Allow me to say that I think very highly of Jason Calacanis, even though I only found out who he was last year when I started to take an interest in blogs, and mainly, using web logs to grow the Mojo Supreme network.
I also think that those who bash Mr. Calacanis (particularly for this “self-promoting” ways) do so out of envy, jealousy and simple pettiness.
Finally, yes, AOL TW bought his company to get into and better understand blogs, but first and foremost it did to so lock down one of the more successful Web entrepreneurs out there.
Ok, now that the obligatory prelude / disclaimer is out of the way, I must say that I am shocked about one thing Mr. Calacanis is doing.
Weblogs and parent AOL Time Warner (I know, it’s only Time Warner now) launched a new blog called BloggingStocks.com.
While many people would question the common sense and ethics of having bloggers blog about stocks they own, I agree that so long as the bloggers do not violate any rules, it’s fair game. After all, blogging is nothing else than writing, and if business columnists for magazines and websites can write and talk about companies whose stock they own, it should not be any different in the blogosphere (in all fairness, I blog about many things, including stocks I own, used to own, will own perhaps, though I follow all mandatory and common sense rules of the practice).
But, what I do find a bit provocative is that one of the eight stocks that BloggingStocks.com covers is, you guessed it, Time Warner, parent of Weblogs. Inc.
Now, I just said that blogging is no different than writing. True. So if Fortune, the magazine, can write about Time Warner, the company, why can’t BloggingStocks.com?
Well, the reasons are simple:
1 - blogging is still relatively new and trying to gain credibility
2 - bloggingstocks.com can eventually talk about TWX, but launching a blog about stocks and covering eight and one of them being your parent company seems like a bad idea.
But maybe that’s just me. But take a look at this, re: ( <-- a really great company 
- ok, we see the smiley face, but is that really what people looking for information on the stock market and investing want to see?
The first eight blogs are:
http://goog.bloggingstocks.com/
http://aapl.bloggingstocks.com/
http://ge.bloggingstocks.com/
http://wmt.bloggingstocks.com/
http://ebay.bloggingstocks.com/
http://twx.bloggingstocks.com/ ( <-- a really great company
http://yhoo.bloggingstocks.com/
http://msft.bloggingstocks.com/You can also have these rolled up into one big blog at www.bloggingstocks.com of course.
Do you agree with me? Am I crazy? Am I being over-ethical? Is there even such a term? Let me know at ash @ mojosupreme . com
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WatchMojo NewsletterIf it’s true that online video is now in batting practice, or at the very latest, the 1st inning, then surely the ad formats being pushed these days - pre rolls, for example being one - cannot be IT.
Expect some very novel ways to promote brands in online video over the next few months over at our sister site WatchMojo.com.
To read more about what online video industry think about their ad formats, click here.
“Television has been the predominant medium for a number of generations, but every generation up to 24-year-olds are going online before TV,” Matt Wasserlauf, president and CEO of Broadband Enterprises, which specializes in broadband video sales, syndication, and original production.
Read more.
Just a few months ago, MySpace realized that it was driving about 35-50% of the video plays on YouTube. Putting two and two together, the folks at MySpace decided to launch their own video service. As reported by HipMojo.com’s own Jackhammer, MySpace’s service still has a lot of improvement, but while the service has been less than perfect and prone to glitches like all things on MySpace initially, it turns out that already, at least according to FIM boss (and owner of MySpace) Ross Levinsohn, last week, users uploaded more video on MySpace than people did on YouTube.
This is not surprising. For one, MySpace has 65M users, that’s about 7-10 times more than YouTube. So if a fraction of MySpacers start to upload video on the site, the number of uploads will dwarf that of YouTube.
Of course, YouTube is a social networking site for online video, whereas MySpace is a social networking site that now allows for video uploads. Those are two fairly different things.
So when PaidContent.org is right to assert that YouTube automatically plays video clips whereas MySpace does not, that has more to do with the mindset and expectation of the user. On MySpace, if the videos played immediately, it would hurt the user experience, on YouTube, having videos load rightaway helps the user experience. This is why on HipMojo.com’s sister site, the video producer WatchMojo.com, we always automatically launch the video, because it’s a video and not a text site.
Translation: while it is a good business call for MySpace to offer video on its site, it should bear in mind what made it king of social networking and not try to alienate its base by shoving clips down their throat. Trust me, if people want to see videos on MySpace, you will know it (in other words, when the ratio between users, video uploads and plays diverges).
Finally, while it is true that the lion’s share of YouTube’s videos are the intellectual property of someone else and as such, not monetizable from an advertising standpoint, the truth is that MySpace’s videos would be mainly user generated, and not necessarily all that much more desirable to advertisers.
Apparently, magazine executives - who are seeing their industry stagnant and their revenues migrate to Web publications - are excited about the potential of leveraging video.
Hmm… maybe I’m crazy, but should they not have been excited about the prospects of the Web for their business 10 or even 5 years ago… or for that matter, even, today?
Magazines have some of the best content, period. Most of what you find online is at best a diluted version of what you can find in magazines. The reason is simple: magazines have historically been able to pay for good writers and good content. But when the Web popped up on their radar, instead of realizing that that was where the action will be, they remained defensive, so a bunch of online players stole their lunch. Of course, the revenues of the print guys is larger mainly due to the industries being more mature, but incorporate growth rates and trends, and you know that the outlook is bleak for magazines. It could be argued that women will be the predominant consumers / readers of magazines while men will largely turn to the Web for infotainment.
Think of the adult industry: 10, 20 years ago, if a teen wanted adult material, he had to buy a magazine. Today, he has the Web. The carnage that tech magazine publications faced was essentially duplicated to lesser degrees in other categories (tech being the most obvious one, followed by video games). Hence the success of an IGN at the expense of a Ziff Davis, for example.
But the bottom line is that in content and search, magazines acted slowly and too defensively.
Notice I also mention search. Why? Search results today favor online publications, not offline ones. Even though offline ones are usually more likely to have great content on a topic. That content may not be digitized, and if it is, the page might not be optimized for online search indexes and crawlers. This was one of the underlying rationale for developing - pardon the shameless plug - the MetaMojo.com domain specific, vertical search engine.
Back to the topic, will online video be the magazine industry’s salvation?
Find out what Mediapost has to say here.
About.com is the grandfather or vertical publishing. Arguably, one of the many influences in the Mojo Supreme network. All to say, shameless plug notwithstanding, today About.com announced the release of 16 new guides, for a list of which ones, see below:
About.com Announces 16 New ‘Guide Sites’ to Offer Practical Information on Topics Ranging from First Aid to ”Lost”
“We’re enormously pleased to be adding deeper content and a wide range of new talent to the About.com network,” said Mike Daecher, senior vice president, content and guide operations. “These new Guide Sites, just a sampling of the 100 we’ll add in 2006, extend About.com’s relevance to a whole new audience.”
About.com visitors can rely on Guides to offer an informed perspective, speaking with authority, passion, personal experience and real field knowledge. For instance, Aron Hsiao, the About.com Guide to eBay, says, “I’m now a bigger eBay user than ever, successfully buying and selling hundreds of items every year. I’d love to help you do the same!”
Wallop is one of many dozens of APIs that Microsoft opened up last year. At the time, the company was interested in licensing the technologies to companies that had secured financing. I had contacted their MSFT IP Ventures division regarding a business opportunity that would employ Wallop.
Note that at this time, I was increasingly made redundant at my then employer, AskMen, who was acquired by IGN (IGN went on to be acquired by Fox Interactive Media, making me totally useless… alas, I digress). Point is, I was looking for something to do, and since all roads all my old employer proved to be dead ends, the notion of leaving and building a company around a MSFT-built API seemed like a fit, as I could handle product development, marketing, sales and business development in months 1-3, at which point I could secure financing in month 4 if necessary. The idea was: until month 3 or 4, we would not really know what direction the company would go in, the same way that it tooks Friendster and MySpace months to realize their identity.
Suffice to say, MSFT politely declined because I had no financing. They wanted that in place, and in all fairness, I do / did not blame them… who one earth were I to suggest otherwise?
Eventually, despite their good intentions, the MSFT IP Ventures fizzled. Until now, I guess.
Today, MSFT announced that it was spinning off the product into a separate company:
Microsoft Corp. said it’s spun off a new social networking company called Wallop Inc., which was developed by its Microsoft Research division [and] will be located in San Francisco, (…) led by CEO Karl Jacob, and has received Series A financing from Bay Partnes. It will launch later this year, according to the Redmond software giant.
Wallop will compete against other online social networking Web sites such as Friendster and MySpace, but will be unique, according to Wallop officials.
“What is exciting to us is Wallop’s vision to turn social computing on its head and significantly change how we look at this sector,” said Eric Chin, venture partner at Bay Partners and Wallop board member, in a statement.
The company, located in San Francisco’s South Park district, is hiring. According to Wallop’s Web site (www.wallop.com), the company is looking for “a killer designer, rockstar engineer, marketing maven, or business development guru.”
Looks like they found their man, business plan to come.
Click here for my earlier post on MSFT’s half-effective effort in opening up their API.
Click here to learn more about Wallop.
Well, that depends if you think that CNET, the company, is a buy.
As one of the few remaining large, independent internet media firms, CNET has for some time now been seen as a potential acquisition target. As such, the stock has always been priced at a premium.
I owned the stock for a white, having bought into it at about $7 in 2004. When the stock hit about $12, I sold my holdings. The stock continued to climb over $16. I did not exactly kick myself because I knew that in the euphoria that surrounds all things digital, CNET would always trade higher the instant a large media company, be it an old media one like News Corp. or Viacom or a new media one like Yahoo! or Google, would eye it in a potential deal.
This week, CNET tumbled 17% in a day because, unlike Yahoo! and Google, its numbers failed to impress the street.
I must say, I was intrigued to get back into it cause overall, CNET has a wonderful business, though yes, surely it could be better.
Bottom line, while I think that any transaction would only materialize if the deal was at least $2 billion, at today’s price, that implies only a 17% gain, which considering the premium the stock already trades at, means that such a return is not really worth the potential downside risk.
Of course, I also do not think that CNET CEO Shelby Bonnie would give up his company for “only” $2 billion. He remained an independent executive for this long, why give up control now?
Time will tell. If the company’s value were to dip below $1.5 billion (which I doubt, frankly), I’d get in, but in the $1.6-2 billion market cap range, I am not sure I’d be tempted.
You have to be taken aback with the growth, potential and downright speed of business, especially anything touching digital media.
Let’s talk about Microsoft acquiring Massive, the new in-game advertising network. But before we do that, let’s put this into context.
About 18 months ago, when I was still an executive at AskMen, we were approached by IGN to be acquired. Those talks went on for a while, over 6 months, to be precise. As I got to study IGN Entertainment, I got the picture that they had a few gems in addition to their ever popular media properties, which included but was not limited to IGN.com, GameSpy.com, etc. In addition to those properties, the company was a leader in digital distribution of content, and was a pioneer of in-game advertising.
The former (digital distribution) was all about offering gamers the opportunity to seamlessly download video games onto their hard drives. This could be extended to allow consumers to download music, films, books and much more. When IGN filed to go public, it knew that some would be acquirers would properly recognize the value of this business unit, even though they knew that this was exactly the kind of feature that larger media companies would salivate over as they wondered about their digital future.
The latter (in-game advertising) was essentially about placing ads in games. So say you are playing Tomb Raider and you live in Philadelphia and Bon Jovi will be in town this summer, you put two and two together and get an ad for Bon Jovi on the scoreboard. Not rocket science but certainly the kind of thing that made IGN a much sought after asset by many.
Connecting the dots in this story… that was 18 months ago. IGN was a great fit for AskMen not just because of the synergies in the media properties, but because IGN seemed so progressive in digital distribution and in-game advertising.
When IGN was trying to choose between going public and selling, the dilemma, I would presume, was: we make (these are arbitrary numbers folks, even though it’s all in the prospectus) $50M in ad sales through the media properties, that’s growing at 30% a year. We make $10M in digital distribution, that’s growing at 75%; we make $5M in (in-game advertising), that’s growing at 100%… sounds great right?
But, the thinking must have been: “if we sell now, we essentially get get so-so multiples on the high income business and high multiples in the low income businesses. If we stay independent, we’re worth $500 million on IPO day (when you considered their comparables, this was more than reasonable) but over time, we could grow to be worth $1 billion, and who knows, maybe even more.”
When IGN sold for $650 million at about 40 times EBITDA, many people thought it was pricey, especially since the company’s management was originally asking for $1 billion or so. The thing that was odd was that the pieces separately were worth more than $650 million mainly because in-game advertising and digital distribution were so highly thought of.
All to say (we’re getting there…), today the Wall Street Journal (though the link here is to ABC News cause WSJ is a paid site) is reporting that Microsoft, who has been playing catchup in the video game console business to SONY’s Playstation - has / is / will be acquiring in-game advertising network Massive for, get this, $200 to $400 million.
Massive is 2 years old folks! Of course, in-game advertising is set to grow, big time: in an interview with Reuters in December, Massive Chief Executive Mitchell Davis said forecasts from a variety of industry sources call for real-time game advertising revenue to grow into a $3 billion-plus global market by 2010.
As I said, let’s try to get back on track and connect the dots. Over a year ago, before AskMen was offiically sold to IGN, when I was still at AskMen, I spoke to some folks at Massive and knew that we were about to be folded in a company that was “the leader” in this kind of thing, right?
Today, two year old Massive sold for $200-$400 million, not too shabby at all.
So, if Massive could fetch that much and IGN “only” fetched $650 million and seemed to have had much more under the hood, methinks some people at IGN must be kicking themselves now.
Of course, then again, I am sure that all is well in the Kingdom of Rupert and the folks in Brisbane don’t regret a thing.
More importantly, what does this mean for Microsoft?
It would be fantastic. First off, even though surely on a multiple or DCF basis, this deal will be expensive at either the $200 or $400 million range, as most deals in digital media have shown (MySpace @ $580 million, which also included Intermix; IGN @ $650 million), the growth in digital media is so ferocious that for a larger company with millions - lest billions - in the coffers, it would be more expensive not to make such deals.
(Did I just say that?)
Yes, I did. Same way that I was telling my cohorts at AskMen that the price tag from IGN was ridiculously low, and the same way that if anyone would have bothered to listen, the IGN price tag from News Corp. was low. But that’s another issue.
So, by acquiring Massive - and having had the luxury of launching the XBOX 360 a full year ahead of the Sony PS3 - Microsoft is narrowing the gap in both advertising and video games.
What is more important is that if it is true that video game sales are low, then a lot of players in the space will be looking to make revenue in other ways, such as in-game ads. This is why MSFT is both hedging itself AND doubling up on the industry.
In fact, I do not know what is going on in Redmond, but this week, MSN hired former Ask.com executive Steve Berkowitz. This means that search will be central to MSN’s strategy going forward. That’s a good thing, cause MSN’s search is pretty good. Hoping that Google does not strike me down for saying this (they have a sense of humor in Mountain View, right?), Google is pretty slow at indexing new content, they index it right away, I’m sure, but their PageRank technology means that new content that is not linked to will not creep up onto the first results page for months. MSN seems to be more concerned with returning new content created online on its first pages, ensuring that as searchers find out about this, they will use it and not Google to see what is new online.
It will be interesting to see what other acquisitions come out of Redmond. Between Viacom, News Corp., Yahoo!, Microsoft, and of course Google, there’s never been a better time to be an entrepreneur.
