The next generation of mothers are already engaged and involved online. They display their belly rings prominently.
Babycenter's Tina Sharkey Says to Expect Seismic Shift in Motherhood
Popular AOL and iVillage veteran Tina Sharkey, who was named CEO of Babycenter last January, advised Jack Myers Media Business Report the company plans to
launch a completely overhauled site and name a new ad sales chief in the next two weeks. (Mary Jo Romeo continues to head NY ad sales.) Babycenter.com, which is wholly owned by Johnson & Johnson, captures nearly 80 percent market share in the online pre-natal and early parenting space and hosts more than 250 advertisers.
Sharkey believes there is a dramatic difference between the Generation Y consumers who are about to become mothers and the generation X and Baby Boomer mothers before them. "They are more
connected to each other because they were born online. They find affinity groups online and culturally they were raised with their friendships developed and nurtured online. They have a different 'ego system' defined around buddy lists. We have kids in diapers today teaching their parents
and grandparents how to change settings on the TV set-top and how to navigate in social networks. The next generation of mothers are already engaged and involved online. They display their belly rings prominently. There is a fundamental seismic shift in how this new generation thinks about motherhood."
The new site will be designed to engage would-be and early-stage parents by "tuning every page to where parents are in the pregnancy and first few months after birth. We know when in the pregnancy parents are involved in outfitting the nursery, when they are focusing on names. We
know the first three months after birth parents shut down on new acquisitions." Parents register at Babycenter to receive e-mails targeted to their specific needs at the appropriate times. Sharkey is also planning to roll-up "mommy bloggers" to create a social community of parents with
feedback loops. Ultimately, she plans to develop a virtual world for parents with a plug-in social platform and applications. "We have our online retail store as one structural beam; original, deep and detailed age and stage based content as our second beam. Social connections are the next beam."
Babycenter is preparing to launch the site in China and Sharkey believes much of the company's growth will be spurred
by international expansion. Babycenter is currently in 10 countries. Contact Tina Sharkey at tsharkey@babycenter.com.
TV Pilots Go Peer-to-Peer
Less than three months ago, Azureus's BitTorrent-based content distribution platform Zudeo came out of beta, rebranding itself Vuze. Rather than be a vessel for pirated content — the software client has been downloaded over 140 million times across 100 countries — it has scoped out a niche in
original HD content, and, in a partnership with the second annual Independent TV Festival (ITVFest) it will leverage user-generated content by soliciting submissions for the event, to be held July 27-29 at Los Angeles' Raleigh Studios. Between June 4 and July 1st Vuze accepted uploads in two categories: Webseries (episodic television designed explicitly for the Web) and traditional television pilots. Vuze members have been able to view content, give each entry a
quick thumbs up or down, and comment if they fancy. While a three judge panel (representing Alliance Atlantic, FanTrust Entertainment Strategies, and Cinequest) will decide on the winners of each category, two "People's Choice" awards will go to the most popular Webseries and TV pilot.
Internet Radio Fiasco Update
Since the Copyright Review Board (CRB) voted to raise fees for Internet Radio broadcasters this spring, the online broadcast industry has been up in arms. A new class of performance royalties will see the overall cost per song rise from .08 to .19 cents by 2010. This
promises to put many broadcasters from Mom and Pop to Pandora.com, out of business. Last week thousands of stations observed a "Day of Silence" as both a protest and organizing tool. The Digital Media Association has bills in both Houses (S. 1353 in the Senate, H.R. 2060 in the House) designed to overturn the CRB decision, even as rates are scheduled to go into effect on July 15th. Last Friday, Sound Exchange (the recording industry's trade group) offered to place a
cap on fees per channel and to hold the royalty rate to current figures until 2008. Buoyed by the success of online mobilization and legislative support, (the bills have 120 co-sponsors) Internet Radio broadcasters are unlikely to cave to recording industry demands.
Bear's Wang Weighs in on Dow Jones/News Corp Deal
Bear Stearns' analyst Spencer Wang commented this week on the News Corp deal to acquire Dow Jones, which appears increasingly
likely. Wang wrote: "With more signs recently that News Corp.'s $60/share offer for Dow Jones could be accepted, in this note, we provide a detailed analysis of potential synergies and the implications for NWS.
Assuming 10.8x '07 EV/EBITDA, we estimate DJ's core businesses are worth $4 billion. In turn, if this is
accurate, NWS's $5.5 billion bid implies $1.5 billion of "synergies." Areas of synergy are potentially economies of scale, overhead elimination, online benefits, and jump starting NWS's fledgling Fox Business News (FBN) channel.
Our analysis finds very low
correlation between scale and margins, implying limited economies of scale, while elimination of DJ's overhead leads to an estimated $383 million of synergy value. We also see limited online synergies as our survey of MySpace users finds that news/information is not users' primary focus on MySpace.
Therefore, for a deal to be value neutral for NWS, synergies related to FBN would need to total ~$1.1 billion. Ex-Dow Jones, we estimate FBN is worth about $540 million, implying that DJ synergies
would have to triple the value of FBN. We think this is unlikely, especially with the WSJ's exclusivity with CNBC running through FY12.
We believe the good news is that a negative value impact from a possible DJ deal is small relative to overall NWS and the stock's recent underperformance appears to have factored in the
downside risk, as long as dilutive acquisitions do not become the norm.
Although we do not regard valuation as demanding for NWS, we maintain our Peer Perform as we think further
exposure to newspaper/business content is a questionable use of capital, relative to other options."
