iVillage wins big from NBC buyout

March 7, 2006

As venerable as NBC Universal may be with its vast empire of television and film networks, it is still not beyond buying out smaller, niche Internet companies catering to a targeted audience for a sizeable price tag.

So while the company's decision Monday to buy out iVillage for $600 million surprised some analysts, many argue that the move highlights how investing in diverse online content is critical for the survival of any media organization, big or small. Indeed, NBC is merely following in the footsteps of other major media players in buying out better-known online entertainment groups. Last year, for instance, Rupert Murdoch's News Corp. bought out MySpace.com, a site popular with younger Internet users as a place to get to know others.

Certainly, iVillage is one of the more popular Web sites catering to women in their 20s and 30s, an age group that is particularly attractive to media groups that has become increasingly difficult to reach. With its slogan "the Internet for women," iVillage lures in female readers with such thought-provoking headlines as "how an orgasm a day may keep the doctor away" and "striving for superskinny."

While such topics may be taboo for daytime viewing on the networks, NBC made clear that it was eager to reach out to the younger female demographic and that the acquisition would only enhance the conglomerate's stable of media outlets.

"Every part of NBC Universal, from television and film to home entertainment will support and drive iVillage forward. From this platform, NBC Universal will chart the next generation of digital content development and enhance user experience," the group said in a news release.

In short, NBC said it would be worth paying for 100 percent of iVillage's shares for $8.50 in cash per common share. The transaction is expected to be completed by the second quarter of this year.

"iVillage immediately gives us scale and a profitable, established platform to expand our digital efforts, especially in the rapidly growing areas of health and women's interests," stated Beth Comstock, president of NBC Universal digital media and market development. "This is all about creating important new intersections between community, content and commerce. We envision connecting more deeply online, on mobile and on demand with key consumers throughout their various life stages -- from their unique interests to their finances to their health and well-being. We are also looking to create a more customized consumer healthcare experience, working in association with GE Healthcare," she added.

For its part, iVillage had been in the market trying to sell itself over the past year, even though the company raked in a net profit of $9.5 million on sales of $91 million in 2005. Indeed, industry analysts largely said that the deal was a big win for iVillage's shareholders.

"We believe that iVillage shareholders should feel fortunate to have received this multiple today, as most of the large traditional media companies have focused their attention elsewhere," said RBC Capital Markets analyst Jordan Rohan.

Indeed, NBC said that it would not be looking for more sizeable Internet acquisitions any time soon, even though the door remains open to buy out companies for a lower price than what it had forked out for iVillage.

"We don't have any plans to make acquisitions at this scale, but we will look at smaller acquisitions of tools or other things that enhance the site," said Robert Wright, chief executive of NBC Universal, in a phone briefing with analysts and reporters shortly after the buyout announcement.

Copyright 2006 by United Press International

Related Stories

Recommended for you

Microsoft describes hard-to-mimic authentication gesture

August 1, 2015

Photos. Messages. Bank account codes. And so much more—sit on a person's mobile device, and the question is, how to secure them without having to depend on lengthy password codes of letters and numbers. Vendors promoting ...

Netherlands bank customers can get vocal on payments

August 1, 2015

Are some people fed up with remembering and using passwords and PINs to make it though the day? Those who have had enough would prefer to do without them. For mobile tasks that involve banking, though, it is obvious that ...

Model shows how surge in wealth inequality may be reversed

July 30, 2015

(Phys.org)—For many Americans, the single biggest problem facing the country is the growing wealth inequality. Based on income tax data, wealth inequality in the US has steadily increased since the mid-1980s, with the top ...

A cataclysmic event of a certain age

July 27, 2015

At the end of the Pleistocene period, approximately 12,800 years ago—give or take a few centuries—a cosmic impact triggered an abrupt cooling episode that earth scientists refer to as the Younger Dryas.

New blow for 'supersymmetry' physics theory

July 27, 2015

In a new blow for the futuristic "supersymmetry" theory of the universe's basic anatomy, experts reported fresh evidence Monday of subatomic activity consistent with the mainstream Standard Model of particle physics.

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.