It’s way too premature… but if CBS/CNET take TV.com (one of the many URLs CBS inherits by way of its $1.8B acquisition of CNET) and delivers on 25% of its promise, considering all of these assets, then I think TV.com can become the next great online video property. This is extremely premature and assumes that traditional media (CBS) and big, new media (CNET) don’t drop the ball, make synergies happen, integrate wisely, blah-blah-blah… but again, at 25% of its potential… I do not see how TV.com cannot become something worth talking about… Just look at all of this, from the official press release:
Technology: CNET.com is the number one Web site in the computer and consumer electronics category, reaching more than 18 million people every month with daily premium content offerings. From the latest product reviews to breaking news from the digital world, as well as video and program downloads, CNET.com has become the leading destination for people looking to navigate today’s digital world.
Entertainment: Representing the third largest online entertainment group on the web, the collective reach of CBS Interactive’s entertainment portfolio will now exceed 24 million users each month, and include many of the leading brands on the web today, including: TV.com, CBS.com, The CBS Audience Network, theInsider.com, GameSpot.com, Last.fm, and CHOW.com, among others. These are among the most visited entertainment destinations on the web today, each with their own identity and audience profile, and they continue to grow in users and time spent visiting. This past year, for instance, CBS.com market share grew a category-leading 41 percent. Combined with the power of America’s most watched network – CBS Television – CBS Interactive offers unparalleled consumer reach online and offline.
Sports: CBS Interactive is a leader in athletic coverage, from sites devoted to professional sports to the largest collection of collegiate brands. Among its top destinations are CBSSports.com, CBSCollegeSports.com, NCAA.com, and MaxPreps.com, representing one of the digital world’s largest sports footprints. Working with its leading broadcast and radio properties, CBS offers the unique opportunity to reach a wide group of people who are passionate about sports across the internet, television and radio.
News: Two of the strongest news sites in their own right, CBSNews.com, a leader in world news, and CNET News.com, the leader in technology news, combine to create the sixth largest property in the Current Events/Global News category. From breaking news and international reports to coverage of business, politics and technology, the combination of these two destinations gives users a global perspective they cannot find anywhere else.
Business: Eighteen million users each month have come to rely on CBS Interactive’s business properties, which include BNET.com, the cornerstone of the business category, and leading sites like ZDNet and TechRepublic. Collectively, these assets are among the fastest growing destinations in the expanding business category and offer users the latest and most insightful business coverage, with unique perspectives on management and technology.
And given the $1B valuation bestowed on Hulu (given the 10% equity sale for $100M) and $1.65B that YouTube fetched… I cannot understand how TV.com should be anything less than a $1B business in 2 years. Why 2 years?
- YouTube went from “domain registration” to “liquidity event” in 2 years.
- Hulu went from an idea on a napkin to a $1B valuation in 2 years…
It won’t be easy… and despite CBS’ offline TV mojo and all of the video efforts of CNET, there’s plenty of work to be done, but it surely can be done.
Will it? I don’t know… I don’t anyone knows. Well…
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WatchMojo NewsletterBy and large, for traditional media companies to penetrate the Top 10 Rankings of Largest Media Properties, the cost of entry seems to be $2B, give or take a few hundred millions of dollars.
We already covered this for News Corp., who spent just under $2.5B to get to where Fox Interactive Media is now:
- MySpace parent Intermix: $580M
- IGN (my former employer): $650M
- Scout: $60M
- Strategic Data: $?M
- Photobucket: $250-300M (reported, but unofficial)
- Flektor: $15-20M (reported, but unofficial)
and by the looks of it, the tally is the same for CBS.
SAI has more on CBS’ rise to become a Top 10 media property, powered by the CNET $1.8B deal, as well as the $240M Last.fm deal. Any more up CBS’ sleeve? Time will tell. Interestingly both companies lack search - though I am not search if search is something traditional media wants to own. One other area where they could use some strengthening is online video… but I am biased there.
CBS is broken up into
- Technology
- Entertainment
- Sports
- News
- Business
Again, pardon my bias as a lifestyle publisher, but CBS also seems light in Lifestyle which is arguably bigger in terms of sheer client interest. Connecting the dots: when IGN bought my former company AskMen, it was to complete the 18-24 and 18-34 demographic amongst men, but it was mainly to complement its categories (IGN was strong in games, movies and technology but non-existent in lifestyle). I could be dreaming, but I am sure when IGN repackaged itself and sold to News Corp., it leveraged AskMen to convey its strength in lifestyle.
Interestingly, CNET has a few cooking and food properties and if my memory serves me right, they lured a former Maxim executive, so time will tell if they bolster that category as well.
Of course, this does not include the $5B News Corp. shelled out for Dow Jones, whose WSJ.com is indeed a crown jewel online and off.
Hum… thank God the press release sounds grandiose, and groundbreaking, because reading that
In September, Seth MacFarlane, creator of “Family Guy” on television, will unveil a carefully guarded new project called “Seth MacFarlane’s Cavalcade of Cartoon Comedy.” Unlike “Family Guy,” which is broadcast on Fox, this animation series will appear exclusively on the Internet.
The innovative part involves the distribution plan. Google will syndicate the program using its AdSense advertising system to thousands of Web sites that are predetermined to be gathering spots for Mr. MacFarlane’s target audience, typically young men. Instead of placing a static ad on a Web page, Google will place a “Cavalcade” video clip.
So Seth will be partnering with Google to distribute and monetize videos using AdSense. I could not help but think: hmm… why does this sound familiar.
MONDAY, AUGUST 7, 2006
Google has struck a deal to allow Web site owners to put video clips from Viacom, including “SpongeBob SquarePants” and MTV’s “Laguna Beach: The Real Orange County,” on their pages. The clips will be accompanied by advertising, with Viacom, Google and the site owners dividing the ad revenue.
Viacom, one of the biggest creators of television programming, is giving a significant endorsement to Google’s ambitious plan to become a big player in video advertising.
The deal also may be a sign that Google is getting better at dealing with the producers of news and entertainment, which have sometimes alleged that Google used their content without appropriate consent and cooperation.
After the test with Viacom, to start at the end of this month, Google hopes to allow any video programmer to use its system to distribute programming with advertising. It also plans to add advertising-supported programs to its own video site.
The deal allows Viacom to extend the reach of its video programming to a host of new sites.
You get the idea. There’s nothing new with this deal, announced today, that Viacom and Google did not try to accomplish two years ago.
As a video content provider to Google’s YouTube, I hope this works… but this seems like more of the same, just rehashed, of things that have been tested and not worked.
Am I missing something?
Yesterday the NY Times wrote an article mentioning that no VC-backed firm did an IPO in Q2 2008. I observed that VCs were basically becoming useless by backing largely useless companies. I was not alone, the main argument was leveled by VC Paul Kedrosky.
A reader of this blog echoed the same thing, and today, the last major IPO to hit the tech space - Google - shows why we go eons between IPOs:
I left [Google to back to MSFT] because Microsoft turned out to be the right place for me.
First, I love multiple aspects of the software development process. I like engineering, but I love the business aspects no less. I can’t write code for the sake of the technology alone - I need to know that the code is useful for others, and the only way to measure the usefulness is by the amount of money that the people are willing to part with to have access to my work.
Sorry open source fanatics, your world is not for me!
Google software business is divided between producing the “eye candy” - web properties that are designed to amuse and attract people - and the infrastructure required to support them.
Some of the web properties are useful (some extremely useful - search), but most of them primarily help people waste time online (blogger, youtube, orkut, etc).
All of them are free, and it’s anyone’s guess how many people would actually pay, say $5 per month to use Gmail. For me, this really does make the project less interesting if people are not willing to pay for it.
This orientation towards cool, but not necessarilly useful or essential software really affects the way the software engineering is done. Everything is pretty much run by the engineering - PMs and testers are conspicuously absent from the process. While they do exist in theory, there are too few of them to matter.
On one hand, there are beneficial effects - it is easy to ship software quickly. I’ve shipped 3 major features (a lot of spell checker and other stuff in the latest Gmail release, multi-user chat in Gmail, and road traffic incidents in Google Maps), and was busy at work on my fourth project in just a year. You can turn really quickly when you don’t have to build consensus between 3 disciplines as you do at Microsoft!
On the other hand, I was using Google software - a lot of it - in the last year, and slick as it is, there’s just too much of it that is regularly broken. It seems like every week 10% of all the features are broken in one or the other browser. And it’s a different 10% every week - the old bugs are getting fixed, the new ones introduced. This across Blogger, Gmail, Google Docs, Maps, and more.
This is probably fine for free software, but I always laugh when people tell me that Google Docs is viable competition to Microsoft Office. If it is, that is only true for the occasional users who would not buy Office anyway. Google as an organization is not geared - culturally - to delivering enterprise class reliability to its user applications.
The culture part is very important here - you can spend more time fixing bugs, you can introduce processes to improve things, but it is very, very hard to change the culture. And the culture at Google values “coolness” tremendously, and the quality of service not as much. At least in the places where I worked.
Since I’ve been an infrastructure person for most of my life, I value reliability far, far more than “coolness”, so I could never really learn to love the technical work I was doing at Google.
The second reason I left Google was because I realized that I am not excited by the individual contributor role any more, and I don’t want to become a manager at Google.
Read more on the why I left Google to go back to MSFT here.
