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DG Becomes Tastier Takeover Target
The stock market has not been a forgiving marketplace as of late. DG can certainly attest to this. The company - which owns ad tech holdings MediaMind, Unicast and Eyewonder among others - is now worth just north of $300 million after being worth nearly 3x that 6 months ago. If you recall, MediaMind was acquired by DG for $414 million in June. The latest stock decline has been attributed by some to an updated "Underweight" rating on DG stock by a Piper Jaffray analyst who sees an aggressive price war breaking out with Extreme Reach run by Fast Channel founder John Roland. (Fast Channel merged with DG in 2006.) Publicly, Roland's mantra is very similar to the DG focus as he told Boston Business Journal in October, "What we're trying to do is lead the fusing of two major industries coming together, the TV industry and the online video advertising industry." For now, Extreme Reach appears to be targeting the HD ad delivery business versus the current online ad video market that MediaMind, Unicast and Eyewonder serve. Nevertheless, with DG's budding cross-video-channel platform selling at what might be seen as below market rates, a DG takeover by a company looking to supercharge their video ad efforts seems more plausible than ever before. How about an online ad private company looking to become public in an instant with a little help from some private equity friends?
Ad Spend Slowdown?
Digital ad spend is slowing in Q4 according to a variety of sources in an Ad Age piece by Jason Del Rey. Macquarie Capital's Ben Schachter tells Del Rey that he has seen Aol and Yahoo! brand advertising take a hit in comparison to 2010. Horizon Media's Donnie Williams says that "his agency has not felt the brunt of this slowdown because of its focus on adding clients rather than increasing budgets with existing accounts." But he still sees sluggishness in CPG and retail. Read it.
Groupon May Darken IPO Door
With certain advertising tech business eyeballing Initial Public Offerings, the recent decline of daily deals supernova Groupon below its IPO price isn't making things easier. The New York Times' Evelyn Ruseli wrote last Wednesday, "The widespread pullback seems to suggest that investors, while eager to capitalize on first-day gains, do not have the confidence, or stomach, to hold on to the Web's latest offerings. That apprehension is likely to be a major concern for high profile start-ups..." Read more.
Last week, All Things D's Peter Kafka followed up his retargeting story with his take on the latest machinations by Yahoo! to require advertisers to buy with their own seats rather than through DSPs on Right Media Exchange. Kafka wrote, "Both decisions are part of a larger strategy designed to give Yahoo more control of inventory it has been selling to outsiders, which is supposed to eventually give Yahoo the ability to sell the ads at higher prices. Read more.
Why Ad Ops Rules
In a piece titled "Yield Management Isn’t Just for Ad Operations Anymore" on his company's blog, Yieldex CEO Andy Nibley ends up making a good case on why Ad Ops is the center of the storm when it comes to effectively managing yield across all departments of a digital publisher. For example: "The IT group needs to always be one step ahead of a publisher's current technology needs and make decisions to prepare for changes that may arise in the future." IT needs to understand their impact on yield. Read it.
Rolling Up Video
Ashkan Karbasfrooshan, the prolific CEO of WatchMojo, a video publisher, sees roll-up potential in video except for some popular Gordon Gekko-like attributes. He writes on TechCrunch, "Online video is booming and the are tons of small video companies across production, advertising, distribution, and technology. Yet we have yet to see a serious attempt to roll up the industry. The reasons, I submit, boil down to egos and greed." Read what he thinks should get rolled up.
But Wait. There's More!
- Akamai in talks to buy Cotendo for $300 million: report - Reuters
- Weekend Holiday Sales Raise Hopes (subscription) - The Wall Street Journal
- Using game mechanics to influence user's behavior - Webtrends blog
- Right Media Forum: Highlights from the Display Advertising Industry Panel - Right Media blog
- Zinio Raises $20 Million For Digital Newsstand - TechCrunch