Tag: Gannett

Buying your loyalty

Ben Kolada

Contact: Ben Kolada

Gannett Co announced on Thursday the acquisition of Mobestream Media, maker of the Key Ring customer loyalty application. The deal is one of only a handful of mobile rewards and loyalty purchases announced so far, but as the market matures, we expect that many startups will be acquired and tucked into larger digital marketing vendors’ portfolios.

Like its pickup of social media marketing startup BLiNQ Media last month, Gannett bought Mobestream to build out its digital marketing portfolio. Mobestream’s Key Ring app allows smartphone users to store and receive merchant loyalty card information and digital coupons. The company’s retail customers also use its platform for marketing campaigns. So far, more than five million users have downloaded the app. Horizon Partners advised Mobestream on its sale (this is Horizon’s fifth M&A deal this year, but won’t be its last).

Because the mobile loyalty sector is still so young, there have only been a few acquisitions. However, there are more than a dozen startups operating in this sector, and purchases by Gannett and Constant Contact suggest that their products are better suited as part of a larger digital marketing portfolio.

As the mobile loyalty market matures, the leading startups will likely become acquisition targets for larger tech marketing vendors and publishers such as Google, Vocus, Teradata and Advance Publications. Several startups have already secured funding to propel their growth. In May, RewardLoop announced a $1m series A round, Beintoo took $5m in its A round and Belly secured $10m in its series B. Kiip followed in July with an $11m B round.

Select mobile loyalty M&A

Date announced Acquirer Target
September 7, 2012 MasterCard Truaxis
September 6, 2012 Gannett Co Mobestream Media [dba Key Ring]
January 19, 2012 Constant Contact CardStar
December 8, 2011 Plum District Chatterfly
July 8, 2011 Google Punchd Labs
November 9, 2010 Angoss Software Hitgroup.ca (mobile solutions assets)

Source: The 451 M&A KnowledgeBase

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US online job companies shop abroad

The large online recruitment companies in the US, having found that their business models don’t always translate in other countries, are increasingly buying their way into foreign markets. In recent weeks, both Monster Worldwide and CareerBuilder.com have gone on shopping trips overseas.

In October, Monster acquired the remaining 55% stake it did not already own in ChinaHR.com for $174m in cash. ChinaHR is a key player in the Chinese online recruiting sector and represents a sizeable gamble by Monster to gain market share in the world’s most-populous country. Monster’s move into Asia came just three months after CareerBuilder picked up Paris-based Lesjeudis.com for an undisclosed amount.

Both Monster and CareerBuilder have said they will continue to look at international expansion. Monster currently gets some 42% of its revenue from outside the US. That’s up from just 23% in 2005. While CareerBuilder, which was recently acquired by Gannett, does not disclose its international segment revenue, it has emphasized that division with its acquisitions. The company’s past four deals, along with its partnership with MSN, show the company is looking abroad.

Number of overseas Monster Worldwide and CareerBuilder deals

Acquirer Number of acquisitions Value Target countries
Monster Worldwide 6 $380m France (2), Germany, Norway, People’s Republic of China, South Korea
CareerBuilder 4 Not disclosed France, Greece, the Netherlands, Sweden

Source: The 451 M&A KnowledgeBase

The ‘new’ Old Media

-by Brenon Daly, Yulitza Peraza

With investment bank Allen & Co opening its annual conference on July 9 in Sun Valley, Idaho, we thought we’d take a look at what sort of shopping the traditional media companies, which make up most of the confab’s attendees, have been doing recently. The short answer: They’ve been busy. And a lot of the buying has been Old Media picking up New Media. (We’ve noted in the past how Allen & Co has re-tooled its business to meet the change in deal flow.)

In the first half of this year, traditional media companies have spent more on Internet content companies than during any other comparable period. Just Tuesday, for instance, Gannett picked up the chunk of ShopLocal that it didn’t already own. Additionally, NBC took a majority stake in Web content and broadcast sports provider World Championship Sports Network for an undisclosed sum last month. (This acquisition, the network’s fourth since 2006, comes just in time to help bolster its upcoming coverage of the Olympic Games in Beijing.) Also, CBS paid $1.8bn in May for CNET, one of the original online information sites. Altogether, since 2002, Old Media has put more than $13bn toward online purchases.

If anything, we expect the pace to pick up in the second half of 2008, as media companies continue to expand their digital offerings. The shopping spree, however, is a bit late because the model has been broken for a long time. It used to be that traditional media companies could run fatly profitable by simply trading their information and entertainment for your dollars, whether the payment came through subscription or advertising. That exchange worked as long as the information and entertainment could be kept closely controlled. In other words, it worked until the Internet came along.

Acquisitions of content companies by media outlets

Period Deal Volume Deal Value
Jan-June 2002 9 $424,000
Jan-June 2003 7 $106m
Jan-June 2004 3 $87m
Jan-June 2005 10 $1.11bn
Jan-June 2006 26 $1.18bn
Jan-June 2007 32 $2.07bn
Jan-June 2008 38 $2.18bn

Source: The 451 M&A KnowledgeBase

Blank printing presses

Brenon Daly

Gutted by the arrival of Internet, newspaper companies have nonetheless printed very few transactions that could help them survive in the Media 2.0 era. One reason for the blank M&A pages: The currencies available to them are disappearing, according to Tim Connors, a partner at U.S. Venture Partners. Speaking on a panel at the recent IBF VC Investing Conference in San Francisco, Connors said the virtually uninterrupted slide in shares of many media company have taken a few would-be acquirers out of the market.

Indeed, we can only imagine it’s probably inconceivable for any of the newspaper companies to be shopping, at least not for an equity deal. Regional newspaper company McGannett shares are currently trading at their lowest level ever; USA Today-owner Gannett stock has sunk to a 14-year low and shares in the venerable New York Times are changing hands at levels not seen since mid-1996.

At the IBF conference, Connors noted USVP recently had an exit to an old media company. Portfolio company Adify, which runs advertising networks for some 120 vertically focused Web sites, got snapped up by Cox Enterprises for $300m. (Adify was in the midst of raising a third round of funding when Cox took them out. JP Morgan banked the deal after one of their analysts initially suggesting the two companies might strike a commercial relationship.) Incidentally, Cox paid its $300m bill for Adify in cash.