News Corp.’s IGN Buys Hearst’s UGO In Preparation For Game Site Spin-Off

News Corp., which is getting ready to part with MySpace, is now prepping a move for another one of its big Web properties.

The media conglomerate plans to spin out its IGN.com dudes-and-games site, and is bulking up in advance by acquiring Hearst’s dudes-and-games-centric UGO.com.

People familiar with the companies’ operations tell me News Corp. and Hearst have been finalizing plans over the weekend, and will likely announce the merger within the next few days.

Plans to cleave off IGN.com will take longer, perhaps months. Roy Bahat, who has been running IGN for News Corp. since 2007, will run the new company.

The goal is to create a standalone Web business that will focus primarily on videogame news, reviews, and culture. News Corp. is weighing taking on outside investors for IGN in advance of the split; IGN may also acquire other properties before the move.

News Corp. officials declined to comment. I haven’t heard back from Hearst. News Corp. also owns this Web site.

Unlike other Web moves News Corp. has been making, the plan to move IGN outside of News Corp.’s corporate walls isn’t a disposal of an impaired asset. People familiar with IGN’s operations say it is growing and profitable.

I’m told the company expects to earn more than $10 million this year on revenues of around $100 million. The idea is that IGN will be able to grow much faster if it isn’t operating inside Rupert Murdoch’s company.

Assuming that News Corp. ends up getting a buyer or partner for MySpace, the IGN move means that the company will have found new homes for all three of the big Web properties it bought during the Web 2.0 boom.

News Corp. kicked off the boom itself by buying MySpace for $580 million in the summer of 2005; a few months later it paid $650 million for IGN. In 2007, it paid about $250 million for photo-sharing site Photobucket, which it handed over to Ontela in December 2009.

Both in and outside of News Corp., IGN has always garnered much less attention than MySpace. Just a few years ago, MySpace was the world’s biggest social network, and the reason Google had signed on for a $900 million ad deal; IGN was simply a collection of dude-oriented sites that News Corp. had overpaid for. More recently, MySpace has been a black hole for money and talent, while IGN has found its focus as a competitor to CBS’ Gamespot.

Hearst, meanwhile, has been trying to figure out what to do with UGO for a while. It paid $100 million for the site in 2007, but its original management team left within two years. Hearst Interactive head Ken Bronfin has been overseeing the site since then, and last year the company hired former Montogmery & Co. banker Kevin Covert to find a partner.

I don’t know how the two sites are valued in the merger, except that IGN is worth more. News Corp. will have a controlling stake in the combined company. Comscore says IGN has an audience of 19.7 million U.S. visitors; it pegs UGO at 13.1 million.

 

 

Barack Obama Wants You To Watch His Funny YouTube Video

The White House Correspondent’s Dinner, an annual tradition where the media and political elite meet to roast/congratulate each other, with mixed results, just finished up. Seth Meyers of “Saturday Night Live” hosted the event, and you should be able to watch replays on C-SPAN if you’re interested.

One new twist to the proceedings: The White House, which normally plays along with the event even though the chief occupant gets ribbed, has gone all in. Immediately after showing this video–a parody trailer based on the “The King’s Speech”–at the event, they released it on YouTube (via Twitter, of course).

The bit isn’t LOL-worthy, IMHO. But it does contain jokes, and I think it’s noteworthy that they’re putting this out there for public consumption, at a time when much of the electorate seems particularly… susceptible to jokes. Even more so if they’re easily accessible via Google.

Also, as The Atlantic.com’s Gabe Snyder points out, the clip contains a Wu Tang Clan sample. Which is sure to upset someone (and please lots of us, too).

(Correction: The song — “Shimmy Shimmy Ya“–is actually from (now-deceased) Wu Tang Clan member Ol’ Dirty Bastard, notes MediaMemo reader “quietstorms“. Even better/worse!)

Meanwhile, you can see all 17 minutes of Obama’s presentation here (much sharper, I think–good Fox News dig), via the Washington Post:

HBO Comes to the iPad, a Couple Days Early

HBO Go, the pay cable channel’s Web service, doesn’t formally launch on the iPad until Monday. But no need to wait: You can download it now at iTunes.

As advertised, the free app is a mirror of HBO’s existing broadband service: It lets the channel’s subscribers stream a very deep catalog of HBO’s shows and movies, on demand, via both Wi-Fi and wireless networks.

It will also work on Apple’s iPhone and iPod Touch, as well as 20 phones running Google’s Android; it won’t work on tablets running Google’s newest Honeycomb OS, though. (Demo video from BTIG’s Rich Greenfield at the bottom of this post)

The two catches:

  • The service is available to most cable customers, with the exception of Time Warner Cable and Cablevision subscribers. Time Warner Cable says it’s working on a deal; Cablevision won’t comment.
  • It’s a very deep catalog–1,400 titles, including the complete run of great series like “The Sopranos” and “The Wire”–but it will still have gaps that could frustrate HBO’s most avid users. I’d like to try David Simon’s “Treme” again, for instance, but I can’t get last season’s episodes; just the new ones that started airing last week.

Some of you will bemoan the fact that you have to be a cable subscriber to get this–there’s no broadband-only option, a la Netflix and Hulu Plus. But that’s the point: Parent company Time Warner is completely wedded to the cable industry and wants to build as many incentives as it can to keep you there, too.

Still, this stuff is lightyears ahead of where the cable business was just a couple years ago, where paying subscribers had no way to get these shows except on their TVs, or by buying it again on DVD or iTunes.

And if you really are a dedicated cord-cutter, and a patient one, you may eventually get your way: I can imagine a scenario where HBO does offer this stuff directly to consumers, and if it happens within a few years, I won’t be completely shocked.

The Bull Case for Demand Media–And Why Wall Street May Not Buy It

There’s no debate that changes Google has made to its search engine’s ranking formula have taken a toll on Demand Media.

How big a toll? That one’s up for debate: Richard Rosenblatt’s company says the changes, which affect the traffic that Demand’s sites get from Google, aren’t significant enough for the company to change its guidance.

Most of Wall Street disagrees, and has been hammering Demand shares for the last couple of weeks. DMD is now trading around $16.70, down from a peak of more than $27 earlier this year.

In a note published today, Stifel Nicolaus analyst Jordan Rohan argues that investors are overreacting (Stifel helped take Demand public in January), and keeps his “buy” rating intact. A worst-case scenario, he says, is that the Google changes will clip Demand revenues by 10 percent and EBITDA by 20 percent–but Wall Street has pummeled Demand much more than that.

Rohan (and many others) are very interested to see what Demand says on its May 5 earnings call:

EHow and Demand Media had a great deal of momentum all the way through the first quarter and into the second quarter. But there is now this new variable with which to contend–it is hard to forecast traffic if there is volatility in index rank. How does that all balance out? To the extent that is possible to broaden the range of possible outcomes for the year, without abandoning the guidance altogether, we believe that would be incrementally positive, at least compared to current levels of fear. Maintaining guidance for full year revenue and EBITDA would be even sweeter, if possible. The “what can be done” part of this is key, in our view–own up to the weaknesses, identify the steps required to address those weaknesses, and correct course. Quickly.

Which sounds great. The problem for Demand (and many other publishers, including the New York Times, which said that its About.com had been beaten up by algorithm changes, too) is that it’s entirely possible that Google isn’t done adjusting its search formulas.

And what if it’s just beginning to overhaul search?

If so, every Google-dependent publisher is going to have a very hard time responding to each and every change the search giant makes. Which means that Demand Media’s fortunes will be in flux for some time. And it will be very hard to make Wall Street feel good about that.

I Do… Want Some Magnum Ice Cream. (Really?)

No surprise that my Twitter feed is overrun with the royal wedding: This is the sort of thing that everyone says they don’t care about, but ends up watching/talking about anyway.

I am surprised, though, at what happens when I click on #royalwedding, Twitter’s official hashtag for the event: I end up on the day’s Promoted Trend, purchased on behalf of something called “Magnum Ice Cream,” and which directs Twitter users to Magnum’s Facebook page.

Turns out this is indeed a real product, from Unilever, and I guess they’re getting their money’s worth, because you’re reading about it now. More important is that near the height of the ceremony Twitter was seeing 13,000 #royalwedding tweets per minute.

I do wonder, though, how the media companies Twitter has been encouraging to use #royalwedding today feel about helping the social network promote the “stylish and luxurious lifestyle inspired by the world’s most pleasurable ice cream.”

Related: In advance of the event, Twitter and ABC News told me they were working closely together on live coverage and plans, with hashtag polls and onscreen meters showing the velocity and total number of wedding tweets, etc.  But this turned out to be pretty restrained: In an hour of viewing this morning, I only saw a single reference to Twitter cross my screen (an ABC rep tells me there have been more).

Also worth noting: If you wanted to, you could watch the wedding itself on Twitter.com, via a livestream that NBC News provided. Pretty sure we’ll see more of this.

A Year After Twitter’s Cold Shoulder, Twitter Ad Shop 140 Proof Says It’s Doing Great

What happens to a Twitter-based company after Twitter tells them to go away?

In the case of 140 Proof, it seems like they do okay.

About a year ago, Twitter put the kibosh on 140 Proof’s plans to sell ads side by side with Twitter users’ posts. But the start-up has modified its product and says that by the end of 2011, it will be profitable and on a pace to generate more than $10 million a year in sales.

That story has helped the company raise $2.5 million in a Series B round led by BlueRun ventures, which also participated in the company’s first $2 million round. Mark Kingdon, the former CEO of Web ad agency Organic, invested in both rounds, along with other angels.

140 Proof used to be one of several companies that sold or hoped to sell ads within Twitter users’ streams, a practice that Twitter stopped in 2010. It was one of several moves Twitter made in the last year that added restraints to what had been a live-and-let-live approach to third party companies.

140 Proof’s new strategy: It buys real estate on third-party social media software like Echofon and Tweetcaster, and rents that space out to advertisers. Here’s a sample:

The ads, to my eyes, look like Twitter messages, which I thought Twitter was trying to discourage. But they sit at the top of the stream, and 140 Proof says Twitter is okay with them.

I asked Twitter reps to confirm that the company approved. They declined to comment.

140 Proof also points out that it will sell ads against other social media platforms that aren’t Twitter, too. Here’s a blog post excerpt from sales chief Andy Scott, published this week, which boasts that “Twitter’s attempt to ‘spank the ecosystem’ is good for 140 Proof:”

The ecosystem continued to pivot away from a pure-play “same as Twitter.com” level of innovation that is about aggregation of social and real-time from multiple sources — Twitter is just one. Will Twitter own social/real-time updates on the scale of Google and Facebook walled gardens? Doesn’t look like it. Love Twitter, but these horses have left the barn and don’t want to come home. The more Twitter builds up the walls ex post facto — the more entire exploding segments (hello group texting!) bag its unpredictable closed system altogether. Classic platform trade-offs, god love an open world.