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Articles of the Week

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

VC 2009 Investments: Which Startups Will Get The Dough? — Investments for venture capitalists got squashed in 2008, and the outlook for initial public offerings (IPOs) and mergers and acquisitions (M&As) doesn’t look much better for this year. But at least one VC firm still plans to make investments in 2009. Jeremy Liew, managing director at Lightspeed Venture Partners, said the Menlo Park, Calif. VC will look to invest in companies focused on gaming, virtual goods, Web 2.0 and advertising, and those with solutions that monetize international traffic. While startups can expect fewer investments in the first two quarters, by the end of the year run rates should return to those seen in 2008, according to Liew. “The challenge with investing now is there’s a lot of uncertainty about the recession we’re in, how long it will last and how deep it will be,” he said. “Consumers with more time on their hands and less disposable income will look for the most entertainment for least amount of money.”

Google Solicits Suggestions For Mobile Products — Building on the openness underlying its Android mobile platform, Google is allowing users to propose ideas for new mobile product features through a new Web site. The Product Ideas page for Google Mobile allows Google users to submit and vote on mobile features they’d like to see the company develop. Through this Digg-like rating system, “we’ll be able to see more clearly what’s important to you and we’ll take it into consideration as we move forward with developing our products,” according to a post on the Google Mobile blog last week. “The Product Ideas team will pop in from time to time to see what you have to say, and we’ll be offering periodic updates on what we see and what ideas make it into your favorite products.”

Publishers Competing With Ad Networks — Behavioral targeting can be something of a double-edged sword for publishers, Ad Age’s Michael Learmonth explains. When a user visits a site like Edmunds.com, he or she instantly becomes an “in-market car buyer”, a valuable asset, but one from which Edmunds.com might not necessarily benefit. Like most Web publishers, Learmonth says that Edmunds doesn’t participate in the “mini-economy that flourishes after visitors leave” their site. Instead, “a host of ad networks will sell that ‘in-market car buyer’ to advertisers at a fraction of the rate, thereby increasing ad inventory while driving down ad rates for Edmunds, KBB.com and other sites like it.” The same story is true for other publishers who, by hosting users who demonstrate an interest in their products, create a profile that is eventually used by a third party network that packages and resells audiences at lower prices. As Learmonth says, publishers have long viewed this universe of networks and targeting firms with “unease”, in a similar manner to the way they compete with portals and news services that aggregate their content. Source: AdAge.

Consumers Union’s New Consumer Media Unit Could Expand Beyond Consumerist; No Paid Ads Allowed — Consumers Union’s new non-profit subsidiary Consumer Media LLC launches on Jan. 1 with newly acquired Consumerist.com as its only property but the announcement release stressed that it’s the first. Does this mean more acquisitions are on the way? “The short answer is we don’t know,” Ken Weine, VP-communications, told us. “We may down the road acquire or create new items.” Consumer Media is viewed as a way to expand
the nonprofit’s consumer advocacy mission and to take advantage of a growth spurt in recent years. For now, the new subsidiary sets boundaries between Consumerist, acquired this week from Gawker Media, and CU’s Consumer Reports magazine and website. “The message we’re trying to project—and the reality will reflect this—is we’re not purchasing Consumerist to make it into Consumer Reports and we wanted for that, among other reasons, to structurally create some distance between the two.”

Getting Rid Of The Box: Netflix Software To Be Embedded Directly Into LG TVs — In the march towards getting “rid of the box” as the going-forward philosophy in the evolving digital home, Netflix has extended its partnership with LG Electronics (SEO: 066570) and embedding its online video service directly into the new HDTVs from the Korean electronics company. LG’s new LCD and plasma “Broadband HDTVs” will allow current Netflix members to stream the videos from its service; these TVs have to be connected to a broadband connection, of course.

Monster.com To Create Co-Branded Job Sites With Sun-Times Media Group — The Sun-Times Media Group has struck an alliance with Monster.com on forming a series of online recruitment services and co-branded job sites across the publisher’s 70 newspapers. The deal comes over six months after Chicago-based Sun-Times joined the Yahoo (NSDQ: YHOO) Newspaper Consortium, which includes access to Yahoo’s Hot Jobs site. More recently, newspapers and online recruiters have seen help wanted ads decline precipitously as the economy worsens and unemployment ticks higher. The deal could help Sun-Times generate some more incremental revenue and attract more readers
to its classifieds. For Monster, it represents the growth of a media alliance that includes 250 newspapers and their sites, such as the NYTimes.com, and over 100 local TV outlets.

Macrovision Backtracks On TV Guide Network Sale To One Equity Partners; Chooses Lionsgate Instead — The TV Guide saga continues … Macrovision (NSDQ: MVSN) has a new buyer for its TV Guide Network and TV Guide Online properties—Lionsgate Entertainment. The TV and movie studio is slated to buy the properties from Macrovision for $255 million, the same price Macrovision had agreed to sell it to Allen Shapiro and One Equity Partners for (plus a $45 million earnout payable for the next three years) less than
a month ago. That deal was expected to close on April 1, 2009. Macrovision’s CFO James Budge told the WSJ that the company went with the
new deal because it seemed more certain to close: “At the end of the day, overall deal considerations were superior with the Lionsgate deal in all
circumstances.” This new deal is slated to close in February.

Gannett Lifts The Curtain On Local/National Hybrid Site ContentOne — Gannett (NYSE: GCI) is going live with its local/national web hybrid ContentOne this morning, says Jim Hopkins on his Gannett Blog. The program was introduced by execs speaking at the UBS Media Week conference last month. At the time, Craig Dubow, Gannett’s chairman, president and CEO, said ContentOne would serve as an exchange between its 85 local papers’ websites and USA Today’s site on the national level. He also described the idea behind ContentOne as “local content on a national level,” adding that it will use the regionally focused MomsLikeMe social net and Metromix web guide as the foundation. ContentOne would operate as a single site and serve as an easy access point for advertisers targeting readers both local and national level.

Better Late Than Never: Ad Agencies Try To Create Online Marketplaces — After witnessing ad networks and exchanges capture more revenue from major marketers these last few years, traditional media agencies are starting to play catch up. Interpublic Group’s buying and planning shop Mediabrands is working on a digital marketplace tool for clients that will include behavioral targeting. IPG’s major ad holding company rivals are not far behind either, WSJ says, noting that WPP Group, Publicis Groupe and Havas are also trying to come up with similar programs.

Mail.ru Investor Offloads Stake; IPO Looks Less Likely — While you were off for Christmas, the ownership of Russia’s top website (according to TNS) shifted a little. Tiger Global Management hedge fund sold its 27 percent stake in Mail.ru to its existing shareholders Digital Sky Technologies and Naspers. The Russian online investment vehicle and the South African media outfit now have 53.2 percent and 42.8 percent respectively, CEO Dmitri Grishin has 2.5 percent. The deal means DST, which is part-owned by Arsenal soccer club and LiveJournal investor Alexander Usmanov, now controls a majority of both Mail.ru and Runet’s top social site Odnoklassniki.ru.

Online To Weather 2009 — How will online advertising fare in 2009? Adweek says there are two schools of thought: optimists see tighter budgets shifting more dollars from less measurable media like TV and print to the Web; pessimists believe that weaker ad budgets will result in cuts across all media, although digital should fare a little better. With that in mind, search spending is expected to remain stable, while display and ads and microsites could come under pressure. Social ads are also likely to remain top of mind this year, as marketers look to move beyond experimenting with social media toward really engaging and leveraging users’ social interactions. Researcher eMarketer pegs online ad spending growth at 8.9% in 2009, from $23.6 billion to $25.7 billion. Forrester Research, another research firm, expects display spending to increase 8% this year.

IAC/InterActiveCorp Sees Strategic ‘Search’ And ‘Local’ Acquisitions As Use For USD 1.7bn in Cash — IAC/InterActiveCorp. (NASDQ:IACI), the New York-listed Internet company, is looking for strategic “search” and “local” area deals with USD 1.7bn in cash, according to a CitiGroup analyst report. The report cited comments made by IAC Chief Executive Barry Diller yesterday during Citi’s Global Entertainment, Media and Telecommunications Conference in Phoenix, Arizona. According to the report, IAC sees growth potential in the two areas, despite a cautious macroeconomic outlook for 2009. Source: mergermarket.

AOL’s Conroy Jumps To Univision As Interactive Media President — paidContent has learned that Kevin Conroy is leaving his post as AOL’s EVP, products, and heading to Spanish-language TV broadcaster Univision as president of interactive media. Before coming to AOL (NYSE: TWX) in 2001 to build AOL Music, Conroy was CMO for new technology at BMG Entertainment, where he worked for eight years. Conroy took on additional duties at AOL last April, when John Burbank departed as CMO less than a year after arriving at AOL.

Confirmed: Apple Dropping DRM Across iTunes, New Pricing Structure, 3G Downloads — Just before Tony Bennett sang goodbye to the Moscone Center faithful with “I Left My Heart In San Francisco,” Apple (NSDQ: AAPL) confirmed at its final Macworld Expo that it will drop DRM copy protection across 10 million iTunes Store songs from all majors, as per CNET’s earlier report. The move will apply to eight million tracks as of today and will extend to a further two million by the end of the quarter. Bringing to a close what have sometimes been fractious label negotiations, Apple is also introducing three new pricing tiers for iTunes tracks—$0.69 for older tracks, $0.99 for recent tracks and $1.29 for new hits. Marketing VP Phil Schiller, taking Steve Jobs’ traditional keynote spot, also said Apple is extending the ability to buy iTunes songs wirelessly via iPhone from merely WiFi to 3G mobile networks; also from today, tracks will be priced the same and have the same bitrate as desktop iTunes downloads.

@ CES: Microsoft CEO Ballmer Starts His Stage Setting With A Swipe At Yahoo’s Yang — We’re in the not-as-crowded-as-usual ballroom at the Venetian where the first Microsoft (NSDQ: MSFT) keynote completely sans Bill Gates (well, he got a mention and some applause) is underway with Steve Ballmer on the stage. It only took a couple of minutes for a light-hearted jab at Yahoo’s Jerry Yang, with a fake message asking: “Why do you keep ignoring my friend requests in Facebook?” No mention of the latest funky Yahoo deal rumor, of course, Ballmer’s real mission tonight is to outline his vision for Microsoft and to pitch Windows as the once and future software that will connect devices, platforms and people—and the PC as THE computer. “In many ways, connecting all of this together is the last mile. … The linchpin for bringing all of this together for you should be Windows.” Windows 7: “I am really pleased with the progress on Windows 7…. We’re working hard to get it right more quickly.” It should boot more quickly, take less battery life, incorporate touch. “We are releasing the beta of Windows 7; Tech Net and MSDN tonight.” Friday, the beta will be available globally for any user to try. Hasta la vista, baby.

Time Warner Warns Of Net Loss For ‘08; Expects $25 Billion Impairment Charge — Time Warner (NYSE: TWX) is warning investors that it will report a net loss ranging from $1.04 to $1.07 a share profit. Back in November, the company said it expected income to grow 5 percent over 2007’s $12.9 billion. The company is also expecting an impairment charge of $25 billion. About $15 billion of those write-downs are related to Time Warner Cable (NYSE: TWC), which the company is planning on spinning off, although it still holds an 85 percent interest, the WSJ noted. Time Warner made the announcement in advance of CFO’s John Martin presentation at the 2009 Citigroup Global Entertainment, Media & Telecommunications Conference today. Following the news, Time Warner shares were down 6.1 percent in
pre-market trading. Time Warner said the change in expectation was due to several factors and not just the worsening economic environment. For example, in December, it was hit with a $280 million expense related to a judgment against Turner Broadcasting System in a court case involving to the 2004 sale of its winter sports teams. Time Warner also pointed out that advertising at AOL and its publishing business suffered more than anticipated in Q4, reducing the expected income growth rate by about 1 percent.

Citi Media: Time Warner’s Martin On AOL: Don’t Expect Any Strategic Deals Soon — Asked about Time Warner’s plans for the AOL business and all its discordant parts—from access service to content and ad sales—CFO John Martin told the 2009 Citigroup Global Entertainment, Media & Telecommunications Conference in Phoenix that the company is still enthusiastic about exploring “strategic relationships.” However, to be realistic, this kind of economic environment isn’t conducive to quick action. The comments were somewhat in contrast to what CEO Jeff Bewkes said last month at the UBS Media Week event, when he told attendees “I’d like to get it resolved, meaning clear… so AOL can be seen and valued… We need to do it fairly soon and we’ve been working hard on it.” Still exploring alternatives: Martin: “We look at the company in three buckets, the cable, the content companies and AOL. With AOL, you have at least two big businesses in there. The access business has surpassed expectations in terms of cash flow. It’s declining, but it’s doing so at a predictable rate. The access business, though, is not strategic to Time Warner (NYSE: TWX). So we would be open to different options, but in this environment, we appreciate the fr*ee cash flow. As for audience size, AOL doesn’t have the industry scale that some of other businesses do. So we’ve been in talks with other companies about creating alternative structures and seeing what we could do. But this is a tough environment to do any strategic relationships. We just completed 22 months of considerable growth in usage on the vertical channels and there is still reason to be optimistic.”

@ CES: Discovery’s Kathy Kayse: ‘We’re Better-Equipped To Deliver On Digital This Year’ — Discovery Communications gobbled up online reference site HowStuffWorks for $250 million back in late 2007, and network brass told us that HSW would be the company’s “primary platform” for online growth. Well, has the company delivered on its promise? We asked Discovery’s EVP of digital ad sales Kathy Kayse at the Reinventing Advertising Conference at CES: Increased traffic: “It’s about a year into the integration process and we’ve seen significant growth in unique visitors and page views to both sites [Discovery.com and HSW],” Kayse said. “This year, we’ll focus even more aggressively on cross-channel promotion and integrating more Discovery (NSDQ: DISAB) content onto HSW.”

Microsoft Beats Out Google To Win Verizon Search Deal — It’s official. Microsoft (NSDQ: MSFT) has won the deal to become the default search provider on all phones on the Verizon Wireless (NYSE: VZ) network, reports Reuters. The two companies said they would go into greater detail about the deal later today at CES in Las Vegas. In November last year, the WSJ reported that in an effort to snatch the deal from Google (NSDQ: GOOG), Microsoft was offering guaranteed payments to the carrier of approximately $550 million to $650 million over five years—about twice what the search giant had proposed. The payments are to come from the ads that Microsoft would be able to serve up with search results.

Travelocity CEO Peluso To Leave — Travelocity CEO Michelle Peluso is packing her bags and will leave the online travel agency early next month. She’ll be replaced by Hugh Jones, who most recently served as chief operating officer for the Sabre Travel Network and Sabre Airline Solutions businesses. Sabre Holdings is Travelocity’s parent company. Peluso came to Travelocity in 2002, when the company acquired online travel site Site59.com, which she founded. Transitioning from CEO of Site59, Peluso became Travelocity’s COO a year later. At the end of 2003, she was became president and CEO. Over the past year, as other vertical categories started seeing slower growth, travel-related sites were still holding their own. Whether that will continue as the recession takes hold is unclear. Jones, who had served as a financial controller for American Airlines, was likely singled out to succeed Peluso because of his background. No word on Peluso’s next move.

Venture Capitalist Sounds Alarm For Facebook, Slide — In an interview with PaidContent writer Tameka Kee, Norwest Venture Partners principal Tim Chang expressed concern about two well-known Silicon Valley startups that he thinks will find it hard to grow their revenues or raise new money this year. “I’m concerned about Facebook,” Chang said. “Microsoft isn’t likely to renew its search-advertising contract–at least not at the same rate–and Facebook makes a significant amount of money from that deal. Imagine if you lost $300 million worth of revenue–how would you make it up? It’s not going to come from advertising, even if they have other ad platforms.” As Kee points out, that also raises questions about what happens to News Corp’s MySpace when Google renegotiates its search deal.

@ CES: Online Video Exec: ‘If We Don’t Do Things Differently, The Industry Is Screwed’ — Online video viewing continues to surge, but the ad dollars flowing into the space still aren’t scaling accordingly. Panelists at the Reinventing Advertising Conference @ CES trotted out well-worn reasons for that imbalance: lack of standard metrics; high volume of low-quality content; building the right amount of reach, etc. But Brian Terkelsen, EVP and managing director at MediaVest’s connectivetissue, (pictured) avoided the hand-wringing and laid it on the line: “Advertisers aren’t being aggressive enough in general—they helped grow TV to where it is now, so I think it’s partly up to them to drive video. If we don’t challenge the industry to do things differently, we’re screwed.”

Google Won’t Buy Ailing Newspapers, Could ‘Merge Without Merging’ — Their fortunes are poles apart and yet inseparable—one is hauling in buckets of advertising, the other is losing it at an alarming rate. Google (NSDQ: GOOG) sympathizes with the newspaper business’ predicament and continues to say it can help, but, sadly for NYT-Google acquisition speculators, CEO Eric Schmidt says he isn’t about to buy or bail out any news publishers.

AOL Reorganizes Products Division Following Conroy’s Departure — AOL (NYSE: TWX) is reshuffling parts of its products division following the departure of Kevin Conroy as AOL’s EVP of products. AOL Video, AOL Radio, Winamp, SHOUTcast, widgets and a few other areas are being moved from the Products & Platforms Group to the AOL Programming Group under EVP Bill Wilson. Programming will also take over AOL’s commerce and marketplace channels. Also, the chat applications under Userplane, which AOL bought in 2006, will move into the People Networks business unit under Joanna Shields. In a memo to staffers about the latest changes, Randy Falco, AOL’s chairman and CEO, says that there are few other details at the People Networks that will be completed in the next few weeks. Meanwhile, Conroy’s remaining duties within the Products and Technologies division, which include overseeing mail, video search tool Truveo, mobile and toolbar, will go to Ted Cahall, the group’s president.

Tracking The Shift In Media M&A Dollars in 2008 — Even though 2008 was a slower year for digital media M&A, about $0.88 of every dollar of industry revenue growth flew to four growth sectors: Database & Information; B2B Online Media; Consumer Online Media; and Interactive Marketing Services. Only $0.12 flowed to traditional media, according to an analysis by media M&A advisory firm The Jordan, Edmiston Group. This compares to $0.67 of every incremental ad dollar flowing to traditional media sectors (newspapers, magazines, events, etc.) from 2001 to 2007, while only $0.33 went to these four growth sectors. Some other highlights: Multiples: The all-important metric for an entrepreneur: The four growth categories saw average revenue and EBITDA multiples range from 3.4x to 4.5x and 13.5x to 21.3x, respectively, in 2008, as compared to 1.5x to 2.4x and 8.0x to 8.5x, respectively, for traditional media sectors. Deal numbers: Deal count and value declined 35 percent and 58 percent, respectively, in Q4 2008 versus Q4 2007. For the full-year, deal count was down 13 percent and deal value declined a significant 68 percent from 2007 highs.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , on November 13, 2008 by Dave Liu

Windows Live Is a Social Network — Microsoft has launched a new version of

its Windows Live service, or whatever it was before (search plus its myriad
communication services tacked on it), and now it is a full blown social
network, with the idea to integrate all the disparate MSFT online services,
as well as allow other third-party services to be embedded within it.
Pretty much everything except MySpace and Facebook is integrated into the
new service, including Flickr, LinkedIn, Pandora, Photobucket, Twitter,
WordPress and Yelp. Nevermind that MSFT has a big inv*stm*nt in
Facebook…apparently it is only being used to “borrow” ideas: it has the
now-de-rigueur news feed, a la Facebook, which lets you track your friends
and their activities. Apparently, people who have reviewed it like it.

Analysts Cut Estimates On Google, As Stock Dives Below $300 — CEO Eric
Schmidt’s has repeatedly said that the economic downturn won’t dent Google
(NSDQ: GOOG)—but that doesn’t seem to have satisfied analysts’ doubts. With
the stock now trading below $300 for the first time since October 2005,
MarketWatch reports that analysts have cut their estimates on Google’s Q4
profits and revenue. Google’s stock was down 6.57 percent, to $291.00, at
the 4 p.m. close today. On average, analysts expect Google to post earnings
of $5.12 a share by the end of this quarter, according to a consensus
estimate by FactSet Research. That same analyst compilation calls for $4.3
billion in net revenue.

Microsoft Closing In On Search Deal With Verizon Wireless; Guarantees May
Exceed $500M
— Microsoft is finally close to edging out Google on a search
deal, and this one is on the mobile side: Under the deal, it would become
the default search provider on the Verizon (NYSE: VZ) Wireless’s phones,
and is even offering guaranteed payments to the carrier of approximately
$550 million to $650 million over five years, or roughly twice what Google
(NSDQ: GOOG) offered, reports the WSJ, citing sources. These revenues would
be against the ads that MSFT would be able to serve up in mobile searches.
Verizon’s talks with Google are still on, but it is leaning towards MSFT
because of better financial incentives. This is similar to the Facebook
deal MSFT did last year. Separately, in an effort to combat the potential
rise of Google-backed Android, MSFT is also trying to get Windows Mobile
software in more Verizon devices, and could even end up paying VZW to
encourage them to use the mobile OS. The combined value of the two deals
could top $1 billion, the story says. VZW has been working with Windows
Mobile for some time now, along with Palm and Brew, though it has also been
cozying up to open source Linux, after recently becoming a member of the
LiMo Foundation, the technology’s trade association.

Media Vets Launch Digital Entertainment-Focused Agility Studios; Gets
Funding
— A new digital studio called Agility Studios, started by three
online vets, has launched today. The company, based in Los Angeles, has
been founded by Scott Ehrlich, former VP of media at RealNetworks, who will
serve as the company’s CEO; Larry Tanz, till recently the President and CEO
of LivePlanet, will now be the President and COO; and Keith Quinn, recently
SVP of Production & Development for LivePlanet, who will oversee
programming and production as the company’s Chief Creative Officer. The
company has also received funding from Colorado-based Mantucket Capital,
which usually invests as a PE firm or provides distressed capital. The
amount was not disclosed, but it “several millions”, Ehrlich told me. The
reason he went outside the traditional VC route was because he believes
creative development requires a different kind of capital from VC money,
with a longer term horizon.

Dentsu Could Make More US Buys — Dentsu, the Japanese advertising giant
that acquired New York-based McGarry Bowen, could make more buys, reported
the Wall Street Journal. The report, part of a story looking at the deal,
cited people familiar with the matter as saying Dentsu is aiming to get 30%
of its revenue from North America by 2010, in part by making acquisitions.
Dentsu posted a net profit for the first six months of the year of USD 82.9
m, according to the report. Source: mergermarket.

Thomson Reuters Sales Up In First Full Quarter, But Will That Continue Next
Year?
— Thomson Reuters is beginning to reap the benefits of one of the
biggest company mergers of recent years, today reporting eight percent
better Q3 revenues of $3.3 billion (£2.2 billion), with operating profit up
17 percent to $676 million (£414 million). In the first full quarter since
the pair’s merger, those leaps come directly from the pair’s £8.7 billion
marriage this June and are helped by $550 million of savings from
integration-related activities – like laying off hundreds of staff
globally… no final figure on casualties has been given, but CEO Tom Glocer
said the process is “ahead of schedule”. Glocer said, while it’s “certainly
mathematically possible” that the company will begin 2009 negatively if it
has a disastrous November and December, in reality all the various
components of the business were holding up well. The dreaded credit crunch
is biting, but “there has already been a silver lining in the disruption…
the demand for financial news, for pricing data, for data feeds, for
infrastructure is strong,” said Glocer.

Social Search Engine OneRiot — The OneRiot search engine official
launched Wednesday after Me.dium, a browser add-on that provided insight to
what others search on, built the technology into a “social search”
application and rebranded the company name. The search engine relies on
feedback from other searchers to return queries. It combines relevant news
articles, blogs, videos and photos from across the Web.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , , , , , on November 10, 2008 by Dave Liu

Razorfish CEO Kokich: Microsoft’s Not Selling Us—But Ask Me Again In Two Years — Clark Kokich, the CEO of Microsoft (NSDQ: MSFT) online ad agency
Razorfish, is downplaying rumors that its parent Microsoft is shopping it
around. He tells Techflash pointedly that Microsoft has no plans to sell
the company, which became part of the Redmond company when it paid $6
billion for Razorfish parent aQuantive in May 2007. However, he did leave
the door open to sale in the not-too-distant future. Just because there are
no plans at the moment, doesn’t mean that in “two to three to four years
from now, it might not happen,” Kokich said.

UK’s Virgin Media May Sell Content Divison — Days after negotiating an
improved deal to bring Sky’s basic TV channels back to it’s 3.5 million TV
customers for upwards of £30 million, Virgin Media (NSDQ: VMED) is now
considering selling its content division, according to sources quoted by
FT.com. The division includes digital channels Virgin 1, Dave and Watch,
and though FT.com’s sources stress the company has not been “hawking the
business around” to potential buyers, a sale has been discussed at board
level. Conversations ran along the lines of turning the business into “a
series of communication platforms rather than producing any content of is
own”, the story says.

YouTube’s Content Thaw: MGM Posting Full Shows and Movies On It — Frozen
out of most of mainstream full length content, YouTube’s repository is
beginning to thaw a bit, as traction among competitors such as Hulu and TV
networks’ own sites begins to grow: Metro-Goldwyn-Mayer Studios (MGM) is
tying up with the Google-owned video site, and will start posting episodes
of its decade-old “American Gladiators” program to YouTube, along with
full-length action films like “Bulletproof Monk” and “The Magnificent
Seven” and clips from popular movies like “Legally Blonde,” the NYT
reports. Some would point out that the financially troubled MGM has nothing
to lose from these experiments, unlike other studios still sitting on the
sidelines.

Blockbuster Changes Its Mind: To Roll Out Set-Top Box For Holiday Rush
AppleTV, Netflix flicks on Xbox 360, and now … a set-top box from
Blockbuster? Consumers can expect one this holiday season, according to Jim
Keyes, Blockbuster’s CEO and Chairman. The company plans to roll out a unit
that will deliver movies on demand from its Movielink download service.
Keyes made the announcement during an investor call this week, Home Media
Magazine reports, though he didn’t offer any details about the
manufacturer, pricing or availability. It’s a complete about-face from what
he told us back in August: namely, that Blockbuster (NYSE: BBI) felt no
urgency to launch its own set-top box any time soon. Perhaps the continued
success of rival Netflix (NSDQ: NFLX) sparked the change of heart—after
all, Netflix had a stellar Q3 (in contrast to Blockbuster’s lackluster
performance), and continues to broker content distribution deals with new
partners like TiVo and Apple.

Yahoo’s Restructured Deal With AT&T: $350 Million Upfront Payment — Yahoo
(NSDQ: YHOO) restructured its AT&T (NYSE: T) broadband/DSL co-branded deal
earlier this year, and at the time, no specific amount was announced,
though Yahoo expected aggregate revenue outside of traffic acquisition
costs to decline by $150-200 million over 2007 because of the
restructuring; Yahoo also expected a $300-400 million upfront payment from
AT&T recognized over the life of the contract. Now in its 10-Q for Q308, it
has the exact number: $350 million as the upfront it got from AT&T, which
was recorded in long-term deferred revenue in Q108 and is being recognized
in marketing services revenues over the underlying service period. Also
this year, it restructured a similar Verizon (NYSE: VZ) deal, though no
specific details have come out for that.

NYTCo Takes $166 Million Writedown For New England Media Group; Faces $400M
Refinancing
— The New York Times Company (NYSE: NYT) filed its 10-Q with
the SEC Friday and it’s not a pretty sight. The company projected a
$140-150 million write down for the New England Media Group when it
reported Q3 results Oct. 23; the number reported in the 10-Q is $166
million with adjustments to come in Q4. That puts the Q3 loss for the News
Media Group at $153 million and the overall loss for Q3 slightly over $106
million. The company has two $400 million revolving credit agreements, one
due in May 2009 and one in 2011. S&P lowered its rating twice this year,
the second time below inv*stm*nt grade; Moody’s has lowered its rating once
and serviced notice that it may do so again. As we reported recently, NYTCo
isn’t in danger of breaching its covenants; there are also no accelerated
payments subject to ratings downgrades. But the downgrades do make
financing trickier and more expensive—and they almost certainly guarantee
that the company faces more restrictive covenants. From the 10-Q: “We are
evaluating future financing arrangements and are in discussions with our
lenders regarding the expiration of one of our credit agreements, scheduled
for May 2009. Based on these discussions, we expect that we will be able to
manage our debt and credit obligations as they mature.” (For the dramatic
interpretation, read this from SAI while listening to Celine Dion. Update:
Should have added that one of SAI’s investors is Kohlberg Ventures, which
is run by James Kohlberg, one of the dissident shareholders appointed to
the NYTCo board. ).

Former Time Vet Robin Domeniconi To Head Up MSFT Ad Sales In U.S. — After
a string of high-profile ad-exec departures,Microsoft has made a key hire:
former Time Inc. vet Robin Domeniconi. Starting January 1, Domeniconi will
serve as VP of U.S. ad sales, reporting to VP of global sales and marketing
Bill Shaughnessy; she’ll oversee sales across MSFT’s roster of digital
products, including MSN and Windows Live, Xbox LIVE, Live Search, and
Facebook. The senior executives who have left MSFT recently include Kevin
Johnson, President of Platforms and Services, and Digital Sales GM Lisa
Utzschneider. While it’s clear that Domeniconi is not taking Johnson’s
place, it’s not clear who will be reporting to her. A company spokesperson
said that the hierarchy won’t be determined until she starts.

Admeld Launches New Platform, Adds Barrett As CEO — Ad optimization
technology provider AdMeld today is expected to launch a new platform to
help publishers maximize revenue from digital ad networks and ad exchanges.
The AdMeld platform, which is emerging from an eight-month beta program,
attempts to leverage dynamic pricing and advanced targeting to better route
inventory from publishers to generate higher revenue for each ad served.
AdMeld is also announcing the appointment of new Chief Executive Officer
Michael Barrett. The online ad veteran most recently served as EVP and
chief revenue officer for News Corp.’s Fox Interactive Media.

BitTorrent In Complete Disarray: President and CEO Leave; 18 Employees Laid
Off
— Goes to the point that P2P is not a business model in itself, and
then, of course, bad management will even make it worse: BitTorrent, the
San Francisco-based company that has been trying to develop an online video
service and company around the open source P2P delivery technology, has
been in deep trouble for a while now, and the issues came to fore this
week, as the CEO and President of the company have left. The company has
also fired about half of its employees, 18 in number, and this after it
laid off 20 percent of the staff in August.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , , , on September 30, 2008 by Dave Liu

MSFT’s Mehdi Upped To Lead Much Of Online Services—But Not As President — Microsoft vet Yusuf Mehdi will now lead much of the company’s online services, including marketing, business development, product management for MSN, and search, according to Kara at AllThingsD. However, CEO Steve Ballmer has yet to appoint an overall replacement for Kevin Johnson, who left his post as president of the platform and service division in July. We suggested earlier this month that Mehdi and Brian McAndrews, SVP-advertiser and publisher solutions, were the most likely contenders to fill Johnson’s shoes. Mehdi, along with McAndrews and Satya Nadella, SVP-search, portal & advertising, are now heading up different aspects of advertising in the company. Formerly SVP-strategic partnerships, he’ll now be responsible for part of the portfolio of SVP Bill Veghte, who will focus on leading Windows and Windows Live.

Yahoo Reorgs Connected Life Division; Next Phase Focused On Making Money On Mobile — Yahoo is reorganizing the Connected Life division with the intention of actually making money. The reorganization, announced internally today at an all-hands meeting, includes a management shuffle and the new goal of contributing to Yahoo’s bottom line by 2009, according to an email we obtained. The email was sent out today to employees by Marco Boerries, Yahoo’s EVP of the Connected Life Division, who also made the announcement at a meeting this morning.

Interview: MediaNews’ Singleton On What’s Ailing Newspapers: It’s The Economy, Not The Internet — It’s been a rough few years for the newspaper business. With the migration of readers and advertisers from print to online, and then the past year’s economic downturn and market meltdown this month, it’s hard to figure out where the fixes are going to come from. William Dean Singleton, CEO of Denver-based publisher MediaNews Group, believes he can address the challenge presented by online media to newspapers by tying print and interactive ad sales more closely together and by relying on cooperative services from Yahoo (NSDQ: YHOO), the AP and real estate ad net Zillow. But the economy, that’s a whole other problem. I spoke with Singleton following Yahoo’s heralding of its APT display ad sales delivery and targeting system last week. During the Yahoo press conference, Singleton said he expects up to 22 percent of the privately-held company’s revenue this year will come from online newspapers, with that number reaching 50 percent in five years. Rather than looking too far ahead though, our conversation focused on the here and now.

AP Signs Up 500 Papers For Online News Sharing Service — While the Associated Press has been trying to beat back threats to defect by member newspapers over the fee structure being implemented next year, a sizable number are still interested in sticking around to take advantage of its growing web tools. The wire service company says that 500 newspapers have signed up for AP Member Marketplace, the online system that lets its subscribers exchange stories, photos and graphics. The service, which was unveiled back in April, is set to get some enhancements this week. In Ohio, 53 papers have asked for access so far, with 45 in Pennsylvania and 26 in Texas are among the 20 states where 10 or more member newspapers have signed up.

AOL Brings Back Digital City As (Yet Another) Blog — In keeping with AOL’s blog-a-week rollout that it’s been doing for the past year to revamp its portal site, the Time Warner company is looking back to its Digital City brand. The site used to resemble *IAC’s* CitySearch network, but Digital City’s new incarnation is more of a general interest blog, with the entertainment, food and nightlife topics underpinning its posts. Perhaps trying too hard to depart from the old Digital City, the site’s postings represent a farrago of topics: a paean to gourmet grill cheese is sandwiched between a post on the upcoming vice presidential candidates’ debate and a post critiquing media coverage of John McCain’s closeness to the gambling business. The general nature of the site makes it more curious as to why AOL needs another site like this, especially when its been sharpening its offerings with sites like the new female focused Lemondrop and the older male counterpart Asylum. Either way, it represents more space to sell ads in struggling display market. Like the other sites, the revamped Digital City’s ads will be handled by Platform-A, AOL’s online ad group.

Broadband ISPs Vow Ad-Targeting To Be ‘Opt-In’ In Congressional Hearing — Although they don’t currently target ads to their broadband subscribers, representatives from AT&T, Time Warner Cable, and Verizon Communications appeared before a Senate committee and promised to adopt a system that would seek customers permission first before serving behavioral ads, ClickZ reported. In a period of increased scrutiny on behavioral targeting, cable companies and telcos are still holding out hope that they can convince lawmakers to allow the industry to self-regulate. Both houses of Congress have been looking into online ad targeting since the summer, when Charter Communications executives were summoned to Capitol Hill to outline a planned test of behavioral ad provider Nebuad’s system.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , on September 4, 2008 by Dave Liu

Yahoo Reups Verizon Portal Deal; Change in Rev Share Terms — There was a time in 2005 and 2000 where Yahoo was signing up various broadband providers to make itself the default portals for the Internet access subscribers: Verizon, SBC (now AT&T) and Bellsouth, among others. Not much was heard on these deals since 2006 (barring that AT&T deal restructuring early this year), but now Yahoo has re-upped its deal with Verizon, along the same lines as before: users will be able to select a start page of a cobranded Verizon-Yahoo with Yahoo services, of course. Users can also choose to use services from Microsoft (NSDQ: MSFT) or AOL (NYSE: TWX), but Yahoo will be the first option on the list under the new agreement, reports WSJ. Verizon said Yahoo earned the top position, previously held by Microsoft, based on the revenue it generated and shared with Verizon.

Sun May Set Soon On New York Sun If It Doesn’t Find New Funding — New York Sun, the small-but-influential NY area newspaper which launched among much hype in 2002, may be forced to close after this month if it does not find new investors. According to NYP, the paper is losing money at the rate of $1 million a month for total losses surpassing $70 million. The paper was backed by deep-pocketed investors to being with, including Roger Hertog, the former vice chairman of AllianceBernstein, and became known for its coverage of New York City government and the arts and for its conservative political bent, reports WSJ. As of 2007 the paper claims a readership of 150K, supposedly among a slice of “New York elite.”

Liberty Media Details Plans To Split-Off Liberty Entertainment — Liberty Media’s board has approved a plan to fully split Liberty Entertainment, currently a tracking stock, off into a separate public company. After the split, Liberty Entertainment would still retain the name. If the plan goes through, the new Liberty Entertainment would be made up of roughly 50 percent of The DirecTV Group (NYSE: DTV), and all holdings belonging Starz Entertainment, FUN Technologies, and Liberty Sports Holdings. It would also include 50 percent of GSN and 37 percent of WildBlue Communications. Liberty Entertainment would also assume the $2 billion in debt that was incurred to acquire 78.3 million DirecTV shares in April 2008. The parent company said it expected the executive officers of Liberty Media to also hold those positions at Liberty Entertainment, which also means media mogul John Malone.

Microsoft and Others To Take Stake in Japanese Broadcaster NHK; Streaming Online As Well — Microsoft, NTT and Itochu Corp, together with 10 other companies are taking a stake in Japan’s first 24-hour English-language broadcasting service, which local public broadcaster NHK which is due to launch in February, reports Nikkei, citing sources and picked up by Thomson Financial. NHK will issue about $1.8 million in new shares through private placements with these 13 investors, the paper said. Once the new shares are issued, NHK’s interest in the unit will drop to around 60 percent, and each of the 13 companies will have stakes of less than 5 percent each. Both MSFT and NTT, which have expertise in digital media, plan to which broadcast the network online as well. This is the first such channel in Japan, and expects to reach 110 million households in North America, Europe, the Middle East, North Africa, Southeast Asia, and other areas of the world.

CNBC-LinkedIn Link Up On Content, Networking — Another media partnership for LinkedIn, which is striving to be more than a place to check contacts. This time it’s CNBC and the business social net in a “significant strategic alliance” that may actually live up to the billing if executed as described: CNBC becomes LinkedIn’s preferred business media provider with text, articles and blogs, financial data, and video content. LinkedIn networking and functionality will be integrated into CNBC.com while LinkedIn content will be used on CNBC the network. Less clear is what the two have to gain financially beyond exposure to each other’s domestic and international audiences: VC-backed LinkedIn has 27-plus million registered users; CNBC hovers around 250,000-265,000 U.S. viewers for total business day viewers but its actual reach is hard to measure because so much of the viewing is out of home.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , , , on August 27, 2008 by Dave Liu

Microsoft’s InPrivate Could Make Ad Prospects More Private — Tech publishers and bloggers are buzzing about the impending release of a new version of Microsoft’s popular Internet Explorer browser – still the dominant tool used to access the Web – that has new privacy features that could more readily delete the browsing history and cookies of individual Internet users, making it more difficult for advertisers and publishers to track and serve ads to them. Consumer privacy experts are hailing the forthcoming release of Microsoft’s Internet Explorer 8 (IE8), and its so-called “InPrivate” blocking feature, but industry analysts say it could be an anathema for targeting and serving online ads.

Rumored Google, Verizon Search/Mobile Deal Signals Major Shift In Attitudes — News of Google’s potential mobile search deal with Verizon Wireless comes as no surprise to analysts who monitor the mobile search and advertising space. In fact, according to Mike Boland, senior analyst at The Kelsey Group, the deal is indicative of a huge shift in the way that mobile service carriers are starting to view technology companies, paved in part by AT&T’s groundbreaking deal with Apple for the iPhone. The deal would essentially make Google search the “on deck” option on Verizon mobile devices, and they would split any ensuing ad revenue.

NYTCo: June Numbers Signal Another Tough Quarter; Revs Fall Sharply; Internet Growth Slow — Q3 is getting off to a rough start at NYTCo… the publisher came out with July numbers showing total revenue fell 10.1 percent to $235.9 million. Ad revenue, which fell 16.2 percent, was weak across all categories. The internet, normally a “bright spot” is rapidly losing its luster: Internet ad revs at the News Media Group were up just .9 percent, hurt by weakness in online recruitment. NYTCo says growth in the current month is up in the “low double digits” helped by improved display advertising on NYTimes.com.

GfK Ends Bid For TNS—All Clear For WPP Takeover? — German audience measurement firm GfK appears to be withdrawing its bid for British research company Taylor Nelson Sofres, according to Reuters, which cited a story in Germany’s Manager magazine based on unidentified sources. GfK is said to be dropping its bid because Apax, the PE firm that agreed to help back it in the deal, began making demands for extensive control over the merger. The German company started to get cold feet last month, when UK ad holding company WPP Group began maneuvering for a hostile takeover of TNS. WPP had sent TNS a formal offer for a 264.2p-per-share offer that values TNS at £1.158 billion ($2.1 billion) – a 55 percent premium from April 28, when TNS said it would merge with GfK.

Greenfield Online Spurns Quadrangle For Higher Offer; Will Pay $5 Million Breakup Fee — Greenfield Online, a provider of online market research, says it’s nixing its sale to media PE firm Quadrangle. The company had already indicated that it received a potentially higher offer than the $426 million or $15.50 per share it was set to get from Quadrangle. The new buyer, an un-named Fortune 100 firm, will pay $17.50 for the company. Per the original agreement announced in early June, Quadrangle will get a $5 million fee for its troubles. Quadrangle could still increase its offer if it acts before August, 29. Full story —

Carat Lowers Overall Ad Outlook, Boosts Online’s — Carat has revised its global and U.S. ad spending outlooks for 2008 downward, but has slightly increased its projections for online ad spending in 2008 and 2009. In a new forecast released early this morning, Carat said it now expects the global advertising marketplace to expand only 4.9%, and U.S. ad spending to rise by 2.1% in 2008. In its preliminary forecast released in March, Carat had projected worldwide ad spending would grow 6.0% and the U.S. would rise 3.8% this year.