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August 2008 - Posts
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Some stories for this long holiday weekend in U.S.:
-- Chinese Online Traffic Exceeds U.S. Web Sites During Olympics: So says WebTrends, citing its own analytics. To be expected, if only because of sheer numbers in China. CCTV.com, the site run by national broadcaster China Central TV, drew more than 100 million unique visitors during the 2008 Olympic Games...In comparison, NBCOlympics.com reported an average of 4.3 million unique users a day. Yahoo (NSDQ: YHOO) averaged 4.7 million daily.
-- Candidates' Sites Do Behavioral Targeting: And that is a surprise? It has raised alarms from some privacy advocates, who say no one should unwittingly have their political leanings analyzed as they use the Web, or be tracked for the delivery of political ads.
-- For Webisodes, Only Handful of Hits: A long NYT story about why webisodes haven;t broken through the mainstream, yet. Usual litany of reason, with usual litany of defenders…
-- Blogs to Riches: Perez Hilton: A profile of Mario Lavandeira, the blogger behind celeb gossip site PerezHilton.com, and his rise to fame. Ads on his homepage fetch up to $54,000 a day, and his overhead is minimal-- his only employee is his sister Barby, who fields emails and corrects typos. Which means he's pulling down millions a year, the Wired story says. The site now averages 198 million pageviews a month, according to Quantcast. Nielsen Online estimates that while visitors to TMZ.com, one of his main competitors, stay only 15 minutes, those on Hilton's site linger for 45 minutes.
-- IAC (NSDQ: IACI) Goes Kids: IAC, in an attempt to cash in on the big kids virtual worlds audiences, will on Sept. 16 will launch its own virtual world aimed at tweens called ZwinkyCuties.com. It will go head to head with Disney's (NYSE: DIS) Club Penguin and Webkinz, among others. The portal is a spinoff of Zwinky.com, a two-year-old site aimed at teenagers that claims more than 16 million registered users globally and six million unique visitors per month.
-- Fans flock to Disney's Club Penguin Times: The Club Penguin Times is more widely read than New York's Daily News, the Chicago Tribune or the Dallas Morning News. And it's not even 3 years old.
-- Apollo joins bidders in race for Reed Business: Yes, one more...US private equity group Apollo Management has entered the bidding war for Reed Business Information...Bidders are expected to submit final offers at the end of September.
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 The Associated Press, a co-operative started by newspapers to share costs and news, has been getting cancellation notices from papers as large as the Minneapolis Star Tribune since its new rates were distributed in July and now the Spokesman-Review in Spokane, Wash., is challenging the two-year cancellation notice that's part of the current contract. The argument, according to E&P: the new rate structure that starts in 2009 is actually a new contract and the paper should not be bound by the old agreement.
AP takes a different stance, as you can imagine, with spokesman Paul Colford telling us: "There is no new contract involved in what is a service upgrade.
At the same time, the AP will be working with the Spokesman-Review and other papers to help resolve concerns they may have during the rollout of the new Member Choice packaging and pricing plan, which will provide newspaper members with greatly expanded basic news coverage."
AP says its outlets include 1,500 daily English-language U.S. newspapers and that most are members. The wire service also has considerable clients in TV, radio, international, and online. As of April, newspapers represented 27 percent of the co-op's revenues; International (broadcast, newspaper services, etc.), 22 percent; U.S. broadcast, 17 percent; digital, 17 percent; non-member photos/graphics and tech services, 17 percent.
In a letter excerpted by E&P, a lawyer for the Spokesman-Review says the paper "will not be executing a new contract reflecting the changes as required by the AP in the new Member Choice program. ... The new contractual arrangement represents a continued and material shift by the AP of separating services from the basic package so that some services will be available only by signing up for supplemental programs. Thus, AP services that formerly were part of a basic plan will now only be available through a supplemental plan approach. This dilutes the value of the basic Breaking News plan and constitutes a material change in the quality and breadth of the services offered by the AP under the basic contract."
For good measure, the Spokesman-Review also claims local and state service has deteriorated and that the new rate is too high. One translation: we wanted more options and now that we have them, we have an early out. Spokesman-Review editor Steve Smith e-mailed E&P: "On that basis, the old contract will expire Dec. 31 and we'll not sign a new one. In a sense, it's not a cancellation at all, but a decision to decline signing any new contracts."
Star-Trib: Meanwhile, MinnPost.com reported that the Star Tribune has served its 2-year notice. For a sense of what readers their might be missing in 2010, the site counted 18 AP stories or photos in the Strib's news sections the day of its report; a wire-service credit on nearly all national sports news and briefs, plus a half-dozen other items. Strib editor Nancy Barnes has been an outspoken critic of AP pricing but her managing editor Rene Sanchez told MinnPost.com this is "not a hostile gesture, by any means. It's the beginning of an assessment of our business model, not the end." Translation: give us better terms.
Conventional wisdom would say that wire services, particularly one that covers all levels of news, gain importance as gap-fillers when newspapers cut newsroom staffs. But they're also handy budget tools, allowing managers to slash large line items in a single move. Expect more along this line.
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Various state and federal regulatory bodies are still looking into Google's (NSDQ: GOOG) ad relationship with Yahoo (NSDQ: YHOO), but CEO Eric Schmidt says the deal is on for October. Schmidt made the remarks in an interview with Bloomberg, while in Denver hanging out at the Democratic National Convention. That regulatory body may seek to block the deal has been a remote, but possible obstacle since it was announced in early June. The companies have always maintained the opinion that they don't need regulatory approval to go ahead, but that they wanted to give regulators some time to voice any objections now. From the beginning, Google and Yahoo have said they'd wait 3.5 months, about 100 days, to go forward. Meanwhile, in addition to potential trip ups from domestic regulators, Canada's Competition Bureau is looking into things as well. Fortunately, the companies don't have to get the blessing of the EU's hard-nosed regulators, since the agreement only applies to ads served up in the US and in Canada.
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 It's a good time to be covering politics, given the interminable campaign season. In between the two big conventions, Forbes checks in on Politico.com, a news site founded in 2007 by former Washington Post reporters John Harris and Jim VandeHei. The company, which operates a website, a print version and a video operation, has had a few months here and there of profitability.
While the site has generated around 2.3 million uniques last month, according to Nielsen, it has topped the 3 million mark. And if you look at comScore (NSDQ: SCOR) numbers, Politico is much lower, drawing roughly 1 million uniques last month). And with the campaign over in little more than two months, how does it plan to grow? Essentially, by covering politics as intently as ESPN (NYSE: DIS) covers sports, says CEO Frederick Ryan.
-- Yes we can—advertise: The site's biggest advertiser has been Barack Obama's campaign. Politico.com has attracted about $2.4 million in online ad sales since January—the Obama campaign has spent $444,000 on the site since then, according to Nielsen AdRelevance. After that, the next big spender has been the Democratic National Committee, which bought $127,700 worth of ad space. That could be a problem once those two have no reason to advertise. But VandeHei claims those numbers are flawed, insisting that only 20 percent of Politico.com's revenues come from ads tied to the campaign season. Furthermore, despite the decline of newspapers and the rise of the web, VandeHei says 60-70 percent of its revenues come from the "mostly free" 25,000-circulation newspaper that's distributed in Washington.
-- An ad network and a wire service: The typical way to try to boost ad sales these days is to form a vertical ad network. Politico.com is prepping one with 25 newspaper sites. The idea is, with newspapers cutting back on their own staffs, Politico can serve almost like a wire service for DC coverage. Its sales staff is offering to sell politically-focused ad inventory in exchange for syndicated Politico content. The company just made three additions to its eight-member sales staff and is trying to bring in large marketers like Lexus and American Express.
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 Yahoo (NSDQ: YHOO) is closing down its one-year-old social networking site, Yahoo Mash. The site, which has been in private beta, will shut down Sept. 29. In a post on the site, via the Atlanta Business Chronicle, Matt Warburton, Yahoo Community Manager, writes that the company may have accidentally contacted non-Mash members about the site's demise. No word was given as to why Yahoo was abandoning the project. As for the actual users—the number of those taking part in the test was not immediately clear—all of the content on their Mash profile will be unavailable after next month. But Warburton said those who have an account with Yahoo 360, the company's current social net portal, will not be affected. Elsewhere, Yahoo says that users' 360 profiles will be transitioned to a new system sometime in the second half of the year.
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 Troubled online music retailer Napster (NSDQ: NAPS) has hired UBS (again) to explore strategic alternatives, including a possible sale. The news was made in a letter to shareholders, urging them not to vote for three outside activists, looking to get representation on the board. In the letter, the company notes that the candidates' previous work experience—musician, nursing home executive, ice cream franchisee, middle management banking executiv—is "irrelevant to a company like Napster." It also notes that contrary to suggestions, it is open to a sale if that turns out to be the best option. Release.
If this all sounds familiar, it is. The company said exactly two years ago that it had retained UBS to explore strategic alternatives. Unfortunately for shareholders, who have seen the stock decline precipitously, that didn't go anywhere. The difference this time: The stock has gotten so low—trading close to cash, even—that it would be a cheap pickup for many companies. In the meantime, Napster is still doing what it can to breathe some life into its business. It recently launched an 'everything must go' sale, temporarily slashing prices on its core service by nearly 50 percent.
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 In a complex and slightly confusing transaction, Greenfield Online, the online market research and surveys company, which earlier this week rejected a bid by media PE firm Quadrangle, is now being bought by an unlikely buyer: Microsoft (NSDQ: MSFT), for about $486 million, $60 million more than the previous bid. MSFT is paying through a cash tender offer for $17.50 per share for the Wilton, Conn-based firm, as opposed to Quadrangle's $15.50 a share bid.
BUT, as part of this buyout, Microsoft will sell off what Greenfield is best known: its online surveys division, and will only retain its European comparison shopping services part. Greenfield, through its Greenfield Online and its European Ciao comparison shopping websites and affiliate networks, collects, organizes and sells consumer opinions in the form of survey responses to marketing research firms and end users. It was founded in 1994, among the first such online survey firms, and current CEO Albert Angrisan is the former COO and president of survey biggie Harris Interactive.
To give you an idea, for Q208, Greenfield had revenues of $36.0 million, out of which its surveys unit contributed $24.6 million, while the Ciao unit was $11.4 million, though in terms of operating income, Ciao unit was contributed $5.6 million out of a total operating income of $11.7 million.
Ciao's comparison shopping site combines consumer reviews and ratings from a "multimillion-user-strong" online community, and prices from online merchants. It currently has more than 26.5 million unique visitors per month, according to Comscore, across seven countries, who so far have generated about 5 million product reviews. It was founded in Munich in 1999 and in 2005 Greenfield bought it.
MSFT says it has found an as-yet-unnamed financial buyer for Greenfield's Internet survey solutions (ISS) business, and will sell off that part to it. Both these deals are expected to close in Q4 this year, but the consummation of the Microsoft transaction is not contingent on the sale of the ISS business. So essentially for MSFT, it is a European expansion deal, and will give it heft in the market...it says it will integrate Ciao's technology into Microsoft Live Search platform and will also get its merchant relationships as a result.
Under the earlier deal, which had a go-shop provision, Quadrangle had the right to match any superior offer, but turns out it decided not to, and Greenfield Online is required to pay Quadrangle a $5 million breakup fee. It could be that the un-named financial buyer for the surveys unit is Quadrangle itself, but no hints in the company statements.
As a side note, curious if MSFT also looked at buying Kelkoo, the European comparison shopping engine that Yahoo (NSDQ: YHOO) bought in 2004 for a price of about $575 million, but now wants to sell off.
More details in the releases here and here.
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Since it's Labor Day weekend, we'll be taking a short break starting this afternoon, Aug. 29, until Monday evening, Sept. 1. Of course, we'll be updating for breaking news, but our regular newsletter will resume Tuesday morning, Sept. 2.
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 The new cable comanies-backed ad targeting company Canoe Ventures has been trying to push its first project, Elections '08 On Demand, as the new-ish TV channel which lets people watch videos about elections, but this NYT story points out that the channel hasn't caught on among viewers or even advertisers. To be fair, this channel was not conceived by Canoe, which is an advertising JV with the idea to make ad buying across cable networks easier, but it has been trying to promote this channel across its constituent networks: Time Warner (NYSE: TWX) Cable, Comcast (NSDQ: CMCSA), Cablevision (NYSE: CVC) Systems, Charter Communications (NSDQ: CHTR), Cox Communications and Bright House Networks. These cable companies pledged to run at least 100 spots a week promoting it.
The channel is available in 32 million households, and for now is only offering about eight hours of programming. But it is tough to find: on Time Warner, for example, it is Channel 1279; on Cablevision, Channel 500. Though "Elections '08" has been available since January, only 500,000 segments have been viewed on all cable channels. Neither traffic nor ads on the election channel has been particularly strong...Obama is the first major candidate to buy time on it, but only in 15 states, the story points out..besides that only a handful of local politicians—and the Texas billionaire T. Boone Pickens, who is promoting wind energy—have bought ad time.
But, the cable companies say, this at least shows how they can work together. "What we've accomplished with 'Elections '08' may not feel and sound like a huge success story to the layperson, but behind the curtain, we've laid the foundation for the cable operators working together in an unprecedented manner," said David Porter, VP for marketing and new media at the Cox Media division of Cox Communications.
That and the fact that there is no dearth of political coverage of TV and online, in all possible platforms and formats. Not necessarily the best sector to start this ambitious venture with....
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 What a buzz kill ... Amazon (NSDQ: AMZN) spokesman Craig Berman tells the NYT: "Don't believe everything you read. ... There's a lot of rumor and speculation about the Kindle. One thing I can tell you for sure is that there will be no new version of the Kindle this year. A new version is possible sometime next year at the earliest." He didn't fuel any of the other fires, like the textbook version that's the subject of so much speculation these days or the sleeker model predicted for months to arrive this fall.
As a Kindle reader, I hope this doesn't mean Amazon won't upgrade the current model. Nearly a year in, it could use a major update with fixes that don't require a new chassis. For instance, users who purchase after reading a sample have to go back to home base, open the book again and click forward to where they left off. That shouldn't require a new form factor to resolve. The last update was in February.
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Comcast (NSDQ: CMCSA), the country's largest broadband provider, is rolling out restrictions on its service usage, and subscribers whose use of the Internet exceeds 250 GB of data a month will first get a warning call, and then on the second instance, their service will be suspended for a year...its current usage policy was amended online today, and this policy will start October 1, the company announced today. The more interesting part is that Comcast will NOT be provding any tools to monitor bandwidth usage, but has told users to search online for bandwidth monitoring tool, reports News.com. The FAQs about excess usage are here.
Here's how it justifies it: "250 GB/month is an extremely large amount of data, much more than a typical residential customer uses on a monthly basis. Currently, the median monthly data usage by our residential customers is approximately 2 - 3 GB. To put 250 GB of monthly usage in perspective, a customer would have to do any one of the following:
Send 50 million emails (at 0.05 KB/email)
Download 62,500 songs (at 4 MB/song)
Download 125 standard-definition movies (at 2 GB/movie)
Upload 25,000 hi-resolution digital photos (at 10 MB/photo)." Of course HD streaming will also speed up that limit.
This move from Comcast comes after its brush with FCC, where the regulator lambasted the company for blocking and slowing down P2P traffic on its service. Comcast insists this latest move has nothing to do with the FCC ruling against it.
Social Media Deals Report: This 199-page report, filled with charts and data, examines the categories, number and size of VC and M&A deal in social media from 2007 through 2008. Visit the ContentNext Reports page
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DigiMeld, a startup offering its own technology for streaming live video online, has raised a $2 million first round from various unspecified angels. The NYC-based company pitches what it calls "grid streaming" an alternative to traditional CDNs as well as P2P-based solutions. It's main test to date: A trial with NASA Television to stream a shuttle launch. DigiMeld was founded by Alex Mashinsky, previously the founder of Arbinet—in fact, DigiMeld's service relies on Arbinet's OptimizeIP platform. Though the company says it's an alternative to CDNs, it also sees CDNs as potential clients. In addition to technology, it's also positioning its site, DigiMeld.com, as a video portal. (Release via email)
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Another Tribune Company exec departs… Clark Morehouse is the latest to leave Sam Zell's house, exiting as head of Tribune Entertainment to join local digital broadcast network .2 (as in "dot-2"), B&C reports. The network launches December 8 and offers entertainment programming on stations' digital channels. Morehouse is the latest in a string of high level departures on Tribune's broadcast side (the exits on the newspaper side are becoming legion as well). As B&C notes, in recent months, the company has lost WGN Chicago GM Tom Ehlmann, WGN America G.M. Bill Shaw and broadcasting EVP John Vitanovec.
Morehouse told B&C that he began looking towards the exit when Tribune shuttered its syndication business. He worked with .2 on programming and felt comfortable that it was owned by broadcasters and not a conglomerate. The network is owned by Guardian Enterprise Group.
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 It's easy to forget that Microsoft (NSDQ: MSFT) is still a solid leader in at least one key internet category: the browser. By some measures, Internet Explorer still commands about three quarters of the market. So it's no surprise that Microsoft is still trying to use this advantage to make much-needed headway online. A number of folks have looked at the way the latest beta of IE8 will be used as an anti-Google (NSDQ: GOOG) weapon. One aspect of it: a privacy mode that theoretically could prevent Google (or anyone else) from collecting useful information for ad targeting. Fortune also looks at certain features, such as a more refined, Google-circumventing search bar, and a tool that will auto-link addresses to Microsoft's Live Maps. Of course, there was talk that Microsoft could make headway in the search wars with the launch of IE7, since it included a search bar for the first time. Google even made some anti-trust noises, but their fears seem to have been unfounded (also, the DOJ slapped them down). For more, SearchEngineLand takes an in-depth look at how Microsoft is integrating search with the new browser.
Meanwhile, Microsoft's most aggressive competitor, Mozilla's Firefox has extended its relationship with Google that sets the search engine as the default homepage and default in the search bar. Mozilla's Mitchell Baker writes about the deal on her blog: "We've just renewed our agreement with Google for an additional three years. This agreement now ends in November of 2011 rather than November of 2008, so we have stability in income. We're also learning more all the time about how to use Mozilla's financial resources to help contributors through infrastructure, new programs, and new types of support from employees."
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So says U.S. News & World Report president Bill Holiber, talking about the relaunch of its America's Best Colleges online portal, in an interview with Folio. Its flagship franchise list saw about 15 million page views in the last one week, and online revenue around the story is up 500 percent. "We're well into seven figures just online for this story," he said. The publisher has sold major online ad packages on the site to Dell and Microsoft (NSDQ: MSFT) Office Student. Meanwhile, the print edition of the mag is still bleeding: ad pages fell 30.2 percent and estimated ad revenue drop 26.1 percent, according to Publishers Information Bureau figures. It is dropping its weekly frequency to a bi-weekly by next year, and recently formed a new U.S. News Media Group, in an effort to develop more franchises beyond the weekly under it.
If I were them, I would dump everything else, and focus on the online development of its college guide franchise: buys some talent, buy some smaller sites, develop the community, and run with it…
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Some more funding for the MMO sector… Webcarzz, the developer of a forthcoming online game, has raised a $4 million first round led by Meakem Becker Venture Capital. Information on the company is pretty light, as it plans to release more information on its products in the coming months. The SF-based company is helmed by Chris Bergstresser, a former Atari exec. Release.
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Former Digitas exec Neal Prescott has been named CEO of WPP Digital's new production services unit, Deliver. The new unit will tie together production services in Asia, Eastern Europe, Latin America and South Africa and work with all of WPP's digital properties, including Actis Systems (Russia), AGENDA (China), Wunderman's ZAAZ (Seattle), as well as The Ogilvy Group and WPP Digital agencies BLUE (China/Singapore), Quasar (India) and Schematic (Los Angeles/Costa Rica). The creation of this unit is expected to save costs associated with using outside production companies. Prescott left Digitas earlier this year. His most recent post at the Publicis Groupe-owned interactive agency was EVP and Global Head of Technology Enablement. While at Digitas, Prescott was charged with creating an offshore digital production facility. Release
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-- TNS still resisting WPP takeover: Even though German audience measurement firm GfK has pulled the plug on its bid to merge with British research company Taylor Nelson Sofres, that does not mean smooth sailing for WPP Group's takeover plan. The company is reiterating its complaint that WPP's offer is too low. It has the support of Cedar Rock, a British fund manager and TNS' largest shareholder, in trying to find another entity to fend off WPP's continued advances.
-- YouTube banner ad revamp?: The video site might be changing its homepage to accommodate banner ads that run across the width of its homepage, says SAI, citing unidentified sources. The placement is modeled on a recent banner that YouTube created for the Sony (NYSE: SNE) Pictures stoner comedy Pineapple Express. YouTube could charge about $200,000 a day for the spot, much more than it gets from its current pre-rolls, for certain.
-- Layoffs coming to Carat: Due to the worsening ad climate it forecast this past week, Aegis will lay off an unspecified number of employees this year. The UK media agency holding company said in its H108 earnings that the layoffs were part of a wider reorg at Carat, which also includes an office relocation in New York. More details on the earnings on our sister site, PC:UK.
-- CNBC web ads: 'not exactly porn': Web publishers often complain about ad networks sending the wrong kind of ads to their sites. CNBC recently had a prime example: as part of its ad partnership with Microsoft (NSDQ: MSFT), the business network was served display ads featuring women unbuttoning their tops. Allen Wastler, CNBC.com's managing editor, reaction: "These ads aren't exactly porn, but they cross the business journalism decorum code."
-- Media Kitchen spawns ad exchange service: MDC Partners is taking a piece out of its media planning consultancy, The Media Kitchen, to establish Varick Media Management, which it calls a "digital management company." Varick will set clients up with the use of online ad exchanges and media trading, as well as ad networks, investment management advice, audience analysis.
Social Media Deals Report: This 199-page report, filled with charts and data, examines the categories, number and size of VC and M&A deal in social media from 2007 through 2008. Visit the ContentNext Reports page
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Yahoo's (NSDQ: YHOO) losing two more of its senior executives, this time from its mobile division, which falls under the heading of Yahoo's Connected Life. Steve Boom, SVP of Connected Life, who reported to EVP Marco Boerries, and Gary Roshak, VP of mobile advertisers and publishers, are both leaving the company to pursue other opportunities, a Yahoo spokesman confirmed. Boom will leave at the end of the month, following CTIA. Roshak left Aug. 1. More here.
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Sprint (NYSE: S) has integrated a slew of content and location-based services into its upcoming XOHM WiMax wireless broadband network. In the release, the company stressed the importance of developers and customers being able to tap into this information, which sounds more open than most relationships with wireless carriers today. The location services can be utilized in all sorts of devices, including laptops, mobile Internet devices, media players, cameras and car navigation.
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As a reminder, the company will launch its Baltimore network commercially this September with other cities expected in the fourth quarter. I can imagine if and when Sprint and Clearwire (NSDQ: CLWR) merge, they'll adopt these services, rather than have to rebuild them from scratch
Here's some of the services that will be available from the Xohm Portal at launch:
-- uLocate Communications: The company will be the backbone of its service, and provide its WHERE platform, and friend-finding app Buddy Beacon. Users will also have access to restaurant reviews, news, events and weather through partners such as Yelp, Eventful, Topix, NAVTEQ and Accuweather.
-- On Topix, the news aggregation site will provide local news based on current location as a summary, with an option to read full stories and others at its site.
-- Google: The company is contributing Local Search along with additional features and functionality from Google Maps. More details here.
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Competition in the online dating industry is starting to heat up… Speeddate has raised a $6 million second round led by Menlo Ventures, reports TechCrunch The Palo Alto-based company's first round was not specified. Like speed-dating in the real world, the site is designed for quick interactions, based on video. WooMe is another one in this space to have gotten funding, as it also takes advantage of live video to facilitate quick interactions.
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No, this isn't the big one, but nonetheless an important precedent: A federal judge in San Jose ruled today that video-sharing site Veoh was not liable for copyrighted material uploaded to its site, dismissing an early 2006 case filed against it by Io Group, an adult video firm. The site pleaded its defense under the "safe harbor" provisions of DMCA copyright law, which meant it could be safe as long as it removed the infringing video when alerted by the copyright holder, which the judge said that Veoh was doing. Meanwhile Veoh's suit against Universal Music Group is still going on.
In the other higher profile case of Viacom (NYSE: VIA) vs YouTube, on similar grounds, Google (NSDQ: GOOG) quickly came out with a statement welcoming this new decision, reports WSJ, and affirming the legality of its own video-sharing service. "It is great to see the Court confirm that the DMCA protects services like YouTube that follow the law and respect copyrights...YouTube has gone above and beyond the law to protect content owners while empowering people to communicate and share their experiences online," said YouTube Chief Counsel Zahavah Levine.
The full judgement, embedded below:
Veoh vs IO - Free Legal Forms
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This has become the equivalent of first snowfall stories that local TV news stations do every year: this gripe against Apple (NSDQ: AAPL) iTunes has been trotted out every year for the last five years or so, and now WSJ spends tons of words to rehash it again, though with some new twists. This time, like before, the argument is that labels would like to sell the albums as a unit instead of singles, and the new part is that some of them are beginning to bypass the iTunes behemoth distribution machine. Apple insists that labels can't sell the whole album as a unit, and has also stuck, for the most part, to its 99 cent-per-song philosophy, which labels have fought against. Another gripe: Apple often asks for exclusive sales rights for songs in exchange for prominent placement on its home page.
Now, a new example has emerged that runs counter to the Apple monopoly: Kid Rock's Rock 'n Roll Jesus album was kept off iTunes, but managed to sell 1.6 million copies in the U.S. since its release last year, a sizable number in these times for the record industry. Seeing that example, his label Atlantic Records (owned by Warner Music) last week yanked an album by R&B singer Estelle from the iTunes Store, four months after it went on sale there. Warner's rationale? It called the removal part of a broad range of digital-release strategies "uniquely tailored to each artist and their fan base in an effort to optimize revenues and promote long-term artist development," the WSJ story quotes.
But this is risky—first, by dissing Apple, and secondly by keeping songs off the biggest music service, users may go off looking for illegal downloads instead. Then there's the little matter of consumer preference: the majority have shown preference for buying singles than albums.
In any case, trying to develop alternatives to monopoly distribution is always admirable, and indeed, desirable in the long run, but the more pertinent question is: if not iTunes, then what? Wal-Mart (NYSE: WMT) is not feasible for every artist or label, and retail sales is on a declining curve. Amazon+Rhapsody+Napster can maybe have the reach, someday, but not the awareness or promotional value. On the mobile side, operators and Nokia (NYSE: NOK) can put up their hands, but the reality is it is not happening on any scale in U.S., yet. The only other alternative left is working through scaled social networks like MySpace. Maybe MySpace Music, when it launches next month, will be able to become that other big alternative the music industry wants…
These and other more nuanced topics will be discussed at our EconMusic conference in London on Sept 23.
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With ad agencies like WPP Group increasingly focused on Asia, Nicholas Guan, a social media researcher at the ad holding company's OgilvyOne unit, decided to look at the prospects for marketers considering ads across Facebook. The verdict: Facebook is fine for reaching Americans and those educated in the west, but there are plenty of other social nets throughout Asia that are much more popular. Using Google (NSDQ: GOOG) Insights, he compared Facebook with the most popular social nets in each Asian country. While cautioning that the results are not quite accurate since Google is not the number one search engine in most Asian countries, the numbers are meant as a rough gauge of where Facebook stands. (Earlier today, Joseph posted an item about Japan's most popular social net, Mixi, and its plans to expand its presence in the U.S. and Europe.)
-- It pays to speak the language: In China, Xiaonei, which is essentially a Facebook clone, trounces the original with a volume pegged at 68 percent compared to 27 percent. And while in the U.S., Friendster can't touch Facebook, the opposite is true in Malaysia. Although Facebook numbers are steadily rising there, Guan says this is mainly among more westernized Malaysians and American expats. Friendster's dominance in Malaysia is due to its early market entry and more importantly, offers the Bahasa Malayu language which is the primary language used in Malaysia.
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 TiVo (NSDQ: TIVO) looks like it wrung decent numbers out of a mixed quarter… Revenue for the quarter was up 4.1 percent to $65.2 million, compared to $62.65 million in the year ago quarter. However excluding hardware, the service and technology portion of revenue fell to $53.5 million from $56.5 million. Analysts had been looking for $55.3 million, so this number is on the light side. Positively, it does say it had $10.6 million in adjusted EBITDA and $2.9 million in net income, which it attributed to higher hardware margins and a pull back in marketing costs. The pullback in SAC is actually quite pronounced: "Our continued efforts to focus on efficient marketing spend and to work with third parties who make their own marketing expenditures on behalf of TiVo is underscored by the decline of our quarterly subscription acquisition costs (SAC) to $135, a considerable decrease when compared to SAC of $758 during the same period last year even considering that the prior year's SAC included the impact of the $11.2 million inventory reserve."
Looking forward, the company expects Q3 service and technology of revenue of $49-$51 million (a sequential decline) and a net loss of $7-$9 million.
Release | Webcast (5:00 PM ET)
Conference Call: TiVO CEO Tom Rogers warned TV networks that ad-skipping is here to stay and that and that it's "by no means a phenomena of TiVo early adopters." The answer: Use TiVo's own DVR-optimized ad solution. The company isn't saying how much its making from these (much hyped) services, just that the number of participants is growing rapidly.
-- Network DVR: Rogers was asked about the big Cablevision (NYSE: CVC) ruling, that cable networks could offer their own DVRs in the cloud. Rogers applied a little fud, noting "there are a lot of legal issues that still need to be resolved on that front." But he said ultimately it wouldn't affect the company's relationship with the cable networks and that TiVo's proposition is more than just a DVR service. Basically, it's making the same argument against the network DVR as it does generic DVRs: that they can't compete with TiVo's feature-rich offering. He then added: "Our view is that the cable industry has totally inadequate capacity at this point for broad scale distribution of the network DVR."
Update: As usual, TiVo earnings are accompanied by announcements. Comcast (NSDQ: CMCSA) is now offering TiVo service on set-tops in Connecticut with more rollouts and a marketing push due later this year. The earnings release includes an odd anonymous statement from "a top Comcast executive" who says the cable operator is pleased with the progress and will continue to fund development for TiVo.
Also, Time Inc.'s Entertainment Weekly, which has 1.8 million subscribers, will offer free critics picks directly to the device. This follows a similar deal last May with the Chicago Tribune for critics' programming picks. The Trib gets a share of subscriber revenue based on how many sign up for the service. No financial terms were disclosed for this one but like a similar arrangement. EW editor Scott Donaton tells WSJ that 60 percent of the magazine's subs use DVRs.
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-- Hollywood classics unavailable for legal download, Blu-ray not coming soon: With the online availability of movies becoming more widespread, it's a wonder there aren't more classics that can be legally streamed or downloaded. Variety reports that of the 25 most successful movies at the U.S. box office, only five are available digitally. This is due to the red tape of clearing these older titles' digital rights, and newer releases still airing via their pay TV, cable and broadcast windows before they can be offered online.
-- FX to begin streaming full episodes: As part of the FXnetworks.com relaunch, FX will offer full episode streaming and later this fall, a redesigned community area. Previously, FX shows were streamed only on Hulu and Fancast and available for download at the iTunes store. There will be an eight-day window from when an episode airs to when it appears on FXnetworks.com, Hulu and iTunes. During that period, FX's affiliates will be able to show the episode via their video-on-demand platforms. At launch the catalog will consist of seasons one and two of It's Always Sunny in Philadelphia and 30 Days, and for each of the shows currently on the air—except The Shield, which FX does not own the streaming rights to—FX expects to have three episodes available on demand. The episodes will feature pre-roll advertising and ads where commercials would normally appear on TV.
-- LonelyGirl15 spinoff premiering on various video sites: For all those who couldn't get enough of the original series, LG15: The Resistance will premiere on Sept. 20 across Hulu, MySpaceTV, imeem, Veoh and YouTube. New six-minute episodes will debut every Saturday for 12 weeks and feature characters from LonelyGirl15 and UK series KateModern. The Resistance will also offer daily blog and photo updates, and the ability to create profile pages and chat with the show's characters.
-- Publishers Clearing House extends online territory with video site: Adding to its digital portfolio including search engine PCHSearchandwin.com and games site PCHGames.com, the company has launched PCHtv.com, a video site where fans can watch as the sweepstakes grand prize winner is surprised by the Prize Patrol. The new site will go live at 7 PM tonight, right after the prize winner is announced during NBC Nightly News with Brian Williams. After the winner's clip is shown, viewers can enter to win their own prizes, and within the coming months, will be able to upload their own videos acting out their reactions if they became a sweepstakes winner.
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 After a year in the works, TheWB.com is out of beta and opening to the public today. While the main draw to the site is the old shows that aired when The WB was known as a youth-centric TV network—e.g., Gilmore Girls, Everwood and Buffy The Vampire Slayer—TheWB.com also hopes to attract those currently in their teens with new shows such as Blue Water High (which premieres on the site today, but previously aired on Australian TV), A Boy Wearing Makeup, and Sorority Forever, which will debut the second week in September.
Sorority Forever, produced by the makers of the digital series Prom Queen, represents where TheWB.com plans to go with its new programming. Episodes will be about 2 minutes each, with a new one airing daily Monday-Friday for eight weeks. I spoke with Craig Erwich, EVP, Warner Horizon Television, and he says that the short form is where the focus will likely remain for new series. "We might come to the point where we might think, 'Hey, this could work as a 20-minute feature.' But we'll take our cues from the audience and adjust if we feel the production costs and timing allow it." Erwich, who also oversees TheWB.com on behalf of the Warner Brothers Television Group, also discussed the brand's value to advertisers and consumers, how its different from Hulu and stressing that TheWB.com wants to work as a website, not a tryout for TV. More after the jump.
-- The WB brand: Bringing back the brand made sense not just to attract advertisers, but to attract former viewers and build on The WB's past identity as a network that runs programming with young women in mind, Erwich said. "Viewers do remember the network and they remember the programming; it really wasn't that long ago. And yes, marketers and ad agencies do recall the network as well. But we mainly felt that The WB had a distinct identity and connection with a certain type of viewer and a certain style of programming. So it made sense to bring it back." So, far, only two advertisers have signed on: Johnson & Johnson and H&M. The studio is currently talking with other marketers, but Erwich declined to say how many he expects to add or when. In general, they will likely be in the beauty and fashion categories, but he said that automotives was an area they're looking to as well. "We have a pretty wide tent in terms of the kinds of advertisers we hope to partner with."
-- We're not Hulu: The main difference between TheWB.com and the NBC Universal/News Corp joint venture Hulu, is that the former is more than just the videos, Erwich said. "We have a clear editorial point of view with regard to the kind of programming we run, whereas Hulu is more of a generalist. Secondly, it's not just about the videos with us. The site is as much programming as it is about the games and video mashups that users can create. We sought to create a more immersive experience."
-- Morphing into a cable net?: "How many times do we have to say, 'No'?" Erwich answered when asked if WBTVG has any ambitions about returning the WB brand to TV as a formal network, possibly on cable. "We're interested in creating a successful website, first and foremost. When we see a new show, we don't ask ourselves if this might have potential to migrate to TV. Creating a website is hard enough. We're not interested in creating another TV network. We believe the internet is a great story-telling canvas. And that's where our focus is."
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Some consolidation in the lower ranks of the online golf world… Stracka.com, which bills itself as "golf's premier social network" has acquired GolfQ.com, a golf promotions site. The two sites will remain separate: Stracka will focus on stuff like handicap recording and other tools, while GolfQ will remain focused on marketing and promotions. GolfQ has been around since 1999, and Stracka is owned by Stracka Design Company, a golf technology and services firm. GolfQ allows its users to find promotions for participating golf courses, including getting preferred tee times. Deal terms were not disclosed. Release.
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 The Active Network, the big provider of sports-related technology, has just closed a huge, $80 million sixth round led by ESPN. Past backers participating in the round include Canaan Partners, North Bridge Venture Partners and Performance Equity Partners. The company, which has now raised $275 million since 1999, will use the funding towards infrastructure and towards "appropriate acquisitions." Acquisitions are a key part of its strategy: Since 2007, it has acquired 11 companies, including Hy-Tek Sports Software, LaxPower, Cool Running and Golfbuzz. Its flagship site is Active.com a sports training and registration portal. In addition to the online communities it runs, The Active Network provides marketing services and other technologies geared towards sports management. It's also worth noting that it's not just a sports company, as it offers services towards organizations like schools, campgrounds and governments.
There's no word on how profitable the company is, though it says it had revenue of $107 million in 2007. For ESPN (NYSE: DIS) it's the latest in a string of deals, including a number of acquisitions of smaller sports properties.
Rafat adds: The company filed for a $46 million IPO in 2004, but pulled it back due to what it called "unfavorable market conditions." Maybe this is finally the mezzanine round...though on second thoughts, ESPN would not necessarily invest in such late stage if the company was close to filing IPO anytime in the next year.
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 An odd deal on multiple fronts… Hollywood Media (NSDQ: HOLL), the entertainment news and ticketing firm, is selling its flagship unit/domain, Hollywood.com. The buyer is R&S Investments, a firm controlled by the company's own chairman and CEO Mitchell Rubenstein and president Laurie Silvers. The price is up to $10 million, but $9 million of that is earnout, with just $1 million paid upfront. The company will also get paid if R&S sells Hollywood.com before the earnout period is complete. Despite the name, the release notes that Hollywood.com represents just 4 percent of revenue, and was a major money loser ($2.5 million) for the last 12 months. Basically, it looks like there's more value there as a premium domain, than as a lower-tier ticketing and showtime site. Going forward, the company will focus on its Broadway.com ticketing business, as well as UK's CinemasOnline. Release.
Update: Rafat adds: This is a very strange turn of events...the company has been a target for the longest time, and in fact had been trying to sell it, on and off, but looks like a buyer never came through. In fact, as late as its latest 10-Q, the company said it was still trying to sell the company, and had restarted the process after halting it earlier in the year. It did sell off its Baseline/StudioSystems and Showtimes businesses in 2006 and 2007, the former to New York Times for $35 million. Also, the company hired Kevin Davis, the former GM of Variety.com, as its new President & COO a year ago, with the expressed purpose of relaunching Hollywood.com as a new consumer destination celebrity news site, and I know it was very close to relaunching it. I am assuming that part it still happening, but the timing is certainly strange....
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 Alibaba.com, the Chinese B2B marketplace, in which Yahoo (NSDQ: YHOO) holds direct and indirect stakes, said revenue for the first half of '08 jumped 47.8 percent to RMB 1.45 billion ($211.9 million). Net income was up 136 percent to 697.2 million ($101.8). In terms of raw numbers, Alibaba.com has 32.5 million users, an increase of 32.5 percent. So far, the company is weathering the weak global economy, but it says it's starting to see a slowdown in the addition of Gold Supplier members in light of the "economic winter". It expects this weakness to continue into next year, although in the long-term the company is confident it will ride China's growth, as a key global supplier. Release.
Yahoo owns a 39 percent stake in Alibaba, which itself owns 75 percent of Alibaba.com. Yahoo also invested another $100 million (about 1 percent) in Alibaba.com prior to its IPO last year. There's been talk of Yahoo liquidating its Asian assets for the sake of shareholders, though that chatter has died down along with Microsoft (NSDQ: MSFT) talk.
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 Lifetime Networks' digital push continues with its first acquisition—picking up privately held ParentsClick Network, both for its technology and its content. With it, Lifetime now is a player in the parenting and moms online category.
The company started as MothersClick in 2006 and since then expanded into other sites as well. The sites include MothersClick.com, which provides tools to find or start groups and share info, and MomBlogNetwork.com, a content aggregator and promoter with more than 2,500 registered blogs. ParentsClick's dowry includes more than 200 parenting-related domain names. Terms weren't disclosed.
ParentsClick becomes a division of Lifetime Digital with headquarters in San Francisco. Founder and CEO Dietrich von Behren joins Lifetime as VP-digital media and investments reporting to Dan Suratt, EVP-Lifetime Digital Media and Business Development. He continues to head the team with co-founder and E-I-C Andra Davidson. The title suggests this won't be the last acquisition.
Expansion plans include national multi-site parenting network with a hyper-local twist and now, with Lifetime, a national ad network to match. Lifetime, a 50-50 JV with Disney (NYSE: DIS) and Hearst, will use the technology to support its other digital efforts "by accelerating the development and launch of key vertical communities on http://www.myLifetime.com, http://www.LMN.tv and http://www.DressUpChallenge.com."
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 The big John Edwards scoop isn't itself enough to turn the tide for American Media, publisher of the National Enquirer, Star and other titles. NYP is reporting that CEO David Pecker is pushing ('at the 11th hour') to refinance its massive debt load, hoping holders will accept a combination of cash and preferred stock equaling 20 percent of the company. The article suggests that the company is heading towards a "cash crunch" by February, if it can't manage to restructure. So far, the plan is being supported by 33 percent of one class of debtholders and 51 percent of another.
The company recently reported earnings, which showed a decline, though the company maintains it's holding on better than its print peers.
As for Edwards, it did give the company a lift in print and online, according to the Audit Bureau of Circulations' Rapid Report. WWD: 'The Enquirer's Aug. 11 issue sold 738,000 single copies, the third-best-selling issue of the year so far and well above its first-half average of 665,419 newsstand copies sold per week. The saga has drawn an even bigger audience online; some 4 to 5 million visitors have flocked to the Enquirer site since the story broke in late July, a tenfold increase in usual monthly traffic."
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While many other forecasters have been backtracking a bit on expectations for online ad spend growth this year, UK media shop Carat has upped its forecast very slightly, the company said in an email release. Back in March, the Aegis-owned agency said global online expenditures would be up 23.3 percent this year, and then slow to 18 percent in '09. In its revised outlook, Carat says that worldwide internet spend will grow 23.7 percent this year and 18.6 percent the next. The company says that the internet is still poised to overtake radio this year to become the world's third most popular medium, behind TV and print.
Overall, its global prediction for 2008 is revised downward by just over a percentage point from 6 percent to 4.9 percent. 2009 is also very slightly reduced, from an increase of 4.9 percent to 4.8 percent. The main culprits for the downward revision was pinned on the worsening economies in the US, the UK, Spain and China. Elsewhere, most of the developed economies are predicted to contribute less than 5 percent growth, emerging markets in Central and Eastern Europe, Central Asia and Latin America are likely to see double-digit growth. Looking at newspapers, Carat says ad spending was marginally positive last year with a 0.4 percent increase in 2007, but this year, it is expected to be down 0.8 percent. In 2009, newspapers situation isn't expected to improve much, as Carat says global ad spending there will be down 0.2 percent.
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 Top US social nets Facebook and MySpace haven't been able to capture the top spot in Japan, where publicly traded Mixi reigns supreme. Mixi itself, however, may be looking to expand in North American and in Europe. In an interview with Reuters, CEO Kenji Kasahara said the company would like to eventually enter English speaking markets, although the end service could be something other than the actual Mixi service. Beyond that, it sounds like any plans won't take hold for awhile, as Kasahara said the expansion will come "some day". Right now, the main thrust is on looking for ways to diversify its business—95 percent of revenue comes from ads. Also, per the article, the stock is off 40 percent since its explosive IPO two years ago, so there's added pressure to goose the business.
If it does eventually come to America, it will likely have a tall order (just as any new social networking entrant). CyWorld anyone?
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The outlook for UK news publishers is as gray and overcast as this summer's weather has been, as the latest earnings testify. Johnston Press, the country's second largest regional news company with 300 weekly titles and 323 websites, saw pre-tax profit slump 18.1 percent to £62.5 million ($115 million) in the six months to June 30, as the economic downturn grew sharper and hit advertising, especially property and motor classifieds in what CEO Tim Bowlder said are "the most challenging conditions encountered by the group for a considerable number of years". Despite raising £249.2 million ($459 million) in May to put against debt, it's had to postpone the latest dividend for the same reason.
Meanwhile, Independent News & Media's UK profit crashed 35.6 percent to €4.7 million ($6.9 million) on 14.1 percent worse revenue, blamed on "challenging trading conditions and poor consumer sentiment" including the housing downturn. It's not that the publishers aren't scoring online wins - web sales are up 52.1 percent and 23.3 percent respectively and the pair are continuing to invest in the internet. They're just not making returns quick enough to offset what they forecast will become an even gloomier advertising economy over the next 18 months. More at paidContent:UK…
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She said it...in a short interview with Portfolio.com at Denver convention.
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 Another big hire for Endemol under the new regime. It's hired Disney-ABC-ESPN (NYSE: DIS) Television's EMEA EVP and MD Tom Toumazis as chief commercial officer, responsible for driving sales and distribution. Toumazis joined Disney in 2001 as EMEA SVP and MD of Buena Vista International Television; he's struck the Europe, Middle East and Africa distribution deals for shows like Lost and Desperate Housewives. Endemol creative director Peter Bazalgette quit in September during its takeover by John de Mol, Silvio Berlusconi's Mediaset and Goldman Sachs Capital Partners. The company got a new CEO in Ynon Kreiz and made a high-profile signing in Arts Alliance's Adam Valkin last month,
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On July 31, an email landed in my inbox alleging that some venture capitalist insiders from Insight Venture Partners benefit disproportionately in last year's sale of online photo site Photobucket to Fox Interactive Media (NYSE: NWS), for about $300 million. Turns out WSJ also got a similar tip, dug into it and was able to verify the details, minus the hyperbole, in its story tonight.
The allegation was that IVP partners invested personally in the deal, instead of getting the venture firm to invest in it, and then pocketed the returns personally, with no returns to limited partners in Insight's technology fund. The email we got detailed that Insight partners and many other employees and friends invested about $3 million of personal funds into Photobucket in return for 20 percent of the then-nascent firm. Their $3 million turned into about $60 million when Fox acquired Photobucket, the email alleged, and funding documents show that none of Insight's pension investors were told about the deal and none got to invest in it.
The documents showed that the primary investors were IVP founders Jeff Horing and Jerry Murdock, who each invested $300,000 into the company and personally made 20 times their money—or $6 million each from the investment. Our informer had this to say: "As shown in the stock purchase agreement, the LLC was called IVP/PB LLC, had a similar name to Insight Venture Partners, and even had the same address as Insight Venture Partners—680 Fifth Avenue in New York—giving the founders of Photobucket the impression that an actual Insight fund was investing in the company."
I am pretty sure Photobucket founders knew IVP, as a fund, was not investing, but turns out most of the other details are true, as WSJ lays out. WSJ says that the return for IVP partners was more than $40 million (not $60 million as the tip we got) and that Horing and Murdock got above $5 million (and not $6 million as our tip said).
This cautionary tale shows the conflicts that venture partners have in investing directly into startups, instead of the venture funds they manage. Some VC funds allow this if the investment is outside the scope of its own investing philosophy...in this case IVP, which has about $3 billion under management, makes later-stage investments in tech companies, often taking a controlling interest. The firm's average investment size is about $35 million, Horing told WSJ. Photobucket didn't come close to meeting those criteria, and hence the personal investment in Photobucket was the only option for these individuals who wanted to invest in the fast-growing (in terms of users) service.
It may be a tempest in a teacup this far down the line, but the relevant chart from the stock purchase agreement in Photobucket's first round:
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 Nothing says try new technology as much as a release of Disney classics in that format, and if anything will drive me to Blu-ray it well could be the original Fantasia. The animation-live-action mix is one of six animated films from the Disney (NYSE: DIS) vault picked to help sell Blu-ray players; the other "platinum" titles the NYT reports will be released over the next two years are Snow White and the Seven Dwarfs, Pinocchio, previously announced Sleeping Beauty and Fantasia 2000. The DVDs go a step further than the usual gimmicks by incorporating BD-Live, a technology we've written about before that meshes the disc and the internet. That equals interactivity—or at least the potential for it. Examples include virtual viewing parties with laptop or mobile chat comments showing up on screen and global trivia contests. The NYT also mentions something Disney calls "movie mail" that allows user video to show up within the "context of the movie."
The goal is to move Blu-ray past the early adopters, Bob Chapek, president of Disney's home entertainment unit, told the Times: "BD-Live is not a niche product. ... We see mass adoption of the technology." It's the same philosophy Disney used to push adoption of the original DVDs by releasing Snow White; it's been off the list since 2001.
But BD-LIve isn't for the masses when it comes to cost; players require ethernet ports and are more expensive than straight Blu-ray.
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Lotsa digital media-related legal news coming out today:
-- Wolfgang's Vault settlement: This was a much anticipated one: Doors and Carlos Santana have reached a tentative settlement with Wolfgang's Vault, the controversial site which sells memorabilia and streams concert footage online. The site was sued two years ago...Sony (NYSE: SNE) BMG Music Entertainment, BMG Music, Arista Records, Santana and the Doors have tentatively settled with the Bill Graham Archive and its CEO William Sagan. The settlement doesn't include other plaintiffs in the case, such as Grateful Dead Productions, and Led Zeppelin rockers Jimmy Page, John Paul Jones and Robert Plant, reports LAT. In June, Wolfgang's Vault reached a pact with Universal Music Group that allowed for the site to offer downloadable concerts by UMG artists such as Jimi Hendrix, reports Billboard.
-- Microsoft-Immersion: Immersion will pay $20.8 million to Microsoft (NSDQ: MSFT) to settle a lawsuit over touch feedback technology used in video games. The lawsuit started against Microsoft over the "rumble" feature of its Xbox game console controllers, alleging that the Xbox controller infringed on a patent for force feedback, Immersion's specialty...Immersion also sued Sony over PlayStation, and got a big payout of $22.5 million over three years, plus more than $100 million in costs, royalties and patent license fees. It gets complicated from here, but Immersion was supposed to pay some out of that Sony settlement to MSFT, which it didn't and then was disputed...this latest settlement comes out of that dispute. More here.
-- Visual voicemail lawsuit: If there is a lock on visual voicemail, Judah Klausner holds the key. The inventor has protected a series of patents he holds with tenacity and a track record to back it up. This time he's going after Google, Verizon Communications, LG Electronics, Comverse Technology, Citrix Systems, Embarq, Cox Communications, PhoneFusion and RingCentral… more here on mocoNews.
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-- LA Times: Having operated without an ad sales head since February, the LA Times has appointed a new EVP and chief revenue officer, Scott McKibben. Marking new Times Publisher Eddy Hartenstein's first major move, the company hopes McKibben will help boost flagging ad revs. Most recently, he was president and publisher of the Gazette in Colorado Springs and VP of Freedom Communications' central region. Release.
-- Politicker: The politics-focused site has poached rival Politico's associate publisher, Waldo Tibbetts, to take on the same role, WSJ reports. Tibbetts was with Politico since the spring of 2007, shortly after its founding. He previously worked in ad sales for Washingtonpost.NewsweekInteractive.
-- 24/7 Real Media: A slew of promotions at 24/7… Ari Bluman has been upped to president-North America sales and ops from VP of the division, Kris Heinrichs has been promoted to CFO from SVP and global controller, and Jon Greenwood is now corporate VP-global ops, having previously served as VP, product manager-internal systems. Brian Lesser is now GM-media innovation group and Nicolle Pangis has been named VP-global media and technology product management, while Irene Bondar rounds out the exec promotions as VP-product development. Just a few weeks ago, the company upped COO Jonathan Hsu to CEO when David Moore stepped down from the position. Release.
-- Glam Media: Christine McNicholas is joining the company as VP-sales for the midwest region. McNicholas has over 15 years of sales and marketing experience, having most recently served as EVP-sales and services at Dotomi. Release.
-- About.com: Frank Minishak is joining the Eastern region sales team as VP. With more than 20 years of ad sales experience, he was most recently VP-digital sales at Madison Square Garden and earlier, a regional sales director for AOL (NYSE: TWX). Release.
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Zero2IPO, an online financial info services provider on the China VC and PE markets, has raised a big $60 million round from a total of 46 different investors, according to SEC filing, picked up by PEHub. The company started as an online database of VC and M&A deals in the Chinese market in 1999, and since expanded into financial advisory service, events and other allied services.
In 2006, it expanded into launching its own VC fund (yes!) called Zero2IPO Capital Group. That fund has invested in Chinese digital media companies such as video site 56.com, classifieds site Tianya.cn and others.
Now with this big raise, Zero2IPO will use most of it in a new investment fund, Zero2IPO China Fund II. The new fund is almost four times larger than the firm's first fund.
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One of the more unexpected M&A deals closed today, as United Online (NSDQ: UNTD) completed the acquisition of floral company FTD for $754 million in cash and stock. The deal, which gives FTD shareholders 15 percent of the combined company, was originally valued around $800 million. The company says the combined company has trailing twelve month revenue of $1.14 billion, and op income of $169.1 million. Release.
The deal's closing comes one day after FTD reported Q4 earnings: Revenue was up 3 percent to $174.9 million. Excluding a gain in the last quarter, net income was basically flat, $12.6 million vs. $12.5 million. Release.
United Online, meanwhile, continues to ride the surprising growth of its Classmates.com unit. Although the company failed to spin it off, company recently announced that the social division would be moving from Renton, WA to fresh digs on Seattle's waterfront.
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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.
That led GfK to rethink the combination of equals that was originally being worked out in May. That deal had been valued at $154 million (£83.8 million, €100 million) and would create the globe's second-largest audience measurement firm behind Nielsen. With WPP in the picture, GfK then began trying to come up with a cash offer for TNS. Meanwhile, WPP seemed to have the support of TNS shareholders, even as TNS executives rejected the ad company's advances three times. By having GfK out of the way, it looks like all systems are go for a WPP takeover. But lately, WPP has been talking with Microsoft (NSDQ: MSFT) about acquiring its Avenue A/Razorfish unit. The price for that purchase could cost WPP around $800 million, even while it would throw in its ad serving unit Open AdStream as well. Still, since WPP has fought hard for TNS, it's doubtful that Sir Martin Sorrell, WPP's CEO, would walk away too at this point.
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I'll resist the temptation to make a crack about how at least somebody is making money on the Zune, but… Zuneboards, a community site devoted to Microsoft's (NSDQ: MSFT) iPod rival, was sold for $62k to Crowdgather, according to the OC Register (via Boston Herald). The Santa Ana, CA-based site was launched by 15-year old Hansup Yoon, and is basically a mix of a message board and Zune-focused blog. Crowdgather is a message board aggregator, having acquired over 70 other forums and message boards. Zuneboards claims to make $1,000 a month in profit and has 60,000 members.
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-- MySpace's new look is better for ads (sub. req.): This summer's MySpace homepage revamp is now more hospitable to brand advertisers, says Pali Research's Rich Greenfield. So far, Sprint (NYSE: S) and Wendy's have been spurred to take advantage of the cleaner look and feel of the page. The revamp allows MySpace to "reach far beyond the 'social media' advertising category and to target far larger portal advertising budgets." Greenfield also finds Myspace is pricing Friday homepage ad buys at a premium, as entertainment companies are finding the placement more attractive.
-- Microsoft was June's number one display advertiser: ComScore (NSDQ: SCOR) reports that Microsoft (NSDQ: MSFT) was the top display advertiser in June with 5.5 billion display ad views. Microsoft's rise was tied to a promotional campaign for Windows Live Search, which included ads for the Windows Live Search cashback program and its games. Coming in second was perennial big display spender University of Phoenix which had 4.7 billion. After the online college's parent, the Apollo Group, bought ad net operator Aptimus last August, the school canceled its multi-million contract with AOL's (NYSE: TWX) Advertising.com.
-- Google opens Ad Manager wide: After debuting in limited beta last March, Google Ad Manager is now live. Created as an ad serving management tool for publishers, it's now available to anyone with an AdSense account. The rollout is part of a wider set of tools that Google (NSDQ: GOOG) hopes to market as a complement to DoubleClick's offerings, such as that unit's Revenue Center, an ad delivery program.
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Kid-oriented virtual worlds continues to be a hot space… Dizzywood, a new virtual worlds startups for kids, has raised $1 million from the European Founders Fund, according to peHUB, citing a regulatory filing. The SF-based company has previously announced funding from Charles River Ventures and Shelby Bonnie. The company was founded by Scott Arpajian, longtime head of CNET's (NSDQ: CNET) Download.com
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Despite the rise of video-on-demand and targeted advertising, mass media is still a viable form and will likely remain so. But within mass media, only TV will continue to stand tall as radio and newspapers decline, says Rishad Tobaccowala, chief innovation officer at Publicis Groupe Media and CEO of Denuo, its new media consultancy. In a long interview with TVNewsday, Tobaccowala contends that broadcast's strength lies in its potential to capitalize on the rise of digital. Still, he is quick to add that he's talking about mere survivability for the most part. Tobaccowala: "Traditional mass media is not a growth business, and so to continue to resonate and be relevant, broadcast stations need to basically embrace digital media, including the Web. You'll actually continue to have a healthy, viable broadcast business, but you have to accept it's not growing, and it's becoming less and less relevant to particular target audiences."
-- More than surviving: Broadcasters have to find ways of building up their online presences. In the past year, a number of broadcasters have tried to expand beyond the 30-minute news at 11 by crafting a more individual online brand. One prime example is NBC Universal (NYSE: GE), which formed a hyper-local "content center" around New York affiliate WNBC in May. Tobaccowala: "The networks and the stations have to recognize that they're in the video information and entertainment-delivery business. A broadcast station limits what they can actually do."
-- TV vs. newspapers and radio: What the broadcast part can do is deliver large audiences at scale. Since more viewers are turning away from newspapers than from TV, that makes broadcast still more valuable to advertisers. Plus, broadcasters have the natural experience and production assets associated with creating online video. As for radio, transferring their brands to online are difficult, as they have to compete with services like Last.fm's as well as MP3 players—in other words, media that is largely commercial free. More from Tobaccowala on Google (NSDQ: GOOG) and Canoe Ventures after the jump.
-- Google is more expensive than TV: Relatively speaking, of course. His reasoning: Google AdWords, on average, across all categories, tends to be about 50 cents per-click. "Let's say on television you get a $20 cost-per-thousand rate. Fifty cents a click is equal to $500 cost per thousand. You can see how much more expensive it is, but the difference is there's some sort of action."
-- On Canoe Ventures: threat and opportunity: In June, cable ad targeting company Canoe Ventures was unveiled. The project has the backing of Comcast (NSDQ: CMCSA) and five of the other major cable companies. Tobaccowala says if the company works as its supposed to—letting cable companies sell targeted ads on a national basis—it will represent both a threat and an opportunity for local stations. "It will simply allow people to get a national footprint, and my sense is national advertising is not competitive with local advertising… Today, spot cable basically sort of sits in between the worst of the programming, and it's hard to buy. Canoe is partly about making it easier to buy. Part of it is basically going to be make it more measurable. Local stations will have both the opportunity of trying to figure out how to be more measurable, and the threat that they've got some other measurable media [competition]."
Social Media Deals Report: This 199-page report, filled with charts and data, examines the categories, number and size of VC and M&A deal in social media from 2007 through 2008. Visit the ContentNext Reports page
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StudioNow, a social net and platform for professional video services, has secured $2 million in private equity from existing investors and Clayton Associates, a Franklin, TN-based PE firm. The Nashville-based company raised $1.5 million in a first round in June 2007 from Claritas Capital, which led the round. Other participants in that previous round included Fred Goad and Jim Kever, original founders of Envoy, a precursor to WebMD (NSDQ: WBMD). StudioNow was founded in January 2007 with the idea of serving as a virtual production house. Businesses and individuals can go to the site to connect with video/movie editors, videographers, directors, producers, animators and voice-over artists. They can then use the site's production tools to create their video.
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Technorati, the still-trying-to-redefine-itself blog search and now blog ad network, has bought out Blogcritics, one of the oldest online blog magazines and blog networks. The site publishes contributions from bloggers on everything from music reviews to articles on politics and technology..it was part of the Technorati ad network since June.
The rationale? Says Technorati CEO Richard Jalichandra in his blog post: "Blogcritics brings us closer to an open community of bloggers and the audience that follows them. It also gives us a lot more advertising inventory. What's in it for them? Our combined resources will help that community grow and expose their work to an even wider audience. We'll also work more closely with Blogcritics authors so they can monetize their own blogs."
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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 (NYSE: NYT) says growth in the current month is up in the "low double digits" helped by improved display advertising on NYTimes.com.
The About Group continues to grow at a healthy clip, with revenue rising 14.6 percent to $9.5 million. This growth rate is a bit slower than what it's been for most of the year, as YTD growth stands at 17.4 percent. Total internet revenue, including About, was up 2.6 percent. It now comprises 12.5 percent of total revenue, up from 11 percent last year. Release.
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We're mainly covering this one due to the jilted buyer… 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 form 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. Release.
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Looking to tap growing online local ad spending, the MTVu cable channel is introducing 25 listings sites tied to specific colleges, Reuters reports. MTVu, which broadcasts to roughly 750 universities in the U.S., is working with local listing site and ad net Zvents on the project, which is now available for colleges such as University of Texas at Austin, Northwestern University, and University of Pennsylvania.
This back-to-school effort follows Fox's attempt to attract college students online by streaming the premiere of two of its anticipated shows "Fringe" and season opener of "Terminator: The Sarah Connor Chronicles" online at the same time as the shows are broadcast on TV. As Reuters says, MTVu has been pretty successful on its broadcast side lately, but that interest has not transferred to its online offerings. The Viacom (NYSE: VIA) network hopes to get generate further interest in its listings network by aligning with individual college newspapers. Also, MTVu is considering publishing a print version of the campus guides as well.
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Amazon (NSDQ: AMZN) is buying up another books-focused social network Shelfari, three weeks after it acquired AbeBooks, which holds a 40 percent stake in Shelfari's main rival, LibraryThing. The Seattle-based startup was founded last year by Josh Hug, the former director of device engineering at RealNetworks (NSDQ: RNWK), and in fact Amazon was a seed investor in the company...it had raised a total of $1 million.
Interestingly, there is no love lost between the two rivals Shelfari and LibraryThing, as SeattlePI describes: LibraryThing founder Tim Spalding has called Shelfari a "bad actor" for engaging in what he called a massive campaign of "astroturfing," the practice of planting positive comments about a service on blogs. It is likely that AMZN disposes of its stake in LibraryThing, or could conceivably be merged together.
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Fairfax Media is the latest media company to slash jobs to cut costs. The "business improvement program" will be implemented during the first half of FY09, resulting in an overall staff trim of 5 percent, some 550 jobs across corporate, its Australian publishing and printing and Fairfax New Zealand. The move follows Fairfax's merger with Rural Press and the acquisition of Southern Cross Radio; the company says it will achieve $45.5 million (AUD $53 million) in "synergies" by the end of this fiscal year. CEO David Kirk: "Media companies fit for the modern media world need to be lean and agile. This far-reaching program will position us well for the next stage of our growth and development."
Fairfax will take a one-time charge of $43 million (AUD $50 million) as a result. The company expects $43 million (AUD $50 million) in annualized savings, about half of that in FY09. Release (pdf).
The Australian: "A pitched battled is now expected between Fairfax management and its heavily unionised workforce that has the potential to cause widespread disruption to its news services." The paper says the amount of the charge averages about $91,000 AU per position "signalling that higher-paid journalists and managers are likely to be targeted."
And from a memo to Fairfax staff: "There will be criticism from some, inside and outside the company, that these changes, particularly in editorial, will compromise quality and critical mass in the metro mastheads and their mission. We reject that."
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 Not everyone is buying the idea that in this economy, performance-based ads are the place to be… Brand.net, an ad net (another one) focusing solely on brand advertising, has raised a $10 million second round led by Norwest Venture Partners. Past backer InterWest, which led a $3 million round last year, also participated. Its total raise is now $13 million. I spoke with CEO Elizabeth Blair, a Yahoo veteran who left early last year, who said she "reads the articles" about the headwinds for brand ads, but that she doesn't buy it. The company is banking on a balancing out of brand and direct response ads, as well as the bigger, non-cyclical trend of brand ad dollars moving from traditional media to online. She said that in the company's experience, the "smartest" companies realize that in the long-term, it doesn't pay to pull back on brand advertising.
Meanwhile, unlike a lot of ad nets that go out and sign up publishers first, Brand.net is reaching out to large brand advertisers and agencies, helping them come up with campaigns that reach a achieve a certain goal. COO Andy Atherton, another ex-Yahoo (NSDQ: YHOO) (four of the six key personnel came from Yahoo), explained that since its clients campaigns are worked out in advance, they can afford to sign up the advertiser first, and then go out and find the right publisher after words.
The San Mateo, CA-based company hasn't released data on who they're working with, but they say they have half-a-dozen of the top 20 blue-chip advertisers, and already hundreds of publishers in the network.
Social Media Deals Report: This 199-page report, filled with charts and data, examines the categories, number and size of VC and M&A deal in social media from 2007 through 2008. Visit the ContentNext Reports page
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Qik, the popular-among-bloggers mobile video streaming service, has received new funding from Marc Andreessen and his longtime business partner Ben Horowitz. Andreessen is the founder of Ning, and Horowitz is the VP and GM of HP's business technology organization unit these days. The Foster City, CA-based company did not disclose how much the two invested.
The live video streaming field is heavily competitive, but Qik has done a nice job integrating a bunch of services, including supposed rivals: it has integrated Twitter, YouTube, Mogulus, MySpace, Orkut and Justin.tv in its service. The service allows users with a camera phone to stream live video, and get feedback from other "followers" online. It has been popular among the bloggers and other citizen journalists touting high end phones like Nokia (NYSE: NOK) N95...Robert Scoble has been the biggest proponent of Qik.
VentureBeat: Both also join the board of advisors following the "significant" investment.
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Cambridge, MA.-based JumpTap, a white-label mobile search and advertising company, plans to announce today that it has raised $26 million in a fourth round of funding, bringing its overall total to $72 million. The latest round was led by Alliance Bernstein L.P., a publicly traded global asset management firm. All other existing investors, including General Catalyst Partners, Summerhill Venture Partners, Redpoint Ventures, Valhalla Partners and WPP, participated. JumpTap said the company is worth more following the round, and that the capital will go towards accelerating the company's advertising efforts and expansion plans in Europe.
The large bankroll will surely help the company grow and compete against several companies, including brand name online search providers, such as Google (NSDQ: GOOG), Yahoo (NSDQ: YHOO) and Microsoft (NSDQ: MSFT), but also other white-label search companies, like Seattle-based Medio Systems. More details on MocoNews.
Social Media Deals Report: This 199-page report, filled with charts and data, examines the categories, number and size of VC and M&A deal in social media from 2007 through 2008. Visit the ContentNext Reports page
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 For the last few weeks, Facebook users outside the U.S. and Canada could do the superior dance between rounds of Scrabulous. Access to Scrabulous, the Scrabble knockoff developed by Indian brothers Rajat and Jayant Agarwalla, from those countries halted last month when the developers agreed to pull the program following a complaint by toy company Hasbro. But, as AP reports, the social network said Monday it has barred access in most countries following a formal complaint by Mattel, which holds rights outside the U.S. and Canada. This time, the brothers refused to withdraw the program themselves and Facebook stepped in. The main exception: India, where Mattel has filed an infringement lawsuit. Jayant Agarwalla told AP he was surprised Facebook didn't wait for the lawsuit to be resolved.
BBC: Rory Cellan-Jones suggests people unscramble these letters "EEDDDLU" to sum up "the attitude of all those who somehow thought that a game which looks and feels exactly like Scrabble would be permitted by Hasbro and Mattel to go on serving millions of Facebook users around the world, while reaping a steady flow of advertising dollars for its young Indian creators. You might as well expect Rolex to endorse those people selling 'Rolex' watches on street markets worldwide, or Viacom (NYSE: VIA) to say, 'Hey, YouTube, great to see our content on a whole new platform.'"
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 Yes, I know..we don't need more coverage of the Democratic convention which started this evening, but I have to point out the live video feeds online. Every major site and TV network is live streaming it online in full, including MSNBC.com, ABCnews.com (on Yahoo News), CNN.com, CBSnews.com, FoxNews.com and Cspan (with a very nice aggregation site). Surprisingly, everyone has a bit of lag in the live feed, or at least not synced up with each other.
Meanwhile, WashingtonPost.com is doing something different..it is going live with its own analysis this evening and every day for the rest of the convention. Even HuffPo has its own live coverage using Kyte video service. UStream also has an unofficial live feed. And then everyone is live blogging it from there.
But the most awesome (I have probably never used that word in seven years of this site) online video feed is on the official Democratic Convention site, on DemConvention.com site. It is in HD, and uses Move Networks' plugin and using Microsoft Silverlight...MSFT just announced its investment in Move. You have to watch it here to see the potential of HD video online...certainly shows how great HD video can look online, though there have been some doubts on how it could scale without overloading the underlying infrastructure of the Internet.
Social Media Deals Report: This 199-page report, filled with charts and data, examines the categories, number and size of VC and M&A deal in social media from 2007 through 2008. Visit the ContentNext Reports page
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I have post-Olympics blues, but that doesn't stop some news and numbers:
-- NBC's final numbers online: NBCU has come out with some numbers for NBCOlympics.com: 75.5 million video streams for Beijing; 9.9 million hours of video; 51.9 million unique users; 1.24 billion page views. Some analysts have come out with estimates on how much NBCU earned in online video revenues.
-- Olympic rights for 2014 Winter Games and the 2016 Summer Games: We already reported on ESPN's (NYSE: DIS) hopes in getting the rights for 2014 and 2016 Olympics for U.S. territory....now a day after the Beijing games ended, buzz has started about other contenders. Other likely bidders would include News Corp (NYSE: NWS). which owns Fox and has bid previously, and CBS (NYSE: CBS). Even online players such as Google (NSDQ: GOOG), Microsoft (NSDQ: MSFT) or Yahoo (NSDQ: YHOO) could make a play for a share of the Olympics, given how big a role digital could play by that time, reports Reuters.
-- NBC's profits for Beijing: NBCU had seen a healthy return on its $894 million investment in exclusive rights to the Games, said NBCU CEO Jeff Zucker to FT, although he added that estimates that it could make as much as $100 million profit were too high. "Obviously we'll make a profit here," he said, noting that the company had sold an additional $25m of Olympic advertising inventory after media buyers realized the Games were attracting larger audiences than expected.
-- Paralympics on Universal Sports and online: Universal Sports, the online amateur sports site and channel o-owned by NBCU and InterMedia Partners, will be broadcast and webcast of the 2008 Beijing Paralympic Games...online is the main focus. The games will be available in the U.S. Sept. 6-17 with daily live and delayed highlight shows on the website. More details here.
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Vudu is trying to break the voodoo curse of online-TV boxes, but is having a tough time: it has laid off about 16-18 of its employees out of 100, and is now trying to build on its retail presence. It has hired a new CFO: Chris Watts, a former eBay (NSDQ: EBAY) executive, has joined as nw CFO, as the former CFO left for "personal reasons," according to company rep, quoted in this News.com story. Recently the company added adult movies within its portfolio, always a desperation move for most online video providers. It has $21 million in funding from Greylock and Benchmark.
The company added Mark Jung, co-founder and former CEO of IGN and COO of Fox Interactive Media (NYSE: NWS), as its CEO in fall last year, but still hasn't gotten much traction in the industry. Competition is fierce, even though the market is still very nascent and small. Moviebeam, Akimbo and others are prime examples...there has been some positive reaction to the Netflix-Roku box but too early to make any trendlines out of that.
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So Microsoft (NSDQ: MSFT) is also jumping into the online video investment space, and has done an undisclosed amount of strategic investment in already-heavily backed online HD video tech provider Move Networks. This is technically part of its third round, which it earlier closed in at $46 million from investors such as Benchmark Capital, as well as Cisco, ComcastInteractive Media, and Televisa. Prior to Microsoft coming in, the American Fork, UT-based company had raised $67.3 million in funding.
The company touts a higher level of quality than other video providers, including HD, and it claims to be able to eliminate buffering. Among its customers are ABC and ESPN, both Disney (NYSE: DIS) properties (hence it also has backing from Steamboat, a Disney VC fund)...it recently announced it was going to adapt its HD media player for mobile Internet devices (or MIDs) using Intel (NSDQ: INTC) processors and Linux software. Move is already in crazy-money-raised territory, and this one adds to it.
Microsoft has been pushing its Silverlight online video technology. It was recently integrated within Move's technology, even though it was not used in NBCOlympics.com's video player, which was all Silverlight. With this Microsoft investment, Move will support Windows Server-based encoding, Microsoft codecs and Silverlight DRM.
If you want to see a brand new example of the integration of the two, check out the official video from Democratic convention coverage here...as usual, you have to download and install the small Move plugin.
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 Another ESPN (NYSE: DIS) story worth mentioning ... after 18 months of acquisitions and building, the Disney sports unit is launching its major online high school initiative aimed at 14-18 year olds. ESPNRise.com later today. (For now, it defaults to ESPNU's football recruiting site.) ESPNRise.com represents significant investment and a basket full of all of the company's high-school hopes. It's designed as "a complete source for national high school sports and lifestyle coverage" and a community that connects athletes, teammates, friends and families. The name comes from the acquisition late last year of School Sports Inc, publisher of RISE (now ESPN RISE) magazine and RISEmag.com, among others. Since 2006, ESPN also has acquired Hoopgurlz.com, Student Sports Inc., and what is now ESPN Scouts Inc.
Among other aspects, the site will:
-- emphasize coverage of high school sports with dedicated pages for every state, regional rankings, features and profiles on athletes and programs.
-- feature the usual bells and whistles—video, podcasts, photo sharing, dedicated blogs, widgets out the wazoo, Next month, users will be able to upload original video.
-- integrate and cross promote content with DyeStat.com (boy's and girl's track & field/cross country) and with regional sites CalHiSports.com (California) and MDVarsity.com (Maryland).
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Fox is touting a new streaming arrangement it is launching: it will stream the premiere of two of its anticipated shows "Fringe" and season opener of "Terminator: The Sarah Connor Chronicles" online at the same time as they are broadcast on TV..but in a twist, this is only for college students, or more accurately, anyone with a .edu address, which includes university staff etc as well. Fox content strategy senior VP Bill Bradford came up with the idea after noticing that .edu addresses were among Fox.com's top visitors, reports Variety. While the thinking behind it is certainly admirable (college students presumably watch more shows online than TV), the audience for live online simulcast of shows is probably very small, compared to on-demand viewing. And even Fox acknowledges the small window for students: these shows will be available on demand after midnight PDT on the night of the broadcast to everyone, not just restricted to college campuses, the company PR told me. Which means for now, this move is mainly for its PR value...and I suppose some residual research purposes. Some more details here.
Social Media Deals Report: This 199-page report, filled with charts and data, examines the categories, number and size of VC and M&A deal in social media from 2007 through 2008. Visit the ContentNext Reports page
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Ad network Adisn has raised a $1 million first round from Battery Ventures, according to peHUB. The Long Beach-based company actually refers to itself as being "anti-ad network", but mainly it says it uses social networking data to deliver advertising that's more relevant than what other ad nets deliver. They're not alone in this approach. Most recently, Media6Degrees announced a $9 million raise, with similar aims in mind. Others are interested in this approach as well.
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 As a former card-carrying member of the SEC (woof, woof, woof for anyone who cares), I can only look at these numbers in awe ... ESPN (NYSE: DIS) will announce later today a major deal for the SEC TV rights not held by CBS (NYSE: CBS), according to Sports Business Journal. SBJ's "industry sources" peg the price at $2.25 billion for 15 years, or roughly $150 million a year. The Southeastern Conference, one of the top athletic conferences, just announced a 15-year deal with CBS for a reported $825 million or $55 million a year. No details yet on the broadband and mobile rights but it would be surprising if ESPN didn't have a lock on multi-platform rights for its games.
SBJ also says to expect a deal that puts ESPNU on Comcast (NSDQ: CMCSA) systems; Comcast has a major SEC presence and this would be the right lever. SEC schools include Alabama, Arkansas, Auburn, Florida, Georgia, Kentucky, LSU, Ole Miss, Mississippi State, South Carolina, Tennessee and Vanderbilt.
Update: It's official and the 15-year deal that starts in 2009-10 and runs through 2023-24—the longest national rights deal ESPN has ever made—does include comprehensive multi-platform rights as expected, among them live streaming of football and basketball. But each SEC school retains the rights to make local multi-media deals. Some details:
-- ESPN can simulcast live SEC games on ESPN360 and ESPN Mobile. ESPN.com also gets "extensive content rights."
-- As was the case with the MLB deal announced last week, this includes rights to emerging such as iTunes, X Box Live/Playstation, Zune, etc, and new platforms.
-- The deal covers more than 5,500 SEC events including football, men's and women's basketball, Olympic sports and SEC Championships.
-- ESPN will use ESPN360 technology for an online SEC Academic Network.
-- ESPN International has rights to live games and encores.
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Whoever said talk was cheap hasn't been following the action at Cablevision: Shares of the Long Island-based cable operators have staged a strong rally in recent months, courtesy of the Dolan family's jib-jabbing and jawboning alone. But don't expect the fun to continue says Citi analyst Jason Bazinet, who downgraded the stock today. Despite the fact that activist Harbinger has taken an 8.1 percent stake in the company, class A shareholders (non-Dolans) don't have the muscle to force anything, like an asset sale. Even though the top non-Dolan shareholders are consolidating their grip (besides Harbinger, top firms like Gamco and Clearbride have added to their stake), the Dolan's control of the Class B shares ensures that they'll retain 73 percent of the voting power.
What's more, even if investors could make something happen, Bazinet doesn't believe there's any more value to "unlock" via a sale or a spinoff (again, the stock has made its run). He estimates the value of the cable nets at $5 billion if sold on the private market. As for the core cable operation, the company is now valued at a slight premium to its peers, but it faces a threat from Verizon's (NYSE: VZ) much-hyped rollout of FiOS in New York. Bazinet thinks the current valuation isn't pricing in any risk whatsoever.
Cablevision (NYSE: CVC) is taking it on the chin today, dropping about 4.5 percent.
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-- Gannett: Another ugly month from Gannett (NYSE: GCI), which says revenue fell 12.3 percent in July, compared to 2007. Publishing ad revs fell 16.7 percent. The hollowing out of the classifieds business continues to be eye-popping: "Classified revenues declined 25.2 percent in July. Real estate revenues were 37.9 percent lower, employment revenues were down 29.1 percent and automotive revenues declined 21.1 percent. " Other Revenue, which includes commercial printing as well as PointRoll and ShopLocal fell 3.8 percent, though there's no breakdown between printing and the digital businesses. (Release)
-- Sacramento Bee: Following June's news that The McClatchy Company (NYSE: MNI) would cut its staff by 10 percent, the company's Sacramento Bee paper is now offering buyouts to 55 percent of full-time staffers. When the McClatchy staff reduction was announced, the Sac Bee slashed 8.1 percent of its roughly 1,000 employees. (Sac Bee)
-- Star Tribune: The Minneapolis/St. Paul daily says it's reinvented its online opinion pages in the form of a blog. Instead of a relatively static presentation of what appears in the print edition, the new section, dubbed Opinion Exchange will be frequently updated and readers will be asked to comment on topics before their written. (Star Tribune)
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 Google TV Ads, which exited out of beta earlier this summer, hasn't moved much from where it started. For the past year, Google (NSDQ: GOOG) has sought to offer targeted ads through cable set-top boxes the way it has served ads online. Adweek checks in and finds Google TV Ads still working with only one pay TV provider, EchoStar (NSDQ: DISH) and a much smaller, local California cable company. That only gives Google access to the satellite TV company's 14 million households out of a roughly 65 million basic cable subscribers, according to figures from the National Cable & Telecommunications Association.
-- An untapped market, but not for long: Despite the limitations and hurdles facing Google TV Ads, that doesn't mean it might not make money soon. Instead of just aiming at the finite group of large, traditional cable and broadcast advertisers, Google is going for the same small marketers that use it on the web. Most of those potential advertisers have never run a TV spot and Google feels that it has an untapped market all to itself. Google also expects to excite advertisers by letting them know once and for all which viewers are tuning off their ads and which one might be receptive (though it still won't be able to tell which of those tend to get up and go to the fridge when a commercial break occurs). Still, as Google tries to gear up its offerings and attract advertisers and other networks—the company says it will announce one large, unspecified deal in the next few weeks—others, like online custom ad creator Spot Runner is hoping to tap small businesses interested in trying cable TV advertising for the first time as well. Another challenge could also come from Microsoft (NSDQ: MSFT), which bought TV ad placement firm Navic Networks in June.
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 Conviva, a startup promising a superior way for companies to distribute live internet video, has raised a big $20 million second round led by UV Partners, along with past backers New Enterprise Associates (NEA) and Foundation Capital. The San Mateo, CA-based company, previously known as Rinera, raised $9 million early last year, for a total raise of $29 million. The company's technology is a bit of a mystery, compounded by the fact that it's raised so much money before having a product to sell. The announcement says the company is building a "virtual living room," though CEO Carlos Ramón didn't care to clarify what that meant in an interview with NewTeeVee. Sans any details about itself, the company is mainly speaking up about the weaknesses of current technology. Release.
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 ABCNews.com's 15-minute webcast will not be scuttled, despite recent rumblings to that effect, THR reports. For the past two years, the webcast has been streamed live weekdays at 3 PM EDT and then available as a free podcast on iTunes. The podcast, which is hosted by ABC World News anchor Charlie Gibson, is currently 44th on iTunes' list of top podcasts, and THR says it gets downloaded about 600,000 times a day.
Given the uncertainty about how many people actually view the downloads has made advertising a tough sell and has led to rumors about the podcast being dropped. Back in June, David Westin, ABC's news-division president, said that the Disney-owned network wasn't ready to pull the plug on the webcast, saying execs wanted to explore ways of making it more relevant. So to start, they're going to try to build up content around the webcast in order to attract advertisers. Starting Monday, Gibson and other news staffers will contribute a blog on the site, which should draw more users this week, as the Democratic National Convention kicks off. Gibson seems to have been dragged to blogging duties, as he tells THR: "I've been reluctant about a blog, not for any other reason that I worry that they become a little self-serving and somewhat narcissistic. I've resisted it in the past. I'm not sure I won't fall into the same trap."
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Telemundo, the Hispanic language media company owned by NBC Universal (NYSE: GE), has unified all its digital media efforts and created a new unit called Digital Media and Emerging Businesses Division. This new unit will include Yahoo (NSDQ: YHOO) Telemundo, holamun2.com, its international digital media efforts and its emerging platforms unit (which included mobile and licensing and merchandising efforts). It will be headed by Peter Blacker as EVP, who was previously SVP. He joined NBCU after a stint as VP, Multicultural & International for AOL Media Networks. The mandate of the new unit is to develop custom branded entertainment, digital and mobile cross-platform solutions. What does this mean? Well, cuts on confusion...more here.
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We don't see many fundings in the online photo space anymore, but this one at least has something of a business model… Picateers, which does online photo sharing for school fundraisers, has raised a $6.6 million second round from backers including Norwest Venture Partners, according to peHUB, citing a regulatory filing. The company raised $5.5 million in 2006, for a total raise of $12.1 million. The basic idea: rather than hiring a company to come in and take pictures of kids, that are then sold back to parents, the school and the parents can do it themselves, while setting up an online shop. A key to the pitch is that 50 percent of the proceeds go back to the school.
Social Media Deals Report: This 199-page report, filled with charts and data, examines the categories, number and size of VC and M&A deal in social media from 2007 through 2008. Visit the ContentNext Reports page
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 Throughout the past several earnings periods, we've noted when companies were benefiting from the weak US dollar. Of late, the dollar has reversed course, firming against foreign currencies, and the effect this will have on earnings is becoming a big discussion point. A couple weeks ago, there was a report on what the changes meant to HP, one of several tech firms with significant international exposure. In a note today, Bernstein's Jeff Lindsay specifically looks at what it all means to major internet firms.
Under the most pessimistic scenario—the dollar gaining another 10 percent by the end of 2009—earnings could be whacked by 8 percent at a company like eBay (NSDQ: EBAY) and 13 percent at Yahoo. Not that Yahoo (NSDQ: YHOO) needs any more bad news, but he notes that despite its relative lack of international revenues (only 30 percent), it's actually the most vulnerable to the trend, given its big asset holdings in Asia (a key component of the company's current value): "Yahoo!'s valuation includes a large component for the value of these overseas investments of approximately $8.71/share at the end of 2Q:08. Under our Pessimistic Scenario, in which the dollar appreciates by a further 10% this contribution to value would be reduced directly by $0.87 to $7.84/share."
Of course, this could all be a "head fake" so to speak and the dollar may resume its slide. In this scenario, conversely, Yahoo is the biggest beneficiary. Although Google (NSDQ: GOOG) now derives over 50 percent of its revenue from overseas, the company is the least vulnerable to currency movements, given its heightened level of profitability.
One interesting point made in the report is the "asymmetry" of currency movements: "Another important factor is that the exchange rate impact on operating margins is its asymmetry. For a company with 20 percent operating margins, 10 percent depreciation in the dollar would give a 182 basis point gain in reported operating margins. However, 10 percent appreciation in the dollar would cause a 222 basis point fall in reported operating margins. This phenomenon happens because more of the company's costs are US-centric and this causes the asymmetry as the magnitudes of the overseas costs and revenues are impacted to a different extent by the dollar exchange rate."
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Over the weekend, U.S. Sen. Joe Biden, who pulled out of the 2008 race for the Democrat's presidential slot when voters gave him the cold shoulder, moved back in as Barack Obama's choice. So where does he stand when it comes to tech policy? He didn't respond to the questions for CNET's (NSDQ: CNET) 2008 Technology Voters' Guide, leaving Declan McCullough to piece it together from the veteran senator's well-documented record. Some examples:
RIAA, MPAA: Biden's track record here is pro-copyright and pro-establishment. As CNET reminds us, he held a Foreign Relations Committee hearing in 2002 on "Theft of American Intellectual Property" without including any internet company, p2p network or consumer group. This year he proposed a $1 billion program to monitor P2P networks for "illegal activity" and a version made it through Judiciary. He sponsored an RIAA bill last year to restrict recording and playback of individual songs from satellite and internet radio stations. In the past, he urged the Justice Department to prosecute individuals who allowed mass-copying intentionally through P2P.
Net neutrality: In 2006, Biden "sounded skeptical" about the need to legislate net neutrality when the subject came up in a Senate Judiciary Committee hearing. Would subsequent events like the FCC's ruling against Comcast (NSDQ: CMCSA) and Obama's support for giving the FCC pre-emptive authority make a difference? My take: too soon to tell how he'll react this time around.
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 LinkedIn is on a Hollywood PR offensive, and positioning itself as the place where out-of-work and freelance creative professionals: it started with LinkedIn Strike Survival Guide (ahead of the then-anticipated SAG strike), as "an ideal way to learn how to tap the greatest asset of your professional life: your network." Then a fawning LAT profile of founder Reid Hoffman. And then LinkedIn's entertainment marketing manager Rob Getzschman workshops at Los Angeles Film Festival.
Then a phone-in show on local public radio station KPCC, on the "Pat Morrison Show", which was an extended advertorial for the social network (no direct link to the segment, but go to this page and search for "LinkedIn), and finish up tonight with a short story in NYT. Both KPCC and NYT has the same example of how someone used Linkedin in Hollywood: Robert Margouleff, a producer of Stevie Wonder albums, who lost a big sound-mixing client, and then found work again through LinkedIn connections…
Brooke Barnes takes couple of major digs at the site in the story: "As LinkedIn struggles to remain relevant in an ever more socially networked world"; and "known to most people as the Web site they begrudgingly visit every few months to approve be-my-contact invitations." Ouch.
Considering that LinkedIn only recently started allowing users to add pics in their profiles, and no other ability to adds pics, audio or video (part and parcel of any creative professional's portfolio these days), it still has a long way to go....
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 Microsoft's (NSDQ: MSFT) talks with WPP Group seem to be taking a more serious turn on the subject of the software giant selling off digital ad shop, Avenue A/Razorfish, AdAge reports. Microsoft acquired Avenue A/Razorfish when it bought parent aQuantive last August for about $6 billion. That purchase also included other aQuantive properties, among them ad network Atlas and digital marketing solutions provider DrivePM.
Initially, Microsoft felt the online agency business represented by Avenue A/Razorfish was fairly ancillary to creating an online ad platform that would compete with Google (NSDQ: GOOG) and DoubleClick. But Brian McAndrews, at the time aQuantive's CEO and now SVP for Microsoft's Advertiser and Publisher Solutions Group, convinced Microsoft to accept the unit whole. Six months in, however, Microsoft began having a change of heart and looked for potential buyers who might be more interested in taking the agency business. So far, the main prospect has been WPP CEO Sir Martin Sorrell.
-- Avenue A/Razorfish's value: about $800 million: Avenue A/Razorfish contributes roughly 60 percent to aQuantive's total revenues. Calculating its worth based on what Microsoft paid for aQuantive would value Avenue A/Razorfish at roughly $3.5 billion. No one is going to pay that price, especially an ad firm. As AdAge pointed out, that figure would be close to WPP rival Interpublic Group's $4.4 billion market cap (incidentally, WPP's market cap is $10.7 billion). According to Microsoft's 2007 annual report, Avenue A/Razorfish had $345 million in revenue from Aug. 10, 2007 through June 30. And factoring in about 20 percent of a digital agency's revenue as EBITDA, that comes to approximately $69 million in earnings for Avenue A/Razorfish. Despite a brutal ad economy right now, digital agencies' potential growth means that a shop could command eight- to 10 times that figure, AdAge said. And so, the magazine cites a consensus of unidentified M&A experts who say that Microsoft could get around $800 million for the shop.
-- A trade?: In the meantime, given the health of the business, Microsoft isn't necessarily rushing to get a deal done. But WPP has a few reasons for its sudden eagerness. AdAge, citing several unidentified sources, said that WPP wants to get rid of one its companies, Open AdStream, which runs an ad serving platform which it acquired as part of its $649 million purchase of 24/7 Real Media in May 2007. As an owner of agencies, online ad serving is not a top priority for WPP. And so, with Microsoft's disinterest in the agency side, and WPP's less than high regard for the ad serving business, the two seem to have the perfect match for a swap. Still, Sir Martin has repeatedly said that his M&A focus is in emerging markets, particularly Asia. And he still has to sort out his battle to take over audience measurement firm TNS. But if the TNS business gets sorted out—and it appears that situation could be ending sometime soon—that could clear the way for Sir Martin to open up WPP's checkbook for Avenue A/Razorfish and include Open AdStream as well.
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 Did you get a text message or e-mail from the Barack Obama campaign late Friday night (on the West Coast)? I didn't and I'm supposing a few others didn't receive one either. Earlier this month the campaign said the vice president pick would first be announced via SMS and email. Instead the choice came to us through more traditional means, such as the LAT Top Of The Ticket blog where I first caught the news. Sure, it's a blog, but it's also the LA Times. The leak from a "Democratic official" up-ended whatever power SMS and email might have wrested from traditional media as a mass communication tool in politics. The Obama campaign planned to do a first for SMS and it didn't happen. If the leak was authorized—which seems likely since cable news networks and news outlets were confirming the news directly within minutes—did the Obama campaign abandon the first-of-its-kind plan to break the news via SMS and email or did it simply fail on the backend? After all, this wouldn't be the first problem we've encountered with breaking news text alerts.
Update: Well, the Obama website has finally been updated. And here's some of the text message we received at 12:58 a.m. (PT) Saturday, almost three hours after the news first broke: "Barack has chosen Senator Joe Biden to be our VP nominee." Still no email from the campaign though…
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As the print side keeps bleeding, the Los Angeles Times Media Group keeps trying to extend into other platforms, both offline and online: the parent of LAT newspaper has jointly launched ZetaBid, a business that will auction foreclosed homes and other properties...it also has a website where the properties could be viewed. The newspaper has nothing to do with the new business, reports the newspaper.
The other partners are London-based GoIndustry-DoveBid, an auction specialist, and CataList Homes of Hermosa Beach, a real estate brokerage. The partners will share fees paid by the buyer on each home sold. Bob Bellack, who is president of digital media, classified and development for Times Media Group, will be chairman of the new enterprise. This is an innovative idea of expanding its commercial opportunities, and though the real estate market is on doldrums, the foreclosure market as a result is not.
The LAT media group also operates revenue-sharing ventures through its other JV, Classified Ventures (parent of Cars.com and Apartments.com), owned jointly by newspaper companies including Tribune.
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 Great lessons in usability ... Almost as soon as Rafat posted about the Opening Ceremonies of the Beijing Olympics, we started getting queries from people who couldn't figure out how to buy DVDs from NBC. (http://www.nbcdvd.com in case you're looking for it. No, we don't get a cut.) I looked at NBCOlympics.com and went right by it, too. I tried searching the site. No dice. I went to NBC Sports PR and was told it was right on the page and easy to find; they also provided a direct link. I looked again and, sure enough, if you scrolled down, there was a promo box for buying DVDs on the right hand side of the home page. OK. We posted the link in our comments and then in the post that was drawing the most search queries and comments from would-be DVD buyers. That solved the problem for some people until the link broke. When I contacted NBC to let them know they had a broken link, I was told to use the shorter URL. Again, ok, but sub optimal given that the other link had been out for a week and could at least have been fixed or redirected. Meanwhile, the queries to us continue, especially from people told to buy the Michael Phelps DVD or others at NBCOlympics.com, who then can't figure out how to give NBC their money. We've had multiple requests just since I started writing this.
Granted, some people will always be clueless—it's not hard to find now through a Google search, for instance—and NBC is selling DVDs anyway. I have no idea what NBC's DVD deal looks like; I'm sure it's not the biggest line item in the rev stream list. But I'm equally sure it will be smaller than it needed to be because NBC, for all of its vaunted commercial ability, was stuck in a template.
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That's the estimate from eMarketer: it says that the online video advertising on NBCOlympics.com will reach a relatively small $5.75 million, only 1.1 percent of this year's online video ad spending projection of $505 million in the US. No methodology of how they arrived at that figure, so take it for what it is worth..I have asked them about how they arrived at this figure..more when I get more.
They do give some reasons of why it could be this low: Even with the Olympics' popularity, much of the record traffic on NBCOlympics.com was not video viewers. The fact that users were forced to download Microsoft Silverlight, as oppose to using Flash, may have hampered its chances to get an even bigger audience. Maybe NBC will chime in now…
For reference, last week, NBCU claimed $10 million in total Olympic ad sales. Earlier, Lehman Brothers analyst Doug Anmuth forecast that internet ads will attract only $70 million, out of a global $1.5 billion ad spend across all media content related to the Beijing Games.
Update: here's how eMarketer came at the figure: NBC's reported video streams the first seven days (25.6 million), averaged out over whole 17 days of Olympics (with increase in daily average for more video viewers over time), estimated 1.5 ads per stream, estimated $50 CPM. Seems reasonable and simple enough, but also consider that the ad packages on the site are likely to be both video and banners, so tough to break out.
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-- Digital now 25 percent of WPP's revs: During the first half of '08, WPP Group's revenue gained 14.3 percent to $6.1 billion (£3.3 billion), despite a worsening ad economy overall. Also, the UK ad holding company said digital now makes up 25 percent of its $13 billion in total annual revenues—about $3.25 billion. Still, it's not a great leap from where things stood last year at this time, when digital was 23 percent of total revs. Separately, WPP now owns a majority of Shanghai-based in-game advertising outfit InGame Ad Interactive Technology's owner IGA Ltd, after buying a further 12.82 percent share of the company, giving it 55 percent ownership in all. More details on our sister site, PC:UK.
-- Google promises "improved" quality on AdWords: Google (NSDQ: GOOG) is replacing AdWords' static per-keyword Quality Scores with a system that will measure an ad's relevance in real time. As News.com points out, Google uses an auction system that decides which ads are placed next to search results. Auction winners aren't chosen solely by price, as Google essentially increases the minimum bid threshold for ads that don't meet its "quality score," such as a good click-through rate or, in a newer addition, how fast a marketers' website loads. In April, some AdWords members complained that new "improvements" led to higher CPC charges, as conversation rates trended lower.
-- Facebook ads get more engaged: Facebook hopes to boost dismal click-through rates with a "Engagement Advertisements," which resemble other social net widgets and encourage members to share and comment on them. The ads come in three styles: "Comment," "Gifts" and "Fan." The latter mimics Facebook fan pages and is being aimed at luxury marketers and established brands like the game Guitar Hero.
-- Marketers slash ad budgets: No big surprises in the Association of National Advertisers' survey that finds that 53 percent of marketers it spoke to expect to cut their ad spend in the latter half of the year. The range of the cuts for that group will range 1 to 10 percent, while 27 percent say their budgets would be reduced between 11 to 20 percent, while 10 percent were envisioning cuts of over 30 percent. Respondents weren't asked about specific media or if they would switch from traditional to digital.
-- Crest finds better marketing through Twitter: Procter & Gamble has gone light on TV ads, heavy on bloggers for its latest product launch, Next month, the packaged goods marketer will begin putting Crest Clean Intensive Cleaning Paste, a new weekly teeth-cleaning product, on the shelves and it's relying on word-of-mouth (no pun intended) to get it in consumers' hands. Under its Vocalpoint buzz-marketing program, P&G claims that bloggers who have been sent the new toothpaste have been Twittering about it.
Social Media Deals Report: This 199-page report, filled with charts and data, examines the categories, number and size of VC and M&A deal in social media from 2007 through 2008. Visit the ContentNext Reports page
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Activist fund Harbinger has added to its stake in Cablevision… In a filing, the fund says it now owns 8.1 percent of the company, or 19.85 million shares. Just last week, the company confirmed that it held 4.9 percent at the end of Q2. Other than the growing stake, it's not clear whether they plan a move similar to what they did with NYTCo (NYSE: NYT). But Cablevision (NYSE: CVC) obviously feels the heat. In addition to promising a strategic review, the Long Island-based cable operator also said last week that it would start paying a dividend, a first, minimal towards mollifying shareholders.
Update: Harbinger hopes to meet with management soon, according to Bloomberg: "Cablevision Systems Corp. investor Harbinger Capital Partners said it is looking at all options after raising its stake in the New York-area cable-television company to 8.1 percent. Harbinger hopes to meet with management 'in the very near future,' Charles Zehren, a spokesman for Harbinger, said in an e-mailed statement today." As Cablevision has already started having meeting with investors, it shouldn't be too hard for Harbinger to get an audience.
The news isn't making big waves in the markets: Cablevision shares are up about 1 percent, which is roughly in line with the indexes.
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 From the we-kill-ourselves-so-you-don't-have-to department, comes a trifecta of conferences we are planning in late October in New York City, with the intent of hitting on strategically important verticals in the media/entertainment industry.
-- October 28, Future of Business Media: Our full-day second annual Future of Business Media conference, covering the business of, well, business media, and will build on the themes that came out of our successful conference last year. In a year that saw News Corp (NYSE: NWS) finally absorb Dow Jones, CNBC fend off the launch of Fox Business, the Thomson Reuters (NASDAQ: TRIN) merger go through, TheStreet (NSDQ: TSCM) introduce Main Street and Business Week introduce a "search product", what were the trends, who were the players and where will business media be this time next year? With the weakening economy and the credit crisis, these business media companies have seen cuts where it hurts. How is the industry coping with the downturn, and what are the bright spots? What are the pockets of innovation?
-- October 29, EconSports: A new half-day conference, EconSports will focus on the economics of online/mobile sports media and leagues' own efforts. From Olympics, to major leagues to the half-pipe, sports is a topic that touches everyone—and it seems like everyone is looking for ways to make new media money from it. Media companies and leagues have been on the forefront of adopting digital media technologies but the business of online sports ranges from community-based little league sites to real time streaming video of major and minor sporting events. EconSports will delve into everything: the complicated economics of league rights, data business, syndication, exclusivity, premium and more.
-- October 29, EconWomen: Also a new half-day conference, EconWomen will focus on the economics of women-centric digital media. The first wave of internet development included a lot of efforts aimed at women—and many failed, consolidated or had to morph because they were too far ahead of critical mass. That critical mass is finally here, with women not only online but spending large amounts of time and money. Media companies old and new are wooing women through gender-specific sites, demo-based ad networks and lifestyle portals. Established companies like iVillage and Oxygen have been gobbled up by big media (NBC Universal (NYSE: GE), in those cases) while new players like Glam, wowOwow, Sugar, Yahoo! (NSDQ: YHOO) Shine, and others have entered the field.
The venue for all of these conferences will be the newly renovated and relaunched Edison Ballroom. We are in early stages of planning these (yes, we are late this year..that small transaction we went through distracted us for a while), and suggestions on all fronts are welcome. We are lining up speakers, sponsors and the logistics now. Send the editorial suggestion to events AT contentnext.com and for sponsorship opportunities at any of these conferences, ping our business side at advertising AT contentnext.com. Stay tuned for more details as we go along…
Social Media Deals Report: This 199-page report, filled with charts and data, examines the categories, number and size of VC and M&A deal in social media from 2007 through 2008. Visit the ContentNext Reports page
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-- NFL extras available through Verizon: Starting this weekend Verizon (NYSE: VZ) video and wireline broadband subscribers can watch as the NFL kicks off preseason games. Users can access live broadcasts of Thursday Night Football games from multiple camera feeds, live audio feeds, chat with other viewers, on-demand video highlights and game stats. NFL-related content is available to all FiOS and high speed internet subscribers. Release.
-- Model.Live debuts on Bebo and Vogue.tv: Vogue Magazine's 12-episode model series has debuted on Vogue.tv and Bebo. Viewers can interact with the stars, three IMG models, and can receive updates on the models throughout the day via video diaries, text messages, photos and blogs.
-- Disney (NYSE: DIS) launches parents' social net: After several months in the making, the company has finally launched Disney Family.com Community, its social net aimed at parents. While the site is designed to present various kinds of information to families, users can also connect via shared interest, age of children, family setup, geographic location and more.
-- Sony's (NYSE: SNE) Crackle premieres Michael Madson series: Sony's online entertainment venture Crackle.com has launched Coma, a new web series starring Michael Madsen, George Hamilton and Paul Ben-Victor, Variety reports. The seven-episode series, set in contemporary noir metropolis, will feature product integration using Sony Vaio laptops and premiere first on Crackle before being syndicated on YouTube, Hulu, AOL, Adobe and mobile phone services from *AT&T* and Verizon.
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 Yahoo (NSDQ: YHOO) News is doing more and more original content, something it planned to do when Lloyd Braun came in to do that for the whole Yahoo Media group, and then pulled back after he left....now it is picking up the baton once again, this time as a series of high profile video/text interviews with world leaders, as AFP points out. Among its recent interviews: South Korean president Lee Myung-bak, the first internet-only interview US president George W. Bush, and US Secretary of State Condoleezza Rice, the latter two done in association with Politico.com. Yahoo is also working with Politico reporters for coverage of the coming Democratic and Republican party conventions.
The pitch is simple to get these "exclusives": "We get these interviews because we have this global audience of 500 million viewers," director of editorial programming Jessica Barron told AFP. "Yahoo News is a news organization," she said. That's news. Yahoo News has typically worked with newswires and other content providers for its site, and it still is the biggest part.
Yahoo Sports also has a dozen reporters on the ground at the Olympics in Beijing to cover events and interview athletes.
Updated: By coincidence, or more likely by design, another story, this time in Variety, about Yahoo Music's original content efforts, and how it has become a repository of original concerts and music. "Nissan Live Sets, shot in HD on a soundstage on the Fox lot, has quickly become as important a concert series as exists," the story says...well, maybe that's stretching it a bit, considering it is only for certain sections of popular music, especially the ones that try to get exposure through late night talk shows. But having been to one, I can vouch it is very well produced.
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Mansell Group, a data-based marketing company, has bought e-mail marketer Sevista Technologies. Terms were not disclosed. Atlanta-based Mansell will merge Sevista with its existing e-mail marketing unit, EnableMail. With this acquisition, Mansell wants to look beyond e-mail and and build up its full digital messaging and marketing offering, including SMS and broadcast voice. Release
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  Last December, ESPN (NYSE: DIS) exercised an opt-out clause in its seven-year digital rights contract with Major League Baseball Advanced Media. Today, the two announced a new deal that runs through 2013—and, in a first for Major League Baseball, allows live streaming of games. ESPN now has matching digital rights to most of its TV events with one notable exception: the National Football League. I spoke by phone separately with ESPN's John Skipper (pictured, left) and MLBAM's Bob Bowman (pictured, right) about the agreement, how it came about and what it means for both.
Why change?: Skipper explained that a lot of the earlier deal was structured around Mobile ESPN because "we needed extensive rights to do our own phone." Without the MVNO, it made sense to reexamine the rights. "When we opted out, we told major league baseball it was not a negotiating tactic. We need a new deal." They kept the previous deal in place. (Unlike most leagues, the digital rights are held by MLBAM and so separate deals are needed for digital and TV.) "Baseball is really, really important digital content because of the volume of games and the time of year they play." Bowman: "If they have the rights in a country, they have the rights to stream." The deal does not include Korea, Japan, China and other countries covered under a different agreement with ESPN Star.
A first for baseball: Bowman: "This is the first time we've allowed someone to stream live games and we do it with a lot of thought. They understand rights and they treat rights appropriately. While I think it's a value-for-value exchange and it's fair for both sides, we wouldn't have done that with many other potential partners." None of MLBAM's other partners—Fox Sports, for instance—have a clause (usually known as most favored nation or an MFN) that automatically grants them the same rights ESPN has so it would be case by case. If Fox asked? Bowman: "ESPN and Fox are such large national partners, we're duty bound to negotiate with them. ... They're so vital to the industry that ... if they wanted to do something we'd have to work with them very hard."
Skipper: "Putting this stuff online doesn't really keep people from watching your television. ... Bowman, I must give him credit—also understands he can build his online business and work with me on building our online business." Bowman: "It seemed to make sense to us. In some ways, it's helpful to promote MLB.TV." In fact, ESPN has to promote MLB.TV.
Strictly cash: Skipper acknowledged that there was some revenue sharing in the last deal. "This deal we're paying cash for valuable rights." Bowman wasn't talking financial details either, saying only, "we believe in our content and we're grateful that ESPN does, too." The previous deal was on track to produce $140 million overall.
Multi-platform math: Skipper and Bowman are fairly evolved on the concept of making games available simultaneously on multiple platforms. As Skipper puts it: "It's not cannibalistic if all of it is ours. .. It's hard to resist things that are good for your customers. If you keep trying to keep people from TiVo-ing things or not get games, ultimately you're going to make your customers mad."
Local live streaming: Earlier this week, the NBA, which held back local rights when it made its recent deal with Turner Sports, said it wants to have local market streaming of live games. Bowman says this deal is subject to all blackouts local and national. "We understand the importance of local rights economically, philosophically and baseball was wise to set up the system they have. When the time is right and in the manner that is right, it will occur. Maybe in five years but no one knows. There are so many important stakeholders her— the fans, the rights holders, the affiliates, there's just a lot of stakeholders here. maybe the NBA will start down a good path and we'll see." At ESPN, says Skipper, "if we have exclusive rights, we expect to be the only way to get there."
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College Tonight, the low-tier, OTCBB-traded social net, is acquiring Gridiron Bash, which is described as: "a series of colossal celebrations tied to spring football games at top tier Division 1 campuses across the country." Sounds fun. So how does it fit with the a social networking site? College Tonight is mainly designed to facilitate real-world meetups and events (for college students), so it actually fits. Plus, the plan is to use Gridiron Bash to expose the site to more college students. It sounds ambitious: "The exposure of our brand at Tier 1 schools will likely result in significant viral growth." There's a forward-looking statement for you. Terms of the deal were not disclosed. College Tonight raised $1.6 million as part of its reverse merger to go public last year. Release.
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 Reed Elsevier (NYSE: RUK) expects the sale of its Reed Business Information trade magazine unit to complete as early as October. In a memo seen by Dow Jones, Marianne van Leeuwen, CEO of the Holland operation, says bids were made for RBI "since last week". "In the first three weeks of September, the global board of Reed Business will give a management presentation to potential acquirers," Van Leeuwen wrote, though she said she did not know who the buyers would be.
BusinessWeek publisher McGraw-Hill (NYSE: MHP), private equity house Bain Capital, Providence Equity Partners and Apollo Management have been linked with bids, while Billboard publisher Nielsen was also linked. In half-year earnings last month, Reed Elsevier reported "strong buyer interest" in RBI. This means we will have a new owner of Variety very soon…
Updated: Reuters reports that German publishing giant Gruner & Jahr is interested in buying the division, citing a German newspaper report...the company exited the U.S. market in 2005 after a disastrous foray buying FastCompany and launching the Rosie magazine. It sold its women's magazine portfolio to Meredith (NYSE: MDP) and its business magazine portfolio to Mansueto Ventures.
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The funding activity in India in digital media is picking up fast: Bangalore-based online DVD rental company Seventymm has received $12.5 million (Rs 50 crore) from NEA Indo US Ventures. This will be the third round of funding for Seventymm, which now has a total capital of around $22 million. While DFJ with ePlanet Ventures had invested $2 million in 2005, the rest was raised from Matrix Partners in 2006.. Last year Seventymm had acquired Delhi-based online DVD rental firm Madhouse, which had received angel investment of $228,000.
There is a lot competition in the DVD rental segment in India with entry Reliance ADAG's Big Flix and Nimbus Communication's Showtime. ADAG was also reported to be in talks to buyout Seventymm after it made its entry into the DVD rental segment. Nimbus communications also made an entry into this segment in May this year with their entertainment rental and sale business called Showtime. Then there is also Moser Baer, who has released DVD and VCD movies at a price of Rs 34. More on our India site ContentSutra.
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iList, a stealthy online classifieds site, has raised $1.5 million from DFJ, according to TechCrunch. Other investors include Dmitry Shapiro (Veoh) and Alex Bard (Goowy). Information is kind of scant. The site just says: "Craigslist is so 1995!", so you can see where they're coming from. TC suggests it will be similar to the various social marketplace apps on Facebook. Craigslist's dominance of this space and the fact that it can't be under-priced hasn't deterred all comers. Fabrice Grinda's OLX has raised over $23 million.
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It's been in limbo for months but ESPN (NYSE: DIS) and MLBAM finally have extended their digital rights deal through 2013. The just-announced agreement covers a plethora of digital platforms, including the right to live stream games and other events like the Home Run Derby when ESPN has TV rights. No financial terms yet but MLBAM doesn't come cheap. Some details:
-- Platforms include ESPN.com, ESPN360.com, ESPN's mobile initiatives (ESPN Mobile TV, ESPN Mobile Publishing, ESPN MVP), and emerging platforms including video game consoles, interactive television, interactive online (ESPN Game Cast) and portable devices (examples: iTunes/iPod, Zune, XBox Live). This includes "all new platforms ESPN creates or develops relationships with through the end of the agreement." It also covers syndication of ESPN-licensed content.
-- The rights extend worldwide with the exception of some Asian and Pacific Rim markets. Not sure yet which are excluded.
-- In addition to live game and event streaming, ESPN gets expanded online and mobile highlight rights.
Sports Business Daily points out that the deal comes seven months after ESPN exercised an out clause "three years into a seven-year, $140M deal." SBD says the live game streaming started with Sunday night's game, using Sports Center to fill commercial time.
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 Microsoft (NSDQ: MSFT) is restructuring its Search Business Group to add a new group geared toward commercial search. It's picked Multimap CEO Jeff Kelisky to be GM of this new Commercial Search unit, which covers Live Search cashback, MSN Shopping, local, consumer mapping, Virtual Earth and mobile. It's part of the big plan to improve the performance of Live as a search and advertising platform. Kelisky will report to Search Business Group GM Brad Goldberg in Redmond but will remain based in London.
Goldberg: "We are increasing our focus on commercial search, including changes to the search leadership team and engineering team and in order to lead this market we need to bring all find, explore and commerce needs together. (Jeff) will direct this team to ensure Microsoft continues to innovate and deliver so that consumers choose us to find local information and services." Goldberg said Kelisky understood particularly how to navigate search, local services, business search and mobile.
Kelisky: "Microsoft has the resources to take what we've started and combine it with its other assets to be the market leader in searches that address the needs of not just 'find' but also the 'research', 'exploration', and 'transaction' phases of a user journey. This is a key strategic push from Microsoft to deliver customers new and innovative services to help when they are researching or buying a product or service." Microsoft enjoys a paltry 1.8 percent search market share in Europe and is building a Search Technology Centre in the continent to drive search R&D.
This plan seems to centre on inclusion of mapping services, with Multimap taking more and more chairs at Microsoft's top table. It's the second time bosses from the company, which Microsoft bought for a reported £24.4 million in December, have been promoted within the company since May, when Multimap B2C GM Jim Cruickshank was upped to be Microsoft EMEA director of mapping, local and shopping. Cruickshank will once again report to Kelisky. And, prior to Multimap, Kelisky spent three years at management consulting firm AT Kearney specialising in corporate restructuring and post-merger integration.
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Online audience measurement firm Quantcast has hired Todd Teresi, who is leaving Yahoo (NSDQ: YHOO) this month as SVP, Publisher Channel. At Yahoo, Teresi took on handling the Publisher Channel last year and helped manage off-network partnerships like WebMD (NSDQ: WBMD), Turner & Cars.com. He was at Yahoo for over nine years. Before that, Teresi served in the tech M&A practice at PricewaterhouseCoopers. He'll start his new job after Labor Day and will be charged with heading business development efforts. Release
-- AdAge: Quantcast doesn't charge web publishers or ad agencies for using their data. But the San Francisco-based company may soon be rolling out services that will come with some sort of payment model. One thing Quantcast isn't doing is heading into the ad network business, Teresi says. He tells AdAge, obliquely, "We look at how we enable the existing players to have a better digital-advertising opportunity." Quantcast CEO Konrad Feldman adds that he sees the online ad business moving to an "impression-based economy" and that the company's business rests on the notion that display ads should be as targeted as search.
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 Ad net Turn Inc. has announced its second big raise just this year… The Redwood City, CA-based company has taken a $15 million third round led by Focus Ventures, along with past backers, Norwest Venture Partners (NVP), Trident Capital, and Shasta Ventures. The company announced a $15 million raise back in March, though actually that round was closed last year. It has now raised a total of $37 million. The overall numbers look impressive for Turn: The company is the 16th largest ad network, per *comScore's* measurements, and it did 1.9 billion ad impressions in July. CEO Jim Barnett, formerly the CEO of AltaVista, told me they're benefiting from superior targeting technology, a model that combines CPA and CPM models and a high level of control for publishers, ensuring that they won't receive brand-denigrating ads. The money will be used to add personnel in sales and client services, expanding beyond its current staffing level of 40.
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 We have added more top speakers to the lineup for our EconMusic conference, which will explore the emerging economics of the digital music business at London's Natural History Museum on September 23.
New speakers are:-
-- Tom Erskine, head of go-to-market, Nokia (NYSE: NOK) Music
-- Tom McLennan, head of music, Vodafone (NYSE: VOD) UK
-- Julian Zmood, head of music business development, O2
-- Marla Shapiro, broadcast and online business director, MCPS-PRS Alliance
They join a list including Billy Bragg, Last.fm co-founder Martin Stiksel and more; see the conference site for full details. Early bird ticket sales are now open
If you have any questions or suggestions about the program, email us at events AT contentnext.com. For sponsorship queries, email our business side at advertising AT contentnext.com.
Social Media Deals Report: This 199-page report, filled with charts and data, examines the categories, number and size of VC and M&A deal in social media from 2007 through 2008. Visit the ContentNext Reports page
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 A wrenching legal battle, a sharp downturn in the economy and nearly a year of planning later, Barry Diller's experiment in building an internet conglomerate comes to an end. Starting today, IAC (NSDQ: IACI) officially becomes five independently traded companies—new IAC, HSN (NSDQ: HSNI), TicketMaster (NSDQ: TKTM), LendingTree (NSDQ: TREE) and Interval (NSDQ: IILG)—each with its own board and management, without obligations to favor their siblings. Despite all the company's gone through, CFO Tom McInerney, who will remain on the same position with new IAC, assured me that the "fundamental premise from the day we announced, (is) more true today." Even the stormy economy doesn't mean it's a bad time to kick the birds out of the nest: "The environment being what it is lays bare that it is the right thing." The key is investor choice: "Our shareholders can now decide… do they like the long term profits of LendingTree?… do they recognize the potential of HSN?… The distinction between the companies are clear; the stories are clear."
But while it's obvious that the split lets investors target their investments, how the companies benefit operationally is not so clear. McInerney acknowledged that there won't be any immediate changes. Consider the alternative: "What would an IAC shareholder want for Interval as part of a broader IAC? It's unanswerable.. it's like solving a Rubic's cube." Now there are all kinds of options: "Maybe interval doesn't change how it operates… Maybe TicketMaster uses its currency (for acquisitions)… Or maybe one or two of these companies gets bought, because there's a better owner for it. Much more after the jump.
-- New IAC's $1.3 billion: in addition to the breakup, the other big financial event was the $2 billion that IAC raised via debt. IAC will end up with about $1.3 billion in cash. McInerney denied that this changes much: "I don't think that substantially we felt constrained before. I don't think it's 'We now have cash and we didn't before.' ... cause we had cash before. We certainly had the ability to borrow on IAC credit. So what's the the difference? "I think what's changed, clearly, is the discipline and focus with which that capital will be deployed." In the past, said McInerney, TicketMaster would make broad bets on the growth of interactivity: "When that worked it worked brilliantly well: TicketMaster was a phenomenal acquisition; it was bought before it sold a single ticket online." Match.com was another one. Not so successful: The coupon business Entertainment Publicatons. "We thought that would evolve into an online business, but it hasn't. So we sold it." Another difference, not stated by McInerney: Expectations. Sure, the company might have been able to do any deal it wanted to before, but now that it actually has the cash, the expectations for action will likely be heightened.
-- Start-up valuations: As CEO Barry Diller did on the company's latest conference call, McInerney took a shot at some of the financial alchemy used by startups to build up their valuations: "They've gone through one, two, three rounds of financing and they've had some success and there's this kind of built in expectation of 'okay, I raised money at a $20 million pre-money valuation and I had 1 million uniques. And then I've got 3 million uniques and I've launched this revenue model… and I've got a little early traction and I'm raising more money and it has to be an up round so it's $40 million pre money. And all the sudden I've got 5 million uniques. It has to be an up round at $75 million." Of course, that means an actual sale has to be around $125 million, to give investors their return. "I understand why a VC or a private equity player would say, 'Iook, if you're going to take me out I need to get a return' ... (but for the buyer) logically it doesn't relate to the value of the company.
-- Acquisition goals: So IAC says it won't buy into richly valued, VC-backed startups. Instead, it wants to find rare situations where it can add value to a fairly valued firm. He described Lexico, bought for around $100 million back in May, as a prototypical acquisition. He said it was acquired at a mid-teens multiple, but that if IAC can add value to it as planned, it will contract towards 10x: "We think we can improve the monetization of the site; we think we can sell more display advertising. | |
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