GREAT MAN ALIVE! NBC and iVillage?
iVillage finds new home at NBC Universal
By Joshua Chaffin in New York
Monday, March 06, 2006
Posted: 07:15 PM EST (00:15 London)
NBC Universal on Monday said it would pay $600m to acquire iVillage (NASDAQ:IVIL) , an internet company dedicated to women, as it seeks to jumpstart its online presence.
NBC executives called iVillage the "centrepiece" of NBC's online strategy, and predicted it would dramatically raise its profile through the promotional muscle of its cable and television networks.
"We believe this is a rallying cry – a rallying event – for NBC Universal for our digital strategy," said Beth Comstock, president of NBC Universal Digital Media.
The deal follows a flurry of internet acquisitions by established media companies as they try to capitalise on a surge in online advertising, which is expected to grow at 20 per cent per year for the next five years. Rupert Murdoch's News Corp last year paid $580m for MySpace, a community site dedicated to teenagers, and $650m for IGN, a gaming and entertainment site aimed at men, while Viacom snapped up Neopets, a youth site, for $160m.
In acquiring iVillage, NBC is paying a premium for a business that generated $9.5m in net income in 2005.
"The pricing is high. There's no question about it," Bob Wright, chairman and chief executive of NBC Universal, said yesterday. "[But] we're buying into a 20 per cent growth rate."
Unlike other recent internet acquisitions, iVillage was founded a decade ago at the dawn of the dotcom era, and managed to survive the subsequent crash. The company draws 14m unique users each month to websites and community discussion boards.
According to the Pew Internet & American Life Project, 86 per cent of women aged 18 to 29 are online, compared with 80 per cent of men in the same age group.
In addition to promoting iVillage on its television networks, NBC believes it will be able to contribute content from its television programmes.
MORE:
NBC agreed to pay $8.50 in cash for each share of iVillage, which describes itself as "the Internet for women" with sites including Astrology.com, GardenWeb.com and gURL, a Web site aimed at teenage girls.
The offer represents a 6.5 percent premium over iVillage's Friday closing price. The companies expect to close the deal in the second quarter, after getting shareholder and regulatory approval. Hearst Corp., which owns 25 percent of iVillage, has already agreed to vote in favor of the deal.
Shares of iVillage rallied 38 cents, or 4.8 percent, to close at $8.36 Monday on the Nasdaq. The stock has traded in a 52-week range of $4.65 to $8.70. Shares of GE rose 4 cents, to close at $33.10 on the New York Stock Exchange.
"What GE/NBC is buying here is digital capability and a portal that has strong synergy with its core female viewership," Deutsche Bank analyst Nigel Coe said in a client note.
NBC, which is 80 percent owned by General Electric Co. and 20 percent owned by Vivendi Universal, says iVillage will form the base of its longer-term strategy to meet consumers wherever they go for information. With iVillage, NBC expects to grow its digital revenue to about $200 million this year, and it is aiming for a 20 percent growth rate going forward.
New York-based iVillage more than tripled its earnings in 2005 to about $9.5 million, or 12 cents per share, on a 36 percent rise in revenue to $91 million.
In addition to merging its traditional television content, such as reality shows "Project Runway" and "The Biggest Loser," with the Internet, GE's health-care business is expected to use iVillage's parenting network as a marketing and promotional outlet.
Beth Comstock, NBC's president of digital media and market development, was among the lead supporters of the acquisition and will be in charge of the new business. The management team at iVillage, including Chairman and Chief Executive Doug McCormick, will report to Comstock.
Wall Street had widely expected an iVillage deal ever since the Financial Times reported last November that the company had hired investment bank JPMorgan Chase & Co. to "explore its options."
Other media companies have been branching out in recent years as well. Rupert Murdoch's News Corp. bought online social site MySpace, New York Times Co. acquired About.com and Dow Jones & Co. bought financial news site MarketWatch.
Analysts see the iVillage deal as a sign of yet more to come.
"The acquisition demonstrates once again the attractiveness of the content group to prospective buyers," Jefferies analyst Youssef Squali said in a client note. "We expect to see more deals in 2006, driven in part by the need of traditional media companies ... to play catch up online."
http://biz.yahoo.com/ap/060306/nbc_universal_ivillage.html?.v=9
By Joshua Chaffin in New York
Monday, March 06, 2006
Posted: 07:15 PM EST (00:15 London)
NBC Universal on Monday said it would pay $600m to acquire iVillage (NASDAQ:IVIL) , an internet company dedicated to women, as it seeks to jumpstart its online presence.
NBC executives called iVillage the "centrepiece" of NBC's online strategy, and predicted it would dramatically raise its profile through the promotional muscle of its cable and television networks.
"We believe this is a rallying cry – a rallying event – for NBC Universal for our digital strategy," said Beth Comstock, president of NBC Universal Digital Media.
The deal follows a flurry of internet acquisitions by established media companies as they try to capitalise on a surge in online advertising, which is expected to grow at 20 per cent per year for the next five years. Rupert Murdoch's News Corp last year paid $580m for MySpace, a community site dedicated to teenagers, and $650m for IGN, a gaming and entertainment site aimed at men, while Viacom snapped up Neopets, a youth site, for $160m.
In acquiring iVillage, NBC is paying a premium for a business that generated $9.5m in net income in 2005.
"The pricing is high. There's no question about it," Bob Wright, chairman and chief executive of NBC Universal, said yesterday. "[But] we're buying into a 20 per cent growth rate."
Unlike other recent internet acquisitions, iVillage was founded a decade ago at the dawn of the dotcom era, and managed to survive the subsequent crash. The company draws 14m unique users each month to websites and community discussion boards.
According to the Pew Internet & American Life Project, 86 per cent of women aged 18 to 29 are online, compared with 80 per cent of men in the same age group.
In addition to promoting iVillage on its television networks, NBC believes it will be able to contribute content from its television programmes.
MORE:
NBC agreed to pay $8.50 in cash for each share of iVillage, which describes itself as "the Internet for women" with sites including Astrology.com, GardenWeb.com and gURL, a Web site aimed at teenage girls.
The offer represents a 6.5 percent premium over iVillage's Friday closing price. The companies expect to close the deal in the second quarter, after getting shareholder and regulatory approval. Hearst Corp., which owns 25 percent of iVillage, has already agreed to vote in favor of the deal.
Shares of iVillage rallied 38 cents, or 4.8 percent, to close at $8.36 Monday on the Nasdaq. The stock has traded in a 52-week range of $4.65 to $8.70. Shares of GE rose 4 cents, to close at $33.10 on the New York Stock Exchange.
"What GE/NBC is buying here is digital capability and a portal that has strong synergy with its core female viewership," Deutsche Bank analyst Nigel Coe said in a client note.
NBC, which is 80 percent owned by General Electric Co. and 20 percent owned by Vivendi Universal, says iVillage will form the base of its longer-term strategy to meet consumers wherever they go for information. With iVillage, NBC expects to grow its digital revenue to about $200 million this year, and it is aiming for a 20 percent growth rate going forward.
New York-based iVillage more than tripled its earnings in 2005 to about $9.5 million, or 12 cents per share, on a 36 percent rise in revenue to $91 million.
In addition to merging its traditional television content, such as reality shows "Project Runway" and "The Biggest Loser," with the Internet, GE's health-care business is expected to use iVillage's parenting network as a marketing and promotional outlet.
Beth Comstock, NBC's president of digital media and market development, was among the lead supporters of the acquisition and will be in charge of the new business. The management team at iVillage, including Chairman and Chief Executive Doug McCormick, will report to Comstock.
Wall Street had widely expected an iVillage deal ever since the Financial Times reported last November that the company had hired investment bank JPMorgan Chase & Co. to "explore its options."
Other media companies have been branching out in recent years as well. Rupert Murdoch's News Corp. bought online social site MySpace, New York Times Co. acquired About.com and Dow Jones & Co. bought financial news site MarketWatch.
Analysts see the iVillage deal as a sign of yet more to come.
"The acquisition demonstrates once again the attractiveness of the content group to prospective buyers," Jefferies analyst Youssef Squali said in a client note. "We expect to see more deals in 2006, driven in part by the need of traditional media companies ... to play catch up online."
http://biz.yahoo.com/ap/060306/nbc_universal_ivillage.html?.v=9
posted by CalvaryGirl at 9:14 PM
1 Comments:
I have mixed feelings about iV. You know I loved it, loved the Soup. But I haven't been back (except to update old friends about Goob's hospitalization) since they fired Birdy. That was the last straw for me, and I tried, I really tried. I can't imagine how my life would be different without them. I wouldn't have my blog, I probably wouldn't have come back to Christ. But I couldn't continue working & supporting the way things were handled there.
Interesting, though.
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