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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 October 27, 2008 by Dave Liu

Cox Communications Betting $500 Million On Ambitious Cellphone Service — Cox Communications plans to launch its own cellphone service in the second half of 2009, an ambitious attempt to compete independently with the major carriers. Cox president Pat Esser told USA Today the company “spent $500 million buying wireless capacity in our markets. Now, we’re going to turn it on.” Plans for the service, which will mesh cellphones, landline, TV and Internet, may sound familiar; after all, Cox was one of the MSOs that formed a JV with Sprint (NYSE: S) to accomplish much of the same. But the JV fell apart earlier this year, following investments of $100 million from the operators and $100 million from Sprint—and a whole lot of hype.

Gannett Q3 Profits Drop 32 Percent; Revs Slide 8.9 Percent — Gannett’s profits and revenues were down again in Q3, with total operating revenues slipping 8.9 percent to $1.64 billion from last year’s $1.80 billion. Net income meanwhile fell 32 percent to $158 million ($0.69 per share) from Q307’s $234 million ($1.01 per share), reflecting the woes its newspaper peers have been experiencing lately as revenue from ads and circulation plummet and the company acts to rein in costs. Gannett (NYSE: GCI) recently said it would eliminate 1,000 staff positions, including 600 layoffs, for a 3 percent reduction in its workforce. Analysts estimates gathered by Thomson Reuters (NASDAQ: TRIN) expected the USA Today parent to post a gain of 75 cents per share and revenue of $1.61 billion, AP reported in its earnings preview. While noting the trouble on the print side, Gannett’s earning statement attempted to highlight some of the more positive news on the digital front. Like most newspaper companies who are still experiencing growth from their respective internet properties—albeit at a slower rate, these days—digital revenue ballooned to $77.5 million in Q3 from $17.1 million. Again, impressive numbers, but certainly not enough to stanch the losses elsewhere. As for a review of some of Gannett’s digital moves during the quarter, the company acquired all of its partners’ ownership stakes in comparison shopping site ShopLocal and took an additional 10 percent stake in CareerBuilder, increasing its ownership to 50.8 percent. While the company publishes 100 websites, mostly related to its newspaper and broadcast properties, the real money makes were CareerBuilder, along with ShopLocal and rich media ad firm PointRoll.

Economy Will Impact Billion-Dollar Deals; Old Media Should Buy New Media — When it comes to the shaky economy, the big question is how are deals getting done? A panel at FOBM offered some optimism, saying that companies with cash are looking for well-priced deals, and that old media companies will be looking to Silicon Valley for their next stage of evolution, but they also cautioned there’s no more mega-billion dollar acquisitions. Along with discussion, Newser Founder Michael Wolff, who is writing a book about News Corp (NYSE: NWS) Chairman and CEO Rupert Murdoch, provided a number of colorful insights about Murdoch’s purchase of Dow Jones, one of the biggest media deals of last year. On how the market changed from a deals perspective in the last four weeks: Scott Peters, managing director of the Jordan Edmiston Group: “The deal market is fantastic. During the first half of this year, it [M&A] was really active and it’s still active, but the type of transactions have shifted. The mega-billion dollar market is gone. The middle of the market is still active with strategic deals—non-private equity deals—and the next flood will be full of challenging situations.” Wolff: “We are going to see a ramp up really quickly. I think you are going to see a vast reconfiguration.

Clearspring Leaps Into Widget Network Lead — Clearspring Technologies has vaulted into the top spot among widget networks in September with 254 million unique viewers worldwide, according to comScore’s latest Widget Metrix report. The company attributes its nearly 60% audience growth since August to its acquisition of social bookmarking site AddThis as well as new partnerships with publishers such as MetroLyrics and SnagFilms. The surge pushed Clearspring well past former category leader Gigya, which saw its viewers worldwide drop from 174 million to 161 million from August to September.

FT.com Trims Free Stories Back Again, Launches Chat Community — FT.com today launches a user-led chatroom, the first step in a six-month overhaul of the site designed to capitalise on the massive interest in financial news as markets collapse and recession looms across the world. The Long Room, named after a notorious but now closed City boozer, will be part of FT.com’s popular Alphaville news and analysis strand and allows users – by invitation only – to begin and run their own discussions and upload files. It’s part of attempts by the FT to make the site more interactive – and to ultimately increase readership across the site and convince more occasional readers to sign up to a paid subscription. In an interview with paidContent:UK FT.com MD Rob Grimshaw said the blog was a sign of things to come, and he gave a strong defence of the site’s part-paid business model.

Articles of the Day

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

Microsoft’s Profits and Revs Up; Online Losses Increase — Microsoft (NSDQ: MSFT) has announced its Q308 earnings, and its revenues are profits are up for the quarter. Revenues came in at $15.06 billion, a 9 percent increase over the year-ago quarter. Net income was $4.37 billion, up slightly $4.29 billion in the year-ago quarter. The company is also downward revising its estimates for next year in keeping with the economic environment, especially for second half of 2009. And the pitch this quarter from MSFT: we can help you save money. “Our customers are asking how they can save money and do more with less…Microsoft is uniquely positioned to help our customers save money through supplier consolidation, increased productivity, and a low total cost of ownership through the depth and breadth of our product portfolio and solutions.” Yes, funny. Division wide: in its Entertainment and Devices Division (EDD), which includes XBox and Zune, revenues came in at $1.81 billion, down from $1.93 billion in the year-ago quarter. Operating income for the division was $178 million, up from $167 million in the year ago quarter. In its Online Services Business (OSB) unit, which includes MSN and other online advertising services, revenues came in at $770 million, up from $671 million in the year ago quarter. Operating losses for the division widened significantly, to $480 million, from $267 million in the year ago quarter.

Weblogs, Inc. Three Years Later: Impressive Page View And Revenue Growth — Earlier this month News Corp. celebrated the three year anniversary of the acquisition of MySpace. Today, AOL does the same for the Weblogs, Inc. blog network they acquired in October 2005. Since the acquisition, AOL says, the Weblogs, Inc. blogs (which include Engadget, TMZ, Download Squad, TUAW, Joystiq, Autoblog and others) have seen worldwide unique visitors climb nearly 1000% (122% annually, on average) and page views rise over 1,500% (154% annually, on average), according to August 2008 comScore Media Metrix. In October 2005, the blogs had a U.S. audience of 1.4 million unique visitors and were generating about $6 million in revenue. Today its 13 million uniques and revenues of about $30 million. In short, it was one of AOL’s better acquisitions.

Cox Enterprises’ Asset Sales Enter First Round Bids, Banker Says; Dirks Van Essen, And Murray Advisor On Sale — Cox Enterprises’ cluster of more than 20 daily and weekly publications has entered the first round of bids, said a banker familiar with the sale. The package has just hit the street, and bidders are now receiving the offering memorandum, the banker said. Cox, a privately-held media conglomerate in Atlanta, is looking at a deal value of 7x-to-8x cash flow. On 13 August, Cox announced the sale of certain newspapers in Texas, North Carolina and Colorado. Cox is also selling Omaha, Nebraska-based Valpak, its direct mail advertising subsidiary. It hired Citigroup for the newspaper sale and Goldman Sachs & Co. for Valpak. Cox did not return phone calls seeking comment. A spokesperson for Dirks Van Essen confirmed the firm was among Cox’s M&A advisors. An industry analyst speculated that the newspaper assets will have a difficult time attracting a buyer in this depressed market. James Gross, an analyst at Barrington Research, noted that although newspapers may occasionally come up for sale, few assets have found buyers in the past couple of years because of rapidly declining classified sales as Internet use grows. The banker himself expressed skepticism that Cox will sell the newspapers. He said until banks make financing available, few deals can consummate. The first analyst named Gannett and Newscorp as possible buyers. On 23 October, Gannett had a market capitalization of USD 2bn and traded at USD 9.65, close to its 52-week low of USD 8.49. Newscorp had a market cap of USD 23.5bn and traded at USD 9.00 close to its 52-week low of USD 7.64. Private equity players have taken interest in the papers, the banker said, although he declined to name them. Source: mergermarket.

Bill Gates Quietly Starts New Company — Just months after officially leaving his day-to-day role with Microsoft, Bill Gates has quietly established a new company with high-tech office space, a cryptic name and even its own trademark. Just what it will do is still anyone’s guess. According to public documents, the new company is called bgC3 LLC, and is some kind of a think tank. According to a Gates insider, it’s not a commercial venture but rather a vehicle to coordinate the software mogul’s work on his business and philanthropic endeavors. But Gates himself, who established the company under a different name in March before changing it to bgC3 in July, isn’t talking.

AOL Adds Yahoo Mail To Your Inbox — AOL has updated its webmail application to include a set of plugins that allow users to quickly access current news topics as well as third party services, most notably Yahoo Mail. Historically portals have been reluctant to give users access to their messages on other services, but they have been recently been opening up (which makes sense, given that they want to be a one-stop hub for all of your internet needs). Last month AOL gave users access to both their Yahoo and Gmail accounts from its homepage, and is now integrating the features into its main webmail client (Gmail hasn’t been integrated there yet, but it’s on the way). The move is another step in AOL’s attempt to prove that it is no longer a walled garden. Unfortunately Yahoo’s API handicaps how useful the feature is, as its integration is pretty clunky – instead of pulling in your messages and displaying them in AOL’s webmail interface, each message is actually a link to the Yahoo webmail client that opens in a new browser window.

Facebook Joins Advertising Research Foundation — Facebook heads a list of 34 new members who have joined The Advertising Research Foundation since June, representing a cross-section of the advertiser/ad agency/media/research and academic communities. “Having Facebook as a new member is a clear indication that our initiatives regarding the value of understanding social media are resonating throughout every facet of our industry,” Joel Rubinson, chief research officer at the ARF, said in a statement. Other new members include Hasbro, Eli Lilly, Kimberly-Clark, Mars, Novartis, UBS, PricewaterhouseCoopers LLP, and Bain & Company. Ad agencies include Adcentricity, Butler/Till, Global Hue and M:30. Cablevision heads a large Media group, including ABC Family and Disney Kids, Catalina Marketing, Fuse, National Cinemedia, PBS Kids Sprout, Rainbow Media and Tribune Media Net.

Despite Layoffs, Yahoo Slated To Set Up Major Shop In Nebraska — One door closes and another new facility opens—at least in Yahoo’s case. AP sources say Yahoo (NSDQ: YHOO) will announce plans to build a major facility in La Vista, Nebraska on Friday, just days after it said it would have to cut 1,500 jobs to help ride out the economic downturn. And the new digs won’t come cheap: in exchange for getting major state tax breaks, Yahoo has to invest at least $100 million and create at least 50 jobs worth at least $68,700 each within four years. Property records show that the Web giant already spent $14.8 million on the building itself (per Data Center Knowledge). Yahoo’s shares were trading up after the company said it would slash $400 million in expenses before the end of the year—and though the Nebraska facility is designed to be a cost-cutting measure, we’ll have to see how Wall Street reacts to this new, slightly more expensive news.

FAS Rejects Kokuna Holdings’ Application To Acquire 100% In Begun — Russia’s Federal Anti-Monopoly Service (FAS) has announced it has rejected Kokuna Holdings Limited’s application to acquire Russian contextual advertising company ZAO Begun. The regulator stated that Kokuna Holdings Limited submitted an application for acquiring 100% voting shares in Begun. FAS stated that, after considering the application, it decided to reject it over competition issues. According to an earlier report, Rambler Media, operating one of Russia’s most popular internet brands, agreed to sell its contextual advertising company ZAO Begun and related subsidiaries to Google, for a total cash consideration of USD 140m. Vedomosti online, and other Russian wires, wrote that Kokuna Holdings Limited is a subsidiary of Google. Source: mergermarket.

Twitter Fastest-Growing Social Networking Site — Twitter, Tagged and Ning were the fastest-growing social networking sites in September, according to Nielsen Online. Starting from a base of less than 1 million visitors a year ago, each has at least tripled U.S. traffic since then. Micro-blogging site Twitter has grown almost fourfold from 533,000 to 2.4 million visitors. Among more established social networks, LinkedIn was the fastest-growing–nearly tripling its audience to 11.9 million. That growth rate helped the site for professionals this week close another $22.7 million in venture capital. In June, it raised $53 million.

Digital Media M&A

Posted in Deals, Digital Media, News with tags , , , , , , , , , on August 15, 2008 by Dave Liu

McClatchy-Owned Real Cities Network Bought By Centro — Online media buying and planning platform operator Centro is going to announce it has bought once-storied local newspaper online rep firm Real Cities from The McClatchy Company. Terms were not disclosed. The purchase comes as local media in general is experiencing both strong growth rates, though newspapers in particular haven’t been able to benefit much. Companies like Centro and Real Cities have been trying to tap the local online media market, with newspapers being a primary client segment. As for what Real Cities brings to the table, it has a network with 1,800 local affiliate sites and claims a combined 44 million monthly uniques on average. For the most part, newspapers in Real Cities’ network consider its services to be complementary to their arrangement with the Yahoo (NSDQ: YHOO) Newspaper Consortium. The Real Cities network was formed by Knight Ridder over four years ago and was absorbed by McClatchy in its $4.5 billion purchase of rival newspaper publisher in March 2006. A year later, McClatchy found itself denying rumors that Real Cities would be disbanded.

Cox Enterprises Selling Austin American-Statesman, Valpak Direct Mail Unit, Other Assets — It’s a buyer’s market for newspaper assets right now: Cox Enterprises is the latest to hang a for-sale sign on certain assets, as it’s announced plans to sell the Austin American-Statesman, affiliated site Austin360.com, as well as other standalone community titles in North Carolina, Colorado and Texas. In addition, it’s looking to sell of Valpak, the distributor of direct mail and coupon marketing. The company has hired Citi to manage the sale of the newspapers and Goldman for the sale of Valpak. Major titles remaining in the fold include The Atlanta Journal-Constitution, The Palm Beach Post, Dayton Daily News. It’s not clear how much the company is looking for, but it plans to use the proceeds to pay down debt—just like what’s been going on at Tribune. The company has also shown a willingness to be aggressive in new media inv*stm*nt, as it acquired ad platform Adify in April for $300 million.

News Corp., Permira Finalize Agreement To Take DRM Firm NDS Private — Back in June, News Corp. announced, along with PE firm Permira, plans to acquire the remaining share of DRM and conditional access firm NDS, that it did not already own. The original offer was $60 per NDS share, or $3.6 billion in total. Today the companies have announced a final agreement, valuing NDS’ NASDAQ-traded shares at $63 each. Subsequent to closure, Permira will own 51 percent of the company, with News Corp. owning the remaining 49 percent.

Wasserstein & Co Buying B2B Media Firm Cygnus — Cygnus Business Media, the B2B media publisher which took the unusual step of spreading the word around about it being on the block through a trade pub, has used it again to signal they are off the block now, at least in the process of being. Folio reports that the due diligence phase is complete and a verbal agreement has been reached between media PE firm Wasserstein & Co. and Cygnus-owners ABRY Partners on the deal, expected to close before the end of the month. Cygnus has about 60 magazines and websites, and generates about $120 million in annual revenue…and were reportedly asking for $200 million to $240 million, or about 8x estimated EBITDA, the Folio story says.

Philips Buys Rest of TV And Online Video Monitoring Firm Teletrax — Teletrax, the UK-headquartered TV and online video monitoring and analytics firm, is being completely acquired by Philips, following a board approval by previous owner Medialink Worldwide, the media services firm. Philips currently owns 24 percent of the Teletrax, and will assume Medialink’s 76 percent ownership stake for a reimbursement of up to approximately $275K of certain net operating costs incurred by the company prior to closing, it said. Under the deals, Philips would continue to provide the Teletrax service to Medialink for use by its media communications services clients.