When Rupert Murdoch spent over $1B scooping up IGN Entertainment and MySpace, people thought he was crazy.
Incidentally, the day he bought IGN (my then employer), I was in NYC meeting some ad agencies. I got a call from my wife telling me News Corp. buys IGN for $650M. Naturally, I grabbed my PDA to do some math to calculate the price of my options. The next thing I did, was try to estimate how long it would take Rupert Murdoch to make up his investment in IGN and MySpace. I was - as always - bullish, but even my most bullish calls did not suggest that Murdoch’s FIM would:
- strike a $900M deal with Google
- generate revenues of $550M in fiscal 2007, a mere two years after the big purchases
- earn profit of $10M in fiscal 2007.
More impressive stats:
- In one day, MySpace did 3.4B pageviews.
- In 2007, FIM is on pace to do $800M
- In 2008, FIM should do $1B in sales.
Oh, and assuming you’re tracking this, Q4 saw News Corp. do a total of $7.36B in revenues with earnings coming in at $890M.
One word: wow.
Disclaimer: News Corp. was my former employer when it bought IGN, who bought the company where I served as VP for 5 years.
Digg this Blog
Share on Facebook
WatchMojo on Twitter
WatchMojo on YouTube
Add to Favorites
WatchMojo NewsletterLast year News Corp. and GE NBC Universal announced plans to launch a YouTube killer. A year has gone by, a new CEO has been hired and it seems like the new site will launch sometime in Fall.
But, News Corp. has relaunched MySpaceTV and today NBC announced Didja.com’s launch:
Launch of Didja — whose name is a play on the phrase “Did ya see that?” — marks USA’s first digital media initiative not directly linked to the cabler’s programming. Brainstormed by USA execs, Didja will start out with extensive promotion on the channel and will eventually extend to all divisions of NBC Universal.
Didja will roll out after NBC and News Corp. mount their first major assault on YouTube, the viral video partnership known as New Co. Both efforts are designed to give NBC a bigger share of the ad revenue being generated by streaming video.
I could be wrong, but I’m not sure if it makes sense for News Corp. and NBC to be launching separate sites and trying to create a super YouTube killer… maybe this is a result of their impatience, who knows. All I know is I look forward to seeing what News Corp. and NBC hatch.
Like sports, rivalries are always a nice thing in business, especially if you’re the seller. Some of the interesting rivalries of late:
Viacom vs. News Corp.: IGN, MySpace
Yahoo! vs. Google: YouTube
Google vs. MSFT: aQuantive, Doubleclick
But what about CondeNast vs. Hearst? Both have fantastic brands but their business is being challenged by the digital revolution. Last year Conde Nast bought Reddit, this year Hearst’s Kenneth Bronfin led the charge to acquire UGO and Kaboodle.
Will Conde Nast counter? Or will Hearst build momentum and pull away? Don’t know, but it’s a fascinating time to be a new media company.
Conde Nast is a unit of Advance Publications. Conde Nast made $1.4B in 2006 revenues and Advance generated $7.3B, Hearst made a not-too-shabby $4.55B.
Just yesterday, private equity firm VSS came out with the most bullish web advertising report ever, suggesting that web ads will be larger than newspapers and TV by 2011. I had run some numbers and I had estimated that that milestone would come in 2021. Regardless, after years of sitting on the sidelines fearful, paranoid or in denial, old media wants to shed its old media moniker and avoid Yahoo!, Google, MSFT from further consolidating web revenues, which were $17B in 2006 but could be as high as $60B.
Hearst made its second major acquisition in two months, shopping community tool Kaboodle, for a sum of $30-40M. Last month it bought UGO. While the initial thinking is that these are all new forays into new media, truth is Hearst is stacked in web companies. Judging by their corporate page, their investments in new media include:
Brandwise, Inc.
Brightcove
Broadcast.com
CirclesCurrent
Cymfony
Double Fusion
drugstore.com
E Ink
Exodus Communications
Gather
Genealogy.com
govWorks
Idilia
I Pro
iVillage, Inc.
Hire.com
Jingle Networks
LiveWorld
Medscape
MetaTV
Mobility Technologies
MobiTV
Netscape
The NewsMarket
NR2B Research
Pandora
Referral Networks
Scene7
SlingSphere
StarMedia
Tavolo
USDTV
WideOrbit
XM Satellite Radio
Zip2
Obviously some of their investments fared better than others, the thing to note is when you invest, the revenues and profits (if any) are not consolidated onto your financial statements, so only when there is an exit would Hearst really materialize any gain. Of course, investing in the right company can provide amazing extraordinary returns, but when your core business in print and peripheral units such as broadcast TV are being attacked by the shift of consumers and advertisers’ budget online, I think it’s clear that Hearst need to get a lot more aggressive online.
That’s the key nuance: what is happening now is that Hearst is taking on more of an operational role: UGO was the first, clearly Kaboodle will be used to bring the clients in Hearst’s magazine to life online… but even without that print-to-web tie-in, for Hearst to ride the commerce opportunity online is not a bad thing at all.
Time will tell what Hearst will morph into online, Kenneth Bronfin seems to be the man of the hour at the venerable publishing empire.
