MediaFile

Google’s Two-Deal Thursday: Katango and Apture in the bag

Google’s dealmakers sure are busy these days.

On Thursday, the company announced two separate acquisitions, adding Katango and Apture to the Google mix.

Katango, which has developed an algorithm for organizing friends on social networks into different groups, looks like an obvious fit for Google – and indeed rumors of Google’s interest in the start-up surfaced back in September.

From the get-go, Google+ has sought to distinguish itself from Facebook by giving users more control over how they organize and communicate with their contacts, based on the notion that your conversations with work colleagues or family might be quite different from what you talk about with poker buddies.

But manually organizing people into different groups is time consuming. With Katango, Google could remove some of the burden by automatically figuring out which circles your contacts belong in and pre-sorting them for you.

“Google+ is seeing tremendous momentum, so it’s a perfect time to join and make Circles smarter for millions of people,” read a message on the front page of Katango’s website on Thursday, announcing that it was joining Google.

Inside Google’s M&A machine: 3 months, $145 million, 9 deals

It’s no secret that Google has been on a buying binge, snapping up tech start-ups at a rapid-fire pace. What’s less transparent is how much that spree is costing it.

How much money is forked over is mostly a matter for speculation. Google doesn’t disclose financial terms for most acquisitions and only a few of the deals have had financial details leak out onto the blogosophere.

So it’s a bit of a welcome surprise that TECHNOLOGY CESGoogle shed a little more light on the matter on Wednesday in a regulatory filing with the SEC, in which it said it paid a total cash consideration of $145 million for nine acquisitions in the first three months of the year.

from DealZone:

Comcast: the antitrust sequel and the M&A trilogy

If you were all twitchy with anticipation about Comcast's NBC Universal deal, just wait for parts two and three! The gathering storm over the merger in Washington and other political power points not only promises to be more riveting, but the rights to part three are already being sold to a wave of media mergers hanging on the outcome.

As Anupreeta Das reports, media dealmaking could pick up if regulators impose minimal conditions on the NBC Universal transaction. But U.S. regulatory scrutiny is expected to be heavy, and the deal could take more than a year to be cleared. The LegalTimes blog notes that even the beauty contest among regulators hoping to oversee the process promises to have many twists and turns.

That might sound like a long wait, but it's not likely to stop M&A lawyers from booking lunches and logging hours to get the balls in place to roll if the deal goes through. That kind or pressure could also work its way behind the scenes in Washington, where lobbyists will be armed with the argument that the merger will save capitalism as we know it by reigniting the dealmaking powderkeg of the early part of this century.

from DealZone:

Next in M&A: the WordPress Hug?

Maybe it's time to add a new weapon to the old M&A arsenal of poison pills, dawn raids, and white knights -- the corporate blog. You could call it the WordPress Hug.

Late on Monday, Cisco's Ned Hooper used the company's blog to insist it had offered "a very good price" for Tandberg, after some shareholders of the Norwegian videoconferencing company said the price was too low. (See his full post here.)

The "Driving Conversations" blog of General Motors Europe has also been a source of news on the long-running (and now abandoned) talks to sell Opel, hosting posts from GM's chief negotiator, John Smith. (See some of his posts on the topic here.)

Cisco flipped for Pure Digital, but did VCs flip out?

Cisco’s $590 million all-stock purchase of Flip video camera maker Pure Digital last week may sound like a nice price for the venture capital-backed company, especially given the non-existent exit market right now.

But Venture Capital Journal editor Larry Aragon writes in a PEHub blog post that the $590 million number doesn’t sound that meaty when you calculate the return on investment for Pure Digital’s venture capital backers. And that’s especially true because some top-notch VC firms like Benchmark Capital and Sequoia Capital have invested in Pure Digital. (Venture Capital Journal and PEHub are part of Thomson Reuters.)

Aragon calculates that if Pure Digital’s VC investors put in about $95 million, and assuming that they own about half the company (since it’s a stock deal), “that’s a return of just over 3x their money.”

Outlook grim for media and entertainment deals

Deal-making in the U.S. media and entertainment sectors is going to be down this year, says a new PricewaterhouseCoopers survey (request a copy here). Now, that’s not a new or startling conclusion given the state of the economy, but it’s just another piece of evidence that when consumers and advertisers get thrifty, deal makers can end up become benchwarmers as companies struggle with cost cuts and other exigencies.

Here are some industry trends for 2009 from the PWC survey:

    Declining consumer spending is hitting many media and entertainment companies. What’s more, these declines were exacerbated by technological convergence, as these firms adapt to and look for ways to make money off new Internet technologies. Overall U.S. advertising market is going to shrink as sponsors cut ad budgets across retail, consumer goods, automotive, financial and other sectors. Companies will continue to divest their non-core assets, but those that don’t get a good price will prefer to hold on rather than sell at bargain prices. Bolt-on deals will likely be popular for risk-averse companies, so deals below $1 billion — mostly small and mid-market companies — will be a rising trend. Private equity will remain quiet since the debt markets aren’t really healthy yet. Deal structures will change this year, given the difficulty of getting debt financing. The strategic rationale for doing a deal will be more important than getting a favorable capital structure.

But all hope is not lost, according to PWC’s Transaction Services Entertainment & Media Leader Thomas Rooney:

With M&A activity ingrained in the DNA of so many companies and the ever growing presence of private equity, E&M deal activity might not be as quiet as many expect in 2009… History has shown the E&M industry to be one of the more active M&A sectors irrespective of market and economic conditions.