Yahoo’s purchase is a big buzz here at PCForum. Everyone wants to know how much – just as they did with Bloglines. I don’t have an exact figure, but my sources, which saw the deal but did not do the deal, say around $15-$17 million. I do not know if there is an earn out as well, there may well be.
That’s Barry Diller on his company’s pending acquisition of Ask. Now, this bears some thinking. I wish I had an open morning to make some calls, but I’m at PC Forum, which is nearly as good as there are no shortage of opinions on this deal here. Also, last night I had dinner with a director at Ask at another event.
The long and short of it is this: This is a media play, pure and simple. Here is the third paragraph of the IAC press release, in it’s entirety.
The online advertising and search markets are growing rapidly; of the $260 billion in total U.S. advertising spend in 2004, less than $10 billion, or 4%, is online, with an expected annual growth rate of 13%. Search is now 36% of U.S. online advertising and expected to grow 24% per year over the next five years (Source: Merrill Lynch Equity Research.)
In other words, this makes sense for a company looking to consolidate and leverage its media assets – and IAC is exactly that kind of company.
All is not necessarily done in this deal, however. This marks the rise of a fourth network – after Google, Yahoo, and MSN – or maybe a fifth, if you include AOL. And that means that now that Diller has declared himself a player, others may see it in their interest to make their own play. It’s entirely possible AOL or even MSN might make a higher bid for Ask. Now that Diller’s in the game, it just might change the calculus of the others who are playing. Remember Lycos?
But enough about deals. What about the playing field post closing? To my mind, this deal augurs my long held position that search and television are going to merge. In short, the first engine to get on Comcast’s interactive guide will have a huge leadership position in terms of the video advertising revolution I wrote of here, and with Diller, who can certainly navigate the cable world better than most, Ask has a shot at being that brand.
For hints of this prior, and some of Diller’s thinking in this area, read my interview with him in B 2.0 here (sub reqr’d). He does get pretty specific on search. Selected quotes:
So you are not interested in tying your properties together?
No, no. Yahoo might say, Let’s go into the travel business. Why not, you know? But it is the difference between a general practitioner and a specialist. The specialization of Expedia’s travel product is very hard to do. Brands that resonate with people have power. I would rather compete using a brand like Match or Expedia that does a service really well instead of using a portal.
You don’t see IAC ever getting into the portal business?
If you define “portal” as a search engine, then I wouldn’t rule it out — though I also wouldn’t want to give anyone the idea that we were planning on plunging in.
You’ve spent something like $300 million trying to crack the local market. Was that a mistake?
I am very committed to Citysearch. I was recently asked at an investor conference, “When will you shut that thing down?” I said, “It’s probably going to break even in the second quarter. I think that would be ill-advised.”
Your name still comes up when there’s an opening in Hollywood, though you’ve made it clear you’re not interested. But is there some point at which the line between the Web and traditional media gets too blurry to make out?
Yes. There’s no question but that the Internet is going to change the way entertainment products are distributed. The first popular piece of this is the digital video recorder. That’s a profound change. It proves that the 500-channel universe was interim technology.
For now, there are still vast differences: Old media tends to be closed; the Web is open. Will the closed model stand?
The gatekeeper model? No, it can’t. How can you trust a gatekeeper when you know the purpose of a gate is to open and close? There will be other wires into the home besides cable. It’s inevitable. Telephone companies are stringing fiber to the door, and who knows what with wireless? That has to take away the historical highways with tollbooths.
More on that too, later….
From their statement:
Today we had to implement comment registration on Searchblog, and across all the sites hosted by my fearless Webmaster Scot Hacker. He explains the reasoning here, I commented at the end of his post on my thoughts. In short, comment spam is borking his servers, and because Searchblog is such a target, this site is unfortunately responsible for much of it . I am saddened that this friction has to be thrown into the conversation, I much prefer the ability for anyone to read these posts and comment at will, without first having to register. I particularly appreciate those of you who post anonymously, I know many of you work at companies that I cover here, and often you make your thoughts known under cover. Do not worry, you can keep doing that, but you have to register under a pseudonym. I very much hope this will not stunt the conversation I have grown to count on to keep me on my toes, please let me know how you think it’s going. jbat at battellemedia dot com, if you can’t stand to register and comment!
Boing Boing is filing an amicus brief in the Apple V. the Blogosphere case. I’ve refrained from comment as it’s not totally search related, but honestly, this is a very bad precedent. I break news here, and intend to keep doing it, much as I did for MacWeek back in 1988. Apple didn’t sue me then, because I was working for an “organization.” But now, if it’s just me, they can? Hogwash.
In any case, we’re looking for examples of blogs breaking news stories. If you have em, send em to BB’s counsel. More info on where and how is at this post.
Yesterday I spoke with Chris DiBona, Google’s open source outreach point man. He told me of plans to launch Google Code, a place where Google makes some of its code-innovations back to the open source community. The site went live today with four developer tools, which are way beyond my ability to grok. Chris told me that Google had been planning to do this for some time down, and that this is not a response to recent postings complaining that Google only takes from the OSS community. On the other hand, surely this move will be welcomed.
Update: Google announcement in extended entry.]]> Read More
The headline says it all: Chirac Rivals Google with French Online Book Plan.