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December 11, 2006

Metacafe Traffic Dips, Acquisition May Have Stalled

Michael Arrington

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The rumors around a possible Metacafe acquisition continue to swirl around silicon valley, with Yahoo or Microsoft being considered the most likely acquiror, at a $300 millionish acquisition price. Another potential acquiror is a rumored industry consortium looking to buy its way into the space. We’ve gotten confirmation from a number of potential acquirors that the company hired Lehman Brothers to shop them around, and were asking for $200-$300 million.

But we are hearing that those discussions may have stalled due to the recent release of November Comscore traffic numbers. The number of monthly unique visitors to Metacafe continues to decline from a high of 4.2 million in September, to just 3.1 million in November, a drop of approximately 25%. Total page views are relatively flat over this period, going from 97 million in September to 101 million in November.

Acquirors are also expressing concern over the relatively large percentage of “adult content” hosted by Metacafe - a profitable but difficult business to be in.

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This entry was posted on Monday, December 11th, 2006 at 3:20 am and is filed under Company & Product Profiles. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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    December 11th, 2006 at 8:52 am

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  1. Startups.in/India

    December 11th, 2006 at 3:35 am

    …and why exactly is the cause for the significant drop between sep and nov? the rumor of acquisition by Yahoo ? ;-)

  2. Notsure

    December 11th, 2006 at 3:53 am

    why you continuing to quote comscore?

    they suck absolute penis ;)

  3. Victor

    December 11th, 2006 at 4:02 am

    Why dont they go for veetube, which is definitely be a better brand for a fraction of all that millions.

  4. Florian Cervenka

    December 11th, 2006 at 4:04 am

    4 million is not that much - at least not enough for a 300.000.000$ price tag. That is 75$ per unique user (=visitor not active member).

    If an unique user/month is indeed worth 75$ then one of my sites is worth 90 million $. Wow! I’m rich! (actually I’m broke)

  5. Mike

    December 11th, 2006 at 4:59 am

    Like your undertone. For 200 million bucks or more people should better get out building their own video upload site (video upload site number 86 I guess) instead of buying metacafe’s porn stash. And by the way why should any one pay that much for 3 million uniques?

    Anyway I think this whole video upload thing got a little bit old fashioned, I better use services like myHolyCrib where you can paste every video you found and store it on a drag&drop desktop . Keeps all that trash away from me and I don’t have to care about where a video is coming from.

    Good luck metacafe…

  6. Drew Olanoff

    December 11th, 2006 at 5:21 am

    the porn stash is not new news, so i’m wondering if there’s something else there drawing ire. i was never really a fan of metacafe, but the traffic is still impressive. google didn’t just buy traffic when they bought youtube, they brought a brand they’re obviously going to grow (look at the latest additions in features)

    is “metacafe” a brand? most people don’t know what meta is. shoot, my dad still tries to go to “UTube.com” when I tell him about a funny video.

  7. Yohay Elam

    December 11th, 2006 at 6:27 am

    Too many rumors, but no confirmed information whatsoever.

    In the meantime, this talk drives traffic to Metacafe.

  8. Pro-SEO

    December 11th, 2006 at 6:40 am

    Maybe they would do better if they didn’t alienate every linux user by requiring you to have flash 8. In this day and age it’s not a good idea to make your site inaccesible to such i large portion of web traffic.

  9. Stephen

    December 11th, 2006 at 6:58 am

    Our site’s traffic “stalled” also. It’s that time of year.

    Oh, I forgot — you guys haven’t been around long enough to see a full year’s log cycle.

  10. Denver Wang

    December 11th, 2006 at 7:30 am

    True?

    http://www.ezecho.com

  11. Florian Cervenka

    December 11th, 2006 at 7:41 am

    @Pro-SEO #8
    There is a beta of the flash player 9 for linux that works quiet well. But who really cares about linux users? They don’t click ads as much as the WinXP-home users do.

  12. richard craft

    December 11th, 2006 at 8:38 am

    Metacafe? They scrap top traffic content from youtube, google video for traffic.

  13. Pungu

    December 11th, 2006 at 9:52 am

    All of a sudden Mark Cuban seems quite intelligent ;)

  14. Joe

    December 11th, 2006 at 10:44 am

    $300m? based on what revenues? OHHHH…based on “eyeballs” - I get it.

    Here we go again…

  15. Marcus

    December 11th, 2006 at 11:11 am

    whoever buys them at $200mm should be fired.

  16. Ankur

    December 11th, 2006 at 11:42 am

    The Comscore traffic numbers you quoted are dead wrong. I guarantee that Metacafe traffic has grown month over month.

    Everybody knows that Comscore is Comshit. Look at what happened when you quoted them for del.icio.us!

  17. Vik

    December 11th, 2006 at 11:56 am

    Ditto on problems with adult content. The DOJ has extended the reach of 18 U.S.C. 2257 (???) to include “secondary producers.” Also, courts have broadened the definition of “sexually explicit” conduct that falls within the ambit to this law. Therefore, Yahoo! or whoever purchases Metacafe should remove the adult conduct, which I believe, will greatly affect the traffic.

  18. David P.

    December 11th, 2006 at 12:02 pm

    I do agree that anything over $50m is way too much… Although I think Joe is the only one that understands what they are buying “EYEBALLS”! Eyeballs are worth a lot of money, especially when they are connected to a brain that is susceptible to spend money!

  19. Markus

    December 11th, 2006 at 1:12 pm

    Comscore numbers are meaningless here. Its like quoting that youtube had 18 million uniques a month in the USA, but not mentioning they have 80 million worldwide.

  20. Michael Arrington

    December 11th, 2006 at 1:21 pm

    Nonetheless, it is our understanding that the comscore numbers may have stalled the deal.

  21. geoff

    December 11th, 2006 at 1:32 pm

    It is inconceivable that comscore numbers could stall a deal. At some point you would think that they would have access to metacafe’s raw logs. Note that according to Alexa Metacafe took a brief dip during the same time period and is going back up… http://www.alexa.com/data/deta.....acafe.com/

  22. steph

    December 11th, 2006 at 2:04 pm

    The decrease in traffic might also be due to their producer rewards programs increasingly feeling like a scam to content producers who see their files filling their end of the “bargain” (20,000+ views, w/ rating of 3+, no porn, etc) and then suddenly being flagged as non eligible when it’s time to pay up, with no further explanations than a hazy list of rules which only becomes available after the fact (ie: once [re-]re-flagged, not on signup, or upload, or even original distribution approval). And I mean, the files are accepted at upload time, then they are accepted for public distribution through an approval process, to finally being rejected after passing all of the program’s requirements. Shafting the people at the source of your content producers (or at the very least making them feel this way) rarely is a good business model. All I know is that from now on, I’m sticking with Google Video, even though it’s just in Beta. Or for indy video producers interested in generating a revenue, I’d look into Revver.com.

  23. Grant

    December 11th, 2006 at 3:43 pm

    At about Aug/Sept time frame, I, as a consumer, uploaded a video because Metacafe is the only one who promises cash payment as long as your video views top certain #, but you need to sign up for that program. I never get called back or emailed back regarding detail. I think customer service maybe a problem? Or it’s just a rabit’s noose? When consumer is unhappy, you know what is next.

  24. lemon obrien

    December 11th, 2006 at 4:58 pm

    i couldn’t find any porn and i tried…i guess i’ll just go back to google image search :)

  25. Steven Jacks

    December 11th, 2006 at 5:06 pm

    This is interesting. GUBA.com went through a similar process several months ago incorporating a technology called Johnny to keep copy-written and adult content off of the site and it caused a significant dip in traffic for them as well (see the graph: http://www.alexa.com/data/deta.....l=guba.com)…

    Perhaps a better choice for Yahoo though, GUBA has deals with studios, the MPAA, user uploaded video capabilities, Usenet video(remember Usenet???) and copyright filtering technology….

  26. Chris D

    December 11th, 2006 at 5:47 pm

    Steven,

    Guba has no real traction with end-users. Their hollywood video downloads are priced below cost, so they loose money on every download. Plus a really lousy brand name.

    Not impressed…

  27. Shufuni

    December 14th, 2006 at 12:30 pm

    I don’t know about Metacafe… but this Video sharing site for porn called Shufuni is now the hottest thing.. (http://www.shufuni.com), as I understand Metacafe had porn long time ago and they stopped, because it’s somethin’ that is not considered good for their investors or somethin’

  28. Fred Destin

    December 16th, 2006 at 6:55 am

    Mike: apparently it is not so much the stalling numbers per se, as much as the fact that they have apparently been buying much of their traffic (two different sources, both credible); thius may have stalled or slowed the due diligence. [Note I am an investor in dailymotion, although my interest would be for them to be sold as high as possible].

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