When we launched WatchMojo.com in January 2006, I went out of my way not to target men, what with my non-compete from AskMen being in effect until 2007. But invariably, over time, there are only so many women’s topics you can cover, so we now have quite a lot of content targeting men.
Not surprisingly, we ended up arming Glam with a lot of their video content on Brash.com, the men’s site they launched today. This move is just the latest site we provide premium video content to.
As a former executive in men’s content, I think they have a shot at becoming a player in the space. Time will tell. Glam has been launching a dizzying array of products of late; yet it is laying off some people in anticipation of hard economic times. As a result, it might be challenging to pull it all off… so we shall see if Brash.com ends up in the hits column or lands in the recycle bin.
The company has brought in a former Fox Interactive Media executive, John Trimble, to handle Brash’s advertising, and magazine industry veteran Richard Perez-Feria to oversee the editorial content. Trimble ran properties that included IGN, Gamespy and AskMen, 3 of the top sites in the coveted men’s 18-34 demographic. Disclosure: I ran sales for AskMen until 2005.
One thing I do like: the name. But we all know you need more than a cool URL to become a hit on the internet.
I’m trying to think who issues more press releases, and seemingly jumps from one “focus area” to another:
Glam Media or Heavy.com?
I could not even tell you what these companies stand for anymore… that’s I guess what happens when you raise gushing amounts of VC: Heavy’s raised some $25M and more, Glam about $100M. I stopped counting… but it’s a bit of a joke that your media partners, advertisers and users get confused by the barrage of hyperbole that crams my freaking inbox every day about the latest thing.
Sizzle over substance… I can’t wait for this wave of hype to crater and more way for something meaningful, again… which will of course give way for more crap and hype. But I digress.
Glam Media - a company that reaches some 35M uniques via the Glam.com property and its network of blogs and like-minded web properties - is the latest to join our syndication network.
Check out the press release here,
Glam Media, Inc., (http://www.GlamMedia.com), the pioneer of vertical content networks and number one in reach for women online with 35 million uniques in the U.S., today announced the launch of the GlamTV Platform, a video distribution and advertising platform for Glam’s network of 500+ premium web sites and blogs. The GlamTV Platform is a flagship service that allows Glam package its content with ads for hyper-targeted audiences (…)Glam Media's publishers can access premium Indie video content such as: interviews with real-life fashionistas from BeautifulStranger.com; the best in fitness content from ExerciseTV.tv; cutting-edge entertainment reporting for the urban audience from Kevin Frazier's HipHollywood.com; expert advice and green-living tips from Howdini.com; social video content and interviews from MOLI.com; premium short-form episodic comedy, original scripted series, and musical performances from Safran Digital Group; lifestyle videos from UK-based Simply Media; smart videos about relationships from TangoMag; video horoscopes from Tarot.com; vintage fashion footage from VIDCAT.com; useful infotainment from VideoJug.com; and international fashion and travel content from WatchMojo.com. Premium videos at launch are available in Fashion, Beauty, Shopping, Celebrities, Entertainment, Living, Health and Wellness Channels.
That’s 35M more uniques that our content just reached, in one deal.
Check out some of our content on Glam here. Arguably more interesting than this video launch is the fact that VentureBeat reports Glam just snubbed a $1.3B offer. Not sure who the would-be buyer would be, but I estimate one of the following players:
- Hearst
- Conde Nast
- Burda Media (an investor who just led the recent big funding, so less likely)
- etc.
Quick housekeeping item: Q1 saw the additions of MySpace TV, Hulu and Imeem as distribution partners. See the press release here. Of course, we also totally kicked ass on YouTube, where we now have almost 1,400 videos (pretty scary to think that we have 4,000 on our site).
Anyway, in Q2, it has not stopped:
- last week we were included in Adobe Media Player’s launch. See more.
- this week it’s time to mention our inclusion in Glam Media’s latest foray. Check out our page here.
Also working on a few big[ger] deals… what could be bigger than all of this? Sit still folks, get a chair… bring your woggles…
Paid Content refers to a NYT article on CBS which calls for the company that Bill Paley built to make digital acquisitions, which begs the question: should they go for a big purchase or make small moves?
Of course, answering that question alone without addressing the backdrop to that question yields an incomplete picture.
CBS has hit some rough patches, according to Paid Content:
The parent company is under a mini-siege of sorts about
a) its performance,
b) Leslie Mooves’ salary,
c) Katie Couric’s disastrous tenure at the company,
d) layoffs (even on the digital side, as others are ramping up) and other issues (…)
e) CBS’s need for an acquisition is becoming apparent. Some CBS executives privately agree.
All right. I want to dive in and comment on e) but let’s run through this list quickly.
a) Its Performance
We’re not sure if they are referring to its financial performance or its stock’s, either way:
As per the NYT:
“Without the cushion of Viacom’s other properties, CBS has been more exposed to the struggles of the advertising market. In 2007, it earned $1.25 billion, down from $1.66 billion the year before. CBS stock closed at $21.40 on Friday, compared with $30.99 a year earlier.”
While no company or manager can control what happens to the stock price, I think big media will see a lot of revenue loss over the next few years. Print-centric media companies shrank, why would TV or radio-centric media companies be any different in the next wave of the Web’s growth?
After all, 1994-2003 saw text-based media explode online, 2003 is about audio/video-heavy media.
CBS is seeing this sooner and faster due to its exposure to TV and radio. However, they are strong in outdoors, the challenge there is the upside there won’t account for the downside in more traditional media.
So all hope signals point to online… which explains why:
“On Monday, the company’s interactive unit will officially open a fully staffed office in Menlo Park, Calif., in Silicon Valley, to stir innovation and content development.”
Ironically, the CBS Interactive brass gets the Web quite a bit, but it’s true that they have been overly cautious, too. Being cautious is a bad thing in booming times and a great thing in corrections. The problem for CBS is that the correction is coming offline and online continues to charge ahead… so indeed, CBS does need to make some bold moves. But what are those moves?
Last year, we suggested an outright merger with Yahoo! With MSFT’s $45B gamble, those bets are off (hmm… are they?).
b) Leslie Moonves’ Salary
Last week Henry Blodget wrote: “CBS CEO Moonves Gets 29% Raise, Just Reward For Job Well Done“.
Clicking through, I realized he was being sarcastic by pointing to the seemingly inverse relationship between Mr. Moonves salary and CBS’ performance. While I appreciate Henry’s position, the truth is that CEO pay is determined on a number of things, frankly.
It’s also about the demand and supply for talent. As the CEO of CBS, Mr. Moonves could probably command a much larger salary elsewhere, if CBS’s Board wants to pay him $100M because that is what it takes to retain him, I am not sure CBS or Moonves should be blamed. For the record, he did not make $100M but rather $37M. Is that a lot of money? Yes. But the company made well over a billion dollars in profit and $14B in revenues. Of course, I’m an executive so my perspective is going to be different than that of an analyst or journalist.
But my point is: running a shrinking business in a mature market is not something most executives would embrace, to lure the best (or retain them), guess what? It takes a generous compensation program.
c) Katie Couric
Don’t care personally, but indeed, this is becoming an albatross and if indeed she is that horrific (I don’t watch TV), it’s time to try something else. I recognize she might not be best suited for news, but surely there is plenty of things she can be doing for CBS in other capacties (infotainment, mainly).
d) Layoffs
Layoffs are always demoralizing, especially when a company is making over $14B in revenue and remains profitable. But what about a case - like this one - when the company is shrinking? This is a tough question.
My gut says Jack Welch’s “the lowest 10% should leave” is not a bad thing… so while I don’t want to dehumanize the layoff dynamics and their effect, I think it’s unfair to question the layoffs.
Of course, I do wonder why layoffs are taking place in online areas… which is what both Paid Content and NYT refer to. But just bear one thing in mind: many traditional media companies are not necessarily well structured in new media; divisions and structures are sometimes borne out of legacy organizational systems and sooner or later a correction or adjustment is called for. If this is the case, then I don’t think it’s fair to bash CBS on this point.
e) Acquisitions
The question remains: should CBS make one big hairy and ambition acquisition or should it buy a number of smallish companies and roll them up and/or foster their growth?
For the record, CBS has done both. In fact, it’s done everything including investments in Spotrunner, Joost and many others. In terms of acquisitions: Last.fm was a mid-sized / big one; Wallstrip was a small one.
What would you do if you were Quincy Smith and company? Buy? Merge? Sell?
ACQUISITIONS:
You know what, I admit a small acquisition won’t move the needle, but a major acquisition won’t either. Who would they have bought?
- Bebo? Is a company that marketers love really well-served by serving advertisers social networking inventory? Nope.
- Facebook? Too expensive to buy. Nothing to see, here (perhaps a merger? See below).
- Gawker Media? That might be an interesting addition. But I think Gawker Media founder Nick Denton wants to become CBS, and not sell to CBS. Anywa, Gawker Media lags in video, CBS needs to look ahead and not look back.
- Speaking of video, one company that might position it for future growth is Blip.tv, but Blip.tv does not own any content… so that is a risky move because CBS might buy a great video platform with amazing bells and whistles but then lose all of the content therein. [Disclaimer: Blip.tv is a partner of WatchMojo.com]. In the same broad category as Blip.tv are Brightcove and Video Egg. Bright Cove also does not own any content and is way too expensive, having raised $80M in funding. Video Egg ain’t cheap either, with $40M of funding in the tilt.
- Then there’s all of the YouTube/MySpaceTV competitors: Revver, Veoh, Metacafe, DailyMotion, Break, etc. Mind you, CBS invested in Joost… so what message would that send? As well, Revver was on the auction block and I presume CBS looked at it and then balked. Again, none of those companies own any content, CBS needs to be stronger in web content. That would be the hedge for CBS going forward, of course, it also needs better distribution. I see CBS works closely with Veoh… but is Veoh big enough as a distribution source? [Disclaimer: WatchMojo.com syndicates video to all of the sites listed here]
- Craigslist.org? Not sure Craig Newmark would sell, no matter how progressive Quincy’s team might be. This is Big Media after all… but Craigslist.org would not unleash CBS’ digital revenues.
- Glam Media? That would be a shot in the arm with regards to bolstering its female audience online… but here’s the problem: female audiences still watch TV… what CBS might be better suited for is getting access to a men’s audience. [Disclaimer: Glam Media is one of WatchMojo.com’s syndication partners, too]
- Digg? Not a fan of this one, frankly. Maybe a combo Revision3 / Digg? Even less of a fan of that. Revision 3 is way too niche: it’s too tech-oriented and relies on two hosts, largely. Given how Kevin Rose’s interest waned from Digg to Revision3, then to Pownce, I am not sure he’s buyable because he’s the main asset of Revision 3. [Disclaimer: if you look very broadly at all video content, then WatchMojo.com is more or less competitive to Revision 3, though I view them as rather complementary to our programming].
- Federated Media? Too tech-focused and they don’t own any of the content on the blogs they rep. Big media needs to own content to make it worth their while. Sorry, but that’s just the way media works.
- Gorilla Nation Media’s audience might be a better fit, but as an advertising representation firm, it faces the same challenges: You are buying a stack of contracts that at any point could be severed. Unless you own the underlying content, those contracts are not worth the paper they are printed on.
- Heavy.com? They have a men’s audience, for sure. But if CBS is to buy a destination, it needs to be an enormous destination, I am not sure Heavy.com would move the proverbial needle. In fact, in 2005, News Corp. bought IGN Entertainment, but IGN was doing over $70M in revenues on the strength of its Media Properties (IGN.com, RottenTomatoes.com, etc.), had a lot of technology (in-game advertising + digital distribution of movies, music and games). Moreover, IGN Entertainment was far and away the leader in terms of men’s 18-34 audiences.
However, if Fox Interactive Media has become a new media behemoth, it has more to do with MySpace’s burgenoning audience than with IGN’s properties. That being said: IGN Entertainment does give a lot of content and audiences that marketers look for. The challenge for IGN is that a major chunk of their inventory comes from their message boards, which are notoriously hard to sell and monetize.
This being said, when one looks at how instrumental MySpace and IGN’s acquisitions were, it’s fair to say that the ROI has hitherto been higher on the MySpace deal. I am surprised at this, I won’t lie. But this lesson would encourage CBS to look for a MySpace and not an IGN.
I am not that familiar with Heavy.com’s business, frankly, but I am not even sure if Heavy is an IGN.
- IAC is way too e-commerce oriented. Its search engine Ask.com does not really fit with CBS, either. So pass.
- There’s Meebo, but at $250M or more in value… I am not sure if CBS would even know what to do with it. And, who are we kidding: do marketers really even want to advertise in instant messaging communications? That one makes sense in theory but in practice? Not sure.
- There’s the barrage of search video tools: Blinkx, Pixcy, etc., but CBS remains a media company; it should be technology-centric, I think. What I mean by that is that its content should be compatible with all tech platforms to make it was widely available as possible.
- There are a number of ad networks: Tribal Fusion, Specific Media, Casale Media, Adconion etc. I think the obsession over ad networks will pass. Moreover, a lot of media companies will build and launch their own, which is a mistake as well. I am not sure if CBS should plunk down $100-$500M on an ad network. Advertising.com rescued AOL’s butt because AOL was transitioning from a walled garden to a normal website but the fact remains, that says more about how poorly AOL was doing than how great Advertising.com has done (for the record: it has done great).
Valueclick is publicly traded, but expensive.
If it was interested in ad networks, it might as well skip over display ad-based ones and dive into video networks such as Tremor Media or Broadband Enterprises. Again, I am not sure being in the ad network business is the best capital allocation move.
- It could - much like how NYT invested $29.5M in Wordpress - make a bid for Six Apart (makers of Movable Type) or even Wordpress. But, again, I am not convinced it makes sense for a media company to own a platform without the underlying content. News Corp. buying MySpace made sense because the content on those sites become News Corp. property, or at the very least, MySpace gets a license to profit from it…
- Slide? At the company’s last $500M pre-money valuation, I think CBS would gain street cred in one block on SF by buying Slide but see Wall Street punish it. Hey, just being honest here folks: that is one expensive widget company with moutain-fulls of unsellable inventory!
- There’s TheStreet.com, though I am not sure if it’s big enough or whether CBS really wants to get that deep into finance and investments. Bear in mind Wallstrip was all about investing… so this would be a doubling down on one category. Moreover, at a market cap of $250M, it would eat a lot of money the company could spend elsewhere.
- CNET remains very tech-oriented but it has embraced a lot of lifestyle properties, too. In fact, CNET would be a good fit with 100M uniques, $400M in revenues etc. In fact, trading at $1.2B, it’s not that expensive. CNET would give CBS some web DNA and CBS would open up swarms of traditional advertisers to CNET. This could be the best move yet: unlike most other options, CNET owns a lot of content. It also owns a lot of URLs such as TV.com that with CBS’ help could come to life.
Updated: Oh, wow, they listened to me: it’s official.
MERGERS
- CBS could in fact merge with Yahoo! I wrote about this and frankly, this remains an option.
- It could merge with Facebook; won’t happen. At a market cap of $14B technically Facebook is worth roughly the same as CBS. This would be a bizzarro world deal where Facebook trades in growth for CBS’ $14B in revenue… but this one is so loopy.
- As crazy as it sounds, it could undo the merger with Viacom; won’t happen.
SALE
What about a sale to News Corp.? News Corp. owns FOX, it would love to own CBS. But for this to happen, it would mean Sumner Redstone and my old boss Rupert Murdoch would have to come to terms; won’t happen.
Incidentally, last Friday, GE lost 12% of its value, or $40B. It could have bought two CBS’s. By buying CBS, GE’s NBC Universal would own two of the three main networks, making this an impossibility.
That same obstacle is present in a sale to Disney, who owns ABC.
CONCLUSION
As you run down the list… you realize that all CBS is actually a great media company that just needs some tweaking. Yes, indeed: “Nobody likes negative growth, from the guy who shines shoes to the C.E.O. Everybody feels the pain” the truth is no one wants to blow something up either.
My two recommendations for CBS:
- Buy CNET for $1.5B - $2B (that would be a 25% to 66% premium), which would take its digital revenues from “$200M” to $600M. Combining CNET with Last.fm would also yield a lot of upside in digital music and video tie-in’s. But even then: for a company with $14B in annual revenues, does $600M mean much? Many analysts only give credit to a media company’s stock if digital revenues account for 10% of total sales. Even News Corp. or Disney do not claim that.
CNET remains one of biggest acquisition targets that represent meaningful revenue opportunities, and even that won’t move the needle. So what other options are there?
OR
- Merge with Yahoo!
Actually, there’s also one more option:
GO PRIVATE?
One way that no one will care about a) Performance or b) Les Moonves salary is if it were not publicly traded. Moreover, Wall Street is being unreasonable: yes the company is shrinking, but it will take time for digital revenues to grow, anyway. However, if someone came along and took CBS out at $20B, I think a lot of shareholders would buy that (or I guess, sell for that).
It then allows CBS to d) clean house if they so choose to (and will have to). Kate Couric becomes moot in the grand scheme of things… but most importantly, it will allow CBS to roll up a number of smaller web properties, content producers and tech applications to bolster its overall portfolio. In 4 years - when video advertising will be $7.1B in the US (up from $1B) and all online advertising will be nearly $100B in annual expenditure - it can then be go public again…
This might very well be the best course of action. The question remains: does private equity have the stomach for a $20B debt purchase? With $16B in annual revenues… I think so.
All righty, that was a great use of 40 minutes of my time. Back to work.
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.
Over the past 2 weeks, women-oriented network Glam.com has recruited senior executives from successful media companies Conde Nast and Fox Interactive Media, this on the heels of hires from new media outfits Doubleclick and MySpace.
They include:
- VP of international strategy Ralph Hirt, a DoubleClick vet
- Former MySpace sales exec Karin Mark
- John Trimble, formerly SVP of ad sales at News Corp.’s Fox Interactive Media division (NWS) who will oversee “advertising sales for new audiences and markets,”
- Print veteran Joe Lagani, the former publishing VP at Conde Nast’s House & Garden will help Glam.com branch out beyond its core fashion business and move into or expand the following verticals: Living, wellness, fitness, diet, health, and entertainment.
Network vs. Property
Invariably, that will come by way of both buying and building. Earlier this year, the company announced plans to raise a ton of money, which raised a lot of eyebrows. The point of contention from many, frankly, was that Glam.com is not a property (such as iVillage) but rather, a network. That’s not a big deal in of itself, but it becomes one because Glam.com’s management likes to stress that the firm is larger than iVillage, the largest women’s property/destination.
Impressive Ramp-up
Regardless, Glam CEO Samir Arora has to his credit managed to scale Glam.com. His background is even more impressive. If he is to be blamed for building a network, I can think of CEOs who are responsible for greater sins.
But, for purposes of illustration, it is worth noting that back in December 2004, comScore’s Total US Home & Work panel gave iVillage 16.9M unique users. iVillage got acquired by NBC in 2006 for $600M.
By the looks of it, Glam.com launched on September 19, 2005. So the company is 2 years old.
iVillage’s Missed Opportunity
Naturally, once a company gets acquired, it loses some of the hunger and drive. So while iVillage could have gone out and roll up smaller sites and blogs and sold advertising on those to extend its reach, it did not see any reason to do so.
For one, it was working on integrating itself within NBC.
Secondly, why sell ads on third-party sites with weaker brands and share revenue when you have more than enough inventory (much of which goes unsold) on iVillage.
An Ad Rep Firm vs. An Ad Network
In other words, Arora saw an opportunity, one that many others have noticed, too. But if we are to get granular, then Glam.com is less of a network and more of an ad repping firm. From my vantage point, it does not look like Glam.com actually buys the underlying sites, though it runs ads.
But the fact remains: Glam.com’s growth has been impressive: This week, comScore’s 2007 September figures were unveiled, and Glam is clearly ahead: Glam.com has 22M uniques vs. 18M for iVillage. There’s also Sugar Publishing, a company with a business model closer to Glam.com’s than iVillage’s.
Strike While Iron is Hot
It’s not surprising then that Arora is trying to capitalize on this traction to raise even more money.
Frankly, when Glam.com raised a massive $18.5M round, I was surprised, because the women’s market - because of its lucrative size - is very competitive. The company has raised about $30 million in three rounds, and investors include Tim Draper, who backed Skype and Hotmail. Glam Media might not be a classic textbook example of viral marketing, but as the numbers above show, the strategy of aggregating traffic from a myriad of blogs and reselling the advertising to branded marketers seems to be working.
Do We Hear $200M?
As such, Arora has enlisted the services of venerable M&A bank Allen & Co., and has supposedly been hitting the street trying to raise a whopping $200M. Here’s the prospectus (it’s “confidential” but we’re not the first ones to post it if the folks at Allen & Co. and/or Glam.com would want us to remove it, feel free to email us at ash@mojosupreme.com).
Anyway, all to say, the initial reaction then was negative, but the recent string of hires suggests one of two things:
a) the money is starting to line up
b) the Street was looking for the company to beef up its management team, if it was looking to raise that much money, or
c) both.
But a devil’s advocate would argue that Glam did not hire Allen & Co. for fundraising purposes, but rather, for M&A consulting and the leaked $200M round was a way to get would-be acquirers to act quickly. After all, a company like Hearst or Conde Nast would be an obvious buyer.
Let’s Call Time Out on the Bullshit and Get Candid Here
I for one have started to move from cynic to believer with regards to their reach because the traffic numbers are indeed impressive, I know how hard it is to roll up sites. But, that being said, as a former sales executive myself, I think Glam.com’s sales projections and targets are very ambitious, the document calls for revenues to rise from $20M in 2007 to $150M in 2008… If anyone can back such lofty forecasts, maye it’s Arora, though the recent string of hires suggests he won’t be alone.
But the bottom line is that as an ad repping firm, Glam.com will lose $0.50 on each dollar (on average). So the multiples Glam.com will command might be less than what a Property such as iVillage could command (before it was acquired, that is). But since M&A multiples have gone up considerably since 2006, I don’t doubt that Glam.com could fetch an attractive valuation.
Men vs. Women
Besides being a former sales executive, I’ve worked in men’s publishing, and one thing that becomes crystal clear is when you target men or women, you stand the chance of owning the market but you grow frustrated to be aiming for half the total online advertising pie. That’s why Mojo Supreme and WatchMojo.com have categories, channels and content that gear to both genders, with tools in place to reach either… that was a lesson I learned and a mistake I did not want to repeat.
But I understand that investors don’t like to hear that, in publishing, they want more focus: pick a gender, stick to it.
Key Metric: Revenue Per Marketer Relationship (RPMR).
This is where with all due respect, investors are wrong. To create the most valuable business in media and publishing, you need to maximize your Revenue per Marketer Relationship (RPMR).
Yes, I just made the term up, but what it is is important for anyone who wants to work in media and publishing. Sales people spend a lot of time and money building relationships with media planners and buyers at both marketers and agencies.
There’s a lot of turnover on both sides, but ultimately, if an ad agency reps VISA, for example, they won’t rep Master Card, too. They will however rep British Airways and Coke (for example). So you not only need content that caters to these brands’ target psychodemographics, but you also need to target both genders to get as many ad deals from said agency. It’s a very simple concept that is obvious when you have actually sold any advertising, but something that seems foreign if you sit behind a desk and read business plans all day. But I digress.
The point is, for all of their swaggers, both Heavy.com and Glam.com will only be capitalizing on half the action. And that action translates to a $600M buyout for iVillage (leader in women’s space) and $650M exit for IGN (my former employer and leader in men’s space). Do you think it’s a coincidence that the figures are essentially similar?
Of course not. But, those are outlier cases and not the norm. UGO, for example, a site with a similar strategy and audience as Heavy.com sold for $100M to Hearst after ten years of operation and $90M in invested capital!
A Marriage Made in Heaven
So if my pontifications hold water: at what point does Glam.com seek to offer a men’s strategy and solution?
Starting that from scratch while trying to scale the women’s network does not seem like a plausible thing to do, it would be tantamount to hubris. Of course, the company could acquire such entities, but I doubt investors would welcome the shift in strategy and focus and sign off on too many acquisitions that won’t fit with the main strategy.
But suppose management, the Board and its investors would consider a merger of sorts. A merger is just as challenging if not more, but in some ways it’s less risky than acquisitions, which I know sounds counter-intuitive (another post, another day).
If it did, one company that comes to mind is Heavy.com.
Heavy.com has raised a lot of money - over $25M, if not more - and its investors are looking for a home run in the form of a buyout by someone from News Corp. or Viacom. UGO was recently acquired by Hearst for $100M, but UGO’s been around for a decade and it too, like Glam.com, employs a network strategy of repping other, smaller sites too. In fact, Heavy.com did the same thing earlier this year, though I’d be curious to see how that is going.
The point is: because both Heavy.com and Glam.com adopt a strategy of one part property and one part network, the mix could be complementary, and if each unit is left alone to operate on its segment, then the cross selling opportunities to advertisers would yield higher revenue per marketer relationship.
We’re Gonna Need a Bigger Boardroom
So should Heavy.com and Glam.com consider a merger of sorts?
We know Glam.com’s financials and audience, we don’t know Heavy.com’s… but even if the M&A specialists could make the numbers add up, something tells me that there isn’t a boardroom large enough for Glam.com’s Arora and Heavy.com’s co-CEO Simon Assaad to co-exist. Yes, we mean that in the nicest way possible, but the fact remains, like oil and vinegar, some things probably just wouldn’t mix.
All to say, it will be very interesting to see how this story ends.
A lot of people are talking about Glam Media and whether or not
- it is larger than iVillage,
- it’s an ad network or a publisher.
Frankly, it does not matter. All that matters is that from the metrics that count, Glam is growing quickly and it’s now looking at leveraging its momentum to raise a whopping $200M on a valuation of $600M. Just some food for thought: iVillage sold to NBC for $600M, this year will make $120M… Glam is making about $35M in revenues and losing $4M in EBITDA. It’s projecting a “hockey-stick-on-steroid” growth trajectory for sales next year… of course, word is they’re about to sign a $1B ad deal with Google… though that seems off since Google paid $900M for all of News Corp.’s Fox Interactive Media…
Anyway, CEO Samir Arora reminds me of Simon Assaad, the sharp, slick and sales-oriented CEO of Heavy.com, another site that has raised some objections but seems to be trecking along nonetheless.
Naturally, for purposes of valuations and comparing apples with apples, yes, it matters whether or not Glam is a media property or an ad network… but frankly, the lines do blur over time.
For example, Gorilla Nation Media started as an ad rep, then added network duties, and then owned some sites, even selling Quizilla to Viacom. Glam reminds me of a young, female oriented Gorilla Nation.
Read the naysayers and supporters…
PLAY
