RWW’s Richard McManus beat me to it, but apparently, according to some numbers from Compete.com, Digg is actually larger than Facebook. Please note than Compete.com is a sponsor of this blog and our network of sites.
That’s shocking. No, not the sponsorship bit, the fact that Digg is larger than Facebook. Facebook is growing ferociously, we first outlined when - at current growth rates - Facebook would hit 100M users. Then, we did some number crunching and outlined that Facebook would be larger than MySpace by August 2009, which was admittedly crazy at face value, but hey, blame Excel.
The question is: if you could buy one of the two, which one would you pull the trigger on?
Digg has many clones, and ultimately I’m still not sure of its value. If it’s true that a couple of dozen of diggers control the main page, it’s utterly useless. Facebook is anything but, but the flip side is that news will always be relevant, and tools to take the power away from editors and place it in the hands of readers is priceless while everyone invariably grows out of Facebook. Trust me, they do, or should. Though what we like about Facebook is that it’s become the Database of Connections, to borrow from John Battelle’s reference to Google as the Database of Intentions.
If you could have one of the two, which one would it be?
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WatchMojo NewsletterPaid Content says it’s official: Yahoo! Acquires Rivals.com for est. $100M.
Like Scout.com, Rivals.com is a sports community site. Scout.com was bought for $60M in August 2005 by News Corp.
If history repeats itself, and it always does, and things come in three’s, then maybe this means that Yahoo! will next buy:
- a social network: Bebo or Facebook anyone?
- a gaming/tech site: CNET anyone?
Technically, News Corp. first bought social network MySpace (then Scout.com) and closed the trifecta with gaming site IGN.
But you get the idea.
Came across something interesting off Valleywag.
Brad Greenspan is nuts, and we admire him for it.
Last year he filed a lawsuit against News Corp. and Intermix for essentially letting News Corp. “steal” away MySpace. He claimed MySpace was worth $10-20 billion, Intermix sold it for $580M. Mind you, today News Corp. Chairman Rupert Murdoch said - via his London Times - that MySpace (and perhaps all of FIM) could be Yahoo!’s in exchange for a 25% stake in Yahoo! Maybe Brad was right, who knows?
Anyway…
We don’t personally really have anything against Rupert Murdoch despite a misunderstanding last year after I left his company, but we’ve repeatedly called for the Bancrofts to say “no thanks” and even encouraged Pearson and GE to consider making a counter offer for Dow Jones.
Today entered a white knight, perhaps.
Brad Greenspan, who unlike us, does seem to hold a grudge against Mr. Murdoch sent the Bancrofts a letter telling them that he would be bidding $60/share in a Dutch auction for 25% of Dow Jones’ share, or $1.25 billion worth of DJ’s shares.
Not surprisingly, the WSJ runs the story, as does Barron’s. But if GE and Pearson were willing to buy 80% and leave 20% for the Bancrofts… why not have GE, Pearson each take 27.5% (that’s 55% if you’re counting), then Greenspan’s group can take 25% and the Bancroft’s will have 20%.
GE and Pearson have strategic interests: the former has CNBC to protect, the latter has both The Economist and Financial Times. Yet neither are online whizes, yet Greenspan is.
That’s ABR (anyone but Rupert) = 100% and Rupert Murdoch = 0%.
And how does the Board vote?
Imagine if we did hold a grudge against Mr. Murdoch? I don’t, I really don’t. In fact, the man does add flair and enigma, doesn’t he?
What, the f***, is Forbes thinking.
And, for that matter, what on earth is Research in Motion thinking for underwriting this nonsense.
So here I am surfing around the Web and I see:
“Five reasons you don’t want an iPhone.”
Naturally, I click and get one of Forbes’ lists. Reason 1, whatever. Reason 2, something else. Nothing too shocking, or surprising… but then what ads do I see adjacent to this list?
That’s Blackberry’s ads. That’s appalling.
But wait, there’s more:
Now someone might say this was an accident etc. But it’s not, these are not just ads, there’s clearly a (roughly) 120×90 pixel-sized AT&T button under the horizontal navigation bar… so this is clearly something sponsored.
I’m a publisher now and I spent 7 years in ad sales so I know something is dubious when I see it.
Let me guess what happened:
1 - Blackberry saw the timing of the Apple’s iPhone release in end of June 2007 and decides to go on the offensive.
2 - RIM - parent of Blackberry - issues out request for proposals (RFPs).
3 - Forbes suggests banners, display ads, video ads, etc., and adjacent ads alongside this article. I’m not saying that Blackberry paid for this content piece, since I have no proof of that… but it is very normal for advertisers to get publishers to write stories and advertisers indirectly underwrite these.
In this case, I doubt Blackberry explicitly asked for this, this was probably an overzealous sales team at Forbes.
But that 120×90 button shows that this is a sponsorship so Blackberry definitely was involved, but notice how it does not explicitly say that “this is sponsored by Blackberry” either?
I doubt anyone will care, but there ought to be a Chinese Wall of sorts.
Write “Five Reasons Why You Need the Blackberry” and I might not really mind about this, but this is tacky, and unethical. Just for that, I might not buy a Blackberry and buy an iPhone.
What is surprising:
I expect this from three stooges running a lame T&A e-zine, not a venerable and otherwise classy publication like Forbes.
I’d expect to see this from print, who might be desperate to stop the flood of ads online… I don’t think online ad sales teams need to resort to this, it’s just wrong!
I guess while some media bend over backwards to canonize Steve Jobs and Apple, all it takes to do otherwise is a sponsorship campaign.
Any thoughts? Related:
- What is Fake Steve was Real Steve?
- Should Apple / MSFT buy Record Labels?
- Apple CSR: Oh Man…
Tech Crunch asks if MySpace is worth $12B, my answer to the question is no, MySpace is not worth $12B!
If FIM is on pace to generate $500M in revenues this year, then at a rich 10 times revenue, FIM would be worth $5B, no?
In fact, no.
Doubleclick fetched 10 times revenue from Google; YHOO and GOOG are trading at 10-15 times sales, but as display and search advertising leaders respectively, they deserve a slight edge in multiples. MySpace, FIM, Scout et al. don’t really exert any leadership in monetization categories. Don’t get me wrong: MySpace is the leader of unsellable impressions, IGN in the gaming community and Scout is a noble sporting site, but to merit sales multiples of 10 and more is pushing it.
P/E you ask? Well, IGN lost money, so did MySpace. FIM while valiantly gunning for $500M in revenues is hitherto not profitable.
In fact, I’ve got some bad news for Rupert Murdoch: if Google pays $25M per month to FIM - or $300M per year - and MySpace/FIM is suddenly owned by Yahoo!, what would that do to Google’s $900M deal?
Would Yahoo! honor it, or would it trump Google’s AdSense for its own ads.
Yahoo! makes $0.04 revenue per click compared to Google’s $0.11 RPC, so that $900M deal would yield far less, if MySpace/FIM was in Yahoo!’s hands. As such, that $500M yearly revenue figure would also slide quite a bit lower.
I don’t think by the way that $300M of the $500M figure comes from Google, by the way. That would mean that all of FIM’s revenue aside from the Google deal nets them $200M, which is extremely low. Something is awry there… I think.
I’d love to learn what drove Murdoch to place a $6B value last year, when UBS pegged its value at $2B.
And, that’s for all of FIM, not even MySpace alone.
Disclaimer: I used to be part of FIM from May - Dec. 2005. I miss those days. Where’s Borat to throw in a “not.”
The Washington Post is now running with this, too.
Here’s what I am hoping, as a Yahoo! shareholder:
- Jerry Yang is in, he’s got time on his side in the sense that he has the trust and confidence of insiders.
- But, he knows that he does not have too much time because every day that rolls by Google strengthens its grip around the Web, MSFT gets more and more desperate to become as relevant online as they are on the desktop.
- So, he lets the rumor of giving up a stake to News Corp. in exchange for MySpace to circulate, to get potential bidders excited about Yahoo! MSFT it was rumored was willing to bid $50B for Yahoo! There’s also AT&T that has been rumored. Of course, Yang does not like MSFT products, so they say, but to swallow MySpace and give up 25% to Murdoch?
I hope it ain’t true.
Don’t get me wrong, MySpace is huge, and apparently Murdoch might toss in IGN… but having been inside of IGN from May 2005 - December 2005 (News Corp. bought IGN in September 2005 for $650M) I can tell you for a fact that Yahoo! looked and passed up on IGN… so why would it want it now? Of course, a few in IGN said that “we don’t want to sell to Yahoo! because Yahoo! would change our name to Yahoo! Video Games and color everything purple.”
But, I digress.
Anyway, Yahoo! should make a run at Facebook, if they’re willing to value MySpace at anything north of $6B, let alone $12B, for how much FIM or MySpace is worth click here.
Better yet: Yahoo! is trying to get buyers excited and impatient. You know what they say: if you want to sell or raise financing, you shorten the time between the “for sale” sign goes up and when you want a deal done.
Of course, it’s not like Yahoo! started this rumor, David Faber did and today the London Times (part of News Corp.) ran with it. We wrote this morning how ballsy and brash that was on Murdoch’s behalf.
All to say, Yahoo! is certainly in play: it’s gobble or be gobbled, big time.
The man never ceases to amaze me.
Rupert Murdoch is an absolutely brilliant and cunning dealmaker.
Is it just me, or should Rupert be brought in to run Yahoo!?
When he bid $60 per share or $5B for Dow Jones, I was impressed. The fact that he’s positioned himself to buy Facebook is equally impressive. But to filter a rumor and hurl a suggestion - through one of this own papers, the London Times - that MySpace would be spun off into Yahoo! and land Murdoch’s News Corp. a 25% stake is sheer bollocks. We’re impressed, considerably.
While a lot of the journalists will report on the merits of this, it should be noted that the general idea or baseline for a YHOO/NWS deal would be as such:
News Corp. boasts a market cap of $70B
Yahoo boasts a market cap of $37B.
In a general merger of sorts, Yahoo! would claim roughly 35% of a merged entity. Rupert Murdoch fought tooth and nail to excise John Malone and Liberty Media from News Corp.’s capital structure, and he will be damned if he gives up that much (read: any) control of his company.
But yet, in Yahoo!, he sees the best digital media asset out there, the most diversified Web company with 500M unique users per month, one that makes $5B per year in revenue and $1B in profits. And one, mainly, that is down but not out.
So what does he do: instead of framing the conversation in terms of a merger or acquisition, he suggests spinning MySpace - a company he bought for $580M just two years ago! - in exchange for 25% of Yahoo! implying a $10B valuation on his acquisition, which has already netted him $900M from Google and $X from Demand Media, when it bought back all non-MySpace assets from News Corp. Note that last year he suggested that MySpace was worth $6B, at a time when UBS was pegging all of FIM at $2B.
In other words, let’s partner up: but don’t take a stake in my company, let me take a stake in yours.
Murdoch is easily the most ballsy media mogul of them all. And this financial engineering is one more example of that.
But wait, there’s more. If you look at the recent “Crazy Like a Fox” article in Business Week, you’ll see that Murdoch does not need the cash per se, ie. he won’t sell an asset that is rising in value. Clearly, he knows something we don’t. That is: MySpace is growing ferociously but it is probably losing an inch every day to Facebook. Of course, at a $10B valuation, he’d be crazy not to sell.
Disclaimer: I used to work at News Corp. in 2005 and I own shares in Yahoo!
