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Sometime today, underwriter Morgan Stanley is widely expected to price the initial public offering of shares in private equity firm Blackstone Group (with trading to begin Friday under the symbol “BX” on the New York Stock Exchange). 

A lot could happen over the next few hours, or day, (tax issues and the questionable applicability of an exemption loom) but assuming the deal does move ahead as expected, the 133.33 million common shares to be sold (at an anticipated price of $29 to $31 a share) could raise as much as $5b. 

With an additional 20 million share over-allotment available for Morgan Stanley and Citigroup to place if there is excess demand, it will likely be one of the ten biggest IPO’s in US history.  The deal will be so large, in fact, it will likely give Blackstone a market-cap equal to about half the value of Wall Street institutions Goldman Sachs or Morgan Stanley. 

A lot of people will make a windfall. Blackstone CEO Stephen Schwarzman personally stands to make about $677 million as a selling shareholder and his retained holdings will have a worth upwards of $7b.  (He earned a staggering $400m in 2006).

While the deal is huge, and will unquestionably be the biggest offering since MasterCard Inc’s $2.4b offering about a year ago,   it is  interesting not just for its size but for bringing the focus onto private equity in general.  (Not that private equity is lacking the spotlight these days) but one of the world’s largest firms opening its books to SEC filings and the reporting requirements of being public will make for interest reading.

The focus on Private Equity from the offering, legislative concerns and other factors (including fears of what might happen to global economies if a Private Equity firm defaults on a loan) begs some questions:  

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Getty Images is expanding its focus from images to other forms of licensed content, today adding Music. The Seattle photo agency announced it was acquiring Pump Audio, a specialist licensing agency for independent musicians, for $42m.

Pump Audio was founded in 2001 as a form of agent for independent musicians. The New York based company allows musicians to upload tracks which are then made searchable for potential licensing. If an Ad Exec, for example, is looking for a soundtrack to run behind a new Television commercial, the Pump platform, allows the Ad Exec to find and work with Independent musicians who otherwise may not have been on their radar. Pump maintains a catalog of more than 100,000 songs many of which might have been recorded explicitly for advertising. Pump licenses all the music in its archive for a flat fee. Last year, Pump reported approximately 80,000 placements. Click to Read More

With news largely being thrown into the category of: what are they thinking? eBay has confirmed month long rumors by  announcing that it was buying Web 2.0, new media companyStumble Upon for $75m.  Despite the confusion, the logic of the deal may actually make sense. 

Stumble Upon, which was founded in Calgary, Canada in 2001 is something of a computer-automated web surfing tool married to a community of users.  Either through their website, or browser-integrated buttons, users can ask for a new page and then the website will redirect them (a “stumble”) towards something related.  The sites in the system, however, are not purely random.  Web Publishers, like Metue for example, can buy placements from Stumble Upon that insure a certain number of page views from Stumble Upon users per day; just another form of website marketing. 

It is that paid search component, along with a feature launched in April called “Stumble Thru” which is likely what attracted eBay. StumbleThru lets a user move through the pages of a specific site with the same semi-randomness of full internet stumbling. In other words, they can “stumble” through the listings of eBay auctions, or products at eBay property, Half.com

While the pricing of the deal will raise some eyebrows, and the value of Stumble Upon in the eBay product portfolio will puzzle some, the deal is not completely illogical, nor is the price.  eBay spends a tremendous amount of resources keeping its site and name well publicized around the web.   Stumble Upon will be an asset in those ongoing marketing efforts.

Here’s a breakdown in more detail:
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CBS is serious about its online content.  That may not have been clear with last weeks confirmed purchase of news videolog Wallstrip, but with today’s announcement that they were buying UK based Internet radio company Last.fm it certainly is.

Now, in addition to a sizable investment in IPTV company Joost, and an active content distribution strategy of its own, CBS will add a community driven music network that has more than 15million users spread around more than 200 countries.

In announcing the deal, CBS CEO Les Moonves said “[Last’s] demographics play perfectly to CBS’s goal to attract younger viewers and listeners across our businesses.”  With Joost, Wallstrip and now Last.fm, CBS is clearly trying to build that audience quickly. 

To acquire Last.fm, CBS will pay $280m in cash.  The founders of Last, which was started in 2002, will continue to run Last.fm independently but they will almost certainly be exploring joint efforts with the CBS Radio Division.

In its overall content strategy, it almost seems that CBS is positioning itself to compete Click to Read More

With a purchase price of more than $3b a little regulatory scrutiny was to be expected for the pending DoubleClick and Google deal.  Yesterday the New York Times confirmed such scrutiny was ongoing, and official.  According to the article, the Federal Trade Commission (instead of the Justice Department) was conducting a review and had issued Google a Second Request which is a formal request for answers to a list of detailed questions.

The news or review, regardless of which agency administered it, was expected.  Google stated back in April when the deal was announced that they’d studied the anti-trust issues, expected regulatory scrutiny, and weren’t concerned. 

Given the stakes for the acquisition are high, and also the fact that, in this transaction, you have two companies coming together that each handle a tremendous volume of consumer behavior related information, a Second Request and a detailed review is not a shocker.

DoubleClick, which provides display advertising (video or graphic banners), displays its advertising across a wide range of independent web properties and through “cookies” has the capacity to track which sites a web surfer has visited. Google, in contrast, as the leading search engine, has the capacity to track what web searchers users have made. Google reportedly keeps that date for up to several years as well.  A combined company could pool this information and theoretically that could be problematic, so it warrants a check-up.

Realistically, however much privacy concerns irk and scare consumer watch groups, privacy concerns are not likely to do more than stimulate debate.  Both sites have clear privacy policies and neither is doing anything outside industry practice. Click to Read More

In a move hinting that Amazon may be interested in offering more than just music at its soon to be launched online music store, Amazon has acquired the nations largest independent audio-book publisher Brilliance Audio.  The terms of the deal weren’t disclosed.

Brilliance, which was founded in the 1980s and is based in Michigan, publishes audio titles from best selling authors ranging from Deeprak Chopra to Ken Follett. Brilliance releases twelve to fifteen audio-books a month in MP3 format on CD or for digital downloads.  Amazon currently offers about 100k audio-book titles, approximately one thousand of which come from Brilliance.

In acquiring Brilliance, Amazon will be in a position to leverage its publishing relationships (as well as its own in- house efforts) to expand the availability of the audio book format to a much larger range of titles. Click to Read More

All week, rumors have been floating around that Web 2.0 company Feedburner, which helps websites and blogs (including Metue) distribute and track RSS (Really Simple Syndication feeds), is being bought by Google.

A short while ago, Tech Crunch ran a story citing sources close to the deal saying the deal was in fact official with an announcement due shortly.  According to the Tech Crunch article, the parties have signed a binding term sheet and are working through the deal documents.    If that’s accurate, and my research also seems to suggest it is, a closing within the next month is likely.

The deal is reported to be for about $100m in cash, with that paid largely upfront.  For Feedburner and its investors, this will mean a nearly 10x return on investment over the 4 year life of the company. 

For Google, Feedburner and its platform could represent a new frontier in advertising, especially for Google’s AdSense platform.  The logic is that:  when people view news (and blog) content through RSS or email feeds (both of which are increasingly popular) they often do not click-thru to the original article and publishing website. Consequence of that, a large number of advertising impressions are potentially lost for the host site (and it’s ad publisher which is often Google).   In buying Feedburner, Google gains the ability to place advertising directly in to the feed-streams.  With that, Google will be able to take it’s AdSense platform and make it more mobile.  Impressions potentially lost to feeds can be recaptured.  That’s a positive opportunity for Google and blog/website publishers alike.