Archive for Gannett

Articles of the Week

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , on December 11, 2008 by Dave Liu

Yahoo Board Receives Letter From Ivory Investment Management Urging Salvage Of Microsoft Deal — Ivory Investment Management LP, one of Yahoo’s largest stockholders with 21.4 million, or 1.5% of the shares outstanding, today proposed in a letter to Yahoo’s Board of Directors that the company salvage a deal with Microsoft “and not miss another value maximization opportunity.” Noting Microsoft’s renewed interest, Ivory proposed that the company sell its search business to Microsoft, with Microsoft becoming the search provider for all Yahoo properties. Under the Ivory proposal, Microsoft would own and operate the combined search platform, with Yahoo becoming an affiliate that retains 80% of the revenue generated through searches on its own site. Finally, Microsoft would become the search engine for Yahoo’s existing search affiliates. We believe a search deal with Microsoft could deliver value to Yahoo shareholders of USD 24-29 per share, or more than double yesterday’s closing price of USD 12.19.” Ivory stated in its letter that it believed Yahoo could “receive more than USD 15bn upfront from Microsoft for its search business and increase EBITDA by more than USD 500m per annum.” “On an after-tax basis, the USD 15bn payment from Microsoft would be USD 9bn for Yahoo shareholders, leaving Yahoo with USD 21.2bn of cash and investments (up from USD 12.2bn today) and annual EBITDA of USD 2.4bn (up from the midpoint of current guidance of USD 1.9bn ). Applying a 5x EBITDA multiple on the “new Yahoo” would result in a value of USD 24 per share. If Yahoo were to go a step further and deploy the USD 9bn in new cash for its own shares at a USD 16 offer price, it could reduce its share count by 40% which would leave the remaining shareholders with a stock approaching USD 30 per share (amazingly close to the original bona fide bid from Microsoft).”

CBS Interactive To Merge CBSNews.com and CNET Newsrooms; Some Layoffs — CBS Interactive, under pressure to cut costs after what now seems like an even more costly acquisition of CNET, is announcing some more restructuring tomorrow, we have learned from reliable sources late tonight, and as part of it, will be merging CBSNews.com and CNET newsrooms. Not clear: if it is merging the two main websites CBSNews.com and News.com. As a result of this merger, there will also be some layoffs, but we couldn’t figure out the extent of those.

Time Warner Cable Split Still On Track For Early 2009 — Time Warner CEO Jeff Bewkes says the Time Warner Cable (NYSE: TWC) spinoff “is on track to get executed in early 2009. … We don’t see any problems really from any side of the transaction.” That should mean an $11 billion payout for all shareholders is still on the way—including $9 billion for parent Time Warner (NYSE: TWX). It also means a return to a content-centric company. Bewkes is the lunch speaker at the UBS Global Media and Communications conference.

Bewkes On AOL: Will Do Whatever Creates Most Value; Needs To Be ‘Fairly Soon’ — Updated: Looking for clarity when it comes to Time Warner (NYSE: TWX) and AOL? So are we—Time Warner is exploring just about every variation you can imagine when it comes to AOL, based on the exchange CEO Jeff Bewkes just had with UBS moderator Aryeh Bourkoff, who asked the questions in just about every way possible. The short answer: “I’d like to get it resolved, meaning clear… so AOL can be seen and valued… We need to do it fairly soon and we’ve been working hard on it.” And, no, he won’t translate “fairly soon” into a real time frame. Bewkes isn’t complaining about operations and said if AOL were a TV network, “he’d say the ratings are up. ” But, he admitted to investors, ad sales are not up the same way and have been disappointing to us and to you.” AOL’s performance is further hampered by being “essentially in third place” and not a market leader. “Because of that, even though some excellent work is being done on cost cuts, programming and traffic,” AOL’s value is being lost. The questions: what would be the improvement in economics from a combination and would the result be “reasonably as good or better” than TW can do with any other option?

RBI Sale Cancelled; Reed Elsevier Still Wants To Sell It In Medium-Term — The verdict is in and the answer is: no sale. Reed Elsevier (NYSE: RUK) has announced that its torturous, nine-month campaign to sell the B2B magazine division is over. Reed announced to the stock market this afternoon that it has “terminated discussions with potential bidders” and that due to the poor economic outlook, shareholders would get more value by the company hanging on to the Farmers’ Weekly and Variety publisher. RBI now remains separate business and will be run by RBI UK CEO Keith Jones as overall CEO of the company.

Gannett’s ContentOne Ties Local Content With National Ads — It’s a tougher time for newspapers, but Craig Dubow, Gannett’s chairman, president and CEO, has a basic answer for the continued existence of newspapers: consumers will always need content and advertisers will need to reach them. As for why newspapers are the best vehicles for that connection, Dubow turned, interestingly enough, not to print, but to Gannett’s web properties. In particular, Dubow, speaking with two other Gannett (NYSE: GCI) execs at the UBS Global Media and Communications (PDF) conference, touted a forthcoming program called ContentOne, which he said “will completely change the way we share content across the company, especially at the local level. It will be created using the web start-up model.” It should be up sometime in Q1. The idea is “local content on a national level,” and will use the regionally focused sites MomsLikeMe and Metromix as the foundation.

CBS Wouldn’t Buy CNET In This Market; ‘Highly Doubt’ Any Acquisitions — CBS CEO Leslie Moonves raved about the value of the CNET acquisition and the integration since the merger with CBS Interactive, but told investors he wouldn’t make the same deal today. “The CNET deal was in May….Life was very different. We would not be doing that acquisition today.” As for other acquisitions, “I highly doubt you will see us acquiring anything in the near future.”

Digital Media M&A

Posted in Deals, Digital Media, News with tags , , , , , , , , , , , , , on November 13, 2008 by Dave Liu

Lifetime Buys S. Korean Dress-Up Site Roiworld; Expands Gaming With

Lifetime Games Studio Korea — Lifetime Networks is expanding its casual
gaming with the acquisition of South Korean dress-up site Roiworld for an
undisclosed amount and the simultaneous launch of Lifetime Games Studio
Korea. Lifetime, a 50-50 joint venture of Hearst and The Walt Disney (NYSE:
DIS) Company, plans to launch a U.S. version of Roiworld.com in early 2009.
The site mixes “casual” virtual worlds, user-generated content and social
networking with fashion. Lifetime says the Korean version had 2.8 million
uniques and 117 million page views in September, with visitors averaging 50
minutes a month. At the same time, Lifetime is investing further in casual
gaming by launching Lifetime Games Studio Korea with headquarters in Seoul
and a San Francisco office focused on biz dev, technology and sales.
Roiworld founder Kiseo Kim, will head the new studio as CEO, extending
Roiworld and developing new games. Kris Soumas, head of Lifetime Games,
adds the new venture to her portfolio. Plans call for integrated ad
packages and micro-transaction technology, in addition to more social
networking.

Gannett Acquires Healthcare Education Site Pearls Review; Digital Now
Separate Segment
— Gannett, which reported its Q308 earnings late last
month, has filed its 10-Q and discloses a new online acquisition: it has
acquired Pearls Review, an online nursing certification and continuing
education review site. No financial details were disclosed, but the site is
now part of the Gannett Healthcare Group (I had no idea such a group
existed within Gannett…the group runs Nurse.com). Pearl has a series of
online courses in various sub-sectors of nursing profession, and is based
in St. Petersburg, FL.

Google SEC Filing Reveals DoubleClick’s Price Tag — Google sold

DoubleClick’s Performics SEM division to Publicis for $53 million in cash
in August 2008, according to a U.S. Security and Exchange Commission (SEC)
filing that posted Friday. The 10-Q states the search engine acquired
DoubleClick “primarily for their customer relationships, as well as patents
and developed technology.” Since the sale of Performics was planned at the
time of the acquisition, the proceeds are netted against the purchase
price. The total net purchase price of DoubleClick was $3.2 billion paid in
cash, including transaction costs of $70.4 million. Google estimates the
life expectancy of customer relationships at 6.7 years; patents and
development technology, 5 years; and trade names, 5.5 years, according to
the filing.

Innovation Interactive Buys European Ad Targeter Netmining NV — Innovation
Interactive, the parent company of digital marketers 360i and SearchIgnite,
has bought Belgian behavioral targeter Netmining NV. Terms were not
disclosed. Netmining will continue to operate as a standalone brand.
However, officially, the company’s services will be merged into
Searchignite’s system within the first half of next year. Aside from
increasing New York-based Innovation Interactive’s European presence, the
company hopes that the promise of greater ROI that comes with Netmining’s
services will make it more attractive to web marketers unnerved by the
economic downturn. Innovation Interactive has been privately funded by ABS
Capital and CIBC Capital Partners. Its most recent funding was in February,
an Innovation Interactive rep said.

Canal Partners Acquires Limos.com — Canal Partners has acquired a majority
stake in Limos.com, a Beaverton, Ore.-based online provider of qualified
leads for ground transportation providers. No financial terms were
disclosed, although Canal’s website says its typical investments are
between $1 million and $5 million for companies worth between $5 million
and $30 million. Source: PEHub.

Gannett Buys Social Media Tech Company Ripple6 — Gannett has acquired
social net tools provider Ripple6 to create online communities for its own
properties and outside media companies. Terms were not disclosed. Gannett
chief digital officer Chris Saridakis had a 10 percent stake in Ripple6 and
as part of the deal, Gannett agreed to buy Saridakis’ stake in the company.
Gannett added that Saridakis was not a part of the negotiations. This is
similar to what Gannett did last March, when it completed its purchase of
PointRoll by buying Saridakis’ shares in the company. A Ripple6 rep also
told me that Saridakis was a member of the company’s board, but he resigned
after Gannett acquired his shares.

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.

Digital Media M&A

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

Viacom-Owned Paramount Buys Game Developer ScreenLife — Paramount Pictures, the Viacom-owned movie studio, has made its first gaming related acquisition: it has bought Seattle-based game developer ScreenLife, the creator of the popular DVD game “Scene It?”. Financial terms of the deal were not disclosed, but last week SeattlePI first broke the story and mentioned that the deal is “for less than $100 million”. Screenlife will continue to operate as a standalone company, but will report into Paramount Digital Entertainment. Scene was launched in 2002 as a series of video-based trivia games..it has since sold about 15 million titles on the DVD, mobile, VOD and video game platforms. The company has over 25 DVD game titles on the market. Screenlife raised $7 million in angel financing in 2003, and a total of about $10 million.

Online Marketer AdEx Buys Lead Gen Company Bay Harbor Marketing — AdEx Media has bought the lead gen business of Bay Harbor Marketing, LLC, a California limited liability company. The terms were not disclosed. AdEx plans to absorb Bay Harbor Marketing’s software to round out its own affiliate marketing and lead gen business. This is Mountain View, CA.-based AdEx’s second purchase in less than a month. It bought Digital Instructor, a marketer of “how-to” courses on CD, in mid-August.

Gannett Pays Tribune $135 Million To Acquire Majority Stake In CareerBuilder –Gannett (NYSE: GCI) has acquired an additional 10 percent stake in CareerBuilder from the troubled Tribune for $135 million. That gives Gannett a 50.8 percent controlling interest in the online jobs site. Tribune, which has been trying to find ways to turn around its financial and debt woes, now owns 30.8 percent of CareerBuilder. The shared ownership doesn’t affect the other partners in CareerBuilder, which includes The McClatchy Company (NYSE: MNI), which continues to own 14.4 percent; and Microsoft (NSDQ: MSFT) Corp. (Nasdaq: MSFT) continues to own 4 percent. Under the new ownership arrangement, Gannett has three seats on the six-seat CareerBuilder board. Tribune and McClatchy have one seat each and CareerBuilder CEO Matt Ferguson has one seat as part of his position. Sam Zell said in a statement that this deal helps “monetize some of the value CareerBuilder has built over the years…while enabling us to maintain a significant stake in a great online property.”

Publicis Looks Westward For Latest Acquisition, Seattle’s PBJS — Although WPP Group and its ad holding company rival Publicis Groupe have been concentrating more in Asia and other emerging markets for their digital acquisitions lately, it seems there are still a few independent targets to be found in the U.S. One of the remaining ones was Seattle’s PBJS, which was just picked up by Publicis. Terms weren’t disclosed. The five-year-old shop concentrates on on “multichannel events” and branded entertainment, including webcasting and video production. The main thing that drew Publicis to PBJS was access to the agency’s biggest client: Microsoft (NSDQ: MSFT). That could bring more closeness between Microsoft and Publicis, which is working with the software giant, as well as Yahoo (NSDQ: YHOO), Google (NSDQ: GOOG) and AOL (NYSE: TWX) on an open source ad network. The 26-person PBJS will continue to operate independently, though it will exist within Publicis Events Worldwide unit. Founder and CEO Bob Bejan will remain in that role, reporting to John Farrell, President & CEO of SAMS.

Ad Network Traffic Marketplace Buys Click-to-Chat Banner Provider Livemarkets — Online ad net Traffic Marketplace has acquired Livemarkets, a company that lets individuals strike up chat sessions with marketers within banner ads. Terms were not disclosed. The basic proposition behind Livemarkets, which was founded last year, is that consumers will click on an ad to chat with a customer service rep about the product featured in a banner. In one example on the company’s site, a consumer might click on a banner ad for a car to ask about a test drive. The “click-to-chat” function can work within any ad unit, Livemarkets says. As for Los Angeles-based Traffic Marketplace, the company bills itself as a “business-to-audience” ad net. It claims 30 billion ad impressions every month, delivering more than 20 million leads through its targeted display ads.

Articles of the Day

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

Yahoo Confirms Appointment Of Biondi And Chapple To Board — As expected, Yahoo is filling its final two board seats with Frank J. Biondi and John H. Chapple. The appointments were part of the company’s settlement with Icahn that give him and his allies three seats on the company’s 11-member board. Earlier this week, multiple reports identified Biondi and Chapple as the likely names to emerge. From the prepared statement of Chairman Roy Bostock: “Frank’s extensive experience in the entertainment and media industries, combined with John’s deep management experience in telecommunications, will provide valuable perspectives to our already diverse board. We look forward to working with them as our board continues its ongoing efforts to enhance stockholder value.”

Facebook Tests Ads Packaging Video, Comments — In its latest experiment with social advertising, Facebook has launched new ads combining in-banner video with the ability for members to post comments visible to friends on the social network. The video ads occupy the new “sponsor” placement on the right side of the home page that Facebook introduced as part of the site’s recent redesign. Facebook declined to say what advertisers are testing the new ads, which are being shown only to a portion of users in the new site design. It also isn’t saying when, if at all, ads with the new user-generated functionality will be offered to advertisers widely. The social network has unveiled a variety of ad initiatives in the last year as it seeks the right formula for monetizing the myriad conversations and interactions among its 132 million members worldwide.

EMarketer Dramatically Lowers U.S. Ad Spend Forecast — EMarketer now expects domestic online ad spending to reach just $505 million this year–a dramatic downturn from the research firm’s $1.4 billion estimate in February. The revised spending projections are the result of changes in methodology, based on historical data from the Interactive Advertising Bureau, eMarketer’s benchmark source. eMarketer’s revised estimates are also much closer to those released by Interpublic’s Magna unit in July. Magna Director of Industry Analysis Brian Wieser projected online video advertising in the U.S. would reach $555 million in 2008, up 54% from 2007, and forecast it would grow another 45% to $805 million in 2009.

Gannett Laying Off 600 Staffers; 1,000 Posts Being Eliminated — In the latest round of newspaper job cuts, Gannett is laying off 600 employees and eliminating 1,000 positions, writes former Gannett editor Jim Hopkins on his Gannett Blog (via Romenesko). According to a memo attributed to Daily Times’ Publisher Rick Jensen that one of Hopkins’ readers sent him, the 1,000 staff positions will be taken from Gannett’s Community Publishing division, amounting to 3 percent of its workforce. The division has 84 papers and does not include Gannett flagship USA Today. A Gannett rep told paidContent that the memo had gone out across the division on Wednesday, saying that all papers need to rein in costs.

Cablevision Tells Investors ‘No More Acquisitions’; Harbinger Takes 4.9 Percent Stake — Cablevision management has been meeting with key investors as it explores various strategies for lifting its share price. The Long Island-based cable operator said earlier this month that it would consider a variety of options to this effect, including asset sales. While it hasn’t done anything definitive yet, it has promised investors that it would cool down on acquisitions, according to WSJ. This makes sense, as the company’s perceived fr*eespending ways contributed to its declining share price throughout much of the year. The company also claimed that the acquisitions of the Sundance Channel and Newsday arose from “special situations”, though it’s not clear what they meant by that. Either way, the new message is clearly getting across. Cablevision shares have been up over 50 percent just since July 14, when they hit a low below $20 per share. They closed yesterday at $30.96. Now the company just has to make good on the changes the market is now expecting.

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.