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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 November 11, 2008 by Dave Liu

Mindshare Wants A Lotame, And A Lot Of You: Cuts Deal Based On How We Spend Time Online — In a Madison Avenue first, WPP’s Mindshare unit has cut a
deal to begin serving ads to social media users based on the time they
actually spend engaged on social media sites, and the advertising content
surrounding them. The deal, details of which will be announced today with
Lotame, the developer of an advanced audience behavior targeting system, is
another step by a major agency away from the classic advertising model of
placing ads based on the context of media content and instead moving to one
based on the context of the audiences consuming it.

AT&T’s VideoCrawler: Part Of A Bigger, Three-Screen Content Distribution
Plan
— A strange launch at a strange time, and from a strange source: AT&T
rolled out a beta version of VideoCrawler, an online video search and
aggregation engine. The public beta comes about three months after an even
softer launch designed to help the company work out VideoCrawler’s kinks,
and AT&T partnered with video search tech firm Divvio in its development.
Divvio founder and CEO Hossein Eslambolchi is AT&T’s former CTO.

FT.com Relaunching This Week: Pink Front Page, New Name Target ‘Obsessive’
Users
— FT.com will tomorrow roll out the latest installment of its
long-term web redesign with a pink front page and a region-specific
homepage for its growing Middle East audience. Those are some of the
immediate changes but, as a redesign, it’s more like a war of attrition:
more changes are on the way but the whole process won’t be over for some
months. In an interview with paidContent:UK, FT.com editor James Montgomery
spoke of his long-term goals and why there’s no money to be made in
attracting casual users.

Facebook Launches New Ad Product, Still Lags Behind MySpace — Facebook may
have passed MySpace in terms of worldwide audience, but the social
networking giant has struggled to sell ads as effectively as its
competitor. Today, the Palo Alto company is unveiling its latest ad format,
called “engagement ads” which prompt a user to do something within the ad
unit, such as post a comment about a product or RSVP to watch a TV show.
Once a user engages with an ad, a message would then be sent through the
news feed to his or her friends list. As the Journal points out, Facebook
has a lot to prove with the new format, which is being made available to
all of its advertisers after four months of testing. According to comScore,
Facebook’s share of U.S. online display spending was just 1.1% in June. By
comparison, News Corp.’s Fox Interactive Media unit, which includes
MySpace, was the market leader in display spending with 15.9%.

For Professional Content, YouTube Pales Next To Hulu — New York Times
technology writer Saul Hansell says Google’s recent move to put
feature-length films and TV shows on YouTube is — like most of the online
video giant’s forays into professional content — more show than substance.
Hansell claims that Google is merely intimating that the professional video
market could become a core moneymaking strategy for YouTube, without really
making the commitment to it. Meanwhile, Hulu.com, the joint venture from
NBC and Fox, is starting to establish itself as the most prominent site for
professional TV shows and movies. As Jim Packer, MGM’s co-president, tells
the Times, “We will have some long-form videos up on YouTube, but I don’t
think that’s the platform to have 30 or 40 movies up at once. I feel much
more comfortable doing that on a site like Hulu.”

Advertising Earnings: Miva Raises $10 Million Credit Line, Posts Q3 Loss;
Marchex Fares Better
— PPC-centric ad network and media company MIVA has
secured a $10 million credit facility from Bridge Capital Holdings
subsidiary Bridge Bank, NA. America’s Growth Capital arranged the credit
line, and MIVA was eligible to borrow $6.5 million of it as of the end of
Q3. The Fort Meyers, FL-based company will use the funds to expand
distribution of its ALOT toolbar, roll out a new media platform (and likely
stave off potential buyers like Blinkx). MIVA seemingly needs all the help
it can get. In today’s Q3 earnings report, the company posted a $10.5
million loss (or 32 cents per share), in contrast to a $3.3 million loss
(12 cents per share) in Q307. Part of the loss stemmed from the company’s
restructuring program—which resulted in a $2.7 million charge in the
quarter—but revenues were also headed the wrong way, down 21 percent to
$28.1 million. CEO Peter Corrao said that MIVA’s restructuring program and
the new ad platform should get the company profitable in 2009.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , on October 29, 2008 by Dave Liu

Aegis’ Fay: ‘Not As Bad As You Think’—And Not Done With M&A — Aegis North America CEO Sarah Fay, in a conversation with Andy Serwer, Fortune’s managing editor, at Future of Business Media conference hit on all the touch points facing the ad industry right now: the state of ad spend, the divide between traditional and digital, the Google issue and M&A activity. In general, Fay expressed a relatively sunny take on the turbulent media industry at the moment. Bullish on M&A activity, display: During the audience Q&A, Fay noted Aegis’ eight digital acquisition this year—a company called IF based in Malaysia—and added that the company has no plans to pull back on digital M&A, especially in emerging markets. She added that while search’s accountability is even more crucial to marketers during an economic downturn, the importance of online branding will make display more attractive as well.

Hulu Hopes To Enter UK; Held Up By Kangaroo’s Troubles — We’ve speculated for a while that NBCU/News Corp.’s US VOD JV Hulu would like to launch here in the UK. Today C21 reports the site is considering “a partnership approach” with UK counterpart Kangaroo, with C21 even suggesting Kangaroo could itself get named “Hulu” rather than the rumoured “See-Saw” This is not quite our understanding of the situation. Sources told paidContent:UK the much-lauded Hulu is hoping for a UK launch next year, along with several other territories under consideration. But its plans are on hold until the outcome of the Competition Commission inquiry that’s currently preventing Kangaroo’s launch. That’s because Hulu would be better to launch with a full service, carrying public service shows from Kangaroo’s founders BBCWW, ITV (LSE: ITV) and C4, than a piecemeal offering.

Long-standing Book Search Lawsuit Costs Google $125 Million — How much has it cost Google to scan hundreds of thousands of books and make them available via its Google Book Search? At least $125 million. That’s how much the search giant has paid to settle a long-standing class action lawsuit with the Authors Guild and the Association of American Publishers (representing publishers like McGraw-Hill (NYSE: MHP) and the Penguin Group). The funds will be used to set up a Book Rights Registry that will let U.S. copyright holders register their works so that they can get a cut of any resulting online retail and ad sales. MarketWatch’s Therese Poletti wonders if the settlement lines Google up as a future Amazon.com competitor, or at least, a contractor—as Google’s scanned books could wind up as part of Kindle’s growing library.

Could A Recession Bring Back The Idea Of Charging For Content? — Economist.com took a pass on the free-content phenomenon first time around – now, just as flares and yo-yos came back in to fashion, the publisher sees pay walls regaining popularity in an advertising downturn. The news mag’s site already charges for stories over a year old and, publisher Paul Rossi told our Future Of Business Media conference, that could be just the right model for a looming recession: ”The growth in online advertising is slowing. Is this the return to paid content online, because advertising becomes less a driver for the business? It will be be interesting to see if paid content comes back online because the model is changing.” The Economist already had something of a disdain for the ad-dependent alternative, vowing never to mix ads and editorial on the same print page: “We start with the premise that a reader is paying us a substantial amount of money for our magazine.” And Rossi, interviewed by our managing editor Ernie Sander, seems never to have considered web ads a truly viable paradigm anyway, saying “to be rely effective online, it has to be interuptive and disruptive” – losing points for user experience. Despite flirting with free, WSJ.com and FT.com have settled on a part-free, part-paid compromise. Economist.com, too, seems to have that base covered as we enter uncertain times.

Bloomberg’s Norman Pearlstine: Acquisitions Won’t Grab Headlines — Norman Pearlstine, chief content officer of Bloomberg, said during his Q&A today that they are indeed looking at acquisitions, while also providing a refreshing take on what’s working with their highly profitable terminal business that charges 290,000 subscribers about $18,000 a year, and the work that needs to be done in its smaller consumer media business, including Bloomberg TV, which reaches 57 million U.S. homes. Bloomberg won’t be buying anything as big as AOL: “Historically, Bloomberg has had a strong preference for building rather than buying, and since I’m coming from Time Warner (NYSE: TWX), the approach makes a lot of sense. But I think that we have shown a number of things—while maybe not in the acquisition area—we have shown the ability to work with others. We also have signaled a willingness to look at acquisitions. The CEO of Bloomberg, who is in charge of the terminal business, created a new group called Bloomberg Ventures, which is looking at a lot of new ventures for potential acquisition. In the immediate future, we aren’t talking about the major kind of acquisition that gets written about. With the difficulties of integration, and again I’m reminded of my AOL/Time Warner experience, I’m with that program.”

Financial Portals May Face Audience ‘Burnout’ — The economics crisis has been good to both financial portals, like Yahoo Finance and AOL (NYSE: TWX), while also benefiting niche sites like Seeking Alpha and Minyanville, according to comments made by those company executives during a panel. Here’s what they said about what products work the best, and any potential tie-up between Yahoo and AOL. On the potential Yahoo-AOL tie-up. Is bigger better? In September, Yahoo Finance recorded 20 million uniques and AOL had 14 million: Scott Moore, Yahoo SVP said the two sites are complimentary. Yahoo is a news aggregator and AOL’s focus is on personal finance. “If one company owned both of the sites, it would be a category-killer. It would be game over in terms of metrics.” Marty Moe, AOL SVP of Money & Finance: “I have no idea what will happen, and I don’t have any knowledge of discussions going on, but with that said, any scenario would present enormous opportunities. In this this economy, there are many ways in which bigger is better. In this economy, it’s inevitable that consolidation is happening. I think that it’s a trend that will happen, particularly for international growth.”

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.