For about a couple of years now, I’ve been telling newspaper executives - both privately in discussions and publicly on this blog - that they should rush to scoop up the most promising online video content startups (75%) and online video technology (25%) players that fit well with their strategies because it’s their only salvation. I could hyperlink each and every one of those words in the previous sentence to something I’ve written.
The rationale was:
- online video advertising will remain a joke for the next couple of years,
- VCs will start to get impatient and move on to their next pipe dream,
- asset prices will start to get less crazy (private asset valuations are more outrageous than public asset ones, let’s face it),
- you can build up your position to take advantage of online video before the online video revenues start to become material.
Did they listen? Nope.
Did anything change in their prognosis? Nope. Why? Because the fundamentals of their business only got worse, faster, and they did not really jump on the online video bandwagon. Remember: to TV-centric media firms, online video is a threat. To print-centric media firms, it’s not: it’s the silver lining, the salvation and a potential cure to their woes.
Turns out newspapers are dying faster, due to their inactivity. Now, as layoffs pile on, it becomes harder to justify buying online video assets that don’t make much revenue and command lofty multiples… a few years ago, before the layoffs were being announced, it could have passed muster. Now? It’s harder, just ask Sam Zell.
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WatchMojo NewsletterApparently, Time Warner is looking at unloading some of the assets in the grand AOL empire. Surely, MSFT has made some calls to inquire about which assets are on the block, and at what prices.
That being said, you don’t need to be a genius to figure that over time, MSFT remains interested in Yahoo! - though the likelihood of a deal there is lower than it was before February 2008.
All to say, can MSFT step in and acquire a few of the assets in AOL’s product assortment today, then in a year come back and buy Yahoo!? It’s not impossible, when you consider that at this rate, Yahoo! very well might be cheaper then than it is now.
Imagine that: MSFT can have both AOL.com and Yahoo.com by 2010 for less than $45B? Likely, probably not. But it’s not impossible.
