The Sulzbergers own 88% of New York Times Company’s super-shares, which gives them a lock on the company’s board, but a group of investors are looking to add nominees to the Board, having spent $400M to build up a nearly 20% stake in the company, according to Paid Content.
“Super-shares” heh? I believe that’s what Mike Huckabee is counting on to win the Republican nomination. All right, bad one. Anyway:
I understand the logic of trying to shake up a company like CNET who doesn’t have a special voting structure, but will applying any pressure on NYT really make a dent?
While CNET and NYT seem as different as can be, they do share hostile shareholders in common. Apart from that?
CNET has $400M in revenues and trades at a mere 3x revenues for a market cap of $1.2B. Mind you, the company made $170M in net income in 2007, up from a puny $7M in 2006 (when it did $369M in annual revenues).
It’s worth noting that the NYT is trading at $2.82B, but its got revenues of $3.2B, so NYT is in fact trading at a discount to its sales, or 0.88x sales.
The NYT’s net income is $208M for 2007… or $38M more than CNET, even though NYT’s revenue is in fact 7x larger, or $2.42B more.
I know, we’re comparing apples with oranges. Where this bizarro script turns into overdrive is the fact that - according to the ever reliable and accurate comScore - the NYT is actually not only the most popular online property amongst all newspaper companies, with 48M uniques in the 11th slot amongst all media properties, but its - get this - ahead of CNET who is 15th with 34M uniques.
CNET is all about tech-savvy audiences, so you’d think that they’d have an enormous audience online… but then again NYT being so mainstream and what not, I guess it makes sense for the newspaper giant to have more readers online, I guess.
What’s the point of this post? I don’t know. I wonder which company will actually be shaken up by year’s end.
Digg this Blog
Share on Facebook
WatchMojo on Twitter
WatchMojo on YouTube
Add to Favorites
WatchMojo NewsletterIt’s very funny (to me at least) that every time I publish something calling for a bullish projection, it turns out I am being conservative.
The latest one? Yahoo! CEO Jerry Yang predicts that:
Spending for online advertising will be bigger than television in five years. Marketers spent $21 billion in online advertising in the United States in 2007, according to the IAB and PricewaterhouseCoopers. TV ad spending was $162 billion in the U.S., and is expected to rise 3% n 2008, according to marketing firm GroupM.
That’s 2013… I had online surpassing TV by 2021, and online video surpassing search ads by 2018. Yang’s predictions makes me seem like a conservative Luddite.
Related: Is Yang a Hero or a Goat?
Digg competitor Mixx raises $2M in funding. This title could be called why social bookmarking sites are bad investments. Let me explain:
Yes, social bookmarking tools like Digg, Reddit, etc., have revolutionized news, publishing and media. Kevin Rose - and Joshua Schachter (founder of Del.icio.us) before him - deserve a lot of credit. But as businesses for investors to invest in, they all fall short.
Valleywag is reporting that Yahoo!’s Digg is launching tomorrow, and its lease on life is an eternal 3 months. Why?
“After [the launch], a tipster tells us, Yahoo VP Tapan Bhat and his Front Page/Front Doors group will have three months to prove the project’s worth. If it’s not driving siginificant traffic to publishers in Yahoo’s ad network by then, EVP Jeff Weiner will shut it down.”
So why does this make them bad investments?
Social bookmarking sites have abysmal click-through rates, so performance-based marketers don’t get any decent returns.
Social bookmarking sites have fickle audiences that are anti-establishment (whatever that means); so any attempt to go beyond the banner for branded advertisers will be greeted by mutiny. Digg’s audience has in the past proven to go berzerk when they want to.
As such combining #1 and 2, this means that the revenue potential of such sites is limited, at best…
Of course, no self-respecting online media company is valued as a function of earning potential alone, right? They are usually valued as a growth play and a function of a potential one-time capital gain sale payoff.
But the problem is that any buyer would want the social bookmark to drive traffic not to any random sites but to the sites that benefit the parent, or acquirer. Much the same way that Yahoo! wants the Digg clone to drive traffic to websites in Yahoo!’s publishing network, a would-be buyer for Digg would want the service to drive traffic back to them.
Have the NYT, News Corp., etc. considered buying Digg?
Of course. But once they realize they cannot force users to link back to proprietary sites, they lose interest.
This is why - I think - Kevin Rose was allowed and encouraged to launch Pownce and Revision 3 (with the same investors as Digg, largely) because Digg is a very challenging case to flip.
I would be very interested to know how Reddit is doing within Conde Nast’s empire. Reddit was acquired on October 31 2006. What happened to traffic since then? Let’s see:
Hmm… no comment.
When Google released its Q4 2007 earnings, it suggested that the Fox Interactive Media / MySpace $900M deal wasn’t working out too well for Google. Some have mentioned that this deal would hang like an albatross around Google’s stock for years to come.
News Corp. then mentioned - during its own earnings call - that Google was not able to get out of the deal, knew that the deal would only become profitable in the tail end of the deal; basically told tough luck, by News Corp. COO Peter Chernin.
Today Tech Crunch is reporting from the ever-popular and reliable “anonymous sources” that FIM is doing a rethink on Google and thinking of MSFT, who also powers Facebook’s ads, MySpace’s arch enemy.
I do not doubt Michael Arrington’s sources, the man has been right ahead of the news on random things like Google buying YouTube or eBay acquiring Stumble Upon as well as many things… but as an executive and dealmaker, I find it very odd for FIM to actually consider this. Here’s why:
- This deal does not allow Google to get out, if I were a FIM dealmaker, I would not even bring that up as a possibility. Why? It gives Google a false sense of hope and distracts any potential tweaks to the deal.
- MSFT runs ads on Facebook, no one, especially a shrewd CEO like Rupert Murdoch, would want one company (especially MSFT) to have all that data on both MySpace and Facebook, the world’s #1 and #2 social networks. Google created a $200B company (now sitting at $165B) based on access to all of that data. Yes, a database of intentions is worth more than a database of connections, but the point is, data = value and MySpace would be foolish to let this happen.
- MSFT can outspend Google, yes, but I doubt they really want MySpace. So I think an opportunistic executive from MSFT contacted MySpace and FIM to inquire about the opportunity to knock out Google… but ultimately, I think News Corp. balked for these reasons.
Why? Much the same reason that Google knocked out Yahoo!/Overture in 2006 for the MySpace inventory, there is nothing stopping MySpace to collect every single penny of that $900M and then strike a bigger deal with MSFT… MSFT’s thirst and hunger for online advertising and search exposure is not going away… so there is no big rush.
Furthermore, while Murdoch does not come out and say it, he welcomes weakening Google.
Tech Crunch says Sergey Brin’s knock at MySpace’s inventory “angered News Corp./FIM execs” so this is why they are re-thinking the Google deal. BS. If that is the case, then they will definitely ensure that Google stays in this deal.
That’s right: unlike Sumner Redstone who sued Google and attacked them head-on, Murdoch likes to keep his enemies close to him… and making sure that Google pays him $900M for 2 years ensures that Google cannot necessarily invest in other areas, or other sites, like Facebook, his MySpace unit’s main enemy.
Ultimately… MySpace is better off keeping the status quo, all the while investing in its own ad network and then getting MSFT to replace Google and coexist along its own ad network in a few years.
Of course, this all begs the questions: why would anyone leak this to Michael Arrington and Tech Crunch? Well, Microsoft is targeting Yahoo! in an unsolicited $44.6B takeover bid… one of the white knight candidates has been Rupert Murdoch’s FIM. I think this is a case of MSFT gladly reminding Silicon Valley (Google and Yahoo!) that it has the firepower and
- ability to knock off Google in any deal if it wants to and
- block any option YHOO thinks it has to fend off Redmond.
If you thoughts soap operas were more interesting, think again.
Disclaimer: News Corp. was my former employer from Sept. to Dec. 2005 and MySpace TV is one of WatchMojo.com’s distribution partners.
Just a week after NBC lays off some employees at iVillage, competitor Glam Media announces a massive - and I mean massive - $84.6M funding round, of which $20M is debt financing.
What’s interesting here is that Hubert Burda Media - an international media powerhouse and publisher of more than 260 magazines titles and an investor in more than 25 high-growth digital holdings - led the equity-financing round.
Men have turned to the Web and gaming, for sure, but that is not the case for women. In fact, while magazine advertising and print advertising in general is facing a slowdown, the women’s magazine market remains fairly robust. But long term, the women advertising market and publishing segment will face many of the systematic trends facing all magazines.
Strategic investors usually invest when there is a clear cost-benefit value to them doing so, I estimate that Hubert Burda Media isn’t looking for a flip, but a potential acquisition of Glam Media down the road.
It’s also interesting to note that while US financial players have gotten nailed in the past 6 months, it’s not surprising to see a European giant lead the charge… and funding.
Obviously the press release doesn’t mention this, but Paid Content is reporting the deal was at a $500M valuation, not sure if they mean pre-money or post-money. The company is aiming for $100M in 2008 revenues.
Disclaimer: Glam Media is a distribution partner of WatchMojo.com.
PLAY
