Wednesday, May 02, 2007

Getty goes multimedia, acquires smaller firm

Stock-art seller branches into video and multimedia, acquires PunchStock for more imagery.

By Stephen Shankland Stock photo seller Getty Images launched a new division Monday for selling licenses to footage and multimedia content, then on Tuesday announced the latest in a series of acquisitions, PunchStock.

Leading the multimedia group is Craig Peters, who joined Getty through its acquisition last week of MediaVast and its subsidiary WireImage, which licenses video content. Peters was senior vice president of new media at MediaVast.

PunchStock, based in Madison, Wis., adds a third stock image unit to the company, supplementing Getty's core business and the newer iStockphoto acquired in 2006. PunchStock offers simpler licensing and search, Getty said.

Getty has been reshaping its business through recent acquisitions. In March, Getty acquired Scoopt, a site that sells amateur photos to the news media. "Citizen journalism is 2,000 years old," Getty CEO Jonathan Klein said in an interview earlier this week, arguing that amateurs can supplement professional coverage and that Getty can assure media outlets using that content that its provenance is sound.

Getty announced the PunchStock acquisition along with its financial results for the quarter ended March 31. The Seattle-based company's revenue increased 6 percent to $213 million compared with the year earlier, and net income was $38 million, or 63 cents per share.

The company also announced it's restating financial results from 1998 through the first half of 2006 to deal with errors in its stock-based compensation. To correct the situation, the company expects to take a noncash charge of $28 million to $32 million, 95 percent of which involves finances in 2002 and earlier years.

A special committee investigating the stock situation concluded in April that the evidence "did not establish any intentional wrongdoing by current employees, officers or directors of the company, and the special committee continues to have confidence in the integrity of current management."

(thanks, Owen)

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Tuesday, May 01, 2007

10x Revenues

Companies don't really sell for multiples of revenue, but the math is easy so everyone does it.

I've read that Doubleclick sold for 10x their revenue of $300mm.

And that Right Media sold for 12x their annual revenue of $70mm.

Please correct me if I am wrong on these numbers as I am just relaying what I've heard and don't have access to the financials of privately held companies.

I believe that ultimately price needs to be factored as a function of EBITDA - earnings power. It could be the present value of future cash flows, it could be a mutiple of current EBITDA, it could even be a multiple of the cash flow that a buyer believes it can get by merging the asset into its business.

So when I see online advertising assets trading at north of 10x revenues, it makes me think that it's the latter factor at work.

I've heard that AOL monetized their acquistion of Advertising.com buy running all of their unsold inventory through Ad.com and that they got a tremendous return on investment from doing that.

So that may be the play for Yahoo! with the Right Media acquisition. And thus a multiple of current revenue or even cash flow is largely irrrelevant.

But even so, these are large numbers being paid and as a part owner of three online ad networks (TACODA, FeedBurner, and TargetSpot), I am thrilled to see these trades print.

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Tesla scales back range targets

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While we doubt it'll be enough to get any of the lucky few first customers to cancel their orders, those planning a long haul trip in their shiny new Tesla Roadster may find themselves slightly disappointed when they finally get the keys, as the company's pulling back a bit on its promised 250 mile range on a single charge. Apparently, testing the car on an EPA-compliant dynamometer proved to be a bit more taxing than their initial estimates, forcing them to reconsider their boasting. While Tesla's not quite ready to get specific with the new numbers, it says it'll still come in at greater than 200 miles, which would still peg it well above other, less stylish electric vehicles. Now, if they'd only find an excuse to scale back the price.

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Monday, April 30, 2007

Lexar's 8GB ExpressCard SSD sneaks on the scene

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While Lexar does a fine job competing in the flash memory arena, it appears that the outfit is giving it a go in the solid state disc realm as well. According a marginally descriptive product page, Lexar is offering up an 8GB ExpressCard SSD, which should go nicely above that 120GB PCMCIA NAND drive as you attempt to cram more storage into peripheral slots than inside your laptop's casing. Moreover, the device features a peak data transfer rate of 250Mbps, and while it doesn't appear to be available for shipment just yet, it'll run you a penny under $200 when it formally launches.

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