Globalisation now comprehends the movement not just of physical goods,
but also services, finance, people, information and ideas. As a result the
world is becoming ever more interlinked putting pressure on global, national
and local governance systems designed in a previous era by those with power and
influence at the time and, as trade agreements are negotiated, even now.
Technology continues to play an important role in communication, entertainment
and improving productivity. Convergence is leading to the merging of computers,
cell-phones, hi-fi, TV and other electronic devices, as well as the blending of
cable, wireless and satellite communication. The rise of outsourcing services
in countries such as India and the Philippines is underpinned by improvements
in the global telecommunications infrastructure.
The Internet plays a key role in all of this. Industry players are extremely active in producing new products and services, forming joint ventures or acquiring companies. Competition is fierce, particularly to gain access to the huge advertising revenues forecast. Litigation, protection of intellectual property and crime are all major challenges.
In the sections below, we list some of the key statistics and
developments for the two years prior to December 2007. To see how this fits
into our global outlook, we refer you to our
World overview. For more
recent information, we suggest you refer to the
MBendi Blog: Signposts to 2020 and the
twice monthly
MBendi
Newsletters.
Interestingly, while we noted no Internet M and A deals in Asia, the
continent was home to several major IPOs by Internet companies. The share price
of Japan's social networking website company Mixi doubled on debut in September
2006 to a market cap of US$ 1.9 billion. In February 2007, Yahoo Japan
announced plans to list on Jasdaq. In November 2007, shares in alibaba.com
nearly tripled in price on the first day of trading.
Other IPOs took place elsewhere in the developing world. In June 2007,
Internet company Access Kenya listed on the Nairobi Stock Exchange. In August
2007, MercadoLibre announced plans to raise US$ 400 million in the first big
USA listing of a South American Internet company since 2000.
Back in the developed world, VMware shares rose 75% on the first day of
trading on the NYSE in August 2007. In October 2007, eDreams, the Spanish
online travel group, prepared for a US$ 500 million IPO.
One of the trends of 2007 was for media companies to buy online
advertising companies. In January 2007, AOL offered US$ 898 million for Swedish
online marketing group TradeDoubler and Publicis bought Digitas, at the same
time announcing plans for two portal projects. In April 2007, Google bought
DoubleClick for US$ 3 billion, a transaction that was reviewed by competition
authorities in the USA and Europe. In May 2007, Microsoft bought Aquantive for
US$ 6 billion. In May 2007, Yahoo bought the Rightmedia advertising exchange
for US$ 680 million and, in September 2007, the 5th largest US online
advertising company BlueLithium for US$ 300 million. In August 2007, Hi-Media,
Europe's third-ranked interactive advertising agency, bought Fotolog for US$ 90
million. In November 2007, Time Warner bought Quigo, which assists in targeting
adverts.
A number of seemingly conventional media mergers and acquisitions, in
May 2007, have implications for the online media world. News Corporation made
an unsolicited bid for Dow Jones; Ironbridge of Australia bought 70% of Media
Works in New Zealand; Mecom made a bid for Dutch newspaper group Algemeen
Dagblad; and Thompson made a bid for Reuters, with Thomson announcing plans to
sell its educational unit. In June 2007, IHS purchased Jane's Information
Group.
The Internet financial services sector also saw several deals. In
January 2007, Prudential sold online bank Egg to Citi Group for GBP 575
million. and in February 2007, ANZ bought E*Trade Australia. In October 2007,
Thomson sold a US$ 180 million stake in TradeWeb to 9 banks.
A number of mergers and acquisitions involving cell-phone and navigation
companies pointed to the further integration of Internet and wireless. In July
2007, Nokia bought Twango, the social networking and photo sharing website and
in October 2007, the company acquired Navteq, a leading provider of
navigational information. Previously Nokia had also bought Loudeye (digital
music) and Enpocket (mobile marketing company). In November 2007, Vodafone and
Telefonica have each bought stakes in mobile phone advertising company Amobee
which was originally funded by Sequoia, Accel and Globespan. In November 2007,
Garmin made a bid of Euro 2.3 billion for Tele Atlas, 15% higher than a bid
made by TomTom. TomTom then raised its bid and finally bought Tele Atlas after
Garmin withdrew its bid.
There were other deals taking place in Europe. In September 2006,
Germany's largest commercial TV company, ProSiebenSat1, bought 30% of MyVideo,
a German website modeled on YouTube and servicing 2 million downloads per day
versus 100 million on YouTube. In December 2007, Bertelsmann announced plans to
spend Euro 5 to Euro 7 billion on acquisitions in the education, Internet and
services sectors. In October 2006, Carphone bought AOL UK. In January 2007,
Naspers bought 30% of Russia's mail.ru. In June 2007, Disney bought Crickinfo
from Wisden.
Africa was also the scene of several M&A deals. In August 2006,
Primedia bought 50% of Exactmobile. In September 2006, Quadrem and Tradeworld
merged. In February 2007, Telkom bought Africa Online for R 137 million. Also
in February 2007, Naspers announced plans to raise R 5.4 billion for overseas
acquisitions. In July 2007, Italian company Buongiorno bought Itouch for US$
193 million. In October 2007, Naspers offered to buy Polish instant messaging
company Gadu Gadu for US$ 100 million. In October 2007, ABSA sold its Internet
services to @lantic. In October 2007, Isingqi Investment Holdings bought 25.1%
of Moneyweb in a deal financed by M-Web. In April 2007 Johnnic bought further
25% of Career Junction for R 54 million cash, raising its shareholding to 85%.
The remaining 15% was bought for a further R 32 million in November 2007. In
October 2007, M-Web bought Afsat Communications, extending its reach into 10
more African countries. In December 2007, Naspers bought Eastern European
trading portal Tradus for GBP 946 million.
Between late 2006 and the end of 2007, Google was probably the most
active acquirer. In addition to the deals already listed above, Google bought
YouTube for US$ 1.6 billion (October 2006), Google Jotspot (November 2006),
online security company Postini for US$ 625 million (July 2007), GrandCentral
Comms (also July 2007), Zingku (September 2007) and Jaiku in Finland (October
2007). Search competitor Yahoo bought Rivals.com (June 2007) and
buzztracker.com (September 2007). In May 2007, Microsoft and Yahoo were
reported to be in merger talks but nothing eventuated at the time; in February
2008, Microsoft made an unsolicited US$ 45 billion bid for Yahoo.
There were other interesting deals involving Internet companies, mostly
in the USA. In November 2006, Ebay announced plans to buy Stubhub which allows
resale of sport and theatre tickets. In May 2007, WPP bought 24/7 Real Media
for US$ 649 million. In June 2007, Elevation Partners bought 25% of Palm. In
October 2007, Adobe acquired Buzzword which has web-based equivalent of Word
and allows collaborative drafting. In October 2007, NBC Universal bought Oxygen
Media.
In November 2007, Verisign announced plans to sell its communications
business. In August 2007, the Emap media group announced it was looking for
buyers.
