I am very excited because we’ll be launching our own video search this week. I have been playing with it all week, we’re adding one pretty majoe functionality change and then I will be adding a link to it here.
Read more about others in the space in the meantime…
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WatchMojo NewsletterThis is touching:
At least 30 prisoners awaiting execution in Texas have pages on MySpace, which is used by millions of teenagers around the world to socialize and make friends.
Groups working with crime victims have demanded that the website, which is owned by Rupert Murdoch’s News Corporation, removes them. So far, MySpace hasn’t responded to any requests by crime victims to take the prisoners pages down.
The profiles list the inmates’ hobbies and personalities and some include blogs in which prisoners relate the daily doings on death row, their favorite music and films, or even the crimes they were convicted of.
As prisoners are not allowed internet access, the profiles are created and managed for them by friends and relatives who receive prisoners’ updates in the form of letters.
One inmate, Randy Halprin, 29, who was involved in the death of a police officer, writes: “I think I’m a pretty funny guy. I have a whacked sense of humor. I can be a big kid at heart. I’m a hopeless (and I mean HOPELESS) romatic [sic].”
Read more.
Read .
The average age of U.S. video viewers is an 39, according to BIG Research.
This has more to do with the fact that one of things people watch most of online - aside from home videos of a cat falling off a balcony, of course - is news. And kids don’t watch news, after all.
And, according to data compiled by Nielsen/NetRatings, comScore and Quantcast (it must be true if all three got into the fun), Web surfers ages 35 to 64 make up anywhere from 48% to 65% of YouTube’s audience.
Read more.
Not necessarily, but the two sites are the furthest thing from what advertisers are looking for.
I like both sites, very different functionality. But if either web property is deemed to be a major loss for John Battelle’s Federated Media, then it’s a crazy market for sure.
Both sites have large audiences, strong brands, and definitely drive a lot of traffic out to linked stories, but they would be very weak advertising mediums for sure.
An astute reader would pause me and say: you just described Google pal, isn’t that the shiznit? No, people go to Google to search for information, get answers and find solutions to their problems. If a commercial answer/solution/web result addresses their needs, they are happy. In other words, consumers understand that on a search engine, the commercial component is as part of the mix as organic results.
But on Digg and Fark, it’s an informative and entertaining platform. The users want free content and don’t really want advertisers in the mix (the links that drive 99.9% of the traffic, we’re not talking banners alongside the text links that feature stories).
Each and every time an advertiser gets a sponsored link on Fark, the advertiser gets flamed. One men’s site recently promoted its top men’s list and Farkers said that the notion of a men’s magazine featuring a list on cool men was, well, you know what.
Who was the magazine? Here’s a hint: it ain’t Maxim, who now sells the inventory on Fark.
Any advertiser that thinks either Fark or Digg are great platform to promote their brand is insane. Why? They immediately see that the best real estate is the outgoing links, and if they tread there, they’ll get blasted!
It’s good for awareness of a new product, if all you want is to slap a banner on top of the headlines, then it works. But advertisers want something measurable, damn it isn’t that how we sell them the Web?
But the instant you try to get integration into the property, you will be hated. This is why all most of these user generated, bookmarking sites are ultimately doomed as a stand alone entity: you need content folks. I’m biased because we create content.
But I do not believe content is kind because we produce it, we create content because content is king. Digg, Fark and many others have the audience but little content. That’s their problem.
Digg and Fark have another double-edged sword they offer advertisers:
if you ever get “digged” or linked up off “Fark,” you will see a tremendous spike in traffic but the pageview to unique count will be very close to 1 to 1. That is what most sites have to say.
Advertisers try to gauge how much interaction goes on after the click: in my life as an ad sales VP, I had a major pharmaceutical cancel on us because they felt that the ratio of pageviews to clicks was too low. This was a common trend online and will continue to remain so. If that is one metric by which one would measure success, a lot of publishers are doomed, but Digg and Fark who have no content of their own might as well dig up their holes cause they’re farked.
That was too easy.
I am certainly not saying that Digg and Fark are bad places to advertise, I am saying they are tough properties to sell.
Like I said yesterday, Federated Media is probably breathing a sigh of relief - until it sees who is left on its ad roster, great sites, eclectic personalities, but rather one-dimensional when an ad buyer looks at the list. Anyway, FM is breathing a sigh of relief because Digg and Fark probably had somewhat unrealistic expectations. I’ll spare you how I know, but trust me: I know.
But don’t take it from me: Digg’s cover story on Business Week or Fark’s story on Business 2.0 and how it is going to be a million dollar profit machine does not translate into a success with advertisers, it only inflates the principals’ expectations.
You think investors are fickle, advertisers are worst. Bottom line: Losing Digg and Fark is a bigger PR loss than financial hit to FM.
News Corp.’s Rupert Murdoch told a crowd of analysts that Myspace could now sell for $6 billion, even though UBS pegs all of Fox Interactive Media at $2 billion.
Having studied in finance and worked as an in-house analyst sitting across the table from the nation’s “top analysts,” I’ll be the first to admit that all analysts (yours truly if I can be counted as one) are full of crap. If I can’t be counted as one, then I’ll simply say ”take what analysts say with a grain of salt.”
Fact is: Numbers, trends and assumptions are meant to be manipulated. Half the time, you are trying to reach an end-number you have in mind practically from when you start the exercise. If you don’t have an end number in mind (the remaining 50% of the time), then you shake, mix and stir the numbers to get to something attention-grabbing (if I could tag this statement, I’d tag it “Mary Meeker, Henry Blogdget, Walter Piecyk, Jordan Rohan”).
Anyone who tells you otherwise is a liar and a phony whose colleagues has an investment banking relationship with you.
Anyway, if Rupert Murdoch is right, the $6 billion price tag would represent a 10-fold increase in what News Corp. paid for all of the Intermix, Myspace’s parent.
Of course, he is not right, he’s biased. He is still selling Myspace to investors and analysts.
Obviously, Mr. Murdoch is not applying a discounted cash flow, accounting-based valuation model but it is interesting to see that the price he attributes to Myspace is 3 times larger than what Facebook founder Mark Zuckerberg wanted to sell his company for, and 6 times more than people wanted to buy Facebook for.
According to recent numbers by Hitwise, Myspace has 82% market share in social networking circles compared to 12% for Facebook. Of course, that does not mean much, since Facebook up to recently only targeted students whereas Myspace targeted sexual predators web surfers of all kinds. Point is: no one actually paid $1 billion for Facebook, and I am not sure any one would pay $6 billion for Myspace, let alone $2 billion.
Youtube - this year’s answer to Myspace with its own legal problems (did we mention the sexual predator thing?) - fetched $1.65 billion from Google…
What is Myspace worth?
Not the $15 billion that RBC’s Jordan Rohan threw out, and not the $6 billion Mr. Murdoch claims today.
More than Youtube? Since the market dictates prices, and YouTube sold for $1.65 billion with the end price tag coming to $1.77 billion, that is the price we attribute to YouTube, not what we think it is actually worth.
So… when you consider that analysts at UBS peg the entire value of Fox Interactive Media at $2 billion (UBS’s institutional investors own 0.53% in all of News Corp.), and “analysts know everything” (only if I’m excluded from the lot, if I am, then it’s “we take as accurate what analysts say at face value”) then Myspace must be projected a value lower than that of YouTube’s $1.77 billion.
After all, considering that IGN sold for $650M, and FIM includes the legacy sites in News Corp. (FOXSports, American Idol etc)., as well as Scout, then all of sudden, it looks like the sum of the parts are worth more separately than together.
Oh, oh. Are we seeing a repeat of media mergers gone wrong of the 1990s?
Let’s see.
Is IGN worth $650M? Well, I worked at IGN for 6 months after they bought my old company. IGN wanted to go public or sell for $600-800 million, it got $650M from News Corp., and initially some people said that the price was on the low range of what it was shopping for.
But, last year in September, 2006 when News Corp. bought IGN, MySpace had yet to further explode. It was also a bastion of user generated content, there were also increasing rumors of sexual predators lurking on the site. News Corp. was not sure it wanted to peg its future prospects in online on Myspace, the black sheep of the world wide web. So, in that context, IGN managed to pin News Corp. against Viacom and got News Corp. to pay 40 times EBITDA for a money-losing dot com: IGN. That transpired into a $650 million deal.
But, that does not guarantee that IGN is worth $650M today. After all, in a recent interview, News Corp./FIM’s media cazr Ross Levinsohn himself admitted that traffic on IGN fell and is only now at its old levels. Furthermore, judging by News Corp.’s recent financial statements, IGN is still losing money. Finally, few companies would be so desperate to be compelled to pay 40 times EBITDA for a digital media company, so if you combine all of these variables, it’s highly unlikely that IGN is worth more than $650 million; it’s very likely that IGN is worth less and not more than $650 million. But since the market dictates prices, we’ll be kind with IGN and say that they are worth what they were worth last year: $650 million. I do not think that News Corp. would be able to sell IGN for $650 million though. Ironically, I think that as an independent company, IGN would be worth more than $650 million. Perhaps a spin off is optimal, so long as IGN can get into the black. Time will tell.
Trying to reconcile all of these numbers, we realize that we will break ranks with experienced, savvy and knowledgeable analysts at UBS and say that they might be a tad too conservative with their $2 billion tag on all of FIM’s assets.
Or, maybe, just maybe, in the world of media, Gestalt’s phenomenon - maintaining that the whole is greater than the sum of its parts - does not hold.
Could it be that Rupert Murdoch’s vision of amalgamating a wide array of digital assets do not add value, but take away? I have always felt that IGN would be worth more outside than inside News Corp. And with these numbers, could it be that these assets should be spun off?
Don’t take it from me, of course, take it from the analysts at UBS and from Rupert Murdoch; after all, if they are both right, then indeed, News Corp. should be looking at splitting up their online assets…
First off, how does one decide that they’re going to get competitive about things like how fast you can write text messages?
ANYway, it is pretty cool that Nuance has created voice recognition that, you know, actually works and doesn’t force you to talk. Extremely. Slowly. And. Deliberately.
That said, what’s the damn point of sending a text message via voice? Isn’t the whole point of texting to not have to talk? Technology makes our lives simpler, it’s true, but then there are other times where I really think people are just inventing things because they know that someone will buy it if only because it’s cool.
Check out an intriguing man v. machine battle here.
So rumors are flying that Facebook is shopping itself to IAC after talks with Yahoo! slowed down.
Last week the rumor mill was that IGN co-founder Mark Jung left Fox Interactive Media to head to Facebook. That’s nonsense, if that happens, Mark Squared will be responsible for the end of the Web as we know it. Do you really think that Mark Jung will be cool with Mark Zuckerberg talking to IAC’s Barry Diller sans Jung? And, by extension, do you think Mark Zuckerberg will be cool with Mark Jung talking to IAC’s Barry Diller sans Zuckerberg? I doubt Mark Z. and Mark J. will be able to get any word in with the other one in the room sitting across our answer to Tencious D, IAC’s Barry Diller. Disclosure: Mark Jung was my boss for 9 months. He then sued me. I won Phase 1. He resigned from FIM. The case is ongoing, I guess…
Anyway, I don’t think Yahoo! should buy Facebook. I’ve explained why here (Scroll down to #7 for that).
But more importantly, I don’t think IAC should buy Facebook. Sure, IAC’s acquisition of 51% of College Humor was not - ahem - gamebreaking, but it gave them a platform to reach students. College Humor this year took a page out of Facebook’s page and adopted a more aggressive strategy vis-a-vis signups and subscribers. Will it work? Who knows. That’s for another post.
But between College Humor’s Josh Abramson (whom I’ve met a few times) and Facebook’s Mark Z. (whom I have not), I’d say Mark Z. should remain independent and report to no one. It’s too late to start pretending that you can live underneath the corporate structure of either Yahoo! or IAC buddy.
Better strategy for IAC: your stock does not need a tonic, it’s doing quite well (I sold mine at just under $30 cause I wanted to cash in profits and eventually people will realize that Ask.com is a distant 4th in the space and it will take much, much more to catch up 3rd place MSN, MSN is showing signs of regaining its mojo, after all). You spent $10 million buying 51% of College Humor, invest another few millions and make that something that can be enough of a Facebook instead of paying $750 million to $1 billion for Facebook.
Don’t take it from me, take it from investor Warren Buffett: it matters what you pay for a stock, with College Humor, you have considerable “margin of safety,” with Facebook, you’d have none.
Disclosure: I own shares in Yahoo!, sold shares in IAC and MSFT recently.
After questioning whether Dogster is anything other than Pets.com 2.0, I ventured on Dogster’s blog this morning and came across this entry:
Why is Getting Funding More Impressive than Generating the Same Amount?
It’s an interesting and accurate realization. The fact that the company is not funded out of the wazoo is the only reason it’s not Pets.com, by the way, or what Pets.com would be today had it not returned VC money to shareholders.
I am driven much more by building a profitable business than getting VC. People think it’s crazy, but it’s the only way to actually generate anything meaningful.
As we grow, we are starting to get more and more inquiries from the smart crowd, which is great… but I make it a rule to spend 2 hours on IT R&D, business development and sales, and content creation for every 1 hour I spend on corporate development. It’s a basic rule to ensure we don’t get distracted by things that might not add any value to the company.
The growth potential of Internet advertising has been underestimated because the predictions did not include advertising on video, social media or mobiles, Terry Semel, CEO of Yahoo Inc, said on Tuesday.
Media buying and planning firm ZenithOptimedia has said the Internet will receive a greater share of global advertising spending this year than outdoor outlets such as billboards, and it is set to overtake radio soon.
read more.
As a general rule, I don’t like to publicly ask for the resignation or dismissal of the CEO and Chairman of the world wide web’s largest media Empire. It’s not exactly good business when you are trying yourself to create a mini global web empire of your own. Notice the small e in our empire, and big E in Yahoo!’s.
The Empire Has Yet to Strike Back
But, when you’re also a writer of a website that questions what Wikipedia should be worth as a for-profit, if Google can overtake MSFT in market cap, whether Google overpaid for News Corp.’s search business or if it’s the 21st century version of Standard Oil or Microsoft, you can’t help but ask the question:
When competitors Google, InterActive Corp. and company are all starting to either build on their lead on Yahoo! or catch up Yahoo!, is it time for a change at the top?
Of course, over time, it will be clear that Google and Yahoo! are not competitors per se. But Yahoo! has not really surpassed many direct or indirect competitors this year, has it? In fact, Yahoo! now has a swarm of new competitors, i.e. News Corp.
When you are that big, that happens. Microsoft has grown revenue and profits and yet its stock price has languished. As the cliche goes, every incremental yard to the goal line becomes harder to secure the closer you get to the end zone. We’ve all seen the flick.
Put Stock in People
But I am also a shareholder, and while I can put up with Yahoo!’s stock falling from the mid-40s price range all the way down to $23 (I am, after all, a long term believer in the web and Yahoo!’s place atop of it, so I will hold on to those shares probably forever), there is one thing I cannot really put up with.
When a company’s own people stop believing in the firm’s Mojo. That’s when I know maybe the stock should not be a perennial holding. After all, even Warren Buffett has changed his perennial holdings, hasn’t he?
Mr. Semel pulled off a masterful turnover in 2003. He got Yahoo! out of a funk: the sub-$10 stock price rose along with revenues and profits, culminating with the Q1 2004 earnings report, after which the stock rose another 15% on the next day. He called for a stock split, and since then, Yahoo! has done very little to get me excited.
But when you look at how much Yahoo! is losing top talent, you start to ask questions. Yes, it is normal in the giddy environment we are in now to see top and mid-level managers leave, as Paid Content is reporting. But when there is a list of others who might be bolting, you start to ask questions. But if what others are reporting that Semel was booed by his own staff, then the problem runs deeper (of course, take everything from ValleyWag with a grain of salt). Of course, these rumors need not be true, the mere fact that they exist suggests a major problem.
No one boos (within MSFT, loudly) Steve Ballmer or Bill Gates, even if they sometimes they might deserve it.
No one boos Larry Page, Sergey Brin, or Eric Schmidt.
Yet when the rumor comes out that Yahoo!-staff booed Semel, they are not quickly dismissed. We almost expect it to be true, or want it to be true. There is a major problem there.
I have worked alongside a boss who had lost the respect of his team. When that happened, I knew it was time to leave. I left for various reasons, mind you… but it made no sense to stay in that environment. It turns out I was not alone, a lot of others left too. We did not all leave to start new companies, we left cause after a while we realized there was no point in staying and going against the grain with someone who had too much power and too little tact.
This is an important consideration: are people leaving Yahoo! because they seek greener pastures and want to join new ventures, or is it because they no longer respect Semel’s vision? Is there a vision other than the status-quo?
In fact, the same Valleywag post adds something that made me cringe: “To which [Semel] responded by challenging critics to leave the company if they didn’t like its direction.”
Of course, VW’s own boss Nick Denton was quick to add that the rumors were unfounded: “hmm, first email returns not very encouraging: ‘he wasn’t booed, and it wasn’t a ’special internal meeting’. it was the regular quarterly all-hands and his message was pretty well received, i think.”
Ok, good. I’m glad we put that to rest, I think. What’s up with the “I think” at the end though?
Could it be that maybe all is not too well in Yahoo!’s HQ? After all, a lot of my colleagues also used to say “all is well,” but when the dust settled, only 33% of the initial team remained, the remaining 67% of the original crew bolted: VPs, editors, sales guys, tech guys. Of course, my old company had 1% of Yahoo!’s headcount, but organizational behavior is organizational behavior; so is bad management.
Of course, no one is accusing Mr. Semel of bad management, or mismanagement. The problem might be in today’s mood: we’re back in the gunslinging mode where we want major, “gamebreaking” deals with an immediate impact. News buys Myspace and becomes a major online player… boom! Google buys YouTube and becomes #1 video player… kapow!
Running with the boom, kapow Batman analogy, another problem is that Semel might not have a Robin to weave through the current threats and opportunities of the Web.
Rumors and innuendo aside, what’s the answer: should Terry stay or should Terry go?
I think that in today’s climate, we are starting see stability trade at a discount. Managers (and investors) are once again putting a premium on risk taking and the almighty high-flying stock. No matter what Mr. Semel does, or does not do, financial results will increasingly play second fiddle to the stock price.
As a coach, you can have a wonderful game plan and do 9 out of 10 things right in a game, but if your win-loss record is abysmal, you’ll be fired. Mr. Semel has proven to be a magician many times over, but after his massive 2003 payday, maybe he is not the best man for the job at Yahoo!
In other words, even though he might not be to blame per se, and Yahoo!’s financial performance is otherwise pretty stellar, at some point the fact that many of his lieutenants and soldiers’ stock holdings are in the red and their options out of the money will cost his job no matter what.
Remember one thing: before Semel, there was another respected executive who had done wonders with Yahoo! whose time had passed: what was his name again? Oh right, Tim Koogle. Mr. Koogle, it could be argued, was a victim of a systematic, market problem: the dot com meltdown. His successor, Mr. Semel is a victim of a unique, unsystematic ailment. Doesn’t that say anything?
The Institutional Imperative?
A large chunk of Yahoo! stock is held by institutional investors, co-founder David Filo remains a large shareholder, the other co-founder Jerry Yang remains a charismatic leader who could himself pull a Steve Jobs and come back to the helm. I know it might be easier for Yang to recruit top talent than for Semel to retain at this point.
Of course, maybe I am being impatient by bringing this up. Just this past week, Web 2.0 was decreed dead and Web 3.0 was ushered in by none other than the New York Times (so of course, it must be true). Maybe we will lose our obsession with flash (pun intended) and return to valuing substance, at which point Mr. Semel will return to being hailed a master for not acting impatient and sticking to his guns.
Manage the Clock
Time will tell for Yahoo! It’s a just a question of whether there is enough time on the clock with Terry Semel running the offense.
Disclosure: I own shares in Yahoo! but that does not mean that you should too…
