NEWS: The Case For A Time Warner – NBC U Merger (TWX, GE)

Ed: Content+Advertising == Media with low CAPEX (capital expenditures)

Access is high CAPEX business based on subscriptions – like cable, telecom, wireless broadband, or the legacy AOL dial-up.

Both are fragmented, highly competitive businesses. Owning both has delivered little synergy for sustained growth. 

The Case For A Time Warner – NBC U Merger (TWX, GE)

from Silicon Alley Insider by Michael Learmonth

So, what’s Jeff Bewkes going to do after the split-off of Time Warner Cable leaves him with a much-smaller, much-less-leveraged Time Warner (TWX)? Well, quite a few people are thinking he’ll buy NBC U (GE), or at least attempt a merger.

Fortune’s Richard Siklos lays out the arguments in favor:

• If the split happened today, Time Warner’s market cap would shrink from $58 billion to $33 billion, making the onetime top dog in media look like a puny also-ran next to Disney (DIS) ($64 billion), News Corp. (NWS) ($50 billion), and Comcast (CMCSA) ($65 billion).
• Time Warner and NBC U have incredibly complementary assets and are both focused on building their cable portfolios. They’re both bidding on Weather Channel, the biggest cable property in play.
• There are big potential cost savings, including merging NBC News with CNN (and shuttering MSNBC) and combining NBC U’s cable networks with Turner Entertainment. The joint company could also sell NBC U’s smaller film studio and theme parks division.
• The spinoff of the cable division would allow Time Warner to own a broadcast TV network (NBC).
• GE’s Jeff Immelt put the conglomerate’s storied appliance unit on the block, so he’s looking to sell assets and nothing is sacred.

Of course none of his happens until after the spin-off is complete in Q4 and Time Warner sorts out what it’s going to do with AOL. And Time Warner will no doubt want to wait until its stock appreciates a bit. Nicholas Heymann at Sterne Agee thinks NBC U is worth about $33 billion, about the same as Time Warner’s content businesses today, even though Time Warner without cable has more than double NBC U’s operating earnings.

NEWS: Time Warner Q1 Net Falls 36 Percent; Bids Final ‘Bye’ to Cable

Time Warner Begins Death by 1,000 Cuts

GigaOM by Stacey Higginbotham

The giant Time Warner implosion starts now with the move to split off its growing cable division and use the capital to buy back shares. While the cable business brought some stability to Time Warner’s bottom line, it’s an awkward asset for a content company to hold onto, especially if the content side of the business is thinking about divestitures. And so it begins.

The nation’s second-largest cable operator will be the first to go. CEO Jeff Bewkes said today that Time Warner would split off the remaining 84 percent of its cable division with details to be worked out later. Then we’ll look for a spin out or sale of the diminishing AOL access line business, which Time Warner plans to separate from the flailing Platform A advertising business.

The logical next step is a retreat from the publishing world with magazines such as Fortune, People and Time going on the block. What will be left are the movie businesses, including Warner Bros. and New Line Cinema, and cable TV properties such as HBO and TBS. Those units brought in sales of $5.5 billion during the quarter but are under continued pressure from the Internet. Like an aging matron, Time Warner appears to be taking refuge in the arms of old Hollywood.

Time Warner to split off cable service

Time Warner is splitting off its cable services division, the company said Wednesday. Time Warner currently owns around 84 percent of Time Warner Cable. The media giant, which has been struggling of late, has been rumored to be discussing an AOL partnership with Yahoo. “A complete structural separation of Time …

Time Warner (TWX): AOL’s Ad Revenue In Line (Phew), But Still Lousy

AOL’s ad revenue (TWX) was up 1% year over year–horrible, but, on the surface anyway, better than the cataclysmic -30% that was echoing around the Street a couple of weeks ago. That said, there is an important (and negative) revenue dynamic here that everyone should be aware of.AOL’s third-party ad revenue (ad networks) grew, as did paid search. D… Silicon Alley Insider

Time Warner plans to spin off Time Warner Cable at long last

NetworkingTime Warner Cable, which just endeared itself to New Yorkers with a whole mess of HD channels, is finally getting a full break from parent company and all-around media conglomerate Time Warner. This has been speculated about for years, and a portion of TWC was spun off into Bright House Networks in 2003, but the clean break should give… Engadget

Time Warner to Sell Cable Division

Time Warner plans sell its stake in its cable division, the company said Wednesday during its quarterly earnings call. PC World: Latest Technology News

Time Warner Q1 Net Falls 36 Percent; Bids Final ‘Bye’ to Cable

Time Warner, the world’s biggest media company, reports a 36% decline in Q1 profits and says it will spin off the rest of its cable business. The owner of AOL and CNN nets 21 cents per share in the first three months of the year, down from 31 cents, on revenues that rose 2% to $11.42 billion. Wired Top Stories

AOL Revenues Worse Than Its Dial-Up Speeds

…Time Warner’s AOL division posted financial results today, and while its revenue did not, as some investors worried, “fall off a cliff,” it’s clearly hanging on to one for dear life. Revenue at the AOL unit slid 23% to $1.1 billion, with much of that decline stemming from a steep 28% drop-off in dial-up subscribers. Ad-revenue [...] AllThingsDigital — WSJ

Time Warner CEO: We Haven’t Yet Integrated AOL’s Platform-A

…Time Warner (TWX) reported largely in-line Q1 earnings Wednesday, with increased revenue from cable networks and filmed entertainment offsetting a 23% drop at AOL. CEO Jeff Bewkes said the company has decided to spin off its cable unit, but gave no indication of timing other than “we expect to finalize a deal soon.” On AOL, Bewkes said the 18% d… Silicon Alley Insider

Earnings: TWX CEO Bewkes: Time Inc’s Online Rev Grew Fast Enough To More Than Offset Print Losses

…Bewkes said Time Warner (NYSE: TWX) Cable’s fate would be determined by today and, sure enough, the announcement that TWC would be spun off completely came this morning. Bewkes kicked off the 1Q call by noting that the promise was kept and telling analysts and investors that TWX and TWC are close to an agreement on how the spin-off will be handl… paidContent.org

AOL’s Ad Strategy Still Waiting to Kick In

…Time Warner today announced that during the first quarter, AOL’s overall advertising revenues grew just 1 percent. Total revenues at AOL slid 23 percent because the access business continues to go away, but everybody knows that and the focus now is on whether AOL can reinvent itself as a pure Internet advertising company. AOL spent about $1 b… TechCrunch

APR 26, 2008

Brand: AOL==Lost in Space

Ed: Dial-up access, cable access, portal content, social network, or advertising network? AOL was number 1 with dial-up. Since then, the AOL brand has mashed or mushed to obscurity.

Brand: AOL==Lost in Space

Ed: Dial-up access, cable access, portal content, social network, or advertising network? AOL was number 1 with dial-up. Since then, the AOL brand has mashed or mushed to obscurity.

AOL Acquires Fantasy Sports Site Fleaflicker

from TechCrunch by Michael Arrington

AOL has acquired Fleaflicker, a New Jersey-based fantasy sports site founded by 26 year old Ori Schwartz. We first coveredin July 2006.

The transaction price isn’t being disclosed. Based on the highlyfluctuating traffic to the site and the fact that they only support football (which explains the huge drops in traffic during the off-season), my guess is this is more of a technology acquisition than the buying of the business operations. Fleaflicker also powers the Washington Post’s Fantasy Football leagues.

AOL runs its own very popular fantasy sports sites for football, baseball, racing and golf, and AOL sports is surging in general (more on that in a follow up post).

AOL Sees Strong Growth In Sites After Year Long Revamping

from TechCrunch by Michael Arrington

AOL’s programming sites (Money & Finance, News, Sports, Health, Food, Music, Games, and Moviefone, among others) hit an all time high in high in unique visitors and traffic in March, the company says. Page views to the sites are up 35% over the last year and unique visitors up 11% to 56 million (AOL as a whole draws 209 million monthly unique visitors, says Comscore).

As a whole, the properties have had six consecutive months of unique visitor and page view growth.

Why the surge? AOL attributes it to a year long rebranding and redesign effort, noting that every key vertical site has been redesigned (see our coverage of AOL Finance, for example, and the almost immediate traffic surge that followed).

Many of the programming sites have dropped the AOL brand altogether. We wrote recently about the launch of Switched, their technology network. Black Voices, an African American culture and news site, and Asylum, a men-focused site, are other examples.

AIM, MapQuest, AOL Music, AOL Television, Black Voices, TMZ and Asylum are No. 1 in their respective categories, based on unique visitor counts from Comscore. AOL Money & Finance, Real Estate, Moviefone, Women, Health and AOL Latino are all in the top three spots compared to competitors.

Also see news of AOL’s acquisition today of fantasy sports site Fleaflicker, which it is integrating into AOL Sports.

Widgets: The Marketer’s Recession Survival Tool

…President of AOL. Userplane, which was acquired by AOL in August 2006, is a communications widget provider (add chat and other services to sites) and a large advertising network. Mike Jones’ personal blog is here. Companies facing a slowing economy are looking for more cost-effective ways to reach customers. Forrester’s recent post on the rol…

Still Need to Make a Call to Buy on AOL’s Spot Market

…about hyping Platform A these days, it’s given the new division a cool new logo. I admit, the design major in me digs it. ClickZ News Blog

AOL’s Build-Your-Own Strategy: Working, At Least Partly [Silicon Alley Insider]

Yep, AOL (TWX) is still going to report a weak Q1 with revenue flat to down slightly from a year ago, but the news isn’t all bad. In fact, one aspect of AOL’s revamp as an ad-supported media company seems to be going reasonably well. Unique visitors to AOL’s (TWX) sites are up 15% in Q1 to 56.6 million unique visitors, according to comScore, outpac…

Is AOL heading for a comeback?

…s Platform A is now the top ad network, beating out competing efforts from Yahoo and Google, are very good signs for the company. It’s not all good news yet, as Time Warner is expected to announce a relatively weak quarter for AOL when it reports earnings next week, according to The Wall Street Journal. But the pieces may be in place now for a s… VentureBeat 

NEWS: Microsoft Bidding for Yahoo-The Soap Opera

Ed: AOL, Google, Fox have joined the band of hunters circling Yahoo’s dead meat. Discussions center on my value – not integration plans to better serve users. Sad.

Microsoft/News Corp. Deal In The Works “For Days”

from Silicon Alley Insider by Peter Kafka

We hear that the Microsoft/News Corp. negotiations, firstreported by the New York Times tonight, aren’t the result of today’s Google/Yahoo news — a source tells us Rupert Murdoch and Steve Ballmer’s teams have “been on it for days, working hard”, and that Yahoo is understandably “pissed” about the attempted union.

Do the MSFT/NWS talks predate the GOOG/YHOO talks or the YHOO/TWX talks? We don’t know…

And Rupert’s interest in a NWS/MSFT/YHOO deal makes as much sense as his interest in a NWS/YHOO deal did earlier this year. Rupe has spent around $1.5 billion building up Fox Interactive Media (MySpace, IGN, Photobucket and some odds and ends) and by all accounts it’s been a heady investment. Even if FIM can’t meet the $1 billion sales goal he laid out for it last summer, it’s still likely to generate $800 – $850 million.

But if he can take FIM , plus some cash (he’s got about $3.5 billion on hand) and turn it into a 10% – 15% stake of a Yahoo/MSN/FIM combo, why wouldn’t he? Getting it done is a different matter. A source tells the NYT negotiations are “sensitive” and we imagine Rupe’s facing the same hurdles he did the last time around: Trying to convince a partner (in this case, Microsoft), that FIM is worth $6- $7 billion. But if he can get anything close, he should jump on it.

See Also: Jerry Strikes Back: Yahoo/AOL Deal May Be Announced Next Week

MySpace Yahoo Deal: Don’t Count On It

Google Calls Quattrone For Yahoo/Microsoft Advicefrom TechCrunch by Jason Kincaid

Google has hired boutique investment bank Qatalyst Group to provide advice on the ongoing battle between Microsoft and Yahoo.

Qatalyst Group is headed by colorful Silicon Valley investment banker Frank Quattrone, who as we noted in March has returned to the Valley after spending years in the wilderness fighting obstruction of justice charges…

News Corp., AOL Pursue Yahoo Deals

Murdoch, Microsoft 
Consider Joint Bid; 
Google Ad Pact

By MATTHEW KARNITSCHNIG, KEVIN J. DELANEY and MERISSA MARR

Yahoo Inc. and Time Warner Inc.’s AOL are closing in on a deal to combine their Internet operations, a move aimed at thwarting MicrosoftCorp.’s effort to acquire Yahoo, people familiar with the matter said Wednesday…

Under the terms being discussed between Yahoo and Time Warner, the latter would fold its AOL unit into Yahoo and make a cash investment in return for about 20% of the combined entity, people familiar with the situation said. The deal, which wouldn’t include AOL’s dial-up access business, would value AOL at about $10 billion. As part of the deal, Yahoo would use the Time Warner cash and additional funds to buy back several billion dollars worth of its own stock at a price somewhere in the middle of the range between $30 and $40 a share, the people said.

MICROSOFT BIDS FOR YAHOO

 

• Deal Journal: A Messy, Mother of All Traffic Jams?

• Yahoo Rebuffs Microsoft Again 
4/8/08

• Microsoft Pressures Yahoo Board 
4/7/08

• Interactive Graphic: How the Tech Titans Compare

See complete coverage of Microsoft’s bid for Yahoo, including recent blog posts on the deal and an interactive stock timeline.

Yahoo is also talking to Google about outsourcing search ad sales. On Wednesday, the two companies announced a test deal around search advertising.

Microsoft kicked off the battle for Yahoo nine weeks ago with a cash-and-stock offer then valued at $44.6 billion, or $31 a share. As of Wednesday, the deal is worth $29.24 a share because Microsoft’s share price has declined. Yahoo shares closed at $27.77, up seven cents, or 0.25%, in 4 p.m. trading on the Nasdaq Stock Market Wednesday.

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A visual guide to the Yahoo mating dance

Posted by Dan Farber
Our CNET News team put together a visual guide to the Yahoo mating dance. It might come in handy when the Yahoo board of directors meets tomorrow to consider the various options. Most bets are still on Microsoft upping its bid to capture Yahoo.

NEWS: Microsoft Wants Yahoo

See AdEcon scorecard.

NEWS: AOL Tech Network of Engadget, Switched, TUAW…

AOL CEO Randy Falco (TWX) sets employees at ease about that distracting AOL-Microsoft-Yahoo-News Corp chatter. (YHOO) (MSFT). No comment yet on how many thousands of AOLers will be fired if the Yahoo merger goes through.

In publishing – which includes Programming, Products and Platforms – our focus has been on growing audience size and engagement. The results have been very encouraging. In February, AOL had its fifth consecutive month of growth, with page views up 16% over the same period in 2007. Thirteen of AOL’s content sites – such as Music, Television, News, Money & Finance and Celebrity – rank in the top 5 in their respective areas. …

In advertising, we’re focused on building the most effective and efficient marketplace for buying and selling digital advertising. Platform-A combines some of the strongest assets…

In the social media area, we’re focused on empowering a truly social Web with programming and tools that help connect people, cultures and lifestyles around the world. Bebo, together with AIM and ICQ, will create a social media network reaching 80 million people worldwide. …

Engadget gets a new look and adds Switched to the family!

by Ryan Block, posted Apr 10th 2008 at 2:11AM

It’s been well over a year since our last big redesign, which in gadget time means our last design was unveiled circa original Walkman. So we’re freshening up the whole joint — all seven sites — with a brand new design. Oh, and we’re also adding an eighth site to the Engadget network: Switched!

Our latest addition, Switched will be dishing out features for those with a more casual interest in tech, as well as highlighting fresh, hand-picked tech news from our network of sister sites. So expect to see hot stories from Engadget classic, Mobile, HD, TUAW, and Download Squad running over there, as well as news from other geeky Weblogs, Inc. sites like Joystiq, Xbox 360 Fanboy, and Wii Fanboy…

AOL Regroups Blogs, Launches AOL Tech Network

AOL launched what they’re calling the AOL Tech Network this evening. It’s a grouping of existing blogs – the Engadget sites, Switched, TUAW and Download Squad, under a new tech content group.

Unike AOL Games, AOL Entertainment and other sub brands, AOL Tech is being branded without “AOL.” A new link on the AOL home page links to Switched, which will now syndicate in content from the other blogs in the network.

This is partly a streamlining of the organization, but it’s also a way for AOL’s sales team to pitch a tech brand to advertisers that has a big footprint. The combined blogs bring in nearly 5 million combined monthly visitors, making it about twice the size of Wired and in the same ballpark as Yahoo Tech….