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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 Day

Posted in Digital Media, News with tags , , , , , , , , , , , , on October 16, 2008 by Dave Liu

Google Makes Health Portal More Accessible, Microsoft Talks HealthVault’s Progress — Google and Microsoft launched their competing health information storage platforms, Google Health and Microsoft HealthVault, amidst a slew of hype earlier this year, and even tried to entice users by agreeing to third-party online privacy standards in June. This week, they’re trying to jumpstart the hype again with more details about their products. Google has built accessibility features into its health records platform, angling for Web users with sight and hearing problems. The company rolled out a new version of Google Health that it says works better for users of screen readers, self-voicing browsers and browser add-ons (like the open source Fire Vox).

EBay Swings To Black For Q3 But Growth Is Oh So Slow — EBay moved into the black for Q3 but will it be there this time next year? The e-commerce company reported third-quarter net income of $492 million after charges, or $0.38 per share, up from a loss of $.69 in the same quarter last year. (Q307 included the massive $1.43 billion writedown for Skype.) Revenue rose $228 million to $2.12 billion, up 12 percent over $1.9 billion in Q307. But the economic downturn combined with eBay’s (NSDQ: EBAY) slowing growth—almost stagnant—doesn’t bode well; that year-over-year revenue increase is actually down $769 million from last quarter and eBay’s increases for the last three quarters were incremental, with a range of $15 million. Q4 will include $70-80 million in charges from the recently announced 10 percent job cuts. The result: eBay would consider zero revenue growth over this quarter to be a win. Skype: Revenue for eBay’s communications division grew 46 percent over last year, to $143 million. A “robust trajectory” as eBay puts it but again, revenue growth is slowing. Sequentially, Skype revenue was $126 million in Q1, $136 million in Q2.

Investors Pump $148.5 Million Into 12 Virtual Worlds Companies In Q3 — While VC firms like Sequoia Capital prep their startups for leaner days, and the WSJ says that marketers are planning to cut back spending on “experimental” ad buys, a group of virtual worlds companies has nearly $150 million to burn. Virtual Worlds Management reports that a dozen virtual worlds-related companies received $148.5 million in funding in Q3, bringing the total amount invested in the space this year to over $493 million. Kid-friendly worlds were definitely a focus, as more than half of the deals (worth more than $36 million) were with companies that had either launched or were set to launch youth-facing properties; but it will be interesting to see if the same level of investment is sustained in the coming months. Notable deals: SF-based Gaia Online picked up $11 million in a third round led by Institutional Venture Partners. All told, the teen hangout has raised over $32 million since 2006. Hollywood Interactive Group snagged $5 million in a first round led by BlueRun Ventures. The company launched MyHollywood.com, a celeb- and entertainment-themed world for women, in June.

Facebook Finally Pays Out $2 Million From Its Apps Fund To 25 Developers — Probably six months too late, Facebook has finally announced 25 recipients from its $10 million fbFund. The fund was announced a year ago by Facebook, with money from the company, Accel Partners, and the Founders Fund, but its disbursement has been delayed since then. These 25 recipients each get $25K grants, with no-strings attached (meaning no equity stakes), to “help build businesses on Facebook.com or around the Web with Facebook Connect,” the company said. These recipients are eligible for an additional $225K each in grant funding, which will be awarded to five winners selected by Facebook users and the fbFund advisory council in December. This comes as arguably some of the app and widget madness is dying down a bit, as companies and services in the space get weeded out during the downturn, both as a result of, well, just useless services, and also because of no underlying business model in them. Some would argue that means this is the best time to invest in these services.

Display Ad Prices Trending Downward; Fall-Off Is Consistent, But Not ‘Dramatic’—Pubmatic — The average price of a display ad was 27 cents in Q3, a nearly 50 percent drop from Q407’s 50 cents, according to Pubmatic, which sells software optimization tools to ad networks and has been surveying prices for the past four months. In Q1, the company said the average price of a display ad was 37 cents, while from Q2’s price was 34 cents, said Pubmatic, which bases its PubMatic AdPrice Index (PDF) on a survey of roughly 5,000 websites mostly in the U.S. Some of the other findings in its survey showed: Display ad pricing has generally trended downwards across website sizes and verticals. All categories moved down from last quarter, with the exception of Technology which stayed flat. Social nets are still the lowest priced category, with sports coming in a close second, at 21 cents and 25 cents, respectively. Entertainment had the biggest drop of all verticals, falling 42 percent to 33 cents in Q3 from 57 cents in Q1. Small-sized websites’ inventory was more than triple the value of larger sites in Q3, with values of 61 cents and 18 cents, respectively.

Experian Cancels Pricegrabber.com Sale Efforts; Blames Failure On Credit Crunch — More evidence arrives illustrating how the collapse of credit markets around the world is affecting companies’ ability to make deals happen. UK credit checking firm Experian has cancelled the sale of price comparison website Pricegrabber.com because it couldn’t find a buyer willing – or able – to finance the deal. Experian bought the site for $485 million (£281 million) in 2005 and by the looks of things it’s going to be holding onto it for a while longer than planned.

Digital Media M&A

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

eBay Pays $945M For Bill Me Later; Buys Two Danish Sites For $390M; Cutting Staff By 10 Percent — eBay (NSDQ: EBAY) announced two acquisitions—spending over $1.3 billion altogether—this morning designed to shore up its other parts of its business in the face of declining profits and stagnant traffic at its primary online auction site. The company also finally addressed layoff rumors and said that it is indeed cutting 10 percent of its 15,000-person workforce. The company said about 1,000 full-time jobs will be affected, in addition to several hundred temporary workers and the elimination of open positions. The two acquisitions and the layoffs were summarized in a single release, with two others containing additional details.

Local Online Research Firm Kelsey Group Bought By BIA Financial Network — Kelsey Group, a Princeton-based provider of research and consultancy services in the local media space, including online (we have quoted their work many times over the years), has been acquired by Chantilly, VA-based BIA Financial Network, the financial and strategic consultancy firm for media and communications industries. Financial terms were not disclosed. Kelsey will operate under the newly formed subsidiary BIA Advisory Services, which will also include BIA Consulting and BIA Research. John Kelsey, who founded the group in 1986 with his wife Pam, will oversee conference planning and execution. More details in release.

Aegis Buys Environmental Marketing Company — Media buying and planning firm Aegis Group’s latest acquisition is a little off the beaten path. It has bought fellow London-based company Clownfish, which helps advise marketers on crafting more eco-friendly, “sustainable” initiatives. The acquisition’s terms weren’t detailed, though Aegis said Clownfish has $880,000 (£500,000) in gross assets. While the purchase would seem to have little to do with digital media, Aegis insists that it does. Clownfish will be folded into Aegis’ Isobar search ad network, as the company says it sees a clear relationship between the online and environmentally sound business practices. Overall, Aegis has been stepping up its buying activities lately. Last month it bought U.S.-based search engine marketer Range Online Media for Isobar, its sixth acquisition this year.

VeriSign Exits Mobile Content; Sells Remaining Stake In JV To News Corp For $200 Million — VeriSign’s effort to capitalize on mobile content through its acquisition of Jamba is officially over. VeriSign tried to keep skin in the game through a JV with News Corp (NYSE: NWS). selling 51 percent in May 2007 for $187.5 million and a merger with Fox Mobile Entertainment. Today, the two companies said VeriSign has sold its remaining 49 percent to News Corp for approximately $200 million, suggesting that the value of the JV, which has struggled with leadership and strategic issues, has been static at best. VeriSign’s sale has been expected for months given the company’s switch to a core focus on internet infrastructure. VeriSign acquired German mobile content company Jamba in 2004 for $273 million.

Monster Acquires Remaining 55 Percent Of ChinaHR For $174 Million — Monster.com has full ownership now of major Chinese recruitment site ChinaHR.com, spending $178 million on the 55 percent it did not already own. Monster acquired 40 percent in 2005 for $50 million with a promise that it could get the remainder if ChinaHR failed to do an IPO within three years, according to TradingMarkets.com. As recently as mid-September, ChinaHR president Zhang Jianguo held out hope that the company would finish its IPO plan before year’s end. The acquisition gives Monster a major presence in online recruiting in Asia as well as China. Monster moved quickly to put its stamp on the company, appointing Edward Lo, EVP, Monster Greater China, as interim CEO of ChinaHR; he’ll keep his Monster regional duties as well. But it’s far from a slam dunk. As TradingMarkets.com notes, China’s growth is slowing and the sites face challenges from smaller companies, more localized companies with less overhead.

TNS’ Saga Nears Its Close, As WPP Declares Victory — WPP Group says it’s ready to close the deal for its $2 billion (£1.14 billion) takeover of TNS Media Intelligence, having received the support of 82 percent of the audience researcher’s shareholders, Reuters reports. The is now unconditional, though the extended offer period for further acceptances is open until Oct. 22. WPP will no longer offer the option to mix and match the share to cash ratio, however. As more shareholders shifted their support to WPP over the past week, TNS finally dropped its opposition to the deal on Monday, though it continued to maintain the WPP’s bid undervalued the company. Executives at the UK media measurement firm said they were in an untenable position, as continued attempts to block the takeover would have left TNS investors holding on to a minority interest in an unlisted company.

Articles of the Day

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

Layoffs Possibility Notwithstanding, eBay Wants To Buy Classified Startups — Rumors are floating around that eBay is going to lay off about 10 percent of its 15,000 employees, attributable mainly to an analyst at Wedge Partners, a small Colorado investment-research firm. And while the company has refused to comment on it, it makes sense that eBay will do some rationalization of its business considering its declining profits and stagnant traffic. Despite that, the company is interested in making some more acquisitions in the online classifieds space, according to Jacob Aqraou, GM of eBay’s global classified business. He told WSJ that the company will take over a “fair” number of companies in the next six months or so. With the market being what it is, and the valuations coming down, the company is looking at sites that have leading positions in geographies and industry segments in which eBay doesn’t currently compete. Eastern Europe and Scandinavia as regional priorities, and areas of coverage includes those that serve professionals, such as car dealers and real-estate agents, as well as individual consumers. eBay owns 25 percent of Craigslist (along with the recent lawsuits), and has bought sites worldwide including Germany’s Mobile.de, Marktplaats of the Netherlands, Spain’s Loquo and India’s Bazee. It also launched Kijiji, a classifieds site available in more than 20 countries including U.S. The classifieds business is estimated to generate between 5 percent and 10 percent of the company’s $7.7 billion in annual revenue, the story said.

Media Moguls: Now’s Not Looking Good For Big Deals—And That Includes NBC — Not that this will shock anyone, but with Wall St. falling off the high wire, this is unlikely to be a a period of big time dealmaking. Speaking at a breakfast sponsored by Portfolio, media bigs Mel Karmazin, Jeff Zucker and Steve Rattner (Quadrangle), agreed that a slow period for deals will only get slower. Said Rattner: “It’s been an incredibly slow year for the media M&A landscape and I think what’s happened in the last few days is simply going to exacerbate that. Big deals today are not going to happen. They’re simply not going to happen.” Karmazin—who has watched shares of Sirius slip below $1 since his merger with XM (NSDQ: XMSR)—didn’t predict a total deal freeze, but said any financing would come at a steep price (that’s been the story for awhile, even before all the latest).

Vivendi CEO Sees Resurgence of Music Industry; UMG “Next Surprise for Our Investors” — Hope spring’s eternal in music, and it seems, in the music industry as well. Jean Bernard Levy, the CEO of Vivendi (EPA: VIV) (which owns the biggest label Universal Music Group), told FT that he sees a new age of revenue growth, especially with digital and mobile sales. He cites Nokia’s (NYSE: NOK) Comes With Music, Apple’s (NSDQ: AAPL) efforts and now MySpace Music as reasons for optimism, despite the gloom and doom in the industry. Universal, which in July reported first-half revenues up 5 percent at $3.1 billion out of Vivendi’s sales of $17.6 billion, “is the next surprise for our investors”. He added: “I think…we are getting close to the lowest part of the cycle..I really believe we are at the turning point for the music industry and I didn’t say that two years ago.”

Newspaper Site Valuations Hit $450 Million — U.S. newspaper Web sites are the most lucrative of local media sites, with valuations of the largest newspaper sites reaching between $300 million and $450 million, according to a new study. But local television, radio and “pure-play” sites are poised for the biggest gains as newspapers’ online growth is slowed by the faltering economy and a reliance on traditional Web ads, the analysis by BIA Financial Network and Borrell Associates concluded. As the most highly developed of local media sites, newspapers’ online arms have naturally become the most highly valued. The media value for newspaper sites in 2008 was $4.2 million compared to $3.7 million for local television sites, $1.2 million for local radio sites, and $2.4 million for Internet-only properties such as Google and Yahoo. The $300 to $450 million range of the biggest newspaper sites, however, dwarfs the upper range of those of local media rivals. TV sites top out at $30 million to $40 million, radio at $15 million to $20 million, and pure-play at $15 million.

MerchantCircle, Spotzer Offer SMBs Ready-Made Online Videos — MerchantCircle has partnered with Spotzer to offer small- and medium-sized businesses online video clips. The service, which is available for between $39 and $79 per month, aims to lure in business owners that don’t have the time or budgets to develop full-length spots for TV or the Web. The clips also help drive increased search traffic to a merchant’s Web page, since the engines typically index and rank video content favorably in the search results.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , on August 14, 2008 by Dave Liu

Tribune Q2 Revs Fall 5.7 Percent; Takes Huge Loss On Writedown; Interactive Down — Privately held Tribune isn’t bucking any industry trends… The Sam Zell-owned company has reported Q2 revenue of $1.1 billion, down 5.7 percent from $1.17 billion in the year ago quarter. The company took a $3.8 billion, after-tax, non-cash charge, associated with the 2000 acquisition of Times Mirror—the charge is in keeping with writedowns across the industry, associated with acquisitions in the past few years. Op cash flow fell 2 percent to $221 million. Publishing revenue was particularly hard hit, falling 11 percent to $701 million. All the usual ad categories were hit hard, as were interactive revenues, which fell 4 percent, or $2 million (meaning a total of $48 million). Weakness in online classifieds contributed to the decline. The broadcasting business managed to hold up, growing 4 percent to $409 million—that’s pretty solid compared to the horrendous results at some broadcasters this quarter.

Aiming At BtoB, NYTimes.com Rolls Out Business, Tech Sub-sections; Handful Of Hires — NYTimes.com has been quietly rolling out a series of sub-sections this month, in hopes of attracting more B-to-B advertisers. By mid-September, new sub-sections will be added to the toolbars of both the Business and Technology channels, including Green Business and Enterprise Technology, respectively. Others will be added throughout the rest of the year. The rollout is also designed to blunt the challenge from WSJ, as the News Corp.-owned paper has expanded its coverage to go head-to-head with NYT on general news. I spoke with NYTimes.com GM Vivian Schiller about the new sub-sections and how they fit in with its goals to have more targeted content and ads during an increasingly difficult time for the newspaper business. To support the expansion, Schiller says the paper has hired a handful of reporters from WSJ, Dow Jones, WaPo, The Economist, Financial Times, and others, with more to come.

eBay Negotiating Minority Stake in South Korea’s GMarket — eBay is in talks to acquire a minority stake in GMarket, a South Korean online auctioneer. The talks are with Interpark Corp., the Korean portal that owns 37 percent of the company. A spokesperson from eBay told AP that there was no certainty a deal would be reached or that it would be approved by South Korean regulators—eBay already owns a South Korean competitor, the aptly named Internet Auction. No deal terms have been announced, although shares of NASDAQ-listed GMarket shot up over 14 percent on the news. In 2006, Yahoo took a 10 percent stake in GMarket, so they’re a beneficiary of this as well.

Google Shuts Feedburner Ad Net; Publishers Offered AdSense For Feeds Instead — RSS distributor FeedBurner has shut down its FeedBurner Ad Network, according to a report on Search Roundtable. Calls to Feedburner and Google, which bought the company for about $100 in June 2007, weren’t returned. A note attributed to Matt S. (possibly Matt Shobe, Feedburner’s co-founder and CDO) on the Feedburner Help Group said that no new applications for FAN publishers are being accepted. The note also encouraged publishers to seek similar options through AdSense, touting the new AdSense for Feeds product, which is powered by FeedBurner.

Articles of the Day

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

There’s Us Too: AOL Intensifies Talks With Microsoft and Yahoo On Possible Sale — AOL, feeling a bit left out in the last few weeks as things turned really ugly in the Yahoo , Microsoft and Carl Icahn ménage à trois, is now accelerating its own sale talks. Its reluctant parent Time Warner has been talking to Microsoft and Yahoo separately, and has intensified deals talks ahead of Yahoo’s crucial Aug 1 shareholders meeting, reports Reuters. Some scenarios: a deal with Yahoo would likely involve merging it with AOL, with Time Warner taking a minority stake in the combined company. A deal with Microsoft would likely be an outright sale of AOL to the software giant. AOL is already splitting off its ISP business and focusing on its content/apps online services, as well as its sprawling online ad services under Platform-A. Yahoo’s merger with AOL is one way it could show its shareholders that it could grow without Microsoft.

Amazon.com’s Streaming Service To Launch in Limited Beta Tomorrow; Links With Sony Bravia — Amazon.com is launching its new streaming online movie and video service tomorrow…the new service is called, surprise surprise, Amazon Video on Demand. Some details of the service were inadvertently pre-announced by CEO Jeff Bezos at the D conference in May. It will be available at Amazon.com/VOD when it launches…well, not yet fully. Turns out it is only launching in beta now, and will be accessible to a limited number of invited Amazon.com customers on Thursday before it opens more broadly to other users later this summer. The service will be separate from its Unbox download service, though one would assume they would be merged down the line.

Gannett Q2 Revenue Down 9.9 Percent; Income Down 19.7 Percent; Stock Crushed — Gannett is still assessing its big writedown announced last month, so technically its quarterly numbers are preliminary… The USA Today parent reported Q2 revenue of $1.79 billion, down 9.9 percent from $1.91 billion in the year-ago quarter. Income from continuing operations fell 19.7 percent to $232.7 million ($1.02 per share) from $289.8 million ($1.24 per share). Ad revenue at the core publishing business was down 13.5 percent to $1.1 billion. The classifieds category, not surprisingly, was hit the hardest, dropping 18.7 percent. On digital, the company offers a couple data points: Online broadcast revenue was up 17.1 percent, though it doesn’t give a baseline, nor does it give an equivalent number for publishing. It says in June it had 23.1 million unique visitors across its network of sites. We’ll see if they offer more on the call. As for the goodwill writedown, its expecting after-tax charges somewhere in the $2.4-$2.7 billion range. One other note: Gannett says it purchased 581,000 of its own shares in the quarter and 2.1 million year-to-date.

eBay Q2 Revs Up 20 Percent; Income Up 22 Percent; Skype Up 51 Percent — Online auctioneer eBay announced Q2 revenue of $2.19 billion, up 20 percent from $1.83 billion in the year-ago quarter. The top-line figure slightly exceeded estimates of $2.17 billion. Adjusted net income grew 20 percent to $568 million ($.43 per share) from $471 million ($.34 per share) a year ago—again, this was slightly ahead of estimates. Core marketplace revenue (ebay, Shopping.com, StubHub, and Kijiji) was up 13 percent, while ad revenue within this unit was up 183 percent (no dollar amounts were given). At the communications business (Skype), which is constantly at the center of strategic speculation, revenue was up 51 percent to $136 million. Skype ended the quarter with 338 million users, adding 29 million in the period. PayPal continues to grow briskly, with revenue up 33 percent to $602 million. On the conference call, the company announced the retirement of Marketplaces chief Rajiv Dutta, who will be replaced by Lori Norrington, formerly the CEO of Shopping.com. Dutta will stay around for the transition.

Lionsgate Brings Movie Clips To YouTube; Rev Share; YouTube on Tivo — This could represent an easing of tensions between Google and the Hollywood studios. Lionsgate has a deal with YouTube to run ad-supported video clips from the film company’s movies. Google CEO Eric Schmidt heralded the news at an Ad Age/William Morris Agency conference, Reuters reported. Unlike Viacom, which is continuing with its $1 billion copyright infringement suit again YouTube, Lionsgate Vice Chair Mike Burns felt it was time to call a truce—and about time to get paid for the scenes of Dirty Dancing, Saw, Crash and other titles from the studio that invariably get posted on the site, albeit without authorization. Lionsgate’s branded YouTube channel is expected to be up quickly. Terms of the ad-sharing deal weren’t disclosed. In the meantime, Google said it is talking to other studios about constructing a similar arrangement to the Lionsgate deal.

Digital Media M&A

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

Amazon Acquires Fabric.com — US retail giant, Amazon, has acquired online fabric store Fabric.com in a bid to further its range of products. The deal, which was closed for undisclosed terms, will see Amazon expand its current selection of sewing, craft and hobby items in the US with patterns, fabrics and sewing accessories. “Over the years, we’ve seen a growing interest in this segment from our customers,” says the VP of Amazon.com’s home and garden division, Chris Nielsen, speaking about the acquisition. Fabric.com CEO, Stephen Friedman adds: “We now have the opportunity to significantly expand our breadth of inventory, as well as benefit from the technology, fulfillment and customer service expertise of Amazon.com.”

Microsoft Acquiring Semantic Searcher Powerset For $100 Million: Report — Well if it can’t get Yahoo’s search business… Microsoft (NSDQ: MSFT) will acquire semantic search engine Powerset for more than $100 million, according to Matt Marshall at VentureBeat. His exact language is that the company “has agreed to acquire” the company and that it will be announced next month. SF-based Powerset has been something of a media darling, despite the fact that it hasn’t taken off yet. In 2006 it raised a $12.5 million first round from Foundation Capital and The Founders Fund, as well as various angels, including Esther Dyson and PayPal founder Luke Nosek. Despite years of interest in “semantic” or “natural language” search, this area is a long way from proving that it works much better than current search technology. VentureBeat also reports that its first round valued the company at $42.5 million, so this wouldn’t be a huge win for the investors. But given the uncertainty of this area, and the cash requirements of an independent search engine, this might’ve looked like a pretty attractive outcome.

Microsoft To Buy Portuguese Mobile App Firm, MobiComp — Microsoft has agreed to buy Portuguese mobile app developer MobiComp for an undisclosed sum, marking its latest push into the mobile software industry. Founded in Braga, Portugal, in 2000, MobiComp develops mobile applications, including a backup service and tools to create and share content. The 40-strong private company claims to be profitable and counts Vodafone, MTN and Nokia among its clients. 

eBay Acquires Media-Sharing Firm VUVOX — eBay has quietly acquired media-sharing and mash-up firm, VUVOX. The deal – which was closed for undisclosed terms – will see VUVOX integrated into eBay, allowing users to embed VUVOX media tools into their personal listings. VUVOX’s staff will join eBay’s design and development teams in California, says eBay employee Richard Brewer-Hay on the auction site’s official blog eBay Ink.

Nokia Buys Location-Based Social Network Plazes — Nokia is acquiring location-based social network Plazes for an undisclosed sum, pursuing its expansion into the mobile services and location sector. Plazes will remain in Berlin and join Nokia’s services unit which includes staff from gate5, a navigation firm that Nokia acquired two years ago. The acquisition follows Nokia’s announcement last month that it expects to sell 35m GPS-enabled phones this year.

Liberty Media Acquires Party Site Celebrate Express For $31 Million — Another e-commerce buy for Liberty Media… this time it is buying out small, publicly traded Celebrate Express, a party supply retailer, for $31 million. At $3.90 per share, the deal represents a 69 percent premium over the company’s $2.30 closing price. Celebrate Express, which traded in the $20s just a few years ago, operates under such brands as Birthday Express and 1st Wishes. The new company will be attributed to the Liberty Interactive Group, and it will be combined with Liberty’s BUYSEASONS business, which operates in the same area. Liberty has made a number of deals for e-commerce companies, including its taking a major stake in BodyBuilding.com and outdoor retailer BackCountry.

Providence And Carlyle Confirm Takeover Talks With Informa — UK publisher Informa is negotiating an all-cash sale to a consortium led by Providence Equity Partners and the Carlyle Group and including Hellman & Friedman. Based on Informa’s stock value on Fri (20 Jun), the firm is worth GBP1.85bn (USD3.65bn), which would make the takeover one of the largest deals in the history of UK publishing industry. However, the bidders say talks are “at an early stage” and there is “no certainty” that they will eventually make an offer.

The Orchard Buys TVT Records Out of Bankruptcy — The Orchard, the digital music label, has bought out TVT Records after a New York bankruptcy court declared its bid the winner on Thursday. The company will gain control of TVT’s catalog, artist contracts and physical record distribution infrastructure, but will not receive holdings in its music publishing subsidiary.

Getty Images Shareholders Approve PE Buyout — Getty Images, the Seattle based images and multimedia giant, has a shareholder approval on its $2.1 billion sale to private equity firm Hellman & Friedman. About 75 percent of the shares represented at the shareholder meeting were in favor of the deal, representing 96 percent of the votes cast.

Fandango acquires Movies.com from Walt Disney — Fandango, the nation’s leading moviegoer destination, today announced that it acquired Movies.com, a leading movie content site previously owned by the Walt Disney Internet Group, a unit of The Walt Disney Company. The synergy of these two well-established and popular movie sites, both launched in 2000, will create new opportunities for exhibitors, studios, advertisers and other partners to reach the movie-going audience, and will provide additional information and entertainment for moviegoers. Fandango’s advertising sales force will represent both sites with a wide variety of advertisers.

IPC Media To Acquire Mousebreaker Website — IPC Media, the UK magazine publishing arm of Time Warner, is to buy Mousebreaker, a gaming website, the Financial Times reported. IPC declined to comment on the deal size, according to the newspaper. The item appeared alongside an article about Yell Group. The deal could take place today (24 June), the report said. The deal size is believed to be in the in the range of GBP 1m (EUR 1.27m) to GBP 10m, according to the report.

Travel Social Network WAYN Admits To Takeover Talks — Travel social network WAYN has held talks with unnamed suitors over a possible takeover, the firm’s chief executive tells StrategyEye. CEO Peter Ward reveals he has met a number of interested parties, but says WAYN wants to grow its business further before selling itself. “We have had a lot of inbound interest and we have met with many other companies,” says Ward. “We believe that to maintain our positioning and grow the business from now holds a lot more value for us than to sell.” However, he acknowledges that selling the platform is definitely part of the firm’s long term strategy, without disclosing a timescale.

Social Media Ad Firm ViTrue Buys Rival UGENmedia — ViTrue, the social media ad firm backed by Comcast and Turner Broadcasting, has acquired competitor UGENmedia for an undisclosed sum. Founded in 2006 by former DoubleClick executives, UGENmedia helps clients develop, deploy and distribute social media marketing programs. Atlanta-based ViTrue says the deal will enhance its ability to offer turnkey social media solutions while providing a strategic New York presence.