Every Friday we round up media & tech industry news you may have missed while you were busy being censored.
Sadly, an inquiry by the Securities and Exchange Commission is prompting Groupon to put the kibosh on its adjusted CSOI party. This week in a ‘tell-all’ filing the company revealed that it lost $181 million last year, compared with the $60 million adjusted CSOI it had initially reported. In the 2nd quarter of 2011 Groupon reported a loss of $102 million.
These revelations, combined with figures showing that only 20% of Groupon’s registered users have actually purchased a deal, have some observers gossiping that the company isn’t exactly runway material.
. . . some in the industry — at private equity firms and bigger companies — have noted to me that the price of AOL might have gotten low enough for a very cheap takeover.
“You have to look, even with all the problems they have been struggling to fix,” said one person, who also underscored the advertising and other challenges that AOL faces. “But it is so inexpensive, it’s also an interesting idea.”
Said another large investor: “It’s almost free, given its cash on hand.”
Investors dumped shares of AOL earlier this week after the company reported a loss of $11 million and an 8 percent revenue reduction. The company’s acquisition of Huffington Post has helped boost ad revenue, but revenue from dial-up subscribers continues to plummet.
Analysts have previously estimated that ad revenue would have to grow by 20 percent annually to keep pace with the exodus of dial-up customers, a far cry from the current 5 percent level of growth.
Steve Katz, Mother Jones’ publisher, attributes that in large part to plain-old, straight-up good content: content that got traction, content that got attention. During the time of the traffic rise, MoJo sent reporters to the oil-spill destruction in the Gulf; to the protests in Wisconsin; to Haiti. It produced a series of popular explainers. Infographics from Kevin Drum’s big story on inequality in America got picked up by huge outlets like Yahoo News and — the holy grail — The Colbert Report. “So there was a whole series of reporting efforts that were going on that were generating more traffic for us,” Katz says. And what resulted was “a wonderful virtuous circle.”
Also seeing strong growth is Demand Media, which reported a 39 percent increase in revenue during the first half of 2011.
“Ad spending has not fully recovered from 2008-09 lows so our assumption is that if there is a downturn, it will not be as severe as 2009,” the analysts’ report notes. “Agencies have stronger balance sheets now (as do the major brand owners who pay them), and industry headcount has not been rebuilt to previous peak levels.”
Meanwhile, it was reported that U.S. magazine circulation declined by 45 percent during the first half of 2011.