Danger, danger Will Robinson: conventional media cash (and margin structures) invade the internet!
Ya know how I said, big changes don’t fully hit home until you experience their effects on a personal level? Of course you do!
Anyway, I just had one of those moments here at BarCampLA. Fox Interactive Media (FIM), the branch of News Corp for which Rupey-boy just earmarked $2B for acquisitions (they’ve already bought IGN, Scout.com, MySpace, and some other shit I can’t remember right now), sent an executive recruiter to BarCampLA and is buying all of us pizza.
Being on the inside at one of the largest Internet pure-plays around, I am acutely aware of the financial pressures the market is putting on the business models that survived the original Internet bubble. Case in point is the fact that there was a tacit embrace of FIM’s presence at this indie geek-fest by a crowd from which you would expect at least some measure of righteous indignation – it appears that people are realizing that geek-cred alone doesn’t pay the bills. However for big media companies that are still printing cash off their legacy businesses that aren’t dying nearly as fast as the press would make you believe, anything above 10% margins is a boon to their valuation. So, look for a lot more over-priced under-thought acquisitions from FIM and the like. You will also see CorpDev groups at Yahoo!, Google, and IAC foolishly staying in the race – because we have the cash and acquisitions like these don’t generally impact margins. Now’s the time to start pitching that start-up concept guys…
P.S. Props to Kakul for saying way back in May 2005 that News Corp should be considered a top competitor to Yahoo!.