If Big Media Wants To Be Cool, They Should Just Buy A Trampoline

from the let's-be-friendsters-in-fiscal-year-'06 dept

Big media’s continuing quest to prove that it gets the internet continues apace as News Corp. is once again acquiring a web startup, though in true stealth-mode fashion they refused to say which company. Not to be left behind, Viacom has also announced that they plan to get into the social-networking area, probably via acquisition, as well. Not only do these acquisitions not prove that the companies get the internet, they’re not a wise growth strategy. If either of these companies actually had a crystal ball that told them what sites would be popular with the kids, they could probably do a lot better just selling the crystal ball. The one company which did okay growing by acquisition is Cisco, but the strategy was different. Cisco had a dominant franchise, which they maintained by buying up small high-tech networking companies, essentially using acquisitions as a substitute for R&D. Not exactly the same thing as buying up the flavor-of-the-month as a way to put lipstick on a pig. Some will say that this isn’t a problem because unlike Time Warner doing the same thing with AOL, the takeout prices aren’t particularly large. But if these purchases are seen as a substitute for fixing ailing business models, the outcome could be just as bad.

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Comments on “If Big Media Wants To Be Cool, They Should Just Buy A Trampoline”

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Tim says:


If you’re going to pontificate about big media, at least have a clue about the business. Virtually every major media company (Time Warner, News Corp, CBS, Viacom, Conde Nast, Vivendi, Disney, etc.) has been built by acquisition, many of which have worked incredibly well.

Actually, I think the hard part is identifying a big media company that didn’t grow in this fashion. The reality of the business (like it or not) is that it’s much more profitable to buy established media properties than to try to build them or create “innovative” new ideas.

Alan says:

Re: Re: Re: Umm...

I disagree…both people have facts..although on the far side of the faces of each other. joe is stating that buying a company just because its the “New GOTTA HAVE IT thing on the block” is downright stupid as a business venture. most of the “it” companies usually have an EXTREMELY short lifespan due to the “it” fad fades quickly. That part I can agree to…to just buy a company because its the thing that the children are into right now is a great way to go bankrupt. HOWEVER…on the other side..yes…buying an established company can be far superior to creating your own. They have already done the necessary footwork to build a clientelle, have a set business parameter, and already have fully staffed the business. That equals ALOT of ease when it comes to the buyer. He/She doesn’t have to do anything to aquire the business except come up with cash. It can be JUST as risky as starting your own however, as you might have to deal with the previous owners staffing loyalties, possible changes in staffing or just having the clientelle sway towards the next comapny. basically, in plain english…DO YOUR HOMEWORK BEFORE BUYING A COMPANY.

Tim says:

Re: Re: Re: Umm...

I used incendiary language because the original poster used it. It’s apparently in the Techdirt manual of style to snarkily insult “management”. That’s fine, but I think it’s important to call people on errors and/or a basic misunderstanding of the industry’s fundamentals.

Joe described growth via acquisition in the media business as putting “lipstick on a pig”, and “not a wise growth strategy”. First, he clearly didn’t understand that this is the basic M.O. of big media, and has been for the last fifty years. It’s managed to be a fairly successful strategy, though there have been some high profile flops as well. Second, he didn’t know what company was being acquired, making the statements speculative at best and likely negligent.

I think this lack of thought is worthy of being called out, and thought that borrowing from the manual of style would be appreciated by other TechDirt readers.

To the commenter that said my point wasn’t backed up, it’s hard to know how much data ws truly needed. All of the companies I listed grew from small companies via near-constant acquisition, so those with a reasonable familiarity with their businesses would understand my point. I expect that everyone else was still high-fiving about the lipstick-on-a-pig comment, so didn’t bother to elucidate. Plus, listing what they’ve done is an exhausting task. Here’s a News Corp chronology, for example:

Brian says:

Big media on the internet

“Getting” the internet doesn’t equal “being cool” on the internet. There are a lot of cool sites, but that doesn’t mean they “get” the internet.

I’d say “big media” is doing just fine. Is it cooler to be obscure and small, or to get millions of page views per day? I guess that’s a matter of perspective.

And I had a trampoline last summer…14 footer…wasn’t all that cool after awhile. 🙂

yer mom... says:

...is great

This whole article, thread and comment posting are all a big, fat, ugly, waste of my time. I wouldn’t have even replied to this pile of caucasian dung if it weren’t for the fact that simply reading it left the inside of my mouth feeling like a skinny tranny boy hooker. Half of the people on this post sound like more of a sheet-head than I do, and I’ll even up the anti by saying that I’ll slap my lipstickdick in tuna. Peace bieortces.

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