Over the last few years TV and Print publishing companies have been acquiring internet companies and providing the primary source of exits as IPOs have been few and far between. Exits have included MySpace and CNet on the top end to last.fm and Plaxo in the middle and Kaboodle and LX.TV on the smaller side.
It looks like there will be fewer such exits in 2009. The major newspaper companies are in trouble (including Tribune and NY Times) with their debt loads which will make acquisitions difficult for them.
It isn’t any better on the TV side. PaidContent reports from UBS Media Week that Viacom has no acquisition plans for a while:
Viacom President & CEO Philippe Dauman told attendees … that the company is focused on organic growth and tended to avoid acquisitions for the past two years… “We have plenty to do in-house; we don’t have to look outside at this point,” he said.
and that NBC is pulling back from M&A.
Zucker added, “ In the 18 months prior to September, I don’t think there was any major media company more active in M&A.” As for pulling back now, “I don’t think that says anything about us more than it says about anybody. We’re in a different time. We’ve got our portfolio.” (I asked Zucker after the session if he had any spending range this for acquisitions—for instance, $50 million dollars might be ok even though nine figures is out. He said no. He also said the company is likely to do more partnerships.)
Fox/Myspace is looking for deals, but only if they’re cheap notes Alley Insider:
MySpace (NWS) CEO Chris DeWolfe told a Reuters conference closed to outside reporters:
DeWolfe said companies worth between $200 million and $300 million just six months ago are now running out of money and willing to sell themselves for less than one-tenth of that value.
But he’s not ready to buy just yet — we still haven’t hit bottom.
“At the lower levels the money dries up, everyone’s looking for some kind of exit and the valuations we’re seeing out there are definitely a small, small fraction of what they were even five or six months ago,” he said, adding that he expects these companies to become even cheaper in the next few months.
Diller told Reuters Media Summit attendees that IAC would have $2.2 billion in cash by March, and it’s a good chance to add new properties to his empire.
Reuters: “This downturn is going to present opportunities if you’re in the position that we’re in,” he said, citing entertainment, media and search as areas of interest.
“In entertainment and media, I think there’s going to be a ‘cascade’ of acquisition opportunities,” he said, referring to his expectation that the downturn would worsen.
Diller said he would be interested in acquisitions in search, but not to acquire technology.
“The interest would be on audience, we would acquire audience absolutely. We would acquire vertical audiences as we acquired with Dictionary.com, Thesauraus.com,” he said.
Internet startups looking for a big exit will need to keep their heads down and focus on building audience and revenues for the foreseeable future.