Archive for WSJ

Articles of the Day

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

SEC Won’t Enforce Rule That Would Make Facebook Finances Public  — Facebook isn’t a public company and it isn’t going to have to act like one any time soon. According to BusinessWeek, the SEC agreed that it won’t enforce a rule that would require public disclosure of financial results when the number of equity holders hits 500 and the assets total more than $10 million because the only class likely to be affected covers employee equity granted through restricted stock units (RSUs). The RSUs won’t be issued unless the company changes hands or launches an IPO. The SEC’s promise of no action—the equivalent of an exemption—was issued last month following a letter from Facebook law firm Fenwick & West in anticipation that Facebook could hit the 500 mark for employees with equity. The exemption wouldn’t cover the company’s common stock or preferred stock for Series A, B, & D, which involve investors or a mix of employees and investors.

BBC Trust: BBC Must Drop $100 Million Local Video Plan; Would Hurt Commercial Rivals — The BBC has been blocked from beginning a £68 million ($101 million), four-year program to add video bulletins to its 65 local UK websites – a proposal that had been vigorously contested by concerned commercial publishers. After a five-month inquiry, the BBC Trust regulator said on Friday the plan would hurt the nascent online video efforts of struggling local newspaper publishers, many of which were forced to answer falling profits and the classified ads downturn with layoffs this week.

Kaiser Family, Other Non-Profits Launching Independent Health News Services — Sensing a void in health care policy news coverage these days, the non-profit Kaiser Foundation is jumping on a recent trend and starting its own web-based news service, NYT reports. Kaiser, which focuses almost exclusively on the subject of national health care concerns, plans to form content sharing arrangements with a variety of media outlets. The service will build on Kaiser’s existing site, which includes aggregated news reports and policy papers. That site has about 100,000 daily pageviews and 55,000 subscribers. 

With Ad Spend Still Down, Financial News Turns To Rising Readership For Revenue Boost — Although financial news providers’ audience numbers have shot up markedly since the global economic crisis erupted this fall, that hasn’t reversed the downward slide of ad dollars. Now, more financial publishers are looking for a revenue boost to come from subscriptions, while those that already primarily rely on such fees are counting on partnerships to support rising audience demand for more content. Even premium products seem poised for growth as publishers seek to tap as many alternatives to the ad model as possible, an IHT piece suggests. Surveying the burst of attraction financial content is getting from cable TV and website users—e.g., WSJ.com’s uniques doubled to 40 million last month, while CNBC’s Q3 daytime viewership rose 26 percent—IHT finds publishers like Financial Times’ parent Pearson (NYSE: PSO) continuing to emphasize reducing its reliance on advertisers, as it has for the past year. So far, its plan seems to be working: less than one-third of FT Group’s revenues now come from ad dollars. 

GigaOm Network Parting Ways With Federated; Going With IDG’s Tech Ad
Network
— Giga Omni Media (GOM), the parent company of the popular network of tech sites including GigaOm, is parting ways with its long time ad partner Federated Media, and moving to a more enterprise-focused IDG TechNetwork, IDG’s tech ad network, we have learned and confirmed from the two companies. The new deal with IDG is for all CPM-based online advertising across GOM’s network of seven sites, and the company will still sell events and online sponsorships directly on its own. While this is not a significant monetary setback for Federated, it does point to what the
John Battelle-founded online-ad company is giving up as it continues to scale: Its focus has been on large-scale national advertisers and creating
both general and custom programs with them, as opposed to the more ‘intimate” sells required for enterprise-focused vendors that GOM attracts.
FM has a big-brand focus, for most part, and beyond its early start with tech sites, it has now moved into all kinds of other verticals like parenting, food, graphic arts, small business and others.  

WSJ Targets NYT’s Luxury Advertisers; NYTCo Stock Hits New Low On Ad
Worries
— The increasingly Murdochized WSJ has been aggressively trying to lure NYT’s luxury advertisers in much the same way the financial newspaper has been trying to broaden its coverage to grab its rivals general news readership. For example, high-end retailer and long-time NYT ad client Saks Inc. has recently been promoting a new Chanel boutique and men’s suit sale in WSJ, Milton Pedraza, CEO of market researcher Luxury Institute, points out to Bloomberg. WSJ is definitely taking away luxury ad dollars from the NYT, both on the print and digital sides, Pedraza told me. Although luxury marketers are shifting more of their declining overall ad spend online, the fight over the category will become more intense he expects.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , on November 17, 2008 by Dave Liu

Despite Industry Gloom, AOL Takes Its Ad Sales Pitch On The Road — Despite all its bad news lately, AOL (NYSE: TWX) can point to at least some revenue gains tied to its traffic jump. The company’s Q3 was mixed at best: profit dropped 7 percent to $400 million and display ad revenue fell 15 percent to $181 million; meanwhile, it had 12 percent gains in paid search. Later tonight, AOL, led by CEO Randy Falco and Lynda Clarizio, head of Platform-A, will gather 400 ad and media execs to kick off a “traveling upfront presentation” it’s calling the AOL Roadshow at the American Museum of Natural History. Bill Wilson, EVP of AOL Programming, demoed his presentation for me Friday; he’ll be trumpeting the company’s traffic numbers (one favorite of his: 21 months of consecutive year-over-year unique visitor growth for a current total of 56 million uniques). More important, he will also try to convince the industry that AOL is actually delivering on those traffic gains. Although total ad revenues were down 6 percent to $500 million in Q3, Wilson will highlight the news that the vertical content network of sites were up “solid double digits in Q3”—but no specific figures.

WSJ.com’s Third Super-Premium Tier Coming? — Murdoch’s love for newspapers is undying, nevermind the near-death throes of the medium itself, and he reads it out (literally, on the radio) as part of a series of Australian radio lectures titled, “The future of newspapers: moving beyond dead trees.” Compare and contrast this to his famous speech on April 13, 2005, to the American Society of Newspaper Editors, which shook the newspaper industry then for its forward thinking about the digital future of newspapers. And this was before he bought MySpace (three months later) and later in 2007 bought Dow Jones.

GE’s Immelt: ‘Some Opportunities In Media Consolidation’ — Jeffrey Immelt’s latest tack to convince people that NBC Universal (NYSE: GE) parent General Electric is staying in the media business—talk about buying more media assets. The GE chairman and CEO told the FT “There are going to be some opportunities in media consolidation, in infrastructure, oil and gas, aviation. And my hope is that we can play in some of those as time goes on.” Those who may need convincing include Vivendi (EPA: VIV), which owns 20 percent of NBCU. As FT points, it’s time for the annual guessing game over whether Vivendi will exercise its put option for GE to buy that stake and whether GE would sell NBCU to avoid further investment. GE acquired the majority of NBCU in a $14 billion deal in 2004. But much has changed at GE since the last time this question came up, including the company’s structure and NBCU’s designation as one of five operating units. Vivendi’s put option runs through 2016 and is based on market value; starting 2011, GE has an annual window with call rights through 2017 with a floor price of $8.3 billion that will increase based on the Consumer Price Index.

AOL Cutting Off Uncut Video Service; More Squeeze On Third-Party Vendors? — AOL (NYSE: TWX), as part of its efforts to trim the non-core and no-revenue-generating parts of its portfolio, is closing down the AOL Uncut online user-gen video service, after 2.5 years of trying to compete in the space. The service, started in May 2006, was powered by Videoegg, which has since moved on to become an online video-advertising network. According to a memo/FAQ to be sent out next week, obtained by Techcrunch, the service will close on Dec 18, and users will have to transfer video off the service before then. It is recommending that users transfer videos to Motionbox, the white-label video-upload service.

Discovery To Invest Up To $100 Million in Oprah Network; Has Spent $7 Million Till Now — The high-profile launch of “OWN: The Oprah Winfrey Network” in late 2009 has attracted its own share of speculation since the announcement in January earlier this year, including executives, programming choices and finances. The company has already names Robin Schwartz as president, Maria Grasso as SVP of programming, Robert Tercek as president of digital media, among others. But no other details on the finances have been revealed till now.

UMG Digital Sales Up 33 Percent, New Streams Offset Dropoff In CD Sales — Universal Music Group predicted a turnaround, and maybe it’s coming to pass… UMG posted EUR 3.14 billion ($3.97 billion) revenue in the first nine months of 2008 –that’s up 3.5 percent if you rule out currency fluctuations. True, in actual currency, it’s down 3.8 percent, but even that’s better than the kind of chronic results some of the majors have become used to. It’s not that CDs are enjoying a revival… the hike came thanks to growth in music publishing and merchandising after UMG bought BMG Music Publishing and Sanctuary, from increased licensing income via the growing number of music-using services, and from a 33 percent increase in digital sales. All of which ”more than offset lower physical sales, according to parent group Vivendi’s earnings. Earnings before the deduction of interest, tax and amortization expenses were up 21.8 percent to EUR 408 million ($516 million) but were actually dragged down by various restructuring costs. Duffy was a big seller for the label.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , , , , on November 7, 2008 by Dave Liu

Obama Begins Transition; Advisors Are Named For Tech And Communications Issues — A day after the election, names are already being floated as to who will likely be on the president-elect’s transition team, including advisors on issues involving technology and communications. Barack Obama is expected to appoint Washington, D.C. lawyer Henry Rivera to head the team focused on the FCC, reports Multichannel News, quoting informed sources. Rivera, who is a Democrat, is a partner at Wiley, Rein, and served at the FCC from 1981 to 1985. Current FCC chairman Kevin Martin also worked at Wiley. Rivera declined to comment.

IAC: Which Emerging Businesses Will It Sell or Close? — In the Q3 earnings call, Barry Diller dropped multiple hints about closing down or selling some of what IAC (NSDQ: IACI) calls its “emerging businesses”. And he said that it would happen within the next month. On the call: “No businesses in the emerging sectors are carrying any big investments. It is an area we not going to emphasize in the future: we think that is ditsy focusing. We don’t think emerging businesses are the tomorrow of our business. Some of the things within our emerging businesses: we will sell off and shut down, and we will do that next month.” The emerging unit is heavily skewed towards its digital media companies, some bought and some incubated within the company. This also includes its IAC Programming unit headed by Michael Jackson, and where MTVN (NYSE: VIA) vet Nicholas Lehman joined as COO last year. Tina Brown’s newly launched DailyBeast site is part of the programming unit.

Time Warner Q3 Profit Dips On Flat Rev; $100M Charge For Time Cuts; AOL Ads Drop 6 Percent — Time Warner managed to keep its net income from slipping much during Q3 but, with revenue “essentially flat” and a $100-125 million charge for Time Inc. layoffs on the way, followed other media companies by trimming its 2008 outlook today. Between New Line, Time Inc and some other restructuring, the company says the total charges by the end of 2008 could top $300 million. (That would seem to suggest the major cuts are done and that AOL won’t take a big hit in Q4 but this economy doesn’t offer much in the way of guarantees.).

Murdoch: WSJ.com Making Over $100 Million From Ads, ‘Probably’ $100 Million In Subscription Fees — WSJ.com is making more than $200 million from advertising and subscription, News Corp Chairman and CEO Rupert Murdoch told analysts during the company’s earnings call. He said the site is making “probably $100 million in subscriptions and certainly over $100 million in advertising.” This time last year, Murdoch was still testing waters on freeing WSJ.com; now safe to say he’s a subscription evangelist. WSJ.com is the “one web site … people are happy to pay for.” Print subscribers—and probably online, although he didn’t specify—are looking at rate increases over the next three years. Those increases will take a while to show up in revenues. Murdoch: “It takes time to work its way through. Advertising is not down a lot. It is certainly a bit below what we budgeted. … Today and tomorrow it’s on target.” He said to expect “even more emphasis than normal on international expansion” and that the big hope in Asia “certainly is putting our web site on mobile.”

FIM Revenues Soft As News Corp. Falls 22% — News Corp. fell 22% in Wednesday trading after the media empire cut its 2009 forecast primarily due to shrinking ad sales at its broadcasting and publishing properties. The traditional media giant finished the day down $3.02 to $12.88, posting its biggest one-day drop since December 1990. News Corp.’s third quarter earnings certainly weren’t boosted much by revenue growth from Fox Interactive Media, the online division which includes the social network MySpace. The division saw a revenue increase of 17%. In call with reporters, News Corp. executives conceded that MySpace display advertising was “softening.”

Disney Disappoints With 14 Percent Profit Drop; Revs Up 6 Percent — The Walt Disney Company has been playing the role of Wall Street darling but not today. The company still turned a profit but not what analysts were expecting—although it did beat revenue estimates with $9.4 billion for the quarter ending Sept. 27, up 6 percent from $8.9 billion year over year. The profit of $760 million was down 14 percent from $883 million in FYQ407, for earnings per share of $.40, down from $.44 last year. Excluding special items, it would have been $.43 per share. The company was hit by the fall of Lehman, taking a $91 million bad debt charge. Via Marketwatch, the FactSet Research analyst estimate was a profit of 49 cents a share on sales of $9.31 billion. We’ll have more color as the call gets underway but the overarching theme so far matches the rest of the media universe as the economic downtown takes its toll.

Ballmer: Yahoo Buyout Is Not Gonna Happen — Sorry, Jerry, a buyout’s not gonna happen. That’s the message MSFT CEO Steve Ballmer made clear at a business luncheon in Sydney, Reuters says. “We made an offer, we made another offer … We moved on,” Ballmer said. “We tried at one point to do a partnership around search … and that didn’t work either, and we moved on and they moved on. We are not interested in going back and re-looking at an acquisition. I don’t know why they would be either, frankly.” But he did leave the door open for a potential search deal, something some analysts say Yahoo will have to consider if it wants to stay alive despite the demise of its search partnership with Google. Ballmer’s definitive statement came after Yahoo CEO Jerry Yang suggested that MSFT buy Yahoo during the Web 2.0 conference yesterday.

NBA Launches International Video Subscription Via Broadband — The latest NBA expansion covers two growth areas for the league: international and broadband. NBA League Pass Broadband International is now available in 19 countries. The subscription includes access to 40-plus live games a week with play-by-play in English and VOD for 24 hours after they air. Some live games will be blacked out. Pay options include full season ($85 through Nov. 11; $100 after), monthly and daily. The international version follows a new U.S. option with NBA League Pass Broadband; before this season, broadband packages were available only as an extension part of the cable or satellite out-of-market package. Speaking of promos, EA NBA Live is sponsoring a fr*ee preview of the U.S. broadband service through Nov. 11.

Articles of the Day

Posted in Digital Media, News with tags , , , , , , , , , on October 29, 2008 by Dave Liu

Aegis’ Fay: ‘Not As Bad As You Think’—And Not Done With M&A — Aegis North America CEO Sarah Fay, in a conversation with Andy Serwer, Fortune’s managing editor, at Future of Business Media conference hit on all the touch points facing the ad industry right now: the state of ad spend, the divide between traditional and digital, the Google issue and M&A activity. In general, Fay expressed a relatively sunny take on the turbulent media industry at the moment. Bullish on M&A activity, display: During the audience Q&A, Fay noted Aegis’ eight digital acquisition this year—a company called IF based in Malaysia—and added that the company has no plans to pull back on digital M&A, especially in emerging markets. She added that while search’s accountability is even more crucial to marketers during an economic downturn, the importance of online branding will make display more attractive as well.

Hulu Hopes To Enter UK; Held Up By Kangaroo’s Troubles — We’ve speculated for a while that NBCU/News Corp.’s US VOD JV Hulu would like to launch here in the UK. Today C21 reports the site is considering “a partnership approach” with UK counterpart Kangaroo, with C21 even suggesting Kangaroo could itself get named “Hulu” rather than the rumoured “See-Saw” This is not quite our understanding of the situation. Sources told paidContent:UK the much-lauded Hulu is hoping for a UK launch next year, along with several other territories under consideration. But its plans are on hold until the outcome of the Competition Commission inquiry that’s currently preventing Kangaroo’s launch. That’s because Hulu would be better to launch with a full service, carrying public service shows from Kangaroo’s founders BBCWW, ITV (LSE: ITV) and C4, than a piecemeal offering.

Long-standing Book Search Lawsuit Costs Google $125 Million — How much has it cost Google to scan hundreds of thousands of books and make them available via its Google Book Search? At least $125 million. That’s how much the search giant has paid to settle a long-standing class action lawsuit with the Authors Guild and the Association of American Publishers (representing publishers like McGraw-Hill (NYSE: MHP) and the Penguin Group). The funds will be used to set up a Book Rights Registry that will let U.S. copyright holders register their works so that they can get a cut of any resulting online retail and ad sales. MarketWatch’s Therese Poletti wonders if the settlement lines Google up as a future Amazon.com competitor, or at least, a contractor—as Google’s scanned books could wind up as part of Kindle’s growing library.

Could A Recession Bring Back The Idea Of Charging For Content? — Economist.com took a pass on the free-content phenomenon first time around – now, just as flares and yo-yos came back in to fashion, the publisher sees pay walls regaining popularity in an advertising downturn. The news mag’s site already charges for stories over a year old and, publisher Paul Rossi told our Future Of Business Media conference, that could be just the right model for a looming recession: ”The growth in online advertising is slowing. Is this the return to paid content online, because advertising becomes less a driver for the business? It will be be interesting to see if paid content comes back online because the model is changing.” The Economist already had something of a disdain for the ad-dependent alternative, vowing never to mix ads and editorial on the same print page: “We start with the premise that a reader is paying us a substantial amount of money for our magazine.” And Rossi, interviewed by our managing editor Ernie Sander, seems never to have considered web ads a truly viable paradigm anyway, saying “to be rely effective online, it has to be interuptive and disruptive” – losing points for user experience. Despite flirting with free, WSJ.com and FT.com have settled on a part-free, part-paid compromise. Economist.com, too, seems to have that base covered as we enter uncertain times.

Bloomberg’s Norman Pearlstine: Acquisitions Won’t Grab Headlines — Norman Pearlstine, chief content officer of Bloomberg, said during his Q&A today that they are indeed looking at acquisitions, while also providing a refreshing take on what’s working with their highly profitable terminal business that charges 290,000 subscribers about $18,000 a year, and the work that needs to be done in its smaller consumer media business, including Bloomberg TV, which reaches 57 million U.S. homes. Bloomberg won’t be buying anything as big as AOL: “Historically, Bloomberg has had a strong preference for building rather than buying, and since I’m coming from Time Warner (NYSE: TWX), the approach makes a lot of sense. But I think that we have shown a number of things—while maybe not in the acquisition area—we have shown the ability to work with others. We also have signaled a willingness to look at acquisitions. The CEO of Bloomberg, who is in charge of the terminal business, created a new group called Bloomberg Ventures, which is looking at a lot of new ventures for potential acquisition. In the immediate future, we aren’t talking about the major kind of acquisition that gets written about. With the difficulties of integration, and again I’m reminded of my AOL/Time Warner experience, I’m with that program.”

Financial Portals May Face Audience ‘Burnout’ — The economics crisis has been good to both financial portals, like Yahoo Finance and AOL (NYSE: TWX), while also benefiting niche sites like Seeking Alpha and Minyanville, according to comments made by those company executives during a panel. Here’s what they said about what products work the best, and any potential tie-up between Yahoo and AOL. On the potential Yahoo-AOL tie-up. Is bigger better? In September, Yahoo Finance recorded 20 million uniques and AOL had 14 million: Scott Moore, Yahoo SVP said the two sites are complimentary. Yahoo is a news aggregator and AOL’s focus is on personal finance. “If one company owned both of the sites, it would be a category-killer. It would be game over in terms of metrics.” Marty Moe, AOL SVP of Money & Finance: “I have no idea what will happen, and I don’t have any knowledge of discussions going on, but with that said, any scenario would present enormous opportunities. In this this economy, there are many ways in which bigger is better. In this economy, it’s inevitable that consolidation is happening. I think that it’s a trend that will happen, particularly for international growth.”

Articles of the Day

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

AOL Hands Off Video Duties To Brightcove — After years of handling video content management internally, AOL is expected to announce today that it is bringing in Brightcove to take over those duties. The transition, expected to be completed by early next year, will leave the thriving online video platform with control over AOL’s video content management, publishing, and playback duties.

NYTimes Partners With Brightcove For Video — NYTimes.com late last week relaunched its video platform with a high-definition, wide-screen format, redesigned video library and individual playback pages for each video. The Times’ new video platform rests on Brightcove’s online video technology platform, Brightcove 3–which is designed to help the Times reach new audiences through SEO, and syndication, and improve streaming experiences. “In layman’s terms, Brightcove’s technology brings more stability and flexibility,” said Nicholas Ascheim, vice president of product management at NYTimes.com. “What you want is for a user to able to click play and the video plays, which is harder than you think.” Brightcove’s technology also introduces new advertising inventory and opportunities for brand marketing, according to Ascheim.

Online Retail Traffic Declines — U.S. traffic to retail Web sites has fallen for eight straight weeks as of Oct. 25, marking the first such decline since June 2007, according to a new study by Hitwise. Visits to retail sites dropped 4% in September compared to an increase of 14% from June through August. Hitwise said the fall-off reflects consumers’ cutting back on spending as a result of the current economic climate. “These declines have strong implications for the upcoming online holiday season as well as offline sales,” said Heather Dougherty, research director at Hitwise. “Everyone is aware of the role that the Internet plays to influence offline sales through research, so this slowdown may indicate a further ripple effect in sales in retail locations.”

Three Bidders Left For Reed Business; Former Publisher of WSJ Involved In One Group — We noted earlier today that the Reed Business Information auction is being sweetened again, with parent Reed Elsevier (NYSE: RUK) planning to to offer a bigger vendor loan to finance the struggling sell-off. Now we have learned that there are three parties left in the auction, and interestingly, one group is working with the former Publisher of the Wall Street Journal Gordon Crovitz. Crovitz is working with the consortium of Apollo Management, the PE firm, and Strauss Zelnick’s PE firm Zelnick Media. The other two parties left in the auction are Bain Capital (which has taken on Helen Alexander, the former CEO of The Economist Group as an advisor on the deal) and the group led by TPG and DLJ Merchant Banking Partners. As has been reported before, Reed had been offering vendor financing from its own coffers to $330 million, besides helping bring in other banks for staple financing, and now it may pony up more its own money.

Mansueto’s Koten: Breaking News Doesn’t Bring In Ad Dollars, Aggregation Does — When Fast Company and Inc. publisher Mansueto Ventures laid off 20 staffers, mostly on the online side of the business, earlier this month, it seemed like a curious move. While the magazine side of business has been healthy, Mansueto had spent a much of the past year building up the digital side, including high-profile hires like Robert Scoble, starting Fast Company TV, and creating a social media initiative around Fast Company as well. So why defenestrate a chunk of the online side? In a Q&A with Forbes.com, Mansueto CEO John Koten elaborates on the company’s rationale behind the cuts, which he says was to tear down the walls between the digital and print sides.

ValueClick COO Yovanno Jumps To Widget Analytics Firm Gigya As CEO — Widget distribution firm Gigya has named ValueClick (NSDQ: VCLK) COO David Yovanno CEO, Venturebeat reported. Yovanno told Venturebeat that after nine years at ValueClick, it was simply time to move on. ValueClick has been struggling over the past year. Back in February, ValueClick settled a suit brought by the Federal Trade Commission that accused the company of using fraudulent tactics for online lead gen activities. More recently, that company has been hit by the downward trajectory of the display business. Aside from helping preside over that, Yovanno also managed ValueClick’s comparison shopping businesses and oversaw the company’s acquisition of 14 firms. News of Yovanno’s departure comes just ahead of ValueClick’s Q3 earnings report this Wednesday.

Articles of the Day

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

Yahoo Starts Limited Beta Of New Front Page — A week after AOL unveiled its new-look front page with lifestreaming and e-mail aggregation, Yahoo (NSDQ: YHOO) is starting limited random beta tests of new home pages—and we mean limited—to less than one percent of users in the U.S., UK, France and India. The beta emphasizes apps from Yahoo and from third parties, including a dashboard with a way to view email from multiple providers similar to that launched last week by AOL (NYSE: TWX). Unlike AOL, though, Yahoo plans more customization and personalization of the home-page experience. Kara Swisher calls it My Yahoo lite. Tapan Bhat, the SVP responsible for the Front Door, explained the changes and the testing on Yodel Anecdotal, the company’s official blog.

Murdoch: WSJ.com Sub Revs Could Increase by $300 Million in Next Few Years — Rupert Murdoch could never be faulted for not being ambitious: at Goldman Sach’s Communacopia conference today, he said that WSJ.com’s online subscription revenue will increase by $300 million per year over the next several years. The site just relaunched this week, and even though exact revenue figures are not available, estimates on sub revenues are around $80 million per year. This means it would have to increase current prices (which Murdoch has previously said they would) and also bring in lotsa new subscribers into the fold. He also has big hopes on ad revenues from the site even though it remains a hybrid site: he said WSJ.com could generate $100 million annually in advertising revenue, and that the company is charging $100K a day for advertisers on its home page. As for MySpace revenues, he said advertisers are charged an average of $500K per day for space on its home page, and up to $1 million.

Discovery Shareholders Approve Plan To Go Fully Public; CEO Zaslav Sees Deals — Any entity with Liberty Media (NSDQ: LINTA) DNA takes some time to unpack, but Discovery should now get a bit simpler… Wednesday shareholders of Discovery Holdings officially approved a plan to create a singular Discovery Communications (NSDQ: DISCA) Inc, owning both Discovery and Animal Planet. The shareholder approval marks a formal conclusion to a plan hatchedlast December between Discovery Holdings and Advance/Newhouse. See more in the release and further explanation from WSJ. So what’s next for the network? CEO David Zaslav told Bloomberg that the new arrangement gives Discovery a “chance to make opportunistic acquisitions.” Specifically, the company is looking for complementary businesses (in the past, it has acquired Treehugger.com and HowStuffWorks) and more growth overseas. A pure Discovery currency could also help with matters of employee retention and compensation—a pretty common justification for these type of arrangements.

Newspapers Still Dominate Local, But TV And Radio Growth Rates Zoom Ahead: Borrell — Local newspapers sites still generate the highest ad revenues, at an estimated $3.7 billion, but local radio and TV sites’ growth rates are double, a report from local media analyst Borrell Associates, with help from BIA Financial, predicts. Aside from the worsening economy and chaos on Wall St., newspapers’ growth is hindered by its limited diet of display ads and the usual pool of marketers they tend to rely on for the print side. But the report also shows that newspapers, along with local TV and radio, are still relatively strong versus internet companies not tied to traditional media. That said, the rise of TV and radio will continue to cut into newpapers’ local dominance.

Earnings: Adobe Quarterly Revs Up 4 Percent: Net Income Up 11 Percent; Company Thanks Online Video — Adobe (NSDQ: ADBE), the company behind the widely used Flash technology, reported revenue of $887 million for the quarter ended August 29, representing a 4.2 increase from $851.7 million in the year-ago quarter. Adjusted EPS grew 11 percent to $.50 per share, compared to $.45 a year ago. The top line slightly edge past the company’s own (wide) forecasted range of $855 to $885 million. Shares in the company, which attributed its growth to its Acrobat and Livecycle Products, are ticking up mildly in early trading. On the company’s quarterly conference call, management talked up the company’s strong position in online video, rattling off various stats about the extent of Flash-based video on the web and various customer wins—China’s CCTV used Adobe Flash and Flex to deliver Olympics coverage during the recent games. What’s interesting in reading through the transcript, is that while analysts understand that Adobe is behind Flash, they still don’t understand how the money is made. Said CEO Shantanu Narayen: “I do want to clarify again, when you see a lot of the video on the web that’s being streamed, it is being streamed through the usage of a Flash video streaming server that Adobe providers, or a Flash Media Server, and the way we monetize it is—think of it as megabytes served, so as the volume of Flash video increases, we have a direct correlation to driving revenue for Adobe.” Narayen also explained how the company would make money on AIR, its internet apps technology—he explained that it would drive usage of the Creative Suite technology, as well as its ability to push usage of the Flash server.

Articles of the Day

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

Cuil’s Too-Cool Valuation: $200 Million — At least it has a valuation worthy of the hype… Cuil, the recently launched search startup, mainly known for the yawning gap between the quality of the site and the amount of press it got, is valued at $200 million by its investors. The number was determined by PE Data Center (via VentureBeat), using public records, going back to its incorporation in late 2006. Besides the eye-popping headline price, the analysis provides a good glimpse into the mechanism for achieving this valuation, which jumped rapidly from $32 million in early 2007, to the latest price, set later that year, when it raised $25 million, for a total raise of about $33 million. The amount raised had been publicly known, so the story isn’t just that they raised a lot (which they did), but that the founders (with Googly resumes), could get such favorable terms. Meanwhile the chief investor, Madrone Capital, which manages the money of the *Wal-Mart* heirs, did a rather un-Wal-Mart job of getting a bargain.

Content Partnerships Set, Linkedin Now Readies Ad Network — Over the past few months, LinkedIn has sought to make itself more than just an online directory for professionals by striking various content-related deals with the likes of BusinessWeek, NYT and CNBC. With those in place, it’s time for the next step: forming an ad network. Dubbed the LinkedIn Audience Network, the social net is promising to make it easier to reach its 27 million members. The company’s announcement was fairly reticent on the details, such as what other sites it is including in the network. The new program is primarily about expanding existing ad targeting through LinkedIn’s inCrowds—which lists members according to pre-defined and scalable audience segments such as corporate execs, small business professionals and IT workers. Advertisers can also can work with LinkedIn to create their own custom audience segments. The company says the non-personally identifiable data it will make available to advertisers includes industry, job function, seniority, company size, gender and geography.

Reed Business’ Auction Running Into Trouble? — Reed Business Information’s second round auction may be running into trouble, as bidders are lowering their prices, reports Times UK. There are no bids close to its £1.25 billion ($2.5 billion) asking price and there is talk the unit may be worth as little as £800 million ($1.6 billion), the report says. Yet, there is still hope that Reed may be able to sell as a whole, with Bain Capital believed to be particularly interested, the story says. Is the piecemeal sale still possible? As for who’s in and who’s out in second round.

EA Terminates Acquisition Discussion With Take-Two — After seven months of back and forth, Electronic Arts has terminated its takeover talks with game publisher Take-Two. It announced in a statement today that “while EA continues to have a high regard for Take-Two’s creative teams and products, after careful consideration, including a management presentation and review of other due diligence materials provided by Take-Two Interactive Software, EA has decided not to make a proposal to acquire Take-Two and has terminated discussions with Take-Two.” This after FTC cleared EA’s bid in August, and it seemed the two were in confidential negotiations to come to some agreement. EA first offered $26 per share in February, and then lowered to $25.74.

NBCU’s Strategy On Women’s Sites Appears To Work; Collective Traffic Up 28 Percent — NBC Universal’s strategy to link its women’s sites together in a content and ad network seems to be paying off, traffic- wise at least. The company’s cluster of women-oriented sites operating under the Women@NBCU banner– iVillage.com, BlogHer, Oxygen.com and BravoTV.com—attracted a collective 19.8 million uniques last month, ClickZ reported, citing stats from Media Metrix. That number represents a 28 percent increase over the 15.4 million uniques it had in August 2007, signifiying the 25th straight month of year-over-year growth.

More MySpace Music: Raising PE Money?; Not 15th; CEO Shortlist; Advertisers — MySpace Music, which was originally expected to launch Monday, is now pushed to later in the week, and other drib drabs about it are leaking out. We had some details earlier on Friday. New PE Funding?: Very much like Hulu. the other digital video JV, MySpace Music, which has investments from the three studios, is looking to raise PE money, reports TC. The post says it is looking to raise “well over $100 million, at a valuation of $2 billion or more.” Providence Equity Partners, which invested $100 million in Hulu at $1 billion valuation, is reported to be looking at investing. Staci adds: Well, yes, News Corp would love a $2 billion-plus valuation—think Facebook—but that doesn’t make it so; that’s their number, not something anyone has agreed to but again, think Facebook and Microsoft. Call it a case of headline valuation versus real valuation. Providence would be a natural investor given that the two already have a good relationship aided by the way Hulu is so far delivering on its promise. MySpace Music is different, though. As one person familiar with the thinking explained it, Hulu is its own company for the most part while MySpace Music is really like a company with MySpace—and with more parties involved. On the other hand, unlike Hulu, which has had to build an audience, even though the music itself is fairly ubiquitous, MySpace Music could launch as the number 1 music site or pretty close to it.

WSJ.com Relaunches During Financial News Meltdown; Glossy New Look, Business Song Remains The Same — It’s either the best of times or the worst of times for the long-awaited relaunch of WSJ.com. With all the tectonic shifts on Wall Street—Lehman Bros. on the verge of bankruptcy, Merrill Lynch in buyout talks with Bank of America, AIG starting a massive reorg, just to name a few—if all goes as planned, WSJ.com readers will see a completely new site Tuesday `morning. Ditto for The Wall Street Journal Digital Network as Dow Jones implements a massive online makeover in the works even before News Corp took over. The familiar blue and white no longer dominates, making way for a glossier look with charcoal backgrounds and beige accents, presaged by the microsite for the new WSJ. magazine. Even the masthead is charcoal. Even though this redesign moves the site further away from the newspaper, the overall look has the kind of elegance of the print Journal at its best. From a usability standpoint, the most dramatic changes are the elimination of the left-hand navigation and the shift from mirroring newspaper sections to an online-centric organization.