt its image from a community site about television to a video destination. “The thought is to weave in this entertainment into the overall community experience,” explains Anthony Soohoo, SVP and GM of CBS Interactive Entertainment and Lifestyle. “We want to use it more as a starter, a fuel to start the conversation versus letting it be so overbearing that it overtakes the rest of the community.”

Yahoo TV Effort Comes At The Right Time — At the Consumer Electronics Show, Yahoo unveiled a range of new televisions and other devices loaded with software developed with chipmaker Intel Corp. that allows users to call up Web pages and tools for use while watching TV. BusinessWeek notes that past attempts to marry the Web and TV have fizzled badly, but some analysts claim that Yahoo’s efforts come at the right time, because consumers are finally ready to enjoy a range of media from a single device. Apple’s iPhone, which users use to surf the Web as well as to make phone calls and text messages, is the perfect example. “This is a very intelligent chance Yahoo is taking,” says Mukul Krishna, global director of digital media at research firm Frost & Sullivan. “Google and Microsoft will be looking at this very closely.”

Report: Google Shows 58% More Ads, Could Report Record Quarter — A major source of frustration for financial analysts covering Google is the fact that the search giant issues no forward-looking guidance. As a result, analysts’ expectations for the stock can vary widely. The gigantic question mark in the company’s recent fourth quarter performance is whether demand for search advertising increased, and by how much. According to data from AdGooroo, a Chicago-based search research firm, Google led its competitors during the fourth quarter with 58% growth in the average number of ads it showed per keyword on the first search results page (4.01 keywords in Q4 vs. 2.54 in Q3). In December 2007, Google actually ran 4.84 ads per keyword, but since then, the company has made a concerted effort to improve the quality of the ads it shows. The result has been far fewer first page ads per keyword in 2008, though these are ostensibly of a higher quality. Looks like Google may have decided to return to showing more ads per keyword in light of the recession.

Major Shake-up At Sling Media: Krikorian Brothers, Hirschhorn, White, Wilkes Leaving — Little more than a year after Sling Media’s sale to EchoStar (NSDQ: SATS), the co-founders and the top team at Sling Entertainment are leaving the company, paidContent.org has learned. The news is being broken to staff in meetings going on now. Departing are brothers Blake and Jason Krikorian, respectively CEO and SVP-business development, and Jason Hirschhorn and Ben White, president and chief creative officer of the Sling Media Entertainment Group. The senior executives agreed to stay in place for at least a year following the acquisition, which was valued at $380 million, but we’ve been expecting one or more to leave—especially given the entrepreneurial bent. The move comes after a burst of good publicity about the new Sling DVR, iPhone app and
back-to-back best of shows at CES and Macworld.

M&A Report: ‘08 Interactive Ad Deals Down 29 Percent — Now that 2008’s finally closed out, we get a better read on the state of the market in terms of M&A—and Petsky Prunier’s latest Deal Notes report (via ClickZ) shows that the interactive advertising space was hit pretty hard: transactions were down 29 percent from 2007, and investors spent about five times less in 2008 than they did in 2007. Of course, 2007 was the year of the ad network/exchange feeding frenzy: Google (NSDQ: GOOG) bought DoubleClick for $3.1 billion, Microsoft (NSDQ: MSFT) acquired aQuantive for $6 billion and Yahoo (NSDQ: YHOO) paid $680 million for Right Media—so those deals and the economic implosion skewed the results. Still the numbers are worth a look: Deals down sequentially and year-over-year in Q4 : There were 31 deals worth about $436 million in the interactive ad space in Q408—down 18 percent in terms of volume from Q3, and 29 percent in terms of money spent. Year-over-year the stats were worse: transaction volume was down 55 percent from Q407, and dollar value was down 77 percent. Overseas interactive agencies were a big draw : Interactive agency deals dominated the M&A activity in Q4, with eight deals worth a total of about $83 million. Interestingly, big ad holding companies focused on shoring up their digital practices overseas: Aegis Group acquired Malaysia-based shop IF, Publicis picked up Brazil-based Tribal, and Microsoft’s Razorfish’s gobbled up Spanish shop WYSIWYG.

Google’s Russian Fortunes: May Lose Ally, Snubbed By Firefox — In the fast-growing Russian internet scene, one of the big three portals, Rambler, could be about to lose its CEO, after dropping market share and seeing the sale of its advertising unit to Google (NSDQ: GOOG) fail. Mark Opzumerom won’t renew his contract, which ends in March, after Rambler.ru’s share of Runet’s search market fell from 14.9 percent last year to just 6.4 percent, business paper Vedomosti says (via Yakov). Rambler had agreed to sell its Begun contextual advertising platform to Google for $140 million in a summer deal that would also have seen Google replace Rambler’s own on-site search box. But the acquisition was curiously blocked in October by Russian antitrust authorities, arguing Google had not supplied the necessary paperwork. Google has already moved on and is testing the provision of search to leading social net Odnoklassniki. An exit for Opzumerom may suggest the Begun-Google deal may not be revisited.

Yahoo’s Board Picks Carol Bartz For CEO — It’s official: Carol Bartz as CEO is in and Sue Decker is out. The Wall Street Journal is reporting that Carol Bartz has been picked by Yahoo’s board of directors to succeed Jerry Yang as CEO and that she has accepted the job. Bartz, executive chairman and former CEO of Autodesk, first emerged as a candidate last week, some two months into the search. A Yahoo (NSDQ: YHOO) spokesman said he could not comment on whether an announcement is due today. Update: Bartz wasn’t on anyone’s public short list last November when Yahoo cofounder and CEO Jerry Yang, who was under pressure from the minute he took the post from former chairman and CEO Terry Semel, announced his decision to step down. The last time Yahoo plucked a CEO from the outside, the board went with seasoned entertainment vet Semel—a sign of its interest in media and entertainment, This time, the choice seems to be a Silicon Valley insider but it may not signal anything more than a belief that she has the right management experience, public company background and style mixed with industry know-how to steer a very troubled company that should be more successful than it is. Yahoo does a lot of things right but none of that matters as long as the image is of a company that is flailing.

Microsoft Gains Searches, Yahoo Acquisition On Horizon? — AdGooroo’s Q4 Search Engine Advertising Update, released Tuesday, points to major gains for Google and Microsoft–including 58.0% and 42.3% growth in advertisers, respectively. Yahoo trailed with 8.8%. “Microsoft has begun to close the
gap in advertising share with Yahoo, but based on the previous quarter’s numbers I would have expected that to take longer,” said Rich Stokes, AdGooroo founder.

Harvard Prof: Deceptive Ads ‘Rampant’ On Yahoo’s Right Media — Yahoo’s Right Media automated ad network allows “deceptive” banner ads to “run rampant through its system,” according to a new report by Harvard Business School’s Ben Edelman. Edelman estimates that as many of 35% of the ads shown through Right Media are deceptive. Right Media, which offers an automated auction platform for advertisers and publishers, said in a statement that it has “rigorous platform standards and guidelines” and doesn’t allow its system to be used in a “misleading, deceptive or illegal manner.

Euro VC House Balderton Targets Downturn Innovation With $430 Million New Fund — Fresh from making $140 million from the sale of Bebo and a “substantial return” on the sale of MySQL, Balderton Capital is announcing a new $430 million (£285 million) tech and media fund to capitalise on promising business plans thrown up in the downturn – proving that VCs really mean it when they say money is still available for good ideas. Though private equity is finding it harder to raise money from banks, Balderton – which was Benchmark’s European arm but span out in 2007 – assembled most of its new fund from investors in just two months, general manager Barry Maloney told FT.com: “We are about to enter a very interesting time for new investments, if not for exits. Part of the reason for raising this fund now is to take advantage of the opportunities that this stage of the cycle throws up.” Innovation gets another spurt in times like these, many investors say, explaining that Web 2.0 came off the back of the dot.com crash. VC money isn’t going away – Accel unveiled a $525 million new London fund last month.

Epperson Out At Havas Digital, CEO Role Split Across London, Madrid — In a move that centralizes more of the power for its digital media operations on the European continent, Paris-based Havas is restructuring the top management team of Havas Digital, following the departure of its Boston-based CEO Don Epperson on Jan. 31. Epperson, an entrepreneur with a deep background in finance and technology, joined Havas in 2001 when it acquired HookMedia, an early Boston-based digital shop he founded in 1998, and which became the backbone of Havas Digital’s operations.

Google Shuts Down Google Video Uploads, Notebook, Dodgeball, Jaiku, Mashup Editor — The day of the long knives at Google (NSDQ: GOOG) when it comes to products. In a burst of blog posts late Wednesday, the company announced the closure or impending closing of a batch of products, some more widely available than others: Google Notebook, Dodgeball, Google Catalog Search, microblogging servie Jaiku, and the Google Mashup Editor. You could call it thinning the herd as Google looks for ways to cut back ever so slightly on
engineering and to divert resources to projects that may have a chance or making money or could be more powerful when it comes to the same functions. Google is also halting uploads to Google Video, directing users instead to YouTube and Picasa.

Blockbuster To Bring Video To PCs And Mobile Devices In Q2 — In what is being considered a defensive move against Netflix (NSDQ: NFLX), Blockbuster (NYSE: BBI) said today it is going to start offering thousands of films and other titles to a number of devices as soon as the second quarter. The devices range from PCs and Macs to media players, Blu-ray Disc players, set-top boxes and mobile phones, Reuters reports. Users will be able to download or stream the movies on an ala carte basis, which will allow Blockbuster to offer newer movies than Netflix, which is frequently criticized for having out-of-date titles. Blockbuster may also consider
subscription services in the future.

Google, SpotMixer Launch Self-Service Video Ads — Google and One True Media–the parent company of online video ad creator SpotMixer–today are expected to publicly launch a self-serve video ad creation service for Google AdWords customers to produce and distribute cable television ads via Google TV Ads. Neither partner company would discuss the financial details of the new deal, One True Media CEO John Love did say there is more to it than just exposure for SpotMixer.

AOL Sports Becomes FanHouse — AOL Sports is rebranding as FanHouse, adopting the name of its popular blog for the entire sports site. The move follows on the heels of AOL’s creation of a new publishing unit called
MediaGlow that will launch more than 30 new sites by year’s end. Besides a redesign, FanHouse will feature expand coverage including on-site coverage of major sporting events, improved scoreboards, more video and RSS feeds from top sports writers. Over the next year, the site aimed at males aged 18 to 54, will also launch specialized sports properties including a mixed martial arts site.

Yahoo CEO Says She Will Spend A Lot Of Time looking At Selling Search Business, But ‘Gut’ Says Not To Sell — Yahoo, the Sunnyvale, California Internet company’s new Chief Executive plans to devote time looking at selling its search business, reported the Wall Street Journal. The article, citing people familiar with comments the new Yahoo CEO Carol Bartz made during a company-wide meeting Wednesday, reported Bartz said she plans to spend a lot of time looking into selling the unit but that her “gut” was to not sell the unit. Bartz also said she spoke with Steve Ballmer, the Chief Executive of Microsoft (NASDAQ:MSFT), the Redmond, Washington software company, after taking the job at Yahoo. The report noted that Yahoo’s board of directors isn’t pushing for a quick deal. Source: mergermarket.

How Heavily Will The Recession Weigh On Tech? — The Economist : The news from technology bellwethers like Microsoft, IBM, Motorola and Intel has been awful of late. According to several blogs, Microsoft and IBM are preparing to get rid of 16,000 employees each, or 17% and 4% of their workforces each. This may or may not be true, but The Economist says the news is telling nonetheless, as the cuts would be the biggest in
information technology history. Meanwhile, Motorola earlier this week said it was cutting 4,000 jobs, and Intel on Thursday reported that fourth quarter profit absolutely fell off a cliff, plummeting 90%. These are the signs of the industry’s current plight, The Economist says, adding: “Hardly a day passes without reports of collapsing revenues and workers being laid off.” So, is the tech industry headed for a worse downturn than the one
that followed the dotcom crash?

BrightRoll: Video Ad Rates Fell 25% In Q4 — Average pre-roll ad rates for online video in the fourth quarter dropped 25% from the year-earlier period and 12.5% from the prior quarter, according to video ad network BrightRoll. Pre-roll rates on average were down 14.2% in 2008 from 2007. BrightRoll, whose network spans hundreds of sites, declined to provide actual average CPM figures for business reasons. But average online video CPMs are generally estimated to run from $20 to $25.

Social Nets Threaten Ad Agency Growth — Advertising agencies are not prepared for the changes that will come as a result of new forms of media such as social networks, a new study claims. The Institute of Practitioners in Advertising’s “Social Media Futures” report warns that ad agencies face growth of just 1.2% per year by 2016 if they fail to tackle the changes prompted by the emergence of social networking. Recommendations from friends are obviously more influential than traditional forms of advertising. Because social networks enable consumers to pass on information about products and services, advertisers need to be able to take advantage of that trend. A good example of this is the Cadbury “Gorilla” spot, which has been viewed on YouTube more than 10 million times, or Dove’s famous “Campaign for real beauty,” which can also be seen on YouTube and other online video sites.

Blockbuster Dumps Movielink Tech After A Few Months; Goes With Cinemanow Instead — Blockbuster’s so-called plans have been changing in real time these days, it seems, as the world changes in real time as well: We pointed out yesterday Blockbuster’s continuing vaporware plans for online and mobile video. What was lost in the shuffle was the fact that the rental chain has dropped the technology behind Movielink, the online video service it bought in 2007 for a firesale price of $6.6 million (after $148 million was invested in it over the years), and will now go with one-time rival Cinemanow’s technology for its new online movie service, to be launched in Q2 this year. It had been integrating the Movielink service with Blockbuster.com for a few months now, but after testing it out in closed beta, it is now dumping the tech part, even though the content deals remain
in place, as Variety points out.

eBay Founder Omidyar Launching New Startup Ginx, A Twitter-Based Sharing Tool — After starting eBay (NSDQ: EBAY) in 1995, he’s spent the last fewyears investing in new sites like Digg, Goodmail and Meetup.com. Now the auction site’s chairman Pierre Omidyar is back in the startup saddle. PEHub found an SEC filing listing Omidyar as an executive of secretive new Honolulu-based outfit Ginx, prompting speculation last night as to the business model. So the company has now issued a release confirming Ginx is being created by Peer News, co-founded by Omidyar and eBay’s former classified ads VP Randy Ching: “Ginx is a Twitter client that aims to provide Twitter users with a rich experience for sharing and discussing links. Ginx was created to enable people to become more actively engaged in the news and topics they care about.”

Articles of the Week

Posted in Digital Media, News with tags , , , , , , , , , , , , , , , , , , , , , , , , on January 10, 2009 by Dave Liu

VC 2009 Investments: Which Startups Will Get The Dough? — Investments for venture capitalists got squashed in 2008, and the outlook for initial public offerings (IPOs) and mergers and acquisitions (M&As) doesn’t look much better for this year. But at least one VC firm still plans to make investments in 2009. Jeremy Liew, managing director at Lightspeed Venture Partners, said the Menlo Park, Calif. VC will look to invest in companies focused on gaming, virtual goods, Web 2.0 and advertising, and those with solutions that monetize international traffic. While startups can expect fewer investments in the first two quarters, by the end of the year run rates should return to those seen in 2008, according to Liew. “The challenge with investing now is there’s a lot of uncertainty about the recession we’re in, how long it will last and how deep it will be,” he said. “Consumers with more time on their hands and less disposable income will look for the most entertainment for least amount of money.”

Google Solicits Suggestions For Mobile Products — Building on the openness underlying its Android mobile platform, Google is allowing users to propose ideas for new mobile product features through a new Web site. The Product Ideas page for Google Mobile allows Google users to submit and vote on mobile features they’d like to see the company develop. Through this Digg-like rating system, “we’ll be able to see more clearly what’s important to you and we’ll take it into consideration as we move forward with developing our products,” according to a post on the Google Mobile blog last week. “The Product Ideas team will pop in from time to time to see what you have to say, and we’ll be offering periodic updates on what we see and what ideas make it into your favorite products.”

Publishers Competing With Ad Networks — Behavioral targeting can be something of a double-edged sword for publishers, Ad Age’s Michael Learmonth explains. When a user visits a site like Edmunds.com, he or she instantly becomes an “in-market car buyer”, a valuable asset, but one from which Edmunds.com might not necessarily benefit. Like most Web publishers, Learmonth says that Edmunds doesn’t participate in the “mini-economy that flourishes after visitors leave” their site. Instead, “a host of ad networks will sell that ‘in-market car buyer’ to advertisers at a fraction of the rate, thereby increasing ad inventory while driving down ad rates for Edmunds, KBB.com and other sites like it.” The same story is true for other publishers who, by hosting users who demonstrate an interest in their products, create a profile that is eventually used by a third party network that packages and resells audiences at lower prices. As Learmonth says, publishers have long viewed this universe of networks and targeting firms with “unease”, in a similar manner to the way they compete with portals and news services that aggregate their content. Source: AdAge.

Consumers Union’s New Consumer Media Unit Could Expand Beyond Consumerist; No Paid Ads Allowed — Consumers Union’s new non-profit subsidiary Consumer Media LLC launches on Jan. 1 with newly acquired Consumerist.com as its only property but the announcement release stressed that it’s the first. Does this mean more acquisitions are on the way? “The short answer is we don’t know,” Ken Weine, VP-communications, told us. “We may down the road acquire or create new items.” Consumer Media is viewed as a way to expand
the nonprofit’s consumer advocacy mission and to take advantage of a growth spurt in recent years. For now, the new subsidiary sets boundaries between Consumerist, acquired this week from Gawker Media, and CU’s Consumer Reports magazine and website. “The message we’re trying to project—and the reality will reflect this—is we’re not purchasing Consumerist to make it into Consumer Reports and we wanted for that, among other reasons, to structurally create some distance between the two.”

Getting Rid Of The Box: Netflix Software To Be Embedded Directly Into LG TVs — In the march towards getting “rid of the box” as the going-forward philosophy in the evolving digital home, Netflix has extended its partnership with LG Electronics (SEO: 066570) and embedding its online video service directly into the new HDTVs from the Korean electronics company. LG’s new LCD and plasma “Broadband HDTVs” will allow current Netflix members to stream the videos from its service; these TVs have to be connected to a broadband connection, of course.

Monster.com To Create Co-Branded Job Sites With Sun-Times Media Group — The Sun-Times Media Group has struck an alliance with Monster.com on forming a series of online recruitment services and co-branded job sites across the publisher’s 70 newspapers. The deal comes over six months after Chicago-based Sun-Times joined the Yahoo (NSDQ: YHOO) Newspaper Consortium, which includes access to Yahoo’s Hot Jobs site. More recently, newspapers and online recruiters have seen help wanted ads decline precipitously as the economy worsens and unemployment ticks higher. The deal could help Sun-Times generate some more incremental revenue and attract more readers
to its classifieds. For Monster, it represents the growth of a media alliance that includes 250 newspapers and their sites, such as the NYTimes.com, and over 100 local TV outlets.

Macrovision Backtracks On TV Guide Network Sale To One Equity Partners; Chooses Lionsgate Instead — The TV Guide saga continues … Macrovision (NSDQ: MVSN) has a new buyer for its TV Guide Network and TV Guide Online properties—Lionsgate Entertainment. The TV and movie studio is slated to buy the properties from Macrovision for $255 million, the same price Macrovision had agreed to sell it to Allen Shapiro and One Equity Partners for (plus a $45 million earnout payable for the next three years) less than
a month ago. That deal was expected to close on April 1, 2009. Macrovision’s CFO James Budge told the WSJ that the company went with the
new deal because it seemed more certain to close: “At the end of the day, overall deal considerations were superior with the Lionsgate deal in all
circumstances.” This new deal is slated to close in February.

Gannett Lifts The Curtain On Local/National Hybrid Site ContentOne — Gannett (NYSE: GCI) is going live with its local/national web hybrid ContentOne this morning, says Jim Hopkins on his Gannett Blog. The program was introduced by execs speaking at the UBS Media Week conference last month. At the time, Craig Dubow, Gannett’s chairman, president and CEO, said ContentOne would serve as an exchange between its 85 local papers’ websites and USA Today’s site on the national level. He also described the idea behind ContentOne as “local content on a national level,” adding that it will use the regionally focused MomsLikeMe social net and Metromix web guide as the foundation. ContentOne would operate as a single site and serve as an easy access point for advertisers targeting readers both local and national level.

Better Late Than Never: Ad Agencies Try To Create Online Marketplaces — After witnessing ad networks and exchanges capture more revenue from major marketers these last few years, traditional media agencies are starting to play catch up. Interpublic Group’s buying and planning shop Mediabrands is working on a digital marketplace tool for clients that will include behavioral targeting. IPG’s major ad holding company rivals are not far behind either, WSJ says, noting that WPP Group, Publicis Groupe and Havas are also trying to come up with similar programs.

Mail.ru Investor Offloads Stake; IPO Looks Less Likely — While you were off for Christmas, the ownership of Russia’s top website (according to TNS) shifted a little. Tiger Global Management hedge fund sold its 27 percent stake in Mail.ru to its existing shareholders Digital Sky Technologies and Naspers. The Russian online investment vehicle and the South African media outfit now have 53.2 percent and 42.8 percent respectively, CEO Dmitri Grishin has 2.5 percent. The deal means DST, which is part-owned by Arsenal soccer club and LiveJournal investor Alexander Usmanov, now controls a majority of both Mail.ru and Runet’s top social site Odnoklassniki.ru.

Online To Weather 2009 — How will online advertising fare in 2009? Adweek says there are two schools of thought: optimists see tighter budgets shifting more dollars from less measurable media like TV and print to the Web; pessimists believe that weaker ad budgets will result in cuts across all media, although digital should fare a little better. With that in mind, search spending is expected to remain stable, while display and ads and microsites could come under pressure. Social ads are also likely to remain top of mind this year, as marketers look to move beyond experimenting with social media toward really engaging and leveraging users’ social interactions. Researcher eMarketer pegs online ad spending growth at 8.9% in 2009, from $23.6 billion to $25.7 billion. Forrester Research, another research firm, expects display spending to increase 8% this year.

IAC/InterActiveCorp Sees Strategic ‘Search’ And ‘Local’ Acquisitions As Use For USD 1.7bn in Cash — IAC/InterActiveCorp. (NASDQ:IACI), the New York-listed Internet company, is looking for strategic “search” and “local” area deals with USD 1.7bn in cash, according to a CitiGroup analyst report. The report cited comments made by IAC Chief Executive Barry Diller yesterday during Citi’s Global Entertainment, Media and Telecommunications Conference in Phoenix, Arizona. According to the report, IAC sees growth potential in the two areas, despite a cautious macroeconomic outlook for 2009. Source: mergermarket.

AOL’s Conroy Jumps To Univision As Interactive Media President — paidContent has learned that Kevin Conroy is leaving his post as AOL’s EVP, products, and heading to Spanish-language TV broadcaster Univision as president of interactive media. Before coming to AOL (NYSE: TWX) in 2001 to build AOL Music, Conroy was CMO for new technology at BMG Entertainment, where he worked for eight years. Conroy took on additional duties at AOL last April, when John Burbank departed as CMO less than a year after arriving at AOL.

Confirmed: Apple Dropping DRM Across iTunes, New Pricing Structure, 3G Downloads — Just before Tony Bennett sang goodbye to the Moscone Center faithful with “I Left My Heart In San Francisco,” Apple (NSDQ: AAPL) confirmed at its final Macworld Expo that it will drop DRM copy protection across 10 million iTunes Store songs from all majors, as per CNET’s earlier report. The move will apply to eight million tracks as of today and will extend to a further two million by the end of the quarter. Bringing to a close what have sometimes been fractious label negotiations, Apple is also introducing three new pricing tiers for iTunes tracks—$0.69 for older tracks, $0.99 for recent tracks and $1.29 for new hits. Marketing VP Phil Schiller, taking Steve Jobs’ traditional keynote spot, also said Apple is extending the ability to buy iTunes songs wirelessly via iPhone from merely WiFi to 3G mobile networks; also from today, tracks will be priced the same and have the same bitrate as desktop iTunes downloads.

@ CES: Microsoft CEO Ballmer Starts His Stage Setting With A Swipe At Yahoo’s Yang — We’re in the not-as-crowded-as-usual ballroom at the Venetian where the first Microsoft (NSDQ: MSFT) keynote completely sans Bill Gates (well, he got a mention and some applause) is underway with Steve Ballmer on the stage. It only took a couple of minutes for a light-hearted jab at Yahoo’s Jerry Yang, with a fake message asking: “Why do you keep ignoring my friend requests in Facebook?” No mention of the latest funky Yahoo deal rumor, of course, Ballmer’s real mission tonight is to outline his vision for Microsoft and to pitch Windows as the once and future software that will connect devices, platforms and people—and the PC as THE computer. “In many ways, connecting all of this together is the last mile. … The linchpin for bringing all of this together for you should be Windows.” Windows 7: “I am really pleased with the progress on Windows 7…. We’re working hard to get it right more quickly.” It should boot more quickly, take less battery life, incorporate touch. “We are releasing the beta of Windows 7; Tech Net and MSDN tonight.” Friday, the beta will be available globally for any user to try. Hasta la vista, baby.

Time Warner Warns Of Net Loss For ‘08; Expects $25 Billion Impairment Charge — Time Warner (NYSE: TWX) is warning investors that it will report a net loss ranging from $1.04 to $1.07 a share profit. Back in November, the company said it expected income to grow 5 percent over 2007’s $12.9 billion. The company is also expecting an impairment charge of $25 billion. About $15 billion of those write-downs are related to Time Warner Cable (NYSE: TWC), which the company is planning on spinning off, although it still holds an 85 percent interest, the WSJ noted. Time Warner made the announcement in advance of CFO’s John Martin presentation at the 2009 Citigroup Global Entertainment, Media & Telecommunications Conference today. Following the news, Time Warner shares were down 6.1 percent in
pre-market trading. Time Warner said the change in expectation was due to several factors and not just the worsening economic environment. For example, in December, it was hit with a $280 million expense related to a judgment against Turner Broadcasting System in a court case involving to the 2004 sale of its winter sports teams. Time Warner also pointed out that advertising at AOL and its publishing business suffered more than anticipated in Q4, reducing the expected income growth rate by about 1 percent.

Citi Media: Time Warner’s Martin On AOL: Don’t Expect Any Strategic Deals Soon — Asked about Time Warner’s plans for the AOL business and all its discordant parts—from access service to content and ad sales—CFO John Martin told the 2009 Citigroup Global Entertainment, Media & Telecommunications Conference in Phoenix that the company is still enthusiastic about exploring “strategic relationships.” However, to be realistic, this kind of economic environment isn’t conducive to quick action. The comments were somewhat in contrast to what CEO Jeff Bewkes said last month at the UBS Media Week event, when he told attendees “I’d like to get it resolved, meaning clear… so AOL can be seen and valued… We need to do it fairly soon and we’ve been working hard on it.” Still exploring alternatives: Martin: “We look at the company in three buckets, the cable, the content companies and AOL. With AOL, you have at least two big businesses in there. The access business has surpassed expectations in terms of cash flow. It’s declining, but it’s doing so at a predictable rate. The access business, though, is not strategic to Time Warner (NYSE: TWX). So we would be open to different options, but in this environment, we appreciate the fr*ee cash flow. As for audience size, AOL doesn’t have the industry scale that some of other businesses do. So we’ve been in talks with other companies about creating alternative structures and seeing what we could do. But this is a tough environment to do any strategic relationships. We just completed 22 months of considerable growth in usage on the vertical channels and there is still reason to be optimistic.”

@ CES: Discovery’s Kathy Kayse: ‘We’re Better-Equipped To Deliver On Digital This Year’ — Discovery Communications gobbled up online reference site HowStuffWorks for $250 million back in late 2007, and network brass told us that HSW would be the company’s “primary platform” for online growth. Well, has the company delivered on its promise? We asked Discovery’s EVP of digital ad sales Kathy Kayse at the Reinventing Advertising Conference at CES: Increased traffic: “It’s about a year into the integration process and we’ve seen significant growth in unique visitors and page views to both sites [Discovery.com and HSW],” Kayse said. “This year, we’ll focus even more aggressively on cross-channel promotion and integrating more Discovery (NSDQ: DISAB) content onto HSW.”

Microsoft Beats Out Google To Win Verizon Search Deal — It’s official. Microsoft (NSDQ: MSFT) has won the deal to become the default search provider on all phones on the Verizon Wireless (NYSE: VZ) network, reports Reuters. The two companies said they would go into greater detail about the deal later today at CES in Las Vegas. In November last year, the WSJ reported that in an effort to snatch the deal from Google (NSDQ: GOOG), Microsoft was offering guaranteed payments to the carrier of approximately $550 million to $650 million over five years—about twice what the search giant had proposed. The payments are to come from the ads that Microsoft would be able to serve up with search results.

Travelocity CEO Peluso To Leave — Travelocity CEO Michelle Peluso is packing her bags and will leave the online travel agency early next month. She’ll be replaced by Hugh Jones, who most recently served as chief operating officer for the Sabre Travel Network and Sabre Airline Solutions businesses. Sabre Holdings is Travelocity’s parent company. Peluso came to Travelocity in 2002, when the company acquired online travel site Site59.com, which she founded. Transitioning from CEO of Site59, Peluso became Travelocity’s COO a year later. At the end of 2003, she was became president and CEO. Over the past year, as other vertical categories started seeing slower growth, travel-related sites were still holding their own. Whether that will continue as the recession takes hold is unclear. Jones, who had served as a financial controller for American Airlines, was likely singled out to succeed Peluso because of his background. No word on Peluso’s next move.

Venture Capitalist Sounds Alarm For Facebook, Slide — In an interview with PaidContent writer Tameka Kee, Norwest Venture Partners principal Tim Chang expressed concern about two well-known Silicon Valley startups that he thinks will find it hard to grow their revenues or raise new money this year. “I’m concerned about Facebook,” Chang said. “Microsoft isn’t likely to renew its search-advertising contract–at least not at the same rate–and Facebook makes a significant amount of money from that deal. Imagine if you lost $300 million worth of revenue–how would you make it up? It’s not going to come from advertising, even if they have other ad platforms.” As Kee points out, that also raises questions about what happens to News Corp’s MySpace when Google renegotiates its search deal.

@ CES: Online Video Exec: ‘If We Don’t Do Things Differently, The Industry Is Screwed’ — Online video viewing continues to surge, but the ad dollars flowing into the space still aren’t scaling accordingly. Panelists at the Reinventing Advertising Conference @ CES trotted out well-worn reasons for that imbalance: lack of standard metrics; high volume of low-quality content; building the right amount of reach, etc. But Brian Terkelsen, EVP and managing director at MediaVest’s connectivetissue, (pictured) avoided the hand-wringing and laid it on the line: “Advertisers aren’t being aggressive enough in general—they helped grow TV to where it is now, so I think it’s partly up to them to drive video. If we don’t challenge the industry to do things differently, we’re screwed.”

Google Won’t Buy Ailing Newspapers, Could ‘Merge Without Merging’ — Their fortunes are poles apart and yet inseparable—one is hauling in buckets of advertising, the other is losing it at an alarming rate. Google (NSDQ: GOOG) sympathizes with the newspaper business’ predicament and continues to say it can help, but, sadly for NYT-Google acquisition speculators, CEO Eric Schmidt says he isn’t about to buy or bail out any news publishers.

AOL Reorganizes Products Division Following Conroy’s Departure — AOL (NYSE: TWX) is reshuffling parts of its products division following the departure of Kevin Conroy as AOL’s EVP of products. AOL Video, AOL Radio, Winamp, SHOUTcast, widgets and a few other areas are being moved from the Products & Platforms Group to the AOL Programming Group under EVP Bill Wilson. Programming will also take over AOL’s commerce and marketplace channels. Also, the chat applications under Userplane, which AOL bought in 2006, will move into the People Networks business unit under Joanna Shields. In a memo to staffers about the latest changes, Randy Falco, AOL’s chairman and CEO, says that there are few other details at the People Networks that will be completed in the next few weeks. Meanwhile, Conroy’s remaining duties within the Products and Technologies division, which include overseeing mail, video search tool Truveo, mobile and toolbar, will go to Ted Cahall, the group’s president.

Tracking The Shift In Media M&A Dollars in 2008 — Even though 2008 was a slower year for digital media M&A, about $0.88 of every dollar of industry revenue growth flew to four growth sectors: Database & Information; B2B Online Media; Consumer Online Media; and Interactive Marketing Services. Only $0.12 flowed to traditional media, according to an analysis by media M&A advisory firm The Jordan, Edmiston Group. This compares to $0.67 of every incremental ad dollar flowing to traditional media sectors (newspapers, magazines, events, etc.) from 2001 to 2007, while only $0.33 went to these four growth sectors. Some other highlights: Multiples: The all-important metric for an entrepreneur: The four growth categories saw average revenue and EBITDA multiples range from 3.4x to 4.5x and 13.5x to 21.3x, respectively, in 2008, as compared to 1.5x to 2.4x and 8.0x to 8.5x, respectively, for traditional media sectors. Deal numbers: Deal count and value declined 35 percent and 58 percent, respectively, in Q4 2008 versus Q4 2007. For the full-year, deal count was down 13 percent and deal value declined a significant 68 percent from 2007 highs.

Articles of the Day

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

NBC Universal not shopping iVillage; will not be too active in M&A for next 18-24 months, CEO says — NBC Universal, based in New York City, is not shopping iVillage, CEO Jeff Zucker told this news service. He denied a report in Women’s Wear Daily, which cited a banker as saying that iVillage was for sale. iVillage is an online site for women, featuring horoscopes, health and pregnancy information, message boards and blogs, celebrity gossip, beauty and more. General Electric (NYSE:GE) holds an 80% stake in NBC and Vivendi (EPA:VIV) has a 20% interest. GE, with a market capitalization of roughly USD 200bn, is trading close to its 52-week low of USD 12.58 per share, down from a 52-week high of USD 38.52 per share. Vivendi will continue to be a long-time partner and there has been no discussion of an exit, Zucker said at the UBS 36th Annual Global Media and Communications Conference. Regarding acquisitions, the media conglomerate will not be too active on the M&A front in the next 18 to 24 months, he said. NBC is going to be opportunistic in the short and long term and “playing it safe” in the marketplace, Zucker said. When asked if the company could divest its theme parks, which represent 5% of revenues, Zucker told this new service, “not in this market.” Zucker did play up the company’s cable operations, which comprise 60% of its revenues. During the conference, he said the cable networks are expected to grow at a rate in the double digits even in this depressed market. Source: mergermarket.

AOL Makes Bebo Changes, Announces More To Come — AOL this morning unveiled a makeover for Bebo, the social network purchased by the Time Warner company for $850 million earlier this year. The most prominent of the new features is the “social inbox,” a “one-stop destination” which aggregates email accounts, site recommendations and social media feeds from across the Web. Beyond the new look and features, Kara Swisher says “a more radical series of announcements” is on the way from the U.K.-based company, which users can expect to be rolled out in the New Year. The latter series of changes have impressed Yahoo in particular, Swisher says, which continues to negotiate an AOL buyout with parent Time Warner. As part of the changes, AOL will turn its various social media tools — like chat rooms, news feeds and instant messaging — into embeddable features on any site. The service will be called “Site Social” and will be monetized through AOL’s Platform A advertising system. As one person familiar with the upcoming changes says, “we … have all these tools and want to reach out to publishers who need to socialize their sites and find it hard to do so.”

Yahoo Courts Former Vodafone Head For CEO Post — A new frontrunner has emerged in the race to succeed departing Yahoo CEO Jerry Yang: Arun Sarin, the former head of UK-based Vodafone, the world’s largest mobile operator. According to The Financial Times, Yahoo has approached Sarin with “strong interest,” although the former Vodafone chief has made no decision on whether to join the ailing Web giant, saying he was considering other offers as well. The report claims that at least one possibility would involve the position of chairman rather than CEO. Sarin stepped down from his post at Vodafone in July after five years with the telecom giant. He is credited with leading the company’s expansion into emerging markets, although he suffered a shareholder revolt in 2006 due to concerns about slowing growth in Vodafone’s core European operations. He was later able to repair relations with investors. Sarin is also the former CEO of Infospace, a once-mighty conglomerate of search engines.

Chrome To Exit Beta, Move Closer To ‘Web OS’ — Google will soon take Chrome, the Web browser the search giant launched last summer, out of beta, vice president Marissa Mayer announced recently at Le Web 08. The move is significant, TechCrunch says, because Google already has a number of eager customers who can’t offer the open source browser until it’s out of beta. With Chrome, Google is essentially trying to redefine the browser around open standards. On Monday, the search giant rolled out a new open source software platform called Native Client, which GigaOm says moves Google “even closer to fulfilling the early promise of a ‘web operating system.”‘ This was one of Microsoft’s original fears when Marc Andreessen brought Netscape to prominence over a decade ago: that the browser maker would be able to offer services and features that compete head on with Microsoft’s desktop software products. Famously, Bill Gates and co. countered with the scripting language ActiveX and the browser Internet Explorer, which ultimately clobbered Java and Netscape.

Goodmail Systems Allows Video In Email — A Silicon Valley company is launching a product early next year that gives movie studios and television networks a compelling new marketing tool. Goodmail Systems has developed a way to insert video directly into emails. When a recipient opens a message, they can almost instantly view a move trailer or promo for an upcoming TV episode.

Google Adds Indie VC To M&A Division — Google (NSDQ: GOOG) has added indie VC Karim Faris to the ranks of its M&A division, peHUB reports. Faris will focus on funding and acquiring smaller companies in the media and Internet space, but his background also meshes quite nicely with Google’s recent forays into energy technology. He sat on the board of Lilliputian Systems, a startup that develops portable fuel cells for electronics, during his four years as a principal at Atlas Venture. Faris also held positions at Level 3 Communications, Intel (NSDQ: INTC), Generation Partners and Morgan Stanley.

Articles of the Week

Posted in Digital Media, News with tags , , , , , , , , , , , , , , , , , , , , , , , , , on December 5, 2008 by Dave Liu

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.

Facebook Connect Set To Expand; Includes Discovery, Digg, Hulu and Others — Facebook, in an increasing attempt to prove its utility beyond its own site (and hence build on its advertising potential in the long run), is expanding its Facebook Connect service on some major media and services sites, including Discovery.com, SFChronicle, Digg, Citysearch, CBS.com, Hulu and others. The Connect service allows a federated identity system of sorts, competing with other services/efforts such as OpenSocial (backed by Google and MySpace) and OpenID, and also allows Facebook services to go outside its own site onto other services. It allows Facebook users to sign in on these third-party sites, connect with their friends who also use the sites, and then share their info and action on the social networking service.

Skol! Digitas Continues Expansionary Roll, Enters Sweden — On the heels of its expansion into South America last week, Publicis’ Digitas has turned its sights on Scandinavia, launching Digitas Sweden. The new Nordic outpost has been formed by combining two pre-existing Publicis units – direct and digital marketing shop 1.1.3, and pure play creative shop Joy – to form a new Stockholm-based full-service digital marketing agency. Digitas Sweden will be led by 1.1.3 founder Lisa Amatiello, who will report to Alan Rutherford, CEO of Digitas Global. The agency will continue to serve 1.1.3 and Joy clients while also offering expanded reach for Digitas’ global clients.

AOL Starts Site For Parents Who Ain’t Got Game (Knowledge) — Parents hit with pre-holiday pleas for “Grand Theft Auto IV” and other hot video games have a new source for sorting out which are appropriate with the launch of PlaySavvy.com from AOL. A complement to the Web portal’s game-focused properties, the new site offers parents a guide to games, from ratings and reviews to connecting with other parents about making informed buying decisions.

During October, Consumers Conducted 12.6 Billion Searches In The U.S., Up 7% Sequentially, According To comScore — Searches on Google rose 7% to 8 billion. Yahoo followed, up 9% to 2.6 billion, and Microsoft was up 8% to 1.1 billion. Google still owns the market–up 0.2% to 63.1%–followed by Yahoo at 20.5%; Microsoft at 8.5%; Ask, 4.2%; and AOL, 3.7%, according to comScore. AOL not only saw its U.S. search count decline, but also its market share, which fell 0.4%. Fox Interactive Media’s MySpace also declined 8% in October, from 614 searches to 563.

Baidu To Launch New Search Product — Baidu, Google’s Chinese search engine rival, will overhaul services after being accused of allowing unlicensed suppliers to fake documents and buy their way up the search results, reports Ars Technica. Chinese citizens had complained about paying exorbitant amounts for products and services found on Baidu’s search engine that later proved to be ineffective. China’s top-ranked search engine expects to unveil a new advertising platform that will offer more information about companies listed in search queries. The forthcoming new platform, Phoenix Nest, aims to offer better search result rankings and resolve some recent problems pertaining to competitive ranking.

MySpace CEO: Cautiously Optimistic About 2009; Chance To Pick Up Startups On Cheap — MySpace CEO Chris DeWolfe was speaking at the Reuters Media Summit (not open to other reporters, only internal Reuters reporters), and said he is cautiously optimistic about growing its ad revenues in 2009, something that of course he has to say officially. “We’re up 18 percent year-over-year as of last quarter,” he said and hopes to grow it next year, despite the economic crisis. He continues: “We haven’t really seen any impact, other than we think we could have grown even more than we have.” Isn’t that the impact? To think that they won’t see a major impact this Q4 and next year is to be delusional, but I think they know that part and have to tow a corporate line publicly.

Newspaper Online Revenues Fall In Third Quarter — The Newspaper Association of America on Friday reported yet more depressing figures for the industry-in-decline that were compounded by a 3% year-over-year drop in overall online sales. This is particularly bad because online revenue growth was supposed to offset rapid declines in print ad sales; now, the industry is reporting losses from both revenue streams. In total, online ad sales fell 3% to $749.8 million, or about 12% of total newspaper spending. Print and online declines combined to produce an 18% decrease in total third quarter spending, from $ 10.9 billion in 2007 to $.8.94 billion. What we have here is an industry in a nosedive. Blogs, social networks, 24-hour news sites like CNN.com and real-time communication services like Twitter are stealing eyeballs from newspaper sites as the weak economy forces financial services, automotive and retail advertisers to greatly cut back on their spending. Meanwhile, newspaper publishers across the board are reporting steep declines and are responding by cutting costs, including thousands of jobs. Some publishers have also defaulted on debt payments, shrunk their pages, or even eliminated print editions altogether, in order to cope with the downturn.

CNBC’s Own Bad News May Be Coming, Soon, Despite ‘Massive’ Marketing Campaign — CNBC, high on its viewership numbers as the markets continue to nosedive, is in for its own downturn possibly by Q1 of next, a long cover story in the latest issue of B&C says. “Despite the yuks and the huge numbers, the network is now in the process of slashing as much as 10% from its budget. People at the network, says one staffer, are ‘scared s—less.’…As CNBC enjoys a new level of visibility and is about to launch a massive new marketing campaign to capitalize on the momentum, it must do so while navigating through the same flailing economy that has sent the network’s proverbial stock soaring.” This far into Q4, the channel viewership is up 66 percent compared to the year-ago quarter.

After Layoffs, Newspapers Embrace Content Sharing; McClatchy And CS Monitor Exchange Foreign Reports — As the newspaper industry’s prospects darken, and rounds of buyouts and layoffs have left little room for more cuts, The McClatchy Company (NYSE: MNI) is joining with the non-profit Christian Science Monitor on sharing foreign news coverage on a trial basis. The trial will last for three months and then the two will evaluate whether the combo worked. The exchange will involve two CS Monitor correspondents, one in New Delhi and the other in Mexico City, and two McClatchy foreign correspondents in Nairobi and in Caracas. The arrangement comes two months after McClatchy said it would cut an additional 1,150 jobs—10 percent of its workforce—while CS Monitor is preparing to shift from a daily to a weekly print pub and going online-only for breaking news. Meanwhile, the Associated Press is planning to slash 10 percent of its staff next year. That could make arrangements like McClatchy’s and CS Monitor’s more common.

Huffington Post Closes $25 Million Third Round; Plans Include ‘Focused Acquisitions’— After weeks of denials and “no comments,” political blog The Huffington Post has closed a $25 million third round funding from Oak investmentPartners, the company said in an e-mailed press release this morning. We reported earlier about a $20 million and above round with post-money valuation in the $110 million range. This probably puts it right at $115 million. The company said it planned to use the proceeds to support general growth efforts and for “focused acquisitions.” HuffPo also wants to build up its in-house ad sales team, as even the internet is succumbing to the wider economic turmoil. The three-year-old HuffPo had previously raised roughly $12 million from Softbank Capital, Greycroft Partners, co-founder Ken Lerer and Bob Pittman.

Ex-AOL CEO Miller Reportedly Raising Funds To Bid For Yahoo; But Could Be For His Own Fund — Jon Miller, former CEO of AOL and now one of the founders of VC firm Velocity along with Ross Levinsohn, is in the process of raising funds to try to buy Yahoo, reports the WSJ, citing sources. The story says he has been trying to do it for months. Our sources say that the WSJ might be reading too much into this: he and his partners at Velocity have been presenting to investors all across the globe, including sovereign investors in Dubai, to raise a new fund for his VC firm. So I would not be surprised if the two things got confused along the way, and someone expressed interest in putting money into a Miller-backed consortium. The story says that Miller believes he can do a deal that would be worth around $20 to $22 a share to Yahoo (NSDQ: YHOO) shareholders, which means raising about $28 billion to $30 billion to purchase the entire company. I have said before that the Indian tech-media giant Reliance ADA should look at a Yahoo deal seriously, and it is likely Miller has had conversations with them, considering Velocity’s India connections (it is an investor in NDTV there, among other companies). Full story —

Google Ratchets Back On Spending, New Projects; Buys Futures In Six Sigma — Nothing says serious about cost cutting and process quite like hiring a CFO with a black belt in Six Sigma management. With or without the tanking economy, Google (NSDQ: GOOG) has been heading towards maturing growth—you can’t keep up triple-digit growth or even double-digits indefinitely—and the addition of McKinsey vet and Bell Canada planning exec Patrick Pichette as CFO in August was one sign that cost containment was on the way. The slowing of online ad growth coupled with the unexpected speed of the economic downturn has only accelerated Google’s need to show maturity of a different sort. That would explain tonight’s long WSJ article about how Google is taking the responsible approach by cutting back on its ubiquitous product approach—along with some of the food perks and redundant offices. CEO Eric Schmidt told the Journal Google has to “behave as though we don’t know” what’s coming. That means cutting what Schmidt calls the “dark matter”—“projects that ‘haven’t really caught on’ and ‘aren’t really that exciting.’” Engineers may still get their 20 percent time but staffing and resources for their projects, particularly those without signs of real revenue potential, will be much harder to come by. Google needs hits that make money, not just headlines.

Yahoo Ties Up With CBS To Save Streaming Radio Service — Yahoo has turned to CBS to help keep its LAUNCHcast streaming radio service alive. As part of the new partnership, CBS Radio will provide the player and handle the ad sales for LAUNCHcast, and various CBS (NYSE: CBS) stations will be available on Yahoo (NSDQ: YHOO) Music. Yahoo will also incorporate more radio content throughout its news and sports portals. It’s the latest move in Yahoo’s strategy to “completely open” its music operations to other services: the company recently launched an enhanced music search service with Rhapsody (the same company it offloaded its premium music subscription business to in February).

Dow Jones Taps Langhoff To Lead European Charge, Focus On Online — Dow Jones (NYSE: NWS) has picked a local publishing exec with online tenure to lead The Wall Street Journal’s assault on Europe next year as it squares up to The Financial Times on its own turf. Andrew Langhoff, CEO of DJ’s Ottaway local publisher, will be publisher of WSJ Europe and MD of DJ’s consumer media group across the whole EMEA region, starting January 5. For extra brownie points, he will also run the South America consumer business, including The Wall Street Journal Americas. Over the last year, DJ has upped its European news coverage, debuted the US WSJ edition in some London locations and added a magazine to the European edition. But the ‘09 push is online. Guardian editorial development director Neil McIntosh is already due to start as WSJ.com’s Europe editor in the new year and WSJ’s LA bureau chief Bruce Orwall is moving to run the London bureau.

Conde Nast’s Flip Goes Flop: Teen Social Network To Be Shuttered — When news came out that Conde Nast was launching its teen social media site Flip.com, back in 2006, Staci had a very pertinent question: “Can Conde Nast, which has been so good at matching demographics with ideas for print, create an online place appealing enough to catch and keep teen girls attention among so much competition?” Now, with the announcement that it is closing Flip.com, the answer seems to be no. The site will close down on Dec. 16, according to a note sent out to users, reported by FishbowlNY. “If you have any flipbooks that you would like to save before this date, we suggest you print them. It’s easy; go to the flipbook and click on the Print button just below it.” How convenient.

FT To Do Some Buyouts; Salary Freeze; The Memo — The Pink One will pass out some pink slips, though more in form of buyouts than actual layoffs, reports Reuters, citing an internal memo sent out today by FT CEO John Ridding. The company has already done some redundancies in its library/research division in October. For those interested in a buyout, Dec. 19 is the cutoff. It also is freezing salaries for employees who earn more than $50K a year or the equivalent, which means most of the mid- to senior journalists at the company. That freeze decision could be reviewed if conditions improve later. Also, FT is offering some employees the opportunity to work three- or four-day weeks, which of course means at a lower salary.

IAC Dissolving Programming Group; Lehman Leaving, Jackson Taking New Role; Which Sites Are in Play? — PaidContent.org has learned that IAC (NSDQ: IACI) is dissolving its programming group as part of its post-spin reorganization. As a result, Nick Lehman, COO of programming, has to decided to leave. Michael Jackson, the president of programming who also worked with Barry Diller at USA Networks and Universal Television Group, will stay on in a new role. Lehman confirmed his move but declined comment on the reasons and referred to IAC public relations for details. (No response yet to phone and e-mail queries.) As we pointed out in some detail recently, Diller said in the Q308 earnings call that IAC would shed some of its emerging businesses and was rethinking investments; this appears to be part of that strategic shift.

Icahn: No MSFT-YHOO Search Deal—For Now; Opposes Sale To Miller — Activist investor and Yahoo (NSDQ: YHOO) director Carl Icahn is throwing more cold water on speculation that the company is about to sell its search business to Microsoft (NSDQ: MSFT). While he would like to see Microsoft take the search off Yahoo’s hands, MarketWatch quotes Icahn as saying there’s nothing imminent now and he knows of no discussions between the two companies. Shares of Yahoo were down over 1 percent to $11.35 in after hours trading. Last week, Icahn added nearly 7 million shares to his holdings in Yahoo—for a to 75.6 million shares— for the relatively low price of $67 million. He muscled his way onto Yahoo’s board back in July, after acquiring a 5 percent stake in the company.

Digg CEO: Read My Lips: Not For Sale — Digg says it is not for sale anymore. Really? How many times have we heard that one before? With a $29 million round recently, that was all but decided then. But wait until the next time someone floats a trial balloon through Techcrunch. For now, with no one coming forward to buy it at the valuations the company hoped for (that’s the reality of it), the four-year-old startup will dial back some of its expansion plans, instead prioritizing projects that generate revenue and profit, says the BW story. Among some of the new “focused” projects: ads in its RSS feeds; a revamped version of its own search engine for more targeted search ads; and it is within a month of closing a deal with a mobile ad provider to sell more mobile ads. On the more important revenue side, Digg tripled revenues in September over the last year. In 2009, CEO Jay Adelson expects “another tripling if not more.” Am I mistaken or are ad-network ads all that Digg has at this point? To scale from there will be tough in this market.

Cox Enterprises Merging Newspapers, TV, Radio Into Cox Media Group; 100-Plus Digital Services — Waving the operational efficiency flag, Cox Enterprises is merging its three media units—Cox Newspapers, Cox Television and Cox Radio– into the Cox Media Group headquartered in Atlanta. The units will operate separately but will share a corporate structure. When the move takes effect in January, the new group will include the flagship Atlanta Journal-Constitution and 16 other daily newspapers; 26 non-daily newspapers; 15 local TV stations; 86 radio stations (Cox Radio will continue trading on the NYSE); and 100-plus digital services. It also includes Valpack, the coupon company Cox put up for sale in August. Cox will continue with plans to sell Valpack and its newspapers in Texas, North Carolina and Colorado. Cox vet Schwartz, who will be president of Cox Media Group, listed digital as one of the advantages of merging the units: “We are bringing together our wide array of digital resources that ultimately will lead to enhanced online and mobile experiences for all our audiences.”

Adobe To Cut 600 Jobs; More Focus On Web Video — Adobe is cutting about 600 jobs, or 8 percent of its workforce, citing the economy slowdown as a reason. Sales for its Creative Suite 4 package, which includes the popular Photoshop, has been much slower than expected, the company said. And these cuts, which are across the board, will help it better focus on its growing online video (through Flash, the default online video standard now) and online software business, CEO Shantanu Narayen said, according to WSJ.
The company said it will record $44 million to $50 million in charges related to the headcount reduction.

Updated: Industry Moves: Microsoft Picks Qi Lu To Head Digital — Update: Microsoft has confirmed Lu’s appointment in an official release. Lu will start January 5, and report directly to CEO Steve Ballmer. He will oversee a trio of execs—but not all of the names initially thought: Nadella, Mehdi and Scott Howe, who has been promoted to SVP of MSFT’s Advertiser & Publisher Solutions group. Former aQuantive CEO Brian McAndrews previously held that title, but he’ll be transitioning out—and leaving MSFT—over the next several months. Microsoft’s quest to find a digital head will end in a rather technical choice: former Yahoo EVP of engineering for Search and Ad Tech Qi Lu, according to Kara. The final details of his contract are being ironed out, and could be announced by next week, the story says. This position has been vacant since Kevin Johnson left and joined Juniper.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , , on November 21, 2008 by Dave Liu

Microsoft Considers Debt Offering — Microsoft is considering selling bonds for the first time in its history, Bloomberg reports, a curious move considering the software giant’s $20 billion cash hoard. An SEC filing noted that the company is now free to issue debt at any time. What does Microsoft need to raise capital for? Silicon Alley Insider reminds us that the software giant sought to at least partially pay for a Yahoo acquisition by issuing debt. Of course, that deal fell apart, leaving no obvious reason as to why the company would continue with the registration process. Is Microsoft preparing another bid for Yahoo? Not if you’ve been listening to Microsoft CEO Steve Ballmer recently. Maybe Microsoft wants to buy Salesforce.com or Facebook, or maybe both? SAI thinks the company is most likely preparing a massive stock repurchasing program. At $17.53 per share, or 9 times trailing earnings, Microsoft thinks its stock is undervalued. Brad Lutz, vice president of investment research at Declaration Management & Research LLC, says a bond offering from Microsoft would be in high demand among investors, who are anxious to find sound investments outside the realm of finance. “Non-financials have generally received a warm reception by the investment-grade capital markets,” Lutz said. “There’s certainly demand for higher-quality issuers.”

Vivendi CEO: No Decision Yet On Whether To Sell Stake In NBCU; GE’s Immelt: ‘Would Buy In Heartbeat’ — Vivendi SA has yet to decide whether it will keep its 20 percent stake in NBC Universal or exercise its annual option to sell, CEO Jean-Bernard Levy told analysts at a Morgan Stanley conference in Barcelona today. According to Bloomberg, Levy said: “Right now, considering the general expectations for the value of the assets, the dividend flow we get from NBCU is very good. … We will have to make a decision to optimize the proceeds that we get from NBC Universal (NYSE: GE). We will probably find a better allocation of assets at the right time, in the right environment.’’ This may not be the time given NBCU’s decent performance in a rough environment but he left the window wide open: “We will have to make the decision in the next two to three weeks, so you will hear about it shortly.’’ The deadline is in early December. Vivendi has an annual option through 2016 to call for an IPO to sell the stake; GE has the right to pre-empt that by buying it. Immelt told Bloomberg earlier this week that GE would do just that: “They have been a terrific partner. I’m not anxious to do it because they have been a good partner, but I would do it in a heartbeat.’’

Yahoo Remains In Talks With Time Warner About Buying AOL — Yahoo, the Sunnyvale, California Internet company, remains in talks about buying Time Warner’s (NYSE:TWX) AOL unit, reported the Boston Globe. The report, citing a newswire, reported people familiar with the matter said executives from both companies have met in the past few weeks and are negotiating over a deal. Time Warner would give Yahoo AOL’s advertising business in exchange for a stake in the combined company, according to the report. The report noted that differences between both sides still exist. Yahoo has a market capitalization of USD 12.4bn. Source: mergermarket.

Q3 Online Ad Revs Rise 11 Percent—Less Than Half Q307 Growth Rate: IAB — Considering the economic meltdown of the past few weeks, the fact that online ad revenues grew 11 percent in Q3 would seem to be reason to celebrate. But comparing the latest figures from the Interactive Advertising Bureau to its Q307 report shows how much growth has slowed. While online ad spending approached $5.9 billion this past quarter, in Q307, when the IAB said revenues hit $5.2 billion, it had gained 25.3 percent over the prior year. Although online ad dollars had already been slowing last year consider the difference from Q306, when web-based advertising was up 33 percent. Flat revenues: Compared to the other two quarters this year, online ad spending is dead flat, said the report, which the IAB partnered with PriceWaterhouseCoopers on. For example, in Q2, online ad dollars climbed 12.8 percent. Looking at the first nine months of the year at least, revenues totaled $17.3 billion, up from $15.2 billion in the same period a year ago, for a 13.8 percent gain. Again, for the sake of perspective, in Q307, the IAB reported that the first nine months of the year grew 26 percent year-over-year.

Google Unveils Search Personalization Tools — Google on Thursday unveiled new personalization tools that allow users to re-rank and edit search results. The SearchWiki tools let anyone logged into a Google account move results up or down, delete them entirely, or add personal notes through markers that appear next to each entry. The changes do not affect anyone else’s search experience, although users can click a separate link to see a view that reflects changes made by other SearchWiki users. Marissa Mayer, Google’s VP of search products and user experience, tells The Wall Street Journal that the tools are particularly useful for searches that users do repeatedly. Someone who frequently searches for medical reference materials, for example, would be able to eliminate results they haven’t found useful in the past.

As Economy Slows, Facebook Hits The Accelerator — As the economic outlook worsens, most Silicon Valley tech startups are cutting costs, but not Facebook, says BusinessWeek. The social networking giant is pressing ahead with aggressive plans for growth. As Facebook investor and board member Peter Thiel says, “This is not the time for tech companies to be cutting back; this is the time to be hitting the accelerator.” What does that mean, exactly? According to the report, Facebook will continue to go to great lengths to keep user growth high in tough times. This means hiring aggressively, hitting the M&A trail (possibly), and continuing to roll out new ad platforms. Despite the site’s growing development costs, engineers are working on versions in languages like Xhosa, Tagalong and French Canadian to corner niche audiences. “We’re in this game not just for five or 10 years,” says Sheryl Sandberg, Facebook’s chief operating officer. “We’re in it for 20 to 30 years.”

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , on November 18, 2008 by Dave Liu

Jerry Yang To Step Down As Soon As Yahoo Board Finds Replacement — Yahoo CEO Jerry Yang will step down from his post as soon as the board finds a suitable replacement, and BoomTown broke the story. The official release from Yahoo is out. Kara also has his full memo to the Yahoo team, in which Yang says he’ll participate in the search for his successor. Once the new CEO is in place, Yang will go back to his role as Chief Yahoo—and he will retain his seat on the board.The board has retained Heidrick & Struggles, an executive search firm, to assist in the process. Yang will participate in the search for his successor.

Google Brings Voice Recognition To Mobile Search — Google was scheduled to launch a voice recognition tool for Apple’s iPhone last Friday as part of a free mobile application allowing users to perform a Google search by speaking a query into the phone. The voice-recognition application, made available for free through Apple’s iTunes Store, is an update to the search tool that is already available for the iPhone. Google uses the technology for Goog 411, too. The voice query passes through algorithms converting to text.

Hulu To Match YouTube In U.S. Revenue Next Year — eHulu, the joint online video venture from News Corp. and NBC, looks poised to match YouTube in U.S. advertising revenues next year, according to a new estimate. This is shocking, considering that YouTube has more than 10 times as many monthly visitors as Hulu (83 million vs. 6 million). Nevertheless, Screen Digest is forecasting that both Hulu and YouTube will earn $180 million in revenue in 2009. The research group estimates that YouTube will make $100 million in U.S. revenue this year, compared to Hulu’s $70 million. Silicon Alley Insider points out that Screen Digest is most likely talking about gross revenue. Hulu actually passes along about 70-80% of revenue through to its content providers, so Hulu’s net revenue is probably closer to $14-$21 million. YouTube also shares some revenue with content providers, but a far smaller percentage.

Why Yahoo Still Matters — Yahoo shares may have fallen from $33 to $10 in the past twelve months, but the Web giant is still far more valuable in the eyes of Madison Avenue than it is in the eyes of Wall Street. Indeed, size still matters to Madison Avenue. “Advertisers are looking at where’s the traffic, volume and value is today. And today is very positive for advertisers at Yahoo,” said Chris Moloney, chief marketing officer at Scottrade. “Google is considered to be the 800-pound gorilla of the internet but it doesn’t have content the way Yahoo does. It receives a massive volume of traffic.” In fact, so big is Yahoo’s audience base that Chrysler’s chief marketing officer, Deborah Wahl Meyer, says she considers Yahoo “almost as a fifth (television) network.”

Yahoo React: Analysts Expect Board To Get Aggressive On MSFT, AOL Deal — Yahoo’s stock had another down day—its last trade dropped $0.19 to close at $10.63—but it could have a nice lift as word of Jerry Yang’s decision to step down as CEO takes hold. In the meantime, analysts following Yahoo shared their reaction in quick notes sent to investors and in press interviews: EO will come from outside: UBS analyst Ben Schachter looks at the list of possible successors and concludes that the company’s board will go outside. In particular, Yahoo president Sue Decker is unlikely to be selected for the top job because she doesn’t represent significant enough change by investors. Yang’s departure as CEO—he’ll revert to his role as “Chief Yahoo” and will retain his board seat—could also spur other board members to pursue “a more meaningful restructuring of YHOO.” Finally, expect the volume of the never-ending talk of a Microsoft deal to rise. Schachter adds: “We still believe MSFT will eventually own YHOO.” Even if a takeover doesn’t happen, the potential for news around restructurings, tie-ups with some combo of News Corp., Time Warner/AOL, Google and others “could be catalysts for shares.”

ESPN To Get Football BCS Starting In 2011; Deal Includes Digital, International — The details are still sketchy and the official announcement has yet to be made by ESPN (NYSE: DIS) and the Bowl Championship Series Group but Fox Sports said today that it will not be hosting the premiere college football games after its current contract expires in 2010. That leaves ESPN, which I’m told is willing to pay $125 million annually for four years to carry the games. This amount has not been confirmed with ESPN but represents the 50 percent increase the BCS governors are said to be seeking. Fox, which is paying $82.5 million a year currently, offered about $100 million a year during its exclusive renewal period. The BCS opened negotiations with ESPN, then, as per the current deal, returned to Fox with the material differences, which decided none of them– including the addition of international rights—were worth the considerable uptick in price.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , on November 17, 2008 by Dave Liu

Despite Industry Gloom, AOL Takes Its Ad Sales Pitch On The Road — Despite all its bad news lately, AOL (NYSE: TWX) can point to at least some revenue gains tied to its traffic jump. The company’s Q3 was mixed at best: profit dropped 7 percent to $400 million and display ad revenue fell 15 percent to $181 million; meanwhile, it had 12 percent gains in paid search. Later tonight, AOL, led by CEO Randy Falco and Lynda Clarizio, head of Platform-A, will gather 400 ad and media execs to kick off a “traveling upfront presentation” it’s calling the AOL Roadshow at the American Museum of Natural History. Bill Wilson, EVP of AOL Programming, demoed his presentation for me Friday; he’ll be trumpeting the company’s traffic numbers (one favorite of his: 21 months of consecutive year-over-year unique visitor growth for a current total of 56 million uniques). More important, he will also try to convince the industry that AOL is actually delivering on those traffic gains. Although total ad revenues were down 6 percent to $500 million in Q3, Wilson will highlight the news that the vertical content network of sites were up “solid double digits in Q3”—but no specific figures.

WSJ.com’s Third Super-Premium Tier Coming? — Murdoch’s love for newspapers is undying, nevermind the near-death throes of the medium itself, and he reads it out (literally, on the radio) as part of a series of Australian radio lectures titled, “The future of newspapers: moving beyond dead trees.” Compare and contrast this to his famous speech on April 13, 2005, to the American Society of Newspaper Editors, which shook the newspaper industry then for its forward thinking about the digital future of newspapers. And this was before he bought MySpace (three months later) and later in 2007 bought Dow Jones.

GE’s Immelt: ‘Some Opportunities In Media Consolidation’ — Jeffrey Immelt’s latest tack to convince people that NBC Universal (NYSE: GE) parent General Electric is staying in the media business—talk about buying more media assets. The GE chairman and CEO told the FT “There are going to be some opportunities in media consolidation, in infrastructure, oil and gas, aviation. And my hope is that we can play in some of those as time goes on.” Those who may need convincing include Vivendi (EPA: VIV), which owns 20 percent of NBCU. As FT points, it’s time for the annual guessing game over whether Vivendi will exercise its put option for GE to buy that stake and whether GE would sell NBCU to avoid further investment. GE acquired the majority of NBCU in a $14 billion deal in 2004. But much has changed at GE since the last time this question came up, including the company’s structure and NBCU’s designation as one of five operating units. Vivendi’s put option runs through 2016 and is based on market value; starting 2011, GE has an annual window with call rights through 2017 with a floor price of $8.3 billion that will increase based on the Consumer Price Index.

AOL Cutting Off Uncut Video Service; More Squeeze On Third-Party Vendors? — AOL (NYSE: TWX), as part of its efforts to trim the non-core and no-revenue-generating parts of its portfolio, is closing down the AOL Uncut online user-gen video service, after 2.5 years of trying to compete in the space. The service, started in May 2006, was powered by Videoegg, which has since moved on to become an online video-advertising network. According to a memo/FAQ to be sent out next week, obtained by Techcrunch, the service will close on Dec 18, and users will have to transfer video off the service before then. It is recommending that users transfer videos to Motionbox, the white-label video-upload service.

Discovery To Invest Up To $100 Million in Oprah Network; Has Spent $7 Million Till Now — The high-profile launch of “OWN: The Oprah Winfrey Network” in late 2009 has attracted its own share of speculation since the announcement in January earlier this year, including executives, programming choices and finances. The company has already names Robin Schwartz as president, Maria Grasso as SVP of programming, Robert Tercek as president of digital media, among others. But no other details on the finances have been revealed till now.

UMG Digital Sales Up 33 Percent, New Streams Offset Dropoff In CD Sales — Universal Music Group predicted a turnaround, and maybe it’s coming to pass… UMG posted EUR 3.14 billion ($3.97 billion) revenue in the first nine months of 2008 –that’s up 3.5 percent if you rule out currency fluctuations. True, in actual currency, it’s down 3.8 percent, but even that’s better than the kind of chronic results some of the majors have become used to. It’s not that CDs are enjoying a revival… the hike came thanks to growth in music publishing and merchandising after UMG bought BMG Music Publishing and Sanctuary, from increased licensing income via the growing number of music-using services, and from a 33 percent increase in digital sales. All of which ”more than offset lower physical sales, according to parent group Vivendi’s earnings. Earnings before the deduction of interest, tax and amortization expenses were up 21.8 percent to EUR 408 million ($516 million) but were actually dragged down by various restructuring costs. Duffy was a big seller for the label.