If you stepped in late, it sounds awfully dull.
An announcement Tuesday tells us all that "certain assets" of a "white-label" online video service called Joost have been acquired by Adconion Media, which calls itself "the largest independent global audience and content network." The acquisition "will be able to provide advertisers, content owners, and Web site publishers with an end-to-end global video platform and cross-channel video and display ad-serving solution," according to a statement from Adconion CEO Tyler Moebius. Financial terms were not disclosed. Yawn.
But really, it's an exceptionally anticlimactic ending for Joost, a company so secretive and hyped that it was once known, James Bond-like, as "The Venice Project," and which was supposed to kill YouTube and that dastardly Cold War villain known as your cable company. It was a scrappy start-up with roots in lawlessness--founders Janus Friis and Niklas Zennstrom had built onetime file-sharing hub Kazaa--but major street cred, too, as they'd also founded Skype and sold it to eBay. There were impressive backers, too, including CBS (which owns CNET).
What went wrong?
Well, there was a big issue with Joost's downloadable peer-to-peer app. By the time it was released, Web-based video was advanced enough so that a required download was a barrier to entry, not a technical leg up. Some of the big-name content partners seemed to be putting in a halfhearted effort with Joost, offering up reruns and esoteric programs instead of the new programming that people actually wanted to watch.
But perhaps what really doomed Joost was something that was itself supposed to be a flop: When NBC Universal and News Corp. announced their plans to create an online video hub that would rival YouTube and address the rampant issue of piracy, it was referred to disparagingly as "Clown Co." We all know how that one turned out. The finished product, Hulu, was extremely well-received and continues to expand its video library.
There was, briefly, a time when it looked like there was a slight chance that things might turn up for Joost. It did, after all, beat most of its competitors to the release of an iPhone app, and a focus on niche content like Japanese anime seemed like a viable business choice as Hulu increasingly placed an emphasis on the mainstreamiest of the mainstream. Unfortunately, that didn't work either.
There was "a major retrenchment" as Joost reined in its lofty plans. Then it switched business models altogether to the far less glamorous "white-label video solutions" modus operandi.
And then the management debacles became evident. CEO Mike Volpi resigned and then was ousted by shareholders from his role as chairman. Oh, and then the company sued him. Nasty.
Sometimes hype plays out well. Sometimes it just doesn't, and Joost was one of those cases. In spite of the founders' prior successes, truckloads of venture capital dollars, and a few early and impressive content deals, it flopped. The end. Now, per Tuesday's release, it'll be "(adding) many dimensions to Adconion's existing video services and further will solidify its position in the online video and content syndication market."
That's a pretty nice way to put it.
Sold!
Auction site eBay has, as long anticipated, sold off the Skype telephony service to a group of investors that includes Marc Andreessen's new Andreessen Horowitz group, Silver Lake, and the Skype co-founders' Joltid Ltd. The investor group now holds about 70 percent of the company; eBay retains the rest in a minority stake. Joltid was brought into the investor group as part of the settlement of a copyright suit that the Skype co-founders, Janus Friis and Niklas Zennstrom, filed against eBay over Skype's technology. At one point, that dispute was looking so ugly that eBay was reportedly considering rebuilding Skype's technology altogether.
The sale amounted to approximately $1.9 billion in cash and a note from the buyer in the principal amount of $125 million, for a total of $2.025 billion.
eBay's plans to get rid of Skype, a purchase that had never fit quite well into its auction business, had been well-publicized. Last spring, the company formally announced that it planned to spin off Skype as a publicly traded company in the first half of 2010.
The final $2.75 billion valuation is only slightly higher than the $2.6 billion that eBay originally acquired Skype for in 2005.
Amazon's acquisition of shoes-and-more retailer Zappos is complete, the e-commerce giant said in a release Monday. The company in July had announced its intent to make the purchase, for about $850 million in cash and stock.
Zappos, which made a name for itself based on outside-the-box customer service principles, will stay independent from the Amazon.com brand and will continue to operate out of its Las Vegas headquarters.
Numbers released by J.P. Morgan Research in conjunction with the acquisition announcement predict that Zappos will post moderate, single-digit growth for the 2009 fiscal year after raking in $635 million in revenues last year.
MySpace CEO Owen Van Natta has confirmed in a Wednesday conference call that the News Corp.-owned social network has "entered into an agreement to acquire iLike," following rumors earlier in the week.
iLike's co-founders will remain at the company and stay headquartered in Seattle; the service will be "unaffected by the acquisition" in the short term.
Van Natta explained in the conference call that the acquisition is on behalf of MySpace Inc. rather than its MySpace Music division, a joint venture with the major record labels, because the company plans to extend its technology to other areas of entertainment such as gaming and possibly film. He highlighted the "discovery" technology that iLike has built and suggested that MySpace planned to integrate it into some of its other properties.
No terms of the deal were disclosed, but reports have indicated that iLike was sold at quite a bargain--something in the neighborhood of $20 million total--because its ad-supported, streaming music model failed to rake in the profits that investors hoped it would.
Van Natta denied that the deal had been delayed due to iLike board disputes or tax issues, as some reports had suggested.
But it's unclear as to how the deal will affect iLike's relationship with Facebook. The social network's developer platform has been home to much of iLike's activity, and now that it will be owned by Facebook's closest rival, there's a chance that Facebook could restrict or block the app. Van Natta, Facebook's former chief operating officer, said that iLike's apps are part of "a lot of different social networks' experience. We're excited about just continuing to expand that experience to other areas of entertainment that MySpace has assets in."
Meanwhile, Van Natta claimed that MySpace Music is "doing extremely well" and that "we absolutely expect MySpace Music to be an important part of MySpace...for years to come." Several months ago, rumors were swirling around the music industry that its performance hadn't been up to expectations.
This post was last updated at 12:13 p.m. PT.
News Corp.-owned MySpace is "close to acquiring" social music service iLike, according to TechCrunch.
The price tag is rumored to be in the neighborhood of $20 million. Representatives from iLike were not immediately available for comment.
The report comes within days of iLike launching a music download store--a development first reported by CNET News--with MP3s available from all four major record labels.
The deal, if confirmed as accurate, highlights the often complicated connections in digital media's elite ranks.
iLike, for example, rose to fame through its close ties to Facebook. The iLike application, since re-branded to simply Music, was one of the first big applications to launch on Facebook's platform at its debut. Its ad-supported streaming music service has become one of the most prominent in a packed field--it now has about 50 million users and just launched a suite of iPhone apps. But the streaming music niche has proven difficult to monetize and has left some players in the space reportedly hunting for an exit.
MySpace, meanwhile, has seen stagnant growth as the once-far-smaller Facebook has rapidly overtaken it in the social-networking race, thanks in part to the proliferation of third-party apps like iLike on Facebook's groundbreaking developer platform. As part of an executive restructuring earlier this year, MySpace installed former Facebook chief operating officer Owen Van Natta as its CEO, replacing co-founder Chris DeWolfe.
Attempting to refocus and return to its roots as a hub for music and pop culture, MySpace launched its own streaming music service, called MySpace Music, and hired MTV veteran Courtney Holt to run the division. MySpace Music, a joint venture with the record labels, does not operate its own download store but instead directs users to Amazon MP3 downloads through affiliate links. But MySpace Music hasn't received thoroughly positive reviews from the record labels hoping to profit from it.
Disclosure: CNET News is part of CBS Interactive, which also publishes Last.fm, a competitor to iLike.
Updated at 7:38 a.m. PDT with additional details and background.
Whoa. This was unexpected: Amazon has agreed to a stock takeover of Zappos.com, a Las Vegas-based online retailer that has become famous for its unusual corporate culture.
While Zappos started out selling only shoes, it has since expanded to other products.
"This morning, our board approved and we signed what's known as a 'definitive agreement,' in which all of the existing shareholders and investors of Zappos (there are over 100) will be exchanging their Zappos stock for Amazon stock," a memo posted to Zappos by CEO Tony Hsieh read. "Once the exchange is done, Amazon will become the only shareholder of Zappos stock."
Until this point, Zappos was privately owned.
Amazon provided more details in an official release: The company will acquire all outstanding Zappos shares in exchange for roughly 10 million shares of Amazon common stock, which comes out to be about $807 million. Additionally, the transaction involves about $40 million in cash and restricted stock units to Zappos employees. The transaction is expected to be complete this fall.
"We think that there is a huge opportunity for us to really accelerate the growth of the Zappos brand and culture, and we believe that Amazon is the best partner to help us get there faster," Hsieh wrote in his memo, adding that he and other Zappos executives plan to stay on board. "Amazon supports us in continuing to grow our vision as an independent entity, under the Zappos brand and with our unique culture."
Zappos.com got a new look a little over a year ago, when it broadened its offerings beyond just shoes.
Hsieh has become a regular speaker on the tech and marketing conference circuit because of his offbeat way of running a company: encouraging employees to Twitter, offering prospective hires $2,000 to turn a Zappos job offer down, and placing customer service at the top of the priority list with free shipping and returns.
"As you know, one of our core values is to build open and honest relationships with communication, and if I could have it my way, I would have shared much earlier that we were in discussions with Amazon so that all employees could be involved in the decision process that we went through along the way," Hsieh wrote. "Unfortunately, because Amazon is a public company, there are securities laws that prevented us from talking about this to most of our employees until today."
Reports had circulated recently that Amazon was looking at acquiring movie rental outlet Netflix. It has a history of being quite acquisition-friendly. Last year, the company bought audiobook retailer Audible for $300 million, rare book site AbeBooks for an undisclosed amount, and book-centric networking site Shelfari (also for an undisclosed amount).
Amazon actually operates its own shoe and handbag retail site, Endless.com, which is mostly free of Amazon branding. The site launched early in 2007.
This story was last updated at 2:01 p.m. PDT.
A nice little summer shopping spree for AOL: Under the auspices of new CEO Tim Armstrong, the company has acquired "hyperlocal" news site Patch and hipster-oriented events listing site Going.com.
The acquisition of Patch isn't too much of a surprise. Armstrong founded and invested in Patch while at his former gig as Google sales chief. The start-up offers a model for local news on the Web and plans to have launched in a dozen cities by the end of 2009. Going, meanwhile, has been around since 2006 and offers event and invitation services along with ticketing. It's likely that AOL will use its technology to take the service beyond its party-friendly current target demographic.
"Local remains one of the most disaggregated experiences on the Web today--there's a lot of information out there but simply no way for consumers to find it quickly and easily," Armstrong said in a release. "Going forward, local will be a core area of focus and investment for AOL. The acquisitions of Patch and Going will help us build out our local network further with excellent local services that enable people to stay better informed about what's going on in their neighborhood."
He's not the only new-media executive thinking local: in his keynote address at the Advertising 2.0 conference on Wednesday, IAC/InterActiveCorp CEO Barry Diller called local "one of the few areas that hasn't been colonized" on the Web. IAC owns Citysearch, with which AOL has partnered in syndication deals.
So should News Corp. buy Twitter? That's what Vanity Fair columnist and pundit Michael Wolff speculated this week in an article on Newser.com, the aggregation site he founded.
"There may not be anything less than Twitter that can distract Wall Street from News Corp.'s stubborn and, at this point, unnatural newspaper fetish," Wolff wrote, "and, as well, convince it, for one last hurrah, that (CEO Rupert Murdoch) isn't...well, gone."
The catalyst for Wolff's recommendation was the recent hire of former AOL chief Jon Miller as head of News Corp.'s digital projects. Miller's venture capital experience would make him an ideal candidate to spearhead an aggressive M&A strategy, and there's no more buzzworthy company than Twitter these days. On the flip side, there really isn't an obvious fit for it within the company, and Twitter still has yet to produce a viable strategy for long-term profits.
Wolff, who wrote this year's Murdoch biography "The Man Who Owns The News," got a whole lot of tech blog attention for insisting in an interview that "MySpace is for f***ing cretins" and predicted a swift doom for the social network. In Monday's brief Newser piece, he called Murdoch "the world's least savvy Internet guy" and said that News Corp. has "run (MySpace) into the ground" since acquiring its parent company Intermix Media for $580 million in 2005.
There are some holes in his argument, to say the least. With the help of News Corp.'s big-media muscle, MySpace was able to launch its MySpace Music joint venture last year, and while it certainly made a few missteps that led to Facebook eclipsing it in worldwide traffic, it's not quite time to stick a fork in it. User engagement is better than Facebook's, ComScore found, and it's had better luck with advertising than Facebook has.
But Wolff may have added motives to want to rip into News Corp.'s digital strategy and suggest that the long-shot possibility that it would buy Twitter is its only clear path to dot-com salvation. His beef with News Corp. has turned into a full-out feud, and the Page Six gossip section of the Murdoch-owned New York Post has recently been making a big deal of his personal life--always getting in a jab about his lack of hair. Ouch.
A report on PaidContent suggests that InterActiveCorp, the media conglomerate owned by Barry Diller, may be looking to sell off some of its smaller ad-supported content properties--effectively, tossing assets overboard to lighten the load during rough financial seas.
According to PaidContent, IAC may be "dissolving" its "programming" group, a set of ad-supported content businesses that includes CollegeHumor, 236.com (a joint venture with The Huffington Post), Very Short List, and the brand-new The Daily Beast. The restructuring reportedly involves the departure of Nick Lehman, chief operating officer of the programming group.
A CollegeHumor executive told CNET News in an e-mail that the comedy site would not be sold. IAC took a majority stake in its parent company, Connected Ventures, which also owns BustedTees and Vimeo, two years ago.
More likely? News comedy site 236 may become wholly owned by The Huffington Post, which just raised $25 million in funding. Very Short List, an e-mail newsletter, may also be up for sale.
IAC underwent a five-way split earlier this year as Diller, convinced that the unfocused nature of the conglomerate was keeping share prices down, spun off properties such as Ticketmaster and LendingTree in order to focus on online media businesses.
Beleaguered online-music pioneer Napster announced to shareholders in a letter Friday that it's still employing investment bank UBS and may be positioning itself for "strategic alternatives" to keeping the company public--i.e. a sale.
The letter was sent on behalf of Napster's board in order to urge shareholders to not vote for three activist candidates for the board. "The press release recently filed by the dissident group appears to imply that your board is not willing to consider a sale of the company," the letter read. "This is not true."
The board additionally recommended that in place of the dissident candidates, shareholders re-elect existing board members Richard Royko, Philip Holthouse, and Robert Rodin.
Napster was the original name in digital music, and a notorious one at that. The free peer-to-peer service was silenced after a high-profile court battle. Its attempts to resurface as a legitimate subscription-based music service just haven't gotten it back on top, and the addition of 6 million DRM-free MP3s would've been more impressive, if Amazon MP3 weren't doing the same.
Napster's letter to shareholders insisted that the proposed new board members would lead the company in a wrong direction. "The dissident group's nominees have no relevant experience in the digital-music industry, have no public-company board experience, and the dissident group has not put forth any substantive plan for how their nominees will enhance value for our stockholders, if elected to the board," the letter read.
