Kara Swisher reports that Tech Crunch is raising $15M on a $35M pre-money. That is $10M more than what Weblogs Inc. sold for… and much much more than Rafat Ali’s Paid Content raised from VC dean Alan Patricof a couple of years ago.
I find it interesting that Tech Crunch’s post on fundraising vs. rollups vs. sales to big media companies came around the same time that Federated Media’s supposed $30M financing deal on a $200M valuation.
Why I find this interesting is that while Federated Media does not handle exclusive ad sales for these blogs, FM serves as a bellwether for them all. It reps Tech Crunch, Silicon Alley Insider, Giga Om, etc. on a non-exclusive basis… yet all of them have developed in-house sales teams, as well… which begs the question: why?
Presumably, FM is not doing as much as the bloguls would like, which means that FM isn’t doing as well as it would like… especially when you consider that it takes 50% of revenues, at most.
I don’t mean to disparage FM or the blogs, I think FM is a great company and their blogs are fantastic.
But am I the only one that sees this entire landscape as one big cesspool?
Arrington admitted the sham-like methods why one blog links to another. I respect the men behind these blogs individually - and they have all built mini-empires - but I agree that readers don’t care about the politics (but they do about the business of, hence this post) and this makes everyone look like clowns.
Anyway, as an ad rep firm, FM gets an RFP (request for proposal) from HP for $100,000 and then splits it 10 ways between Tech Crunch, GigaOm, Alley Insider etc. FM gets 50% and the blogs get 50% divided amongst them.
At the next merry-go-round, the blogs don’t like that they each got $10K (for example), so they set up independent sales teams… and then go after that $100K RFP directly. Next time around, FM gets $50K of the spend and the blogs split up the remaining $50K.
What the ?
The pie might grow over time, but not by much… what I think is happening is that some of the bloggers don’t like to hear that FM is raising mega money and they want a piece of the action, too.
I am not the only one that finds this crazy, thankfully… but I see why the desire to raise money comes in, because these blogs write largely about the same things, they are highly dependent on one person, and the technology space is too niche to really make it valuable enough for VCs to back.
I would be surprised to see Tech Crunch raise VC money (they might and will because the Silicon Valley moneymen would love to have Arrington under their control) but despite hiring the very talented and connected Heather Harde and recruiting gifted writers like Erick Schonfeld, the company has not raised outside funding. Trust me, I know fundraising takes time… but if TC was close to it… why the crazy post yesterday? In no way is that a criticism of TC, Arrington, Harde or even blogs… it’s that VCs won’t see the kind of growth in blogs that they can get elsewhere, even though, let’s face it, VCs track record is abysmal.
I personally see TC selling to a media company like CNET or someone else (which makes yesterday’s rant that much crazier… and that’s why we love Arrington, frankly).
All in all, VCs and content do not really mix… and VCs and blogs mix even less. Just because some VCs have invested in blog networks does not mean that the payoffs will be there. They might in some extreme cases, but I think that ship has passed.
Mind you, one leading blog that up to now remained a one-man shop just catapulted into a business, with numerous authors and plans for expansion. Check out Allen Stern’s plans for his Center Networks. Allen maintains one of the better blogs out there on product and technology news, we expect good things to come from him and his team.
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WatchMojo NewsletterNew media entrepreneurs are supposedly stick-it-to-the-institution renegade types. But what happens when the tables get turned on the renegades and someone steals your IP?
Last week I realized that someone had taken one of our skits and uploaded the video onto their own YouTube account. When we launched the WatchMojo.com site back in January 2006, there was no way to download the video, heck, there was no way to grab the embed code, either.
We relaunched last year and you could now do both: you could grab an embed code and our files could be downloaded…
Ultimately, I agree with those who say media should be media-agnostic and really mobile, for consumers to take it where they choose to. We’re one of the disruptors: we create high-quality, low-cost content and syndicate it widely online. We have the luxury not to worry about cannibalism of offline sales.
The skit in question is an “Emo Thanksgiving”. For the record, I help develop a lot of the skits, but that one I had nothing to do with. I didn’t even know what emo was, in case you don’t either, according to Urban Dictionary:
Emo is a genre of softcore punk music that integrates unenthusiastic melodramatic 17 year olds who dont smile, high pitched overwrought lyrics and inaudible guitar rifts with tight wool sweaters, tighter jeans, itchy scarfs (even in the summer), ripped chucks with favorite bands signature, black square rimmed glasses, and ebony greasy unwashed hair that is required to cover at least 3/5 ths of the face at an angle.
Back to the story, someone named Squirrelonfire25 had effectively pirated our Emo skit.
Interestingly, Squirrelonfire25 has all of 1 clip on that YouTube account, and you guessed it, the one clip is ours… of course, as an individual user, he does not generate revenue, so while there is no tangible loss to us, we do not get credit for the streams either, so we lose, sort of.
Of course, I have long argued (or rather, stated the obvious) that YouTube is both commercial and promotional.
So when our clip is on Squirrelonfire25’s account, that video becomes promotional; when it’s on our profile, it is both commercial and promotional.
WatchMojo.com is an up-and-coming player in the video space, though. If the same thing was happening to NBC, CBS, ABC or FOX, I am not sure they would share my enlightened, glass-is-half-full perspective, especially when you consider that Squirrelonfire25’s 3,000 streams beat the streams we generated on YouTube 10 to 1.
Mind you, despite YouTube being so massive and accounting for 1 out of 3 streams online, the very same skit did 300,000 streams on MySpace (it’s nowhere close to being our all-time top performer, however).
Am I going to send a cease and desist letter to Squirrel Boy? No, not really.
Does it help or hurt us that he grabbed our clip and uploaded it onto YouTube? I think so.
But this begs the question: if you were, say for example, an investor in WatchMojo.com and you realized that 100 Squirrel Boys were downloading 1,000 videos and adding them on 10,000 sites, would you think this was a positive thing? I’d be very interested in your take on this. Email me at ash@mojosupreme.com or leave your comments below, please.
Without further ado:
To be fair to both of our valued partners, see Part 1 on MySpace:
And here’s part 2 on YouTube: A Very Emo Easter.
Hey, we might be a speck next to these two giants, but at least we’re loyal and diplomatic specks. And yeah, I don’t get the Emo humor either… but there are some funny parts in there.
This week, Jamie Dimon cemented his place in business lore. A lot of people who follow technology and media news might not recognize his name: Jamie Dimon is arguably one of America’s Top 10 most powerful businessmen. Time magazine put him in their Top 100, but this week, after buying Bear Stearns for $2/share, I cannot imagine how his power is not great enough to crack the Top 10.
According to this Wikipedia page:
- Jamie Dimon majored in biology and economics at Tufts University. He earned an Master of Business Administration degree from Harvard Business School.
- Upon his graduation in 1982, Sandy Weill convinced him to turn down offers from Goldman Sachs and Morgan Stanley to join him as an assistant at American Express. Though Weill could not offer the same amount of money as the investment banks, Weill promised Dimon that he would have “fun.”
- In a power struggle, Weill left American Express in 1985, Dimon followed him, and the two took over Commercial Credit, a consumer finance company, from Control Data, which became the vehicle that Dimon and Weill would use to propel themselves to the top of the financial world.
- Through a series of unprecedented mergers and acquisitions, in 1998 Dimon and Weill were able to form the largest financial services conglomerate the world had ever seen, Citigroup.
- Although Weill was the one who made the deals, Dimon was the “whiz kid” who made the numbers work.
- Dimon left Citigroup in November 1998. It was rumored at the time that he and Weill got into an argument in 1997 over the perceived lack of promotion given by Dimon to Weill’s daughter, Jessica M. Bibliowicz.
- In his 2005 University of Chicago Graduate School of Business Fireside Chat and 2006 Kellogg School interviews, Dimon stated that he was fired by Weill.
- In March 2000 Dimon became CEO of Bank One, then the nation’s fifth largest bank. He became president of J.P. Morgan Chase in mid-2004 when it acquired Bank One.
In case you were sleeping, Dimon orchestrated the acquisition of Bear Stearns this past week.
Jamie Dimon was a figure that I looked up to when I was completing my finance degree from 1996-99. Dimon was ambitious, but he was always in someone else’s shadow.
Midway through my undergraduate studies, I accepted a job as customer service rep for RBC’s VISA unit, RBC was and remains the largest bank in Canada. I naively believed that I could go on to become the CEO of RBC if I stuck around for 20 years or so. When I completed my degree, I walked degree-in-hand into my manager’s office and diplomatically asked for a transfer to RBC’s investment banking unit, Dominion Securities, Canada’s answer to Goldman Sachs (well… there’s only one Goldman… but you know what I mean).
Anyway, my manager said she would never let me be transferred to another department, because I was a very good performer. My rating, I’ll never forget, was 149. The average bank employee in my unit’s score was 100… so I had the productivity of 1.5 employees… that was an early lesson in business for me: if you do too good of a job, you might hinder your rise. One more reason why I wanted out of corporate environments.
The greater lesson: Dimon was shown the door by the man whose empire he helped build. I did not go through that at RBC, but I did at my last gig. I did not take it personally, but I knew that despite my brash demeanor… I could prove myself with patience.
Today, via shrewd dealmaking, Dimon’s JP Morgan Chase stands above Citigroup, with a market cap of $150B compared to Citigroup’s $110B.
More importantly, by acquiring Bear Stearns for a song… Dimon’s grip on the financial industry strengthens. Meanwhile, Citigroup continues to try to estimate the damage and toll it will take from the same sub-prime credit mess than knocked off Bear Stearns.
From a management perspective, I always stress the importance of having a good platform, but Dimon’s rise echoes what Jack Welch used to say: it’s important to have runway, too. Dimon had so much runway that he was able to take just about any platform and exponentially make it greater.
It also does go to show, maybe patience is a virtue.
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