Seth Gilbert, 03-18-2008
Over the course of a week there are always a few news items that don’t warrant front page attention but still merit a mention; things like new hires or deals that finally closed after being widely reported when first announced. This week with Electronic Arts hiring a COO,the New York Times proxy settlement and deal closings from Clear Channel and Amazon, there have been a handful that fell into that category. Here’s the roundup in one dose:
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Seth Gilbert, 03-5-2008
Things have gone from bad to worse for publishing house Ziff Davis Media and its Private Equity owner Willis Stein. Bankruptcy is now official.
Under mounting debt, things have been bad for some time. Last year the troubled company sold off their enterprise division ($160m in June). In August, they announced they’d be unable to make interest payments on their mounting debt. Today’s news that the company will seek Chapter 11 bankruptcy protection to try and sort out the mess was a foregone conclusion.
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Seth Gilbert, 02-25-2008
In less than two years, San Francisco private equity firm Hellman Friedman turned a $1.1b investment in advertising network DoubleClick into a $3.1b windfall. Now they will set out to try and wring a similar result out of the struggling financials but solid intellectual property of stock photo and content licensor Getty Images.
The $2.1b buyout deal ($2.4b with the assumption of debt) was announced Monday. It effectively closes a month long auction process in which Getty, beaten and battered in the markets, was seeking bailout assistance from a deep pocketed suitor.
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Seth Gilbert,
Thanks to popular websites like Digg, Propeller (rebranded from Netscape in September) and Reddit, the idea of crowd-sourced, user submitted, news sites have become a staple of the “Web 2.0” Internet-era. Mixx, a later entrant to the market that launched in October, has reportedly just closed a $2m financing led by prior investor Intersouth Partners.
It’s unclear if the round is formally a Series B or an extension of their prior A round financing.
Mixx is based out of Maclean, Virginia. It was founded by Chris McGill, the former General Manager of Yahoo News and former VP of Strategy for USA Today. They initially raised $1.5m from Intersouth. A small equity investment was also sold to the LA Times as part of a larger syndication and partnership struck in early December.
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Seth Gilbert, 02-21-2008
Bracing for the possibility of further economic downturn and to reduce exposure to related volatility in the ad markets, Anglo Dutch media powerhouse Reed Elsevier announced a surprise plan to sell off their publishing arm, Reed Business Information (RBI), Thursday. The group is home to a number of high profile online/offline specialty news outlets including the entertainment industry staple Variety and the publishing trade magazine Publisher’s Weekly.
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Seth Gilbert, 02-4-2008
In 1998 Patrick McGovern and John Battelle launched the Industry Standard as a news magazine covering Internet business. They called it “the news magazine of the Internet economy.” The audience grew along with the Internet industry and by 2000, with high volume ad sales, the publication had annual revenue north of $100m and staffing in the hundreds (450 by some accounts). Then, as rapidly as they climbed, they fell. Victim of the same bubble they were reporting on. The Industry Standard shut its door in August 2001. Today, the magazine is being reborn; reinventing itself from a Web 1.0 publication to Web 2.0 social news website.
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Seth Gilbert, 01-31-2008
Amazon was a pioneer in establishing internet based e-commerce. Now, in their second act, they look like they are trying to blaze a similar trail in the sale of digital goods. Today, in line with those efforts, Amazon announced they will buy spoken word (audiobook) publisher Audible for $11.50 a share in cash.
At the $11.50 a share price Amazon is paying a 24% premium over Audible’s Wednesday closing price of $9.33 a share. Two months ago Audible traded upwards of $14 a share. Last quarter they did sales of $27m and lost $192k. Those metrics may make the purchase look like a bargain (and it probably is), but views on that are likely to be divergent. Part of the reason: last month, Audible’s largest shareholder, Apax, signaled a lack of confidence in the company when they (and affiliates) began selling off their 23% stake in the company.
Probably the best near term gauge for valuing this deal as an Amazon shareholder lies in measuring the strategy it reflects rather than the approximately $300m purchase price.
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