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This is almost like a follow-up to my previous post on TechCrunch and CNET (be sure to read the updates, because I added some worthwhile links), but PaidContent has a post up about a new report from Jordan Edmiston Group looking at M&A activity in the media sector: according to the report, the total value of media M&A during the third quarter was $95-billion, up 110 per cent from last year — and the largest single segment was online media, with 232 deals worth a total of $8.3 billion — up from 136 deals worth $5.7 billion last year.

Boy, Henry “I used to be a famous Wall Street analyst” Blodget is sure on a roll — or make that a troll. Today he’s got a post about how TechCrunch could be bought by CNET for $100-million or so. His post is actually a response to one by Doug McIntyre at 24/7 Wall Street, in which Doug hypothesizes about blog networks such as TechCrunch and Huffington Post and GigaOm and how much they might be worth to existing media entities.

Mike has a sarcastic response to Henry’s post here. And there’s no question that $100-million seems like a fairy tale price — a lot like Henry’s $2,000 Google post from yesterday. Still, the idea itself makes sense. TechCrunch or GigaOm would fit as a part of CNET or several other media entities. The ironic thing is that selling would probably be a mistake, because at the moment they are doing far better than most of the companies that would be thinking about buying them.

Update:

Is $100-million nonsensical or not? Let’s look at the numbers: TechCrunch says it has 1.5 million unique visitors a month — although a commenter below says those numbers may be high — and CNET Networks has about 10 million a month, according to comScore (Compete says about 6 million a month). But as we all know, it’s about more than just uniques, right? It’s about monetization.

CNET had revenue last year of almost $400-million, although it only made a profit of $7-million, which is pretty pathetic. No one except Mike knows what TechCrunch made last year (check below for some Valleywag scuttlebutt — I have no idea whether it is even close).

Still, CNET’s market cap is $1.2-billion. If you assume that someone could monetize Mike’s 1.5 million unique visitors better than CNET can monetize its uniques (which wouldn’t be a stretch) then you could easily come to the conclusion that TechCrunch is worth about 20 per cent of what CNET is worth — or about $250-million.

I’m not saying it is, I’m just saying $100-million doesn’t look all that crazy. Oh, and Mike? If you do a deal, Cynthia Brumfield at IPDemocracy has some advice for you.

Update 2:

Dan Farber of ZDNet (which is part of CNET) notes that the rankings at Alexa and (presumably) comScore only measure CNET.com, but CNET’s family of sites get 137 million uniques a month. That’s an order of magnitude larger than the numbers I was using. That suggests TechCrunch might be worth in the neighbourhood of $20-million. Still nothing to sneeze at.

Mike’s got a post up at TechCrunch about Henry “I used to be a famous Wall Street analyst” Blodget, in which he goes on at length about Blodget’s Google-related post at Silicon Alley Insider today — the one in which Hank argues that Google could hit $2,000 a share. Mike seems genuinely pissed that Henry is shooting his mouth off about such a thing, especially after the history, and says someone should “muzzle Blodget.”

The history, as pretty well everyone knows by now, goes more or less like this: in 1998, Blodget says Amazon is going to $400, it does so, stocks climb to the moon, then they crater, Blodget is investigated for fraud for misleading investors by publicly pumping stocks and privately dumping on them, etc. and agrees to a settlement in which he is barred from the securities industry for life.

As I said in a comment on Mike’s post, I could be wrong, but I read Henry’s post as a sarcastic response to a reader who complained he was being too pessimistic all the time (can you blame him, given what happened the last time he was overly positive?). I think the point he was making was that it’s easy enough to throw a few multiples out there, a few back-of-a-napkin financial projections, and get to almost any number you want. Heck, that’s what analysts do for a living — as Blodget knows better than just about anyone.

I think Henry was having some fun with his reputation, and maybe trolling to get a reaction. And he sure got one.

Update:

Henry has an update on what he was up to (and a response to Mike) here, and Kara Swisher has a take on it as well.

I must have missed the news that Getty Images — one of the largest image-licensing firms around, next to Bill Gates’s Corbis — had bought a company called Pump Audio back in June and was getting into the music-licensing business. Then I read this morning on TechCrunch that PumpAudio has relaunched as part of the Getty site, offering a song-tracking and licensing tool called (what else) Soundtrack.

Although the service is starting small, with just 20,000 songs from independent artists, Getty says it wants to expand through deals with the major record labels and others — and knowing Getty, it is likely to do so with a vengeance. Maybe it will even get into the “crowdsourcing” of music, the way it did with photos by buying Calgary-based success story iStockphoto.com.

Whether Getty succeeds or not remains to be seen, but there’s no question that the music-licensing business needs some organization. Insiders — including Spiral Frog CEO Joe Mohen, who I interviewed for this recent piece — say the process of getting all the required performance and publishing rights for a piece of music is byzantine and in some cases almost impossible, since there are thousands of different publishers and no central repository of information. A real “goat rodeo,” as a friend of mine likes to say.

If Getty can help to bring some semblance of order to that process, it will not only benefit anyone who is trying to license music — including perhaps the folks at Saturday Night Live, who had to pull a hilarious video from SNL off YouTube because they apparently failed to get a license for an Aphex Twin song — but will also benefit (theoretically) the artists who make the music.

Say what you will about Valleywag (just don’t get Mike Arrington started) but Owen Thomas is a pretty smart guy, and I think he makes a good point amidst all the sturm und drang about Facebook and its market value, and how eBay’s $1.4-billion Skype-related writedown could affect the perception of that value (for more on that, just see this Techmeme thread or the Times Online blog).

It’s true that eBay’s writedown says a lot about the risks of paying bubblicious prices for things, and a $10-billion valuation for Facebook has certainly got more than a whiff of bubble about it. At the same time, however, Owen points out that there are just as many risks in not buying things. eBay is a great example of that too, having tried and failed to buy PayPal early on. And Yahoo has a boatload of missed opportunities, including Google and Facebook.

As for Microsoft’s hyperactive basketball-coach CEO, Steve Ballmer, his remarks to the Times about Facebook being a “fad” are just as likely to be an exercise in talking down the value of something before you buy a chunk as they are a thoughtful commentary on the company’s actual value. Or it’s possible that he really doesn’t get it.

In the end, I think Kara Swisher at All Things D probably has the right read on the situation: Facebook is likely to take some money, at a handsome valuation, but remain independent (unless $10-billion gets dropped off at Mark Zuckerberg’s flat, of course). If nothing else, MySpace shows the downside of being acquired too early.

From the New York Times comes word that Huffington Post, which started as a rag-tag collection of blogs and has become a new-media superstar, is hiring away the general manager of CBSNews.com, Betsy Morgan, and making her the new CEO of the Post. This is a big coup for Arianna Huffington and her team, and it’s probably no coincidence that it comes just before a U.S. election, one that the HuffPost and Jay Rosen’s NewAssignment.net have teamed up to cover.

It will be interesting to see where this new hire takes the site (Mike Arrington says that he smells an IPO). In any case, congrats to Arianna and the entire HuffPost team — which includes the lovely and talented (and Canadian) Rachel Sklar of Eat The Press — for creating something extraordinary.

Well, now it’s official: Skype turns out not to be worth the $4.1-billion that eBay seemed to think it was back in 2005. As Henry Blodget notes at Silicon Alley Insider, the $1.4-billion writedown that the online auction company just announced effectively recognizes what everyone else has known for some time: Skype may or may not have been a mistake (I would argue it was, although Ash Karbasfrooshan disagrees), but one thing is for sure — eBay paid way too much for it.

In true contrarian fashion, my friend Paul Kedrosky says that all the breast-beating about eBay overpaying for Skype is overdone:

“Ebay is still motoring along, and this is lots of reason to be optimistic about the auction company’s future.

Over-focusing on the lamentable (and long past) Skype deal strikes me as a mistake.”

As I said in a comment on Paul’s post, I disagree. eBay may very well be motoring along, but the purchase of Skype was an error in judgment, and a fairly expensive one at that. I realize that a $1.4-billion writedown is small beer for eBay, but the fact that the company made such a decision — without any compelling synergies or anything else to justify the price — speaks volumes about the leadership of the company as far as I’m concerned (as usual, John Paczkowski has the best headline).

It’s nice for Niklas Zennstrom and Janus Friis that they not only get a big chunk of that $530-million earnout, but they can now get on with their lives (and with Joost, which launched as a no-invite-required app today) and quit trying to force some kind of fit between Skype and eBay — a fit I’m willing to bet they never saw either, although Niklas defends the deal in an interview with Thomas Crampton (Janus writes about it here).

As for eBay? Henry thinks they should sell Skype to Yahoo or Microsoft or someone like that, and he might just be right. Jeff Nolan thinks the company should turn it into a backend service-type offering, a la Amazon’s EC2.

Mike Arrington has the scoop on the latest move by Gabe “Techmeme” Rivera: a Top 100 blogs list, which will be made up of the blogs whose posts most often appear on the blog aggregation engine — a site that I (and many other bloggers I know) check at least once a day, if not once an hour or so). As Mike points out, this is a pretty big kick in the goolies for Technorati, which has been losing its grip on the blog-search and blog-ranking business for the past little while, and now doesn’t even have a CEO any more.

Marshall Kirkpatrick over at Read/Write Web disagrees that Techmeme’s launch of the Top 100 means trouble for Technorati, however — he says that there’s “plenty of room for other standards of measurement.” And as a number of people have pointed out — including Jason from Webomatica in a comment you can find below (try my new Ajaxy comment feature) — Technorati tracks all blogs, while Techmeme is, well… just tech. Fair enough.

I’d also like to point out that my somewhat rah-rah approach to Techmeme’s new feature has absolutely nothing to do with the fact that yours truly is number 37 on said list, according to this post by Dave Winer.

An interesting piece in the New York Times today (although it was in the Fashion & Style section, which I thought was a little odd). I’m not sure if the topic signals some kind of evolution in the way the Times looks at the blogosphere or an evolution in the blogosphere itself — or maybe a bit of both.

It’s about people who have become known — “Internet famous” — not for having a popular blog, or for being a YouTube star, but for commenting on other people’s blogs and content (no doubt an academic somewhere will call this “meta-blogging.”) As the Times piece puts it:

“Since many blogs have a readership of one — or, at best, the writer, his mother and some guy he sat next to in seventh grade who found him on Google — piggybacking on a more popular site offers a wider audience for a keyboard jockey’s gripes and quips.

Not everyone is up to the task of creating a blog with the kind of consistent tone and provocative topics that attract visitors.”

The Times piece profiles a Metafilter commenter known as DaShiv, as well as Seth Chadwick, who posts on a food-related site called Chowhound. But my favourite quote comes from Marshall Poe, a professor of new media at the University of Iowa, who describes the motivation of commenters in this way:

“You are one of the millions of people who sit at a computer all day… every hour you have 10 minutes where you’re not doing anything productive at work, and you can’t look at porn.

So you make a comment and fulfill this desire to show yourself off as a smarty-pants.”

The Times piece also talks about a commenter on Gawker, where the site picks and chooses who will be allowed to comment, and so a competition has developed where people try to post the wittiest comments so that they can join the club. Now that’s social networking. And DaShiv explains why he prefers to comment at Metafilter rather than starting his own blog:

“It’s easier to join in on a conversation than to start one,” he said matter of factly.

And it takes both kinds to make the blogosphere tick.

Hats off to Erick Schoenfeld — ex of Business 2.0, and now the Numero Duo over at TechCrunch — for his post about Apple and the iPhone. At the risk of getting flamed again (or having my server melt down from the Digg-storm), I have to say that I think he has put his finger on one of the main things that bothers me about the whole iPhone/iBrick episode: namely, that by locking down its device and crippling it when anyone messes with it, Apple is acting just like every other phone company and device company. That is likely to come as a disappointment for many Apple fans — or at least those who believed that the phrase “Think different” was more than just a marketing slogan. As Erick puts it:

Apple, of course, is free to try to lock in customers to its partner AT&T and to control what software will work on the phone. That’s just the way the cell phone business works. Right? It’s all about customer lock-in and reducing churn.

More than one commenter on my previous Apple post made the exact same point: Why should we criticize Apple for cutting off that guy’s Internet access because he was uploading code from his iTouch? Why should we give Steve-O a hard time just because Apple wants to control what people do with his phone? After all, that’s what companies do.

The only problem with all of that (as some other commenters on my earlier Apple post pointed out) is that I think people have grown used to the idea of Apple as a different kind of company — the company that makes things easier to use, not harder; the one that actually cares what people want and tries to give it to them. Was that idea just an illusion?

Nick Carr says it’s because Steve sees Apple products as works of art, and doesn’t want people to mess with them, which I think is probably pretty close to the mark. According to the accounts I’ve read of Apple’s birth, he didn’t want to let people fiddle with the first Apple PCs either.

Update:

Peter Ha has some videos that also make the point over at CrunchGear.

Video footage obtained by this Japanese TV station shows that the Japanese photojournalist who died during the crackdown in Rangoon was shot at point-blank range by a Burmese soldier.

[youtube https://www.youtube.com/watch?v=LymH0aPenBM&w=425&h=350]

[youtube https://www.youtube.com/watch?v=gYrd5qwzPrA&w=425&h=350]

New world record set by Markus “Hercules” Stoeckl in Chile.

(This is a story I wrote for globetechnology.com about Spiral Frog, based on an interview I did with founder and CEO Joe Mohen. I’m cross-posting it here for anyone who might have missed it. You can listen to the audio of our interview here. And my colleague Ivor Tossell has a look at the service here)

Delivering entertainment for free — paid for by occasional ads for cars and toothpaste — has worked pretty well for TV and radio all these years. So why not use the same model for music that gets delivered over the Internet? That’s the idea behind SpiralFrog, a new service that launched in Canada and the United States earlier this month. It’s one of a number of services that are trying to make a business out of giving away ad-supported music.

With Spiral Frog, users must watch a video advertisement or take a survey while a song is downloading. Two-thirds of the income from those ads is then passed on to record companies and others who hold the licensing rights to the music. Spiral Frog founder Joe Mohen, a former U.S. software industry executive, says that while the idea seems simple enough, the reality of putting together such a service has been “the most complex project I’ve ever undertaken.”

The company has been around for almost five years, but only opened to the public a couple of weeks ago, in part because the technical issues involved were so complex. The service was originally scheduled to launch last year. SpiralFrog has also undergone a certain amount of executive turmoil. Several senior executives left the company abruptly in January, including CEO Robin Kent, the former chairman and CEO of ad agency Universal McCann.

Continue reading “Interview: Spiral Frog CEO Joe Mohen”