Archive for Hulu

Articles of the Week

Posted in Digital Media, News with tags , , , , , , , , , , , , , on January 2, 2009 by Dave Liu

Gijrath Media Group Could Interest Glam Media — Glam Media, the California-based lifestyle media company, would consider discussing a partial acquisition of Dutch peer Gijrath Media Group (GMG), a company
source said. Joint ventures could also be a possibility, the source added.
“We built out our luxury channel not too long ago, so [this] would
definitely be an area that is of interest to us”, the source said. “International [targets are] definitely on the radar in terms of acquisition potential,” the source said when asked about GMG. A sector banker lent credence to the source’s argument, pointing out that the groups could use each other’s content interchangeably in their publications. Other potential US-based suitors for GMG could include Modern Luxury, another American lifestyle media group, a second sector banker suggested. In reaction, GMG’s owner and chief executive officer Yves Gijrath said he “could be open to” approaches by Glam Media or other players. He added that he would have to become better acquainted with Glam Media’s operations before commenting further on the matter. GMG will have 100 full-time employees in 2009. Gijrath confirmed news reports that the recent Amsterdam edition of GMG’s “Millionaire Fair” had revenues of around EUR 200m, according to preliminary figures. He declined to provide further financials. Earlier, Gijrath said the Amsterdam-based company would consider a minority stake sale to an industry player to stimulate growth. Gijrath specified that an external investor must bring more than capital. GMG is also open to joint ventures with industry players, especially outside the Netherlands, he said. A player with a strong profile in the Internet sphere, or a niche player such as Conde Nast, would be an appropriate suitor, Gijrath said. Conde Nast, however, may be scaling back its M&A activity, one sector banker said. He cited the recent dismissal of Kourosh Karimkhany, vice president of corporate development at its sister company, CondeNet, as a signal to this effect. Source: mergermarket.

Hulu CEO: More Global Moves Planned For ’09 — In just a year, Hulu has morphed into what is arguably the most successful television
network online. The co-venture of NBC Universal and News Corp.’s Fox
already is the sixth-most-viewed online video hub, providing insights into
how consumers transfer their television viewing preferences and habits to
the Web. Here’s what Hulu CEO Jason Kilar told MediaPost about that future.

Social Media Wins In Marketers’ ’09 Plans — Marketers are directing their 2009 budgets toward content, custom media and social media initiatives, according to a new study from online marketing resource and vendor-matching tool Junta42. More than half–56%–of marketing and publishing decision-makers plan to increase their content marketing spending next year, Junta42 found after surveying its community of corporate marketers and publishing/agency professionals.

Britain Introduces Movie-Like Ratings For Web Sites — The British
government is looking into rating Web sites in a similar manner to the way
movies are rated by the Motion Picture Association of America in the U.S.
Britain’s Minister For Culture Andy Burnham told The Daily Telegraph that
the government was planning to negotiate age ratings for English language
sites with the administration of President-elect Barack Obama. “The more we
seek international solutions to this stuff — the U.K. and the U.S. working
together — the more that an international norm will set an industry norm,”
Burnham said. “This is an area that is really now coming into full focus.”

Online Advertising To Weather Recession — It matters little what sector you’re in: 2008 was a lousy year for most businesses, particularly
advertising. And if you believe the forecasters, 2009 isn’t supposed to be
much better, either. Just last week, Barclays Capital lowered its
projection for advertising in the U.S. to a negative 10% next year, with
every single traditional media sector receiving a major hit. By comparison,
advertising fell just 1.9% in the 1991 recession, and 6.2% in 2001.
However, while Barclays and others expect the rest of advertising to get
torched, online advertising is still expected to grow between 6 and 10%
next year over 2008 levels. In fact, according to BusinessWeek, advertising
may see the kind of seismic shift next year that is now bringing about
unprecedented changes to the financial and automotive sectors. “The
harbinger of advertising’s radical transformation is the sustained growth
of online,” the report says, noting while the rest of the sector takes a
big hit, “online is holding its own.”

Bonnier Eyeing Six Possible Targets Within Digital Media — Bonnier, the Swedish privately-owned media company, is looking to expand within digital media via acquisitions, according to Svenska Dagbladet. The Swedish daily cited Sara Ohrvall, director at Bonnier, who said that the company needs to grow via acquisitions, especially within new business areas which will help the company move forward quickly. The paper reported that Bonnier is currently eying six possible targets and that most of them are digital media companies and that the acquisitions are to occur both in Sweden and internationally with a focus on the US. The item noted that Bonnier has a turnover of SEK 30bn (EUR 3.1bn). Source: mergermarket.

NYTCo Lays Groundwork To Raise Funds Through Debt, Equity — With a $400 million revolving credit line expiring in May, the New York Times Company (NYSE: NYT) continues to put its fund-raising ducks in a row. The latest: an SEC filing setting the stage to secure debt or raise equity. The terms in the prospectus are as vague as possible—an unspecified amount, indeterminate price—and meant to allow the company to move fast should it go this route. Times spokeswoman Catherine Mathis explains: ‘In these difficult markets, the company wants to ensure that it has maximum
flexibility and, accordingly, is filing a shelf that would permit it to
offer both debt and equity.” The Washington Post Company (NYSE: WPO) filed a similar prospectus in November for possible debt securities.

Blinkx Debuts ‘Un-Roll’ Streaming Video Ad Unit — In the ongoing pursuit for the killer Web video ad, video search engine blinkx has introduced a new ad unit that allows users to engage with a brand continuously throughout the duration of a streaming video. The Un-roll unit, as the company has dubbed it, was developed in-house by blinkx in response to the industry’s need for an alternative format to traditional pre- and post-roll ads.

Arrington: January Spending To ‘Fall Off A Cliff’ — The U.S. may have been in recession for a year now, but TechCrunch’s Michael Arrington says the fact is that most Internet-base companies haven’t seen their revenues drop yet. Amazon, for example, recently recorded its “best ever” holiday sales period. Of course all that’s about to change for content sites, he says,
starting this week. “Display advertising revenue is going to fall of a
cliff in January according to a number of content sites I’ve spoken with
who rely on advertising for revenue,” Arrington says. One sales exec said
that sales through December remained strong as advertisers used up their
marketing budgets, but “there are few buyers for this next fiscal quarter,
and those few that are buying are looking for steep discounts.”

Digging In To MySpace And Facebook’s (Projected) Slump In Ad Sales — Earlier this month, eMarketer lowered its social media ad spending outlook for 2008 through 2013, with revised forecasts for News Corp.‘s MySpace and Facebook. In an update, the online research firm offers details for why the two nets will take in less money this year: Slower growth overall at FIM: eMarketer lowered its MySpace ad revenue forecast for 2008 by more than 22 percent—from $755 million to $585 million—partly because of slowed revenue growth at parent company Fox Interactive Media (NYSE: NWS) (FIM). Over the course of News Corp.‘s past fiscal year (which includes half of 2007 and half of 2008) FIM’s year-over-year revenue growth sputtered from 87 percent at the end of Q2, to 55 percent in Q3, to just 23 percent in Q4. The downward trend continued in the company’s most recent earnings report: for the quarter ended September 30, 2008, FIM’s revenues were up just 17 percent year-over-year, and eMarketer expects the trend to continue. Just don’t tell that to MySpace CEO Chris DeWolfe: at the Reuters Media Summit he said that the social net hadn’t really seen “any impact” from the financial crunch and that he expected revenues to grow next year.

Internet Tops Newspapers As News Source — The Internet is now the most popular source of news after TV, according to the Pew Research Center for the People & the Press, which released its year-end roundup of news media consumption last week. While TV is still king of the hill, its steady
decline in the face of Internet competition bodes ill in the long term.

ComScore: First Drop In Online Holiday Sales Since 2001 — E-commerce sales fell 3% this holiday season, marking the first drop since 2001, according to data released by comScore. The Web measurement firm attributed the falloff to five less shopping days in 2008 between Thanksgiving and Christmas and the impact of the recession on consumer spending. ComScore had predicted sales from Nov. 1 to Dec. 23 would be flat to last year, at $26.3 billion. The total came in shy, at $25.5 billion.

2008: Worst VC-Backed Liquidity Year Since 2003 — With no initial public offerings (IPOs) and just $3.9 billion generated via mergers and
acquisitions (M&As) of 65 venture-backed companies in the fourth quarter,
2008 proved to be the worst year in terms of liquidity for U.S. venture
capitalists since the post-tech-bust doldrums of 2003, according to
official statistics released today by Dow Jones VentureSource (
http://www.venturecapital.dowjones.com). Overall, U.S. venture-backed
companies generated $24.1 billion in liquidity through IPOs and M&As in
2008, down 58% from the $57.6 billion in liquidity produced in 2007. Just
seven companies completed public offerings in 2008, raising $551 million —
a far cry from the $6.8 billion generated through the public listings of 76
companies in 2007 and the lowest totals recorded since VentureSource began tracking the industry in 1992.

Lee Enterprises Says Does Not have Sufficient Cash Flows To Meet Both Its Requirements For 2009 Operations And Repayment Of Pulitzer Notes — In its Form 10-K filed on 31 December, Lee Enterprises made the following disclosure: The Company generated cash flows in 2008 sufficient to reduce net debt by USD 102,225,000, pay dividends totaling USD 32,573,000 and acquire shares of its Common Stock in the amount of USD 19,483,000. The Company does not have sufficient cash flows to meet both its requirements for 2009 operations and repayment of the Pulitzer Notes. 2009 principal payments required under the Credit Agreement totaling USD 142,500,000 are expected to exceed the Company’s cash flows available for such payments. As a result, the Company expects to utilize a portion of its capacity under its revolving credit facility to fund a portion of the 2009 principal payments required. At September 28, 2008, the Company had USD 207,000,000 outstanding under the revolving credit facility, and after consideration of the 2009 Amendments, letters of credit and other commitments, has approximately USD 162,000,000 available for future use. Principal payments under the Credit Agreement totaling USD 166,250,000 are due in 2010. The Company expects to utilize the remainder of its capacity under its revolving credit facility to fund a portion of the 2010 principal payments required. The Pulitzer Notes mature in April 2009. The Company is actively engaged in discussions with the Noteholders, and to the extent their approval may also be required, the Lenders under the Credit Agreement, to extend or refinance the Pulitzer Notes. The Company has also initiated discussions with the Lenders related to changes to the Credit Agreement to maintain sufficient long-term liquidity. However, the timing and ultimate outcome of such discussions cannot be determined at this time due, in part, to the abnormal condition of the domestic credit markets and the overall recessionary operating environment in which the Company, Pulitzer, and other publishing companies are currently operating. Continuing instability or further disruptions of these markets could prohibit or make it more difficult for the Company to access new capital, increase the cost of capital or limit its ability to refinance existing indebtedness. There are numerous potential consequences under the Credit Agreement, and Guaranty Agreement and Note Agreement related to the Pulitzer Notes, if an Event of Default, including expiration of existing waivers, occurs and is not
remedied. Many of those consequences are beyond the control of the Company, Pulitzer, and PD LLC, respectively. The occurrence of one or more Events of Default would give rise to the right of the Lenders or the Noteholders, or both of them, to exercise their remedies under the Credit Agreement and the Note and Guaranty Agreements, respectively, including, without limitation, the right to accelerate all outstanding debt and take actions authorized in such circumstances under applicable collateral security documents, any of which would impair the ability of the Company to operate its business as a going concern. Source: mergermarket.

Microsoft To Lay Off 17% Of Workforce? — Fudzilla, a tech blog, reports that Microsoft may lay off 17% of its work force, or 15,000 people, on Jan. 15, but Silicon Alley Insider contends that a cut of this magnitude is
unlikely. “Unless Microsoft’s business has been absolutely crushed in the
past two months, there is no reason for the company to suddenly cut this
much cost,” writes Henry Blodget. He points out that Microsoft’s margins
are actually fine, as much of the company’s revenue is generated from
multi-year contracts that aren’t expiring anytime soon. Blodget says the
only way Microsoft would lay off this many people is if decided to
eliminate whole businesses, but again, this is unlikely, because the
software giant would be more likely to sell rather than shut down any
divisions it no longer wanted. This includes MSN, which Fudzilla cites as a
major recipient of the pending job cuts. Blodget adds that if Microsoft
wanted to get out of the Internet biz, the best way would be to combine its
online operations with Yahoo and then take a majority stake in the combined entity. However, Microsoft just hired a new head of MSN, and while it’s possible he will make some cuts, “15,000 sounds extreme,” Blodget says.

Publicis Continues To Bet On Internet Ad Spend, Despite The Risks — Looking back at the growing strains on the traditional ad business over the last year, Publicis Groupe CEO Maurice Lévy expresses his continued enthusiasm to the NYT that the rise of digital media will save the
industry. Lévy, who spends most of the article professing his ardor for
Barack Obama, says that despite the global economic downturn, online growth will remain solid. As he has maintained since last year, by 2010, Lévy expects 15 percent of global ad spend will be tied to the web. He has also previously said that 25 percent of Publicis’ revenues would be related to the internet by next year, but the NYT interview didn’t include an update
on whether or not Lévy still holds that view. Risks to betting on internet
ad spend: To be sure, banking on the growth of online as traditional ad
spend was cutting back was a fairly safe one when Lévy first made it in May
2007, a Morgan Stanley report on Publicis says that the company might want to rethink its past bets internet gains. “This has recently become a
higher-risk strategy,” the Morgan Stanley report says, pointing to the last
downturn, when online spending suffered the most. Still, the current signs
suggest that even with the significant economic pitfalls, online appears
fairly resilient, although that’s mainly attributable to lower cost search
ads.

Social Gaming: Challenges And Opportunities For ’09 — Social gaming may be a growth sector, but GigaOm’s Wagner James Au warns the coming year will bring challenges as well as opportunities for social gaming startups. One of the biggest challenges, he says, is that the majority of startups are still at the mercy of top social networks like Facebook, which have a habit of suddenly changing their policies. Such changes can have an adverse affect on third party application makers. There’s also unpredictability in competition. Most social networking games are easy to reproduce, so developers often find themselves competing with knockoff versions of their own app. Also, the proliferation of poor quality games could hurt the sector as a whole, says Kristian Segerstrale, CEO and co-founder of Playfish: “Poor quality user experiences or misleading monetization mechanisms like some of the aggressive CPA practices we’ve seen in 2008 could jeopardize the perception of social games and our growth potential as an industry.”

Online Or Bust: Why 2009 May Be The Nail In Newspapers’ Coffin — Optimistic newspaper proprietors like Sly Bailey and Tim Bowdler blame the business’ current malaise (we’ve covered over 1,000 newspaper job losses in UK since October alone) on an advertising downturn that’s merely
“cyclical”. In reality, 2009 is more likely to bring more layoffs, further
consolidation and the death of certain long-running titles than it is a
cyclical upturn in fortunes, as publishers grapple with the truth that
their businesses have changed fundamentally and forever. In 2008, every
newspaper group either cut regional budgets, closed offices, shut titles or
cut staff – in some cases, all of the above. In one way, this is nothing
new – cutbacks are part of life for most newspapers and magazines nowadays. But there’s a strong case for saying 2009 will mark a shift from seasonal, sensible belt-tightening to the long-term shrinking of the newspaper industry in Britain.

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 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.

Articles of the Week

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

Microsoft, Yahoo Said To Be Hammering Out $20 Billion Search Buyout; Denied — Microsoft (NSDQ: MSFT) is working out a deal that would ultimately net it Yahoo’s search business for $20 billion, The Times Online reports, but has been denied outright by parties involved. If it turns out to be true, it would be complex deal with many moving parts: MSFT would initially only invest $5 billion, with the option to buy out the new unit for $20 billion after two years. Yahoo (NSDQ: YHOO) would continue to run its own email, messaging, display and content services businesses in the event of a buyout. Velocity Investment Group founders Jonathan Miller and Ross Levinsohn would likely lead the new search division; and they’d match MSFT’s funding with $5 billion from external investors. The new unit would end up with a 30 percent stake in Yahoo, and the external investors would have the right to appoint three of Yahoo’s 11 board directors. Senior execs at both MSFT and Yahoo have reportedly agreed on some of the terms, but the deal hasn’t been finalized—and may not be approved at all, The Times’ sources say.

Facebook Connect Set To Expand; Includes Discovery, Digg, Hulu and Others — Facebook, in an increasing attempt to prove its utility beyond its own site (and hence build on its advertising potential in the long run), is expanding its Facebook Connect service on some major media and services sites, including Discovery.com, SFChronicle, Digg, Citysearch, CBS.com, Hulu and others. The Connect service allows a federated identity system of sorts, competing with other services/efforts such as OpenSocial (backed by Google and MySpace) and OpenID, and also allows Facebook services to go outside its own site onto other services. It allows Facebook users to sign in on these third-party sites, connect with their friends who also use the sites, and then share their info and action on the social networking service.

Skol! Digitas Continues Expansionary Roll, Enters Sweden — On the heels of its expansion into South America last week, Publicis’ Digitas has turned its sights on Scandinavia, launching Digitas Sweden. The new Nordic outpost has been formed by combining two pre-existing Publicis units – direct and digital marketing shop 1.1.3, and pure play creative shop Joy – to form a new Stockholm-based full-service digital marketing agency. Digitas Sweden will be led by 1.1.3 founder Lisa Amatiello, who will report to Alan Rutherford, CEO of Digitas Global. The agency will continue to serve 1.1.3 and Joy clients while also offering expanded reach for Digitas’ global clients.

AOL Starts Site For Parents Who Ain’t Got Game (Knowledge) — Parents hit with pre-holiday pleas for “Grand Theft Auto IV” and other hot video games have a new source for sorting out which are appropriate with the launch of PlaySavvy.com from AOL. A complement to the Web portal’s game-focused properties, the new site offers parents a guide to games, from ratings and reviews to connecting with other parents about making informed buying decisions.

During October, Consumers Conducted 12.6 Billion Searches In The U.S., Up 7% Sequentially, According To comScore — Searches on Google rose 7% to 8 billion. Yahoo followed, up 9% to 2.6 billion, and Microsoft was up 8% to 1.1 billion. Google still owns the market–up 0.2% to 63.1%–followed by Yahoo at 20.5%; Microsoft at 8.5%; Ask, 4.2%; and AOL, 3.7%, according to comScore. AOL not only saw its U.S. search count decline, but also its market share, which fell 0.4%. Fox Interactive Media’s MySpace also declined 8% in October, from 614 searches to 563.

Baidu To Launch New Search Product — Baidu, Google’s Chinese search engine rival, will overhaul services after being accused of allowing unlicensed suppliers to fake documents and buy their way up the search results, reports Ars Technica. Chinese citizens had complained about paying exorbitant amounts for products and services found on Baidu’s search engine that later proved to be ineffective. China’s top-ranked search engine expects to unveil a new advertising platform that will offer more information about companies listed in search queries. The forthcoming new platform, Phoenix Nest, aims to offer better search result rankings and resolve some recent problems pertaining to competitive ranking.

MySpace CEO: Cautiously Optimistic About 2009; Chance To Pick Up Startups On Cheap — MySpace CEO Chris DeWolfe was speaking at the Reuters Media Summit (not open to other reporters, only internal Reuters reporters), and said he is cautiously optimistic about growing its ad revenues in 2009, something that of course he has to say officially. “We’re up 18 percent year-over-year as of last quarter,” he said and hopes to grow it next year, despite the economic crisis. He continues: “We haven’t really seen any impact, other than we think we could have grown even more than we have.” Isn’t that the impact? To think that they won’t see a major impact this Q4 and next year is to be delusional, but I think they know that part and have to tow a corporate line publicly.

Newspaper Online Revenues Fall In Third Quarter — The Newspaper Association of America on Friday reported yet more depressing figures for the industry-in-decline that were compounded by a 3% year-over-year drop in overall online sales. This is particularly bad because online revenue growth was supposed to offset rapid declines in print ad sales; now, the industry is reporting losses from both revenue streams. In total, online ad sales fell 3% to $749.8 million, or about 12% of total newspaper spending. Print and online declines combined to produce an 18% decrease in total third quarter spending, from $ 10.9 billion in 2007 to $.8.94 billion. What we have here is an industry in a nosedive. Blogs, social networks, 24-hour news sites like CNN.com and real-time communication services like Twitter are stealing eyeballs from newspaper sites as the weak economy forces financial services, automotive and retail advertisers to greatly cut back on their spending. Meanwhile, newspaper publishers across the board are reporting steep declines and are responding by cutting costs, including thousands of jobs. Some publishers have also defaulted on debt payments, shrunk their pages, or even eliminated print editions altogether, in order to cope with the downturn.

CNBC’s Own Bad News May Be Coming, Soon, Despite ‘Massive’ Marketing Campaign — CNBC, high on its viewership numbers as the markets continue to nosedive, is in for its own downturn possibly by Q1 of next, a long cover story in the latest issue of B&C says. “Despite the yuks and the huge numbers, the network is now in the process of slashing as much as 10% from its budget. People at the network, says one staffer, are ‘scared s—less.’…As CNBC enjoys a new level of visibility and is about to launch a massive new marketing campaign to capitalize on the momentum, it must do so while navigating through the same flailing economy that has sent the network’s proverbial stock soaring.” This far into Q4, the channel viewership is up 66 percent compared to the year-ago quarter.

After Layoffs, Newspapers Embrace Content Sharing; McClatchy And CS Monitor Exchange Foreign Reports — As the newspaper industry’s prospects darken, and rounds of buyouts and layoffs have left little room for more cuts, The McClatchy Company (NYSE: MNI) is joining with the non-profit Christian Science Monitor on sharing foreign news coverage on a trial basis. The trial will last for three months and then the two will evaluate whether the combo worked. The exchange will involve two CS Monitor correspondents, one in New Delhi and the other in Mexico City, and two McClatchy foreign correspondents in Nairobi and in Caracas. The arrangement comes two months after McClatchy said it would cut an additional 1,150 jobs—10 percent of its workforce—while CS Monitor is preparing to shift from a daily to a weekly print pub and going online-only for breaking news. Meanwhile, the Associated Press is planning to slash 10 percent of its staff next year. That could make arrangements like McClatchy’s and CS Monitor’s more common.

Huffington Post Closes $25 Million Third Round; Plans Include ‘Focused Acquisitions’— After weeks of denials and “no comments,” political blog The Huffington Post has closed a $25 million third round funding from Oak investmentPartners, the company said in an e-mailed press release this morning. We reported earlier about a $20 million and above round with post-money valuation in the $110 million range. This probably puts it right at $115 million. The company said it planned to use the proceeds to support general growth efforts and for “focused acquisitions.” HuffPo also wants to build up its in-house ad sales team, as even the internet is succumbing to the wider economic turmoil. The three-year-old HuffPo had previously raised roughly $12 million from Softbank Capital, Greycroft Partners, co-founder Ken Lerer and Bob Pittman.

Ex-AOL CEO Miller Reportedly Raising Funds To Bid For Yahoo; But Could Be For His Own Fund — Jon Miller, former CEO of AOL and now one of the founders of VC firm Velocity along with Ross Levinsohn, is in the process of raising funds to try to buy Yahoo, reports the WSJ, citing sources. The story says he has been trying to do it for months. Our sources say that the WSJ might be reading too much into this: he and his partners at Velocity have been presenting to investors all across the globe, including sovereign investors in Dubai, to raise a new fund for his VC firm. So I would not be surprised if the two things got confused along the way, and someone expressed interest in putting money into a Miller-backed consortium. The story says that Miller believes he can do a deal that would be worth around $20 to $22 a share to Yahoo (NSDQ: YHOO) shareholders, which means raising about $28 billion to $30 billion to purchase the entire company. I have said before that the Indian tech-media giant Reliance ADA should look at a Yahoo deal seriously, and it is likely Miller has had conversations with them, considering Velocity’s India connections (it is an investor in NDTV there, among other companies). Full story —

Google Ratchets Back On Spending, New Projects; Buys Futures In Six Sigma — Nothing says serious about cost cutting and process quite like hiring a CFO with a black belt in Six Sigma management. With or without the tanking economy, Google (NSDQ: GOOG) has been heading towards maturing growth—you can’t keep up triple-digit growth or even double-digits indefinitely—and the addition of McKinsey vet and Bell Canada planning exec Patrick Pichette as CFO in August was one sign that cost containment was on the way. The slowing of online ad growth coupled with the unexpected speed of the economic downturn has only accelerated Google’s need to show maturity of a different sort. That would explain tonight’s long WSJ article about how Google is taking the responsible approach by cutting back on its ubiquitous product approach—along with some of the food perks and redundant offices. CEO Eric Schmidt told the Journal Google has to “behave as though we don’t know” what’s coming. That means cutting what Schmidt calls the “dark matter”—“projects that ‘haven’t really caught on’ and ‘aren’t really that exciting.’” Engineers may still get their 20 percent time but staffing and resources for their projects, particularly those without signs of real revenue potential, will be much harder to come by. Google needs hits that make money, not just headlines.

Yahoo Ties Up With CBS To Save Streaming Radio Service — Yahoo has turned to CBS to help keep its LAUNCHcast streaming radio service alive. As part of the new partnership, CBS Radio will provide the player and handle the ad sales for LAUNCHcast, and various CBS (NYSE: CBS) stations will be available on Yahoo (NSDQ: YHOO) Music. Yahoo will also incorporate more radio content throughout its news and sports portals. It’s the latest move in Yahoo’s strategy to “completely open” its music operations to other services: the company recently launched an enhanced music search service with Rhapsody (the same company it offloaded its premium music subscription business to in February).

Dow Jones Taps Langhoff To Lead European Charge, Focus On Online — Dow Jones (NYSE: NWS) has picked a local publishing exec with online tenure to lead The Wall Street Journal’s assault on Europe next year as it squares up to The Financial Times on its own turf. Andrew Langhoff, CEO of DJ’s Ottaway local publisher, will be publisher of WSJ Europe and MD of DJ’s consumer media group across the whole EMEA region, starting January 5. For extra brownie points, he will also run the South America consumer business, including The Wall Street Journal Americas. Over the last year, DJ has upped its European news coverage, debuted the US WSJ edition in some London locations and added a magazine to the European edition. But the ‘09 push is online. Guardian editorial development director Neil McIntosh is already due to start as WSJ.com’s Europe editor in the new year and WSJ’s LA bureau chief Bruce Orwall is moving to run the London bureau.

Conde Nast’s Flip Goes Flop: Teen Social Network To Be Shuttered — When news came out that Conde Nast was launching its teen social media site Flip.com, back in 2006, Staci had a very pertinent question: “Can Conde Nast, which has been so good at matching demographics with ideas for print, create an online place appealing enough to catch and keep teen girls attention among so much competition?” Now, with the announcement that it is closing Flip.com, the answer seems to be no. The site will close down on Dec. 16, according to a note sent out to users, reported by FishbowlNY. “If you have any flipbooks that you would like to save before this date, we suggest you print them. It’s easy; go to the flipbook and click on the Print button just below it.” How convenient.

FT To Do Some Buyouts; Salary Freeze; The Memo — The Pink One will pass out some pink slips, though more in form of buyouts than actual layoffs, reports Reuters, citing an internal memo sent out today by FT CEO John Ridding. The company has already done some redundancies in its library/research division in October. For those interested in a buyout, Dec. 19 is the cutoff. It also is freezing salaries for employees who earn more than $50K a year or the equivalent, which means most of the mid- to senior journalists at the company. That freeze decision could be reviewed if conditions improve later. Also, FT is offering some employees the opportunity to work three- or four-day weeks, which of course means at a lower salary.

IAC Dissolving Programming Group; Lehman Leaving, Jackson Taking New Role; Which Sites Are in Play? — PaidContent.org has learned that IAC (NSDQ: IACI) is dissolving its programming group as part of its post-spin reorganization. As a result, Nick Lehman, COO of programming, has to decided to leave. Michael Jackson, the president of programming who also worked with Barry Diller at USA Networks and Universal Television Group, will stay on in a new role. Lehman confirmed his move but declined comment on the reasons and referred to IAC public relations for details. (No response yet to phone and e-mail queries.) As we pointed out in some detail recently, Diller said in the Q308 earnings call that IAC would shed some of its emerging businesses and was rethinking investments; this appears to be part of that strategic shift.

Icahn: No MSFT-YHOO Search Deal—For Now; Opposes Sale To Miller — Activist investor and Yahoo (NSDQ: YHOO) director Carl Icahn is throwing more cold water on speculation that the company is about to sell its search business to Microsoft (NSDQ: MSFT). While he would like to see Microsoft take the search off Yahoo’s hands, MarketWatch quotes Icahn as saying there’s nothing imminent now and he knows of no discussions between the two companies. Shares of Yahoo were down over 1 percent to $11.35 in after hours trading. Last week, Icahn added nearly 7 million shares to his holdings in Yahoo—for a to 75.6 million shares— for the relatively low price of $67 million. He muscled his way onto Yahoo’s board back in July, after acquiring a 5 percent stake in the company.

Digg CEO: Read My Lips: Not For Sale — Digg says it is not for sale anymore. Really? How many times have we heard that one before? With a $29 million round recently, that was all but decided then. But wait until the next time someone floats a trial balloon through Techcrunch. For now, with no one coming forward to buy it at the valuations the company hoped for (that’s the reality of it), the four-year-old startup will dial back some of its expansion plans, instead prioritizing projects that generate revenue and profit, says the BW story. Among some of the new “focused” projects: ads in its RSS feeds; a revamped version of its own search engine for more targeted search ads; and it is within a month of closing a deal with a mobile ad provider to sell more mobile ads. On the more important revenue side, Digg tripled revenues in September over the last year. In 2009, CEO Jay Adelson expects “another tripling if not more.” Am I mistaken or are ad-network ads all that Digg has at this point? To scale from there will be tough in this market.

Cox Enterprises Merging Newspapers, TV, Radio Into Cox Media Group; 100-Plus Digital Services — Waving the operational efficiency flag, Cox Enterprises is merging its three media units—Cox Newspapers, Cox Television and Cox Radio– into the Cox Media Group headquartered in Atlanta. The units will operate separately but will share a corporate structure. When the move takes effect in January, the new group will include the flagship Atlanta Journal-Constitution and 16 other daily newspapers; 26 non-daily newspapers; 15 local TV stations; 86 radio stations (Cox Radio will continue trading on the NYSE); and 100-plus digital services. It also includes Valpack, the coupon company Cox put up for sale in August. Cox will continue with plans to sell Valpack and its newspapers in Texas, North Carolina and Colorado. Cox vet Schwartz, who will be president of Cox Media Group, listed digital as one of the advantages of merging the units: “We are bringing together our wide array of digital resources that ultimately will lead to enhanced online and mobile experiences for all our audiences.”

Adobe To Cut 600 Jobs; More Focus On Web Video — Adobe is cutting about 600 jobs, or 8 percent of its workforce, citing the economy slowdown as a reason. Sales for its Creative Suite 4 package, which includes the popular Photoshop, has been much slower than expected, the company said. And these cuts, which are across the board, will help it better focus on its growing online video (through Flash, the default online video standard now) and online software business, CEO Shantanu Narayen said, according to WSJ.
The company said it will record $44 million to $50 million in charges related to the headcount reduction.

Updated: Industry Moves: Microsoft Picks Qi Lu To Head Digital — Update: Microsoft has confirmed Lu’s appointment in an official release. Lu will start January 5, and report directly to CEO Steve Ballmer. He will oversee a trio of execs—but not all of the names initially thought: Nadella, Mehdi and Scott Howe, who has been promoted to SVP of MSFT’s Advertiser & Publisher Solutions group. Former aQuantive CEO Brian McAndrews previously held that title, but he’ll be transitioning out—and leaving MSFT—over the next several months. Microsoft’s quest to find a digital head will end in a rather technical choice: former Yahoo EVP of engineering for Search and Ad Tech Qi Lu, according to Kara. The final details of his contract are being ironed out, and could be announced by next week, the story says. This position has been vacant since Kevin Johnson left and joined Juniper.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , on November 18, 2008 by Dave Liu

Jerry Yang To Step Down As Soon As Yahoo Board Finds Replacement — Yahoo CEO Jerry Yang will step down from his post as soon as the board finds a suitable replacement, and BoomTown broke the story. The official release from Yahoo is out. Kara also has his full memo to the Yahoo team, in which Yang says he’ll participate in the search for his successor. Once the new CEO is in place, Yang will go back to his role as Chief Yahoo—and he will retain his seat on the board.The board has retained Heidrick & Struggles, an executive search firm, to assist in the process. Yang will participate in the search for his successor.

Google Brings Voice Recognition To Mobile Search — Google was scheduled to launch a voice recognition tool for Apple’s iPhone last Friday as part of a free mobile application allowing users to perform a Google search by speaking a query into the phone. The voice-recognition application, made available for free through Apple’s iTunes Store, is an update to the search tool that is already available for the iPhone. Google uses the technology for Goog 411, too. The voice query passes through algorithms converting to text.

Hulu To Match YouTube In U.S. Revenue Next Year — eHulu, the joint online video venture from News Corp. and NBC, looks poised to match YouTube in U.S. advertising revenues next year, according to a new estimate. This is shocking, considering that YouTube has more than 10 times as many monthly visitors as Hulu (83 million vs. 6 million). Nevertheless, Screen Digest is forecasting that both Hulu and YouTube will earn $180 million in revenue in 2009. The research group estimates that YouTube will make $100 million in U.S. revenue this year, compared to Hulu’s $70 million. Silicon Alley Insider points out that Screen Digest is most likely talking about gross revenue. Hulu actually passes along about 70-80% of revenue through to its content providers, so Hulu’s net revenue is probably closer to $14-$21 million. YouTube also shares some revenue with content providers, but a far smaller percentage.

Why Yahoo Still Matters — Yahoo shares may have fallen from $33 to $10 in the past twelve months, but the Web giant is still far more valuable in the eyes of Madison Avenue than it is in the eyes of Wall Street. Indeed, size still matters to Madison Avenue. “Advertisers are looking at where’s the traffic, volume and value is today. And today is very positive for advertisers at Yahoo,” said Chris Moloney, chief marketing officer at Scottrade. “Google is considered to be the 800-pound gorilla of the internet but it doesn’t have content the way Yahoo does. It receives a massive volume of traffic.” In fact, so big is Yahoo’s audience base that Chrysler’s chief marketing officer, Deborah Wahl Meyer, says she considers Yahoo “almost as a fifth (television) network.”

Yahoo React: Analysts Expect Board To Get Aggressive On MSFT, AOL Deal — Yahoo’s stock had another down day—its last trade dropped $0.19 to close at $10.63—but it could have a nice lift as word of Jerry Yang’s decision to step down as CEO takes hold. In the meantime, analysts following Yahoo shared their reaction in quick notes sent to investors and in press interviews: EO will come from outside: UBS analyst Ben Schachter looks at the list of possible successors and concludes that the company’s board will go outside. In particular, Yahoo president Sue Decker is unlikely to be selected for the top job because she doesn’t represent significant enough change by investors. Yang’s departure as CEO—he’ll revert to his role as “Chief Yahoo” and will retain his board seat—could also spur other board members to pursue “a more meaningful restructuring of YHOO.” Finally, expect the volume of the never-ending talk of a Microsoft deal to rise. Schachter adds: “We still believe MSFT will eventually own YHOO.” Even if a takeover doesn’t happen, the potential for news around restructurings, tie-ups with some combo of News Corp., Time Warner/AOL, Google and others “could be catalysts for shares.”

ESPN To Get Football BCS Starting In 2011; Deal Includes Digital, International — The details are still sketchy and the official announcement has yet to be made by ESPN (NYSE: DIS) and the Bowl Championship Series Group but Fox Sports said today that it will not be hosting the premiere college football games after its current contract expires in 2010. That leaves ESPN, which I’m told is willing to pay $125 million annually for four years to carry the games. This amount has not been confirmed with ESPN but represents the 50 percent increase the BCS governors are said to be seeking. Fox, which is paying $82.5 million a year currently, offered about $100 million a year during its exclusive renewal period. The BCS opened negotiations with ESPN, then, as per the current deal, returned to Fox with the material differences, which decided none of them– including the addition of international rights—were worth the considerable uptick in price.

Articles of the Day

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

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

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

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

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

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

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

Articles of the Day

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

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

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

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

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

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

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