Content Matters

Tumblr is not a blogging platform

Lots of great information out there on the Yahoo-Tumblr deal, but I keep seeing posts comparing Tumblr to Wordpress and referring to it as a "blogging platform".

While that might be technically accurate, just as you might still refer to Twitter as a "micro-blogging" platform, it reflects little understanding to how Tumblr is used today and why Yahoo is buying it.

First and foremost, Tumblr is a social platform. Users post media to Tumblr and it gets shared. A lot. If you look at their user numbers, it tells a lot of the story. As of April, 2013, Tumblr had 170 million users and 100 million "blogs". In other words, its usage is more like Twitter - where most people who are active on the platform both author/share as well as read content. Contrast that to a platform like Wordpress, where relatively few people author content, compared to the numbers who consume it.

The second key difference is demographics. A recent Pew internet study estimates that 13% of  online users 18-29 use Tumblr vs only 5% of those 30-49. Yet Pew's cutoff at age 18 causes them to miss the key Tumblr demographic - teens and tweens, or to be more specific, female teens and tweens.

Another recent study from Garry Tan using Survata data from Y Combinator shows that of those age 13-18, Tumblr has stronger usage than Facebook.

Surveys and studies aside, I can just ask my 14-year-old daughter for insights. She doesn't use Facebook at all. While some of her friends have accounts, they rarely use them. "Facebook is for old people" according to them (perhaps validated by the fact that her grandmother is now on Facebook using the iPad she got for Christmas). She and her friends are active on Twitter, Skype, Tumblr and, of couse, texting. 

If you ask her or her friends to name a blog platform, they couldn't tell you one. And they sure wouldn't consider Tumblr one. "Tumblr is for sharing cat gifs" was her response when I asked her about Tumblr.

So, what Yahoo is acquiring is not a blog platform. We should immediately stop the calls I've seen for all Yahoo blogs to switch over to being authored on Tumblr. Yahoo is acquiring a highly social platform that is used by (mostly female) millenials to share memes and funny images with friends.

That opens up many possibilities for Yahoo, none of which should involve slapping a bunch of banner ads on Tumblr pages. 

As TechCrunch's Erick Shonfeld points out, "Tumblr is also an amazing testbed for new forms of social advertising. Yahoo can now go up against Twitter in that arena"

 

 

 

 

 

Adds Globe & Mail's Shane Dingman, "Tumblr's main value isn't its flexible blog template, it is designed to be a vector for viral sharing"

Tumblr is closer to Twitter or Facebook than it is to Wordpress, Posterous or other blogging platforms. 

I don't know whether the Yahoo acquisition will ultimately be good for Tumblr (though it's a nice exit for David Karp and a win for the NYC startup scene). But what they are acquiring is a way to begin to enage a demographic that otherwise barely knows they exist. And if they are careful, and let the Tumblr team largely stay independent, they will probably learn more about social media and younger users than they could in any other way. And in keeping Tumblr away from Facebook, Microsoft and other potential suitors, they keep Yahoo relevant in a way that it's not been in years.

 

 

5 Companies Who Might Buy Time, Inc.

Today comes word that a potential buyer is exploring the purchase of Time, Inc. from Time Warner (TWX). The Company has three main groups: News and Sports (Time Magazine, CNN Money and Sports Illustrated ), Style & Entertainment (People, InStyle and Entertainment Weekly) and Lifestyle (RealSimple, Southern Living, MyRecipes.com and others). According to reports, the sale could exclude three flagship brands:  Time, Sports Illustrated and Fortune, which would remain with Time Warner.

Who might the suitor be?

Obviously, there could be a private equity firm lining up to bid, but that’s not too interesting, so I thought I’d suggest some potential strategic acquirers.

UPDATE: The NY Times notes that analysts are speculating the bidder could be Meredith Corp.

That would make sense from the content/titles, and could see Jack Griffin doing it from an ego standpoint, but would be a challenge for them to absorb IMO. Assuming a price tag of $2-3 billion, it could cost nearly double Meredith's current market cap.

Disney (DIS) would make a lot of sense. They have the news (ABC) and sports (ESPN) coverage in place and could certainly capitalize on media and web opportunities around the style and entertainment business.

Hearst would find the titles would be hugely attractive, but absorbing an acquisition this large would be a challenge.  

Conde Nast/Advance Publications, publisher of Bon Appetit, Glamour and Vogue, would be a great home for the lifestyle and style brands, but may find a deal too large to absorb.

News Corp (NWS) is in the midst of splitting itself in two. An acquisition here could diversify that publishing group, reducing its reliance on newspapers and opening up more avenues for digital publishing.

Viacom (VIA) could see this as interesting way to build new video and digital content around the style, entertainment and lifestyle markets in the way that Time Warner's TMZ has found success.

Who am I missing? Who do you think might bid on Time? Add your ideas in the comments.

Pinterest and The Verticalization of Social Media

Over the holidays, my wife was discussing Pinterest with a few family members.

I found it interesting that she viewed Pinterest as a “recipe site”. Me, being the social media expert, jumped in -- “no, no, Pinterest is a platform, like Twitter or Facebook” I explained.

Fast-forward a couple of weeks and looks like in some ways, my wife was right (as usual). Pinterest this week announced the acquisition of Punchfork, a recipe aggregator.  And I think that approach makes a lot of sense. Twitter still struggles to help new users understand what it is and why it’s valuable. Most users simply read, rather than posting. So, rather than just being a social scrapbook, Pinterest could be well-served by developing a bunch of verticals and acquiring or partnering for content.

Other obvious markets to pursue include fashion, home décor, beauty, autos and travel. Those markets also have potential ecommerce components, making it even more interesting.

What do you see as the next steps for Pinterest? Who might their next acquisition targets be?

PS - here's the recipe for that French Onion Soup Grilled Cheese. Looks like the perfect winter comfort food, doesn't it?

 

Related articles

Pinterest's First Acquisition Is a Recipe Site | Adweek

Pinterest acquires Punchfork, the social site for recipes, meals, and gorgeous photos of food

Who Should Buy the FT?

Rumours are swirling this morning that Pearson (PSO) could consider putting its prize asset, the Financial Times, on the selling block after appointing John Fallon its new CEO, replacing Marjorie Scardino, who is stepping down after sixteen years in the role.

The FT is a unique asset in many ways. It’s one of the few paid online news success stories, due largely to the fact that it’s mostly paid for by companies, not individuals. It’s completely dominant in the UK; you can be sure your content has been read by every UK banker by the time they get to their desk in the morning. It has global reach and employs some top quality journalists.

So, who should buy the FT?

The obvious buyers might include Bloomberg, Thomson Reuters (TRI) and News Corp (NWSA).  While News Corp is splitting off its news publishing assets into a new company, the combination of the FT and Wall Street Journal would be hard for Rupert Murdoch to ignore. A major European publisher like Axel Springer (SPR) would likely be interested as well. It's also possible someone like Reed Elsevier could jump in. Yet I don't see many other publishers getting involved. The FT would be a lot to swallow for a company like the NY Times in this market.

But an eventual buyer could come from outside the obvious names. One city analyst quoted in the Guardian story suggests the FT could get bids of as much as £1bn as a trophy buy:

“Who wouldn't want to own the FT. Russian oligarchs, a wealthy Middle Eastern owner would get more status than owning a football team.”

Whom do you think might be the best suitor for the FT? Add your thoughts in the comments.

Microsoft’s Yammer Acquisition Validation of the Mobile Enterprise

This week’s acquisition of enterprise social media provider Yammer by Microsoft (MSFT) for $1.2 billion raised a lot of eyebrows. While specific revenue figures are not available for Yammer, I’ve seen estimates of Yammer revenue in the $10-20 million range. Yammer peer Jive (NASD: JIVE) reported revenues of $77 million for the year ending 12/31/2011, with a 4^th quarter run rate of nearly double that.

Clearly Microsoft didn’t buy Yammer based upon its direct revenue potential. Instead, the acquisition was an acknowledgement of where the market is heading, and how Microsoft desperately needs to reposition itself for the future.

For those who’ve never used it, Yammer is best thought of as “Twitter for the enterprise”. It’s a great way of sharing information among workgroups or departments. Microsoft, of course, has long dominated communications inside the enterprise, with Exchange and Outlook. But as communication shifts away from email, and as the enterprise becomes more mobile, that market position is at risk.

Microsoft today is at risk of losing the desktop to the iPad while the Office document market has seen inroads by Google and other cloud-based services. Installed software, upon which Microsoft’s empire was built, is slowly, yet steadily being displaced by SaaS models. They’ve struggled to gain a foothold in mobile. In many ways, their future seems dim.

While Yammer alone won’t reverse that course, it does provide an immediate platform for Microsoft to remain relevant in mobile communications within the enterprise.  As more and more users rely upon devices that do not run Windows and sit outside the firewall, tools like Yammer give Microsoft a way to remain relevant.

There are many other ways in which Microsoft can play in this market. Its acquisition of Skype was one. The market for systems to allow the enterprise to manage today’s BYOD (bring your own device) world is wide open. And while, I’d initially thought RIM (NASD: RIMM) was best positioned to adapt its Blackberry Enterprise Server to the Mobile Device Management (“MDM”) space, their inability to recognize and adapt to market changes have left a huge opening for Microsoft.  In fact, I wouldn’t be surprised to see Microsoft acquire an MDM provider like AirWatch or Zenprise in the near future.

The $1.2 Billion price tag may seem high for a company with low 8-figure revenue, but Microsoft is sending a clear message here that it understands the dramatic changes that mobile and the cloud are driving, and is looking for ways to remain relevant into the future.

GigaOm Acquires PaidContent Creating Premier Digital Media Brand

Tech blog GigaOm has acquired Content Next Media, parent of PaidContent and related blogs.

Content Next, first acquired by Guardian Media in 2008, has been on the shopping block in recent months, as GMG looks to focus its operations. 

Of all the rumored buyers (including AOL, Vox Media, WebMediaBrands, Dow Jones, SAY Media) this is likely the best possible result, both for readers and the Content Next team.

From the outside, it looks as though the two companies have very similar cultures. Both founded around the same time as independent blogs (by Om Malik and Rafat Ali), GigaOm has been able to remain solo, taking venture funding along the way.

The combined GigaOm - Content Next will be an impressive media company:

• Great editorial - from editors and writers like Staci Kramer, Ernie Sander, Mathew Ingram, Nicole Solis, Om Malik, Erica Ogg and others - will yield great coverage of the digital media and technology space.
• Both companies have great events - including Structure, Structure: Data, Mobilize, PaidContent, PaidContent Entertainment, and more.
• GigaOm has experimented with paid research, led by VP research Michael Wolf, which has the potential to grow further.

With a modest cost structure, the combined company should retain the flexibility and nimbleness to test and adapt in an ever-changing digital media environment. 

Congratulations to both companies. I look forward to seeing what comes next.

Why AOL – HuffPo is a Smart Deal

The big media news this morning was the AOL (AOL) acquisition of the Huffington Post. HuffPo had long been considered the diamond of the alternative media world. The only online newspaper site with more traffic than HuffPo is NYTimes.com.

Many argue that it may be too little, too late for AOL, but I’m not so sure. Content may not be King (platforms like Facebook, Google and Twitter have proven that), but traffic can still be monetized.  By adding HuffPo, along with Engadget and TechCrunch, AOL positions itself strongly in the upper and middle segments in terms of quality content, while it already covers the lower end with its Seed platform.

The acquisition strengthens their position in local news, augmenting their existing Patch platform. And, HuffPo gives AOL much greater potential reach for Wow, it’s daily deal/Groupon clone. And the large AOL  sales force should be able to generate much higher revenues from the Huffington Post.

Key to the deal is Arianna, who will bring a clear voice to their disparate content properties. As Felix Salmon writes:

It’s smart, and bold, to put Arianna in charge of all AOL’s editorial content, since she is one of the precious few people who has managed to create a mass-market general-interest online publication which isn’t bland and which has an instantly identifiable personality. That’s a rare skill and one which AOL desperately needs to apply to its broad yet inchoate suite of websites.

Meanwhile, Jeff Jarvis notes:

Content alone isn’t enough for Aol. It has content. Lots. What HuffPo and Arianna bring is a new cultural understanding of media that is built around the value of curation, the power of peers, the link economy, passion as an asset, and celebrity as a currency.

Yet analysts remain cautious about AOL. Macquarie’s Ben Schachter advises clients to “wait on the sidelines”, while Clayton Moran at the Benchmark Company notes that the $315m price tag is “more than 40% of the $802 million in cash that AOL had on hand at the end of last year. The acquisition price is a bit of a stretch.”

There are really only two major online content companies left – AOL and Yahoo. With this acquisition, AOL takes a big step forward.  As Keith Rabois points out, with this acquisition, AOL becomes a more attractive acquirer for startups and entrepreneurs than Yahoo.

As newspapers experiment with moving content behind the paywall, it creates additional opportunity for free news sites. With a mix of topical, political and local content, AOL is positioning itself to fill any void. Of course, the proof will come in the months that follow. Will authors look to be paid? Will Patch integrate nicely with HuffPo? Lots of questions yet to be resolved, but this is a smart deal and it has a good chance for success.

 

Alacra Pulse M&A Rumors Fuel StockTwits Streams

A few weeks ago we did a soft launch of a "stream" of Alacra Pulse M&A Rumors on the StockTwits platform. StockTwits has been doing a quiet rollout of the Streams, which will launch with more visibility soon.

This morning, StockTwits' Phil Pearlman wrote a blog post spotlighting a couple of deals that were uncovered by Pulse early on before the market reacted:

Alacra Pulse: M&A Rumors & Deals Stream is Officially Rocking

The first deal involved Smurfit-Stone Container (SSCC) being acquired by Rock Tenn (RKT), which was announced January 24. As Phil notes in the post, on January 20, Alacra Pulse pushed out notification that Smurfit-Stone would be a good acquisition target, based on a blog post from Footnoted. Investors who bought the stock at the market close on the 20th would have seen better than a 25% return.

A similar case occurred with Genoptix (GXDX), acquired by Novartis (NVS) also on the 24th. Two weeks earlier, the Pulse M&A Rumors Stream noted that Genoptix was rumored to be in-play.  Investors buying on the close that day would have gained 27% on the stock.

Through our partnership with StockTwits, we can push these Pulse Streams, previously available only to institutional clients, out to a broader market of active traders and investment professionals.

To learn more about the Pulse M&A Rumor Stream on StockTwits, visit the StockTwits Marketplace and sign up for a free trial.

 

Who Should Buy Barnes & Noble?

Barnes & Noble (BKS) is being put on the block due to its depressed stock price. Current market value is barely $750 million, making it a reasonably inexpensive purchase.

The two most obvious suitors are founder Len Riggio and investor Ron Burkle, who currently owns about 19% of the company. But beyond those two, who might bid for the company?

Some have suggested Amazon (AMZN), but I don’t see that happening. First, that deal would be unlikely to pass antitrust scrutiny. More importantly, the deal wouldn’t make a lot of sense for Amazon. In Barnes & Noble, they have a weakened competitor on both the traditional book and eBook market. The Amazon model is working and there’s no reason to burden it with the negatives of running a brick & mortar business.

I’m sure that private equity firms will be in the mix (they always are) but won’t speculate on which ones might bid. Suffice to say that there will be other financial bidders here.

Barnes & Noble might also gain attention from other traditional brick & mortar retailers. It could be an interesting purchase for Target (TGT) or Wal-Mart (WMT), but neither is very acquisitive and I’m not sure that it would fit either company’s business model nor culture.

I think Barnes & Noble might have the most appeal to companies in the education market, perhaps someone like Blackboard, Inc. (BBBB). B&N already operates numerous college bookstores and its textbook division remains a strength. More importantly, the Nook seems well positioned to become the delivery platform of choice for education. B&N and Blackboard recently signed a partnership for eTextbooks. Financially, a deal wouldn’t be that easy. Blackboard’s market cap is just $1.3 billion, so they would need help in financing a deal. But a combination of the two companies could establish the dominant player in the educational e-reader space. The Nook would have incredible branding (every time a student logs on to their Blackboard service) and would have both online and offline distribution.

What Sidney Harman should do with Newsweek

It’s possible that 91-year old Sidney Harman acquired Newsweek simply as a means of minimizing estate taxes for his family. But assuming he truly wants to turn Newsweek into a viable product in the coming years, what might he do?

Here are three steps he might take to make Newsweek viable.

Leverage the brand

This won’t be easy. Newsweek has very strong brand recognition, but that brand name is an anachronism in the age of real-time news.Perhaps the best thing he can do here is come up with a clever tagline. Maybe something like:

There are 604,800 seconds in every week. Newsweek covers each and every one of them.

Kill the print edition

This one is the most obvious, but will also be very difficult for many inside Newsweek to embrace.
But there is no better way to change the mindset of a newsweekly than to eliminate the weekly editorial and print schedule.

It may seem harsh to kill the print version and the many jobs that will go with it, but if he wants to save the brand, he will need to move swiftly in that direction.

Reconstitute themselves as the curator of choice for politics & policy

Rather than trying to author content on a vast number of topics, what if they instead set out to become the curator of choice for political and policy content? Don't try to comment on the news - instead, provide insights on key policy issues, both domestic and international.

Retain a few key editors, each of whom will be expected to write 1-2 blog posts each day. Then, using a combination of technology and lower-cost curators, sift through content from other media and blog sites, identifying relevant content and classifying it by topic. The end result will be a series of high quality pages on compelling topics, led by a modest amount of proprietary blog content surrounded by carefully curated web content. Some topics may be evergreen, while others may be cyclical (elections) or event-driven (e.g. WikiLeaks). The content should be multimedia in nature and should aim to provoke and promote discussion.

I would trash the existing Newsweek.com site and come up with a dual strategy for website and mobile.  They should take a look at what Flipboard and Pulse have done on the iPad for inspiration. Everything should be based on easily browsing and sharing content.

That’s what I would do with Newsweek. What would you do?