Wednesday, May 02, 2007
Digg Surrenders to Mob
from TechCrunch by
That just got the Digg community fired up, and soon the entire Digg home page was filled with stories containing the decryption key. The users had taken control of the site, and unless Digg went into wholesale deletion mode and suspended a large portion of their users, there was absolutely nothing they could do to stop it.
Digg CEO Jay Adelson responded on the Digg blog earlier this afternoon but it was clear he did not yet understand the chaos that was coming. The post only added fuel to the fire. Just now, co-founder Kevin Rose posted yet again on the Digg blog, effectively capitulating to the mob’s demands: He says
But now, after seeing hundreds of stories and reading thousands of comments, you’ve made it clear. You’d rather see Digg go down fighting than bow down to a bigger company. We hear you, and effective immediately we won’t delete stories or comments containing the code and will deal with whatever the consequences might be.
If we lose, then what the hell, at least we died trying.
Until today, it seems, even Digg didn’t fully understand the power of its community to determine what is “news.” I think the community made their point crystal clear.
Vive La Revolution.
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)
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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