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EconCeleb Pics: Fuller, Harvey, Omg, Perez, Paparazzi, Tech Issues Et Al

Rafat Ali — Fri, 25 Jul 2008 02:32:14 -0500

Yesterday, our EconCeleb conference went well, despite the technical/audio troubles. Everyone seemed surprised no one had thought of doing a conference on this hugely popular category of media...well, we did, and thanks everyone for coming and making it a success. Full coverage from the conference is here. We will have the videos of all the sessions by next week.

Meanwhile, our own celeb photographer Alen Lin took some fabulous pics throughout the conference, and the full set is here.

Also, in case you missed it, check out our Econoclast10 list, a list of top 10 most innovative celebrities in digital media.

Our mobile application for Blackberry and other Smartphones brings you the latest headlines when you're on the go. Go here to download.

India's Bennett, Coleman Eyeing UK's Trinity Mirror?

VCCircle — Fri, 25 Jul 2008 01:47:52 -0500

Is Indian media group Bennett, Coleman & Co, owner of Times of India newspaper, eyeing another cheap UK acquisition? The shares of British media group Trinity Mirror rose more than 5 percent on Thursday on market rumours that the Indian media giant is looking to bid for the UK company whose market cap had dipped from $2.8 billion last year to $300 million now.

Trinity Mirror's share prices had almost doubled in the last fortnight from 54.75 pence on July 15 to 92.25 on July 24. There is no confirmation from either companies that a deal is in the offing. Trinity Mirror (LSE: TNI) publishes papers like Daily Mirror and Sunday Mirror. According to Independent, BCCL is in talks with some large shareholders of Trinity Mirror to pick up their stakes before launching a formal offer.

Bennett, Coleman & Co publishes Times of India and The Economic Times, besides it owns TV, radio and magazine ventures. Only recently, the group bought out Virgin Radio from Scottish media company SMG for £53.2 million ($105.2 million).

Trinity Mirror plc is one of the UK's largest newspaper publishers, with a portfolio of more than 350 media brands including: five National newspapers, over 150 regional newspapers, and 200-plus websites. The group employs over 9,000 people in more than 150 centres across the UK, including nine major printing sites, its website said.

Trinity Mirror is reportedly going through certain pension fund deficit problems, and as a result, the company's share prices had taken a knock. Trinity Mirror has pension liabilities of £1.53 billion, while it had a £125 million pension deficit at the end of 2007, which is expected to go up this year. Its market capitalisation has declined from £1.4 billion a year ago to £150 million last week (about $300 million).

This story was provided by our content partner VCCircle

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The economics of social media are continuing to heat up as more and more value and buzz are created in new and growing market categories. This 199-page report, filled with charts and data, examines the categories, number and size of investment into social media and the resulting value created from 2007 through 2008. Visit the ContentNext Reports page.

AOL Trimming Up For Sale; Sun Sets On XDrive, AOL Pictures, Mobile And Others

Rafat Ali — Thu, 24 Jul 2008 23:29:21 -0500

Some belt tightening has started at AOL (NYSE: TWX), as it prepares and dresses itself up for a sale: It is discontinuing some of its tech projects, and also trimming some of its content blogs under the Weblogs Inc network. According to an internal memo sent by Kevin Conroy, AOL's EVP of Products and Marketing, products Bluestring, Xdrive and AOL Pictures "will be sunset," meaning closed down after a transition period. "These consumer storage products haven't gained sufficient traction in the marketplace or the monetization levels necessary to offset the high cost of their operation," according to the memo posted here by TC.

Some other changes:
-- MyAOL will complete its HP deployments by the end of October and will transform the MyAOL platform from proprietary to industry open standards...meaning it will continue to be maintained, but that's about it.

-- On the mobile side, which is based in Seattle, it will stop further investment in AIMWorld (haven't heard of this one before) and "will sunset MyMobile next year in order to focus on our core revenue producing products (ie, mail, messaging, portal and mapping)."

-- The AOL Video Portal will merge with AOL Programming Video Experiences to "deliver a higher value product inside of the AOL Programming channels". The work to merge the two products is currently ongoing and will be completed in early Q4.

Meanwhile, Conroy's group will now focus on toolbar, mail, desktop apps, and expanding video search site Truveo. Coincidentally, we have also learned that Tim Tuttle, the former CEO of Truveo, which AOL bought two years ago, left the company a few months ago, though he is still on in an advisory role. He was the AOL VP responsible for video search and relaunched Truveo late last year as a consumer destination site.

Form Conroy, this quote is instructive of the tough times ahead: "There was a time at AOL when the strengths of our aggregate portfolio of products more than compensated for the weakness of an underperforming product. The realities of the industry and market shifts in online advertising no longer make that possible. Simply put, every product makes a direct impact on our bottom line. With two quarters behind us, it is fair to say that results across the AOL products team have been mixed."

On Weblogs Inc, which falls under Bill Wilson's programming group, some changes: it is asking some of its bloggers, who get paid by the post, to stop blogging until July 31 to save on costs. The blogs affected include Diylife.com, The Unofficial Apple Weblog, and DownloadSquad, according to another internal memo we obtained. DIYLife will be closed down.

The memo, sent out by a programming manager for the blogs: Full text after the jump.

Staci adds: I'm not discounting the possibility of a sale but a lot of these actions would be taken either way given the trajectory AOL has been on for the last year. As for what's happening with Weblogs, not every blog in a big network is going to make it, sorry to say. But I've been down this cost-cutting road before (and with the same parent company albeit long before AOL was part of Time Warner) when Time decided to help make its numbers one year by halting freelance spending for the 4th quarter with very little notice. I was lucky; another Time Inc. publication helped me fill a serious income gap. Punishing the people at the lower end of the scale by cutting their income hurts them—and while it may help the numbers now, it hurts the company, too, by endangering both the loyalty of its readers and its contributors.
The Weblogs Inc memo: "Hi Teams. I've spoken to your respective leads about some budget concerns, but wanted to pass along one more last-minute (and unfortunate) effort: we must halt any new posting on the blogs through next Thursday, July 31. There may be some exceptions, and not all blogs will be paused in the same manner."

The goal is to safeguard against further budget overages, thus protecting our business and hopefully continuing as usual (though maybe a little restrained) in August. Going forward we will remain slightly leaner, but my hope is that by the end of the year we'll continue to ramp up as we have historically.

You may see posts get rescheduled to account for the change, and if you have larger features those should not be published until August. Sorry about that, and very sorry about the unintended shortfall of income for all of you. Again, the long view is to return to normal as we re-align with our original budget estimates.

I'm here all day for questions and concerns, on this lists or off. Again, I know this is difficult and will cause some worry.

As of now the only blog to be put on hiatus after this month is DIY Life, effective August 1 (DIY Life could be resurrected at some point, but that is out of my hands). Everyone else should make plans for a resumption in a week. DLS bloggers should immediately press pause on new content. TUAW can continue with 1 or 2 App Store posts a day.

Thanks in advance everyone, we'll get through this an emerge stronger, I know it."

The economics of social media are continuing to heat up as more and more value and buzz are created in new and growing market categories. This 199-page report, filled with charts and data, examines the categories, number and size of investment into social media and the resulting value created from 2007 through 2008. Visit the ContentNext Reports page.

Blockbuster's Digital Kiosks and Movielink Plans; August Launch

Rafat Ali — Thu, 24 Jul 2008 23:00:45 -0500

Blockbuster (NYSE: BBI), which recently abandoned its foolish quest to buy Circuit City, is now on to the next thing, which it has been talking about for the last year: its digital re-invention. The company has a strong presence at Comic-Con going on this week in San Diego, and is also demo-ing its digital kiosks, reports Home Media magazine. It has talked about these kiosks before...they are being tested in select Blockbuster stores in the Dallas area, and plans are to roll it out country-wide in the next three years. These kiosks allow consumers to download movies to portable devices in less than two minutes, though for now, it only works on Archos portable media devices.

Another part of its digital hope: Movielink. It is quietly beta testing a new version of the online movie service, which will be incorporated into a revamped Blockbuster site later this summer. The story says this new site will have about 85,000 DVD titles for rent by mail (including Blockbuster's all-in-one Total Access program); 30,000 new and used DVDs for purchase; more than 4,500 downloadable digital movies for purchase and 2,000 digital movies for rent. That is still small, on all fronts, compared to its rival Netflix.

Its integrated service is being tested among 500 users, reports Dallas News. The test will expand next week and keep expanding until the formal launch sometime in August. Blockbuster will charge $2 and up for each movie rental and $8 and up for each movie purchase. Interestingly, it is download only, and not streaming. In a fact sheet about the integration, Blockbuster makes the case for downloads being more reliable and portable than streaming video, which is used by rival Netflix (NSDQ: NFLX) and Amazon's new Video on Demand service, reports VB.

The company also recently hired a new VP of studio relation and digital media, a new position for the company. Longtime Warner Bros. exec Jeffrey Calman is the new VP based in LA.

Related

Blockbuster Abandons Its Circuit City Quest

Industry Moves: Blockbuster Hires Former WaBro Exec As New Digital Content VP

Blockbuster Working on Direct-To-TV Streaming Device; Similar To Netflix

The economics of social media are continuing to heat up as more and more value and buzz are created in new and growing market categories. This 199-page report, filled with charts and data, examines the categories, number and size of investment into social media and the resulting value created from 2007 through 2008. Visit the ContentNext Reports page.

Thomson Reuters Aiming For a Linear TV Channel?

Rafat Ali — Thu, 24 Jul 2008 22:55:16 -0500

This has been brought up many times before, and Reuters has even said it that it wants to expand its TV/video activities, though it has denied any attempt to launch a linear TV channel over the years. Now, The Telegraph is reporting that it is preparing to launch a business TV news channel to rival that of Bloomberg, CNBC and Fox Business, and could be launched as soon as January, though could get delayed. The plans call for the channel to be online, and on some form of cable or digital platform, though not clear if in U.S. or UK, or both.

Since the merger, the company has cut some staff, but has also previously said it expects to create 50 new newsroom jobs on a variety of strategic projects over the next few months, including up to 20 web video staff.

Somehow I doubt Reuters would go for a linear play, especially in this market as its core business is under pressure with the financial markets in doldrums. And media, however the company wants to play it, has always been a small—though high profile—part of Reuters business, and with the merger, it may become an even smaller part. Reuters apparently opened a new New York newsroom yesterday, which will act as the main studio for the channel, though again, this could be for its online and newswire video. I have requests out to Reuters PR… More when we hear more.

Related

Thomson Reuters' Playbook For Beating Bloomberg: Compete On Price

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Rosetta Marketing Buys Rival Interactive Shop Brulant

David Kaplan — Thu, 24 Jul 2008 17:10:30 -0500

New Jersey digital shop Rosetta Marketing has bought the interactive agency Brulant, Mediapost reported. Terms of the deal weren't disclosed. Chris Kuenne, Rosetta's founder and CEO, said he expects the combined entity's revenues will reach $130 million by the end of the year. In 2007, he said 10-year-old Rosetta's revenue was $50 million. Brulant will also add its 370 staffers to Rosetta's 230 employees. As part of the deal, Brulant will give up its name. Len Pagon, Brulant's founder and CEO, will stay on as vice chairman of growth initiatives for Rosetta. Pagon tells Mediapost that the new entity is already planning additional purchases, in the areas of rich media, social networking and mobile.

Check out the best business jobs in digital media. Go here for paidContent.org Job Board.

San Diego Union-Tribune Puts Itself Up For Sale; Real Estate Weakness Hits It

Rafat Ali — Thu, 24 Jul 2008 17:13:47 -0500

Sign of the times: The San Diego Union-Tribune, the nation's 21st largest newspaper and owned by privately-held Copley Press, has put itself up for sale, reports the paper itself. Copley has engaged the New York-based banker Evercore Partners, which also represented the publishing company in the sale of newspapers it owned in LA and in the Midwest in 2006 and 2007. Not surprisingly, the reasons are very local: "The last couple of years have been a difficult period for the newspaper industry, especially those in a real-estate dependent market like San Diego...the uncertainties pose too great a risk to sit still." Harold W. Fuson Jr., EVP of Copley.

The paper's circulation has fallen in recent years, but still exceeds 300,000 on weekdays and 350,000 on Sundays...its website SignOnSanDiego has than 3 million unique users per month, it said. Copley Press has been divesting its assets in recent years, including newspapers it long owned in the Midwest.

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Hasbro Finally Sues Makers Of Scrabulous; Invokes DMCA To Get It Removed

Joseph Weisenthal — Thu, 24 Jul 2008 16:45:03 -0500

The latest turn in this saga doesn't look so good for Scrabulous… Hasbro, the maker of Scrabble, is suing the creators of Scrabulous, the uber-popular Facebook app. In a statement, the company says the suit was filed against Rajat Agarwalla and Jayant Agarwalla in the Southern District of New York, and it adds that it has filed a DMCA takedown notice with Facebook, demanding that the app be removed now. We'll monitor how fast or whether Facebook complies, but hopefully you don't have too many unfinished games. Just a guess: Faced with a DMCA takedown notice from a company that has a solid complaint, Facebook will cave (right now it's still up). Back in January, Hasbro and Mattel first demanded that Facebook deal with the app. It's clear what's going on timing-wise: An official version of Scrabble was just launched on Facebook with the help of Electronic Arts (NSDQ: ERTS), and obviously that's the version Hasbro wants folks playing. Perhaps we need some sort of non-profit "Scrabble-portability" organization to ensure that users can move their in-process games from one to the other. Release.

Update: The full lawsuit is embedded below (RSS readers may have to click through)..read pages 9-11 for the most relevant part...after the jump.

Hasro Vs Scrabulous - Upload a Document to Scribd
Read this document on Scribd: Hasro Vs Scrabulous

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Check out the best business jobs in digital media. Go here for paidContent.org Job Board.

Earnings: TechTarget's Pre-Announcement: Lower Q2 Than Expected; Bad Sign For Perfomance-Based Ads?

Rafat Ali — Thu, 24 Jul 2008 16:41:53 -0500

Online tech media publisher TechTarget (NSDQ: TTGT) pre-announced its Q2 earnings, and lowered its forecast for Q3 on account of weakening macro environment. The formal earnings will be on Aug 13. The company expects Q208 revenue of $29.4 million, compared to consensus expectations of $31 million. Also, the company projects Q208 EBITDA of $7.5 million, compared to consensus estimates of $9 million. Total revenues are expected to increase to $29.4 million, compared to $24.6 million for Q207. According to CEO Greg Strakosch: "We believe that we are continuing to gain market share, however, due to the macroeconomic weakness in the U.S. and its impact on advertising spending, we believe it is prudent to reduce our guidance to reflect the current market conditions." More details here.

Update: What makes the shortfall particularly interesting is that TechTarget's ads are largely performance based, which Doug Anmuth points out in a note sent out this afternoon. Here you have all the big online publishers crowing about how they'll weather the ad downturn, because they can shift to performance from brand based (see Yahoo's conference call). TechTarget, you'd think, would have two layers of insulation from the economy: performance ads and a non-consumer, B2B focus. Anmuth still believes in a secular shift from brand ads to performance based, but it's clear that the model is not a magic bullet.

The economics of social media are continuing to heat up as more and more value and buzz are created in new and growing market categories. This 199-page report, filled with charts and data, examines the categories, number and size of investment into social media and the resulting value created from 2007 through 2008. Visit the ContentNext Reports page.

Microsoft Announces Search Deal With Facebook; Expands on Ad Deal

Joseph Weisenthal — Thu, 24 Jul 2008 19:54:49 -0500

Google-MySpace Part II? WSJ reports that Microsoft (NSDQ: MSFT) will unveil a search deal with Facebook at today's analyst meeting.... Update: The news was just announced by Microsoft's Satya Nadella on stage at the company's analyst meeting, after first reciting a long list of technical accomplishments that the company had achieved in search. Here's the exact announcement based on the transcript (so it's a little sloppy): "One last thing I want to talk about is an extension of our Facebook relationship where we are extending it to search and page search. We will be providing an API to Facebook where they will create a rich search experience for the Facebook users and that is something that they will launch in the fall working with us. And it will carry both our web results, as well as our page search advertising. We are excited (transcription error here) as an opportunity to further expand the Live Search reach. That is what I have in terms of anteing up and focus (sic) our invention and reinvent the business model. Let me flip back to Steve."

Given Microsoft's outsized investment into Facebook (They invested $240 million at a $15 billion valuation, though court documents suggest Facebook's internal valuation for itself is much less), it makes sense that this might happen. It is an extension of the established advertising relationship between the two companies that goes back to 2006.

Obviously some initial questions come to mind: Assuming that Facebook is getting some kind of revenue guarantee for this, how does it compare to Google's $900 million guarantee to MySpace? Google (NSDQ: GOOG), of course, has had a tough slog of it. Will users actually use Facebook to search? Could this bring Microsoft enough extra scale so as to start monetizing search all around better? And will advertisers get to place ads directly into Facebook, or will they be part of the larger Live Search inventory?

Related

Microsoft Gets Facebook Stake; $240 M For 1.6%; $15B Valuation; More Money May Come From Others

The economics of social media are continuing to heat up as more and more value and buzz are created in new and growing market categories. This 199-page report, filled with charts and data, examines the categories, number and size of investment into social media and the resulting value created from 2007 through 2008. Visit the ContentNext Reports page.

Earnings: Vivendi's H1 Revs up; Universal Music's Digital Revs Up 33 Percent

Rafat Ali — Fri, 25 Jul 2008 02:05:52 -0500

Vivendi (EPA: VIV), the France-based media giant and parent of Universal Music Group, has reported its first half 2008 and Q208 earnings, and its revenues totaled €11.2 billion ($17.7 billion), compared to €10.2 billion ($16 billion) for the first half 2007. For Q2, Vivendi's revenues totaled €5.98 billion ($9.35 billion) compared to €5.2 billion ($8.15 billion) a year earlier. Out of the units: Universal Music Group saw a 2.4 percent decline in revenues, while Vivendi Games saw the largest revenue drop, at 11.2 percent.

On UMG side, for H108, it had revenues of €2 billion ($3.12 billion), which is 2.4 percent decline in actual currency compared to the same period last year. It had a 33 percent increase in digital sales at constant currency. For Q208, UMG had revenues of €1.01 billion ($1.58 billion), which is a 5.3 percent decline in actual currency compared to the same period last year. More details in release here.

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Blog Media In UK: Danson Buys LabourHome Blog; Messy Media Gives Up

Rafat Ali — Thu, 24 Jul 2008 13:27:57 -0500

So it isn't just in U.S., but some frentic blog media activity in UK as well:

-- Datamonitor founder Mike Danson, who bought half of left-leaning current affairs mag New Statesman in April, has invested a five-figure sum to buy a majority of unofficial Labour party blog LabourHome. More details here

-- MessyMedia, an attempt by former Yahoo European news director to set up a Gawker-style UK blog publisher, has just been shut down - or at least, the blog publishing part. The reason: "The audiences for these titles didn't warrant continued investment, particularly in the light of the advertising downturn the media sector is wrestling with." More here.

The economics of social media are continuing to heat up as more and more value and buzz are created in new and growing market categories. This 199-page report, filled with charts and data, examines the categories, number and size of investment into social media and the resulting value created from 2007 through 2008. Visit the ContentNext Reports page.

Microsoft Analyst Day: Ballmer: Search Is A 'Two-Horse Race'; This Is Not About Yahoo

Joseph Weisenthal — Thu, 24 Jul 2008 19:54:45 -0500

After last night's surprise news, this becomes a lot more interesting: Microsoft (NSDQ: MSFT) is hosting a day-long analyst event today, kicking off with Steve Ballmer at 11:40 (ET). Suffice to say, they'll have plenty to talk about. You can catch the live webcast and a schedule here, and we'll be updating with any major news. One other note: If you're at work and can't listen, you can keep refreshing this page for a live transcript.

Ballmer: Kicking off with some introductory statements about business, he says, jokingly, that today is all about "Shareholders! Shareholders! Shareholders!" in his trademark growl.

-- Org. Changes: For the first part of the talk, Ballmer talked up all the opportunities in enterprise and on PCs (including comments about competing with Apple (NSDQ: AAPL) that he made in last night's memo). I'll skip that here, but you can check the transcript. Before getting into the online stuff, Ballmer brings up the big elephant in the room, the org changes announced last night: "We wish Kevin the best… he's been a great contributor here. We thought it was a good idea to announce org changes before today, so we moved things (the announcement) along a little faster." He noted that they wanted to make sure whoever was up there talking internet would be there in three weeks. Lots more after the jump...
-- Online: Ballmer sounds like a starry-eyed tech blogger. 'Everything is internet, internet, internet.' Sounding much like Bill Gates here, talking about screens as thin and light as a sheet of paper: "Everu surface that we walk up to will be a window to the world of digital information." Why are we pursuing this? "There's at least a trillion dollars just of media, communications and advertising… we don't have a lot of trillion dollar markets that are being transformed." On search, why is it so important? It's still a key gateway to internet services. Would GMail be as popular as it is without Google's backing? "We're going to have to ante up to be in the game," (as they said on the recent earnings call.) There's no avoiding the investments that they'll have to make.

-- Search scale: Notes Google's advantage because it has more advertisers: "A lot of our discussion around Yahoo (NSDQ: YHOO) centers as much on this issue as any other issue. How do we get enough advertisers to have a pool of advertising to change the whole advertising approach?" This is the first mention of Yahoo during the presentation.

Following this, Ballmer introduced aQuantive CEO Brian McAndrews to explain what's going on with online ads and ad exchanges. McAndrews predicts major consolidation ahead in the online ad game: "The ad network game is a scale game. You are collecting data. You are out there in the market serving ads and collecting data and the larger ad networks are the ones that can attract, collect more data, utilize that data through expensive investments in R&D to then monetize it better for publishers. At the end of the day the publishers want to work with the networks who make them the most money. It is hard for little guys to do that and compete over time."

Now back to Ballmer, who's talking very specifically about goals in online competition: That is—let's face it, this is not about Yahoo, I will talk about that in a minute. This is a two-horse race, Microsoft and Google (NSDQ: GOOG). We are saying we are in the game of anteing up, focusing and reinventing. Ante, focus, reinvent. You got to look at that and what it means in the context of Google. Google does about 500 billion queries a year, something like that."

-- Anteing up: A major theme of Ballmer's speech: Microsoft will ante up. He's used that phrase several times already. The fight against Google is going to cost a lot of money, depending on your perspective.

-- Yahoo: "There's nothing under discussion between the two of us… Yahoo for us was always a tactic, not a strategy: Ante, focus, reinvent, innovation, the focus on semantic expertise—that's the strategy." Yahoo was a tactic to achieve scale. At the right price: "It was a heck of a tactic… at the wrong price "we wanted to get our regulatory review in before administration shifts in Europe and the US" (Basically, it'd be harder to get such a big deal done under an Obama administration). He says it again: "It's a tactic". He likes to repeat himself for emphasis, clearly. A few more comments trashing Yahoo: "...Just a small reminder Yahoo has no position really outside of the United States and Japan… Yahoo will stay around and find their path. Yet for the kind of (thing we're) talking about in this game I think it really is the two of us."

-- Bottom Line: Microsoft will compete online. It's too big of an opportunity not to try. It's going to cost money, and Microsoft has to do a lot more on marketing that Google does (just the way it goes), but it can be done. Referring to Google, he notes how difficult it is for an industry leader to reinvent its business model and respond to threats (he might as well have been talking about Microsoft there too), suggesting it won't be easy for Google to counterattack innovations in search from Microsoft.

Related

Industry Moves: Microsoft's Kevin Johnson Out; Reorg Of Platform And Services; Ballmer Memo

The economics of social media are continuing to heat up as more and more value and buzz are created in new and growing market categories. This 199-page report, filled with charts and data, examines the categories, number and size of investment into social media and the resulting value created from 2007 through 2008. Visit the ContentNext Reports page.

Earnings: Ad Slump Hits Online, As Lee Enterprises' Q2 Internet Revs Fall 9.1 Percent

David Kaplan — Thu, 24 Jul 2008 13:30:11 -0500

The dismal economy not only hit newspaper publisher Lee Enterprises (NYSE: LEE) on the print side, but even its online ad revenues fell in Q2. Online dropped 9.1 percent, Lee said, adding that combined print and digital revenues also fell 10 percent to $195.5 million. Also, combined same property print and national online ad revenue slid 21.2 percent. This is a striking turnabout from last year, when Davenport, Iowa, publisher of the St. Louis Post-Dispatch said online advertising grew 61.2 percent to $16.2 million from $10 million in Q206. Overall, the picture was not a pretty one for Lee, though not out of the ordinary for the industry these days: Q2 net income was $12.5 million down 44.2 percent from last year's $22.4 million, while total operating revenue from continuing operations fell 8.3 percent year-over-year to $256.4 million.

Release

The economics of social media are continuing to heat up as more and more value and buzz are created in new and growing market categories. This 199-page report, filled with charts and data, examines the categories, number and size of investment into social media and the resulting value created from 2007 through 2008. Visit the ContentNext Reports page.

Earnings: McClatchy Q2 Revenues, Profits Plummet, As Online Ad Sales Grow 12.5 Percent

David Kaplan — Thu, 24 Jul 2008 17:43:57 -0500

The McClatchy Company's (NYSE: MNI) financial struggles only seemed to deepen in Q2, as Gary Pruitt, the publisher's chairman and CEO, pinned the weakening economy and the shift from print to digital on its revenue and income decreases. Revenues were down 15.6 percent to $489.7 million in Q2 compared to last year's $580 million. And while online ad sales grew 12.5 percent in the quarter, since they made up only 11.8 percent of total ad dollars—compared to an 8.6 percent share for all of 2007—it was not enough to offset wider declines. In all, McClatchy's ad revenue fell 16.8 percent to come in at $406.3 million. Meanwhile, Q2 net income from continuing operations was $20.1 million, or 24 cents per share, down by roughly 50 percent from last year's $40 million.

-- Internet ads: Pruitt highlighted McClatchy's online ad growth in a statement. He attributed the steady gains to the ad sales team moving away from convergent ad sales—that is, tying print up-sells to digital, which tends to dilute the latter. Pruitt: "Excluding employment advertising, which is the category most tied to print up-sell advertising, and which has declined nationally both in print and online, our online advertising grew 58.5 percent in the second quarter of this year. We were pleased to note that nearly 50 percent of our online advertising came from ads placed only online; they were not tied to a print up-sell." Lots more after the jump...
-- Savings: As part of its restructuring plan, Pruitt said the company expected to see $95 million to $100 million in annual savings over the next four quarters. This plan includes cutting McClatchy's staff by roughly 10 percent and is expected to result in severance of approximately $30 million. Secondly, the sale of its 15 percent stake in ShopLocal for $7.8 million last month will used to reduce debt.

-- Outlook: In the statement, Pruitt said he doesn't expect the Sacramento, CA.-based publisher's ad revenues to recover any time soon, despite its online efforts. In general, the company's outlook is dependent on what happens in the larger economy, he added. In an attempt to at least mitigate that negative impact, the company is banking on its arrangement with the Yahoo (NSDQ: YHOO) Newspaper Consortium. It will also embark on other partnerships and is "investing significantly in online operations," including adding ad sales staff and "realigning sales incentives to focus on driving sales and expanding online sales training budgets and efforts."

Release | Webcast (12:00 PM EDT)

-- Update: During the Q&A, Pruitt said that the company has completely embraced the need to move away from convergent ad sales. The realization that digital ad sales tied to print was a losing game only occurred to the company within the past two years. The problem with convergent up-sells is that digital is sold to print advertisers as an add-on, not as a completely different property that can reach a different (think national, for one) audience. Plus, print up-sells limit the range of clients to a small finite group of existing advertisers who are not likely to increase their ad spend substantially on the web.

Pruitt: "When McClatchy started online 10 years ago, all ad sales were upsells. Things were still the same in 2006. We're trying to establish digital as a separate product and an independent ad base. We're not kidding ourselves; we know that the value of the content and the brand identity are shared. But we see the demand for digital as separate from print. And in light of that demand, we price [our online ads] aggressively." As for particular digital ad drivers, Chris Hendricks, VP for interactive media, said that revenues from jobs site CareerBuilder and Cars.com have been among the main contributors, especially on the display side, with dollars coming from the retail category. Last September, McClatchy decided to keep its 14.4 percent stake in CareerBuilder (other owners include Gannett (NYSE: GCI), Tribune Company and Microsoft), after renegotiating the terms of its affiliate agreement. That summer, Pruitt had argued that the terms were not that favorable and the company was thinking of selling its interest.

Check out the best business jobs in digital media. Go here for paidContent.org Job Board.

Update: XM And Sirius Resolving Final Issues; Martin Says Agreement Reached

Joseph Weisenthal — Thu, 24 Jul 2008 13:48:02 -0500

The conclusion of the XM-Sirius (NSDQ: SIRI) saga is playing out like the final 2 minutes of a close basketball game. All signs are that the deal will be approved. It was reported yesterday that the swing voter on the FCC, Deborah Taylor Tate, would approve the union, provided XM (NSDQ: XMSR) and Sirius agreed to some last minute enforcement actions, including a fine. Now the two companies have confirmed that they are in talks to settle these issues, including the fine ($17 million for XM, $2 million for Sirius). The companies warn that there's still no guarantee, but the end is now looking very, very close. Release.

Update: Here's what Kevin Martin told the WSJ: "I think it's fair to say an agreement in principle has been reached… We're still trying to work out the language."

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Earnings: Scripps Q2 up 3.8 Percent; Op Income Slips

Joseph Weisenthal — Thu, 24 Jul 2008 16:05:29 -0500

The separation of EW Scripps (NYSE: SSP) and Scripps Interactive occurred on July 1, the day after Q2 ended, so this will be the last time the two Scripps report as one company: Total combined revenue for the quarter was $664.1 million, a 3.8 percent increase from $640.0 in the year-ago quarter. Net income comparisons were affected by a debt repurchase, but op income slipped 1.3 percent to $163.6 million.

The split between the cable/interactive segments and the old media newspaper segments tell you why they split the company in half. Revenue at Scripps Networks (which includes HGTV, Food Network, DIY) was up 13 percent to $349 million, with profit growing 9 percent to $180 million. Revenue at Shopzilla and uSwitch were up 13 percent to $66.9 million, with profits of $15.1 million, compared to $6.8 million, a big jump. The company cited growth at Shopzilla and lower costs at the challenged uSwitch business for the jump. It looks like these results continue a turnaround in this business that was evident last quarter, though top-line growth was a bit down.

And then at the newspaper business, it looks like any other newspaper company: Revenue was down 13 percent to $144 million. Segment profits were almost cut in half to $16.1 million from $30 million. For broadcast TV, revenue slipped to $80.5 million from $84.5 million, and profits fell to $18.3 million from $23.5 million.

Release | Webcast (10:00 AM ET)

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A Different Pay-To-Play: MTVN Offers Developers Cash Bonus For Creating Hit Games

David Kaplan — Thu, 24 Jul 2008 16:11:39 -0500

MTV Networks' (NYSE: VIA) Nickelodeon Kids and Family Group's AddictingGames is going to announce a program designed to encourage developers to make more popular productions. The rewards program will launch sometime in Q3. Over the next 12 months, AddictingGames will reward the developers of the portal's top 25 games that generate the most plays, ranked by the site, at the end of each quarter.

-- An abacus, anyone?: Hopefully, developers will be able to figure out the math. The bonus percentage will be pro-rated according to the total number of plays the game attracts. Then, the figure is divided by the total game plays of the top 25 games combined. Here's Nickelodeon's calculation: if the total game plays generated from the top 25 list in the quarter equals 100 million, and an individual top 25 game generates five million game plays in that quarter, that developer will be awarded 5 percent of the total bonus pool. Got it? It's still not clear what the dollar amounts will average on that, but suffice to say, it's certainly better than nothing.The effort is part of Nick's goal of adding 75 self-published titles and 600 games from outside developers.

-- First money, next a gaming awards show: Nickelodeon has another way to shower game developers with honor and affection; the MTVN unit will host The Most AddictingGames Awards —working title— next summer. Nick emphasizes that the show is being tailored not for TV, but as a "multiplatform" event, adding that the show is one of the networks top priorities looking ahead to 2009.

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Earnings: Publicis On Way To Digital Target, Though Online Profits Lag

Robert Andrews — Thu, 24 Jul 2008 16:17:51 -0500

Big-four communications group Publicis says it's on track to reach its 2010 target of pulling a quarter of revenue from digital, after seeing it comprise 18.8 percent of business in the first half of the year (up from 12.7 percent last year).

But online performance is not there yet, and that may be down to roll-out costs. "(Digital) profitability is improving, but is still below the group's average ... the average (online) margin is lower despite the fact that it is constantly improving."

Publicis has been going on an acquisition binge over the last year to bolster its acquisition of Digitas, which it is making its prime online arm. But in the quarter, Publicis also created VivaKi, an umbrella for Digitas and its Starcom MediaVest, Denuo and ZenithOptimedia units that lets clients more easily sell ads in to Google (NSDQ: GOOG), Yahoo (NSDQ: YHOO), Microsoft (NSDQ: MSFT), Platform-A (NYSE: TWX) and more.

Quarterly organic revenue grew 5.5 percent to €1.16 billion ($2.5 billion) despite a "somewhat depressed world economy, and against a backdrop of financial unease". The outlook for next half: "We will see a small slowdown which may be compensated in some areas of the business," CEO Maurice Levy told FT.com.

Release | Results | Slides | Webcast

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The economics of social media are continuing to heat up as more and more value and buzz are created in new and growing market categories. This 199-page report, filled with charts and data, examines the categories, number and size of investment into social media and the resulting value created from 2007 through 2008. Visit the ContentNext Reports page.

UK's Biggest ISPs Agree To Warn Illegal Music, Movie Downloaders

Robert Andrews — Thu, 24 Jul 2008 02:55:25 -0500

Threatened with legislation by April if they fail to halt piracy, the UK's six largest ISPs will today announce a plan to tackle illegal music and movie downloading by sending warning letters to thousands of customers.

Virgin Media and BT, already began sending letters to music downloaders last month. Now Orange, Tiscali, BSkyB (NYSE: BSY) and Carphone Warehouse have joined in signing a memorandum of understanding with the government that commits them to a "significant reduction" in filesharing and to setting up their own legal music services. In other words, they get Westminster's endorsement for pushing subscribers toward new all-you-can-eat subscription packages.

The threat of legislation will stay on the table - government's own proposal for such action will be published today, suggesting either a levy on copying hardware, a compulsion on ISPs to filter traffic or a French-style "three-strikes-and-you're-out" disconnection warning system. Sixty-three percent of people download music from P2P networks - an average of 53 illegal tracks per month, according to June University of Hertfordshire research for British Music Rights. But one warning from an ISP would be enough to stop 70 percent of illegal file sharers in their tracks, according to Entertainment Media Research in March.

We've been following this stuff closely, so read the full post at paidContent:UK and save the date for our EconMusic conference on September 23 at London's Natural History Museum

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The economics of social media are continuing to heat up as more and more value and buzz are created in new and growing market categories. This 199-page report, filled with charts and data, examines the categories, number and size of investment into social media and the resulting value created from 2007 through 2008. Visit the ContentNext Reports page.