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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 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 Week

Posted in Digital Media, News with tags , , , , , , , , , , , , , , , , , , on December 26, 2008 by Dave Liu

YouTube’s Plan To Gain The Upper Hand With Music Labels — Record labels like Universal Music Group are using YouTube to rake in millions of dollars from their music videos, and yesterday we raised the question of whether Google was making much money from these deals. Well, sources tell MediaMemo’s Peter Kafka that the answer is a big, fat no. In fact, the music clips are costing Google (NSDQ: GOOG) money, even though YouTube is running ads on them. But that is about to change, Kafka says. Currently, YouTube pays the labels either a per-stream fee or a portion of the ad revenue (if there’s an ad on the video) every time a user clicks on one of their music clips; but since YouTube hasn’t saturated the site with ads (yet), most of the time it’s stuck with the per-stream fee. YouTube is in the midst of negotiating new deals with the labels (UMG, EMI, Sony (NYSE: SNE) and Warner Music Group) on very different terms, and Kafka’s sources say the new terms will not add nearly as much cash to the labels’ coffers. The current deals expire over the course of 2009.  

Newspapers Suddenly Adapt To Social Media; Nearly 60 Percent Offer User-Gen Content — Newspapers’ tough times appear to have spurred the industry to adopt the kind of social media habits that have led so many readers away from the traditional news format. In The Bivings Group’s annual look at how newspapers use the internet, the researcher found that 58 percent of dailies offered some form of user-generated content this past year. That’s more than double the 24 percent of papers that had user-gen features in 2007. Other finding’s from Bivings’ report (PDF): The number of papers who opened up stories to user comments also more than doubled in the last year to 75 percent in 2007 versus just 33 percent the year before.

Facebook Continues Torrid Growth — Facebook is growing faster than ever, especially overseas. Active users on the social network have hit 140 million, according to new data released by the company this week. That total is up from the 130 million Facebook reached earlier this month, putting its current growth rate at more than 600,000 users a day, by the estimation of Inside Facebook blogger Justin Smith. It crossed 100 million users in August. Most of that growth–about 70%–continues to be outside the U.S. Inside Facebook pointed out that growth has been especially explosive in Italy, where users have jumped from 572,000 in July to 4.9 million now.  

Warner Pulls Videos From YouTube As Contract Talks Break Down — In another setback for Google’s popular video sharing site, Warner Music Group over the weekend ordered YouTube to remove all music videos by its artists after contractual negotiations broke down. According to Reuters, Warner’s decision could affect hundreds of thousands of video clips. Talks broke down early Saturday because Warner wanted a bigger share of ad revenues. “We simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide,” Warner said in a statement. According to comScore, YouTube had more than 100 million viewers in the U.S. in October, making it the most popular destination for online video by a massive margin. Warner became the first major media company to negotiate a deal with YouTube in 2006. As part of that deal, Warner, Universal Music Group and Sony Music each took small stakes in the online video giant prior to Google’s acquisition in 2006, profiting from its close.

NeoEdge Takes On comScore — NeoEdge Networks will announce today a service to collect survey data to support some of the advertising technologies and online games it develops and supports. The NeoEdge survey, dubbed “NeoMom,” takes on comScore and focuses on females ages 25 and 54. The survey topics are geared toward consumer products. Gathering survey data for the first report begins in January.  

Redstone Gets Reprieve To Restructure $800 Million In Debt — No financial Armageddon today for Sumner Redstone, who gets an indefinite reprieve on either paying—not gonna happen—or restructuring some $800 million in debt coming due for National Amusements. The total debt is about $1.6 billion. Redstone owns 80 percent of the company, which owns movie theaters and controls Viacom (NYSE: VIA) and CBS (NYSE: CBS). (Redstone is chairman of both media company boards.) The reason for the extension: National Amusements is gaining time to finesse a plan that’s already been presented to creditors, it’s current on payments and the deadline was more of a target than anything.  

Study: Almost 10% On Social Networks Via Mobile — The proportion of U.S. mobile subscribers who access social networks on their cell phones nearly tripled to almost 10% over a year ago, according to a consumer study by The Kelsey Group and ConStat spotlighted Monday by eMarketer. Specifically, 9.6% of mobile users were connecting to a social network as of October 2008, compared to 3.4% in September 2007. The rapid growth is due in part to the small base of people who are social networking on mobile. 

Fanscape Projects 15% Revenue Increase In ’09 — At best, next year represents uncertainty for most advertising and agencies. Social-centric media shops, however, continue to wax optimistic over their prospects for growth. Take Los Angeles-based Fanscape, a digital-engagement marketing agency that works with clients to better understand and influence niche audiences online. “The jury’s still out, but I believe that revenue is going to grow by 15% next year,” said Terry Dry, president and co-founder of Fanscape. 

Warner Overplays YouTube Hand — CNet’s Greg Sandoval claims that it was YouTube that actually began removing Warner Music Group’s videos from its site after Warner came to Google with an “11th-hour demand” for better financial terms. Warner over the weekend said that it began asking that YouTube remove its videos after talks to renegotiate its licensing deal broke down, but two sources close to the situation claim that YouTube actually walked away from the deal first. According to the sources, managers at YouTube considered Warner’s demand, only to begin pulling Warner music videos as its answer. YouTube also first notified the public of the split by posting a note on its blog. Warner responded by saying the music labels were building a YouTube competitor, and that YouTube didn’t drive much revenue for them, anyway, and that Warner’s departure was a bad sign for the Google video site.

Friendfinder Networks files to go public, may make acquisitions — Friendfinder Networks, the Boca Raton, Florida-based social networking company, has filed for an initial public offering and anticipates USD 460m in proceeds. The Internet-based company said in an S-1 filing on 23 December 2008 with the US Securities and Exchange Commission that Renaissance Capital is the underwriter. “To access technologies and provide products that are necessary for us to remain competitive, we may make future acquisitions and investments and may enter into strategic partnerships with other companies. Such investments may require a commitment of significant capital and human and other resources,” stated the company in its SEC filing. Source: mergermarket.

WaPo Digital-Print Integration: The Fast Track — Reading through some clips in the wake of the news that Jim Brady is leaving WashingtonPost.com, I was struck by the rapid shift from separate but cooperating news operations to Russian nesting dolls following Katharine Weymouth’s promotion to Washington Post (NYSE: WPO) publisher and CEO of the Media Group: Feb. 7, 2008: From the Washington Post: “Washington Post Media is designed to forge a closer relationship between the business functions of The Post newspaper and washingtonpost.com, while maintaining separate newsrooms and editorial decision-making.” 

Online Display Ad Spending Dips 6% Through Q3 — A 27% plunge in spending by financial services marketers led to an overall 6% drop in the online display ad market in the first nine months of 2008, compared to the same period a year ago. The percentage declines in both instances mirrored results from the first six months of the year, according to data released by Nielsen Online. Other sectors downsizing display ad budgets included Web media, down 15% to $1.1 billion; travel, falling 7% to $304 million; and retail goods and services, slipping 4% to $833 million. The declines were offset partly by surging ad dollars in the automotive and entertainment categories, which jumped 32% and 29%, respectively. The continued growth in auto advertising online contrasts sharply with the 8% spending fall-off in the category offline. 

Ad-Revenue Sharing Model For Publishers Emerges In 2009 — Advertising networks will begin sharing ad revenue with publishers in 2009. Attributor, which published a study on the ad-serving market this week, will soon offer a service that lets customers monetize content. Rich Pearson, VP of marketing at Attributor, said the Redwood City, Calif. company will rely on technology to automate the process. “We are working with Politico, but it hasn’t been formally launched,” he said. Last week, Reuters–a division of global information company Thomson Reuters–said it will incorporate government and political news from Politico, a unit of Capital News, into its newswire service in a revenue-sharing deal. The group will allow Politico to sell online advertising on their sites. Ad code attached to the media content will determine the revenue-sharing agreement.  

Google, Microsoft, Yahoo Rattle SEO In 2009 — Rival search engines and marketers will continue to fret over Google’s market gains regardless of how the “large actor” acts. Microsoft will “dance and flounder” until cutting a deal with Yahoo toward the end of 2009. The Sunnyvale, Calif. company will need to first find a CEO–which Danny Sullivan, Search Engine Land founder, predicts could happen by February. Whether Yahoo cuts a deal with Microsoft or breaks off and sells the search business remains up in the air. “Yahoo’s CEO will first need to learn the landscape, rather than immediately cut a deal with Microsoft,” Sullivan said. “If a deal happens, it will need to go through a review, which would take two months. By this time you’re in the middle of 2009.” Aside from who’s doing what at search engines, tech-related trends will move beyond Web search results and page content, and into video SEO, local search engine rankings and analytics. Marketers will look for ways to dominate local search results based on demographics. Perhaps local listings will appear at the top, video in the middle and blog search results on the bottom, all on one page. 

NYT Online Ad Revenues Decline In November — It appears that even online advertising–long a growth engine–has started sputtering for the beleaguered New York Times Co. The company said Wednesday that Internet ad revenues across its Internet properties dropped 3.8% in November, compared to a 4.6% gain in October. It marks the first monthly decline in online ad revenue the Times Co. has reported to date. 

MySpace’s Berman: More Ad Products To Come — MySpace has introduced a flurry of new applications and services as it transforms into an advertising-supported social portal, chasing the big bucks spent on Yahoo and Google’s YouTube. It is aggressively leveraging its 75 million active monthly users, each with about 111 friends and spending an average four hours monthly in ways that Madison Avenue and Hollywood cannot ignore. When you can claim nearly 12% of all Internet minutes in the U.S., people will listen. Jeff Berman, MySpace president of sales and marketing, discussed future plans with MediaPost. 

Liberty Media Could Sell Shares Of IAC/InterActiveCorp Until April 2010 — IAC/InterActiveCorp. (NASDAQ:IACI), the New York Internet company, could have Liberty Media (NASDAQ:LINTA) sell shares until April of 2010, reported the Wall Street Journal. The unsourced report in the Heard on the Street column, said the rate at which Liberty Media is going in selling shares of IAC, the company could continue stock sales until April of 2010. According to the report, to avoid the pain of Liberty Media slowly selling its stake IAC could issue a dividend or a buyback of shares. IAC has a market capitalization of USD 2.2bn. Source: mergermarket.

Articles of the Day

Posted in Digital Media, News with tags , , , , , on December 19, 2008 by Dave Liu

Glam Claims Confidence On Display Ads—But Cuts Salaries (Just In Case) — Despite months of evidence of display advertising’s increasing vulnerability, female-focused ad network Glam Media continues to claim it has detected no considerable retreat in revenue. The latest claim comes via an internal company memo obtained by Venturebeat that also happens to include news of a switch to “variable pay.” Instead of further layoffs—it cut 14 posts in September as part of what it said was a routine annual review—Glam is cutting salaries across the board with promises to supplement based on revenue. This isn’t the first time Glam implemented this tactic. Earlier this year, the 12-person management team of 12 accepted a temporary 25 percent pay cut. Next year, management will take a 25- to 60 percent cut in compensation. Top sales reps, for example, will now only have about 25 percent of their compensation “fixed.” Before the change, 75 percent was “fixed.” Therefore, sales reps will have to drive more revenue in order to make up the lost compensation.

Barclays Reduces ‘09 Online Ad Forecast To 6 Percent Growth; Total Ad Spend To Fall 10 Percent — Another day, another ad spend downgrade… Online advertising will grow a paltry 6.1 percent to $25.1 billion next year, says Barclays Capital internet analyst Doug Anmuth, in his latest significant downward revision. It was only October when he predicted that web ad dollars would grow 16.9 percent. That was revised down from May’s expectation of 23.4 percent. But as a commenter said on an earlier ad spend outlook, some growth is better than none. Putting things into perspective, the U.S. total ad spending looks to plummet 10 percent to $252.1 billion, Anmuth now says, altering his previous -5.5 percent projection.

Startup Bubble Goes Pop — Last year at this time, news aggregation service Digg hired investment bank Allen & Co. to put itself on the block for an asking price of $300 million. Bloggers predicted that buyers could “easily justify” the price tag for Digg, although no deal ever materialized. BusinessWeek says those were heady days for popular Web 2.0 startups. On Sept. 24 of this year, Highland Capital Partners and three other VC firms invested close to $30 million in the firm. The valuation: $167 million, according to sources close to the deal. Across the board, the value of Web and technology startups is falling. Digg, Facebook, even Twitter, which have built businesses on the back of their popularity, are seeing their once lofty valuations fall back down to earth. “Declining valuations are throwing a wrench into the gears of Silicon Valley’s wealth machine,” says BusinessWeek’s Spencer E. Ante. If the money dries up, startups are forced to shut down.

Casual Gaming Continues Rise — Console games aren’t the only part of the gaming sector having a banner year: The Economist points out that “casual” games, which are played over the Web on a PC or mobile device, are also booming. And while these games may lack the depth of console video games, even the most hardcore gamer would admit that simple puzzle, card and quest games can be just as if not more addictive. Now, thanks to the rise of social networking sites like Facebook and smartphones like Apple’s iPhone, casual gaming is widening its user base. “Social gaming”, or games that can be played between friends on social networks, has become especially popular. Zynga, a developer of such games, has more than doubled its staff since June. Serial entrepreneur Mark Pincus, Zynga’s founder, attributes the success of his company’s games to their social nature. Of course, it doesn’t hurt that the games don’t cost anything, either. Taking a hint from the online gaming model in Asia, Zynga offers its games for free but invites users to pay for optional in-game extras. The startup has had positive cash flow since September 2007.

YouTube: A Money-Maker For Music Labels, But What About Google? — YouTube is driving more than traffic to music labels like Universal Music Group. Rio Caraeff, EVP of UMG’s eLabs, told CNET that YouTube is adding “tens of millions of dollars” to the recording company’s bottom line: “(YouTube) is not like radio, where it’s just promotional … It’s a revenue stream, a commercial business.” The video site shares revenue with record companies like UMG from ads appearing with their music videos, as well as user-generated clips featuring their artists’ tracks. UMG’s eLabs division has brokered such deals with YouTube and others, including MySpace Music, over the past three years, and has made about $100 million dollars off its music videos as a result. By Caraeff’s account, YouTube has been responsible for a large chunk of that (which should make UMG doubly happy, since it, like some other labels, took a small stake in YouTube as part of the content-sharing deal). And while that’s great for the labels, what about Google?

Articles of the Day

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

Liberty Media To Split Off Majority Of Liberty Entertainment; Assets Include DirecTV, Sports Nets — In typical Liberty Media (NSDQ: LINTA) fashion, the company founded by John Malone has just filed a complicated business plan with the SEC on a Friday night. It’s also a relatively rare move—a split-off that will give holders of the Liberty Entertainment group tracking stock shares in a new subsidiary that will hold the majority of the group’s businesses, assets and liabilities in exchange for some of their tracking stock shares. The announcement follows CEO Greg Maffei’s assurance this week at the UBS Global Media and Communications conference that the company is looking for a structure that benefits shareholders better than the current tracking stocks. If it gets the usual regulatory and IRS approval—as is generally the case with Liberty, the goal is a tax-fr*ee transaction—holders of the tracking stock will have stock in two investments. Release. The details: The new Liberty Entertainment will be a publicly traded company—not a tracking stock—called Liberty Entertainment, Inc. That company would include roughly 52 percent of The DirecTV Group (NYSE: DTV), Inc., 50 percent of GSN, LLC, 100 percent of FUN Technologies and 100 percent of Liberty Sports Holdings, LLC (three regional sports nets.) It also will be responsible for $2 billion in debt incurred when Liberty acquired its majority interest in DirecTV last spring.

New NYT.com GM Denise Warren: Tip-toeing Into Aggregation With Guarded Optimism — As if heading advertising for the New York Times (NYSE: NYT) Media Group wasn’t tough enough in this climate, Denise Warren is taking on the role of GM of NYTimes.com as the site fends off increased challenges from competitors and the economy. Warren has been chief advertising officer of the NYT Media Group for three years and has been with The New York Times Company for 20 years. As she settles into the GM job vacated by Vivian Schiller, who exited after being named CEO of NPR, Warren tells paidContent that she has been able to maintain her optimism. For example, despite the temptation to suspend new initiatives and wait until a more supportive ad market returns, Warren has faith the NYTimes.com’s new experiments with aggregation will deliver. In particular, she’ll be taking a close look at recently unveiled Times Extra feature and the current beta test of Times Widgets, which lets readers create custom apps for RSS feeds from various news sections. While the NYTCo has a lot more plans along those lines, Warren concedes that the economy will likely force the company to scale other experiments back a bit. “One of the unfortunate things about this downturn is that you can’t do all the things you’d like to, whether it’s your personal life or your professional life,” Warren says. “You have to watch that budget. You can only do the things that are really important. But in a way, these constraints that we’re operating under can help focus you.

Google Quietly Tries Brokering Deals With ISPs To Get Priority Access — Congress has failed to pass legislation regarding so-called “Net Neutrality,” and now the issue is again top of mind as Internet providers seeking preferential treatment; network operators considering a tiered approach, and once-staunch defenders beginning to soften their stance on the matter. This time, it appears Google (NSDQ: GOOG), which has been traditional a huge advocate of network equality and openness, is working behind the scenes with major cable and phone companies to get its Internet traffic prioritized, according to documents reviewed by The Wall Street Journal.

CBS Relaunching TV.com; Hoping Finally To Become A Video Player; Aiming Beyond Hulu, Not At It — CBS Interactive is relaunching TV.com, hoping to transform the well-named site known for its TV-related community and user-generated content into a serious video destination, paidContent has learned. The full-scale relaunch with new content partners is slated for January but the cosmetic changes will start this week with a new look and logo, according to sources familiar with the plans. TV.com is among the assets CBS (NYSE: CBS) picked up with its $1.8 billion acquisition of CNET last summer. (The other notable non-brand domains: News.com, MP3. com and Radio.com). Despite having the ultimate url and folding in some video through agreements first with CBS and then with Hulu, CNET missed multiple opportunities to grab early advantage. Now it’s playing catchup with a number of competitors, including Hulu and newest challenger Sling.com.

Lycos Europe Opts For Liquidation, $66 Million Paid Back To Shareholders — Lycos Europe shareholders voted to liquidate the business at an extraordinary general meeting at a hotel in Amsterdam this morning. They also nodded through management’s strategy to sell its domain registration business, shopping portal and Danish website as going concerns. Shareholders will get €50 million ($66.72 million) returned to them on December 19 – not a bad Christmas present, but the price per share of €0.1605 ($0.21) is vastly less than its opening high of about €24 (now $32) in 2000.

Facebook Opens Paris Sales Office As Part of European Expansion — What does Facebook want for Christmas? A greater foothold on the European ad market by the looks of things: the social network is set to open a sales office in Paris as part of plans to grow across Europe, according to Mad.co.uk. The site’s commercial director for EMEA Blake Chandlee has unveiled the office’s first employee Damien Vincent who has defected from MySpace France where he was head of sales. Facebook claims to have 6.1 million users in France and to have just reached the one million mark in Switzerland, adding to its 130 million users worldwide. Facebook translated the site into French in April and saw an immediate traffic boost, but it still trails in France to the Skyrock social net, which has more than 12 million users. In August Chandlee was behind moves to double the site’s UK sales and marketing staff to about 40. There are more than eight million UK users but according to Nielsen Online suffered a slight dip at the start of 2007 from a peak of 8.5 million.

Articles of the Day

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

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

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

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

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

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

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

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , on December 9, 2008 by Dave Liu

Tribune Hires Bankruptcy Advisers; May File Ch. 11 This Week — Tribune, the Sam Zell-owned newspaper chain, has hired bankruptcy advisers in an attempt to stave off potential bankruptcy filing, reports NYT, citing sources. It is using investment bank Lazard and the law firm Sidley Austin, to try and restructure its crippling debt and assess its options, the story says. WSJ says it could file for Chapter 11 bankruptcy protection as early as this week. Last month, the company reported a Q3 loss of $124 million, compared with earnings of $84 million for the same period last year. Publishing advertising revenues slid 19 percent ($111 million), and as part of that, interactive revenues dropped 7 percent ($4 million). The company has about $12 billion in borrowings, and stayed ahead of the interest payments as a result of asset sales, but the economy and resulting ad decline continues to hit it hard. The company doesn’t have enough cash to pay $1 billion in interest payments this year, and also owes a $512 million debt payment in June.

Why Can’t Google Invest in Hulu? Or At Least Do A Syndication Deal — As I have been playing around with Sling.com, the new video portal from Echostar-owned Sling Media, this thought came to mind: if Sling can make a deal with Hulu to essentially create a competitor to Hulu, then why can’t Google (NSDQ: GOOG) make a deal with the News Corp-NBCU JV? With YouTube, Google will continue having a tough time doing mainstream full-episode TV deals. I think even YouTube realizes it, as its head of content partnerships Jordan Hoffner hinted in his speech at B&C’s OnScreen Media Summit this week: “If people want to see the last episode of Ugly Betty they know they can go to ABC.com, but on the other side, we can compete by getting into everyone’s old favorite [TV shows] and feature films … Given the audience and how big it is, do we essentially become the museum of broadcasting? Do you start doing deals for libraries?” Pretty boring, if you ask me. The way YouTube is currently tooled and perceived, it will not be a lean-back experience for most users. Hoffner’s main message was: “YouTube is a great place for premium content … But we need to do a better job of creating areas where the user can go and know what they are going to get.” And that is the biggest dilemma for the company. Then Google has to deal with YouTube’s monetization head on, especially as the next year is going to be a tough slog for everyone.

Obama: ‘We’ll Renew Our Information Superhighway’ — A day after the dismal news that the United States lost 553,000 jobs in November, President-elect Barack Obama outlined some of his job creation and economic recovery plans—including a strong emphasis on improving broadband access. In his regular Saturday morning message, Obama promised “the single largest new inv*stm*nt in our national infrastructure since the creation of the federal highway system in the 1950s” and “the most sweeping effort to modernize and upgrade school buildings that this country has ever seen.” Then the president-elect—who made a point from the beginning of distributing his message online through YouTube as well as traditional radio—placed broadband alongside those efforts: “As we renew our schools and highways, we’ll also renew our information superhighway. It is unacceptable that the United States ranks 15th in the world in broadband adoption. Here, in the country that invented the internet, every child should have the chance to get online, and they’ll get that chance when I’m President – because that’s how we’ll strengthen America’s competitiveness in the world.”

Diller Looking For Buying Opportunities In Downturn; Offers The Pretzel Metaphor For IAC — Bring on the downturn! Barry Diller is still looking to buy websites, because the economy “tomorrow will present unknown opportunities.” The IAC (NSDQ: IACI) CEO told Reuters’ media summit in New York he expects a “‘cascade’ of acquisition opportunities at bargain prices,” Reuters reports. Acquisitions won’t come so much in search, where IAC already owns Ask.com, but: ”The interest would be on audience; we would acquire audience absolutely; we would acquire vertical audiences as we acquired with Dictionary.com, Thesauraus.com.” Rule out social media buys; they’re not good advertising plays, Diller said: “Think of the bimbo words this internet has created: ‘portal’, ‘social network’; I could riff on … ‘networking,’ horrible word too.”

TV Guide’s Print Buyer To Launch A New Site, Separate From TVGuide.com — TV Guide, the print magazine now under the ownership of LA-based private equity firm OpenGate Capital, plans to launch a new website (at TVGuidemagazine.com which it owns) to accompany the mag. The only problem is that TVGuide.com exists, and was not sold by Macrovision (NSDQ: MVSN) as part of the sale, so not sure how the PE firm will navigate around that confusion. The closest parallel I can think of was the Wired.com and Wired magazine situation (the online part was owned by Lycos US and print by Conde Nast) that existed for a few years until Conde Nast bought back the online part two years ago.