In This Update:
• Diller’s IAC/InterActiveCorp to Split Into Five Businesses
• MySpace to Unveil New ‘Targeted Ad’ System to Rival Facebook’s
• NameMedia Files to Raise $172.5 Million
• Microsoft Defends Facebook Stake
• PCs Being Pushed Aside in Japan
• Fox Lifts Ban on Universal Music Content, Lawsuit Remains
• Gov’t Commissioned Study Finds P2P Downloaders Buy More Music
• Microsoft Adds ESPN Programming to Xbox
• CarsDirect Owner Internet Brands Prices $132 Million IPO
• SuccessFactors Prices Up To $108 Million IPO
• Dell Paying $1.4 Billion for EqualLogic
• TheStreet.com (TSCM) Buys Bank Info Sites
• Wiki Software Provider Socialtext Raises $9.5 Million, Announces New CEO
• Study: In Context Out Performs General Ads

Diller’s IAC/InterActiveCorp to Split Into Five Businesses
WALL STREET JOURNAL
IAC/InterActiveCorp, the Internet conglomerate run by media mogul Barry Diller, said Monday it will break itself into five businesses. New York-based IAC said its HSN home shopping network, Ticketmaster ticketing service, Interval time-share business and LendingTree mortgage referral units would be spun off.
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MySpace to Unveil New ‘Targeted Ad’ System to Rival Facebook’s
THE REGISTER
MySpace has tightened its advertising targeting system to let marketeers aim their pitch at more specific user interests, in the hope they’ll be more likely to respond. The social network first introduced 10 categories earlier this year to allow products to be pitched at interests listed by MySpace members, such as “movies”. Today’s so-called “hyper-targeting” upgrade means ads will be targeted on hundreds of sub-categories, such as “action movies”. The system will use data users have made public, and there will be an opt-out, MySpace execs have promised.The timing of MySpace’s move is telling: Facebook will announce its widely-trailed targeting network tomorrow.
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NameMedia Files to Raise $172.5 Million
ONLINE MEDIA DAILY
Domain company NameMedia Inc. has filed for an initial public offering to raise up to $172.5 million. NameMedia makes money through the sale of domain names and by selling advertising on a network of Web sites developed from unused domain names. Overall, it monetizes a portfolio of more than 2 million owned and third-party domain names. The Waltham, MA-based company posted net income of $2.6 million on revenue of $61 million last year, and profit of $160,000 on revenue of $58 million through the first nine months of 2007. A key focus of its growth strategy is to develop a network of premium sites based on enthusiast communities such as photography and gardening. Major investors include Highland Capital Partners and Summit Partners.
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Microsoft Defends Facebook Stake
REUTERS
Microsoft Corp Chief Executive Steve Ballmer said on Monday his firm’s acquisition of a 1.6 percent stake in socializing Web site Facebook for $240 million was an important investment, not a mistake. “We didn’t make a mistake,” Ballmer told reporters on the sidelines of a business conference in Mumbai. Analysts have said Microsoft paid a steep price on a bet that the three-year-old firm would be able to transform itself into a hub for all sorts of Web activity. “The valuation of Facebook is still to be determined. Certainly today, it’s very, very popular. So for a company like ours that wants to be a pre-eminent presence in this space, it’s very important for us,” Ballmer said.
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PCs Being Pushed Aside in Japan
AP via YAHOO
The PC’s role in Japanese homes is diminishing, as its once-awesome monopoly on processing power is encroached by gadgets such as smart phones that act like pocket-size computers, advanced Internet-connected game consoles, and digital video recorders with terabytes of memory. “A new PC just isn’t high on my priority list right now,” said Igarashi, a consumer who was shopping at a Bic Camera electronics shop in central Tokyo and said his three-year-old desktop was “good for now. For the cost, I’d rather buy something else,” he said. Japan’s PC market is already shrinking, leading analysts to wonder whether Japan will become the first major market to see a decline in personal computer use some 25 years after it revolutionized household electronics – and whether this could be the picture of things to come in other countries.
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Fox Lifts Ban on Universal Music Content, Lawsuit Remains
WALL STRET JOURNAL
For much of this year, News Corp.’s movie and television studios refused to use in their productions almost any music controlled by Vivendi SA’s Universal Music Group — a move that people familiar with the situation say was retaliation for a Universal Music lawsuit against News Corp.’s MySpace social-networking site. The Twentieth Century Fox film and TV studios’ ban on using Universal music was recently lifted. But the move highlights the tense and convoluted relations between media conglomerates with conflicting agendas in the digital age.
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Gov’t Commissioned Study Finds P2P Downloaders Buy More Music
MICHAEL GEIST
A newly study commissioned by Industry Canada, which includes some of the most extensive surveying to date of the Canadian population on music purchasing habits, finds what many have long suspected (though CRIA has denied) – there is a positive correlation between peer-to-peer downloading and CD purchasing. The Impact of Music Downloads and P2P File-Sharing on the Purchase of Music: A Study For Industry Canada was conducted collaboratively by two professors from the University of London, Industry Canada, and Decima Research, who surveyed over 2,000 Canadians on their music downloading and purchasing habits. When assessing the P2P downloading population, there was “a strong positive relationship between P2P file sharing and CD purchasing. That is, among Canadians actually engaged in it, P2P file sharing increases CD purchases.” The study estimates that one additional P2P download per month increases music purchasing by 0.44 CDs per year.
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Microsoft Adds ESPN Programming to Xbox
AP via YAHOO
Microsoft Corp. has added college basketball and other ESPN programming to the growing lineup of video content available for download to its Xbox 360 video game console. Microsoft and ESPN said people can purchase complete NCAA basketball and football games, the X Games sports competitions and programs like ESPN’s “Madden Nation,” which chronicles a competition of “Madden NFL” video game players, from the Xbox Live web site.
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CarsDirect Owner Internet Brands Prices $132 Million IPO
ALARM:CLOCK
LA’s Internet Brands priced its IPO shares at $10.00 – $12.00 per share floating 9,566,454 shares. For the nine months ended Sept. 30, Internet Brands swung to a loss of $2.5M, after paying preferred dividends, compared with earnings of $6.3M in the first nine months of 2006. During the same period, the company’s revenue dipped to about $65M from $65.2M. Those aren’t trends that Wall St. will appreciate even with a sound explanation. InternetBrands runs CarsDirect.com, Wikitravel.org, ApartmentRatings.com and about 40 other sites.
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SuccessFactors Prices Up To $108 Million IPO
REUTERS
SuccessFactors Inc on Friday registered its initial public offering of 10.8 million shares at an estimated price of $8 to $10 per share. In an amended filing with the U.S Securities and Exchange, the provider of talent management software said it would offer 10 million common shares while selling stockholders would offer 790,000 common shares. The company expects net proceeds of $80.9 million, assuming an initial public offering price of $9.00 per share, the midpoint of the estimated price range. SuccessFactors plans to use the net proceeds to repay debt of about $20.7 million. It also plans to use it for general corporate purposes and acquisition of companies.
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Dell Paying $1.4 Billion for EqualLogic
PE HUB
Dell has agreed to buy EqualLogic, a Nashua, N.H.-based provider of SAN solutions specifically optimized for virtualization, for approximately $1.4 billion in cash. EqualLogic had raised $52 million in VC funding since 2001, from firms like Charles River Ventures, Sigma Partners, Focus Ventures and TD Capital Ventures. The acquisition will strengthen Dell’s product and channel leadership in simplifying and virtualizing IT for customers globally. iSCSI SAN technology represents the fastest growing part of the storage business.
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TheStreet.com (TSCM) Buys Bank Info Sites
SILICON ALLEY INSIDER
TheStreet.com (TSCM) has acquired Bankers Financial Products, whose holdings include RateWatch.com, which compiles bank rate information for financial institutions, and BankingMyWay, which provides rate information to consumers. The deal is worth about $25 million, including $16.9 million in cash; TSCM will also kick in stock and pay off $3.9 million in Bankers’ debt. This is the company’s second recent acquisition outside their core business of financial journalism: In August, TheStreet bought Corsis, a digital advertising and promotions firm.
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Wiki Software Provider Socialtext Raises $9.5 Million, Announces New CEO
MASHABLE
Socialtext, a provider of wiki software, has announced a $9.5 million Series C round as well as the appointment of a new CEO. Eugene Lee, co-founder of Beyond.com, will be replacing Ross Mayfield in the CEO slot, while Mayfield will move to Chairman and President. Lee has previously worked at Cisco, where was VP Worldwide Enterprise Marketing, and Adobe, where he was a VP Product Marketing. Investors in the round include Draper Fisher Jurvetson, Omidyar Network, and SAP Ventures. Socialtext previously raised $3 million in June.
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Study: In Context Out Performs General Ads
ADOTAS
Seeing an ad in context on a web page has a direct positive impact on ad effectiveness, according to a pilot study conducted by OTX (Online Testing eXchange), a consumer research and consulting firm. Advertising placed on relevant pages of content on neutral and general interest websites outperformed the same advertising on out of context pages and equaled the response to the same ad on a highly relevant website. The study, the first in a series, was commissioned by ContextWeb, creator of online ad exchange ADSDAQ.
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Tags: Adobe, Brand, Cisco, College, Dell, EMI, Facebook, File-sharing, Fox, IPO, Microsoft, Music, MySpace, P2P, Sigma Partners, Universal Music Group, VC, Video, Vivendi, Yahoo