Who Will Barry Diller Buy Next?
Barry Diller’s IAC/InterActiveCorp hooks up with CollegeHumor.com, and promises more such deals to come.
August 15, 2006
It’s a good day to be in the content business. The Internet’s most acquisitive mogul, Barry Diller, has taken out his wallet. Mr. Diller’s IAC/InterActiveCorp said Tuesday that it had bought a 51 percent stake and full voting control of Connected Ventures, the New York-based parent company of smart-alecky CollegeHumor.com. And there’s every reason to believe there is more to come.
IAC made its intentions to build a content business clear when it launched IAC Programming in January with veteran TV executive Michael Jackson at the helm. IAC/InterActiveCorp is a hodgepodge of companies, including Home Shopping Network in retail and Internet dating site Match.com. Now the company plans to add content to its collection, making CollegeHumor.com the first in a string of niche content sites.
IAC has waited a long time to make a play in online content. Maybe too long. In the post-bubble era, online content sites became as popular as a dead rat in a swimming pool. But the emergence of online advertising models and the wild success of video content sites like YouTube made it safe to get back in the water.
For latecomer IAC, CollegeHumor.com would seem to be an attractive way to start. The site attracts more than 6 million unique visitors per month and generates more than 200 million page views per month, according to Nielsen site census. Seventy-five percent of the site’s audience is males age 18-24, a key demographic for advertisers, according to Nielsen.
“You’re going to see us doing more along those lines,” Moshe Koyfman, vice president of IAC Programming said of the CollegeHumor.com deal. “We believe that the opportunity has finally arrived for advertising-supported, branded online content.”
Acquisition Spree?
So what will IAC be buying? Industry insiders expect to see a spate of media company acquisitions in the near term. Among the companies that could go on the block is video-sharing site Guba, whose chief executive, Tom McInerney, has said an acquisition would be a natural next step for the company. Guba competitor YouTube may also be looking for a buyer given the possibility that big media could come after the site for copyright violations.
Mr. Koyfman said IAC will look for "branded vertical content properties that will leverage the growth in online advertising.” Translation: sites that can grab ad dollars. The right content might help IAC turn all its traffic into ad dollars. IAC’s Ask.com, for example, ranks just behind AOL in terms of users. “We’ve never forced synergy, but we’ve fostered it,” said Mr. Koyfman.
With the acquisition, IAC joins media companies News Corp. and Viacom, which have grabbed headlines by acquiring hot online properties MySpace and Atom Entertainment, respectively.
But Mr. Koyfman says that unlike those media companies, IAC wants to build a stable of small niche sites targeting diverse interests. “Certainly MySpace has done a tremendous job in attracting a phenomenal audience and is looking to do a lot of interesting things with that, but we want to make our mark more with brands that speak to coherent audiences,” he said.
With all of the recent activity in the content space, it may seem like the shelves have been picked over. That may be bad news for Mr. Diller. But that only makes the prospects of those still left for sale that much sweeter.
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