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AOL, the Internet unit of Time Warner, said on Monday it had agreed to buy Swedish online marketing firm TradeDoubler for about $900 million to enhance its advertising capabilities in Europe.
But the cash deal, which was recommended by the TradeDoubler board, ran into quick trouble as a major shareholder said it would vote against the transaction, and other investors signaled they would need a sweetener before approving it. The deal is the first major strategic move for AOL under Randy Falco, who was hired as AOL's chief executive last November from GE's NBC Universal to help turn the business around.
AOL deal for TradeDoubler won't be easy [money.cnn.com]
Always shows that the best negotiator is one who can afford not to do the deal and hold out for the best price.
This said, TD has been for sale for almost 2 years, so I'm surprised that they didn't sign it up there and then.
It's certainly great news for anyone with a stake in a network - it's definitely made my New Year anyway :)
"Or buy CJ.
Heh... although they'd immediately have to ban millions of sites once they got that db in house. "
That's a scary thought jc - " Google Adaffiliates" And they have all that conversion data too! Oh dear, what a mess.
I'm so glad we only do direct deals these days - I'd hate to be a TD affiliate once AOL gets their teeth into it.
[edited by: Michael_Anthony at 7:33 pm (utc) on Jan. 15, 2007]
New CEO meets predecessor, who has been the captain of a sinking ship for some time. Old CEO gives him three envelopes, and says to open one at each annual shareholder's meeting.
After 1 year and no improvement, new CEO opens envelope one and reads...
"Of course, these problems are the legacy left by (Old CEO), and next year will be better.
"The legacy left has been harder to change than first expected, but next year should see the changes that I have implemented start to show results"
Year 3, he opens the envelope..
"Take three enveleopes....."
Sound familiar to anyone at AOL I wonder?!
On a more serious note, if G/AOL/Y controls the search market, both paid and free, and the revenue providers, CJ/TD etc., why do they need affiliates any more.
I wonder if the AOL guy was one of those newbie posters here who asked "I have loads of traffic, how do I monetise it?" If he was, I wish we'd have all kept our mouths shut. That's another fine mess we've got ourselves into.
I know personally one of the original investors in TradeDoubler. He is now 35 years old. Back in 1999 he invested everything he had - $500.000 - and got 10% of their stock in return. On the day they went public in 2005, the market valued the company at $386 million. He had sold 30% of his holding to help with the IPO, but kept the rest. On that day, his personal net worth became $38,6 million in cash and stock.
AOL is now offering to buy the company for $900 million and he still has lots of shares to sell. The real tragedy is that he has no idea about consumption and doesn't know how to get about using up money.
Makes you wonder why you work so hard, doesn't it?
And I still think that I'm making good money, and I still don't work much at all :)
[edited by: Michael_Anthony at 1:06 pm (utc) on Jan. 16, 2007]
a) let it go to their heads and forget that money doesn't make them smarter, more interesting, or more important
b) spend it foolishly, buying expensive houses that are actually worth a fraction of what they pay for them, and fast cars they'll never be able to drive fast enough
c) end up divorcing or breaking up with their S.O. Money (and not the lack of it) is the great breaker of relationships here
a smallish ad network that never took off
Tradedoubler's hidden gem is the Media Agency all in one tracking tool, so apart from affiiates/merchants, they have something very very valuable to go with it.
Add to that a very strong management team,key clients with rock solid contracts tied in for a few years.
So personally speaking I'll stick to real world multiples for valuing our business, as currently we are a bit short on 1 or 2 of the above, but that's something being worked on.
That's my 2cents worth.
TradeDoubler is profitable and the unquestioned market leader in Europe. AOL has offered 27 times earnings
More than 3 million earnings p.a. is a hard to believe figure. Where is that from?
Not that long ago TD had been so broke, that they had trouble to pay even a few hundred Euro. And that was before adsense did conquer the market.
Marketleader in which country?
I still think that AOL have bought a pup though, and my own experience with their management tends to contradict your views Shak.
And it's not $3 million per year, it's 900/27 = 33.3 million.
And Shak, get back under that radar mate, the world was a safer place with you there :)
Not that long ago TD had been so broke, that they had trouble to pay even a few hundred Euro
According to Tradedoubler's terms, they only pay out to the affiliates when the merchant has paid them. Unfortunately merchants often stall and delay paying for a couple of months. That's probably why you had trouble getting your money.