Content Matters

Yes, Blogs Can Be Attractive M&A Candidates

About a week ago I wrote a post on blogs as M&A candidates.  I was responding in part to an article in the Mergers & Acquisitions Journal that included a number of quotes from Seth Alpert suggesting that blogs were riskier than traditional media companies. I'm glad that in that same article, I was quoted saying "investment in the space should be a no-brainer".

Fast forward a week and look at the news. Yesterday, we had CBS acquiring CNET for $1.8 billion (wish I could write that with a Dr. Evil sounding "one beeelion"). Sort of like a Triassic Period dinosaur acquiring a wooly mammoth. CNET's not quite as old as CBS, but it's proven to be about as nimble.

Meanwhile, late this afternoon, Mashable broke the news that Conde Nast's Wired division was acquiring Ars Technica. That's right, a traditional publisher acquiring a blog. Surely that must be a mistake, as all the experts indicated that blogs weren't legitimate acquisition targets. Perhaps the Conde Nast people just didn't read enough to learn what a horrible mistake they were making.

Or, perhaps, the team at Conde Nast reads their own stuff (or eats their own dog food, if you prefer). In particular, the blogonomics posts from Felix Salmon, blogger for Conde Nast Portfolio's Market Movers blog. Conde Nast did not disclose the acquisition price, but it was rumored to be for $25 million. If the figure is correct, that's a $10 million premium over the $15 million valuation assigned to Ars Technica by 24/7 Wall Street's Doug McIntyre. And, it's about $1.775 billion less than CNET cost.  With a reported 4.5 million monthly uniques, it seems to me that Conde Nast has gotten itself a pretty nice property which complements Wired well and should yield some nice CPMs as a package sold by the CondeNet sales force. 

This should also be good news for the other blogs on Doug's list including Gawker, HuffPost, TechCrunch and others, as I believe this may kick off a small flurry of similar deals.

At SIIA NetGain

I will be at the SIIA NetGain conference in San Francisco Sunday – Tuesday. NetGain should be a very interesting conference, as it brings together both halves of the SIIA – the software and content groups.

The convergence of these two groups at the conference takes place at an opportune time, as the emergence of new application-led platforms from companies like Google and Salesforce.com which marry technology with content in a software-as-a-service environment.

I will be discussing the impact of these emerging platforms on a panel Monday afternoon entitled Platforms – Will They Tilt in Your Favor? The panel also features Tom Herrmann of Oracle and ZoomInfo President Bryan Burdick and will be moderated by Tim Miller, analyst at the 451 Group. It looks as though our panel is the last one before cocktail hour, so I hope you’ll join us for what should be a fascinating discussion.

For SIIA attendees who use Twitter, we’ll also be using LiveTwitting, a service that will enable participants to twitter the SIIA event, with all of the results displayed in a single RSS feed or website. I’ve provided instructions on how to LiveTwitter the event here. If you’re a Twitterer, please join us in live-twitting the conference.

LiveTwitting SIIA NetGain

For SIIA NetGain attendees who use Twitter, we’d encourage you to LiveTwitter the event.

LiveTwitting is a channel that allows us to post tweets during the conference. All of our tweets will be organized according to the appropriate panel.

Here are quick instructions on LiveTwitting:

First, from your Twitter account go to www.twitter.com/livetwitting and select follow (or, if you use a different Twitter client, just follow @livetwitting).

Next, to turn on Live Twitting:

• d livetwitting ON NetGain # Session Title (a session will be created for each panel session)
• Simply send your tweets as usual
• When finished, end livetwitting by typing:
  • d livetwitting OFF
• More features can be found here

Please use the session titles below for each of the conference sessions (this will ensure that everyone’s comments are mapped to the same sessions):

Monday
Welcome Remarks:            welcome
Keynote - John Hagel:        Hagel
State of the Industry:        Industry
Previews (morning):          Previews1
Blurring Perspectives:        Blurring
Play With a Partner:          Partner
Software and Content on the Mobile:        Mobile
Previews (afternoon):        Previews2
Revelation or Revolution:   Social
Platforms – Will they Tilt?   Platforms

Tuesday:
Keynote – George Hu:            Hu
State of the Industry-Private Equity:        PE
Previews (morning):            Previews3
Enterprise Opportunities:     Enterprise
Keynote: Matthew Glotzbach: Glotzbach
Previews (afternoon):            Previews4
Keynote – Clay Shirky:            Shirky
State of the Industry-CEO:     CEO

Need help? Send me a tweet @graubart

I Love Great Marketing Events

I've spent most of my career with startups and small companies, so I've never had a big enough marketing budget to do major events. But that doesn't stop me from appreciating the work of others.
Earlier today I got to watch a real pro - Peter Shankman - pull together a very successful promotional effort for Harrah's Atlantic City hotels. Harrah's has gone through a makeover and Shankman's promotional efforts were designed to give away a couple of hundred one-night stays at the hotel, all on June 5.

The campaign centered around a single event which took place during lunch hour today at the corner of Wall Street and Broadway. Shankman arranged for four gorgeous models to be body-painted, complete with Harrah's logos. They gave out "keys" each with a URL and code to get your free room.

Four body-painted gorgeous models will get attention anywhere, particularly in the testosterone-filled Wall Street area. You can see the crowds below and even New York's finest getting into the act.

What made the campaign most interesting to me is that I got to follow the early stages of it through Peter's emails and Twitter tweets. You see, Peter has an intra-day email for the PR community called HARO - "Help a Reporter Out". The emails list specific editorial queries sent to Peter by various journalists. Subscribers (there are now several thousands) respond to those inquiries for which they can provide a relevant response. The service is free and all that Peter asks is that any responses remain on target.  I'd also been following Peter (or as I knew him, @skydiver) on Twitter for a while. Finally at today's event I got to put the face to the tweet, so to speak.

For more details and images, visit Peter Shankman's website.

If You Don't Like the Answers, Just Ask.com Again

After Answers.com could not complete the financing to acquire them, Lexico, parent of Dictionary.com, has agreed to be acquired by Ask.com.

Ask, owned by IAC InterActiveCorp (NASD:IACI) agreed to be acquired by Answers.com (NASD:ANSW) for $100 million last fall, but Answers was unable to complete the financing round that would have been required for the deal.

Dictionary.com and it's siblings thesaurus.com and reference.com generate strong traffic today, but, assuming the deal is in the range of the original answers.com deal, it seems like a lot to pay for what is, in essence, a set of vanity URLs. Ask states that the acquisition will grow their user base to 145 million unique visitors monthly, which would make them the 9th most visited site.

On CNET, Plaxo and M&A in this Environment

The morning's buzz was all about two acquisitions - CBS (NYSE:CBS) acquiring the downtrodden CNET (NASD:CNET) and Comcast (NASD:CMCSA) acquiring Plaxo.

Looking at the CNET deal, I guess my initial reaction is that if I had $1.8 billion to spend, it certainly wouldn't be at the top of my list. While traffic stats are unreliable, it was fairly well documented last year that CNET had lost about 50% of its traffic, as compared to 2006. The stock, which peaked around $70 during the dot-com boom has been stuck in the $8-14 band for the past five years. Revenue last quarter was $91 million, up a paltry 3% from the same quarter in the prior  year.

About a week ago, I wrote a post suggesting there should be more M&A in the blog space. I think an acquirer would be much better served acquiring a series of blogs to get into this space. The obvious start would be TechCrunch, followed by gadget blog Boing Boing, and I'm sure that Nick Denton would part with Gizmodo for the right price. Heck, you could buy all of Gawker for about a tenth of the price of CNET, according to Doug McIntyre's estimates.

While none of these blogs have the current traffic of CNET, they all have two features that make them much more attractive (IMO) than CNET: growth and a low cost structure.

It makes sense that during down markets, companies fish around for acquisitions at discount prices. What doesn't make sense to me though is bottom-fishing in this space. Rather than buying underperforming assets for bargain basement prices, why not leverage the bad market to buy growth businesses at a (albeit lower) discount?

This is just another case of an old media company buying another dying media business. Hey, CBS - why not go acquire a few newspapers while you're at it?

The Comcast/Plaxo deal is a little harder for me to get my arms around. The deal is rumored to be for $170 million. The two companies have partnered for the past year, with Plaxo serving as the address book for Comcast's data subscribers.
Plaxo is a great utility for keeping address books current. That was its initial purpose and I've always thought that it would be a great add-on for Gmail, Hotmail or Yahoo. Recently, it's tried to leverage its user base to form a social network, Plaxo Pulse. I've joined and have gotten a bunch of invites, but have yet to find any value in it as a YASS ("yet another social network"). PaidContent, via the Washington Post, notes that the companies see the future as leveraging Plaxo Pulse's social networking capabilities via the Comcast set top box. Sounds OK in theory, but I don't see any real value there in practice.

A Blog Is Not a Web 2.0 Strategy

Traditional publishers have largely struggled to embrace web 2.0. That’s not surprising and in some ways sitting on the sidelines might be the right strategy for many of them. At the same time, every publishing conference has an obligatory “web 2.0” session, though many are light on ways for publishers to really engage their audience using social strategies.

This week, I attended Marketing Sherpa’s Selling Online Subscriptions.  The conference was very good, overall, and was filled with specific ideas for improving customer acquisition and retention rates. Of course, there was a Web 2.0 panel, with Oz Sultan (who left the Economist a few weeks ago to join professional services firm Tacit Knowledge) and Jamie Steven of Real Networks and moderated by SEO-PR CEO Greg Jarboe.

Oz  was a strong panelist and shared examples of what they’d done at the Economist, deploying their Debate series, which allowed them to get sponsorship for this interactive forum, developing a Facebook widget for their fan page and more. Jamie shared examples of Real Networks efforts (some successful, others less so) to engage their audience by allowing them to create and share playlists with friends and family. He also shared how their initial efforts to develop a Facebook app have been less successful than they’d hoped and how they’re now partnering with an as-yet-unnamed partner with great Facebook penetration (Slide, perhaps?) for a co-branded widget.

The session was pretty good, but then they got to the question of “what can publishers do to embrace Web 2.0”?  The first response, from Jamie, was “launch a blog”. This is the same advice I’ve heard from web 2.0 panelists for the past few years.

But my question is “Are blogs really a web 2.0 strategy”?

To me, Web 2.0 is all about connectivity, collaboration, engagement and community. While blogs can be a part of that, for the most part publisher blogs become a one-way communication platform; they’re a bullhorn. Most publishers use blogs as a means of posting editorials online but they tend to generate little or no comments.

Oz had other suggestions that I think were more relevant – open up your content and create a mashup with Google maps or do something to generate more value out of your content.

So, by all means publishers, launch a blog. In fact, launch several. But don’t consider that a Web 2.0 strategy.

BLR Seeks Director of Product and Market Management

Business & Legal Reports ("BLR") is seeking a Director of Product & Market Management. BLR is a leading publisher of HR, safety and environmental content. Much of their traditional business has been in print but their growth is coming from their online segments and they're looking for someone to help drive the growth in that area.

BLR recently hired content industry pro Kathy Greenler Sexton as Chief Marketing Officer. Kathy held a similar role at Highbeam Research and also worked for a number of  Internet content leaders such as Inlumen and Individual.com. With Kathy heading their market strategy, BLR should be an interesting place to be in the next few years.

Serious candidates should have 7+ years experience in online publishing, technology and/or product management and a solid understanding of marketing and ecommerce. The full job spec is available on the BLR careers page or on this LinkedIn job profile. The position is based in BLR's Old Saybrook, Connecticut headquarters.

(feel free to mention Content Matters if you apply - can't promise it will help but it couldn't hurt)

Marketing Sherpa - B2B Web 2.0 Survey

In an earlier post at the MarketingSherpa Selling Online Subscriptions conference, I promised to share some charts from Stefan Tornquist's presentation. Stefan is the MarketingSherpa Research Director and these charts are from a survey of 400+ content publishers.

I take these survey results with a grain of salt; publishers may respond differently based upon different understanding levels of the questions or simply because they want to seem ahead of where they actually are. That said, the year-over-year numbers are probably somewhat useful.

This chart asks b2b publishers to assess the impact of various Web 2.0 efforts. Again, my impression is that some of the responses are aspirational and that these publishers are not yet providing these capabilities, but that's just my gut. The key takeaway is the large amount of blue - publishers today largely have no idea of the impact of any of these things. But a few things surprised me, notably how they feel that tagging is having significant impact. I'm guessing this is simply use of Digg and other chiclets in the footer of an article. Meanwhile, uploading photos and videos is assigned minimal impact or no idea, again, I assume, largely because they're not doing it today.

The next chart asks the same b2b publishers for their impression overall of the effects of Web 2.0 initiatives. Three quarters of the respondents believe that it will increase the engagement of their readers, increasing page views and/or time spent on the site. Others are seeking awareness or improved customer retention.

This final chart asks the b2b publishers which Web 2.0 things they are currently doing or have set as a high priority and compares that number to the prior year. The biggest gain is in the use of video clips, which at 35% is much higher than I'd anticipate. Larry Schwartz noted that the 50% figure for blogs seems quite high as well, but I'd guess many trade publishers now have their editors doing some form of blogging, so maybe it's not unrealistic.

Jerry, Meet Carl

Maybe it wasn't the dollars that kept Yahoo (NASD:YHOO) from accepting the Microsoft offer. Perhaps it wasn't even the corporate culture gap between Sunnyvale and Redmond. Maybe it was simply a personality style clash between Jerry and Steve.

Just as Jerry Yang and crew were high-fiving each other and heading back to the foosball table to celebrate their victory over the evil empire from Redmond (NASD:MSFT), Carl Icahn comes along and drops word that he's purchased 50 million shares.

The blogs are all warning that if Jerry thought Steve Ballmer was a tough guy, just wait until a shark like Carl Icahn gets hold of him. But Carl's got a soft side as well, as shown here in this stand up comedy routine from Caroline's Comedy Club via the Livermore Report. Perhaps Jerry Yang just needs to get a sense of humor.