According to Mo Ibrahim, from The Economist:
“His time at BT - Britain’s biggest telecoms provider - was also informative: big companies, he says, teach a fellow everything he ought not to do to be successful. ‘Later on in life I was not worried about taking on the big guys, because you know they are not efficient.’”
Who is Mo Ibrahim? Here’s his foundation’s page, here’s his Wikipedia page.
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WatchMojo NewsletterOpen letter to Matt Marshall, of VentureBeat.com.
Hmm… so, Matt, here’s the thing.
Love your website, when I can access it. Don’t know what’s going on with your coding, but it sucks. Everytime I click through to your site, I realize I’m playing with fire because I fear my computer is about to crash. Usually, it does. I was going to email you about this, but finding an email link wasn’t obvious. Once I did, I noticed I was prompted to Outlook.
Memo to Matt: I don’t use Outlook. Don’t use a stupid Java script shortcut either, display your email even if you don’t want to hyperlink it!
So, here’s my attempt to get you to get your site’s act together.
Content is king, but accessing is half the battle.
I must say that I never really got why so many journalists were against News Corp.’s bid for Dow Jones, but reading this, you get the idea, from David Sweet, of MSNBC.com:
Though I’ve never worked for News Corp., I was employed by Dow Jones for five years at The Wall Street Journal Online. There, I wrote a column — one that was fortunate enough to appear in print form scores of times in The Wall Street Journal. During that span, I witnessed the workings of a rare news-gathering operation.
Standards are the lifeblood of WSJ and its related properties. Back in 1998, a source called to ask me to attend a World Series game with him at Yankee Stadium. When the request was shared with WSJ.com’s managing editor, it was denied — even if I paid for the ticket — because it was a ticket I was unlikely to be able to procure on my own, thus making me indebted to the source if I accepted it. Along the same lines, I remember being told in a meeting that not only were advertising representatives who sold for WSJ.com on a different floor; we weren’t even allowed to know their names. That way, ad reps and their clients could never influence a story.
It is hard to imagine that News Corp. — a juggernaut with more than $25 billion in revenue in 2006 — will keep such ideas in place, considered almost relics in a struggling business. Since Murdoch’s bid was announced, The Wall Street Journal has excelled at covering the story about itself. If bad news erupts about News Corp., will Murdoch dare let reporters investigate the problem and potentially scare off advertisers?
Read on.
On May 1st, News Corp. Chairman Rupert Murdoch unleashed an unsolicited takeover of Dow Jones for $5B, a 67% premium attempt. A lot of people cringed at the notion of Murdoch unleashing his mojo on DJ’s venerable brands Wall Street Journal and Barron’s, but ultimately, few stepped up to the plate.
Sure, Pearson and GE considered it, briefly, but then they balked, even though a combined News Corp./DJ would be a direct onslaught to the former’s The Economist and the latter’s CNBC.
Of course, who could forget Web entrepreneur Brad Greenspan, who sought to inflict payback to Murdoch after Murdoch allegedly and figuratively stole MySpace away from him… but in the end, three months later, the Bancrofts gave in to temptation… there have been many back and forths, but this time, it looks like it’s official.
News Corp./DJ is a fait accompli, or will be some time today.
Murdoch’s got balls, we’ve said that all along, even though we were hoping Murdoch’s pro-war views would catch up with him, despite the fact that we love the fact that he’ll make WSJ.com free. Too bad some of his lieutenants that I worked alongside for a few years have the combined backbone of a poodle.
Valleywag got its hands on Facebook’s rate card.
It is nice to see that, besides the MSFT deal, sponsorships drive Facebook’s revenue. The problem is that Facebook’s implicit valuation has gone up so much that it needs really strong revenues to justify that market cap as it gets older.
We’ve said that:
- Yahoo! became king of the world wide by mastering the art of selling display banners on CPM rates, in other words, by making pennies off each impression.
- Google overtook Yahoo! by mastering the art of selling text links on CPC rates, in other words, making tens of cents off each click.
History not only repeats itself, it also tends to provide a glimpse into where the spectrum will take us. If the latter is true, then Facebook needs to harness the power of CPA offers, connecting consumers and merchants to take a slice off leads, sales and introduction. If it does that, it will make a few dollars of each connection.
Fitting, since we’ve dubbed Facebook the Database of Connections… but as the easy money will come in between MSFT’s guaranteed revenue and fixed fee sponsorship, maybe Facebook won’t have the stomach to give up the low hanging fruit in order to aim for the billion dollar streams beyond the proverbial fence.
- 31 Companies Outside of US to watch, from Business 2.0.
- 30 Entrepreneurs Below 30, from Inc.com.
We’re outside of the US, and I’m under 30… hmm… I think we need a PR agency. Just kidding, I think.
Just because the tide is rising, does not mean all boats will rise.
Valueclick rose quite a bit in the euphoria surrounding online ad networks, to $35/share. I was so close to shorting the darn thing, because anyone who knew the market well knew that VCLK’s business was very different to that of 24/7 Realmedia, aQuantive or Doubleclick. The company’s stock fell back to $25 since rumors calmed down… and today, after announcing its latest results (22% spike in earnings) and cutting 2007 guidance, the company’s shares are down another 20%.
Be careful not to get caught up in the hype when it comes to M&A and investing. And, anytime a company grows considerably via M&A over a period of quarters and years, it is bound to experience some hiccups along the way. I’m not sure yet if this is a hiccup or a sign of slowing business fundamentals. As the company’s market cap now sits at $1.99B, this puppy is getting back on my radar, but it will take a lot more to get me to dive back in to the stock.
Disclaimer: I owned VCLK in the past, but not at the time of this post.
Last week there were some questions as to the wisdom and validity of having a video content creation business online. I’ve decided not to comment on what other companies are doing in the area. With time the critics and naysayers will see that if you have a plan and don’t raise more money than you need and spend way more money than you should, you can build a fantastic, “boundary-less” business.
Anyway, another week and another announcement as our web video unit WatchMojo.com gains more traction:
A couple of highlights (things I struggled to say with a straight face, cause it sounds like we’ve taken over the world when you read it…)
- Throughout 2007, WatchMojo.com has leveraged its free, eclectic and high-quality programming to build one of the largest syndication networks of any online or offline video content company with relationships with YouTube, Joost, Blinkx, Roo Media, GoFish, Canoe, MySpace, Yahoo! Video, AOL Videos, Voxant’s TheNewsRoom, Azureus’ Vuze, Revver, Veoh, LiveVideo and many more, reaching well over 95% of the world wide web’s video watching audience.
- “As we continue to publish ferociously and build an insurmountable lead in video production, we’re always looking for complementary distribution venues and ClipSyndicate effectively allows us to amplify our syndication efforts and in turn, our viewership audience”, states WatchMojo.com President Ashkan Karbasfrooshan.
Then again, it’s only funny cause it’s true…
Oh, and we have a bigger announcement to make this week… what could be bigger than insurmountable leads and 95% reach… you will see.
Read the whole press release here.
Much of the discussion pertaining to TV content seems to focus on piracy and copyright. This begs the question, even if media companies could be in control of their content online, will they really want it out there? Let’s see.
Just a couple of months ago, I ran some numbers based on revenue growth forecasts for a) global advertising, b) TV advertising and c) online advertising and asked whether or not Online Ads Would Surpass TV Advertising by 2021?
This week, Understanding & Solutions came out and pegged online video advertising at $10B by 2011, with total global TV advertising growing from $160B in 2006 to $190B in 2011.
Last year, Fortune penned an overview of News Corp.’s business and pegged the US TV advertising market at $57B in 2005 with a potential to be a $73B by 2009, with filmed entertainment and licensing pushing the total revenue derived from TV in the US at $230B by 2009, up from 2005 sales of $185B.
As the president of a media company, I want to see all ad markets grow: TV, web, even print and radio. I am still trying to wrap my arms around VC Josh Kopelman’s excitement over companies that shrink markets, but slowly but surely, I think I am starting to understanding the logic.
Let’s apply it to something I certainly understand: marketing to men in general and advertising specifically. Using TV, marketers have to spend a lot of money to reach the elusive 18-34 men. As such, the objective to reach a male consumer becomes very expensive. Alternatively, using the Web, it is becomes that much more efficient and effective.
As more and more consumers get on the Web, then slowly the audiences that the Web offers to marketers relative to TV become one and the same. But because the cost of indexing, aggregating, publishing and producing content is cheaper online than offline, I think that online media companies can always offer better rates than offline ones. Over time, as every single request for proposals (RFP) comes in, more and more of these call for Web components to the point of them all eventually being web-based campaigns. Since there will always be one media company that will be able to offer a better rate (because inventory is infinite online, but finite offline) then the cost of advertising goes down.
In other words, I am not sure if total advertising will grow, neither will TV. I think it is very, very reasonable to think that much the same way that print companies like Washington Post are having a hard time converting online audiences to revenues that match their offline businesses, TV media firms will experience an even greater challenge because despite what some think, the challenge of converting a 22 minute show, 48 minute program or 90 minute film into something that Web audiences want to see is far greater than the challenge that print companies faced… and look at how poorly they fared.
I think that is one major, major reason why NBC and News Corp.’s NewCo/NewSite product has been slow to launch. It’s not just a question of taking content, creating a user interface and coming up with a name (well, 2 out of 3 anyway in NBC/News Corp.’s case). There are very deep and serious business implications for TV companies to get online: the faster they do so, the quicker they kill their businesses. This is why I understand the angst and envy that TV execs have.
I’m very bias in this debate: as a web content producer, I produce and publish online, but then I syndicate on the Web, on wireless, in out of home networks and soon, on TV. TV companies have to protect their content because the TV market is where the money is at, but the TV market is too expensive for marketers to support long term.
Right now, when you read all of this, it’s hard to buy this theory, but if you study history and consider the economics outlined above, and mainly, the multiples that online companies command relative to their offline peers, there is very little incentive for TV companies to get online. I ran some numbers and at the multiples that online media companies get, the online ad market can create $150B in market cap by 2010. But the total advertising revenue, even on the most bullish scenario, will be 1/7 of what TV advertising will be! See that analysis in depth here.
In fact, when it comes to TV content, their web strategy can be summed up by Must Not Watch Online TV… because if consumers do, then TV companies’ shelf life will be shorter than a low rated sitcom in its first season.
As readers of this blog know, from 2000-05 I worked in the men’s space…
Anyway, today I came across a couple of interesting, albeit ironic stories:
- Rodale - publisher of men’s health - might raise $100M to roll out its online properties.
- Emap - publisher of FHM - looking at breaking up its assets.
To think that these companies could have bought my old employer for $13.51M and been relevant online… for months and years we tried to strike a deal with these firms, and they were still in their shell. Oddly, an online media company, IGN Entertainment, bought us, and they strenghtened their hand online, ultimately selling for $650M to News Corp.
I wish execs at these firms were on hand tonight, my father in law, my wife and I were in a room. She was reading a magazine, he was watching TV, I was online. I’m 29. He’s not. Follow the audience, don’t wait too long.
Sounds simple enough, no?
