Women’s ad network Glam Media thinks it’s worth more than $1.3 billion, reports Matt Marshall at VentureBeat. That’s how much an unnamed suitor is supposedly offering for Glam. But Marshall thinks that Glam will turn it down.
The company has raised $115 million, most recently in an $85 million round. Glam runs ads on female-oriented Websites that it says reaches 64 million people a month. Today it just launched a video ad service called the Glam TV Platform that bundles rights-cleared video (from partners like E! Online, CelebTV, Sony BMG, Brightcove, YouTube, and others) with video ads that publishers can put on their sites.
Last March, Glam started tightening up its finances by ending its policy of giving guaranteed revenues to blogs and other publishers in its network. As we reported back then:
Last year the company lost $3.7 million on $21 million in revenue. They’ve promised investors that 2008 would bring in $150 million in revenue with $40 million in profit. The only way to get there is bring in a lot more publishers, sell a lot more ads, and keep a larger share for themselves.
If Glam is on target, a $1.3 Billion acquisition would be 8.7 times revenues and 32.5 times estimated profits. Is it really that beautiful? If there are any advertisers out there who can tell us their experience with ads on Glam, and the ROI theta re seeing there versus other ad networks, please share in comments.
Glam should surely speculate to accumulate. Right now it is a house of cards, since it doesn’t own the key websites that have put it on the map. If these publishers leave then it’s in trouble. It has some great sites onboard but Glam doesn’t own them. Very dangerous, no? I wouldn’t invest in Glam for that reason.
Maybe that’s why it is raising all this money. It has 20 years worth of free cash in the bank based on previous VC rounds and its cashburn.
What else, apart from acquisitions, does it need it for?
anyone can claim to be worth 1 billion these days
my test to whether a site a site is worth 1 billion
is if it left today would it be miss
glammedia: no
facebook: no
tech cruch : hell yes
myspace: no
google:hell hell yes
yahoo: hell no
I think the it’s the same ibanker running the deal that got the $100M offer for Powerset.
@ #1 - I completely disagree with you. If Glam needs to buy blogs to keep their ads on them then their ad network model is totally bogus. How many blogs does Federated Media own? Buying blogs would result in outside publishers leaving their network in droves. Nothing wrong with making strategic acquisitions, but buying blog content shouldn’t be anywhere on Glam’s to-do list.
(3..2..1 until glam sends all of their bloggers over here to rave about them)
Some sites on the glam network include:
short-hairstyles.com
short-hairstyles-magazine.com
hairstyles.free-beauty-tips.com
romantic-lyrics.com
just-hairstyles.com
hairstylesdesign.com
More power for women!
I like the idea that everyone is getting part of the Web 2.0 action.
If Glam does it correctly, they can position to be the new generation of MTV/Channel V. The future pop culture will emerge from the Internet.
Now they can compete with the likes of MySpace/Facebook in terms of pop branding.
Depends on the scale. Google managed to grow its publisher business without buying any of their top publishers. If Glam continues to get major publishers like E! and CBS, the game changes possibly. But buying a few and accumulating would seem like a good idea and probably why they raised the cash. Buying too many would make it like Yahoo. My 2 cents is they will try to get scale in display and video ads, then a few publishers leaving doesn’t make a difference and they have a chance at being the leader like Google did in text ads. Seems like they have the brand advertiser’s ears though- just browsed over to see the site it feels like a glossy magazine with good brands.
So let me get this strait… they have received $115M in funding… WTF!!!
A: Do they even own any of there company still?
B: If it costs that much to keep the ship floating… it’s not worth it!
C: It’s sites like this that will fail and scare any and all VC firms from investing in GOOD ideas in the future!
@4 - hey Jeff, maybe so, but the threat is clearly there if a rival snaps up some of the bigger publishers in the Glam Network, and I can’t see what would stop them from doing so.
I don’t think it needs to buy all 600 sites, or however many it owns, but it should presumably pin down some of the key sites as assets that it owns and can take all the revenue from. The 80:20 rule might come into play.
Good post.
Depends on the long game. Looks like they are doing a good job of monetizing and have a *vocal community as we have seen here before.
Yahoo ans MSN had ample chances to snap up publishers from Google- they lost the end game because Google does it better. Depends on how Glam plays this, with loyalty with publishers, scale with advertisers, and technology– it has a shot at it. Don’t think they need to buy publishers– just make them win in the market and provide more services to them.
150M in rev, 40M in profit. Assuming 10M payroll, overhead, etc. And I bet that 150M is pre-TAC. So They are paying out approx. 100M to publishers.
The technology here is no big deal, and the sales force already exists at most of the big players. So why not just buy out all their publishers at 1/10th of the cost? You can get the tech and sales force together for a lot less than the difference.
This deal makes no sense. I should’ve been a banker.
I inquired about advertising w/ Glam at one point. They wanted about $9 cpm…. which is outrageous . I make money at about .40c CPM max. Probably most people can’t afford over $2-3 cpm and make money. Unless their running a “branding” campaign
No way they are monetizing to that rate…I’ve worked with them for a few years now at two different agencies.
I’d take the the $1.3 B in a HEARTBEAT.
$1.3 BILLION?
Time to learn from Yahoo maybe? If I was a major shareholder I would throw my weight around pretty hard to get that deal to go through!
It seems odd that another women’s ad network doesn’t swoop in and woo away some of Glam’s properties. Especially now that they’re removing guarantees. Glam isn’t doing anything magical except raising ungodly amounts of cash.
I’m pretty sure that women, especially the ones being targeted by Glam are pretty big spenders online..it’ll be a great audience to have, but 1.3b great? I’m not so sure.
It seems like we’re back in the 90s cycle where revenue/profit doesn’t matter anymore, just the userbase..
*pop*
It may be growth thats key– growth in traffic, ad revenue, and profits. I’ve noticed when most media companies buy sites the growth usually stops after the deal- CNet, IGN, iVillage. But if there is a growth engine at Glam, like MySpace, Overture, DoubleClick had, then buying Glam is better than buying the publishers. And if a big player has a sales force, buying Glam is likely to add revenue, who could buy and manage 500 publishers? So if someone can do 50-100M more in revenue on top of Glam the deal is 5x revenue. That’s a lot better than Facebook or MySpace revenue.
How are these websites worth 8X revenue? I don’t get it. I think the whole valuation system is like a popularity contest with no basis in reality. This is a big multiple for a loosely coupled set of web sites. But, I still want to date her.
How are these websites worth 8X revenue? I don’t get it. I think the whole valuation system is like a popularity contest with no basis in reality. This is a big multiple for a loosely coupled set of web sites. But, I still want to date her.
there is little connection between money and value
“How are these websites worth 8X revenue? I don’t get it.”
Make that “projected revenue” which is 7x what they did this year. So really it’s like 60x revenue.
“If there are any advertisers out there who can tell us their experience with ads on Glam, and the ROI theta re seeing there versus other ad networks, please share in comments.”
Can someone please explain an ROI ‘theta’ as pertains to online advertising? I’ve never heard of theta used in this way.
#23 - I think he means “ROI they are seeing”. Typo and spaceo.
I’m advertising with Glam and not seeing any results on my campaign. Really no opportunties to optimize. A women’s network is perfect for my campaigns–but not on the sites they are offering. Disappointing.
ROI Theta makes zero sense. Typo or just someone who likes fancy words?
Erick, if I have interpreted it correctly, Glam is asking its publishers to publish Glam’s partner’s video for free?
and Glam gets all the $$$$$$$$$$$$$?
as a glam blogger, that’s exactly what one blogger was told– the videos are free at this time– meaning there is no payment. She might have been informed incorrectly but it’s definitely something to think about.
Rather than the big blogs as someone else posted about, I would suggest you look at the smaller but equally hard working bloggers who are running a solo/smaller situation and making less $$ because they are smaller.. they aren’t offered equal treatment or visibility. While a big blog can run a campaign post 1x and get a 4 digit payout, a small blogger has to run it 4 x and gets a small (*really small) 3 digit payout.
Glam doesn’t own the blogs– they just use them and they are doing that.
So the operative question would be is what would happen if someone came along and offered a level playing field for the small bloggers and targeted advertising and rotating visibility and a chunk of those small bloggers left… since MOST of Glam’s blogs are small blogs. See where I am going with this?
i’m pretty sure “theta re” is type for “they are”.
interesting post on glam…8.7x projected revenue is the key here, we’ll have to see how well they do this year (particularly given probably large focus on CPM ads which are more susceptible to economic downturns)…nowhere near as bad still as valuations on some of the social nets
Glam is a disaster waiting to happen. Something about the company just smells fishy, because I have never talked to anyone in their target market who has heard of, let alone uses, the site. $1.3b, are you crazy? It isn’t worth the $115m they have been given. If you want a company targeting women who is actually building real value and a good community, look at what Sugar Inc. is doing.
not sure i would say everyone is using popsugar over glam looking at compete and quantcast
http://siteanalytics.compete.c.....?metric=uv
http://www.quantcast.com/profi.....psugar.com
Please don’t compare PopSugar and Glam– they are run very differently. While they have some serious bloggers — Cotorture for one– I know that their strategy is quite different
I am a current publisher with Glam.com and I have to say that Glam has been nothing but helpful to me– I started out a year ago *(no kidding. it’s my anniversary) and they took me on as a little blog. Thanks to their advertising deals, the co-op posting situations and my persistant blogging, I am making money. I won’t kid you– it’s not enough to live on, but it’s enough to pay for the costs of my start-up and my upkeep.
I am growing faster and they are recognizing the reach that I have and what I am doing and they present me with attractive contests, ad opportunities and help me when I need tech expertise. Why bash a company that is actually helping me succeed? They are helping me grow. They are offering me opportunities in advertising and to make money.
I am a viral/social media/ web 2.0 marketing whiz.. and I have been long before those terms were used — and I went into blogging knowing that it could only be a good thing. What’s nice about Glam is that they don’t claim ownership of my blog, they don’t charge me for help when I request it. They don’t require me to make X target of hits (gawker.. what say thee?) to get paid.
The ROI for advertisers is there. Don’t kid yourself. Go add up all the exposure numbers– Do you really think that the big boys at P&G and SATC producers would be involved if there wasn’t a good ROI?
Talk about stirring up a tempest in a teapot..
Thwo things from a publisher perspective:
1) # 27 SD Glam is NOT asking us to post their video player for free. They asked for Beta testers. They are not asking us to do anything we don’t want to do
2) Have you taken the time to look at the ads they provide?. Premium, High CPMs ads. Go to my site and take a look. Do you think Movie Studios would spend the kind of money they do or pay the CPMs Glam commands for bad performance?. I think not.
#5 we are not sent here to rave about Glam (at least not me). We feel the need to speak up when stupid stuff like this is published. That’s all.
I support Michael and TechCrunch and VentureBeat for staying on point and sharing news not rants!
Valleywag has a bunch of b**s** as usual- no facts, envy and all the stuff we see on Tom Cruise and Scientology Videos on YouTube. They rant about dating and stuff no one seems to care about and miss all the facts. Sounds like Gawker is upset that it did not figure out how to do this and is just plain jealous. How about some disclosures- we compete so we are biased? Or we don’t like Michael so we will throw dirt at his personal life. No wonder they have no advertisers and revenue!
My take is that Microsoft or AOL are the most likely suiters, or likely to be and Google if anyone else is serious. There is probably a few media companies, but the price is getting high other than CBS, Viacom, Disney and Fox. European investors are very likely as the dollar is low, so if they are buying up New York apartments and Google shares, this is a one time 50% off everything in the US offers because of the $ rate. I think a European investor is already in Glam.
Cox just bought Adify at a 11x multiple at 300M, Google– DoubleClick was 12x, and Microsoft– aQuantive was a 20x. Vertical networks seem to be the hot right now. Will be interesting to see how this plays out. Clearly, a shakeout is coming, and the winner takes all looking at how search played out.
This is probably the most neutral GLAM story I have seen on TC, so maybe TC is warming up to GLAM? All about progress right!
A Blogger makes great points, specifically points about adify etc, but I think for an AOL or MS to be on board, GLAM.com would need to permanently add some properties to their roster - could get risky ….but thats’ business for you.
As a publisher with multiple sites, some with GLAM, some with other premium networks. I can safely say GLAM is about as perfect as a network comes (in my experience) . And the continued premium ads are a testament to that… talk will only take you so far….
Glam guarantees unrealistic, unsustainable CPMs to get sites in the door. The company provides no real service for their partners that can’t be obtained elsewhere. Once the CPMs disappear so will the partners. The icing on the cake is their staff is disliked by many. They are elitist wankers.
I have been looking at the glam network. We are currently using google referral ads on our site. We target women & moms. I have thought about trying out glam or federated or blogads but there are confusing reviews on all of them. I am on the fence about glam? If anyone has suggestions I would appreciate it. Thanks!
I feel compelled to respond to this post and echo Stevie, post 31 almost to the letter. I, too am a publisher with Glam.com and they took us on when we started our niche blog a year ago. Thanks to their advertising deals, the co-op posting situations and the staff at Glam.com’s nurturing I am not only making money but getting great visability and exposure.
I, for one, am thrilled at their growth and can only expect them to be the next Google of Women’s Ad Networks!
One Question to Steve (post 31). What for shares, do you get from the revenue-cake of your site? Is it 20% or 80 % of the revenue?
I don’t have anything remotely close to 80%.. that’s for sure. I would be lucky to say I would be getting 20%. The portion I get isn’t based on %.. it’s a flat fee. My site is growing.
Okay, I am a publisher with Glam and just need to speak up - their ads are NOTHING compared to even basic Google Adsense ads in terms of money making for bloggers.
I run a niche fashion, beauty, and lifestyle blog, and since joining Glam last year, my revenues have consistently gone DOWN every month, despite my page impressions increasing by a lot each month.
Currently, I am making more than twice as much money a month from my Google Adsense ads as I am with Glam’s ads. We’re talking probably a 2.50 CPM from Glam versus over 5.00 with Google. I am thinking of terminating my contract with Glam soon and selling my own ads. It’s just pointless to use this company anymore, when they obviously don’t offer any real benefits to bloggers.