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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 16, 2009 by Dave Liu

AOL’s Web Strategy Refined Yet Again With MediaGlow — AOL is tweaking its website strategy yet again. As the company struggles with the slowdown in display ad activity, it is giving its web publishing unit a formal name, called MediaGlow. AOL’s Bill Wilson will go from EVP of programming to president of the new unit, which will oversee programming’s 75 sites, NYT reports. AOL plans to create 30 more sites this year. The formation of MediaGlow is meant to move AOL away from being a portal, as opposed to a publisher with niche sites, like “edgy” younger men’s site Asylum and its female counterpart Lemondrop.com, something it’s been working towards for over a year.

Hearst Says Seattle P-I Will Either Be Sold, Close Or Go Web-Only — Following yesterday’s leak to a local TV station that Hearst Corp. was planning to sell or close the Seattle Post Intelligencer, the parent company has confirmed that it is seeking a buyer for the daily, the paper itself reported. The unidentified source who tipped off KING-TV yesterday about Hearst’s plans told the station that the company is pessimistic about finding a buyer in this dismal environment. Publicly, Hearst sees three possibilities for the Seattle P-I, which is one of only two of the city’s daily papers: it will either be sold, turned into a web-only publication or shuttered.

CBS Interactive’s TV.Com Relaunches With Video From Showtime, Sony, Endemol And More — A follow-up to the TV.com relaunch we first reported last month… the CBS Interactive (NYSE: CBS) site, which already sports its new front-page look, is expanding its video catalog with content from Endemol, Sony (NYSE: SNE) Pictures TV, MGM, PBS, and sibling Showtime. TV.com is trying to tilt its image from a community site about television to a video destination. “The thought is to weave in this entertainment into the overall community experience,” explains Anthony Soohoo, SVP and GM of CBS Interactive Entertainment and Lifestyle. “We want to use it more as a starter, a fuel to start the conversation versus letting it be so overbearing that it overtakes the rest of the community.”

Yahoo TV Effort Comes At The Right Time — At the Consumer Electronics Show, Yahoo unveiled a range of new televisions and other devices loaded with software developed with chipmaker Intel Corp. that allows users to call up Web pages and tools for use while watching TV. BusinessWeek notes that past attempts to marry the Web and TV have fizzled badly, but some analysts claim that Yahoo’s efforts come at the right time, because consumers are finally ready to enjoy a range of media from a single device. Apple’s iPhone, which users use to surf the Web as well as to make phone calls and text messages, is the perfect example. “This is a very intelligent chance Yahoo is taking,” says Mukul Krishna, global director of digital media at research firm Frost & Sullivan. “Google and Microsoft will be looking at this very closely.”

Report: Google Shows 58% More Ads, Could Report Record Quarter — A major source of frustration for financial analysts covering Google is the fact that the search giant issues no forward-looking guidance. As a result, analysts’ expectations for the stock can vary widely. The gigantic question mark in the company’s recent fourth quarter performance is whether demand for search advertising increased, and by how much. According to data from AdGooroo, a Chicago-based search research firm, Google led its competitors during the fourth quarter with 58% growth in the average number of ads it showed per keyword on the first search results page (4.01 keywords in Q4 vs. 2.54 in Q3). In December 2007, Google actually ran 4.84 ads per keyword, but since then, the company has made a concerted effort to improve the quality of the ads it shows. The result has been far fewer first page ads per keyword in 2008, though these are ostensibly of a higher quality. Looks like Google may have decided to return to showing more ads per keyword in light of the recession.

Major Shake-up At Sling Media: Krikorian Brothers, Hirschhorn, White, Wilkes Leaving — Little more than a year after Sling Media’s sale to EchoStar (NSDQ: SATS), the co-founders and the top team at Sling Entertainment are leaving the company, paidContent.org has learned. The news is being broken to staff in meetings going on now. Departing are brothers Blake and Jason Krikorian, respectively CEO and SVP-business development, and Jason Hirschhorn and Ben White, president and chief creative officer of the Sling Media Entertainment Group. The senior executives agreed to stay in place for at least a year following the acquisition, which was valued at $380 million, but we’ve been expecting one or more to leave—especially given the entrepreneurial bent. The move comes after a burst of good publicity about the new Sling DVR, iPhone app and
back-to-back best of shows at CES and Macworld.

M&A Report: ‘08 Interactive Ad Deals Down 29 Percent — Now that 2008’s finally closed out, we get a better read on the state of the market in terms of M&A—and Petsky Prunier’s latest Deal Notes report (via ClickZ) shows that the interactive advertising space was hit pretty hard: transactions were down 29 percent from 2007, and investors spent about five times less in 2008 than they did in 2007. Of course, 2007 was the year of the ad network/exchange feeding frenzy: Google (NSDQ: GOOG) bought DoubleClick for $3.1 billion, Microsoft (NSDQ: MSFT) acquired aQuantive for $6 billion and Yahoo (NSDQ: YHOO) paid $680 million for Right Media—so those deals and the economic implosion skewed the results. Still the numbers are worth a look: Deals down sequentially and year-over-year in Q4 : There were 31 deals worth about $436 million in the interactive ad space in Q408—down 18 percent in terms of volume from Q3, and 29 percent in terms of money spent. Year-over-year the stats were worse: transaction volume was down 55 percent from Q407, and dollar value was down 77 percent. Overseas interactive agencies were a big draw : Interactive agency deals dominated the M&A activity in Q4, with eight deals worth a total of about $83 million. Interestingly, big ad holding companies focused on shoring up their digital practices overseas: Aegis Group acquired Malaysia-based shop IF, Publicis picked up Brazil-based Tribal, and Microsoft’s Razorfish’s gobbled up Spanish shop WYSIWYG.

Google’s Russian Fortunes: May Lose Ally, Snubbed By Firefox — In the fast-growing Russian internet scene, one of the big three portals, Rambler, could be about to lose its CEO, after dropping market share and seeing the sale of its advertising unit to Google (NSDQ: GOOG) fail. Mark Opzumerom won’t renew his contract, which ends in March, after Rambler.ru’s share of Runet’s search market fell from 14.9 percent last year to just 6.4 percent, business paper Vedomosti says (via Yakov). Rambler had agreed to sell its Begun contextual advertising platform to Google for $140 million in a summer deal that would also have seen Google replace Rambler’s own on-site search box. But the acquisition was curiously blocked in October by Russian antitrust authorities, arguing Google had not supplied the necessary paperwork. Google has already moved on and is testing the provision of search to leading social net Odnoklassniki. An exit for Opzumerom may suggest the Begun-Google deal may not be revisited.

Yahoo’s Board Picks Carol Bartz For CEO — It’s official: Carol Bartz as CEO is in and Sue Decker is out. The Wall Street Journal is reporting that Carol Bartz has been picked by Yahoo’s board of directors to succeed Jerry Yang as CEO and that she has accepted the job. Bartz, executive chairman and former CEO of Autodesk, first emerged as a candidate last week, some two months into the search. A Yahoo (NSDQ: YHOO) spokesman said he could not comment on whether an announcement is due today. Update: Bartz wasn’t on anyone’s public short list last November when Yahoo cofounder and CEO Jerry Yang, who was under pressure from the minute he took the post from former chairman and CEO Terry Semel, announced his decision to step down. The last time Yahoo plucked a CEO from the outside, the board went with seasoned entertainment vet Semel—a sign of its interest in media and entertainment, This time, the choice seems to be a Silicon Valley insider but it may not signal anything more than a belief that she has the right management experience, public company background and style mixed with industry know-how to steer a very troubled company that should be more successful than it is. Yahoo does a lot of things right but none of that matters as long as the image is of a company that is flailing.

Microsoft Gains Searches, Yahoo Acquisition On Horizon? — AdGooroo’s Q4 Search Engine Advertising Update, released Tuesday, points to major gains for Google and Microsoft–including 58.0% and 42.3% growth in advertisers, respectively. Yahoo trailed with 8.8%. “Microsoft has begun to close the
gap in advertising share with Yahoo, but based on the previous quarter’s numbers I would have expected that to take longer,” said Rich Stokes, AdGooroo founder.

Harvard Prof: Deceptive Ads ‘Rampant’ On Yahoo’s Right Media — Yahoo’s Right Media automated ad network allows “deceptive” banner ads to “run rampant through its system,” according to a new report by Harvard Business School’s Ben Edelman. Edelman estimates that as many of 35% of the ads shown through Right Media are deceptive. Right Media, which offers an automated auction platform for advertisers and publishers, said in a statement that it has “rigorous platform standards and guidelines” and doesn’t allow its system to be used in a “misleading, deceptive or illegal manner.

Euro VC House Balderton Targets Downturn Innovation With $430 Million New Fund — Fresh from making $140 million from the sale of Bebo and a “substantial return” on the sale of MySQL, Balderton Capital is announcing a new $430 million (£285 million) tech and media fund to capitalise on promising business plans thrown up in the downturn – proving that VCs really mean it when they say money is still available for good ideas. Though private equity is finding it harder to raise money from banks, Balderton – which was Benchmark’s European arm but span out in 2007 – assembled most of its new fund from investors in just two months, general manager Barry Maloney told FT.com: “We are about to enter a very interesting time for new investments, if not for exits. Part of the reason for raising this fund now is to take advantage of the opportunities that this stage of the cycle throws up.” Innovation gets another spurt in times like these, many investors say, explaining that Web 2.0 came off the back of the dot.com crash. VC money isn’t going away – Accel unveiled a $525 million new London fund last month.

Epperson Out At Havas Digital, CEO Role Split Across London, Madrid — In a move that centralizes more of the power for its digital media operations on the European continent, Paris-based Havas is restructuring the top management team of Havas Digital, following the departure of its Boston-based CEO Don Epperson on Jan. 31. Epperson, an entrepreneur with a deep background in finance and technology, joined Havas in 2001 when it acquired HookMedia, an early Boston-based digital shop he founded in 1998, and which became the backbone of Havas Digital’s operations.

Google Shuts Down Google Video Uploads, Notebook, Dodgeball, Jaiku, Mashup Editor — The day of the long knives at Google (NSDQ: GOOG) when it comes to products. In a burst of blog posts late Wednesday, the company announced the closure or impending closing of a batch of products, some more widely available than others: Google Notebook, Dodgeball, Google Catalog Search, microblogging servie Jaiku, and the Google Mashup Editor. You could call it thinning the herd as Google looks for ways to cut back ever so slightly on
engineering and to divert resources to projects that may have a chance or making money or could be more powerful when it comes to the same functions. Google is also halting uploads to Google Video, directing users instead to YouTube and Picasa.

Blockbuster To Bring Video To PCs And Mobile Devices In Q2 — In what is being considered a defensive move against Netflix (NSDQ: NFLX), Blockbuster (NYSE: BBI) said today it is going to start offering thousands of films and other titles to a number of devices as soon as the second quarter. The devices range from PCs and Macs to media players, Blu-ray Disc players, set-top boxes and mobile phones, Reuters reports. Users will be able to download or stream the movies on an ala carte basis, which will allow Blockbuster to offer newer movies than Netflix, which is frequently criticized for having out-of-date titles. Blockbuster may also consider
subscription services in the future.

Google, SpotMixer Launch Self-Service Video Ads — Google and One True Media–the parent company of online video ad creator SpotMixer–today are expected to publicly launch a self-serve video ad creation service for Google AdWords customers to produce and distribute cable television ads via Google TV Ads. Neither partner company would discuss the financial details of the new deal, One True Media CEO John Love did say there is more to it than just exposure for SpotMixer.

AOL Sports Becomes FanHouse — AOL Sports is rebranding as FanHouse, adopting the name of its popular blog for the entire sports site. The move follows on the heels of AOL’s creation of a new publishing unit called
MediaGlow that will launch more than 30 new sites by year’s end. Besides a redesign, FanHouse will feature expand coverage including on-site coverage of major sporting events, improved scoreboards, more video and RSS feeds from top sports writers. Over the next year, the site aimed at males aged 18 to 54, will also launch specialized sports properties including a mixed martial arts site.

Yahoo CEO Says She Will Spend A Lot Of Time looking At Selling Search Business, But ‘Gut’ Says Not To Sell — Yahoo, the Sunnyvale, California Internet company’s new Chief Executive plans to devote time looking at selling its search business, reported the Wall Street Journal. The article, citing people familiar with comments the new Yahoo CEO Carol Bartz made during a company-wide meeting Wednesday, reported Bartz said she plans to spend a lot of time looking into selling the unit but that her “gut” was to not sell the unit. Bartz also said she spoke with Steve Ballmer, the Chief Executive of Microsoft (NASDAQ:MSFT), the Redmond, Washington software company, after taking the job at Yahoo. The report noted that Yahoo’s board of directors isn’t pushing for a quick deal. Source: mergermarket.

How Heavily Will The Recession Weigh On Tech? — The Economist : The news from technology bellwethers like Microsoft, IBM, Motorola and Intel has been awful of late. According to several blogs, Microsoft and IBM are preparing to get rid of 16,000 employees each, or 17% and 4% of their workforces each. This may or may not be true, but The Economist says the news is telling nonetheless, as the cuts would be the biggest in
information technology history. Meanwhile, Motorola earlier this week said it was cutting 4,000 jobs, and Intel on Thursday reported that fourth quarter profit absolutely fell off a cliff, plummeting 90%. These are the signs of the industry’s current plight, The Economist says, adding: “Hardly a day passes without reports of collapsing revenues and workers being laid off.” So, is the tech industry headed for a worse downturn than the one
that followed the dotcom crash?

BrightRoll: Video Ad Rates Fell 25% In Q4 — Average pre-roll ad rates for online video in the fourth quarter dropped 25% from the year-earlier period and 12.5% from the prior quarter, according to video ad network BrightRoll. Pre-roll rates on average were down 14.2% in 2008 from 2007. BrightRoll, whose network spans hundreds of sites, declined to provide actual average CPM figures for business reasons. But average online video CPMs are generally estimated to run from $20 to $25.

Social Nets Threaten Ad Agency Growth — Advertising agencies are not prepared for the changes that will come as a result of new forms of media such as social networks, a new study claims. The Institute of Practitioners in Advertising’s “Social Media Futures” report warns that ad agencies face growth of just 1.2% per year by 2016 if they fail to tackle the changes prompted by the emergence of social networking. Recommendations from friends are obviously more influential than traditional forms of advertising. Because social networks enable consumers to pass on information about products and services, advertisers need to be able to take advantage of that trend. A good example of this is the Cadbury “Gorilla” spot, which has been viewed on YouTube more than 10 million times, or Dove’s famous “Campaign for real beauty,” which can also be seen on YouTube and other online video sites.

Blockbuster Dumps Movielink Tech After A Few Months; Goes With Cinemanow Instead — Blockbuster’s so-called plans have been changing in real time these days, it seems, as the world changes in real time as well: We pointed out yesterday Blockbuster’s continuing vaporware plans for online and mobile video. What was lost in the shuffle was the fact that the rental chain has dropped the technology behind Movielink, the online video service it bought in 2007 for a firesale price of $6.6 million (after $148 million was invested in it over the years), and will now go with one-time rival Cinemanow’s technology for its new online movie service, to be launched in Q2 this year. It had been integrating the Movielink service with Blockbuster.com for a few months now, but after testing it out in closed beta, it is now dumping the tech part, even though the content deals remain
in place, as Variety points out.

eBay Founder Omidyar Launching New Startup Ginx, A Twitter-Based Sharing Tool — After starting eBay (NSDQ: EBAY) in 1995, he’s spent the last fewyears investing in new sites like Digg, Goodmail and Meetup.com. Now the auction site’s chairman Pierre Omidyar is back in the startup saddle. PEHub found an SEC filing listing Omidyar as an executive of secretive new Honolulu-based outfit Ginx, prompting speculation last night as to the business model. So the company has now issued a release confirming Ginx is being created by Peer News, co-founded by Omidyar and eBay’s former classified ads VP Randy Ching: “Ginx is a Twitter client that aims to provide Twitter users with a rich experience for sharing and discussing links. Ginx was created to enable people to become more actively engaged in the news and topics they care about.”

Digital Media VC

Posted in Deals, Digital Media, News with tags , , , , , , , , , , , , , on January 15, 2009 by Dave Liu

Yodle Raised $10 Million In Series C — New York-based provider of local online advertising and lead generation, has raised $10 million in Series C funding. JAFCO Ventures led the round, and was joined by return backers Draper Fisher Jurvetson and Bessemer Venture Partners.

SocialVibe Raised $8 Million In Series B — Los Angeles-based social media monetization platform, has raised $8 million in Series B funding. JAFCO Ventures led the round, and was joined by return backer Redpoint Ventures.

SimpleTuition Raised $6 Million In Series C — Newton, Mass.-based online student loan comparison site, has raised $6 million in Series C funding, according to a regulatory filing. Backers include Atlas Ventures, Flybridge Venture Capital and North Hill Ventures.

RevaHealth.com Raised Euro1.25 Million — Dublin, Ireland-based provider of a global health clinic search engine, has raised €1.25 million in new VC funding. Existing backer Mianach Venture Capital led the round, and was joined by Enterprise Ireland.

Go Internet Media Raised $10 Million In Series A — Santa Clara, Calif.-based online advertising network focused on consumer acquisition services, has raised $10 million in Series A funding led by Kennet Partners.

NewsGator Technologies Raised $10 Million In Series E — Denver-based provider of content aggregation tools and services, has raised $10 million in additional Series E funding. Return backers include Masthead Venture Partners, Mobius Venture Capital and Vista Ventures.

United Sample Raised $3 Million In Series B — Encino, Calif.-based provider of online sample solutions for the market research industry, has raised $3 million in Series B funding. Greycroft Partners led the round, and was joined by return backer DFJ Frontier.

Schoolwires Raised $12 Million In First Round — State College, Penn.-based provider of online portals and content management solutions for K-12 schools, has raised $12 million in its first round of institutional funding. Kennet Partners led the round, with Kennet principal Eric Filipek joining the company’s board of directors.

Motionbox Raised $6 Million In Series C — New York-based personal video sharing and storage site, has raised $6 million in Series C funding. Constellation Ventures led the round, and was joined by fellow return backers Canaan Partners and SAS Investors.

Meez Raised Undisclosed Amount Of VC Funding — San Francisco-based social entertainment community, has raised an undisclosed amount of VC funding led by Anthem Venture Partners. The company also acquired Pulse Entertainment Inc., a San Francisco-based provider of avatar messaging services for mobile phones and websites. Meez had previously raised VC funding from Battery Ventures and Transcosmos, while Pulse had raised over $50 million from firms like Anthem, DFJ, El Dorado Ventures, Encore Venture Partners and Mobius Venture Capital.

ServiceChannel.com Raised Undisclosed Amount Of Series B — Albertson, N.Y.-based provider of online tools for contractors to collaborate with facilities managers, has raised an undisclosed amount of Series B funding led by SJF Ventures.

Kewego Raised $6.2 Million In Funding — Internet video company based in Paris, raised $6.2 million (4.7 million Euros) from Banexi Venture Partners and CDC Entreprises.

Digital Media VC

Posted in Deals, Digital Media, News with tags , , , , , , , , on January 10, 2009 by Dave Liu

Superfish Raised $5.3 Million In Series B — Visual search engine startupwith offices in Israel and Silicon Valley, has raised $5.3 million in
Series B funding, according to a regulatory filing. Backers include DFJ Tamir Fishman Ventures, The Individuals’ Venture Fund and Xenia Venture Capital. Board members include Andreas Stavropoulos of DFJ.

Play Hard Sports Raised $8 Million In Series B — Foxboro, Mass.-based provider of sports-focused MMO games, has raised $8 million in Series B funding, according to a regulatory filing. Return backer New Enterprise Associates participated, alongside an outside lead. The company is run by former Turbine CEO Jeffrey Anderson, and had previously raised a $5 million Series A round. http://www.playhard.net

Major League Gaming Raised $7.5 Million — New York-based professional video game league, has raised $7.5 million in follow-on funding from Oak Investment Partners. It had previously raised $25 million.

JibJab Raised $7.5 Million In Series C — Venice, Calif.–based provider of digital greetings and online entertainment, has raised $7.5 million in Series C funding. Overbrook Entertainment and Sony Pictures Entertainment joined return backer Polaris Venture Partners. The company had previously raised around $10 million.

Digital Entertainment Corp. of America Raised $10 Million In Series B — Rustic Canyon was joined by return backers Atomico, General Catalyst Partners and Mayfield. The Santa Monica, Calif.-based company was founded to actively identify, develop, finance, market, and distribute interactive entertainment concepts and properties across the Internet. http://www.deca.tv

Digital Media M&A

Posted in Deals, Digital Media, News with tags , , , , , , , on January 10, 2009 by Dave Liu

Ziff Davis Gets Out Of The Game: Sells 1UP To Hearst, Shutters EGM Mag To Focus On PCMag Network — Looking to conserve its resources for its PC Mag Digital business, Ziff Davis Media has sold off the 1UP Digital Network, its collection of video game sites, to Hearst Corp., which will fold it into the UGO Entertainment division. In conjunction with the sale, the related print mag Electronic Gaming Monthly will publish its last issue this month.

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.

Digital Media M&A

Posted in Deals, Digital Media, News with tags , , , , , , on January 3, 2009 by Dave Liu

Consumers Union To Buy Gawker’s Consumerist.com — Consumers Union is buying Consumerist.com from Gawker Media, according to the New York Times—meshing the non-profit publisher’s interest in expanding its reach to a younger online crowd with Nick Denton’s latest blog diet. (The Times, the average age of a print Consumer Reports sub is 60 and ConsumerReports.com is 50, while the snarkier Consumerist draws from the 18-49 crowd.) Kevin McKean, VP and editorial director of Consumers Union, told the NYT the blog would be part of a new division, that the current editors would stay on and that the style would stay the same. Two contributors who were laid off by Gawker will rejoin the site in January. No terms disclosed.