Archive for Internet

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , on June 24, 2008 by Dave Liu

Ticketmaster To Be Independent In Early August Following $750MM Payment To IAC/InterActiveCorp — Ticketmaster, a West Hollywood, California-based ticket seller, will be spun off IAC/InterActiveCorp by the beginning of August, Los Angeles Business Journal reported. Sean Moriarty, the chief executive officer of Ticketmaster, said that Ticketmaster will have roughly USD 750m of debt and USD 450m of cash after leaving its parent company, IAC/InterActiveCorp, according to the report. A Wall Street Journal article reported that Ticketmaster will make a USD 750m dividend payment to IAC/InterActiveCorp immediately prior to its spin-off. The move was announced by IAC yesterday, the report said, adding that other units being spun off – HSN and Interval International – will also pay a dividend, totalling in excess of USD 1bn when taken with the Ticketmaster payment. The dividends will be made public by the subsidiaries within the next few days, the item stated.

Google To Launch Media Planning Tool AdPlanner — Continuing its inroads in the media planning side of the business, Google (NSDQ: GOOG) will launch an ad planning tool for agencies and marketers tomorrow called AdPlanner. According to NYT, “AdPlanner, was designed to help agencies identify sites where their target audience might be active. While it uses audience measurement data, AdPlanner also combines it with search engine data and information from third parties, to determine with more precision what sites attract a certain demographic audience. It then uses that data to help agencies determine where to place ads.”

Monster Aligns With 19 Newspapers For Career Ad Network; Co-Branded Sites On The Way Too — Seeing slow ad growth, deliberate or not, Monster has formed a “career ad network” with 19 local newspapers. The move comes just as that industry feels increasingly squeezed by an economic downturn and the industry. Monster first struck an ad alliance with the New York Times Co (NYSE: NYT). in February 2007 and a few months later rolled out a co-branded site with its Boston Globe Boston.com site last year as well. Since then, the newspaper ad alliance space has been filled by new entrants like the NYTCO-backed QuadrantOne and the more established Yahoo Newspaper Consortium, which is planning to unveil some additional targeting services in Q3. 

Murdoch Restructures WSJ And Sets High Digital Target — Revenue from Dow Jones’ digital operations could shoot up to 75% from 50% in a just a few years, says Rupert Murdoch, chairman of Dow Jones’ parent, News Corp. His comments come as the company is restructuring itself to become more nimble and efficient. Among the changes, Dow Jones’ Wall Street Journal (WSJ) is creating a new central news desk to coordinate domestic and international reporting between the newspaper and Dow Jones Newswires print and online operations. The company is also promoting three new deputy managing editors who will report to the WSJ’s managing editor Robert Thomson, also editor in chief of Dow Jones.  

Former Yahoo! Exec Rolls Out Topspin Media — Topspin Media, an online marketing services firm for musicians, has emerged from stealth mode. The firm, headed by Yahoo!’s former VP for music Ian Rogers, goes live after a year in development, with more services to be rolled out over the coming months. Topspin’s unbranded marketing software – aimed at bands and existing marketing firms – is designed to help musicians connect with fans and build their brands. Eventually the platform will be open to anyone, and is currently being used by selected artists such as the Dandy Warhols and Josh Rouse, who are using it to independently release new material through their websites.

Deals of the Week

Posted in Deals, Digital Media, News with tags , , on April 28, 2008 by Dave Liu

Ning raises USD60m Series D — White label social network firm Ning has raised USD60m in a Series D round from undisclosed institutional investors. The round reportedly values the firm at roughly USD560m, post-investment, up from USD170m in Jun last year when it raised USD44m in a third round of funding.

Travel Ad Network Raised $15 million First-Round — Travel Ad Network has raised $15 million in a first-roundventure financing led by Rho Ventures and including Village Ventures and individual investors. The company, which sells advertising across more than 50 travel sites including LonelyPlanet.com and RandMcNally.com, will use the funding to expand operations in the U.S. and abroad and increase the size of its network.

MediaBank Raised $30 Million In Second-Round — Chicago-based provider of procurement and analytics to the advertising industry, has raised $30 million in second-round funding from New Enterprise Associates.

GamerDNA Gains $3 Million in Series A Round — Flybridge Capital Partner led a $3 million Series A round of financing for GamerDNA. The Cambridge, MA- based company operates a social network Web site for online gamers.

TripIt Closes $5.1 Million Series B Round — San Francisco, CA provider of online travel services, completed a $5.1 million Series B round of financing. Investors in the round included O’Reilly AlphaTech Ventures, Sabre Holdings, and European Founders Fund.

Nurien Software Raised $15 Million In Series A — Seoul, South Korea-based provider of social networking and online gaming services, has raised $15 million in Series A funding. Backers include Northern Light Venture Capital, Globespan Capital Partners, New Enterprise Associates and QiMing Venture Partners.

Health Plan One Raised $6.5 Million In Series A — Shelton, Conn.-based online marketplace for health insurance, has raised $6.5 million in Series A funding. Pequot Ventures led the round, and was joined by Greycroft Partners.

The Guild Inc. Raised $2.5 Million In Series C — Madison, Wis.-based online art retailer, has raised $2.5 million in Series C funding, according to a regulatory filing. Shareholders include Dolphin Equity Partners.

Vysr Inc. Raised Around $2 Million In Series A — Palo Alto, Calif.-based developer of an online voice and text communication tool, has raised around $2 million in Series A funding. Backers include Sand Hill Group and VenturEast of India.

Play Hard Sports Inc. Raised $5 Million In Series A — Foxboro, Mass.-based developer of casual sports gaming network, has raised $5 million in Series A funding from New Enterprise Associates.

MediaScrape Raised $3.2 Million In VC Funding –Montreal-based video news aggregator, has raised $3.2 million in VC funding from an undisclosed investor.

PropertyMaps.com Raised Bridge Funding — Sarasota, Fla.-based provider of a broker-centric online real estate search platform, has raised an undisclosed amount of bridge funding from Merrick Capital.

Tiny Prints Inc. Raised First Round — Mountain View, Calif.-based online stationary retailer, has raised its first round of outside funding from Summit Partners and Technology Crossover Ventures.

MobiTV Raises $5 Million — Mobile TV and VoD platform, MobiTV has raised USD5m in funding from Leader Ventures.

Digital Ad Network Adcentricity Raises $2.9 Million Series A — Outdoor digital advertising network Adcentricity has raised CDN3m (USD2.9m) in a Series A round led by Propulsion Ventures, a subsidiary of Canadian telco Telesystem.

Retail Convergence Inc. Raised $25 Million In Series A — Boston-based ecommerce conglomerate, has raised $25 million in Series A funding. Participants include Breakaway Ventures, New England Development, Mugar Investments and General Catalyst Partners.

RightScale Raised $4.5 Million In Series A — Santa Barbara, Calif.-based provider of automated management platform for Internet cloud computing services, has raised $4.5 million in Series A funding from Benchmark Capital.

SaysMe Inc Raised Series A Financing — Los Angeles-based provider of politics-based, consumer-driven television advertising, has closed a series A financing led by Intel Capital and Prime Capital.

Autoquake Raised $11.8 Million Second Round — U.K.-based online retailer of used cars, has closed a £6 million ($11.8 million) second round of venture capital funding led by Highland Capital Partners in conjunction with existing investor Accel Partners.

Online Domain Name Game Yields Real Profits for Virtual Brokers

Posted in Digital Media, Media, News with tags , , , on July 30, 2007 by Dave Liu

Below is an article that was published in the Boston Globe.  I was interviewed for my views on the domain name sector.

Profits hefty in Web addresses

By Carolyn Y. Johnson, Globe Staff | July 30, 2007

The Web addresses that businesses and people online call home have spawned the equivalent of a real estate boom in the real world with speculators, appraisers, developers, investors, and brokers turning the names typed on navigation bars into hefty profits.

“It is a global, multibillion-dollar industry,” said Peter Lamson, senior vice president and general manager of Waltham-based NameMedia Inc.’s domain name marketplace. “Customers need to find your doorstep. A brick-and-mortar business needs an attractive address, and it’s no different online.”

In the 1990s, speculators registered Internet domain names on the cheap, often hoping to make a lucrative flip selling them to someone else. When the tech bubble burst, many were left with little more than words.

But as money has flooded into Web-based businesses such as MySpace and YouTube and online advertising has grown explosively – rising by nearly a third each year for the past three years – domain names have become a hot investment.

Some industry watchers said that the market could prove volatile over time, and there’s always the potential that a speculator will be left with nothing more than a string of words.

“There’s value there – a few of these companies think they’re worth half a billion because they’ve got all this waterfront property,” said Todd Dagres, general partner and cofounder of Spark Capital, a firm that invests mainly in media, technology, and entertainment businesses. “Right now, the stock’s rising because we’re in a fairly frothy market.”

Backed by venture capital firms Highland Capital and Summit Partners, NameMedia has raised more than $100 million in debt, according to a New York Times story, with the help of Goldman Sachs and owns 750,000 domain names as well as marketplaces where people can buy or sell names. This outfit of “cyber real estate tycoons,” as president Jeffrey Bennett calls it, is just one of three local firms that are playing a leading role in the rush for prime virtual space.

Internet Real Estate Group LLC, with offices amid the boutiques of Newbury Street, takes a luxury developer’s approach to the domain names game. The company turns a select number of “premium” domains – site names that are instantly recognizable, such as jeans.comchocolate.com, or software.com, into full-fledged Internet businesses with content, ads, and products for sale. Taking another tack, Sedo.com LLC, a German company with US headquarters in Kendall Square, handles more than $3 million of transactions every month, acting as a kind of eBay for domain names.

DN Journal, an online publication that follows the industry, has tracked five sales this year that topped $1 million each– including Porn.com andSeniors.com — and 50 for $100,000 or more as of July 22.

“We’re about three years into a major upturn,” said Ron Jackson, editor of DN Journal. “A ton of ad revenue started flowing from traditional media models onto the Web and it’s been unbroken upward momentum.”

While people frequently navigate the net by punching keywords into search engines, an estimated 10 percent of searches occur when people type keywords directly into their address bar. That means a website with a common name, such as WiFi.com, already generates a certain amount of natural traffic, and people who buy a portfolio of names could earn a dividend on their investment just by putting ads up, according to Jeremiah Johnston, chief operating officer at Sedo.com.

Think of domain names “as analogous to buying spectrum in the wireless world or channels on television or buying real estate,” said David Liu, managing director of Jefferies Broadview in Silicon Valley.

Mike “Zappy” Zapolin and Andrew Miller, founders of Internet Real Estate Group, got into the domain business in 1998, buying beer.com for $80,000 from a young man in Colorado, who they said used the website to post photos of inebriated people vomiting. The owner, hoping to buy more beer, posted a banner asking for advertising.

They sold beer.com four months later for $7 million. Now, they believe the businesses they are building will ultimately be worth hundreds of millions.

“In real estate, if you built a building and were offered three times what you paid for it in a week, you’d be thrilled,” Zapolin said.

“A piece of virtual real estate, on the other hand, may cost a thousand or a million, but bring in 50 times greater return. “It’s like buying Madison Avenue 110 years ago.”

Acting as a broker, Sedo takes a different approach from Internet Real Estate Group and NameMedia – listing, but not owning 8 million domain names, and taking a 10 percent commission on each sale.

The company also provides services to help people put content on their domains, so they can earn some revenue when people stumble on the sites and click on ads. Recently, Sedo managed the sale of Vodka.com for $3 million and Chinese.com for $1.1 million.

“We were being told when the company was founded that it was the worst possible timing,” Johnston said. “It turned out to be excellent.”

Digital Media of the Future

Posted in Digital Media, Media, News with tags , , , , on July 13, 2006 by Dave Liu

Below is a follow up to an interview I gave to the folks at The Dealmaker.

Digital Media of the Future

It’s 2010 in the United States. Tell us what the digital media landscape looks like.

Let me describe it by giving an example of how I envision I will be consuming digital media in 4 years: I live in my fully networked house where I have a server that acts as a central nervous system and stores or accesses all of my digital media and controls everything in my house according to my personal preferences. My server stores or caches all of the digital media I have ever consumed and anticipates what I would like to consume so that upon request I can view it at my leisure – not at the leisure of my wireless data connection. Content I consume can loosely be categorized into proprietary (created by me), sponsored (created by corporations) and user generated (created by individuals). Obviously all of my proprietary content is secure and is largely hosted locally. Access to my digital locker is conducted verbally – not through a cumbersome text method – and my server automatically makes recommendations based on my profile and historical habits. Today my server recommends Spider-Man 5 because it knows I have watched the previous four and accessed a few blogs that critiqued the prior movies. As I move from room to room, the movie is automatically displayed in each room’s flat panel until I go outdoors. At that point its streamed to my handheld pocket computer. I decide to switch to pay mode to eliminate all the ads that are embedded in the movie.

Although all content is free and ad supported in 2010, I detest the branded shoes Peter Parker wears because I just learned through my custom news feed that they have a sweat shop in China.

I think you get the idea. I think all digital media companies are ultimately driven to provide content or applications Any Time, Any Where, Any Device. Obviously in 2010 we’ll be a lot closer to this reality than where we are today.

Where do you see growth happening in the next 6 months? 12 months? 18 months?

I think growth over the next 6 months will likely come from many of the same areas your readers have already been tracking: video/rich media, user-generated sites, and mobile applications. However, as we head into the next 2 years, I think we’ll really see a rapid acceleration of applications optimized for an always connected world. We may finally see the promise of convergence between the TV and PC fulfilled although I’m betting it may actually occur first with mobile devices.

Finally, we should not underestimate the impact China, India and Russia will have on all things digital media related. The Internet has no borders so I wouldn’t be surprised if we start to see more US companies benefiting from growth over there. The best is yet to come so stay tuned.

There’s More Where Baidu Came From

Posted in China, Deals, Digital Media, Investment Banking, Media, News with tags , , , , , , , , , , , , on August 11, 2005 by Dave Liu

I was interviewed for the following article which was written by Brian Bremner and Justin Hibbard and published by Business Week on August 11, 2005.

The search engine’s runaway stock may spur Chinese Net IPOs — and rein in M&A as companies’ ideas of their own valuation soar How do you say feeding frenzy in Chinese? The moon shot of an initial public offering by Chinese Internet search engine Baidu.com (BIDU ) — whose $27-a-share launch on Aug. 4 jumped fivefold, to $154, before settling back to around $90 — shattered a five-year record for the best debut on the Nasdaq. It tapped into a deep investor hunger for the next Google (GOOG ) — which has seen its shares triple in the past year — and a desire to profit from the Internet in China, where some 100 million people now go online.

So will Baidu’s success unleash a flood of China Net IPOs? There’s good reason for excitement. Broadband subscribers in China last year more than doubled, to 43 million, and Beijing technology research firm BDA China is forecasting the online advertising market, worth $208 million in 2004, will expand to nearly $1 billion by 2009.

IPO INSPIRATION

Although the stampede into Baidu is partly based on the search engine’s similarity to Google, it also reflects optimism about that potential growth. That’s why many analysts are bullish on Chinese Internet companies. “We will see an expansion of the valuations. Baidu helped that,” says Piper Jaffray analyst Safa Rashtchy.

Indeed, some Chinese tech companies that have been considering a flotation might now jump in. “Given the success of Baidu, I’m sure some other Google look-alikes will be inspired to [do an] IPO,” says Khiem Do, head of Asian equities at Baring Asset Management.

At the same time, Baidu’s offering could put a damper on a wave of mergers and acquisitions among Chinese Net companies that had been picking up. Yahoo! last year paid $120 million for control of Beijing 3721 Technology Co., and it now appears to be close to a $1 billion deal to buy a one-third stake in Alibaba.com, an online marketplace for small and midsize Chinese companies.

“CROWD PSYCHOLOGY”

And in February online game pioneer Shanda Interactive Entertainment bought a 19% stake in portal Sina.com. After Baidu’s performance, however, Chinese Net entrepreneurs may believe their companies are worth more than potential acquirers are willing to pay. “The Baidu IPO pushes valuations beyond the point where many M&A deals can get done,” says David Liu, a managing director at investment bank Jefferies & Co. (see BW Online, 8/11/05, “Baidu: “We’ve Seen This Movie Before””).

All this doesn’t mean Baidu truly warrants its own sky-high valuation. Baidu, co-founded five years ago by former Infoseek engineer Robin Yanhong Li, is the mainland’s No.1 search engine, with 45% of the market. But the company earned just $1.45 million on $14 million in sales in 2004. At $90 per share, Baidu’s market capitalization is nearly $3 billion — which values it at more than 1,800 times 12-month trailing earnings, compared with price-earnings ratios of 70 or so for Google and Yahoo.

And Baidu faces intense competition. Its rivals include well-heeled U.S. search providers such as Google (which owns 2.6% of Baidu), smaller Chinese search sites, e-commerce players like Alibaba, and portals Netease, Sina, and Sohu. “We are in the realm of crowd psychology,” says Duncan Clark, BDA’s managing director.

WHO GETS BITTEN?

Investors might also note that the record of Chinese Net stocks has been mixed. Of the 10 Chinese tech companies that went public last year, 7 are trading below their offering price. Online 51job Inc., which went public at $14 in September, 2004, zoomed to $55 before falling to its current $13.

The one exception: Shanda Interactive, the best-performing stock on the Nasdaq last year. It went public in May, 2004, at $11 and now trades at $37.50, up 241%. Although Baidu’s IPO boosted some of the laggards, they quickly fell back to where they were before the IPO. In a feeding frenzy, it seems, someone always gets bitten.