Following last week's post, this week's news:
AOL buys Third Screen Media, WPP buys 24/7 Real Media, and now MSFT buys aQuantive for an 85% premium (congrats to my old Razorfish friends).
VLCK's out there if you have, oh, $4B lying around. However, I'd be surprised if we saw another 2x deal, since it takes a lot of cash and a big market cap to absorb that kind of dilution. OMC's a possibility given the logic of the WPP-24/7 deal, though it would be a more complicated deal, and like WPP, OMC might be tempted to look "deeper in the draft".
These moves by the big portals clearly raise the stakes for the big online publishers. Not only do the portals control how traffic gets to them, but now they control even more of how ads are placed on them.
Still, what's missing from this picture is that when it comes to advertising in new media (PC, mobile, otherwise), we're not demand-constrained, it's supply that's short. That is, supply of high-quality yet affordable content in the higher CPM/ROI video environment advertisers can place against.
Joost will be as interesting to watch as a company as it is a medium. And, it's a good time for all those indie film folks living between YouTube's ocean of stuff on one side and the networks' "high-end" (high-priced) offerings on the other. Here's an example for you light-saber duel fans (and here's how they do it).
What does this mean for the big content players? It puts a premium on being able to source and produce high-quality content inexpensively and quickly, before new "houses" with those skills emerge to compete with them, as they have done on other fronts (e.g., Glam Media). At first I was trying to understand why Rob Scoble left MSFT do start Podtech.net; now it's coming clear...
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