Posted by Mark Blei in : Uncategorized , In a move that helps consolidate the fringe players competing against the dominant media buying processing provider, Donovan Data Systems, upstart MediaBank has acquired Mediaplex Systems from ValueClick. Terms of the deal were not disclosed, but the deal expands MediaBank’s market share, and gives it more impetus in its quest to unseat DDS. MediaBank did not say what the acquisition does to its market share in the media industry, but its CEO Brad Keywell said it “expands our footprint” and “takes us from being a strong No. 2 to being an even stronger No. 2.”
In the process, MediaBank gains an organization of 80 people, most of whom Keywell said would be retained by MediaBank, as well as a variety of data processing systems for managing most major media, digital asset management, production and accounting. He said the best of MediaPlex’s systems would be incorporated into MediaBank, and best of MediaBank’s technology would augment MediaPlex.
Over time, MediaBank will re-brand MediaPlex products as MediaBank’s and the MediaPlex name will go away. Some of the big agencies MediaBank gains from the acquisition include Doner, and The Martin Agency, as well as a number of smaller independents, and a number of smaller advertisers who buy direct through in-house advertising departments.
The deal also marks yet another chapter in the storied history of a media buying system provider that began life in the 1970s as part of what was once the largest advertising agency in Kentucky, Zimmer-McClaskey-Lewis (ZML). ZML was purchased by McCann-Erickson in 1981 and the media buying system became known as the Mnn Erickson system. In 200, the system was sold to MediaPlex, and in 2001 MediaPlex merged with online marketing services giant ValueClick.
| Joe Mandese is Editor of MediaPost. |
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Posted by Mark Blei in : Uncategorized , TheStreet.com joins several IB partners, including CNN, Cox Television and Hearst-Argyle Television
July 24, 2008
-By Katy Bachman
Internet Broadcasting, an Internet publisher for local Web sites, and TheStreet.com, announced Thursday (July 24) a new strategic content distribution deal. Under the agreement, TheStreet.com articles and videos will be featured across IB’s network of about 70 local Web sites.
“With TheStreet.com’s network delivering premium editorial content, plus stock market quotes pages and more, we will be able to provide the Internet Broadcasting network’s users a comprehensive, up-to-the-minute package of information relating to their investments, business and personal finance need,” said Erik Greenberger, vp of revenue business development for IB.
TheStreet.com joins several IB partners, including CNN, Cox Television, Hearst-Argyle Television, McGraw-Hill Broadcasting, Meredith Broadcasting, NBC and Post-Newsweek Stations. In June, the IB network had more than 46.3 million unique visitors.
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Posted by Mark Blei in : Uncategorized , Battling a Microsoft takeover attempt and a weakening economy, Yahoo posted a 19% drop in quarterly profit and net revenue that fell shy of Wall Street analysts’ expectations of $1.37 billion. Net income for the second quarter minus one-time charges fell to $139 million, or 10 cents a share, compared with $161 million, or 12 cents a share in the year-earlier period. It also missed the consensus earnings estimate of 11 cents of analysts surveyed by Thomson Financial.
Revenue, excluding payments to Yahoo’s advertising partners, rose 8% from a year ago to $1.35 billion. Gross revenue grew 6% to $1.7 billion.
In a conference call Tuesday discussing the tumultuous quarter, Yahoo Co-founder and CEO Jerry Yang acknowledged the impact of the economic downturn on the Web giant’s ad business. He said branded display advertising, especially in consumer packaged goods and finance, had “softened.”
But he sounded an optimistic note based on progress the company is making in performance-based advertising and new search initiatives including its pending outsourcing deal with Google. “We are executing and delivering against the strategy we laid out, even under extraordinary conditions,” Yang said.
One reason he may have been feeling more upbeat was Yahoo’s settlement Monday with dissident investor Carl Icahn, averting a showdown at the company’s upcoming annual shareholder meeting Aug. 1.
Under the agreement, Yahoo will appoint Icahn and two other members of the alternative group of candidates he had nominated to its board of directors. Icahn, who holds a nearly 5% stake in the company, initiated the proxy fight two months ago in order to force Yahoo’s merger with Microsoft.
Yang said that settling with the billionaire investor had “eliminated a distraction” and that he looked forward “to working with the new board members who will be joining us.”
He also reiterated that Yahoo remains open to any “value-creating transactions” that provide real and tangible benefits to the company, without specifically referring to Microsoft.
Yahoo most recently rebuffed a joint proposal by Microsoft and Icahn to acquire its search business only after the software giant failed in its earlier bid to acquire the Web portal outright. Yahoo had rejected Microsoft’s last acquisition offer of $33 a share in early May, but last week said it would be willing to sell at that price to Microsoft under the right terms.
Yahoo’s second-quarter earnings aren’t likely to reinvigorate negotiations with Microsoft, AOL or other potential merger partners. “We expect any shortfall to be only a minor short term negative to the stock as investors continue to await news around a deal,” wrote Gene Munster, a senior research analyst at Piper Jaffray, in a preview of Yahoo’s earnings report.
Given the struggling economy’s impact on the earnings of ValueClick, BankRate and Microsoft, he and other analysts also expected Yahoo’s results might be even softer than estimated. With display ad revenue accounting for 40% of it revenues, Yahoo is especially vulnerable to the ad slowdown.
Mark Walsh can be reached at walsh@mediapost.com
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Posted by Mark Blei in : Uncategorized , Current management will stay in place; proxy fight averted
NEW YORK Yahoo! reached an agreement with financier Carl Icahn that will expand its board to include Icahn and two of his proposed directors while leaving Yahoo!’s current executive team in control.
The agreement, announced this morning, heads off a messy proxy battle at Yahoo!’s annual shareholder meeting on Aug. 1.
Under the deal, Yahoo!’s entire current board, other than Robert Kotick, will remain in place, including chairman Roy Bostock and CEO Jerry Yang. After the annual meeting, Icahn will join the board. Yahoo!’s nominating committee will select two extra members from among the names Icahn suggested and former AOL CEO Jon Miller, who was not among those originally submitted by Icahn. All told, the board will grow from nine to 11 members.
Icahn, who owns nearly 5 percent of Yahoo!, will withdraw his slate and support management’s nominees.
“This agreement will not only allow Yahoo! to put the distraction of the proxy contest behind us, it will allow the company to continue pursuing its strategy of being the starting point for Internet users and a must-buy for advertisers,” Yang said in a statement.
Yahoo! gained the upper hand in its battle with Icahn last week when top shareholder Legg Mason said it would support current management.
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Posted by Mark Blei in : Uncategorized , …
As Microsoft Corp. explores the possibility of making another move for Yahoo Inc., the Internet company continues to flirt with other potential partners.
Yahoo has picked up discussions with Time Warner Inc. over a combination, say people familiar with the situation. The renewed talks come after a lull following Microsoft’s withdrawal in May of its $47.5 billion offer to buy Yahoo. Still, the talks aren’t as serious as they were in April, when a combination valued Time Warner’s AOL unit at about $10 billion. Yahoo’s stock has since declined sharply.
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CHICAGO (MarketWatch) — Anheuser-Busch Cos. has approved a $52 billion takeover bid by InBev in a deal that will create the world’s largest beer maker and transfer ownership of the iconic American brewer to the Belgian-Brazilian giant.
The new company, to be called Anheuser-Busch InBev, would have had net sales of about $36.4 billion in 2007. Anheuser-Busch and Belgian-based InBev together operate 300 brands, including Anheuser’s Budweiser and Bud Light and InBev’s Stella Artois and Beck’s.
Both companies’ boards have approved the terms and InBev has arranged financing for the deal, which is expected to close by the end of the year.
St. Louis will be the North American headquarters for the new company, which will be headed by InBev Chief Executive Carlos Brito.
The new board will include InBev’s 12 current directors plus Anheuser-Busch CEO August Busch IV and one other current or former Anheuser-Busch director, they said.
While some hurdles remain, the deal, announced by the companies late Sunday, marks the probable end of what was shaping up to be a prolonged takeover drama.
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Posted by Mark Blei in : Uncategorized , SAN FRANCISCO, California (AP) — Yahoo Inc. has rejected Microsoft’s latest attempt to buy its online search operations in a “take or leave it” proposal that Yahoo said would have dismantled its Internet franchise.
As described by Yahoo in a statement released late Saturday, Microsoft packaged its latest offer with activist investor Carl Icahn, a billionaire who is seeking to overthrow Yahoo’s board of directors in a shareholder meeting scheduled for August 1.
Without providing many specifics, Yahoo said Microsoft renewed an earlier bid to buy the company’s search engine and proposed turning over the remaining pieces to a board controlled by Icahn.
Yahoo said it received the complex proposal Friday and was given less than 24 hours to respond.
Backed into a corner, Yahoo lashed out in a blunt manner likely to inject even more bad blood into its already venomous relationship with Microsoft and Icahn.
“It is ludicrous to think that our board could accept such a proposal,” Yahoo Chairman Roy Bostock said in the statement. “While this type of erratic and unpredictable behavior is consistent with what we have come to expect from Microsoft, we will not be bludgeoned into a transaction that is not in the best interests of our stockholders.”
Microsoft did not immediately respond to a request for comment late Saturday. Efforts to reach Icahn were unsuccessful. READ THE REST OF THIS CNN ARTICLE BY CLICKING HERE
Posted by Mark Blei in : Uncategorized , Microsoft Offers to Buy Yahoo Search: Source
New deal represents an alternative means of competing with rival Google
May 20, 2008
Microsoft Corp has proposed to buy Yahoo Inc’s search business and take a minority stake in the Web pioneer, stopping short of a full-out merger, a person familiar with the discussions said on Monday.
As part of the deal Yahoo would put its Asian assets, including significant minority stakes in Yahoo Japan and China’s Alibaba Group, up for sale, while Microsoft would buy a chunk of what remains of the company, the source said.
The talks were revealed by the two companies on Sunday, but they declined to reveal the terms of the discussions. Earlier this month, Microsoft walked away from a proposal to acquire Yahoo for $47.5 billion, or $33 per share, after Yahoo rebuffed the offer, saying it would only settle for $37 a share.
The new deal, if completed, would forge an alliance between the two companies that would represent an alternative means of competing with rival Google Inc, whose ubiquitous search engine has made it an online advertising powerhouse.
The proposal represents an outline of Microsoft’s current thinking and it does not yet put a value on Yahoo’s search business, said the source, who was not authorized to speak on the record because the discussions are confidential.
Microsoft and Yahoo representatives declined to comment.
Shares of Yahoo fell as much as 0.87 percent on Monday, before closing up 2 cents at $27.68 on Nasdaq. Microsoft dropped 1.8 percent to $29.46.
Collins Stewart analyst Sandeep Aggarwal estimates Yahoo’s search advertising business is worth about $21 billion, while putting the value of its international assets at $9.25 billion, according to a research note he published on Monday. Anupreeta Das, Reuters, reports
| Group M Merges Media Marketing Solution, Maxus |
| by Gavin O’Malley, Wednesday, May 2, 2007 6:00 AM ET |
| WPP’S GROUPM ON TUESDAY ANNOUNCED the merger of two separate media agencies, Media Marketing Solutions and Maxus. MMS’s 30 employees will now become part of the New York office of Maxus, which also has North American offices in Chicago, Atlanta, Toronto, and, most recently, Los Angeles. Maxus began U.S. operations in January 2005 as a separate communications company. From that point, the agency has attracted a network of clients, including Estee Lauder, Welch’s, T. Rowe Price, and Church & Dwight Co. The agency was also recently awarded the global media assignment for Palm, maker of the Palm Treo Smartphone. MMS, meanwhile, boasts a client roster that includes Barnes & Noble, Vespa, Chubb, and the WNBA’s New York Liberty. “The merger of MMS into MAXUS joins two GroupM units with tremendous growth potential,” said Maxus president and CEO Carla Loffredo. MMS was founded in 1995 as the SMNY Marketing Consulting Agency by Loretta Volpe, and was sold to Young & Rubicam in 1999. It was acquired by WPP in 2000 when the holding company purchased Y&R and all its assets. In the agency’s new configuration Volpe will remain at Maxus as chief operating officer, reporting to Loffredo. GroupM’s units have been performing particularly well of late, generating an estimated $4.361 billion in net new billings during 2006. Media services such as planning and buying showed the greatest growth of all of WPP’s service sectors during 2006, while digital media played an increasingly larger role within that mix, the holding company reported earlier this year. Along with Maxus and MMS, GroupM also includes media services operating units MediaCom, Mediaedge:cia, and MindShare.
| Gavin O’Malley can be reached at gavin@mediapost.com |
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Posted by Mark Blei in : Uncategorized , AFTER MONTHS OF SPECULATION, SATELLITE radio rivals Sirius and XM have agreed to a merger with the goals of offering greater variety to subscribers and reducing costs, which have kept both companies from profitability. Under the terms of the agreement, announced Monday, Sirius CEO Mel Karmazin will become CEO of the new combined entity, and XM chairman Gary Parsons will serve as its chairman. XM’s CEO Hugh Panero is expected to step down after the merger is complete. The new company, whose new name has yet to be announced, would have total assets worth about $13 billion and a shared debt of $1.6 billion. Combining XM’s 7.6 million subscribers with Sirius’ 6 million, the new company could have a total subscription base of well over 16 million by the end of 2007, if previous projections are accurate.
The companies’ plan still faces significant regulatory “hurdles,” according to FCC chairman Kevin Martin, who released a statement on Monday noting that “the companies would need to demonstrate that consumers would clearly be better off with both more choice and affordable prices.” Meanwhile, the National Association of Broadcasters, representing terrestrial radio stations that compete with satellite, issued a scathing comment which read in part: “NAB would be shocked if federal regulators permitted a merger of XM and Sirius… When the FCC authorized satellite radio, it specifically found that the public would be served best by two competitive nationwide systems. Now, with their stock prices at rock bottom and their business model in disarray because of profligate spending practices, they seek a government bail-out to avoid competing in the marketplace.”
A merger may help cut costs at both companies that led to losses in 2006. One of the chief culprits is the high cost of acquiring new subscribers, which at one time stood well over $100 per new subscriber for both companies. In third-quarter results–the most recent available–Sirius’ net loss was $162.9 million, down from $180.4 million in the third quarter of 2005. The company posted a second-quarter loss of $237.8 million and a first-quarter loss of $458.5 million, associated with high marketing costs surrounding Howard Stern’s move to the company. For its part, XM’s third-quarter loss was $83.8 million, down from $131.9 million in the same quarter last year. The company also posted a second-quarter loss of $229 million and a first-quarter loss of $149.2 million. Wall Street analysts forecast cost savings of $3 billion or more resulting from the merger.
The new company’s stated goals also include more flexibility in their subscription terms by allowing consumers to choose which channels they want to receive in an “a la carte” system. Additionally, the partnership would aim to produce cheaper, more attractive radio sets that will help broaden the appeal of satellite radio. Sharing expertise could also help avoid regulatory troubles: in 2006, both companies faced close scrutiny and product delays because the Federal Communications Commission was concerned about unwanted electronic emissions from the radios. Engineers from the two companies would be able to pool valuable “lessons learned” in the merger.
One of the most important results, however, would be a vast increase in both players’ installed base of satellite radio sets in new cars. Currently, XM has agreements with car manufacturers representing about 59% of the U.S. auto market, including General Motors, Honda, Hyundai, Nissan, Porsche, Subaru, Suzuki and Toyota, while Sirius has deals with most of the rest, including Ford and DaimlerChrysler.
As the rate of new subscription additions slowed over the last year, both companies pointed to their partnerships with automakers as a key future growth area. In an acknowledgement of the importance of these automaker partnerships, the new company’s 12-member board of directors will include representatives from Honda and GM.
Although their partnership agreements blanket the auto market, actual penetration of new cars is rising slowly: in 2007 Sirius hopes to have sets installed in 28% of Ford cars, up from 17% in 2006; while XM sets will be installed in 1.8 million GM cars in 2007, or 40% of total production. What’s more, these installed sets don’t necessarily lead to new subscriptions after a free trial period: XM claims a 52% overall retention rate. Sirius doesn’t discuss its retention numbers.
It’s not clear how–or if–the merger will affect an ongoing lawsuit against XM brought by the Recording Industry Association of America, which alleges that XM’s portable Pioneer Inno player allows consumers to engage in music piracy by recording up to a gigabyte of music from digital airplay. The RIAA lawsuit, seeking $150,000 for every song thus recorded, came on the heels of threats of similar legal action against Sirius Satellite over its S50 player. This conflict was resolved in March 2006 by a deal between Sirius and four leading recording companies, in which Sirius paid them an undisclosed sum for each S50 device sold. The terms of the Sirius settlement included a redesign of the device to certain RIAA specifications, reducing its recording capabilities–something XM has refused to do with the Pioneer Inno.
Finally, the departure of XM CEO Hugh Panero after the merger is complete may relieve some skepticism from investors who are angry about allegations of earlier wrongdoing. In May 2006, XM investors brought a lawsuit disputing the sale of a total of about $79 million of XM stock by CEO Hugh Panero and four other XM executives in 2005. Panero and the other executives are accused of issuing false forecasts of overall subscriptions and the average cost of new subscriber acquisition to inflate stock prices in the 6-month period before they sold their stock.
