Archive for IAC

Digital Media M&A

Posted in Deals, Digital Media, News with tags , , , , , , , , , , , , on January 16, 2009 by Dave Liu

Huffington Post Acquires Comedy News Site 236.com From IAC — Huffington Post is wasting little time in putting last month’s $25 million funding to work: as expected, the company says it’s buying comedy news site 236.com. The comedy site was created in Nov. 2007 as part of a joint venture between Huffington Post and IAC (NSDQ: IACI). Now, after a year as a standalone, 236.com will be integrated into Huffington Post as a vertical channel. The purchase represents Huffington Post’s recognition that it needs to expand its offerings beyond straight commentary, now that the presidential campaign is over and traffic and advertising are expected to fall off. 236.com claims roughly 2 million unique users a month, which is a drop compared to HuffPo’s 16 million monthly uniques.

TheKnot Expands Social Net Offerings To New Moms, Acquires Breastfeeding.com — Wedding planning and content site The Knot has acquired a community site aimed at new mothers called Breastfeeding.com. Terms weren’t disclosed. The addition of Breastfeeding.com to The Knot follows a few other acquisitions of the past year that are designed to expand the company’s purview beyond nuptials and into what often comes after. In particular, The Knot has been focusing on pregnancy sites, such as the purchase of TheBump.com for $1.4 million last February, as well as parents community TheNestBaby.com and general parenting site Lilaguide.com, which were added in 2007.

Online Marketing Firm Theorem Acquires Interactive Designer Webpencil — In the latest in a series of deals in the online-marketing space over the past two days, Theorem has acquired Webpencil, an interactive ad design firm, for an undisclosed sum. N.J.-based Theorem offers campaign management and analytics services for search, display and email ads, and the addition of Webpencil gives the firm a creative arm with rich-media experience. Las Vegas-based Webpencil’s client roster has included the Obama campaign and CareerBuilder, and founders David and Cheryl Rosowsky will remain with the company in their current roles. The other recent activity in online marketing includes new funding for Goodmail, Yodle, Go Internet Media and avVenta.

Donnerwood Media Merges Meez Brand With Pulse Entertainment; Gets New Funding, CEO — Several big changes at avatar-based social-networking service Meez … The company is merging with Pulse Entertainment, a mobile entertainment platform also built around avatars. Meez’ service is primarily Web- and IM-based, with brand sponsorship of virtual goods like clothing and accessories for the avatars, while carriers like AT&T and Verizon Wireless offer subscribers Pulse’s animated messages. Both companies are based in San Francisco, and the new joined entity will use the name Meez.

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 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 7, 2008 by Dave Liu

Obama Begins Transition; Advisors Are Named For Tech And Communications Issues — A day after the election, names are already being floated as to who will likely be on the president-elect’s transition team, including advisors on issues involving technology and communications. Barack Obama is expected to appoint Washington, D.C. lawyer Henry Rivera to head the team focused on the FCC, reports Multichannel News, quoting informed sources. Rivera, who is a Democrat, is a partner at Wiley, Rein, and served at the FCC from 1981 to 1985. Current FCC chairman Kevin Martin also worked at Wiley. Rivera declined to comment.

IAC: Which Emerging Businesses Will It Sell or Close? — In the Q3 earnings call, Barry Diller dropped multiple hints about closing down or selling some of what IAC (NSDQ: IACI) calls its “emerging businesses”. And he said that it would happen within the next month. On the call: “No businesses in the emerging sectors are carrying any big investments. It is an area we not going to emphasize in the future: we think that is ditsy focusing. We don’t think emerging businesses are the tomorrow of our business. Some of the things within our emerging businesses: we will sell off and shut down, and we will do that next month.” The emerging unit is heavily skewed towards its digital media companies, some bought and some incubated within the company. This also includes its IAC Programming unit headed by Michael Jackson, and where MTVN (NYSE: VIA) vet Nicholas Lehman joined as COO last year. Tina Brown’s newly launched DailyBeast site is part of the programming unit.

Time Warner Q3 Profit Dips On Flat Rev; $100M Charge For Time Cuts; AOL Ads Drop 6 Percent — Time Warner managed to keep its net income from slipping much during Q3 but, with revenue “essentially flat” and a $100-125 million charge for Time Inc. layoffs on the way, followed other media companies by trimming its 2008 outlook today. Between New Line, Time Inc and some other restructuring, the company says the total charges by the end of 2008 could top $300 million. (That would seem to suggest the major cuts are done and that AOL won’t take a big hit in Q4 but this economy doesn’t offer much in the way of guarantees.).

Murdoch: WSJ.com Making Over $100 Million From Ads, ‘Probably’ $100 Million In Subscription Fees — WSJ.com is making more than $200 million from advertising and subscription, News Corp Chairman and CEO Rupert Murdoch told analysts during the company’s earnings call. He said the site is making “probably $100 million in subscriptions and certainly over $100 million in advertising.” This time last year, Murdoch was still testing waters on freeing WSJ.com; now safe to say he’s a subscription evangelist. WSJ.com is the “one web site … people are happy to pay for.” Print subscribers—and probably online, although he didn’t specify—are looking at rate increases over the next three years. Those increases will take a while to show up in revenues. Murdoch: “It takes time to work its way through. Advertising is not down a lot. It is certainly a bit below what we budgeted. … Today and tomorrow it’s on target.” He said to expect “even more emphasis than normal on international expansion” and that the big hope in Asia “certainly is putting our web site on mobile.”

FIM Revenues Soft As News Corp. Falls 22% — News Corp. fell 22% in Wednesday trading after the media empire cut its 2009 forecast primarily due to shrinking ad sales at its broadcasting and publishing properties. The traditional media giant finished the day down $3.02 to $12.88, posting its biggest one-day drop since December 1990. News Corp.’s third quarter earnings certainly weren’t boosted much by revenue growth from Fox Interactive Media, the online division which includes the social network MySpace. The division saw a revenue increase of 17%. In call with reporters, News Corp. executives conceded that MySpace display advertising was “softening.”

Disney Disappoints With 14 Percent Profit Drop; Revs Up 6 Percent — The Walt Disney Company has been playing the role of Wall Street darling but not today. The company still turned a profit but not what analysts were expecting—although it did beat revenue estimates with $9.4 billion for the quarter ending Sept. 27, up 6 percent from $8.9 billion year over year. The profit of $760 million was down 14 percent from $883 million in FYQ407, for earnings per share of $.40, down from $.44 last year. Excluding special items, it would have been $.43 per share. The company was hit by the fall of Lehman, taking a $91 million bad debt charge. Via Marketwatch, the FactSet Research analyst estimate was a profit of 49 cents a share on sales of $9.31 billion. We’ll have more color as the call gets underway but the overarching theme so far matches the rest of the media universe as the economic downtown takes its toll.

Ballmer: Yahoo Buyout Is Not Gonna Happen — Sorry, Jerry, a buyout’s not gonna happen. That’s the message MSFT CEO Steve Ballmer made clear at a business luncheon in Sydney, Reuters says. “We made an offer, we made another offer … We moved on,” Ballmer said. “We tried at one point to do a partnership around search … and that didn’t work either, and we moved on and they moved on. We are not interested in going back and re-looking at an acquisition. I don’t know why they would be either, frankly.” But he did leave the door open for a potential search deal, something some analysts say Yahoo will have to consider if it wants to stay alive despite the demise of its search partnership with Google. Ballmer’s definitive statement came after Yahoo CEO Jerry Yang suggested that MSFT buy Yahoo during the Web 2.0 conference yesterday.

NBA Launches International Video Subscription Via Broadband — The latest NBA expansion covers two growth areas for the league: international and broadband. NBA League Pass Broadband International is now available in 19 countries. The subscription includes access to 40-plus live games a week with play-by-play in English and VOD for 24 hours after they air. Some live games will be blacked out. Pay options include full season ($85 through Nov. 11; $100 after), monthly and daily. The international version follows a new U.S. option with NBA League Pass Broadband; before this season, broadband packages were available only as an extension part of the cable or satellite out-of-market package. Speaking of promos, EA NBA Live is sponsoring a fr*ee preview of the U.S. broadband service through Nov. 11.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , , , , on October 8, 2008 by Dave Liu

Blinkx Drops Bid For Search Marketing Firm Miva — Online video search firm Blinkx, which is publicly traded on the AIM market, has dropped its public bid to acquire pay-per-click ad network MIVA. The London- and San Francisco-based Blinkx had offered $1.20 per share, valuing Miva at $41.13 million, a 54 percent premium over its early August stock price…Miva board rejected it outright then, saying the bid wasn’t up to the mark. This morning, in a statement, Blinkx explained its decision to withdraw: “The large premium blinkx offered in our initial proposal is even more significant today in light of MIVA’s second quarter earnings miss, subsequent downward revision of annual guidance, and public disclosure related to restructuring of the Media EU business. By choosing not to engage in substantive discussions in any material respect and an agreement with blinkx, MIVA Board and management in our view have failed to give due consideration to a transaction that had a uniquely attractive opportunity for MIVA shareholders, particularly in light of several challenges MIVA faces in the near term.”

AOL-Yahoo Merger Details Emerge; Deal Could Happen This Month — Yahoo is continuing its marathon merger discussions with AOL, sources close to the negotiations have whispered to us, and a deal could happen as early as this month. Is this just a rehash of the reported discussions in February and then again in April? Yes and no. It’s clear that AOL’s parent company, Time Warner, wants this deal more than ever. What isn’t clear is whether AOL’s assets will fix any of Yahoo’s problems. The deal structure that is currently being discussed is Yahoo’s acquisition of AOL (content, services and advertising), minus their subscription dial up business. That plus a couple of billion dollars in cash from Time Warner gets them approximately a third of the combined entity. Time Warner’s AOL headache is gone, and they have a stake in the world’s most valuable chess piece in the Google/Microsoft search and advertising war.

Viacom-YouTube Update: VCs Will Have To File With Court On Decisions To Back YouTube, Sell To Google — YouTube’s VC backers are being asked to explain to a federal court why they invested in the video venture—and why they sold to Google. As part of the $1 billion lawsuit Viacom (NYSE: VIA) filed against YouTube and Google in early 2007, MarketWatch reports, Viacom wants documents from Sequoia Capital, Artis Capital Management and TriplePoint Capital “related to the firms’ “actual and potential” investment in YouTube, Google’s acquisition of the startup and a “proposed indemnification for copyright infringement relating to this merger.” The documents are due Oct. 27, although there have been a lot of delays in this case all along so who knows. The companies reaped significant rewards in Google stock in the $1.65 billion 2006 sale: Sequoia, $504 million; Artis, $83 million; TriplePoint, $6.4 million. MKTW sees the notion of having VCs explain themselves as unusual but Google senior litigation counsel Catherine Lacavera says it is “not out of the ordinary.”

Google Begins Wider Testing In-Game AdSense System — Google is hoping to take advantage of in-game ads’ strong growth with its new AdSense for Games system, the company announced in a post on its blog. Citing comScore data, Google says over 25 percent of web users play online games every week, representing over 200 million global users. Google began offering the system on a limited basis back in November. It started off using pre-roll and mid-roll inserts with gaming startup Bunchball Games. With this wider beta test, AdSense for Games will let marketers place video ads, image ads, or text ads within developers’ games. The system is based on technology from Adscape, which Google bought for $23 million in February 2007.The AdWords sales team will sell company’s in-game ad placements directly to advertisers. Google is also promising text and image ads that are targeted by demo and location. To be eligible for the program, publishers must have a minimum of 500,000 game plays and have 80 percent of their traffic from the U.S. or the U.K.

Yahoo’s Yang May Have Missed Sales Opportunity In Asia — Yahoo CEO Jerry Yang has made clear his intention to sell off Asian assets such as Alibaba.com Corp. and Gmarket Inc. But thanks to the global financial crisis, it looks like he may have missed his chance to get top dollar. Such holdings have shrunk about $2.2 billion–that’s 23%–since Yahoo assessed them in July. The value of the holdings has been depressed thanks to investor fears that the deepening crisis will hurt the Internet advertising market. And even if a buyer were interested at this point, raising the capital to make the purchase would likely prove difficult now that banks are hoarding cash.

IAC/InterActiveCorp CEO Acknowledges Business Is Being Scrutinized For Divestments; Declines To Name Potential Disposals — IAC/InterActiveCorp boss Barry Diller declined to name potential disposals being considered by the listed Internet conglomerate. In the course of a Wall Street Journal interview, Diller was asked to identify areas of operation which might be divested; he replied that the decision had not yet been made so he would not be specific. He added that the New York-based group’s businesses were being analyzed in relation to size and markets to see if they were worth bothering with, the report said. When asked whether the credit crunch might hamper any efforts to sell, Diller said Internet companies had not so far suffered too much but added that it was possible the sector might freeze in the future. IAC/InterActiveCorp was broken up by Diller several weeks ago in a move towards streamlining the company, the report noted. It added that Diller said any acquisitions made with the proceeds of the USD 1.3bn break-up are most likely to be in the Internet advertising sphere with which IAC is familiar. Source: WSJ.