Seth Gilbert, 02-9-2008
Just as the writer’s strike seems poised to end, another complex negotiation may be about to get even more intense. The Wall Street Journal is reporting Yahoo’s Board of Directors is set to reject Microsoft’s $44.6b takeover offer as soon as Monday.
According to the report which cites a “person familiar with the situation” as its source: Yahoo’s board has concluded from initial discussions that Microsoft’s $31 per share offer “massively undervalues” the company. They believe the offer is an opportunistic effort to take advantage of recent weakness in the stock market, and Yahoo’s stock price in particular.
In what may be a negotiating ploy aimed at raising the price, the Journal’s source notes that the company is unlikely to consider any offer below $40 a share. That would raise the deal value by more than $12b to more $56b.
If the report proves accurate, Yahoo’s decision will put Microsoft to a difficult decision. Click to Read More
Seth Gilbert, 02-8-2008
A new effort by the major music labels to distribute their own music online may be in trouble before it even launches. According to reports circulating Thursday, Sony BMG and Vivendi’s Universal Music Group have both received letters of inquiry from the Department of Justice over their planned “Total Music” service. (Early reports suggested the other Big 4 labels (EMI and Warner Music) were also contacted but their spokespeople have apparently denied any involvement).
Not a lot is known about what “Total Music” will entail. The most common theory is that it will be a new breed of music subscription service. By this theory, unlike current equivalents from Napster and Rhapsody, or the now shuttering Yahoo Music Unlimited, “Total Music” won’t Click to Read More
Seth Gilbert, 02-7-2008
It’s been a good year for video games and the holidays were especially good for game publisher Activision. Much like a movie studio with two huge summer blockbusters in the theaters at the same time, Activision’s Guitar Hero and Call of Duty sequels powered the company to record results (thanks, in part, to strong November and December sales.)
In what may be the company’s last earnings report before the completion of their merger with Vivendi Games, Activision reported stellar third quarter results. This is now the 16th consecutive year that sales are up for the company.
CEO Bobby Kotick said “broader audiences are responding to products like Guitar Hero, and we expect that the demographics for video games will continue to expand.” He also added in the conference call with analysts that the company, and game industry, are “taking mindshare away from traditional forms of entertainment like movies and television.”
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Seth Gilbert,
MTV has been through its share of ups and downs as the original cable TV brand has matured, new offerings launched, and their audience’s preferences adapted to changing entertainment and communication technologies. Now, MTV will see some change in the executive ranks too.
Christina Norman, president of the cable channel since 2005, and a 17 year veteran of Viacom’s MTV Networks, has resigned. She will leave at the end of the month.
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Seth Gilbert, 02-6-2008
YouTube long ago won the popularity contest for user generated video. Other startups, even some of the same founding generation, have been battling for second place or to just survive. Some like Grouper, reinvented themselves. Now, Los Angeles based Revver, one of the earlier competitors, appears poised to bow out of the race entirely.
Citing “sources familiar” CNET’s News.com is reporting that the company is in dire need of cash and may be sold for as little as $300 to $500k plus the assumption of an estimated million dollar debt. A price in that range would represent pennies on the dollar relative to total investment in the company.
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Seth Gilbert,
For the second time in as many days, a major global media company released results which suggested little adverse, or material, impact from either the writers’ strike or a feared slow down in advertising spending related to the economy.
As was the case with News Corp, Disney’s CFO Tom Staggs reported a “really strong ad market.” during Disney’s earnings call Tuesday. Revenue at the Media Networks Division which houses ABC, ESPN and the other cable networks was $4.17b versus $3.79b for the same period a year ago. Operating profit at ABC climbed to $322m, a 30% gain. The rest of the cable networks had operating profits of $586m (up 27%).
Contrary to fears, the writers’ strike hasn’t had much teeth (so far). Just the opposite, in the short term it may even be helping financially. Click to Read More
Seth Gilbert, 02-5-2008
As sure handed as Amazon’s digital strategy seems to be, adjustments in forward planning are always necessary. On Monday, Amazon made such an adjustment with the rare move to exit a market they were already targeting.
According to the announcement, Amazon Europe will sell their online video rental service in the UK and Germany to LoveFilm International Ltd in exchange for an equity stake. Amazon will also invest cash. The move will allow Amazon to focus on its core retail business and digital strategies but still allow them to retain a beneficial interest in their prior DVD rental investment.
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