Murdoch finally closes in on Dow Jones: report

The Business magazine today reports that Rupert Murdoch's News Corp. has finally clinched its $5bn deal to buy financial publishing powerhouse Dow Jones, and that a deal is expected to be announced next week.

Apparently, younger members of the Bancroft family -- which controls Dow Jones, owner of the Wall Street Journal -- had been pressuring the family to accept the offer, a 67% premium on the company's stock price when the offer was made in April, because they didn't think a comparable bid was likely.

The deal reportedly includes a legally-binding contract that will ensure the editorial independence of the WSJ. News Corp. can still hire and fire the top editors and publishers, but a five-member committee will be allowed to veto those decisions.


In what may be a very telling anecdote, though, the story points out that a similar (but not as strong) agreement had been made when Murdoch bought the Times and Sunday Times in 1981. A UK lawmaker refers to that agreement now as a 'fig leaf' used to get the deal approaved by antitrust regulators in the UK.

The scoop has some News Corp. pedigree behind it: it was co-written by Andrew Neil and James Forsyth. In addition to Neal's affiliation with The Business (he is editor-in-chief of Press Holdings, which owns The Business and The Spectator), he is a broadcaster who also once was very much also a part of the News Corp. stable, editing the Sunday Times for 11 years.

Here's a link to the original story.

Sky's the limit

A couple of notable news items today around the UK satellite TV provider BSkyB. In the morning, the Guardian ran a story that said Sky was in talks with Microsoft to offer its proposed DTT service over its new PC-based TV platform. The DTT service that Sky hopes to launch, pending approval from regulator Ofcom, will see the provider use MPEG4 technology to put four pay-TV channels into the spectrum currently being used by Sky to offer three free channels over the DTT service, which is sold as Freeview in the UK.

If it happens, it will be an interesting step in the convergence of media in the UK. Although Sky, which is 39.1% owned by News Corp., bought a broadband service provider a couple of years back, it is using this asset in its consumer business primarily as a triple play bundle. Putting its channels on Microsoft's Windows Media Centre will be the first time that the provider actually attempts to offer its services to the PC.

It also builds on the announcement Sky made last week that it would provide its premium channels to Tiscali for its IPTV service.

Presumably both of these moves are being done for Sky to test the broadband waters rather than really hope for big paybacks for the services. Indeed, if reports from moneysupermarket are to be believed, there's such a speed gap between what consumers are being promised and what they are getting that it may be a while because PC/broadband-based television services really take off in this country.

The other Sky story is that this week it launched a counter attack in its ongoing fight with cable provider Virgin Media over whether the latter was right to claim that Sky was really abusing its market position in negotiating over channels (or not negotiating, as the case may be). If the UK courts rule in Sky's favour after all, it will likely have a negative impact on Virgin Media's bargaining position in the future, not just over channels but for the price at which it potentially gets sold.

EMI: the latest on Terra Firma and Warner Music

An update on Warner's other, ongoing story, its will-they-won't-they bid for rival music firm EMI: Terra Firma is only slowly drumming up acceptances for its £2.5bn offer for the EMI Group. Yesterday morning, the private equity firm said it would extend the offer period to 4 July after only 3.53% of EMI's shareholders accepted the bid (TF will need 90% to get control of the company).

One Numis Securities analyst speaking to AFX said he thought most shareholders would not vote on the Terra Firma offer of 265 pence a share until Warner Music either made a counter bid, or officially pulled out of the process.

But investors might not want to hold their breath for too long: A story in this morning's Daily Telegraph notes that Warner insiders think there is only a 50-50 chance of Warner Music Group finally coughing up an offer. Issues in the balance include WMG's assessment of EMI's balance sheets, which WMG has only recently started to examine; and of course whether the EU competition commission will the give the deal its regulatory blessing.

If EMI doesn't fly in the end, it will make Warner's new business move into the Russian market (see my post from earlier today) all the more poignant and worth watching.

Warner Music: with EMI bid still up in the air, next stop Russia

Is it possible to run a profitable, legit business in a market that's already established a thriving but illegal trade in the same item? If you look at the music industry, and how it's tried to make money out of Internet music distribution in the wake of successful sites predicated on piracy (and of course cheaper/free content), it's not entirely impossible. But it may take a very long time, if it ever happens at all.

In the latest attempt by Big Music to create a market in a thriving but illicit environment, yesterday Warner Music and Sony BMG announced they would team up with Russian firm Access Industries to start a wholesale digital music distribution business in Russia and former Soviet-bloc countries.

Digital Access, as the JV will be called, will aim to create a new distribution channel for legitimate digital music, including wholesale deals for full-track downloads, ringtones and video clips. It anticipates its customers will be online music portals, mobile operators, rights owners and other content providers; and it doesn't have plans to launch its own retail operation.

The news comes at a time when the Russian digital music industry is thriving, but at a controversial cost. Sites like Allofmp3.com, owned by Media Services, have been hugely popular for music downloads, not just in the region but worldwide—it sells music by the megabyte, which works out to a fraction of what a track would cost on a site like iTunes. This has meant the site usually ranks as number-two or number-one for music downloads in different markets.

MediaServices says allofMP3.com has a license to operate from the Russian government, but in recent months, it has come under a lot of pressure to close down its international operation. Major credit card companies will no longer allow payments to the site, and it appears to be blocked in many countries. (In London, where I live, I cannot access the site or its mirror domain, allofMP3.ru.)

But like many a black market Lazarus, MediaServices has launched several other sites to siphon new business. Among them are the punny allTunes and mp3Sparks. These do allow credit card purchases and seem to work on the same business model as allofMP3.com. And I can access them in London.

Big music's domestic partner, Access Industries, is an interesting company to watch. It may hold the key for Western labels to at least get a foothold in the market, rather than continue to be taken for a ride by the likes of MediaServices. Access Industries is controlled by the uber-influential Russian-American billionaire Leonid Blavatnik, who also has investments in oil, aluminum, coal and telecoms (ie the typical portfolio of Russian ex-state commodities held by most oligarchs). He is on the board of Warner Music and owns Russian music labels Soyuz and Nikikin Records, which will also join the venture.

The plan is to launch Digital Access in the 4th quarter of this year.

UK: Google: pole position, Facebook: shooting star

News today that Google has managed to hold on to its top spot yet again in the rankings for most visited web property in the UK, bringing in some 28m visitors to its web sites in May 07, according to figures from comScore. Microsoft and eBay were ranked second and third, with 27.4m and 22.2m respective visitors to their sites. Yahoo was in fourth place with an estimated 20.6m visitors.

Interesting to note that Facebook had the biggest growth in traffic of all sites. Between April and May of this year, traffic on the social network went up by 30%, and comScore says Facebook's traffic has gone up by 2,123% over the last year. Despite this, with visitor numbers totalling 4.8m for the month of May, Facebook still doesn't make the top-20 rankings for the UK.

Part of the explosive growth surely must be down to the company having recently opened the site to new members--in the past it was restricted to people with college/university email addresses. That makes me wonder whether its growth will be sustainable in the longer term.

The way Facebook allows users to invite the entirety of their email address books in one click has definitely been used a lot lately. I'm not a high-volume Internet community type myself, but even I have had loads emails saying I've been added as a Facebook friend to other people's pages. (Each invite requires me to click in and approve the friendship, meaning more traffic for Facebook.)

When Google bought YouTube in 2006, there was a lot of speculation over whether Yahoo or a big media player would buy up Facebook. Founder Mark Zuckerberg has said he doesn't want to sell, but if this momentum keeps up beyond the 'signing up' stage, I won't be at all surprised if this actually happens.

Yahoo reshuffles, and Google follows it in Asia

Today's news, slipped in after the markets closed, was that Yahoo has finally reshuffled its top management, with Terry Semel out as CEO and Jerry Yang in. In an attempt to appease frustrated shareholders as Yahoo continues to lag behind Google in popularity (both for searches and for ad sales), Susan Decker has also been promoted up to the newly-created role of president to support Yang.

Jerry Yang, who was one of the founders of Yahoo, has in recent years focussed a lot of his attention on the company's growth in Asia. The search giant has struck some very fruitful deals in the East, for example partnering with Softbank in Japan to offer a hugely popular Internet and broadband service. And when things started to go awry in China, Yahoo decided to bank on a similar type of arrangement, striking up a joint venture with local partner Alibaba, of which it now owns 40%. It's also attracted controversy for complying with Chinese authorities to provide information about its users (with them subsequently landing in jail for making anti-government statements).

Human rights notwithstanding, if Yahoo was hoping that it had stolen a march on Google in the East, Jerry Yang might have to rethink the strategy. Last week, Google announced it would team up with the Chinese portal Sina to offer services on the mainland. Google already has a respectable portion of the market for search in China (some 19% according to Analysys International), but it has found it difficult to gain the same kind of dominance in China as it has in other (western) parts of the world. Now Google is following in the footsteps of its rival Yahoo in teaming up to target the market. Google has also taken a similar route in South Korea, and one wonders if Japan or other Asian countries might also be JV targets.

Chatting about this deal with our Hong Kong-based correspondent Craig, he relayed this anecdote: "I tried using Google inside China's great firewall and it was amazing how frustrating and useless it is as everything's blocked. The way China controls stuff, you really need a partner."

He went on to say that the Sina deal makes sense as China will continue to focus on holding up national Internet champions. China doesn't have laws enforcing joint ventures for foreign Internet companies that want to do business in the country (as it does for infrastructure-based businesses like telecoms). But the moves by Yahoo aligning with Alibaba and Yahoo teaming with Sina demonstrates that this seems to be the de facto route anyway.

Mobile music: to boldly go where no one has gone before

This was published last Friday on Total Content + Media's web site....

This week saw the launch of a new mobile music service called MusicStation.

For those of you who think that mobile music—downloading tracks over a cellular network and listening to them on your phone—has been a non-starter so far, you are right. In the UK, for example, only 1.7 million people used their phones to listen to music downloaded from operators in the course of a month, says M-Metrics; another 5.4 million used their phones to listen to sideloaded music (taken off PCs). But compare both of those figures to the number of MP3 players in use in the UK: nearly 19 million; or the number of mobile phones in the UK: over 60 million.

Even Rob Lewis, the CEO of Omnifone (the company behind MusicStation) admitted to me that “Mobile music today is not a grown up experience.”

But put your scepticism aside! MusicStation is hoping its new approach will prove you wrong. It claims to have the most comprehensive catalogue—having signed global agreements with the four major labels of Sony BMG, Universal Music, Warner Music and EMI, and many of the minor ones—the most deals with mobile operators to run the service, and the most agreements with important vendors to preload the service onto handsets (although it admits that the number-two handset maker Motorola, is not pre-loading it on its music models just yet).

And instead of selling a la carte tracks, it is based around a subscription model, where a user pays one price per week for an unlimited amount of music. (The catch is that you don’t get to own any of the tracks you listen to.)

It’s no surprise that the labels have signed up—after all, they couldn’t possibly be doing any worse in mobile music than they are now. What’s interesting is that the operators and vendors, who have usually relied on exclusivity in their data offerings, have all agreed to try out a collaborative approach. (Compare this for example to AT&T, which has a five-year exclusive agreement to distribute the iPhone in the US, hoping this will migrate mobile users to its network.)

Still, MusicStation is not going all guns blazing from the start: the service launched first this week in the tech-happy but small market of Sweden, not with the incumbent but with Telenor’s network, charging users €2.99 per week for the service. Lewis tells me that the “lion’s share” of the revenues—well over 50%—will go to the music labels. Operators will get a cut in the billing and also a provision for letting the data pass over the network for no charge.

Lewis says Omnifone does not want to target the US market at this point because of the high penetration of MP3 players and the patchy availability of high-speed mobile data networks, which are necessary for the service to work.

“It’s really a landgrab right now in the digital music market, and we can’t catch up in the US,” Lewis told me when I met him earlier this week. Omnifone will instead aim for Europe and Asia, where they want the service to be on 100 million devices in the next 12 months. But the company would not give a target for subscriptions, or indeed how many would be needed to break even as a business.

There’s a lot to be pointed out in how MusicStation will differ from what is already available on the market today.

For one, because the tracks you hear will not be download-to-own, they will be quicker to get from the network than ordinary tracks.

And given that people have not been prepared cough up much money at the price points set for a la carte mobile music today (or any digital music, for that matter), it’s about time that the subscription model be tried out, even it’s unfamiliar to the music industry (and crucially to music consumers). It’s worth noting MusicStation isn’t the only one trying to push this: both Yahoo and Rhapsody are also trying out subscription models in their PC-based music services.

Plus it’s launching at what Paul Goode, an analyst at M-Metrics, told me was “the perfect time,” with “a raft” of music phones about to hit the market later this year. He said that of the 730 phones in the UK market today, only about 10 could really be classified as “true music phones.” An appallingly low number like that goes some way towards explaining why mobile music hasn’t worked so far.

A few thoughts on News Corp. and Dow Jones

News Corp. is slowly inching its way into getting what it wants out of Dow Jones—which is of course to own it. There's been a huge amount written on this story since it broke several weeks ago, not least by DJ publications themselves. One thing hasn't been pointed out by anyone, though, is the irony of a company that has made free market economics the cornerstone of its publishing content, concerning itself not with the best offer it may ever get, but whether its legacy and integrity will be maintained if they decide to sell. I'm not saying this is bad, but it does underscore how any theory can often be undermined when it comes to your personal predicament.

It was also interesting to read in last week's The Business magazine (the one that was once a weekly broadsheet and is published by Andrew Neil, a former News International acolyte) about how Murdoch Senior brought along Murdoch Junior (that is, James) along to the meeting he recently had with the controlling Bancroft family—their first face-to-face. James of course had experience at the News Corp. Asia pay-TV subsidiary Star before moving to the UK to head up BSkyB, and this was certainly one of the reasons why he would have been brought into the meeting (since apparently the Bancrofts and DJ journalists are concerned about Murdoch's chummy relationships in China). But it was also a way of telling the sceptical Bancrofts, "Hey! I'm a family guy, too, and I care about legacy as much as the next one."

It may have also been Rupert's way of introducing the Bancrofts to the man who may end up getting tasked with running the business, should it become a division of his family's empire.

James Murdoch has definitely come a long way since his scruffier days of running a small music label in New York City, shrugging off the inevitable family association that has now become the centre of what he does, and a huge force in the media industry.

The Daily Telegraph offers free print ads to online recruitment advertisers - Brand Republic News - Brand Republic

The Daily Telegraph offers free print ads to online recruitment advertisers - Brand Republic News - Brand Republic

OK, so it may be a short term initiative, but how the tide has turned. It wasn't so long ago that publishers gave away presence on their website to clients who booked in print, but now the Daily Telegraph has turned the tables offering free print advertising in return for placing a recruitment listing.

I don't know what the Telegraph online recruitment ratecard looks like, but I would presume the value add is worth more than the purchased product!

Week in review: News Corp. and fiestas

(from the TC+M web site on Friday if you missed it...)

It's been another good week for big fish eating up smaller fish in the media world. This week that seemed to largely translate to big media giants consolidating smaller social media plays into their strategies.

On the same day that CBS snapped up the hipster online radio community last.fm for a relatively modest sum of $280m,, News Corp.'s online division, Fox Interactive, itself bought up two more social networking sites: the online photo organising site Photobucket and Flektor, a site that lets users create mashups, slide shows and other presentations of their user-generated content.

The two unknown-value deals will give News Corp.'s social networking sites, namely MySpace, another way of trying to monetise its still-growing user base.

Both sites are already popular with MySpace users who use them to incorporate graphics on their pages, so in a sense it was a matter of solidifying a relationship already in place.

It will mean that Fox will be able to embed the functionality of Photobucket and Flektor directly into its own site, which will make the experience easier for users.

But more importantly it helps the company consolidate any traffic that might be passing through Photobucket's and Flektor's services for its own financial gain.

This in fact was a touchy subject between Photobucket and MySpace only weeks earlier. MySpace had started blocking Photobucket usage when it said the image sharing site was using its service to encourage users to run ad-supported slideshows on their pages.

Now that MySpace owns the two sites, any potential ad revenue gained in such a way will be theirs to keep.

According to Fox, the two products will continue to operate as standalone entities and will still be able to be used on other sites like YouTube and Facebook.

(For a closer look at the Last.fm deal with CBS, you can read a blog entry I wrote on the day of the deal. There will also be a longer analysis, including an interview with one of the Last.fm founders, in the upcoming monthly issue of TC+M, out in two weeks).

Burritos in China
Saw an interesting item on the wires today about how Grupo Televisa, the largest broadcaster in Mexico, has done a deal with the Chinese government to export its reality TV shows and soap operas to the Mainland. Chinese broadcasters, like broadcasters in many other parts of the world, already dub Mexican programmes for their market, but this deal will let Chinese producers recreate the various shows for their own market.

The terms of the deal were not disclosed. But what stands out about this to me is that despite the huge potential of the Chinese market, there seems to be a distinct dearth of content to fill the airwaves.

Back in Mexico, the Chinese government broadcaster CCTV will be providing a feed of its channel to Grupo Televisa, who will deliver it in its domestic market dubbed.

The two countries of China and Mexico may have more in common than previously thought, in addition to their tastes for telenovelas and raucous variety shows with mariachi bands. This week, the high court in Mexico struck down a ruling that effectively lets the country's two dominant TV companies, Grupo Televisa (70% of the market) and TV Azteca (30% of the market), to continue to stay on top. In fact, the CCTV deal shows that today there is an opening for smaller new channels to emerge, but it takes a deal with a big player to make it happen. Perhaps in the future you won't need a tie-up with one of the big-two to do this.

Last.fm gets snapped up by CBS

When Google bought video sharing site YouTube for $1.65bn in 2006, it triggered a lot of media companies into action. Among them, the longtime U.S. broadcaster and television producer CBS set out to position itself as a forward-thinking member of the digital media vanguard.

“We don’t want to buy YouTube, we want to buy the next YouTube,” said Leslie Moonves, the chief executive of cross-media broadcaster CBS, not long after the deal.

Today CBS made a little move toward filling in Moonves' strategy when it announced it would pay $280m for online user-generated radio site Last.fm.

The London-based company has been quietly building up a loyal user base since 2002. When I recently spoke to one of the founders, Martin Stiksel, he told me that on average the site has 20 million active users every month and is 'generating substantial revenue' from several income streams, from amazon music retailing to ticket sales.

There's some interesting synergies between CBS and Last.fm. I'll be curious to see if the two companies them. For one, CBS has relaunched its own music label, CBS Records, which had originally been sold to Sony. And while Last.fm is in many ways a product of the web 2.0 juggernaut, it's also run a little like a broadcaster: it may have 20m active users, but it only has some 5.5 million registered visitors. That means that like CBS's TV channels, it banks on advertising to a critical mass for revenue generation.

I have to say, though, that as a long-time fan of Last.fm, one of the things I've always loved about it is its quirky, quiet approach to offering music: the exact opposite of many radio stations, and definitely the opposite of the 'big media' kind of experience offered by other online radio sites like Yahoo's.

It's also been frighteningly good at sussing out my tastes (if at times I seem to get into jags where all I get are songs by The Decemberists).

For now the management will remain in place and all they can talk about is how the deal will give them the money to do all the things they've always wanted to do. I'll look forward to seeing if CBS really lets Last.fm keep control of the jukebox.

Google Zeitgeist Europe 2007: Frenemies become friends of me

[this was originally published on www.totalcontentandmedia.com]

The days preceding a long weekend, especially in an early summer period, can be slow for news. This conversely makes it a good week for pow-wows among the titans of the media industry.

Monday kicked off with Google Zeitgeist Europe outside of London, a get-together for high-level executives—heads of industry, media giants, and leading technologists—to speak about Google and the latest in how technology and information will impact our lives. Of course, if the event's host has its way, those two topics will become even less mutually exclusive as time goes on.

Journalist attendance, according Google's European PR, was restricted to a "handful of general columnists" (meaning I was not invited). This also meant there wouldn't be lots of press coverage.

So, I decided to use Google Zeitgeist as to test of the search giant's usefulness in information gathering today.

The advances of social media and online video are such that many of the event's speeches were posted around the Internet. But there was a lot less 'chatter' about the event than I thought I would find. Perhaps this is a testament to attendees' loyalty to the big G.

Most of the speeches were quite high level—eg, the CEO of Orange, Sanjiv Ahuja, spoke about the need to extend communication to all parts of the developing world. He also pointed out that Orange's year-on-year revenue growth in Africa is 'north of 30%' and its margins in the region are some of the highest. "As human beings, we should be doing business everywhere," he concluded.

Stelios Haji-Ioannou, founder of Easy Jet and its affiliated companies, talked about climate change, chiding his executive audience for using private jets to get to events like Google Zeitgeist.

Among the info-bytes I came across, Google makes 40% of its advertising revenue outside of the US, with 19% in the UK alone. This is interesting information because in the past the company's not broken out these figures. (I found this on a Twitter entry from Loïc LeMeur, a social media entrepreneur and obsessive-compulsive user of its many tools.)

I also found an interview between Google's chief Eric Schmidt and the editor of the Economist, John Micklethwait. This had originally been posted on YouTube by Google, but curiously the first result for it in Google's weblog search was on what appears to be a Ninja-fan blog called Mung Ning Ryu. I'll leave it to you to make the connection between Ninjas and Google.

(Google incidentally has posted a number of other videos from the event on YouTube, many of which focus on topics like the environment.)

Schmidt uses public appearances to articulate what Google's ambitions are as a business. But he also spends quite a lot of time acting frankly surprised at the company's impact.

"We're beginning to see significant issues about our role in the world," he said during his interview at the Zeitgeist event. "We're trying to be more transparent and clear [about] how information is being used and what is available. "

Acting wide-eyed is not a bad way of deflecting negative attention Google might get as a result of its newfound power. But this doesn't work all the time:

Dylan Thwaites, CEO of search marketing company Latitude, he writes in his blog: "The audience got the chance to ask [one panel of advertising executives] questions – ostensibly about the panel topic “branding”. Zero interest in branding - two of the three questions were on the theme 'Is Google the enemy?' [Martin] Sorrell [WPP's CEO] says he invented the word 'Frenemy' to describe his $200m relationship with Google. Nikesh Arora, CEO EMEA for Google, pretended to mistake this for 'Friend of Me', so Sorrell now uses Froe (Friend /Foe). All very light hearted, but at the root of this there is an earthquake of change."

More specifics on change were not spelled out by attendees, but there has definitely been a shift in how Google thinks about itself. Back in his Economist-editor interview, Schmidt said: "One of the key messages [to Google employees] in the last month or two is that we want people to be focussed around the core business of Google, which is textual advertising." Note that he did not say "search," which used to be what Google would say their core business was.

What about the future? Danny Rimer, general partner at VC firm Index Ventures, served as the moderator for a group of European entrepreneur panellists who spoke on the second day of the conference. Speaking with Nathalie Massenet, the founder of online retailer net-a-porter.com (a video I also found on Loïc LeMeur's blog), he made a distinction between exploration and fulfilment online: some sites are good at one, some are good at the other, but it's very hard to be good at both. He seemed to think that net-a-porter.com was succeeding, though.

HSN launches interactive TV in the US: why the wait?

Saw today that the IAC/InterActive Corp.'s Home Shopping Network is launching a new interactive TV service in the US where viewers will be able to use their remote controls to buy goods being peddled on television. HSN is initially teaming up with satellite broadcaster EchoStar to offer the service, which means it will at first reach 12 million households.

I find it interesting that the US has taken so long to implment an interactive TV service. In other media, such as online, it has been a trail blazer. Just think of how almost all the innovations--and popular surge in usage--in 'Web 2.0' sites has come out of the US.

The UK, which has adopted a wait-and-see attitude regarding other new services such as online TV, has for once been a leader: the red button on a UK consumer's remote has become synonymous with interactive elements for a range of channels, from news and sport networks to home shopping programmes.

Yet maybe there has been some method to this US madness. The article notes that in trial markets interactive TV is accounting for 10% of all sales. I know that in the UK there have been lots of hiccups with very low usage for interactive TV services—despite their ubiquity.

The trend right now for broadcasters is to inject money into developing their online presence rather than expanding how to make their traditional TV services more dynamic. But I wouldn't be surprised if the rise of user-participation in online media has a knock-on effect in flagging interactive TV services. Perhaps being a late adopter in this case might not have been such a bad move after all?

Facebook: a new social media ad model

Following on from Rob's post on the growth of Internet advertising, a lot of people have been noting how ad spend online is still wildly disproportionate to the amount of people surfing the net and spending time online.

One area this is particularly true is social networking, where sites like MySpace and Bebo are drawing in huge crowds but not the ad dollars to match it (although this is growing I hear).

Now one of their newer competitors, Facebook, is getting ready to initiate a new spin on how to promote brands and products on social networks: sell pages to partners like Amazon and Apple and Ebay (I guess...), where they can create portals to sell their wares, and then make it possible for Facebook members to embed into their pages links/portals/widgets to links to these. According to this article Facebook won't be taking a cut from the sales so presumably they will be charging a pretty penny for the privilege of accessing Facebook users (anonymously of course).

(I'm still waiting for a reply from Facebook about all this directly. Will post it here when/if I get it.)

From what I understand this isn't being done by the other sites yet but if the premium on these sites is their dedicated eyeball count, then this could be a good way of capitalising on it.

And it positions a social network like Facebook in a new position as a portal of sorts, like Google or Yahoo but more recommended.

Internet advertising exceeds 10% for first time

WARC News - WARC.com
Research for the Advertising Association yearbook compiled by WARC noted that for the first time in 2006 internet advertising in Great Britain exceeded 10% of the total. As they estimated advertising expenditure in Great Britain as £19 billion in 2006, this is nearly £2 billion online!

Television was still the biggest element of spend, followed by Press (inc newspapers and magazines), but both saw falls in their share.

Week in review: Endemol and Telefonica's fear factor

(Originally published in Total Content + Media earlier today.)

Among the noteworthy M&A deals this week in the media industry—they included online advertising companies snapped up by Microsoft, WPP and AOL and Thomson finalising its deal to buy Reuters—Telefonica finally offloaded its 75% stake in Endemol to the tune of €2.6 billion.

It sounds like a nice sum, except for the fact that the Spanish telco had actually bought the stake in the TV production company in 2000 for €5.5 billion.

The consortium of successful buyers was led by Endemol’s founder, John de Mol and his investment vehicle Cyrte Fund, and included the Italian media giant Mediaset as well as Goldman Sachs.

"John de Mol did a great deal," one executive from a major broadcaster, told me this week. "He’s basically bought back his company for almost half of what he sold it for a few years ago! We should all try to do that.”

Putting aside the obvious waste of money in buying Endemol at a high and selling it for a low, one has to ask whether Telefonica would have ever been able to capitalise on its asset.

Endemol has been hugely successful in its traditional market of TV, producing franchises in largely in non-scripted formats: shows like Big Brother, Deal or No Deal and Fear Factor now grace millions of TV sets in dozens of countries.

But it’s also been setting the pace in new markets, too, developing mobile-only programming, games and products for other new formats like IPTV. Endemol has made some interesting progress here, signing distribution deals not just with Telefonica properties like mobile operator O2 but with a number of other distributors (mobile and otherwise). And it partners with a number of content companies to develop the products themselves.

Now it may not be your particular cup of tea, but a recent product, a mobile-only TV programme called Get Close To…Sugababes, was done in partnership with Universal Music, appeared exclusively on the O2 network, and really works to push the idea of how to use a small, short mobile format in a compelling way not just for the viewer, but also as part of the programme itself.

In the mobile space alone, Endemol claims that mobile users have downloaded 10 million minutes of Endemol-produced content, and that one million people have streamed endemol shows on their phones.

But all this still didn’t seem to be enough to make Endemol a compelling asset for Telefonica to keep, or to raise its price above what the telco had paid in 2000.

To be fair, Telefonica did try to work some convergence magic on Endemol over the last seven years. This apparently was why the telco didn’t sell it sooner. According to a source, Telefonica had actually wanted to sell off Endemol as far back as 2005 but held off after it bought mobile phone operator O2.

“They didn’t want to upset the relationship between the two,” he said, referring to the deal Endemol had struck with the mobile operator to run text voting for programmes like Big Brother, a lucrative mobile data deal for O2.

“Telefonica seemed to do the right thing buying Endemol,” said the executive. “They just did it at the wrong time.”

Looking to the future, early days under its new owners might be rocky for Endemol. From the moment the deal was announced, there were reports that the company would lose some key executives. Stephane Courbit, the chairman and founder of Endemol France, who was one of the unsuccessful bidders, said he would leave if John de Mol returned to the helm. And the chief creative officer and chairman of Endemol UK, Peter Bazalgette is also rumoured to be eyeing up the exit.

Mediaset, the Berlusconi-owned Italian media conglomerate, may have less time for new projects like mobile TV and IPTV as previous owner Telefonica did. Mediaset has been quick to release a statement saying that Endemol will retain its editorial independence, but this wouldn’t rule out trying to shape the production company’s product line up to better fit with its own media assets.

And Goldman Sachs could stay on the sidelines as a pure financial punter, but it too wouldn’t be in this deal if it didn’t think it could make some money out of it at some point. Perhaps those bankers know something that Telefonica did not.

Microsoft Pays $6 billion for aQuantive: Massive Ad Network Consolidation Is Occuring

Microsoft Pays $6 billion for aQuantive: Massive Ad Network Consolidation Is Occuring
Advertising in the digital arena is one of the hottest subjects around at the moment, especially as we observe numerous reports of falling value of and importance for traditional media. Microsofts aquisition of aQuantive is yet another demonstration of just how seriously the major IT players are taking the opportunity to become media (or at least advertising) companies, coming as it does hot on the heels of Googles aquisition of Doubleclick.

Another demonstration of this shift comes from the Magazine Publishers of America who have noted 57 major digital initiatives in Q1 2007, ranging from blogs to podcasts to video to UGC. For a full list of those noted, visit the MPA website