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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, 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 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. 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, 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’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 “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 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 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 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.”

Articles of the Day

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

Acquisition Talks Between Facebook And Twitter Break Down — So, Twitter still believes it can figure out how to generate some revenues. Kara Swisher is reporting that the rumors about Facebook acquiring Twitter were not only true, but that talks between the microblogging company and the social-network site broke down three weeks ago. The social net was offering to acquire the company for $500 million of its stock, but Twitter execs and investors apparently believe the company should “take a shot” at building revenues “as well as it [has] done building its growth” and not just jump at the first chance it gets to sell the business. Of course, there was also the matter of price—or, in this case, is half-a-billion dollars worth of Facebook stock really worth half-a-billion dollars? Facebook was pricing the transaction based on its own $15 billion valuation following Microsoft’s investment in it. But Twitter believed a more accurate valuation was $5 billion, making the deal worth $150 million.  

Random House To Double Size Of Its Digital Book Catalog — With consumers pulling back on in-store book purchases lately, Random House may be picking a good time to ramp up its ebooks offering. The publisher is expected to increase the number of ebook titles it has to 15,000 from the current 8,000, the LAT reports. Although ebooks represent just 1 percent of total book sales, that could change as both publishers and consumers adjust their habits in the current economic climate. Wider adoption of e-readers like Amazon’s Kindle could help too, although the dismal financial picture could depress growth there as well. Matt Shatz, Random House’s VP for digital operations, is crediting the Kindle with driving ebook sales’ growth by triple-digit percentages this year. He declined to offer the LAT any specific figures, indicating that the revenues and sales units are still comparatively small. 

Xing CEO Logs Out, Replacement Coming From eBay — LinkedIn rival Xing’s founder and CEO Lars Hinrichs has stepped down from the post to concentrate on “new entrepreneurial challenges”, and is being replaced by Dr. Stefan Gross-Selbeck, eBay’s general manager for Germany. But Hinrichs remains on the company’s board and remains its largest shareholder, he confirmed on his blog. No further info given behind the CEO swap. Under Hinrichs, Xing has tried to scale up to fight LinkedIn by buying smaller, country-specific European business networks – its acquisitions in Spain and Turkey totalling EUR 14 million ($17.6 million). On its home ground in Europe, it’s beating LinkedIn.  

Social Networking Services Growing, Advertising Not So Much — The use of social networking sites will continue to grow, but advertising will not necessarily expand along with it, according to market research firm IDC. Framingham, Mass.-based IDC says in a new study that social networks will face slow ad sales until they can get users to do more than just keep up with friends. That’s because members of social networks such as Facebook, MySpace and Bebo tend to click on ads less than the U.S. Internet users overall.  

AdBrite Launches CPC Auction For Banner Ads — Marking a significant departure from traditional CPM-based advertising, ad exchange AdBrite has launched a cost-per-click auction for graphical banner ads. When direct-response advertisers pay on a CPM or per- impression basis, they assume the full risk of impressions that may never convert into clicks or sales. AdBrite advertisers can now pay for graphical banner advertising in the same way they pay for search placements and text ads–paying only when their ad is clicked.  

EMarketer Revises ’09 Forecast Down Again — In yet another sign that “the industry needs to completely rethink display ads,” eMarketer has revised its online advertising outlook for 2009 down again, cutting its forecast to $25.7 billion, from $28.4 billion. Six months ago, the online industry research aggregator forecast that online spending would total $30 billion. That figure has now been cut twice. Meanwhile, Google should remain the biggest beneficiary of the 9% growth projected for 2009, down from 11% growth in 2008, as its search advertising system is widely believed to drive sales and conversions for marketers. In fact, eMarketer actually raised its search advertising estimate for next year to $12.3 billion next, up from its August estimate of $11.9 billion.  

Google To Lay Off 10,000 — Google is reportedly preparing to lay off as many as 10,000 workers, according to sources at the blog Web Guild.
Hundreds of employees have already been laid off and there are reports that about 500 of them were recruiters for the search giant. In fact, this is
one of the reasons the company was able to meet Wall Street’s Q3 expectations, Web Guild claims. Google has clearly managed to get around
the SEC’s requirement that it publicly disclose layoffs by classifying close to 30% of its workforce as contract workers. According to SEC
documents, Google has 20,123 employees, but Web Guild claims the actual number is closer to 30,000. Many of these workers will be getting the boot. As Google co-founder Sergey Brin said, “There is no question that the number (of workers) is too high.”

Articles of the Day

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

Microsoft’s Profits and Revs Up; Online Losses Increase — Microsoft (NSDQ: MSFT) has announced its Q308 earnings, and its revenues are profits are up for the quarter. Revenues came in at $15.06 billion, a 9 percent increase over the year-ago quarter. Net income was $4.37 billion, up slightly $4.29 billion in the year-ago quarter. The company is also downward revising its estimates for next year in keeping with the economic environment, especially for second half of 2009. And the pitch this quarter from MSFT: we can help you save money. “Our customers are asking how they can save money and do more with less…Microsoft is uniquely positioned to help our customers save money through supplier consolidation, increased productivity, and a low total cost of ownership through the depth and breadth of our product portfolio and solutions.” Yes, funny. Division wide: in its Entertainment and Devices Division (EDD), which includes XBox and Zune, revenues came in at $1.81 billion, down from $1.93 billion in the year-ago quarter. Operating income for the division was $178 million, up from $167 million in the year ago quarter. In its Online Services Business (OSB) unit, which includes MSN and other online advertising services, revenues came in at $770 million, up from $671 million in the year ago quarter. Operating losses for the division widened significantly, to $480 million, from $267 million in the year ago quarter.

Weblogs, Inc. Three Years Later: Impressive Page View And Revenue Growth — Earlier this month News Corp. celebrated the three year anniversary of the acquisition of MySpace. Today, AOL does the same for the Weblogs, Inc. blog network they acquired in October 2005. Since the acquisition, AOL says, the Weblogs, Inc. blogs (which include Engadget, TMZ, Download Squad, TUAW, Joystiq, Autoblog and others) have seen worldwide unique visitors climb nearly 1000% (122% annually, on average) and page views rise over 1,500% (154% annually, on average), according to August 2008 comScore Media Metrix. In October 2005, the blogs had a U.S. audience of 1.4 million unique visitors and were generating about $6 million in revenue. Today its 13 million uniques and revenues of about $30 million. In short, it was one of AOL’s better acquisitions.

Cox Enterprises’ Asset Sales Enter First Round Bids, Banker Says; Dirks Van Essen, And Murray Advisor On Sale — Cox Enterprises’ cluster of more than 20 daily and weekly publications has entered the first round of bids, said a banker familiar with the sale. The package has just hit the street, and bidders are now receiving the offering memorandum, the banker said. Cox, a privately-held media conglomerate in Atlanta, is looking at a deal value of 7x-to-8x cash flow. On 13 August, Cox announced the sale of certain newspapers in Texas, North Carolina and Colorado. Cox is also selling Omaha, Nebraska-based Valpak, its direct mail advertising subsidiary. It hired Citigroup for the newspaper sale and Goldman Sachs & Co. for Valpak. Cox did not return phone calls seeking comment. A spokesperson for Dirks Van Essen confirmed the firm was among Cox’s M&A advisors. An industry analyst speculated that the newspaper assets will have a difficult time attracting a buyer in this depressed market. James Gross, an analyst at Barrington Research, noted that although newspapers may occasionally come up for sale, few assets have found buyers in the past couple of years because of rapidly declining classified sales as Internet use grows. The banker himself expressed skepticism that Cox will sell the newspapers. He said until banks make financing available, few deals can consummate. The first analyst named Gannett and Newscorp as possible buyers. On 23 October, Gannett had a market capitalization of USD 2bn and traded at USD 9.65, close to its 52-week low of USD 8.49. Newscorp had a market cap of USD 23.5bn and traded at USD 9.00 close to its 52-week low of USD 7.64. Private equity players have taken interest in the papers, the banker said, although he declined to name them. Source: mergermarket.

Bill Gates Quietly Starts New Company — Just months after officially leaving his day-to-day role with Microsoft, Bill Gates has quietly established a new company with high-tech office space, a cryptic name and even its own trademark. Just what it will do is still anyone’s guess. According to public documents, the new company is called bgC3 LLC, and is some kind of a think tank. According to a Gates insider, it’s not a commercial venture but rather a vehicle to coordinate the software mogul’s work on his business and philanthropic endeavors. But Gates himself, who established the company under a different name in March before changing it to bgC3 in July, isn’t talking.

AOL Adds Yahoo Mail To Your Inbox — AOL has updated its webmail application to include a set of plugins that allow users to quickly access current news topics as well as third party services, most notably Yahoo Mail. Historically portals have been reluctant to give users access to their messages on other services, but they have been recently been opening up (which makes sense, given that they want to be a one-stop hub for all of your internet needs). Last month AOL gave users access to both their Yahoo and Gmail accounts from its homepage, and is now integrating the features into its main webmail client (Gmail hasn’t been integrated there yet, but it’s on the way). The move is another step in AOL’s attempt to prove that it is no longer a walled garden. Unfortunately Yahoo’s API handicaps how useful the feature is, as its integration is pretty clunky – instead of pulling in your messages and displaying them in AOL’s webmail interface, each message is actually a link to the Yahoo webmail client that opens in a new browser window.

Facebook Joins Advertising Research Foundation — Facebook heads a list of 34 new members who have joined The Advertising Research Foundation since June, representing a cross-section of the advertiser/ad agency/media/research and academic communities. “Having Facebook as a new member is a clear indication that our initiatives regarding the value of understanding social media are resonating throughout every facet of our industry,” Joel Rubinson, chief research officer at the ARF, said in a statement. Other new members include Hasbro, Eli Lilly, Kimberly-Clark, Mars, Novartis, UBS, PricewaterhouseCoopers LLP, and Bain & Company. Ad agencies include Adcentricity, Butler/Till, Global Hue and M:30. Cablevision heads a large Media group, including ABC Family and Disney Kids, Catalina Marketing, Fuse, National Cinemedia, PBS Kids Sprout, Rainbow Media and Tribune Media Net.

Despite Layoffs, Yahoo Slated To Set Up Major Shop In Nebraska — One door closes and another new facility opens—at least in Yahoo’s case. AP sources say Yahoo (NSDQ: YHOO) will announce plans to build a major facility in La Vista, Nebraska on Friday, just days after it said it would have to cut 1,500 jobs to help ride out the economic downturn. And the new digs won’t come cheap: in exchange for getting major state tax breaks, Yahoo has to invest at least $100 million and create at least 50 jobs worth at least $68,700 each within four years. Property records show that the Web giant already spent $14.8 million on the building itself (per Data Center Knowledge). Yahoo’s shares were trading up after the company said it would slash $400 million in expenses before the end of the year—and though the Nebraska facility is designed to be a cost-cutting measure, we’ll have to see how Wall Street reacts to this new, slightly more expensive news.

FAS Rejects Kokuna Holdings’ Application To Acquire 100% In Begun — Russia’s Federal Anti-Monopoly Service (FAS) has announced it has rejected Kokuna Holdings Limited’s application to acquire Russian contextual advertising company ZAO Begun. The regulator stated that Kokuna Holdings Limited submitted an application for acquiring 100% voting shares in Begun. FAS stated that, after considering the application, it decided to reject it over competition issues. According to an earlier report, Rambler Media, operating one of Russia’s most popular internet brands, agreed to sell its contextual advertising company ZAO Begun and related subsidiaries to Google, for a total cash consideration of USD 140m. Vedomosti online, and other Russian wires, wrote that Kokuna Holdings Limited is a subsidiary of Google. Source: mergermarket.

Twitter Fastest-Growing Social Networking Site — Twitter, Tagged and Ning were the fastest-growing social networking sites in September, according to Nielsen Online. Starting from a base of less than 1 million visitors a year ago, each has at least tripled U.S. traffic since then. Micro-blogging site Twitter has grown almost fourfold from 533,000 to 2.4 million visitors. Among more established social networks, LinkedIn was the fastest-growing–nearly tripling its audience to 11.9 million. That growth rate helped the site for professionals this week close another $22.7 million in venture capital. In June, it raised $53 million.

Articles of the Day

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

Time Warner’s Future: All About Content (Unless It’s From Time Inc or AOL) — Jeff Bewkes has been sitting at the desk where the Time Warner buck stops for seven months now, and beyond the Time Warner Cable spin and the New Line trim we’re not all that much closer to his full vision of the company. It’s really quite simple, though, contends Tim Arango in a sprawling Sunday biz story —it’s all about content. Matching it with distribution no longer counts. Spin TWC, sell off AOL’s access business and possibly AOL itself, and focus on three core content areas: Warner Brothers, Turner Broadcasting and HBO. Or, as Bewkes describes it, “dominating niches with a clear brand strategy.” M&A & NBC: He’s also looking at acquisitions in film and TV, the NYT reports, even considering bidding for NBC Universal (NYSE: GE) should GE decide to sell, “according to executives and bankers who requested anonymity because they were not authorized to disclose details of the discussions.” (Sirius (NSDQ: SIRI) CEO Mel Karmazin tells the NY Post he doesn’t think it’s a good time for GE to sell: “Would there be buyers for NBC? Sure, but I can’t tell you whether or not they’ll pay as much as what it might be worth a year or two from now. And the cash flow it is throwing off may be worth more to GE than selling it, paying the taxes and winding up with 50 percent of what it sold for.”)

Is Google a Content Company? — The familiar and at-times tiresome argument: it Google a content company and is it competing against the very content partners that use its services? This time the culprit is the newly launched Wikipedia-challenger Knol, and the argument is whether Google will give preferential treatment in its search to articles within Knol, vs similar topics from other competing sites. NYT picks up that thread, and does say that there is little evidence that Knol has received favorable treatment in search results till now. Some of the media companies are beginning to embrace Knol, adding their own stories/topics to Knol, but some, like Martha Stewart Living Omnimedia (NYSE: MSO), has no intention of building up a competitor. Wenda Harris Millard, the co-CEO of MSLO, said: “You are continuing to build their business if you do that, versus building your own.” According to Jason Calacanis, the CEO of Mahalo, a competition of sorts to Knol, it is possible that with YouTube, Knol, Blogger and other company sites, Google could take 3 of the top 10 results in some searches, thus alienating Web publishers that are Google’s advertising partners, even if there is no indication that Google artificially favored its sites. Of course at this point, very few have a choice not to work with Google…

AOL Unveils Larger Home Page Ad — Offering advertisers more prime online real estate, AOL has launched a new skyscraper unit on its home page nearly double the size of the largest placement the Web portal previously sold on its main page. The Interactive Advertising Bureau-standard (300 x 600) unit dominating the right side of the screen debuts with Samsung Mobile’s Olympics-themed “Medal Mania” campaign, awarding a $100,000 prize to the winner of an online scavenger hunt for virtual gold medals.

Twitter’s Secret Weapon: Audience — How is Twitter able to maintain such a large, loyal audience despite persistent service outages? TechCrunch’s Gregor Hochmuth argues that the mini-blogging service reaches a wide variety of users who would never dream of starting a blog or using an RSS reader. There’s also something about releasing a tweet and knowing your friends will receive it-even if it doesn’t exactly work that way (in actual fact, anyone who wants to can follow you on Twitter, whether that person is your friend or not). But from a user’s perspective, those receiving your messages are people you know, people who care enough to “follow” you. This, Hochmuth says, is the secret to Twitter’s success: The moment you send a message, not only do you have an idea about who’s receiving your message, you also know exactly who’s online and capable of responding to your message instantly.

Cablevision Sale Of Assets Likely To Focus On Rainbow Media Division; JP Morgan And Merrill Lynch Expected To Lead Process — Cablevision’s strategic review is expected to focus on selling its Rainbow Media assets, along with other smaller units, said an industry source claiming familiarity with the situation. The source said no final decision has yet been made, however. “Everything remains on the table absent the sale of the company,” he noted. The industry source went on to say that he would expect Cablevision’s long-time bankers — Bear Stearns media bankers who joined JP Morgan and Merrill Lynch — to lead the process, although no formal mandate has yet been handed out.  The source acknowledged there was speculation material is already circulating regarding the sale of Cablevision assets, but said the speculation is premature as an official process has not been kicked off. On 31 July, during a conference call with investors, Cablevision CEO James Dolan said the media company is exploring options to close the gap between its operating performance and its current market value. Cablevision owns a broad collection of media assets which range from cable properties, to Madison Square Garden and the ownership of the New York Knicks and Rangers, to Radio City Music Hall. The asset of particular focus is Rainbow Media, a collection of cable TV stations and programming units, a shareholder said. This is an asset that can be monetized and not affect the covenants for Cablevision’s outstanding debt, he noted. Also, in a note to clients, Chris Marangi of Gabelli & Company pointed out that the media assets Rainbow owns are receiving attractive valuations in today’s market. Further, Cablevision can likely utilize its USD 1.8bn net operating loss to reduce taxes associated with a Rainbow transaction, he added. Source: mergermarket.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , , , on July 22, 2008 by Dave Liu

Icahn Ends Proxy Fight In Settlement With Yahoo — In a shock move, Yahoo announced a settlement today that puts billionaire investor Carl Icahn on the company’s board, and expands its total number of seats to 11. The two remaining seats will be chosen by the board from a list of nine candidates who were going to run as part of Icahn’s slate. Former AOL Chairman and CEO Jonathan Miller is part of that list, and is widely expected to be named one of the three new board members, along with Icahn. Also, as part of the settlement, Yahoo said eight of its current board members would run for re-election, including CEO Jerry Yang, while one member, Activision Blizzard CEO Bobby Kotick, will not.

MSN Live CashBack Off To Good Start — Microsoft launched Live Search CashBack in June, and after its first full month of operation, comScore shows a 15% gain in search volume for the search giant vs. the previous month. As TechCrunch’s Michael Arrington points out, “this erases the previous month’s losses, bringing Microsoft up to 9.2% overall search share.” Live Search Cashback lets advertisers offer users a direct rebate for purchases made through Microsoft’s search engine. The product shifts the advertising model from cost-per-click to cost-per-action, giving a lot of the revenue earned from advertising back to users. As Arrington says, “Live Search Cashback isn’t designed to grab a ton of market share away from Google and Yahoo, but Microsoft is hopeful that more users will come to them when doing searches around buying goods online.” Those just happen to be the kind of queries that bring in the lion’s share of search dollars. The move is designed to help Microsoft grow its search share against Google, but it doesn’t help the software giant’s bottom line, as most of the money from purchases goes right back to consumers.

Is Twitter On the Cusp Of A Turnaround? — For awhile, there was nothing Twitter could do right. Frequent crashes would prompt a slew of angry bloggers to rant about the service in lengthy posts that criticized the company for being incompetent. But over the last few weeks, the micro-blogging site’s outages have become more rare and the headlines have started to turn positive. Following a recent round of venture funding and an acquisition, Twitter’s turnaround has started to feel real. Even USA Today is noticing. It wrote today: “So many people now use Twitter to update friends that the system often crashes. That could be about to change. Twitter executives are working feverishly to solve the problem through a new inv*stm*nt ($15 million, according to several tech blogs) from Spark Capital and Amazon (NSDQ: AMZN) founder Jeff Bezos and putting off expansion plans (i.e., making money) until the network issues are resolved.”

NYT Joins LinkedIn For Targeting Ads And Content — is working with LinkedIn on targeting news stories and ads at their respective readers and members, the two said in a joint announcement. For the past few months, LinkedIn has been forging partnerships designed to expand its offerings beyond just connecting people through their jobs. In March, the company signed a similar deal with that connects the mag site’s news to the jobs and associations of LinkedIn members and their network. This latest partnership involves a similar kind of “recommended reading” feature for the news site’s Business and Tech sections on For example, if you work in the media business and you’re on LinkedIn, five related headlines will appear in a new module within Times site’s Business and Tech sections. Users can then push those articles to members of their network through the share tool.

Tacoda Founder Predicts Huge Growth For Behavioral — Behavioral marketing could grow from around $700 million in 2007 to roughly $10 billion in the next five years, according to Dave Morgan, the founder and former CEO of Tacoda, speaking at the OMMA Behavioral conference on Monday. This represents an annualized growth rate of about 85% per year over five years. By comparison, Internet advertising revenue is expected to double in the same time, from $25.5 in 2007 billion to $51.1 billion in 2012, according to a separate forecast from IDC. Morgan’s “blue sky” prediction was significantly higher than figures from research firms like eMarketer, for example, which predicts $4.4 billion in behavioral revenues by 2012.

Facebook Unveils New Ad Placements, New Look — Facebook is giving ads greater prominence through new display units launched as part of the home page and member profile redesign. The site is shifting ad placements from the left side of pages to the right-hand columns. The social network said it will soon start selling the new home page units through its direct sales force. On all other pages, including user profiles, ads have been shifted to the right side from the left side to better fit the new design.

EA Extends Offer For Take-Two (Again) — Meanwhile, this saga continues to drag on: EA says it has extended, yet again, its offer to buy rival gamer Take-Two. The new deadline is August, 18th; the previous offer had expired on Friday. Once again, the company says the move is designed to let the FTC continue with its antitrust review. EA says 11.7 million shares of Take-Two have been tendered, which is up from 6.13 million shares last time.

Digital Media M&A

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

Social Messaging Apps Firm BigString Buys IM Firm Buddystumble — Two companies I had not heard of before, but I guess they exist: BigString, an OTC-traded provider of social networking messaging apps, has bought out Buddystumbler, an IM-based social network that integrates all other major IM clients in an online environment…both of them are similar to the much bigger and well-known Meebo. The deal was done as an all-stock transaction, and future rev share.

Twitter Buys Micro-Blogging Search Site Summize; Reportedly $15MM Cash+Stock — Twitter announced today that it has officially acquired Summize, according to a post written by Twitter co-founder Biz Stone. All five of Summize’s engineers will move to San Francisco and take jobs at Twitter, according to the company. “This is an important step forward in the evolution of Twitter as a service and as a company,” Stone wrote. Summize will help users search Twitter and keep up to date with news real-time (which they have already enabled, as shown above and on their site)—two examples they use is keeping up to date on Mars, and what people are thinking of the new Will Smith movie. As for the details, the company says the Summize service and API will be merged with our own and integrated under the Twitter brand. To get an idea of how search works, it can be checked out at The terms of the deal were not announced, but Silicon Alley Insider is reporting that Twitter paid $15 million in cash and stock. Twitter has received a lot of criticism recently for its ability to handle all of its traffic, but as of recently seems to be making a bit of a turnaround.

Expedia Buying European Hotels Site Venere — Expedia is following its acquisition of a majority of India’s TravelGuru site by buying, an Italy-based travel site listing about 29,000 hotels in Europe and the US, for an undisclosed amount.. All told, it means an extra 10,000 Europe, Middle East and Africa hotels for Expedia. Venere, which has offices in Rome, London and Paris, has been majority-owned by buyout house Advent since 2006, though the four founders retained stakes and still keep hold of those shares. Originally started by Microsoft (NSDQ: MSFT), Expedia was later acquired and spun off by IAC and is steadily building (or, rather, buying) a big footprint, also owning TripAdvisor and Expedia CEO said Dara Khosrowshahi (via release): “Acquiring Venere will bring a well-known, respected European consumer brand to the Expedia portfolio.”

Merrill Reaches Deal To Sell Bloomberg Stake: Report — And it sounds like earlier details were basically correct… WSJ is reporting that Merrill has reached a deal to sell its 20 percent in financial news service Bloomberg for $4.5-$5 billion. The buyer is Bloomberg LP, which had a right of first refusal. News of an imminent deal at this prace was first reported last week. There’s no word on when the announcement will be made, but it could come as early as tomorrow, when capital-hungry Merill announces quarterly earnings to much anticipation.

Comcast-Owned thePlatform Buys Social Media Apps Firm Chirp Interactive — thePlatform, the broadband and mobile video services provider that is now part of Comcast,, has acquired assets from San Francisco-based Chirp Interactive, a provider of social media applications…some of Chirp’s employees are transitioning into the bigger company. Chirp’s standalone service will not continue, but its community and content discovery features will be integrated within thePlatform’s media publishing system. In addition, thePlatform, based in Seattle, is now expanding into Silicon Valley, including opening a branch office.

Glam Media Uber Alles: Expanding Into Germany, Buying Munich’s Codex Media — Glam Media is opening a German site with help from its backer Burda Cross Media. Glam is also getting some extra assistance from its latest acquisition, Munich-based digital marketing firm Codex Media, the company announced. Terms were not disclosed. The move is part of a wider European expansion Glam has been pursuing lately, including last month’s acquisition of London-based online ad sales rep firm firm Monetise.

Google Buys Russian Search Firm For $140 Million — Fresh from its poor second quarter earnings report, Google is aiming to boost overseas revenues through the acquisition of Russian contextual ad firm ZAO Begun. TechCrunch reports that the search giant has agreed to pay UK-based Rambler Media $140 million for the firm. Rambler owned a 50.1% stake in Begun, but agreed to by the rest of it in order to sell to Google at a profit. The UK company will net about $50 million from the deal. As part of the deal, Rambler will now use Google AdSense for its search and contextual services.