Microsoft Buys Ciao

29 August, 2008
a $486m logo?

Ciao: a $486m logo?

So – our friends over at Microsoft have gone a splurged nearly half a billion on Ciao. Well, OK, not just Ciao – they bought the site’s owners, marketing research firm Greenfield Online apparant just so they could grab Ciao. Wow.

Dear old Brand Republic compare Ciao to shopping comparison engines like Kelkoo, Froogle (oops, I mean the ridiculously re-named ‘Google Product Search’), Shopping.com and PriceGrabber.

But they do Ciao a disservice: the magic lies in combining price comparison with product reviews from (gasp) real people, adding (for AdViking at least) some real value other than just hogging the search results on Google. Is that, AdViking wonders, where Microsoft see the value?

There are some other players around in this industry (ReviewCentre springs to mind) who must be raising an eyebrow or two. Good luck to them!


blinkx Make a Run at Miva

8 August, 2008

 

blinkx have announced they have made a $41 million cash offer for Miva, which represents a 54% premium above the $0.78 closing price of Miva stock yesterday.  As Miva has $20 mill cash in the bank, as this price blinkx would actually only be paying $21 million.

Miva was a combination of eSpotting and FindWhat and at one time would have been considered by a few as being on the edge of getting into the Premiership of PPC ad networks.

Latest

Miva have turned down the unsolicited offer but with Miva announcing their Q2 results today, AdViking states the obvious and say’s it’s only a matter of time before this deal is done.

Miva announced their Q2 results on Monday.  Revenue was $30.2m for the quarter, down from $32.7m year on year.  Which was a EBITDA loss of $5.2 million.  And cashflow dropped down to $17.2 million.

Why Should I Care About this Deal?

On the surface (e.g.:  Miva announcing staff cuts), this could just appear some consolidation but few points make it interesting.

blinkx are a British company, spun out of Autonomy, and to date are considered a video play (video search engine and contextual video advertising platform).  Cross-Atlantic traffic going from the Old World to New is a bit different and thankfully (and this is good based on what AdViking has heard from Miva insiders about the state of the Miva technology), PiperJaffray analyst Rajeev Bah also thinks this is about getting in some additional revenue and advertisers from a pure-Search network.

Blinkx’s proposed bid for Miva has the potential to significantly change the shape of the business, marrying Blinkx’s advanced search and ad-matching capabilities to Miva’s material base of search-based advertising revenue

For a lot of people (like AdViking contributor and ex-eSpotter, A Fuller View on the Miva Blinkx Deal and Motley Fool’s Rick Aristotle Munarriz) who have been following the fall from great height of Miva since 2005, having this deal done will bring some needed closure.

Offer Letter

Here’s the offer letter:

August 8, 2008

MIVA, Inc.
5220 Summerlin Commons Boulevard
Suite 500
Fort Myers, FL 33907
Attention:     Peter Corrao, CEO
Larry Weber, Chairman
Members of the Board of Directors

Dear Ladies and Gentlemen,
Re: blinkx and MIVA Combination

I am writing on behalf of the board of directors of blinkx Plc to make a proposal for the business combination of blinkx and MIVA. Under our proposal, blinkx would acquire all of the outstanding shares of MIVA common stock for $1.20 in cash per share. Our proposal is not subject to any financing condition. The transaction would be funded from existing cash resources of the two companies.
Proposal. Our proposal represents a 54.0% premium above the closing price of MIVA common stock of $0.78 on August 7, 2008, and a 36% premium over the average closing price for the one month prior to August 7, 2008.
By whatever financial measure one might use, we believe this proposal represents a compelling value realization opportunity for your shareholders and the quickest and most secure way to see such value, particularly given the several challenges MIVA faces in the near term, including: risk and cost associated with the new technology platform, a deteriorating cash position, continued deterioration of the Media EU business and continued decline in revenue and profitability.
We believe that MIVA’s shareholders would not be well-served by any delay in negotiating or completing the merger process, and that time and/or another round of restructuring plans will not significantly increase MIVA’s valuation.
Background. Having worked together for a number of years you will be aware that blinkx is the world’s largest and most advanced video search engine. Founded in 2004 by Suranga Chandratillake, the company completed a successful IPO on the London Stock Exchange (AIM) in May 2007 and currently has a market capitalization of approximately $160 million, with headquarters in San Francisco, CA and the UK. With an index of over 26 million hours of searchable video and more than 350 media partnerships, including national broadcasters, commercial media giants, and private video libraries, blinkx has cemented its position as the premier destination for online TV. blinkx pioneered video search on the Internet, enhanced by $150 million in R&D over 12 years, and is now protected by 111 patents.
Rationale. blinkx believes that a combination of the two companies would be mutually beneficial to both companies’ shareholders, employees, and customers. blinkx and MIVA have complementary businesses that could benefit greatly from blinkx’s technology and MIVA’s distribution network.
blinkx has worked with MIVA as a customer and partner for a number of years and has a great deal of respect for MIVA’s success in building a global keyword advertising network and growing the MIVA Direct consumer offering. We believe, however, that with the Internet’s continued progression towards rich media and newer forms of advertising, more advanced technology will play a fundamental role in achieving success.
blinkx already has in place a proven and growing video-driven revenue engine, and enjoys an unrivalled technology portfolio which is applicable across many aspects of the online market. A combination of the two companies – fusing MIVA’s advertising network with blinkx’s ability to leverage its technology portfolio into the online market – presents an exciting and compelling opportunity.
Specifically, blinkx’s advanced and scalable matching technology will enable immediate platform improvements for MIVA. As a result large portions of relevant search traffic from MIVA’s search ad network will be monetizeable at higher rates through blinkx’s technology. Furthermore blinkx’s technology holds the potential to build on MIVA’s existing toolbar network, adding the latest functionality and an entirely new revenue stream. Finally, MIVA’s consumer sites and portals, that already attract large audiences, will immediately benefit from blinkx’s advanced video technology and AdHoc advertising platform.
Process and Employees. We would value the opportunity to further discuss with you how to optimize the integration of our respective businesses to create a leading global technology company. We believe that the management and employees of MIVA are critical to realizing a successful transition and foresee an important and central role for MIVA employees in the combined company.
Any acquisition of MIVA would be subject to the opportunity to conduct a limited confirmatory due diligence investigation, the negotiation of a definitive merger agreement containing customary terms and conditions, including customary conditions to closing; no material adverse change to MIVA’s business; appropriate shareholder approvals; and any regulatory requirements. Given our participation in the industry and MIVA’s public status, we envisage an efficient due diligence process appropriate to a public company. We are prepared to deliver a draft merger agreement to you and begin discussions immediately.
Due to the importance of these discussions and the value represented by our proposal, we expect the MIVA Board to engage in a full review of our proposal and discussion of its contents with MIVA’s shareholders. We are prepared to meet at a time and location of your convenience to complete due diligence and commence definite agreement negotiations.
We believe this proposal represents a unique opportunity for MIVA’s shareholders to realize value, and the combined company will be well positioned for future growth. We hope that you and your Board share our enthusiasm, and we look forward to a prompt and favourable reply.
Yours sincerely,
Suranga Chandratillake
CEO and Founder

This communication does not constitute, or form any part of, any offer for, or any solicitation of any offer for, securities or the solicitation of any vote for approval in any jurisdiction


Handbags @ Dawn: Yahoo! Annual Meeting

1 August, 2008

In what’s probably a sad indication of the excitement factor in AdViking’s life at the moment but I’ve woken up this morning with a thrill that today’s finally the day of the 2008 Yahoo! Annual Meeting.

We can expect fireworks, what with threats from the big shareholders, questions about turning down Microsoft and what’s that the Google/Yahoo! ad deal now has politicians demanding the deal gets a good look at.

All ready, we’ve got the somewhat deflating news that Carl Ichann will not be attending, maybe he’s be sending Ballmer instead!

The meeting will start at 10am Pacific and webcast here.


Yahoo! must really hate Microsoft

14 June, 2008

Well, as we all know Yahoo! and Google announced a new deal around paid search yesterday. Lots and lots of coverage and analysis on TechCrunch, here and here, and SAI here. What strikes us at AdViking late on a warm weekend afternoon is that if you dig into the deal [read this one!] it really looks like the CEO and other senior executives at Yahoo must really hate Microsoft. You might even think they look pretty desperate and we are not talking about desperate house wives (that at least would be fun to watch).

Don’t get me wrong, we are fans of Yahoo and I’ve been using the site for more than a decade. But if this deal isn’t letting the fox right into the hen house then there is obviously things we’re not bale to see from up here in the land of the viking. I guess we can look at this as the end of web 1.0 and the day Yahoo as they become essentially an affiliate to Google (much like AOL). We also think there must be a host of legal and regulatory problems that lie ahead for G and Y.

Now the really interesting thing is what will other big publishers and content owners do? And is this day that a new online advertising war started?

We need to go back to the fort for awhile to ponder this but in the meantime we are going to re-read the Blog Maverick’s post on one way possible to beat Google and also think some more about how great brands (both advertiser and publisher) like to work together (we’ll start be re-reading some post such as this one from JB – The Rise of Independent Media Brands Online). Enjoy the rest of your weekend!


Microhoo or is it YahAOL?

10 April, 2008

It’s heating up to end game as there’s plenty of moves on the potential purchase of Yahoo! by Microsoft.

To AdViking the way Yahoo is going about it is a reminder of Wargames and at this point Jerry Yang is making sure that no-one will win, especially his shareholders which they can’t be happy about.

The big three moves are:

  1. WSJ reports that Time Warner and Yahoo are close to making a deal for AOL (minus the access business) to join Yahoo
  2. Yahoo have announced they are going to run a two week trial to run AdSense ads
  3. New York Times reports that News Corp. may have flopped over to joining the Microsoft bid

AdViking thinks the last one as being the most interesting. If you have a combined Yahoo, News Corp and Microsoft then you have a truly viable alternative to Google in the digital ad space and this then creates opportunities through out the digital advertising ecosystem. e.g.: for technologies like OpenX; indy ad networks like adconion; or indy publisher networks like Federated Media.


Microsoft Buys Rapt – cool ad technology

19 March, 2008

rapt_logo1.gif

Last Friday Microsoft announced that it is buying ad technology firm Rapt – here’s the official PR on the deal. This looks like a very strategic and smart buy that will bolster Microsoft’s APS offering in the optimization and sales tool area. Rapt looks like a great tool to help with online display for big publishers… Rapt has an impressive rooster of top teir customers including: MSN, Yahoo, Fox Interactive, NCB, CNET and Dow Jones. This post on Yankee Group helps explain why they are buying Rapt and here is the TC post.


Microhoo – Wall Street Poll & They Meet

18 March, 2008

A couple of interesting items about the proposed deal by Microsoft to acquire Yahoo! came out over the last couple of days.

Analysts Give the Thumbs Up to the deal

Reuters provided details on a poll they ran against the Wall Street analysts who cover Microsoft and Yahoo! Some breakout of the numbers given:

  • 28 of the 30 respondents say the deal will be done
  • 1 of the nay, holds out hopes for AOL
  • 1 of the nay, thinks it will be blocked by regulators
  • 14 expect MSFT to close the deal at the initial offer
  • 4 expect MSFT to convert the deal to all cash
  • 12 expect MSFT to raise the price between 413.50 & $35 per share

The full story was in the iht on Sunday.

Exec Meet & Greet

WSJ and others have reported that on Monday, Senior Execs from Microsoft and Yahoo! met so that Microsoft could outline what the vision for what a post-merger entity would look like. The agenda for the meeting was similar to those that Yahoo! held with AOL and News Corp. What’s interesting is that this is the first time the companies have spent some face time together since the unsolicited bid was announced.

Is Yahoo! being tactical by playing nice before Ballmer gets hostile ahead of the Yahoo! board meeting or is Jerry Yang realising that in the face of a hardening economy, he should probably shake hands on this one before it’s too late.