Archive for McClatchy

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 September 29, 2008 by Dave Liu

Liberty’s Malone: We’ve Held Limited Talks To Get AOL Access — Talk of a Yahoo-AOL combo has once again heated up, but what becomes of the access business? Its final home could still be Liberty Media. CEO John Malone told the FT that his company and Time Warner have had “limited talks” to swap the declining (but profitable) dial-up business in exchange for Liberty’s stake in Time Warner (NYSE: TWX). Of course, as Malone notes: “Time Warner still needs to divide the business.” Yeah, the process of splitting access and portal isn’t exactly “done” yet. The other party that’s clearly interested in AOL access is EarthLink, which has had some success in improving dial-up profits by cutting costs.

McClatchy Loan Deal Wins It Flexibility—With Costs — The McClatchy Company, like just about every other newspaper publisher, has found itself even more squeezed by the current economic convulsions. On Friday, the Sacramento company announced it has renegotiated $1.175 billion of debt, which includes banks loans and available lines of credit. While the company insisted it was in no danger of default, it needed to amend its debt agreements to alleviate the pressure from falling ad revenues, particularly in its California and Florida markets. But as the company’s SacBee points out, McClatchy will be faced with higher interest rates—about 25 percent extra—and the amount of credit it can access has been reduced. Ultimately, McClatchy’s borrowing costs could increase by $11 million annually, treasurer Elaine Lintecum told SacBee.

Glam Media Readies Male Version; Tries 7 Percent Solution, Cutting Workforce By 14 Jobs — Glam Media, the women’s fashion and entertainment ad net, has had a lot of activity lately. It’s now prepping a men’s channel and ad net with the working title CodeBlue, Venturebeat reports. The content will be comprised of in-house posts and videos in addition to bringing material from outside. The channel is being readied for a November launch under a different name—CodeBlue. NBC/*News Corp.’s* Hulu, Sony Music and MTV are rumored to be signed up as content partners and Glam is said to be talking with other media companies as well. Venturebeat is uncertain as to whether Glam will own CodeBlue completely or if this is to be part of a joint venture. This comes as Glam is cutting 14 jobs, or 7 percent of its 200-person workforce.

Auto Site Autobytel Cuts Staff; Puts Up a For Sale Sign — Online auto site Autobytel, based in Irvine, CA, has laid off about 75 employees under a cost-cutting plan it began last year, it said, citing, as usual, the economy. These represent about 35 percent of its work force. It has also hired RBC Capital Markets to explore a possible sale of the company. “We believe our current stock price as well as overall market conditions are conducive to, and have driven, increased interest in Autobytel from various third parties,” Autobytel CEO Jim Riesenbach said in a statement. The company will record $2.2 million during Q3-Q4 related to severance and other employee-related costs. It expects to save about $10 million each year as the result. In Q2, the company reported revenues of around $19 million, down from $21.6 million in the year-ago quarter.

Health Sites Aim To Stave Off Economic Ills — Health information sites have continued to show growth even as more and more players crowd into the category. Data released earlier this month by comScore showed that traffic in the segment increased 21% in the last year, four times the growth rate of the U.S. Internet audience. But as the wider economic weakness spreads to online advertising, will health sites be immune to the downturn? Driving that surge have been newer properties such as Revolution Health Network–launched by former AOL chairman Steve Case, which nearly tripled traffic to 11.3 million as of July, the rebranded AOL Health, almost doubling to 11 million, and Everyday Health Network, jumping 63% to 14.7 million. Longtime category leader WebMD grew only 3%, but was still comfortably on top with a monthly audience of 17.2 million. The site also boasted the biggest share of views for display advertising, at 18.6%–compared to almost 13% for Revolution Health, 12% for AOL Health, and about 10% for Everyday Health.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , , on September 23, 2008 by Dave Liu

Microsoft Plans $40 Billion Buyback — Microsoft on Monday announced that it would repurchase $40 billion worth of its own stock, and raise its quarterly dividend to 18% in an effort to spur investors into buying the company’s stock. That raises Microsoft’s dividend from 11 cents a share to 13 cents. The $40 billion buyback program will expire on Sept. 30, 2013. According to Reuters, the company recently completed a $40 billion stock repurchase program. It also said its board had issued debt financings “from time to time” of up to $6 billion. The company will use the proceeds from this for general corporate purposes.

Platform-A Gets Into The Ad Exchange Business With ‘BidPlace’ — While Yahoo’s Right Media and Google’s AdSense serve as the largest examples of online ad exchanges, AOL’s (NYSE: TWX) Platform-A wants them to make room for another one: later today, the Time Warner company will be introducing BidPlace, billed as a a self-service marketplace exchange which is set to launch during the first half of next year. In an interview with paidContent, Lynda Clarizio, Platform-A’s president, says that the exchange is being presented as a way for marketers to better manage their display campaigns. The announcement, coming on the second day of New York’s Advertising Week, also comes after months of industry reports showing that display advertising revenues have slowed considerably and the darkening economy has advertisers feeling less certain about the ad format. Clarizio says that BidPlace is not being created to allay such fears—though she seems to feel it should help. BidPlace has been in the works for some time, Clarizio says, emphasizing it is not a reaction to anything going on in the market right now or that recent warning that Time Warner gave last week about AOL possibly missing its revenue targets due to the ad slowdown.

Yahoo To Form Digital Advisory Council — Yahoo on Monday announced formation of a Digital Advisory Council made up of agency and advertising partners that it said will work together “to explore the continued evolution of digital media and online advertising.” More to the point, the effort is aimed at helping smooth adoption of Yahoo’s forthcoming display ad system and acceptance of its controversial search ad partnership with Google.

Microsoft Partners With CNBC On Mobile Ads — Microsoft will be the exclusive third-party display ad provider for the mobile Web site of CNBC, the companies announced Monday. The deal expands an online ad agreement Microsoft and the cable network reached last December and marks the software giant’s first mobile ad syndication deal in the U.S.

Ailing Newspapers: NY Sun Still Needs Cash; McClatchy CEO: ‘Too Early To Judge Knight-Ridder Buy’ — The New York Sun, the highbrow conservative daily in New York, needs cash now in order to survive. Just a couple of weeks ago, the company published a letter, saying that without fresh capital it would have to fold up shop. In an interview with NYT, editor and publisher Seth Lipsky says: “I haven’t raised all that I need, but I’ve raised a lot.” He added that avid readers have sent in checks of $100-$200, though that’s not going to cut it. He also seems pretty sure that Rupert Murdoch will not swoop in as a savior. The most likely rescue scenario at this point would be for a major, wealthy benefactor to step in with no illusions about getting a return on investment. Meanwhile McClatchy (NYSE: MNI) CEO Gary Pruitt made some surprising comments about the company’s 2006 acquisition of Knight-Ridder… In an interview with the Sacramento Bee, Pruitt said it was “too early to tell” whether it was a smart buy. Seeing as the company has already taken goodwill writedowns associated with the deal, and there’s no question that the overall business has deteriorated, this is a hard position to reconcile. He did add that “It’s hard to claim it’s a good deal when you see the stock performance,” so perhaps the earlier statement needs more context. Faced with a steep debt load, McClatchy made its second major employment cutback for the year, just last week.

Answers.com Writes Off Brainboost Acquisition; Does Away With Direct Ad Sales — Last week, the troubled Answers.com filed an S-3 with SEC. In it, it disclosed that it has written off its acquisition of Brainboost Technology, the developer of the Brainboost Answer Engine (BAE) that it bought in December 2005 for about $4.56 million, $4.0 million of which was in cash. The reason? It says that its WikiAnswers site of user-gen questions is growing much faster, and both BAE and WikiAnswers are effectively focused on similar areas, answering complex natural language questions. “Conversely, during that period, Answers.com has generally declined each quarter….the success of user-generated questions and answers as compared to the technology-driven answers presented by the BAE, we made a strategic decision in the second quarter of 2008 to focus our efforts, in the realm of questions-and-answers, on user-generated questions and answers, and effectively abandoned our use of the BAE,” it says in the filing. As a result of abandoning its use of the BAE, the net book value of the BAE, as of May 25, 2008, in the amount of $3.138 million, was written off during the three months ended June 30, 2008, the company said.

Articles of the Day

Posted in Digital Media, News with tags , , , , on September 16, 2008 by Dave Liu

McClatchy Eliminates Another 1,150 Jobs Or 10 Percent Of Workforce; Sees $100 Million Cost Savings — McClatchy (NYSE: MNI), whose shares have fallen from around $21 to about $3 in the last year, has announced its second big job elimination of the year: The newspaper publisher is cutting 1,150 jobs, or about 10 percent of its workforce. About half will come from “voluntary programs and managed attrition.” Excluding $20 million in severance costs, the company expects the move will save it $100 million over the next year; that represents about 6 percent of trailing twelve month expenses for the company. In June, McClatchy said it was eliminating 1,400 positions (which then also represented 10 percent of its workforce). There had been some hope that further layoffs might be avoided following a wage fr*eeze announced last month. The announcement doesn’t offer a breakdown between editorial and non-editorial eliminations, though CEO Gary Pruitt mentioned efforts to “sustain editorial quality and meet its public service journalism obligations despite some staff reductions.”

Wall St. Turmoil Not Likely To Touch Online Ad Spend; WPP’s Sorrell: Too Soon To Tell — Today’s news about the fall of Lehman Brothers, Bank of America’s planned rescue of Merrill Lynch and insurer AIG’s debt problems isn’t going to have any immediate affect on online ad spending, though residual impact could eventually cause advertisers to pullback somewhat. But for the moment, online ad expenditures are expected to remain stable, since the industry has already been bracing itself for a wider economic retrenchment that started in earnest last year when the mortgage lending crisis first hit ground. For the moment, most agencies are pretty reticent about reacting, opting for the wait and see approach. Responding to a question for what the impact of all this news is likely to have on spending, WPP Group CEO Sir Martin Sorrell said via email: “Far too early to assess, but expect continuation of current trends.”

Time Inc’s Maghound Service Launches Under the Radar; Some Majors Missing — Time Inc has quietly launched its much delayed and much-anticipated online magazine subscription website Maghound. The service, in beta, borrows concepts heavily from Netflix, in that it allows users to choose up to 15 magazines from a broad range of titles for one set monthly fee, with the ability to switch titles at any time. At launch, it has 240 titles, about 40 less that what Time Inc said at a trade show in June, Folio notes. In addition to all Time inc titles, of course, it has titles from Conde Nast (not all), Rodale, and others. Notably missing is any magazine from the Hearst stable, including Esquire, Cosmopolitan and others. Some of the other notables I checked on which are missing are The Atlantic, Business Week, Wired, The Economist, Reader’s Digest, and National Geographic .

MTVN Aims For ‘Tribes’ With Online Ad Net For Its Cable Channels — MTV Networks is readying Tribes, an online ad network tied to its various cable channels, Mediaweek reports. Tribes will pull in outside sites to establish ad sales and content syndication for MTV, VH1, Spike TV and CMT over the next several weeks. At some point after the new year, Comedy Central will get the Tribes treatment as well. Tribes is modeled on the ParentsConnect ad net, which MTVN’s Nickelodeon set up in February, with less than a dozen blogs and sites related to children’s entertainment. The company tells Mediaweek that ParentsConnect now has 46 sites, with more to come. At launch, Tribes is connected with Echo, which is comprised of several fan sites focusing on particular artists like Alicia Keys and Kanye West.

Articles of the Day

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

Zillow, Newspapers Launch Real Estate Ad Network; Looking To Each Other’s Strengths — Last fall, 11 newspaper publishers agreed to let real estate upstart Zillow.com carry the real estate listings from their 282 papers. Now, the Zillow Newspaper Consortium, which includes Hearst and Lee Enterprises (NYSE: LEE), and the price-comparison site are launching a real estate ad network with the right to sell ads on each other’s sites. The newspapers can sell Zillow, with national traffic averaging some 5 million uniques monthly, while VC-funded Zillow can target local real estate users and sell some additional national inventory across the newspaper sites. Other publishers involved include Media General (NYSE: MEG) , Inc.; MediaNews Group, Inc.; Morris Communications Company, Philadelphia Media Holdings; and The E.W. Scripps (NYSE: SSP) Company. Newspapers include The Philadelphia Inquirer, San Francisco Chronicle, St. Louis Post-Dispatch, and the San Jose Mercury News. This is not to be confused with the Yahoo (NSDQ: YHOO) Newspaper Consortium, although many members are the same. Both efforts are among the many newspaper-web experiments as national sites try to go local and publishers look for online ad growth.

McClatchy Going Private? CEO Pruitt Resigns Controlling Interest In Family Trusts — The McClatchy Co. CEO Gary Pruitt has stepped down from four trusts owned by the McClatchy family—leading to speculation that McClatchy might be looking to go private, first picked up by Alan Mutter and then by E&P reported. An earlier story in the Sacramento Bee, which is owned by McClatchy, detailed that Pruitt removed himself as a co-trustee of four separate McClatchy family-owned trusts. The trusts hold 12.5 million Class B shares, or 80 percent of the voting stuck in The McClatchty Co. Elaine Lintecum, McClatchy’s treasurer, tells SacBee that Pruitt is stepping aside because of “governance issues.” The company feels that it would be better to “break up the roles” and that Pruitt shouldn’t be wearing “so many hats.” Lintecum also says that the move isn’t a precursor to McClatchy going private, something that has been rumored for some time. Pruitt’s responsibility for the trusts has been assumed by Leroy Barnes Jr., a non-family member who has been a McClatchy director for eight years.

Google-Yahoo Ad Tie Up: Ad Trade Body ANA Opposes Deal; “Limits Choices” — The Association of National Advertisers, which represents big ticket consumers advertisers such as Procter & Gamble, General Motors, Apple and others, has sent a letter to the Department of Justice opposing the recent Google-Yahoo search advertising pact. In the letter, posted on its site, Bob Liodice, President and CEO, ANA, mentioned the organization’s opposition to the deal. It says that ANA came to its conclusions after “a comprehensive, independent analysis, which included input from the Board’s members and face-to-face discussions with Google and Yahoo”.

Microsoft’s Help Wanted: Head Of Advertising Needed, Possibly A ‘Palin’ — Since the departure of Kevin Johnson as president of Microsoft’s Platforms and Services Division in July, it’s pretty clear that the company is in need of an advertising head. AdAge handicaps some possible contenders, with one unidentified source telling the mag that Microsoft needs a “Palin”—namely, an unexpected choice similar to Republican presidential candidate John McCain’s surprise pick of Alaska Gov. Sarah Palin as his running mate. Some of the names being bandied about include: Brian McAndrews, Yusuf Mehdi, Dan Rosensweig, Jonathan Miller.

Informa Rejects Lower Takeover Offer, Wants More Money — The story of the sale of B2B publisher and Datamonitor owner Informa got longer last night after it rejected a total £3.2 billion ($5.57 billion) bid from a three-way consortium of Providence Equity LLP, the Carlyle Group and Blackstone. The trio offered £1.87 billion ($3.25 billion) but would also have to take care of the company’s £1.2 billion ($2.09 billion) of debt. The 450p-a-share offer “significantly underalues” Informa chairman Derek Mapp said, in a company statement that wastes no time reminding that the consortium – before Blackstone replaced Hellman & Friedman this week – originally offered 506p per share.

RealNetworks Launching DVD Ripping Service; Will It Make Any Ripples? — DVD ripping software have been around for the longest of times, but this is a more mainstream attempt at it, and continues RealNetworks’ (NSDQ: RNWK) efforts to stir up the pot a bit: later this month it is launching a new software called RealDVD, which will allow Windows users to easily make a digital copy of an entire DVD, along with all the extras on it. It will cost $30, which will probably be a big barrier in adoption. The idea is to allow users to make backup copies for their personal use on laptops.

Digital Media M&A

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

McClatchy-Owned Real Cities Network Bought By Centro — Online media buying and planning platform operator Centro is going to announce it has bought once-storied local newspaper online rep firm Real Cities from The McClatchy Company. Terms were not disclosed. The purchase comes as local media in general is experiencing both strong growth rates, though newspapers in particular haven’t been able to benefit much. Companies like Centro and Real Cities have been trying to tap the local online media market, with newspapers being a primary client segment. As for what Real Cities brings to the table, it has a network with 1,800 local affiliate sites and claims a combined 44 million monthly uniques on average. For the most part, newspapers in Real Cities’ network consider its services to be complementary to their arrangement with the Yahoo (NSDQ: YHOO) Newspaper Consortium. The Real Cities network was formed by Knight Ridder over four years ago and was absorbed by McClatchy in its $4.5 billion purchase of rival newspaper publisher in March 2006. A year later, McClatchy found itself denying rumors that Real Cities would be disbanded.

Cox Enterprises Selling Austin American-Statesman, Valpak Direct Mail Unit, Other Assets — It’s a buyer’s market for newspaper assets right now: Cox Enterprises is the latest to hang a for-sale sign on certain assets, as it’s announced plans to sell the Austin American-Statesman, affiliated site Austin360.com, as well as other standalone community titles in North Carolina, Colorado and Texas. In addition, it’s looking to sell of Valpak, the distributor of direct mail and coupon marketing. The company has hired Citi to manage the sale of the newspapers and Goldman for the sale of Valpak. Major titles remaining in the fold include The Atlanta Journal-Constitution, The Palm Beach Post, Dayton Daily News. It’s not clear how much the company is looking for, but it plans to use the proceeds to pay down debt—just like what’s been going on at Tribune. The company has also shown a willingness to be aggressive in new media inv*stm*nt, as it acquired ad platform Adify in April for $300 million.

News Corp., Permira Finalize Agreement To Take DRM Firm NDS Private — Back in June, News Corp. announced, along with PE firm Permira, plans to acquire the remaining share of DRM and conditional access firm NDS, that it did not already own. The original offer was $60 per NDS share, or $3.6 billion in total. Today the companies have announced a final agreement, valuing NDS’ NASDAQ-traded shares at $63 each. Subsequent to closure, Permira will own 51 percent of the company, with News Corp. owning the remaining 49 percent.

Wasserstein & Co Buying B2B Media Firm Cygnus — Cygnus Business Media, the B2B media publisher which took the unusual step of spreading the word around about it being on the block through a trade pub, has used it again to signal they are off the block now, at least in the process of being. Folio reports that the due diligence phase is complete and a verbal agreement has been reached between media PE firm Wasserstein & Co. and Cygnus-owners ABRY Partners on the deal, expected to close before the end of the month. Cygnus has about 60 magazines and websites, and generates about $120 million in annual revenue…and were reportedly asking for $200 million to $240 million, or about 8x estimated EBITDA, the Folio story says.

Philips Buys Rest of TV And Online Video Monitoring Firm Teletrax — Teletrax, the UK-headquartered TV and online video monitoring and analytics firm, is being completely acquired by Philips, following a board approval by previous owner Medialink Worldwide, the media services firm. Philips currently owns 24 percent of the Teletrax, and will assume Medialink’s 76 percent ownership stake for a reimbursement of up to approximately $275K of certain net operating costs incurred by the company prior to closing, it said. Under the deals, Philips would continue to provide the Teletrax service to Medialink for use by its media communications services clients.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , on July 25, 2008 by Dave Liu

Microsoft Announces Search Deal With Facebook; Expands on Ad Deal — Google-MySpace Part II? WSJ reports that Microsoft will unveil a search deal with Facebook at today’s analyst meeting…. Update: The news was just announced by Microsoft’s Satya Nadella on stage at the company’s analyst meeting, after first reciting a long list of technical accomplishments that the company had achieved in search. Here’s the exact announcement based on the transcript (so it’s a little sloppy): “One last thing I want to talk about is an extension of our Facebook relationship where we are extending it to search and page search. We will be providing an API to Facebook where they will create a rich search experience for the Facebook users and that is something that they will launch in the fall working with us. And it will carry both our web results, as well as our page search advertising. We are excited (transcription error here) as an opportunity to further expand the Live Search reach. That is what I have in terms of anteing up and focus (sic) our invention and reinvent the business model. Let me flip back to Steve.”

AOL Trimming Up For Sale; Sun Sets On XDrive, AOL Pictures, Mobile And Others — Some belt tightening has started at AOL,, as it prepares and dresses itself up for a sale: It is discontinuing some of its tech projects, and also trimming some of its content blogs under the Weblogs Inc network. According to an internal memo sent by Kevin Conroy, AOL’s EVP of Products and Marketing, products Bluestring, Xdrive and AOL Pictures “will be sunset,” meaning closed down after a transition period. “These consumer storage products haven’t gained sufficient traction in the marketplace or the monetization levels necessary to offset the high cost of their operation,” according to the memo posted here by TC.

McClatchy Q2 Revenues, Profits Plummet, As Online Ad Sales Grow 12.5 Percent — The McClatchy Company’s financial struggles only seemed to deepen in Q2, as Gary Pruitt, the publisher’s chairman and CEO, pinned the weakening economy and the shift from print to digital on its revenue and income decreases. Revenues were down 15.6 percent to $489.7 million in Q2 compared to last year’s $580 million. And while online ad sales grew 12.5 percent in the quarter, since they made up only 11.8 percent of total ad dollars—compared to an 8.6 percent share for all of 2007—it was not enough to offset wider declines. In all, McClatchy’s ad revenue fell 16.8 percent to come in at $406.3 million. Meanwhile, Q2 net income from continuing operations was $20.1 million, or 24 cents per share, down by roughly 50 percent from last year’s $40 million.

Vivendi’s H1 Revs up; Universal Music’s Digital Revs Up 33 Percent — Vivendi, the France-based media giant and parent of Universal Music Group, has reported its first half 2008 and Q208 earnings, and its revenues totaled $17.7 billion, compared to $16 billion for the first half 2007. For Q2, Vivendi’s revenues totaled $9.4 billion compared to $8.15 billion a year earlier. Out of the units: Universal Music Group saw a 2.4 percent decline in revenues, while Vivendi Games saw the largest revenue drop, at 11.2 percent.

Blockbuster’s Digital Kiosks and Movielink Plans; August Launch — Blockbuster, which recently abandoned its foolish quest to buy Circuit City, is now on to the next thing, which it has been talking about for the last year: its digital re-invention. The company has a strong presence at Comic-Con going on this week in San Diego, and is also demo-ing its digital kiosks, reports Home Media magazine. It has talked about these kiosks before…they are being tested in select Blockbuster stores in the Dallas area, and plans are to roll it out country-wide in the next three years. These kiosks allow consumers to download movies to portable devices in less than two minutes, though for now, it only works on Archos portable media devices.

Moneysupermarket Rebuffs Ontario Teachers — Moneysupermarket.com, a publicly-traded price comparison website based in Britain, has rejected a preliminary buyout approach from Ontario Teachers’ Pension Plan. Moneysupermarket shares rose 22% yesterday, to increase the company’s market cap to £419 million.