Comments on: Federated Media Weighing Its Options

By: Bloggers Rebel Against Federated Media : Techozi

Bloggers Rebel Against Federated Media : Techozi — Tue, 20 Jan 2009 09:06:21 +0000

[...] Federated Media (FM), which sells advertising for some of the most popular blog sites has been shrouded in controversy. First FM was trying to raise capital or cash out on a crazy valuation of $400 million. They [...]

By: Ad network Federated Media close to raising $30M round, valued at $200M » VentureBeat

Wed, 19 Mar 2008 17:28:41 +0000

[...] was trying to raise between $20 and $30 million, while entertaining various offers and aiming for a substantially higher [...]

By: mojonixon

mojonixon — Fri, 07 Mar 2008 03:55:59 +0000

$400 mill for $2m*12months*40% = $9.6million in annual revenues? Nucking Futs!

By: Peter Harrington

Peter Harrington — Thu, 06 Mar 2008 19:30:09 +0000

I doubt they will get an offer that they are hoping for. They just don’t have the revenue to support that kind of buyout offer

By: Ian Bell

Ian Bell — Thu, 06 Mar 2008 18:50:48 +0000

*Note: Glam is doing this the other way around. Creating a content site, then adding other sites as a way to increase pageviews/revenue.

By: Ian Bell

Ian Bell — Thu, 06 Mar 2008 18:48:44 +0000

Why do you think FM hasn’t decided to purchase content sites, and to try and build a content network backed by their sales company?

Exponential (owner of the Tribal Fusion network) has been purchasing content sites, Gorilla Nation is going the same route, and rumor has it Google could be going this route as well.

This would allow FM to create more revenue channels (shopping, content licensing etc) while actually owning a valuable media network. It’s better to own 100% than splitting profits with sites you do not own.

I would be curious to get their thoughts on this. Otherwise it looks like he wants a quick flip.

By: Alex Hammer

Alex Hammer — Thu, 06 Mar 2008 18:44:32 +0000

You are right. I missed it. Sorry.

By: sami bay

sami bay — Thu, 06 Mar 2008 15:31:13 +0000

Here is why FM should have taken he 100m offer;

- It’s not a unique business; the talent and resources needed to enter this market is abundant.

- In a recession, when internet marketeers need to cut expenses, overpriced “branding” display advertising is usually the first to go. So it’s quite likely that the growth will slow down soon and even reverse!

- Your big partners like TC, should get their name’s worth as far as percentages go so they don’t have to complain publicly

By: Shafqat

Shafqat — Thu, 06 Mar 2008 14:18:44 +0000

@Alex- the first line of the post has the disclaimer: “which sells advertising on our behalf.”

By: thomas

thomas — Thu, 06 Mar 2008 14:02:51 +0000

they do a great job; i’m happy to deal with advertisers a one-man show would never be able to reach out to.

By: Alex Hammer

Alex Hammer — Thu, 06 Mar 2008 14:01:00 +0000

1) I would be extremely hesitant to second guess John Battelle in regard to business strategy.

2) Michael – Where is the note/disclaimer in your post in regard to TechCrunch ads and FM.

Thanks.

By: jenkins

jenkins — Thu, 06 Mar 2008 12:54:07 +0000

Why would anyone pay a premium valuation for a company that didn’t have the wisdom to build their own ad server? 2007 was all about ad networks and the companies that got bought were great at selling, pricing and serving ads across lots of web sites. FM is a rep firm which means they are at the very low end of the valuation range. Period.

By: Robin Wauters

Robin Wauters — Thu, 06 Mar 2008 12:46:50 +0000

From a certain distance, it looks like they’re just projecting the faith of this company long-term, I disagree that they should’ve sold.

By: jenkins

jenkins — Thu, 06 Mar 2008 12:36:51 +0000

You bet they should’ve taken the offer. The many buyouts last year — Right Media, Quigo, Tacoda and Blue Lithium were are substantially larger companies than Federated, and all built their own ad servers/technology/optimization engines. Federated is a NON-technical rep firm, not a real ad network. They use OpenAds.org — how quaint.

They are also very vulnerable to the big loss. I don’t think Chas is very happy, either.

By: Michael Arrington

Michael Arrington — Thu, 06 Mar 2008 11:22:33 +0000

Paul – FM hates it when I do this, but here’s the truth:

pros – they sell really, really well, at very high CPMs, often to very well known brands. The head of sales, Chas Edwards, is a stud. Really, that’s all that matters when it comes to an advertising partner. Revenue.

cons – they keep a lot of the money (which is standard). And since they sell into a network, a lead coming from us may be sold but the buy may be split between us and other blogs to try to keep everyone happy. Of course, that can work in our favor, too, but I believe on balance we lose more than we gain.

Overall we’re happy, and we’ve stuck with FM since late 2005. My only real issues with the company were tech/lag related (long since solved), and one time when Battelle, in my opinion, threw us under the bus when one of his experiments went wrong. They pushed us to run these stupid ads, and when people yelled conflict of interest Battelle distanced himself.

http://www.crun...otes.com/?p=410

But it is a good company, responsibly run. And they should have taken that $100 million offer.

By: Paul

Paul — Thu, 06 Mar 2008 11:15:11 +0000

What’s the advantage of even using a company like FM, over simply hiring someone to sell your advertising (maybe a 2-day a week job, max). It’s much, much cheaper, and at the end of the day you’re simply selling slots on your website.

I’ve just always been incredibly confused as to why anyone would choose to give away a significant percentage of ad revenue, when they could just take it all with a little extra effort.

By: Yakov

Yakov — Thu, 06 Mar 2008 10:53:37 +0000

If FM were to worth over 100M, then what would a real value of OpenX ad server business that powers its business? should be HUGE

By: Carlo Maglinao

Carlo Maglinao — Thu, 06 Mar 2008 10:51:58 +0000

Btw, Buzz up! doesn’t work with this post because “it is not yet live on Yahoo buzz.” Clearly doesn’t work like digg.

By: Carlo Maglinao

Carlo Maglinao — Thu, 06 Mar 2008 10:44:07 +0000

Nothing to do with the post: I like the changes you’ve made on CrunchBase information. Seems like it’s now retrieving CB data faster. And there’s a new Buzz up! =)